Document:

Senior Secured Credit Agreement between Titan, Lender and
SureBeam, Borrower

SENIOR
SECURED CREDIT AGREEMENT,

dated as of
August 2, 2002,

between

THE TITAN
CORPORATION

as the
Lender,

and

SUREBEAM
CORPORATION

as the
Borrower 

SENIOR
SECURED CREDIT AGREEMENT

THIS SENIOR SECURED CREDIT
AGREEMENT, dated as of August 2, 2002, is between SUREBEAM
CORPORATION, a Delaware corporation (the
“Borrower”), and THE TITAN CORPORATION, a
Delaware corporation (the
“Lender”).

W I T N E
S S E T H:

WHEREAS, the Lender
intends to distribute the Borrower’s common stock owned by
Lender to the Lender’s stockholders in a tax-free spin-off
(the “Spin-off”); and

WHEREAS, the Borrower has
requested that the Lender make available to the Borrower a senior
secured credit facility in the amount of Fifty Million Dollars
($50,000,000); and

WHEREAS, the Lender is
willing to make such senior secured credit facility available upon
and subject to the terms and conditions contained
herein.

NOW, THEREFORE, the
parties hereby agree as follows:

DEFINITIONS AND ACCOUNTING TERMS

Defined
Terms.  The following capitalized terms
(whether or not underscored) when used in this Agreement, including
its preamble and recitals, shall, except where the context
otherwise requires, have the following meanings (such meanings to
be equally applicable to the singular and plural forms
thereof):

“Affiliate” of any Person
means any other Person which, directly or indirectly, controls, is
controlled by or is under common control with such Person. 
“Control” of a Person means the power, directly or
indirectly,

to vote 10% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors,
managing members or general partners (as applicable); or

to direct or cause the direction of the management and policies
of such Person (whether by contract or otherwise).

“Agreement” means this Senior
Secured Credit Agreement, as it may be amended, restated,
supplemented, or otherwise modified from time to time.

“Allowed
Quarterly Maximum” is defined in Section
2.1(b).

“Annual Operating
Plan” means the 2002-2003 annual operating plan prepared
by the Borrower and previously delivered to the Lender, a copy of
which is attached hereto as Exhibit A.

“Asset
Sale” means any sale, lease, sale and leaseback,
assignment, conveyance, transfer or other disposition by the
Borrower or any of its Subsidiaries of any of its property or
assets, including the Capital Stock of any Subsidiary.

“Authorized
Officer” means, relative to any Obligor, those of its
officers, general partners or managing members (as applicable)
whose signatures and incumbency shall have been certified to the
Lender in the certificate of incumbency most recently delivered by
such Obligor.

“Borrower” is defined in the
preamble.

“Borrower Pledge
Agreement” means the Pledge Agreement executed and
delivered by the Borrower pursuant to Article V
substantially in the form of Exhibit B hereto, as
amended, restated, supplemented or otherwise modified from time to
time.

“Borrower
Security Agreement” means the Security Agreement executed
and delivered by the Borrower pursuant to Article V
substantially in the form of Exhibit C hereto, as
amended, restated, supplemented or otherwise modified from time to
time.

“Borrowing” means the
Revolving Loans and/or the Letters of Credit, as the case may
be.

“Borrowing
Request” means a Revolving Loan request and certificate
duly completed and executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit D
hereto, together with such changes thereto as the Lender may from
time to time reasonably request for the purpose of determining
Borrower’s satisfaction of conditions for each Borrowing
Request.

“Business
Day” means any day which is neither a Saturday or Sunday
nor a legal holiday on which banks are authorized or required to be
closed in New York, New York or San Diego, California.

“Capital
Expenditures” means, for any period, the aggregate, or
separate amount, as the case may be, of all expenditures of the
Borrower and its Subsidiaries for fixed or capital assets made
during such period which, in accordance with GAAP, would be
classified as capital expenditures.

“Capital
Stock” means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) of such Person’s
capital, whether now outstanding or issued after the Closing
Date.

“Capitalized
Lease Liabilities” means all monetary obligations of the
Borrower or any of its Subsidiaries under any leasing or similar
arrangement which have been (or, in accordance with GAAP, should
be) classified as capitalized leases, and for purposes of each Loan
Document the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP, and the stated
maturity thereof shall be the date of the last payment of rent or
any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of
a premium or a penalty.

“Cash
Equivalents” means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States
government and backed by the full faith and credit of the United
States government; (b) domestic and Eurodollar certificates of
deposit and time deposits, bankers’ acceptances and floating
rate certificates of deposit issued by any commercial bank
organized under the laws of the United States, any State thereof,
the District of Columbia, any foreign bank, or its branches or
agencies (fully protected against currency fluctuations), which, at
the time of acquisition, are rated A-1 (or better) by S&P or
P-1 (or better) by Moody’s; (c) commercial paper of
United States and foreign banks and bank holding companies and
their Subsidiaries and United States and foreign finance,
commercial industrial or utility companies which, at the time of
acquisition, are rated A-1 (or better) by S&P or P-1 (or
better) by Moody’s; (d) marketable direct obligations of any
State of the United States of America or any political subdivision
of any such State given on the date of such investment the highest
credit rating by Moody’s and S&P; provided, that the
maturities of all obligations of the type specified in clauses
(a) through (d) above shall not exceed one hundred
eighty (180) days; and (e) reverse purchase agreements covering
obligations of the type specified in clause (a)
above.

“Cash Equivalent
Investment” means, at any time:

any direct obligation of (or unconditionally guaranteed by) the
United States of America or a State thereof (or any agency or
political subdivision thereof, to the extent such obligations are
supported by the full faith and credit of the United States of
America or a State thereof) maturing not more than one year after
such time;

commercial paper maturing not more than 270 days from the date
of issue, which is issued by:

a corporation (other than an Affiliate of any Obligor) organized
under the laws of any State of the United States or of the District
of Columbia and rated A-1 or higher by S&P or P-1 or higher by
Moody’s;

any certificate of deposit, time deposit or bankers acceptance,
maturing not more than one year after its date of issuance, which
is issued by any bank organized under the laws of the United States
(or any State thereof) and which has (x) a credit rating of A2 or
higher from Moody’s or A or higher from S&P and (y) a
combined capital and surplus greater than $500,000,000;

any repurchase agreement having a term of 30 days or less
entered into with any commercial banking institution satisfying the
criteria set forth in clause (c) which:

is secured by a fully perfected security interest in any
obligation of the type described in clause (a); and

has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of
such commercial banking institution thereunder;

Investments, classified in accordance with GAAP as current
assets, in money market investment programs registered under the
Investment Company Act of 1940, as amended, which are administered
by financial institutions that have the highest rating obtainable
from either Moody’s or S & P’s and the portfolios
of which are limited solely to Investments of the character,
quality and maturity described in clauses (a), (b),
(c) and (d) above.

“CERCLA” means the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended.

“CERCLIS” means the
Comprehensive Environmental Response Compensation Liability
Information System List.

“Change in
Control” means (i) the acquisition by any person, entity
or “group”, within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act, (excluding,
for this purpose, the Lender, the Borrower or its Subsidiaries, or
any employee benefit plan of the Borrower or its Subsidiaries which
acquires beneficial ownership of voting securities of the Borrower)
of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of thirty-three percent (33%)
or more of either the then outstanding shares of common stock of
the Borrower or the combined voting power of the Borrower’s
then outstanding voting securities entitled to vote generally in
the election of directors; or (ii) individuals who immediately
following the distribution date for the Spin-off (the
“Distribution Date”) constitute the Board
of Directors (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board
of Directors; provided that any person becoming a director
subsequent to the Distribution Date whose election, or nomination
for election by the Borrower’s stockholders, was approved by
a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such person were a
member of the Incumbent Board; or (iii) approval by the
stockholders of the Borrower of a reorganization, merger or
consolidation, in each case with respect to which Persons who were
the stockholders of the Borrower immediately prior to such
reorganization, merger or consolidation do not, immediately
thereafter, own more than sixty-six percent (66%) of the combined
voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated
company’s then outstanding voting securities or (iv) any
“Change of Control” (or substantially similar
provision) under (and as defined in) any Sub Debt Document;
provided, however, any changes that occur directly as
a result of the Spin-off shall not constitute a Change in
Control.

“Closing
Date” means the first date on which all of the conditions
precedent set forth in Section 5.1 have been satisfied, but
in no event shall such date be later than August 2,
2002.

“Code”
means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified
from time to time.

“Collateral
Assignment of Rights under License Agreement” means the
Collateral Assignment of Rights Under License Agreement executed
and delivered by SB OperatingCo, Inc., now known as SB OperatingCo,
LLC,  pursuant to Article V substantially in the form of
Exhibit E hereto, as amended, restated, supplemented or
otherwise modified from time to time.

“Collateral
Documents” means the Borrower Pledge Agreement, the
Borrower Security Agreement, the Collateral Assignment of Rights
under License Agreement; the Subsidiary Guaranty, the Subsidiary
Pledge Agreement, the Subsidiary Security Agreement, each Copyright
Security Agreement, each Trademark Security Agreement and each
Patent Security Agreement.

“Commitment” means, as the
context may require, the Revolving Loan Commitment and the Letter
of Credit Commitment.

“Commitment
Termination Event” means:

the occurrence of any Event of Default described in Section
9.1(i); or

the occurrence and continuance of any other Event of Default and
either

the declaration by the Lender of all or any portion of the
Revolving Loans to be due and payable pursuant to Section
9.3, or

the giving of notice by the Lender to the Borrower that the
Revolving Loan Commitment has been terminated.

“Compliance
Certificate” means a certificate duly completed and
executed by an Authorized Officer of the Borrower, substantially in
the form of Exhibit F hereto, together with such
changes thereto as the Lender may from time to time reasonably
request for the purpose of monitoring the Borrower’s
compliance with Section 8.4 of this Agreement.

“Contingent
Liability” means any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise
becomes or is contingently liable upon (by direct or indirect
agreement, contingent or otherwise, to provide funds for payment,
to supply funds to, or otherwise to invest in, a debtor, or
otherwise to assure a creditor against loss) the Indebtedness or
any other obligation of any other Person (other than (i) by
endorsements of instruments in the course of collection and (ii)
guarantees of obligations of Subsidiaries incurred in the ordinary
course of business and not constituting Indebtedness).  The
amount of any Person’s obligation under any Contingent
Liability shall (subject to any limitation set forth therein) be
deemed to be the outstanding principal amount of the debt,
obligation or other liability guaranteed thereby.

“Controlled
Group” means all members of a controlled group of
corporations and all members of a controlled group of trades or
businesses (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer
under Section 414(b) or 414(c) of the Code or Section
4001 of ERISA.

“Copyright
Security Agreement” means any Copyright Security
Agreement executed and delivered by any Obligor in substantially
the form of Exhibit G to any Security Agreement, as amended,
restated, supplemented or otherwise modified from time to
time.

“Credit
Extension” means the making of a Revolving Loan by the
Lender or the issuance of a Letter of Credit.

“Credit Extension
Request” means any Borrowing Request.

“Default” means any Event of
Default or any condition, occurrence or event which, after notice
or lapse of time or both, would constitute an Event of
Default.

“Disclosure
Schedule” means the Disclosure Schedule attached hereto
as Schedule I, as it may be amended, restated, supplemented or
otherwise modified from time to time by the Borrower with the
written consent of the Lender.

“Disbursement” is defined in
Section 2.7(b).

“Disbursement
Date” is defined in Section 2.7(b).

“Disqualified
Stock” means any Capital Stock of the Borrower or any
Subsidiary of the Borrower which by its terms (or by the terms of
any security into which it is convertible or for which it is
exchangeable or exercisable) or upon the happening of any event (a)
matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (b) is convertible or exchangeable for
Indebtedness or Disqualified Stock, or (c) is redeemable or subject
to required repurchase at the option of the holder thereof, in
whole or in part, in each case in this clause (c) before the
final Revolving Loan Maturity Date.

“Dollar” and the sign
“$” mean lawful money of the United
States.

“EBITDA” means, for the
Borrower and its Subsidiaries, for any applicable period, the sum
(without duplication) of the following:

Net Income,

minus

all amounts added by the Borrower and its Subsidiaries, in
determining Net Income, representing either non-cash or
non-recurring gains, including as a result of changes in accounting
treatment under GAAP and including all royalty income recognized by
the Borrower and its Subsidiaries in accordance with that certain
Amended and Restated License Agreement dated October 17, 2001
between SB OperatingCo, Inc., now known as SB OperatingCo, LLC and
the Lender,

plus

the amount deducted by the Borrower and its Subsidiaries, in
determining Net Income, representing amortization, as determined in
accordance with GAAP,

plus

the amount deducted, in determining Net Income, of all federal,
state and local income taxes (whether paid in cash or deferred) of
the Borrower and its Subsidiaries,

plus

the amount deducted, in determining Net Income, of Interest
Expense of the Borrower and its Subsidiaries,

plus

(f)   the amount
deducted, in determining Net Income, representing depreciation of
assets of the Borrower and its Subsidiaries, as determined in
accordance with GAAP.

“EBITDA AOP
Target” means that amount set forth as the
Borrower’s EBITDA Target for the particular period in the
Borrower’s Annual Operating Plan.

“Environmental
Laws” means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and
guidelines (including consent decrees and administrative orders)
relating to pollution, public health and safety and protection of
the environment.

“ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import,
together with the regulations thereunder, in each case as in effect
from time to time.  References to sections of ERISA also refer
to any successor sections thereto.

“Event of
Default” is defined in Section 9.1.

“Exchange
Act” means the Securities Exchange Act of 1934, as
amended.

“Fiscal
Quarter” means a quarter ending on the last day of each
March, June, September or December.

“Fiscal
Year” means any period of twelve consecutive calendar
months ending on December 31 of each year; references to a Fiscal
Year with a number corresponding to any calendar year (e.g., the
“Fiscal Year 2001”) refer to the Fiscal Year ending on
December 31 of such calendar year.

“Foreign
Subsidiary” means any Subsidiary that is not a U.S.
Subsidiary.

“F.R.S.
Board” means the Board of Governors of the Federal
Reserve System or any successor thereto.

“GAAP”
is defined in Section 1.4.

“Governmental
Authority” means the government of the United States of
America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to
government.

“Guarantor” means each direct
and indirect U.S. Subsidiary and Foreign Subsidiary of the Borrower
whether now existing or hereafter acquired or organized, each of
which shall be required to execute and deliver the Subsidiary
Guaranty, or a supplement thereto; provided, however,
with respect to Foreign Subsidiaries, Guarantor shall not include
Foreign Subsidiaries to the extent that the granting of such
Subsidiary Guaranty would cause material adverse tax consequences
to the Borrower or such Foreign Subsidiary or would be violative of
applicable law.

“Hazardous
Material” means

any “hazardous substance”, as defined by CERCLA;

any “hazardous waste”, as defined by the Resource
Conservation and Recovery Act, as amended; or

any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance (including any petroleum product)
within the meaning of any other applicable federal, state or local
law, regulation, ordinance or requirement (including consent
decrees and administrative orders) relating to or imposing
liability or standards of conduct under any Environmental Law, all
as amended.

“Hedging
Agreements” means currency exchange agreements, interest
rate swap agreements, interest rate cap agreements and interest
rate collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest
rates or currency exchange rates.

“Hedging
Obligations” means, with respect to any Person, all
liabilities of such Person under Hedging Agreements.

“herein”,
“hereof”, “hereto”,
“hereunder” and similar terms contained in this
Agreement or any other Loan Document refer to this Agreement or
such other Loan Document, as the case may be, as a whole and not to
any particular Section, paragraph or provision of this Agreement or
such other Loan Document.

“Impermissible
Qualification” means, relative to the opinion or
certification of any independent public accountant as to any
financial statement of the Borrower, any qualification or exception
to such opinion or certification:

which is of a “going concern” or similar nature;

which relates to the limited scope of examination of matters
relevant to such financial statement; or

which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal,
would require an adjustment to such item the effect of which would
be to cause the Borrower to be in default of any of its obligations
under Section 8.4.

“including” and
“include” means including without limiting the
generality of any description preceding such term, and, for
purposes of this Agreement and each other Loan Document, the
parties hereto agree that the rule of ejusdem generis shall
not be applicable to limit a general statement, which is followed
by or referable to an enumeration of specific matters, to matters
similar to the matters specifically mentioned.

“Incumbent
Board” is defined in the definition of “Change in
Control.”

“Indebtedness” of any Person
means, without duplication:

all obligations of such Person for borrowed money or advances
and all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments;

all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and
banker’s acceptances issued for the account of such
Person;

all Capitalized Lease Liabilities of such Person;

net liabilities of such Person under all Hedging
Obligations;

whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase
price of property or services excluding trade accounts payable in
the ordinary course of business which are not overdue for a period
of more than ninety (90) days or, if overdue for more than ninety
(90) days, as to which a dispute exists and adequate reserves in
conformity with GAAP have been established on the books of such
Person, and indebtedness or other obligations secured by (or for
which the holder of such indebtedness or other obligations has an
existing right, contingent or otherwise, to be secured by) a Lien
on property owned or being acquired by such Person (including
indebtedness or other obligations arising under conditional sales
or other title retention agreements), whether or not such
indebtedness or other obligations shall have been assumed by such
Person or is limited in recourse;

all Contingent Liabilities of such Person;

the principal portion of all obligations of such Person under
any Synthetic Lease;

all Disqualified Stock of such Person; and

all Lender Guaranties and Letters of Credit issued by or caused
to be issued by the Lender on behalf of the Borrower.

For all purposes of this
Agreement, the Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the
extent the terms of such Indebtedness provide that such Person is
not liable therefor (provided, Indebtedness shall not be calculated
twice for purposes of this Agreement).

“Intellectual
Property” is defined in Section 6.19.

“Indemnified
Liabilities” is defined in Section
10.4.

“Indemnified
Parties” is defined in Section 10.4.

  “Interest
Expense” means, for any Fiscal Quarter, the aggregate
interest expense of the Borrower and its Subsidiaries for such
Fiscal Quarter, as determined in accordance with GAAP, including
the portion of any payments made in respect of Capitalized Lease
Liabilities allocable to interest expense.

“Investment” means, relative
to any Person, (a) any direct or indirect purchase or other
acquisition by such Person of, or of a beneficial interest in, the
Capital Stock or other debt or equity securities (including
options, warrants or other rights to acquire such Capital Stock or
other securities) of any other Person, (b) any direct or indirect
purchase or other acquisition by such Person of any assets
constituting a business unit of any Person or all or substantially
all of a Person’s assets, (c) any direct or indirect loan,
advance (excluding commission, travel, petty cash, relocation and
similar advances to officers, directors, and employees made in the
ordinary course of business) or capital contribution by such Person
to any other Person, including all Indebtedness and accounts
receivable acquired from that other Person that are not current
assets or did not arise from sales to that other Person in the
ordinary course of business, (c) any Hedging Agreements of such
Person and (d) any Contingent Liability of such Person.  The
amount of any Investment shall be the original principal or capital
amount thereof less all returns of principal or equity thereon and
shall, if made by the transfer or exchange of property other than
cash, be deemed to have been made in an original principal or
capital amount equal to the fair market value of such property at
the time of such Investment.

“Issuance
Request” means a Letter of Credit request duly completed
and executed by an Authorized Officer of the Borrower,
substantially in the form of Exhibit H hereto, together
with such changes thereto as the Lender may from time to time
reasonably request for the purpose of determining the
Borrower’s satisfaction of conditions for each Issuance
Request.

“Lender” is defined in the
preamble.

“Lender
Guaranties” means those outstanding guaranties of the
Borrower’s obligations by the Lender set forth on Item 2.7 of
the Disclosure Schedule.

“Lender Guaranty
Disbursement” is defined in Section
2.7(b).

“Lender Guaranty
Disbursement Date” is defined in Section
2.7(b).

“Lender Guaranty
Outstandings” means, on any date, an amount equal to the
sum of:

the then aggregate amount which is guarantied by the Lender
under all issued and outstanding Lender Guaranties,

plus

                       
(b) the then aggregate amount of all outstanding Lender Guaranty
Reimbursement Obligations.

“Lender Guaranty
Reimbursement Obligation” is defined in Section
2.7(c).

“Lender’s
Credit Agreement” means that certain Senior Secured
Credit Agreement dated as of May 23, 2002 among the Lender, various
financial institutions from time to time parties thereto, Wachovia
Bank, National Association, as administrative agent, The Bank of
Nova Scotia and Comerica Bank-California, as syndication agents,
and Branch Banking and Trust Company and Toronto Dominion (New
York), Inc., as documentation agents (as such Senior Secured Credit
Agreement may be amended, restated, supplemented, renewed,
replaced, refinanced or otherwise modified from time to time
whether or not with the same financial institutions).

“Lender’s
Environmental Liability” means any and all losses,
liabilities, obligations, penalties, claims, litigation, demands,
defenses, costs, judgments, suits, proceedings, damages (including
consequential damages), disbursements or expenses of any kind or
nature whatsoever (including reasonable attorneys’ fees at
trial and appellate levels and experts’ fees and
disbursements and expenses incurred in investigating, defending
against or prosecuting any litigation, claim or proceeding) which
may at any time be imposed upon, incurred by or asserted or awarded
against the Lender or any of the Lender’s Affiliates,
shareholders, directors, officers, employees, and agents (all such
parties to the extent of their capacity only as lender and relating
thereto, but not in any other capacity) in connection with or
arising from:

any Hazardous Material on, in, under or affecting all or any
portion of any property of the Borrower or any of its Subsidiaries,
the groundwater thereunder, or any surrounding areas thereof to the
extent caused by Releases from the Borrower’s or any of its
Subsidiaries’ or any of their respective predecessors’
properties;

any misrepresentation, inaccuracy or breach of any warranty,
contained or referred to in Section 6.12;

any violation or claim of violation by the Borrower or any of
its Subsidiaries of any Environmental Laws; or

the imposition of any lien for damages caused by, or the
recovery of any costs for, the cleanup, release or threatened
release of any Hazardous Material (i) by the Borrower or any of its
Subsidiaries or (ii) in connection with any property owned or
formerly owned by the Borrower or any of its Subsidiaries.

“Letter of
Credit” is defined in Section 2.3.

“Letter of Credit
Commitment” means the Lender’s obligation to cause
the issuance of Letters of Credit pursuant to Section
2.3.

“Letter of Credit
Commitment Amount” means, on any date, a maximum amount
of Five Million Dollars ($5,000,000), as such amount may be
permanently reduced from time to time pursuant to Section
2.2 or Section 3.1.

“Letter of Credit
Outstandings” means, on any date, an amount equal to the
sum of:

the then aggregate amount which is undrawn and available under
all issued and outstanding Letters of Credit,

plus

                       
(b)  the then aggregate amount of all outstanding
Reimbursement Obligations.

“Lien”
means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or
otherwise), charge against or interest in property, or other
priority or preferential arrangement of any kind or nature
whatsoever, to secure payment of a debt or performance of an
obligation.

“Loan
Documents” collectively means this Agreement, the
Collateral Documents, each agreement pursuant to which the Lender
is granted a Lien to secure the Obligations and each other
agreement, certificate, document or instrument delivered in
connection with this Agreement or such other Loan Documents,
whether or not specifically mentioned herein or therein.

“Material Adverse
Effect” means the result of one or more events, changes
or effects which, individually or in the aggregate, would
reasonably be expected to have a material adverse effect on (i) the
business, results of operations, condition (financial or otherwise)
or prospects of the Obligors, in each case, taken as a whole, or
(ii) the validity or enforceability of any of the Loan Documents,
or the rights, remedies and benefits available to the parties
thereunder.

 
“Moody’s” means Moody’s Investors
Service, Inc.

“Net
Income” means for any period, the aggregate of all
amounts which would be included as net income on the consolidated
financial statements of the Borrower and its Subsidiaries for such
period, as determined in accordance with GAAP. 

“Net
Proceeds” means (a) with respect to the issuance of any
equity securities in excess of Twenty-Five Million Dollars
($25,000,000) (other than the issuance or exercise of stock options
in connection with employee incentive programs or employee benefit
programs or similar programs) of the Borrower or any of its
Subsidiaries, the excess of (i) the proceeds received by the
Borrower or any of its Subsidiaries from the sale or issuance to
any Person of any stock, warrants, convertible securities or
options or the exercise of any such warrants or options in excess
of Twenty-Five Million Dollars ($25,000,000), over (ii) all
reasonable and customary underwriting commissions and legal,
investment banking, brokerage and accounting and other professional
fees, sales commissions and disbursements actually incurred in
connection with such sale or issuance; (b) with respect to any
Asset Sale (other than sales of inventory or equipment or systems
built for customers in the ordinary course of the Borrower’s
business), the excess of (i) the proceeds received from any Asset
Sale over (ii) the reasonable cash costs of such Asset Sale, taxes
paid or payable as a result thereof, and all reasonable and
customary legal, investment banking, accounting, and other
professional fees, sales commissions or disbursements actually
incurred in connection with such Asset Sale which have not been
paid to Affiliates of the Borrower in connection therewith; and (c)
with respect to the incurrence or issuance of Indebtedness, the
excess of (i) the proceeds received from the incurrence or issuance
of any Indebtedness (except for Indebtedness permitted by
Section 8.2) of the Borrower or any of its Subsidiaries over
(ii) the reasonable costs incurred in such transaction, and all
reasonable and customary legal, investment banking, accounting, and
other professional fees, sales commissions or disbursements
actually incurred in connection with such transaction.

The amount of the proceeds
described in clauses (a) and (b) above may, at
the option of the Borrower and so long as no Default or Event of
Default shall have occurred and be continuing, be used by the
Borrower or a Subsidiary, as applicable, to purchase (x) (i) with
respect to the proceeds described in clause (a), assets
reasonably acceptable to the Lender and (ii) with respect to the
proceeds described in clause (b), substantially similar
assets useful in the business of the Borrower or such Subsidiary,
(with such assets or interests described in clause (x),
collectively, referred to as “Qualified
Assets”) within 180 days (with respect to the
proceeds described in clause (a)), and 360 days (with
respect to the proceeds described in clause (b)), after the
consummation (and with the proceeds) of such sale, conveyance or
disposition. In the event the Borrower or such Subsidiary elects to
exercise its right to purchase Qualified Assets with the Net
Proceeds pursuant to this provision, the Borrower shall deliver a
certificate of an Authorized Officer to the Lender within 120 days
following the receipt of Net Proceeds (with respect to the proceeds
described in clause (a) above) or within 180 days following
receipt of Net Proceeds (with respect to the proceeds described in
clause (b) above) setting forth the amount of the Net
Proceeds which the Borrower or such Subsidiary expects to use to
purchase Qualified Assets during such 180-day or 360-day period, as
applicable.  Any amount of such Net Proceeds which the
Borrower does not expect to use to purchase Qualified Assets shall
be paid to the Lender in accordance with Section 3.1(d) on
the 120th day following receipt of such Net Proceeds (with respect
to the proceeds described in clause (a) above) or the 180th
day following receipt of such Net Proceeds (with respect to the
proceeds described in clause (b) above).  If the
Borrower fails to deliver a certificate within such 120- or 180-day
period, as applicable, specifying the amount of Net Proceeds which
the Borrower expects to use to purchase Qualified Assets, all of
the Net Proceeds received shall be paid to the Lender in accordance
with Section 3.1(d) on the 120th day following receipt of
such Net Proceeds (with respect to the proceeds described in
clause (a) above) or the 180th day following receipt of such
Net Proceeds (with respect to the proceeds described in clause
(b) above).

If and to the extent that
the Borrower or such Subsidiary has elected to reinvest Net
Proceeds referred to in clauses (a) and (b) as
permitted above, then on the date which is 180 days or 360 days, as
appropriate, after the relevant sale, conveyance or disposition,
the Borrower shall deliver a certificate of an Authorized Officer
to the Lender certifying as to the amount and use of such Net 
Proceeds actually used to purchase Qualified Assets.  To the
extent such Net Proceeds are not so used to purchase Qualified
Assets then the Revolving Loans shall be repaid as set forth in
Section 3.1(d) and the Revolving Loan Commitment Amount,
pursuant to Section 2.2(b), shall be automatically reduced
by an amount equal to the aggregate amount of such proceeds not so
used to purchase Qualified Assets.

 
“Non-Excluded Taxes” means any Taxes other than
net income and franchise taxes imposed with respect to the Lender
by the Governmental Authority under the laws of which the Lender is
organized or in which it maintains its corporate office.

 
“Obligations” means all obligations (monetary or
otherwise, whether absolute or contingent, matured or unmatured) of
the Borrower and each other Obligor arising under or in connection
with this Agreement, each other Loan Document and any Hedging
Agreement between the Borrower and the Lender or an Affiliate of
the Lender.

“Obligor” means, as the
context may require, the Borrower and each other Person (other than
the Lender) obligated under any Loan Document.

“Operating
Expenses” means all research and development expenses
plus all sales, general and administrative expenses of the Borrower
and its Subsidiaries on a consolidated basis, excluding only
non-cash asset impairment charges, as such expenses are determined
under GAAP consistent with the Borrower’s historical
accounting practices and classifications of expenses and consistent
with the Annual Operating Plan.

“Organic
Document” means, relative to any Obligor, as applicable,
its certificate of incorporation, articles of organization,
by-laws, certificate of partnership, partnership agreement,
certificate of formation, limited liability agreement, operating
agreement and all shareholder agreements, voting trusts and similar
arrangements applicable to any of such Obligor’s partnership
interests, limited liability company interests or authorized shares
of Capital Stock.

“Other
Taxes” means any and all stamp, documentary or similar
taxes, or any other excise or property taxes or similar levies that
arise on account of any payment being made or being required to be
made hereunder or under the Revolving Note or from the execution,
delivery, registration, recording or enforcement of this Agreement
or any other Loan Document (but excluding income, franchise and
related taxes of the Lender).

“Overadvance” is defined in
Section 3.1(c).

“Patent Security
Agreement” means any Patent Security Agreement executed
and delivered by any Obligor in substantially the form of
Exhibit A to any Security Agreement, as amended, restated,
supplemented, or otherwise modified from time to time.

“PBGC”
means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

“Pension
Plan” means a “pension plan”, as such term is
defined in Section 3(2) of ERISA, which is subject to Title
IV of ERISA (other than a multiemployer plan as defined in Section
4001(a)(3) of ERISA), and to which the Borrower or any corporation,
trade or business that is, along with the Borrower, a member of a
Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of
Section 4063 of ERISA at any time during the preceding five years,
or by reason of being deemed to be a contributing sponsor under
Section 4069 of ERISA.

“Permitted
Acquisitions” means an acquisition (whether pursuant to
an acquisition of stock, assets or otherwise) by the Borrower or
any Guarantor of any Person or the assets of any Person which meets
all of the following conditions: (i) such Person is primarily
engaged in a similar line of business as the Borrower or such
Guarantor as of the Closing Date; (ii) all or substantially all of
the assets acquired or owned by the Person being acquired are
located in the United States and such Person (in the case of an
acquisition of Capital Stock) is organized under the laws of the
United States or a state thereof or the District of Columbia and
will become a Guarantor upon the consummation of such acquisition
and otherwise comply with Section 7.7; (iii) all or
substantially all of the Capital Stock or assets so acquired will
become subject to Liens created under the Loan Documents; (iv) with
respect to any single acquisition, or a series of related
acquisitions with a single or aggregate net purchase price of
greater than Two Million Dollars ($2,000,000), including any
assumed Indebtedness (with any non-cash consideration being valued
in good faith by senior management of the Borrower as set forth in
an Officer’s Certificate delivered to the Lender), the
Borrower has obtained the prior consent of the Lender (which
consent shall not be unreasonably withheld); (v) immediately before
and after giving effect to such acquisition, no Default or Event of
Default shall have occurred and be continuing or would result
therefrom (including under Section 8.1); (vi) the Borrower
shall have delivered to the Lender a Compliance Certificate for the
period of four (4) full Fiscal Quarters immediately preceding such
acquisition (prepared in good faith and in a manner and using such
methodology which is consistent with the most recent financial
statements delivered pursuant to Section 7.1) giving pro
forma effect in accordance with this Agreement to the consummation
of such acquisition and evidencing compliance with the covenants
set forth in Section 8.4; and (vii) the Lender shall have
received a certificate, dated a date reasonably acceptable to the
Lender, of an Authorized Officer of the Borrower certifying as to a
true and complete copy of each purchase agreement, and all other
documents and instruments delivered in connection with the
consummation of any Permitted Acquisitions and that are required to
be delivered pursuant to the terms of the relevant purchase
agreement and the Lender shall be reasonably satisfied with all
amendments, waivers or other modifications of, or other
forebearance to exercise any rights with respect to, any of the
terms or provisions of such purchase agreements and the exhibits
and schedules thereto.

“Permissive
Prepayments” is defined in Section 3.1.

“Person” means any natural
person, corporation, limited liability company, partnership, joint
venture, association, trust or unincorporated organization,
Governmental Authority or any other legal entity, whether acting in
an individual, fiduciary or other capacity.

“Plan”
means any Pension Plan or Welfare Plan.

“Pledge
Agreement” means, as the context may require, the
Borrower Pledge Agreement or the Subsidiary Pledge
Agreement.

“Pledged
Subsidiary” means, at any time, each Subsidiary in
respect of which the Lender has been granted, at such time, a
security interest in and to, or a pledge of, (i) any of the issued
and outstanding shares of Capital Stock of such Subsidiary, or (ii)
any intercompany notes of such Subsidiary owing to the Borrower or
another Subsidiary of the Borrower.

“Pro Forma
Financial Statements” is defined in Section
5.1(j).

“Qualified
Assets” is defined in the definition of “Net
Proceeds”.

“Quarterly
Maximum” is defined in Section 2.1.

“Quarterly
Payment Date” means the first Business Day of January,
April, July and October of each Fiscal Year.

“Regulation
S-X” means Regulation S-X promulgated by the
SEC.

“Reimbursement
Obligation” is defined in Section
2.6(c).

“Release” means a
“release”, as such term is defined in
CERCLA.

“Resource
Conservation and Recovery Act” means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as
amended.

“Restricted
Payment” means the declaration or payment of any dividend
(other than dividends payable solely in common stock of the
Borrower) on, or the making of any payment or distribution on
account of, or setting apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of any class of Capital Stock of
the Borrower or any Subsidiary or any warrants or options to
purchase any such Capital Stock, whether now or hereafter
outstanding, or the making of any other distribution in respect
thereof, either directly or indirectly, whether in cash or
property, obligations of the Borrower or any Subsidiary or
otherwise.

“Revenue” means, for the
Borrower and its Subsidiaries, revenue determined on a consolidated
basis in accordance with GAAP.

“Revolving
Loan” is defined in Section 2.1.

“Revolving Loan
Commitment” means the Lender’s obligation to make
Revolving Loans pursuant to Section 2.1.

“Revolving Loan
Commitment Amount” means, on any date, Fifty Million
Dollars ($50,000,000), as such amount may be reduced from time to
time pursuant to Sections 2.2 and 3.1.

“Revolving Loan
Commitment Termination Date” means December 31,
2003.  Upon such date, the Revolving Loan Commitment shall
terminate automatically and without any further action.

“Revolving Loan
Maturity Date” means December 31, 2005.

“Revolving
Note” means a promissory note of the Borrower payable to
the Lender, in the form of Exhibit I hereto (as such
promissory note may be amended, endorsed or otherwise modified from
time to time), evidencing the aggregate Indebtedness of the
Borrower to the Lender resulting from outstanding Revolving Loans,
and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.

“S&P” means Standard &
Poor’s Rating Services.

“SEC”
means the Securities and Exchange Commission.

“Security
Agreement” means, as the context may require, the
Borrower Security Agreement and the Subsidiary Security Agreement,
in each case as amended, restated, supplemented, or otherwise
modified from time to time.

“Solvent” means, with respect
to any Person, that as of the date of determination both (i) (a)
the then fair saleable value of the property sold as a going
concern of such Person is (y) greater than the total amount of
liabilities (including contingent liabilities but excluding amounts
payable under intercompany promissory notes) of such Person and (z)
not less than the amount that will be required to pay the probable
liabilities on such Person’s then existing debts as they
become absolute and matured considering all financing alternatives
and potential asset sales reasonably available to such Person; (b)
such Person’s capital is not unreasonably small in relation
to its business or any contemplated or undertaken transaction; and
(c) such Person does not intend to incur, or believe that it will
incur, debts beyond its ability to pay such debts as they become
due; and (ii) such Person is “solvent” within the
meaning given that term and similar terms under applicable laws
relating to fraudulent transfers and conveyances.  For
purposes of this definition, the amount of any contingent liability
at any time shall be computed as the amount that, in light of all
of the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or
matured liability, taking into account the amount that can
reasonably be expected to be reimbursed or paid by a Person that is
not affiliated with such Person.

“Spin-off” is defined in the
first paragraph in the Recitals to this Agreement.

“Stated
Amount” means on any date and with respect to a
particular Letter of Credit, the total amount then available to be
drawn under such Letter of Credit.

“Stated Expiry
Date” is defined in Section 2.6(a).

“Sub Debt
Documents” means, collectively, the loan agreements,
indentures, note purchase agreements, promissory notes, guarantees,
and other instruments and agreements evidencing the terms of
Subordinated Debt, as amended, supplemented, amended and restated
in accordance with Section 8.11.

“Subordinated
Debt” means unsecured Indebtedness of the Borrower
subordinated in right of payment to the Obligations pursuant to
documentation containing maturities, amortization schedules,
covenants, defaults, remedies, subordination provisions and other
terms reasonably satisfactory to the Lender.

“Subordinated
Notes” means, collectively, any promissory notes
evidencing Subordinated Debt, as such notes or instruments may be
amended, supplemented or otherwise modified from time to time in
accordance with Section 8.11.

“Subsidiary” means, with
respect to any Person, any corporation, limited liability company,
partnership or other entity of which more than fifty percent (50%)
of the outstanding securities (or other ownership interest) having
ordinary voting power to elect the board of directors, managers or
other voting members of the governing body of such corporation,
limited liability company, partnership or other entity
(irrespective of whether at the time securities (or other ownership
interest) of any other class or classes of such corporation,
limited liability company, partnership or other entity shall or
might have voting power upon the occurrence of any contingency) is
at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more other Subsidiaries of such
Person, or by one or more other Subsidiaries of such Person. 
Unless the context otherwise specifically requires, the term
“Subsidiary” shall be a reference to a Subsidiary of
the Borrower.

“Subsidiary
Guaranty” means the subsidiary guaranty executed and
delivered by each Guarantor pursuant to the terms of this
Agreement, substantially in the form of Exhibit J
hereto, as amended, restated, supplemented or otherwise modified
from time to time.

“Subsidiary
Pledge Agreement” means the Pledge Agreement executed and
delivered by each Subsidiary that in turn has any Subsidiaries,
substantially in the form of Exhibit K hereto, in each
case as amended, restated, supplemented or otherwise modified from
time to time.

“Subsidiary
Security Agreement” means, collectively, each Security
Agreement executed and delivered by any Subsidiary in favor of the
Lender pursuant to the terms of this Agreement, in substantially
the form of Exhibit L, in each case, as amended,
restated, supplemented or otherwise modified from time to
time.

“Synthetic
Lease” means any synthetic lease, tax retention operating
lease or off-balance sheet financing product where such transaction
is considered borrowed money Indebtedness for tax purposes but
which is classified as an operating lease pursuant to
GAAP.

“Taxes”
means any and all income, stamp or other taxes, duties, levies,
imposts, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, and all interest, penalties or similar
liabilities with respect thereto.

“Trademark
Security Agreement” means any Trademark Security
Agreement executed and delivered by any Obligor substantially in
the form of Exhibit B to any Security Agreement, as amended,
restated, supplemented or otherwise modified from time to
time.

“U.C.C.” means the Uniform
Commercial Code as from time to time in effect in the State of
California.

“United
States” or “U.S.” means the United
States of America, its fifty states and the District of
Columbia.

“Unutilized
Amount” is defined in Section 2.1(f).

“U.S.
Subsidiary” means any Subsidiary that is incorporated or
organized under the laws of the United States or a state thereof or
the District of Columbia.

  “Voting
Stock” means, with respect to any Person, Capital Stock
of any class or kind ordinarily having the power to vote for the
election of directors, managers or other voting members of the
governing body of such Person.

“Welfare
Plan” means a “welfare plan”, as such term is
defined in section 3(1) of ERISA.

“Weighted Average
Term Debt Rate” means the rate obtained by, for any date
of determination, multiplying the Lender’s average daily debt
outstanding on the Lender’s Credit Agreement by the average
daily effective interest rate under the Lender’s Credit
Agreement divided by the total number of days for that given
period.  The Effective Weighted Average Term Debt Rate shall
include, but not be limited to, the interest rate charged, the
non-utilization fees charged and any other debt financing costs
incurred by the Lender or charged by the Lender’s syndicated
bank group under the Lender’s Credit
Agreement. 

“wholly
owned” means any Subsidiary all of the outstanding common
stock (or similar equity interest) of which (other than any
director’s qualifying shares or investments by foreign
nationals mandated by applicable laws) is owned directly or
indirectly by the Borrower and the officers, directors or employees
of such Subsidiary.

Use of Defined
Terms.  Unless
otherwise defined or the context otherwise requires, terms for
which meanings are provided in this Agreement shall have such
meanings when used in each other Loan Document and the Disclosure
Schedule.

Cross-References.  Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or
Section are references to such Article or Section of this Agreement
or such other Loan Document, as the case may be, and, unless
otherwise specified, references in any Article, Section or
definition to any clause are references to such clause of such
Article, Section or definition.

Accounting and
Financial Determinations.    Unless otherwise specified,
all accounting terms used herein or in any other Loan Document
shall be interpreted, and all accounting determinations and
computations hereunder or thereunder (including under
Section 8.4) shall be made, in accordance with, those
generally accepted accounting principles
(“GAAP”) in effect on the Closing Date.
Unless otherwise expressly provided, all financial covenants and
defined financial terms shall be computed on a consolidated basis
for the Borrower and its Subsidiaries, in each case without
duplication.

COMMITMENTS, BORROWING AND ISSUANCE

PROCEDURES AND NOTES 

  Revolving
Loan Commitment/Availability.         On
the terms and subject to the conditions set forth in this
Agreement, from time to time on any Business Day occurring after
the Closing Date but prior to the Revolving Loan Commitment
Termination Date, the Lender will make loans
(“Revolving Loans”) to the Borrower in an
aggregate principal amount outstanding not to exceed at any one
time the Revolving Loan Commitment Amount less the Letter of Credit
Outstandings and the Lender Guaranty Disbursements; provided,
however, outstanding Revolving Loans may exceed the Revolving Loan
Commitment Amount if, and only to the extent that, a Lender
Guaranty Disbursement is made at a time when the sum of outstanding
Revolving Loans, plus Letter of Credit Outstandings, plus Lender
Guaranty Outstandings exceeds the Revolving Loan Commitment
Amount.  To the extent there is availability under the
Revolving Loan Commitment Amount at the time a Revolving Loan is
made on account of a Lender Guaranty Disbursement, such Revolving
Loan will reduce the availability on a dollar for dollar
basis.  Notwithstanding the foregoing, in no event shall the
Lender be obligated to make Revolving Loans (and for this purpose
only, Revolving Loans shall not include Revolving Loans made
pursuant to Section 2.6(b)) or to cause to be issued Letters
of Credit on behalf of the Borrower that collectively have an
aggregate principal amount and an aggregate undrawn face amount
exceeding Twelve Million Five Hundred Thousand Dollars
($12,500,000) during any one (1) of Lender’s Fiscal Quarters
(the “Quarterly Maximum”); provided,
however, for the third Fiscal Quarter in Fiscal Year 2002, such
Quarterly Maximum shall be Seventeen Million Dollars ($17,000,000),
provided however, that Ten Million Dollars ($10,000,000) of the
Fifteen Million Dollar ($15,000,000) Borrowing to be made on the
Closing Date and the One Hundred Fifty Three Thousand Seven Hundred
Fifty Nine and 72/100 Dollar ($153,759.72) Borrowing to be made on
the Closing Date (the “Interest
Borrowing”) shall not be applied toward such
Quarterly Maximum; provided further that Revolving Loans made
during a particular Fiscal Quarter may exceed the Quarterly Maximum
or the Allowed Quarterly Maximum (defined below) if, and only to
the extent, that a Revolving Loan made on account of a Lender
Guaranty Disbursement would cause the Revolving Loans plus the
Letters of Credit issued during such Fiscal Quarter to exceed the
Quarterly Maximum or Allowed Quarterly Maximum for such Fiscal
Quarter.  To the extent there is availability under the
Quarterly Maximum or the Allowed Quarterly Maximum at the time a
Revolving Loan is made on account of a Lender Guaranty
Disbursement, such Revolving Loan will reduce the availability of
the Quarterly Maximum or the Allowed Quarterly Maximum on a dollar
for dollar basis.  The Quarterly Maximum may be reduced as set
forth in the following paragraphs.

For the third and fourth Fiscal Quarters in Fiscal Year 2002 and
the first Fiscal Quarter of Fiscal Year 2003, no Borrowings will be
available if the Borrower was not in compliance with its covenants
set forth in Section 8.4 during the immediately preceding Fiscal
Quarter.

For each of the second, third and fourth Fiscal Quarters in
Fiscal Year 2003, the Quarterly Maximum shall be subject to the
following:  (i) if the Borrower’s EBITDA for the
immediately preceding Fiscal Quarter (or for the second preceding
Fiscal Quarter in accordance with Section 2.5) is less than
twenty-five percent (25%) of the EBITDA AOP Target for such
preceding Fiscal Quarter, then the Borrower is limited to
Borrowings of Five Million Dollars ($5,000,000) for such Fiscal
Quarter, provided that no Borrowings shall be available to the
Borrower unless the Borrower covenants in writing to the Lender to
restrict its Operating Expenses during the current Fiscal Quarter
to an amount not to exceed Five Million Dollars ($5,000,000), not
taking into account amounts allowed to be carried forward as
provided in Section 8.4(b) (provided further that if the Borrower
makes such a covenant and fails to comply with such covenant during
such Fiscal Quarter, then no Borrowings shall be available in the
next Fiscal Quarter); and (ii) if the Borrower’s EBITDA for
such preceding Fiscal Quarter is twenty-five percent (25%) of the
EBITDA AOP Target for such preceding Fiscal Quarter, the Borrower
may borrow up to fifty percent (50%) of the Quarterly Maximum (the
“Allowed Quarterly Maximum”).  The
Allowed Quarterly Maximum for such Fiscal Quarter shall increase
pro rata with the percentage increase that the Borrower’s
EBITDA for such preceding Fiscal Quarter was above twenty-five
percent (25%) of the EBITDA AOP Target for such preceding Fiscal
Quarter, but in no event to exceed the Quarterly Maximum. 
During the second Fiscal Quarter of Fiscal Year 2003, the following
shall apply in determining the portion of the Quarterly Maximum
available for Borrowing during such Fiscal Quarter:  The
EBITDA AOP Target for the first Fiscal Quarter of Fiscal Year 2003
is negative $2,169,000.  If the Borrower’s EBITDA is
negative $2,350,000 or better during the first Fiscal Quarter of
Fiscal Year 2003, then one hundred percent (100%) of the Quarterly
Maximum ($12,500,000) will be available for Borrowings during the
second Fiscal Quarter of Fiscal Year 2003.  If the
Borrower’s EBITDA is negative $3,000,000 during such Fiscal
Quarter, then fifty percent (50%) of the Quarterly Maximum or
$6,250,000 will be available for Borrowings during the second
Fiscal Quarter of Fiscal Year 2003.  If the Borrower’s
EBITDA is between negative $2,350,000 and negative $3,000,000
during such Fiscal Quarter, then the amount of the Quarterly
Maximum shall be determined by linear interpolation between fifty
percent (50%) of the Quarterly Maximum and one hundred percent
(100%) of the Quarterly Maximum.  No Borrowings shall be
available in the second Fiscal Quarter of Fiscal Year 2003 if
Borrower achieves negative EBITDA in excess of $3,000,000 during
the first Fiscal Quarter of Fiscal Year 2003.

Beginning with the second Fiscal Quarter of Fiscal Year 2003, if
the Borrower has negative EBITDA in any Fiscal Quarter, the
Borrower may not make any Borrowings in the Fiscal Quarter
immediately following.

If the Borrower or any of its Subsidiaries receives proceeds
from the sale or issuance to any Person of any stock, warrants or
options or the exercise of such warrants or options and such
proceeds are not used to prepay the Revolving Loans in accordance
with Section 3.1, the Borrower must exhaust such proceeds
before any Borrowings may be made hereunder.

Subject to Sections 2.6(b) and 2.7(b), no
Revolving Loan will be made after the Revolving Loan Commitment
Termination Date.  Subject to Section 2.1(a), no
Revolving Loan will be made which will result in the aggregate
principal amount of the Revolving Loans then outstanding exceeding
the Revolving Loan Commitment Amount less the Letter of Credit
Outstandings and the Lender Guaranty Disbursements, or which would
result, in any Fiscal Quarter, in Borrowings in excess of the
Quarterly Maximum.  However, notwithstanding the foregoing, to
the extent that the Borrower borrows less than the Quarterly
Maximum available for Borrowings (as determined in accordance with
Section 2.1) in any prior Fiscal Quarter in Fiscal Year 2002
(such unutilized Quarterly Maximum being referred to herein as the
“Unutilized Amount”), then such
Unutilized Amount shall be available, in addition to the Quarterly
Maximum, for Borrowings during such subsequent Fiscal Quarter in
Fiscal Year 2002.

Any amounts paid by the Borrower as a Permissive Prepayment
under Section 3.1 during any Fiscal Quarter, may be
reborrowed or issued as Letters of Credit in any subsequent Fiscal
Quarter notwithstanding that the Borrower has not delivered the
Compliance Certificate as required under Section 2.5, and
such amounts when so borrowed or issued as Letters of Credit shall
not be calculated as part of the Quarterly Maximum and shall not be
subject to reduction as provided in Section 2.1(c), provided
that, subject to Sections 2.6(b) and 2.7(b) no
Revolving Loan will be made after the Revolving Loan Commitment
Termination Date and, subject to Section 2.1(a),  no
Revolving Loan will be made which will result in the aggregate
principal amount of the Revolving Loans then outstanding exceeding
the Revolving Loan Commitment Amount less the Letter of Credit
Outstandings and Lender Guaranty Disbursements.

Reduction of the
Commitment Amounts. 
The Borrower may, from time to time on any Business Day occurring
after the Closing Date, voluntarily reduce the Revolving Loan
Commitment Amount or the Letter of Credit Commitment Amount, on the
Business Day so specified by the Borrower; provided,
however, that all such reductions shall require at least one
(1) Business Day’s prior notice to the Lender and be
permanent, and any partial reduction of the Revolving Loan
Commitment Amount shall be in a minimum amount of One Million
Dollars ($1,000,000) and in an integral multiple of Five Hundred
Thousand Dollars ($500,000).

Letter of Credit
Commitment.  On the
terms and subject to the conditions set forth in this Agreement,
from time to time on any Business Day occurring from and after the
Closing Date, but prior to the fifth (5th)
Business Day prior to the Revolving Loan Commitment
Termination Date, the Lender will (a) cause to be issued one or
more standby letters of credit (each a “Letter of
Credit”) for the account of the Borrower in the
Stated Amount requested by the Borrower on such day or (b) cause to
be extended the Stated Expiry Date of a standby Letter of Credit
previously issued hereunder to a date not later than the earlier of
(i) five (5) Business Days prior to the Revolving Loan Maturity
Date or (ii) twelve (12) months from the date of such extension or
issuance; provided, however, that with respect to Letters of Credit
with an aggregate undrawn face amount not exceeding Five Hundred
Thousand Dollars ($500,000), the Stated Expiry Date of such Letters
of Credit may be up to twenty-four (24) months following the
issuance or extension thereof.  No Letter of Credit will be
caused to be issued which, taking into account the issuance of such
Letter of Credit, would either cause the Letter of Credit
Outstandings to exceed the Letter of Credit Commitment Amount or
cause the aggregate principal amount of the Revolving Loans then
outstanding plus the Letter of Credit Outstandings and the Lender
Guaranty Disbursements to exceed the Revolving Loan Commitment
Amount.

Borrowing Procedure
for Revolving Loans. 
By delivering a Borrowing Request to the Lender on or before 11:00
a.m., California time, on a Business Day prior to the Revolving
Loan Commitment Termination Date, the Borrower may from time to
time irrevocably request, on not less five (5) Business Days’
notice and not more than seven (7) Business Days’ notice,
that a Borrowing of a Revolving Loan be made in a minimum amount of
One Million Dollars ($1,000,000) and an integral multiple of Five
Hundred Thousand Dollars ($500,000), subject to the Quarterly
Maximum and the other terms and conditions contained herein. 
On the terms and subject to the conditions of this Agreement, each
Borrowing of a Revolving Loan shall be made on the Business Day
specified in such Borrowing Request.  The Lender shall make
such funds available to transfer to the accounts the Borrower shall
have specified in its Borrowing Request.  The Borrower may not
request more than one (1) Borrowing (excluding Letters of Credit)
per calendar month; provided, for the month of August 2002, the
Borrower may request two (2) Borrowings, two (2) on the Closing
Date and one (1) additional Borrowing.

Borrowing Procedure
for Revolving Loans and Letters of Credit. The
Borrower may not request any Borrowing (and no Borrowing shall be
made) during any particular Fiscal Quarter of the Borrower after
sixty (60) days following the end of a prior Fiscal Quarter of the
Borrower prior to the Borrower’s completion and delivery to
the Lender of a Compliance Certificate that includes the
Borrower’s certification as to the Borrower’s
compliance for the preceding Fiscal Quarter.  During the first
sixty (60) days of any of the Borrower’s Fiscal Quarters,
prior to the Borrower’s completion and delivery of the
Compliance Certificate for the preceding Fiscal Quarter, the
availability under the Revolving Loan Commitment and the Letter of
Credit Commitment will be based upon the Borrower’s
Compliance Certificate for the second preceding Fiscal Quarter.

Letters of
Credit. 

Issuance Procedures.  By delivering to the Lender an
Issuance Request on or before 12:00 noon, New York time, on a
Business Day, the Borrower may from time to time irrevocably
request on not less than seven (7) nor more than fifteen (15)
Business Days’ notice, that the Lender cause to be issued, or
cause to be extended the Stated Expiry Date of, as the case may be,
an irrevocable Letter of Credit in such form as may be requested by
the Borrower and approved by the Lender and the issuer of the
Letter of Credit, solely for the purposes described in Section
7.8.  Borrower agrees that it shall work directly with the
issuing bank in connection with the issuance of any Letter of
Credit.  Each Letter of Credit shall by its terms be stated to
expire on a date (its “Stated Expiry
Date”) no later than the earlier to occur of (i) five
(5) Business Days prior to the Revolving Loan Maturity Date or (ii)
twelve (12) months from the date of its issuance; provided,
however, that with respect to Letters of Credit with an
aggregate undrawn face amount not exceeding Five Hundred Thousand
Dollars ($500,000), the Stated Expiry Date of such Letters of
Credit may be up to twenty-four (24) months following the issuance
or extension thereof. No Letter of Credit will be caused to be
issued which, taking into account the issuance of such Letter of
Credit, would either cause the Letter of Credit Outstandings to
exceed the Letter of Credit Commitment Amount or cause the
aggregate principal amount of the Revolving Loans then outstanding
plus the Letter of Credit Outstandings to exceed the Revolving Loan
Commitment Amount.

Disbursements.  The Lender will notify the Borrower,
promptly upon the Lender receiving knowledge thereof, of the
presentment for payment of any Letter of Credit, together with
notice of the date (the “Disbursement
Date”) such payment shall have been or be made (each
such payment, a “Disbursement”). 
Prior to 1:00 p.m., California time, on the first (1st)
Business Day following the Lender giving written notice to the
Borrower of the Disbursement Date, the Borrower will reimburse the
Lender for all amounts which the Lender has disbursed to reimburse
the issuing bank in connection with such issuing bank’s honor
of a draw under such Letter of Credit, together with interest
thereon at a rate per annum equal to the Weighted Average Term Debt
Rate for the period from the Disbursement Date through the date of
such reimbursement (a “Lender
Disbursement”).  Without limiting in any way the
foregoing and notwithstanding anything to the contrary contained
herein or in any separate application for any Letter of Credit, the
Borrower hereby acknowledges and agrees that it shall be obligated
to reimburse the Lender upon each Lender Disbursement of a Letter
of Credit, and it shall be deemed to be the obligor for purposes of
each such Letter of Credit issued pursuant hereto (whether the
account party on such Letter of Credit is the Borrower or a
Subsidiary).  In the event the Borrower fails to so reimburse
the Lender for any Lender Disbursement, the Lender shall be deemed
to have made, without further notice to the Borrower, a Revolving
Loan (notwithstanding that the Revolving Loan Commitment
Termination Date may have passed), and interest shall accrue from
the Disbursement Date, in the principal amount equal to the amount
drawn under such Letter of Credit, and, for this purpose, the
conditions precedent in Article V or any other Borrower
requirements hereunder shall not apply.  Any Revolving Loan
deemed to be made pursuant to this Section 2.6(b) and
advanced after the Revolving Loan Maturity Date shall be
immediately due and payable.

Reimbursement.  The obligation (a
“Reimbursement Obligation”) of the
Borrower under Section 2.6(b) to reimburse the Lender with
respect to each Lender Disbursement (including interest
thereon)  shall be absolute and unconditional under any and
all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against
the Lender or the issuer of the Letter of Credit, including any
defense based upon the failure of any Disbursement to conform to
the terms of the applicable Letter of Credit (if, in the
Lender’s or the issuer’s good faith opinion, such
Disbursement is determined to be appropriate) or any
non-application or misapplication by the beneficiary of the
proceeds of such Letter of Credit, except to the extent of the
Lender’s and the issuer’s gross negligence or willful
misconduct.

Deemed Disbursements.  Upon the occurrence and
during the continuation of any Event of Default under Section
9.1(i) or upon notification by the Lender to the Borrower of
its obligations under this Section following the occurrence and
during the continuation of any other Event of Default:

the aggregate Stated Amount of all Letters of Credit shall,
without demand upon or notice to the Borrower or any other Person,
be deemed to have been paid or disbursed by the Lender
(notwithstanding that such amount may not in fact have been paid or
disbursed); and

the Borrower shall be immediately obligated to reimburse the
Lender for the amount deemed to have been so paid or disbursed.

Amounts payable by the
Borrower pursuant to this Section shall be deposited in immediately
available funds with the Lender and held as collateral security for
the Reimbursement Obligations and all other Obligations.  When
all Events of Default giving rise to the deemed disbursements under
this Section have been cured or waived, the Lender shall, if no
other Events of Default is then existing, return to the Borrower
all amounts then on deposit with the Lender pursuant to this
Section which have not been applied to the satisfaction of the
Reimbursement Obligations and/or all other Obligations.

Nature of Reimbursement Obligations.  The Borrower
and each other Obligor shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the beneficiary
thereof.  Neither the Lender nor any other issuer of the
Letter of Credit (except to the extent of its own gross negligence
or willful misconduct) shall be responsible for:

the form, validity, sufficiency, accuracy, genuineness or legal
effect of any Letter of Credit or any document submitted by any
party in connection with the application for and issuance of a
Letter of Credit, even if it should in fact prove to be in any or
all respects invalid, insufficient, inaccurate, fraudulent or
forged;

the form, validity, sufficiency, accuracy, genuineness or legal
effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits
thereunder or the proceeds thereof in whole or in part, which may
prove to be invalid or ineffective for any reason;

failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;

errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or
otherwise; or

any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a
Letter of Credit.

None of the foregoing
shall affect, impair or prevent the vesting of any of the rights or
powers granted to the Lender hereunder.  In furtherance and
not in limitation or derogation of any of the foregoing, any action
taken or omitted to be taken by the Lender in good faith (and not
constituting gross negligence or willful misconduct) shall be
binding upon each Obligor, and shall not put the Lender under any
resulting liability to any Obligor.

Lender
Guaranties. 

Lender Guaranties.  The Lender has issued guaranties
for those obligations of the Borrower set forth on Item 2.7 of the
Disclosure Schedule.

