Document:

Exhibit
10.27

 

AMENDMENT
2003-2 TO

THE TITAN CORPORATION

DEFERRED COMPENSATION PLAN

 

The Chief Executive
Officer of the Titan Corporation hereby adopts the following amendment to the
Titan Corporation Deferred Compensation Plan (the “Plan”):

 

1.  Section 4.5 of the Plan is hereby
amended in its entirety to read as follows effective November 1, 2003:

 

“4.5                           Distribution
Upon a Change in Control. Notwithstanding any other provision of the Plan,
if there is a Change in Control, no deferrals will be made under the Plan with
respect to periods following the Change in Control and all vested Account
Balances under the Plan shall immediately be distributed or commence to be
distributed in accordance with this Section 4.5.  For purposes of this Section 4.5, the vested account balance
of a Participant who is an active Employee of the Company on the date of the
Change in Control will be determined: (a) 
by crediting the Participant with a Year of Service for the year of
employment in which the Change in Control occurs; and (b) without applying the
provision that a Participant must be employed on the last day of the Plan Year
to avoid forfeiture of the Annual Company Matching Amount and attributable
earnings for the Plan Year in which the Participant terminates employment with
the Company.  On or before
December 31 of the calendar year preceding the calendar year in which the
Change in Control occurs and prior to the satisfaction of all shareholder
approval and all regulatory approval requirements that may be applicable to such
Change in Control or such earlier date as the Committee shall designate, a
Participant whose vested Account Balance exceeds $25,000 as of the
September 30 preceding the last day on which such election could be made
can elect whether the Participant’s vested Account Balance will be paid: (a) in
a single lump sum; or (b) pursuant to the Annual Installment Method over five
years.   The vested Account Balance of
any Participant not described in the prior sentence will be paid automatically
in a single lump sum.  If a Participant
who is entitled to make an election fails to do so, the Participant’s vested
Account Balance will be paid in a single lump sum.  If the Participant has made an alternative distribution election
pursuant to any other provision of the Plan but has not commenced to receive
distributions as of the date of the Change in Control, such election shall be
void and shall have no force or effect. 
If, as of the date of the Change in Control, a Participant has commenced
to receive distributions under the Plan under an Annual Installment Method with
more than five years of installments remaining to be paid at the time of the
Change in Control, the Participant’s unpaid vested Account Balance as of the
Change in Control will thereafter be paid

 

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pursuant to the Annual
Installment Method over five years determined from the date of the Change in
Control.”

 

IN WITNESS WHEREOF, the
Chief Executive Officer of the Titan Corporation has caused this amendment to
be executed this 22nd day of December 2003.

 

 

	
   

  	
  The Titan Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gene W. Ray

  	
   

  
	
   

  	
  Chief
  Executive Officer

  

 

2Exhibit
10.35

SETTLEMENT
AGREEMENT

This Settlement Agreement (this “Agreement”) is dated
as of March 4, 2004 by and between The Titan Corporation (“Titan”) and Richard
M Kipperman (“Trustee”), solely in his capacity as the Chapter 7 trustee for
SureBeam Corporation (“SB”) and for SB OperatingCo, LLC (“OpCo” and together
with SB, “SureBeam”) (Titan and the Trustee are hereinafter referred to each as
a “Party” and collectively as the “Parties”).

RECITALS

WHEREAS, on January 19, 2004, SB and its wholly-owned
subsidiary, OpCo, filed voluntary petitions for relief under Chapter 7 of Title
11 of the United States Code (the “Bankruptcy Code”), which cases are pending
before the United States Bankruptcy Court for the Southern District of
California (the “Bankruptcy Court”) as Case Nos. 04-00421-LA and 04-00422-LA,
respectively (the “Cases”);

WHEREAS, the Trustee has been appointed and has
accepted his appointment as Chapter 7 trustee in the Cases;

WHEREAS, on February 9, 2004, Titan filed motions
seeking relief from the automatic stay in the SureBeam Cases (the “Relief
Motions”) in which it made a number of assertions, including that SureBeam is
indebted to Titan in an amount in excess of $47.9 million (representing amounts
advanced to SureBeam pre-petition under a senior secured credit facility and
the aggregate Titan liabilities under lease guaranties executed by Titan for
the benefit of SureBeam); that such debt (the “Secured Debt”) is secured by
duly perfected and validly enforceable first-priority liens on all of SureBeam’s
pre-petition assets of any and every kind save and except only for the
remaining proceeds of SureBeam’s Fall 2003 equity round, that the SureBeam
bankruptcy estates (the “Estates”) have no equity in such assets above the
amount of the Secured Debt; that SureBeam defaulted pre-petition in the rent
and other payments owed to Titan under three subleases of real property
(collectively, the “Subleases”), that such Sublease rent defaults continue
post-petition, and that there is no net value in the Subleases for SureBeam or
its Estates, such Subleases generally described as:

	
  (A)

  	
  Sioux City:

  
	
   

  	
  Lessor:

  	
   Cloverleaf
  ColdStorage Co.

  
	
   

  	
  Location: 

  	
  2640 Murray Street

  
	
   

  	
  Sioux City, IA 
  51111

  
	
   

  	
   

  
	
  (B)

  	
  Dublin Facility Office Space:

  
	
   

  	
  Lessor: CZAPLA Inc.

  
	
   

  	
  Location: 6780 Sierra Court, Suite A

  
	
   

  	
  Dublin, CA 94568

  

 

 

	
  (C)

  	
  Dublin Facility Manufacturing Space:

  
	
   

  	
  Lessor: 

  	
  BG Management

  
	
   

  	
  Location:   

  	
  6780 Sierra Court, Suite R,Q,L,O

  
	
   

  	
  Dublin, CA 94568

  

 

WHEREAS, the Trustee disputes certain of the
allegations and assertions made by Titan as described in the immediately
preceding recital paragraph;

 

WHEREAS, the Parties wish to settle all outstanding
disputes among them arising prior to the Effective Date of this Agreement;

 

NOW, THEREFORE, in consideration of the mutual promises
made in this Agreement, the Parties hereby agree as follows:

 

1.             Acknowledgment
of the Recitals.  The Parties
acknowledge the accuracy of the matters and facts set forth in the recital
paragraphs which are part of this Agreement.

