EXHIBIT 10.27
July 15, 1996
Mr. James Helfrich
Mr. Scott Kepner
Mr. Robert Issacson
Village Properties
562 Mission Street, Suite 201
San Francisco, CA 94105
Dear Sirs:
Thank you for your cooperation over the past several months with our evaluation
of candidate sites for Fair, Isaac's corporate facilities expansion. As you
know, Sandy Greenblat of H&L Commercial and AMB have been working with Fair,
Isaac management to determine Fair, Isaac's best course of action. At this time,
we are prepared to recommend that Fair, Isaac & Company, Inc. ("Tenant") enter
into a build-to suit lease ("Lease") with Village Properties ("Landlord") on the
following terms:
1. INITIAL PROCESS
1.1 Feasibility Phase. This letter presents an outline of terms that
both Landlord and Tenant find acceptable given the parties' current knowledge
and understanding of the intended project. Commencing with the execution of this
letter of intent and extending for a period of one hundred and twenty (120) days
(the "Feasibility Phase") both Landlord and Tenant will endeavor to 1) refine
their respective understanding of the feasibility of the project through
undertaking design studies, environmental investigations, and discussions with
technical consultants, public officials and others; and 2) draft a lease and
other agreements incorporating the terms of this letter with additional detail
as required. A separate letter agreement will describe Landlord's and Tenant's
cost responsibility during the Feasibility Phase.
2. PARTIES & PREMISES
2.1 Parties. The parties to the Lease would be Fair, Isaac & Company,
Inc., a Delaware corporation and an entity affiliated with Village Builders,
L.P., a California limited partnership. Landlord warrants that Village Builders,
L.P. holds a valid option to purchase the parcels identified below as the PG&E
Property and the City of San Rafael has passed a resolution to grant an option
to purchase City Property.
2.2 Area and Location. The initial premises would consist of a building
or buildings to be built according to plans and specifications to be mutually
agreed upon by Tenant and Landlord, and comprising a total of approximately
200,000 gross building square feet of office space in the initial phase with
structure and on-grade parking as mutually agreed upon by the Parties. The
project will be located in San Rafael, California on the PG&E Property. The
development process for the project is described in Paragraph 5, below.
2.2.1 PG&E Property. The PG&E Property consists of all that presently
unimproved real property commonly known as 750 & 751 Lindaro Streets, San
Rafael, CA, further referred to as Assessor's Parcel Numbers 13-021-10 &
13-012-12 comprising approximately 13.97 gross acres (less dedications), and
described more fully in Exhibit A.
1.2.2 City Property. The City Property consists of all that presently
improved site presently owned by the City of San Rafael Redevelopment Agency
located between the general boundaries of Second Street on the north, Lindaro
Street on the west, San Rafael Creek on the east and the confluence of Lincoln
Avenue and San Rafael Creek on the south, presently occupied by the Shell
Service Station at the north end of site and the City of San Rafael Corporation
Yard on the balance of site. This parcel is further referred to as Assessor's
Parcel Number 13-021-19, comprising approximately 2.38 acres (less dedications)
and described more fully in Exhibit A.
3. TERM
3.1 Term and Commencement. The term of the Lease would commence thirty
(30) days following substantial completion of the tenant improvements and
issuance by the City of San Rafael of a Certificate of Occupancy and extend for
a term of twenty (20) years. The Lease will address issues of phased move-in and
Landlord and Tenant delay in construction. The parties anticipate the
commencement date to occur not before July 1, 1999 and not later than July 1,
2000.
3.2 Extension Options. Tenant would have four (4) options to extend the
Lease for a term of five (5) years each, subject to not less than twelve (12)
months prior written notice. The annual base rent for each option would be no
more than ninety-five percent (95%) of the Fair Market Rental Value ("FMRV") for
the premises at the start of the additional term, but in no event less than the
initial base rent.
FMRV would be defined in the Lease as the net effective rent per
rentable square foot being charged for comparable space in comparable buildings
leased on comparable terms including as relevant factors the presence or absence
of tenant improvement contributions and rent concessions. The discount of the
FMRV to ninety five percent (95%) would adjust for the fact that no lost rent
would be incurred by the Landlord and no leasing commissions would be incurred.
