Loading...
HomeMy WebLinkAbout11270RESOLUTION NO. 11270 A RESOLUTION APPROVING AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND PEDCO FOUNDATION, INC. RELATING TO THE LEASE PROCEEDS ESCROW ACCOUNT CREATED UNDER THE JUNE 28, 1999 AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND PEDCO FOUNDATION, INC., PLEDGING THE BALANCE OF THE LEASE PROCEEDS ESCROW ACCOUNT FOR PAYMENT OF PEDCO FOUNDATION, INC. NET OPERATING EXPENSES REASONABLY INCURRED IN CONNECTION WITH THE BUILDING LOCATED AT 317 N. MAIN STREET, PUEBLO, COLORADO, APPROVING A PARKING PERMIT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND THE RECEIVABLE MANAGEMENT SERVICES CORPORATION, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE THE AGREEMENT AND PARKING PERMIT, AND AUTHORIZING AND DIRECTING THE CITY MANAGER AND DIRECTOR OF FINANCE TO TAKE ANY AND ALL ACTIONS NECESSARY OR REQUIRED TO EFFECTUATE THE PROVISIONS OF THE AGREEMENT WHEREAS, the City and PEDCO Foundation, Inc. (the "Foundation ") entered into an Agreement dated June 28, 1999 relating to the QualMed Building located at 317 N. Main Street, Pueblo, Colorado (the "Building ") (the "1999 Agreement "), and WHEREAS, pursuant to paragraph 5 of the 1999 Agreement (the "Paragraph 5 ") all rent and other payments received from the lease of the Building (the "Lease ") (the "Loan Proceeds ") were to be collected by Foundation and deposited in a separate escrow account (the "1999 Escrow Account ") for the following uses and purposes: first, to pay all cost and expenses reasonably and necessarily incurred by Foundation in connection with the Building and Personal Property and the transactions contemplated by the 1999 Agreement and the Lease, and the balance thereof to City in repayment of the Represented Value ($12.9 million), and WHEREAS, The Receivable Management Services Corporation has expressed its desire to modify its lease arrangements with Foundation and to lease additional space in the Building in order to employ an additional 250 full -time employees provided the $2 million balance of the 1999 Escrow Account (the "Lease Proceeds Balance ") is escrowed with the City's Finance Department and pledged for payment of Net Foundation Operating Expenses as defined in the Agreement, and WHEREAS, The Receivable Management Services Corporation in conjunction with its current operations and its future business expansion will need approximately 522 off - street parking spaces for its employees, and City is willing to make 522 parking spaces available for such purposes, and WHEREAS, City and Foundation are willing to modify and amend Paragraph 5 to transfer the Lease Proceeds Balance to the City's Department of Finance and to pledge the Lease Proceeds Balance for payment of the Net Foundation Operating Expenses as defined in the Agreement. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The Agreement dated March 24, 2008 between Pueblo a municipal corporation and PEDCO Foundation, Inc. relating to the 1999 Escrow Account, a copy of which is attached hereto, having been approved as to form by the City Attorney, is hereby approved. The President of the City Council is authorized to execute the Agreement in the name of the City with such modifications and changes thereto as the President of the City Council and City Attorney deem necessary, desirable or appropriate, the execution thereof to constitute conclusive evidence of any and all modifications and changes from the form and content of the Agreement attached hereto. The City Clerk is instructed to affix the seal of the City thereto and attest same. SECTION 2 The Lease Proceeds Balance in the amount of $2 million shall be transferred from the 1999 Escrow Account and deposited in an escrow account established in the office of the City's Director of Finance (the "Director") to be known as the "Lease Proceeds Escrow Account." The Director is authorized and directed to hold and administer the Lease Proceeds Escrow Account as provided in the Agreement. SECTION 3 The money and investments on deposit and held in the Lease Proceeds Escrow Account are pledged and held for payment of Net Foundation Operating Expenses as defined in the Agreement incurred during the period starting January 1, 2008 and ending March 1, 2013. The City Manager and Director are authorized and directed to take any and all action necessary or required to effectuate the provisions of Sections 2 and 3 hereof. SECTION 4_ The Parking Permit dated March 24, 2008 between Pueblo, a Municipal Corporation and The Receivable Management Services Corporation relating to 522 off -site parking spaces in City's parking facilities, a copy of which is attached hereto, having been approved as to form by the City Attorney, is hereby approved. The President of the City Council is authorized to execute the Parking Permit in the name of the City with such modifications and changes as the President of the City Council and City Attorney shall deem