 

2.             Allowance
of Claim.  Titan shall have allowed
claims in the Cases as follows:

 

(a)           Titan
Secured Claim.  Titan
shall have an allowed secured claim in the amount of a minimum of approximately
$47.9 million (1) in both of the Cases (the “Titan Secured Claim”), one such claim
if the Cases are substantively consolidated and the collateral shall be
aggregated for the purpose of the amount thereof such that Titan shall have
only one recovery on the Titan Secured Claim. 
The Titan Secured Claim shall be deemed secured by a duly perfected and
validly enforceable first-priority liens (but subject to any other duly
perfected liens therein which are senior in priority to Titan’s liens thereon)
in all assets of SureBeam of any kind and every kind and wherever located, save
and except only for those “Excluded Assets” as defined in paragraph 8 below
(such property, excluding the Excluded Assets, shall be identified as the
“Collateral,” a non-exclusive summary schedule of which is attached hereto as
Exhibit “A”).  The amount of the Titan
Secured Claim shall be the total amount of Titan’s Secured Claim less any
amounts realized by Titan from the sale or disposition of all or part of its
Collateral to third parties.  If Titan
exercises its remedies under state law and forecloses on part or all of its
Collateral by credit bidding, the amount of Titan’s credit bid or bids shall be
credited toward the amount of its Secured Claim.  If Titan takes title to all or part of its Collateral other than
through foreclosure under state law, the amount to be credited toward Titan’s
Secured Claim shall be decided by agreement between Titan and the Trustee.  If no agreement is reached, Titan shall
provide a 10 day notice of the amount it seeks to credit bid, for all or part
of the Collateral, to all parties entitled to notice pursuant to the order
limiting notice entered in the Cases and unless a third party makes a bona fide
and irrevocable bid in an amount in excess of the amount of Titan’s credit bid,
the amount of Titan’s credit bid shall be credited toward the amount of Titan’s
Secured Claim.  If a third party makes a
bona fide and irrevocable bid in excess of Titan’s credit bid, Titan will have
the option to increase its credit bid. 
SB and OpCo owned Collateral shall be aggregated for determining the amount
of Titan’s Secured Claim.

 

(1) The final amount of Titan’s Secured Claim will be
determined in accordance with the Senior Secured Credit Agreement, dated as of
August 2, 2002, between The Titan Corporation and SureBeam Corporation.

 

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(b)           Titan
Unsecured Claim.  Titan
shall also have an allowed unsecured claim, calculated as set forth herein, in
both of the Cases (the “Titan Unsecured Claim”), one such claim if the Cases
are substantively consolidated such that Titan shall have only one recovery on
the Titan Unsecured Claim.  The Titan
Unsecured Claim shall be equal to the Titan Secured Claim, plus, to the extent
not included in the Titan Secured Claim, (i) costs incurred by Titan in
connection with the Secured Debt, (ii) any amounts owed Titan pursuant to the
Subleases, (iii) any costs and expenses incurred by Titan in enforcing its
rights with respect to the Collateral or in satisfaction of any other liability
for which SureBeam is the primary obligor, and (iv) any other incidental Titan
claims including any claim of subsidiaries or affiliates of Titan  against SureBeam, less
(v) any amounts realized from all or part of the Collateral as set forth in
paragraph 2(a)  The Trustee for himself
and the Estates waives any and all right to object to (A) the manner of
disposition of the Collateral, (B) the price for which the Collateral is sold
or, if retained, credited; and (C) the designee of any transfer of any of the
Collateral.  By including any component
claim, debt or obligation in the calculation of the Titan Unsecured Claim,
neither the Trustee nor Titan waives, releases or lessens its ability to use
such component as a defense, offset or recoupment with respect to any third
party claim against Titan, SureBeam, the Trustee or the Estates.

 

(c)           No
Other Claims  Except for the Titan
Secured Claim and the Titan Unsecured Claim, neither Titan nor any of its
subsidiaries or affiliates, including, but not limited to,  Titan Scan , shall have any other claim in
the Cases.

 

3.             Modification
of Stays.  As of the Effective Date,
the automatic stay in the Cases will be modified so as to permit Titan, and the
Trustee on behalf of the Estates, at their sole discretion and option, in the
case of Titan, to exercise its rights and remedies as a secured creditor and
sublessor including, but not limited to, the rights to dispose of all or any
part of the Collateral, collect the SureBeam accounts receivable which are
Collateral and, to the extent not already rejected by the Trustee or as an
operation of law, terminate the Subleases pursuant to applicable state law  and to take the other actions contemplated
by this Agreement.  The Trustee for himself
and the Estates waives any and all right to notification of the disposition of
the Collateral, to require disposition of the Collateral, and to the redeem any
or all of the Collateral, to the maximum extent permissible, except as
expressly provided in this Agreement. 
Titan’s disposition of the Collateral will be made by Titan as it
deems appropriate in its sole and absolute discretion pursuant to applicable
state law, but subject to the other provisions of this Agreement.

 

4.             Delivery
to Titan.  Except for the Excluded
Assets (as defined below), the Trustee will promptly turn over or make
available, to the extent within the Trustee’s reasonable control or possession,
to Titan the proceeds of any SureBeam accounts receivable (other than any of
which are Excluded Assets) and at Titan’s request all other Collateral and
proceeds thereof in the possession of the Estates as of the Effective Date or
thereafter.  Titan will retain or
dispose of its Collateral or the proceeds of its Collateral, subject to the
terms hereof, including originals or copies of books, journals and other
records, drawings, diagrams, illustrations, tapes, software, etc., which are
part of the Collateral or which were created in connection with the Collateral
(the “Books and Records”).  Titan will
reimburse the Trustee for any actual and reasonable costs incurred in order to
comply with this paragraph.  Moreover,
the Trustee may in his sole discretion keep copies of the Books and Records and
in any event Titan agrees to provide the 

 

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Trustee access to the Books and Records as may be reasonably required
by the Trustee to wind up the Estates and the Cases.