If the parties are unable to agree on the FMRV of the space, the rent
determination would be submitted to arbitration through a procedure described in
the Lease.
In the alternative, Tenant would have two options to extend the Lease
for terms of ten (10) years each at ninety-two and one half percent (92.5%) of
FMRV.
3.3 Holdover. Upon twelve (12) months prior written notice, Tenant
would have the option to holdover following expiration of the initial or
extension term of the Lease for a fixed period designated in the notice, but not
exceeding six (6) months, at a rent equal to one hundred and ten percent (110%)
of the escalated base rent applying to the final month of the term. The Lease
would address holdover rights absent such prior notice.
4. RENT
4.1 Initial Base Rent. The initial annual base rent for the initial
premises would be established by multiplying the Project Cost times the
Development Constant.
4.1.1 Project Cost. Exhibit C presents a preliminary proforma
reflecting estimated Project Costs. Project Costs would include all development
costs of the Project as outlined in this Section 4.
4.1.1.1 Developer Fixed Price Items ("DPFI"). These items would be paid
for and contributed by the Developer at a stipulated price. The Developer would
bear all cost risk on these items:
4.1.1.1.1. All land costs for the PG&E Property and all process costs
of entitlement.
(1) All Developer overhead
(2) EIR
(3) Consultants
(4) City staff time
(5) City consultants
(6) Campaigns and referenda
(7) Creek Park restoration
(8) All legal fees and the cost of any litigation
related to entitlements
(9) Public Relations
(10) Carrying and operating costs incurred by
Landlord during the period between Landlord's purchase of the PG&E Property and
commencement of construction, including interest, property taxes, insurance,
maintenance and any other costs of ownership, subject to the provisions of
Paragraph 5.6.
4.1.1.1.2. All Environmental Issues.
(1) Remediation including any existing and future
obligations and any premiums or costs imposed on the construction of the Project
solely by virtue of contamination of the soil or groundwater. During the
Feasibility Phase, the parties will establish a practical method for determining
the amount of this premium, if any.
(2) Reports
(3) Indemnities
Land Entitlement Stipulated Price: $10,000.00
4.1.1.1.3. One Half of all mitigations and exactions imposed by City
and other parties as a condition of project approval.
(1) Including Impact Fees and Fair-Share Fees
(2) Including all required road widenings, parks
(except Creek Park), signals
(3) Including all settlements with the City and other
parties as a condition required to obtain or expedite project approval.
(4) Does not include: (a) curb, gutter, sidewalk and
normal offsites or costs that any development project would incur; (b) utilities
impact fees or capacity or hook-up fees: (c) PG&E, water or sewer district or
school, park or building plan check, permit or similar regularly scheduled fees;
(d) any architectural or engineering costs, including entitlement submittals and
presentations.
50% of Mitigation - Stipulated Price:
$1,000,000.00
Landlord and Tenant agree that the value of the property described
above, for the purposes of calculating Phase One Project Costs, are the
stipulated prices shown above. A portion of the DFPI would be allocated to Phase
One development with the exact amount depending on site development and parking
strategies. That portion of the DFPI not included in the Project Cost would be a
Forward Cost Item.
4.1.1.2 Construction Hard Costs. The following costs of constructing
the project would be included in the Project Costs.
4.1.1.2.1 Off-site Utilities. The cost of installation of utilities,
including extensions to offsite services, and utility impact fees will be
included in Phase One Project Costs except to the extent allocable to future
phases.
4.1.1.2.2 Site Work and Landscaping. The cost of site work, off-site
work not related to mitigations, and landscaping will be included in Phase One
Project Costs except to the extent allocable to future phases.
4.1.1.2.3 Base Buildings Shell and Core. The cost of constructing
approximately 200,000 GSF of office building space will be included in Phase One
Project Cost. The definition of Base Building in relation to Tenant Improvement
scope of work is outlined in Exhibit D.
4.1.1.2.4 Parking Structure(s). The cost of constructing parking
structures as required by the design of the Project would be included as a
Project Cost.
4.1.1.2.5 Tenant Improvements. An allowance of twenty-eight dollars
($28.00) per gross square foot of building area would be included in Project
Costs.
