***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b)(4),
200.83 and 240.24b-2
AMENDMENT TO STRATEGIC ALLIANCE AGREEMENT
THIS AMENDMENT TO STRATEGIC ALLIANCE AGREEMENT is made effective as of
March 28, 2001, between X H Partners, a California limited partnership having an
address at 0000 Xxxx Xxxxxxxxx Xxxx, 0xx xxxxx, Xxxxxxxx, XX 00000; Square-X
Xxxxxx, Inc., a Delaware corporation ("Square-H") having an address at 0000 Xxxx
Xxxxxx, Xxx Xxxxxxx, XX 00000-0000; and SureBeam Corporation, a Delaware
corporation ("SureBeam") having a principal place of business at 0000 Xxxxxxx
Xxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000.
RECITALS
WHEREAS, effective as of November 29, 2000, Square-H and
SureBeam entered into a Strategic Alliance Agreement pursuant to which the
Developer and SureBeam would develop, and SureBeam would operate, a food
irradiation facility in Vernon, California;
WHEREAS, Square-H has now identified X H Partners as the
Developer under the Agreement; and
WHEREAS, the Developer and SureBeam have now agreed on the
remaining terms and conditions pursuant to which the Facility will be
constructed and leased;
NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, Developer, Square-H and SureBeam agree as follows:
AMENDMENT
ARTICLE I
As additional definitions:
1.1 "ARCHITECT" shall mean Delphy/Xxxxxx Engineering,
Inc.
1.2 "ORIGINAL AGREEMENT" shall mean the original
Strategic Alliance Agreement without regard to the within Amendment.
1.3 "SUBSTANTIAL COMPLETION" shall mean the completion of
the Shell generally in accordance with the plans and specifications therefor, as
revised from time to time hereunder, except for punch list items and other work
which (i) will not materially interfere with the completion of the SureBeam
Improvements; or (ii) following prudent construction practices, should not be
completed until the completion of the SureBeam Improvements. Substantial
Completion, as defined herein, shall be established by a certificate to that
effect issued by the Architect.
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1.4 "TENANT DELAY" shall mean any delay in reaching the
Commencement Date attributable to SureBeam, including any delay attributable to
a request by SureBeam for a change in the plans and specifications for the
Shell; the interference by SureBeam or persons acting by, through or under
SureBeam with the construction of the Shell, whether in connection with
SureBeam's construction of the SureBeam Improvements or otherwise; or the
failure of SureBeam to obtain, or a delay in SureBeam obtaining, any
entitlements for which it is responsible hereunder and which are required for
the construction of the Shell although not otherwise applicable to the Shell.
Capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Original Agreement.
ARTICLE II
THE DEVELOPER
2.1 DEVELOPER AS PARTY. Developer has been formed to
serve as the Developer and Square-H has assigned to Developer all of its right,
title and interest in and to the Original Agreement, except for Article III
thereof and the Services Agreement. Developer hereby agrees, for the benefit of
SureBeam, to be bound by all of the terms and conditions of the Original
Agreement, except for Article III thereof and the Services Agreement, as though
the Developer was an original party thereto. SureBeam hereby consents to the
substitution of the Developer for Square-H with respect to Article II of the
Original Agreement and Square-H and SureBeam agree that all of the other
provisions of the Original Agreement remain applicable to, and binding upon,
Square-H.
2.2 REPRESENTATIONS AND WARRANTIES BY DEVELOPER.
Developer represents and warrants that (i) through its general partner, it is
familiar with the requirements of developing the Shell and has the resources and
expertise necessary to effect the development of the Shell and perform the other
obligations of Developer under the Agreement; and (ii) the Shell will be
completed in substantial conformity with the plans and specifications therefor
in a good and workmanlike fashion in accordance with sound construction
practices and shall be free of defects for a period of [...***...] following
Substantial Completion.