 

5.             Leased
and Subleased Properties.  The
Trustee will cooperate with Titan in giving Titan and its representatives
access to the Collateral and to the leased and subleased properties.  At Titan’s request, the Trustee shall assume
and assign one or more SureBeam leases or subleases to Titan.  At Titan’s request, the Trustee shall reject
one or more Subleases. Titan shall obtain the agreement of the landlords for
properties where Titan is either a guarantor or sublessor to release and waive
any claims such landlords may have against the Estates or otherwise satisfy
such claims.  With respect to the
Scranton Road lease only, Titan consents to the Trustee retaining or using any
security deposit or prepaid rent as an offset to any claim filed against the
Estates by the Scranton Road lease landlord.

 

6.             The Landlord Receivable and the Vietnam Receivable.  Titan, in consultation with the Trustee,
shall (a) undertake commercially reasonable efforts to collect and pay over to
the Trustee  the “Landlord Receivable”
and the “Vietnam Receivable” (as those terms are defined hereafter), (b) timely
advise the Trustee of its efforts in this regard, and (c) deliver to the
Trustee any proceeds of the Landlord Receivable and the Vietnam
Receivable.  Notwithstanding the
foregoing, in no event shall Titan be required to contribute or pay internal
and/or third-party fees, costs and/or expenses (together, “Amounts”) (a) in
excess of $25,000 to satisfy its agreement to exercise commercially reasonable
efforts to collect and pay over to the Trustee the Landlord Receivable; or (b)
in excess of $25,000 to collect and pay over to the Trustee the Vietnam
Receivable.  Titan may, but it shall not
be obligated to, incur Amounts in excess of $25,000 to recover the Landlord
Receivable and/or in excess of $25,000 to recover the Vietnam Receivable.  If, and only if, after consulting with the
Trustee, the Trustee agrees that Titan should take additional commercially
reasonable efforts which will require Titan to incur Amounts in excess of
$25,000 to recover the Landlord Receivable and/or in excess of $25,000 to
recover the Vietnam Receivable, Titan shall be permitted to pay itself from the
applicable receivable proceeds all Amounts incurred and pre-approved by the
Trustee in excess of such $25,000 Amounts before delivering such applicable
proceeds of such receivable(s) to the Trustee. 
Titan agrees that it will not take any action which would directly or
indirectly deprive the Trustee of the benefit of the Landlord Receivable.  Nothing in this paragraph authorizes Titan
to enter into any settlement regarding the Landlord Receivable or the Vietnam
Receivable, or to waive any claims or to enter into any other agreement with
respect thereto, without the express prior written consent of the Trustee (and
Bankruptcy Court approval, if and as required).

7.             Subordination
of Titan Unsecured Claim.  Titan
agrees to subordinate the Titan Unsecured Claim (and the Titan Unsecured Claim
shall be deemed subordinated without further action or order) to all allowed
claims in the Cases including, but not limited to, all allowed administrative
claims and expenses, allowed priority claims, allowed general unsecured claims
and any other allowed claim in the Cases as identified in Bankruptcy Code
section 726 (collectively, the “Senior Allowed Claims “).  Titan shall be entitled to receive
distributions from the Estates and in the Cases on account of the Titan
Unsecured Claim as a subordinated general unsecured creditor only after the
allowed amounts of the Senior Allowed Claims are paid or satisfied in full.

 

4

 

8.             Priority
of Distributions.  Recoveries from
the following property (the “Excluded Assets”) shall first be used to pay or
satisfy Senior Allowed Claims in full before Titan shall be entitled to receive
any distribution of remaining recoveries, if any, on account of and up to the
full amount of the Titan Unsecured Claim:

 

(a)           any and all of the proceeds of
SureBeam’s Fall 2003 equity/PIPE transaction in the current remaining
approximate amount of $2.2 million (the “Cash”);

(b)           the loan by SB to XH Partners, L.P.,
evidenced by that certain Loan Agreement and Promissory Note, dated March 2001,
made by XH Partners, L.P. to the order of SB in the approximate amount of $1
million and collateralized by a lien on certain real estate in Vernon,
California, and any and all rights and amounts due SB thereunder (the “Landlord
Receivable”);

(c)           any and all rights, accounts,
accounts receivable and proceeds thereof due under or with respect that certain
Letter of Credit issued in the original face amount of $1,450,000 of which
approximately $750,000 remains outstanding, issued by Saigon Bank for Industry
and Trade to SureBeam, and all contract and other rights against Son Son
Company, Ltd. relating thereto (the “Vietnam Receivable”);

(d)           any and all shareholder derivative
litigation claims held by SB or the Estates, all insurance claims relating thereto,
and any and all recoveries and proceeds thereof, whether obtained through
settlement or otherwise and whether from any insurance company or otherwise,
including claims, recoveries and/or proceeds recovered against the Chubb Group
of Insurance Companies (Federal Insurance Company), National Union, Axis and
ACE under the denial of coverage to SureBeam under the Executive Protection
Portfolios Policies and any related derivative claim or proceedings against Aon
Risk Services, Inc. of Southern California, provided however, notwithstanding
anything in this Agreement to the contrary, the claims covered by this
subparagraph 8(d) must be based on shareholder derivative claims (collectively,
the “Derivative Claims”); and

                (e)           causes
of action arising under or by virtue of the Bankruptcy Code (including actions
under Bankruptcy Code §§ 542 - 550 and 553).

If, and only if, the recoveries from the Excluded
Assets  are sufficient
to pay the Senior Allowed Claims in full, will Titan be entitled to receive the
remaining recoveries up to the full amount of the Titan Unsecured Claim.  In no event shall Titan be obligated to make
any additional contributions or payments of any kind whatsoever, except as may
be agreed to by the Parties or as provided in this Agreement, if the recoveries
from the Excluded Assets are insufficient to pay the Senior Allowed Claims in
full.

9.             Transfer of Title to Collateral.  Upon the Effective Date and thereafter,
Titan shall, in its sole and absolute discretion, elect to pursue a transfer of
title to the Collateral in either of the following two (2) ways:

(a)           State Law Foreclosure Remedies.  Titan may elect to pursue state law remedies
to foreclose on all or any portion of the Collateral.  If Titan elects to do so, Titan will do so with the reasonable
assistance of the Trustee, if needed, including documentation 

 

5

 

pertaining to the
Collateral that the Trustee may provide to Titan upon Titan’s reasonable
request and at Titan’s sole expense.