4.1.1.3 Soft Costs. The following soft costs would be included in the
Project Costs:
4.1.1.3.1 Architectural and Engineering Fees. Architectural and
Engineering Fees related to the planning, design, and construction of the
Project would be included in the Project Cost.
4.1.1.3.2 Development Management Fees. A Development Management Fee
would be included in the Project Cost. The amount of the Development Management
Fee would be established based on comparable fees for similar projects, with the
scope of work excluding the entitlements phase of the project. This fee would
not exceed 2% of Project Cost.
4.1.1.3.3 Building Permit, Plan Check and Inspection Fees. These fees
would be included at rates actually incurred.
4.1.1.3.4 Governmental Fees. Governmental fees, including school, park,
utility district, and other fees normally imposed on all new office projects in
San Rafael, CA. These fees would be included at rates actually incurred.
4.1.1.3.5 Construction Financing. The actual cost of obtaining a
construction loan and the actual interest paid on that loan, through lease
commencement, would be included in Phase One Project Cost. Interest and land
option payments related to carrying the land through commencement of
construction, subject to Paragraph 5.6, and associated entitlements-related
costs would be excluded. Landlord would finance actual costs of land and
entitlements, as opposed to the Land Entitlement Stipulated Price. The Lease
will contain a provision entitling Tenant to provide substitute financing.
4.1.1.3.6 Property Tax and Insurance. The cost of property taxes and
insurance, allocated to Phase One, commencing upon construction and terminating
upon Lease Commencement, would be a Project Cost.
4.1.1.3.7 Permanent Financing Fees. The cost of obtaining a permanent
loan, not to exceed two percent (2%) of the loan amount, would be included in
Project Cost.
4.1.1.3.8 Mitigations. The portion of the mitigation and exaction costs
not paid as part of the DFPI will be included in Project Costs.
4.1.2 Development Constant. The Development Constant will be 110% of
the Mortgage Constant. The Mortgage Constant will be based upon an institutional
loan quote for funding upon completion of the Phase One buildings upon the
following terms:
Fixed rate; non-recourse; 75% loan to value or 75% loan to cost, to be
determined in the Lease, for 25 year amortization for a 25-year term.
The use of the above loan-to-cost criteria is for the purpose of
establishing a rental rate and is no intended to limit Landlord's ability to
borrow in excess of the 75% loan level, if it so desires. Tenant will have the
right to obtain a forward commitment on permanent financing with the cost of
such financing to be included in Project Costs.
4.1.3 Example. Assume the Project Cost equals $38.0 Million. Further
assume that on the Rent Determination Date, the interest rate for the benchmark
loan having the parameters described in Paragraph 4.1.2 above, is 8.55% per
annum. Given a twenty-five (25) year amortization, the Mortgage Constant would
equal 9.63%. This constant would then be multiplied by 1.10 to produce the
Development Constant of 10.60%. The Development Constant would, in turn, be
multiplied by the Project Cost to produce the net rent of $4,025,340 per year.
4.1.4 Rent Determination Dates. The Initial Rent Determination Date
will be a date determined by Tenant within thirty (30) days following acceptance
by Landlord and Tenant of a Guaranteed Maximum Price construction contract. In
the case in which Landlord and Tenant elect to purchase a forward loan
commitment in advance of commencement of construction, the Initial Rent
Determination Date will also be the date on which the commitment to an interest
rate is made. In the case the parties wish to defer the mortgage loan commitment
but the construction lender requires a stated rental rate, the rent will be
determined by the same methodology described above except the interest rate will
be based on quoted rates and no loan commitment will be made. On the date such
mortgage loan commitment is made, the rent will be adjusted accordingly. The
Rent will be adjusted within ninety (90) days following substantial completion
of the Project to include any legitimate change order costs in excess of the
Guaranteed Maximum Price, plus actual soft cost incurred, multiplied by the
Development Constant.
4.2 Adjustments. The Initial Base Rent would be subject to a ten
percent (10%) increase on the fifth, tenth, and fifteenth anniversaries of the
Lease.