Disbursements.  The Lender will notify the Borrower
promptly of any demand for payment under a Lender Guaranty,
together with notice of the date (the “Lender Guaranty
Disbursement Date”) such payment shall be made (each
such payment, a “Lender Guaranty
Disbursement”).  Subject to the terms and
provisions of such Lender Guaranty and applicable laws, the Lender
shall make such payment to the beneficiary (or its designee) of
such Lender Guaranty.  Each Lender Guaranty Disbursement and
any obligation of the Borrower for payment assumed by the Lender
shall be deemed to have made, without further notice to the
Borrower, as a Revolving Loan (notwithstanding that the Revolving
Loan Commitment Termination Date may have passed) in the principal
amount equal to the amount demanded of and paid by the Lender under
such Lender Guaranty, and, for this purpose, the conditions
precedent in Article V or any other Borrower requirements shall not
apply. 

Reimbursement.  The obligation (a
“Lender Guaranty Reimbursement
Obligation”) of the Borrower under Section
2.7(b) to reimburse the Lender with respect to each Lender
Guaranty Disbursement (including interest thereon)  shall be
absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Lender,
including any defense based upon the failure of any Lender Guaranty
Disbursement to conform to the terms of the applicable Lender
Guaranty (if, in the Lender’s good faith opinion, such Lender
Guaranty Disbursement is determined to be appropriate) or any
non-application or misapplication by the beneficiary of the
proceeds of such Lender Guaranty Disbursement, except to the extent
of the Lender’s gross negligence or willful misconduct.

Deemed Disbursements.  Upon the occurrence and
during the continuation of any Event of Default under Section
9.1(i) or upon notification by the Lender to the Borrower of
its obligations under this Section following the occurrence and
during the continuation of any other Event of Default:

the aggregate amount guarantied under all Lender Guaranties
shall, without demand upon or notice to the Borrower or any other
Person, be deemed to have been paid or disbursed by the Lender
(notwithstanding that such amount may not in fact have been paid or
disbursed); and

the Borrower shall be immediately obligated to reimburse the
Lender for the amount deemed to have been so paid or disbursed.

Amounts payable by the
Borrower pursuant to this Section shall be deposited in immediately
available funds with the Lender and held as collateral security for
the Lender Guaranty Reimbursement Obligations and all other
Obligations.  Provided, however, if the Borrower can provide
adequate assurances that the Lender Guaranties are not reasonably
likely to be drawn upon, the Lender may, in its sole and absolute
discretion, waive the Borrower’s requirements under this
Section 2.7(d).  When all Events of Default giving rise
to the deemed disbursements under this Section have been cured or
waived, the Lender shall, if no other Event of Default is then
existing, return to the Borrower all amounts then on deposit with
the Lender pursuant to this Section which have not been applied to
the satisfaction of the Lender Guaranty Reimbursement Obligations
and/or all other Obligations.

Nature of Lender Guaranty Reimbursement
Obligations.  The Borrower and each other Obligor shall
assume all risks of the acts, omissions or misuse of any Lender
Guaranty by the beneficiary thereof.  The Lender (except to
the extent of its own gross negligence or willful misconduct) shall
not be responsible for:

the form, validity, sufficiency, accuracy, genuineness or legal
effect of any Lender Guaranty, even if it should in fact prove to
be in any or all respects invalid, insufficient, inaccurate or
fraudulent;

the form, validity, sufficiency, accuracy, genuineness or legal
effect of any instrument transferring or assigning or purporting to
transfer or assign a Lender Guaranty or the rights or benefits
thereunder or the proceeds thereof in whole or in part, which may
prove to be invalid or ineffective for any reason;

failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Lender Guaranty;

errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or
otherwise; or

any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Lender Guaranty
Disbursement under a Lender Guaranty.

Release of Lender Guaranties.  The Borrower shall
use reasonable efforts to obtain the Lender’s full and
unconditional release from the Lender Guaranties as soon as
reasonably possible, but in any event prior to the Revolving Loan
Maturity Date.  In the event that one or more of the Lender
Guaranties is outstanding on the Revolving Loan Maturity Date, if
all of the other Obligations hereunder and under each of the other
Loan Documents have been fully and indefeasibly satisfied, and no
Event of Default then exists, neither this Agreement nor the other
Loan Documents shall govern or apply to Lender Guaranty
Reimbursement Obligations of the Borrower with respect to Lender
Guaranty Disbursements advanced after the Revolving Loan Maturity
Date, provided that the Borrower shall have entered into a
reimbursement agreement and provided collateral to the Lender to
secure its reimbursement obligations under the Lender Guaranties in
form and amount reasonably satisfactory to the Lender.

Disclaimer.  None of the
foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to the Lender hereunder.  In
furtherance and not in limitation or derogation of any of the
foregoing, any action taken or omitted to be taken by the Lender in
good faith (and not constituting gross negligence or willful
misconduct) shall be binding upon each Obligor, and shall not put
the Lender under any resulting liability to any Obligor.

Guaranty Fee.  The
Borrower shall pay the Lender a monthly fee equal to ten percent
(10%) of the monthly payment amount guaranteed pursuant to the
Lender Guaranties then outstanding and ten percent (10%) of the
monthly payments of any kind made by the Lender under the leases
entered into by the Lender on behalf of the Borrower identified on
Item 2.9 of the Disclosure Schedule (collectively, the
“Guaranty Fee”).  The Borrower shall
pay the Guaranty Fee quarterly in arrears on the last day of each
Fiscal Quarter.  If the Borrower fails to pay any Guaranty Fee
when due, then the amount unpaid shall be deemed to be made,
without further notice to the Borrower, as a Revolving Loan.

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

Repayments and
Prepayments.  The
Borrower shall repay in full the unpaid principal amount of each
Revolving Loan upon the Revolving Loan Maturity Date.  Prior
thereto, payments and prepayments of Revolving Loans shall or may
be made as set forth below.

The Borrower shall make the following principal reductions on
the last day of each Fiscal Quarter during each of the following
periods:

(i)        
during Fiscal Year
2002           
None

(ii)       
during Fiscal Year
2003           
None

(iii)       during
Fiscal Year
2004           
quarterly payments equal to thirteen and three-quarters percent
(13.75%) of the outstanding principal balance of the Revolving
Loans as of December 31, 2003

(iv)       during
Fiscal Year
2005           
quarterly payments equal to twenty-five percent (25%) of the
outstanding principal balance of the Revolving Loans as of December
31, 2004

(iv)       on
December 31,
2005            
one hundred percent (100%) of the then outstanding principal
balance of the Revolving Loans and all accrued interest

           
Repayments under Section 3.1(a) shall permanently reduce the
Revolving Loan Commitment Amount in the amount of each required
principal payment as of the date that such payment is required to
be made, and the Letter of Credit Commitment Amount shall be
correspondingly reduced.

From time to time on any Business Day, the Borrower may make a
voluntary prepayment, in whole or in part, of the outstanding
principal amount of any Revolving Loan, provided,
however, that:

all such voluntary prepayments shall require at least three (3)
but no more than seven (7) Business Days’ prior written
notice to the Lender; and

all such voluntary partial prepayments shall be in an aggregate
minimum amount of One Million Dollars ($1,000,000) and an integral
multiple of Five Hundred Thousand Dollars ($500,000).

Subject to Section 2.1(a), on each date when the sum of
the aggregate outstanding principal amount of all Revolving Loans
exceeds the Revolving Loan Commitment Amount (as it may be reduced
from time to time, including pursuant to Section 2.2) less
the Letter of Credit Outstandings and the Lender Guaranty
Disbursements (the amount of such excess being an
“Overadvance”), the Borrower shall make a
mandatory prepayment of the Overadvance, together with accrued
interest thereon.

Concurrently with the receipt (or deemed receipt) of any Net
Proceeds or any insurance proceeds or condemnation proceeds (or
after the expiration of any period designated for the purchase of
Qualified Assets, if appropriate) by the Borrower or any of its
Subsidiaries, the Borrower shall make a mandatory prepayment of the
Revolving Loans in an amount equal to one hundred percent (100%) of
such Net Proceeds (provided, however, the Borrower shall only be
required to make a mandatory prepayment of the Revolving Loans in
an amount equal to fifty percent (50%) of the Net Proceeds
described in clause (a) of the definition of Net Proceeds) which
has not been used to purchase Qualified Assets, insurance proceeds
or condemnation proceeds to be applied as set forth in Section
3.2.  Provided, however, the Borrower may, with the
Lender’s prior written consent, which consent shall not be
unreasonably withheld, use insurance proceeds for the purchase of
Qualified Assets or the rebuilding of any structure to which the
insurance proceeds relate, upon conditions reasonably acceptable to
the Lender.  The Borrower will, prior to prepaying the
Revolving Loans, give the Lender telephone notice (promptly
confirmed in writing) thereof.

On or before the last Business Day of each Fiscal Quarter of the
Borrower, the Borrower shall make a mandatory prepayment of the
Revolving Loans in an amount equal to the aggregate amount of cash
and cash equivalents in the Borrower’s and its
Subsidiaries’ accounts, as of the last day of such Fiscal
Quarter in excess of Five Million Dollars ($5,000,000) (excepting
Net Proceeds which are not subject to mandatory prepayment pursuant
to Section 3.1(d) above), however, such mandatory prepayment
shall not exceed the amount of the Revolving Loans outstanding at
that time.  Such mandatory prepayment shall be made by wire
transfer of immediately available funds.

The Borrower shall make a scheduled repayment of the aggregate
outstanding principal amount of the Revolving Loans immediately
upon any acceleration of the Revolving Loan Maturity Date pursuant
to Section 9.2 or Section 9.3.

Each prepayment of the
Revolving Loans made pursuant to this Section shall be without
premium or penalty, unless as a result of such prepayment the
Lender uses the proceeds of such prepayment to repay or prepay
indebtedness outstanding under the Lender’s Credit Agreement
(in the Lender’s sole discretion) and the Lender is thereby
subject to a premium or penalty under the Lender’s Credit
Agreement, in which case the Borrower shall promptly reimburse the
Lender for such premium or penalty.  No prepayment of
principal of the Revolving Loans pursuant to clause (b),
(c), (d) or (e) shall cause a reduction in the
Revolving Loan Commitment Amount and such amounts may be reborrowed
prior to the Revolving Loan Commitment Termination Date. 
Prepayments under clauses (b), (d) or (e)
shall be referred to herein as the “Permissive
Prepayments”.

Application. 
Each prepayment or repayment of the principal of the Revolving
Loans shall be made together with accrued interest in accordance
with Section 3.5 and shall be applied, to the extent of such
prepayment or repayment, first, to accrued interest and then to the
principal amount thereof.

Interest
Rate.   Except as specifically provided in
the next succeeding sentence, the Revolving Loans shall accrue
interest at the Weighted Average Term Debt Rate plus three percent
(3.0%) per annum, or the maximum interest rate allowable by law, if
and to the extent applicable, whichever is lower.  The
Interest Borrowing shall not bear or accrue interest on the
principal amount thereof during the period from the Closing Date
through December 31, 2002.  The outstanding principal amount
of the Interest Borrowing shall commence to bear interest on
January 1, 2003, and shall thereafter accrue interest at the rates
applicable to other Revolving Loans under this Agreement.

Default
Rate.   Upon the
occurrence and during the continuation of an Event of Default, the
Borrower shall pay interest on all Obligations, including, without
limitation, overdue interest and other amounts due under this
Agreement, at a rate per annum equal to two percent (2.0%) above
the otherwise applicable interest rate.

Interest Payment
Dates.  
Interest accrued on each Revolving Loan shall be payable, without
duplication:

on the Revolving Loan Maturity Date;

on the date of any payment or prepayment, in whole or in part,
of principal outstanding on any Revolving Loan, on the principal
amount so paid or prepaid;

beginning as of January of Fiscal Year 2003, on the third
Business Day of each month after the Lender provides the Borrower
notice of the amount of the interest payment due, including
information as to the applicable interest rate; provided, however,
the cumulative amount of all interest accrued on the outstanding
principal amount of the Revolving Loans for the period from the
Closing Date through December 31, 2002 (the “Cumulative
2002 Interest”) shall automatically, provided no
Default of Event of Default has occurred and is continuing,
constitute a Borrowing on and as of January 1, 2003 in the
principal amount equal to the Cumulative 2002 Interest and shall
thereafter accrue interest at the rates applicable to other
Borrowings, and shall correspondingly reduce the amount available
under the Revolving Loan Commitment Amount (but shall not be deemed
a Borrowing for purposes of determining the number of Borrowings
that the Borrower may request under this Agreement in any given
month or be counted toward the Quarterly Maximum in any given
month).  The Lender may provide notice of the interest payment
due by facsimile or electronic mail addressed to the Chief
Financial Officer of the Borrower and notice shall be deemed given
when such notice is sent by the Lender;

on that portion of any Revolving Loans the Revolving Loan
Maturity Date of which is accelerated pursuant to Section
9.2 or Section 9.3, immediately upon such
acceleration.

Interest accrued on
Revolving Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is
due and payable (whether on the Revolving Maturity Date, any
scheduled date for repayment of the Revolving Loans, upon
acceleration or otherwise) shall be payable upon demand.

Letter of Credit
Fees.   The
Borrower agrees to pay to the Lender, on demand, any fees or
expenses, of any kind, reasonably incurred by the Lender in
securing the issuance of any Letter of Credit hereunder, whether
pursuant to Lender’s Credit Agreement or otherwise.

TAXES AND OTHER PROVISIONS

Increased Capital
Costs.  If any change
in, or the introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in of, any law or regulation, directive,
guideline, decision or request (whether or not having the force of
law) of any court, central bank, regulator or other Governmental
Authority affects or would affect the amount of capital required or
expected to be maintained by the lenders under the Lender’s
Credit Agreement or any Person controlling such lenders, and costs
or expenses or other amounts associated with such increased capital
costs are passed on to the Lender under Lender’s Credit
Agreement, then, in any such case upon notice from time to time by
the Lender to the Borrower, the Borrower shall immediately pay
directly to the Lender additional amounts (or in the case of
amounts passed on to the Lender under Lender’s Credit
Agreement, the pro rata portion (defined as a percentage equal to
the percentage obtained by the Revolving Loan Commitment Amount
divided by the amount available to the Lender under Lender’s
Credit Agreement) of such amounts) sufficient to compensate the
Lender for such increased capital costs.  A statement of the
Lender, or a statement provided to the Lender under Lender’s
Credit Agreement, as to any such additional amount or amounts
(including calculations thereof in reasonable detail) shall be
rebuttably presumptive evidence of the amount of such loss or
expense.  In determining such amount, the Lender may use any
method of averaging and attribution that it (in its sole and
absolute discretion) shall deem applicable.

Taxes.   

Any and all payments by the Borrower and each other Obligor
under this Agreement and each other Loan Document shall be made
without setoff, counterclaim or other defense, and free and clear
of, and without deduction or withholding for or on account of, any
Taxes, except to the extent such Taxes are required by law to be
deducted or withheld.  In the event that any Taxes are
required by law to be deducted or withheld from any payment
required to be made by the Borrower or any other Obligor to or on
behalf of the Lender hereunder or under any other Loan Document,
then:

if such Taxes are Non-Excluded Taxes, the amount of such payment
shall be increased as may be necessary such that such payment is
made, after withholding or deduction for or on account of such
Taxes, in an amount that is not less than the amount provided for
herein or in such other Loan Document; and

the Borrower shall withhold the full amount of such Taxes from
such payment (as increased pursuant to clause (a) (i)) and
shall pay such amount to the Governmental Authority imposing such
Taxes in accordance with applicable law.

In addition, the Borrower and each other Obligor shall pay any
and all Other Taxes imposed to the relevant Governmental Authority
imposing such Other Taxes in accordance with applicable law.

As promptly as practicable after the payment of any Taxes or
Other Taxes, and in any event within forty-five (45) days of any
such payment being due, the Borrower shall furnish to the Lender a
copy of an official receipt (or a certified copy thereof)
evidencing the payment of such Taxes or Other Taxes.

The Borrower shall indemnify the Lender for any Non-Excluded
Taxes and Other Taxes levied, imposed or assessed on (and whether
or not paid directly by) the Lender (and whether or not such
Non-Excluded Taxes or Other Taxes are correctly or legally asserted
by the relevant Governmental Authority) arising out of this
Agreement.  Promptly upon having knowledge that any such
Non-Excluded Taxes or Other Taxes have been levied, imposed or
assessed, and promptly upon notice thereof by the Lender, the
Borrower shall pay such Non-Excluded Taxes or Other Taxes directly
to the relevant Governmental Authority (provided, however,
that the Lender shall be under no obligation to provide any such
notice to the Borrower).   In addition, the Borrower
shall indemnify the Lender for any incremental Taxes that may
become payable by the Lender as a result of any failure of the
Borrower to pay any Taxes when due to the appropriate Governmental
Authority or to deliver to the Lender, pursuant to clause
(c), documentation evidencing the payment of Taxes or Other
Taxes.  With respect to indemnification for Non-Excluded Taxes
and Other Taxes actually paid by the Lender or the indemnification
provided in the immediately preceding sentence, such
indemnification shall be made within thirty (30) days after the
date the Lender makes written demand therefor.  The Borrower
acknowledges that any payment made to the Lender or to any
Governmental Authority in respect of the indemnification
obligations of the Borrower provided in this clause shall
constitute a payment in respect of which the provisions of this
clause shall apply.

Payments,
Computations, etc.  Unless otherwise expressly provided,
all payments by the Borrower pursuant to this Agreement, the
Revolving Note, or any other Loan Document shall be made by the
Borrower to the Lender.  All such payments required to be made
to the Lender shall be made, without setoff, deduction or
counterclaim, not later than 1:00 p.m., California time, on the
date due, in same day or immediately available funds, to such
account as the Lender shall specify from time to time by notice to
the Borrower.  Funds received after that time shall be deemed
to have been received by the Lender on the next succeeding Business
Day. All interest and fees shall be computed on the basis of the
actual number of days (including the first day but excluding the
last day) occurring during the period for which such interest or
fee is payable over a year comprised of 360 days.  Whenever
any payment to be made shall otherwise be due on a day which is not
a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in
computing interest and fees, if any, in connection with such
payment.

Setoff.  The
Lender shall, upon the occurrence and during the continuance of any
Event of Default described in Section 9.1(i), have the right
to appropriate and apply to the payment of the Obligations (whether
or not then due), and (as security for such Obligations) the
Borrower hereby grants to the Lender a continuing security interest
in, any and all balances, credits, deposits, accounts or moneys of
the Borrower then or thereafter maintained with the Lender or any
Affiliate of the Lender.  The Lender agrees promptly to notify
the Borrower after any such setoff and application made by the
Lender or its Affiliate; provided, however, that the
failure to give such notice shall not affect the validity of such
setoff and application.  The rights of the Lender under this
Section are in addition to other rights and remedies (including
other rights of setoff under applicable law or otherwise) which the
Lender may have.  Notwithstanding the foregoing, nothing in
this Agreement or other Loan Documents is intended to affect rights
or obligations or apply in any way to agreements other than the
Loan Documents.

CONDITIONS TO CREDIT EXTENSIONS

Conditions
Precedent to the Effectiveness of this Agreement.  This Agreement shall become
effective on the date when each of the conditions precedent set
forth in this Section 5.1 have been satisfied (unless waived
by the Lender or unless the deadline for delivery has been extended
by the Lender).  All such conditions may occur
contemporaneously but shall be deemed to have occurred
simultaneously.

Execution of Agreement. The Lender shall have received
this Agreement, duly executed and delivered on behalf of the
Borrower.

Resolutions, etc.  The Lender shall have received
from the Borrower and each Guarantor, (i) a copy of a good standing
certificate, dated a date reasonably near the Closing Date, and
(ii) a certificate, dated the Closing Date, duly executed and
delivered by such Person’s Secretary or Assistant Secretary,
as to:

resolutions of such Person’s Board of Directors then in
full force and effect authorizing the execution, delivery and
performance of each Loan Document to be executed by such Person and
the transactions contemplated by the Loan Documents to be performed
by such Person;

the incumbency and signatures of those of its officers,
authorized to act with respect to each Loan Document to be executed
by such Person; and

the full force and validity of each Organic Document of such
Person and copies thereof;

upon which certificates
the Lender may conclusively rely until it shall have received a
further certificate of the Secretary or Assistant Secretary, of
such Person, canceling or amending its prior
certificate.

Closing Date Certificate.  The Lender shall have
received a certificate (the “Closing Date
Certificate”), dated the Closing Date and duly
executed and delivered by an Authorized Officer of the Borrower, in
which certificate the Borrower shall agree and acknowledge that the
statements made therein shall be deemed to be true and correct
representations and warranties in all material respects of the
Borrower as of such date, and, at the time each such certificate is
delivered, such statements shall in fact be true and correct in all
material respects.  All documents and agreements required to
be appended to the Closing Date Certificate shall be in form and
substance reasonably satisfactory to the Lender.

Revolving Note.  The Lender shall have received the
Revolving Note.

Pledge Agreements.  The Lender shall have
received,

the Borrower Pledge Agreement (which Pledge Agreement shall be
substantially in accordance with the provisions of Section
7.7(b)), dated as of the Closing Date, duly executed and
delivered by an Authorized Officer of the Borrower, together
with:

certificates evidencing all of the issued and outstanding shares
of Capital Stock of each of its Subsidiaries, except to the extent
such pledge would be violative of applicable law, owned by the
Borrower, which certificates shall be accompanied by undated stock
powers duly executed in blank; and

all Pledged Notes (as defined in the Borrower Pledge Agreement),
if any, evidencing Indebtedness of any of the Borrower’s
Subsidiaries payable to the Borrower duly endorsed to the order of
the Lender;

the Subsidiary Pledge Agreement (which Pledge Agreement shall be
substantially in accordance with the provisions of Section
7.7(b)), dated as of the Closing Date, duly executed and
delivered by an Authorized Officer of each Guarantor, together
with:

certificates evidencing all of the issued and outstanding shares
of Capital Stock owned by such Guarantor which certificates shall
be accompanied by undated stock powers duly executed in blank;
and

all Pledged Notes (as defined in the Subsidiary Pledge
Agreement), if any, evidencing Indebtedness payable to a Guarantor
duly endorsed to the order of the Lender; and

the Lender and its counsel shall be satisfied that  the
Lien granted to the Lender in the collateral described above is a
first priority (or local equivalent thereof) security interest;
and  no Lien exists on any of the collateral described above
other than the Lien created in favor of the Lender pursuant to a
Loan Document.

Security Agreements.  The Lender shall have received
the Borrower Security Agreement, duly executed by the Borrower, and
the Subsidiary Security Agreement, executed by each Guarantor, each
dated as of the Closing Date, together with:

copies of Uniform Commercial Code financing statements (Form
UCC-1), naming the applicable Obligor as a debtor and the Lender as
the secured party, or other similar instruments or documents, to be
filed under the Uniform Commercial Code of all jurisdictions as may
be necessary or, in the opinion of the Lender, desirable to perfect
the security interests of the Lender pursuant to the applicable
Security Agreement;

copies of proper Uniform Commercial Code Form UCC-2 termination
statements necessary to release all Liens and other rights of any
Person in any collateral described in such Security Agreement
previously granted by any Person, together with evidence that the
Borrower or applicable Obligor has the authority to file such
termination statements, and such other Uniform Commercial Code Form
UCC-2 termination statements as the Lender may reasonably request
from such Obligors; and

certified copies of Uniform Commercial Code search results, or a
similar search report certified by a party acceptable to the
Lender, dated a date reasonably near to the Closing Date, listing
all effective financing statements which name any Obligor (under
its present name and any previous names) as the debtor and which
are filed in the jurisdictions in which filings were made pursuant
to clause (a) above, together with copies of such financing
statements.

the Lender and its counsel shall be satisfied that the Lien
granted to the Lender in the collateral described above is a first
priority (or local equivalent) security interest (subject to the
filing of the documents described in clause f(i) above); and
no other effective Lien (other than Liens permitted under
Section 8.3) exists on any of the collateral described above
other than the Lien created in favor of the Lender pursuant to a
Loan Document.

Patent Security Agreement, Copyright Security Agreement and
Trademark Security Agreement.  The Lender shall have
received the Patent Security Agreement, the Copyright Security
Agreement and the Trademark Security Agreement, as applicable, each
dated as of the Closing Date, duly executed and delivered by the
Borrower and any Subsidiary of the Borrower that is required to
execute and deliver such Loan Documents pursuant to this
Agreement.

Deposit Account Control Agreements.  The Lender
shall have received a Deposit Account Control Agreement, in form
and substance satisfactory to the Lender, dated as of the Closing
Date, duly executed and delivered by the Borrower and any
Subsidiary of the Borrower that is required to execute such Loan
Documents pursuant to this Agreement and each financial institution
where Borrower or any Subsidiary maintains cash deposits.

Collateral Assignment of Rights under License
Agreement.  The Lender shall have received a Collateral
Assignment of Rights Under License Agreement dated as of the
Closing Date, duly executed and delivered by SB OperatingCo,
LLC.

Financial Information, etc.  The Lender shall have
received financial statements of the Borrower (including notes
thereto), consisting of (i) consolidated financial statements of
the Borrower and its Subsidiaries including balance sheets as of
the end of each of the last two Fiscal Years and income and cash
flow statements as of the end of and for each of the last three
Fiscal Years, in each case audited by independent public
accountants of recognized national standing and prepared in
conformity with GAAP, together with the report thereon which shall
not contain an Impermissible Qualification; (ii) comparable
unaudited historical and pro forma interim financial statements
covering all quarterly or other appropriate periods subsequent to
the Fiscal Year most recently ended (the “Pro Forma
Financial Statements”) and (iii) such final
projections in respect of the Obligors and their respective
Subsidiaries as the Lender may reasonably request; and all such
financial statements, historical or pro forma, delivered pursuant
to this clause (i) shall be in compliance with the
requirements of Regulation S-X for a public offering registered
under the Securities Act of 1933, and all financial statements and
projections referred to in this clause (i) shall not be
materially inconsistent with financial statements, projections and
estimates previously provided to the Lender.

Compliance Certificate.  In the event a Credit
Extension is contemplated to be made on the Closing Date, the
Lender shall have received a Compliance Certificate on a pro forma
basis as if the Credit Extension to be made on the Closing Date had
occurred as of June 30, 2002 and as to such items therein as
the Lender reasonably requests, dated the Closing Date, duly
executed (and with all schedules thereto duly completed) and
delivered by the chief executive officer, the chief financial
officer, the treasurer or the assistant treasurer of the
Borrower.

Subsidiary Guaranty.  The Lender shall have received
the Subsidiary Guaranty, dated as of the Closing Date, duly
executed and delivered by each Guarantor.

Insurance.  The Lender shall have received
certificates of insurance from one or more insurance companies
satisfactory to the Lender, evidencing coverage required to be
maintained pursuant to this Agreement and each other Loan
Document.

Opinions of Counsel.  The Lender shall have received
opinions, dated the Closing Date and addressed to the Lender from
Luce Forward Hamilton & Scripps in form and substance
reasonably satisfactory to the Lender.

Material Adverse Change.  Since March 31,
2002, there shall not have occurred or become known to the
Lender any event or events, adverse condition or change that,
individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect.

Payment of Outstanding Indebtedness, etc.  After
giving effect to the transactions contemplated by this Agreement,
no Obligor shall have outstanding any Indebtedness or preferred
stock other than (i) with respect to the Revolving Loans, Letters
of Credit and the Lender Guaranties hereunder, and (ii) the
Indebtedness permitted under Section 8.2.  The Lender
shall have received payoff letters satisfactory in form and
substance to the Lender with respect to any Indebtedness to be
repaid on the Closing Date.

Consents, etc.  All governmental and third party
approvals and consents  required to be obtained prior to the
Closing Date in connection with the financing contemplated pursuant
to this Agreement (including the execution and delivery of this
Agreement and each other Loan Document required hereunder by each
Obligor and the performance of their respective Obligations) and
continuing operations of the Borrower and each Guarantor shall have
been obtained and be in full force and effect (and, to the extent
requested by the Lender, the Lender shall have received true and
correct copies of such approvals and consents) and all applicable
waiting periods shall have expired without any action being taken
or threatened by any competent authority which would restrain,
prevent or otherwise impose adverse conditions on the transactions
contemplated by this Agreement and the other Loan Documents.

Litigation, etc.  There shall exist no pending or,
to the knowledge of the Borrower, threatened, litigation,
proceedings or investigations which involve any Loan Document or
which could reasonably be expected to have a Material Adverse
Effect.

Due Diligence.  The Lender shall have completed and
be satisfied in its sole discretion with respect to its
comprehensive due diligence in all matters pertaining to the
business, properties, operations, financial condition or prospects
of the Borrower and its Subsidiaries, including, without
limitation, business, accounting, tax, legal and environmental due
diligence and any documentation as the Lender may require in its
sole discretion.

Closing Fees, Expenses, etc.  The Lender shall have
received for its own account all fees, costs and expenses due and
payable pursuant to Section 10.3 of this Agreement, if then
invoiced (in reasonable detail).

Legal Details, etc.  All documents executed or
submitted pursuant hereto shall be reasonably satisfactory in form
and substance to the Lender and its counsel.  The Lender and
its counsel shall be satisfied as of the Closing Date with the
terms and conditions of each agreement entered into in connection
herewith and with all legal, tax and accounting matters relating to
this Agreement and the other Loan Documents, including, without
limitation, any such matters pertaining to the Lender’s
unconditional release from all guaranties or surety or
indemnification arrangements with respect to the Borrower’s
Indebtedness or Indebtedness of the Borrower’s customers (or
the Borrower’s reimbursement of the Lender with respect to
any liabilities that the Lender may become subject to under such
guaranties or surety or indemnification arrangements).  In
addition, the corporate, capital and legal structure of the
Borrower and its Subsidiaries, and all organizational documents of
the Borrower and its Subsidiaries, shall be satisfactory to the
Lender.  The Lender and its counsel shall have received all
information and such counterpart originals or such certified or
other copies or such materials, as the Lender or its counsel may
reasonably request.

No Material Adverse Change in the Market.  There
shall not have occurred and be continuing (i) any general
suspension of trading in securities on the New York or American
Stock Exchange or in the NASDAQ National Market System (other than
circuit breakers), (ii) the declaration of a banking moratorium or
any suspension of payments in respect of banks in the United
States, or (iii) any other material adverse change in banking or
capital market conditions that has had or could reasonably be
expected to have a material adverse effect on the syndication of
leveraged bank credit facilities or the consummation of high yield
offerings, as the case may be.

Margin Regulations.  All Revolving Loans and other
Credit Extensions made by the Lender shall be in full compliance
with all applicable requirements of Regulations T, U and X of the
F.R.S. Board.

All Credit
Extensions.  The
obligation of the Lender to make any Credit Extension (including
the initial Credit Extension, if any) shall be subject to
Section 2.1 and the satisfaction of each of the conditions
precedent set forth in this Section 5.2.

Compliance with Warranties, No Default, etc.  Both
before and after giving effect to any Credit Extension, the
following statements shall be true and correct:

the representations and warranties set forth in Article
VI and in each other Loan Document shall, in each case, be true
and correct in all respects (with respect to representations and
warranties qualified by materiality or Material Adverse Effect) and
in all material respects (with respect to all other representations
and warranties) with the same effect as if then made (unless stated
to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct in all
material respects as of such earlier date unless such
representations and warranties are qualified by materiality or
Material Adverse Effect, in which case such representations and
warranties shall be true and correct as of such earlier date);

except as disclosed by the Borrower to the Lender pursuant to
Section 6.7,

no labor controversy, litigation, action, arbitration or
governmental investigation or proceeding shall be pending or, to
the knowledge of the Borrower, threatened against the Borrower or
any of its Subsidiaries or any Obligor, or any of their respective
properties, business, assets or revenues, which is reasonably
likely to, if adversely determined, have a Material Adverse Effect,
or which purports to involve the transactions contemplated by this
Agreement or would adversely affect the legality, validity or
enforceability of this Agreement or any other Loan Document;
and

no development shall have occurred in any labor controversy,
litigation, action, arbitration or governmental investigation or
proceeding disclosed pursuant to Section 6.7 which could
reasonably be expected to have a Material Adverse Effect; and

no Default or Event of Default shall have then occurred and be
continuing.

Credit Extension Request, etc.  The Lender shall
have received a Borrowing Request for Revolving Loans being
requested or an Issuance Request for Letters of Credit being
requested.  Each of the delivery of a Borrowing Request or an
Issuance Request, as applicable, and the acceptance by the Borrower
of the proceeds of such Credit Extension shall constitute a
representation and warranty by the Borrower that on the date of
such Credit Extension (both immediately before and after giving
effect to such Credit Extension and the application of the proceeds
thereof) the statements made in Section 5.2(a) are true and
correct in all material respects.

Satisfactory Legal Form.  All documents executed or
submitted pursuant hereto by or on behalf of the Borrower or any of
its Subsidiaries or any other Obligors shall be reasonably
satisfactory in form and substance to the Lender and its counsel;
the Lender and its counsel shall have received all information,
approvals, opinions, documents or instruments as the Lender or its
counsel may reasonably request.

Compliance Certificate.  The Lender shall have
received a Compliance Certificate on a pro forma basis as if the
Credit Extension had been made as of the most recent practicable
date for demonstrating compliance with the covenants set forth in
Section 8.4 and as to such items therein as the Lender
reasonably requests, dated the proposed date of the Credit
Extension, duly executed (and with all schedules thereto duly
completed) and delivered by the chief executive officer, the chief
financial officer, the treasurer or the assistant treasurer of the
Borrower.

REPRESENTATIONS AND WARRANTIES

In order to induce the
Lender to enter into this Agreement and to make Credit Extensions
hereunder, the Borrower represents and warrants to Lender as set
forth in this Article.

Organization,
etc.  The
Borrower and each of its Subsidiaries is (a)  validly
organized and existing and in good standing, or if a Foreign
Subsidiary the equivalent of good standing, under the laws of the
state or jurisdiction of its incorporation or organization, and (b)
duly qualified to do business and is in good standing as a foreign
entity in each jurisdiction where the nature of its business
requires such qualification, except where the failure to so qualify
would not result in a Material Adverse Effect, and has full power
and authority and holds all requisite governmental licenses,
permits and other approvals to enter into and perform its
Obligations under this Agreement and each other Loan Document to
which it is a party and to own and hold under lease its property
and to conduct its business substantially as currently conducted by
it except where the failure to hold such licenses, permits and
other approvals would not result in a Material Adverse
Effect. 

Due Authorization,
Non-Contravention, etc.  The execution, delivery and
performance by the Borrower of this Agreement and each other Loan
Document executed or to be executed by it, the execution, delivery
and performance by each other Obligor of each Loan Document
executed or to be executed by it and the execution, delivery and
performance by the Borrower and any of its applicable Subsidiaries
of each agreement entered into in connection herewith are in each
case within each such Person’s powers, have been duly
authorized by all necessary action, and do not:

contravene any such Person’s Organic Documents;

contravene any contractual restriction binding on or affecting
any such Person;

contravene (i) any court decree or order binding on or affecting
any such Person or (ii) any law or governmental regulation binding
on or affecting any such Person; or

result in, or require the creation or imposition of, any Lien on
any of such Person’s properties (except as permitted by this
Agreement).

Government
Approval, Regulation, etc.  Except as set forth in Item 6.3 of
the Disclosure Schedule, and except for filings or recordings to
perfect the Lender’s security interests, no authorization or
approval or other action by, and no notice to or filing with, any
Governmental Authority or regulatory body or other Person other
than those that have been duly obtained or made and which are in
full force and effect is required for the due execution, delivery
or performance by the Borrower or any other Obligor of any Loan
Document to which it is a party or in connection with the
transactions contemplated under this Agreement.  Neither the
Borrower nor any of its Subsidiaries is an “investment
company” within the meaning of the Investment Company Act of
1940, as amended, or a “holding company”, or a
“subsidiary company” of a “holding
company”, or an “affiliate” of a “holding
company” or of a “subsidiary company” of a
“holding company”, within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

Validity,
etc. 
This Agreement and each other Loan Document executed by the
Borrower will, on the due execution and delivery thereof,
constitute, the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their
respective terms; and each other Loan Document executed by each
other Obligor will, on the due execution and delivery thereof by
such Obligor, constitute the legal, valid and binding obligation of
such Obligor enforceable against such Obligor in accordance with
its terms (except, in any case, as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors’ rights generally and by
principles of equity).

Financial
Information.  The
financial statements of the Borrower and its Subsidiaries furnished
to the Lender pursuant to Section 5.1(i) have been prepared
in accordance with GAAP consistently applied, and present fairly
the consolidated financial condition of the Persons covered thereby
as at the dates thereof and the results of their operations for the
periods then ended.  All balance sheets, all statements of
operations, shareholders’ equity and cash flow and all other
financial information of each of the Borrower and its Subsidiaries
furnished pursuant to Section 7.1 have been and will for
periods following the Closing Date be prepared in accordance with
GAAP consistently applied, and do or will present fairly the
consolidated financial condition of the Persons covered thereby as
at the dates thereof and the results of their operations for the
periods then ended.

No Material Adverse
Effect.  No Material
Adverse Effect has occurred since March 31, 2002 with respect to
the Borrower and its Subsidiaries.

Litigation, Labor
Controversies, etc.  There is no pending or, to the
knowledge of the Borrower or its Subsidiaries, threatened
litigation, action, proceeding, arbitration, governmental
investigation or labor controversy (a) affecting the Borrower or
any of its Subsidiaries or any Obligor, or any of their respective
properties, businesses, assets or revenues, which is reasonably
likely to, if adversely determined, have a Material Adverse Effect,
except as disclosed in Item 6.7 of the Disclosure Schedule or (b)
which purports to involve the transactions contemplated by this
Agreement or affect the legality, validity or enforceability of
this Agreement or any other Loan Document.

Subsidiaries. 
The Borrower has no Subsidiaries, except those Subsidiaries

which are identified in Item 6.8 of the Disclosure Schedule;
or

which constitute Investments permitted by Section 8.5 or
which are permitted to have been organized or acquired in
accordance with Sections 8.5 or 8.9.

Ownership of
Properties.  The
Borrower and each of its Subsidiaries owns (a) in the case of owned
real property, good and marketable fee title to, and (b) in the
case of owned personal property, good and valid title to, or, in
the case of leased real or personal property, valid and enforceable
leasehold interests (as the case may be) in, all of its properties
and assets, real and personal, tangible and intangible, of any
nature whatsoever, free and clear in each case of all Liens or
claims, except for Liens permitted pursuant to Section
8.3.

Taxes.  The
Borrower and each of its Subsidiaries has timely filed all tax
returns and reports required by law to have been filed by it, and
all such tax returns are complete, accurate and correct in all
material respects.  The Borrower and each of its Subsidiaries
has paid all material taxes and governmental charges due and
payable on or prior to the date hereof, except any such taxes or
charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.

Pension and Welfare
Plans.  During the
twelve-consecutive-month period prior to the date of the execution
and delivery of this Agreement and prior to the date of any Credit
Extension hereunder, no steps have been taken to terminate any
Pension Plan under circumstances in which the Pension Plan has
insufficient assets to pay all of its benefit liabilities (as
required by section 4041(b)(1) of ERISA), and no contribution
failure has occurred with respect to any Pension Plan, sufficient
to give rise to a Lien under section 302(f) of ERISA.  No
condition exists or event or transaction has occurred with respect
to any Pension Plan which might result in the incurrence by the
Borrower or any member of the Controlled Group, if any, of any
material liability, material fine or material penalty.  
Except as disclosed in Item 6.11 of the Disclosure Schedule,
neither the Borrower nor any member of the Controlled Group has any
material contingent liability with respect to any post-retirement
benefit under a Welfare Plan, other than liability for continuation
coverage described in Part 6 of Title I of ERISA.

Environmental
Warranties.  Except
as set forth in Item 6.12 of the Disclosure Schedule:

all facilities and property (including underlying groundwater)
owned or leased by the Borrower or any of its Subsidiaries have
been, and continue to be, owned or leased by the Borrower and its
Subsidiaries in material compliance with all Environmental
Laws;

there have been no past, and there are no pending or to the
Borrower’s best knowledge threatened:

actions, investigations, claims, complaints, notices or requests
for information received by the Borrower or any of its Subsidiaries
with respect to any alleged violation of any Environmental Law
which could result in a liability to the Borrower or its
Subsidiaries in excess of $250,000 individually or $500,000 in the
aggregate, or

actions, investigations, complaints, notices or inquiries to the
Borrower or any of its Subsidiaries regarding potential liability
under any Environmental Law which could result in a liability to
the Borrower or its Subsidiaries in excess of $250,000 individually
or $500,000 in the aggregate;

to the Borrower’s best knowledge, there have been no
Releases of Hazardous Materials at, on or under any property now or
previously owned or leased by the Borrower or any of its
Subsidiaries that have, or could reasonably be expected to result
in a liability to the Borrower or its Subsidiaries in excess of
$250,000 individually or $500,000 in the aggregate;

the Borrower and its Subsidiaries have been issued and are in
material compliance with all permits, certificates, approvals,
licenses and other authorizations relating to environmental matters
and necessary for their businesses;

to the Borrower’s best knowledge, no property now or
previously owned or leased by the Borrower or any of its
Subsidiaries is listed or proposed for listing (with respect to
owned property only) on the National Priorities List pursuant to
CERCLA, on the CERCLIS or on any similar state list of sites
requiring investigation or clean-up;

to the Borrower’s best knowledge, there are no underground
storage tanks, active or abandoned, including petroleum storage
tanks, on or under any property now or previously owned or leased
by the Borrower or any of its Subsidiaries that, singly or in the
aggregate, have, or could reasonably be expected to result in a
liability to the Borrower or its Subsidiaries in excess of $250,000
individually or $500,000 in the aggregate;

neither the Borrower nor any Subsidiary of the Borrower has
directly transported or directly arranged for the transportation of
any Hazardous Material to any location which is listed or proposed
for listing on the National Priorities List pursuant to CERCLA, on
the CERCLIS or on any similar state list or which is the subject of
federal, state or local enforcement actions or other investigations
which may lead to material claims against the Borrower or such
Subsidiary for any response costs, remedial work, damage to natural
resources or personal injury, including claims under CERCLA;

to the Borrower’s best knowledge, there are no
polychlorinated biphenyls or friable asbestos present at any
property now or previously owned or leased by the Borrower or any
Subsidiary of the Borrower that, singly or in the aggregate, have,
or could reasonably be expected to result in a liability to the
Borrower or its Subsidiaries in excess of $250,000 individually or
$500,000 in the aggregate; and

to the Borrower’s best knowledge, no conditions exist at,
on or under any property now or previously owned or leased by the
Borrower which, with the passage of time, or the giving of notice
or both, would give rise to material liability under any
Environmental Law.

Accuracy of
Information.  None of
the factual information heretofore or contemporaneously furnished
by or on behalf of the Borrower in writing to the Lender for
purposes of or in connection with this Agreement or any of the
transactions contemplated hereby or the financing contemplated
hereby (true and complete copies of which were furnished to the
Lender in connection with its execution and delivery hereof),
contains any untrue statement of a material fact, and none of the
other factual information hereafter furnished in connection with
this Agreement or any other Loan Document  by the Borrower or
any other Obligor to Lender will contain any untrue statement of a
material fact on the date as of which such information is dated or
certified and, as of the date of the execution and delivery of this
Agreement by the Lender, the information delivered prior to the
date of execution and delivery of this Agreement (unless such
information specifically relates to a prior date) does not, and the
factual information hereafter furnished shall not on the date as of
which such information is dated or certified, omit to state any
material fact necessary to make any information not misleading.

Regulations T, U
and X.  No Obligor is
engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock, and no proceeds of any Credit
Extensions will be used to purchase or carry margin stock or
otherwise for a purpose which violates, or would be inconsistent
with, F.R.S. Board Regulation T, U or X.  Terms for which
meanings are provided in F.R.S. Board Regulation T, U or X or any
regulations substituted therefor, as from time to time in effect,
are used in this Section with such meanings.

Compliance with
Laws.  None of the
Borrower or any of its Subsidiaries or any of their respective
material properties or assets is in violation of, nor will the
continued operation of their material properties and assets as
currently conducted violate in any material respect, any law, rule
or regulation (including any Food and Drug Administration or United
States Department of Agriculture law, rule or regulation or any
Environmental Law or any zoning or building law, rule or regulation
or any ordinance, code or approval or building permits) or any
restrictions of record or agreements affecting such material
properties or assets, and none of the Borrower or any of its
Subsidiaries is in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority, in each
case where such violation or default could result in a Material
Adverse Effect.

Labor
Matters. The hours worked
by and payments made to employees of the Borrower and its
Subsidiaries have not been in violation of the Fair Labor Standards
Act or any other applicable federal, state, local or foreign law
dealing with such matters.  All payments due from the Borrower
or any of its Subsidiaries, or for which any claim may be made
against the Borrower or any of its Subsidiaries, on account of
wages and employee health and welfare insurance and other benefits,
have been paid or accrued as a liability on the books of the
Borrower or such Subsidiary.  The consummation of the
transactions contemplated by this Agreement will not give rise to
any right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which the
Borrower or any of its Subsidiaries is bound.

Security
Documents.  Each Pledge
Agreement is effective to create in favor of the Lender a legal,
valid and enforceable security interest in the collateral (as
defined in such Pledge Agreement) and, when such collateral is
delivered to the Lender and for so long as the Lender continues to
hold such collateral, such Pledge Agreement shall constitute a
fully perfected first priority Lien on, and security interest in,
all right, title and interest of the pledgors thereunder in such
collateral, in each case prior and superior in right to any other
Person.

Each Security Agreement is effective to create in favor of the
Lender a legal, valid and enforceable security interest in the
collateral (as defined in each such Security Agreement) and, when
financing statements in appropriate form are filed in the
appropriate offices or other necessary steps are taken by the
Lender to perfect its security interests, each Security Agreement
shall constitute a fully perfected Lien on, and security interest
in, all right, title and interest of the grantors thereunder in
such collateral, in each case prior and superior in right to any
other Person, other than with respect to Liens expressly permitted
by Section 8.3.

Insurance. The
Borrower and each of its Subsidiaries maintains insurance on its
property with financially sound and reputable insurance companies
against loss and damage in at least the amounts (and with only
those deductibles) customarily maintained, and against such risks
as are typically insured against in the same general area, by
Persons of comparable size engaged in the same or similar business
as the Borrower and its Subsidiaries, and also maintains all
worker’s compensation, employer’s liability insurance
or similar insurance as may be required under the laws of any state
or jurisdiction in which it may be engaged in business.

Intellectual
Property. The Borrower and
each of its Subsidiaries own or possess, or can acquire on
reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks,
trade names or other intellectual property (collectively,
“Intellectual Property”) necessary to
carry on the business now operated by them, and, except as
disclosed in Item 6.19 of the Disclosure Schedule, neither the
Borrower nor any of its Subsidiaries have received any notice or
are otherwise aware of any infringement or conflict with asserted
rights of others with respect to any Intellectual Property or of
any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the
Borrower or any of its Subsidiaries therein, and which infringement
or conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, singly or in the aggregate,
could result in a Material Adverse Effect.  To the knowledge
of the Borrower, upon due inquiry, the business of the Borrower and
its Subsidiaries as currently conducted does not infringe or
conflict with any Intellectual Property rights or franchise rights
of any Person.

Solvency.  The
Borrower and its Subsidiaries, taken as a whole, are, and, upon the
incurrence of any Obligations by any Obligor (including, without
limitation, the making of the Revolving Loans, the issuance of the
Letters of Credit, the delivery of each Subsidiary Guaranty and the
Liens created by the Collateral Documents) on any date on which
this representation is made, will be, Solvent.

AFFIRMATIVE COVENANTS

The Borrower agrees with
the Lender that until the Commitments have expired or terminated,
all Letters of Credit have been cancelled or otherwise terminated,
and all Obligations have been paid and performed in full, the
Borrower will, and will cause its Subsidiaries to, perform or cause
to be performed the obligations set forth below.

Financial
Information, Reports, Notices, etc.  The Borrower will furnish or cause to
be furnished to the Lender copies of the following financial
statements, reports, notices and information:

as soon as available and in any event within sixty (60) days
after the end of each of the first three Fiscal Quarters of each
Fiscal Year, an unaudited consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such Fiscal Quarter
and consolidated statements of income and cash flow of the Borrower
and its Subsidiaries for such Fiscal Quarter and for the period
commencing at the end of the previous Fiscal Year and ending with
the end of such Fiscal Quarter, and including (in each case), in
comparative form the figures for the corresponding Fiscal Quarter
in, and year to date portion of, the immediately preceding Fiscal
Year, certified as complete and correct by the chief financial or
accounting Authorized Officer of the Borrower;

as soon as available and in any event within ninety (90) days
after the end of each Fiscal Year, a copy of the consolidated
balance sheet of the Borrower and its Subsidiaries, and the related
consolidated statements of stockholders’ equity and cash flow
and the consolidated statements of income of the Borrower and its
Subsidiaries for such Fiscal Year, setting forth in comparative
form the figures for the immediately preceding Fiscal Year, audited
(without any Impermissible Qualification) by independent public
accountants acceptable to the Lender, stating that, in performing
the examination necessary to deliver the audited financial
statements of the Borrower, no knowledge was obtained of any
Default or Event of Default;

concurrently with the delivery of the financial information
pursuant to clauses (a) and (b), a Compliance
Certificate, executed by the chief executive, financial or
accounting Authorized Officer of the Borrower, (i) showing
compliance with the financial covenants set forth in Section
8.4, (ii) stating that no Default or Event of Default has
occurred and is continuing (or, if a Default or Event of Default
has occurred, specifying the details of such Default or Event of
Default and the action that the Borrower has taken or proposes to
take with respect thereto) and (iii) showing the outstanding
balance of all Revolving Loans as of the applicable Fiscal
Quarter;

as soon as possible and in any event within five (5) days after
the Borrower or any of its Subsidiaries obtains knowledge of the
occurrence of a Default or Event of Default, a statement of the
chief executive, financial or accounting Authorized Officer of the
Borrower setting forth details of such Default of Event of Default
and the action which the Borrower has taken and proposes to take
with respect thereto;

as soon as possible and in any event within five (5) days after
the Borrower or any of its Subsidiaries obtains knowledge of (i)
the occurrence of any material adverse development with respect to
any litigation, action, proceeding or labor controversy described
in Item 6.7 of the Disclosure Schedule or (ii) the commencement of
any litigation, action, proceeding or labor controversy of the type
and materiality described in Section 6.7, notice thereof
and, to the extent the Lender requests, copies of all documentation
relating thereto;

promptly after the sending or filing thereof, copies of all
reports, notices, prospectuses and registration statements which
the Borrower or any of its Subsidiaries files with the SEC or any
national securities exchange;

immediately upon becoming aware of (i) the institution of any
steps by the Borrower or any other Person to terminate any Pension
Plan, (ii) the failure to make a required contribution to any
Pension Plan if such failure is sufficient to give rise to a Lien
under Section 302(f) of ERISA, (iii) the taking of any action with
respect to a Pension Plan which could result in the requirement
that the Borrower furnish a bond or other security to the PBGC or
such Pension Plan, or (iv) the occurrence of any event with respect
to any Pension Plan which could result in the incurrence by the
Borrower of any material liability, fine or penalty, notice thereof
and copies of all documentation relating thereto;

promptly upon receipt thereof from the Borrower’s audit
committee, copies of all “management letters” submitted
to the Borrower by the independent public accountants referred to
in clause (b) in connection with each audit made by such
accountants;

as soon as available and in any event within fifteen (15) days
after the end of each Fiscal Year a copy of Borrower’s Annual
Operating Plan; and

such other financial and other information as the Lender may
from time to time reasonably request (including information and
reports in such detail as the Lender may request with respect to
the terms of and information provided pursuant to the Compliance
Certificate).

Maintenance of
Existence; Compliance with Laws, etc.  The Borrower will, and will
cause each of its Subsidiaries to,

except as otherwise permitted by Section 8.9, preserve
and maintain its legal existence; and

comply in all material respects with all applicable laws, rules,
regulations and orders, including, but not limited to, ERISA,
employee benefits, Food and Drug Administration and United States
Department of Agriculture laws, rules and regulations, and
including the payment, before the same become delinquent, of all
taxes, assessments and governmental charges imposed upon the
Borrower or its Subsidiaries or upon their property except to the
extent being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
have been set aside on the books of the Borrower or its
Subsidiaries, as applicable.

Maintenance of
Properties.  The
Borrower will, and will cause each of its Subsidiaries to,
maintain, preserve, protect and keep its and their respective
properties in good repair, working order and condition (ordinary
wear and tear excepted), and make necessary repairs, renewals and
replacements so that the business carried on by the Borrower and
its Subsidiaries may be properly conducted at all times, unless the
Borrower determines in good faith that the continued maintenance of
such property is no longer economically desirable.

Insurance. 
The Borrower will, and will cause each of its Subsidiaries to:

maintain insurance on its property with financially sound and
reputable insurance companies against loss and damage in at least
the amounts (and with only those deductibles) customarily
maintained, and against such risks as are typically insured against
in the same general area, by Persons of comparable size engaged in
the same or similar business as the Borrower and its Subsidiaries;
and

all worker’s compensation, employer’s liability
insurance or similar insurance as may be required under the laws of
any state or jurisdiction in which it may be engaged in
business.

Without limiting the
foregoing, all insurance policies required pursuant to this Section
shall (i) name the Lender as loss payee (in the case of property
insurance) or additional insured (in the case of liability
insurance), as applicable, and provide that no cancellation or
modification of the policies will be made without thirty (30)
days’ prior written notice (or ten (10) days’ prior
written notice with respect to failure to pay the premium), to the
Lender and (ii) be in addition to any requirements to maintain
specific types of insurance contained in the other Loan
Documents.

Books and
Records.  The
Borrower will, and will cause each of its Subsidiaries to, keep
books and records in accordance with GAAP which accurately reflect
all of its business affairs and transactions and permit the Lender
or any of its representatives, at reasonable times and intervals
upon reasonable notice to the Borrower, to visit its offices, to
discuss its financial matters with its officers and employees, and
its independent public accountants (and the Borrower hereby
authorizes such independent public accountants to discuss the
Borrower’s and its Subsidiaries’ financial matters with
the Lender or its representatives whether or not any representative
of the Borrower is present so long as the Borrower has been given
reasonable prior written notice of such meeting) and to examine
(and photocopy extracts from) any of its books and records. 
The Borrower shall pay any fees of such independent public
accountants incurred in connection with the Lender’s exercise
of its rights pursuant to this Section.

Environmental Law
Covenant.  The
Borrower will, and will cause each of its Subsidiaries to:

use and operate all of its facilities and properties in material
compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating
to environmental matters in effect and remain in material
compliance therewith, and handle all Hazardous Materials in
material compliance with all applicable Environmental Laws; and

promptly notify the Lender and provide copies upon receipt of
all material written claims, complaints, notices or inquiries
relating to the condition of its facilities and properties in
respect of, or as to compliance with, Environmental Laws, and shall
promptly resolve any non-compliance with Environmental Laws and
keep its property free of any Lien imposed by any Environmental
Law.

Future
Subsidiaries; Collateral.  The Borrower shall promptly notify the
Lender upon any Person becoming a Subsidiary, or upon an Obligor
directly or indirectly acquiring additional Capital Stock of any
existing Subsidiary or real property described in clause (d)
below, and (except to the extent that, for Foreign Subsidiaries,
the granting of a Subsidiary Guaranty or Subsidiary Pledge
Agreement would cause material adverse tax consequences to the
Borrower or such Foreign Subsidiary or would be violative of
applicable law):

such Person shall (i) execute and deliver to the Lender a
supplement to the Subsidiary Guaranty and a supplement to the
Subsidiary Security Agreement and (ii) to the extent such
Subsidiary is required to pledge stock of a Subsidiary pursuant to
clause (b) of Section 7.7, execute and deliver to the
Lender a supplement to the Subsidiary Pledge Agreement, if not
already a party thereto as a pledgor, in a manner satisfactory to
the Lender;

the Borrower and each Subsidiary shall, pursuant to the
applicable Pledge Agreement (as supplemented, if necessary, by a
foreign pledge agreement in form and substance satisfactory to the
Lender), pledge to the Lender all of the outstanding shares of
Capital Stock of (i) each U.S. Subsidiary and (ii) any Subsidiary
that is not a U.S. Subsidiary owned (other than where such
ownership is in such U.S. Subsidiary’s capacity as a nominee
shareholder) directly by the Borrower or such U.S. Subsidiary
(provided that, subject to the last sentence of the penultimate
paragraph of this Section, not more than sixty-five percent (65%)
of the Capital Stock of any Foreign Subsidiary shall be so
pledged), along with undated stock powers for such certificates,
executed in blank (or, if any such shares of Capital Stock are
uncertificated, confirmation and evidence satisfactory to the
Lender that the security interest in such uncertificated securities
has been perfected (as a first priority Lien) by the Lender, in
accordance with the U.C.C. or any other similar or local or foreign
law which may be applicable);

the Borrower and each Subsidiary shall, pursuant to the
applicable Pledge Agreement, pledge to the Lender, all intercompany
notes evidencing Indebtedness in favor of the Borrower or such
Subsidiary (which shall be in a form acceptable to the Lender);
and

if such Person owns any real property, such Obligor will execute
and deliver to the Lender a Mortgage, together with, in the case of
real property, mortgagee’s title insurance policies in
amounts, in form and substance (including, if available, a
revolving credit endorsement) and issued by insurers satisfactory
to the Lender, and such policies shall be accompanied by evidence
of the payment in full of all premiums thereon;

together, in each case,
with such opinions of legal counsel for the Borrower, which may be
the corporate general counsel of the Borrower (which shall be from
counsel satisfactory to the Lender) relating thereto, which legal
opinions shall be in form and substance satisfactory to the
Lender.  The Borrower agrees that if, as a result of a change
in law after the date hereof, (i) a Foreign Subsidiary can execute
and deliver a supplement to the Subsidiary Guaranty or execute and
deliver a supplement to the Subsidiary Pledge Agreement as a
pledgor or (ii) the Borrower or any Subsidiary can pledge more than
sixty-five percent (65%) of the Capital Stock of any Foreign
Subsidiary or any intercompany Indebtedness of any Subsidiary
evidenced by a note or other instrument, in any such case without
material adverse tax consequences to the Borrower or such
Subsidiary, then the provisions of clause (a) of this
Section shall thereafter apply to any Foreign Subsidiary and/or (as
the case may be) the provisions of clause (b) of this
Section shall thereafter apply to one hundred percent (100%) of the
Capital Stock of such Foreign Subsidiary.

The Borrower shall, and
shall cause each of its Subsidiaries to, cause the Lender to have
at all times a first priority perfected security interest (subject
only to Liens permitted under Section 8.3) in all of the
property (real and personal, including Capital Stock owned by such
Obligors) now or hereafter acquired from time to time by the
Borrower and such Subsidiaries to the extent the same is of the
type of property that constitutes “Collateral” (as
defined in any Loan Document) or is required to be pledged or
assigned to the Lender hereunder.   Without limiting the
generality of the foregoing, the Borrower shall, and shall cause
each of its Subsidiaries to, promptly execute, deliver and/or file
(as applicable) Uniform Commercial Code financing statements and
other instruments and documentation deemed necessary by the Lender
to grant and perfect such security interest, in each case in form
and substance satisfactory to the Lender.

Use Of
Proceeds.  The
Borrower will apply the Revolving Loans as set forth below:

to repay principal and accrued interest on those certain demand
notes dated May 24, 2002, June 14, 2002 and July 26, 2002,
respectively, each in the amount of Five Million Dollars
($5,000,000), provided that the proceeds of such demand notes shall
have been and shall be after repayment hereunder be used for the
purposes set forth in subsections (ii), (iii) and (iv) hereof;

for working capital and general corporate purposes of the
Borrower;

to pay fees and expenses related to the Revolving Loans; and

to finance Capital Expenditures.

The Borrower will use the
Letters of Credit for working capital and general corporate
purposes of the Borrower.

