Exhibit 10.1

 

FIFTH AND JACKSON

SUBLEASE

 

THIS SUBLEASE, is made as of this 19th day of August, 2003, by and between GRAY
GARY WARE & FREIDENRICH LLP, a California limited liability partnership,
“Sublessor”) and Atlas DMT LLC, a New York limited liability company
(“Sublessee”), with reference to the following facts:

 

A. Union Street Improvement Company, L.L.C., as lessor (“Lessor”), and
Sublessor, as lessee, are parties to that certain The Gray Gary Building Office
Lease dated as of October 24, 2000, as amended by that certain The Gray Gary
Building -First Amendment to Office Lease dated as of July 25, 2001 (the “First
Amendment”), and that certain Second Amendment to Office Lease dated as of May
8, 2002 (the “Second Amendment”) (as so amended, the “Master Lease”). The Master
Lease covers the entire 4th and 5th floors of the building located at 351 Fifth
Avenue South, Seattle, Washington 98104 (“Building”).

 

B. Sublessor desires to sublease the Premises to Sublessee, and Sublessee
desires to sublease the Premises from Sublessor, upon the terms and conditions
set forth herein.

 

C. Sublessor desires to obtain Lessor’s consent to this transaction pursuant to
the terms and conditions set forth in the Lessor’s Consent to Sublease attached
hereto.

 

1. DESCRIPTION. Sublessor, in consideration of the agreements contained in this
Sublease, does hereby sublease to Sublessee, upon the terms and conditions
hereinafter set forth, that certain space consisting of the agreed upon square
footage* of 32,376 rentable square feet (hereinafter referred to as “Premises”)
situated on the 4th and 5th floors of the Building. The legal description of the
Building is:

 

A portion of Lots 4, 5, 6, 7 and 8, and the vacated alley, Block 28, D.S.
Maynard’s Plat of the Town (now City) of Seattle, King County, Washington,
according to the plat thereof, recorded in Volume 1 of Pats, page 23, records of
King County, Washington.

 

*Rentable square footage stated above is an estimate of the rentable square
footage and is based on the Building Owners and Managers Association Standard
Method for Measuring Area in Office Buildings (ANSI/BOMA Z65.1-1996). Sublessor
acknowledges that it is determining with Lessor whether any adjustment is
required to be made to such estimated square footage, and Sublessor shall use
commercially reasonable efforts to make such determination prior to any payment
of the tenant improvement allowance referenced in Paragraph 33 below. If any
adjustment is made to the amount of rentable square feet contained in the
Premises under the Master Lease, the same adjustment shall be made to the amount
of rentable square feet subleased to Sublessee under this Sublease.

 

2. TERM. The term of this Sublease shall be for a period of 63 months and 25
days, commencing on the 1st day of January, 2004 (“Commencent Date”), and ending
April 25, 2009.

 

3. RENT. Sublessee covenants and agrees to pay directly to Lessor rent each
month in advance on the first day of each calendar month. Rent shall be computed
as follows:

 

Month

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   Annual Rent /RSF

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   Monthly Rent

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1-12

   $ 18.00/RSF    $ 43,479  

13-24

   $ 19.00/RSF    $ 45,895  

25-36

   $ 20.00/RSF    $ 48,310  

37-48

   $ 21.00/RSF    $ 56,658 *

49-62

   $ 22.00/RSF    $ 59.356  

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* Commencing in month 37. Sublessee shall pay rent for the Expansion Space
pursuant to Paragraph 29 below.

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Rent for any fractional calendar month, at the beginning or end of the Sublease
term, shall be the pro rated portion of the rent computed on a monthly basis.

 

4. CONSIDERATION. As consideration for the execution of this Sublease, Sublessee
has this date paid to Sublessor the sum of $56,184.30, receipt of which is
hereby acknowledged. In the event Sublessee fully complies with all the terms
and conditions of this Sublease, but not otherwise, an amount equal to such sum
shall be credited toward the rent due for the last month of the term of this
Sublease.

 

5. USES. Sublessee agrees that Sublessee will use and occupy said Premises for
general offices and related purposes and for no other purposes.

 

6. RULES AND REGULATIONS. Sublessee and its agents, employees, servants or those
claiming under Sublessee will at all times observe, perform and abide by all of
the Rules and Regulations that are contained in this Sublease, or which may be
hereafter reasonably promulgated by Lessor, all of which it is covenanted and
agreed by the parties hereto shall be and are hereby made a part of this
Sublease.