(b)           Bankruptcy Code Section 363
Transfer.  Upon the Effective Date
and thereafter, at the reasonable request of Titan, the Trustee agrees to, at
the option of and in the manner requested by Titan in its reasonable discretion
and pursuant to documentation prepared by Titan and reasonably acceptable to
the Trustee, voluntarily grant, assign, transfer, and deliver free and clear of
all claims, liens, interests, and encumbrances pursuant to sections 105, 363(b)
and 363(f) of the Bankruptcy Code to Titan or its designee, as directed by
Titan, his entire right, title, and interest in any and all or part of the
Collateral; provided, however, that neither Titan nor any designated transferee
shall assume any liability or claim associated with the Collateral that has accrued
on or before the Effective Date, except such liabilities as Titan or such other
transferee shall expressly assume or as to which Titan or such other transferee
are otherwise liable separate from such transfer.  Titan, its designees or any third party transferee shall be
deemed a good faith purchaser pursuant to section 363(m) of the Bankruptcy
Code.  Such transfers shall take place
without further order of the Bankruptcy Court as Bankruptcy Court approval of
this Agreement shall constitute approval of the transfer procedure set forth in
this paragraph.  The Trustee’s
obligation to deliver and/or legally transfer Collateral continues in the event
that any Collateral in existence at the time of this Agreement and not
disclosed by the Trustee or disclosed by SureBeam are subsequently located by
the Parties.  The Trustee shall
cooperate with Titan and use commercially reasonable efforts to take any and
all reasonably necessary actions necessary to effectuate the transfer of the
Collateral to Titan and/or its designee, in each case, at Titan’s sole
expense.  The Trustee agrees to execute
and deliver all documents reasonably necessary to effectuate the transfer of
the Collateral, at Titan’s sole expense, pursuant to this paragraph if
requested by Titan to do so.  In
addition to the foregoing, upon execution of this Agreement, the Trustee agrees
to, at the option of and in the manner reasonably requested by Titan in its
sole and absolute discretion and pursuant to documentation prepared by Titan,
turn over possession of the Collateral (within the Trustee’s control or
possession) to Titan or its designee, as directed by Titan, with transfer of
title to subsequently occur as set forth in this Paragraph 9.  Notwithstanding anything in this Agreement
to the Contrary, any Collateral transferred or delivered to Titan or its
designee by the Trustee shall be irrevocably transferred to Titan and Titan
shall not be entitled to thereafter reject delivery or transfer of any such
Collateral.

(c)           Abandonment.  Nothing in this Agreement shall preclude the
Trustee from abandoning property in accordance with the Bankruptcy Code or
applicable rules.

10.           Disposition of Collateral.  Following or in conjunction with the
transfer of all or any part of the Collateral by the Trustee to Titan or its
designee pursuant to Paragraph 9, the Trustee agrees that Titan may thereafter
dispose of all or any part of the Collateral in its sole and absolute
discretion.

11.           Preservation
of Collateral.  Prior to the
Effective Date, the Trustee, in consultation with Titan, shall take all actions
that the Trustee deems reasonable to preserve and protect the Collateral.  Titan shall pay for the actual and
reasonable costs heretofore and hereafter incurred by the Estates to preserve
or protect the Collateral, including without limitation the costs set forth in
Exhibit “B” hereto.

 

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12.           Claims Administration.  Without in any way diminishing Titan’s or
the Trustee’s independent rights under the Bankruptcy Code, but subject to the
other provisions of this Agreement, Titan and the Trustee shall work
cooperatively together in claim analysis, objection and administration.  Both the Trustee and Titan will be able to
use claims, rights or defenses to the extent available as an offset or defense
against claims against SureBeam and/or the Estates.  Both the Trustee and Titan shall provide each other notice of the
filing of any objection to claim and notice of the settlement of any objection
to claim.

13.           Assumption and Assignment of
Contracts.  Upon the Effective Date
and thereafter, but prior to any rejection of any Contract either by the
Trustee or by operation of law, the Trustee agrees to, at the option of and at
the request of Titan, to voluntarily seek assumption and assignment to Titan or
its designee or, at Titan’s request, seek an extension of the period in which
to assume, in each case upon Titan’s payment of any resulting administrative
liability to the Estates, of any and all contracts, agreements, executory contracts
or unexpired leases, including but not limited to those contracts identified on
SureBeam’s schedules, which are property of the Estates (the “Contracts”)
pursuant to section 365 of the Bankruptcy Code, it being understood that
notwithstanding anything to the contrary herein, Titan has the right at its
sole and absolute discretion to elect at any time which Contracts as to which
assumption and assignment to Titan or its designee shall be sought, and absent
such election, Titan will have no liability whatsoever under such Contracts,
(except as may exist independent of assumption and assignment, such liabilities
as Titan has contractually assumed pre-petition, and any liability as provided
elsewhere in this Agreement).  The
Trustee agrees to provide Titan with access to and information about any such
Contracts and to promptly file such pleadings as may be appropriate in the
Bankruptcy Court in a form and manner reasonably acceptable to Titan.  In the event Titan requests the Trustee
assume and assign any Contract, or seek any extension to do so, Titan will pay
any and all costs necessary to effect the assumption and assignment to Titan or
extension and any administrative liability incurred with respect to doing
so.  The Parties acknowledge and understand that any such
Contracts not assumed or for which the time period to assume is not extended,
or which is not otherwise rejected, will be deemed rejected on March 19, 2004
as a matter of law.

