Exhibit 10.6
 
SUBLEASE AGREEMENT
 
This Sublease Agreement (“Sublease”) is entered into as of this 9th  day of May,
2019 (“Effective Date”), by and between Cardinal Health 121, LLC, a Delaware
limited liability company (hereinafter “Sublandlord”) and Rekor Systems, Inc., a
Delaware corporation (hereinafter “Subtenant”).
 
Recitals
 
A. Sublandlord has leased from Exeter 7164 Columbia Gateway, LLC, a Delaware
limited liability (hereinafter “Landlord”), certain premises, containing
approximately 31,241 rentable square feet of floor area known as Suites 100,
300, and 400 in the building located at 7172 Columbia Gateway Driveway,
Columbia, Maryland 21046 (such building hereinafter referred to as the
“Building,” and such premises hereinafter referred to as the “Premises”)
pursuant to the terms of a certain lease agreement dated March 5, 2010
(hereinafter the “Original Lease”), as amended by that First Amendment to Lease
dated October 3, 2013 (hereinafter, the “First Amendment” and collectively with
the Original Lease and any other amendments or modifications, hereinafter the
“Lease”), a copy of which is attached hereto as Exhibit A.
 
 
B. Sublandlord is willing to sublease to Subtenant a portion of the Premises
including approximately 8,738 rentable square feet of floor area in Suite 400
(hereinafter the “Subleased Premises”) as depicted on Exhibit B, attached
hereto, and Subtenant is willing to sublease the Subleased Premises from
Sublandlord subject and pursuant to the terms hereinafter set forth.
 
Agreement
 
It is mutually agreed:
 
Section 1. Subleased Premises. Sublandlord hereby subleases the Subleased
Premises to Subtenant, together with all obligations and all parking and other
rights attributable to the Subleased Premises under the Lease, if any, and
Subtenant hereby subleases the Subleased Premises and such obligations and
rights from Sublandlord. Subtenant has had an opportunity to inspect the
Subleased Premises and accepts it in their “AS IS” condition. Sublandlord shall
have no obligation to undertake any improvements, alterations, or maintenance
obligations on behalf of Subtenant, provided, however, Sublandlord shall notify
Landlord of any maintenance deficiencies or repair obligations of Landlord under
the Lease within two (2) business days after Subtenant notifies Sublandlord of
such deficiencies. Except as otherwise expressly stated in this Sublease,
Subtenant shall be responsible for performing all obligations of Sublandlord
owed to Landlord under the terms of the Lease with respect to the maintenance
and repairs of the Subleased Premises. Sublandlord covenants that Subtenant may
peaceably and quietly enjoy the Subleased Premises without disturbance by
Sublandlord or any person claiming by, through or under Sublandlord, subject
nevertheless to the terms and conditions of this Sublease and to the Lease and
any other leases, mortgages, or other matters to which this Sublease is
subordinate.
 
Section 2. Term. The term of this Sublease (“Term”) shall commence on the later
of (i) May 1, 2019 or (ii) the date Sublandlord tenders possession of the
Subleased Premises to
 
 
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Section 3. Subtenant (the “Commencement Date”) and shall expire August 31, 2021,
unless sooner terminated as provided in this Sublease (the “Termination Date”).
In no event shall Subtenant have any right to extend the Term beyond the term of
the Sublease. Within thirty (30) days of the Commencement Date, Sublandlord and
Subtenant shall execute a commencement date certificate substantially in the
form of Exhibit G, attached hereto (the “Commencement Date Certificate”).
 
Section 4. Annual Base Rent. Commencing on the Commencement Date and throughout
the Term, Subtenant shall pay to Sublandlord monthly base rent (“Base Rent”) for
the Subleased Premises at the rate per month set forth in the table below.
Commencing on the anniversary of the Commencement Date (and if the Commencement
Date is not the first day of the month, then the first day of the calendar month
in which the Commencement Date occurs), and continuing for every twelve (12)
month period thereafter, Base Rent shall increase in accordance with the
schedule listed in the table below. If the Commencement Date is not the first
day of the calendar month, the monthly installment of Base Rent payable by
Subtenant shall be prorated on a day for day basis in accordance with the terms
of Section 4.1 of the Lease. Base Rent shall be paid monthly in advance, on or
before the first business day of every calendar month throughout the Term in
accordance with the following schedule:
 
Lease Year
Annual Base Rent per Rentable Square Foot
Annual Base Rent Total
 
Monthly Base Rent Payment Totals
Year 1
$16.50
 $144,177.00
 $12,014.75
Year 2
$17.16
 $149,944.08
 $12,495.34
Start of Year 3 through the Termination Date
$17.85
 $155,973.30
 $12,997.78

 
Sublandlord and Subtenant hereby acknowledge that the Base Rent payable pursuant
to this Section 3 includes Subtenant’s proportionate share of Tenant’s Share of
Operating Expense Increases, Real Property Taxes, utility charges, and all other
charges payable by Sublandlord under the Lease for the Subleased Premises.
 