Down Payment on
International Sales. 
The Borrower shall, and shall cause each Subsidiary, in connection
with agreements entered into after the date of this Agreement, to
receive, on all sales made to buyers located outside of the United
States, prior to shipment, at least a ten percent (10%) cash down
payment of the sales price of the inventory or an irrevocable
standby or documentary letter of credit in favor of the Borrower in
an amount equal to at least ten percent (10%) of the sales price of
the inventory, issued by a United States recognized commercial bank
or financial institution which is rated A-1 (or better) by S&P
or P-1 (or better) by Moody’s or issued by a foreign bank and
confirmed by a United States recognized commercial bank or
financial institution, which, at the time of confirmation, is rated
A-1 (or better) by S&P or P-1 (or better) by Moody’s and
payable at the counter of such bank or institution that provides
customary draw procedures to protect the seller of goods in
international markets; provided, however, the Lender may waive in a
writing signed by the Lender’s chief financial officer such
requirement for contracts entered into after the Closing Date.

Contract
Obligations.  The
Borrower shall, and shall cause each Subsidiary, to perform in
accordance with its material terms every contract, agreement,
obligation or other arrangement to which such Person is a party or
by which it or any of its property is bound, including government
contracts, if any.  In the event that any material default or
material performance deficiency occurs, the Borrower shall notify
the Lender promptly in writing.  The Borrower shall provide
the Lender promptly with copies of any cure notices or default
notices it may receive on any contract or from any party and detail
the proposed corrective action.  At the Lender’s
request, the Borrower shall also provide the Lender with copies of
any stop work notices in effect at the date of the Lender’s
request.

Notice of Claims
Under Lender Guaranties.  Promptly, and in any case within seven
(7) days notice thereof, notify the Lender of any demand or event
or circumstance that is reasonably likely to cause a demand under
any Lender Guaranty.

NEGATIVE COVENANTS

The Borrower covenants and
agrees with the Lender that until the Revolving Loan Commitment has
expired or terminated and all Obligations have been paid and
performed in full, the Borrower will not, and will not permit its
Subsidiaries to, do any of the following.

Business
Activities.  The
Borrower will not, and will not permit any of its Subsidiaries to,
engage in any business activity except those business activities
primarily engaged in by the Borrower and its Subsidiaries as of the
Closing Date and activities reasonably incidental thereto.

Indebtedness. 
The Borrower will not, without the Lender’s prior written
consent, and will not permit any of its Subsidiaries to, create,
incur, assume or permit to exist any Indebtedness, other than:

Indebtedness in respect of the Obligations;

Indebtedness existing as of the Closing Date which is identified
in Item 8.2 of the Disclosure Schedule;

unsecured Indebtedness (i) incurred in the ordinary course of
business of the Borrower and the Guarantors (including open
accounts extended by suppliers on normal trade terms in connection
with purchases of goods and services which are not overdue for a
period of more than ninety (90) days or, if overdue for more than
ninety (90) days, as to which a dispute exists and adequate
reserves in conformity with GAAP have been established on the books
of the Borrower or such Guarantor) and (ii) in respect of
performance, surety, statutory, appeal or similar bonds provided in
the ordinary course of business, but excluding (in each case),
Indebtedness incurred through the borrowing of money or Contingent
Liabilities in respect thereof;

unsecured Indebtedness not to exceed Two Million Dollars
($2,000,000) in the aggregate, which is convertible into equity
upon terms and conditions reasonably acceptable to the Lender;

Indebtedness of any Guarantor owing to the Borrower or any other
Guarantor, which Indebtedness shall be evidenced by one or more
promissory notes in form and substance satisfactory to the Lender,
duly executed and delivered in pledge to the Lender pursuant to a
Loan Document, and shall not be forgiven or otherwise discharged
for any consideration other than payment in full or in part in cash
(provided, that only the amount repaid in part shall be
discharged); and

Indebtedness of the Borrower and the Guarantors in respect of
purchase money Indebtedness and Capitalized Lease Liabilities which
does not exceed $5,000,000 in the aggregate at any time
outstanding;

provided,
however, that no Indebtedness otherwise permitted by
clause (d) shall be assumed or otherwise incurred if a
Default or Event of Default has occurred and is then continuing or
would result therefrom.

Liens.  The
Borrower will not, and will not permit any of its Subsidiaries to,
create, incur, assume or permit to exist any Lien upon any of its
property (including Capital Stock of any Person), revenues or
assets, whether now owned or hereafter acquired, except:

Liens securing payment of the Obligations;

Liens existing as of the Closing Date and disclosed in Item 8.3
of the Disclosure Schedule securing Indebtedness described in
clause (b) of Section 8.2; provided that no such Lien
shall encumber any additional collateral and the amount of
Indebtedness secured by such Lien is not increased from that
existing on the Closing Date;

Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;

Liens in favor of carriers, warehousemen, mechanics, materialmen
and landlords granted in the ordinary course of business for
amounts not overdue or being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books;

Liens incurred or deposits made in the ordinary course of
business in connection with workmen’s compensation,
unemployment insurance or other forms of governmental insurance or
benefits, or to secure performance of tenders, statutory
obligations, bids, leases or other similar obligations (other than
for borrowed money) entered into in the ordinary course of business
or to secure obligations on surety, statutory and appeal bonds or
performance and similar bonds;

judgment Liens in existence for less than forty-five (45) days
after the entry thereof or with respect to which execution has been
stayed or the payment of which is covered in full (subject to a
customary deductible) by insurance maintained with responsible
insurance companies and which do not otherwise result in an Event
of Default under Section 9.1(f), or attachment, pre-judgment
or similar Liens in existence less than twenty (20) days after the
entry thereof or which have been vacated, discharged, released or
bonded over in a manner reasonably satisfactory to the Lender
within such time period;

easements, rights-of-way, zoning restrictions, minor defects or
irregularities in title and other similar encumbrances not
interfering in any material respect with the value or use of the
property to which such Lien is attached; and

Liens securing payment of Indebtedness of the type described in
clause (f) of Section 8.2 used to purchase or lease
assets of the Borrower or any Guarantor so long as such Lien
extends only to the asset or assets so financed.

Financial Condition
and Operations.  The
Borrower will not permit to occur any of the events set forth
below:

Maximum Capital Expenditures.  (i) If the
Borrower’s Revenue for any Fiscal Quarter in Fiscal Year 2002
is greater than eighty-five percent (85%) of the quarterly revenue
target set forth in the Annual Operating Plan for such Fiscal
Quarter, the Borrower will not incur cumulative Capital
Expenditures during the next Fiscal Quarter (including Capital
Expenditures incurred during such Fiscal Quarter and all prior
Fiscal Quarters during Fiscal Year 2002) greater than Five Hundred
Thousand Dollars ($500,000) in excess of the capital expenditure
budget for that next Fiscal Quarter and all prior Fiscal Quarters
during Fiscal Year 2002, set forth in the Annual Operating
Plan.

(ii)  If the
Borrower’s Revenue for any Fiscal Quarter in Fiscal Year 2002
is less than eighty-five percent (85%) of the quarterly revenue
target set forth in the Annual Operating Plan for such Fiscal
Quarter, the Borrower will not incur cumulative Capital
Expenditures during the next Fiscal Quarter (including Capital
Expenditures incurred during such Fiscal Quarter and all prior
Fiscal Quarters during Fiscal Year 2002) greater than Five Hundred
Thousand Dollars ($500,000) in excess of the “adjusted
plan” model capital expenditure budget for that next Fiscal
Quarter and all prior Fiscal Quarters during Fiscal Year 2002, set
forth in the Annual Operating Plan.

Operating Expenses.  (i)  If the
Borrower’s Revenue for any Fiscal Quarter in Fiscal Year 2002
is greater than eighty-five percent (85%) of the quarterly revenue
target set forth in the Annual Operating Plan for such Fiscal
Quarter, then for the following Fiscal Quarter, the Borrower may
not incur Operating Expenses in excess of Five Hundred Thousand
Dollars ($500,000) more than the Operating Expenses, excluding
amortization and depreciation included in Operating Expenses, for
such Fiscal Quarter set forth in the Annual Operating Plan. 
However, notwithstanding the foregoing, to the extent that in any
Fiscal Quarter Borrower was limited in the incurrence of Operating
Expenses as provided herein, and its Operating Expenses for such
Fiscal Quarter were less than Five Hundred Thousand Dollars
($500,000) more than the Operating Expenses, excluding amortization
and depreciation included in Operating Expenses, for such Fiscal
Quarter set forth in the Annual Operating Plan, the Borrower may
use such unincurred Operating Expenses in the subsequent Fiscal
Quarter. 

(ii)  If the
Borrower’s Revenue for any Fiscal Quarter in Fiscal Year 2002
is equal to or less than eighty-five percent (85%) of the quarterly
revenue target set forth in the Annual Operating Plan for such
Fiscal Quarter, then for the following Fiscal Quarter:

the Borrower may not incur
Operating Expenses in excess of Five Hundred Thousand Dollars
($500,000) more than the product of ((D-E) x ((C-B)/(A-B))) + E,
where:

                                   
A=Fiscal Quarter Revenue of the immediately preceding Fiscal
Quarter from the Annual Operating Plan.

                                   
B=Fiscal Quarter Revenue of the immediately preceding Fiscal
Quarter from the “adjusted plan” model in the Annual
Operating Plan.

                                   
C=Actual Revenue from the immediately preceding Fiscal
Quarter.

                                   
D=Operating Expenses of the following Fiscal Quarter from the
Annual Operating Plan.

E=Operating Expenses of
the following Fiscal Quarter from the “adjusted plan”
model in the Annual Operating Plan.

Any calculation to determine compliance with clauses (a),
(b), (d), (e) or (f) of this Section
8.4 or to determine whether a Default or Event of Default has
occurred or would occur as a result of a particular transaction
under those clauses shall be on a pro forma basis and calculated on
the assumption that any Permitted Acquisitions or other relevant
transaction which occurred during the relevant period were
consummated on the first day of such period. 

Investments. 
The Borrower will not, and will not permit any of its Subsidiaries
to, purchase, make, incur, assume or permit to exist any Investment
in any other Person, except:

Investments existing on the Closing Date and identified in Item
8.5 of the Disclosure Schedule, and Investments in SB OperatingCo,
Inc. after its conversion (the
“Conversion”) to a limited liability
company;

Cash Equivalent Investments;

without duplication, Investments to the extent permitted as
Indebtedness pursuant to Section 8.2;

Investments by way of contributions to capital or purchases of
equity (i) by the Borrower in any Guarantor or by such Guarantor in
other Guarantors; or (ii) by any Subsidiary in the Borrower;

Investments constituting (i) accounts receivable arising, (ii)
trade debt granted, or (iii) deposits made in connection with the
purchase price of goods or services, in each case in the ordinary
course of business;

Investments by way of Permitted Acquisitions;

Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and
disputes with, customers and suppliers, in each case in the
ordinary course of business;

Investments consisting of any deferred portion of the sales
price received by the Borrower or any Guarantor in connection with
any Asset Sale permitted under Section 8.10;

Hedging Agreements; and

after the Closing Date, other Investments (other than any
acquisition of any Person) in an amount not to exceed $500,000 in
the aggregate over the remaining term of this Agreement;

provided,
however, that

any Investment which when made complies with the requirements of
clauses (a), (b) or (c) of the definition of
the term “Cash Equivalent Investment” may continue to
be held notwithstanding that such Investment if made thereafter
would not comply with such requirements;

no Investment otherwise permitted by clauses (c),
(d), (e), (f), (g) or (j) shall
be permitted to be made if any Default or Event of Default has
occurred and is continuing or would result therefrom; and

after the Closing Date the aggregate amount of acquisitions
(whether pursuant to an acquisition of stock, assets constituting a
business unit of any Person or all or substantially all of the
assets of any Person or Persons or otherwise and including any
assumed debt) by the Borrower or any Guarantor of any Person or
Persons or the assets of any Person or Persons shall not exceed
$2,000,000 over the remaining term of this Agreement.

Restricted
Payments, etc.  The Borrower will not, and
will not permit any of its Subsidiaries to, declare or make a
Restricted Payment, or make any deposit for any Restricted Payment,
other than:

dividends or distributions payable in common stock of the
Borrower and its Subsidiaries;

Restricted Payments made by Subsidiaries to the Borrower or
wholly owned Subsidiaries of the Borrower; or

redemptions of Capital Stock in accordance with the exercise of
mandatory put rights under existing agreements with employees, and
future agreements with employees that have been consented to by the
Lender in writing, provided that the aggregate amount of such
redemptions shall not exceed One Million Dollars ($1,000,000) in
any Fiscal Year.

provided,
however, both before and after giving effect to such
Restricted Payment, no Default or Event of Default shall have
occurred and be continuing or caused thereby.

Subordinated
Debt.  The Borrower
will not, and will not permit any of its Subsidiaries to, (a) make
any payment or prepayment of principal of, or premium or interest
on, any Subordinated Debt; (b) pay or cause to be paid any
consideration, whether by way of payment of principal, interest,
fee, indemnity or otherwise, to (i) any holder of any Indebtedness
(in its capacity as such) that is subordinate or junior in right of
payment to amounts owing hereunder or (ii) any holder (in its
capacity as such) of any Capital Stock or other securities of any
Obligor or any warrants, options or subscription rights with
respect to any Capital Stock of any Obligor (whether as payment of
such obligations, Capital Stock, securities, warrants, options or
subscription rights or otherwise or as inducement to, any consent,
waiver or amendment of any of the terms or provisions of the
documentation evidencing such Subordinated Debt or such Capital
Stock, securities, warrants, options or subscription rights); (c)
refinance, redeem, retire, purchase, defease or otherwise acquire
any Subordinated Debt; or (d) make any deposit (including the
payment of amounts into a sinking fund or other similar fund) for
any of the foregoing purposes; provided that:

the Borrower and its Subsidiaries may pay, in the case of
interest only, interest on such Subordinated Debt no earlier than
the stated, scheduled date for such payment of interest set forth
in the Sub Debt Documents governing such Subordinated Debt, so long
as no Default or Event of Default shall have occurred and be
continuing or would result therefrom; and

the Borrower and its Subsidiaries may make Restricted Payments
as permitted under Section 8.6.

Stock of
Subsidiaries.  The
Borrower will not permit any of its Subsidiaries to, (a) issue any
Capital Stock (whether for value or otherwise) to any Person other
than (i) officers or employees of the Guarantors, in connection
with incentive compensation programs or employee benefit plans or
(ii) the Borrower or another wholly owned Guarantor, or (b) other
than as set forth in Section 8.6, become liable in respect
of any obligation (contingent or otherwise) to purchase, redeem,
retire, acquire or make any other payment in respect of any shares
of Capital Stock of the Borrower or any Subsidiary or any option,
warrant or other right to acquire any such shares of Capital Stock;
provided, however, that the options and warrants
issued by the Guarantors as set forth in Item 8.8 of the Disclosure
Schedule shall be permitted.

Consolidation,
Merger, etc.  The Borrower will not, and
will not permit any of its Subsidiaries to, liquidate or dissolve,
consolidate with, or merge into or with, any other Person, or
purchase or otherwise acquire all or substantially all of the
assets of any Person (or of any division thereof) or change its
corporate structure, except:

as contemplated by the Conversion;

any Guarantor may liquidate or dissolve voluntarily into, and
may merge with and into, the Borrower or any other Guarantor, and
the assets or stock of any Guarantor may be purchased or otherwise
acquired by the Borrower or any other Guarantor; provided, that in
no event shall any Guarantor consolidate with or merge with and
into any other Guarantor unless after giving effect thereto, the
Lender shall have a perfected pledge of and security interest in
and to, at least the same percentage of the issued and outstanding
shares of Capital Stock of the surviving Person as the Lender had
immediately prior to such merger or consolidation in form and
substance satisfactory to the Lender and its counsel, pursuant to
such documentation and opinions as shall be necessary in the
opinion of the Lender to create, perfect or maintain the collateral
position of the Lender therein as contemplated by this Agreement;
and

so long as no Default or Event of Default has occurred and is
continuing or would occur after giving effect thereto, the Borrower
or any Guarantor may (to the extent permitted by clause (f) and
clause (iii) following clause (j) of Section 8.5)
purchase all or substantially all of the assets or stock of any
Person (or any division thereof) (other than the Borrower or any
Subsidiary, such intercompany transactions being subject to
clause (b)), or acquire such Person by merger.

Permitted
Dispositions.  Other
than in connection with the Borrower’s incentive compensation
arrangements, the Borrower will not, and will not permit any of its
Subsidiaries to, sell, transfer, lease, contribute or otherwise
convey (including by way of merger), or grant options, warrants or
other rights with respect to, any of the Borrower’s or such
Subsidiaries’ assets (including accounts receivable of the
Borrower and its Subsidiaries and Capital Stock of its
Subsidiaries) to any Person in one transaction or series of
transactions unless such transaction is (a) in the ordinary course
of its business, including sales of inventory or equipment or
systems built for customers in the ordinary course of the
Borrower’s business within the United States or sales of
inventory or equipment or systems built for customers in the
ordinary course of Borrower’s business outside of the United
States in accordance with the provisions of Section 8.15; or
(b) a transaction among the Borrower and/or the Guarantors
permitted by Section 8.9(b).

Modification of
Certain Agreements. 
The Borrower will not, and will not permit any of its Subsidiaries
to, consent to any amendment, supplement, waiver or other
modification of, or enter into any forbearance from exercising any
rights with respect to the terms or provisions contained in:

the Sub Debt Documents, other than any amendment, supplement,
waiver or modification which (x) extends the date or reduces the
amount of any required repayment, prepayment or redemption of the
principal of such Subordinated Debt, (y) reduces the rate or
extends the date of payment of the interest, premium (if any) or
fees payable on such Subordinated Debt, or (z) makes the covenants,
events of default or remedies in such Sub Debt Documents less
restrictive on the Borrower; or

the Borrower’s or any Subsidiary’s Organic Documents
(provided that SB OperatingCo, LLC may enter into documents
relating to its conversion to a limited liability company provided
the Lender has reviewed and approved the terms of such documents)
to the extent that any such change would be adverse to the
interests of the Lender.

Transactions with
Affiliates.  The
Borrower will not, and will not permit any of its Subsidiaries to,
enter into or cause or permit to exist any arrangement or contract
(including for the purchase, lease or exchange of property or the
rendering of services) with any of its other Affiliates, unless
such arrangement or contract (i) is on fair and reasonable terms no
less favorable to the Borrower or such Subsidiary than it could
obtain in an arm’s-length transaction with a Person that is
not an Affiliate and (ii) is of the kind which would be entered
into by a prudent Person in the position of the Borrower or such
Subsidiary with a Person that is not one of its Affiliates.

Restrictive
Agreements, etc.  The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any
agreement prohibiting:

the creation or assumption of any Lien upon its properties,
revenues or assets, whether now owned or hereafter acquired (except
for usual terms in contracts or agreements providing for
restrictions on transfer or assignment);

the ability of any Obligor to amend or otherwise modify this
Agreement or any other Loan Document; or

the ability of any Subsidiary to make any payments, directly or
indirectly, to the Borrower, including by way of dividends,
advances, repayments of loans, reimbursements of management and
other intercompany charges, expenses and accruals or other returns
on investments.

The foregoing prohibitions
shall not apply to restrictions contained in this Agreement and any
other Loan Document.

Sale and
Leaseback.  The
Borrower will not, and will not permit any of its Subsidiaries to,
directly or indirectly enter into any agreement or arrangement
providing for the sale or transfer by it of any property (now owned
or hereafter acquired) to a Person and the subsequent lease or
rental of such property or other similar property from such Person
involving an amount of sale proceeds in excess of $2,500,000 in the
aggregate.  The Net Proceeds of such sale and leaseback shall
be applied by the Borrower pursuant to Section 3.1(d).

Shipment of Assets
Outside of U.S. 
Without the Lender’s prior written consent, which consent
shall not be unreasonably withheld, the Borrower will not ship any
fixed assets or a group of fixed assets, in one or more shipments,
outside of the United States; provided, however, that without the
Lender’s prior written consent, the Borrower may ship
inventory to an unaffiliated customer in the ordinary course of
business if the Borrower receives a minimum payment of at least ten
percent (10%) of the sales price of the inventory or an irrevocable
standby or documentary letter of credit in favor of the Borrower in
an amount equal to at least ten percent (10%) of the sales price of
the inventory, issued by a United States recognized commercial bank
or financial institution which is rated A-1 (or better) by S&P
or P-1 (or better) by Moody’s or issued by a foreign bank and
confirmed by a United States recognized commercial bank or
financial institution, which, at the time of confirmation, is rated
A-1 (or better) by S&P or P-1 (or better) by Moody’s and
payable at the counter of such bank or financial institution that
provides customary draw procedures to protect the seller of goods
in the international markets.  Provided further, that the
Borrower, within eighteen (18) months following the Closing Date
may ship to its existing Tech Ion facility under construction in
Brazil up to four accelerator guns and related system components,
without further consent from the Lender.

Modification of Lender Guaranty
Documents.  So long as
the Lender remains a guarantor under any of the Lender Guaranties,
the Borrower shall not agree to and shall not permit any
modifications, amendments, consents or waivers of any provisions to
the underlying documents relating to the Lender Guaranties, nor
shall the Borrower exercise any option to extend the term of the
underlying documents relating to the Lender Guaranties, without the
prior written consent of the Lender, which consent may be withheld
in the Lender’s sole and absolute discretion, provided that
the Lender shall not unreasonably withhold its consent to a
modification, amendment, consent or waiver if such modification,
amendment, consent or waiver could not, in any way, have an adverse
effect upon the Lender’s obligations under the Lender
Guaranties.

EVENTS OF DEFAULT

Events of
Default.  Each of the
following events or occurrences described in this Article shall
constitute an “Event of Default”.

Non-Payment of Obligations.  The Borrower shall
default in the payment or prepayment when due of:

any principal of or interest on any Revolving Loan and such
default shall continue unremedied for three (3) Business Days after
such amount becomes due; or

any fee described in Article III or any other monetary
Obligation and such default shall continue unremedied for a period
of three (3) days (including one Business Day) after such amount
was due.

Breach of Warranty.  Any representation or warranty
of any Obligor made or deemed to be made in any Loan Document
(including any certificates delivered pursuant to Article V)
is or shall be incorrect (i) in any respect when made or deemed to
have been made (with respect to representations and warranties
qualified by materiality or a Material Adverse Effect) or (ii) in
any material respect when made or deemed to have been made (with
respect to all other representations or warranties).

Non-Performance of Certain Covenants and
Obligations.  The Borrower shall default in the due
performance or observance of any of its obligations under
Section 7.1, Section 7.8, Section 7.9 or
Article VIII or any Obligor shall default in the due
performance or observance of its obligations under (i) Articles
III or IV of the Subsidiary Guaranty, (ii) Articles
III or IV of a Security Agreement, or (iii) Articles
III or IV of a Pledge Agreement.

Non-Performance of Other Covenants and Obligations. 
Any Obligor shall default in the due performance and observance of
any other agreement contained herein or in any other Loan Document
executed by it, and such default shall continue unremedied for a
period of thirty (30) days after notice thereof shall have been
given to the Borrower by the Lender.

Default on Other Indebtedness.  A default shall
occur in the payment when due (subject to any applicable grace
period), whether by acceleration or otherwise, of any Indebtedness
(including for purposes of this Section 9.1(e), all items
which, in accordance with GAAP, would be included as liabilities on
the liability side of the balance sheet of a Person as of the date
at which Indebtedness is to be determined, but excluding
Indebtedness described in Section 9.1(a)) of the Borrower or
any of its Subsidiaries or any other Obligor having a principal
amount, individually or in the aggregate, in excess of $500,000, or
a default shall occur in the performance or observance of any
obligation or condition with respect to such Indebtedness if the
effect of such default is to accelerate the maturity of any such
Indebtedness or such default shall continue unremedied for any
applicable period of time sufficient to permit the holder or
holders of such Indebtedness, or any trustee or agent for such
holders, to cause or declare such Indebtedness to become due and
payable or to require such Indebtedness to be prepaid, redeemed,
purchased or defeased, or require an offer to purchase or defease
such Indebtedness to be made, prior to its expressed maturity.

Judgments.  Any judgment or order for the payment of
money in excess of $250,000 (exclusive of any amounts fully covered
by insurance (less any applicable deductible) and as to which the
insurer has acknowledged its responsibility to cover such judgment
or order) shall be rendered against the Borrower or any of its
Subsidiaries or any other Obligor and such judgment shall not have
been vacated or discharged or stayed or bonded pending appeal
within thirty (30) days after the entry thereof.

Pension Plans.  Any of the following events shall
occur with respect to any Pension Plan:

the institution of any steps by the Borrower, any member of its
Controlled Group, if any, or any other Person to terminate a
Pension Plan if, as a result of such termination, the Borrower or
any such member could be required to make a contribution to such
Pension Plan, or could reasonably expect to incur a liability or
obligation to such Pension Plan, in excess of $250,000; or

a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of
ERISA.

Change in Control.  Any Change in Control shall
occur, and Lender determines, in its sole and absolute discretion,
that such Change in Control shall constitute an Event of
Default.

Bankruptcy, Insolvency, etc.  The Borrower or any of
its Subsidiaries shall:

become insolvent or generally fail to pay, or admit in writing
its inability or unwillingness generally to pay, debts as they
become due;

apply for, consent to, or acquiesce in the appointment of a
trustee, receiver, sequestrator or other custodian for any
substantial part of the property of any thereof, or make a general
assignment for the benefit of creditors;

in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for a substantial part of the
property of any thereof, and such trustee, receiver, sequestrator
or other custodian shall not be discharged within sixty (60) days;
provided, that the Borrower, each Subsidiary and each other Obligor
hereby expressly authorizes the Lender to appear in any court
conducting any relevant proceeding during such sixty (60) day
period to preserve, protect and defend its rights under the Loan
Documents;

permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under
any bankruptcy or insolvency law or any dissolution, winding up or
liquidation proceeding, in respect thereof, and, if any such case
or proceeding is not commenced by the Borrower, any Subsidiary or
any Obligor, such case or proceeding shall be consented to or
acquiesced in by the Borrower, such Subsidiary or such Obligor, as
the case may be, or shall result in the entry of an order for
relief or shall remain for sixty (60) days undismissed; provided,
that the Borrower, each Subsidiary and each Obligor hereby
expressly authorizes the Lender to appear in any court conducting
any such case or proceeding during such sixty (60) day period to
preserve, protect and defend its rights under the Loan Documents;
or

take any action authorizing, or in furtherance of, any of the
foregoing.

Impairment of Security, etc.  Any Loan Document or
any Lien granted thereunder shall (except in accordance with its
terms), in whole or in part, terminate, cease to be effective or
cease to be the legally valid, binding and enforceable obligation
of any Obligor party thereto; any Obligor or any other party shall,
directly or indirectly, contest in any manner such effectiveness,
validity, binding nature or enforceability; or, except as permitted
under any Loan Document, any Lien securing any Obligation shall, in
whole or in part, cease to be a perfected first priority Lien
(except due solely to any action or inaction by the Lender).

Failure of Subordination.  Unless otherwise waived
or consented to by the Lender in writing, the subordination
provisions relating to any Subordinated Debt (the
“Subordination Provisions”) shall fail to
be enforceable by the Lender in accordance with the terms thereof,
or the monetary Obligations shall fail to constitute “Senior
Indebtedness” or “Secured Debt” (or similar term)
referring to the Obligations; or the Borrower or any of its
Subsidiaries shall, directly or indirectly, disavow or contest in
any manner (i) the effectiveness, validity or enforceability of any
of the Subordination Provisions, (ii) that the Subordination
Provisions exist for the benefit of the Lender or (iii) that all
payments of principal of or premium and interest on the
Subordinated Debt, or realized from the liquidation of any property
of any Obligor, shall be subject to any of such Subordination
Provisions. 

Action if
Bankruptcy.  If any
Event of Default described in Section 9.1(i) shall occur,
the Revolving Loan Commitment (if not theretofore terminated) shall
automatically terminate and the outstanding principal amount of all
outstanding Revolving Loans and all other Obligations shall
automatically be and become immediately due and payable, without
presentment, protest, notice or demand (all of which are hereby
expressly waived by the Borrower).

Action if Other
Event of Default.  If
any Event of Default (other than any Event of Default described in
Section 9.1(i)) shall occur for any reason, whether
voluntary or involuntary, and be continuing, the Lender may, at its
option, by notice to the Borrower declare all or any portion of the
outstanding principal amount of the Revolving Loans and other
Obligations to be due and payable and/or the Revolving Loan
Commitment (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Revolving Loans and other
Obligations which shall be so declared due and payable shall be and
become immediately due and payable, without further presentment,
protest, notice or demand (all of which are hereby expressly waived
by the Borrower).

MISCELLANEOUS PROVISIONS

Waivers,
Amendments, etc.  The provisions of this
Agreement and of each other Loan Document may from time to time be
amended, modified or waived, if such amendment, modification or
waiver is in writing and consented to by the Borrower and the
Lender.

No failure or delay on the
part of the Lender in exercising any power or right under this
Agreement or any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power
or right preclude any other or further exercise thereof or the
exercise of any other power or right.  No notice to or demand
on the Borrower or any other Obligor in any case shall entitle it
to any notice or demand in similar or other circumstances.  No
waiver or approval by the Lender under this Agreement or any other
Loan Document shall, except as may be otherwise stated in such
waiver or approval, be applicable to subsequent transactions. 
No waiver or approval hereunder shall require any similar or
dissimilar waiver or approval thereafter to be granted
hereunder.

Notices.  All
notices and other communications provided to any party hereto under
this Agreement or any other Loan Document shall be in writing or by
facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth below its signature
hereto or at such other address or facsimile number as may be
designated by such party in a notice to the other party.  Any
notice, if mailed and properly addressed with postage prepaid or if
properly addressed and sent by pre-paid courier service, shall be
deemed given when received; any notice, if transmitted by
facsimile, shall be deemed given when the confirmation of
transmission thereof is received by the transmitter.

Payment of Costs
and Expenses.  The
Borrower agrees to pay on demand all reasonable expenses of the
Lender  (including the reasonable fees, costs and
out-of-pocket expenses of counsel to the Lender) in connection
with:

(i) any due diligence investigation of the Borrower and its
Subsidiaries and (ii) the negotiation, preparation, execution and
delivery and administration of this Agreement and of each other
Loan Document, including schedules and exhibits, and any
amendments, waivers, consents, supplements or other modifications
to this Agreement or any other Loan Document as may from time to
time hereafter be required, whether or not the transactions
contemplated hereby or thereby are consummated;

the filing, recording, refiling or rerecording of any Loan
Document and/or any Uniform Commercial Code financing statements
relating thereto and all amendments, supplements, amendments and
restatements and other modifications to any thereof and any and all
other documents or instruments of further assurance required to be
filed or recorded or refiled or rerecorded by the terms hereof or
the terms of any Loan Document; and

the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan
Document.

The Borrower further
agrees to pay, and to save the Lender harmless from all liability
for, any stamp or other taxes which may be payable by it in
connection with the execution or delivery of this Agreement, the
Credit Extensions hereunder, or the issuance of the Revolving Note,
or any other Loan Documents.  The Borrower also agrees to
reimburse the Lender upon demand for all reasonable out-of-pocket
expenses (including reasonable attorneys’ fees and legal
expenses of counsel to the Lender) incurred by the Lender in
connection with (y) the negotiation of any restructuring or
“work-out” with the Borrower, whether or not
consummated, of any Obligations and (z) the enforcement of any
Obligations.

Indemnification.  In consideration of the execution and
delivery of this Agreement by the Lender, the Borrower hereby
indemnifies, exonerates and holds Lender and its officers,
directors, employees and agents (collectively, the
“Indemnified Parties”) free and harmless
from and against any and all actions, causes of action, suits,
losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such Indemnified
Party is a party to the action for which indemnification hereunder
is sought), including reasonable attorneys’ fees and
disbursements, whether incurred in connection with actions between
or among the parties hereto or the parties hereto and third parties
(collectively, the “Indemnified
Liabilities”), incurred by the Indemnified Parties or
any of them as a result of, or arising out of, or relating to:

any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Credit Extension,
including all Indemnified Liabilities arising in connection with
transactions contemplated hereby or by any other Loan Document or
transactions which are financed with proceeds of any Revolving
Loan;

the entering into and performance of this Agreement and any
other Loan Document by any of the Indemnified Parties (including
any action brought by or on behalf of the Borrower as the result of
any determination by the Lender pursuant to Article V not to
fund any Credit Extension);

any Indemnified Liabilities (as defined in Lender’s Credit
Agreement) which Lender is required to pay under Lender’s
Credit Agreement and that arise out of or relate to the
Lender’s borrowings under the Lender’s Credit Agreement
that are used to finance any Revolving Loans;

any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries of all or any portion of the stock or assets of any
Person, whether or not an Indemnified Party is party thereto;

any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating
to Environmental Laws or the protection of the environment or the
Release by the Borrower or any of its Subsidiaries of any Hazardous
Material;

the presence on or under, or the Release or threatened Release
from, any real property owned or operated by the Borrower or any
Subsidiary thereof of any Hazardous Material (including any losses,
liabilities, damages, injuries, costs, expenses or claims asserted
or arising under any Environmental Law), regardless of whether
caused by, or within the control of, the Borrower or such
Subsidiary; or

Lender’s Environmental Liability (the indemnification
herein shall survive repayment of the Obligations and any transfer
of the property of the Borrower or any of its Subsidiaries by
foreclosure or by a deed in lieu of foreclosure for any
Lender’s Environmental Liability, regardless of whether
caused by, or within the control of, the Borrower or such
Subsidiary);

except for any such
Indemnified Liabilities arising for the account of a particular
Indemnified Party to the extent caused by or resulting from the
relevant Indemnified Party’s gross negligence or willful
misconduct.  The Borrower and its successors and assigns
hereby waive, release and agree not to make any claim or bring any
cost recovery action against, the Lender under CERCLA or any state
equivalent, or any similar law now existing or hereafter enacted,
except to the extent the Lender is liable due to its ownership,
possession, or operation of property.  It is expressly
understood and agreed that to the extent that any of such Persons
is strictly liable under any Environmental Laws, the
Borrower’s obligation to such Person under this indemnity
shall likewise be without regard to fault on the part of the
Borrower with respect to the violation or condition which results
in liability of such Person.  If and to the extent that the
foregoing undertaking may be unenforceable for any reason, the
Borrower hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities
which is permissible under applicable law.

Survival.  The
obligations of the Borrower under Sections 4.1,
4.2, 10.3 and 10.4 shall survive any
termination of this Agreement, the payment in full of all the
Obligations and the termination of the Revolving Loan
Commitment.  The representations and warranties made by the
Borrower and each other Obligor in this Agreement and in each other
Loan Document shall survive the execution and delivery of this
Agreement and each such other Loan Document.

Severability. 
Any provision of this Agreement or any other Loan Document which is
prohibited or unenforceable in any jurisdiction shall, as to such
provision and such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or such Loan Document or
affecting the validity or enforceability of such provision in any
other jurisdiction.

Headings.  The
various headings of this Agreement and of each other Loan Document
are inserted for convenience only and shall not affect the meaning
or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.

Execution in
Counterparts, Effectiveness, etc.  This Agreement may be executed
by the parties hereto in several counterparts, each of which shall
be an original and all of which shall constitute together but one
and the same agreement.  This Agreement shall become effective
when counterparts hereof executed on behalf of the Borrower and the
Lender  shall have been received by the Lender.

Governing Law;
Entire Agreement. 
THIS AGREEMENT, THE REVOLVING NOTE AND EACH OTHER LOAN DOCUMENT
(INCLUDING PROVISIONS WITH RESPECT TO INTEREST, LOAN CHARGES AND
COMMITMENT FEES) SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF CALIFORNIA,
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF A SECURITY
INTEREST OR MORTGAGE HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF CALIFORNIA.  This
Agreement, the Revolving Note and the other Loan Documents
constitute the entire understanding among the parties hereto with
respect to the subject matter hereof and thereof and supersede any
prior agreements, written or oral, with respect thereto.

Successors and
Assigns.  This
Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns;
provided, however:

that the Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of the
Lender;

the Lender may transfer, sell or assign its rights hereunder
to:

to one or more commercial banks, other financial institutions or
special purpose investment funds which are organized for the
specific purpose of making, acquiring, participating in or
investing in loans of the type made pursuant to this Agreement;

to any of its Affiliates.

Confidentiality.  The Lender shall hold all non-public
information (which has been identified as such by the Borrower or
any of its Subsidiaries) provided to it by the Borrower or any of
its Subsidiaries pursuant to or in connection with this Agreement
in accordance with its customary procedures for handling
confidential information of this nature, but may make disclosure to
any of its examiners, regulators, Affiliates, outside auditors,
counsel and other professional advisors in connection with this
Agreement or any other Loan Document or as reasonably required by
any potential bona fide transferee or assignee, or in connection
with the exercise of remedies under a Loan Document, or to any
nationally recognized rating agency that requires access to
information about the Lender’s investment portfolio in
connection with ratings issued with respect to the Lender, or as
requested by any governmental agency or representative thereof or
pursuant to legal process; provided, however, that
unless specifically prohibited by applicable law or court order,
the Lender shall use reasonable efforts to promptly notify the
Borrower of any request by any governmental agency or
representative thereof (other than any such request in connection
with an examination of the financial condition of the Lender by
such governmental agency) for disclosure of any such non-public
information and, where practicable, prior to disclosure of such
information; provided further, however, that the
Lender shall not be liable to the Borrower if any such Person fails
to provide such notice; prior to any such disclosure pursuant to
this Section 10.11, the Lender shall require any such bona
fide transferee and assignee receiving a disclosure of non-public
information to agree, for the benefit of the Borrower and its
Subsidiaries, in writing to be bound by this Section 10.11;
and to require such Person to require any other Person to whom such
Person discloses such non-public information to be similarly bound
by this Section 10.11; and except as may be required by an
order of a court of competent jurisdiction or other applicable law,
and to the extent set forth therein, the Lender shall not be
obligated or required to return any materials furnished by the
Borrower or any of its Subsidiaries.

Forum Selection and
Consent to Jurisdiction.  ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE LENDER OR
THE BORROWER IN CONNECTION HEREWITH OR THEREWITH SHALL BE BROUGHT
AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF CALIFORNIA
OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
CALIFORNIA; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE LENDER’S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND.  THE BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF CALIFORNIA AT THE ADDRESS FOR
NOTICES SPECIFIED IN SECTION 10.2.  THE BORROWER HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO
THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH
COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.  TO THE EXTENT THAT THE
BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT
IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES TO THE FULLEST
EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

Waiver of Jury
Trial.  THE LENDER
AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE
LENDER OR THE BORROWER IN CONNECTION HEREWITH OR THEREWITH. 
THE BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER
ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized as of the day and
year first above written.

	
                                                          

	
   

	
SUREBEAM
CORPORATION

	

  

	

  

	

 By:

	

 /s/ L. A. OBERKFELL

				

				
L. A.
Oberkfell

 President

 Chief Executive Office

				

 9276 Scranton Road, Suite 600

 San Diego, California  92121

		
   

	
            

		
 

	
THE TITAN
CORPORATION

	

  

	

  

	

 By:

	

 /s/ MARK W. SOPP

				

				
Mark W.
Sopp

 Senior Vice President

 Chief Financial Officer

				

 3033 Science Park Road

 San Diego, CA  92121

EXHIBITS

Exhibit A      Annual
Operating Plan

Exhibit B      Borrower
Pledge Agreement

Exhibit C      Borrower
Security Agreement

Exhibit D      Borrowing
Request

Exhibit E      Collateral
Assignment or Rights under License Agreement

Exhibit F      Compliance
Certificate

Exhibit G      Copyright
Security Agreement

Exhibit H      Issuance
Request

Exhibit I      
Revolving Note

Exhibit J      
Subsidiary Guaranty

Exhibit K     Subsidiary
Pledge Agreement

Exhibit L      Subsidiary
Security Agreement

 

SCHEDULE I

                                
DISCLOSURE SCHEDULE TO CREDIT AGREEMENT

ITEM 2.7  Lender
Guaranties

	
Description

	
	
Chicago Facility Lease
dated November 17, 2000 with Bradley Associates Limited
Partnership

	
Los Angeles Facility Lease
dated March 26, 2002 with XH Partners, L.P.

	
Iowa Dept. of Economic
Development

	
	

ITEM 2.9  Leases
entered into by the Lender on behalf of the Borrower

	
Description

	
	
Lease dated August 22,
2000 with B/G Management Co for the lease of certain property in
Dublin, California

	
Lease dated August 15,
2000 with Czapla DBA Zendex for the lease of certain property in
Dublin, California

	
Lease dated February 1,
2001 with Cloverleaf Cold Storage Co for the lease of certain
property in Sioux City, Iowa

	
Lease dated May 15, 2000
with Embassy Tower Limited Partnership for the lease of certain
property in Omaha, Nebraska

	
Lease dated January 1,
2001 with Cooperative Real Estate Investment Company for the lease
of certain property

In Saudi Arabia

	

ITEM 6.3  
Governmental Approval, Regulation.

N/A

ITEM 6.7 
Litigation.

Corporate Brands, Inc.
– Seeking $185,408.44.

ITEM 6.8  Existing
Subsidiaries*.

1.                    
SB OperatingCo, Inc. (wholly-owned)

                                   
which was previously named SureBeam Corporation

                                   
and before that was named Titan Scan Corp.

                                   
and before that was named Titan Purification, Inc.

                                   
This entity has been or will be converted to a Delaware
limited

liability company, SB
OperatingCo, LLC.

           
2.                    
Titan SureBeam Brazil Inc.

           
3.                    
SureBeam Brasil Ltda

*There may be other
Subsidiaries, the Borrower agrees to update this Item 6.8 upon
confirming information regarding other Subsidiaries.

ITEM 6.11  Employee
Benefit Plans.

N/A

ITEM 6.12 
Environmental Matters.

N/A

ITEM 8.2 Outstanding
Indebtedness.

None, except (i) in favor
of Lender, (ii) accounts payable that occur in the ordinary course
of business, (iii) endorser liability arising in the ordinary
course of business, and (iv) as disclosed in the financial
statements as of March 31, 2002 filed with the SEC and furnished to
Lender.

ITEM 8.3 
Liens.

Crown Credit
Company—Lease for forklift equipment

Certain vendors may have
purported to retain purchase money security interests pursuant to
their standard purchase agreements or invoices in the ordinary
course of business, but there have been no UCC Financing Statements
filed.

ITEM 8.5 
Investments.

Investments in
Subsidiaries to the Closing Date.

Investments as disclosed
in the financial statements as of March 31, 2002 filed with the SEC
and furnished to Lender.

Investments in Hawaii
Pride LLC.—loan of approximately $5,400,000

Investments in SureBeam
Middle East—joint venture wherein the Borrower has invested
approximately $250,000

ITEM 8.8  Options and
Warrants.

None.

Exhibit A

SureBeam
Corporation

FY 2002
AOP

[...***...]

SureBeam
Corporation

FY 2002
Adjusted AOP

[...***...]

*
Confidential Treatment Requested

SureBeam
Corporation

2002
AOP

[...***...]

*
Confidential Treatment Requested

SureBeam
Corporation

2003
AOP

[...***...]

*
Confidential Treatment Requested

SureBeam
Corporation

2002
Adjusted AOP

[...***...]

*
Confidential Treatment Requested

Exhibit B

BORROWER PLEDGE AGREEMENT

This PLEDGE AGREEMENT (as
amended, restated, supplemented, or otherwise modified from time to
time, this “Pledge Agreement”), dated as of
August 2, 2002, is made by SUREBEAM CORPORATION, a Delaware
corporation (the “Pledgor”), in favor of THE
TITAN CORPORATION, a Delaware corporation (the
“Pledgee”).   

W I T N E
S S E T H:

WHEREAS, pursuant to a
Senior Secured Credit Agreement, dated as of  August 2, 2002
(as amended, restated, supplemented, or otherwise modified from
time to time, the “Credit Agreement”), between
the Pledgor and Pledgee, the Pledgee has agreed to make Credit
Extensions to the Borrower;

WHEREAS, as a condition
precedent to the making of the Credit Extensions (including the
initial Credit Extension) under the Credit Agreement, the Pledgor
is required to execute and deliver this Pledge
Agreement;

WHEREAS, the Pledgor has
duly authorized the execution, delivery and performance of this
Pledge Agreement; and

NOW THEREFORE, for good
and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, and in order to induce the Pledgee to make
Credit Extensions (including the initial Credit Extension) to the
Pledgor pursuant to the Credit Agreement, the Pledgor agrees as
follows:

DEFINITIONS

Certain Terms.  Capitalized terms used but not
otherwise defined herein shall have the meanings given them in the
Credit Agreement.  The following terms (whether or not
underscored) when used in this Pledge Agreement, including its
preamble and recitals, shall have the following meanings (such
definitions to be equally applicable to the singular and plural
forms thereof):

“Act”
is defined in Section 6.2.

“Certificated
Interests” means, collectively, all Pledged Shares
evidenced by certificates.

“Collateral” is defined in
Section 2.1.

“Credit
Agreement” is defined in the first
recital.

“Distributions” means all
stock dividends, liquidating dividends, shares of stock resulting
from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or
dissimilar to the foregoing) on or with respect to any Pledged
Interests or other shares of Capital Stock constituting Collateral,
but shall not include Dividends.

“Dividends” means cash
dividends and cash distributions with respect to any Pledged
Interests made in the ordinary course of business and not as a
liquidating dividend.

“Interest Rate
Hedging Agreements” means interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements,
and all other agreements or arrangements designed to protect
against fluctuations in interest rates, entered into for the
purpose of hedging interest rate risk with respect to the
Obligations.

“Interest Rate
Hedging Obligations” means all liabilities of the Pledgor
under Interest Rate Hedging Agreements.

“LLC”
means each limited liability company listed from time to time as a
Pledged Interest Issuer on Attachment 1 hereto.

“LLC
Interest” means the entire ownership interest of the
Pledgor in each Pledged Interest Issuer that is an LLC listed on
Attachment 1 hereto, including such Pledgor’s capital
account, its gain, loss, deduction and credit of such Pledged
Interest Issuer, the Pledgor’s interest in all distributions
made or to be made by such Pledged Interest Issuer to the Pledgor
and all of the other rights, titles and interests of the Pledgor as
an owner or a member of such Pledged Interest Issuer, whether set
forth in the operating or membership agreement of such Pledged
Interest Issuer, by separate agreement or otherwise.

“Partnership” means each
general partnership or limited partnership listed from time to time
as a Pledged Interest Issuer on Attachment 1
hereto.

“Partnership
Interest” means the entire ownership interest of the
Pledgor in each Pledged Interest Issuer that is a Partnership
listed on Attachment 1 hereto, including the Pledgor’s
capital account, its gain, loss, deduction and credit of such
Pledged Interest Issuer, the Pledgor’s interest in all
distributions made or to be made by such Pledged Interest Issuer to
the Pledgor and all of the other rights, titles and interests of
the Pledgor as an owner, a general partner or a limited partner of
such Pledged Interest Issuer, whether set forth in the partnership
agreement of such Pledged Interest Issuer, by separate agreement or
otherwise.

“Pledge
Agreement” is defined in the preamble.

“Pledged Interest
Issuers” means each Person identified in Attachment
1 hereto as the issuer of the Pledged Interests (including the
maker of each Pledged Note) identified opposite the name of such
Person and each Person whose ownership, equity or other similar
interests, including shares of Capital Stock, Partnership Interests
and LLC Interests, are, or are required to be, pledged hereunder
and under the Credit Agreement from time to time.

“Pledged
Interests” means (i) all Pledged Shares and (ii) all
Pledged Notes.

“Pledged
Notes” means all promissory notes of any Pledged Interest
Issuer identified on Attachment 1 hereto, and any promissory
notes issued to Pledgor in the future, as such promissory notes are
amended, restated, supplemented or otherwise modified from time to
time, in accordance with Section 4.1.6, together with any
promissory note of any Pledged Interest Issuer taken in extension
or renewal thereof or substitution therefor.

“Pledged
Shares” means (a) all ownership, equity or other similar
interests, including shares of Capital Stock, Partnership Interests
and LLC Interests, of any Pledged Interest Issuer listed on
Attachment 1 hereto and any shares of Capital Stock,
Partnership Interests and LLC Interests of any Pledged Interest
Issuer obtained in the future by the Pledgor, (b) the certificates
representing all such ownership, equity or similar interests and
(c) all securities convertible into, and all warrants, options or
other rights to acquire, such ownership, equity or similar
interests; but excluding all shares of voting stock of each class
of any Foreign Subsidiary in excess of sixty five percent (65%) of
the total issued and outstanding shares of the voting stock of each
such class.

“Pledgee” is defined in the
preamble.

“Pledgor” is defined in the
preamble.

“Secured
Obligations” is defined in Section 2.2.

“Termination
Date” means the date on which all Obligations have been
indefeasibly paid in full in cash, all Commitments have been fully
terminated and all Letters of Credit have been canceled or
otherwise terminated.

“U.C.C.” means the Uniform
Commercial Code, as in effect from time to time in the State of
California; provided, however, in the event that, by
reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of Pledgee’s security
interest in any Collateral is governed by the Uniform Commercial
Code (including Articles thereof) as in effect in a jurisdiction
other than the State of California, “U.C.C.” shall mean
the Uniform Commercial Code as in effect at such time in such other
jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions
related to such provisions.

Credit Agreement Definitions.  Unless otherwise
defined herein or the context otherwise requires, terms used in
this Pledge Agreement, including its preamble and recitals, have
the meanings provided in the Credit Agreement.

U.C.C. Definitions.  Unless otherwise defined herein
or in the Credit Agreement or the context otherwise requires, terms
for which meanings are provided in the U.C.C. are used in this
Pledge Agreement, including its preamble and recitals, with such
meanings.

PLEDGE

Grant of Security Interest.  The Pledgor hereby
pledges, hypothecates, assigns, charges, mortgages, delivers and
transfers to the Pledgee, and the Pledgor hereby grants to the
Pledgee, to secure the Secured Obligations, a continuing security
interest in, all of the following property (the
“Collateral”):

all Pledged Interests;

all right, title and interest of the Pledgor, whether now
existing or hereafter arising or acquired, in, to and under any
partnership agreement, limited liability company agreement or
similar agreement which governs the rights and obligations of the
holder of ownership, equity or similar interests in a Pledged
Interest Issuer;

all voting trust certificates held by Pledgor evidencing the
right to vote any Pledged Shares subject to any voting trust;

all Dividends, Distributions, interest and without duplication,
other payments and rights with respect to any Pledged Interest;
and

all Proceeds of any of the foregoing.

Security for Obligations.  This Pledge Agreement
secures the payment in full of all Obligations of the Pledgor now
or hereafter existing under the Credit Agreement, each other Loan
Document and each Interest Rate Hedging Agreement, whether for
principal, interest, costs, fees, indemnities, expenses, Interest
Rate Hedging Obligations or otherwise (including all Obligations of
the Pledgor now or hereafter existing under this Pledge Agreement
and each other Loan Document to which such Pledgor is or may become
a party), with all such Obligations being referred to as the
“Secured Obligations”.

Pledge and Transfer of Pledged Interests.  Any
Certificated Interests representing or evidencing any Collateral
shall be delivered to and held by or on behalf of the Pledgee
pursuant hereto, shall be in suitable form for transfer by
delivery, and shall be accompanied by all necessary instruments or
documents of transfer or assignment, duly executed in blank by the
Pledgor or, if any Collateral is in the form of uncertificated
securities, confirmation and evidence satisfactory to the Pledgee
that the Pledgor has taken all actions requested by the Pledgee to
provide for the transfer to and perfection by the Pledgee of the
security interests in such uncertificated securities in accordance
with the U.C.C. and any other applicable law.

Dividends on Pledged Interests. 

In the event that any Dividend or other payment is to be paid on
any Pledged Interests (including any payment of any principal or
interest on any Pledged Note) at a time when no Default has
occurred and is continuing or would result therefrom, such Dividend
or payment may be paid directly to the Pledgor; and

If any such Default or Event of Default has occurred and is
continuing, then any such Dividend or payment shall be paid
directly to the Pledgee.

Continuing Security Interest.  This Pledge Agreement
shall create a continuing security interest in the Collateral and
shall:

remain in full force and effect until the Termination Date;

be binding upon the Pledgor and its successors, transferees and
assigns; and

inure to the benefit of and be enforceable by the Pledgee.

Without limiting clause
(c), the Pledgee may assign or otherwise transfer (in whole or
in part) the Revolving Note or any Credit Extension or Commitment
held by it to any other Person, and such other Person shall
thereupon become vested with all the rights and benefits in respect
thereof granted to the Pledgee under any Loan Document (including
this Pledge Agreement) or otherwise, in each case as provided in
Section 10.10 of the Credit Agreement.

Upon (i) the sale,
transfer or other disposition of Collateral in accordance with the
Credit Agreement or (ii) the occurrence of the Termination Date,
the security interests granted herein shall automatically terminate
with respect to (x) such Collateral (in the case of clause (i)) or
(y) all Collateral (in the case of clause (ii)), and at such time
the Pledgee will, at the Pledgor’s sole expense, deliver to
the applicable Pledgor, without any representations, warranties or
recourse of any kind whatsoever, all certificates and instruments
previously delivered to the Pledgee representing or evidencing all
Pledged Interests, together with all other Collateral held by the
Pledgee hereunder, and execute and deliver to the Pledgor such
documents as the Pledgor shall reasonably request to evidence such
termination.

REPRESENTATIONS AND WARRANTIES

Representations and Warranties, etc.  In order to
induce the Pledgee to enter into the Credit Agreement and to make
Credit Extensions thereunder, the Pledgor represents and warrants
to the Pledgee as set forth in this Article III.

Ownership, No Liens, etc.  The Pledgor is the legal
and beneficial owner of, and has good and marketable title to (and
has full right and authority to pledge and assign) its Collateral,
free and clear of all Liens, options and other charges, except any
Lien granted pursuant hereto in favor of the Pledgee.

Valid Security Interest.  With respect to U.S.
entities, the execution and delivery of this Pledge Agreement,
together with (a)(i) in the case of Collateral in the form of a
Certificated Interest, the delivery of such Collateral to the
Pledgee together with undated stock powers executed in blank by the
Pledgor, (ii) in the case of Collateral in the form of an
uncertificated security, the registration in the name of the
Secured Party as owner with the Pledged Interest Issuer of such
uncertificated security, or (iii) in the case of Collateral in the
form of Pledged Notes, delivery of such Collateral and an
allonge to such Collateral to the Pledgee, or (b) in
the case of other than Certificated Interests, the filing of U.C.C.
financing statements in the filing offices listed on Attachment
2 hereto, is effective to create a valid, perfected, first
priority security interest in such Collateral and all Proceeds
thereof, securing the Secured Obligations.  Upon the
performance of the actions set forth in the first sentence of this
Section 3.1.2, no further action is necessary to
perfect or protect such security interest in the Collateral and the
Proceeds thereof.  The Pledgor agrees that it shall take all
necessary actions reasonably requested by the Pledgee to create a
valid, perfected security interest in non-U.S. entities.

As to Pledged Interests.  In the case of

any Pledged Interests (other than Pledged Notes) constituting
Collateral,

all of such Pledged Interests are duly authorized, and validly
issued, fully paid, and non-assessable, and constitute that
percentage of the issued and outstanding shares of Capital Stock,
Partnership Interests, LLC Interests and other ownership interests
of each Pledged Interest Issuer set forth on Attachment 1
hereto; and

the Pledgor has delivered to the Pledgee true and complete
copies of the partnership, membership, operating or ownership
agreements, as applicable, for each Pledged Interest Issuer that is
an LLC or a Partnership, which agreements are currently in full
force and effect and have not been amended or modified except as
disclosed to the Pledgee in writing; and

each Pledged Note, all of such Pledged Notes have been duly
authorized, executed, endorsed, issued and delivered, and are the
legal, valid and binding obligation of the issuers thereof, and no
default or event of default has occurred and is continuing
thereunder.

Location of Pledgor.  The jurisdictions in which the
Pledgor is located for purposes of Section 9307 of the U.C.C. are
set forth in Attachment 1 hereto.

Nature of Pledged Interests.  No LLC Interests or
Partnership Interests are Certificated Interests.

COVENANTS

Covenants.  The Pledgor covenants and agrees that,
at all times prior to the Termination Date, it will perform, comply
with and be bound by the obligations set forth in this Article
IV.

Protect Collateral; Further Assurances, etc.  The
Pledgor covenants and agrees that it will not sell, assign,
transfer, pledge, or encumber in any other manner the Collateral
except in favor of the Pledgee hereunder or as permitted in the
Credit Agreement). The Pledgor will warrant and defend the right
and title herein granted unto the Pledgee in and to the Collateral
(and all right, title, and interest represented by the Collateral)
against the claims and demands of all Persons.  The Pledgor
agrees that from time to time, at the expense of the Pledgor, it
will promptly execute and deliver all further instruments, and take
all further action, that may be necessary or desirable, or that the
Pledgee may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to
enable the Pledgee to exercise and enforce its rights and remedies
hereunder with respect to any Collateral.  The Pledgor will
not, without thirty (30) days’ prior written notice to the
Pledgee, (i) change its name or structure so as to make any
financing or other statement filed pursuant to this Pledge
Agreement become seriously misleading or (ii) change the
jurisdiction in which it is located to other than those specified
in Section 3.1.4 hereof.  The Pledgor further covenants
and agrees as follows:

If the Pledgor shall become entitled to receive or shall receive
any stock or other certificate (including any certificate
representing a Dividend or a Distribution in connection with any
reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option
or rights, whether in addition to, in substitution of, as a
conversion of, or in exchange for any portion of the Collateral (or
otherwise in respect thereof), the Pledgor shall accept the same as
the agent of the Pledgee, hold the same in trust for the Pledgee
and deliver the same forthwith to the Pledgee in the exact form
received, duly endorsed (in blank) by the Pledgor to the Pledgee,
if required, together with an undated stock power or other
necessary instrument of transfer covering such certificate duly
executed in blank by the Pledgor, to be held by the Pledgee,
subject to the terms of this Pledge Agreement, as additional
security for the Secured Obligations.  In addition, any sums
paid upon or in respect of the Collateral upon the liquidation or
dissolution of any Pledged Interest Issuer shall be held by the
Pledgee as additional security for the Secured Obligations. 
If any sums of money or property so paid or distributed in respect
of any Collateral shall be received by the Pledgor, then the
Pledgor shall, until such money or property is paid or delivered to
the Pledgee, hold such money or property in trust for the Pledgee,
segregated from other funds of the Pledgor, as additional
collateral securing the Secured Obligations.

Except as otherwise expressly permitted by the Credit Agreement,
without the prior written consent of the Pledgee, the Pledgor will
not (i) consent to any material modification, extension or
alteration of the terms of any partnership, membership or operating
agreement of the LLCs or the Partnerships or (ii) accept a
surrender of any partnership, membership or operating agreement of
any of the LLCs or the Partnerships, as applicable, or waive any
breach of or default under any such agreement by any other party
thereto.

The Pledgor will advise the Pledgee promptly, in reasonable
detail (i) of any Lien or claim made or asserted against any part
of the Collateral, (ii) of any material change in the composition
of the Collateral, and (iii) of the occurrence of any other event
relating specifically to the Pledgor or its assets which could
reasonably be expected to have a material adverse effect on the
aggregate value of the Collateral or on the security interests
created hereunder.

Registration of Pledged Interests, etc.  The Pledgor
shall execute and deliver to the applicable Pledged Interest Issuer
instructions to register, substantially in the form of Exhibit
A hereto, and cause each Pledged Interest Issuer to execute and
deliver to the Pledgee the Transaction Statement, substantially in
the form of Exhibit B hereto, confirming that each Pledged
Interest Issuer (in which the Pledgor owns a Pledged Interest
(other than in the case of a Certificated Interest or a Pledged
Note)) has registered the pledge by the Pledgor effected by this
Pledge Agreement on its books.  In addition, the Pledgor
agrees that it shall cause each issuer of Certificated Interests to
execute and deliver to the Pledgee an acknowledgment in a form
satisfactory to the Pledgee.