 

7. CARE AND SURRENDER OF PREMISES. Sublessee shall take good care of the
Premises and shall promptly make all necessary repairs except those required
herein to be made by Lessor. At the expiration or sooner termination of this
Sublease, Sublessee, without notice, will immediately and peacefully quit and
surrender the Premises in good order, condition and repair (damage by reasonable
wear, the elements, or fire excepted). Sublessee shall be responsible for
removal of all personal property from the Premises, (excepting fixtures being
that which is attached to the Premises, and property of Lessor) including, but
not limited to, the removal of Sublessee’s communication cabling, telephone
equipment and signage. Sublessee shall be responsible for repairing any damage
to the Premises caused by such removal. If Sublessee fails to remove and restore
the Premises on or prior to Sublease expiration, then Lessor shall have the
right to remove said property and restore the Premises and Sublessee shall be
responsible for all costs associated therewith. Sublessee shall also be
responsible for those costs incurred by Lessor for removing debris Sublessee may
discard in the process of preparing to vacate the Premises and for a final
cleaning of the Premises, including, but not limited to, the cleaning, or
replacement of carpets if damage is not caused by reasonable wear, and removal
and disposal of Sublessee’s personal property remaining in the Premises.

 

8. ALTERATIONS. Sublessee shall not make any material alterations or
improvements in, or additions to, the Premises which alter the Premises by more
than five thousand dollars ($5,000) in value without first obtaining the written
consent of Sublessor and Lessor, whose consent shall not be unreasonably
withheld. Sublessee acknowledges and agrees that Sublessor’s consent may be
reasonably withheld whenever Lessor has failed or refused to give its consent.
All alterations, additions and improvements to the Premises shall be at the sole
cost and expense of Sublessee and shall become the property of Lessor and shall
remain in and be surrendered with the Premises as a part thereof at the
termination of this Sublease, without disturbance, molestation or injury.

 

9. RESTRICTIONS. Sublessee will not use or permit to be used in the Premises
anything that will increase the rate of insurance on the Building or any part
thereof, nor anything that may be dangerous to life or limb; nor in any manner
deface or injure the Building or any part thereof; nor overload any floor or
part thereof; nor permit any objectionable noise or odor to escape or to be
emitted from the Premises, or do anything or permit anything to be done upon the
Premises in any way tending to create a nuisance or to disturb any other tenant
or occupant of any part of the Building. Sublessee, at Sublessee’s expense, will
comply with all health, fire and police regulations respecting the Premises. The
Premises shall not be used for lodging or sleeping, and no animals or birds will
be allowed in the Building.

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10. WEIGHT RESTRICTIONS. Safes, furniture or bulky articles may be moved in or
out of the Premises only at such hours and in such manner as wil11east
inconvenience other tenants, which hours and manner shall be at the discretion
of Lessor. No safe or other article of over 2,000 pounds shall be moved into the
Premises without the consent of Lessor, whose consent shall not be unreasonably
withheld, and Lessor shall have the right to locate the position of any article
of weight in the Premises if Lessor so desires.

 

11. SIGN RESTRICTION. No sign, picture, advertisement or notice shall be
displayed, inscribed, painted or affixed to any of the glass or woodwork of the
Building without the prior approval of Lessor, which approval shall not be
unreasonably withheld.

 

12. LOCKS. Sublessee shall have the right to install a reasonable number of
security locks, as it deems appropriate. Sublessee shall assume the cost
associated with the installation of such security locks. No additional locks
shall be placed upon any doors of the Premises. Keys will be furnished to each
door lock. At the termination of this Sublease, Sublessee shall surrender all
keys to the Premises whether paid for or not.

 

13. Lessor, its janitor, engineer or other agents may retain a pass key to the
Premises to enable it to examine the Premises from time to time with reference
to any emergency or to the general maintenance of the Premises.

 

14. TELEPHONE SERVICE. If Sublesses desires telephonic or any other electric
connection, Lessor will direct the electricians as to where and how the wires
are to be introduced, and without such directions, no boring or cutting of wires
in installation thereof will be permitted.

 

15. SERVICES. Lessor shall maintain the Premises and the public and common areas
of the Building, such as lobbies, stairs, corridor and restrooms, in reasonably
good order and condition, except for damage occasioned by the act of Sublessee.

 

Lessor shall furnish the Premises with electricity for lighting and operation of
low power usage office machines, heat, normal office air-conditioning, and
elevator services, during the hours of 7:00 a.m. to 6:00 p.m. Monday through
Friday and 9:00 a.m. to 1 :00 p.m. Saturday. Air-conditioning units and
electricity therefore for special air-conditioning requirements, such as for
computer centers and after hours air conditioning, shall be available on demand
at a cost comparable to other similar buildings in Seattle, and shall be at
Sublessee’s expense. Lessor shall also provide lighting replacement for
Lessor-furnished lighting, toilet room supplies, window washing with reasonable
frequency, and customary janitor service five (5) days per week. Janitorial
specifications are attached as Exhibit “C” to this Sublease.