Section 5. Base Rent Abatement Period. Notwithstanding anything to the contrary
contained in this Sublease, provided that Subtenant is not in default of its
obligations under this Sublease prior to or during the Base Rent Period (as such
term is defined hereunder), commencing on the Commencement Date and continuing
throughout the first (1st) sixty-one (61) days of the Term of this Sublease (the
“Base Rent Abatement Period”), Base Rent shall be abated by an amount equal to
one hundred percent (100%) of the Base Rent otherwise due.
 
Section 6. Advanced Rent Payment. Upon the execution and delivery of the
Sublease, Subtenant shall pay to Sublandlord an amount equal to $25,012.53
("Advanced Rent Payment"), comprised collectively of the installment of the Base
Rent due for the first (1st) full calendar month of the Term and the installment
of the Base Rent due for the last full calendar month of the Term ("Advanced
Rent Payment"). The Advanced Rent Payment shall be applied to the first and last
monthly installments of Base Rent, respectively, coming due under this Sublease.
 
 
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Section 7. Utilities and Janitorial Services. Charges for the utility services
consumed by Subtenant in or at the Subleased Premises during the Term (including
electricity, and natural gas provided by Landlord) shall be included in the Base
Rent. All Building services and utility services (to the extent applicable)
shall be provided in accordance with the terms of Section 11 of the Lease.
Sublandlord shall not be liable to Subtenant for or any interruption or
termination of utility services. Subtenant shall provide, at its own expense,
any janitorial services it may use or require for the Subleased Premises.
Subtenant shall not exceed the occupancy density ratio allocated to the
Subleased Premises in accordance with Section 11.2 of the Lease during the Term.
In the event Subtenant exceeds such density ratio in connection with its use of
the Subleased Premises, Subtenant acknowledges and agrees that Subtenant shall
be solely liable and responsible for all of the obligations and covenants of the
Tenant under Section 11.2 of the Lease occasioned by such excessive usage,
including without limitation, all costs and expenses in connection with any
additional services and utilities supplied to the Subleased Premises, any
installation of additional systems and equipment serving the Subleased Premises,
and any repair to Subleased Premises due to damage or wear and tear. To the
extent Landlord does not provide any service to Sublandlord under the Lease that
are not otherwise reimbursed as Operating Expenses, Subtenant shall contract
directly with the service provider for such services (which shall include, but
shall not be limited to telecommunications services).
 
Sublandlord agrees, upon Subtenant’s request, to use reasonable efforts
(excluding litigation or other adversarial proceedings), at Subtenant’s expense,
(a) to cause Landlord to provide any Building services contemplated under the
Lease to be provided to Subtenant, or (b) to obtain Landlord’s consent or
approval under the Lease whenever required by the Lease, including promptly
requesting such consent or approval from Landlord. Sublandlord and Subtenant
hereby agree that reasonable efforts shall include, without limitation,
Sublandlord promptly (x) providing written notice to Landlord (or oral notice if
permitted under the terms of the Lease) after Sublandlord receives notice from
Subtenant hereunder, (y) providing Subtenant with copies of written notices or
written responses received from Landlord relating to the Building services or
any requested consents or approval, and (z) otherwise keeping Subtenant
reasonably informed as to communications with Landlord relating to the Sublease
Premises and the use thereof, the Building services and any requested consents
or approvals hereunder or under the Lease.
 
Section 8. Use of Subleased Premises. Subtenant shall use the Subleased Premises
for general office use only in conformance with the terms of the Lease, and for
no other purpose. Subtenant shall have no right to erect or change any Building
Signage without the express written consent of Sublandlord, which consent shall
not be unreasonably withheld, conditioned, or delayed, provided however,
Sublandlord’s consent shall be subject to and conditioned upon Landlord’s
express consent in accordance with the terms of the Lease. Subtenant shall have
no right to use any existing external or backup generator currently used by
Sublandlord at the Subleased Premises.
 
Section 9. Subordination of Sublease. This Sublease shall be subject to and
subordinate to the terms of the Lease. Upon the termination of the Lease for any
reason, this Sublease shall automatically terminate and Subtenant shall vacate
the Subleased Premises in accordance with the requirements for surrender of the
Premises by the Tenant under Section 7.2 of the Lease.
 