necessary, desirable or appropriate, the execution thereof to constitute conclusive evidence of any and all modifications and changes from the form and content of the Parking Permit attached hereto. The City Clerk is instructed to affix the seal of the City thereto and attest same. SECTION 5_ This Resolution shall become effective upon final approval and passage. BY Ray Aquilera Councilperson AP PROVE Lim ATTEST D BY: �. � y PPI`81f I T' i I INTRODUCED March 24, 2008 R e--.c. rlag0 � D Background Paper for Proposed RESOLUTION DATE: March 24, 2008 AGENDA ITEM # 4 9 DEPARTMENT: Law Department TITLE A RESOLUTION APPROVING AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND PEDCO FOUNDATION, INC. RELATING TO THE LEASE PROCEEDS ESCROW ACCOUNT CREATED UNDER THE JUNE 28, 1999 AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND PEDCO FOUNDATION, INC., PLEDGING THE BALANCE OF THE LEASE PROCEEDS ESCROW ACCOUNT FOR PAYMENT OF PEDCO FOUNDATION, INC. NET OPERATING EXPENSES REASONABLY INCURRED IN CONNECTION WITH THE BUILDING LOCATED AT 317 N. MAIN STREET, PUEBLO, COLORADO, APPROVING A PARKING PERMIT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND THE RECEIVABLE MANAGEMENT SERVICES CORPORATION, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE THE AGREEMENT AND PARKING PERMIT, AND AUTHORIZING AND DIRECTING THE CITY MANAGER AND DIRECTOR OF FINANCE TO TAKE ANY AND ALL ACTIONS NECESSARY OR REQUIRED TO EFFECTUATE THE PROVISIONS OF THE AGREEMENT ISSUE Should the City Council approve the Agreement between the City and PEDCO Foundation, Inc., as well as the Parking Permit with Receivable Management Services Corporation? RECOMMENDATION PEDCO Foundation, Inc. recommends approval of the Agreement and Parking Permit. BACKGROUND Receivable Management Services Corporation ( "RMS ") intends to expand its business operation in the building located at 317 N. Main Street ( "Building ") and employ an additional 250 employees provided the Proceeds Balance (described herein) is escrowed with the City and pledged for the payment of Foundation's Building Operating Expenses and that City makes available 522 off - street parking spaces for its employees. Under the 1999 Agreement between the City and PEDCO Foundation, Inc. ( "Foundation ") all rent and other payments received by Foundation from the lease of the Building were collected by Foundation and deposited in a separate escrow account ( "1999 Escrow Account ") for payment of Foundation expenses and repayment to the City for the purchase of the Building. There is a $2 million balance in the 1999 Escrow Account ( "Lease Proceeds Balance"). RMS and Foundation have entered into a Second Amendment To Lease Agreement for the Building pursuant to which RMS will lease an additional 16,080 square feet or a total of 64,796 square feet of the 101,992 net rentable space in the Building. RMS will pay an increased amount equal to $0.81 per square foot monthly rent ($9.72 per year) based upon its pro -rata share of expenses for the operation and maintenance expenses of the Building. Under its lease arrangements with RMS, Foundation is responsible for payment of all operation and maintenance expenses for the Building. Pursuant to the March 24, 2007 Agreement between the City and Foundation, the $2 million Lease Proceeds Balance will be transferred to an escrow account in the City's Department of Finance to be known as the "Lease Proceeds Escrow Account." The money and investments in the Lease Proceeds Escrow Account are pledged for the payment of Foundation's operating expenses for the Building during the period from January 1, 2008 to March 13, 2013 in excess of rent paid by RMS and other tenants in the Building. City and RMS will enter into a Parking Permit whereby City will make available 522 parking spaces for a monthly charge of $16,970 in City's parking facilities for use by RMS's employees. FINANCIAL IMPACT See Background. AGREEMENT THIS AGREEMENT entered into as of March 24, 2008 by and between Pueblo, a Municipal Corporation (the "City ") and PEDCO Foundation, Inc., a Colorado nonprofit corporation (the "Foundation "), WITNESSETH: WHEREAS, City and Foundation entered into an Agreement dated June 28, 1999 relating to the acquisition and lease of the QualMed Building located at 317 N. Main Street, Pueblo, Colorado, 81003 ( "Building ") (the "1999 Agreement "), and WHEREAS, pursuant to paragraph 5 of the 1999 Agreement ( "Paragraph 5 ") all rent and other payments received from the lease of the Building (the "Lease) ( "Lease Proceeds ") were collected by Foundation and deposited in a separate escrow account (the "1999 Escrow Account ") for the following uses and purposes: first, to pay all cost and expenses reasonably and necessarily incurred by Foundation in connection with the Building and Personal Property and the transactions contemplated by the 1999 Agreement and the Lease, and the balance thereof to City in repayment of the Represented Value ($12.9 million), and WHEREAS, City and Foundation are desirous of modifying and amending Paragraph 5 to transfer the $2 million balance of the 1999 Escrow Account (the "Lease Proceeds Balance ") to the City's Department of Finance and to pledge the Lease Proceeds Balance to payment of Net Foundation Operating Expenses as described below. NOW; THEREFORE, in consideration of the foregoing and mutual covenants contained herein, City and Foundation agree as follows: 1. Definitions The terms capitalized in this Agreement but not defined herein shall have the meaning given to them in the 1999 Agreement. 