 

Neither Lessor nor Sublessor shall be liable to Sublessee for any loss or damage
caused by or resulting from any variation, interruption or any failure of said
services due to any cause whatsoever. Temporary interruptions or failures of
such services incident to the making of repairs, alterations, or improvements,
or due to accident or strike or conditions or events not under Lessor’s control
shall not constitute an eviction of Sublessee or relieve Sublessee from any of
Sublessee’s obligations hereunder.

 

In the event of any lack of attention on the part of Lessor and any
dissatisfaction with the service of the Building, or any unreasonable annoyance
of any kind, Sublessee is requested to make complaints directly at Lessor’s
office in the Building and not to Lessor’s employees or agents seen within the
Building. Sublessee is further requested to remember that Lessor is as anxious
as Sublessee that a high grade service be maintained, and that the Premises be
kept in a state to enable Sublessee to transact business with the greatest
possible ease and comfort. The rules and regulations are not made to
unnecessarily restrict Sublessee, but to enable Lessor to operate in the
Building to the best advantage of both parties hereto. To this end, Lessor shall
have the right to waive from time to time such part or parts of these rules

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and regulations as in its judgment may not be necessary for the proper
maintenance or operation of the Building or consistent with good service, and
may from time to time make such further reasonable rules and regulations as in
its judgment may be needed for the safety, care and cleanliness of the Premises
and the Building and for the preservation of order therein.

 

16. SOLICITORS. Lessor will make an effort to keep solicitors out of the
Building, and Sublessee will not oppose Lessor in its attempts to accomplish
this end.

 

17. FLOOR PLAN. The floor plan and specifications for Sublessee’s occupancy
shall be attached hereto and marked Exhibit “A” which shall be approved by both
Lessor and Sublessee, both of whose approval shall not be unreasonably withheld.

 

18. ASSIGNMENT. Sublessee will not assign this Sublease, or any interest
hereunder, and this Sublease, or any interest hereunder, shall not be assigned
by operation of law. Sublessee will not sub-sublet the Premises or any part
thereof and will not permit the use of the Premises by others other than
Sublessee and the agents of Sublessee without first obtaining the written
consent of Sublessor and Lessor, whose consent shall not be unreasonably
withheld, conditioned or delayed. Sublessee acknowledges and agrees that
Sublessor’s consent may be reasonably withheld whenever Lessor has failed or
refused to give its consent. In the event such written consent shall be given,
no other or subsequent assignment or subletting shall be made without the
previous written consent of Sublessor and Lessor, whose consent shall not be
unreasonably withheld. Sublessee shall reimburse Lessor for reasonable review
costs Lessor incurs while reviewing and executing legal documentation for such
sublease and/or assignment. Sublessor and Sublessee shall equally divide between
themselves any profits that may be realized from such sublease and/or
assignment. As used in the foregoing sentence, the term “profits” shall mean any
rent or other consideration payable by the sublessee or assignee to Sublessee in
excess of rent due under this Sublease by Sublessee, minus the reasonable
expenses incurred by Sublessee for (i) any changes, alterations and improvements
made to the Premises in connection with such sublease or assignment, and (ii)
attorneys’ fees, brokerage commissions or any other out-of-pocket costs and
expenses incurred by Sublessee therewith.

 

19. OPERATING SERVICES AND REAL ESTATE TAXES. The annual base rental rate per
rentable square foot of the Premises (as set forth in Paragraph 3) includes
Sublessee’s proportionate share of Operating Services and Real Estate Taxes for
the first twelve months of the Sublease term (“Base Year Costs”). Only a
proportionate share, based on the proportion that the rentable square footage of
the Premises bears to the rentable square footage of the Building, of the actual
increases over these Base Year Costs, if any, will be passed on to Sublessee.

 

DEFINITIONS

 

Base Year

 

For computing the Base Year Costs, the base year shall be the calendar year
stated herein or if a specific calendar year is not stated herein then the base
year shall be the calendar year in which the Sublease term commences. The Base
Year for purposes of this Sublease shall be the calendar year 2004.

 

Comparison Year

 

The Comparison Year(s) shall be any calendar year(s) during the Sublease term
subsequent to the Base Year.