4.3 Carrying Costs Related to Future Development. It is anticipated
that the Landlord will incur certain costs and expenses related to preparing the
site to accept future phases of the project ("Forward Cost Items"). Examples of
such Forward Cost Items include, but are not limited to, land, architectural and
engineering fees, site development costs, and utilities installation costs. The
Lease will describe a procedure to enable Tenant and Landlord to mutually agree
on a schedule of Forward Cost Items.
Tenant will pay Landlord, as option payments for the Future Phase land,
upon commencement of the Lease term, the cost of carrying these Forward Cost
Items at an annual rate equal to the total actual cost of the Forward Cost Items
multiplied times the Development Constant. Tenant would be responsible for
paying any operating expenses and taxes associated with the Forward Cost Items.
The Lease will address the prospect that future phase development might be
delayed or abandoned, in which case an equitable termination payment would be
made to Landlord.
4.4 Operating Expenses and Taxes. The Lease will be "triple net," with
the Tenant responsible for payment of all direct building and site operating
expenses, including maintenance, property management, insurance, janitorial and
security services, taxes and utilities and amortization or reserves related to
replacement of capital items. Landlord will be responsible for any costs related
to continued monitoring and remediation of any environmental contamination
identified as of the Lease Date, and one half of any continuing obligations
imposed on the project as a special condition of approval (i.e., excluding
municipal taxes, fees, and imposition required of all developments as a result
of laws existing as of the Lease date). Tenant will have the right to select and
contract directly with service providers (e.g. janitorial, landscape
maintenance, etc.) subject to reasonable Landlord approval.
4.5 Property Tax Reassessment. The Lease will address Tenant's
requirement for some protection from increases in property tax caused by
Landlord's transfer of the project.
5. DEVELOPMENT OF PROJECT
5.1 Entitlement Process. Landlord will undertake to achieve land use
entitlements for the development of four hundred fifty thousand (450,000) gross
square feet of commercial office space but in no case less than four hundred
thousand (400,000) gross square feet, with parking for not less than 1,600 cars
on the Property. Tenant would consider a reduced amount of parking if supported
by an analysis of usage patterns and acceptable to the City of San Rafael. All
significant decisions affecting the design and phasing of the Project will be
subject to Tenant's review and approval. Landlord will consult with Tenant
regarding its conduct of the approval process. Tenant will expeditiously
cooperate with Landlord in the effort to achieve the entitlements. Tenant will
have the right to approve all significant documents related to the development,
including all of the following: the application for planning review, the PD
application, application for a vesting tentative map, and the development
agreement. All costs related to the entitlement process, including fees and
project expenses, and consulting expenses incurred by Landlord in furtherance of
the entitlement effort, will be borne by Landlord. Tenant will pay the cost of
its own consultants retained to advise it during this process. Architectural and
engineering fees will be paid by Landlord subject to the overall limit described
in Paragraph 4.1.1.3.1.
5.2 Construction of Base Buildings and Parking Structures. Landlord
will undertake the development of office buildings and parking structures on the
site, including site work and landscaping as described in plans and
specifications to be approved by Tenant. The cost of this construction,
including governmental fees, permits, construction interest, taxes, and the cost
of architectural, engineering, and other consulting services will be borne by
Landlord. Exhibit D describes the scope of base building construction in
relation to the scope of tenant improvement construction. Landlord and Tenant
will cooperate during the design process to develop a base building design with
flexibility to enable eventual conversion for multi-tenant occupancy. The
project will be developed on an "open book" basis with respect to all cost
information.
5.3 Construction of Tenant Improvements Landlord would construct all
improvements to the premises in accordance with plans and specifications
provided by Tenant, according to a schedule and procedure mutually agreed upon
in the Lease. The selection of a general contractor and subcontractors for the
tenant improvement work would be subject to Tenant's approval. In the case in
which Landlord provides construction management services for the tenant
improvement work, the cost of such services will be charged at prevailing market
rates for similar third party services. Landlord may not impose any charge for
review or approval of plans and specifications, either for the initial tenant
improvement work or for subsequent improvements and alterations within the
project. In the alternative, Tenant would have the right to undertake its own
tenant improvement construction, subject to notice, delivery and commencement
provisions to be described in the Lease.
5.4 Tenant Improvement Allowance. Landlord would provide Tenant a
tenant improvement allowance equal to twenty-eight dollars ($28.00) per gross
square foot of space leased.