Stock Powers, etc.  The Pledgor agrees that all
Certificated Interests constituting Collateral delivered by the
Pledgor pursuant to this Pledge Agreement will be accompanied by
duly executed undated blank stock powers, or other equivalent
instruments or documents of transfer acceptable to the Pledgee, as
are necessary under all applicable laws to perfect the Lien in
favor of the Pledgee on such Collateral.  The Pledgor will,
from time to time upon the request of the Pledgee, promptly deliver
to the Pledgee such stock powers, instruments, and similar
documents, satisfactory in form and substance to the Pledgee, with
respect to the Collateral as the Pledgee may reasonably request and
will, from time to time upon the request of the Pledgee after the
occurrence, and during the continuance, of any Event of Default,
promptly transfer any Pledged Interests or other shares of Capital
Stock or other ownership interests constituting Collateral into the
name of any nominee designated by the Pledgee.

Continuous Pledge.  The Pledgor will, at all times,
keep pledged to the Pledgee pursuant hereto all Pledged Interests
and all other shares of Capital Stock or other ownership interests
constituting Collateral, all Dividends and Distributions with
respect thereto (provided that if no Event of Default shall have
occurred or be continuing, such Dividends and Distributions may be
used for working capital or other purposes), all Pledged Notes, all
interest, principal and other proceeds received by the Pledgee with
respect to the Pledged Notes, and all other Collateral and other
securities, instruments, proceeds, and rights from time to time
received by or distributable to the Pledgor in respect of any
Collateral, and will not permit any Pledged Interest Issuer to
issue any Capital Stock or other ownership interests or any
options, warrants or other rights to subscribe for or purchase
Capital Stock (other than as permitted by the Credit Agreement)
which shall not have been immediately duly pledged hereunder on a
first priority perfected basis.

Voting Rights; Dividends, etc.  The Pledgor
agrees:

after any Event of Default shall have occurred and be
continuing, promptly upon receipt of notice thereof by the Pledgor
and without any request therefor by the Pledgee, such Pledgor will
deliver (properly endorsed where required hereby or requested by
the Pledgee) to the Pledgee all Dividends, Distributions, all other
cash payments, and all Proceeds of the Collateral, all of which
shall be held by the Pledgee as additional Collateral for use in
accordance with Section 6.4 hereof; and

after any Event of Default shall have occurred and be continuing
and the  Pledgee has notified the Pledgor of the
Pledgee’s intention to exercise its voting power under this
Section 4.1.5:

the Pledgee may exercise (to the exclusion of the Pledgor) the
voting power and all other incidental rights of ownership with
respect to any Pledged Interests or other shares of Capital Stock
or other ownership interests constituting Collateral and the
Pledgor hereby grants the Pledgee an irrevocable proxy, exercisable
under such circumstances, to vote the Pledged Interests and such
other Collateral; and

to promptly deliver to the Pledgee such additional proxies and
other documents requested by the Pledgee as may be necessary to
allow the Pledgee to exercise such voting power.

All Dividends,
Distributions, cash payments and Proceeds which may at any time and
from time to time be held by the Pledgor but which the Pledgor is
then obligated to deliver to the Pledgee, shall, until delivery to
the Pledgee, be held by the Pledgor separate and apart from its
other property in trust for the Pledgee.  The Pledgee agrees
that unless an Event of Default shall have occurred and be
continuing and the Pledgee shall have given the notice referred to
in clause (b), the Pledgor shall have the exclusive
voting power with respect to any shares of Capital Stock or other
ownership interests (including any of the Pledged Interests)
constituting Collateral and the Pledgee shall, upon the written
request of the Pledgor, promptly deliver such proxies and other
documents, if any, as shall be reasonably requested by the Pledgor
which are necessary to allow the Pledgor to exercise voting power
with respect to any such share of Capital Stock or other ownership
interests (including any of the Pledged Interests) constituting
Collateral; provided, however, that no vote shall be
cast, or consent, waiver, or ratification given, or action taken by
the Pledgor that would impair any Collateral or be inconsistent
with or violate any provision of the Credit Agreement, any other
Loan Document or any Interest Rate Hedging Agreement.

Additional Undertakings.  The Pledgor will not,
without the prior written consent of the Pledgee, take or omit to
take any action the taking or the omission of which could with
reasonable likelihood result in any impairment or alteration of any
Instrument constituting Collateral.  In furtherance of the
foregoing, the Pledgor agrees that it will not, without the prior
written consent of the Pledgee, which consent shall not be
unreasonably withheld:

enter into any agreement amending, supplementing, or waiving any
provision of any Pledged Note (including any underlying Instrument
pursuant to which such Pledged Note is issued) or compromising or
releasing or extending the time for payment of any obligation of
the maker thereof; or

take or omit to take any action the taking or the omission of
which would result in any impairment or alteration of any
obligation of the maker of any Pledged Note or other Instrument
constituting Collateral.

Pledgor Remains Liable.  Anything herein to the
contrary notwithstanding:

the Pledgor shall remain liable to perform all of its duties and
obligations as an owner of the Pledged Interests, to the same
extent as if this Pledge Agreement had not been executed;

the exercise by the Pledgee of any of its rights hereunder shall
not release the Pledgor from any of its duties or obligations as
owner of the Pledged Interests; and

the Pledgee shall not have any obligation or liability as an
owner of any Pledged Interest as applicable, by reason of this
Pledge Agreement.

ATTORNEY IN FACT

Pledgee Appointed Attorney-in-Fact.  The Pledgor
hereby irrevocably appoints the Pledgee as the Pledgor’s
attorney-in-fact, with full authority in the place and stead of the
Pledgor and in the name of the Pledgor or otherwise, from time to
time in the Pledgee’s discretion, after the occurrence and
during the continuance of an Event of Default, to take any action
and to execute any instrument or document which the Pledgee may
deem necessary or advisable to accomplish the purposes of this
Pledge Agreement, including without limitation:

to ask, demand, collect, sue for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral;

to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with
clause (a); and

to file any claims or take any action or institute any
proceedings which the Pledgee may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the
rights of the Pledgee with respect to any of the Collateral.

The Pledgor hereby
acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section 5.1 is irrevocable and
coupled with an interest.

Pledgee May Perform.  If the Pledgor fails to
perform any agreement contained herein, the Pledgee may perform, or
cause performance of, such agreement, and the reasonable expenses
of the Pledgee incurred in connection therewith shall be payable by
the Pledgor pursuant to Section 6.5 hereof.

Pledgee Has No Duty.  The powers conferred on the
Pledgee hereunder are solely to protect its interests in the
Collateral and shall not impose any duty on it to exercise any such
powers.  Except for reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it
hereunder, the Pledgee shall have no duty as to any Collateral or
responsibility for:

ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters
relative to any Pledged Interests, whether or not the Pledgee has
or is deemed to have knowledge of such matters; or

taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.

Reasonable Care.  Other than the exercise of
reasonable care in the custody and preservation of the Collateral
in its possession, the Pledgee shall have no duty with respect
thereto.  The Pledgee shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral
in its possession if the Collateral is accorded treatment
substantially equal to that which the Pledgee accords its own
property.  The Pledgee shall not be liable or responsible for
any loss or damage to any of the Collateral, or for any diminution
in the value thereof, by reason of the act or omission of any agent
or bailee selected by the Pledgee in good faith.

REMEDIES

Certain Remedies.  If any Event of Default shall
have occurred and be continuing:

The Pledgee may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured
party under the U.C.C. (whether or not the U.C.C. applies to the
affected Collateral) and also may, without notice except as
specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at  the
Pledgee’s offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Pledgee may deem
commercially reasonable.  The Pledgor agrees that, to the
extent notice of sale shall be required by law, at least ten (10)
days’ prior notice to the Pledgor of the time and place of
any public sale or the time after which any private sale is to be
made shall constitute reasonable notification.  The Pledgee
shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given.  The Pledgee may adjourn any
public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so
adjourned.

The Pledgee may:

transfer all or any part of the Collateral into the name of the
Pledgee or its nominee, with or without disclosing that such
Collateral is subject to the Lien hereunder;

notify the parties obligated on any of the Collateral to make
payment to the Pledgee of any amount due or to become due
thereunder;

           
enforce collection of any of the Collateral by suit or otherwise,
and surrender, release or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer
than the original period) any obligations of any nature of any
party with respect thereto;

endorse any checks, drafts, or other writings in the
Pledgor’s name to allow collection of the Collateral;

take control of any Proceeds of the Collateral;

execute (in the name, place and stead of the Pledgor)
endorsements, assignments, stock powers and other instruments or
other documents of conveyance or transfer with respect to all or
any of the Collateral;

accelerate any Pledged Note which may be accelerated in
accordance with its terms and take any other action to collect upon
any Pledged Note (including, without limitation, making any demand
for payment thereon); and

to vote all or any part of the Pledged Interests (whether or not
transferred into the name of the Pledgee) and give all consents,
waivers and ratifications in respect of the Collateral (including,
without limitation, under all operating agreements, partnership
agreements or other agreements relating to the Collateral) and
otherwise act with respect thereto as if the Pledgee were the
outright owner thereof.

Securities Laws.  If the Pledgee shall determine to
exercise its right to sell all or any of the Collateral pursuant to
Section 6.1 hereof, the Pledgor agrees that, upon request of
the Pledgee, the Pledgor will, at the Pledgor’s own
expense:

execute and deliver, and cause each issuer of the Collateral
contemplated to be sold and cause the directors and officers
thereof to execute and deliver, all such instruments and documents,
and do or cause to be done all such other acts and things, as may
be necessary or, in the opinion of the Pledgee, advisable to
register such Collateral under the provisions of the Securities Act
of 1933, as from time to time amended (the “Act”) and
comparable legislation in other jurisdictions, and to cause the
registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by
law to be furnished, and to make all amendments and supplements
thereto and to the related prospectus which, in the opinion of the
Pledgee, are necessary or advisable, all in conformity with the
requirements of the Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto and
comparable legislation, rules and regulations in other
jurisdictions;

use its best efforts to qualify the Collateral under the
applicable state securities or “Blue Sky” laws and to
obtain all necessary governmental approvals for the sale of the
Collateral, as requested by the Pledgee;

cause each such Pledged Interest Issuer to make available to its
security holders, as soon as practicable, an earnings statement
that will satisfy the provisions of Section 11(a) of the Act and
comparable legislation in other jurisdictions; and

do or cause to be done all such other acts and things as may be
necessary to make such sale of the Collateral or any part thereof
valid and binding and in compliance with applicable law.

The Pledgor further
acknowledges the impossibility of ascertaining the amount of
damages that would be suffered by the Pledgee by reason of the
failure by the Pledgor to perform any of the covenants contained in
this Section 6.2 and, consequently, agrees that, if the
Pledgor shall fail to perform any of such covenants, the Pledgor
shall pay, as liquidated damages and not as a penalty, an amount
equal to the value (as determined by the Pledgee) of the Collateral
on the date the Pledgee shall demand compliance with this
Section 6.2.  Notwithstanding the provisions of this
Section 6.2, the Pledgee shall not be obligated to register
any of the Collateral under the Act in connection with the exercise
of remedies hereunder and may elect, in its sole discretion, to
sell the Collateral or any part thereof by private sale in such
manner and under such circumstances as the Pledgee may deem
necessary or advisable in order that such sale be effected without
such registration.

Compliance with Restrictions.  The Pledgor agrees
that in any sale of any of the Collateral whenever an Event of
Default shall have occurred and be continuing, the Pledgee is
hereby authorized to comply with any limitation or restriction in
connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the
number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications, and
restrict such prospective bidders and purchasers to Persons who
will represent and agree that they are purchasing for their own
account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required
approval of the sale or of the purchaser by any governmental
regulatory authority or official, and the Pledgor further agrees
that such compliance shall not result in such sale being considered
or deemed not to have been made in a commercially reasonable
manner, nor shall the Pledgee be liable or accountable to the
Pledgor for any discount allowed by the reason of the fact that
such Collateral is sold in compliance with any such limitation or
restriction.

Application of Proceeds.  All cash proceeds received
by the Pledgee in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral may, in the
discretion of the Pledgee, be held by the Pledgee as additional
collateral security for, or then or at any time thereafter be
applied in whole or in part by the Pledgee against all or any part
of the Secured Obligations as follows:

first, to the payment of all Obligations owing to the Pledgee
pursuant to Section 10.3 of the Credit Agreement and Section
6.5 hereof;

second, after payment in full of the amounts specified in
clause (i), to the payment of all other Obligations owing to
the Pledgee, with such amounts applied first to fees and expenses,
then to accrued and unpaid interest, then to the outstanding
principal amount of the Revolving Loan, and then to Letter of
Credit Outstandings and then to Interest Rate Hedging Obligations,
if any; and

third, payment in full of the amounts specified in clauses (i)
and (ii), and following the Termination Date, to the Pledgor or any
other Person lawfully entitled to receive such surplus.

Indemnity and Expenses.  The Pledgor hereby agrees
to indemnify and hold harmless the Pledgee from and against any and
all claims, losses, and liabilities arising out of or resulting
from this Pledge Agreement (including enforcement of this Pledge
Agreement), except claims, losses, or liabilities resulting from
the Pledgee’s gross negligence or willful misconduct. 
Upon demand, the Pledgor agrees that it will pay to the Pledgee the
amount of any and all reasonable expenses, including the reasonable
fees and disbursements of its counsel and of any experts, which the
Pledgee may incur in connection with:

the administration of this Pledge Agreement, the Credit
Agreement and any other Loan Document;

the custody, preservation, use, or operation of, or the sale of,
collection from, or other realization upon, any of the
Collateral;

the exercise or enforcement of any of the rights of the Pledgee
hereunder; or

the failure by the Pledgor to perform or observe any of the
provisions hereof.

The provisions of this
Section 6.5 shall survive the Termination Date.

MISCELLANEOUS PROVISIONS

Loan Document.  This Pledge Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall
(unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and
provisions thereof, including Article X thereof.

Protection of Collateral.  The Pledgee may from time
to time, at its option, perform any act which the Pledgor agrees
hereunder to perform and which the Pledgor shall fail to perform
after being requested in writing so to perform (it being understood
that no such request need be given after the occurrence and during
the continuance of an Event of Default) and the Pledgee may from
time to time take any other action which the Pledgee reasonably
deems necessary for the maintenance, preservation or protection of
any of the Collateral or of its security interest therein.

Binding on Successors, Transferees and Assigns;
Assignment.  This Pledge Agreement shall be binding upon
the Pledgor and its successors, transferees and assigns and shall
inure to the benefit of and be enforceable by Pledgee and its
successors, transferees and assigns; provided,
however, that the Pledgor may not assign any of its
obligations hereunder without the prior written consent of the
Pledgee.

Amendments, etc.  No amendment to or waiver of any
provision of this Pledge Agreement, nor consent to any departure by
the Pledgor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Pledgee and then such
waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

Notices.  All notices and other communications
provided for hereunder shall be given in accordance with Section
10.2 of the Credit Agreement.

No Waiver; Remedies.  No failure on the part of the
Pledgee to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. 
The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.

Captions.  Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not
affect the construction of this Pledge Agreement.

Severability.  Wherever possible, each provision of
this Pledge Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Pledge Agreement shall be prohibited by or invalid under such
law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Pledge
Agreement.

Counterparts.  This Pledge Agreement may be executed
by the parties hereto in several counterparts, each of which shall
be deemed to be an original and all of which shall constitute
together but one and the same agreement.

Governing Law, Entire Agreement, etc.  THIS
PLEDGE AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.  THIS PLEDGE
AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING BETWEEN THE PARTIES HERETO WITH RESPECT TO THE
SUBJECT MATTER HEREOF AND SUPERCEDE ANY PRIOR AGREEMENTS, WRITTEN
OR ORAL, WITH RESPECT THERETO.

[Remainder Of Page Left Blank
Intentionally.]

IN WITNESS WHEREOF, the
Pledgor has caused this Borrower Pledge Agreement to be duly
executed and delivered by its officer thereunto duly authorized as
of the date first above written.

	
                                                                 

	
   

	
SUREBEAM
CORPORATION,

 as Pledgor

			
By:

	
/s/ DAVID A.
RANE

				

				
David A.
Rane

 Senior Vice President,

 Chief Financial Officer

ACKNOWLEDGED AND
ACCEPTED:

	
   

	
THE TITAN
CORPORATION,

 as Pledgee

	
                                                          

		
By:

	
/s/ MARK W.
SOPP

		
 

			

		
 

			
Mark W. Sopp

 Senior Vice President,

 Chief Financial Officer

		
 

EXHIBIT
A

INSTRUCTION
TO REGISTER PLEDGE

__________
__, ____

[                       
]

Attention:
________________

Ladies and
Gentlemen:

The undersigned, a
[member] [partner] [shareholder] of ___________, [a ___________
limited liability company] [a __________ corporation] [a
___________ partnership] (the “Company”), hereby
instructs the Company to register on the books of the Company the
pledge of the undersigned’s [membership] [partnership]
interest in favor of The Titan Corporation, a Delaware corporation
(the “Pledgee”), pursuant to the Borrower Pledge
Agreement, dated as of August 2, 2002, made by the undersigned in
favor of the Pledgee.

Very truly
yours,

SUREBEAM
CORPORATION

By:                                                                 

Name:

Title:

cc:  The Titan
Corporation

EXHIBIT
B

TRANSACTION
STATEMENT

___________
__, ____

To:       The Titan
Corporation

Attention: 

This statement is to
advise you that a pledge of the following uncertificated securities
has been registered in the name of The Titan Corporation (the
“Pledgee”), as follows:

1.        
Uncertificated Securities:

The entire [limited
liability company] [partnership] interests of SUREBEAM CORPORATION
in the undersigned [limited liability company] [_____ partnership]
[corporation].

2.        
Registered Owner:

SUREBEAM
CORPORATION

3.        
Pledged in favor of:

The Titan
Corporation,

   as the
Pledgee

4.        
There are no liens or restrictions of the undersigned [limited
liability company] [_______ partnership] [corporation] and no
adverse claims to which the uncertificated securities are or may be
subject known to the undersigned [limited liability company]
[______ partnership] [corporation], other than in favor of The
Titan Corporation, in its capacity as the Pledgee.

5.        
The pledge was registered on _______ __, ____.

6.        
No transfer of the uncertificated securities shall be made without
the prior written consent of the Pledgee.

THIS STATEMENT IS MERELY A
RECORD OF THE RIGHTS OF THE ADDRESSEE AS OF THE TIME OF ITS
ISSUANCE.  DELIVERY OF THIS STATEMENT, OF ITSELF, CONFERS NO
RIGHTS ON THE RECIPIENT.  THIS STATEMENT IS NEITHER A
NEGOTIABLE INSTRUMENT NOR A SECURITY.

Very truly
yours,

[NAME OF PLEDGED INTEREST
ISSUER]

By:___________________________________

Name:

Title:

ATTACHMENT 1

Pledged
Interests

	
Issuer

	
Class

	
Certificate Numbers, if applicable

	
Number of Shares or percentage ownership
interest

	
SB
OperatingCo, LLC

			
100%

				
		
                                                                                   

		

Pledged
Notes

Location of
Pledgor (Section 3.1.4)

SureBeam Corporation
– Delaware

9276 Scranton Road, Suite
600

San Diego,
California  92121

Exhibit C

BORROWER
SECURITY AGREEMENT

This BORROWER SECURITY
AGREEMENT (as amended, restated, supplemented or otherwise modified
from time to time, this “Security Agreement”),
dated as of August 2, 2002, is made by SUREBEAM CORPORATION, a
Delaware corporation (the “Grantor”) in favor of
THE TITAN CORPORATION, a Delaware corporation (the
“Secured Party”). 

W I T N
E S S E T H :

WHEREAS, pursuant to a
Senior Secured Credit Agreement, dated as of August 2, 2002 (as
amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), between the
Grantor and the Secured Party, the Secured Party has agreed to make
Credit Extensions to the Grantor;

WHEREAS, as a condition
precedent to the making of the Credit Extensions (including the
initial Credit Extension) under the Credit Agreement, the Grantor
is required to execute and deliver this Security Agreement;
and

WHEREAS, the Grantor has
duly authorized the execution, delivery and performance of this
Security Agreement;

NOW THEREFORE, for good
and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, and in order to induce the Secured Party to
make Credit Extensions (including the initial Credit Extension) to
the Grantor pursuant to the Credit Agreement, the Grantor agrees as
follows:

DEFINITIONS

Certain Terms.  The following terms (whether or not
underscored) when used in this Security Agreement, including its
preamble and recitals, shall have the following meanings (such
definitions to be equally applicable to the singular and plural
forms thereof):

“Chattel
Paper” has the meaning provided in the U.C.C.

“Collateral” is defined in
Section 2.1.

“Collateral
Account” is defined in Section
4.1.2(b).

“Commercial Tort
Claims” means any claim arising in tort now or hereafter
owned, acquired, or received by Grantor in which Grantor now holds
or hereafter acquires any right or interest.

“Computer
Hardware and Software Collateral” means:

all computer and other electronic data processing hardware,
integrated computer systems, central processing units, memory
units, display terminals, printers, features, computer elements,
card readers, tape drives, hard and soft disk drives, cables,
electrical supply hardware, generators, power equalizers,
accessories and all peripheral devices and other related computer
hardware;

all software programs (including both source code, object code
and all related applications and data files), whether now owned,
licensed or leased or hereafter acquired by the Grantor, designed
for use on the computers and electronic data processing hardware
described in clause (a) above;

all firmware associated therewith;

all documentation (including flow charts, logic diagrams,
manuals, guides and specifications) with respect to such hardware,
software and firmware described in the preceding clauses (a)
through (c); and

all rights with respect to all of the foregoing, including any
and all copyrights, licenses, options, warranties, service
contracts, program services, test rights, maintenance rights,
support rights, improvement rights, renewal rights and
indemnifications and any substitutions, replacements, additions or
model conversions of any of the foregoing.

“Contracts” means all
agreements between the Grantor and one or more additional
parties.

“Contract
Rights” means all rights of the Grantor (including,
without limitation, all rights to payment) under each
Contract.

“Copyright
Collateral” means all copyrights (including all
copyrights for semi-conductor chip product mask works) of the
Grantor, whether statutory or common law, registered or
unregistered, now or hereafter in force throughout the world
including all of the Grantor’s right, title and interest in
and to all copyrights registered in the United States Copyright
Office or anywhere else in the world and also including the
copyrights referred to in Item A of Schedule IV
attached hereto, and all applications for registration thereof,
whether pending or in preparation, all copyright licenses,
including each copyright license referred to in Item B of
Schedule IV attached hereto, the right to sue for past,
present and future infringements of any thereof, all rights
corresponding thereto throughout the world, all extensions and
renewals of any thereof and all Proceeds of the foregoing,
including licenses, royalties, income, payments, claims, damages
and Proceeds of suit.

“Credit
Agreement” is defined in the first recital.

“Deposit
Accounts” has the meaning provided in the U.C.C. and, in
any event, includes, without limitation, any demand, time, savings,
passbook or like account maintained with a depositary institution,
including those Deposit Accounts set forth in Item G of
Schedule I hereto.

“Documents” has the meaning
provided in the U.C.C.

“Equipment” has the meaning
provided in the U.C.C. and, in any event, includes, without
limitation, all equipment in all of its forms of the Grantor,
wherever located, including all parts thereof and all accessions,
additions, attachments, improvements, substitutions and
replacements thereto and therefor and all accessories related
thereto.

“Fixtures” has the meaning
provided in the U.C.C., and in any event, includes, without
limitation, with respect to the Grantor, regardless of where
located, any of the fixtures, systems, machinery, apparatus,
equipment or fittings of any kind or nature whatsoever, and all
appurtenances and additions thereto and substitutions or
replacements thereof, now or hereafter attached or affixed to or
constituting a part of, or located in or upon, real property
wherever located, including sign, escalator, elevator, any heating,
electrical, mechanical, lighting, lifting, plumbing, ventilating,
air-conditioning or air cooling, refrigerating, food preparation,
incinerating or power, loading or unloading, boilers,
communication, switchboard, tank, pump, filter, sprinkler or other
fire prevention or extinguishing fixture, system, machinery,
apparatus or equipment, and any engine, motor, dynamo, machinery,
pipe, pump, tank, conduit or duct constituting a part of any of the
foregoing, together with all extensions, improvements, betterments,
renewals, substitutes, and replacements of, and all additions and
appurtenances to any of the foregoing property, and all conversions
of the security constituted thereby, immediately upon any
acquisition or release thereof or any such conversion, as the case
may be.

“General
Intangibles” has the meaning provided in the U.C.C. and,
in any event, includes, without limitation, with respect to the
Grantor, all Contracts, agreements, Instruments and indentures in
any form, and portions thereof, to which the Grantor is a party or
under which the Grantor has any right, title or interest or to
which the Grantor or any property of the Grantor is subject, as the
same may from time to time be amended, supplemented or otherwise
modified, including, without limitation, (i) all rights of the
Grantor to receive moneys due and to become due to it thereunder or
in connection therewith, (ii) all rights of the Grantor to damages
arising thereunder and (iii) all rights of the Grantor to perform
and to exercise all remedies thereunder.

“Goods”
has the meaning provided in the U.C.C.

“Grantor” is defined in the
preamble.

“Instrument” has the meaning
provided in the U.C.C.

“Intellectual
Property Collateral” means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the
Patent Collateral, the Trademark Collateral and the Trade Secrets
Collateral.

“Interest Rate
Hedging Agreements” means interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements,
and all other agreements or arrangements designed to protect the
Grantor against fluctuations in interest rates, entered into for
the purpose of hedging interest rate risk.

“Interest Rate
Hedging Obligations” means all liabilities of the Grantor
under Interest Rate Hedging Agreements.

“Inventory” has the meaning
provided in the U.C.C. and, in any event, includes, without
limitation, all inventory in all of its forms of the Grantor,
wherever located, including

all raw materials and work in process therefor, finished goods
thereof, and materials used or consumed in the manufacture or
production thereof,

all goods in which the Grantor has an interest in mass or a
joint or other interest or right of any kind (including goods in
which the Grantor has an interest or right as consignee), and

all goods which are returned to or repossessed by the
Grantor,

and all accessions
thereto, products thereof and documents therefor.

“Investment
Property” has the meaning provided in the
U.C.C.

“Letter of Credit
Right” means any right of the Grantor to payment or
performance under a letter of credit (as such term in defined in
Article 5 of the U.C.C.), whether or not the beneficiary has
demanded or is at the time entitled to demand payment or
performance.

“Patent
Collateral” means:

all letters patent and applications for letters patent
throughout the world, including all patent applications in
preparation for filing anywhere in the world and including each
patent and patent application referred to in Item A of Schedule II
attached hereto;

all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items
described in clause (a);

all patent licenses, including each patent license referred to
in Item B of Schedule II attached hereto; and

all Proceeds of, and rights associated with, the foregoing
(including license royalties and  Proceeds of infringement
suits), the right to sue third parties for past, present or future
infringements of any patent or patent application, including any
patent or patent application referred to in Item A of
Schedule II attached hereto, and for breach or enforcement
of any patent license, including any patent license referred to in
Item B of Schedule II attached hereto, and all rights corresponding
thereto throughout the world.

“Payment
Intangibles” has the meaning provided in the
U.C.C.

“Promissory
Notes” has the meaning provided in the U.C.C.

“Proceeds” has the meaning
provided in the U.C.C., and shall include, in any event, with
respect to the Grantor, any and all currently owned or
after-acquired (a) Receivables, Chattel Paper, Instruments,
Investment Property, cash or other forms of money, currency or
funds or other property of any nature, type or land whatsoever
payable to or renewable by the Grantor from time to time in respect
of the Collateral, including upon the sale, lease, license,
exchange or other disposition of any Collateral, (b) proceeds of
any insurance, indemnity, warranty or guaranty payable to the
Grantor from time to time with respect to any of the Collateral,
including by reason of the loss, nonconformity or interference with
the use of, defects or infringement of rights in, or damage to, any
of the Collateral, (c) payments (in any form whatsoever) made or
due and payable to the Grantor from time to time in connection with
any requisition, confiscation, condemnation, seizure or forfeiture
of all or any part of the Collateral by any governmental authority
(or any person acting under color of governmental authority), (d)
claims of the Grantor against third parties arising out of the
loss, nonconformity, interference with the use of, defects or
infringements of rights in, or damage to, any of the Collateral,
including any claim (i) for past, present or future infringement of
any patent or patent license, copyright or copyright license or
(ii) for past, present or future infringement or dilution of any
Trademark or Trademark license or for injury to the goodwill
associated with any Trademark, Trademark registration or Trademark
licensed under any Trademark license, (e) certificates, dividends,
cash, Instruments or other forms of money, currency or funds and
other Property received or distributed in respect of or in exchange
for any Investment Property, (f) cash or other forms of money,
currency or funds and other proceeds received under and in respect
of any letter of credit or other support obligation, (g) rights
arising out of any of the Collateral, and (h) other property of any
nature, type or kind whatsoever from time to time paid or payable
under or in connection with, collected on, or distributed on
account of, any of the Collateral.

“Receivables” means
“accounts” (as such term is defined in the
U.C.C.), including but not limited to rights to payments for goods
sold or leased or services rendered, whether now existing or
hereafter arising, including, without limitation, rights evidenced
by an account, note, Contract, security agreement, Chattel Paper,
or other evidence of indebtedness or security, together with (a)
all security pledged, assigned, hypothecated or granted to or held
by the Grantor to secure the foregoing, (b) all of the
Grantor’s right, title and interest in and to any goods, the
sale of which gave rise thereto, (c) all guarantees, endorsements
and indemnifications on, or of, any of the foregoing, (d) all
powers of attorney for the execution of any evidence of
indebtedness or security or other writing in connection therewith,
(e) all books, records, ledger cards, and invoices relating
thereto, (f) all evidences of the filing of financing statements
and other statements and the registration of other Instruments in
connection therewith and amendments thereto, notices to other
creditors or secured parties, and certificates from filing or other
registration officers, (g) all credit information, reports and
memoranda relating thereto and (h) all other writings related in
any way to the foregoing.

“Secured
Obligations” is defined in Section 2.2.

“Secured
Party” is defined in the preamble.

“Securities
Account” has the meaning provided in the U.C.C.,
including without limitation those Securities Accounts listed in
Item H of Schedule I hereto.

“Security
Agreement” is defined in the preamble.

“Supporting
Obligations” has the meaning provided in the
U.C.C.

“Termination
Date” means the date on which all Obligations have
indefeasibly been paid in full in cash, all Commitments have been
fully terminated and all Letters of Credit and Lender Guaranties
have been canceled or otherwise terminated.

“Trademark
Collateral” means:

all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos, other source
of business identifiers, prints and labels on which any of the
foregoing have appeared or appear, designs and General Intangibles
of a like nature (all of the foregoing items in this clause
(a) being collectively called a
“Trademark”), now existing anywhere in the world
or hereafter adopted or acquired, whether currently in use or not,
all registrations and recordings thereof and all applications in
connection therewith, whether pending or in preparation for filing,
including registrations, recordings and applications in the United
States Patent and Trademark Office or in any office or agency of
the United States of America or any State thereof or any foreign
country, including those referred to in Item A of
Schedule III attached hereto;

all Trademark licenses, including each Trademark license
referred to in Item B of Schedule III attached
hereto;

all reissues, extensions or renewals of any of the items
described in clauses (a) and (b);

all of the goodwill of the business connected with the use of,
and symbolized by the items described in, clauses (a) and
(b); and

all Proceeds of, and rights associated with, the foregoing,
including any claim by the Grantor against third parties for past,
present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, including any
Trademark, Trademark registration or Trademark license referred to
in Item A and Item B of Schedule III attached
hereto, or for any injury to the goodwill associated with the use
of any such Trademark or for breach or enforcement of any Trademark
license.

“Trade Secrets
Collateral” means all common law and statutory trade
secrets and all other confidential or proprietary or useful
information and all know-how obtained by or used in or contemplated
at any time for use in the business of the Grantor (all of the
foregoing being collectively called a “Trade
Secret”), whether or not such Trade Secret has been
reduced to a writing or other tangible form, including all
documents and things embodying, incorporating or referring in any
way to such Trade Secret, all Trade Secret licenses, including each
Trade Secret license referred to in Schedule V attached
hereto, and including the right to sue for and to enjoin and to
collect damages for the actual or threatened misappropriation of
any Trade Secret and for the breach or enforcement of any such
Trade Secret license.

“U.C.C.” means the Uniform
Commercial Code, as in effect from time to time in the State of
California; provided, however, in the event that, by
reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of Secured Party’s
security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State
of California, the term “U.C.C.” shall mean the Uniform
Commercial Code (including the Articles thereof) as in effect at
such time in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for
purposes of definitions related to such provisions.

Credit Agreement Definitions.  Unless otherwise
defined herein or the context otherwise requires, terms used in
this Security Agreement, including its preamble and recitals, have
the meanings provided in the Credit Agreement.

U.C.C. Definitions.  Unless otherwise defined herein
or in the Credit Agreement or the context otherwise requires, terms
for which meanings are provided in the U.C.C. are used in this
Security Agreement, including its preamble and recitals, with such
meanings.

SECURITY INTEREST

Grant of Security.  The Grantor hereby assigns and
pledges to the Secured Party, and hereby grants to the Secured
Party, to secure the Secured Obligations, a security interest in
all of the following, whether now or hereafter existing or acquired
by the Grantor (the “Collateral”):

the Collateral Account;

all Commercial Tort Claims;

all Computer Hardware and Software Collateral;

all Contracts, together with any Contract Rights arising
thereunder;

all Deposit Accounts;

all Equipment;

all Fixtures;

all Intellectual Property Collateral;

all Inventory;

all Investment Property;

all Letter of Credit Rights;

all Receivables;

all Securities Accounts;

all Supporting Obligations;

all other Goods, Chattel Paper, Documents, Instruments
(including, without limitation, Promissory Notes), and General
Intangibles (including, without limitation, Payment Intangibles and
tax refunds) of the Grantor now or hereafter existing;

all books, records, writings, data bases, information and other
property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the
foregoing in this Section 2.1;

all of the Grantor’s other personal property and rights of
every kind and description and interests therein; and

all products and Proceeds of and from any and all of the
foregoing Collateral (including Proceeds which constitute property
of the types described in clauses (a) through (q)
and, to the extent not otherwise included, all payments under
insurance which the Grantor is entitled to receive (whether or not
the Secured Party is the loss payee thereof), or any indemnity,
warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral.

Notwithstanding anything
herein to the contrary, in no event shall the Collateral include,
and the Grantor shall not be deemed to have granted a security
interest in, any of the Grantor’s rights or interests in any
license, contract or agreement to which the Grantor is a party or
any of its rights or interests thereunder to the extent, but only
to the extent, that such a grant would, under the express terms of
such license, contract or agreement or otherwise, result in a
breach of the terms of, or constitute a default under such license,
contract or agreement (other than to the extent that any such term
would be rendered ineffective pursuant to Sections 9407(a) or
9408(a) of the U.C.C. or any other applicable law (including the
Bankruptcy Code) or principles of equity); provided, that
immediately upon the ineffectiveness, waiver, lapse or termination
of any such provision, the Collateral shall include, and the
Grantor shall have granted a security interest in, all such rights
and interests as if such provision had never been in
effect.

Security for Obligations.  This Security Agreement
secures the payment of all Obligations of the Grantor now or
hereafter existing under the Credit Agreement and each other Loan
Document, whether for principal, interest, costs, fees, expenses,
Interest Rate Hedging Obligations or otherwise, with all such
obligations being collectively referred to as the “Secured
Obligations”.

Continuing Security Interest; Transfer of Notes. 
This Security Agreement shall create a continuing security interest
in the Collateral and shall:

remain in full force and effect until the Termination Date;

be binding upon the Grantor and its successors, transferees and
assigns; and

inure to the benefit of the Secured Party.

The Secured Party may
assign or otherwise transfer (in whole or in part) the Revolving
Note or any Credit Extension held by it to any other Person or
entity, and such other Person or entity shall thereupon become
vested with all the rights and benefits in respect thereof granted
to the Secured Party under any Loan Document (including this
Security Agreement) or otherwise, subject, however, to the
provisions of Section 10.10 of the Credit Agreement.

Grantor Remains Liable.  Anything herein to the
contrary notwithstanding:

the Grantor shall remain liable under the Contracts and
agreements included in the Collateral to the extent set forth
therein, and shall perform all of its duties and obligations under
such Contracts and agreements to the same extent as if this
Security Agreement had not been executed;

the exercise by the Secured Party of any of its rights hereunder
shall not release the Grantor from any of its duties or obligations
under any such Contracts or agreements included in the Collateral;
and

the Secured Party shall not have any obligation or liability
under any such Contracts or agreements included in the Collateral
by reason of this Security Agreement, nor shall the Secured Party
be obligated to perform any of the obligations or duties of the
Grantor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.

REPRESENTATIONS AND WARRANTIES

Representations and Warranties.  The Grantor
represents and warrants to the Secured Party as set forth in this
Section.

Location of Collateral, etc.  All of the Equipment
and Inventory of the Grantor is located at the places specified in
Item A and Item B, respectively, of Schedule I
hereto, except for such property in transit in the ordinary
course.  None of the Equipment and Inventory has, within the
four (4) months preceding the date of this Security Agreement, been
located at any place other than the places specified in Item
A and Item B, respectively, of Schedule I hereto except
as set forth in the footnote thereto.  The place(s) of
business and chief executive office of the Grantor and the
office(s) where the Grantor keeps its records concerning the
Receivables, and all originals of all Chattel Paper  which
evidence Receivables, are located at the address set forth in
Item D of Schedule I hereto.  The Grantor has no
trade names other than those set forth in Item E of
Schedule I hereto.  During the four (4) months
preceding the date hereof, the Grantor has not been known by any
legal name different from the one set forth on the signature page
hereto, nor has the Grantor been the subject of any merger or other
corporate reorganization, except as set forth in Item F of
Schedule I hereto.  All Receivables, if such
receivables are in excess of Two Hundred Fifty Thousand Dollars
($250,000), and otherwise at the request of Secured Party,
evidenced by a promissory note or other Instrument, negotiable
Document or Chattel Paper have been duly endorsed and accompanied
by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Secured Party and delivered and
pledged to the Secured Party pursuant to Section 4.1.7
hereof.

Ownership, No Liens, etc.  The Grantor and/or its
Subsidiaries (with respect to Collateral shown on Schedules II
through V hereto) owns its Collateral free and clear of any Lien,
security interest, charge or encumbrance except for the security
interest created by this Security Agreement and except as permitted
by the Credit Agreement.  No effective financing statement or
other instrument similar in effect covering all or any part of the
Collateral is on file in any recording office, except such as may
have been filed in favor of the Secured Party relating to this
Security Agreement or as have been filed in connection with Liens
permitted pursuant to Section 8.3 of the Credit Agreement.

Possession and Control.  The Grantor has exclusive
possession and control of its Equipment and Inventory, except for
such property in transit in the ordinary course.

Negotiable Documents, Instruments and Chattel
Paper.  The Grantor has, contemporaneously herewith,
delivered to the Secured Party possession of all originals of all
negotiable Documents, Instruments and Chattel Paper currently owned
or held by the Grantor (duly endorsed in blank, if requested by the
Secured Party).

Intellectual Property Collateral.  With respect to
any Intellectual Property Collateral the loss, impairment or
infringement of which is reasonably likely to have a Material
Adverse Effect:

such Intellectual Property Collateral is subsisting and has not
been adjudged invalid or unenforceable, in whole or in part;

such Intellectual Property Collateral is valid and
enforceable;

the Grantor (and/or its Subsidiaries) has made all necessary
filings and recordations to protect its interest in such
Intellectual Property Collateral, including recordations of all of
its interests in the Patent Collateral and Trademark Collateral in
the United States Patent and Trademark Office and in corresponding
offices throughout the world and its claims to the Copyright
Collateral in the United States Copyright Office and in
corresponding offices throughout the world, in each case where it
is commercially reasonable to do so;

other than as previously disclosed in writing to the Secured
Party, the Grantor (and/or its Subsidiaries) is the exclusive owner
of the entire and unencumbered right, title and interest in and to
such Intellectual Property Collateral and no claim has been made
that the use of such Intellectual Property Collateral does or may
violate the asserted rights of any third party; and

the Grantor has performed and will continue to perform and cause
all acts and has paid and will continue to pay all required fees
and taxes to maintain each and every item of Intellectual Property
Collateral in full force and effect throughout the world, as
applicable, unless the Grantor (i) has reasonably and in good faith
determined that any of the Intellectual Property Collateral is of
negligible economic value to the Grantor, or (ii) has a reasonable
and valid business purpose to do otherwise.

The Grantor owns directly
or is entitled to use by license or otherwise, all patents,
Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of
the foregoing necessary to the conduct of the Grantor’s
business as presently conducted.

Validity, Priority, etc.  Assuming the proper filing
of one or more financing statements identifying the Collateral with
the proper local, state and/or federal authorities, the security
interests in the Collateral granted to the Secured Party hereunder
constitute valid and continuing first priority perfected security
interests in the Collateral (subject to Liens permitted under the
Credit Agreement), securing payment of the Secured Obligations, to
the extent such security interests may be perfected by the filing
of financing statements or other filings with the United States
Patent and Trademark Office or United States Copyright Office.

Authorization, Approval, etc.  Except as have been
obtained or made and are in full force and effect, no
authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is
required under U.S. law, except for necessary filings in connection
with the U.C.C., either:

for the grant by the Grantor of the security interest granted
hereby or for the execution, delivery and performance of this
Security Agreement by the Grantor; or

for the perfection of or the exercise by the Secured Party of
its rights and remedies hereunder.

Compliance with Laws.  The Grantor is in compliance
in all material respects with the requirements of all applicable
laws (including the provisions of the Fair Labor Standards Act),
rules, regulations and orders of every governmental authority, the
non-compliance with which is reasonably likely to have a Material
Adverse Effect or which is reasonably likely to materially
adversely affect the value of the Collateral or the worth of the
Collateral as collateral security.

COVENANTS

Certain Covenants.  The Grantor covenants and agrees
that until the Revolving Loan Commitment and Letter of Credit
Commitment have expired or terminated, and all Secured Obligations
have been paid and performed in full, the Grantor will perform,
comply with and be bound by the obligations set forth in this
Article.

As to Equipment and Inventory.  The Grantor hereby
agrees that it shall:

keep all the Equipment and Inventory (other than Inventory sold
or certain Equipment in transit and is permitted under the Credit
Agreement in the ordinary course of business, or except as
otherwise provided in the Credit Agreement or any of the other Loan
Documents) at the places therefor specified in Section 3.1.1
hereof or, upon thirty (30) days’ prior written notice to the
Secured Party, at such other places in a jurisdiction within the
United States where all representations and warranties set forth in
Article III shall be true and correct, and all action
required pursuant to the first sentence of Section
4.1.7 hereof shall have been taken with respect to the
Equipment and Inventory (collectively, “Specified
Locations”);

cause the Equipment to be maintained and preserved in the same
condition, repair and working order as when new, ordinary wear and
tear excepted, and in accordance with any manufacturer’s
manual or good business practice; and forthwith, or in the case of
any loss or damage to any of the Equipment, as quickly as
practicable after the occurrence thereof, make or cause to be made
all repairs, replacements, and other improvements in connection
therewith which are necessary or desirable to such end; and
promptly furnish to the Secured Party a statement respecting any
material loss or damage to any of the Equipment; and

pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the
Equipment and Inventory, except to the extent the validity thereof
is being contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP have been set
aside.

As to Receivables and Contracts.

The Grantor shall keep its place(s) of business and chief
executive office and the office(s) where it keeps its records
concerning the Receivables, and all originals of all Chattel Paper
which evidences Receivables, located at the address(es) set forth
in Item D of Schedule I hereto, or, upon thirty (30)
days’ prior written notice to the Secured Party, at such
other locations in a jurisdiction within the United States where
all actions required by the first sentence of Section 4.1.7
hereof shall have been taken with respect to the Receivables; not
change its name except upon thirty (30) days’ prior written
notice to the Secured Party; hold and preserve such records and
Chattel Paper; and permit representatives of the Secured Party at
any time during normal business hours to inspect (upon reasonable
prior written notice so long as no Event of Default shall have
occurred and be continuing) and make abstracts from such records
and Chattel Paper.  In addition, the Grantor shall give the
Secured Party a supplement to Schedule I hereto on each date
a Compliance Certificate is required to be delivered to the Secured
Party under the Credit Agreement, which shall set forth any changes
to the information set forth in Section 3.1.1 hereof.

Upon written notice by the Secured Party to the Grantor pursuant
to this clause, all Proceeds of Collateral received by the Grantor
shall be delivered in kind to the Secured Party for deposit to a
deposit account (the “Collateral Account”) of
the Grantor maintained with Comerica Bank-California and the
Grantor shall not commingle any such Proceeds, and shall hold
separate and apart from all other property, all such Proceeds in
express trust for the benefit of the Secured Party until delivery
thereof is made to the Secured Party.  The Secured Party will
not give the notice referred to in the preceding sentence unless
there shall have occurred and be continuing an Event of
Default.

The Secured Party shall have the right to apply any amount in
the Collateral Account to the payment of any Secured Obligations
which are due and payable or payable upon demand, or to the payment
of any Secured Obligations at any time that an Event of Default
shall exist.

The Grantor shall not enter into any government contract which
prohibits assignment to the Secured Party of any payments due or to
become due thereunder, other than contracts for which the
government has determined that a prohibition on assignment of
claims is in the government’s interest.

Without the Lender’s prior written consent, which consent
shall not be unreasonably withheld, the Grantor shall not cause the
aggregate value of Receivables or Contracts or Contract Rights and
the value of similar Receivables and Contracts as to which a Lien
in favor of the Secured Party cannot be granted hereunder pursuant
to the final paragraph of Section 2.1 hereof, or pursuant to
any Subsidiary Security Agreement, to exceed $500,000 at any
time.

As to Collateral.

Until the occurrence and continuance of an Event of Default, the
Grantor (i) may, in the ordinary course of its business, at its own
expense, sell, lease or furnish under the contracts of service any
of the Inventory normally held by the Grantor for such purpose, and
use and consume, in the ordinary course of its business, any raw
materials, work in process or materials normally held by the
Grantor for such purpose, (ii) will, at its own expense, endeavor
to collect, as and when due, all amounts due with respect to any of
the Collateral, including the taking of such action with respect to
such collection as the Secured Party may reasonably request
following the occurrence of an Event of Default or, in the absence
of such request, as the Grantor may reasonably deem advisable, and
(iii) may grant, in the ordinary course of business, to any party
obligated on any of the Collateral, any rebate, refund or allowance
to which such party may be lawfully entitled, and may accept, in
connection therewith, the return of goods, the sale or lease of
which shall have given rise to such Collateral.  The Secured
Party may, at any time following an Event of Default, whether
before or after any revocation of such power and authority or the
maturity of any of the Secured Obligations, notify any parties
obligated on any of the Collateral to make payment to the Secured
Party of any amounts due or to become due thereunder and enforce
collection of any of the Collateral by suit or otherwise and
surrender, release, or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer
than the original period) any indebtedness thereunder or evidenced
thereby.  Upon request of the Secured Party following an Event
of Default, the Grantor will, at its own expense, notify any
parties obligated on any of the Collateral to make payment to the
Secured Party of any amounts due or to become due thereunder.

After an Event of Default, the Secured Party is authorized to
endorse, in the name of the Grantor, any item, howsoever received
by the Secured Party, representing any payment on or other Proceeds
of any of the Collateral.

As to Intellectual Property Collateral.  The Grantor
covenants and agrees to comply with the following provisions as
such provisions relate to any Intellectual Property Collateral of
the Grantor:

The Grantor shall not do any act, or omit to do any act, whereby
any of the Patent Collateral may lapse or become abandoned or
dedicated to the public or unenforceable, unless the Grantor shall
either (i) reasonably and in good faith determine that any of the
Patent Collateral is of negligible economic value to the Grantor,
or (ii) has a reasonable and valid business purpose to do
otherwise.

The Grantor shall not, and the Grantor shall not permit any of
its licensees to:

fail to continue to use any of the Trademark Collateral in order
to maintain all of the Trademark Collateral in full force free from
any claim of abandonment for non-use,

fail to maintain as in the past the quality of products and
services offered under all of the Trademark Collateral,

fail to employ all of the Trademark Collateral registered with
any Federal or state or foreign authority with an appropriate
notice of such registration,

adopt or use any other Trademark which is confusingly similar or
a colorable imitation of any of the Trademark Collateral,

use any of the Trademark Collateral registered with any Federal
or state or foreign authority except for the uses for which
registration or application for registration of all of the
Trademark Collateral has been made, and

do or permit any act or knowingly omit to do any act whereby any
of the Trademark Collateral may lapse or become invalid or
unenforceable,

unless the Grantor shall
either (x) reasonably and in good faith determine that any of the
Trademark Collateral is of negligible economic value to the
Grantor, or (y) have a reasonable and valid business purpose to do
otherwise.

The Grantor shall not do or permit any act or knowingly omit to
do any act whereby any of the Copyright Collateral or any of the
Trade Secrets Collateral may lapse or become invalid or
unenforceable or be placed in the public domain except upon
expiration of the end of an unrenewable term of a registration
thereof, unless the Grantor shall either (i) reasonably and in good
faith determine that any of the Copyright Collateral or any of the
Trade Secrets Collateral is of negligible economic value to the
Grantor, or (ii) have a reasonable and valid business purpose to do
otherwise.

The Grantor shall notify the Secured Party immediately if it
knows, or has reason to know, that any application or registration
relating to any material item of the Intellectual Property
Collateral may become abandoned or dedicated to the public or be
placed in the public domain or become invalid or unenforceable, or
of any adverse determination or development (including the
institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the
United States Copyright Office or any foreign counterpart thereof
or any court) regarding the Grantor’s ownership of any of the
Intellectual Property Collateral, its right to register the same or
to keep and maintain and enforce the same.

In no event shall the Grantor or any of its agents, employees,
designees or licensees file an application for the registration of
any Intellectual Property Collateral with the United States Patent
and Trademark Office, the United States Copyright Office or any
similar office or agency in any other country or any political
subdivision thereof, unless it promptly upon such filing informs
the Secured Party, and upon request of the Secured Party, executes
and delivers any and all agreements, instruments, documents and
papers as the Secured Party may reasonably request to evidence the
Secured Party’s security interest in such Intellectual
Property Collateral and the goodwill and general intangibles of the
Grantor relating thereto or represented thereby.

The Grantor shall take all necessary steps, including in any
proceeding before the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency
in any other country or any political subdivision thereof, to
maintain and pursue any application (and to obtain the relevant
registration) filed with respect to, and to maintain any
registration of, the Intellectual Property Collateral, including
the filing of applications for renewal, affidavits of use,
affidavits of incontestability and opposition, interference and
cancellation proceedings and the payment of fees and taxes (except
to the extent that dedication, abandonment or invalidation is
permitted under the foregoing clauses (a), (b) and
(c)).

The Grantor shall, contemporaneously herewith, execute and
deliver to the Secured Party a Patent Security Agreement, a
Trademark Security Agreement and a Copyright Security Agreement in
the forms of Exhibit A, Exhibit B and Exhibit
C hereto, respectively, and shall execute and deliver to the
Secured Party any other document required to acknowledge or
register or perfect the Secured Party’s interest in any part
of the Intellectual Property Collateral.

Insurance.  The Grantor will maintain or cause to be
maintained with financially sound and reputable insurance companies
insurance with respect to its business and properties (including
the Equipment and Inventory) against such casualties and
contingencies and of such types and in such amounts as is required
pursuant to the Credit Agreement and will, upon the request of the
Secured Party, furnish a certificate of a reputable insurance
broker setting forth the nature and extent of all insurance
maintained by the Grantor in accordance with this Section. 
Without limiting the foregoing, the Grantor further agrees as
follows:

Each policy for property insurance shall show the Secured Party
as loss payee.

Each policy for liability insurance shall show the Secured Party
as an additional insured.

Each insurance policy shall provide that at least thirty (30)
days’ prior written notice of cancellation or of lapse shall
be given to the Secured Party by the insured (or at least ten (10)
days’ prior written notice of cancellation shall be given
with respect to failure to pay the premium).

The Grantor shall, if so requested by the Secured Party, deliver
to the Secured Party a copy of each insurance policy.

Transfers and Other Liens.  The Grantor shall
not:

sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except as may be permitted by the
Credit Agreement; or

create or suffer to exist any Lien or other charge or
encumbrance upon or with respect to any of the Collateral, except
for the security interest created by this Security Agreement and
except as permitted by the Credit Agreement, including the cure
periods set forth therein.

Further Assurances, etc.  The Grantor agrees that,
from time to time at its own expense, it will promptly execute and
deliver all further instruments and documents, and take all further
action, that may be necessary or desirable (provided that it is
reasonable), or that the Secured Party may reasonably request, in
order to perfect, preserve and protect any security interest
granted or purported to be granted hereby or to enable the Secured
Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral.  Without limiting the
generality of the foregoing, the Grantor will:

mark conspicuously each Document (evidencing title) included in
the Inventory, each Chattel Paper included in the Receivables, and
at the request of the Secured Party, upon the occurrence and during
the continuance of an Event of Default each of its records
pertaining to the Collateral with a legend, in form and substance
satisfactory to the Secured Party, indicating that such Document,
Chattel Paper, or Collateral is subject to the security interest
granted hereby;

if any Receivable shall be evidenced by a Promissory Note or
other Instrument, negotiable Document or Chattel Paper, deliver and
pledge to the Secured Party hereunder such Promissory Note,
Instrument, negotiable Document or Chattel Paper duly endorsed and
accompanied by duly executed Instruments of transfer or assignment,
all in form and substance satisfactory to the Secured Party;
provided, however, if such evidences amounts less than Two Hundred
Fifty Thousand Dollars ($250,000) such delivery and pledge shall be
at Secured Party’s request;

execute and file such financing or continuation statements, or
amendments thereto, and such other Instruments or notices as may be
necessary or desirable, or as the Secured Party may reasonably
request, in order to perfect and preserve the security interests
and other rights granted or purported to be granted to the Secured
Party hereby;

promptly execute and file any notice or other required form
under or pursuant to the federal assignment of claims statute, 31
U.S.C. § 3727, any successor or amended version thereof or any
regulation promulgated under or pursuant to any version thereof, as
the Secured Party may reasonably request; and

furnish to the Secured Party, from time to time at the Secured
Party’s request, statements and schedules further identifying
and describing the Collateral and such other reports in connection
with the Collateral as the Secured Party may reasonably request,
all in reasonable detail.

With respect to the
foregoing and the grant of the security interest hereunder, the
Grantor hereby authorizes the Secured Party to file one or more
financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature
of the Grantor.  A carbon, photographic or other reproduction
of this Security Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law.

ATTORNEY IN FACT

Secured Party Appointed Attorney-in-Fact.  The
Grantor hereby irrevocably appoints the Secured Party the
Grantor’s attorney-in-fact, with full authority in the place
and stead of the Grantor and in the name of the Grantor or
otherwise, from time to time in the Secured Party’s
discretion, following the occurrence and continuation of an Event
of Default, to take any action and to execute any instrument which
the Secured Party may deem necessary or advisable to accomplish the
purposes of this Security Agreement, including:

to ask, demand, collect, sue for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral;

to receive, endorse, and collect any drafts or other
Instruments, Documents and Chattel Paper, in connection with
clause (a) above;

to file any claims or take any action or institute any
proceedings which the Secured Party may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce
the rights of the Secured Party with respect to any of the
Collateral; and

to perform the affirmative obligations of the Grantor hereunder
(including all obligations of the Grantor pursuant to Section
4.1.7 hereof).

The Grantor hereby
acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable until the
Obligations are satisfied and coupled with an interest.

Secured Party May Perform.  If any Grantor fails to
perform any agreement contained herein, the Secured Party may
itself perform, or cause performance of, such agreement, and the
expenses of the Secured Party incurred in connection therewith
shall be payable by the Grantor pursuant to Section 6.2
hereof.

Secured Party Has No Duty.  In addition to, and not
in limitation of, Section 2.4(c) hereof, the powers
conferred on the Secured Party hereunder are solely to protect its
interest in the Collateral and shall not impose any duty on it to
exercise any such powers.  Except for reasonable care of any
Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Secured Party shall have no duty as
to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights
pertaining to any Collateral.

Reasonable Care.  Other than the exercise of
reasonable care in the custody and preservation of the Collateral,
the Secured Party shall have no duty with respect thereto. 
The Secured Party shall be deemed to have exercised reasonable care
in the custody and preservation of the Collateral in its possession
if the Collateral is accorded treatment substantially equal to that
which the Secured Party accords its own property.  The Secured
Party shall not be liable or responsible for any loss or damage to
any of the Collateral, or for any diminution in the value thereof,
by reason of the act or omission of any agent or bailee selected by
the Secured Party in good faith.

REMEDIES

Certain Remedies.  If any Event of Default shall
have occurred and be continuing:

The Secured Party may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured
party under the U.C.C. (whether or not the U.C.C. applies to the
affected Collateral) and also may:

require the Grantor to, and the Grantor hereby agrees that it
will, at its expense and upon the request of the Secured Party
forthwith, assemble all or part of the Collateral as directed by
the Secured Party and make it available to the Secured Party at a
place to be designated by the Secured Party which is reasonably
convenient to both parties;

reclaim, take possession, recover, store, maintain, finish,
repair, prepare for sale or lease, shop, or advertise for sale or
lease the Collateral;

without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale,
at any of the Secured Party’s offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the
Secured Party may deem commercially reasonable.  The Grantor
agrees that, to the extent notice of sale shall be required by law,
at least ten (10) days’ prior notice to the Grantor of the
time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable
notification.  The Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of sale having
been given.  The Secured Party may adjourn any public or
private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned;

withdraw all monies, securities and Instruments in the
Collateral Account for application to the Obligations; and

license or sublicense, whether on an exclusive or nonexclusive
basis, any Trademark Collateral, Patent Collateral or Copyright
Collateral included in the Intellectual Property Collateral for
such term and on such conditions and in such manner as the Secured
Party shall in its sole judgment determine.

All cash proceeds received by the Secured Party in respect of
any sale of, collection from, or other realization upon all or any
part of the Collateral may, in the discretion of the Secured Party,
be held by the Secured Party as collateral for, and/or then or at
any time thereafter applied (after payment of any amounts payable
to the Secured Party pursuant to Section 6.2) in whole or in
part by the Secured Party against, all or any part of the Secured
Obligations in such order as the Secured Party shall elect. 
The Grantor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient
to pay all amounts to which the Secured Party is entitled from the
Grantor.  Any surplus of such cash or cash proceeds held by
the Secured Party and remaining after payment in full in cash of
all the Secured Obligations shall be paid over to the applicable
Grantor or to whomsoever may be lawfully entitled to receive such
surplus.

To the extent the Grantor has the right to do so, the Grantor
authorizes the Secured Party to take possession of the Collateral,
or any part of it, and to pay, purchase, contract, or compromise
any encumbrance, charge, or Lien which, in the opinion of the
Secured Party, appears to be prior or superior to its security
interest.

The Secured Party shall have the right upon any such public sale
or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of said
Collateral so sold, free of any right or equity of redemption,
which equity of redemption the Grantor hereby releases.

To the maximum extent permitted by law, the Grantor waives all
claims, damages, and demands against the Secured Party arising out
of the repossession, retention, or sale of the Collateral.

As to any Collateral constituting certificated securities or
uncertificated securities, if, at any time when the Secured Party
shall determine to exercise its right to sell the whole or any part
of such Collateral hereunder, such Collateral or the part thereof
to be sold shall not, for any reason whatsoever, be effectively
registered under Securities Act of 1933, as amended (as so amended
the “Act”), the Secured Party may, in its
discretion (subject only to applicable requirements of law), sell
such Collateral or part thereof by private sale in such manner and
under such circumstances as the Secured Party may deem necessary or
advisable, but subject to the other requirements of this Section
6.1(f), and shall not be required to effect such registration
or cause the same to be effected.  Without limiting the
generality of the foregoing, in any such event the Secured Party
may, in its sole discretion, (i) in accordance with applicable
securities laws, proceed to make such private sale notwithstanding
that a registration statement for the purpose of registering such
Collateral or part thereof could be or shall have been filed under
the Act; (ii) approach and negotiate with a single possible
purchaser to effect such sale; and (iii) restrict such sale to a
purchaser who will represent and agree that such purchaser is
purchasing for its own account, for investment, and not with a view
to the distribution or sale of such Collateral or part
thereof.  In addition to a private sale as provided above in
this Section 6.1(f), if any of such Collateral shall not be
freely distributable to the public without registration under the
Act at the time of any proposed sale hereunder, then the Secured
Party shall not be required to effect such registration or cause
the same to be effected but may, in its sole discretion (subject
only to applicable requirements of law), require that any sale
hereunder (including a sale at auction) be conducted subject to
such restrictions as the Secured Party may, in its sole discretion,
deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in
compliance with the Bankruptcy Code and other laws affecting the
enforcement of creditors’ rights and the Act and all
applicable state securities laws.