 

Operating Services

 

“Operating Services” include, but are not limited to, the charges incurred by
Lessor for: Building operation salaries, benefits, management fee (currently 5%
of gross income for the Building), insurance, electricity, janitorial, supplies,
telephone, HVAC, repair: and

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maintenance, window washing, water and sewer, security, landscaping, disposal,
elevator, and any other service or supplies reasonably necessary to the use and
operation of the Premises. Operating Services shall also include the
amortization cost of capital investment items and of the installation thereof,
which are primarily for the purpose of safety, saving energy or reducing
operating costs, or which may be required by governmental authority, (all such
costs shall be amortized over the reasonable life of the capital investment
item, with the reasonable life and amortization schedule being determined in
accordance with generally accepted accounting principles). Notwithstanding
anything to the contrary contained herein, Operating Services shall not include
any of the following:

 

(i) real estate taxes;

 

(ii) legal fees, auditing fees, brokerage commissions, advertising costs, or
other related expenses incurred by Lessor in an effort to generate rental
income;

 

(iii) repairs, alterations, additions, improvements, or replacements made to
rectify or correct any defect in the original design. materials or workmanship
of the Building or common areas (but not including repairs, alterations.
additions. improvements or replacements made as a result of ordinary wear and
tear);

 

(iv) damage and repairs attributable to fire or other casualty;

 

(v) damage and repairs necessitated by the negligence or willful misconduct of
Lessor, Lessor’s employees, contractors or agents;

 

(vi) executive salaries to the extent that such services are not in connection
with the management, operation, repair or maintenance of the Building;

 

(vii) Lessor’s general overhead expenses not related to the Building;

 

(viii) legal fees, accountant’s fees and other expenses incurred in connection
with disputes with tenants or other occupants of the Building or associated with
the enforcement of the terms of any leases with tenants or the defense of
Lessor’s title to or interest in the Building or any part thereof unless the
outcome is to the financial benefit of all tenants;

 

(ix) costs (including permit, license and inspection fees) incurred in
renovating or otherwise improving, decorating, painting or altering (1) vacant
space (excluding common areas) in the Building or (2) space for tenants or other
occupants in the Building and costs incurred in supplying any item or service to
less than all of the tenants in the Building;

 

(x) costs incurred due to a violation by Lessor or any other tenant of the
building of the terms and conditions of a lease;

 

(xi) cost of any specific service provided to Sublessee or other occupants of
the Building for which Lessor is reimbursed (but not including Operating
Services and Real Estate Tax increases above Base Year Costs to the extent
Lessbr is not reimbursed) or any other expense for which Lessor is or will be
reimbursed by another source (i.e., expenses covered by insurance or
warranties);

 

(xii) costs and expenses which would be capitalized under generally accepted
accounting principles, with the exception of the capital investment items
specified hereinabove;

 

(xiii) Building management fees in excess of the management fees specified
hereinabove;

 

(xiv) cost incurred with owning and/or operating the parking lot(s) serving the
Building by independent parking operator(s);

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(xv) fees paid to Lessor or any affiliate of Lessor for goods or services in
excess of the fees that would typically be charged by unrelated, independent
persons or entities for similar goods and services;

 

(xvi) rent called for under any ground lease or master lease; and

 

(xvii) principal and/or interest payments called for under any debt secured by a
mortgage or deed of trust on the Building.

 

Operating Services shall be adjusted for the Base Year and all Comparison
Year(s) to reflect the greater of actual occupancy or 95% occupancy and shall
not increase by more than five percent (5%) annually on a non-cumulative basis.

 

Real Estate Taxes

 

Real Estate Taxes shall be the taxes paid by Lessor in the Base Year and each
respective Comparison Year. Real Estate Taxes shall be a separate category and
shall be treated as such.

 

Proportionate Basis

 

Sublessee’s share of Base Year and Comparison Year(s) Costs shall be a fraction,
the numerator of which shall be the number of rentable square feet contained in
the Premises (see Paragraph 1) and the denominator of which shall be the number
of rentable square feet in the Building (approximately 130,OOO/RSF).

 

Computation of Adjustments to Base Year Costs

 

Any adjustment to Base Year Costs will commence to occur in Month 13 of the
Sublease term with subsequent adjustments occurring every twelve months
thereafter (i.e., in Months 25, 37, 49, etc. as appropriate under the Sublease
term). Sublessee shall be responsible for any increase between Sublessee’s
proportionate share of Base Year Costs and Sublessee’s proportionate share of
each respective Comparison Year’s Costs. The increase shall be the increase to
each expense individually. These costs shall be initially calculated based on
estimated (projected) costs with reconciliation to actual costs when annual
audited numbers are completed. For the purpose of calculating projected
increases to Base Year Costs, Lessor shall review historical data to predict if
any estimated increases would be anticipated in a Comparison Year(s).

 

If they are, then commencing in Month 13 and/or every twelve-month period
thereafter, Lessor will assess Sublessee a monthly charge to be paid together
with monthly base rent. Once actual cost data for Comparison Year(s) Real Estate
Taxes and Operating Services for the entire Building is formulated in accordance
with generally accepted accounting principles and adjusted to the greater of
actual occupancy or 95% occupancy, then Sublessee’s estimated pass-through costs
shall be corrected with Sublessee or Lessor, as appropriate, reimbursing the
other for the difference between the estimated and actual costs, at that time in
a lump sum payment. Sublessee shall pay Sublessee’s proportionate share of
increases over Base Year Costs for Operating Services and Real Estate Taxes
directly to Lessor and shall coordinate all inquiries or disputes regarding same
directly with Lessor.

