Exhibit 99(e)
January 11, 2000
BY HAND DELIVERY
ADMIRAL PROPERTIES, LLC
c/o Xx. Xxx X. Xxxxxxx
PROPERTY MANAGEMENT COMPANY
000 Xxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
LETTER OF INTENT
Re: Lease for CommerceFirst Bank Facilities at 0000 Xxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000
Dear Xxx:
On behalf of CommerceFirst Bancorp, Inc., a Maryland corporation,
("CommerceFirst"), the purpose of this Letter of Intent is to outline the
general parameters upon which CommerceFirst is prepared to enter into a
Definitive Lease Agreement (the "Lease") with Admiral Properties, LLC (the
"Landlord") for the lease of space for facilities for its wholly-owned
subsidiary, CommerceFirst Bank, a to-be-formed Maryland state-chartered, Federal
Reserve Member commercial bank now in organization (the "Bank"). By their
execution of this Letter of Intent, CommerceFirst and the Landlord confirm their
tentative understanding with respect to the basic terms of the transaction and
they confirm that this Letter supersedes all prior Letters of Intent, if any.
The general parameters of the transaction will be as follows:
1. Transaction Description.
1.1 Subject to the terms and conditions of the Lease to be negotiated
and entered into between the parties, CommerceFirst will lease approximately
SEVEN THOUSAND EIGHT HUNDRED FIFTY (7,850) square feet (exclusive of the Boiler
Room) of space, more or less (the exact square footage to be determined upon
execution of a final Lease Agreement) (the "Demised Space") on the first floor
in the building located at 0000 Xxxx Xxxxxx xx Xxxxxxxxx, Xxxxxxxx (the
"Building"). The Demised Space will be located at the easterly end of the
building at the front corner and will correspond approximately to the space
identified on the attached Exhibit 1.1, "PROPOSED FIRST FLOOR PLAN as prepared
by Alt Breeding Xxxxxxx Architects. The Demised Space will be used by
CommerceFirst for general corporate offices and for branch and other banking
activities of the Bank.
1.2 At a minimum, the transaction will be specifically conditioned on
the following:
1.2.1 The perimeter of the space to be included in the Demised
Premises will be Ninety (90) feet (approximately 60 feet net of the Boiler Room)
across the front of the Building (approximately as shown on the attached Exhibit
1.1). The Boiler Room will be reduced in size approximately as shown on the
attached Exhibit 1.1 at the Landlord's expense.
1.2.2 The vacant cinder block building (approximately 2,500
square feet) now existing in front of the Building (adjacent to the Honda
parking lot) be demolished and replaced with parking, driveway and/or open drive
aisle areas. The Landlord reserves the right to construct a building on a pad
site in the parking lot of the
ADMIRAL PROPERTIES, LLC
c/o Xx. Xxx X. Xxxxxxx
PROPERTY MANAGEMENT COMPANY
January 11, 2000
Page 2
project upon the following conditions (i) the Landlord will not build the pad
site building until it has acquired and incorporated into the project of which
the Demised Premises is a part the veterinary offices building located to the
west of the project, (ii) without the advance written consent of CommerceFirst,
the Landlord will not build the pad site building in a Bank Line of Sight Area
to be designated on an attached Exhibit 1.2.2, which will generally run from the
front of the Demised Premises to the corner of Admiral and West Streets, then
along West Street to approximately the intersection of West Street and
Chinquapin Round Road and then diagonally back to the front of the Demised
Premises, (iii) the Landlord will not lease any pad site or any other site in
the property to a bank, and (iv) the Landlord will grant to CommerceFirst a
right of first refusal to lease the pad site for its bank branch location.