 
 
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Section 10. Alterations and Improvements. Notwithstanding any terms in the Lease
to the contrary, Subtenant may not make or permit to be made, alterations or
improvements to the Subleased Premises (including without limitation,
telecommunications, data transmission and other wiring), without the prior
written consent of Sublandlord, which consent shall not be unreasonably
withheld, conditioned, or delayed, provided however, Sublandlord’s consent shall
be subject to and conditioned upon Landlord’s express consent in accordance with
the terms of the Lease. All such alterations or improvements to be performed by
Subtenant, including any work requested by Subtenant as necessary for Subtenant
to prepare the Subleased Premises for its occupancy as approved and described in
the work letter attached as Schedule I to Exhibit C, and as detailed in the
drawings from Banta Campbell Architects, Inc. and attached as Schedule I to
Exhibit C (“Subtenant's Improvements”), shall be made in accordance with the
express terms of the Lease and shall be subject to all approval or removal
requirements contained in the Lease. At the time of Sublandlord’s and Landlord’s
approval of any alterations or improvements in accordance with the terms of this
Sublease, Sublandlord or Landlord shall notify Subtenant in writing whether or
not Subtenant will be required to remove any such alterations or improvements
prior to the expiration of the Term and restore any portion of the Subleased
Premises to its original condition. Subtenant shall promptly pay all costs and
expenses attributable to any and all alterations and improvements and shall
indemnify Sublandlord and Landlord against any (i) mechanics' liens or other
liens or claims filed or asserted as a result thereof and against any costs
related thereto or (ii) expenses which may be incurred as a result of building
code violations attributable to such alterations or improvements. Subtenant
shall promptly repair any damage to the Subleased Premises or to the Building
caused by any and all alterations or improvements. Subtenant shall indemnify
Sublandlord and Landlord for any claims, causes of action, or damages arising
from or associated with such alterations. Subtenant’s obligation to indemnify
Landlord and Sublandlord pursuant to this Section 9 shall survive the
termination of this Sublease. Unless Sublandlord otherwise requires removal by
Subtenant during the Term, any alterations or improvements to the Subleased
Premises, except movable furniture and equipment and trade fixtures, shall
become the property of Sublandlord, and shall not be removed by Subtenant.
 
Section 11. Existing Personal Property. Subtenant shall have the right to use
Sublandlord’s furniture and equipment ("Personal Property") listed on Exhibit D
at no additional cost and expense to Subtenant during the Term. Sublandlord does
not warrant the suitability of the Personal Property and Subtenant shall accept
such Personal Property in its “AS IS” condition with all faults. Subtenant shall
maintain the Personal property in good condition, subject to reasonable wear and
tear from regular use. Sublandlord shall have no obligation or liability for the
repair or replacement of the Personal Property. Subtenant shall have the right
to relocate and modify the Personal Property, provided however, the Personal
Property shall not be removed from the Subleased Premises without Sublandlord’s
express written consent, which consent shall not be unreasonably withheld,
conditioned or delayed. In the event Sublandlord consents to the removal of any
of the Personal Property from the Subleased Premises during the Term, then: (i)
such removal and storage of the Personal Property shall be at Subtenant’s sole
cost and expense; (ii) Subtenant shall be solely responsible for any repair or
replacement of the Personal Property occasioned by such removal; and (iii)
Sublandlord shall continue to own all such Personal Property during the Term,
subject to the automatic transfer of the Personal Property to Subtenant
described herein. Upon the expiration of the Term, provided that Subtenant is
not in default of its obligations under this Sublease, the Personal Property
shall automatically be transferred and conveyed to Subtenant for an amount equal
to $1.00. Sublandlord shall have the right to provide a bill of sale to
Subtenant to reflect such sale. After such transfer of the Personal Property as
provided herein, Subtenant shall thereafter be solely responsible for removing
the Personal Property following its occupancy of the Subleased Premises in
accordance with the terms of the Lease.
 
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Section 12. Sublandlord Representations. Sublandlord represents and warrants to
Subtenant that to the best knowledge of Sublandlord, neither Landlord nor
Sublandlord is in default in the performance of any covenant, agreement or
condition contained in the Lease, and the Lease is in full force and effect.
 
Section 13. Parking. Subject to the use restrictions expressly stated in Section
16.1 of the Lease, during the Term, Subtenant shall have the non-exclusive right
to use sixty (60) unreserved parking spaces allocated to Sublandlord under the
Lease, subject to the rights of any existing subtenant(s). The unreserved
parking spaces allocated to Sublandlord under the Lease are shaded in yellow on
the parking site plan attached hereto as Exhibit E (the “Parking Site Plan”).
 
Section 14. Assignment or Subletting. Subtenant shall not assign this Sublease
or any estate or interest therein or right of occupancy thereunder (including
any mortgage or other collateral assignment) or sublet the Subleased Premises or
any part thereof without the prior written consent of Sublandlord and Landlord,
as may be required under the Lease, which consent shall not be unreasonably
withheld, conditioned, or delayed, provided however, Sublandlord’s consent shall
be subject to and conditioned upon Landlord’s express consent in accordance with
the terms of the Lease.
 
