Exhibit 10.31

 

THIRD AMENDMENT TO LEASE AGREEMENT

 

THIS THIRD AMENDMENT TO LEASE AGREEMENT (“this Third Amendment”) is dated as of
July 27, 2015 (“Effective Date”), by and between ARE-MARYLAND NO. 30, LLC, a
Maryland limited liability company, having an address at 385 E. Colorado Blvd.,
Suite 299, Pasadena, California 91101 (“Landlord”), and GENVEC, INC., a Delaware
corporation, having an address at Suite 220N, 910 Clopper Road, Gaithersburg,
Maryland 20878 (“Tenant”).

 

RECITALS

 

A.           Landlord and Tenant have entered into that certain Lease Agreement
(“Original Lease”) dated as of November 15, 2013, as amended by a First
Amendment to Lease Agreement dated as of December 19, 2014 (“First Amendment”)
and that certain Second Amendment to Lease Agreement dated as of February 11,
2015 (“Second Amendment”; together with the Original Lease and the First
Amendment, the “Lease”), between Landlord and Tenant, wherein Landlord leased to
Tenant certain premises containing approximately 9,512 rentable square feet
(“Original Premises”) located at Suites 220N, 260S, and 2805, 910 Clopper Road,
Gaithersburg, Maryland 20878, as more particularly described in the Lease.

 

B.           Landlord and Tenant desire to amend the Lease, among other things,
to lease to Tenant an additional 4,457 rentable square feet on the second floor
of the Building as shown on Exhibit A attached hereto located at Suite 215N, 910
Clopper Road, Gaithersburg, Maryland 20878 (“CPJ Expansion Premises”; the
Original Premises and the CPJ Expansion Premises are hereinafter collectively
referred to as the “Premises”).

 

AGREEMENT

 

Now, therefore, the parties hereto agree that the Lease is amended as follows:

 

1.           Definitions; Recitals. Terms used in this Third Amendment but not
otherwise defined shall have the meanings set forth in the Lease. The Recitals
form an integral part of this Third Amendment and are hereby incorporated by
reference.

 

2.           CPJ Expansion Premises. The current tenant in the CPJ Expansion
Premises is Charles P. Johnson & Associates (“Current Tenant”), and the lease
agreement between Landlord and Current Tenant is scheduled to expire on June 30,
2016 unless Current Tenant timely exercises its right to extend the term of its
lease as more fully described in Section 5 below (Contingency). If the Current
Tenant does not timely exercise its right to extend the term of its lease, the
Current Tenant is obligated to vacate the CPJ Expansion Premises by June 30,
2016; provided, however, that Landlord does not guaranty or covenant that the
Current Tenant will, in fact, timely vacate the CPJ Expansion Premises by June
30, 2016. Accordingly, on July 1, 2016 or such later date on which Landlord is
able to deliver possession of the CPJ Expansion Premises to Tenant free and
clear of the tenancy of the Current Tenant (“CPJ Expansion Premises Commencement
Date”), (i) the Original Premises shall be expanded to include the CPJ Expansion
Premises, and (ii) Exhibit A to this Third Amendment, which depicts the CPJ

 

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Expansion Premises, supplements Exhibit A to the Lease. Upon request of
Landlord, Tenant shall execute and deliver a written acknowledgement of the CPJ
Expansion Premises Commencement Date when the same is established in a form
substantially similar to the form of “Acknowledgment of Commencement Date”
attached hereto as Exhibit B; provided, however, that Tenant’s failure to
execute and deliver such acknowledgement shall not affect Landlord’s rights
under this Third Amendment. If Landlord fails to deliver timely the CPJ
Expansion Premises, Landlord shall not be liable to Tenant for any loss or
damage resulting therefrom, and this Third Amendment and the Lease with respect
to the CPJ Expansion Premises shall not be void or voidable; provided, however,
that if Landlord has not delivered the CPJ Expansion Premises vacant, free and
clear of ail tenancies, and broom clean on or before November 1, 2016, Tenant
shall have the right to terminate this Third Amendment by written notice to
Landlord no later than November 15, 2016.