ARTICLE III
THE FACILITY
3.1 PLANS AND SPECIFICATIONS. In lieu of the applicable
provisions of paragraph 2.1.1 of the Original Agreement:
3.1.1 DEVELOPER'S PLANS. Developer shall construct
the Shell generally in accordance with the preliminary plans and
specifications therefor identified on Exhibit A-1 hereto with such
changes thereto as may be (i) made by Developer and consented to
2
* Confidential Treatment Requested
by SureBeam, which such consent shall not be unreasonably withheld or
delayed as long as such changes do not either (y) materially increase
the cost to SureBeam of constructing the SureBeam Improvements or (z)
materially delay the Commencement Date; or (ii) requested by SureBeam
and consented to by Developer, which such consent shall not be
unreasonably withheld or delayed; provided, however, that with respect
to any such change requested by SureBeam, SureBeam shall pay the
additional costs, if any, attributable thereto and any delay in
achieving the Commencement Date attributable to any such change shall
be a Tenant Delay hereunder.
3.1.2 SUREBEAM'S PLANS. SureBeam shall construct
the SureBeam Improvements generally in accordance with the preliminary
plans and specifications therefor identified on Exhibit A-2 hereto with
such changes thereto as may be made by SureBeam; provided, however,
that SureBeam shall pay the additional costs, if any, attributable
thereto and any delay in achieving the Commencement Date attributable
to any such change shall be a Tenant Delay hereunder.
3.2 CONSTRUCTION. The Facility shall be constructed on
the Parcel and Developer will not include the Facility in the Complex.
Accordingly, paragraph 2.1.2 of the Original Agreement is hereby deleted in its
entirety and replaced with the following:
3.2.1 CONCURRENT WORK. The parties anticipate that
portions of the SureBeam Improvements will be constructed prior to the
construction of portions of the Shell. Developer shall endeavor to
coordinate the construction in a manner that will enable SureBeam to
construct portions of the SureBeam Improvements concurrently with
Developer's construction of the Shell. SureBeam will coordinate its
construction of the SureBeam Improvements with Developer and shall not
materially interfere with Developer's construction of the Shell. Any
delay in achieving the Commencement Date attributable to any such
interference shall be a Tenant Delay hereunder. Developer shall be the
sole arbitrator of whether or not SureBeam's construction is so
interfering with Developer's construction.
3.2.2 TIMETABLE. Developer shall endeavor to
effect Substantial Completion of the Shell on or before December 31,
2001. Towards that end, Developer shall endeavor to adhere to the
following schedule;
(i) Demolition and clearing of site -
July 15, 2001;
(ii) Design drawings complete - June 15,
2001;
(iii) Commence construction of the Shell
- July 15, 2001;
(iv) Allow occupancy of the Parcel and
the Shell by SureBeam for the purpose of commencing
construction of the SureBeam Improvements - October
1, 2001; and
(v) Substantial completion of Shell -
December 31, 2001.
3
3.2.3 PENALTY FOR DELAY. To the extent that
Developer fails to achieve Substantial Completion by December 31, 2001
PLUS such additional time, if any, as Substantial Completion has been
delayed by unusually inclement weather, fire, earthquakes, labor
disturbances, moratoria or other matters beyond Developer's reasonable
control, SureBeam shall be entitled to one (1) day of free rent for
each day of delay; provided, however, that the Commencement Date shall
not be affected for purposes of paying rent, and SureBeam shall not be
entitled to free rent, to the extent that any delay is attributable to
Tenant Delay.
3.2.4 COOPERATION. At SureBeam's request,
Developer will cause to be constructed, in addition to the Shell, the
SureBeam Improvements or such portion of thereof as may be designated
by SureBeam; subject, however, to reaching a mutually satisfactory
agreement with SureBeam regarding the costs of such work, the timetable
therefor and the effect thereon, if any, of the Completion Date.
ARTICLE IV
THE LEASE
4.1 TERM. Paragraph 2.2.2 of the Original Agreement shall
be amended in its entirety to read as follows:
4.1.1. COMMENCEMENT DATE. The Commencement Date
shall be the first to occur of (i) the commencement of business from
the Facility and (ii) the Substantial Completion of the Shell;
disregarding for such purposes, however, Tenant Delays.