Section 15. Waiver of Subrogation. Any provision of the Lease with respect to
the waiver of subrogation shall apply under this Sublease, except that
“Sublandlord” shall be substituted for “Landlord” and “Subtenant” shall be
substituted for “Tenant.” In addition to the foregoing, any obligation under
Section 8.4 of the Lease for Tenant to waive any rights of subrogation with
respect to claims against Landlord shall apply to Subtenant, and Subtenant
affirmatively waives and herby releases any right of recovery against Landlord
in accordance with the requirements of Section 8.4 of the Lease.
 
Section 16. Insurance. Subtenant shall maintain with respect to the Subleased
Premises all insurance required to be maintained by Sublandlord pursuant to the
Lease. Such insurance shall name Sublandlord as an additional insured, and, if
any of such insurance is required by the Lease to cover Landlord or anyone else
or to name Landlord or anyone else as an additional insureds, it shall also be
required to cover Landlord and such others and name Landlord and such others as
an additional insureds. Subtenant shall provide certificates of insurance to
Sublandlord prior to taking occupancy of the Subleased Premises and upon
renewals of such policies. Subtenant shall endeavor to provide a thirty (30) day
written notice of any cancellation prior to the policy(ies) expiration date. If
Subtenant should fail to comply with the foregoing requirements relating to
insurance, Landlord and Sublandlord shall have the right, but not the
obligation, to obtain such insurance on Subtenant's behalf, in which event
Subtenant shall reimburse Landlord and/or Sublandlord, as the case may be, on
demand for all reasonable costs and expenses incurred by such party in obtaining
such insurance.
 
Section 17. Indemnification. Without limiting any specific agreement of
Subtenant to indemnify, defend and/or hold Sublandlord harmless provided for in
this Sublease, Subtenant acknowledges and agrees that any and all provisions of
the Lease providing for the Tenant hereunder to indemnify, defend and/or hold
harmless the Landlord, and any and all waivers of the tenant under the Lease,
are hereby incorporated into this Sublease and made by Subtenant to, for the
benefit of and in favor of Sublandlord. The foregoing indemnity shall not
relieve any insurance carrier of its obligations under policies required to be
carried by Subtenant pursuant to the provisions of this Sublease to the extent
that such policies cover the results of such acts or conduct. In addition to the
foregoing, Subtenant agrees, to the fullest extent permitted by law, to
indemnify, defend, and hold Sublandlord and its employees, partners, agents,
contractors, and lenders harmless from and against any and all loss, cost,
expense, or liability (including, without limitation, reasonable attorneys'
fees, accountants' fees, and court costs) resulting from any claims or causes of
action existing in favor of or asserted by any party arising out of or relating
to Subtenant's failure to perform any duties or obligations imposed on Subtenant
under this Sublease.
 
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Section 18. Compliance with Lease. Except as otherwise expressly provided under
this Sublease, Subtenant shall comply with all of the obligations imposed by the
Lease on Sublandlord, and Subtenant shall indemnify, defend and hold harmless
Sublandlord from any default by Subtenant under this Sublease or the Lease. In
the event of any conflict between the terms of the Lease and this Sublease, the
terms of this Sublease shall control as between Sublandlord and Subtenant.
Subtenant, its employees, agents, licensees and visitors will at all times
faithfully observe and comply with the Rules and Regulations, as set forth in
Exhibit C of the Lease.
 
Section 19. Subtenant's Default. The occurrence of any one or more of the
following events shall be deemed a default and breach of this Sublease by
Subtenant (each an “Event of Default”):
 
A. Subtenant’s failure to make any payment of Base Rent or any other payment
required to be made by Subtenant hereunder, as and when due which failure shall
continue for five (5) business days after receipt of written notice from
Sublandlord;
 
B. Subtenant’s failure to perform or observe any term, condition, covenant or
obligation required to be performed or observed by it under this Sublease (other
than a default under Section 18.A of this Sublease), for more than thirty (30)
days after receipt of written notice thereof from Sublandlord (or such longer
period as may be allowed under the terms of the Lease to cure such failure); and
 
C. Subtenant’s failure to perform or observe any term, condition, covenant or
obligation required to be performed or observed by Sublandlord under the Lease,
and such failure continues beyond any applicable notice or cure period provided
for in the Lease.
 
Any occurrence under Section 18.A, Section 18.B, or Section 18.C of this
Sublease shall be deemed an event of default under the Lease with respect to
Subtenant under this Sublease. Upon the occurrence of any Event of Default under
this Sublease, Sublandlord shall have all rights afforded to Landlord under the
Lease.
 