1.2.3 CommerceFirst and the Landlord will reach an agreement
whereby the Landlord will develop the facade of the Demised Premises to be
designed by Xxxxxxxx Xxxxxxxx of Alt Breeding Schwartz Architects in Annapolis,
Maryland in a manner acceptable to CommerceFirst (which design will be
reasonably consistent architecturally with the brick design previously provided
to the Landlord and to CommerceFirst by Xxxxxxxx Xxxxxxxx and which design is
consistent with and takes advantage of the brick character of the end of the
building in which the Demised Premises are located). The architectural design
fees and the costs of construction of the agreed-upon facade treatment will be
borne by the Landlord.
2. Transaction Structure.
2.1 The Lease will be for an initial term of FIVE (5) years (the
"Initial Term") with THREE (3) FIVE (5) year options to renew (the "Option
Terms") granted to CommerceFirst. The Option Terms rent will be at the
prevailing market rate at the time of exercise, provided, however, that in any
event, the rent for an Option Term will not be less that the rent for the last
year in the preceding term.
2.2 The Lease will be executed as soon as it is negotiated in
accordance with the terms of this Letter of Intent but will have a commencement
date of March 1, 2000 (the "Commencement Date").
2.3 CommerceFirst will have the option to extend the Commencement Date
for THREE (3) extension periods of ONE (1) month each in exchange for payment to
the Landlord of a monthly extension fee equal of SEVEN THOUSAND AND 00/100
DOLLARS ($7,000.00) per month.
2.4 CommerceFirst shall have the option to terminate the Lease at any
time prior to the Commencement Date (as may be extended pursuant to the
preceding section) in the event of a Regulatory Failure. For purposes of this
Letter of Intent and the Lease, a "Regulatory Failure" will mean the failure of
CommerceFirst to receive all necessary and appropriate approvals from all
federal and state bank and securities regulatory authorities to open the Bank
for business as a Maryland state chartered, Federal Reserve Member commercial
bank together with the reasonable judgment of the Organizers of CommerceFirst
that such regulatory approvals are not likely to be achieved in a reasonable
period of time.
2.5 The Landlord will commence construction of the Landlord Standard
Improvements and the Tenant Improvements for which the Landlord has agreed to
serve as contractor upon the Commencement Date. The Landlord will complete the
foregoing construction work within SIXTY (60) days of the Commencement Date.
2.6 For purposes of this Letter of Intent, (i) "Final Bank Approval
Date" shall mean the date upon all final federal and state regulatory approvals
are received by CommerceFirst for the opening of the Bank. CommerceFirst shall
have the further option to terminate the Lease after the Commencement Date, but
prior to the Final Bank Approval Date, in the event of a Regulatory Failure (as
defined above) by paying and/or forfeiting to the Landlord the following: (i)
the Security Deposit of FIFTEEN THOUSAND AND 00/100 DOLLARS ($15,000.00)
referred to hereinbelow, (ii) all Commencement Date extension fees
ADMIRAL PROPERTIES, LLC
c/o Xx. Xxx X. Xxxxxxx
PROPERTY MANAGEMENT COMPANY
January 11, 2000
Page 3
paid to the Landlord referred to hereinabove, (iii) any and all
post-Commencement Date rent paid to the Landlord, (iv) a termination fee in the
amount of ONE HUNDRED THOUSAND AND 00/100 DOLLARS ($100,000.00), and (v) the
Tenant Upgrades Reimbursement referred to in SECTION 2.7 below.. The total
breakdown compensation payable to the Landlord, assuming all Commencement Date
extensions have been exercised and at least one month's pre-Delivery Date rent
has been paid will be approximately ONE HUNDRED FORTY-SIX THOUSAND AND 00/100
DOLLARS ($146,000.00) (Security Deposit = $15,000.00; plus three extension fees
@ $7,000.00 each = $21,000.00; plus first month's pre-Delivery Date rent =
$10,140.00; plus Termination Fee = $100,000.00 = total of $146,140.00) plus the
Tenant Upgrade Reimbursement referred to in Section 2.7, below.