4.1.2 INITIAL TERM. The "Initial Term" of the
Lease shall commence on the Commencement Date and shall expire on the
twelfth (12th) anniversary of the last day of the calendar month in
which the Commencement Date has occurred (or the twelfth (12th)
anniversary of the day preceding the Commencement Date if the
Commencement Date is the first day of the calendar month).
4.1.3 OPTION TERM. SureBeam shall have one (1)
option to extend the Lease for an additional eight (8) years (an
"Option Term"), commencing with the expiration of the Initial Term. The
option must be exercised, if at all, by written notice to the Developer
given at least one (1) year prior to the expiration of the Initial
Term. The base rent for the Option Term shall be the base rent in
effect for the last year of the Initial Term, increased as of the
commencement of the Option Term and annually thereafter in accordance
with the provisions of paragraph 4.2(b) hereof.
4.2 RENT. Paragraph 2.2.3 of the Original Agreement shall
be amended in its entirety to read as follows:
4.2.1 BASE RENT. The base rent payable as of the
Commencement Date shall be Four Hundred Ninety-Two Thousand Dollars
($492,000) per year, payable in
4
equal monthly installments in advance on or before the first day of
each calendar month. Base rent shall be net of insurance, taxes and
operating expenses with respect to the Facility and the Parcel.
4.2.2 CPI INCREASES. The base rent shall be
adjusted on each anniversary of the first day of the month following
the end of the month in which the Commencement Date occurred (or the
Commencement Date if the Commencement Date is the first day of a
calendar month) in an amount equal to the greater of (i) one hundred
two percent (102%) of the base rent in effect for the preceding lease
year; and (ii) the amount of such base rent increased in proportion to
any increase in the "Core" Consumer Price Index (defined as the
Consumer Price Index, Urban Wage Earners and Clerical Workers (Los
Angeles - Anaheim - Riverside Area, All items, Base Period 1982-1984 =
100); excluding food and energy prices) or similar index if such Index
is no longer available; provided, however, that in no event shall the
base rent be increased to an amount which would exceed one hundred five
percent (105%) of the base rent in effect during the preceding lease
year.
4.3 LEASE TERMINATION. Paragraph 4.3 of the Original
Agreement is amended in its entirety to read as follows:
"SureBeam is and will remain the owner of the System. Upon the
expiration or sooner termination of this Agreement, SureBeam
shall remove the SureBeam Improvements, including the Shield,
restore the Facility to a general purpose refrigerated
Building and repair any damage to the Facility caused by such
removal or restoration; provided, however, that SureBeam shall
not be obligated to remove the SureBeam Improvements or
restore the Facility to a general purpose refrigerated
building if SureBeam exercises its option to extend the term
of the Lease for the Option Term and thereafter fulfills its
obligations thereunder. Nothing contained herein shall
prohibit SureBeam from removing from the Facility its trade
fixtures and equipment provided that SureBeam shall repair any
damage to the Facility caused by such removal."
ARTICLE V
MISCELLANEOUS
5.1 NOTICES. All notices and other communications given
or made to the Developer pursuant to the Agreement shall be in writing and shall
be deemed to have been duly given or made as of the date delivered, mailed or
transmitted, and shall be effective upon receipt, if delivered personally,
mailed by registered or certified mail (postage prepaid, return receipt
requested) at the address set forth above (or at such other address as shall be
specified by like changes of address).
5.2 ENTIRE AGREEMENT. Except as specifically amended
hereby, the Original Agreement shall remain in full force and effect.
5
5.3 COUNTERPARTS. This Amendment may be executed in one
or more counterparts, each of which shall be deemed an original and all of
which, taken together, shall constitute one and the same instrument.
