SUBLEASE AGREEMENT
Exhibit 10.6
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 0000 Xxxxxxxx Xxxxxxx Xxxxxxxx, Xxxxxxxx,
Xxxxxxxx 00000 (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
1
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.
2
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.
3
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 Xxxxx Xxxxxxxx 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 xxxx 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.
4
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.
5
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.
6
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:
|
Attn:
Director of Administration
xxx
xxxxx xx
xxxx,
xx xxxxx
Email
xxxxx@xxxxxxxxxxxx.xxx
Telephone
xxx-xxx-xxxx
|
7
|
Notices
to Sublandlord:
|
Cardinal Health
121, LLC,
c/o
Cardinal Health, Inc.
0000
Xxxxxxxx Xxxxx
Xxxxxx,
Xxxx 00000
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.
8
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)
9
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/ Xxxxxx
Xxxxxxxxxxx
Name:
Xxxxxx Xxxxxxxxxxx
Its:
Authorized Signatory
SUBTENANT:
a
Delaware corporation
By:
/s/ Xxxxxx
Xxxxxx
Name:
Xxxxxx Xxxxxx
Its:
Authorized Signatory
Drafted
and approved as to form by:
/s/ Xxxxx X. Xxx
Xxxxx
X. Xxx
Xxxxxx
Xxxxxx Xxxxxx & Xxxxxx LLP
10
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
0000 XXXXXXXX XXXXXXX, 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 0000 Xxxxxxxx
Xxxxxxx Xxxxxxxx, Xxxxxxxx, Xxxxxxxx 00000 (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:
000
Xxxx Xxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX
00000
Attn:
Chief Financial Officer
Sublessor:
Cardinal Health
121, LLC
c/o
Cardinal Health, Inc.
0000
Xxxxxxxx Xxxxx
Xxxxxx,
Xxxx 00000
Attn:
Corporate Real Estate
Sublessee:
Attn:
Director of Administration
xxx
xxxxx xx
xxxx,
xx xxxxx
Email
xxxxx@xxxxxxxxxxxx.xxx
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.
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MASTER LANDLORD:
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EXETER 7164 COLUMBIA GATEWAY, LLC,
a
Delaware limited liability company
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By: Exeter Operating Partnership III, L.P.,
a
Delaware limited partnership,
its
sole member
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By: Exeter Operating Partnership III GP LLC,
a
Delaware limited liability company,
its
sole general partner
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By: Exeter Industrial REIT III LLC,
a
Delaware limited liability company,
its
sole member
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By:
______________________________
Name:
______________________________
Title:
______________________________
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SUBLESSOR:
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CARDINAL
HEALTH 121, LLC
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a Delaware limited
liability company
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By:____________________________________
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Name: Xxxxxx
Xxxxxxxxxxx
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Its: Authorized
Signatory
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SUBLESSEE:
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a
Delaware corporation
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By:
______________________________
Name:
Xxxxxx Xxxxxx
Title:
Authorized Signatory
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Drafted
and approved
as
to form by:
_____________________________
Xxxxx
X. Xxx, Esq.
Xxxxxx
Xxxxxx Xxxxxx & Xxxxxx LLP
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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.
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SUBLANDLORD
Cardinal Health 121, LLC,
a
Delaware limited liability company
By:___________________________________
Name:
Xxxxxx Xxxxxxxxxxx
Title:
Authorized Signatory
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SUBTENANT
a
Delaware corporation
By:_________________________________
Name:
Xxxxxx Xxxxxx
Title:
Authorized Signatory
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