5.5 Limitation on Project Costs and Developer Equity Requirements. The
Lease will address the legitimate needs of the Landlord with respect to project
financing. The method of determining rent based on the Development Constant and
Project Cost assumes a loan ratio of 75% or greater.
5.6 Timing of Construction. The parties intend to proceed with the
project according to the Preliminary Project Schedule attached as Exhibit B. The
Lease will contain a provision that will enable Tenant to defer commencement of
construction for the maximum period allowable by the terms of the Development
Agreement to be executed between Landlord and the City of San Rafael.
All actual costs of deferral beyond the target construction
commencement date will be borne by Tenant as a current expense. The target
construction commencement date will be mutually agreed by the parties, but not
before the later of June 1, 1998 or that date six (6) months following receipt
of an executed development agreement, unless Tenant consents to an earlier date
or the parties agree to a method to allocate risk associated with proceeding
with architectural work in advance of receipt of final entitlements. The Lease
will define the target date and itemize cost categories related to deferral. A
similar provision will apply to construction of the second phase of the project
with the objective of affording Tenant maximum flexibility with respect to
timing the second phase.
6. OPTIONS TO PURCHASE
6.1 First Option to Purchase - Execution of Development Agreement.
Landlord grants Tenant the right to purchase the PG&E Property and to purchase
the option to purchase the City Property, complete with all plans and
specifications, and subject to agreements with the City of San Rafael and other
jurisdictions, for a price of Ten Million Dollars ($10,000,000). This option
would become effective upon Execution of the Development Agreement and extend
for sixty (60) days. An adjustment would be made to the purchase price to
reflect the cost of any obligations for which Landlord would have been
responsible subject to Paragraphs 4.1.1.1.1 and 4.1.1.1.2 had the option not
been exercised. In addition, Tenant would reimburse Landlord any Project Costs
incurred by Landlord prior to closing. No reimbursement would be made for any
portion of the Development Management Fee.
6.2 Second Option to Purchase - Completion of Phase One Development.
Landlord grants Tenant the right to purchase the PG&E Property and to purchase
the option to purchase the City Property, including the office buildings,
parking structures, and other improvements constructed pursuant to this Lease,
at a price equal to one hundred and ten percent (110%) of the Project Cost plus
an agreed upon price for Forward Cost Items. Notice of intent to exercise this
option would be made no later than sixty (60) days following the execution of
the development agreement. Landlord would remain responsible for all costs
described in Paragraphs 4.1.1.1.1, 4.1.1.1.2 and 4.1.1.1.3. except to the extent
the parties agree to transfer specified obligations from Landlord to Tenant in
exchange for an adjustment in the purchase price. The Lease will provide for an
interest bearing deposit or Letter of Credit adequate to secure the purchase,
and will address accommodations to Landlord's preference for a closing deferral
of one year. Closing would occur on a date corresponding to the intended
Commencement Date of the Lease.
6.3 Third Option to Purchase - Completion of Phase One Development.
Landlord grants Tenant the right to purchase the PG&E Property, and to purchase
the option to purchase the City Property, including all office buildings,
parking structures, and other improvements constructed pursuant to this Lease,
at a price equal to one hundred and thirteen percent (113%) of the Project Cost
plus an agreed upon price for Forward Cost Items. Notice of intent to exercise
this option must be made no later than one hundred and eighty (180) days
following the Commencement of the Lease. Closing would be scheduled for a
mutually agreed upon date not earlier than the first anniversary of the Lease
Commencement. The Lease will provide for an interest bearing deposit or Letter
of Credit adequate to secure the purchase.
6.4 Financing Limitation The option prices indicated in Paragraphs 6.2
and 6.3 above are predicated on the Landlord's ability to attract sufficient
equity capital to the project to enable construction. The Lease will address
those circumstances in which the purchase price would be adjusted to enable
financing by third-party equity sources. In addition, the Lease will describe a
procedure whereby Tenant would have the right to contribute cash equity to the
project prior to construction in exchange for a reduction in the purchase price
corresponding to the value of the avoided financing costs.