5.4 GUARANTIES. Titan Corporation hereby acknowledges
that its guaranty, and its obligation to execute and deliver any further
guaranty, as set forth in paragraph 10.11 of the Original Agreement, remain in
full force and effect with respect to the Agreement, as amended hereby.
6
*** CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(b)(4),
200.83 and 240.24b-2
IN WITNESS WHEREOF, The parties hereto have caused this
Amendment to Strategic Alliance Agreement to be executed as of the date
first-above written.
SUREBEAM CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------
Title: President & CEO
-------------------------------------
THE TITAN CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------
Title: Sr. Vice President
-------------------------------------
SQUARE-X XXXXXX, INC.
By: /s/ Xxxxx Xxxxxxx
---------------------------------------
Title: President
-------------------------------------
XH PARTNERS, a
California limited partnership
By: Xebec Development Company, a
California corporation, its sole
general partner
By: /s/ Xxxx Xxxx
-------------------------------
Xxxx Xxxx
President
Signature Page to Amendment to Strategic Alliance Agreement
S-1.
SUREBEAM EXHIBIT "A"-1
VERNON, CA.
OUTLINE SPECIFICATION FOR SHELL BUILDING
PREPARED BY: XXXXXXXX CONSTRUCTION SERVICES, INC.
Project Owner & Landlord: XH Partners
Project Tenant: Surebeam Corporation (Titan Corp)
Address: Xxxxxx Avenue
Vernon, CA
Estimate Date: March 26, 2001
BUILDING & SITE CHARACTERISTICS
Parcel Area 92,067 sf
Building Footprint 32,184 sf
Second Floor Mezzanine 1,000 sf
----------
Total Floor Area 33,184 sf
Parking Spaces Per City of Xxxxxx requirements
Office Area TBD (To Be Determined)
Truck Doors
-Dock High (8.5'X10') 4 Doors
-Ground Level (12'X14') 1 Door
Minimum Interior Clearance 28.5 Feet
Dock Elevation 54 Inches
Bay Spacing TBD
Power Landlord to provide amply power
equipment to run the basic
mechanical for the refrigeration
[...***...] degree cooler.
Sprinkler Calculation .45/3000 GPM dry system
-ASSUMES CITY PROVIDED FLOW AND
STATIC PRESSURE IS AMPLE, NO FIRE
PUMP INCLUDED
Type of Construction Pre Engineered Metal Building
Framing with Insulated Panels, Type
III (Type V at Property Line or as
required), Non Rated
COMMENTS: This specification is intended to define the shell building and site
work to be provided by Landlord for the basic lease to SureBeam per the
Amendment to
Strategic Alliance Agreement. It is subject to change based upon
final design and city requirements.
Page #1
* Confidential Treatment Requested
SITE WORK
DEMOLITION 243 lf of removal of existing curb
& gutter
Relocate one (1) city of
Xxxxxx power pole
-POWER POLE RELOCATION ALLOWANCE OF $10,000.00
OFFSITE IMPROVEMENTS 156 lf of new city curb & gutter
1,248 sf of new city sidewalk
400 sf of new concrete drive approach
ROUGH GRADE Over-Excavate (2) feet
underneath and within 5 feet of
building pad (approximately 2,834
CY) Import, place and compact 4,768
CY of material 90% Compaction.
SUBJECT TO CHANGE BASED ON FINAL
SOILS REPORT.
IMPORT ASSUMED TO BE $5.00/CY IN PLACE.
FINE GRADE 32,184 sf of building pad fine
grading
59,883 sf of site fine grading
STORM DRAIN 300 lf of 18" HDPE storm drain line
282 lf of 24" HDPE storm drain line
8 ea. 24"x24" catch basins
1 ea. Traffic control
FIRELINE WATER 518 lf 8" line
2 ea. Fire hydrant onsite
1 ea. Detector check 8"
1 ea. vault
1 ea. P.I.V.