 

Upon termination of this Sublease, the amount of any corrected amount between
estimated and actual costs with respect to the final Comparison Year shall
survive the termination of this Sublease and shall be paid to Sublessee or
Lessor as appropriate within thirty (30) days after final reconciliation.

 

Computation of or adjustment to Operating Services and/or Real Estate Taxes
pursuant to this paragraph or to rent pursuant to Paragraph 3 shall be computed
based on a three hundred sixty-five (365) day year.

 

Forr an example, see Exhibit A attached hereto.

 

20. ADDITIONAL TAXES OR ASSESSMENTS. Should there presently be in effect or
should there be enacted during the term of this Sublease, any law, statute

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or ordinance levying any assessments or any tax upon the Premises other than
federal or state income taxes, Sublessee shall reimburse Lessor for Sublessee’s
proportionate share of said expenses at the same time as rental payments.

 

21. LATE PAYMENTS. Any payment required to be made pursuant to this Sublease
that is not made on the date the same is due shall bear interest at a rate equal
to the prime rate of interest charged from time to time by Bank of America, or
its successor.

 

In addition to any interest charged herein, a late charge of three percent (3%)
of the payment amount shall be incurred for payments received more than five (5)
days late.

 

22. RISK. All personal property of any kind or description whatsoever in the
Premises shall be at Sublessee’s sole risk. Lessor shall not be liable for any
damage done to or loss of such personal property or damage or loss suffered by
the business or occupation of the Sublessee arising from any acts or neglect of
co-tenants or other occupants of the Building, or of Lessor or the employees of
Lessor, or of any other persons, or from bursting, overflowing or leaking of
water, sewer or steam pipes, or from the heating or plumbing or sprinklering
fixtures, or from electric wires, or from gas, or odors, or caused in any other
manner whatsoever except in the case of negligence on the part of Lessor.
Sublessee shall keep in force throughout the term of this Sublease such
casualty, general liability and business interruption insurance as a prudent
tenant occupying and using the Premises would keep in force.

 

23. INDEMNIFICATION. Sublessee will defend, indemnify and hold harmless Lessor
from any claim, liability or suit including attorney’s fees on behalf of any
person, persons, corporations and/or firm for any injuries or damages occurring
in or about the Premises or on or about the sidewalk, stairs, or thoroughfares
adjacent thereto where said damages or injury was caused or partially caused by
the ordinary or gross negligence or intentional. act of Sublessee and/or by
Sublessee’s agents, employees, servants, customers or clients.

 

Lessor will defend, indemnify and hold harmless Sublessee from any claim,
liability or suit including attorneys’ fees on behalf of any person, persons,
corporations and/or firm for any injuries or damages occurring in or about the
Premises or on or about the sidewalk, stairs, or thoroughfares adjacent thereto
where said damages or injury was caused or partially caused by the ordinary or
gross negligence or intentional act of Lessor and/or Lessor’s agents, employees,
servants, customers or clients, but not to the extent caused or partially caused
by the ordinary or gross negligence or intentional act of Sublessee and/or
Sublessee’s agents, employees, servants, customers or clients.

 

24. WAIVER OF SUBROGATION. Sublessee and Lessor do hereby release and relieve
the other, and waive their entire claim of recovery for loss, damage, injury,
and all liability of every kind and nature which may arise out of, or be
incident to, fire and extended coverage perils, in, on, or about the Premises
herein described, whether due to negligence of either of said parties, their
agents, or employees, or otherwise.

 

25. SUBORDINATION. This Sublease and all interest and estate of Sublessee
hereunder is subject to and is hereby subordinated to all present and future
mortgages and deeds of trust affecting the Premises or the property of which the
Premises are a part. Sublessee agrees to execute at no expense to Lessor, any
instrument which may be deemed necessary or desirable by Lessor to further
effect the subordination of this Sublease to any such mortgage or deed of trust.
In the event of a sale or assignment of Lessor’s interest in the Premises, or in
the event of any proceedings brought for the foreclosure of, or in the event of
exercise of the power of sale under any mortgage or deed of trust made by Lessor
covering the Premises, Sublessee shall attorn to the purchaser and recognize
such purchaser as Lessor. Sublessee agrees to execute, at no expense to Lessor,
any estoppel certificate deemed necessary or desirable by Lessor to further
effect the provisions of this paragraph.