Section 20. Security Deposit. Upon Subtenant’s execution of this Sublease,
Subtenant shall deposit with Sublandlord one monthly installment of Base Rent in
the amount equal to $12,014.75 as the “Security Deposit” which shall be retained
by Sublandlord as security for Subtenant’s payment of Base Rent, and performance
of its other obligations under the provisions of this Sublease. On the
occurrence of an event of default, Sublandlord shall be entitled, at its sole
discretion, to (a) apply any or all of such sum in payment of any Base Rent due
and unpaid, any expense incurred by Sublandlord in curing any such event of
default, and any damages incurred by Sublandlord by reason of such event of
default (including but not limited to reasonable attorneys’ fees); or (b) retain
any or all of such sum in liquidation of any or all damages suffered by
Sublandlord by reason of such default. The Security Deposit shall not be applied
to the last month’s installment of Base Rent; rather, upon the expiration of
this Sublease, provided Subtenant is not in default of its obligations
hereunder, any of the Security Deposit then remaining shall be returned to
Subtenant within thirty (30) days after the Expiration Date.
 
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Section 21. Miscellaneous.
 
A. Waiver. One or more waivers of any breach by Sublandlord of any covenant or
condition of this Sublease shall not be construed as a waiver of subsequent
breach of the same covenant or condition, and the consent or approval by
Sublandlord to or for any act by the other requiring consent or approval shall
not be deemed to render unnecessary consent or approval to or for any subsequent
similar act. No breach of a covenant or condition of this Sublease shall be
deemed to have been waived by Sublandlord, unless such waiver is in writing
signed by Sublandlord.
 
B. Entire Agreement. This Sublease and the Exhibits attached hereto set forth
all of the covenants, promises, agreements, conditions and understandings
between Sublandlord and Subtenant concerning the Subleased Premises and there
are no covenants, promises, agreements, conditions or understandings, either
oral or written, between them other than as are herein set forth. No alteration,
amendment, change, or addition to this Sublease shall be binding upon
Sublandlord or Subtenant unless reduced to writing and signed by each party.
 
C. Notices. Any notice required or permitted to be given under this Sublease or
by law shall be deemed to have been given if reduced to writing and delivered in
person or mailed by registered, certified mail, or overnight express mail,
postage prepaid to the party who is to receive such notice. Such notice to
Sublandlord and Subtenant shall be mailed to their respective addresses set
forth below. When so mailed, the notice shall be deemed to have been given as of
one (1) business day after the date it was mailed if sent by overnight express
mail or courier, and three (3) business days after the date it was mailed if
sent by registered or certified mail. The address of the parties may be changed
by giving written notice thereof to the other party.
 
Notices to Subtenant:
Rekor Systems, Inc.,
Attn: Director of Administration
xxx xxxxx xx
xxxx, xx xxxxx
Email xxxxx@rekorsystems.com
Telephone xxx-xxx-xxxx
 
 

 
 
 
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Notices to Sublandlord:
Cardinal Health 121, LLC,
c/o Cardinal Health, Inc.
7000 Cardinal Place
Dublin, Ohio 43017
Attn: Corporate Real Estate
 

D. Captions and Capitalized Terms. The captions appearing in this Sublease are
inserted only as a matter of convenience and in no way define, limit, construe
or describe the scope or intent of such sections nor in any way affect this
Sublease. Capitalized terms used herein, if not otherwise defined herein, shall
have the meaning ascribed to such terms as stated in the Lease.
 
E. Broker's Commissions. Each of the parties represents and warrants that there
are no claims for brokerage commissions or finder's fees in connection with the
execution of this Sublease, other than CBRE, Inc. on behalf of Sublandlord
("Broker"), and that no other broker or finder procured or negotiated this
Sublease or is entitled to any commissions or fees in connection herewith.
Sublandlord will pay the Broker a commission pursuant to a separate agreement.
Sublandlord and Subtenant each shall indemnify and hold the other harmless from
and against any and all costs, expenses (including reasonable attorneys' fees),
and liabilities relating to any compensation, commissions, or charges by any
broker or agent with whom the indemnifying party has had or claims to have had
any dealings.
 
F. Successors. All rights and liabilities herein given to or imposed upon the
respective parties hereto shall extend to and bind the several respective
successors and assigns of said parties, subject to the restrictions on
assignment contained herein; and if there shall be more than one (1) person or
entity which makes up a party, they shall be bound jointly and severally by the
terms, covenants and agreements herein.
 
G. Surrender of the Premises. Upon the expiration or earlier termination of this
Sublease, or upon the exercise by Sublandlord of its right to reenter the
Subleased Premises without terminating this Sublease, Subtenant shall
immediately surrender the Subleased Premises to Sublandlord, together with all
alterations, improvements and other property as provided elsewhere herein, in
broom-clean condition and in good order, condition and repair, except for
ordinary wear and tear and damage which Subtenant is not obligated to repair,
failing which Sublandlord may restore the Subleased Premises to such condition
at Subtenant's expense. Upon such expiration or termination, Subtenant shall
have the right to remove its personal property and trade fixtures. Subtenant
shall promptly repair any damage caused by any such removal, and shall restore
the Subleased Premises to the condition existing prior to the installation of
the items so removed.
 