2.7 In addition to the Termination Fees referred to in Section 2.6,
above, in the event the Landlord pays or incurs any bank-specific build-out
expenses (subject to adjustments for returns and allowances) over and above the
cost of FIFTY-FIVE and 00/100 DOLLARS ($55.00) per square foot of the Demised
Premises (the "Excess Bank Expenses"), CommerceFirst will also reimburse the
Landlord for such Excess Bank Expenses in the event of a termination of the
Lease for the reasons specified in Section 2.6. For purposes of this Section
2.7, "bank-specific expenses" will mean expenses paid or incurred by the
Landlord for build-out items which are requested or specified by CommerceFirst
and which are unique to CommerceFirst's branch banking facility (as opposed to
general office space expenses) such as teller counters, security cameras, bank
security systems, special glass or teller counter enclosures and the like.
2.8 The anticipated schedule of events under the transaction is as
follows:
2.8.1 Execution of this Letter of Intent by both parties by
January 12, 2000;
2.8.2 Execution of the Lease by February 15, 2000;
2.8.4 Expiration of CommerceFirst's Design Feasibility Period
by February 15, 2000;
2.8.5 Completion of Landlord Standard Improvements Drawings
and Tenant Improvements Drawings by February 1, 2000 (the Landlord Standard
Improvement Drawings shall be at the sole expense of the Landlord; the Landlord
and CommerceFirst agree to split the costs of the Tenant Improvement Drawings to
be completed by Alt Breeding Xxxxxx Architects);
2.8.6 Apply for and secure all permits for construction by
March 1, 2000.
2.8.7 Construction commences not later than TEN (10) days
after (i) the Commencement Date (subject to any extensions of the Commencement
Date in accordance with the Tenant's option to extend such date as provided in
Section 2.3, above), or (ii) the receipt of all building permits for the
construction of the improvements to the Demised Space.
2.8.8 The Landlord shall deliver the Demised Premises the
earlier of (i) May 10, 2000 or ii) SIXTY (60) days after the commencement of
construction.
3. Rental Rate.
3.1 Commencing on the date the Demised Premises are delivered to
CommerceFirst, with all Landlord Standard Improvements and Tenant Improvements
completed (the "Delivery Date") the rental rate for the Demised Premises will be
NINETEEN AND 00/100 DOLLARS ($19.00) per square foot, which rate will be based
on and will include (i) the provision of the Landlord Standard Improvements by
the Landlord and (ii) a Tenant Improvement Allowance provided for hereinbelow
over and above the
ADMIRAL PROPERTIES, LLC
c/o Xx. Xxx X. Xxxxxxx
PROPERTY MANAGEMENT COMPANY
January 11, 2000
Page 4
Landlord Standard Improvements (as defined below).
3.2 From the Commencement Date to the Delivery Date, the rental rate
for the Demised Premises will be FIFTEEN AND 50/100 DOLLARS ($15.50) per square
feet.
3.3 The Landlord will build-out the Demised Premises in accordance with
the Landlord' Work Letter for base building standard build-out, which Work
Letter is attached here to as Exhibit 3.3 (the "Landlord Standard
Improvements"). In addition, at the Landlord's expense the Landlord will:
3.3.1 During the term of the Lease be responsible for all
structural components of the building including the roof;
3.3.2 Provide a second means of doorway egress at the rear as
required by the Fire Xxxxxxxx (including, if so required, an appropriate
landing);
3.3.3 Provide a new window to replace any window lost by the
provision of item 3.1.2, above;
3.3.4 Reduce the size of the boiler room by 10 feet;
3.3.5 Remove the entrance of the boiler room from the front of
the building to the interior of the building (inside the bank's space) if
permitted by the Fire Xxxxxxxx;
3.3.6 Move the front entrance of the bank toward Admiral Drive
by TEN (10) feet or so to take advantage of the reduced boiler room size and to
maximize the space available for the branch (within the context of the reduced
90 foot overall frontage) consistent with the attached Exhibit 1.1 prepared by
Alt Breeding Xxxxxxx Architects;
3.3.7 Close the window vent spaces on Admiral Drive with
bronze sheeting or comparable material (as opposed to attempting to match the
brick);
3.3.8 Install wire mesh (exact dimensions to be determined)
over the windows for security purposes.3.4 The annual rent escalator during the
Initial Term of the Lease will be fixed at THREE PERCENT (3.0%). On the first
month of the first Option Term, and during each Option Term, the annual rent
escalator will be based on CPI, but will have a minimum of THREE PERCENT (3.0%)
and a maximum of SIX PERCENT (6.0%).