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26. CASUALTY. In the event the Premises or the said Building is destroyed or
injured by fire, earthquake or other casualty to the extent that they are
untenantable in whole or in part, then Lessor may, at Lessor’s option, proceed
with reasonable diligence to rebuild and restore the Premises or such part
thereof as may be injured as aforesaid, provided that within sixty (60) days
after such destruction or injury Lessor will notify Sublessee of Lessor’s
intention to do so, and during the period of such rebuilding and restoration the
rent shall be abated on the portion of the Premises that is unfit for occupancy.
During any period of abatement of rent due to casualty or destruction of the
Premises, Lessor shall use its best efforts to locate comparable space for
Sublessee at the fair market rate not to exceed Sublessee’s rental rate
hereunder. Lessor shall not be liable for any consequential damages by reason of
inability, after use of its best efforts, to locate alternative space comparable
to the Premises.

 

27. INSOLVENCY. If Sublessee becomes insolvent, or makes an assignment for the
benefit of creditors, or a receiver is appointed for the business or property of
Sublessee, or a petition is filed in a court of competent jurisdiction to have
Sublessee adjudged bankrupt, then lessor may at lessor’s option terminate this
Sublease. Said termination shall reserve unto lessor all of the rights and
remedies available under Paragraph 28 (“Default”) hereof, and lessor may accept
rents from such assignee or receiver without waiving or forfeiting said right of
termination. As an alternative to exercising its right to terminate this
Sublease, lessor may require Sublessee to provide adequate assurances, including
the posting of a cash bond, of Sublessee’s ability to perform its obligations
under this Sublease.

 

28. DEFAULT. If this Sublease is terminated in accordance with any of the terms
herein (with the exception of Paragraph 27), or if Sublessee vacates or abandons
the Premises or if Sublessee shall fail at any time to keep or perform any of
the covenants or conditions of this Sublease, i.e. specifically the covenant for
the payment of monthly rent, then, and in any of such events Sublessor may with
or without notice or demand, at Sublessor’s option, and without being deemed
guilty of trespass and/or without prejudicing any remedy or remedies which might
otherwise be used by Sublessor for arrearages or preceding breach of covenant or
condition of this Sublease, enter into and repossess the Premises and expel
Sublessee and all those claiming under Sublessee. In such event Sublessor may
eject and remove from the Premises all goods and effects (forcibly if
necessary). This Sublease if not otherwise terminated may immediately be
declared by Sublessor as terminated. The termination of this Sublease pursuant
to this Article shall not relieve Sublessee of its obligations to make the
payments required herein. In the event this Sublease is terminated pursuant to
this Article, or if Sublessor enters the Premises without terminating this
Sublease and Sublessor relets all or a portion of the Premises, Sublessee shall
be liable to Sublessor for all the costs of reletting, including necessary
renovation and alteration of the Premises. Sublessee shall remain liable for all
unpaid rental which has been earned plus late payment charges pursuant to
Paragraph 21 and for the remainder of the term of this Sublease for any
deficiency between the net amounts received following reletting and the gross
amounts due from Sublessee, or if Sublessor elects, Sublessee shall be
immediately liable for all rent and additional rent (Paragraph 19) that would be
owing to the end of the term, less any rental loss Sublessee proves could be
reasonably avoided, which amount shall be discounted by the discount rate of the
Federal Reserve Bank, situated nearest to the Premises, plus one percent (1%).
Waiver by Sublessor of any default, monetary or non-monetary, under this
Sublease shall not be deemed a waiver of any future default under this Sublease.

 

Acceptance of rent by Sublessor or Lessor after a default shall not be deemed a
waiver of any defaults (except the default pertaining to the particular payment
accepted) and shall not act as a waiver of the right of Sublessor to terminate
this Sublease as a result of such defaults by an unlawful detainer action or
otherwise.

 

29. POCKET SPACE. Approximately 3,390 rentable square feet on the 5th floor,
identified as “Expansion Space” in the drawing produced by JPC Architects dated
April 28, 2003, shall be considered as pocket space for use by Sublessee
beginning on the first day of the fourth (4th) year of the Sublease term.
Provided the space remains unused by Sublessee prior to the first day of the
fourth (4th) year of the Sublease term, Sublessee will have no obligation to pay
rent on that space until the first

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day of the 4th year of the Sublease term. If Sublessee commences using the
Expansion Space for general office purposes prior to the first day of the fourth
(4th) year of the Sublease term, Sublessee shall pay rent for such use at the
then-applicable rental rate, including any increase for Operating Services and
Real Estate Taxes.