 

a.           Acceptance. Except as set forth in this paragraph: (i) Tenant shall
accept the CPJ Expansion Premises in their condition as of the CPJ Expansion
Premises Commencement Date; (ii) Landlord shall have no obligation for any
defects in the CPJ Expansion Premises, and (iii) Tenant’s taking possession of
the CPJ Expansion Premises shall be conclusive evidence that Tenant accepts the
CPJ Expansion Premises and that the CPJ Expansion Premises were in good
condition at the time possession was taken. Notwithstanding the foregoing
provisions of this paragraph, Landlord shall, at its expense, deliver the CPJ
Expansion Premises to Tenant on the CPJ Expansion Premises Commencement Date in
a broom clean condition free and clear of all tenancies.

 

b.           No Representation or Warranty. Tenant agrees and acknowledges that
neither Landlord nor any agent of Landlord has made any representation or
warranty with respect to the condition of all or any portion of the CPJ
Expansion Premises, and/or the suitability of the CPJ Expansion Premises for the
conduct of Tenant’s business, and Tenant waives any implied warranty that the
CPJ Expansion Premises are suitable for the Permitted Use. Tenant shall use the
CPJ Expansion Premises only for the Permitted Use under the Lease in compliance
with the provisions of Section 7 of the Lease.

 

c.           No Work. Landlord shall have no obligation to perform any work at
the Building in connection with Tenant’s occupancy of the CPJ Expansion Premises
or obtain any permits, approvals, or entitlements related to Tenant’s specific
use of the CPJ Expansion Premises or Tenant’s business operations therein.

 

d.           Second Base Term Extension. The Base Term of the Lease expires on
March 31, 2020. Landlord and Tenant hereby agree that the Base Term of the Lease
shall be extended from March 31, 2020 to June 30, 2021 (“Second Base Term
Extension”). The Extension Right set forth in Section 39 of the Lease remains in
full force and effect with respect to the Second Base Term Extension. For the
avoidance of doubt, references to the Base Term in Section 39 of the Lease shall
mean and refer to the Base Term as extended pursuant to the Second Base Term
Extension.

 

e.           CPJ Expansion Premises TI Allowance. Effective as of the CPJ
Expansion Premises Commencement Date, Landlord shall provide Tenant a tenant
improvement

 

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allowance (“CPJ Expansion Premises TI Allowance”) of up to $44,570, which amount
is included in the calculation of Base Rent for the CPJ Expansion Premises. The
CPJ Expansion Premises TI Allowance shall be made available by Landlord to
Tenant to reimburse Tenant for fixed improvements to the Premises (including
carpet and painting) (collectively, the “Renovations”), and disbursed in
accordance with the terms of this Section 2.e. No part of the CPJ Expansion
Premises TI Allowance shall be used for the purchase of any furniture, fixtures,
equipment, or other items of personal property. Tenant shall perform the
Renovations in strict accordance with the terms and conditions of the Lease,
including, but not limited to, Section 12 (Alterations and Tenant’s Property).

 

i.            Approval Process. Any architect, engineer, general contractor, and
any subcontractor for the Renovations shall be selected by Tenant, subject to
Landlord’s approval, which approval shall not be unreasonably withheld,
conditioned, or delayed. Prior to the commencement of the Renovations, Tenant
shall provide to Landlord for Landlord’s review and approval, a schematic
drawing and outline specifications detailing the Renovations (“Renovation
Specifications”), and a detailed breakdown of the costs to be incurred by Tenant
and reimbursed from the CPJ Expansion Premises TI Allowance relating to the
Renovations (“Budget”). Landlord shall respond to Tenant regarding Landlord’s
approval or disapproval of the Renovations Specifications and Budget, within 10
business days after Landlord’s receipt thereof, and in the case of Landlord’s
disapproval of the proposed Renovation Specifications and/or Budget, Landlord
shall provide Tenant with written objections, questions, or comments. Tenant
shall cause the proposed Renovation Specifications and/or Budget to be revised
to address such written comments and shall submit the revised Renovation
Specifications and/or Budget to Landlord for approval within 10 days thereafter.
Such process shall continue until Landlord has approved such Renovation
Specifications and Budget, after which approval neither the Renovation
Specifications nor the Budget shall be modified without Landlord’s written
approval.