H. Holding Over. Subtenant shall have no right to occupy the Subleased Premises
or any portion thereof after the Termination Date or the earlier termination of
this Sublease. In the event that Subtenant shall remain in possession of the
Subleased Premises following the Termination Date, Subtenant shall indemnify,
save, protect, defend and hold Sublandlord and Landlord harmless from and
against all cost, expense, and damages including, without limitation, attorneys'
fees and consequential damages, arising from such holdover. In the event of such
holdover, such occupancy shall be a tenancy from month to month upon all terms
and conditions of this Sublease pertaining to the obligations of Subtenant,
except that, Subtenant shall pay to Sublandlord an amount as monthly any
payments Base Rent equal to the great of (i) all sums payable by Sublandlord to
Landlord under the Lease as a result of such holdover; or (ii) two hundred
percent (200%) of the monthly installment of the Base Rent payable under this
Sublease for the period immediately prior to the holdover period. In the event
of any holdover, Sublandlord may exercise all remedies available to Sublandlord
in an Event of Default under this Sublease.
 
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I. Authority. Sublandlord and Subtenant mutually represent and warrant that each
has the authority and power to enter into this Sublease and that this Sublease
constitutes a legal, valid and binding obligation of both Sublandlord and
Subtenant.
 
J. Landlord Consent to Sublease. The parties acknowledge that this Sublease is
expressly contingent upon each of Subtenant and Sublandlord receiving and
approving, in their sole discretion, an instrument executed by Landlord
confirming its consent to this Sublease and such other matters as either party
may require, in substantially the same form attached hereto as Exhibit F (the
“Consent”). Sublandlord shall use commercially reasonable efforts to obtain such
Consent. In the event Landlord does not so Consent within thirty (30) days of
the Effective Date, either party may terminate this Sublease upon written notice
to the other party after the expiration of such 30-day period, but before
Landlord delivers the Consent. If this Sublease is so terminated, Sublandlord
shall promptly return any prepaid Base Rent and the Security Deposit to
Subtenant.
 
K. Applicable Law. This Sublease shall be governed by and construed in
accordance with the laws of the State of Maryland.
 
L. Counterparts. This Sublease may be executed in one or more counterparts, each
of which shall be deemed to be an original Sublease, but all of which shall
constitute but one and the same Sublease. All parties hereto may rely upon
emailed signatures (including signatures in Portable Document Format) as if such
signatures were originals. All parties hereto agree that an emailed signature
page may be introduced into evidence in any proceeding arising out of or related
to this Sublease as if it were an original signature page.
 
 
(Signatures on following page)
 
 
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IN WITNESS WHEREOF, Sublandlord and Subtenant have caused this Sublease to be
signed by their duly authorized officers or agents as of the day and year first
above written.
 
 
 
SUBLANDLORD:
 
CARDINAL HEALTH 121, LLC,
a Delaware limited liability company
 
By: /s/ Marino Colatruglio
Name: Marino Colatruglio
Its: Authorized Signatory
 
 
 
SUBTENANT:
 
REKOR SYSTEMS, INC.,
a Delaware corporation
 
By: /s/ Robert Berman
Name: Robert Berman
Its: Authorized Signatory
 
Drafted and approved as to form by:
 
/s/ Karim A. Ali
Karim A. Ali
Porter Wright Morris & Arthur LLP
 
 
 
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EXHIBIT A
 
Lease
 
Omitted.
 
 
 
 

 
 
EXHIBIT B
 
Subleased Premises
 
Omitted.

 
 

 
 
EXHIBIT C
 
Subtenant’s Improvements Work Letter
 
This Subtenant’s Improvements Work Letter shall set forth the terms and
conditions relating to the construction of the Subtenant’s Improvements in the
Subleased Premises.
 
SECTION 1
 
Lease Requirements.                                                      In
addition to any requirements under the Sublease and this Exhibit C, all the
Subtenant’s Improvements shall be completed by Subtenant in accordance with the
requirements applicable to the Tenant as set forth in Section 7.3 of the Lease
(Alterations and Additions); provided that if any approval or consent is
required from Landlord under Section 7.3 of the Lease, for purposes of this
Sublease such approval or consent shall require the approval and/or consent of
Sublandlord and Landlord.
 