6.4 Right of First Refusal to Purchase. Throughout the term of the
Lease, Tenant will have the right of first refusal to purchase the Project,
subject to a thirty (30) day response period. The details of this right would be
addressed in the Lease.
7. DEVELOPMENT OF FUTURE PHASE(S)
Future phase or phases are expected to total from 200,000 to 250,000
gross square feet plus parking (the "Expansion Premises"). The Lease will grant
Tenant the option to lease these Expansion Premises on the same terms and
conditions as the Lease on the initial Premises, excephere circumstances dictate
an appropriate notification. The Lease will describe a procedure governing
notification, design, and construction of the Expansion Premises. The rent will
be established according to the formula presented in Paragraph 3.1. At Tenant's
option, the term of the Lease with respect to the Expansion Premises will be
coterminous with that of the initial Premises, but in no case less than fifteen
(15) years. The Lease will contain assurances satisfactory to Tenant regarding
Landlord's obligation to develop Phase Two, if so requested.
8. TERMINATION OF LEASE
8.1 Tenant's Option to Terminate Lease Prior to Land Purchase by
Landlord. The Lease will address issues related to termination of the Lease by
Tenant. In general, prior to Landlord's exercise of its option to purchase the
PG&E Property, Tenant will have the right to terminate the Lease upon payment to
Landlord of liquidated damages in an amount to be stipulated in the Lease based
on Landlord's projected overhead costs, out-of-pocket costs, and opportunity
costs.
8.2 Tenant's Option to Terminate Lease Following Land Purchase by
Landlord. Following Landlord's purchase of the PG&E Property, but prior to
commencement of construction, Tenant will have an option to terminate the lease
upon payment to Landlord of Liquidated Damages in an amount to be stipulated in
the Lease based on Landlord's projected overhead costs, out-of-pocket costs, and
opportunity costs.
8.3 Termination Due to Landlord Non-Performance. The Lease will provide
Tenant adequate security with respect to Landlord's performance of its
obligations under the Lease.
8.4 Landlord's Termination Rights. Landlord may terminate the Lease if
the City of San Rafael fails to grant the necessary entitlements or to execute a
development agreement consistent with the terms of the Lease and Project plans.
9. Environmental Indemnities.
Tenant will require indemnities from Landlord and PG&E with respect to
the PG&E Property, and from Landlord and the City of San Rafael with respect to
the City Property, assuring Tenant that it will bear no risk of environmental
liability related to the existing condition of the soil and groundwater, either
as Tenant or as owner.
During the Feasibility Phase, Tenant will require cooperation from
Landlord regarding access to existing documents related to the Properties. In
addition, Tenant will require Landlord to obtain an agreement from PG&E and the
City of San Rafael to undertake additional Phase II environmental
investigations, subject to Tenant cost reimbursement.
10. OTHER PROVISIONS
10.1 Assignment and Subleasing. Tenant would have the right to assign
the Lease or sublease space in the premises with the consent of the Landlord,
which consent would not be unreasonably withheld.
Tenant would have the right to assign the Lease in its entirety or
sublease all or a portion of the premises without the consent of the Landlord to
any entity resulting from merger or consolidation with Tenant, or any subsidiary
or affiliate of Tenant. This waiver of Landlord's consent would be contingent
upon the financial worth and organizational structure of the resulting entity
being greater than or equal to that of the Tenant as of the date of such
assignment.
Subsequent to a sublease notification or sublease, the Landlord would
have no right to terminate the Lease, "recapture" the premises by the right of
first refusal, or otherwise. The Landlord would have no right to additional rent
from subleases entered into by Tenant.
10.2 Restoration of Premises. Landlord would agree to waive any
requirement that Tenant restore the premises or remove any improvements
including stairs, floor penetrations, cabling, supplemental HVAC units, or any
other construction upon expiration of the Lease.
10.3 Building Identity. Within the terms and conditions of existing
local ordinances, the subject property will be identified as exclusively the
site of Fair, Isaac & Co. with signage and/or other identity designed in such a
way as to compliment the project. Such identity will be subject to the approval
of Landlord with such approval not to be unreasonably withhold.
10.4 Tenant Security. The Lease will address Landlord's reasonable
concerns with respect to Tenant's financial capability to undertake the Lease's
obligations.