 

ii.          Payment of CPJ Expansion Premises TI Allowance. Landlord shall pay
the CPJ Expansion Premises TI Allowance at Tenant’s request to either Tenant’s
contractor or to Tenant in not more than 2 requisitions (the final requisition
shall be paid after final completion of the Renovations in compliance with the
Renovation Specifications) in accordance with the following terms and
conditions: (A) at any time before the second anniversary of the CPJ Expansion
Premises Commencement Date (“CPJ Expansion Premises TI Allowance Expiration
Date”), Tenant shall have the right to provide Landlord with not more than 2
requisitions for reimbursement of the costs incurred by Tenant for the
performance of the Renovations, (B) the CPJ Expansion Premises TI Allowance can
be used for any Renovations made to the Premises on and after the CPJ Expansion
Premises Commencement Date, and (C) Landlord shall have inspected and approved
the Renovations. For the purposes hereof, a “requisition” shall mean written
documentation, including, but not limited to, invoices from Tenant’s
contractor(s) or vendor(s), written lien waivers from Tenant’s contractor(s) and
subcontractor(s), and such other documentation as Landlord may reasonably
request for the Renovations showing in reasonable detail the costs of the
Renovations performed by, or on behalf of, Tenant. Each requisition, which shall
be on Landlord’s standard form, shall be accompanied by evidence reasonably
satisfactory to Landlord that all of the costs of the Renovations performed to
the date of the requisition have been fully paid by Tenant. Landlord

 

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will not fund Tenant’s requisition: (x) if Tenant is then in Default of any of
its obligations under the Lease, (y) if the requisition is received after the
CPJ Expansion Premises TI Allowance Expiration Date, or (z) if the requisition
is for any amount in excess of the CPJ Expansion Premises T1 Allowance. In no
event shall Landlord be responsible for any costs hereunder for Renovations that
exceed the CPJ Expansion Premises TI Allowance, it being understood and agreed
that Tenant shall be solely responsible for the payment of any costs for
Renovations in excess of the CPJ Expansion Premises TI Allowance. If Landlord
has not received such requisition before the CPJ Expansion Premises TI Allowance
Expiration Date, then Tenant shall be deemed to have forfeited any unpaid
portion of the CPJ Expansion Premises TI Allowance.

 

iii.         Title to Improvements. Title to the Renovations paid for out of the
CPJ Expansion Premises TI Allowance shall vest in and remain in the sole name of
Landlord and shall not be subject to any liens or encumbrances. On the
expiration or earlier termination of the Term for the CPJ Expansion Premises,
Tenant shall surrender possession of the Renovations to Landlord. During the
Term for the CPJ Expansion Premises, Tenant shall maintain the Renovations in
good order, condition, and repair (ordinary wear and tear excepted).

 

3.           Changes to Defined Terms. Effective as of the CPJ Expansion
Premises Commencement Date, the following amendments are hereby made to the
definitions contained on page 1 of the Lease in the Basic Lease Provisions.

 

a.           The defined term “Premises” shall be deleted in its entirety and
replaced with the following:

 

“Premises:That portion of the Project, containing approximately 13,969 rentable
square feet, as determined by Landlord, consisting of (1) approximately 6,489
rentable square feet of space shown on Exhibit A to the Original Lease
(“Original Premises”), (ii) approximately 2,290 rentable square feet of space
shown as the hatched area on Exhibit A attached to the First Amendment to Lease
Agreement dated December 19, 2014 between Landlord and Tenant (“Expansion
Premises”), (c) approximately 733 rentable square feet of space outlined on
Exhibit A attached to the Second Amendment to Lease Agreement between Landlord
and Tenant (“2015 Expansion Premises”), and (d) approximately 4,457 rentable
square feet of space outlined on Exhibit A attached to the Third Amendment to
Lease Agreement between Landlord and Tenant (“CPJ Expansion Premises”).
Gaudreau, Inc., Landlord’s architect, has measured the area of the Premises
pursuant to the 1996 Standard Method of Measuring Floor Area in Office Buildings
as adopted by the Building Owners and Managers Association (ANSI/BOMA
Z65.11996). Tenant acknowledges receipt of such measurement and confirms that
(a) Tenant has had an opportunity to confirm such measurement with an architect
of its selection before the Effective Date (with

 

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respect to the Original Premises), the Expansion Premises Commencement Date
(with respect to the Expansion Premises), the 2015 Expansion Premises
Commencement Date (with respect to the 2015 Expansion Premises), and the CPJ
Expansion Premises Commencement Date (with respect to the CPJ Expansion
Premises), and (b) such measurement shall be conclusive as to the area of the
Premises.”