3.5 CommerceFirst will pay its pro-rata share of the real estate taxes
with respect to the Demised Premises from and after the Delivery Date.
3.6 CommerceFirst will pay its pro-rata share of the Landlord's
insurance with respect to the Demised Premises from and after the Delivery Date.
3.7 CommerceFirst will pay its pro-rata share of the Common Area
Maintenance expenses for the project from and after the Delivery Date which are
estimated to be TWENTY-EIGHT CENTS ($0.28) per square foot. In no year will the
Common Area Maintenance expenses exceed FIFTY CENTS ($0.50) per square foot.
3.8 The Tenant Improvement Allowance will be FIFTEEN AND 00/100 DOLLARS
($15.00) per square foot over and above the Landlord Standard Improvements.
ADMIRAL PROPERTIES, LLC
c/o Xx. Xxx X. Xxxxxxx
PROPERTY MANAGEMENT COMPANY
January 11, 2000
Page 5
3.9 From and after the Delivery Date, CommerceFirst will be responsible
for all operating expenses within the leased premises.
4. Security Deposit. CommerceFirst will pay to the Landlord a Security Deposit
in the amount of FIFTEEN THOUSAND 00/100 DOLLARS ($15,000) at the time the Lease
is signed. The Security Deposit will be forfeited by CommerceFirst at any time
if the Lease is terminated by CommerceFirst after the end of the Design
Feasibility Period (as defined below) but prior to the end of the term thereof
for any reason other than a material default by the Landlord
5. Design Feasibility Period. From the date of the execution of this Letter of
Intent and/or the date of the execution of the Lease until the close of business
on February 15, 2000, CommerceFirst will determine to its satisfaction the
design and financial feasibility of the transaction during which time, and in
connection with the negotiation of other customary terms and conditions and the
execution of the Lease, CommerceFirst will review and evaluate to its
satisfaction, among other items:
5.1 The nature, scope and specifications of the Landlord's Work to be
performed on the exterior of the Demised Premises and the surrounding property,
including exterior finishes, facades, porticos, awnings, parking lots,
landscaping, building and other signage and other matters. CommerceFirst and/or
its architects will be entitled to review in detail the Landlord's site plans,
specifications, drawings and other indicia of such work and improvements.
5.2 The nature, scope and specifications of the Landlord Standard
Improvements as outlined in the Landlord's Work Letter to be performed on the
interior of the Demised Premises and other work which is to be performed by the
Landlord, including, but not limited to, demising walls, floors, ceilings,
demolition of interior improvements, electrical, fire sprinkler, water, HVAC
rough-in and other matters to be completed by the Landlord as part of the
Landlord's work and/or the Landlord Standard Improvements before the Tenant
Improvement Allowance is to be applied. CommerceFirst and/or its architects will
be entitled to review in detail the Landlord's site plans, specifications,
drawings and other indicia of such work and improvements.
5.3 The nature, scope and specifications of the Landlord's Work to be
performed as part of the Tenant Improvement Allowance, the remainder of the
Tenant Improvement Allowance and any additional funds CommerceFirst elects to
apply to the project which need to l be applied toward upgrades in the finishes
and fixtures of the build-out of the Demised Premises.
5.4 CommerceFirst may terminate this Letter of Intent and/or the Lease
without penalty or expense to CommerceFirst, and CommerceFirst shall be entitled
to have its Security Deposit refunded, if at any time during the Design
Feasibility Period CommerceFirst determines, in its sole discretion, that the
project is not feasible to CommerceFirst for any reason whatsoever, including,
but not limited to, issues of design and cost of build-out of the Demised
Premises and its surrounding areas.