14.           Cooperation and Commercially
Reasonable Efforts. The Parties agree to use commercially reasonable
efforts to cooperate fully with each other and to execute and deliver any and
all further documents that may be reasonably necessary or desirable to
effectuate the purposes of this Agreement (provided, the Trustee shall not be
required to incur any material costs or expenses to do so).  The Parties specifically agree (a) to
cooperate and supply any and all information requested by either Party in
connection with this Agreement; (b) to use commercially reasonable efforts and to
fully cooperate in the liquidation of the Collateral in accordance with this
Agreement (provided, the Trustee shall not be required to incur any costs
and/or expenses to do so); and (iii) to use commercially reasonable efforts and
to fully cooperate in the resolution of third-party class action and the
Derivative Claims for a period of four (4) years from the Effective Date or
until the conclusion of any third-party class action or the Derivative Claims
litigation, whichever is later.  Nothing
in this Agreement shall be construed to create any employment, independent
contractor, agency, co-venture, partnership, or other similar relationship
between Titan and the Trustee.

 

7

 

15.           Alternative Dispute Resolution.  The Trustee, as holder of the Derivative
Claims belonging to the Estates, and Titan, shall use reasonable efforts to
seek to have resolved and released the claims against SB’s and OpCo’s directors
and officers and (Titan’s directors and officers to the extent action outside
the scope of directors and officers) in the context of a global settlement of
claims of the Estates, of the Derivative Claims litigation and of the class
action litigation, including the litigations identified on Exhibit “C” hereto,
by promptly pursuing a compromise through an alternative dispute resolution
procedure, if reasonably possible or available.  The Trustee and Titan shall use reasonable efforts to have any
settlement reached by the Trustee or Titan through this mechanism to provide
for a general release of SureBeam, the Estates, Titan, their subsidiaries, and
their successors and assigns, as well as their directors and officers from all
parties who have asserted or could assert such claims against SureBeam, the
Estates Titan, their subsidiaries and/or their successors and assigns or their
directors and officers.

16.           Mutual Releases.  As of the Effective Date and in
consideration of the Trustee’s and Titan’s covenants, duties and
responsibilities under this Agreement, the Trustee, on behalf of himself, the
Estates, and their successors, assigns and representatives, and Titan, on
behalf of itself, its subsidiaries, its affiliates, its successors, assigns,
and representatives hereby waives and releases as follows:

(i)            Release and Waiver of Claims.  Except as to such rights or claims as may be
created or recognized by this Agreement (including without limitation the Titan
Secured Claim and the Titan Unsecured Claim), each of the Parties releases,
remises, and forever discharges each of the Parties (including Titan’s
subsidiaries) and their successors and assigns, and their (Titan and its
subsidiaries) directors, officers, agents and employees (to the extent such
individuals were acting in their capacities as directors, officers, agents and
employees of Titan or its subsidiaries), from any and all claims, demands,
causes of action, obligations, damages, and liabilities, whether known or
unknown, heretofore or hereafter arising out of, connected with or incidental
to these Cases or the allegations set forth in the derivative action litigation
and class action litigation including, but not limited to, all claims for
recoveries and/or damages for amounts arising under any state or federal
statute, including, but not limited to, claims arising under any state
fraudulent conveyance law or federal bankruptcy law including, but not limited
to sections 542, 544, 545, 547, 548, 549 or 553 of Title 11 of the United
States Code.  Each of the Parties represents
and warrants that it has not assigned, conveyed, transferred or pledged any
potential claims, defenses, demands, or causes of action against the other
Party to any other person or entity, whether voluntarily or involuntarily
(except in favor of Titan or as may be provided under insurance policies or as
may have occurred pre-petition), and that to the extent any such claims,
defenses, demands or causes of action exist, the Parties are the sole owners
and holders of such claims, defenses, demands, or causes of action.  Notwithstanding the foregoing: (a) the
Parties will retain (and the foregoing release shall not act to release) any
and all rights, interests and claims which they may have with respect to or
against any and all persons other than each other (including without
limitation insurance companies or other issuers of insurance policies) and (b)
the Parties will retain (and the foregoing release shall not act to release)
any claim against each other to the extent that such may be used to offset,
reduce or otherwise defend Titan, the Trustee and/or the Estates against any
claim which 

 

8

 

might be brought against
Titan, the Trustee and/or the Estates other than a claim by a Party to this
Agreement.

 

(ii)           Waiver of Civil Code Section 1542.  With respect to the matters released
pursuant to Paragraph 16(i), each of the Parties specifically waives the
benefit of the provisions of section 1542 of the California Civil Code, which
provides as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.

 

(iii)          Survival of Release and Waiver of
Claims.  The provisions set forth in
this Paragraph 16 shall survive full performance of all of the terms of this
Agreement.

(iv)          Limitation on Releases.  Notwithstanding anything to the contrary,
the Parties reserve the right to assert claims against each other as a nominal
party to the extent that the other Party , as a matter of law, needs to be
named as a defendant in order to maintain or defend claims against third
parties.

 

17.           Entire Agreement.  This Agreement represents the entire
agreement and understanding between the Parties concerning the settlement of
all claims and supersedes and replaces any and all prior agreements and
understandings among them.  Each term of
this Agreement is contractual and not merely a recital.

18.           No Admission of Liability.  The Parties understand and acknowledge that
this Agreement constitutes a compromise and settlement of disputed claims.  Except as set forth explicitly herein to the
contrary, no action taken by the Parties hereto, or any of them, either previously
or in connection with this Agreement, shall be deemed or construed to be (a) an
admission of the truth or falsity of any claims, including claims of fact,
heretofore made or (b) an acknowledgement or admission by any of the Parties of
any fault or liability or the amount of claims whatsoever to any other of the
Parties or to any third party.

19.           No Oral Modification.  This Agreement may only be amended in
writing signed by the Parties; provided, however, that during the course of the
implementation of this Agreement, the Parties may agree in writing to modify
the non-economic terms of this Agreement, as appropriate, in furtherance of the
Parties’ intent under this Agreement.

20.           Governing Law.  The laws of the State of California shall
govern this Agreement.

21.           Effective Date.  This Agreement is effective immediately upon
entry of an order  by the Bankruptcy
Court approving the terms hereof and which order expressly provides the
inapplicability of any stay of effectiveness thereof (the “Effective Date”) and
absent a stay thereof, the Parties may thereupon act in reliance on such order
in implementing and acting on 

 

9

 

this Agreement.  The Trustee shall promptly seek and
diligently pursue expedited Bankruptcy Court approval of this Agreement and shall
provide Titan with an opportunity to review and comment in advance of filing
any pleading in connection with such approval. 
Any such pleading will contain a request for waiver of the ten day stay
period provided for relief from stay orders pursuant to Federal Bankruptcy Rule
4001(a)(3) any other applicable similar provision.  The order approving this Agreement shall be in form and substance
reasonably acceptable to Titan and the Trustee.