 

b.           The defined term “Rentable Area of the Premises” shall mean
approximately 13,969 rentable square feet.

 

c.           The defined term “Tenant’s Share of Operating Expenses” shall mean
7.73% (the rentable area of the Building is 180,650 rentable square feet;
13,969/180,650 = 7.73%).

 

4.           Base Rent for CPJ Expansion Premises. (a) Tenant shall continue to
pay Base Rent with respect to the Original Premises, the Expansion Premises, and
the 2015 Expansion Premises at the rates set forth in the Lease, and (b)
commencing on the CPJ Expansion Premises Commencement Date, Base Rent for the
CPJ Expansion Premises shall be payable at the rate of $5,924.10 per month and
shall, notwithstanding any contrary provision contained in the Lease, thereafter
be increased on each anniversary of the CPJ Expansion Premises Commencement Date
by multiplying the Base Rent payable for the CPJ Expansion Premises immediately
before such date by the Rent Adjustment Percentage (i.e., 3%) and adding the
resulting amount to the Base Rent payable for the CPJ Expansion Premises
immediately before such date. Base Rent for the CPJ Expansion Premises, as so
adjusted, shall thereafter be due as provided in the Lease.

 

5.           Contingency. This Third Amendment is contingent (“Contingency”) on
Current Tenant not exercising its right to extend the term of its lease by
October 1, 2015. If Current Tenant exercises its extension right by October 1,
2015, Landlord shall so notify Tenant and this Third Amendment shall
automatically terminate, whereupon neither Landlord nor Tenant shall have any
further rights, duties, or obligations under this Third Amendment. If Current
Tenant does not exercise its extension right by October 1, 2015, Landlord shall
so notify Tenant and this Third Amendment shall remain in full force and effect
in accordance with its terms. Within 10 days after written request from Landlord
or Tenant, Landlord and Tenant shall execute and deliver a statement in form and
substance reasonably acceptable to them confirming that the Contingency has been
satisfied. Tenant understands, acknowledges, and agrees that Landlord makes no
guaranty, representation, or assurance that Current Tenant will not exercise its
extension right by October 1, 2015.

 

6.           Miscellaneous.

 

a.           Entire Agreement. This Third Amendment is the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior and contemporaneous oral and written agreements and discussions. This
Third Amendment may be amended only by an agreement in writing, signed by the
parties hereto.

 

b.           Binding Effect. This Third Amendment is binding upon and shall
inure to the benefit of the parties hereto, their respective agents, employees,
members, representatives,

 

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officers, directors, divisions, subsidiaries, affiliates, assigns, heirs,
successors in interest and shareholders.

 

c.           Counterparts. This Third Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument. The signature page
of any counterpart may be detached therefrom without impairing the legal effect
of the signature(s) thereon provided such signature page is attached to any
other counterpart identical thereto except having additional signature pages
executed by other parties to this Third Amendment attached thereto.

 

d.           Broker. Landlord and Tenant each represents and warrants that it
has not dealt with any broker, agent, or other person (collectively, “Broker”)
in connection with this transaction and that no Broker brought about this
transaction, other than Jones Lang LaSalle Brokerage, Inc., as Tenant’s broker
(“JLL”). JLL shall be paid pursuant to a separate agreement between Landlord and
JLL. Landlord and Tenant each hereby agrees to indemnify and hold the other
harmless from and against any claims by any Broker, other than JLL, claiming a
commission or other form of compensation by virtue of having dealt with Tenant
or Landlord, as applicable, with regard to this leasing transaction.