2. Lease Proceeds, Escrow Account The Parties stipulate and agree that the Lease Proceeds Balance on March 24, 2008 is Two Million Dollars ($2,000,000.00). The Lease Proceeds Balance shall be transferred from the 1999 Escrow Account to an escrow account established in the office of the City's Director of Finance (the "Director ") to be known as the "Lease Proceeds Escrow Account." The Director shall hold and administer the Lease Proceeds Escrow Account as provided in this Agreement. 3. Pledge The money and investments deposited and held in the Lease Proceeds Escrow Account are hereby pledged and held for payment of Foundation's Operating Expenses as described in Schedule 1 attached hereto and incorporated herein, however, excluding item 8 thereof but including capital expenditures, incurred by Foundation during the period starting January 1, 2008 and ending March 1, 2013 in excess of rent and other payments made by RMS and other tenants in the Building (the "Tenants' Rent ") (the "Net Foundation Operating Expenses "). 4. Disbursements Director is authorized and directed to disburse funds on deposit in the Lease Proceeds Escrow Account to Foundation for the sole and only purpose of paying Net Foundation Operating Expenses upon receipt of a complete written request for payment submitted by Foundation and certified to be true and correct by an authorized representative of Foundation (the "Request For Payment "). Requests For Payment shall be on forms approved by the Director. Each Request For Payments shall (a) state that the amounts included in the request for payment have not been included in any prior Request For Payment, (b) identify the period during which Foundation's Operation Expenses were incurred, and (c) identify and itemize for each such period Foundation's Operating Expenses, Tenants' Rent and Net Foundation Operating Expenses. In addition, Foundation shall furnish to Director any and all supporting invoices and documentation for Foundation's Operating Expenses and /or Tenants' Rent as may be reasonably requested by the Director. All Tenants' Rent and Net Foundation Operating Expenses received by Foundation shall be deposited in a separate account requiring two signatures for withdrawal and shall be held in trust by Foundation for the sole and only purpose of paying Foundation's Operating Expenses. 5. 1999 Agreement Paragraph 5 of the 1999 Agreement is revoked and cancelled in its entirety. The term "Lease" as defined in the 1999 Agreement is amended to include all lease arrangements between Foundation and RMS which the City Council of City has by Resolution consented to or approved. The date for Foundation to pay City the Represented Value set forth in Paragraph 4 of the 1999 Agreement is extended from December 31, 2009 to March 1, 2013. As modified by this Agreement, the 1999 Agreement shall remain in full force and effect binding upon and inuring to the benefit of City and Foundation and their successors. 6. Consent to RMS Lease Modifications City does hereby consent to Foundation entering into and executing the Second Amendment To Lease Agreement between Foundation and RMS, a copy of which is attached hereto as Attachment A. 7. Entire Understanding This Agreement expresses the entire understanding of the parties and supersedes any and all prior dealings and commitments with respect to the subject matter of this Agreement and may not be amended except in writing signed by City and Foundation. 8. Al2nlicable Law This Agreement shall be construed in accordance with and governed by the laws of the State of Colorado, without regard to conflict of laws principles. Exclusive venue for any action arising under this Agreement shall be Pueblo County, Colorado. 9. Notices Any notices hereunder shall be sufficiently given if given personally or mailed by certified mail, postage prepaid, addressed: (a) if to City, City Manager, City of Pueblo, l City Hall Place, Pueblo, Colorado, 81003, with a copy to Thomas E. Jagger, City Attorney, 503 N. Main Street, Suite 127, Pueblo, Colorado, 81003, or (b) if to the Foundation, 301 N. Main Street, Pueblo, Colorado, 81003, Attention: Chairman of the Board of Directors, or to such other address as either party shall specify in written notice given to the other party. -2- 10. Bindiny Effect Time is of the essence hereof. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors. Neither party shall have the right to assign this Agreement or any part thereof. 11. Representations of Foundation The persons signing this Agreement in the name of and on behalf of Foundation represent and warrant that they and Foundation have the requisite power and authority to enter into, execute, and deliver this Agreement, and that this Agreement is a valid and legally binding obligation of Foundation enforceable against Foundation in accordance with their terms. 12. Execution of Counterparts This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 14. Severabili . If any provision of this Agreement shall be held by a court of competent jurisdiction to be invalid or unenforceable, such holding shall not affect the other provisions of this Agreement which shall remain in full force and effect. 15. Parties Interested Nothing in this Agreement expressed or implied is intended or shall be construed upon, or given to, any person other than the City and Foundation any right, remedy or claim under or by reason of this Agreement or any covenant, conditions or stipulations hereof; and all the covenants, stipulations, provisions and agreements herein contained by and on behalf of the City and Foundation shall be for the sole and exclusive benefit of the City and Foundation. Executed at Pueblo, Colorado, the day and year first above written. :.[SEAL.} ATTE 4 o2 l )0 1 � _ =Name:..;; ' C G A/2. Title: — __. D - ATTEST: _Gift'= rk PEDCO FOUNDATION, INC. :M I �r Name: Pb - T).S[+A� Title: Chaiv yA � PUEBLO, A MUNICIPAL CORPORATION By ` P D President of the City Council Approved as to form: City Atto -3- CG_1311026_4 (3) FINAL Second Amendment to the Lease 032408 SECOND AMENDMENT TO LEASE AGREEMENT This Second Amendment to Lease Agreement (the "Second Amendment ") is dated as of March , ,, 2008, to be effective retroactive to January 1, 2008 (except as otherwise set forth herein), by and between PEDCO FOUNDATION, INC., 301 N. Main Street, Pueblo, Colorado 81003 as "Landlord" and THE RECEIVABLE MANAGEMENT SERVICES CORPORATION, 240 Emery Street, Bethlehem, Pennsylvania 18015, a Delaware corporation, as "Tenant ". RECITALS Benesight, Inc. and Tenant were parties to a Sublease dated April 1, 2005 (the "Sublease "); the underlying Lease between Benesight and Landlord has expired and the Sublease became a direct lease between Landlord and Tenant (now known as the "Lease "). The parties to this Second Amendment executed the First Amendment to Lease Agreement on or about January 9, 2007. The parties have agreed to certain modifications to the Lease and First Amendment to Lease Agreement as more fully set forth herein. Except as modified herein, the terms of the Lease remain in full force and effect as modified by the First Amendment to Lease Agreement and by this Second Amendment. In the event of a conflict between the terms of the Lease, the terms of the First Amendment to Lease Agreement and the terms of this Second Amendment, the terms of this Second Amendment shall control. Capitalized terms used herein and not otherwise defined shall have the meanings used in the Lease. NOW, THEREFORE, the parties do covenant and agree as following with the intent to be legally bound: AGREEMENT 1. The "Premises" under and as defined in the Lease is hereby expanded to include for all purposes under the Lease an additional 16,080 square feet located in the Lower Level West, in its present "AS IS" condition, during the period from May 1, 2008 to March 1, 2013, which is the end of the initial "Term" of the Lease (subject to the extension options set forth in the Lease). Tenant may cancel the Lease with respect to all or any portion of the 2008 Expansion Premises (defined below) at any time upon 120 days notice to Landlord if Tenant's customer (or its successors or assigns) for which the space is being acquired to service lowers its actual or anticipated business volume commitments to Tenant. In the event that Tenant exercises this termination right, the Lease of the applicable portion of the 2008 Expansion Premises (defined below) will terminate on the date set forth in Tenant's termination notice (which termination date shall not be sooner than 120 days from the date that Tenant's termination notice is sent to Landlord), Tenant will vacate such space and leave the same in broom clean condition (ordinary wear and tear excepted) and neither party will have any further rights or obligations with respect thereto. Tenant shall, at its expense make all Tenant improvements to said Lower Level West as Tenant may require to prepare such s3ace for use and occupancy by Tenant. Tenant also will rent an additional 414 square feet (2" Training Room) located on 3 East beginning effective as of May 1, 2008 and such space also will be included within the "Premises" for all purposes under the ATTACH M ENT A CG_1311026_4 (3) FINAL Second Amendment to the Lease 032408 Lease. The 16,080 square feet of space located in Lower Level West and the 414 square feet located in 3 East are collectively referred to as the "2008 Expansion Premises ". In summary, the total space rented by Tenant as of May 1, 2008 will be as follows: lE 19,994 LLW 16,080 3W 12,978 4W 14,527 2W 200 (Data Center) 3E 990 (2 Training Rooms) TOTAL 64,769 square feet The parties acknowledge and agree that the 2008 Expansion Premises have been delivered and made available to Tenant for purposes of preparing the same for use and occupancy pursuant to that certain Access and Indemnity Agreement between Landlord and Tenant dated as of March JZ, 2008. 