22.           Construction; Interpretation.  The Parties have cooperated in the drafting
and preparation of this Agreement. 
Hence, in any interpretation of this Agreement, the same shall not be
construed against any one of the Parties. 
As used herein: (a) the terms “include,” “including” and forms
thereof mean inclusive without limitation; (b) the term “person” means any
individual, corporation, partnership, limited liability company, trust,
governmental authority, or other entity of any kind; (c) singular words
shall connote the plural as well as the singular and vice versa as the context
requires; (d) each gender will include any other gender; (e) the term
“day” means calendar day unless business day is expressly referred to; and
(f) the words “herein,” “hereof,” “hereunder” and words of similar import
refer to this Agreement as a whole and not to any particular paragraph or
subparagraph.

23.           Counterparts.  This Agreement and may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.

24.           Voluntary Execution of Agreement.  This Agreement is executed voluntarily and
without any duress or undue influence on the part or behalf of the Parties
hereto, with the full intent of releasing all claims to the extent set forth herein.  The Parties acknowledge that:

(i)            they have read this Agreement;

(ii)           they have been represented in the
preparation, negotiation, and execution of this Agreement by legal counsel of
their own choosing, or that they have voluntarily declined to seek such counsel
with full knowledge of the potential consequences thereof;

(iii)          they have made such investigation of
the facts pertaining to this settlement and this Agreement, and of all the
matters pertaining to it, as they deem necessary;

(iv)          they understand the terms and
consequences of this Agreement and of the releases it contains; and

(v)           they are fully aware of the legal and
binding effect of this Agreement (subject to approval of the Bankruptcy Court).

25.           Enforcement and Jurisdiction.

(a)           Generally.
This Agreement shall be subject to Bankruptcy Court approval and incorporated
into an order of the Bankruptcy Court approving the settlement, and all Parties

 

10

 

shall submit to the jurisdiction of Bankruptcy Court
to enforce the continuing obligations under this Agreement, and to resolve any
dispute that may arise under this Agreement.

                                (b)           Severability.  Any term or provision of this
Agreement that is invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending term nor
provision in any other situation or in any jurisdiction.

                                (c)           Succession.  Neither this Agreement nor rights or
obligations hereunder shall be assignable without the consent of the other
Party, except as occurs as a matter of law. 
Subject to the foregoing, this Agreement shall be binding upon and inure
to the benefit of the Parties named herein and their respective successors and
assigns.

26.           Notice.  Whenever any party shall desire or be
required to give or serve any notice, demand, request or other communication
with respect to this Agreement, each such notice shall be in writing and shall
be effective only if the same is delivered by personal service, by telecopy, by
telegram, or mailed by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:

	
  If to Titan:

  	
   

  	
  The Titan Corporation

  
	
   

  	
   

  	
  Mark W. Sopp, Sr. Vice President and Chief

  
	
   

  	
   

  	
  Financial Officer

  
	
   

  	
   

  	
  3033 Science Park Road

  
	
   

  	
   

  	
  San Diego, CA  92121

  
	
   

  	
   

  	
  Fax: (858) 552-9614

  
	
   

  	
   

  	
   

  
	
  With a Copy to:

  	
   

  	
  Ali M.M. Mojdehi, Esq.

  
	
   

  	
   

  	
  Baker & McKenzie

  
	
   

  	
   

  	
  101 W. Broadway, 12th Floor

  
	
   

  	
   

  	
  San Diego, CA 92101

  
	
   

  	
   

  	
  Fax: (619) 236-0429

  
	
   

  	
   

  	
   

  
	
  And

  	
   

  	
  Edward C. Dolan, Esq.

  
	
   

  	
   

  	
  Hogan & Hartson LLP

  
	
   

  	
   

  	
  Columbia Square

  
	
   

  	
   

  	
  555 Thirteenth Street, NW

  
	
   

  	
   

  	
  Washington, DC 20004

  
	
   

  	
   

  	
  Fax: (202) 637-5910

  
	
   

  	
   

  	
   

  
	
  And

  	
   

  	
  John P. Brincko

  
	
   

  	
   

  	
  Brincko Associates, Inc.

  
	
   

  	
   

  	
  1801 Avenue of the Stars, Suite 1025

  
	
   

  	
   

  	
  Los Angeles, CA 90067

  
	
   

  	
   

  	
  Fax: (310) 553-6782

  
	
   

  	
   

  	
   

  
	
  If to Trustee:

  	
   

  	
  Richard M Kipperman

  
	
   

  	
   

  	
  Corporate Management, Inc.

  
	
   

  	
   

  	
  Bankruptcy Trustee

  
	
   

  	
   

  	
  P.O. Box 3939

  
	
   

  	
   

  	
  La Mesa, CA  91944-3939

  
	
   

  	
   

  	
  Fax: (619) 668-9014

  
	
   

  	
   

  	
   

  
	
  With a Copy to:

  	
   

  	
  Martin A. Eliopulos, Esq.

  
	
   

  	
   

  	
  Higgs Fletcher & Mack LLP

  
	
   

  	
   

  	
  401 West A Street

  
	
   

  	
   

  	
  Suite 2600

  
	
   

  	
   

  	
  San Diego, CA 92101-7910

  

 

11

 

Any such notice delivered personally or telecopied
shall be deemed to have been received upon delivery.  Any such notice sent by telegram shall be deemed to have been
received by the addressee one (1) business day after its acceptance for sending
by an authorized carrier thereof.  Any
such notice sent by mail shall be deemed to have been received by the addressee
three (3) business days after posting in the United States Postal Service.  A Party hereto may change its address by
giving each of the Parties written notice of any address change as herein
provided.

27.           Authorization to Bind.  The Parties warrant that the signatories
have full authority to enter into this Agreement on behalf of any entity or
entities for whom they are signing (subject, in the case of the Trustee, to
approval by the Bankruptcy Court).