The Grantor agrees that in any sale of any of such Collateral,
whether at a foreclosure sale or otherwise, the Secured Party is
hereby authorized to comply with any limitation or restriction in
connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the
number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications and
restrict such prospective bidders and purchasers to persons who
will represent and agree that they are purchasing for their own
account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required
approval of the sale or of the purchaser by any governmental
authority, and the Grantor further agrees that such compliance
shall not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner, nor shall the
Secured Party be liable nor accountable to the Grantor for any
discount allowed by the reason of the fact that such Collateral is
sold in compliance with any such limitation or restriction.

Indemnity and Expenses.

The Grantor agrees to indemnify the Secured Party and its
officers, employees, and agents from and against any and all
claims, losses and liabilities arising out of or resulting from
this Security Agreement (including enforcement of this Security
Agreement), except claims, losses or liabilities resulting from the
gross negligence or willful misconduct of the Secured Party.

The Grantor will upon demand pay to the Secured Party the amount
of any and all reasonable expenses, including the reasonable fees
and disbursements of its counsel and of any experts and agents,
which the Secured Party may incur in connection with:

the administration of this Security Agreement;

the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the
Collateral;

the exercise or enforcement of any of the rights of the Secured
Party hereunder; or

the failure by Grantor to perform or observe any of the
provisions hereof.

The provisions of this
Section 6.2 shall survive the Termination Date.

MISCELLANEOUS PROVISIONS

Loan Document.  This Security Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall
(unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and
provisions thereof.

Amendments; etc.  No amendment to or waiver of any
provision of this Security Agreement nor consent to any departure
by the Grantor here from, shall in any event be effective unless
the same shall be in writing and signed by the Secured Party, and
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

Notices.  All notices and other communications
provided for hereunder shall be given in accordance with Section
10.2 of the Credit Agreement.

Captions.  Section captions used in this Security
Agreement are for convenience of reference only, and shall not
affect the construction of this Security Agreement.

Severability.  Wherever possible each provision of
this Security Agreement shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision
of this Security Agreement shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Security
Agreement.

Counterparts.  This Security Agreement may be
executed by the parties hereto in several counterparts, each of
which shall be deemed an original and all of which shall constitute
together but one and the same agreement.

Governing Law, Entire Agreement, etc.  THIS
SECURITY AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA, EXCEPT TO THE
EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN
THE STATE OF CALIFORNIA.  THIS SECURITY AGREEMENT AND THE
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING BETWEEN
THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND
SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.

[Remainder
of page left blank intentionally.]

IN WITNESS WHEREOF, the
Grantor has caused this Borrower Security Agreement to be duly
executed and delivered by its officer thereunto duly authorized as
of the date first above written.

           

By                                                                   

    
Name: 

    
Title: 

	
                                                                 

	
   

	
SUREBEAM
CORPORATION,

 as Grantor

			
By:

	
/s/ DAVID A.
RANE

				

				
David A. Rane

 Senior Vice President,

 Chief Financial Officer

				
			
THE TITAN
CORPORATION,

 as Secured Party

			
By:

	
/s/ MARK W.
SOPP

				

				
Mark W. Sopp

 Senior Vice President,

 Chief Financial Officer

SCHEDULE
I

Item A.  Location
of Equipment

Location                                                 
Description

           
9276 Scranton Road, Suite
600              
Leasehold improvements, furniture

           
San Diego, CA
92121                            
and computer equipment

           

           
6780 Sierra Court, Suite
A                     
Leasehold improvements, furniture,

           
Dublin, CA
94568                                  
machinery and computer equipment.

           
9040 Activity Road, Suite A
                  
Leasehold improvements, furniture

           
San Diego,
CA                                       
and computer equipment

           
2640 Murray
Street                                
Furniture, computer equipment and machinery

           
Sioux City, IA 51111

           
9300 Underwood Avenue Suite
150        Leasehold
improvements, furniture and

           
Omaha, NE
68114-2684                       
computer equipment

           
3285 East Vernon
Avenue                      
Leasehold improvements, furniture,

           
Vernon, CA
90058                                
computer equipment and machinery

           
300 Regency
Drive                                 
Leasehold improvements, furniture,

           
Glendale Heights,
IL60139                     
computer equipment and machinery

           
400 Discovery
Drive                               
Machinery and equipment

           
College Station, TX 77845

           
Avenida Brasil
19001                             
Leasehold improvements, furniture,

           
(Proximo Ao lado Pavilhao
100              
computer equipment and machinery

           
CEASA) Rio de Janeiro, RJ

           
Brazil 21-531-140

           

           
Abbraj Att’awuneya
BLDG                    
Leasehold improvements, furniture and

           
8th floor
North                                        
computer equipment

           
King Fahad Road

           
Riyadh 11533

           
Kingdom of Saudi Arabia

Item B.  Location
of Inventory

Location                                                          
Description

           
9276 Scranton Road, Suite
600                       
Inventory

           
San Diego, CA 92121

           

           
6780 Sierra Court, Suite
A                              
Inventory

           
Dublin, CA 94568

                     

           
9040 Activity Road, Suite A
                           
Inventory

           
San Diego, CA

*Item C.  Location
of Lock Boxes

                                                                                              
Contact

        
Bank Name and
Address            
Account Number       
Person

        
Comerica Bank
California           
1891382754

        
600 B
Street                               
1891505008

        
San Diego, CA   92101

Item D.  Place(s)
of Business and Chief Executive Office

Current:           
9276 Scranton Road, Suite 600

                       
San Diego, CA  92121

Former:           
3033 Science Park Road

                       
San Diego, CA  92121

Item E.  Trade
Names

SB OperatingCo, LLC
(8/1/02)

SB OperatingCo, Inc.
(8/3/00)

SureBeam Corporation
(4/17/00)

Titan Scan Corp.
(8/25/98)

Titan Purification Inc.
(12/8/97)

SureBeam Brasil
LTDA

Item F.  Merger or
Other Corporate Reorganization

*Item G.  Location
of Deposit Accounts

                                                                                              
Contact

        
Bank Name and
Address         
Account
Number          
Person

        
Comerica Bank
California           
1891507129

        
600 B
Street                               
1891428169

        
San Diego, CA 
92101               
1891427583

                                                           
1891382747

                                                           
1891427591

                                                           
1891507970

                                                           
2176994453

                                                           
1891504993

Item H.  Location
of Securities Accounts

                                                                                              
Contact

        
Bank Name and
Address         
Account
Number          
Person

           
None.

SCHEDULE
II

Item A. 
Patents

	
Country

	
Patent
No.

	
Issue
Date

	
Title

				
	
U.S.

	
5,590,602

	
1/7/1997

	
Conveyor System Utilizing
Articles Carriers

	
PCT

	
5,994,706

	
11/30/1999

	
Article Irradiation System
________ Intermediate Wall of ________ Shielding Material Within
Loop of Conveyor System That Transports the Articles

	
U.S.

PCT

EPO

JAP

CA

	
5,994,706

	
11/30/1999

	
Article Irradiation System
in Which Articles Transporting Conveyor is Closely Encompassed by
Shielding Material

	
U.S.

AUS

DAN

CAN

EPO

JAP

KR

MA

	
5,396,074

	
3/7/1995

	
Irradiation System
Utilizing Conveyor Transported Article Carriers

	
U.S.

	
6,127,687

	
10/3/2000

	
Article Irradiation System
having Intermediate Wall of Radiation Shielding Material Within
Loop of Conveyor System that transports the Articles.

	
U.S.

	
6,236,055

	
5/22/2001

	
Article Irradiation System
having Intermediate Wall of Radiation Shielding Material Within
Loop of Conveyor System that transports the Articles.

	
U.S.

	
6,285,030

	
9/4/2001

	
Article Irradiation System
in Which Article Transporting Conveyor is Closely Encompassed by
Shielding

	
U.S.

	
6,294,791

	
9/24/2001

	
Article Irradiation System
having Intermediate Wall of Radiation Shielding Material Within
Loop of Conveyor System that transports the Articles.

	

 

Pending
Patent Applications

	
Country

	
Serial
No.

	
Filing
Date

	
Title

	
U.S

	
09/710,730

	
11/10/2000

	
System For and Method of
Irradiating an Object with an Optimal Amount of
Radiation

	
U.S.

	
09/872131

	
6/1/2001

	
System For, and Method of
Irradiating Article with Multiple Irradiations

	
U.S.

	
09/872,441

	
6/1/2001

	
System For, and Methods
Of, Irradiating Articles

	
U.S.

	
09/456,061

	
12/7/1999

	
System For and Methods Of,
Irradiating Articles to Sterilize The Articles

	
U.S.

	
9/753,287

	
12/29/2000

	
System For, And Method Of,
Irradiating Articles With X-Ray Beam

	
U.S.

	
09/881,257

	
6/13/2001

	
System For, and Methods
Of, Irradiating Articles With X-Ray Beam

	
U.S.

	
09/710,730

	
11/10/2000

	
System For, And
Methods Of, Irradiating Opposite Sides Of Articles With Optimal
amounts of Cumulative Irradiation

	
U.S.

	
09/569,402

	
5/12/2000

	
System For, and
Method of Providing Frequency Hopping

	
PCT

WO

	
09/458,051

	
12/7/1999

	
Apparatus For, And
Methods for Sterilizing Products, Primarily Food
Products

	
U.S.

	
60/141,781

	
6/30/1999

	
Apparatus For, And Methods
for Sterilizing Products, Primarily Food Products

	
U.S.

	
09/912,576

	
7/24/2001

	
System For, and Methods
Of, Irradiating Articles

	
U.S.

	
09/971,986

	
10/4/2001

	
Compact Self-Shielded
Irradiation System and Method

	
U.S.

	
10/167,544

	
6/10/2002

	
System For, and Method Of,
Irradiating Articles To Sterilize Articles

	
U.S.

	
09/964,785

	
9/26/2001

	
System For, And Methods
Of, Irradiating Opposite Sides Of Articles With Optimal amounts of
Cumulative Irradiation

Patent
Applications in Preparation

Expected*Country       
Docket
No.                 
Filing
Date              
Inventor(s)                 
Title

Item B.  Patent
Licenses

*Country
or                                                                                    
Effective                     
Expiration    Subject

 
Territory
                   
Licensor                      
Licensee                 
   Date 
                     
    Date  
        Matter

SCHEDULE
III

Item A. 
Trademarks

Registered Trademarks

	
*Country

	
Trademark

	
Registration No.

	
Status

	
United States

	
SUREBEAM in class
40

	
(RN) 1,855,367

	
Registered

	
Lebanon

	
SUREBEAM in classes 9
& 40

	
(RN) 88045

	
Registered

Pending
Trademark Applications

	
*Country

	
Trademark

	
Serial
No.

	
Status

	
United States

	
GOOD FOOD. MADE BETTER. in
class 40

	
(SN) 76/326,832

	
Pending

	
United States

	
SAFER FRESHER BETTER in
class 40

	
(SN) 76/326,461

	
Pending

	
United States

	
SERVE WITH CONFIDENCE in
class 40

	
(SN) 76/264,588

	
Pending

	
United States

	
SERVED WITH CONFIDENCE in
class 40

	
(SN) 76/264,589

	
Pending

	
United States

	
SUREBEAM in class
9

	
(SN) 76/260,478

	
Published

	
United States

	
SUREBEAM & Design in
class 40

	
(SN) 76/326,834

	
Pending

	
United States

	
SUREMAIL in class
40

	
(SN) 76/335,335

	
Pending

	
United States

	
YOUR FAVORITE FOODS MADE
BETTER in class 40

	
(SN) 76/264,590

	
Pending

	
United States

	
Be SureBeam
Safe

	
78/145,494

	
Pending

	
Australia

	
GOOD FOOD. MADE BETTER. in
class 40

	
(SN) 894010

	
Pending

	
Australia

	
SUREBEAM in classes 9
& 40

	
(SN) 865938

	
Allowed for
Registration

	
Brazil

	
SUREBEAM in class
9

	
(SN)
822,218,100

	
Published

	
Brazil

	
SUREBEAM in class
40

	
(SN)
822,218,119

	
Published

	
Canada

	
SUREBEAM in classes 9
& 40

	
(SN) 1068730

	
Pending

	
China

	
SUREBEAM in class
9

	
(SN) 2001165531

	
Pending

	
China

	
SUREBEAM in class
40

	
(SN) 2001179227

	
Pending

	
Egypt

	
SUREBEAM in class
9

	
(SN) 144891

	
Pending

	
Egypt

	
SUREBEAM in class
40

	
(SN) 144892

	
Pending

	
Guatemala

	
SUREBEAM in class
9

	
(SN) 07579

	
Pending

	
Guatemala

	
SUREBEAM in class
40

	
(SN) 07580

	
Pending

	
Indonesia

	
SUREBEAM in class
9

	
(SN)
16501-16604

	
Pending

	
Indonesia

	
SUREBEAM in class
40

	
(SN)
16502-16605

	
Published

	
India

	
SUREBEAM in class
9

	
(SN) 1012183

	
Pending

	
Japan

	
SUREBEAM in classes 9
& 40

	
(SN)
2000-097384

	
Published

	
Kuwait

	
SUREBEAM in class
40

	
(SN) 52208

	
Pending

	
Mexico

	
SUREBEAM in class
9

	
(SN) 496290

	
Pending

	
Mexico

	
SUREBEAM in class
40

	
(SN) 496291

	
Pending

	
New Zealand

	
GOOD FOOD. MADE BETTER. in
class 40

	
(SN) 647625

	
Pending

	
Oman

	
SUREBEAM in class
9

	
(SN) 25945

	
Pending

	
Oman

	
SUREBEAM in class
40

	
(SN) 25946

	
Pending

	
Panama

	
SUREBEAM in class
9

	
(SN) 117604

	
Pending

	
Panama

	
SUREBEAM in class
40

	
(SN) 115892

	
Pending

	
Philippines

	
SUREBEAM in classes 9
& 40

	
(SN)
4-2001005137

	
Pending

	
Pakistan

	
SUREBEAM in class
9

	
(SN) 172685

	
Pending

	
Pakistan

	
SUREBEAM in class
16

	
(SN) 173569

	
Pending

	
Qatar

	
SUREBEAM in class
9

	
(SN) 25783

	
Pending

	
Qatar

	
SUREBEAM in class
40

	
(SN) 25784

	
Pending

	
Russia

	
SUREBEAM in class
9

	
(SN) 2001721891

	
Pending

	
Russia

	
SUREBEAM in class
40

	
(SN) 2001721845

	
Pending

	
Saudi Arabia

	
GOOD FOOD. MADE BETTER. in
class 40

	
(SN) 73859

	
Pending

	
Saudi Arabia

	
SUREBEAM in class
9

	
(SN) 71887

	
Pending

	
Saudi Arabia

	
SUREBEAM in class
40

	
(SN) 71888

	
Pending

	
South Africa

	
SUREBEAM in class
9

	
(SN) 2001/12160

	
Pending

	
South Africa

	
SUREBEAM in class
40

	
(SN) 2001/12161

	
Pending

	
South Korea

	
SUREBEAM in class
7

	
(SN)
40200051220

	
Published

	
South Korea

	
SUREBEAM in class
9

	
(SN)
40200041625

	
Published

	
South Korea

	
SUREBEAM in class
40

	
(SN)
41200023540

	
Pending

	
Spain

	
SUREBEAM in class
9

	
(SN) 2351499

	
Published

	
Spain

	
SUREBEAM in class
37

	
(SN) 2414906

	
Published

	
Spain

	
SUREBEAM in class
40

	
(SN) 2346640

	
Published

	
Thailand

	
SUREBEAM in class
9

	
(SN) 472133

	
Pending

	
Thailand

	
SUREBEAM in class
40

	
(SN) 472134

	
Pending

	
Turkey

	
GOOD FOOD. MADE BETTER. in
class 40

	
(SN) 2001-22756

	
Pending

	
United Arab
Emirates

	
SUREBEAM in class
9

	
(SN) 44556

	
Pending

	
United Arab
Emirates

	
SUREBEAM in class
40

	
(SN) 44557

	
Pending

	
Argentina

	
GOOD FOOD. MADE BETTER. in
class 40

	
Awaiting serial number and
confirmation of application filed from local counsel

	
Unfiled

	
Brazil

	
GOOD FOOD. MADE BETTER. in
class 40

	
Awaiting serial number and
confirmation of application filed from local counsel

	
Unfiled

	
Guatemala

	
GOOD FOOD. MADE BETTER. in
class 40

	
Awaiting serial number and
confirmation of application filed from local counsel

	
Unfiled

	
Jordan

	
SUREBEAM in class
9

	
Awaiting serial number
from local counsel

	
Pending

	
Jordan

	
SUREBEAM in class
40

	
Awaiting serial number
from local counsel

	
Pending

	
Japan

	
GOOD FOOD. MADE BETTER. in
class 40

	
Awaiting serial number and
confirmation of application filed from local counsel

	
Unfiled

	
Mexico

	
GOOD FOOD. MADE BETTER. in
class 40

	
Awaiting serial number and
confirmation of application filed from local counsel

	
Unfiled

	
Philippines

	
GOOD FOOD. MADE BETTER. in
class 40

	
Awaiting serial number
from local counsel

	
Pending

	
Turkey

	
SUREBEAM in classes 9
& 40

	
Awaiting serial number
from local counsel

	
Pending

	
Yemen

	
SUREBEAM in class
9

	
Awaiting serial number
from local counsel

	
Pending

Trademark Applications in
Preparation

                                                                                                       
Expected 
                 
Products/

*Country                     
Trademark                  
Docket
No.            
Filing
Date                 
Services

Item B.  Trademark
Licenses

*Country
or                                                                                    
Effective                     
Expiration

Territory
                     
Trademark     
Licensor          
Licensee         
Date                        
   Date

SCHEDULE
IV

Item A. 
Copyrights/Mask Works

Registered Copyrights/Mask Works

*Country                     
Registration
No.          
Registration Date     
Author(s)                   
Title

Copyright/Mask Work Pending Registration
Applications

*Country                     
Serial
No.                    
Filing
Date              
Author(s)                   
Title

Copyright/Mask Work Registration Applications in
Preparation

                                                                       
Expected

*Country                     
Docket
No.                 
Filing
Date              
Author(s)                   
Title

Item B. 
Copyright/Mask Work Licenses

*Country
or                                                                                    
Effective                     
Expiration      Subject

 
Territory
                    
Licensor                      
Licensee                 
   Date 
                     
    Date  
        Matter

SCHEDULE
V

Trade
Secret or Know-How Licenses

*Country
or                                                                                    
Effective                     
Expiration    Subject

 
Territory
                    
Licensor                      
Licensee                 
   Date 
                     
    Date  
        Matter

EXHIBIT
A

BORROWER
PATENT SECURITY AGREEMENT

This BORROWER PATENT
SECURITY AGREEMENT (this “Agreement”), dated as
of August 2, 2002, is made between SUREBEAM CORPORATION, a Delaware
corporation (the “Grantor”), and THE TITAN
CORPORATION, a Delaware corporation (the “Secured
Party”);

W I T N
E S S E T H :

WHEREAS, pursuant to a
Senior Secured Credit Agreement, dated as of August 2, 2002 (as
amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), between the
Grantor and the Secured Party, the Secured Party has agreed to make
Credit Extensions to the Grantor;

WHEREAS, in connection
with the Credit Agreement, the Grantor has executed and delivered
to the Secured Party a Borrower Security Agreement, dated as of
August 2, 2002 (as amended, restated, supplemented or otherwise
modified from time to time, the “Security
Agreement”);

WHEREAS, as a condition
precedent to the making of the Credit Extensions (including the
initial Credit Extension) under the Credit Agreement, the Grantor
is required to execute and deliver this Agreement; and

WHEREAS, the Grantor has
duly authorized the execution, delivery and performance of this
Agreement;

NOW THEREFORE, for good
and valuable consideration the receipt of which is hereby
acknowledged, and in order to induce the Secured Party to make
Credit Extensions (including the initial Credit Extension) to the
Grantor pursuant to the Credit Agreement, the Grantor agrees as
follows:

Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including
its preamble and recitals, have the meanings provided (or
incorporated by reference) in the Security Agreement.

Grant of Security Interest.  For good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Secured Obligations, the Grantor
does hereby mortgage, pledge and hypothecate to the Secured Party,
and grant to the Secured Party a security interest in all of the
following property (the “Patent Collateral”), whether
now owned or hereafter acquired or existing by it:

all letters patent and applications for letters patent
throughout the world, including all patent applications in
preparation for filing anywhere in the world and including each
patent and patent application referred to in Item A of Attachment 1
attached hereto;

all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items
described in clause (a);

all patent licenses, including each patent license referred to
in Item B of Attachment 1 attached hereto; and

all Proceeds of, and rights associated with, the foregoing
(including license royalties and Proceeds of infringement suits),
the right to sue third parties for past, present or future
infringements of any patent or patent application, including any
patent or patent application referred to in Item A of Attachment 1
attached hereto, and for breach or enforcement of any patent
license, including any patent license referred to in Item B of
Attachment 1 attached hereto, and all rights corresponding thereto
throughout the world.

Security Agreement.  This Agreement has been
executed and delivered by the Grantor for the purpose of
registering the security interest of the Secured Party in the
Patent Collateral with the United States Patent and Trademark
Office and corresponding offices in other countries of the
world.  The security interest granted hereby has been granted
as a supplement to, and not in limitation of, the security interest
granted to the Secured Party under the Security Agreement. 
The Security Agreement (and all rights and remedies of the Secured
Party thereunder) shall remain in full force and effect in
accordance with its terms.

Release of Security Interest.  Upon the Termination
Date, the Secured Party shall, at the Grantor’s expense,
execute and deliver to the Grantor all Instruments and other
Documents as may be necessary or proper to release the lien on and
security interest in the Patent Collateral which has been granted
hereunder.

Acknowledgment.  The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Secured
Party with respect to the security interest in the Patent
Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which (including the
remedies provided for therein) are incorporated by reference herein
as if fully set forth herein.

Loan Document, etc.  This Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall
(unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and
provisions of the Credit Agreement.

Counterparts.  This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together
but one and the same agreement.

IN WITNESS WHEREOF, the
parties hereto have caused this Borrower Patent Security Agreement
to be duly executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above
written.

SUREBEAM
CORPORATION,

           
as Grantor

By                                                                   

    
Name: 

    
Title: 

THE TITAN
CORPORATION,

           
as Secured Party

By                                                                   

    
Name: 

    
Title: 

ATTACHMENT
1

Item A. 
Patents

Issued
Patents

*Country                     
Patent
No.                   
Issue
Date               
Inventor(s)                 
Title

Pending
Patent Applications

*Country                     
Serial
No.                    
Filing
Date              
Inventor(s)                 
Title

Patent
Applications in Preparation

Expected*Country       
Docket
No.                 
Filing
Date              
Inventor(s)                 
Title

Item B.  Patent
Licenses

*Country
or                                                                                    
Effective                     
Expiration    Subject

 
Territory
                   
Licensor                      
Licensee                 
   Date 
                     
    Date  
        Matter

EXHIBIT
B

BORROWER
TRADEMARK SECURITY AGREEMENT

This BORROWER TRADEMARK
SECURITY AGREEMENT (this “Agreement”), dated as
of August 2, 2002, is made between SUREBEAM CORPORATION, a Delaware
corporation (the “Grantor”), and THE TITAN
CORPORATION, a Delaware corporation (the “Secured
Party”);

W I T N
E S S E T H :

WHEREAS, pursuant to a
Senior Secured Credit Agreement, dated as of August 2, 2002 (as
amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), between the
Grantor and the Secured Party, the Secured Party has agreed to make
Credit Extensions to the Grantor;

WHEREAS, in connection
with the Credit Agreement, the Grantor has executed and delivered
to the Secured Party a Borrower Security Agreement, dated as of
August 2, 2002 (as amended, restated, supplemented or otherwise
modified from time to time, the “Security
Agreement”);

WHEREAS, as a condition
precedent to the making of the Credit Extensions (including the
initial Credit Extension) under the Credit Agreement, the Grantor
is required to execute and deliver this Agreement; and

WHEREAS, the Grantor has
duly authorized the execution, delivery and performance of this
Agreement;

NOW THEREFORE, for good
and valuable consideration the receipt of which is hereby
acknowledged, and in order to induce the Secured Party to make
Credit Extensions (including the initial Credit Extension) to the
Grantor pursuant to the Credit Agreement, the Grantor agrees as
follows:

Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including
its preamble and recitals, have the meanings provided (or
incorporated by reference) in the Security Agreement.

Grant of Security Interest.  For good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Secured Obligations, the Grantor
does hereby mortgage, pledge and hypothecate to the Secured Party,
and grant to the Secured Party a security interest in, all of the
following property (the “Trademark Collateral”),
whether now owned or hereafter acquired or existing by it:

all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos, other source
of business identifiers, prints and labels on which any of the
foregoing have appeared or appear, designs and general intangibles
of a like nature (all of the foregoing items in this clause (a)
being collectively called a “Trademark”), now existing
anywhere in the world or hereafter adopted or acquired, whether
currently in use or not, all registrations and recordings thereof
and all applications in connection therewith, whether pending or in
preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in
any office or agency of the United States of America or any State
thereof or any foreign country, including those referred to in Item
A of Attachment 1 attached hereto;

all Trademark licenses, including each Trademark license
referred to in Item B of Attachment 1 attached hereto;

all reissues, extensions or renewals of any of the items
described in clauses (a) and (b);

all of the goodwill of the business connected with the use of,
and symbolized by the items described in, clauses (a) and (b);
and

all Proceeds of, and rights associated with, the foregoing,
including any claim by the Grantor against third parties for past,
present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, including any
Trademark, Trademark registration or Trademark license referred to
in Item A and Item B of Attachment 1 attached hereto, or for any
injury to the goodwill associated with the use of any such
Trademark or for breach or enforcement of any Trademark
license.

Security Agreement.  This Agreement has been
executed and delivered by the Grantor for the purpose of
registering the security interest of the Secured Party in the
Trademark Collateral with the United States Patent and Trademark
Office and corresponding offices in other countries of the
world.  The security interest granted hereby has been granted
as a supplement to, and not in limitation of, the security interest
granted to the Secured Party under the Security Agreement. 
The Security Agreement (and all rights and remedies of the Secured
Party thereunder) shall remain in full force and effect in
accordance with its terms.

Release of Security Interest.  Upon the Termination
Date, the Secured Party shall, at the Grantor’s expense,
execute and deliver to the Grantor all Instruments and other
Documents as may be necessary or proper to release the lien on and
security interest in the Trademark Collateral which has been
granted hereunder.

Acknowledgment.  The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Secured
Party with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which (including the
remedies provided for therein) are incorporated by reference herein
as if fully set forth herein.

Loan Document, etc.  This Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall
(unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and
provisions of the Credit Agreement.

Counterparts.  This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together
but one and the same agreement.

IN WITNESS WHEREOF, the
parties hereto have caused this Borrower Trademark Security
Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the day and year first
above written.

SUREBEAM
CORPORATION,

           
as Grantor

By                                                                   

    
Name: 

    
Title: 

THE TITAN
CORPORATION,

           
as Secured Party

By                                                                   

    
Name: 

    
Title: 

ATTACHMENT
1

Item A. 
Trademarks

Registered Trademarks

*Country                     
Trademark                  
Registration No.      
Registration
Date        

Pending
Trademark Applications

*Country                     
Trademark                  
Serial
No.               
Filing
Date                 

Trademark Applications in
Preparation

Expected                                                                                        
Products/

*Country                     
Trademark                  
Filing
Date              
Services 
                   

Item B.  Trademark
Licenses

*Country
or                                                                                    
Effective                     
Expiration    Subject

 
Territory
                   
Licensor                      
Licensee                 
   Date 
                     
    Date  
        Matter

EXHIBIT
C

BORROWER
COPYRIGHT SECURITY AGREEMENT

This BORROWER COPYRIGHT
SECURITY AGREEMENT (this “Agreement”), dated as
of August 2, 2002, is made between SUREBEAM CORPORATION, a Delaware
corporation (the “Grantor”), and THE TITAN CORPORATION,
a Delaware corporation (the “Secured
Party”);

W I T N
E S S E T H :

WHEREAS, pursuant to a
Senior Secured Credit Agreement, dated as of August 2, 2002 (as
amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), between the
Grantor and the Secured Party, the Secured Party has agreed to make
Credit Extensions to the Grantor;

WHEREAS, in connection
with the Credit Agreement, the Grantor has executed and delivered
to the Secured Party a Borrower Security Agreement, dated as of
August 2, 2002 (as amended, restated, supplemented or otherwise
modified from time to time, the “Security
Agreement”);

WHEREAS, as a condition
precedent to the making of the Credit Extensions (including the
initial Credit Extension) under the Credit Agreement, the Grantor
is required to execute and deliver this Agreement; and

WHEREAS, the Grantor has
duly authorized the execution, delivery and performance of this
Agreement;

NOW THEREFORE, for good
and valuable consideration the receipt of which is hereby
acknowledged, and in order to induce the Secured Party to make
Credit Extensions (including the initial Credit Extension) to the
Grantor pursuant to the Credit Agreement, the Grantor agrees as
follows:

Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including
its preamble and recitals, have the meanings provided (or
incorporated by reference) in the Security Agreement.

Grant of Security Interest.  For good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Secured Obligations, the Grantor
does hereby mortgage, pledge and hypothecate to the Secured Party,
and grant to the Secured Party a security interest in all of the
following property (the “Copyright Collateral”),
whether now owned or hereafter acquired or existing by it, being
all copyrights (including all copyrights for semi-conductor chip
product mask works) of the Grantor, whether statutory or common
law, registered or unregistered, now or hereafter in force
throughout the world including all of the Grantor’s right,
title and interest in and to all copyrights registered in the
United States Copyright Office or anywhere else in the world and
also including the copyrights referred to in Item A of Attachment 1
attached hereto, and all applications for registration thereof,
whether pending or in preparation, all copyright licenses,
including each copyright license referred to in Item B of
Attachment 1 attached hereto, the right to sue for past, present
and future infringements of any thereof, all rights corresponding
thereto throughout the world, all extensions and renewals of any
thereof and all Proceeds of the foregoing, including licenses,
royalties, income, payments, claims, damages and Proceeds of
suit.

Security Agreement.  This Agreement has been
executed and delivered by the Grantor for the purpose of
registering the security interest of the Secured Party in the
Copyright Collateral with the United States Copyright Office and
corresponding offices in other countries of the world.  The
security interest granted hereby has been granted as a supplement
to, and not in limitation of, the security interest granted to the
Secured Party under the Security Agreement.  The Security
Agreement (and all rights and remedies of the Secured Party
thereunder) shall remain in full force and effect in accordance
with its terms.

Release of Security Interest.  Upon the Termination
Date, the Secured Party shall, at the Grantor’s expense,
execute and deliver to the Grantor all Instruments and other
Documents as may be necessary or proper to release the lien on and
security interest in the Copyright Collateral which has been
granted hereunder.

Acknowledgment.  The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Secured
Party with respect to the security interest in the Copyright
Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which (including the
remedies provided for therein) are incorporated by reference herein
as if fully set forth herein.

Loan Document, etc.  This Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall
(unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and
provisions of the Credit Agreement.

Counterparts.  This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together
but one and the same agreement.

IN WITNESS WHEREOF, the
parties hereto have caused this Borrower Copyright Security
Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the day and year first
above written.

SUREBEAM
CORPORATION,

           
as Grantor

By                                                                   

    
Name: 

    
Title: 

THE TITAN
CORPORATION,

           
as Secured Party

By                                                                   

    
Name: 

    
Title: 

ATTACHMENT
1

Item A. 
Copyrights/Mask Works

Registered Copyrights/Mask Works

*Country                     
Registration
No.          
Registration Date     
Author(s)                   
Title

Copyright/Mask Work Pending Registration
Applications

*Country                     
Serial
No.                    
Filing
Date              
Author(s)                   
Title

Copyright/Mask Work Registration Applications in
Preparation

                                                                       
Expected                                                   

*Country                     
Docket
No.                 
Filing
Date              
Author(s)                   
Title

Item B. 
Copyright/Mask Work Licenses

*Country
or                                                                                    
Effective                     
Expiration    Subject

 
Territory
                   
Licensor                      
Licensee                 
   Date 
                     
    Date  
        Matter

Exhibit D

  
                                                     
BORROWING REQUEST

The Titan Corporation

3033 Science Park Road

San Diego, CA 
92121

Attention:
                       

Re:  SUREBEAM
CORPORATION

Gentlemen and Ladies:

           
This Borrowing Request is delivered to you pursuant to Section 2.4
of the Senior Secured Credit Agreement, dated as of August 2, 2002
(as amended, restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), between
SureBeam Corporation (the “Borrower”), and The
Titan Corporation (the “Lender”).  Unless
otherwise defined herein or the context otherwise requires, terms
used herein have the meanings provided in the Credit
Agreement.

           
The Borrower hereby requests that (i) a Revolving Loan in the
aggregate principal amount of $15,000,000 and (ii) a Revolving Loan
in the aggregate principal amount of $153,759.72 be made on August
2, 2002.

           
The Borrower hereby acknowledges that, pursuant to Section 5.2(b)
of the Credit Agreement, each of the delivery of this Borrowing
Request and the acceptance by the Borrower of the proceeds of the
Revolving Loan requested hereby constitute a representation and
warranty by the Borrower that, on the date of such Revolving Loan,
and immediately before and after giving effect thereto and to the
application of the proceeds therefrom, the statements set forth in
Section 5.2(a) of the Credit Agreement are true and correct in all
material respects.

           
The Borrower agrees that if prior to the time of the Borrowings
requested hereby any matter certified to herein by it will not be
true and correct in all material respects at such time as if then
made, it will immediately so notify the Lender.  Except to the
extent, if any, that prior to the time of the disbursement of funds
or the issuance of the Letter of Credit for the Borrowings
requested hereby, the Lender shall receive written notice to the
contrary from the Borrower, each matter certified to herein shall
be deemed once again to be certified as true and correct in all
material respects at the date of such disbursement or issuance as
if then made.

           
The proceeds of this Borrowing Request shall be used to refinance
the principal and accrued interest of that certain Promissory Note
dated May 24, 2002, in the original principal amount of $5,000,000,
that certain Promissory Note dated June 14, 2002, in the original
principal amount of $5,000,000 and that certain Promissory Note
dated July 26, 2002, in the original principal amount of
$5,000,000, each executed by the Borrower in favor of the Lender.
           

           
IN WITNESS WHEREOF, the Borrower has caused this Borrowing Request
to be executed and delivered, and the certification and
representations and warranties contained herein to be made, by its
duly Authorized Officer this 2nd day of August, 2002.

	
                                                                 

	
   

	
SUREBEAM
CORPORATION,

			
By:

	
/s/ DAVID A.
RANE

				

				
Senior Vice
President,

 Chief Financial Officer

Exhibit E

CONSENT
AND AGREEMENT

OF
LICENSOR TO COLLATERAL ASSIGNMENT

THIS CONSENT AND
AGREEMENT OF LICENSOR TO COLLATERAL ASSIGNMENT (this
“Consent”), made and entered this 23 day of May,
2002 by SB OPERATINGCO, INC. (the “Licensor”);
THE TITAN CORPORATION, a Delaware corporation (the
“Borrower”); and WACHOVIA BANK, NATIONAL
ASSOCIATION (hereinafter “Bank”), as
administrative agent (the “Agent”) for the
lenders from time to time party to the Credit Agreement referred to
below (individually a “Lender” and collectively
the “Lenders”);

WITNESSETH:

WHEREAS, the Licensor and
the Borrower are parties to a certain License Agreement, dated as
of October 17, 2001 (such License Agreement, as amended, modified,
supplemented or restated from time to time, being herein called the
“License Agreement”), a copy of which is
attached hereto as Exhibit A, pursuant to which the
Licensor has granted to the Borrower certain rights with regard to
Patent Rights, Improvements, Other Intellectual Property and
Licensed Software (as those terms are defined in the License
Agreement), all in the territory and upon the terms and subject to
the conditions described therein (collectively, the
“SureBeam Technology”);

WHEREAS, the Borrower, the
Agent and the Lenders have entered into a certain Senior Secured
Credit Agreement dated as of May 23, 2002 (such Senior Secured
Credit Agreement, as amended, modified, supplemented or restated
from time to time, being herein called the “Credit
Agreement”), pursuant to which, and upon the terms and
subject to the conditions contained therein, the Lenders have
agreed to make loans and extend credit and other financial
accommodations to the Borrower;

WHEREAS, pursuant to the
Credit Agreement, the Borrower has executed in favor of the Agent a
Security Agreement dated as of May 23, 2002 (such Security
Agreement, as amended, modified, supplemented or restated from time
to time, being herein called the “Assignment”),
by which the Borrower has collaterally assigned to the Agent for
the benefit of itself and the Lenders, as security for all of the
Obligations (as such term is defined in the Credit Agreement), all
of the Borrower’s right, title and interest in, to and under
the License Agreement;

WHEREAS, pursuant to
Section 11.4 of the License Agreement, the Borrower is
prohibited from assigning any of its rights, interests or
obligations under the License Agreement without, the prior written
consent of the Licensor, which the Licensor agrees not to
unreasonably withhold;

WHEREAS, as a condition
precedent to the making of the loans and the extending of the
credit to the Borrowers contemplated by the Credit Agreement, the
Agent and the Lenders require the execution of this Consent by the
Licensor, pursuant to which the Licensor shall grant its consent to
the Assignment and shall grant certain assurances to the Agent and
the Lenders with respect to the License Agreement: and

WHEREAS, in order to
induce the Agent and the Lenders to enter into the Credit Agreement
and to make the loans and extend the credit to the Borrowers
contemplated thereby, the Licensor has agreed to make and execute
this Consent;

NOW, THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:

1.        
Estoppel.  The Licensor hereby represents and warrants
to the Agent and the Lenders that:

(a)        The
Licensor is the licensor under the License Agreement;

(b)        A
true, accurate and complete copy of the License Agreement, and all
supplements, amendments and modifications thereto, is attached to
this Consent as Exhibit A;

(c)        As
of the date hereof, the License Agreement is valid and in full
force and effect without modification or amendment;

(d)        The
License Agreement embodies the entire agreement between the
Licensor and Lessee with respect to the use and license by the
Borrower of the SureBeam Technology.  There are no other
agreements or understandings between the Licensor and the Borrower
with regard to the use or license of the SureBeam Technology, and
there are no other agreements, understandings or side letters
whatsoever between the Licensor and the Borrower pertaining in any
way to the SureBeam Technology; and

(e)        To
the best knowledge of the Licensor, there have been and are no
defaults under the terms and conditions of the License Agreement by
either the Licensor or the Borrower and there are no events which
have occurred which, with the giving of notice or the passage of
time, or both, would constitute a default by either the Licensor or
the Borrower thereunder.  No controversy presently exists
between the Licensor and the Borrower, including litigation or
arbitration, with regard to the License Agreement or the
performance thereof.

2.        
Consent to Assignment.  The Licensor hereby consents to
the collateral assignment by the Borrower to the Agent for the
benefit of itself and the Lenders of the Borrower’s rights
in, to and under the License Agreement pursuant to the Assignment
and agrees that the Assignment is permitted under the License
Agreement and will not constitute a default or event of default on
the part of the Borrower thereunder.

3.        
Agreements of the Licensor.  The Licensor agrees with
the Agent and the Lenders that:

(a)        The
Licensor shall provide the Agent with a copy of any notice of
default, notice of cure of default, termination or similar kind of
notice given to the Borrower under the License Agreement,
contemporaneously with the giving of such notice to the
Borrower.  No default or event of default or termination of
the License Agreement predicated on the giving of any notice to the
Borrower shall be complete unless like notice in writing shall have
been given to the Agent and the Agent has been given the same cure
period as is given to the Borrower under the License Agreement, or
a period of thirty (30) days, whichever period is
longer;

(b)        In
the event the Borrower defaults in the performance of any of its
obligations under the License Agreement, regardless of whether such
default consists of a failure to make a payment when due or a
failure to do any other thing which the Borrower is required to do
under the License Agreement, the Agent, without prejudice to any of
its rights against the Borrower, shall have the right (but not the
obligation) to make good such default within the period set forth
in Section 3(a) above, and the Licensor shall accept such
performance on the part of the Agent as though the same had been
performed by the Borrower; and

(c)        If
the Borrower is in default under the Obligations secured by the
Assignment and the Agent elects to exercise its rights and remedies
with the License Agreement as granted under the Assignment, the
License Agreement may be assigned by the Agent to a third party
assignee or to any purchaser pursuant to a private or public
foreclosure sale, in each case to a third party assignee or other
purchaser approved by the Licensor, which approval shall not be
unreasonably withheld, but otherwise subject to all of the other
covenants, conditions and restrictions set forth in the License
Agreement, and the requirement that all amounts then due and owing
to the Licensor under the License Agreement be paid concurrently
with the granting of any such approval by the Licensor. 
Nothing herein, however, shall give the Agent, any third party
assignee or any purchaser any greater rights than those granted
under the License Agreement.

4.        
Notices.  All notices, requests and demands to or upon
a party hereto, to be effective, shall be in writing and shall be
sent by certified or registered mail, return receipt requested, by
personal delivery against receipt, by overnight courier or by
facsimile transmission and, unless expressly provided herein, shall
be deemed to have been validly served, given or delivered
immediately when delivered against receipt, three (3) business days
after deposit in the mail, postage prepaid, or, in the case of
facsimile transmission, when received (if on a business day and, if
not received on a business day, then on the next business day after
receipt), addressed as follows:

(i)        
If to the Agent,
at:                    
Wachovia Bank, National Association

One Wachovia
Center

301 South College Street,
5th Floor

Charlotte, NC
28288-0760

Attention:  Scott
Santa Cruz

Facsimile No.: 
704-374-4793

(ii)        If
to the Borrower, at:
             
The Titan Corporation

                                                           
3033 Science Park Road

                                                           
San Diego, CA 92121

                                                           
Attention:  Mark Sopp

Facsimile No.: 
858-552-9802

(iii)       If to
the Licensor,
at:                
SB OperatingCo,
Inc.                                                              
                                   
3033 Science Park Rd.

San Diego, CA  92121

Attention: David
Rane

Facsimile No.: 
858-552-9973

or to such other address
as each party may designate for itself by notice given in
accordance with this Section 4.  Any written notice or
demand that is not sent in conformity, with the provisions hereof
shall nevertheless be effective on the date that such notice is
actually received by the noticed party.

5.        
Term of Agreement.  This Consent, and the agreement of
the parties set forth herein, shall continue to be effective until
all Obligations owed by the Borrower to the Agent and the Lenders
shall have been paid and discharged in full and the Credit
Agreement shall be terminated in writing, provided, however, that
nothing herein shall be deemed to extend the term of the License
Agreement beyond the term specified therein.

6.        
Execution in Counterparts.  This Consent may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same
instrument.

7.        
Miscellaneous.  The provisions of this Consent may not
be modified or terminated orally and shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns.  The Section titles contained in
this Consent are and shall be without substantive meaning or
content of any kind whatsoever and are not part of the agreement
among the parties hereto.

[remainder
of page intentionally left blank]

IN WITNESS WHEREOF, the
parties hereto have caused this Consent to be duly executed by
their duly authorized corporate offices on the day and year first
above written.

	
                                                                 

	
   

	
SB OPERATINGCO,
INC.

			
By:

	

 /s/ DAVID A. RANE

				

				
David A.
Rane

 Senior Vice President,

 Chief Financial Officer

	
      

			
   

			
THE TITAN
CORPORATION

				

 /s/ RAY H. GUILLAUME

				

				
Ray H.
Guillaume

 Director of Corporate Treasury

				
               

			
WACHOVIA
BANK, NATIONAL

 ASSOCIATION, as Agent

				
   

				

 /s/ GERALD P. HULLINGER

				

				
Gerald P.
Hullinger

 Vice President

EXHIBIT F

COMPLIANCE
CERTIFICATE

The Titan
Corporation

3033 Science Park
Road

San Diego, California
92121

Attention:

                                                    
SUREBEAM CORPORATION

Ladies and
Gentlemen:

This Compliance
Certificate is delivered to you pursuant to Section 5.1(k) of the
Senior Secured Credit Agreement, dated as of August 2, 2002 (as
amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), between SureBeam
Corporation, a Delaware corporation (the
“Borrower”), and The Titan Corporation, a
Delaware corporation (the “Lender”). 
Unless otherwise defined in this Compliance Certificate, terms used
herein (including the Attachments hereto) have the meanings
provided in the Credit Agreement.  Each reference to a Section
is to the relevant Section in the Credit Agreement.

The Borrower hereby
certifies and warrants that as of June 30, 2002 (the
“Computation Date”):

1.         Borrower’s Revenue for the current Fiscal
Quarter* is $10,785,000.  The quarterly revenue target for the
current Fiscal Quarter, as set forth in Borrower’s Annual
Operating Plan is $11,000,000. 

           
Borrower’s Revenue for the current Fiscal Quarter is greater
than 85% of the quarterly revenue target set forth in the Annual
Operating Plan.

The Capital Expenditures
for the current Fiscal Quarter of the Borrower are
$6,102,000.

           
The maximum Capital Expenditures permitted pursuant to clause (a)
of Section 8.4 of the Credit Agreement is $9,625,000 in the
aggregate during Fiscal Year 2002 and, accordingly, the Capital
Expenditures covenant has been satisfied.

2.        
Borrower’s Revenue for the current Fiscal Quarter is
$10,785,000.  The quarterly revenue target for the current
Fiscal Quarter, as set forth in Borrower’s Annual Operating
Plan is $11,000,000. 

           
Borrower’s Revenue for the current Fiscal Quarter is greater
than 85% of the quarterly revenue target set forth in the Annual
Operating Plan.

The Operating Expenses for
the current Fiscal Quarter of the Borrower are
$9,844,000.

           
The maximum Operating Expenses permitted pursuant to clause (b) of
Section 8.4 of the Credit Agreement is $9,844,000 in the aggregate
during Fiscal Year 2002 and, accordingly, the Operating Expenses
covenant has been satisfied.

3.        
Borrower’s EBITDA for the Fiscal Quarter is $(1,254,000), as
computed on Attachment 1 hereto.

4.        
Indebtedness of the Borrower and the Guarantors as set forth in
clause (f) of Section 8.2 of the Credit Agreement was, in the
aggregate, $0.  Indebtedness pursuant to clause (f) of Section
8.2 of the Credit Agreement is not allowed to exceed, in an
aggregate amount at any time, $5,000,000, and accordingly, such
Indebtedness was permitted.

5.        
Other Investments (other than any acquisition of any Person) of the
Borrower or any of its Subsidiaries as set forth in clause (j) of
Section 8.5 of the Credit Agreement, was $0.  Such other
Investments pursuant to clause (j) of Section 8.5 of the Credit
Agreement are not permitted to exceed $500,000 in the aggregate
over the term of the Credit Agreement, and accordingly, to date,
such Investments were permitted.

6.        
The aggregate amount of acquisitions (whether pursuant to an
acquisition of stock, assets constituting a business unit of any
Person, or substantially all of the assets of any Person or Persons
or otherwise and including any assumed debt) by the Borrower or any
Guarantor of any Person or Persons or the assets of any Person or
Persons was $0.  Such acquisitions pursuant to clause (j)(iii)
of Section 8.5 of the Credit Agreement are not permitted to exceed
$2,000,000 in the aggregate over the term of the Credit Agreement,
and accordingly, to date, such acquisitions were
permitted.

7.        
The aggregate value of Capital Stock redemptions for the Borrower
and its Subsidiaries under clause (c) of Section 8.6 of the Credit
Agreement was $0.  The aggregate value of such redemptions
pursuant to clause (c) of Section 8.6 of the Credit Agreement are
not permitted to exceed $1,000,000, and accordingly, such
redemptions were permitted.

8.        
The amount of sale proceeds from sale-leasebacks of the Borrower
and its Subsidiaries under Section 8.14 of the Credit Agreement was
$0 in the aggregate.  Such proceeds from sale-leasebacks
pursuant to such Section 8.14 of the Credit Agreement are not
allowed exceed $2,500,000 in the aggregate, and accordingly, such
sale-leasebacks were permitted.

9.        
No Default has occurred or is continuing.

*  As used herein,
the term “current Fiscal Quarter” shall mean the Fiscal
Quarter for which calculations are being provided.

IN WITNESS WHEREOF, the
Borrower has caused this Compliance Certificate to be duly executed
and delivered by its chief executive, financial or accounting
Authorized Officer this 2nd day of August
2002.

	
                                                       

	
    

	
SUREBEAM
CORPORATION

	

  

	

  

	

 By:  

	

 /s/ DAVID A. RANE

				

				
David A.
Rane

 Senior Vice President and

 Chief Financial Officer

SCHEDULE
1

(Compliance
Certificate as of June 30, 2002)

DEFAULTS

Describe details of
Default and actions that the Borrower has taken or proposes to take
with respect thereto.

None.

ATTACHMENT
1

                                                                                                                                                           

EBITDA

for the
preceding Fiscal Quarter

ending on
June 30, 2002 (the “Computation Date”)

(the
“Computation Period”)

1.        
EBITDA:

	

(a)        Net
Income
...................................................................................

	

$(5,102,000)

	

(b)        the
amount deducted by the Borrower and its Subsidiaries, in
determining Net Income, representing amortization, as determined in
accordance with
GAAP.................................................................

	

$ 4,157,000

	

(c)        the
amount deducted, in determining Net Income, of all federal, state
and local income taxes (whether paid in cash or deferred) of the
Borrower and its
Subsidiaries,..................................................

	

$             
0

	

(d)        the
amount deducted, in determining Net Income, of Interest Expense of
the Borrower and its
Subsidiaries..................................

	

$           
65

	

(e)        the
amount deducted, in determining Net Income, representing
depreciation of assets of the Borrower and its Subsidiaries, as
determined in accordance with
GAAP............................................

	

$         
667

	

	

	

(f)        
The sum of Items 1(a) through
1(e).................................................

	

$        
(213)

	

(g)        all
amounts added by the Borrower and its Subsidiaries, in determining
Net Income, representing either non-cash or non-recurring gains,
including as a result of changes in accounting treatment under
GAAP, and including royalty income recognized by the Borrower and
its Subsidiaries in accordance with that certain Amended and
Restated License Agreement dated October 17, 2001 between SB
OperatingCo, Inc., now known as SB OperatingCo, LLC, and
Lender.....................................................

	

$       
1,041

	

(h)       
EBITDA:  Item 1(f) minus Item
1(g)...............................................

	

$      
(1,254)

                                                                                                                                               

Exhibit G

BORROWER COPYRIGHT SECURITY
AGREEMENT

This BORROWER COPYRIGHT
SECURITY AGREEMENT (this “Agreement”), dated as
of August 2, 2002, is made between SUREBEAM CORPORATION, a Delaware
corporation (the “Grantor”), and THE TITAN CORPORATION,
a Delaware corporation (the “Secured Party”);
 

W I T N
E S S E T H :

WHEREAS, pursuant to a
Senior Secured Credit Agreement, dated as of August 2, 2002 (as
amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), between the
Grantor and the Secured Party, the Secured Party has agreed to make
Credit Extensions to the Grantor;

WHEREAS, in connection
with the Credit Agreement, the Grantor has executed and delivered
to the Secured Party a Borrower Security Agreement, dated as of
August 2, 2002 (as amended, restated, supplemented or otherwise
modified from time to time, the “Security
Agreement”);

WHEREAS, as a condition
precedent to the making of the Credit Extensions (including the
initial Credit Extension) under the Credit Agreement, the Grantor
is required to execute and deliver this Agreement; and

WHEREAS, the Grantor has
duly authorized the execution, delivery and performance of this
Agreement;

NOW THEREFORE, for good
and valuable consideration the receipt of which is hereby
acknowledged, and in order to induce the Secured Party to make
Credit Extensions (including the initial Credit Extension) to the
Grantor pursuant to the Credit Agreement, the Grantor agrees as
follows:

Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including
its preamble and recitals, have the meanings provided (or
incorporated by reference) in the Security Agreement.

Grant of Security Interest.  For good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Secured Obligations, the Grantor
does hereby mortgage, pledge and hypothecate to the Secured Party,
and grant to the Secured Party a security interest in all of the
following property (the “Copyright Collateral”),
whether now owned or hereafter acquired or existing by it, being
all copyrights (including all copyrights for semi-conductor chip
product mask works) of the Grantor, whether statutory or common
law, registered or unregistered, now or hereafter in force
throughout the world including all of the Grantor’s right,
title and interest in and to all copyrights registered in the
United States Copyright Office or anywhere else in the world and
also including the copyrights referred to in Item A of
Attachment 1 attached hereto, and all applications for
registration thereof, whether pending or in preparation, all
copyright licenses, including each copyright license referred to in
Item B of Attachment 1 attached hereto, the right to
sue for past, present and future infringements of any thereof, all
rights corresponding thereto throughout the world, all extensions
and renewals of any thereof and all Proceeds of the foregoing,
including licenses, royalties, income, payments, claims, damages
and Proceeds of suit.

Notwithstanding anything
herein to the contrary, in no event shall the Collateral include,
and the Grantor shall not be deemed to have granted a security
interest in, any of the Grantor’s rights or interests in any
license, contract or agreement to which the Grantor is a party or
any of its rights or interests thereunder to the extent, but only
to the extent, that such a grant would, under the express terms of
such license, contract or agreement or otherwise, result in a
breach of the terms of, or constitute a default under such license,
contract or agreement (other than to the extent that any such term
would be rendered ineffective pursuant to Sections 9407(a) or
9408(a) of the U.C.C. or any other applicable law (including the
Bankruptcy Code) or principles of equity); provided, that
immediately upon the ineffectiveness, waiver, lapse or termination
of any such provision, the Collateral shall include, and the
Grantor shall have granted a security interest in, all such rights
and interests as if such provision had never been in
effect.

Security Agreement.  This Agreement has been
executed and delivered by the Grantor for the purpose of
registering the security interest of the Secured Party in the
Copyright Collateral with the United States Copyright Office and
corresponding offices in other countries of the world.  The
security interest granted hereby has been granted as a supplement
to, and not in limitation of, the security interest granted to the
Secured Party under the Security Agreement.  The Security
Agreement (and all rights and remedies of the Secured Party
thereunder) shall remain in full force and effect in accordance
with its terms.

Release of Security Interest.  Upon the Termination
Date, the Secured Party shall, at the Grantor’s expense,
execute and deliver to the Grantor all Instruments and other
Documents as may be necessary or proper to release the lien on and
security interest in the Copyright Collateral which has been
granted hereunder.

Acknowledgment.  The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Secured
Party with respect to the security interest in the Copyright
Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which (including the
remedies provided for therein) are incorporated by reference herein
as if fully set forth herein.

Loan Document, etc.  This Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall
(unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and
provisions of the Credit Agreement.

Counterparts.  This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together
but one and the same agreement.

IN WITNESS WHEREOF, the
parties hereto have caused this Borrower Copyright Security
Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the day and year first
above written.

	
                                                                 

	
   

	
SUREBEAM
CORPORATION,

 as Grantor

			
By:

	
/s/ DAVID A. RANE

				

				
David A. Rane

 Senior Vice President,

 Chief Financial Officer

				
			
THE TITAN
CORPORATION,

 as Secured Party

			
By:

	
/s/ MARK W. SOPP

				

				
Mark W. Sopp

 Senior Vice President,

 Chief Financial Officer

ATTACHMENT
1

Item A. 
Copyrights/Mask Works

Registered Copyrights/Mask Works

*Country                     
Registration
No.          
Registration Date     
Author(s)                   
Title

Copyright/Mask Work Pending Registration
Applications

*Country                     
Serial
No.                    
Filing
Date              
Author(s)                   
Title

Copyright/Mask Work Registration Applications in
Preparation

                                                                       
Expected                                                   

*Country                     
Docket
No.                 
Filing
Date              
Author(s)                   
Title

Item B. 
Copyright/Mask Work Licenses

*Country
or                                                                                    
Effective                     
Expiration    Subject

 
Territory
                   
Licensor                      
Licensee                 
   Date 
                     
    Date  
        Matter

Exhibit H

[BORROWING] [ISSUANCE]
REQUEST

The Titan Corporation

[ADDRESS]

Attention:
                       

Re:  SUREBEAM
CORPORATION

Gentlemen and Ladies:

           
This Borrowing Request is delivered to you pursuant to [Section
2.4] [Section 2.6] of the Senior Secured Credit Agreement, dated as
of August ___, 2002 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit
Agreement”), between SureBeam Corporation (the
“Borrower”), and The Titan Corporation (the
“Lender”).  Unless otherwise defined herein
or the context otherwise requires, terms used herein have the
meanings provided in the Credit Agreement.

           
[The Borrower hereby requests that a Revolving Loan be made in the
aggregate principal amount of
$                       
  on
                   
        ,
20       .]

           
[The Borrower requests that Lender issue or cause to be issued a
Letter of Credit in the amount of
$            
           
  on
                   
        ,
20       .]

           
The Borrower hereby acknowledges that, pursuant to Section 5.2(b)
of the Credit Agreement, each of the delivery of this [Borrowing
Request] [Issuance Request] and the acceptance by the Borrower of
the [proceeds of the Revolving Loan] [Letter of Credit] requested
hereby constitute a representation and warranty by the Borrower
that, on the date of such [Revolving Loan] [Letter of Credit], and
immediately before and after giving effect thereto and to the
application of the proceeds therefrom, the statements set forth in
Section 5.2(a) of the Credit Agreement are true and correct in all
material respects.

           
The Borrower hereby certifies that, pursuant to Section 2.1(c) of
the Credit Agreement, Borrower’s EBITDA for the immediately
preceding Fiscal Quarter (or for the second preceding Fiscal
Quarter in accordance with Section 2.5 of the Credit Agreement) is
_____________________. 

           
[If amount in blank space above is less that 25% of the EBITDA
AOP Target for such preceding Fiscal Quarter, include the
following:  Borrower hereby covenants that it shall
restrict its Operating Expenses during the current Fiscal Quarter
to an amount not to exceed Five Million Dollars ($5,000,000), not
taking into account amounts allowed to be carried forward as
provided in Section 8.4(b) of the Credit Agreement.]

           
The Borrower agrees that if prior to the time of the Borrowing
requested hereby any matter certified to herein by it will not be
true and correct in all material respects at such time as if then
made, it will immediately so notify the Lender.  Except to the
extent, if any, that prior to the time of the disbursement of funds
or the issuance of the Letter of Credit for the Borrowing requested
hereby, the Lender shall receive written notice to the contrary
from the Borrower, each matter certified to herein shall be deemed
once again to be certified as true and correct in all material
respects at the date of such disbursement or issuance as if then
made.

           
[Please wire transfer the proceeds of the Borrowing to the accounts
of the following persons at the financial institutions indicated
respectively:]

	
Amount to be

Transferred              

	
Person to be
Paid        

	
Name, Account No.,

Address,
etc.          

	
$                              

		
                                                        

                                                        

Attention:
                                         

	
$                              

		
                                                        

                                                        

Attention:
                                         

	
$                              

Balance of such
proceeds

		
                                                        

                                                        

Attention:
                                         

           
[Please cause to be issued a Letter of Credit in the name of the
following persons in the following amounts:]

	
Amount of Letter of

Credit                      

	
Issued in the Name
of  

	
Name, Address,
etc.

	
$                              

		
                                                        

                                                        

                                                        

	
$                              

		
                                                        

                                                        

                                                        

	
$                              

		
                                                        

                                                        

                                                        

           
IN WITNESS WHEREOF, the Borrower has
caused this [Borrowing Request] [Issuance Request] to be executed
and delivered, and the certification and representations and
warranties contained herein to be made, by its duly Authorized
Officer this
        day of
____________, ____.