SECTION 2
 
Subtenant Obligations.                                                      Any
Subtenant’s Improvements in or about the Subleased Premises that Subtenant shall
desire to make shall be presented to Sublandlord and Landlord in written form,
with plans and specifications which are sufficiently detailed to obtain a
building permit, provided a building permit is required under applicable law,
regulations or ordinances. If Sublandlord and Landlord each consent to the
Subtenant’s Improvements, such consent shall be conditioned upon Subtenant
acquiring a building permit from the applicable governmental agencies,
furnishing a copy thereof to Sublandlord and Landlord prior to the commencement
of the work, and compliance by Subtenant with all conditions of said permit in a
prompt and expeditious manner. Subtenant shall not commence the Subtenant’s
Improvements until Sublandlord and Landlord have approved in writing Subtenant’s
plans and specifications. To the extent a building permit is required under
applicable law, regulations or ordinances, Sublandlord agrees to reasonably
cooperate with Subtenant in obtaining the same at no cost or expense to
Sublandlord. Subtenant shall have the right to use its own, architect,
engineers, and contractors, subject to Sublandlord’s and Landlord’s review and
approval. The Subtenant’s Improvements shall be completed in a good workmanlike
manner and in accordance with the terms of the Lease. Within thirty (30) days of
Subtenant’s substantial completion of Subtenant’s Improvements, Subtenant shall
submit to Sublandlord (i) as-built drawings of the Subleased Premises in CAD or
other electronic form reasonably acceptable to Sublandlord; and (ii) final
waivers of liens, owner’s sworn statements, contractor’s sworn statements, and
architects’ certificates in such form as may be reasonably required by
Sublandlord from all parties performing labor or supplying materials or services
in connection with the Subtenant’s Improvements, showing that all of said
parties have been compensated in full and waiving all liens in connection with
the Subleased Premises and Building.
 
 

 
 
SCHEDULE I
 
TO EXHIBIT C
 
Subtenant’s Drawings
 
Omitted.

  
 
 

 
 
EXHIBIT D
 
Personal Property
 
Omitted.
 
 

 
 
EXHIBIT E
 
Parking Site Plan
 
Omitted.
 
 
 
 

 
 
EXHIBIT F
 
FORM OF
 
LANDLORD’S CONSENT TO SUBLEASE
 
 
THIS CONSENT TO SUBLEASE (the “Consent”) is made this ____ of ______________,
2019, by EXETER 7164 COLUMBIA GATEWAY, LLC, a Delaware limited liability company
(“Master Landlord”); CARDINAL HEALTH 121, LLC, a Delaware limited liability
company (“Sublessor”); and REKOR SYSTEMS, INC., a Delaware corporation
(“Sublessee”).
 
WITNESSETH:
 
A.           Master Landlord and Sublessor are parties to that certain lease
agreement (hereinafter the “Original Lease”), as amended by that First Amendment
to Lease dated October 3, 2013 (hereinafter, the “First Amendment” and
collectively with the Original Lease and any other amendments or modifications,
hereinafter the “Master Lease”) for certain premises containing approximately
31,241 rentable square feet of floor area known as Suites 100, 300, and 400 in
the building located at 7172 Columbia Gateway Driveway, Columbia, Maryland 21046
(the “Premises”), as more fully described in the Master Lease.
 
B.           Sublessor desires to enter into a sublease agreement with Sublessee
(“Sublease Agreement”), whereby Sublessor will sublease to Sublessee a portion
of the Premises including approximately 8,738 rentable square feet of floor area
in Suite 400 and has requested that Master Landlord consent thereto.
 
NOW, THEREFORE, in consideration of the foregoing recitals, which are true and
correct and incorporated herein by reference, and for the mutual covenants set
forth herein, the parties hereto, intending to be legally bound, hereby agree as
follows:
 
1.           A true, correct and complete copy of the Sublease Agreement between
Sublessor and Sublessee is attached hereto as Exhibit “A”.
 
2.           Master Landlord hereby consents to the sublease of the premises
described in the Sublease Agreement to Sublessee. In the event that Sublessor
and Sublessee desire to modify or amend the Sublease Agreement in any way,
Sublessor and Sublessee shall be required to obtain Master Landlord's consent
thereto, and any further sublease of the Premises shall require Master
Landlord’s consent.
 