2. Paragraph 2 of the Lease is hereby amended as follows: Rent for the Premises (the "Rent ") will be $0.81 per square foot per month commencing January 1, 2008 for 48,275 square feet of space and commencing on May 1, 2008 for the 2008 Expansion Premises, subject to the reconciliation described below; the parties acknowledge that prior to the execution of this Second Amendment, Tenant has paid Rent for 48,275 square feet of space in the Premises at the rate of $0.69 per square foot per month and that such payment and any resulting underpayment for such portion of the Premises will be considered and resolved when Tenant's total Rent payments for 2008 are compared to Tenant's pro rata share of actual Foundation Operating Expenses for 2008 as provided below (provided that Tenant's pro rata share of the Premises will include only 48,275 square feet of space prior to May 1, 2008). Tenant's Rent for each month subsequent to December 31, 2008 will be computed based upon all costs and expenses incurred by Landlord in managing, operating and maintaining the Building, including without limitation, property and use taxes, insurance, building security /fire, utilities, management fees, service contracts, depreciation and/or amortization of repairs to and replacement of fixtures and equipment and repairs to the building, which costs and expenses in each case are defined and subject to the limitations and exclusions as set out in Schedule 1 attached hereto (collectively, "Foundation Operating Expenses ") for the prior calendar year, applied on a pro rata basis as follows: Foundation Operating Expenses, divided by 101,992 (net rentable space in the building) multiplied by 64,769 (the total space leased by Tenant) divided by 12. The 64,769 square feet (and Tenant's pro rata share of Foundation Operating Expenses) will be reduced by 16,080 upon Tenant's cancellation of the Lease for Lower Level West and by any other partial cancellation permitted pursuant to the Second Amendment, and will be increased by the square feet of any additional space occupied by Tenant. -2- CG_1311026_4 (3) FINAL Second Amendment to the Lease 032408 If Tenant's total monthly Rent payments for any calendar year beginning with calendar year 2008 are less or more than Tenant's pro rata share of Foundation Operating Expenses for that calendar year, Tenant shall pay the difference to Landlord or Landlord shall refund the overpayment to Tenant, as the case may be, within 45 days after the receipt of Landlord's reconciliation statement provided as set forth in the following paragraph for such calendar year. On or before March 1 of each calendar year, commencing March 1, 2009, Landlord will provide Tenant with documentation to support Foundation Operating Expense for the prior calendar year, along with a calculation of the difference between Tenant's total Rent payments for such calendar year and Tenant's pro rata share of Foundation Operating Expenses for that calendar year. Tenant shall have the right to inspect during normal business hours, upon 48 hours prior written notice to Landlord, the records of the Building related to such Foundation Operating Expenses. Tenant will have 30 days after receipt thereof (subject to extension if Landlord fails to provide complete and timely access to the books and records as required above) to dispute in writing specific items of Foundation Operating Expenses, If Tenant, Landlord and City of Pueblo are unable to resolve such dispute, the dispute will be submitted for resolution to an independent qualified property manager doing business in Pueblo, Colorado Springs or Denver, Colorado, selected by mutual consent of the parties. Notwithstanding Tenant's dispute, the monthly Rent will be implemented January 1 of each calendar year based upon "Foundation Operating Expenses" for the prior calendar year and, if the dispute is settled in Tenant's favor, monthly Rent will be adjusted to reflect the same (and Landlord will refund any overpayment to Tenant within 30 days after the same is finally determined). Each party shall bear its own cost and expense in resolving such disputes except that the independent property manager's fees and expenses shall be paid one -half by Landlord and one -half by Tenant, unless it is determined that Landlord's determination of