SUREBEAM CORPORATION

By                                                                   

  Name:

  Title:

Exhibit I

 
                                                          
REVOLVING NOTE

$50,000,000                                                                                                           
August 2, 2002

San Diego,
California

           
FOR VALUE RECEIVED, the undersigned, SUREBEAM
CORPORATION, a Delaware corporation (the
“Borrower”), promises to pay to the order of THE
TITAN CORPORATION, a Delaware corporation, and its assigns (the
“Lender”) on the Revolving Loan Maturity Date,
the principal sum of FIFITY MILLION DOLLARS ($50,000,000) or, if
less, the aggregate unpaid principal amount of all Revolving Loans
made by the Lender pursuant to that certain Senior Secured Credit
Agreement, dated as of August 2, 2002 by and between the Borrower
and the Lender (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit
Agreement”).  Unless otherwise defined, terms used
herein have the meanings provided in the Credit
Agreement.

           
The Borrower also promises to pay interest on
the unpaid principal amount hereof from time to time outstanding
from the date hereof until maturity (whether by acceleration or
otherwise) and, after maturity, until paid, at the rates per annum
and on the dates specified in the Credit Agreement.  Payments
of both principal and interest are to be made in lawful money of
the United States of America in same day or immediately available
funds at the place or places designated by the Lender pursuant to
the Credit Agreement.

           
This Revolving Note is the Revolving Note
referred to in, and evidences Obligations incurred under, the
Credit Agreement, to which reference is made for a description of
the security for this Revolving Note and for a statement of the
terms and conditions on which the Borrower is permitted and
required to make prepayments and repayments of principal of the
Obligations evidenced by this Revolving Note and on which such
Obligations may be declared to be immediately due and
payable.

           
The Borrower hereby irrevocably authorizes
the Lender to make (or cause to be made) appropriate notations on
the grid attached hereto (or on any continuation of such grid),
which notations, if made, shall evidence, inter alia, the
date of and the outstanding principal of, the Revolving Loans
evidenced hereby.  Such notations shall be rebuttable
presumptive evidence of the accuracy of the information so set
forth; provided, however, that the failure of the Lender to
make any such notations shall not limit or otherwise affect any
Obligations of the Borrower. 

           
All parties hereto, whether as makers,
endorsers, or otherwise, severally waive presentment for payment,
demand, protest and notice of dishonor.

	
                                                          

	
   

	
SUREBEAM
CORPORATION

			
By:

	
/s/ L. A.
OBERKFELL

				

				
L. A.
Oberkfeff

 President and Chief Executive Officer

The following subtractions and
additions of portions of the principal amount of this Revolving
Note have been made:

	
Date
Made

	
Principal Amount Subtracted or
Added

	
Principal Amount Following Such Subtraction of
Addition

			
			
			
			

Exhibit J

SUBSIDIARY GUARANTY

This SUBSIDIARY GUARANTY
(as amended, restated, supplemented, or otherwise modified from
time to time, this “Guaranty”), dated as of
August 2, 2002, is made by each Subsidiary of SUREBEAM CORPORATION,
a Delaware corporation (the “Borrower”), now or after
the date hereof (including pursuant to Section 5.5) a party
to this Guaranty (individually referred to as a
“Guarantor” and collectively referred to as the
“Guarantors”) in favor of THE TITAN CORPORATION,
a Delaware corporation (the “Secured
Party”). 

W I T N
E S S E T H:

WHEREAS, pursuant to a
Senior Secured Credit Agreement, dated as of August 2, 2002 (as
amended, restated, supplemented, or otherwise modified from time to
time, the “Credit Agreement”), between the
Borrower and the Secured Party, the Secured Party has agreed to
extend Commitments to make Credit Extensions to the
Borrower;

WHEREAS, as a condition
precedent to the making of the Credit Extensions (including the
initial Credit Extension) under the Credit Agreement, each
Guarantor is required to execute and deliver this
Guaranty;

WHEREAS, each Guarantor
has duly authorized the execution, delivery and performance of this
Guaranty; and

WHEREAS, it is in the best
interests of each Guarantor to execute this Guaranty inasmuch as
such Guarantor will derive substantial direct and indirect benefits
from the Credit Extensions made from time to time to the Borrower
by the Secured Party pursuant to the Credit Agreement;

NOW THEREFORE, for good
and valuable consideration the receipt of which is hereby
acknowledged, and in order to induce the Secured Party to make
Credit Extensions (including the initial Credit Extension) to the
Borrower, each Guarantor jointly and severally agrees, for the
benefit of the Secured Party, as follows:

DEFINITIONS

Certain
Terms.  The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and
recitals, shall have the following meanings (such definitions to be
equally applicable to the singular and plural forms thereof):

“Borrower” is defined in the
preamble.

“Credit
Agreement” is defined in the first recital.

“Guarantor” and
“Guarantors” is defined in the
preamble.

“Guaranty” is defined in the
preamble.

“Termination
Date” means the date on which all Obligations have
indefeasibly been paid in full in cash, all Commitments have been
fully terminated and all Letters of Credit and Lender Guaranties
have been canceled or otherwise terminated.

Credit Agreement
Definitions.  Unless otherwise defined herein or
the context otherwise requires, terms used in this Guaranty,
including its preamble and recitals, have the meanings provided in
the Credit Agreement.

GUARANTY PROVISIONS

Guaranty.  Each Guarantor hereby
jointly and severally absolutely, unconditionally and
irrevocably:

guarantees the full and
punctual payment when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise, of all
Obligations of the Borrower and each other Obligor now or hereafter
existing, whether for principal, interest (including interest
accruing at the then applicable rate provided in the Credit
Agreement after the occurrence of any Default set forth in Section
9.1(i) of the Credit Agreement, whether or not a claim for
post-filing or post-petition interest is allowed under applicable
law following the institution of a proceeding under bankruptcy,
insolvency or similar laws), fees, Reimbursement Obligations,
Hedging Obligations, expenses or otherwise (including all such
amounts which would become due but for the operation of the
automatic stay under Section 362(a) of the United States Bankruptcy
Code, 11 U.S.C. §362(a), and the operation of Sections 502(b)
and 506(b) of the United States Bankruptcy Code, 11 U.S.C.
§502(b) and §506(b)) (the
“Liabilities”); and

indemnifies and holds
harmless the Secured Party for any and all costs and expenses
(including reasonable attorneys’ fees and expenses) incurred
by the Secured Party in enforcing any rights under this Guaranty
(together with the Liabilities, the “Guaranty
Obligations”);

provided, however, that
each Guarantor shall only be liable under this Guaranty for the
maximum amount, if there is such a maximum amount, of such
liability that can be hereby incurred without rendering this
Guaranty, as it relates to such Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent
transfer, and not for any greater amount.  This Guaranty
constitutes a guaranty of payment when due and not of collection,
and each Guarantor specifically agrees that it shall not be
necessary or required that the Secured Party exercise any right,
assert any claim or demand or enforce any remedy whatsoever against
the Borrower, any other Obligor or any other Person before or as a
condition to the obligations of such Guarantor
hereunder.

Reinstatement,
etc.  Each Guarantor hereby jointly and severally
agrees that this Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time any payment (in
whole or in part) of any of the Obligations is invalidated,
declared to be fraudulent or preferential, set aside, rescinded or
must otherwise be restored by the Secured Party, upon the
insolvency, bankruptcy, reorganization (or similar event) of the
Borrower, any other Obligor or otherwise, all as though such
payment had not been made.

Guaranty Absolute,
etc.  This Guaranty shall in all respects be a
continuing, absolute, unconditional and irrevocable guaranty of
payment, and shall remain in full force and effect until the
Termination Date has occurred.  Each Guarantor jointly and
severally guarantees that the Obligations of the Borrower and each
other Obligor will be paid strictly in accordance with the terms of
the Credit Agreement, each other Loan Document and any Interest
Rate Hedging Agreement under which they arise, regardless of any
law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the
Secured Party with respect thereto.  The liability of each
Guarantor under this Guaranty shall be joint and several, absolute,
unconditional and irrevocable irrespective of:

any lack of validity,
legality or enforceability of the Credit Agreement or any other
Loan Document;

the failure of the Secured
Party

to assert any claim or
demand or to enforce any right or remedy against the Borrower, any
other Obligor or any other Person (including any other guarantor)
under the provisions of the Credit Agreement, any other Loan
Document, any Interest Rate Hedging Agreement or otherwise,
or

to exercise any right or
remedy against any other guarantor (including each Guarantor) of,
or collateral securing, any Obligations;

any change in the time,
manner or place of payment of, or in any other term of, all or any
part of the Obligations, or any extension, compromise or renewal of
any Obligation;

any reduction, limitation,
impairment or termination of any Obligations for any reason,
including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to (and each Guarantor hereby
waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting,
any Obligations or otherwise;

any amendment to,
rescission, waiver, or other modification of, or any consent to or
departure from, any of the terms of the Credit Agreement, any other
Loan Document or any Interest Rate Hedging Agreement, including
without limitation any increase in the Obligations from the
extension of additional credit to the Borrower or
otherwise;

any addition, exchange,
release, surrender or non-perfection of any collateral, or any
amendment to or waiver or release or addition of, or consent to or
departure from, any other guaranty held by the Secured Party
securing any of the Obligations;

any change, restructuring
or termination of the corporate structure or existence of the
Borrower or any other Obligor; or

any other circumstance
which might otherwise constitute a defense available to, or a legal
or equitable discharge of, the Borrower, any other Obligor, any
surety or any guarantor.

Setoff.  Each Guarantor hereby
irrevocably authorizes the Secured Party, without the requirement
that any notice be given to such Guarantor (such notice being
expressly waived by each Guarantor), upon the occurrence and during
the continuance of any Default described in Section 9.1(i) of the
Credit Agreement as it relates to the Borrower or upon the
occurrence and during the continuance of any other Event of
Default, to set-off and appropriate and apply to the payment of the
Obligations owing to the Secured Party (whether or not then due,
and whether or not the Secured Party has made any demand for
payment of the Obligations), any and all balances, claims, credits,
deposits (general or special, time or demand, provisional or
final), accounts or money of such Guarantor then or thereafter
maintained with the Secured Party.  The Secured Party agrees
to notify the applicable Guarantor after any such setoff and
application made by the Secured Party; provided,
however, that the failure to give such notice shall not
affect the validity of such setoff and application.  The
rights of the Secured Party under this Section are in addition to
other rights and remedies (including other rights of setoff under
applicable law or otherwise) which the Secured Party may have.

Waiver,
Etc. 

Each Guarantor hereby
waives promptness, diligence, notice of acceptance and any other
notice with respect to any of the Obligations and this Guaranty and
any requirement that the Secured Party protect, secure, perfect or
insure any Lien, or any property subject thereto, or exhaust any
right or take any action against the Borrower, any other Obligor or
any other Person (including any other guarantor) or entity or any
collateral securing the Obligations, as the case may be.

Each Guarantor hereby
waives any right to revoke this Guaranty, and acknowledges that
this Guaranty is continuing in nature and applies to all
Obligations, whether existing now or in the future.

Each Guarantor
acknowledges that it will receive substantial direct and indirect
benefits from the financing arrangements contemplated by the Loan
Documents and that the waivers set forth in this Section 2.4
are knowingly made in contemplation of such benefits.

Each Guarantor assumes all
responsibility for being and keeping itself informed of the
financial condition and assets of the Borrower, and of all other
circumstances bearing upon the risk of non-payment of the
Obligations and the nature, scope and extent of the risks the
Guarantors assume and incur hereunder, and agrees that the Secured
Party shall have no duty to advise the Guarantors of information
known to it regarding such circumstances or risks.

Each Guarantor hereby
waives all claims (as such term is defined in the United States
Bankruptcy Code) it may at any time otherwise have against the
Borrower arising from any transaction whatsoever, including,
without limitation, its rights to assert or enforce any such
claims, until the Obligations are repaid in full in cash and all
Commitments have been terminated.

Each Guarantor hereby
waives, to the fullest extent permitted by applicable law, without
limiting the generality of the foregoing or any other provision
hereof, all rights and benefits which might otherwise be available
to each Guarantor under Sections 1432, 2809, 2810, 2815, 2819,
2821, 2839, 2845, 2848, 2849, 2850, 2899 and 3433 of the California
Civil Code.

Each Guarantor
acknowledges and affirms that it understands and is aware that if
the Secured Party elects to foreclose on any real property security
nonjudicially, any right of subrogation of such Guarantor against
the Borrower may be impaired or extinguished and that as a result
of such impairment or extinguishment or subrogation rights, the
Guarantors might otherwise have a defense to a deficiency judgment
arising out of the operation of Section 580d of the California Code
of Civil Procedure and related principles of estoppel, and waives
any defense arising out of any such election by the Secured Party,
including, without limitation, the defense arising out of the
operation of Section 580d of the Code of Civil Procedure and
related principles of estoppel, even though such election operates
to impair or extinguish any right of reimbursement or subrogation
or other right or remedy of the Guarantors against the Borrower or
any other party or any security.

Subrogation.  Each Guarantor
agrees that it will not exercise any rights that it may now have or
hereafter acquire against the Borrower that arise from the
existence, payment, performance or enforcement of such
Guarantor’s obligations under this Guaranty or any other Loan
Document, including without limitation any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of the Secured Party or
any beneficiary against the Borrower or any collateral, whether or
not such claim, remedy or right arises at equity or under contract,
statute or common law, including without limitation the right to
take or receive from the Borrower, directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or
security on account of such claim, remedy or right except as
specifically otherwise provided in the Loan Documents, until the
Obligations are repaid in full in cash and all Commitments have
been terminated.  Any amount paid to any Guarantor on account
of any such subrogation rights shall be held in trust for the
benefit of the Secured Party and shall immediately be paid and
turned over to the Secured Party in the exact form received by such
Guarantor (duly endorsed in favor of the Secured Party, if
required), to be credited and applied against the Obligations,
whether matured or unmatured, in accordance with Section 2.7
hereof ; provided, however, that if:

any Guarantor has made
payment to the Secured Party of all or any part of the Obligations;
and

the Termination Date has
occurred;

then at such
Guarantor’s request, the Secured Party will, at the expense
of such Guarantor, execute and deliver to such Guarantor
appropriate documents (without recourse and without representation
or warranty) necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Obligations resulting from
such payment by such Guarantor.  In furtherance of the
foregoing, at all times prior to the Termination Date, each
Guarantor shall refrain from taking any action or commencing any
proceeding against the Borrower or any other Obligor (or  its
or their successors or assigns, whether in connection with a
bankruptcy proceeding or otherwise) to recover any amounts in the
respect of payments made under this Guaranty to the Secured
Party.  Notwithstanding the foregoing, to the extent necessary
to toll the statute of limitations, such Guarantor may take such
action required to preserve any rights it has by way of rights of
subrogation as consented to by the Secured Party in its reasonable
discretion.

Successors, Transferees
and Assigns, etc.  This Guaranty shall:

be binding upon each
Guarantor, and its successors, transferees and assigns;
and

inure to the benefit of
and be enforceable by the Secured Party.

Without limiting the
generality of clause (b), the Secured Party may assign or
otherwise transfer (in whole or in part) the Revolving Note or any
Credit Extension or Commitment held by it to any other Person and
such other Person shall thereupon become vested with all rights and
benefits in respect thereof granted to the Secured Party under any
Loan Document (including this Guaranty) or otherwise, in each case
as provided in Section 10.10 of the Credit Agreement.

Payments;
Application.  Each Guarantor hereby agrees with the
Secured Party as follows:

Each Guarantor agrees that
all payments made by such Guarantor hereunder will be made in
Dollars to the Secured Party, without set-off, counterclaim or
other defense and in accordance with Sections 4.2 and 4.3 of the
Credit Agreement, free and clear of and without deduction for any
Taxes, the Guarantor hereby agreeing to comply with and be bound by
the provisions of Sections 4.2 and 4.3 of the Credit Agreement in
respect of all payments made by it hereunder and the provisions of
which Sections are hereby incorporated into and made a part of this
Guaranty by this reference as if set forth herein; provided,
that references to the “Borrower” in such Sections
shall be deemed to be references to each Guarantor, and references
to “this Agreement” shall be deemed to be references to
this Guaranty.

All payments made
hereunder shall be applied upon receipt as follows:

first, to the payment of
all Obligations owing to the Secured Party pursuant to Section 10.3
of the Credit Agreement;

second, after payment in
full of the amounts specified in clause (b)(1), to the
payment of all other Obligations owing to the Secured Party, with
such amounts applied first to fees and expenses, then to accrued
and unpaid interest, then to the outstanding principal amount of
the Revolving Loan, then to Letter of Credit Outstandings, then to
Lender Guaranty Outstandings, and then to Interest Rate Hedging
Obligations, if any; and

third, after payment in
full of the amounts specified in clauses (b)(1) and
(b)(2), and following the Termination Date, to such
Guarantor or any other Person lawfully entitled to receive such
surplus.

Acceleration of
Guaranty.  Each Guarantor hereby jointly and
severally agrees that, in the event of an Event of Default under
the Credit Agreement, each Guarantor jointly and severally agrees
that all or any part of the Guaranty Obligations may, at the option
of the Secured Party and without demand, notice, or legal process
of any kind, be declared, and immediately shall become, due and
payable.

REPRESENTATIONS AND WARRANTIES

Representations.  In order to
induce the Secured Party to enter into the Credit Agreement and
make Credit Extensions thereunder, each Guarantor represents and
warrants to the Secured Party that the representations and
warranties contained in Article VI of the Credit Agreement, insofar
as the representations and warranties contained therein are
applicable to it and its properties, are true and correct (it being
understood that such representations and warranties not qualified
by reference to materiality or Material Adverse Effect shall be
true and correct in all material respects), each such
representation and warranty set forth in such Article VI (insofar
as applicable as aforesaid) and all other terms of the Credit
Agreement to which reference is made therein, together with all
related definitions and ancillary provisions, being hereby
incorporated into this Guaranty by this reference as though
specifically set forth in this Article III.  Furthermore, each
Guarantor represents that it has knowledge of the Borrower’s
and each other Obligor’s financial condition and affairs and
that it has adequate means to obtain from the Borrower and each
other Obligor on an ongoing basis, information relating thereto and
to the Borrower’s and such Obligor’s ability to pay and
perform the Obligations, and agrees to assume the responsibility
for keeping, and to keep, so informed for so long as this Guaranty
is in effect.  Each Guarantor acknowledges and agrees that the
Secured Party shall have no obligation to investigate the financial
condition or affairs of any Obligor for the benefit of such
Guarantor nor to advise such Guarantor of any fact respecting, or
any change in, the financial condition or affairs of the Borrower
or any other Obligor that might become known to the Secured Party
at any time, whether or not the Secured Party knows or believes or
has reason to know or believe that any such fact or change is
unknown to such Guarantor, or might (or does) materially increase
the risk of such Guarantor as guarantor, or might (or would) affect
the willingness of such Guarantor to continue as a guarantor of the
Obligations.

COVENANTS, ETC.

Covenants.  Each Guarantor
covenants and agrees that, at all times prior to the Termination
Date, it will perform, comply with and be bound by all of the
agreements, covenants and obligations contained in the Credit
Agreement (including Articles VII and VIII thereof) which are
applicable to such Guarantor or its properties, each such
agreement, covenant and obligation contained in the Credit
Agreement and all other terms of the Credit Agreement to which
reference is made herein, together with all related definitions and
ancillary provisions, being hereby incorporated into this Guaranty
by this reference as though specifically set forth in this Article
IV.

MISCELLANEOUS PROVISIONS

Loan
Document.  This Guaranty is a Loan Document
executed pursuant to the Credit Agreement and shall (unless
otherwise expressly indicated herein) be construed, administered
and applied in accordance with the terms and provisions
thereof.

Binding on Successors,
Transferees and Assigns; Assignment. In addition to, and
not in limitation of, Section 2.6, this Guaranty shall be
jointly and severally binding upon each Guarantor and its
successors, transferees and assigns and shall inure to the benefit
of and be enforceable by the Secured Party and its respective
successors, transferees and assigns (to the full extent provided
pursuant to Section 2.6); provided, however,
that no Guarantor may (unless otherwise permitted under the terms
of the Credit Agreement) assign any of its obligations hereunder
without the prior written consent of the Secured Party.

Amendments,
etc.  No amendment to or waiver of any provision of
this Guaranty, nor consent to any departure by any Guarantor
therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Secured Party, and then such waiver or
consent shall be effective only in the specific instance and for
the specific purpose for which given.

Notices.  All notices and other
communications provided for hereunder shall be in writing
(including facsimile communication) and, mailed or telecopied or
delivered to each Guarantor, in care of the Borrower at the address
or facsimile number of the Borrower specified in the Credit
Agreement.  All such notices and other communications, when
mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed
given when received; any such notice or communication, if
transmitted by facsimile, shall be deemed given when the
confirmation of transmission thereof is received by the
transmitter.

Additional Subsidiary
Guarantors.  Upon the execution and delivery by any
other Person of an instrument in the form of Annex I hereto, such
Person shall become a “Guarantor” hereunder with the
same force and effect as if originally named as a
“Guarantor” herein.  The execution and delivery of
any such instrument shall not require the consent of any other
Guarantor hereunder.  The rights and obligations of each
Guarantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor as a party to
this Guaranty.

No Waiver;
Remedies.  In addition to, and not in limitation
of, Section 2.2 and Section 2.4 hereof, no failure on
the part of the Secured Party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of
any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

Captions.  Section captions used
in this Guaranty are for convenience of reference only, and shall
not affect the construction of this Guaranty.

Severability.  Wherever possible
each provision of this Guaranty shall be interpreted in such manner
as to be effective and valid under applicable law, but if any
provision of this Guaranty shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Guaranty.

Governing Law, Entire
Agreement, etc.  THIS GUARANTY SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE
OF CALIFORNIA.  THIS GUARANTY AND THE OTHER LOAN DOCUMENTS
CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.

Forum Selection and
Consent to Jurisdiction.  ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
GUARANTY OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS
OF THE SECURED PARTY OR ANY GUARANTOR SHALL BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE OF CALIFORNIA OR IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
CALIFORNIA; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY PROPERTY MAY BE BROUGHT, AT THE SECURED
PARTY’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
PROPERTY MAY BE FOUND.  EACH GUARANTOR IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF CALIFORNIA
ADDRESSED TO SUCH GUARANTOR, CARE OF THE BORROWER, AT THE ADDRESS
FOR NOTICES SPECIFIED IN THE CREDIT AGREEMENT.  EACH GUARANTOR
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF CALIFORNIA AND OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF CALIFORINIA FOR THE PURPOSE OF
ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH
LITIGATION.   EACH GUARANTOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.  TO THE EXTENT THAT ANY GUARANTOR HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT
OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH GUARANTOR
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER LOAN
DOCUMENTS.

Waiver of Jury
Trial. EACH GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS GUARANTY OR ANY OTHER LOAN
DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE SECURED PARTY OR SUCH
GUARANTOR.  EACH GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE SECURED
PARTIES ENTERING INTO THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.

Counterparts.  This Guaranty may
be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original and all of which shall
constitute together but one and the same agreement.

IN WITNESS WHEREOF, each
Guarantor has caused this Guaranty to be duly executed and
delivered by its officer thereunto duly authorized as of the date
first above written.

	
Guarantor                                      

	
   

	
SB
OPERATINGCO, LLC,

 a Delaware limited liability company

			
By:

	
/s/ L. A.
OBERKFELL

				

				
L. A.
Oberkfeff

 President and Chief Executive Officer

 

ANNEX
I

to
the

Subsidiary
Guaranty

SUPPLEMENT, dated as of
_______________, ____ (this “Supplement”), to the
Subsidiary Guaranty, dated as of August 2, 2002 (together with all
amendments, supplements, restatements and other modifications, if
any, from time to time thereafter made thereto, the
“Guaranty”), among the initial signatories thereto and
each other Person (such capitalized term, and other terms used in
this Supplement, to have the meanings set forth in Article I of the
Guaranty) which from time to time thereafter became a party thereto
pursuant to Section 5.5 thereof (each, individually, a
“Guarantor”, and, collectively, the
“Guarantors”), in favor of the Secured Party (as
defined in the Guaranty).

W I T N
E S S E T H:

WHEREAS, pursuant to the
provisions of Section 5.5 of the Guaranty, the undersigned
is becoming a Guarantor under the Guaranty; and

WHEREAS, the undersigned
Guarantor desires to become a “Guarantor” under the
Guaranty in order to induce the Secured Party to continue to extend
Credit Extensions under the Credit Agreement;

NOW THEREFORE, in
consideration of the premises, and for other consideration (the
receipt and sufficiency of which is hereby acknowledged), the
undersigned agrees, for the benefit of the Secured Party, as
follows.

In accordance with the terms of the Guaranty, by its signature
below the undersigned hereby irrevocably agrees to become a
Guarantor under the Guaranty with the same force and effect as if
it were an original signatory thereto, and the undersigned
Guarantor hereby (a) agrees to be bound by and comply with all of
the terms and provisions of the Guaranty applicable to it as a
Guarantor and (b) represents and warrants that the representations
and warranties made by it as a Guarantor thereunder are true and
correct as of the date hereof.  In furtherance of the
foregoing, each reference to a “Guarantor” in the
Guaranty and each other Loan Document shall be deemed to include
the undersigned Guarantor.

The undersigned Guarantor hereby represents and warrants that
this Supplement has been duly authorized, executed and delivered by
it and that this Supplement and the Guaranty constitute the legal,
valid and binding obligation of the undersigned Guarantor,
enforceable against it in accordance with its terms.

Except as expressly supplemented hereby, the Guaranty shall
remain in full force and effect in accordance with its terms.

In the event any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein and in the Guaranty shall not in any
way be affected or impaired.

THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA. 

This Supplement may be executed by the parties hereto in several
counterparts, each of which shall be deemed to be an original and
all of which shall constitute together but one and the same
agreement.

IN WITNESS WHEREOF, the
parties hereto have caused this Supplement to be duly executed and
delivered by their respective officers thereunto duly authorized as
of the day and year first above written.

[NAME OF ADDITIONAL
SUBSIDIARY GUARANTORS]

By:                                                                              

Name:

Title: 

Exhibit K

SUBSIDIARY PLEDGE AGREEMENT

This SUBSIDIARY PLEDGE
AGREEMENT (as amended, restated, supplemented, or otherwise
modified from time to time, this “Pledge
Agreement”), dated as of August 2,2002 is made by each
Subsidiary (as defined in the Credit Agreement referred to below)
of SUREBEAM CORPORATION, a Delaware corporation (the
“Borrower”), now or after the date hereof
(including pursuant to Section 7.6) a signatory hereto (each,
individually, a “Pledgor,” and collectively, the
“Pledgors”), in favor of THE TITAN CORPORATION,
a Delaware corporation (the
“Pledgee”). 

W I T N
E S S E T H:

WHEREAS, pursuant to a
Senior Secured Credit Agreement, dated as of August 2, 2002 (as
amended, restated, supplemented, or otherwise modified from time to
time, the “Credit Agreement”), between Borrower
and Pledgee, the Pledgee has extended Commitments to make Credit
Extensions to the Borrower;

WHEREAS, as a condition
precedent to the making of the Credit Extensions (including the
initial Credit Extension) under the Credit Agreement, each Pledgor
is required to execute and deliver this Pledge
Agreement;

WHEREAS, each Pledgor has
duly authorized the execution, delivery and performance of this
Pledge Agreement; and

WHEREAS, it is in the best
interests of each Pledgor to execute this Pledge Agreement inasmuch
as such Pledgor will derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to the
Borrower by the Pledgee pursuant to the Credit
Agreement;

NOW THEREFORE, for good
and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, and in order to induce the Pledgee to make
Credit Extensions (including the initial Credit Extension) to the
Borrower pursuant to the Credit Agreement, each Pledgor jointly and
severally agrees, for the benefit of Pledgee, as
follows:

DEFINITIONS

Certain Terms.  Capitalized terms used but not
otherwise defined herein shall have the meanings given them in the
Credit Agreement.  The following terms (whether or not
underscored) when used in this Pledge Agreement, including its
preamble and recitals, shall have the following meanings (such
definitions to be equally applicable to the singular and plural
forms thereof):

“Act”
is defined in Section 6.2.

“Certificated
Interests” means, collectively, all Pledged Shares
evidenced by certificates.

“Collateral” is defined in
Section 2.1.

“Credit
Agreement” is defined in the first recital.

“Distributions” means all
stock dividends, liquidating dividends, shares of stock resulting
from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or
dissimilar to the foregoing) on or with respect to any Pledged
Interests or other shares of Capital Stock constituting Collateral,
but shall not include Dividends.

“Dividends” means cash
dividends and cash distributions with respect to any Pledged
Interests made in the ordinary course of business and not as a
liquidating dividend.

“Interest Rate
Hedging Agreements” means interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements,
and all other agreements or arrangements designed to protect
against fluctuations in interest rates, entered into for the
purpose of hedging interest rate risk with respect to the
Obligations.

“Interest Rate
Hedging Obligations” means all liabilities of the
Pledgors under Interest Rate Hedging Agreements.

“LLC”
means each limited liability company listed from time to time as a
Pledged Interest Issuer on Attachment 1 hereto.

“LLC
Interest” means the entire ownership interest of any
Pledgor in each Pledged Interest Issuer that is an LLC listed on
Attachment 1 hereto, including such Pledgor’s capital
account, its gain, loss, deduction and credit of such Pledged
Interest Issuer, such Pledgor’s interest in all distributions
made or to be made by such Pledged Interest Issuer to such Pledgor
and all of the other rights, titles and interests of such Pledgor
as an owner or a member of such Pledged Interest Issuer, whether
set forth in the operating or membership agreement of such Pledged
Interest Issuer, by separate agreement or otherwise.

“Partnership” means each
general partnership or limited partnership listed from time to time
as a Pledged Interest Issuer on Attachment 1
hereto.

“Partnership
Interest” means the entire ownership interest of the
Pledgor in each Pledged Interest Issuer that is a Partnership
listed on Attachment 1 hereto, including the Pledgor’s
capital account, its gain, loss, deduction and credit of such
Pledged Interest Issuer, the Pledgor’s interest in all
distributions made or to be made by such Pledged Interest Issuer to
the Pledgor and all of the other rights, titles and interests of
the Pledgor as an owner, a general partner or a limited partner of
such Pledged Interest Issuer, whether set forth in the partnership
agreement of such Pledged Interest Issuer, by separate agreement or
otherwise.

“Pledge
Agreement” is defined in the preamble.

“Pledged Interest
Issuers” means each Person identified in Attachment
1 hereto as the issuer of the Pledged Interests (including the
maker of each Pledged Note) identified opposite the name of such
Person and each Person whose ownership, equity or other similar
interests, including shares of Capital Stock, Partnership Interests
and LLC Interests, are , or are required to be pledged hereunder
and under the Credit Agreement from time to time.

“Pledged
Interests” means (i) all Pledged Shares and (ii) all
Pledged Notes.

“Pledged
Notes” means all promissory notes of any Pledged Interest
Issuer, identified on Attachment 1 hereto, and any
promissory notes issued to any Pledgor in the future, as such
promissory notes are amended, restated, supplemented or otherwise
modified from time to time, in accordance with Section 4.1.6,
together with any promissory note of any Pledged Interest Issuer
taken in extension or renewal thereof or substitution
therefor.

“Pledged
Shares” means (a) all ownership, equity or other similar
interests, including shares of Capital Stock, Partnership Interests
and LLC Interests, of any Pledged Interest Issuer listed on
Attachment 1 hereto and any shares of Capital Stock,
Partnership Interests and LLC Interests of any Pledged Interest
Issuer obtained in the future by any Pledgor, (b) the certificates
representing all such ownership, equity or similar interests and
(c) all securities convertible into, and all warrants, options or
other rights to acquire, such ownership, equity or similar
interests; but excluding all shares of voting stock of each class
of any Foreign Subsidiary in excess of sixty-five percent (65%) of
the total issued and outstanding shares of the voting stock of each
such class.

“Pledgee” is defined in the
preamble.

“Pledgor” is defined in the
preamble.

“Secured
Obligations” is defined in Section 2.2.

“Termination
Date” means the date on which all Obligations have been
indefeasibly paid in full in cash, all Commitments have been fully
terminated and all Letters of Credit have been canceled or
otherwise terminated.

“U.C.C.” means the Uniform
Commercial Code, as in effect from time to time in the State of
California; provided, however, in the event that, by
reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of Pledgee’s security
interest in any Collateral is governed by the Uniform Commercial
Code (including Articles thereof) as in effect in a jurisdiction
other than the State of California, “U.C.C.” shall mean
the Uniform Commercial Code as in effect at such time in such other
jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions
related to such provisions.

Credit Agreement Definitions.  Unless otherwise
defined herein or the context otherwise requires, terms used in
this Pledge Agreement, including its preamble and recitals, have
the meanings provided in the Credit Agreement.

U.C.C. Definitions.  Unless otherwise defined herein
or in the Credit Agreement or the context otherwise requires, terms
for which meanings are provided in the U.C.C. are used in this
Pledge Agreement, including its preamble and recitals, with such
meanings.

PLEDGE

Grant of Security Interest.  Each Pledgor hereby
pledges, hypothecates, assigns, charges, mortgages, delivers and
transfers to the Pledgee, and each Pledgor hereby grants to the
Pledgee, to secure the Secured Obligations, a continuing security
interest in, all of the following property (the
“Collateral”):

all Pledged Interests;

all right, title and interest of such Pledgor, whether now
existing or hereafter arising or acquired, in, to and under any
partnership agreement, limited liability company agreement or
similar agreement which governs the rights and obligations of the
holder of ownership, equity or similar interests in a Pledged
Interest Issuer;

all voting trust certificates held by each Pledgor evidencing
the right to vote any Pledged Shares subject to any voting
trust;

all Dividends, Distributions, interest and without duplication,
other payments and rights with respect to any Pledged Interest;
and

all Proceeds of any of the foregoing.

Security for Obligations.  This Pledge Agreement
secures the payment in full of (i) all Obligations of the Borrower
now or hereafter existing under the Credit Agreement, each other
Loan Document to which the Borrower is or may become a party, and
each Interest Rate Hedging Agreement, whether for principal,
interest, costs, fees, expenses, Interest Rate Hedging Obligations
or otherwise, and (ii) all Obligations of each Pledgor now or
hereafter existing under the Credit Agreement and each other Loan
Document and each Interest Rate Hedging Agreement, whether for
principal, interest, costs, fees, indemnities, expenses, Interest
Rate Hedging Obligations or otherwise (including all Obligations of
each Pledgor now or hereafter existing under this Pledge Agreement
and each other Loan Document to which such Pledgor is or may become
a party), with all such Obligations being referred to as the
“Secured Obligations”.

Pledge and Transfer of Pledged Interests.  Any
Certificated Interests representing or evidencing any Collateral
shall be delivered to and held by or on behalf of the Pledgee
pursuant hereto, shall be in suitable form for transfer by
delivery, and shall be accompanied by all necessary instruments or
documents of transfer or assignment, duly executed in blank by the
applicable Pledgor or, if any Collateral is in the form of
uncertificated securities, confirmation and evidence satisfactory
to the Pledgee that the applicable Pledgor has taken all actions
requested by the Pledgee to provide for the transfer to and
perfection by the Pledgee of the security interests in such
uncertificated securities in accordance with the U.C.C. and any
other applicable law.

Dividends on Pledged Interests. 

In the event that any Dividend or other payment is to be paid on
any Pledged Interests (including any payment of any principal or
interest on any Pledged Note) at a time when no Default has
occurred and is continuing or would result therefrom, such Dividend
or payment may be paid directly to the applicable Pledgor.

If any such Default or Event of Default has occurred and is
continuing, then any such Dividend or payment shall be paid
directly to the Pledgee.

Continuing Security Interest.  This Pledge Agreement
shall create a continuing security interest in the Collateral and
shall:

remain in full force and effect until the Termination Date;

be binding upon each Pledgor and its successors, transferees and
assigns; and

inure to the benefit of and be enforceable by the Pledgee.

Without limiting clause
(c), the Pledgee may assign or otherwise transfer (in whole or in
part) the Revolving Note or any Credit Extension or Commitment held
by it to any other Person, and such other Person shall thereupon
become vested with all the rights and benefits in respect thereof
granted to the Pledgee under any Loan Document (including this
Pledge Agreement) or otherwise, in each case as provided in Section
10.10 of the Credit Agreement. 

Upon (i) the sale,
transfer or other disposition of Collateral in accordance with the
Credit Agreement, or (ii) the occurrence of the Termination Date,
the security interests granted herein shall automatically terminate
with respect to (x) such Collateral (in the case of clause (i)), or
(y) all Collateral (in the case of clause (ii)), and at such time
the Pledgee will, at each Pledgor’s sole expense, deliver to
the applicable Pledgor, without any representations, warranties or
recourse of any kind whatsoever, all certificates and instruments
previously delivered to the Pledgee representing or evidencing all
Pledged Interests, together with all other Collateral held by the
Pledgee hereunder, and execute and deliver to the applicable
Pledgor such documents as a Pledgor shall reasonably request to
evidence such termination.

Security Interest Absolute.  All rights of the
Pledgee and the security interests granted to the Pledgee
hereunder, and all obligations of each Pledgor hereunder, shall be
joint and several and shall be absolute and unconditional,
irrespective of:

any lack of validity or enforceability of the Credit Agreement
or any other Loan Document;

the failure of the Pledgee

to assert any claim or demand or to enforce any right or remedy
against any Obligor or any other Person under the provisions of the
Credit Agreement, any other Loan Document or otherwise, or

to exercise any right or remedy against any other guarantor of,
or collateral securing, any Secured Obligations;

any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations or any other
extension, compromise or renewal of any Secured Obligation;

any reduction, limitation, impairment or termination of any
Secured Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be
subject to (and each Pledgor hereby waives any right to or claim
of) any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Secured Obligations or otherwise;

any amendment to, rescission, waiver, or other modification of,
or any consent to departure from, any of the terms of the Credit
Agreement or any other Loan Document;

any addition, exchange, release, surrender or non-perfection of
any collateral (including the Collateral), or any amendment to or
waiver or release of or addition to or consent to departure from
any guaranty, for any of the Secured Obligations; or

any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any
Obligor, any surety or any guarantor.

Postponement of Subrogation, etc.  Each Pledgor
agrees that it will not exercise any rights which it may acquire by
way of rights of subrogation under this Pledge Agreement, any
payment made hereunder, whether by way of subrogation,
reimbursement or otherwise, until after the Termination Date. 
Any amount paid to any Pledgor on account of any such subrogation
rights prior to the Termination Date shall be held in trust for the
benefit of the Pledgee and shall immediately be paid to the Pledgee
and credited and applied against the Secured Obligations, whether
matured or unmatured, in accordance with the terms of the Credit
Agreement; provided, however, that if:

any Pledgor has made payment to the Pledgee of all or any part
of the Secured Obligations; and

the Termination Date has occurred;

then the Pledgee agrees
that, at such Pledgor’s request, the Pledgee will execute and
deliver to such Pledgor appropriate documents (without recourse and
without representation or warranty) necessary to evidence the
transfer by subrogation to such Pledgor of an interest in the
Secured Obligations resulting from such payment by such
Pledgor.  In furtherance of the foregoing, at all times prior
to the Termination Date, each Pledgor shall refrain from taking any
action or commencing any proceeding against the Borrower or any
other Obligor (or its successors or assigns, whether in connection
with a bankruptcy proceeding or otherwise) to recover any amounts
in respect of payments made under this Pledge Agreement to the
Pledgee.  Notwithstanding the foregoing, to the extent
necessary to toll the statute of limitations, such Pledgor may take
such action required to preserve any rights it has by way of rights
of subrogation as consented to by the Pledgee in its reasonable
discretion.

REPRESENTATIONS AND WARRANTIES

Representations and Warranties, etc.  In order to
induce the Pledgee to enter into the Credit Agreement and to make
Credit Extensions thereunder, each Pledgor represents and warrants
to the Pledgee as set forth in this Article III.

Ownership, No Liens, etc.  Each Pledgor is the legal
and beneficial owner of, and has good and marketable title to (and
has full right and authority to pledge and assign) its Collateral,
free and clear of all Liens, options and other charges, except any
Lien granted pursuant hereto in favor of the Pledgee.

Valid Security Interest.  With respect to U.S.
entities, the execution and delivery of this Pledge Agreement,
together with (a)(i) in the case of Collateral in the form of a
Certificated Interest, the delivery of such Collateral to the
Pledgee together with undated stock powers executed in blank by the
Pledgor, (ii) in the case of Collateral in the form of an
uncertificated security, the registration  in the name of the
Secured Party as owner with the Pledged Interest Issuer of such
uncertificated security, or (iii) in the case of Collateral in the
form of Pledged Notes, delivery of such Collateral and an allonge
to such Collateral to the Pledgee, or (b) in the case of other than
Certificated Interests, the filing of U.C.C. financing statements
in the filing offices listed on Attachment 2 hereto, is
effective to create a valid, perfected, first priority security
interest in such Collateral and all Proceeds thereof, securing the
Secured Obligations.  Upon the performance of the actions set
forth in the first sentence of this Section 3.1.2, no
further action is necessary to perfect or protect such security
interest in the Collateral and the Proceeds thereof.  The
Pledgor agrees that it shall take all necessary actions reasonably
requested by the Pledgee to create a valid, perfected security
interest in the Collateral related to non-U.S. entities.

As to Pledged Interests.  In the case of

any Pledged Interests (other than Pledged Notes) constituting
Collateral,

all of such Pledged Interests are duly authorized, and validly
issued, fully paid, and non-assessable, and constitute that
percentage of the issued and outstanding shares of Capital Stock,
Partnership Interests, LLC Interests and other ownership interests
of each Pledged Interest Issuer set forth on Attachment 1 hereto;
and

the Pledgor has delivered to the Pledgee true and complete
copies of the partnership, membership, operating or ownership
agreements, as applicable, for each Pledged Interest Issuer that is
an LLC or a Partnership, which agreements are currently in full
force and effect and have not been amended or modified except as
disclosed to the Pledgee in writing; and

each Pledged Note, all of such Pledged Notes have been duly
authorized, executed, endorsed, issued and delivered, and are the
legal, valid and binding obligation of the issuers thereof, and no
default or event of default has occurred and is continuing
thereunder.

Location of Pledgor.  The jurisdictions in which the
Pledgor is located for purposes of Section 9307 of the U.C.C. are
set forth in Attachment 1 hereto.

Nature of Pledged Interests.  No LLC Interests or
Partnership Interests are Certificated Interests.

COVENANTS

Covenants.  Each Pledgor covenants and agrees that,
at all times prior to the Termination Date, it will perform, comply
with and be bound by the obligations set forth in this Article
IV.

Protect Collateral; Further Assurances, etc.  Each
Pledgor covenants and agrees that it will not sell, assign,
transfer, pledge, or encumber in any other manner the Collateral
(except in favor of the Pledgee hereunder or as permitted in the
Credit Agreement).  Each Pledgor will warrant and defend the
right and title herein granted unto the Pledgee in and to the
Collateral (and all right, title, and interest represented by the
Collateral) against the claims and demands of all other
Persons.  Each Pledgor agrees that from time to time, at the
expense of such Pledgor, it will promptly execute and deliver all
further instruments, and take all further action, that may be
necessary or desirable, or that the Pledgee may reasonably request,
in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable the Pledgee to exercise
and enforce its rights and remedies hereunder with respect to any
Collateral.  The Pledgor will not, without thirty (30)
days’ prior written notice to the Pledgee, (i) change its
name or structure so as to make any financing or other statement
filed pursuant to this Pledge Agreement become seriously misleading
or (ii) change the jurisdiction in which it is located to other
than those specified in Section 3.1.4 hereof.  Each
Pledgor further covenants and agrees as follows:

If any Pledgor shall become entitled to receive or shall receive
any stock or other certificate (including any certificate
representing a Dividend or a Distribution in connection with any
reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option
or rights, whether in addition to, in substitution of, as a
conversion of, or in exchange for any portion of the Collateral (or
otherwise in respect thereof), such Pledgor shall accept the same
as the agent of the Pledgee, hold the same in trust for the Pledgee
and deliver the same forthwith to the Pledgee in the exact form
received, duly endorsed (in blank) by such Pledgor to the Pledgee,
if required, together with an undated stock power or other
necessary instrument of transfer covering such certificate duly
executed in blank by such Pledgor, to be held by the Pledgee,
subject to the terms of this Pledge Agreement, as additional
security for the Secured Obligations.  In addition, any sums
paid upon or in respect of the Collateral upon the liquidation or
dissolution of any Pledged Interest Issuer shall be held by the
Pledgee as additional security for the Secured Obligations. 
If any sums of money or property so paid or distributed in respect
of any Collateral shall be received by any Pledgor, then such
Pledgor shall, until such money or property is paid or delivered to
the Pledgee, hold such money or property in trust for the Pledgee,
segregated from other funds of such Pledgor, as additional
collateral securing the Secured Obligations.

Except as otherwise expressly permitted by the Credit Agreement,
without the prior written consent of the Pledgee, no Pledgor will
(i) consent to any material modification, extension or alteration
of the terms of any membership, partnership or operating agreement
of the LLCs or the Partnerships or (ii) accept a surrender of any
membership, partnership or operating agreement of any of the LLCs
or the Partnerships, as applicable, or waive any breach of or
default under any such agreement by any other party thereto.

Each Pledgor will advise the Pledgee promptly, in reasonable
detail (i) of any Lien or claim made or asserted against any part
of the Collateral, (ii) of any material change in the composition
of the Collateral, and (iii) of the occurrence of any other event
relating specifically to such Pledgor or its assets which could
reasonably be expected to have a material adverse effect on the
aggregate value of the Collateral or on the security interests
created hereunder.

Registration of Pledged Interests, etc. 
Concurrently with the execution and delivery of this Pledge
Agreement, each Pledgor shall execute and deliver to the applicable
Pledged Interest Issuer instructions to register, substantially in
the form of Exhibit A hereto, and cause each Pledged Interest
Issuer to execute and deliver to the Pledgee the Initial
Transaction Statement, substantially in the form of Exhibit B
hereto, confirming that each Pledged Interest Issuer (in which such
Pledgor owns a Pledged Interest (other than in the case of a
Certificated Interest or a Pledged Note)) has registered the pledge
by such Pledgor effected by this Pledge Agreement on its
books.  In addition, the Pledgor agrees that it shall cause
each issuer of Certificated Interests to execute and deliver to the
Pledgee an acknowledgment in a form satisfactory to the
Pledgee.

Stock Powers, etc.  Each Pledgor agrees that all
Certificated Interests constituting Collateral delivered by such
Pledgor pursuant to this Pledge Agreement will be accompanied by
duly executed undated blank stock powers, or other equivalent
instruments or documents of transfer acceptable to the Pledgee, as
are necessary under all applicable laws to perfect the Lien in
favor of the Pledgee on such Collateral.  Each Pledgor will,
from time to time upon the request of the Pledgee, promptly deliver
to the Pledgee such stock powers, instruments, and similar
documents, satisfactory in form and substance to the Pledgee, with
respect to the Collateral as the Pledgee may reasonably request and
will, from time to time upon the request of the Pledgee after the
occurrence, and during the continuance, of any Event of Default,
promptly transfer any Pledged Interests or other shares of Capital
Stock or other ownership interests constituting Collateral into the
name of any nominee designated by the Pledgee.

Continuous Pledge.  Each Pledgor will, at all times,
keep pledged to the Pledgee pursuant hereto all Pledged Interests
and all other shares of Capital Stock or other ownership interests
constituting Collateral, all Dividends and Distributions with
respect thereto [(provided that if no Event of Default shall have
occurred or be continuing, such Dividends and Distributions may be
used for working capital or other purposes)], all Pledged Notes,
all interest, principal and other proceeds received by the Pledgee
with respect to the Pledged Notes, and all other Collateral and
other securities, instruments, proceeds, and rights from time to
time received by or distributable to such Pledgor in respect of any
Collateral, and will not permit any Pledged Interest Issuer to
issue any Capital Stock or other ownership interests or any
options, warrants or other rights to subscribe for or purchase
Capital Stock (other than as permitted by the Credit Agreement)
which shall not have been immediately duly pledged hereunder on a
first priority perfected basis.

Voting Rights; Dividends, etc.  Each Pledgor
agrees:           

after any Event of Default shall have occurred and be
continuing, promptly upon receipt of notice thereof by such Pledgor
and without any request therefor by the Pledgee, such Pledgor will
deliver (properly endorsed where required hereby or requested by
the Pledgee) to the Pledgee all Dividends, Distributions, all other
cash payments, and all Proceeds of the Collateral, all of which
shall be held by the Pledgee as additional Collateral for use in
accordance with Section 6.4 hereof; and

after any Event of Default shall have occurred and be continuing
and the Pledgee has notified any Pledgor of the Pledgee’s
intention to exercise its voting power under this Section
4.1.5:

the Pledgee may exercise (to the exclusion of each Pledgor) the
voting power and all other incidental rights of ownership with
respect to any Pledged Interests or other shares of Capital Stock
or other ownership interests constituting Collateral and each
Pledgor hereby grants the Pledgee an irrevocable proxy, exercisable
under such circumstances, to vote the Pledged Interests and such
other Collateral; and

to promptly deliver to the Pledgee such additional proxies and
other documents requested by the Pledgee as may be necessary to
allow the Pledgee to exercise such voting power.

All Dividends,
Distributions, cash payments and Proceeds which may at any time and
from time to time be held by any Pledgor but which such Pledgor is
then obligated to deliver to the Pledgee, shall, until delivery to
the Pledgee, be held by such Pledgor separate and apart from its
other property in trust for the Pledgee.  The Pledgee agrees
that unless an Event of Default shall have occurred and be
continuing and the Pledgee shall have given the notice referred to
in clause (b), such Pledgor shall have the exclusive voting power
with respect to any shares of Capital Stock or other ownership
interests (including any of the Pledged Interests) constituting
Collateral and the Pledgee shall, upon the written request of such
Pledgor, promptly deliver such proxies and other documents, if any,
as shall be reasonably requested by such Pledgor which are
necessary to allow such Pledgor to exercise voting power with
respect to any such share of Capital Stock or other ownership
interests (including any of the Pledged Interests) constituting
Collateral; provided, however, that no vote shall be cast, or
consent, waiver, or ratification given, or action taken by any
Pledgor that would impair any Collateral or be inconsistent with or
violate any provision of the Credit Agreement, any other Loan
Document or any Interest Rate Hedging Agreement.

Additional Undertakings.  No Pledgor will, without
the prior written consent of the Pledgee, take or omit to take any
action the taking or the omission of which could with reasonable
likelihood result in any impairment or alteration of any Instrument
constituting Collateral.  In furtherance of the foregoing,
each Pledgor agrees that it will not, without the prior written
consent of the Pledgee, which consent shall not be unreasonably
withheld:

enter into any agreement amending, supplementing, or waiving any
provision of any Pledged Note (including any underlying Instrument
pursuant to which such Pledged Note is issued) or compromising or
releasing or extending the time for payment of any obligation of
the maker thereof; or

take or omit to take any action the taking or the omission of
which would result in any impairment or alteration of any
obligation of the maker of any Pledged Note or other Instrument
constituting Collateral.

Pledgor Remains Liable.  Anything herein to the
contrary notwithstanding:

each Pledgor shall remain liable to perform all of its duties
and obligations as an owner of the Pledged Interests, to the same
extent as if this Pledge Agreement had not been executed;

the exercise by the Pledgee of any of its rights hereunder shall
not release any Pledgor from any of its duties or obligations as
owner of the Pledged Interests; and

the Pledgee shall not have any obligation or liability as an
owner of any Pledged Interest, by reason of this Pledge
Agreement.         

ATTORNEY IN FACT

Pledgee Appointed Attorney-in-Fact.  Each Pledgor
hereby irrevocably appoints the Pledgee as such Pledgor’s
attorney-in-fact, with full authority in the place and stead of
such Pledgor and in the name of such Pledgor or otherwise, from
time to time in the Pledgee’s discretion, after the
occurrence and during the continuance of an Event of Default, to
take any action and to execute any instrument or document which
such Pledgee may deem necessary or advisable to accomplish the
purposes of this Pledge Agreement, including without
limitation:

to ask, demand, collect, sue for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral;

to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
(a); and

to file any claims or take any action or institute any
proceedings which the Pledgee may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the
rights of the Pledgee with respect to any of the Collateral.

Each Pledgor hereby
acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section 5.1 is irrevocable and
coupled with an interest.

Pledgee May Perform.  If any Pledgor fails to
perform any agreement contained herein, the Pledgee may itself
perform, or cause performance of, such agreement, and the
reasonable expenses of the Pledgee incurred in connection therewith
shall be jointly and severally payable by the Pledgors pursuant to
Section 6.5 hereof.

Pledgee Has No Duty.  The powers conferred on the
Pledgee hereunder are solely to protect its interests in the
Collateral and shall not impose any duty on it to exercise any such
powers.  Except for reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it
hereunder, the Pledgee shall have no duty as to any Collateral or
responsibility for:

ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters
relative to any Pledged Interests, whether or not the Pledgee has
or is deemed to have knowledge of such matters; or

taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.

Reasonable Care.  Other than the exercise of
reasonable care in the custody and preservation of the Collateral
in its possession, the Pledgee shall have no duty with respect
thereto.  The Pledgee shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral
in its possession if the Collateral is accorded treatment
substantially equal to that which the Pledgee accords its own
property.  The Pledgee shall not be liable or responsible for
any loss or damage to any of the Collateral, or for any diminution
in the value thereof, by reason of the act or omission of any agent
or bailee selected by the Pledgee in good faith.

REMEDIES

Certain Remedies.  If any Event of Default shall
have occurred and be continuing:

The Pledgee may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured
party under the U.C.C. (whether or not the U.C.C. applies to the
affected Collateral) and also may, without notice except as
specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at the Pledgee’s
offices or elsewhere, for cash, on credit or for future delivery,
and upon such other terms as the Pledgee may deem commercially
reasonable.  Each Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten (10) days’ prior
notice to any Pledgor of the time and place of any public sale or
the time after which any private sale is to be made shall
constitute reasonable notification.  The Pledgee shall not be
obligated to make any sale of Collateral regardless of notice of
sale having been given.  The Pledgee may adjourn any public or
private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.

The Pledgee may:

transfer all or any part of the Collateral into the name of the
Pledgee or its nominee, with or without disclosing that such
Collateral is subject to the Lien hereunder;

notify the parties obligated on any of the Collateral to make
payment to the Pledgee of any amount due or to become due
thereunder;

enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part
thereof, or compromise or extend or renew for any period (whether
or not longer than the original period) any obligations of any
nature of any party with respect thereto;

endorse any checks, drafts, or other writings in any
Pledgor’s name to allow collection of the Collateral;

take control of any Proceeds of the Collateral;

execute (in the name, place and stead of any Pledgor)
endorsements, assignments, stock powers and other instruments or
other documents of conveyance or transfer with respect to all or
any of the Collateral;

accelerate any Pledged Note which may be accelerated in
accordance with its terms and take any other action to collect upon
any Pledged Note (including, without limitation, making any demand
for payment thereon); and

to vote all or any part of the Pledged Interests (whether or not
transferred into the name of the Pledgee) and give all consents,
waivers and ratifications in respect of the Collateral (including,
without limitation, under all operating agreements, partnership
agreements or other agreements relating to the Collateral) and
otherwise act with respect thereto as if the Pledgee were the
outright owner thereof.

Securities Laws.  If the Pledgee shall determine to
exercise its right to sell all or any of the Collateral pursuant to
Section 6.1 hereof, each Pledgor agrees that, upon request
of the Pledgee, such Pledgor will, at such Pledgor’s own
expense:

execute and deliver, and cause each issuer of the Collateral
contemplated to be sold and cause the directors and officers
thereof to execute and deliver, all such instruments and documents,
and do or cause to be done all such other acts and things, as may
be necessary or, in the opinion of the Pledgee, advisable to
register such Collateral under the provisions of the Securities Act
of 1933, as from time to time amended (the “Act”), and
comparable legislation in other jurisdictions, and to cause the
registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by
law to be furnished, and to make all amendments and supplements
thereto and to the related prospectus which, in the opinion of the
Pledgee, are necessary or advisable, all in conformity with the
requirements of the Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto and
comparable legislation, rules and regulations in other
jurisdictions;

use its best efforts to qualify the Collateral under the
applicable state securities or “Blue Sky” laws and to
obtain all necessary governmental approvals for the sale of the
Collateral, as requested by the Pledgee;

cause each such Pledged Interest Issuer to make available to its
security holders, as soon as practicable, an earnings statement
that will satisfy the provisions of Section 11(a) of the Act and
comparable legislation in other jurisdictions; and

do or cause to be done all such other acts and things as may be
necessary to make such sale of the Collateral or any part thereof
valid and binding and in compliance with applicable law.

Each Pledgor further
acknowledges the impossibility of ascertaining the amount of
damages that would be suffered by the Pledgee by reason of the
failure by such Pledgor to perform any of the covenants contained
in this Section 6.2 and, consequently, jointly and
severally, agrees that, if any Pledgor shall fail to perform any of
such covenants, such Pledgor shall pay, as liquidated damages and
not as a penalty, an amount equal to the value (as determined by
the Pledgee) of the Collateral on the date the Pledgee shall demand
compliance with this Section.  Notwithstanding the provisions
of this Section 6.2, the Pledgee shall not be obligated to
register any of the Collateral under the Act in connection with the
exercise of remedies hereunder and may elect, in its sole
discretion, to sell the Collateral or any part thereof by private
sale in such manner and under such circumstances as the Pledgee may
deem necessary or advisable in order that such sale be effected
without such registration.

Compliance with Restrictions.  Each Pledgor agrees
that in any sale of any of the Collateral whenever an Event of
Default shall have occurred and be continuing, the Pledgee is
hereby authorized to comply with any limitation or restriction in
connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the
number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications, and
restrict such prospective bidders and purchasers to Persons who
will represent and agree that they are purchasing for their own
account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required
approval of the sale or of the purchase by any governmental
regulatory authority or official, and each Pledgor further agrees
that such compliance shall not result in such sale being considered
or deemed not to have been made in a commercially reasonable
manner, nor shall the Pledgee be liable or accountable to any
Pledgor for any discount allowed by the reason of the fact that
such Collateral is sold in compliance with any such limitation or
restriction.

Application of Proceeds.  All cash proceeds received
by the Pledgee in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral may, in the
discretion of the Pledgee, be held by the Pledgee as additional
collateral security for, or then or at any time thereafter be
applied in whole or in part by the Pledgee against all or any part
of the Secured Obligations as follows:

first, to the payment of all Obligations owing to the Pledgee
pursuant to Section 10.3 of the Credit Agreement and Section
6.5 hereof;

second, after payment in full of the amounts specified in
clause (i), to the payment of all other Obligations owing to
the Pledgee, with such amounts applied first to fees and expenses,
then to accrued and unpaid interest, then to the outstanding
principal amount of the Revolving Loan, and then to Letter of
Credit Outstandings and then to Interest Rate Hedging Obligations,
if any; and

third, after payment in full of the amounts specified in clauses
(i) and (ii), and following the Termination Date, to the Pledgors
or any other Person lawfully entitled to receive such surplus.

Indemnity and Expenses.  Each Pledgor hereby jointly
and severally agrees to indemnify and hold harmless the Pledgee
from and against any and all claims, losses, and liabilities
arising out of or resulting from this Pledge Agreement (including
enforcement of this Pledge Agreement), except claims, losses, or
liabilities resulting from the Pledgee’s gross negligence or
willful misconduct.  Upon demand, each Pledgor jointly and
severally agrees that it will pay to the Pledgee the amount of any
and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts, which the Pledgee
may incur in connection with:

the administration of this Pledge Agreement, the Credit
Agreement and any other Loan Document;

the custody, preservation, use, or operation of, or the sale of,
collection from, or other realization upon, any of the
Collateral;

the exercise or enforcement of any of the rights of the Pledgee
hereunder; or

the failure by any Pledgor to perform or observe any of the
provisions hereof.

The provisions of this
Section 6.5 shall survive the Termination Date.