 

e.           Ratification; Conflicts. Except as amended and/or modified by this
Third Amendment, the Lease is hereby ratified and confirmed and all other terms
of the Lease shall remain in full force and effect, unaltered and unchanged by
this Third Amendment. In the event of any conflict between the provisions of
this Third Amendment and the provisions of the Lease, the provisions of this
Third Amendment shall prevail. Regardless of whether specifically amended by
this Third Amendment, all of the terms and provisions of the Lease are hereby
amended to the extent necessary to give effect to the purpose and intent of this
Third Amendment.

 

f.            Non-Disclosure of Terms. Tenant acknowledges and agrees that the
terms of the Lease are confidential and constitute proprietary information of
Landlord. Disclosure of such terms could adversely affect the ability of
Landlord and its affiliates to negotiate, manage, and administer other leases
and impair Landlord’s relationship with other tenants. Accordingly, as a
material inducement for Landlord to enter into this Third Amendment, Tenant, and
behalf of itself and its partners, managers, members, officers, directors,
employees, agents, and attorneys, agrees that it shall not intentionally and
voluntarily disclose the terms and conditions of the Lease to any publication or
other media or any tenant or apparent prospective tenant of the Building or
other portion of the Project, or real estate agent or broker, either directly or
indirectly.

 

[SIGNATURES APPEAR ON NEXT PAGE]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment under
seal as of the day and year first above written.

 

  TENANT:       GENVEC, INC.,   a Delaware corporation

 

  By: Douglas J. Swirsky (SEAL)   Its: President + CEO  

 

  LANDLORD:       ARE-MARYLAND NO. 30, LLC,   a Maryland limited liability
company

 

  By: ARE-Maryland No. 29, LLC,

  a Delaware limited liability company, as its sole member

 

  By: Alexandria Real Estate Equities, L.P.,

  a Delaware limited partnership, as its sole member

 

  By: ARE-QRS CORP.,     a Maryland corporation,     general partner

 

  By: /s Jennifer Banks (SEAL)

  Name: Jennifer Banks  

  Title: EVP, General Counsel  

 

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EXHIBIT A (SUPPLEMENTS EXHIBIT A TO ORIGINAL LEASE)
CPJ Expansion Premises

 

[t1700563_ex10-31p8.jpg]

 

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EXHIBIT B

 

ACKNOWLEDGMENT OF CPJ EXPANSION PREMISES COMMENCEMENT DATE

 

This ACKNOWLEDGMENT OF CPJ EXPANSION PREMISES COMMENCEMENT DATE is made as of
this ____ day of ____________, 2016, between ARE-MARYLAND NO. 30, LLC, a
Maryland limited liability company (“Landlord”), and GENVEC, INC., a Delaware
corporation (“Tenant”), and is attached to and made a part of the Third
Amendment to Lease Agreement dated as of July _____, 2015 (“Third Amendment”),
by and between Landlord and Tenant. Any initially capitalized terms used but not
defined herein shall have the meanings given them in the Third Amendment.

 

Landlord and Tenant hereby acknowledge and agree that the CPJ Expansion Premises
Commencement Date is _______________, 2016 and the expiration date of the Base
Term of the Lease shall be midnight on June 30, 2021. In case of a conflict
between the terms of the Third Amendment and the terms of this Acknowledgement
of CPJ Expansion Premises Commencement Date, this Acknowledgement of CPJ
Expansion Premises Commencement Date shall control for all purposes.

 

IN WITNESS WHEREOF, Landlord and Tenant have executed this ACKNOWLEDGMENT OF CPJ
EXPANSION PREMISES COMMENCEMENT DATE under seal to be effective on the date
first above written.

 

  TENANT:       GENVEC, INC.,   a Delaware corporation

 

  By:   (SEAL)   Its:    

 

  LANDLORD:       ARE-MARYLAND NO. 30, LLC,   a Maryland limited liability
company

 

  By: ARE-Maryland No. 29, LLC,

  a Delaware limited liability company, as its sole member

 

  By: Alexandria Real Estate Equities, L.P.,

  a Delaware limited partnership, as its sole member

 

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  By: ARE-QRS CORP.,     a Maryland corporation,     general partner

 

  By:   (SEAL)

  Name:    

  Title:    

 

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