28.           Headings.  Headings herein are used for convenience of
reference only and do not define or limit the scope of provisions of this
Agreement.

IN WITNESS OF THE
FOREGOING, the Parties have executed this Agreement as of the Effective Date.

 

 

	
  DATED:  March 4, 2004

  	
   

  	
   

  	
  THE TITAN CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Mark W. Sopp

  	
   

  
	
   

  	
   

  	
   

  	
  Mark W. Sopp

  
	
   

  	
   

  	
   

  	
  Sr. Vice President and Chief

  
	
   

  	
   

  	
   

  	
  Executive Officer

  
	
  DATED: March 4, 2004

  	
   

  	
  By: 

  	
  /s/ Richard M Kipperman

  	
   

  
	
   

  	
   

  	
   

  	
  Richard M Kipperman

  
	
   

  	
   

  	
   

  	
  Chapter 7 Trustee in the Bankruptcy

  
	
   

  	
   

  	
   

  	
  Case of In re SureBeam Corp.,

  
	
   

  	
   

  	
   

  	
  Case No. 04-00421

  
	
   

  	
   

  	
   

  	
   

  
	
  DATED: March 4, 2004

  	
   

  	
  By: 

  	
  /s/ Richard M Kipperman

  	
   

  
	
   

  	
   

  	
   

  	
  Richard M Kipperman

  
	
   

  	
   

  	
   

  	
  Chapter 7 Trustee in the Bankruptcy

  
	
   

  	
   

  	
   

  	
  Case of In re SB OperatingCo LLC,

  
	
   

  	
   

  	
   

  	
  Case No. 04-00422

  
						

 

12

 

EXHIBIT “A”

 

SCHEDULE
OF COLLATERAL

 

In the Borrower Security Agreement, dated August 2,
2002, SUREBEAM CORPORATION granted, and in the Subsidiary Security Agreement,
dated August 2, 2002, SB OPERATINGCO, LLC granted, to Titan Corporation
security interests in all of the following, whether then or thereafter existing
or acquired (the “Collateral”):

(a)           the
Collateral Account;

(b)           all
Commercial Tort Claims;

(c)           all
Computer Hardware and Software Collateral;

(d)           all
Contracts, together with any Contract Rights arising thereunder;

(e)           all
Deposit Accounts;

(f)            all
Equipment;

(g)           all
Fixtures;

(h)           all
Intellectual Property Collateral;

(i)            all
Inventory;

(j)            all
Investment Property;

(k)           all
Letter of Credit Rights;

(1)           all
Receivables;

(m)          all
Securities Accounts;

(n)           all
Supporting Obligations;

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

(p)           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; and

(q)           all of Surebeam’s other personal
property and rights of every kind and description and interests therein; and

 

 

(r)            all
products and Proceeds of and from any and all of the foregoing (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 Surebeam 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.

DEFINITIONS

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

“Collateral Account” means a deposit account of
Surebeam Corporation maintained with Comerica Bank-California.

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

“Computer Hardware and Software Collateral”
means:

(a)           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;

(b)           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 Surebeam, designed for use on the computers and
electronic data processing hardware described in clause (a) above;

(c)           all
firmware associated therewith;

(d)           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

(e)           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
Surebeam and one or more additional parties.

“Contract
Rights” means all rights of Surebeam (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
Surebeam, whether statutory or common law, registered or unregistered, now or
hereafter in force throughout the world including all of Surebeam’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 the Security Agreement, and all applications for
registration thereof, whether pending or in preparation, all copyright
licenses, including each copyright license referred to in the Security
Agreement, 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.

“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 Security Agreement.

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

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

 

16

 

“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 Surebeam, wherever located, including

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

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

                (iii)          all goods which are returned to or
repossessed by Surebeam, 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
Surebeam 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:

(a)           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;

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

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

(d)           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 the Security
Agreement, and for breach or enforcement of any patent license, including any
patent license referred to in the Security Agreement, 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.

 

17

 

“Proceeds” has the meaning provided in the U.C.C.,
and shall include, in any event, with respect to Surebeam, 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
Surebeam 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 Surebeam
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 Surebeam 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
Surebeam 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 Surebeam to secure the foregoing, (b) all
of Surebeam’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.

“Securities Account” has the meaning provided
in the U.C.C., including without limitation those Securities Accounts listed in
the Security Agreement.

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

 

18

 

“Trademark Collateral”
means:

(a)           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 the
Security Agreement;

(b)           all
Trademark licenses, including each Trademark license referred to in the
Security Agreement attached hereto;

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

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

(e)           all
Proceeds of, and rights associated with, the foregoing, including any claim by
Surebeam 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 the Security Agreement 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 Surebeam (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 the
Security Agreement, 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.

 

19

 

EXHIBIT
“B”

 

SCHEDULE
OF REIMBURSABLE COSTS RELATED TO PRESERVATION OF COLLATERAL

 

	
  Amount

  	
   

  	
  Description

  
	
  $80,638.53

  	
   

  	
  Payment to Imperial AI Credit Corporation which is the company that
  financed payment of SureBeam’s insurance policies through August of 2004 for
  the January 5, 2004, installment.

  
	
  $42,476.50

  	
   

  	
  Payment to SureBeam Brasil Ltda. for security and protection of the
  Brazil facility which requires 24 hour surveillance and armed guards.

  
	
  $1,995.80

  	
   

  	
  Payment for records preservation.

  

 

20

 

EXHIBIT
“C”

 

SCHEDULE
OF DERIVATIVE ACTIONS AND CLASS ACTION LITIGATIONS

SUREBEAM
CORPORATION

 

COMPLAINTS

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
   

  

 

	
  Date Filed

  	
   

  	
  Case No.