 

30. OPTION TO RENEW. Lessor has granted Sublessee an option to renew this
Sublease in the Lessor’s Consent to Sublease attached hereto. If Sublessee
timely exercises its option to renew this Sublease as provided therein and
concurrently provides notice of such exercise to Sublessor, Sublessor shall
extend the term of this Sublease for an additional five (5) days (the “Stub
Period”) so that the term of this Sublease shall expire coterminously with the
expiration of the term of the Master Lease. Sublessor shall sublease the
Premises to Sublessee during the Stub Period on the same terms and conditions as
set forth herein, except that rent as set forth in Paragraph 3 hereof for each
month during the Stub Period shall be amended to mean the average monthly rent
due over the renewal term, as determined by Lessor and Sublessee pursuant to the
Lessor’s Consent to Sublease.

 

31. RIGHT OF FIRST REFUSAL. Lessor has granted Sublessee a right of first
refusal to lease space on contiguous floors pursuant to the terms and conditions
set forth in the Lessor’s Consent to Sublease attached hereto.

 

32. EARLY ACCESS. Sublessee shall have access to the Premises upon Sublease
execution for the purposes of installing tenant improvements and for furniture
and equipment assembly.

 

33. TENANT IMPROVEMENT ALLOWANCE. Pursuant to Lessor’s Consent to Sublease,
Sublessee shall receive a tenant improvement allowance of Forty Six Dollars and
Ninety One Cents ($46.91) per rentable square foot to be used to construct
improvements over and above the base building items provided by Lessor pursuant
to the Master Lease, as reflected in the Base Building Specifications described
in the Master Lease. Such allowance shall be paid as set forth in the Lessor’s
Consent to Sublease attached hereto. In addition, Sublessee shall be entitled to
a rent credit in the amount of One Hundred Thousand Dollars ($100,000) against
its initial three months’ rent obligations pursuant to the Lessor’s Consent to
Sublease.

 

34. PARKING. Sublessee will be entitled to eighty-three (83) parking stalls, of
which twelve (12) will be located in the Building and seventy one (71) will be
located in the Union Station Garage or in other public parking within closer
proximity to the Building. All parking shall be at a cost consistent to that
prevailing market rate.

 

35. SATELLITE DISH/ANTENNA SPACE. Lessor has granted Sublessee right to install
a satellite dish/antenna on the roof of the Building pursuant to the terms and
conditions set forth in the Lessor’s Consent to Sublease attached hereto.

 

36. SUBLEASE CONDITIONS. The respective obligations of Sublessor and Sublessee
under this Sublease are subject to the concurrent execution and delivery of
Lessor’s Consent to Sublease attached hereto.

 

37. REPRESENTATION. Washington Partners, Inc. represents Sublessee, Washington
Realty Group, Inc. represents Sublessor, and Martin Selig Real Estate represents
Lessor in this transaction. Any brokerage commission payable to Washington
Partners, Inc. and Washington Realty Group, Inc. shall be paid by Sublessor
pursuant to a separate agreement, and any brokerage commission payable to Martin
Selig Real Estate shall be paid by Lessor pursuant to a separate agreement. This
fee shall be payable upon complete execution of this Sublease.

 

38. BINDING EFFECT. The parties hereto further agree with each other that each
of the provisions of this Sublease shall extend to and shall, as the case may
require. bind and inure to the benefit, not only of Sublessor and Sublessee, but
also of their respective heirs, legal representatives, successors and assigns,
subject, however, to the provisions of Paragraph 18 of this Sublease.

--------------------------------------------------------------------------------

It is also understood and agreed that the terms “Sublessor,” “Lessor” and
“Sublessee” and verbs and pronouns in the singular number are uniformly used
throughout this Sublease regardless of gender, number or fact of incorporation
of the parties hereto. The typewritten riders or supplemental provisions, if
any, attached or added hereto are made a part of this Sublease by reference. It
is further mutually agreed that no waiver by Sublessor of a breach by Sublessee
of any covenant or condition of this Sublease shall be construed to be a waiver
of any subsequent breach of the same or any other covenant or condition.

 

39. HOLDING OVER. If Sublessee holds possession of the Premises after term of
this Sublease, Sublessee shall be deemed to be a month-to-month lessee upon the
same terms and conditions as contained herein, except rent which shall be
revised to reflect the then current market rate. During month-to-month tenancy,
Sublessee acknowledges Lessor or Sublessor will be attempting to relet the
Premises. Sublessee agrees to cooperate with Lessor or Sublessor, and Sublessee
further acknowledges Sublessor’s statutory right to terminate Sublessee’s
tenancy with proper notice.

 

40. ATTORNEY’S FEES. If any legal action is commenced to enforce any provision
of this Sublease, the prevailing party shall be entitled to an award of
reasonable attorney’s fees and disbursements.

 

41. NO REPRESENTATIONS. Lessor and Sublessor have made no representations or
promises except as contained herein or in some future writings signed by Lessor
or Sublessor.