3.           The parties hereto agree that: (i) this Consent does not constitute
approval by Master Landlord of the terms, conditions and/or requirements of the
Sublease Agreement but only approval as to the sublet of the subleased premises
by Sublessor to Sublessee; (ii) Master Landlord’s consent to the Sublease
Agreement shall not create privity of contract between Master Landlord and
Sublessee with respect to the Sublease Agreement; (iii) the Sublease Agreement
is subject to and subordinate to all provisions of the Master Lease and
Sublessor shall remain liable for performance of all obligations and liabilities
under the Master Lease; (iv) the Sublease Agreement shall in no way whatsoever
expand the liability or obligations of Master Landlord; (v) any termination of
the Master Lease for any cause whatsoever, shall at Master Landlord's sole
option in Master Landlord’s absolute discretion, either (a) immediately
terminate the Sublease Agreement, or (b) operate as an assignment to Master
Landlord of the Sublease Agreement as if Master Landlord was the sublessor
thereunder; (vi) Sublessor's obligation to indemnify and hold Master Landlord
harmless as set forth in the Master Lease shall include, but not be limited to,
indemnification from any claims arising from the use of the Property, or any
portion thereof, by Sublessee, its agents, employees, invitees, representatives,
or contractors, or any negligence or willful misconduct by any of said parties,
and (vii) this Consent shall not be deemed an expressed or implied affirmation
or representation of any factual statements or recitations contained in the
Sublease Agreement. Further, nothing herein shall be deemed as Master Landlord’s
consent or approval to any planned or anticipated improvements or alterations to
the Premises and any such improvements must be consented to and performed in
accordance with the Master Lease. In the event of a Sublessor default under the
Master Lease, Master Landlord may elect, in its sole discretion, by providing
written notice to Sublessee to have Sublessee pay all sums due under the
Sublease Agreement directly to Master Landlord and upon receipt of such notice,
Sublessee shall, notwithstanding anything to the contrary in the Sublease
Agreement and without being in default of the Sublease Agreement pay such sums
directly to Master Landlord.
 

 
 
4.           Any notice or communication with any party hereto that such party
may desire or be required to give to any other party under or with respect to
this Consent shall be given in the manner required by the notice provisions of
the Master Lease. The current notice addresses of the parties are as follows:
 
Master Landlord:
 
101 West Elm Street, Suite 600
Conshohocken, PA 19428
Attn: Chief Financial Officer
 
Sublessor:
 
Cardinal Health 121, LLC
c/o Cardinal Health, Inc.
7000 Cardinal Place
Dublin, Ohio 43017
Attn: Corporate Real Estate
 
Sublessee:
 
Rekor Systems, Inc.,
Attn: Director of Administration
xxx xxxxx xx
xxxx, xx xxxxx
Email xxxxx@rekorsystems.com
Telephone xxx-xxx-xxxx
 
5.           Sublessee shall provide Master Landlord and Master Landlord shall
provide Sublessee with a copy of any notices of default that Sublessee or Master
Landlord may send to Sublessor pursuant to the terms of the Sublease Agreement
and Master Lease Agreement.
 
[Remainder of page left intentionally blank.]
[Signatures on following page]
 
 

 
 
IN WITNESS WHEREOF, the parties have executed this Consent as of the date first
set forth hereinabove.
 

 
MASTER LANDLORD:

 
 
 
EXETER 7164 COLUMBIA GATEWAY, LLC,
a Delaware limited liability company
 
 
 
By: Exeter Operating Partnership III, L.P.,
      a Delaware limited partnership,
      its sole member
 
 
 
By: Exeter Operating Partnership III GP LLC,
      a Delaware limited liability company,
      its sole general partner
 
 
 
 
By: Exeter Industrial REIT III LLC,
      a Delaware limited liability company,
      its sole member
 
 
 
By: ______________________________

Name: ______________________________
Title: ______________________________
 
 
 
 
 
SUBLESSOR:

 
 
 
CARDINAL HEALTH 121, LLC

 
a Delaware limited liability company

 
 
 
By:____________________________________

 
Name: Marino Colatruglio

 
Its: Authorized Signatory

 
 
 
SUBLESSEE:

 
 
 
REKOR SYSTEMS, INC.,
 
a Delaware corporation
 
By: ______________________________
Name: Robert Berman

Title: Authorized Signatory

 

Drafted and approved
as to form by: 
 

 
    _____________________________                                     

Karim A. Ali, Esq.
Porter Wright Morris & Arthur LLP
 

 
 
 
 
 
 

 
 
EXHIBIT "A"
 
SUBLEASE AGREEMENT
 
 
 

 
 
EXHIBIT G
 
FORM OF
 
COMMENCEMENT DATE CERTIFICATE
 
 
 
This Certificate, dated as of May __, 2019, is being provided pursuant to the
terms and provisions of that certain Sublease Agreement dated May __, 2019 (the
“Sublease”) between Cardinal Health 121, LLC, a Delaware limited liability
company (hereinafter “Sublandlord”) and Rekor Systems, Inc., a Delaware
corporation (hereinafter “Subtenant”)
 
Sublandlord and Subtenant hereby confirm and certify as follows:
 
1.
Sublandlord has delivered the Subleased Premises in accordance with the Lease as
of May __, 2019.
 
2.
The Commencement Date of the Sublease is May __, 2019.
 
3.
The Termination Date of the Term of the Sublease is August 31, 2021.
 
 
 
SUBLANDLORD
 
Cardinal Health 121, LLC,
a Delaware limited liability company
 
By:___________________________________
Name: Marino Colatruglio
Title: Authorized Signatory
SUBTENANT
 
Rekor Systems, Inc.,
a Delaware corporation
 
By:_________________________________
Name: Robert Berman
Title: Authorized Signatory