6. Governing Law. This Letter of Intent and the Lease will, except as preempted
by federal, tax or other applicable laws, be subject to and shall be construed
under the laws of the State of Maryland.
7. Modification. This Letter of Intent may not be modified or amended except by
a writing signed unanimously by the parties hereto.
ADMIRAL PROPERTIES, LLC
c/o Xx. Xxx X. Xxxxxxx
PROPERTY MANAGEMENT COMPANY
January 11, 2000
Page 6
8. Public Announcement. No public or general disclosure of the negotiations
surrounding this Letter of Intent and/or the Lease or of the consummation of any
of the transactions contemplated in this Letter of Intent will be made without
the written consent of all parties to this Letter of Intent.
9. No Broker. The parties hereto acknowledge that PROPERTY MANAGEMENT COMPANY
has represented the Landlord in this transaction. All commissions due to the
Broker will be paid by the Landlord. CommerceFirst has not engaged the services
of any brokers, investment bankers or other parties who may suppose themselves
entitled to a commission on the transaction. Each party will hold harmless the
other from and against any claim to a commission or fee raised by any party with
whom the other has engaged to assist in this transaction.
10. Purpose of Letter of Intent; Non-binding Nature. It is the purpose of this
Letter of Intent to express the seriousness and commitment of the parties to
enter into a Final Definitive Lease Agreement and to cause the parties to
proceed to instruct their respective counsel and advisors to commence due
diligence and to negotiate and prepare the necessary documents and agreements to
effectuate the understandings set forth herein. It is understood and agreed that
this letter is merely a letter and statement of intent and not a legally binding
agreement, except as to the matters of confidentiality set forth in Paragraph 8
above and the exclusive right to negotiate set forth in Paragraph 11, below. All
parties reserve the right in its sole and absolute discretion (until a Final
Definitive Lease Agreement has been negotiated and executed) to determine
whether the contemplated transaction can be successfully consummated, and any
party may, without any obligation to the others, decline to proceed with the
proposed transaction until such time as a Definitive Agreement is executed.
11. Exclusive Right to Negotiate. Upon the execution of this Letter of Intent by
both parties, each party will grant to the other an exclusive right to negotiate
the proposed transaction for a period of time commencing upon the delivery by
the Landlord of this Letter of Intent to CommerceFirst and expiring 5:00 p.m.,
February 15, 2000.
12. Definitive Lease Agreement. The parties will enter into a Definitive Lease
Agreement on or before February 15, 2000. The Definitive Lease Agreement will
incorporate the terms and conditions of this Letter of Intent in to it.
13. Expiration and Term of Letter of Intent. Unless extended by the parties
hereto in writing this Letter of Intent and the offers contained herein will
expire, lapse and be of no force and effect:
13.1 if this Letter of Intent is not accepted, signed and delivered to
CommerceFirst at the above-captioned address on or before the close of business
on January 12, 2000; or
13.2 unless extended by written agreement of the parties, the parties
hereto do not enter into a Definitive Lease Agreement for the transaction on or
before February 15, 2000; or
13.3 if the transaction contemplated herein is canceled in writing by
either party in accordance with the terms of this Letter of Intent; or
13.4 upon the execution of the Definitive Lease Agreement; or
13.5 upon the failure of any of the contingencies provided for herein.
Please review the foregoing with your advisors and return your acceptance as
indicated above. We look forward to having the opportunity of working with you
to consummate the transactions referred to herein. Please do not hesitate to
call me if you have any questions.
AGREED TO AND ACCEPTED:
COMMERCEFIRST BANCORP, INC.
By:
---------------------------------
Xxxxxxx X. Xxxxxx, Date
President and Chief Executive Officer
ADMIRAL PROPERTIES, LLC
By:
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Date
Title:
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