MISCELLANEOUS PROVISIONS

Loan Document.  This Pledge Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall
(unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and
provisions thereof, including Article X thereof.

Protection of Collateral.  The Pledgee may from time
to time, at its option, perform any act which any Pledgor agrees
hereunder to perform and which such Pledgor shall fail to perform
after being requested in writing so to perform (it being understood
that no such request need be given after the occurrence and during
the continuance of an Event of Default) and the Pledgee may from
time to time take any other action which the Pledgee reasonably
deems necessary for the maintenance, preservation or protection of
any of the Collateral or of its security interest therein.

Binding on Successors, Transferees and Assigns;
Assignment.  This Pledge Agreement shall be jointly and
several binding upon each Pledgor and each of their successors,
transferees and assigns and shall inure to the benefit of and be
enforceable by Pledgee and its successors, transferees and assigns;
provided, however, that no Pledgor may assign any of
its obligations hereunder without the prior written consent of the
Pledgee.

Amendments, etc.  No amendment to or waiver of any
provision of this Pledge Agreement, nor consent to any departure by
any Pledgor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Pledgee and then such
waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

Notices.  All notices and other communications
provided for hereunder shall be in writing (including facsimile
communication) and, mailed or telecopied or delivered to each
Pledgor, in care of the Borrower at the address specified in the
Credit Agreement.  All such notices and other communications,
when mailed and properly addressed with postage prepaid or if
properly addressed and sent by pre-paid courier service, shall be
deemed given when received; any such notice or communication, if
transmitted by telecopier, shall be deemed given when transmitted
and electronically confirmed.

Additional Subsidiary Pledgors.  Upon the execution
and delivery by any other Person of an instrument in the form of
Annex I hereto, such Person shall become a “Pledgor”
hereunder with the same force and effect as if originally named as
a “Pledgor” herein.  The execution and delivery of
any such instrument shall not require the consent of any other
Pledgor hereunder.  The rights and obligations of each Pledgor
hereunder shall remain in full force and effect notwithstanding the
addition of any new Pledgor as a party to this Pledge
Agreement.

No Waiver; Remedies.  No failure on the part of the
Pledgee to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. 
The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.

Captions.  Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not
affect the construction of this Pledge Agreement.

Severability.  Wherever possible, each provision of
this Pledge Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Pledge Agreement shall be prohibited by or invalid under such
law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Pledge
Agreement.

Counterparts.  This Pledge Agreement may be executed
by the parties hereto in several counterparts, each of which shall
be deemed to be an original and all of which shall constitute
together but one and the same agreement.

Governing Law, Entire Agreement, etc.  THIS
PLEDGE AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.  THIS PLEDGE
AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL,
WITH RESPECT THERETO.

Forum Selection and Consent to Jurisdiction.  ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF THE PLEDGEE OR ANY PLEDGOR SHALL BE BROUGHT
AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF CALIFORNIA
OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
CALIFORNIA; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY PROPERTY MAY BE BROUGHT, AT THE PLEDGEE’S OPTION,
IN THE COURTS OF ANY JURISDICTION WHERE SUCH PROPERTY MAY BE
FOUND.  EACH PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS
TO THE JURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIA AND OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
CALIFORNIA FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH
ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH SUCH LITIGATION. EACH PLEDGOR
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE
OF CALIFORNIA.  EACH PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY
CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.  TO THE EXTENT THAT ANY PLEDGOR HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR
TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, SUCH PLEDGOR HEREBY IRREVOCABLY
WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS.

Waiver of Jury Trial.  EACH PLEDGOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS PLEDGE
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS
OF THE PLEDGEE OR SUCH PLEDGOR.  EACH PLEDGOR ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR
THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR
THE PLEDGEE ENTERING INTO THE CREDIT AGREEMENT AND EACH OTHER LOAN
DOCUMENT.

[Remainder of page intentionally left
blank]

IN WITNESS
WHEREOF, the Pledgor has caused this Subsidiary Pledge Agreement to
be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.

	
                                                                 

	
   

	
SB OPERATINGCO, LLC,

 as Pledgor

			
By:

	
/s/ L. A.
OBERKFELL

				

				
L. A. Oberkfell

 President,

 Chief Executive Officer

				
			
THE TITAN
CORPORATION,

 as Pledgee

			
By:

	
/s/ MARK W.
SOPP

				

				
Mark W. Sopp

 Senior Vice President,

 Chief Financial Officer

ATTACHMENT
1

	
Owner

	
Issuer

	
Class

	
Certificate Numbers, if applicable

	
Number of Shares or percentage ownership
interest

					
					
			
                                                                                   

		

Pledged
Notes

Location of
Pledgor (Section 3.1.4)

SB OperatingCo, LLC
– Delaware

9276 Scranton Road, Suite
600

San Diego,
California  92121

ANNEX
I

SUPPLEMENT, dated as of
________________, ____ (this “Supplement”), to the
Subsidiary Pledge Agreement, dated as of August 2, 2002 (together
with all amendments, supplements, restatements and other
modifications, if any, from time to time thereafter made thereto,
the “Pledge Agreement”), among the initial
signatories thereto and each other Person (such capitalized term,
and other terms used in this Supplement, to have the meanings set
forth in Article I of the Pledge Agreement) which from time to time
thereafter became a party thereto pursuant to Section 7.6 thereof
(each, individually, a “Pledgor”, and,
collectively, the “Pledgors”), in favor of the
Pledgee (as defined in the Pledge Agreement).

W I T N
E S S E T H:

WHEREAS, pursuant to the
provisions of Section 7.6 of the Pledge Agreement, the undersigned
is becoming a Pledgor under the Pledge Agreement; and

WHEREAS, the undersigned
Pledgor desires to become a “Pledgor” under the Pledge
Agreement in order to induce the Pledgee to continue to extend
Credit Extensions under the Credit Agreement;

NOW, THEREFORE, in
consideration of the premises, and for other consideration (the
receipt and sufficiency of which is hereby acknowledged), the
undersigned agrees, for the benefit of Pledgee, as
follows.

In accordance with the terms of the Pledge Agreement, by its
signature below the undersigned hereby irrevocably agrees to become
a Pledgor under the Pledge Agreement with the same force and effect
as if it were an original signatory thereto and the undersigned
Pledgor, hereby (a) agrees to be bound by and comply with all of
the terms and provisions of the Pledge Agreement applicable to it
as a Pledgor and (b) represents and warrants that the
representations and warranties made by it as a Pledgor thereunder
are true and correct as of the date hereof.  In furtherance of
the foregoing, each reference to a “Pledgor” in the
Pledge Agreement shall be deemed to include the undersigned
Pledgor.

The undersigned Pledgor hereby represents and warrants that this
Supplement has been duly authorized, executed and delivered by it
and that this Supplement and the Pledge Agreement constitute the
legal, valid and binding obligation of the undersigned Pledgor,
enforceable against it in accordance with its terms.

Except as expressly supplemented hereby, the Pledge Agreement
shall remain in full force and effect in accordance with its
terms.

In the event any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein and in the Pledge Agreement shall not
in any way be affected or impaired.

THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.

This Supplement may be executed by the parties hereto in several
counterparts, each of which shall be deemed to be an original and
all of which shall constitute together but one and the same
agreement.

IN WITNESS WHEREOF, the
parties hereto have caused this Supplement to be duly executed and
delivered by their respective officers thereunto duly authorized as
of the day and year first above written.

[NAME OF ADDITIONAL
SUBSIDIARY PLEDGOR]

By:                                                                              

      Name:

     
Title: 

ACCEPTED BY:

THE TITAN
CORPORATION,

as Pledgee

By:                                                                  
                                                    
     

    
Name:

    
Title:

EXHIBIT
A

INSTRUCTION
TO REGISTER PLEDGE

___________ __,
____

[                       
]

Attention:
________________

Ladies and
Gentlemen:

The undersigned, a
[member] [partner] [shareholder] of ___________, a [___________
limited liability company] [a ________ partnership] [a __________
corporation] (the “Company”), hereby instructs the
Company to register on the books of the Company the pledge of the
undersigned’s [membership] [partnership] interest in favor of
THE TITAN CORPORATION, a Delaware corporation, as Pledgee (the
“Pledgee”), pursuant to the Subsidiary Pledge
Agreement, dated as of May 24, 2002, made by, among others, the
undersigned in favor of the Pledgee.

Very truly
yours,

[NAME OF
PLEDGOR]

By:______________________

      Name:

     
Title:                                                          

cc:  The Titan
Corporation

      

EXHIBIT
B

INITIAL
TRANSACTION STATEMENT

___________ __,
____

To:       The Titan
Corporation

           
Attention: 

This statement is to
advise you that a pledge of the following uncertificated securities
has been registered in the name of The Titan Corporation (the
“Pledgee”), as follows:

1.        
Uncertificated Securities:

The entire [limited
liability company] [partnership] interests of [NAME OF PLEDGOR] in
the undersigned [limited liability company] [________ partnership]
[corporation].

2.        
Registered Owner:

[NAME OF
PLEDGOR]

3.        
Pledged in favor of:

The Titan
Corporation,

   as the
Pledgee

4.        
There are no liens or restrictions of the undersigned [limited
liability company] [________ partnership] [corporation] and no
adverse claims to which the uncertificated securities are or may be
subject known to the undersigned [limited liability company]
[________ partnership] [corporation], other than in favor of The
Titan Corporation, in its capacity as the Pledgee.

5.        
The pledge was registered on _______ __, ____.

6.        
No transfer of the uncertificated securities shall be made without
the prior written consent of the Pledgee.

THIS STATEMENT IS MERELY A
RECORD OF THE RIGHTS OF THE ADDRESSEE AS OF THE TIME OF ITS
ISSUANCE.  DELIVERY OF THIS STATEMENT, OF ITSELF, CONFERS NO
RIGHTS ON THE RECIPIENT.  THIS STATEMENT IS NEITHER A
NEGOTIABLE INSTRUMENT NOR A SECURITY.

Very truly
yours,

[NAME OF PLEDGED INTEREST
ISSUER]

By:___________________________________

      Name:

      Title:

Exhibit L

SUBSIDIARY SECURITY AGREEMENT

This SUBSIDIARY SECURITY
AGREEMENT (as amended, restated, supplemented, or otherwise
modified from time to time, this “Security
Agreement”), dated as of August 2, 2002, is made by each
Subsidiary (as defined in the Credit Agreement referred to below)
of the Borrower (as defined below), now or after the date hereof
(including pursuant to Section 7.4) a signatory hereto
(each, individually, a “Grantor,” and
collectively, the “Grantors”), in favor of THE
TITAN CORPORATION, a Delaware corporation (the “Secured
Party”). 

W I T N E
S S E T H :

WHEREAS, pursuant to a
Senior Secured Credit Agreement, dated as of August 2, 2002 (as
amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), between SUREBEAM
CORPORATION, a Delaware corporation (the
“Borrower”) and Secured Party, the Secured Party
has extended Commitments to make Credit Extensions to the
Borrower;

WHEREAS, as a condition
precedent to the making of the Credit Extensions (including the
initial Credit Extension) under the Credit Agreement, each Grantor
is required to execute and deliver this Security
Agreement;

WHEREAS, each Grantor is a
Subsidiary of the Borrower;

WHEREAS, each Grantor has
duly authorized the execution, delivery and performance of this
Security Agreement; and

WHEREAS, it is in the best
interests of each Grantor to execute this Security Agreement
inasmuch as such Grantor will derive substantial direct and
indirect benefits from the Credit Extensions made from time to time
to the Borrower by the Secured Party pursuant to the Credit
Agreement;

NOW THEREFORE, for good
and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, and in order to induce the Secured Party to
make Credit Extensions (including the initial Credit Extension) to
the Borrower pursuant to the Credit Agreement, each Grantor jointly
and severally agrees, for the benefit of the Secured Party, as
follows:

DEFINITIONS

Certain Terms.  The following terms (whether or not
underscored) when used in this Security Agreement, including its
preamble and recitals, shall have the following meanings (such
definitions to be equally applicable to the singular and plural
forms thereof):

“Borrower” is defined in the
first recital.

“Chattel
Paper” has the meaning provided in the U.C.C.

“Collateral” is defined in
Section 2.1.

“Collateral
Account” is defined in Section
4.1.2(b).

“Commercial Tort
Claims” means any claim arising in tort now or hereafter
owned, acquired, or received by any Grantor in which any Grantor
now holds or hereafter acquires any right or interest.

“Computer
Hardware and Software Collateral” means:

all computer and other electronic data processing hardware,
integrated computer systems, central processing units, memory
units, display terminals, printers, features, computer elements,
card readers, tape drives, hard and soft disk drives, cables,
electrical supply hardware, generators, power equalizers,
accessories and all peripheral devices and other related computer
hardware;

all software programs (including both source code, object code
and all related applications and data files), whether now owned,
licensed or leased or hereafter acquired by any Grantor, designed
for use on the computers and electronic data processing hardware
described in clause (a) above;

all firmware associated therewith;

all documentation (including flow charts, logic diagrams,
manuals, guides and specifications) with respect to such hardware,
software and firmware described in the preceding clauses (a)
through (c); and

all rights with respect to all of the foregoing, including any
and all copyrights, licenses, options, warranties, service
contracts, program services, test rights, maintenance rights,
support rights, improvement rights, renewal rights and
indemnifications and any substitutions, replacements, additions or
model conversions of any of the foregoing.

“Contracts” means all
agreements between any Grantor and one or more additional
parties.

“Contract
Rights” means all rights of any Grantor (including,
without limitation, all rights to payment) under each
Contract.

“Copyright
Collateral” means all copyrights (including all
copyrights for semi-conductor chip product mask works) of each
Grantor, whether statutory or common law, registered or
unregistered, now or hereafter in force throughout the world
including all of such Grantor’s right, title and interest in
and to all copyrights registered in the United States Copyright
Office or anywhere else in the world and also including the
copyrights referred to in Item A of Schedule IV
attached hereto, and all applications for registration thereof,
whether pending or in preparation, all copyright licenses,
including each copyright license referred to in Item B of
Schedule IV attached hereto, the right to sue for past,
present and future infringements of any thereof, all rights
corresponding thereto throughout the world, all extensions and
renewals of any thereof and all Proceeds of the foregoing,
including licenses, royalties, income, payments, claims, damages
and Proceeds of suit.

“Credit
Agreement” is defined in the first
recital.

“Deposit
Accounts” has the meaning provided in the U.C.C. and, in
any event, includes, without limitation, any demand, time, savings,
passbook or like account maintained with a depositary institution,
including those Deposit Accounts set forth in Item G of
Schedule I hereto.

“Documents” has the meaning
provided in the U.C.C.

“Equipment” has the meaning
provided in the U.C.C. and, in any event, includes, without
limitation, all equipment in all of its forms of the Grantors,
wherever located, including all parts thereof and all accessions,
additions, attachments, improvements, substitutions and
replacements thereto and therefor and all accessories related
thereto.

“Fixtures” has the meaning
provided in the U.C.C., and in any event, includes, without
limitation, with respect to the Grantors, regardless of where
located, any of the fixtures, systems, machinery, apparatus,
equipment or fittings of any kind or nature whatsoever, and all
appurtenances and additions thereto and substitutions or
replacements thereof, now or hereafter attached or affixed to or
constituting a part of, or located in or upon, real property
wherever located, including sign, escalator, elevator, any heating,
electrical, mechanical, lighting, lifting, plumbing, ventilating,
air-conditioning or air cooling, refrigerating, food preparation,
incinerating or power, loading or unloading, boilers,
communication, switchboard, tank, pump, filter, sprinkler or other
fire prevention or extinguishing fixture, system, machinery,
apparatus or equipment, and any engine, motor, dynamo, machinery,
pipe, pump, tank, conduit or duct constituting a part of any of the
foregoing, together with all extensions, improvements, betterments,
renewals, substitutes, and replacements of, and all additions and
appurtenances to any of the foregoing property, and all conversions
of the security constituted thereby, immediately upon any
acquisition or release thereof or any such conversion, as the case
may be.

“General
Intangibles” has the meaning provided in the U.C.C. and,
in any event, includes, without limitation, with respect to the
Grantors, all Contracts, agreements, Instruments and indentures in
any form, and portions thereof, to which any Grantor is a party or
under which any Grantor has any right, title or interest or to
which any Grantor or any property of any Grantor is subject, as the
same may from time to time be amended, supplemented or otherwise
modified, including, without limitation, (i) all rights of any
Grantor to receive moneys due and to become due to it thereunder or
in connection therewith, (ii) all rights of any Grantor to damages
arising thereunder and (iii) all rights of any Grantor to perform
and to exercise all remedies thereunder.

“Goods”
has the meaning provided in the U.C.C.

“Grantor” and
“Grantors” are defined in the
preamble.

“Instrument” has the meaning
provided in the U.C.C.

“Intellectual
Property Collateral” means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the
Patent Collateral, the Trademark Collateral and the Trade Secrets
Collateral.

“Inventory” has the meaning
provided in the U.C.C. and, in any event, includes, without
limitation, all inventory in all of its forms of the Grantors,
wherever located, including

all raw materials and work in process therefor, finished goods
thereof, and materials used or consumed in the manufacture or
production thereof,

all goods in which any Grantor has an interest in mass or a
joint or other interest or right of any kind (including goods in
which such Grantor has an interest or right as consignee), and

all goods which are returned to or repossessed by any
Grantor,

and all accessions
thereto, products thereof and documents therefor.

“Investment
Property” has the meaning provided in the
U.C.C.

“Letter of Credit
Right” means any right of any Grantor to payment or
performance under a letter of credit (as such term in defined in
Article 5 of the U.C.C.), whether or not the beneficiary has
demanded or is at the time entitled to demand payment or
performance.

“Patent
Collateral” means:

all letters patent and applications for letters patent
throughout the world, including all patent applications in
preparation for filing anywhere in the world and including each
patent and patent application referred to in Item A of
Schedule II attached hereto;

all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items
described in clause (a);

all patent licenses, including each patent license referred to
in Item B of Schedule II attached hereto; and

all Proceeds of, and rights associated with, the foregoing
(including license royalties and Proceeds of infringement suits),
the right to sue third parties for past, present or future
infringements of any patent or patent application, including any
patent or patent application referred to in Item A of
Schedule II attached hereto, and for breach or enforcement
of any patent license, including any patent license referred to in
Item B of Schedule II attached hereto, and all rights
corresponding thereto throughout the world.

“Payment
Intangibles” has the meaning provided in the
U.C.C.

“Promissory
Notes” has the meaning provided in the U.C.C.

“Proceeds” has the meaning
provided in the U.C.C., and shall include, in any event, with
respect to any Grantor, any and all currently owned or
after-acquired (a) Receivables, Chattel Paper, Instruments,
Investment Property, cash or other forms of money, currency or
funds or other property of any nature, type or land whatsoever
payable to or renewable by any Grantor from time to time in respect
of the Collateral, including upon the sale, lease, license,
exchange or other disposition of any Collateral, (b) proceeds of
any insurance, indemnity, warranty or guaranty payable to any
Grantor from time to time with respect to any of the Collateral,
including by reason of the loss, nonconformity or interference with
the use of, defects or infringement of rights in, or damage to, any
of the Collateral, (c) payments (in any form whatsoever) made or
due and payable to any Grantor from time to time in connection with
any requisition, confiscation, condemnation, seizure or forfeiture
of all or any part of the Collateral by any governmental authority
(or any person acting under color of governmental authority), (d)
claims of any Grantor against third parties arising out of the
loss, nonconformity, interference with the use of, defects or
infringements of rights in, or damage to, any of the Collateral,
including any claim (i) for past, present or future infringement of
any patent or patent license, copyright or copyright license or
(ii) for past, present or future infringement or dilution of any
Trademark or Trademark license or for injury to the goodwill
associated with any Trademark, Trademark registration or Trademark
licensed under any Trademark license, (e) certificates, dividends,
cash, Instruments or other forms of money, currency or funds and
other Property received or distributed in respect of or in exchange
for any Investment Property, (f) cash or other forms of money,
currency or funds and other proceeds received under and in respect
of any letter of credit or other support obligation, (g) rights
arising out of any of the Collateral, and (h) other property of any
nature, type or kind whatsoever from time to time paid or payable
under or in connection with, collected on, or distributed on
account of, any of the Collateral.

“Receivables” means
“accounts” (as such term is defined in the U.C.C.),
including but not limited to rights to payments for goods sold or
leased or services rendered, whether now existing or hereafter
arising, including, without limitation, rights evidenced by an
account, note, Contract, security agreement, Chattel Paper, or
other evidence of indebtedness or security, together with (a) all
security pledged, assigned, hypothecated or granted to or held by
any Grantor to secure the foregoing, (b) all of any Grantor's
right, title and interest in and to any goods, the sale of which
gave rise thereto, (c) all guarantees, endorsements and
indemnifications on, or of, any of the foregoing, (d) all powers of
attorney for the execution of any evidence of indebtedness or
security or other writing in connection therewith, (e) all books,
records, ledger cards, and invoices relating thereto, (f) all
evidences of the filing of financing statements and other
statements and the registration of other Instruments in connection
therewith and amendments thereto, notices to other creditors or
secured parties, and certificates from filing or other registration
officers, (g) all credit information, reports and memoranda
relating thereto and (h) all other writings related in any way to
the foregoing.

“Secured
Obligations” is defined in Section 2.2.

“Secured
Party” is defined in the preamble.

“Securities
Account” has the meaning provided in the U.C.C.,
including without limitation those Securities Accounts listed in
Item H of Schedule I hereto.

“Security
Agreement” is defined in the preamble.

“Supporting
Obligations” has the meaning provided in the
U.C.C.

“Termination
Date” means the date on which all Obligations have
indefeasibly been paid in full in cash, all Commitments have been
fully terminated and all Letters of Credit and Lender Guaranties
have been canceled or otherwise terminated.

“Trademark
Collateral” means:

all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos, other source
of business identifiers, prints and labels on which any of the
foregoing have appeared or appear, designs and General Intangibles
of a like nature (all of the foregoing items in this clause
(a) being collectively called a
“Trademark”), now existing anywhere in the world
or hereafter adopted or acquired, whether currently in use or not,
all registrations and recordings thereof and all applications in
connection therewith, whether pending or in preparation for filing,
including registrations, recordings and applications in the United
States Patent and Trademark Office or in any office or agency of
the United States of America or any State thereof or any foreign
country, including those referred to in Item A of
Schedule III attached hereto;

all Trademark licenses, including each Trademark license
referred to in Item B of Schedule III attached
hereto;

all reissues, extensions or renewals of any of the items
described in clauses (a) and (b);

all of the goodwill of the business connected with the use of,
and symbolized by the items described in, clauses (a) and
(b); and

all Proceeds of, and rights associated with, the foregoing,
including any claim by any Grantor against third parties for past,
present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, including any
Trademark, Trademark registration or Trademark license referred to
in Item A and Item B of Schedule III
attached hereto, or for any injury to the goodwill associated with
the use of any such Trademark or for breach or enforcement of any
Trademark license.

“Trade Secrets
Collateral” means all common law and statutory trade
secrets and all other confidential or proprietary or useful
information and all know-how obtained by or used in or contemplated
at any time for use in the business of any Grantor (all of the
foregoing being collectively called a “Trade
Secret”), whether or not such Trade Secret has been
reduced to a writing or other tangible form, including all
documents and things embodying, incorporating or referring in any
way to such Trade Secret, all Trade Secret licenses, including each
Trade Secret license referred to in Schedule V attached
hereto, and including the right to sue for and to enjoin and to
collect damages for the actual or threatened misappropriation of
any Trade Secret and for the breach or enforcement of any such
Trade Secret license.

“U.C.C.” means the Uniform
Commercial Code, as in effect from time to time in the State of
California; provided, however, in the event that, by
reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of Secured Party’s
security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State
of California, the term “U.C.C.” shall mean the Uniform
Commercial Code (including the Articles thereof) as in effect at
such time in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for
purposes of definitions related to such provisions.

Credit Agreement Definitions.  Unless otherwise
defined herein or the context otherwise requires, terms used in
this Security Agreement, including its preamble and recitals, have
the meanings provided in the Credit Agreement.

U.C.C. Definitions.  Unless otherwise defined herein
or in the Credit Agreement or the context otherwise requires, terms
for which meanings are provided in the U.C.C. are used in this
Security Agreement, including its preamble and recitals, with such
meanings.

SECURITY INTEREST

Grant of Security.  Each Grantor hereby assigns and
pledges to the Secured Party, and hereby grants to the Secured
Party, to secure the Secured Obligations, a security interest in
all of the following, whether now or hereafter existing or acquired
by such Grantor (the “Collateral”):

the Collateral Account;

all Commercial Tort Claims;

all Computer Hardware and Software Collateral;

all Contracts, together with any Contract Rights arising
thereunder;

all Deposit Accounts;

all Equipment;

all Fixtures;

all Intellectual Property Collateral;

all Inventory;

all Investment Property;

all Letter of Credit Rights;

all Receivables;

all Securities Accounts;

all Supporting Obligations;

all other Goods, Chattel Paper, Documents, Instruments
(including, without limitation, Promissory Notes), and General
Intangibles (including, without limitation, Payment Intangibles and
tax refunds) of such Grantor now or hereafter existing;

all books, records, writings, data bases, information and other
property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the
foregoing in this Section 2.1;

all of such Grantor’s other personal property and rights
of every kind and description and interests therein; and

all products and Proceeds of and from any and all of the
foregoing Collateral (including Proceeds which constitute property
of the types described in clauses (a) through (q)
and, to the extent not otherwise included, all payments under
insurance which such Grantor is entitled to receive (whether or not
the Secured Party is the loss payee thereof), or any indemnity,
warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral.

Notwithstanding anything
herein to the contrary, in no event shall the Collateral include,
and no Grantor shall be deemed to have granted a security interest
in, any of such Grantor's rights or interests in any license,
contract or agreement to which such Grantor is a party or any of
its rights or interests thereunder to the extent, but only to the
extent, that such a grant would, under the express terms of such
license, contract or agreement or otherwise, result in a breach of
the terms of, or constitute a default under such license, contract
or agreement (other than to the extent that any such term would be
rendered ineffective pursuant to Sections 9407(a) or 9408(a) of the
U.C.C. or any other applicable law (including the Bankruptcy Code)
or principles of equity); provided, that immediately upon
the ineffectiveness, waiver, lapse or termination of any such
provision, the Collateral shall include, and such Grantor shall
have granted a security interest in, all such rights and interests
as if such provision had never been in effect.

Security for Obligations.  This Security Agreement
secures the payment of (i) all Obligations of the Borrower now or
hereafter existing under the Credit Agreement and each other Loan
Document to which the Borrower is or may become a party, whether
for principal, interest, costs, fees, expenses, Interest Rate
Hedging Obligations or otherwise, and (ii) all obligations of each
Grantor and each other Obligor now or hereafter existing under this
Security Agreement and each other Loan Document to which such
Grantor or such other Obligor is or may become a party, with all
such obligations of the Borrower and each Grantor and each other
Obligor being collectively referred to as the “Secured
Obligations”.

Continuing Security Interest; Transfer of Notes.  
This Security Agreement shall create a continuing security interest
in the Collateral and shall:

remain in full force and effect until the Termination Date;

be binding upon each Grantor and each of their successors,
transferees and assigns; and

inure to the benefit of the Secured Party.

The Secured Party may
assign or otherwise transfer (in whole or in part) the Revolving
Note or any Credit Extension held by it to any other Person or
entity, and such other Person or entity shall thereupon become
vested with all the rights and benefits in respect thereof granted
to the Secured Party under any Loan Document (including this
Security Agreement) or otherwise, subject, however, to the
provisions of Section 10.10 of the Credit
Agreement. 

Grantors Remain Liable.   Anything herein to the
contrary notwithstanding:

each Grantor shall remain liable under the Contracts and
agreements included in the Collateral to the extent set forth
therein, and shall perform all of its duties and obligations under
such Contracts and agreements to the same extent as if this
Security Agreement had not been executed;

the exercise by the Secured Party of any of its rights hereunder
shall not release any Grantor from any of its duties or obligations
under any such Contracts or agreements included in the Collateral;
and

the Secured Party shall not have any obligation or liability
under any such Contracts or agreements included in the Collateral
by reason of this Security Agreement, nor shall the Secured Party
be obligated to perform any of the obligations or duties of any
Grantor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.

Security Interest Absolute.  All rights of the
Secured Party and the security interests granted to the Secured
Party hereunder, and all obligations of each Grantor hereunder,
shall be absolute and unconditional, irrespective of:

any lack of validity or enforceability of the Credit Agreement
or any other Loan Document;

the failure of the Secured Party

to assert any claim or demand or to enforce any right or remedy
against any Obligor or any other Person under the provisions of the
Credit Agreement, any other Loan Document or otherwise, or

to exercise any right or remedy against any other guarantor of,
or collateral securing, any Secured Obligations;

any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations or any other
extension, compromise or renewal of any Secured Obligation;

any reduction, limitation, impairment or termination of any
Secured Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be
subject to (and each Grantor hereby waives any right to or claim
of) any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Secured Obligations or otherwise;

any amendment to, rescission, waiver, or other modification of,
or any consent to departure from, any of the terms of the Credit
Agreement or any other Loan Document;

any addition, exchange, release, surrender or non-perfection of
any collateral (including the Collateral), or any amendment to or
waiver or release of or addition to or consent to departure from
any guaranty, for any of the Secured Obligations; or

any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any
Obligor, any surety or any guarantor.

Postponement of Subrogation, etc.  Each Grantor
agrees that it will not exercise any rights which it may acquire by
way of rights of subrogation under this Security Agreement, by any
payment made hereunder, whether by way of subrogation,
reimbursement or otherwise, until after the Termination Date. 
Any amount paid to any Grantor on account of any such subrogation
rights prior to the Termination Date shall be held in trust for the
benefit of the Secured Party and shall immediately be paid to the
Secured Party and credited and applied against the Secured
Obligations, whether matured or unmatured, in accordance with the
terms of the Credit Agreement; provided, however, that if:

any Grantor has made payment to the Secured Party of all or any
part of the Secured Obligations; and

the Termination Date has occurred;

then the Secured Party
agrees that, at such Grantor’s request, the Secured Party
will execute and deliver to such Grantor appropriate documents
(without recourse and without representation or warranty) necessary
to evidence the transfer by subrogation to such Grantor of an
interest in the Secured Obligations resulting from such payment by
such Grantor.  In furtherance of the foregoing, at all times
prior to the Termination Date, each Grantor shall refrain from
taking any action or commencing any proceeding against the Borrower
or any other Obligor (or its successors or assigns, whether in
connection with a bankruptcy proceeding or otherwise) to recover
any amounts in respect of payments made under this Security
Agreement to the Secured Party.  Notwithstanding the
foregoing, to the extent necessary to toll the statute of
limitations, such Grantor may take such action required to preserve
any rights it has by way of rights of subrogation as consented to
by the Secured Party in its reasonable discretion.

REPRESENTATIONS AND WARRANTIES

Representations and Warranties.  Each Grantor
represents and warrants to the Secured Party (a) as to all matters
contained in Article VI of the Credit Agreement insofar as the
representations and warranties contained therein are applicable to
such Grantor and its properties, each such representation and
warranty set forth in such Article (insofar as applicable as
aforesaid) and all other terms of the Credit Agreement to which
reference is made therein, together with all related definitions
and ancillary provisions, being hereby incorporated into this
Security Agreement by reference as though specifically set forth in
this Section 3.1 and (b) insofar as the representations and
warranties contained herein are applicable to such Grantor and its
properties, as set forth in this Article.

Location of Collateral, etc.  All of the Equipment
and Inventory of such Grantor is located at the places specified in
Item A and Item B, respectively, of Schedule I
hereto, except for such property in transit in the ordinary
course.  None of the Equipment and Inventory has, within the
four (4) months preceding the date of this Security Agreement, been
located at any place other than the places specified in Item A and
Item B, respectively, of Schedule I applicable to such
Grantor hereto except as set forth in a footnote thereto.  The
place(s) of business and chief executive office of such Grantor and
the office(s) where such Grantor keeps its records concerning the
Receivables, and all originals of all Chattel Paper which evidence
Receivables, are located at the address set forth in Item D
of Schedule I applicable to such Grantor hereto.  Such
Grantor has no trade names other than those set forth in Item
E of Schedule I applicable to such Grantor
hereto.  During the four (4) months preceding the date hereto,
such Grantor has not been known by any legal name different from
the one set forth on the signature page hereto, nor has such
Grantor been the subject of any merger or other corporate
reorganization, except as set forth in Item F of Schedule
I applicable to such Grantor hereto.  All Receivables[, if
such Receivables are in excess of Two Hundred Fifty Thousand
Dollars ($250,000), and otherwise at the request of Security Party)
evidenced by a promissory note or other Instrument, negotiable
Document or Chattel Paper have been duly endorsed and accompanied
by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Secured Party and delivered and
pledged to the Secured Party pursuant to Section 4.1.7
hereto.

Ownership, No Liens, etc.  Such Grantor and/or the
Borrower (with respect to Collateral shown on Schedules II through
V hereto) owns its Collateral free and clear of any Lien, security
interest, charge or encumbrance except for the security interest
created by this Security Agreement and except as permitted by the
Credit Agreement.  No effective financing statement or other
instrument similar in effect covering all or any part of the
Collateral is on file in any recording office, except such as may
have been filed in favor of the Secured Party relating to this
Security Agreement or as have been filed in connection with Liens
permitted pursuant to Section 8.3 of the Credit Agreement.

Possession and Control.  Such Grantor has exclusive
possession and control of its Equipment and Inventory, except for
property in transit in the ordinary course.

Negotiable Documents, Instruments and Chattel
Paper.  Such Grantor has, contemporaneously herewith,
delivered to the Secured Party possession of all originals of all
negotiable Documents, Instruments and Chattel Paper currently owned
or held by such Grantor (duly endorsed in blank, if requested by
the Secured Party).

Intellectual Property Collateral.  With respect to
any Intellectual Property Collateral the loss, impairment or
infringement of which is reasonably likely to have a Material
Adverse Effect:

such Intellectual Property Collateral is subsisting and has not
been adjudged invalid or unenforceable, in whole or in part;

such Intellectual Property Collateral is valid and
enforceable;

such Grantor (and/or the Borrower) has made all necessary
filings and recordations to protect its interest in such
Intellectual Property Collateral, including recordations of all of
its interests in the Patent Collateral and Trademark Collateral in
the United States Patent and Trademark Office and in corresponding
offices throughout the world and its claims to the Copyright
Collateral in the United States Copyright Office and in
corresponding offices throughout the world, in each case where it
is commercially reasonable to do so;

other than as previously disclosed in writing to the Secured
Party, such Grantor (and/or the Borrower) is the exclusive owner of
the entire and unencumbered right, title and interest in and to
such Intellectual Property Collateral and no claim has been made
that the use of such Intellectual Property Collateral does or may
violate the asserted rights of any third party; and

such Grantor has performed and will continue to perform and
cause all acts and has paid and will continue to pay all required
fees and taxes to maintain each and every item of Intellectual
Property Collateral in full force and effect throughout the world,
as applicable, unless such Grantor (i) has reasonably and in good
faith determined that any of the Intellectual Property Collateral
is of negligible economic value to such Grantor, or (ii) has a
reasonable and valid business purpose to do otherwise.

Such Grantor owns directly
or is entitled to use by license or otherwise, all patents,
Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of
the foregoing necessary to the conduct of such Grantor’s
business as presently conducted.

Validity, Priority, etc.  Assuming the proper filing
of one or more financing statements identifying the Collateral with
the proper local, state and/or federal authorities, the security
interests in the Collateral granted to the Secured Party hereunder
constitute valid and continuing first priority perfected security
interests in the Collateral (subject to Liens permitted under the
Credit Agreement), securing payment of the Secured Obligations, to
the extent such security interests may be perfected by the filing
of financing statements or other filings with the United States
Patent and Trademark Office or United States Copyright Office.

Authorization, Approval, etc.  Except as have been
obtained or made and are in full force and effect, no
authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is
required under U.S. law, except for necessary filings in connection
with the U.C.C., either:

for the grant by such Grantor of the security interest granted
hereby or for the execution, delivery and performance of this
Security Agreement by such Grantor; or

for the perfection of or the exercise by the Secured Party of
its rights and remedies hereunder.

Compliance with Laws.  Such Grantor is in compliance
in all material respects with the requirements of all applicable
laws (including the provisions of the Fair Labor Standards Act),
rules, regulations and orders of every governmental authority, the
non-compliance with which is reasonably likely to have a Material
Adverse Effect or which is reasonably likely to materially
adversely affect the value of the Collateral or the worth of the
Collateral as collateral security.

COVENANTS

Certain Covenants.   Each Grantor covenants and
agrees that, so long as any portion of the Secured Obligations
shall remain unpaid, any Letters of Credit shall be outstanding or
the Secured Party shall have any outstanding Commitment, such
Grantor will, unless the Secured Party shall otherwise consent in
writing, perform, comply with and be bound by (a) all of the
agreements, covenants and obligations contained in Article VII of
the Credit Agreement which are applicable to such Grantor or its
properties, each such agreement, covenant and obligation contained
in such Article and all other terms of the Credit Agreement to
which reference is made herein, together with all related
definitions and ancillary provisions, being hereby incorporated
into this Security Agreement by reference as though specifically
set forth in this Section 4.1 and (b) the obligations set
forth in this Article.

As to Equipment and Inventory.  Such Grantor hereby
agrees that it shall:

keep all the Equipment and Inventory (other than Inventory sold
or certain Equipment in transit and is permitted under the Credit
Agreement), each in the ordinary course of business, or except as
otherwise provided in the Credit Agreement or any of the other Loan
Documents) at the places therefor specified in Section 3.1.1
hereof or, upon thirty (30) days’ prior written notice to the
Secured Party, at such other places in a jurisdiction where all
representations and warranties set forth in Article III
shall be true and correct, and all action required pursuant to the
first sentence of Section 4.1.7 hereof shall have
been taken with respect to the Equipment and Inventory
(collectively, “Specified Locations”);

cause the Equipment to be maintained and preserved in the same
condition, repair and working order as when new, ordinary wear and
tear excepted, and in accordance with any manufacturer’s
manual or good business practice; and forthwith, or in the case of
any loss or damage to any of the Equipment, as quickly as
practicable after the occurrence thereof, make or cause to be made
all repairs, replacements, and other improvements in connection
therewith which are necessary or desirable to such end; and
promptly furnish to the Secured Party a statement respecting any
material loss or damage to any of the Equipment; and

pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the
Equipment and Inventory, except to the extent the validity thereof
is being contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP have been set
aside.

As to Receivables and Contracts.

Such Grantor shall keep its place(s) of business and chief
executive office and the office(s) where it keeps its records
concerning the Receivables, and all originals of all Chattel Paper
which evidences Receivables, located at the address(es) set forth
in Item D of Schedule I hereto, or, upon thirty
(30) days’ prior written notice to the Secured Party, at such
other locations in a jurisdiction where all actions required by the
first sentence of Section 4.1.7 hereof shall have been taken
with respect to the Receivables; not change its name except upon
thirty (30) days’ prior written notice to the Secured Party;
hold and preserve such records and Chattel Paper; and permit
representatives of the Secured Party at any time during normal
business hours to inspect (upon reasonable prior written notice so
long as no Event of Default shall have occurred and be continuing)
and make abstracts from such records and Chattel Paper.  In
addition, such Grantor shall give the Secured Party a supplement to
Schedule I hereto on each date a Compliance Certificate is required
to be delivered by the Borrower to the Secured Party under the
Credit Agreement, which shall set forth any changes to the
information set forth in Section 3.1.1 hereof.

Upon written notice by the Secured Party to such Grantor
pursuant to this clause, all Proceeds of Collateral received by
such Grantor shall be delivered in kind to the Secured Party for
deposit to a deposit account (the “Collateral
Account”) of such Grantor maintained with Comerica
Bank-California, and such Grantor shall not commingle any such
Proceeds, and shall hold separate and apart from all other
property, all such Proceeds in express trust for the benefit of the
Secured Party until delivery thereof is made to the Secured
Party.  The Secured Party will not give the notice referred to
in the preceding sentence unless there shall have occurred and be
continuing an Event of Default.

The Secured Party shall have the right to apply any amount in
any such Collateral Account to the payment of any Secured
Obligations which are due and payable or payable upon demand, or to
the payment of any Secured Obligations at any time that an Event of
Default shall exist.

Such Grantor shall not enter into any government contract which
prohibits assignment to the Secured Party of any payments due or to
become due thereunder or under any other government contract, other
than contracts for which the government has determined that a
prohibition on assignment of claims is in the government's
interest.

Without Lender’s prior written consent, which consent
shall not be unreasonably withheld, such Grantor shall not cause
the aggregate value of Receivables or Contracts or Contract Rights
and the value of similar Receivables and Contracts as to which a
Lien in favor of the Secured Party cannot be granted hereunder
pursuant to the final paragraph of Section 2.1 (including
Liens granted by other Grantors), or pursuant to the Borrower
Security Agreement to exceed $[500,000] at any time.

As to Collateral.

Until the occurrence and continuance of an Event of Default,
such Grantor (i) may in the ordinary course of its business, at its
own expense, sell, lease or furnish under the contracts of service
any of the Inventory normally held by such Grantor for such
purpose, and use and consume, in the ordinary course of its
business, any raw materials, work in process or materials normally
held by such Grantor for such purpose, (ii) will, at its own
expense, endeavor to collect, as and when due, all amounts due with
respect to any of the Collateral, including the taking of such
action with respect to such collection as the Secured Party may
reasonably request following the occurrence of an Event of Default
or, in the absence of such request, as such Grantor may reasonably
deem advisable, and (iii) may grant, in the ordinary course of
business, to any party obligated on any of the Collateral, any
rebate, refund or allowance to which such party may be lawfully
entitled, and may accept, in connection therewith, the return of
goods, the sale or lease of which shall have given rise to such
Collateral.  The Secured Party may, at any time following an
Event of Default, whether before or after any revocation of such
power and authority or the maturity of any of the Secured
Obligations, notify any parties obligated on any of the Collateral
to make payment to the Secured Party of any amounts due or to
become due thereunder and enforce collection of any of the
Collateral by suit or otherwise and surrender, release, or exchange
all or any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any
indebtedness thereunder or evidenced thereby.  Upon request of
the Secured Party following an Event of Default, such Grantor will,
at its own expense, notify any parties obligated on any of the
Collateral to make payment to the Secured Party of any amounts due
or to become due thereunder.

After an Event of Default, the Secured Party is authorized to
endorse, in the name of such Grantor, any item, howsoever received
by the Secured Party, representing any payment on or other Proceeds
of any of the Collateral.

As to Intellectual Property Collateral.  Each
Grantor covenants and agrees to comply with the following
provisions as such provisions relate to any Intellectual Property
Collateral of such Grantor:

Such Grantor shall not do any act, or omit to do any act,
whereby any of its Patent Collateral may lapse or become abandoned
or dedicated to the public or unenforceable, unless such Grantor
shall either (i) reasonably and in good faith determine that any of
its Patent Collateral is of negligible economic value to such
Grantor, or (ii) have a reasonable and valid business purpose to do
otherwise.

Such Grantor shall not, and such Grantor shall not permit any of
its licensees to:

fail to continue to use any of its Trademark Collateral in order
to maintain all of its Trademark Collateral in full force free from
any claim of abandonment for non-use,

fail to maintain as in the past the quality of products and
services offered under all of its Trademark Collateral,

fail to employ all of its Trademark Collateral registered with
any Federal or state or foreign authority with an appropriate
notice of such registration,

adopt or use any other Trademark which is confusingly similar or
a colorable imitation of any of its Trademark Collateral,

use any of its Trademark Collateral registered with any Federal
or state or foreign authority except for the uses for which
registration or application for registration of all of its
Trademark Collateral has been made, and

do or permit any act or knowingly omit to do any act whereby any
of its Trademark Collateral may lapse or become invalid or
unenforceable,

unless such Grantor shall
either (x) reasonably and in good faith determine that any of its
Trademark Collateral is of negligible economic value to such
Grantor, or (y) have a reasonable and valid business purpose to do
otherwise.

Such Grantor shall not do or permit any act or knowingly omit to
do any act whereby any of its Copyright Collateral or any of its
Trade Secrets Collateral may lapse or become invalid or
unenforceable or placed in the public domain except upon expiration
of the end of an unrenewable term of a registration thereof, unless
such Grantor shall either (i) reasonably and in good faith
determine that any of its Copyright Collateral or any of its Trade
Secrets Collateral is of negligible economic value to such Grantor,
or (ii) have a reasonable and valid business purpose to do
otherwise.

Such Grantor shall notify the Secured Party immediately if it
knows, or has reason to know, that any application or registration
relating to any material item of its Intellectual Property
Collateral may become abandoned or dedicated to the public or be
placed in the public domain or become invalid or unenforceable, or
of any adverse determination or development (including the
institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the
United States Copyright Office or any foreign counterpart thereof
or any court) regarding such Grantor’s ownership of any of
its Intellectual Property Collateral, its right to register the
same or to keep and maintain and enforce the same.

In no event shall such Grantor or any of its agents, employees,
designees or licensees file an application for the registration of
any Intellectual Property Collateral with the United States Patent
and Trademark Office, the United States Copyright Office or any
similar office or agency in any other country or any political
subdivision thereof, unless it promptly upon such filing informs
the Secured Party, and upon request of the Secured Party, executes
and delivers any and all agreements, instruments, documents and
papers as the Secured Party may reasonably request to evidence the
Secured Party’s security interest in such Intellectual
Property Collateral and the goodwill and general intangibles of
such Grantor relating thereto or represented thereby.

Such Grantor shall take all necessary steps, including in any
proceeding before the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency
in any other country or any political subdivision thereof, to
maintain and pursue any application (and to obtain the relevant
registration) filed with respect to, and to maintain any
registration of, its Intellectual Property Collateral, including
the filing of applications for renewal, affidavits of use,
affidavits of incontestability and opposition, interference and
cancellation proceedings and the payment of fees and taxes (except
to the extent that dedication, abandonment or invalidation is
permitted under the foregoing clauses (a), (b) and
(c)).

Such Grantor shall, contemporaneously herewith, execute and
deliver to the Secured Party a Patent Security Agreement, a
Trademark Security Agreement and a Copyright Security Agreement in
the forms of Exhibit A, Exhibit B and Exhibit
C hereto, respectively, and shall execute and deliver to the
Secured Party any other document required to acknowledge or
register or perfect the Secured Party’s interest in any part
of its Intellectual Property Collateral.

Insurance.  Such Grantor will maintain or cause to
be maintained with financially sound and reputable insurance
companies insurance with respect to its business and properties
(including the Equipment and Inventory) against such casualties and
contingencies and of such types and in such amounts as is required
pursuant to the Credit Agreement and will, upon the request of the
Secured Party, furnish a certificate of a reputable insurance
broker setting forth the nature and extent of all insurance
maintained by such Grantor in accordance with this Section. 
Without limiting the foregoing, such Grantor further agrees as
follows:

Each policy for property insurance shall show the Secured Party
as loss payee.

Each policy for liability insurance shall show the Secured Party
as an additional insured.

Each insurance policy shall provide that at least thirty (30)
days’ prior written notice of cancellation or of lapse shall
be given to the Secured Party by the insured (or at least ten (10)
days’ prior written notice of cancellation shall be given
with respect to failure to pay the premium).

Such Grantor shall, if so requested by the Secured Party,
deliver to the Secured Party a copy of each insurance policy.

Transfers and Other Liens.  Such Grantor shall
not:

sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except as may be permitted by the
Credit Agreement; or

create or suffer to exist any Lien or other charge or
encumbrance upon or with respect to any of the Collateral, except
for the security interest created by this Security Agreement and
except as permitted by the Credit Agreement, including the cure
periods set forth therein

Further Assurances, etc.  Such Grantor agrees that,
from time to time at its own expense, it will promptly execute and
deliver all further instruments and documents, and take all further
action, that may be necessary or desirable (provided that it is
reasonable), or that the Secured Party may reasonably request, in
order to perfect, preserve and protect any security interest
granted or purported to be granted hereby or to enable the Secured
Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral.  Without limiting the
generality of the foregoing, each Grantor will:

mark conspicuously each Document (evidencing title) included in
the Inventory, each Chattel Paper included in the Receivables and,
at the request of the Secured Party, and upon the occurrence and
during the continuance of an Event of Default, each of its records
pertaining to the Collateral with a legend, in form and substance
satisfactory to the Secured Party, indicating that such Document,
Chattel Paper, or Collateral is subject to the security interest
granted hereby;

if any Receivable shall be evidenced by a Promissory Note or
other Instrument, negotiable Document or Chattel Paper, deliver and
pledge to the Secured Party hereunder such Promissory Note,
Instrument, negotiable Document or Chattel Paper duly endorsed and
accompanied by duly executed Instruments of transfer or assignment,
all in form and substance satisfactory to the Secured Party;
provided, however, if such evidences amounts less than Two Hundred
Fifty Thousand Dollars ($250,000) such delivery and pledge shall be
at Secured Party’s Request;

execute and file such financing or continuation statements, or
amendments thereto, and such other Instruments or notices as may be
necessary or desirable, or as the Secured Party may reasonably
request, in order to perfect and preserve the security interests
and other rights granted or purported to be granted to the Secured
Party hereby;

promptly execute and file any notice or other required form
under or pursuant to the federal assignment of claims statute, 31
U.S.C. § 3727, any successor or amended version thereof or any
regulation promulgated under or pursuant to any version thereof, as
the Secured Party may reasonably request; and

furnish to the Secured Party, from time to time at the Secured
Party’s request, statements and schedules further identifying
and describing the Collateral and such other reports in connection
with the Collateral as the Secured Party may reasonably request,
all in reasonable detail.

With respect to the
foregoing and the grant of the security interest hereunder, such
Grantor hereby authorizes the Secured Party to file one or more
financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature
of such Grantor.  A carbon, photographic or other reproduction
of this Security Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law.

ATTORNEY-IN-FACT

Secured Party Appointed Attorney-in-Fact.  Each
Grantor hereby irrevocably appoints the Secured Party such
Grantor’s attorney-in-fact, with full authority in the place
and stead of such Grantor and in the name of such Grantor or
otherwise, from time to time in the Secured Party’s
discretion, following the occurrence and continuation of an Event
of Default, to take any action and to execute any instrument which
the Secured Party may deem necessary or advisable to accomplish the
purposes of this Security Agreement, including:

to ask, demand, collect, sue for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral;

to receive, endorse, and collect any drafts or other
Instruments, Documents and Chattel Paper, in connection with
clause (a) above;

to file any claims or take any action or institute any
proceedings which the Secured Party may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce
the rights of the Secured Party with respect to any of the
Collateral; and

to perform the affirmative obligations of such Grantor hereunder
(including all obligations of such Grantor pursuant to Section
4.1.7 hereof).

Such Grantor hereby
acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable until the
Obligations are satisfied and coupled with an interest.

Secured Party May Perform.  If any Grantor fails to
perform any agreement contained herein, the Secured Party may
itself perform, or cause performance of, such agreement, and the
expenses of the Secured Party incurred in connection therewith
shall be payable by such Grantor pursuant to Section 6.2
hereof.

Secured Party Has No Duty.  In addition to, and not
in limitation of, Section 2.4(c) hereof, the powers conferred on
the Secured Party hereunder are solely to protect its interest in
the Collateral and shall not impose any duty on it to exercise any
such powers.  Except for reasonable care of any Collateral in
its possession and the accounting for moneys actually received by
it hereunder, the Secured Party shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any
Collateral.

Reasonable Care.  Other than the exercise of
reasonable care in the custody and preservation of the Collateral,
the Secured Party shall have no duty with respect thereto. 
The Secured Party shall be deemed to have exercised reasonable care
in the custody and preservation of the Collateral in its possession
if the Collateral is accorded treatment substantially equal to that
which the Secured Party accords its own property.  The Secured
Party shall not be liable or responsible for any loss or damage to
any of the Collateral, or for any diminution in the value thereof,
by reason of the act or omission of any agent or bailee selected by
the Secured Party in good faith.

REMEDIES

Certain Remedies.  If any Event of Default shall
have occurred and be continuing:

The Secured Party may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured
party under the U.C.C. (whether or not the U.C.C. applies to the
affected Collateral) and also may:

require each Grantor to, and such Grantor hereby agrees that it
will, at its expense and upon request of the Secured Party
forthwith, assemble all or part of the Collateral as directed by
the Secured Party and make it available to the Secured Party at a
place to be designated by the Secured Party which is reasonably
convenient to both parties;

reclaim, take possession, recover, store, maintain, finish,
repair, prepare for sale or lease, shop, or advertise for sale or
lease the Collateral;

without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale,
at any of the Secured Party’s offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the
Secured Party may deem commercially reasonable.  Each Grantor
agrees that, to the extent notice of sale shall be required by law,
at least ten days’ prior notice to such Grantor of the time
and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. 
The Secured Party shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. 
The Secured Party may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and
place to which it was so adjourned;

withdraw all monies, securities and Instruments in the
Collateral Account for application to the Obligations; and

license or sublicense, whether on an exclusive or nonexclusive
basis, any Trademark Collateral, Patent Collateral or Copyright
Collateral included in the Intellectual Property Collateral for
such term and on such conditions and in such manner as the Secured
Party shall in its sole judgment determine.

All cash proceeds received by the Secured Party in respect of
any sale of, collection from, or other realization upon all or any
part of the Collateral may, in the discretion of the Secured Party,
be held by the Secured Party as collateral for, and/or then or at
any time thereafter applied (after payment of any amounts payable
to the Secured Party pursuant to Section 6.2 hereof) in
whole or in part by the Secured Party against, all or any part of
the Secured Obligations in such order as the Secured Party shall
elect.  Each Grantor shall remain liable for any deficiency if
the proceeds of any sale or disposition of its Collateral are
insufficient to pay all amounts to which the Secured Party is
entitled from such Grantor.  Any surplus of such cash or cash
proceeds held by the Secured Party and remaining after payment in
full in cash of all the Secured Obligations shall be paid over to
the applicable Grantor or to whomsoever may be lawfully entitled to
receive such surplus.

To the extent such Grantor has the right to do so, such Grantor
authorizes the Secured Party to take possession of the Collateral,
or any part of it, and to pay, purchase, contract, or compromise
any encumbrance, charge, or Lien which, in the opinion of the
Secured Party, appears to be prior or superior to its security
interest.

The Secured Party shall have the right upon any such public sale
or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of said
Collateral so sold, free of any right or equity of redemption,
which equity of redemption such Grantor hereby releases.

To the maximum extent permitted by law, the Grantors waive all
claims, damages, and demands against the Secured Party arising out
of the repossession, retention, or sale of the Collateral.

As to any Collateral constituting certificated securities or
uncertificated securities, if, at any time when the Secured Party
shall determine to exercise its right to sell the whole or any part
of such Collateral hereunder, such Collateral or the part thereof
to be sold shall not, for any reason whatsoever, be effectively
registered under Securities Act of 1933, as amended (as so amended
the “Act”), the Secured Party may, in its
discretion (subject only to applicable requirements of law), sell
such Collateral or part thereof by private sale in such manner and
under such circumstances as the Secured Party may deem necessary or
advisable, but subject to the other requirements of this Section
6.1(f), and shall not be required to effect such registration
or cause the same to be effected.  Without limiting the
generality of the foregoing, in any such event the Secured Party
may, in its sole discretion, (i) in accordance with applicable
securities laws, proceed to make such private sale notwithstanding
that a registration statement for the purpose of registering such
Collateral or part thereof could be or shall have been filed under
the Act; (ii) approach and negotiate with a single possible
purchaser to effect such sale; and (iii) restrict such sale to a
purchaser who will represent and agree that such purchaser is
purchasing for its own account, for investment, and not with a view
to the distribution or sale of such Collateral or part
thereof.  In addition to a private sale as provided above in
this Section 6.1(f), if any of such Collateral shall not be
freely distributable to the public without registration under the
Act at the time of any proposed sale hereunder, then the Secured
Party shall not be required to effect such registration or cause
the same to be effected but may, in its sole discretion (subject
only to applicable requirements of law), require that any sale
hereunder (including a sale at auction) be conducted subject to
such restrictions as the Secured Party may, in its sole discretion,
deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in
compliance with the Bankruptcy Code and other laws affecting the
enforcement of creditors’ rights and the Act and all
applicable state securities laws.

Each Grantor agrees that in any sale of any of such Collateral,
whether at a foreclosure sale or otherwise, the Secured Party is
hereby authorized to comply with any limitation or restriction in
connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the
number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications and
restrict such prospective bidders and purchasers to persons who
will represent and agree that they are purchasing for their own
account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required
approval of the sale or of the purchaser by any governmental
authority, and such Grantor further agrees that such compliance
shall not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner, nor shall the
Secured Party be liable nor accountable to such Grantor for any
discount allowed by the reason of the fact that such Collateral is
sold in compliance with any such limitation or restriction.

Indemnity and Expenses.

Each Grantor jointly and severally agrees to indemnify the
Secured Party and its officers, employees, and agents from and
against any and all claims, losses and liabilities arising out of
or resulting from this Security Agreement (including enforcement of
this Security Agreement), except claims, losses or liabilities
resulting from the gross negligence or willful misconduct of the
Secured Party.

Each Grantor will upon demand pay to the Secured Party the
amount of any and all reasonable expenses, including the reasonable
fees and disbursements of its counsel and of any experts and
agents, which the Secured Party may incur in connection with:

the administration of this Security Agreement;

the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the
Collateral;

the exercise or enforcement of any of the rights of the Secured
Party hereunder: or

the failure by any Grantor to perform or observe any of the
provisions hereof.

The provisions of this
Section 6.2 shall survive the Termination Date.

MISCELLANEOUS PROVISIONS

Loan Document.  This Security Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall
(unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and
provisions thereof.

Amendments; etc.  No amendment to or waiver of any
provision of this Security Agreement nor consent to any departure
by any Grantor here from, shall in any event be effective unless
the same shall be in writing and signed by the Secured Party, and
then such waiver or consent shall be effective only for the
specified Grantor, in the specific instance, and for the specific
purpose for which given.

Notices.  All notices and other communications
provided for hereunder shall be in writing (including facsimile
communication) and, if to any Grantor, mailed or telecopied or
delivered to it, addressed to it, care of the Borrower at the
address for the Borrower specified in the Credit Agreement, if to
Secured Party, mailed or telecopied or delivered to it, addressed
to it at the address of the Secured Party specified in the Credit
Agreement.  All such notices and other communications, when
mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed
given when received; any such notice or communication, if
transmitted by telecopier, shall be deemed given when transmitted
and electronically confirmed.

Additional Subsidiary Grantors.  Upon the execution
and delivery by any other Person of an instrument in the form of
Annex I hereto, such Person shall become a
“Grantor” hereunder with the same force and effect as
if originally named as a “Grantor” herein.  The
execution and delivery of any such instrument shall not require the
consent of any other Grantor hereunder.  The rights and
obligations of each Grantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Grantor as a
party to this Security Agreement.

Captions.  Section captions used in this Security
Agreement are for convenience of reference only, and shall not
affect the construction of this Security Agreement.

Severability.  Wherever possible each provision of
this Security Agreement shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision
of this Security Agreement shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Security
Agreement.

Counterparts.  This Security Agreement may be
executed by the parties hereto in several counterparts, each of
which shall be deemed an original and all of which shall constitute
together but one and the same agreement.

Governing Law, Entire Agreement, etc.  THIS
SECURITY AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA, EXCEPT TO THE
EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN
THE STATE OF CALIFORNIA.  THIS SECURITY AGREEMENT AND THE
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE
PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND
SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.

Forum Selection and Consent to Jurisdiction.  ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF THE SECURED PARTY OR ANY GRANTOR SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF
CALIFORNIA OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF CALIFORNIA; PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY
MAY BE BROUGHT, AT THE SECURED PARTY’S OPTION, IN THE COURTS
OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND.  EACH GRANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF CALIFORNIA ADDRESSED TO SUCH
GRANTOR, CARE OF THE BORROWER, AT THE ADDRESS FOR NOTICES SPECIFIED
IN THE CREDIT AGREEMENT.  EACH GRANTOR HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF CALIFORNIA AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF CALIFORNIA FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH
LITIGATION.  EACH GRANTOR IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF CALIFORNIA.  EACH
GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  TO
THE EXTENT THAT ANY GRANTOR HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, SUCH GRANTOR HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS SECURITY
AGREEMENT AND THE OTHER LOAN DOCUMENTS.