  	
   

  	
  Plaintiff(s)

  	
   

  	
  Defendants

  
	
  UNITED STATES DISTRICT COURT CASES — CALIFORNIA

  
	
  8/27/03

  	
   

  	
  03-CV-1721JM

  	
   

  	
  Weiss

  	
   

  	
  SureBeam Corporation, Lawrence A. Oberkfell and
  David A. Rane

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8/28/03

  	
   

  	
  03-CV-1734H

  	
   

  	
  Curran

  	
   

  	
  SureBeam Corporation, Lawrence A. Oberkfell, John C.
  Arme, Kevin K. Claudio and David A. Rane

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8/29/03

  	
   

  	
  03-CV-1747J

  	
   

  	
  Joo

  	
   

  	
  SureBeam Corporation, Lawrence A. Oberkfell and
  David A. Rane

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9/3/03

  	
   

  	
  03-CV-1763J

  	
   

  	
  Aronson

  	
   

  	
  SureBeam Corporation, Lawrence A. Oberkfell and
  David A. Rane

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9/3/03

  	
   

  	
  03-CV-1768j

  	
   

  	
  Busbice

  	
   

  	
  SureBeam Corporation, Lawrence A. Oberkfell and
  David A. Rane

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9/4/03

  	
   

  	
  03-CV-1773JM

  	
   

  	
  Vallario

  	
   

  	
  SureBeam Corporation, Lawrence A. Oberkfell and
  David A. Rane

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9/4/03

  	
   

  	
  03-CV-1774J

  	
   

  	
  Berger .

  	
   

  	
  SureBeam Corporation, Lawrence A. Oberkfell and
  David A. Bane [sic]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9/5/03

  	
   

  	
  03-1779JM

  	
   

  	
  Chase

  	
   

  	
  SureBeam Corporation, Lawrence A. Oberkfell and
  David A. Rane

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9/8/03

  	
   

  	
  03-CV-1791H

  	
   

  	
  Janette

  	
   

  	
  SureBeam Corporation, Lawrence A. Oberkfell and
  David A. Rane

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9/12/03

  	
   

  	
  03-CV-1832K

  	
   

  	
  Strachan

  	
   

  	
  SureBeam Corporation, Lawrence A. Oberkfell and
  David A. Rane

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9/15/03

  	
   

  	
  03-CV-1863L

  	
   

  	
  Lemon

  	
   

  	
  SureBeam Corporation, Lawrence A. Oberkfell and
  David A. Rane

  

 

21

 

SUREBEAM
CORPORATION

 

COMPLAINTS

 

 

	
  Date Filed

  	
   

  	
  Case No.

  	
   

  	
  Plaintiff(s)

  	
   

  	
  Defendants

  
	
  9/17/03

  	
   

  	
  03-CV-1877 JAH

  	
   

  	
  Yerre

  	
   

  	
  SureBeam Corporation, Lawrence A. Oberkfell and
  David A. Rane

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9/17/03

  	
   

  	
  03-CV-1876 K

  	
   

  	
  Sage

  	
   

  	
  SureBeam Corporation, Lawrence A. Oberkfell and
  David A. Rane

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10/3/

  	
   

  	
  03 03-CV-1967 IEG

  	
   

  	
  Taylor

  	
   

  	
  SureBeam Corporation, Lawrence A. Oberkfell and
  David A. Rane

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10/22/03

  	
   

  	
  03-CV-2099 JH

  	
   

  	
  Scarsdale Fabrics, Inc

  	
   

  	
  SureBeam Corporation, Lawrence A. Oberkfell and
  David A. Rane

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10/23/03

  	
   

  	
  03-CV-2105 JFS

  	
   

  	
  W Morrow

  	
   

  	
  SureBeam Corporation; The Titan Corporation; Merrill
  Lynch, Pierce, Fenner & Smith, Inc.; Credit Suisse First Boston
  Corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10/23/03

  	
   

  	
  03-CV-2106H(NLS)

  	
   

  	
  Hom

  	
   

  	
  SureBeam Corporation, Lawrence A. Oberkfell and
  David A. Rane

  

 

22

 

SUREBEAM
CORPORATION

 

COMPLAINTS

 

	
  Date Filed

  	
   

  	
  Case No.

  	
   

  	
  Plaintiff(s)

  	
   

  	
  Defendants

  
	
  11/12/03

  	
   

  	
  03-CV-02223JH(POR)

  	
   

  	
  Harris (Derivative Case)

  	
   

  	
  Robert O. Aders, John C. Arme, William C. Hale,
  Michael J. Licata, Lawrence A. Oberkfell and David A. Rane

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11/20/03

  	
   

  	
  03-CV-02294BTM(POR)

  	
   

  	
  Ruckstuhl 
  (Derivative Case)

  	
   

  	
  Lawrence A. Oberkfell, David A. Rane, John C. Rane,
  Michael J. Licata, William C. Hale, Robert O. Aders, Susan Golding, Gene W.
  Ray, Donald Segal, Dennis G. Olson, Gary Loda, Jr. Thomas Allen,
  Kevin K. Claudio and DOES 1-25, inclusive

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12/24/03

  	
   

  	
  03-CV-2572J

  	
   

  	
  Reed  (Derivative
  Case

  	
   

  	
  Lawrence A. Oberkfell, David A. Rane, John C. Rane,
  Michael J. Licata, William C. Hale, Robert O. Aders, Susan Golding, Gene W.
  Ray, Donald Segal, Dennis G. Olson, Gary Loda, Jr. Thomas Allen, Kevin K.
  Claudio and DOES 1-25, inclusive

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SAN
  DIEGO SUPERIOR COURT CASES

  
	
   

  
	
  9/04/03

  	
   

  	
  GIC 817150

  	
   

  	
  Haubein 
  (Derivative Case)

  	
   

  	
  Lawrence A. Oberkfell, David A. Rane, John C. Arme,
  Michael J. Licata, William C. Hale, James Roth, Robert O. Aders, Susan
  Golding, Gene W. Ray, Donald Segal, Dennis G. Olson, Gary Loda, J. Thomas
  Allen, Kevin K. Claudio

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9/11/03

  	
   

  	
  GIC 817618

  	
   

  	
  Zach 
  (Derivative Case)

  	
   

  	
  Lawrence A. Oberkfell, David A. Rane, John C. Arme,
  Michael J. Licata, William C. Hale, James Roth, Robert O. Aders, Susan
  Golding, Gene W. Ray, Donald Segal, Dennis G. Olson, Gary Loda, J. Thomas
  Allen, Kevin K. Claudio

  

 

23

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