 

42. QUIET ENJOYMENT. So long as Sublessee pays the rent and performs the
covenants contained in this Sublease. Sublessee shall hold and enjoy the
Premises peaceably and quietly, subject to the provisions of this Sublease.

 

43. RECORDATION. Sublessee shall not record this Sublease without the prior
written consent of Lessor. However, at the request of Lessor, both parties shall
execute a memorandum or “short form” of this Sublease for the purpose of
recordation in a form customarily used for such purpose. Said memorandum or
short form of this Sublease shall describe the parties, the Premises and the
Sublease term, and shall incorporate this Sublease by reference.

 

44. MUTUAL PREPARATION OF LEASE. It is acknowledged and agreed that this
Sublease was prepared mutually by both parties. In the event of ambiguity, it is
agreed by both parties that it shall not be construed against either party as
the drafter of this Sublease.

 

45. GOVERNING LAW. This Sublease shall be governed by, construed and enforced in
accordance with the laws of the State of Washington.

 

46. NOTICES. All notices, demands, approvals or other communications
(collectively, “Notices”) given or required to be given by either party to the
other hereunder shall be in writing and sent by (a) United States certified or
registered mail, postage prepaid, return receipt requested, (b) a nationally
recognized and reputable overnight courier (e.g., Federal Express or Network
Courier), or (c) personal delivery. Notice shall be sent (i) to Sublessee at the
following address, or to such other place as Sublessee may from time to time
designate in a Notice to Lessor; or (ii) to Lessor at the following address, or
to such other place as Lessor may from time to time designate in a Notice to
Sublessee:

 

If to Lessor:

  

Union Street Improvement Company, LLC

    

1000 Second Avenue, Suite 1800

    

Seattle, Washington 98104-1046

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If to Sublessor:

  

Gray Cary Ware & Freidenrich LLP

    

Attention: Chairman

    

4365 Executive Drive, Suite 1100

    

San Diego, California 92121-2133

with a copy to:

  

Gray Cary Ware & Freidenrich LLP

    

Attention: General Counsel

    

4365 Executive Drive, Suite 1100

    

San Diego, California 92121-2133

If to Sublessee:

  

Atlas DMT LLC

    

Attention: Michael Vernon, Chief Financial Officer

    

506 Second Avenue Seattle, WA 98104

 

Any notice will be deemed given on the date which is three business days after
the date it is mailed as provided in this paragraph, the next business day if
sent by overnight courier, or upon the date personal delivery is made.

 

47. SUBLEASE SUBJECT TO MASTER LEASE. This Sublease is subject and subordinate
to all of the terms and conditions of the Master Lease and all matters of
record. Sublessee hereby agrees to accept the Premises subject to the Master
Lease and to perform the obligations of Sublessor (as Lessee) in the Master
Lease to the extent such terms and conditions are applicable to the Premises
and, except for the Excluded Provisions (as defined below) or as otherwise
expressly provided herein, each reference therein to “Lease,” “Lessor” and
“Lessee” to be deemed to refer to this Sublease, Sublessor and Sublessee,
respectively, and, along with all of the provisions set forth in this Sublease,
shall be the complete terms and conditions hereof. Sublessee shall not commit or
permit to be committed on the Premises any act or omission which shall violate
any term or condition of the Master Lease. Each party hereto shall indemnify,
defend, protect and hold the other party hereto harmless from any and all
damages, claims, loss, liability, cost and expense (including, without
limitation, court costs and reasonable attorneys’ fees) incurred in connection
with or arising from such indemnifying party’s breach of any of its respective
obligations under the Master Lease. Subject to any nondisturbance agreement
between Master Lessor and Sublessee, in the event of the termination of
Sublessor’s interest as Lessee under the Master Lease for any reason, then this
Sublease shall terminate simultaneously therewith.

 

48. EXCLUDED PROVISIONS OF MASTER LEASE. The following terms and conditions
contained in the Master Lease are excluded from this Sublease: Paragraphs 1.2,
2, 3, 4, 11, 15.4, 15.7, 15.8, 17, 18, 31, 32, 33, 37, 43, 44, 45, Exhibit A,
Schedule 1 to Exhibit A and Exhibit B (collectively, the “Excluded Provisions”).

 

IN WITNESS WHEREOF, the parties hereof have executed this Sublease the day and
year first above written.

 

GRAY CARY WARE & FREIDENRICH LLP

  

ATLAS DMT LLC,

A California limited liability partnership

  

a New York limited liability company

By:

  

/s/ John. R. Shuman, Jr.

--------------------------------------------------------------------------------

  

By:

  

/s/ Michael Vernon

--------------------------------------------------------------------------------

    

John R. Shuman, Jr.

       

Michael Vernon

Its:

  

Managing Partner-Operations

  

Its:

  

Chief Financial Officer

‘Sublessor’”

  

“Sublessee’”