1 ls fire line service to property line
-FIRE LINE SERVICE TO PROPERTY LINE
ALLOWANCE OF $10,000.00
DOMESTIC WATER 100 lf of 2" domestic water
main service
2" DOMESTIC WATER SERVICE TO PROPERTY
LINE NOT INCLUDED
SEWER 100 lf of 6" line (on site)
35 lf of 6" line (off site)
1 ea. building connection
1 ea. clean out
1 ea. offsite sewer lateral tap
1 ea. traffic control
GAS Not included
ELECTRICAL/TELEPHONE 40 lf of telephone and primary
power conduit
1 ea. Transformer vault (site)
ASPHALT PAVING 21,142 s of 3"on 8" asphalt for
main drives and truck areas
243 lf of slot cut at street
Page #2.
SITE WORK (CONTINUED)
SITE CONCRETE 545 lf of 3' wide V-swale
60 lf of Planter Curb
2,641 sf of concrete at driveways
1,970 sf of Entry Walks and Stairs
with Special Finish
2 ea light pole base
STRIPING & BUMPERS 19 ea Single Stripe Spaces
2 ea Handicap Stalls
2 ea Handicap entrance signs
LANDSCAPE & IRRIGATION 13,510 sf landscape and irrigation
-$2.00PER SQUARE FOOT ALLOWANCE
FENCES & GUARDRAILS Not included
Page #0
XXXXX XXXXXXXX
XXXXXXXX XXXXXXXX [...***...]
12 each pad footings (assumed
5'x5'x1.5')
[...***...] Concrete Slab
-1.5" AGGREGATE CONCRETE MIX
-3,500 PSI CONCRETE
1 ea. Trash enclosure
4,192 sf of 6" Truck Apron with
no reinforcement
2,851 sf of 2" of clean sand on 6
mil. of visqueen over compacted
fill at office area
4,023 lf of off-cut joints
REINFORCING STEEL [...***...]
143 cy of footing reinforcement
STRUCTURAL AND MISC. STEEL Pre Engineered Metal Building
framing
4 ea. door jamb protector channels
4 ea. Dock sill angle
28 If roof ladder with cage
2 ea. Trash gates (galv)
40 ea. Guard posts (5"-6" diam)
Structural steel supports for
Chillers as required
ROUGH CARPENTRY 1 ea. telephone backboards
PANELIZED ROOF N/A, roof to be insulated panel
INSULATION [...***...] thick insulated wall panels
[...***...] thick insulated standing roof panel
[...***...] insulated panels
separating shield area from
staging/cooler area to be provided
by Tenant
ROOFING N/A, roof to be insulated panel
SHEET METAL/ One (1) Roof Hatch
ROOF ACCESSORIES 400 lf of gutters
8 ea. downspouts
FLOOR SEALER Mechanically Scrub and Rinse
Concrete Floors Apply one (1) Coat
of floor sealer (approximately
30,759 sf)
DOORS, FRAMES & HW 4 ea Exterior Metal Doors schlage
"L" series with closer (Norton 1602) inst
OVER-HEAD DOORS 4 ea 8.5'X10' Insulated Dock High
Vertical Lift Doors
1 ea. 10x10 vertical lift cooler door
2 ea. 3'x7' cooler exit doors by Tenant
1 ea. 8'x10' high speed roll up door
by Tenant
3 ea. 3'x7' exterior cooler doors
Page #4
* Confidential Treatment Requested
SHELL BUILDING (CONTINUED)
GLASS & GLAZING 800 sf of Medium Performance Ford
Blue Glass (1/4") Center Glazed
2 ea. Storefront entry doors (four
pairs)
PAINTING 4 ea. HM exterior doors
4 ea. Overhead sectional doors
2 ea. Trash gates 1 ea. Ladder & hatch
8 ea. Downspouts
SIGNAGE One (1) building address sign
MISC. EQUIPMENT 4 ea. pairs dock bumpers
4 ea. 25,000# capacity mechanical dock
levelers by Tenant
PLUMBING 2" copper water line from PL to
building
6" cast iron sewer line from PL to
building Floor Drains by Tenant
FIRE SPRINKLERS 32,184 sf of .45/3000 dry fire
sprinkler system
1 ea. Fire riser assemblies
HVAC/REFRIGERATION [...***...]