Waiver of Jury Trial.  EACH GRANTOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS SECURITY
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE SECURED PARTY OR SUCH
GRANTOR. EACH GRANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED
FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY)
AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE SECURED
PARTY ENTERING INTO THE CREDIT AGREEMENT AND EACH SUCH OTHER LOAN
DOCUMENT.

[Remainder
of page left blank intentionally.]

IN WITNESS WHEREOF, each
Grantor has caused this Subsidiary Security Agreement to be duly
executed and delivered by its officer thereunto duly authorized as
of the date first above written.

	
                                                                 

	
   

	
SB OperatingCo, LLC,

 as Grantor

			
By:

	
/s/ L. A.
OBERKFELL

				

				
L. A. Oberkfell

 President,

 Chief Executive Officer

ANNEX
I

SUPPLEMENT, dated as of
________________, ____ (this “Supplement”), to
the Subsidiary Security Agreement, dated as of August 2, 2002
(together with all amendments, supplements, restatements and other
modifications, if any, from time to time thereafter made thereto,
the “Security Agreement”), among the initial
signatories thereto and each other Person (such capitalized term,
and other terms used in this Supplement, to have the meanings set
forth in Article I of the Security Agreement) which from time to
time thereafter became a party thereto pursuant to Section 7.4
thereof (each, individually, a “Grantor”, and,
collectively, the “Grantors”), in favor of the
Secured Party.

W I T N E
S S E T H :

WHEREAS, pursuant to the
provisions of Section 7.4 of the Security Agreement, the
undersigned is becoming a Grantor under the Security Agreement;
and

WHEREAS, the undersigned
Grantor desires to become a “Grantor” under the
Security Agreement in order to induce the Secured Party to continue
to extend Credit Extensions under the Credit Agreement;

NOW, THEREFORE, in
consideration of the premises, and for other consideration (the
receipt and sufficiency of which is hereby acknowledged), the
undersigned agrees, for the benefit of the Secured Party, as
follows.

In accordance with the terms of the Security Agreement, by its
signature below the undersigned hereby irrevocably agrees to become
a Grantor under the Security Agreement with the same force and
effect as if it were an original signatory thereto and the
undersigned Grantor, hereby (a) agrees to be bound by and comply
with all of the terms and provisions of the Security Agreement
applicable to it as a Grantor and (b) represents and warrants that
the representations and warranties made by it as a Grantor
thereunder are true and correct as of the date hereof.  In
furtherance of the foregoing, each reference to a
“Grantor” in the Security Agreement shall be deemed to
include the undersigned Grantor.

The undersigned Grantor hereby represents and warrants that this
Supplement has been duly authorized, executed and delivered by it
and that this Supplement and the Security Agreement constitute the
legal, valid and binding obligation of the undersigned Grantor,
enforceable against it in accordance with its terms.

Except as expressly supplemented hereby, the Security Agreement
shall remain in full force and effect in accordance with its
terms.

In the event any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein and in the Security Agreement shall not
in any way be affected or impaired.

THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.

This Supplement may be executed by the parties hereto in several
counterparts, each of which shall be deemed to be an original and
all of which shall constitute together but one and the same
agreement.

IN WITNESS WHEREOF, the
parties hereto have caused this Supplement to be duly executed and
delivered by their respective officers thereunto duly authorized as
of the day and year first above written.

[NAME OF ADDITIONAL
SUBSIDIARY GRANTOR]

By:                                                                  

Name:

Title: 

ACCEPTED BY:

THE TITAN CORPORATION, as
Secured Party

By:                                                                        

Name:

Title:

SCHEDULE
I

Item A. 
Location of Equipment

Location                                                 
Description

           
9276 Scranton Road, Suite
600              
Leasehold improvements, furniture

           
San Diego, CA
92121                            
and computer equipment

           

           
6780 Sierra Court, Suite
A                     
Leasehold improvements, furniture,

           
Dublin, CA
94568                                  
machinery and computer equipment.

           
9040 Activity Road, Suite A
                  
Leasehold improvements, furniture

           
San Diego,
CA                                       
and computer equipment

           
2640 Murray
Street                                
Furniture, computer equipment and machinery

           
Sioux City, IA 51111

           
9300 Underwood Avenue Suite
150        Leasehold
improvements, furniture and

           
Omaha, NE
68114-2684                       
computer equipment

           
3285 East Vernon
Avenue                      
Leasehold improvements, furniture,

           
Vernon, CA
90058                                
computer equipment and machinery

           
300 Regency
Drive                                 
Leasehold improvements, furniture,

           
Glendale Heights,
IL60139                     
computer equipment and machinery

           
400 Discovery
Drive                               
Machinery and equipment

           
College Station, TX 77845

           
Avenida Brasil
19001                             
Leasehold improvements, furniture,

           
(Proximo Ao lado Pavilhao
100              
computer equipment and machinery

           
CEASA) Rio de Janeiro, RJ

           
Brazil 21-531-140

           

           
Abbraj Att’awuneya
BLDG                    
Leasehold improvements, furniture and

           
8th floor
North                                        
computer equipment

           
King Fahad Road

           
Riyadh 11533

           
Kingdom of Saudi Arabia

Item B.  Location
of Inventory

Location                                                          
Description

           
9276 Scranton Road, Suite
600                       
Inventory

           
San Diego, CA 92121

           

           
6780 Sierra Court, Suite
A                              
Inventory

           
Dublin, CA 94568

                     

           
9040 Activity Road, Suite A
                           
Inventory

           
San Diego, CA

*Item C.  Location
of Lock Boxes

                                                                                              
Contact

        
Bank Name and
Address            
Account Number       
Person

        
Comerica Bank
California           
1891382754

        
600 B
Street                               
1891505008

        
San Diego, CA  92101

Item D.  Place(s)
of Business and Chief Executive Office

Current:           
9276 Scranton Road, Suite 600

                       
San Diego, CA  92121

Former:           
3033 Science Park Road

                       
San Diego, CA  92121

Item E.  Trade
Names

SB OperatingCo, LLC
(8/1/02)

SB OperatingCo, Inc.
(8/3/00)

SureBeam Corporation
(4/17/00)

Titan Scan Corp.
(8/25/98)

Titan Purification Inc.
(12/8/97)

SureBeam Brasil
LTDA

Item F.  Merger or
Other Corporate Reorganization

*Item G.  Location
of Deposit Accounts

                                                                                              
Contact

        
Bank Name and
Address         
Account
Number          
Person

        
Comerica Bank
California           
1891507129

        
600 B
Street                               
1891428169

        
San Diego, CA 
92101               
1891427583

                                                           
1891382747

                                                           
1891427591

                                                           
1891507970

                                                           
2176994453

                                                           
1891504993

Item H.  Location
of Securities Accounts

                                                                                              
Contact

        
Bank Name and
Address         
Account
Number          
Person

           
None.

SCHEDULE
II

Item A. 
Patents

	
Country

	
Patent
No.

	
Issue
Date

	
Title

				
	
U.S.

	
5,590,602

	
1/7/1997

	
Conveyor System Utilizing
Articles Carriers

	
PCT

	
5,994,706

	
11/30/1999

	
Article Irradiation System
________ Intermediate Wall of ________ Shielding Material Within
Loop of Conveyor System That Transports the Articles

	
U.S.

PCT

EPO

JAP

CA

	
5,994,706

	
11/30/1999

	
Article Irradiation System
in Which Articles Transporting Conveyor is Closely Encompassed by
Shielding Material

	
U.S.

AUS

DAN

CAN

EPO

JAP

KR

MA

	
5,396,074

	
3/7/1995

	
Irradiation System
Utilizing Conveyor Transported Article Carriers

	
U.S.

	
6,127,687

	
10/3/2000

	
Article Irradiation System
having Intermediate Wall of Radiation Shielding Material Within
Loop of Conveyor System that transports the Articles.

	
U.S.

	
6,236,055

	
5/22/2001

	
Article Irradiation System
having Intermediate Wall of Radiation Shielding Material Within
Loop of Conveyor System that transports the Articles.

	
U.S.

	
6,285,030

	
9/4/2001

	
Article Irradiation System
in Which Article Transporting Conveyor is Closely Encompassed by
Shielding

	
U.S.

	
6,294,791

	
9/24/2001

	
Article Irradiation System
having Intermediate Wall of Radiation Shielding Material Within
Loop of Conveyor System that transports the Articles.

	

 

Pending
Patent Applications

	
Country

	
Serial
No.

	
Filing
Date

	
Title

	
U.S

	
09/710,730

	
11/10/2000

	
System For and Method of
Irradiating an Object with an Optimal Amount of
Radiation

	
U.S.

	
09/872131

	
6/1/2001

	
System For, and Method of
Irradiating Article with Multiple Irradiations

	
U.S.

	
09/872,441

	
6/1/2001

	
System For, and Methods
Of, Irradiating Articles

	
U.S.

	
09/456,061

	
12/7/1999

	
System For and Methods Of,
Irradiating Articles to Sterilize The Articles

	
U.S.

	
9/753,287

	
12/29/2000

	
System For, And Method Of,
Irradiating Articles With X-Ray Beam

	
U.S.

	
09/881,257

	
6/13/2001

	
System For, and Methods
Of, Irradiating Articles With X-Ray Beam

	
U.S.

	
09/710,730

	
11/10/2000

	
System For, And
Methods Of, Irradiating Opposite Sides Of Articles With Optimal
amounts of Cumulative Irradiation

	
U.S.

	
09/569,402

	
5/12/2000

	
System For, and
Method of Providing Frequency Hopping

	
PCT

WO

	
09/458,051

	
12/7/1999

	
Apparatus For, And
Methods for Sterilizing Products, Primarily Food
Products

	
U.S.

	
60/141,781

	
6/30/1999

	
Apparatus For, And Methods
for Sterilizing Products, Primarily Food Products

	
U.S.

	
09/912,576

	
7/24/2001

	
System For, and Methods
Of, Irradiating Articles

	
U.S.

	
09/971,986

	
10/4/2001

	
Compact Self-Shielded
Irradiation System and Method

	
U.S.

	
10/167,544

	
6/10/2002

	
System For, and Method Of,
Irradiating Articles To Sterilize Articles

	
U.S.

	
09/964,785

	
9/26/2001

	
System For, And Methods
Of, Irradiating Opposite Sides Of Articles With Optimal amounts of
Cumulative Irradiation

Patent
Applications in Preparation

Expected*Country       
Docket
No.                 
Filing
Date              
Inventor(s)                 
Title

Item B.  Patent
Licenses

*Country
or                                                                                    
Effective                     
Expiration    Subject

 
Territory
                   
Licensor                      
Licensee                 
   Date 
                     
    Date  
        Matter

SCHEDULE
III

Item A. 
Trademarks

Registered Trademarks

	
*Country

	
Trademark

	
Registration No.

	
Status

	
United States

	
SUREBEAM in class
40

	
(RN) 1,855,367

	
Registered

	
Lebanon

	
SUREBEAM in classes 9
& 40

	
(RN) 88045

	
Registered

Pending
Trademark Applications

	
*Country

	
Trademark

	
Serial
No.

	
Status

	
United States

	
GOOD FOOD. MADE BETTER. in
class 40

	
(SN) 76/326,832

	
Pending

	
United States

	
SAFER FRESHER BETTER in
class 40

	
(SN) 76/326,461

	
Pending

	
United States

	
SERVE WITH CONFIDENCE in
class 40

	
(SN) 76/264,588

	
Pending

	
United States

	
SERVED WITH CONFIDENCE in
class 40

	
(SN) 76/264,589

	
Pending

	
United States

	
SUREBEAM in class
9

	
(SN) 76/260,478

	
Published

	
United States

	
SUREBEAM & Design in
class 40

	
(SN) 76/326,834

	
Pending

	
United States

	
SUREMAIL in class
40

	
(SN) 76/335,335

	
Pending

	
United States

	
YOUR FAVORITE FOODS MADE
BETTER in class 40

	
(SN) 76/264,590

	
Pending

	
United States

	
Be SureBeam
Safe

	
78/145,494

	
Pending

	
Australia

	
GOOD FOOD. MADE BETTER. in
class 40

	
(SN) 894010

	
Pending

	
Australia

	
SUREBEAM in classes 9
& 40

	
(SN) 865938

	
Allowed for
Registration

	
Brazil

	
SUREBEAM in class
9

	
(SN)
822,218,100

	
Published

	
Brazil

	
SUREBEAM in class
40

	
(SN)
822,218,119

	
Published

	
Canada

	
SUREBEAM in classes 9
& 40

	
(SN) 1068730

	
Pending

	
China

	
SUREBEAM in class
9

	
(SN) 2001165531

	
Pending

	
China

	
SUREBEAM in class
40

	
(SN) 2001179227

	
Pending

	
Egypt

	
SUREBEAM in class
9

	
(SN) 144891

	
Pending

	
Egypt

	
SUREBEAM in class
40

	
(SN) 144892

	
Pending

	
Guatemala

	
SUREBEAM in class
9

	
(SN) 07579

	
Pending

	
Guatemala

	
SUREBEAM in class
40

	
(SN) 07580

	
Pending

	
Indonesia

	
SUREBEAM in class
9

	
(SN)
16501-16604

	
Pending

	
Indonesia

	
SUREBEAM in class
40

	
(SN)
16502-16605

	
Published

	
India

	
SUREBEAM in class
9

	
(SN) 1012183

	
Pending

	
Japan

	
SUREBEAM in classes 9
& 40

	
(SN)
2000-097384

	
Published

	
Kuwait

	
SUREBEAM in class
40

	
(SN) 52208

	
Pending

	
Mexico

	
SUREBEAM in class
9

	
(SN) 496290

	
Pending

	
Mexico

	
SUREBEAM in class
40

	
(SN) 496291

	
Pending

	
New Zealand

	
GOOD FOOD. MADE BETTER. in
class 40

	
(SN) 647625

	
Pending

	
Oman

	
SUREBEAM in class
9

	
(SN) 25945

	
Pending

	
Oman

	
SUREBEAM in class
40

	
(SN) 25946

	
Pending

	
Panama

	
SUREBEAM in class
9

	
(SN) 117604

	
Pending

	
Panama

	
SUREBEAM in class
40

	
(SN) 115892

	
Pending

	
Philippines

	
SUREBEAM in classes 9
& 40

	
(SN)
4-2001005137

	
Pending

	
Pakistan

	
SUREBEAM in class
9

	
(SN) 172685

	
Pending

	
Pakistan

	
SUREBEAM in class
16

	
(SN) 173569

	
Pending

	
Qatar

	
SUREBEAM in class
9

	
(SN) 25783

	
Pending

	
Qatar

	
SUREBEAM in class
40

	
(SN) 25784

	
Pending

	
Russia

	
SUREBEAM in class
9

	
(SN) 2001721891

	
Pending

	
Russia

	
SUREBEAM in class
40

	
(SN) 2001721845

	
Pending

	
Saudi Arabia

	
GOOD FOOD. MADE BETTER. in
class 40

	
(SN) 73859

	
Pending

	
Saudi Arabia

	
SUREBEAM in class
9

	
(SN) 71887

	
Pending

	
Saudi Arabia

	
SUREBEAM in class
40

	
(SN) 71888

	
Pending

	
South Africa

	
SUREBEAM in class
9

	
(SN) 2001/12160

	
Pending

	
South Africa

	
SUREBEAM in class
40

	
(SN) 2001/12161

	
Pending

	
South Korea

	
SUREBEAM in class
7

	
(SN)
40200051220

	
Published

	
South Korea

	
SUREBEAM in class
9

	
(SN)
40200041625

	
Published

	
South Korea

	
SUREBEAM in class
40

	
(SN)
41200023540

	
Pending

	
Spain

	
SUREBEAM in class
9

	
(SN) 2351499

	
Published

	
Spain

	
SUREBEAM in class
37

	
(SN) 2414906

	
Published

	
Spain

	
SUREBEAM in class
40

	
(SN) 2346640

	
Published

	
Thailand

	
SUREBEAM in class
9

	
(SN) 472133

	
Pending

	
Thailand

	
SUREBEAM in class
40

	
(SN) 472134

	
Pending

	
Turkey

	
GOOD FOOD. MADE BETTER. in
class 40

	
(SN) 2001-22756

	
Pending

	
United Arab
Emirates

	
SUREBEAM in class
9

	
(SN) 44556

	
Pending

	
United Arab
Emirates

	
SUREBEAM in class
40

	
(SN) 44557

	
Pending

	
Argentina

	
GOOD FOOD. MADE BETTER. in
class 40

	
Awaiting serial number and
confirmation of application filed from local counsel

	
Unfiled

	
Brazil

	
GOOD FOOD. MADE BETTER. in
class 40

	
Awaiting serial number and
confirmation of application filed from local counsel

	
Unfiled

	
Guatemala

	
GOOD FOOD. MADE BETTER. in
class 40

	
Awaiting serial number and
confirmation of application filed from local counsel

	
Unfiled

	
Jordan

	
SUREBEAM in class
9

	
Awaiting serial number
from local counsel

	
Pending

	
Jordan

	
SUREBEAM in class
40

	
Awaiting serial number
from local counsel

	
Pending

	
Japan

	
GOOD FOOD. MADE BETTER. in
class 40

	
Awaiting serial number and
confirmation of application filed from local counsel

	
Unfiled

	
Mexico

	
GOOD FOOD. MADE BETTER. in
class 40

	
Awaiting serial number and
confirmation of application filed from local counsel

	
Unfiled

	
Philippines

	
GOOD FOOD. MADE BETTER. in
class 40

	
Awaiting serial number
from local counsel

	
Pending

	
Turkey

	
SUREBEAM in classes 9
& 40

	
Awaiting serial number
from local counsel

	
Pending

	
Yemen

	
SUREBEAM in class
9

	
Awaiting serial number
from local counsel

	
Pending

Trademark Applications in
Preparation

                                                                                                       
Expected 
                 
Products/

*Country                     
Trademark                  
Docket
No.            
Filing
Date                 
Services

Item B.  Trademark
Licenses

*Country
or                                                                                    
Effective                     
Expiration

Territory
                     
Trademark     
Licensor          
Licensee         
Date                        
   Date

SCHEDULE
IV

Item A. 
Copyrights/Mask Works

Registered Copyrights/Mask Works

*Country                     
Registration
No.          
Registration Date     
Author(s)                   
Title

Copyright/Mask Work Pending Registration
Applications

*Country                     
Serial
No.                    
Filing
Date              
Author(s)                   
Title

Copyright/Mask Work Registration Applications in
Preparation

                                                                       
Expected

*Country                     
Docket
No.                 
Filing
Date              
Author(s)                   
Title

Item B. 
Copyright/Mask Work Licenses

*Country
or                                                                                    
Effective                     
Expiration      Subject

 
Territory
                    
Licensor                      
Licensee                 
   Date 
                     
    Date  
        Matter

SCHEDULE
V

Trade
Secret or Know-How Licenses

*Country
or                                                                                    
Effective                     
Expiration    Subject

 
Territory
                    
Licensor                      
Licensee                 
   Date 
                     
    Date  
        Matter

EXHIBIT
A

SUBSIDIARY PATENT SECURITY
AGREEMENT

This SUBSIDIARY PATENT
SECURITY AGREEMENT (this “Agreement”), dated as
of August 2, 2002, is made between ___________________, a
____________ (the “Grantor”), and THE TITAN
CORPORATION, a Delaware corporation (the “Secured
Party”);

W I T N E
S S E T H :

WHEREAS, pursuant to a
Senior Secured Credit Agreement, dated as of August 2, 2002 (as
amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), between SUREBEAM
CORPORATION, a Delaware corporation (the
“Borrower”), and the Secured Party, the Secured
Party has extended Commitments to make Credit Extensions to the
Borrower;

WHEREAS, in connection
with the Credit Agreement, the Grantor has executed and delivered
to the Secured Party a Subsidiary Security Agreement, dated as of
August 2, 2002 (as amended, restated, supplemented or otherwise
modified from time to time, the “Security
Agreement”);

WHEREAS, as a condition
precedent to the making of the Credit Extensions (including the
initial Credit Extension) under the Credit Agreement, the Grantor
is required to execute and deliver this Agreement;

WHEREAS, the Grantor has
duly authorized the execution, delivery and performance of this
Agreement; and

WHEREAS, it is in the best
interests of the Grantor to execute this Agreement inasmuch as the
Grantor will derive substantial direct and indirect benefits from
the Credit Extensions made from time to time to the Borrower by the
Secured Party pursuant to the Credit Agreement;

NOW THEREFORE, for good
and valuable consideration the receipt of which is hereby
acknowledged, and in order to induce the Secured Party to make
Credit Extensions (including the initial Credit Extension) to the
Borrower pursuant to the Credit Agreement, the Grantor agrees, for
the benefit of the Secured Party, as follows:

Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including
its preamble and recitals, have the meanings provided (or
incorporated by reference) in the Security Agreement.

Grant of Security Interest.  For good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Secured Obligations, the Grantor
does hereby mortgage, pledge and hypothecate to the Secured Party,
and grant to the Secured Party a security interest in all of the
following property (the “Patent Collateral”),
whether now owned or hereafter acquired or existing by it:

all letters patent and applications for letters patent
throughout the world, including all patent applications in
preparation for filing anywhere in the world and including each
patent and patent application referred to in Item A of
Attachment 1 attached hereto;

all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items
described in clause (a);

all patent licenses, including each patent license referred to
in Item B of Attachment 1 attached hereto; and

all Proceeds of, and rights associated with, the foregoing
(including license royalties and Proceeds of infringement suits),
the right to sue third parties for past, present or future
infringements of any patent or patent application, including any
patent or patent application referred to in Item A of
Attachment 1 attached hereto, and for breach or enforcement
of any patent license, including any patent license referred to in
Item B of Attachment 1 attached hereto, and all
rights corresponding thereto throughout the world.

Notwithstanding anything
herein to the contrary, in no event shall the Collateral include,
and the Grantor shall not be deemed to have granted a security
interest in, any of the Grantor’s rights or interests in any
license, contract or agreement to which the Grantor is a party or
any of its rights or interests thereunder to the extent, but only
to the extent, that such a grant would, under the express terms of
such license, contract or agreement or otherwise, result in a
breach of the terms of, or constitute a default under such license,
contract or agreement (other than to the extent that any such term
would be rendered ineffective pursuant to Sections 9407(a) or
9408(a) of the U.C.C. or any other applicable law (including the
Bankruptcy Code) or principles of equity); provided, that
immediately upon the ineffectiveness, waiver, lapse or termination
of any such provision, the Collateral shall include, and the
Grantor shall have granted a security interest in, all such rights
and interests as if such provision had never been in
effect.

Security Agreement.  This Agreement has been
executed and delivered by the Grantor for the purpose of
registering the security interest of the Secured Party in the
Patent Collateral with the United States Patent and Trademark
Office and corresponding offices in other countries of the
world.  The security interest granted hereby has been granted
as a supplement to, and not in limitation of, the security interest
granted to the Secured Party under the Security Agreement. 
The Security Agreement (and all rights and remedies of the Secured
Party thereunder) shall remain in full force and effect in
accordance with its terms.

Release of Security Interest.  Upon the Termination
Date, the Secured Party shall, at the Grantor’s expense,
execute and deliver to the Grantor all Instruments and other
Documents as may be necessary or proper to release the lien on and
security interest in the Patent Collateral which has been granted
hereunder.

Acknowledgment.  The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Secured
Party with respect to the security interest in the Patent
Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which (including the
remedies provided for therein) are incorporated by reference herein
as if fully set forth herein.

Loan Document, etc.  This Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall
(unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and
provisions of the Credit Agreement.

Counterparts.  This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together
but one and the same agreement.

IN WITNESS WHEREOF, the
parties hereto have caused this Subsidiary Patent Security
Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the day and year first
above written.

[NAME OF
GRANTOR]

By                                                                   

Name:

Title:

THE TITAN
CORPORATION,

as Secured
Party

By                                                                   

Name:

Title:

ATTACHMENT
1

Item A.
Patents

Issued
Patents

	
*Country

	
Patent
No.

	
Issue
Date

	
Inventor(s)

		
Title

		
				
				

Pending
Patent Applications

	
*Country

	
Serial
No.

	
Filing
Date

	
Inventor(s)

		
Title

		
				
				

Patent
Applications in Preparation

	
*Country

	
Docket
No.

	
Expected

 Filing Date

	
Inventor(s)

		
Title

		
				
				

Item
B.            
Patent Licenses

	

*Country
or

 Territory

	

Subject
Licensor

	

Licensee

	

Effective

 Date

	

Expiration

 Date

	

Subject

 Matter

						
						

EXHIBIT
B

SUBSIDIARY TRADEMARK SECURITY
AGREEMENT

This SUBSIDIARY TRADEMARK
SECURITY AGREEMENT (this “Agreement”), dated as
of August 2, 2002, is made between _____________________, a
___________ __________ (the “Grantor”), and THE
TITAN CORPORATION, a Delaware corporation (the “Secured
Party”);

W I T N E
S S E T H :

WHEREAS, pursuant to a
Senior Secured Credit Agreement, dated as of August 2, 2002 (as
amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), between SUREBEAM
CORPORATION, a Delaware corporation, (the “Borrower”)
and the Secured Party, the Secured Party has extended Commitments
to make Credit Extensions to the Borrower;

WHEREAS, in connection
with the Credit Agreement, the Grantor has executed and delivered
to the Secured Party a Subsidiary Security Agreement, dated as of
August 2, 2002 (as amended, restated, supplemented or otherwise
modified from time to time, the “Security
Agreement”);

WHEREAS, as a condition
precedent to the making of the Credit Extensions (including the
initial Credit Extension) under the Credit Agreement, the Grantor
is required to execute and deliver this Agreement;

WHEREAS, the Grantor has
duly authorized the execution, delivery and performance of this
Agreement; and

WHEREAS, it is in the best
interests of the Grantor to execute this Agreement inasmuch as the
Grantor will derive substantial direct and indirect benefits from
the Credit Extensions made from time to time to the Borrower by the
Secured Party pursuant to the Credit Agreement;

NOW THEREFORE, for good
and valuable consideration the receipt of which is hereby
acknowledged, and in order to induce the Secured Party to make
Credit Extensions (including the initial Credit Extension) to the
Borrower pursuant to the Credit Agreement, the Grantor agrees, for
the benefit of the Secured Party, as follows:

Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including
its preamble and recitals, have the meanings provided (or
incorporated by reference) in the Security Agreement.

Grant of Security Interest.  For good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Secured Obligations, the Grantor
does hereby mortgage, pledge and hypothecate to the Secured Party,
and grant to the Secured Party a security interest in all of the
following property (the “Trademark Collateral”),
whether now owned or hereafter acquired or existing by it:

all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos, other source
of business identifiers, prints and labels on which any of the
foregoing have appeared or appear, designs and general intangibles
of a like nature (all of the foregoing items in this
clause (a) being collectively called a
“Trademark”), now existing anywhere in the world
or hereafter adopted or acquired, whether currently in use or not,
all registrations and recordings thereof and all applications in
connection therewith, whether pending or in preparation for filing,
including registrations, recordings and applications in the United
States Patent and Trademark Office or in any office or agency of
the United States of America or any State thereof or any foreign
country, including those referred to in Item A of
Attachment 1 attached hereto;

all Trademark licenses, including each Trademark license
referred to in Item B of Attachment 1 attached
hereto;

all reissues, extensions or renewals of any of the items
described in clauses (a) and (b);

all of the goodwill of the business connected with the use of,
and symbolized by the items described in, clauses (a) and
(b); and

all Proceeds of, and rights associated with, the foregoing,
including any claim by the Grantor against third parties for past,
present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, including any
Trademark, Trademark registration or Trademark license referred to
in Item A and Item B of Attachment 1 attached
hereto, or for any injury to the goodwill associated with the use
of any such Trademark or for breach or enforcement of any Trademark
license.

Notwithstanding anything
herein to the contrary, in no event shall the Collateral include,
and the Grantor shall not be deemed to have granted a security
interest in, any of the Grantor’s rights or interests in any
license, contract or agreement to which the Grantor is a party or
any of its rights or interests thereunder to the extent, but only
to the extent, that such a grant would, under the express terms of
such license, contract or agreement or otherwise, result in a
breach of the terms of, or constitute a default under such license,
contract or agreement (other than to the extent that any such term
would be rendered ineffective pursuant to Sections 9407(a) or
9408(a) of the U.C.C. or any other applicable law (including the
Bankruptcy Code) or principles of equity); provided, that
immediately upon the ineffectiveness, waiver, lapse or termination
of any such provision, the Collateral shall include, and the
Grantor shall have granted a security interest in, all such rights
and interests as if such provision had never been in
effect.

Security Agreement.  This Agreement has been
executed and delivered by the Grantor for the purpose of
registering the security interest of the Secured Party in the
Trademark Collateral with the United States Patent and Trademark
Office and corresponding offices in other countries of the
world.  The security interest granted hereby has been granted
as a supplement to, and not in limitation of, the security interest
granted to the Secured Party under the Security Agreement. 
The Security Agreement (and all rights and remedies of the Secured
Party thereunder) shall remain in full force and effect in
accordance with its terms.

Release of Security Interest.  Upon the Termination
Date, the Secured Party shall, at the Grantor’s expense,
execute and deliver to the Grantor all Instruments and other
Documents as may be necessary or proper to release the lien on and
security interest in the Trademark Collateral which has been
granted hereunder.

Acknowledgment.  The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Secured
Party with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which (including the
remedies provided for therein) are incorporated by reference herein
as if fully set forth herein.

Loan Document, etc.  This Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall
(unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and
provisions of the Credit Agreement.

Counterparts.  This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together
but one and the same agreement.

IN WITNESS WHEREOF, the
parties hereto have caused this Subsidiary Trademark Security
Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the day and year first
above written.

[NAME OF
GRANTOR]

By                                                                   

Name:

Title:

THE TITAN
CORPORATION,

as Secured
Party

By                                                                   

Name:

Title:

ATTACHMENT
1

Item A.
Trademarks

Registered Trademarks

	
*Country

	
Trademark

	
Registration No.

	
Registration Date

				
				
				

Pending
Trademark Applications

	
*Country

	
Trademark

	
Serial
No.

	
Filing
Date

				
				
				

Trademark Applications in
Preparation

	
*Country

	
Trademark

	
Docket
No.

	
Expected

 Filing Date

	
Products/

 Services

					
					
					

Item
B.            
Trademark Licenses

	

*Country
or

 Territory

	

Trademark

	

Licensor

	

Licensee

	

Effective
Date

	

Expiration
Date

						
						

EXHIBIT
C

SUBSIDIARY COPYRIGHT SECURITY
AGREEMENT

This SUBSIDIARY COPYRIGHT
SECURITY AGREEMENT (this “Agreement”), dated as
of August 2, 2002, is made between _____________________, a
__________ __________ (the “Grantor”), and THE
TITAN CORPORATION, a Delaware corporation (the “Secured
Party”);

W I T N E
S S E T H :

WHEREAS, pursuant to a
Senior Secured Credit Agreement, dated as of August 2, 2002 (as
amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), between SUREBEAM
CORPORATION, a Delaware corporation (the
“Borrower”), and the Secured Party, the Secured
Party has extended Commitments to make Credit Extensions to the
Borrower;

WHEREAS, in connection
with the Credit Agreement, the Grantor has executed and delivered
to the Secured Party a Subsidiary Security Agreement, dated as of
August 2, 2002 (as amended, restated, supplemented or otherwise
modified from time to time, the “Security
Agreement”);

WHEREAS, as a condition
precedent to the making of the Credit Extensions (including the
initial Credit Extension) under the Credit Agreement, the Grantor
is required to execute and deliver this Agreement;

WHEREAS, the Grantor has
duly authorized the execution, delivery and performance of this
Agreement; and

WHEREAS, it is in the best
interests of the Grantor to execute this Agreement inasmuch as the
Grantor will derive substantial direct and indirect benefits from
the Credit Extensions made from time to time to the Borrower by the
Secured Party pursuant to the Credit Agreement;

NOW THEREFORE, for good
and valuable consideration the receipt of which is hereby
acknowledged, and in order to induce the Secured Party to make
Credit Extensions (including the initial Credit Extension) to the
Borrower pursuant to the Credit Agreement, the Grantor agrees, for
the benefit of the Secured Party, as follows:

Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including
its preamble and recitals, have the meanings provided (or
incorporated by reference) in the Security Agreement.

Grant of Security Interest.  For good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Secured Obligations, the Grantor
does hereby mortgage, pledge and hypothecate to the Secured Party,
and grant to the Secured Party a security interest in all of the
following property (the “Copyright Collateral”),
whether now owned or hereafter acquired or existing by it, being
all copyrights (including all copyrights for semi-conductor chip
product mask works) of the Grantor, whether statutory or common
law, registered or unregistered, now or hereafter in force
throughout the world including all of the Grantor’s right,
title and interest in and to all copyrights registered in the
United States Copyright Office or anywhere else in the world and
also including the copyrights referred to in Item A of
Attachment 1 attached hereto, and all applications for
registration thereof, whether pending or in preparation, all
copyright licenses, including each copyright license referred to in
Item B of Attachment 1 attached hereto, the right to
sue for past, present and future infringements of any thereof, all
rights corresponding thereto throughout the world, all extensions
and renewals of any thereof and all Proceeds of the foregoing,
including licenses, royalties, income, payments, claims, damages
and Proceeds of suit.

Notwithstanding anything
herein to the contrary, in no event shall the Collateral include,
and the Grantor shall not be deemed to have granted a security
interest in, any of the Grantor’s rights or interests in any
license, contract or agreement to which the Grantor is a party or
any of its rights or interests thereunder to the extent, but only
to the extent, that such a grant would, under the express terms of
such license, contract or agreement or otherwise, result in a
breach of the terms of, or constitute a default under such license,
contract or agreement (other than to the extent that any such term
would be rendered ineffective pursuant to Sections 9407(a) or
9408(a) of the U.C.C. or any other applicable law (including the
Bankruptcy Code) or principles of equity); provided, that
immediately upon the ineffectiveness, waiver, lapse or termination
of any such provision, the Collateral shall include, and the
Grantor shall have granted a security interest in, all such rights
and interests as if such provision had never been in
effect.

Security Agreement.  This Agreement has been
executed and delivered by the Grantor for the purpose of
registering the security interest of the Secured Party in the
Copyright Collateral with the United States Copyright Office and
corresponding offices in other countries of the world.  The
security interest granted hereby has been granted as a supplement
to, and not in limitation of, the security interest granted to the
Secured Party under the Security Agreement.  The Security
Agreement (and all rights and remedies of the Secured Party
thereunder) shall remain in full force and effect in accordance
with its terms.

Release of Security Interest.  Upon the Termination
Date, the Secured Party shall, at the Grantor’s expense,
execute and deliver to the Grantor all Instruments and other
Documents as may be necessary or proper to release the lien on and
security interest in the Copyright Collateral which has been
granted hereunder.

Acknowledgment.  The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Secured
Party with respect to the security interest in the Copyright
Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which (including the
remedies provided for therein) are incorporated by reference herein
as if fully set forth herein.

Loan Document, etc.  This Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall
(unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and
provisions of the Credit Agreement.

Counterparts.  This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together
but one and the same agreement.

IN WITNESS WHEREOF, the
parties hereto have caused this Subsidiary Copyright Security
Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the day and year first
above written.

[NAME OF
GRANTOR]

By                                                                   

Name:

Title:

THE TITAN
CORPORATION,

as Secured
Party

By                                                                   

Name:

Title:

ATTACHMENT
1

Item A. Copyrights/Mask
Works

Registered Copyrights/Mask Works

	
*Country

	
Registration No.

	
Registration Date

	
Author(s)

	
Title

					
					
					

Copyright/Mask Work Pending Registration
Applications

	
*Country

	
Serial
No.

	
Filing
Date

	
Author(s)

	
Title

					
					
					

Copyright/Mask Work Registration Applications in
Preparation

	
*Country

	
Docket
No.

	
Expected

 Filing Date

	
Author(s)

	
Title

					
					
					

Item
B.            
Copyright/Mask Work Licenses

	

*Country
or

 Territory

	

Licensor

	

Licensee

	

Effective
Date

	

Expiration
Date

	

Subject

 Matter

						
						

EXHIBIT LIST

* Accounts are SB
OperatingCo, LLC and/or Borrower accounts.

* List items related to
the United States first for ease of recordation.  List items
related to other countries next, grouped by country and in
alphabetical order by country name.

* Accounts are SB
OperatingCo, LLC and/or Borrower accounts.

* List items related to
the United States first for ease of recordation.  List items
related to other countries next, grouped by country and in
alphabetical order by country name.

*          
List items related to the United States first for ease of
recordation.

           
List items related to other countries next, grouped by country and
in alphabetical order by country name.

*    
List items related to the United States first for ease of
recordation.

      List items related
to other countries next, grouped by country and in alphabetical
order by country name.

*          
List items related to the United States first for ease of
recordation.

           
List items related to other countries next, grouped by country and
in alphabetical order by country name.Form of Tax Sharing Agreement

FORM
OF

TAX
SHARING AND DISAFFILIATION AGREEMENT

Tax Sharing And
Disaffiliation Agreement dated as 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 of Titan;

Whereas,
Titan is the common parent of an affiliated group of corporations
within the meaning of Section 1504(a) of the Code, which currently
files consolidated federal income Tax Returns and which includes
SureBeam as a member of that consolidated group;

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

Whereas,
Titan and SureBeam intend that the Recapitalization and the
Conversion will qualify as one or more reorganizations within the
meaning of Section 368(a) of the Code, and the Distribution will
qualify as a distribution described in Section 355 of the Code, and
none of the Recapitalization, the Conversion or the Distribution
will result in the recognition 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 of SureBeam Common
Stock);

Whereas,
after the Distribution Date, SureBeam will cease to be a member of
the Titan Affiliated Group for federal income Tax purposes;

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

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

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

DEFINITIONS

For the purposes of this Agreement:

“Acquisition
Proposal” shall mean any proposal, plan, agreement
or arrangement contemplating (i) any merger, consolidation,
reorganization, recapitalization or similar transaction involving
SureBeam, or (ii) any transfer 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 and Disaffiliation Agreement as the same may be
amended from time to time.

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

“Claim” shall have the
meaning set forth in Section 5.3(a) of this Agreement.

“Code” shall mean the
Internal Revenue Code of 1986, as amended from time to time.

“Controlling
Party” shall have the meaning set forth in Section
5.1 of this Agreement.

“Conversion” shall have
the meaning set forth in the third recital.

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

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

“Equity
Transaction” shall mean (a) the grant, offer for
sale, sale or issuance of (i) any stock of SureBeam, (ii) any debt
security of SureBeam 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 or issuance of
compensatory equity arrangements that meet the criteria set forth
in Temporary Treasury Regulation §1.355-7T(g)(3)(ii), or any
successor regulation thereto; (b) any redemption, retirement,
repurchase, cancellation or other transaction that reduces the
number of shares of SureBeam Common Stock outstanding; or (c) any
consideration, discussions, negotiations, provision of confidential
information relating to SureBeam or the SureBeam Business to any
party regarding, or the solicitation of or encouragement of any
Acquisition Proposal.  For the purposes of this paragraph,
“stock” shall have the meaning given to that term in
Section 355(e) of the Code.

“Filing
Party” shall have the meaning set forth in Section
4.1 of this Agreement.

“Final
Determination” shall mean with respect to any
issue (i) a decision, judgment, decree or other order by any court
of competent jurisdiction, which decision, judgment, decree or
other order has become final and not subject to further appeal,
(ii) a closing agreement (whether or not entered into under Section
7121 of the Code) or any other binding settlement agreement
(whether or not with the IRS) entered into in connection with or in
contemplation of an administrative or judicial proceeding, or (iii)
the completion of the highest level of administrative proceedings
if a judicial contest is not or is no longer available.

“Indemnitor” shall have
the meaning set forth in Section 5.2 of this Agreement.

“IRS” shall mean the
Internal Revenue Service of the United States.

“Liable
Party” shall have the meaning set forth in Section
4.1 of this Agreement.

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

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

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

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

“Restructuring
Taxes” shall mean any Taxes and other liabilities,
including, without limitation, liability to stockholders of Titan
and the costs of defending against the imposition of such taxes and
other liabilities, imposed as a result of a Final Determination
that (i) the Recapitalization and/or the Conversion failed to
qualify as a reorganization within the meaning of Section 368 (a)
of the Code; (ii) the Distribution failed to qualify as a
distribution described in Section 355 of the Code, or (iii) any
stock or securities of SureBeam failed to qualify as
“qualified property” within the meaning of Section
355(c)(2) of the Code because of the application of Section 355(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 the preamble to this Agreement.

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

“SureBeam
Group” shall mean, for any period, the affiliated
group of corporations as defined in Section 1504(a) of the Code, or
similar group of entities as defined under corresponding provisions
of the laws of other jurisdictions, of which SureBeam would be the
common parent corporation if it were not a subsidiary of Titan, and
any corporation or other entity which may be, may have been or may
become a member of such group from time to time.

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

“SureBeam
Tainting Act” shall mean:

any inaccuracy or breach of any representation, warranty, or
covenant that is made by SureBeam pursuant to Section 2.1 of this
Agreement.

any action (or failure to take any reasonably available action)
by any member of the SureBeam Group; or

any acquisition or other transaction involving the capital stock
of SureBeam (other than the Recapitalization, Conversion or
Distribution).

“SureBeam
Taxes” shall mean (i) any Taxes that are
attributable to the SureBeam Group, (ii) Restructuring Taxes
allocable to SureBeam under Section 3.4, and (iii) an amount equal
to the product of (x) any Restructuring Taxes allocable to SureBeam
payable under (ii) hereof plus any amount payable by SureBeam under
this (iii), and (y) the highest marginal effective federal and
California state income tax rates applicable to a
corporation. 

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

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

“Tax
Benefits” shall mean benefits taken into account
in computing the tax liability of a member of either the SureBeam
Group or the Titan Group, including the benefit of the graduated
tax rates of Section 11 of the Code, as well as any similar or
corresponding benefits under state or local tax 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
decreases Taxes paid or payable, including an adjustment under
Section 481 of the Code resulting from a change in accounting
method.

“Tax
Return” shall mean any return, report or similar
statement required to be filed with respect to any Tax (including
any attached schedules), including, without limitation, any
information return, claim for refund, amended return or declaration
of estimated Tax.

“Tax
Rulings” shall mean the rulings by the IRS
requested by Titan in connection with the Distribution.

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

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

“Titan
Group” shall mean, for any period, the affiliated
group of corporations as defined in Section 1504(a) of the Code, or
similar groups of entities as defined under corresponding
provisions of the laws 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 a member of such group
from time to time, but excluding any member of the SureBeam
Group.

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

“Titan Tainting
Act” shall mean:

any inaccuracy or breach of any representation, warranty, or
covenant that is made by Titan pursuant to Section 2.2 of this
Agreement;

any action (or failure to take any reasonably available action)
by any member of the Titan Group;

any acquisition or other transaction involving the capital stock
of Titan (other than the Distribution).

“Titan
Taxes” shall mean (i) any Taxes that are
attributable to the Titan Group and (ii) Restructuring Taxes
allocable to Titan under Section 3.4.

REPRESENTATIONS AND WARRANTIES

Surebeam. SureBeam hereby represents and warrants that:
(i) it has examined the Tax Rulings and the Representation Letters,
and (ii) the facts set forth therein, and the representations made
therein, to the extent descriptive of the SureBeam Group or the
SureBeam Business and not descriptive of the Titan Group
(including, without limitation, the facts and representations in
the Representation Letters and the Tax Rulings or tax opinions, as
applicable, to the extent that they relate to the SureBeam Group or
the SureBeam Business, and the plans, proposals, intentions and
policies of the SureBeam Group and the SureBeam Business) were
true, correct and complete in all material respects when the Tax
Rulings were issued, and will be true, correct and complete in all
material respects on the Distribution Date.

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

TAX RETURNS, TAX PAYMENTS AND TAX SHARING OBLIGATIONS

Obligations To File Tax Returns.  

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

Titan shall timely file or cause to be timely filed all Tax
Returns with respect to the Titan Group.

Obligation To Remit Taxes. Titan and SureBeam shall each
remit or cause to be remitted any Taxes due in respect of any Tax
Return it is required to file or cause to be filed pursuant to
Section 3.1, and shall be entitled to reimbursement for such
payments to the extent provided in Section 3.3.

Tax Sharing Obligations.

SureBeam shall be liable for and pay, and shall indemnify,
defend, and hold harmless Titan and the Titan Indemnified Parties
from and against, any and all loss, cost, damage or expense,
including reasonable attorneys’ fees and costs incurred or
suffered by Titan or one or more of the Titan Indemnified Parties
in connection with, relating to, arising out of or due to, directly
or indirectly (i) any SureBeam Taxes and (ii) any amount determined
to be SureBeam’s liability under Section 3.4. SureBeam shall
be entitled to any refund of or credit for Taxes for which SureBeam
is responsible under this Section 3.3(a).

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

Except as set forth in this Agreement or the Tax Allocation
Agreement and in consideration of the mutual indemnities and other
obligations of this Agreement, any and all prior Tax sharing
agreements or practices between any member of the Titan Group and
any member of the SureBeam Group shall be terminated with respect
to the SureBeam Group as of the Distribution Date.

Restructuring Taxes. 

SureBeam and Titan shall each be liable for 50% of Restructuring
Taxes that are imposed as a result of neither a SureBeam Tainting
Act nor a Titan Tainting Act.  In the case of the imposition
of a Restructuring Tax where there is both a SureBeam Tainting Act
and a Titan Tainting Act, and each of the SureBeam Tainting Act and
the Titan Tainting Act would alone be sufficient to result in the
imposition of such Restructuring Tax, SureBeam and Titan shall each
be liable for 50% of such Restructuring Tax.  In the case of a
Restructuring Tax that would not have been imposed but for the
existence of both a SureBeam Tainting Act and a Titan Tainting Act,
SureBeam and Titan shall be liable for such Restructuring Tax to
the extent the SureBeam Tainting Act and the Titan Tainting Act,
respectively, contributed to the imposition of such Restructuring
Tax.

Except as described in Section 3.4(a), SureBeam shall be liable
for Restructuring Taxes imposed as a result of a SureBeam Tainting
Act.

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

Additional SureBeam Equity Financing. 
Notwithstanding Section 3.4, (a) any Equity Transaction by SureBeam
during the two year period following the Distribution Date and (b)
any shareholder vote contemplated by Section 6(b)(ii) of the
Certificate of Incorporation of SureBeam; shall be subject to the
prior written consent of Titan, which consent shall not be
unreasonably withheld but which consent may be conditioned upon the
receipt by Titan of (i) a legal opinion or tax opinion in form and
substance satisfactory to Titan of a reputable tax counsel or tax
adviser of national reputation reasonably satisfactory to Titan
which opinion has been concurred in by Titan’s tax counsel or
advisors or (ii) a favorable ruling from the Internal Revenue
Service, in each case to the effect that the proposed issuances of
stock should not result in the imposition of any Restructuring
Taxes.

Period That Includes The Date Of Distribution.

To the extent permitted by law or administrative practice, the
taxable year of the SureBeam Group shall be treated as closing at
the close of the Distribution Date.

If it is necessary for purposes of this Agreement to determine
the SureBeam Taxes or Titan Taxes for a taxable year that begins on
or before and ends after the Distribution Date and is not treated
under Section 3.6(a) as closing at the close of the Distribution
Date, the determination shall be made by assuming that such taxable
year ended on a “closing of the books” basis at the
close of the Distribution Date, except that exemptions, allowances
or deductions that are calculated on an annual basis shall be
apportioned on a time basis.

PAYMENTS

General Tax Payments. With respect to any Taxes for which
one party (the “Liable Party”) is liable
under Section 3.3 and that are to be remitted in connection with
Tax Returns to be filed by the other party (the “Filing
Party”) after the Distribution Date pursuant to
Sections 3.1 and 3.2, (i) upon the request of the Filing Party, the
Liable Party shall promptly provide to the Filing Party all
information necessary to enable the Filing Party to file such Tax
Returns and (ii) assuming compliance by the Liable Party with the
Liable Party’s obligations under clause (i) (or written
waiver by the Filing Party of such compliance), the Filing Party
shall, not later than ten (10) days prior to the due date for
remitting such Taxes (or, if the due date is within sixty (60) days
after the Distribution Date, as promptly following the Distribution
Date as possible) provide the Liable Party with a written request
showing in reasonable 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 pursuant to this Agreement. 
Subject to Section 4.2 which provides for payments due as a result
of a Final Determination, the Liable Party shall have the right to
object in writing to such calculation on or before sixty (60) days
after the date on which such request is provided to the Liable
Party, on the grounds that there is substantial authority that such
calculation is incorrect; provided that if the Liable Party so
objects, (i) the Filing Party and the Liable Party shall promptly
submit the dispute to an independent accounting or law firm
acceptable to both the Filing Party and the Liable Party for prompt
resolution, whose decision shall be final and binding on the Filing
Party and the Liable Party, and (ii) the party that such accounting
or law firm determines has lost the dispute shall pay all of the
fees and expenses incurred in connection with submitting such
dispute. The Liable Party shall pay to the Filing Party any amount
not in dispute on or before the thirtieth (30th) day following the
receipt of such request by the Liable Party, with additional
amounts to be paid by the Liable Party (together with interest at
the Applicable Federal Rate accruing from the date on which such
Return is filed) promptly upon resolution of any objection.

Other Payments. Other payments due to a party under
Section 3.3 shall be due not later than twenty (20) days after the
receipt or crediting of a refund or the receipt of notice of a
Final Determination to the effect that the indemnified party is
liable for an indemnified cost, together with interest at a rate
equal to the Applicable Federal Rate from the date on which the
indemnifying party receives such receipt, credit or notice.

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

TAX AUDITS

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

Indemnified Claims In General. Titan or SureBeam shall
promptly notify the other in writing upon the receipt of an actual
oral or written notice from any relevant Taxing authority of any
proposed adjustment to a Tax Return that may result in liability of
the other party (the “Indemnitor”) under
this Agreement. If the Indemnitor is not also the Controlling
Party, the Controlling Party shall provide the Indemnitor with
information about the nature and amounts of the proposed
adjustments and, subject to additional rights of the Indemnitor in
certain circumstances under Section 5.3 of this Agreement, shall
permit the Indemnitor to participate in the proceeding at the
Indemnitor’s own expense; provided, however, that the
Controlling Party shall not be required to indemnify the Indemnitor
if the Controlling Party fails to notify or provide such
information to the Indemnitor, unless the Indemnitor is materially
prejudiced thereby. The Indemnitor shall pay all (or, in the case
of Restructuring Taxes for which liability is shared under Section
3.4(a) of this Agreement, a portion based on the Indemnitor’s
share of such Restructuring Taxes) reasonable expenses (including,
but not limited to, legal and accounting fees) incurred by the
Controlling Party in connection with the assessment or adjustment
within seven (7) days after a written request by the Controlling
Party.

Certain Federal Income Tax Claims.

Any issues (other than issues relating to Restructuring Taxes
for which liability is shared under Section 3.4(a), which shall be
excluded from the provisions of this Section 5.3) raised by the IRS
in any Tax inquiry, audit, examination, investigation, dispute,
litigation or other proceeding that would result in liability to
the Indemnitor under this Agreement that in the aggregate would
equal or exceed $250,000 with respect to any taxable year are
defined as a Claim (a “Claim”). Except as
provided in Section 5.3(d) and notwithstanding any other provision
of this Agreement that may be construed to the contrary, the
Controlling Party agrees to contest any Claim and not to settle any
Claim without prior written consent of the Indemnitor, provided
that (i) the Controlling Party shall provide notice to Indemnitor
pursuant to Section 5.2 of any Claim, (ii) within thirty (30) days
after such notice is received by the Indemnitor, the Indemnitor
shall request in writing that such Claim be contested and the
Indemnitor shall provide an opinion of independent tax counsel,
selected by the Indemnitor and reasonably acceptable to the
Controlling Party, to the effect that it is more likely than not
that a Final Determination will be substantially consistent with
the Indemnitor’s position relating to such Claim, (iii) the
Indemnitor shall agree to pay (and shall pay) on demand all
out-of-pocket costs, losses and expenses (including, but not
limited to, reasonable legal and accounting fees) paid or incurred
by the Controlling Party in connection with contesting such Claim,
and (iv) the Controlling Party, after reasonable consultation with
the Indemnitor, shall determine in the Controlling Party’s
sole discretion the nature of all actions to be taken to contest
such Claim, including (x) whether any action to contest such Claim
shall initially be by way of judicial or administrative proceeding,
or both, (y) whether any such Claim shall be contested by resisting
payment thereof or by paying the same and seeking a refund thereof,
and (z) the court or other judicial body before which judicial
action, if any, shall be commenced. To the extent the Indemnitor is
not participating, the Controlling Party shall keep the Indemnitor
(and, upon request by the Indemnitor, its counsel) informed as to
the progress of the contest.

If the Indemnitor requests that the Controlling Party accept a
settlement of a Claim offered by the IRS and if such Claim may, in
the reasonable discretion of the Controlling Party, be settled
without prejudicing any claims the IRS may have with respect to
matters unrelated to the Claim, the Controlling Party shall either
accept such settlement offer or agree with the Indemnitor that the
Indemnitor’s liability with respect to such Claim shall be
limited to the lesser of (i) an amount calculated on the basis of
such settlement offer plus interest owed to the IRS on the date of
eventual payment or (ii) the amount calculated on the basis of a
Final Determination.

If the Controlling Party shall elect to pay the Tax claimed and
seek a refund, the Indemnitor shall lend sufficient funds on an
interest-free basis to the Controlling Party (with no net after-tax
cost to the Controlling Party), to cover any applicable indemnity
obligations of the Indemnitor. To the extent such refund claim is
ultimately disallowed, the loan or portion thereof equal to the
amount of the refund claim so disallowed shall be applied against
the Indemnitor’s obligation to make indemnity payments
pursuant to this Agreement. To the extent such refund claim is
allowed, the Controlling Party shall pay to the Indemnitor all
amounts advanced to the Controlling Party with respect to the
indemnity obligation within ten (10) days of the receipt of such
refund (or if the Controlling Party would have received such refund
but for the existence of a counterclaim or other claim not
indemnified by the Indemnitor under this Agreement, within ten (10)
days of the final resolution of the contest), plus an amount equal
to any interest received (or that would have been received) from
the IRS that is properly attributable to such amount.

Except as provided below, the Controlling Party shall not settle
a Claim that the Indemnitor is entitled to require the Controlling
Party to contest under Section 5.3(a) without the prior written
consent of the Indemnitor. At any time, whether before or after
commencing to take any action pursuant to this Section 5.3 with
respect to any Claim, the Controlling Party may decline to take
action with respect to such Claim and may settle such Claim without
the prior written consent of the Indemnitor by notifying the
Indemnitor in writing that the Indemnitor is released from its
obligations to indemnify the Controlling Party with respect to such
Claim (which notification shall release the Indemnitor from such
obligations except to the extent the Indemnitor has agreed in
writing that it would be willing to have its liability calculated
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 such Claim or based on the outcome of such Claim. If the
Controlling Party settles any Claim or otherwise takes or declines
to take any action pursuant to this paragraph, the Controlling
Party shall pay to the Indemnitor any amounts paid or advanced by
the Indemnitor with respect to such Claim (other than amounts
payable by the Indemnitor in connection with a settlement offer
pursuant to Section 5.3(b)), plus interest attributable to such
amounts.

COOPERATION

General. Titan and SureBeam shall cooperate with each
other in the filing of any Tax Returns and the conduct of any audit
or other proceeding and each shall execute and deliver such powers
of attorney and make available such other documents as are
reasonably necessary to carry out the intent of this Agreement.
Each party agrees to notify the other party in writing of any audit
adjustments that do not result in Tax liability but can be
reasonably expected to affect Tax Returns of the other party, or
any of its Subsidiaries, for a Post-Distribution Period. Each party
agrees to treat the Recapitalization , the Conversion and the
Distribution for all income Tax purposes as not causing the
recognition of any income, gain or loss (except with respect to the
payment of cash in lieu of fractional shares).  Each party
agrees to prepare and file their Tax Returns for all periods on a
basis consistent with the positions taken on the Tax Returns filed
by Titan during the period SureBeam was a member of the Titan
Affiliated Group.  Further, each party agrees to cooperate
with the other to promptly provide such Representation Letters as
shall be reasonably requested.

Cooperation With Respect To Tax Return Filings, Examinations
And Tax Related Controversies.

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

SureBeam shall fully cooperate with Titan and its
representatives, in a prompt and timely manner, in connection with
(i) the preparation and filing of and (ii) any inquiry, audit,
examination, investigation, dispute, or litigation involving, any
Tax Return required to be filed by Titan pursuant to this
Agreement. Such cooperation shall include, but not be limited to,
(x) the execution and delivery to Titan by SureBeam of any power of
attorney required to allow Titan and its counsel to participate in
or control any inquiry, audit or other administrative proceeding
and to assume the defense or prosecution, as the case may be, of
any suit, action or proceeding pursuant to the terms of and subject
to the conditions set forth in Article V of this Agreement, and (y)
making available to Titan, during normal business hours, 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.

RETENTION OF RECORDS; ACCESS

The Titan Group and the
SureBeam Group shall:

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 Taxes of the Titan Group or the SureBeam Group or for
the audit of such Tax Returns; and

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

DISPUTES

If Titan and SureBeam
cannot agree on any calculation of any liabilities under this
Agreement, such calculation shall be made by any independent public
accounting firm acceptable to both Titan and SureBeam. The decision
of such firm shall be final and binding. The fees and expenses
incurred in connection with such calculation shall be borne by the
party that such independent public accounting firm determines has
lost the dispute.

TERMINATION OF LIABILITIES

Notwithstanding any other
provision in this Agreement, any liabilities determined under this
Agreement shall survive indefinitely.

MISCELLANEOUS PROVISIONS

Co-ordination With Existing Agreement.  It is
acknowledged that, the Tax Allocation Agreement shall continue in
effect with respect to any tax year for which consolidated federal
income tax returns are filed by the Titan Consolidated Group and
for state income tax purposes with respect to any tax year for
which combined, consolidated or unitary tax returns are filed by
the Titan Consolidated Group, as those terms are defined in such
Tax Allocation Agreement.

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

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

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 of this Agreement a provision as
similar in terms to such invalid, illegal or unenforceable
provision as may be possible and be valid, legal and enforceable
and (b) the validity, legality and enforceability of the remaining
provisions, or any subsequent applications thereof, shall not in
any way be affected or impaired thereby. 

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 delegate any obligation hereunder without the
express prior written consent of Titan.

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 or
noncompliance by another party under this Agreement shall impair
any such right, 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 similar breach, default or noncompliance
thereafter occurring.  All remedies, either under this
Agreement, by law, or otherwise afforded to any party, shall be
cumulative and not alternative.

Captions.  Titles or
captions of Sections and paragraphs contained in this Agreement are
inserted only 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 provision hereto.

Number and Gender. 
Whenever required by the context, the singular number shall include
the plural, the plural number shall include the singular, and the
gender of any pronoun shall include all genders.

Notices.  Unless otherwise
provided, any notice required or permitted under this Agreement
shall be given in writing and shall be deemed effectively given:
(a) upon personal delivery to the party to be notified; (b) when
sent by confirmed telex or facsimile if sent during normal business
hours of the recipient, if not, then on the next business day; or
(c) upon deposit with the United States Post Office, by registered
or certified mail, postage prepaid and addressed to the party to be
notified parties; or (d) one (1) day after deposit with a
nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt at the address
indicated for such party on the signature page hereof, or at such
other address as such party may designate by ten (10) days’
advance written notice to the other.

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

Counterparts.  This
Agreement may be executed in multiple copies, each of which shall
for all purposes constitute an Agreement, binding on the parties,
and each partner hereby covenants and agrees to execute all
duplicates or replacement counterparts of this Agreement as may be
required.

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

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

Counterparts.   This
Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall
constitute one instrument.

In Witness
Whereof, the parties hereto have duly executed this
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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