11. CESSATION OF TENANT'S SEARCH AND LANDLORD'S MARKETING EFFORTS
Upon mutual execution of this Letter of Intent, Tenant and Landlord
agree to end their respective search and marketing efforts related to the
subject property for a period of one hundred and twenty (120) days.
12. Non-Binding Agreement
With the exception of Paragraph 11 above, this letter is a general
expression of interest and does not constitute a binding agreement. Neither
Tenant nor Landlord will be bound until a definitive, mutually-satisfactory
lease has been executed and both Tenant and Landlord warrant that they will not
act in reliance on any terms of this agreement, except Paragraph 11, above.
We would appreciate receiving a response by July 14, 1996. If the above terms
are acceptable to you, please indicate by signing in the space provided below.
When counter-signed by Fair, Isaac, this letter will constitute a Letter of
Intent with regard to the matters agreed upon.
Sincerely,
AMB CORPORATE REAL ESTATE ADVISORS, INC.
/s/ Richard Springwater
- -------------------------
Richard Springwater
ACCEPTED AND AGREED
Village Properties Fair, Isaac & Company
By: /s/James A. Helfrich By: /s/Gerald de Kerchove
- ------------------------- ------------------------------
Its: Partner Its: Executive Vice President
Date: July 15, 1996 Date: July 16, 1996
Exhibit A
Map of Site
Exhibit B
Preliminary Project Schedule
Execute Letter of Intent - Commence Feasibility Phase July 15, 1996
End of Feasibility Phase - Execute Lease November 10, 1996
Submit Application for Planning Review January 1, 1997
EIR Certification, Development Agreement Executed January 1, 1998
PG&E Option Exercise Date May 1, 1998
Complete Construction Documents June 1, 1998
Accept Guaranteed Maximum Price July 1, 1998
Rent Determination Date August 1, 1998
Commence Construction September 1, 1998
Occupancy January 1, 2000
Exhibit C
Hypothetical Proforma
Phase One Costs Total Cost/SF
- -----------------------------------------------------------------------------
Land 5,800 $29.00
Mitigation Guarantee 580 $2.90
EIR & Entitlements Landlord
Environmental Compliance Landlord
Subtotal Land 6,380 $31.90
Construction Costs
Offsite Utilities and Improvements 650 $3.25
Sitework/Landscaping 2,000 $10.00
Building Shell 14,600 $73.00
Tenant Improvement Allowance 5,600 $28.00
Parking Structure 3,500 $17.50
------------------------------------
Subtotal Construction 26,350 $131.75
Soft Costs
Architecture/Engineering 1,307 $6.53
Development Management 600 $3.00
Permits/Fees 500 $2.50
Construction Financing 2,250 $11.25
Property Tax/Insurance 350 $1.75
Permanent Financing 400 $2.00
Mitigations - Tenant's Share 500 $2.50
------------------------------------
Subtotal Soft Costs 5,907 $29.53
- -----------------------------------------------------------------------------
Total Phase One 38,637 $193.18
Forward Cost Items
Land 4,200 $21.00
Offsite Utilities 650 $3.25
Total Forward Cost Items 4,850 $24.25
------------------------------------
Exhibit D
BASE BUILDING CHECKLIST
Exhibit 10.27
First Amendment to Letter of Intent
Between Village Properties and
Fair, Isaac and Company, Inc.
Dated July 15, 1996
The following additions and modifications to the Letter of Intent are agreed
upon by the parties:
1. The date for expiration of the Feasibility Phase is extended to November 21,
1996.
2. Landlord and Tenant agree that any disputes involving this Letter will be
resolved through arbitration, performed subject to the rules of the American
Arbitration Association.
3. Landlord warrants that James Helfrich is duly authorized to execute the
Letter of Intent and this Amendment to the Letter of Intent on behalf of Village
Properties and Village Builders, L.P.
ACCEPTED AND AGREED
Village Properties Fair, Isaac & Company
By: /s/ SCOTT KEPNER By: /s/ GERALD DE KERCHOVE
-------------------------- ----------------------------
Its: Vice President Its: Executive Vice President
-------------------------- ----------------------------
Date: July 17, 1996 Date: July 18, 1996
-------------------------- ----------------------------