1 ea condensing unit rack
1 ea compressor
10 ea. coils
[...***...] SYSTEM
-FREON SYSTEM
ELECTRICAL 500 lf of 2-4" conduit
2000 amp pull section
800-amp service
2ea. 25 kva transformer
2ea. 200 amp panel boxes with breakers
29,840 sf of 400 watt Metal Halide Fixtures
@ 24'o.c.
8 ea. 400W exterior Wall Packs
2 ea. Light standards
Page #5
* Confidential Treatment Requested
TENANT IMPROVEMENTS
Tenant shall provide and contract for at Tenant's sole expense all Tenant
Improvements including but not limited to office, mezzanine, dock leveler
package, demising wall and all improvements related to the irradiation xxxxxxx
and any other improvements to convert the proposed general purpose refrigerated
building into a facility acceptable for Tenant's intended use. Landlord will
generate construction documents for the general-purpose building described
herein, and Tenant will contract and oversee the production of all other plans
related to the Tenant Improvements.
Page #6.
SUREBEAM CORPORATION EXHIBIT "A-2"
VERNON, CA SERVICE CENTER
OUTLINE SPECIFICATION FOR SUREBEAM TENANT IMPROVEMENTS
Prepared by:
SureBeam Corporation
Date: April 11, 2001
COMMENT: This document is not all-inclusive and is provided to list out and
identify major tenant improvements that SureBeam is responsible for under the
terms of the Amendment to
Strategic Alliance Agreement. It is subject to change
based upon final design and city, county and/or state requirements.
SUREBEAM IMPROVEMENTS
SHIELD STRUCTURES
E-beam: [...***...], concrete structure
X-ray: [...***...], concrete structure
Mezzanine: [...***...]
FACILITY SUPPORT AREAS
Modulator Rooms:
- E-beam [...***...]
- X-ray [...***...]
Control Rooms:
- E-beam [...***...]
- X-ray [...***...]
Dosimetry Lab [...***...]
OPERATIONS SUPPORT AREAS [...***...] sq/ft total (tbd)
Offices Approx. Min. Area
- Facility Manager 12' x 10'
- QA 10' x 10'
- USDA 10' x 10'
- Production Manager 8' x 15'
- Customer Service/Receiving 8' X 15'
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* Confidential Treatment Requested
Reception Area Open Area
- Receptionist 8' x 8'
- Customer Waiting 10' x 14'
- Office Equipment 8' x 8'
Conference Room 10' x 15'
Break Room 9' x 14'
Locker Area 8' x 14'
Restrooms:
- Men's 8' x 15'
- Women's 8' x 15'
Storage Mechanical Room 7' x 10'
Maintenance Office 8' x 10'
HVAC
Modulator Rooms: SureBeam to provide all HVAC
equipment and systems necessary to
support operation of the linear
accelerators and support hardware.
Control/Dosimetry Room: SureBeam to provide all HVAC
equipment and systems for
temperature and/or humidity,
(dosimetry room) control.
Office Areas: SureBeam to provide HVAC
equipment and system.
ELECTRICAL
SureBeam will provide all electrical hardware, equipment and systems
necessary for the office areas, modulator roams, control rooms,
dosimetry labs, and to support operation of the linear accelerators and
ancillary equipment.
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Outline Specification for SureBeam Tenant Improvements
Mechanical/Other
----------------
Plumbing: Floor drains (# tbd)
Water Heaters
Fire Protection in office areas
Insulation: [...***...] insulated wall panels
separating refrigerated treatment
area from non-refrigerated shield
area.
Miscellaneous
-------------
Dock Hardware: Dock Levelers (4)
Door seals
Truck locks (need tbd)
Other: Treatment area fencing
Safety curbs
* Confidential Treatment Requested