Foundation Operating Expenses payable by Tenant hereunder was overstated by more than 20 %, in which case Landlord shall pay all of the independent property manager's fees and expenses. Tenant will be given an opportunity to review at least 30 days (where reasonably possible) before implementation, any substantial price increases (greater than 5 %) for the following expenses: trash removal, maintenance, janitorial, security /fire and management fees, except that any expense for $10,000 or less annually will be excluded from this review. If Landlord fails to comply with this paragraph, then the increased amount will be excluded from Foundation Operating Expenses. Tenant will be given an opportunity to review at least 30 days in advance of signing any service contract that Landlord proposes to enter into with any provider of utility services to the Building that provides for a greater than 5% increase in rates. In addition, Landlord will submit to Tenant no later than the -3- Ca_1311026_4 (3) FINAL Second Amendment to the Lease 032408 20 th day of each month a copy of Landlord's monthly accounting reports showing all utility costs for the Building for the preceding month; upon Tenant's request, Landlord also will provide copies of applicable utility bills. 3. Paragraph 6 of the First Amendment is hereby amended to read as follows: City of Pueblo will commit to provide 522 parking spaces to Tenant, pursuant to a mutually acceptable parking permit, the terms of which shall govern Tenant's rights to such parking spaces. 4. Landlord agrees to permit Tenant at no expense to Tenant to use the cubicles (approximately 108 in number) located in Lower Level West for so long as reasonably required by Tenant; when Tenant no longer requires the use of such cubicles, Tenant will arrange for removal of such cubicles at Tenant's expense and Landlord will be responsible at Landlord's expense for storage or disposal of such cubicles. All new cubicles purchased and installed by Tenant in the Premises will belong to Tenant at all times and Tenant will have the right and option to retain and remove such cubicles from the Building (upon termination of the Lease in whole or in part or otherwise). 5. Paragraph 1(f) and (g) of the Lease is hereby amended by adding the following: Notwithstanding the above, Tenant agrees that it will not cancel nor terminate the Lease (pertaining to Floors 3W, 4W and I prior to March 1, 2013) unless its customer (or its successors and assigns) referred to in the Second Amendment to Lease Agreement further reduces its business volume commitment. Should said customer (or its successors and assigns) further reduce its actual or anticipated business volume commitment, Tenant shall have the right to commensurately (based on the amount of business reduction and the space needed for Tenant's employees to service such business) reduce the amount of space it leases in the Building upon written notice to Landlord, effective any time after September 1, 2010. In the event that Tenant exercises this termination right, the Lease to the portion of the Premises specified in Tenant's notice will terminate on the date set forth in Tenant's termination notice (which termination date shall not be sooner than 30 days from the date that Tenant's termination notice is sent to Landlord), Tenant will vacate such portion of the Premises and leave the same in broom clean condition (ordinary wear and tear excepted) and neither party will have any further rights or obligations with respect thereto; Tenant's pro rata share of Foundation Operating Expenses will be adjusted accordingly based on any such partial termination. 6. Paragraph 14 of the Lease is hereby amended to add subparagraph (f) as follows: Landlord and City of Pueblo will enter into an agreement wherein the City of Pueblo will cause Two Million Dollars of prior escrow funds under its June 28, 1999 Agreement with the Landlord to be escrowed with City of Pueblo's Finance Department and pledge said escrow fund to be used for payment of Foundation Operating Expenses and Landlord's other operating expenses for the 10 CG_1311026_4 (3) FINAL Second Amendment to the Lease 032408 Building in excess of Tenant and other tenants' rent incurred during the period commencing January 1, 2008 through March 1, 2013. Said agreement will contain language relating to the disbursement of such escrowed funds. Landlord will provide Tenant with a fully executed copy of such agreement no later than April 30, 2008. 7. Landlord acknowledges and agrees that notwithstanding Landlord's efforts to market the remainder of the Building to new tenants, Landlord remains bound by Tenant's right of first refusal set forth in the Lease as well as the restrictions on uses and other tenants set forth in the Lease. The parties acknowledge and agree that Tenant's right of first refusal expressly extends to any space on the same floor as or on any floors adjacent to any portion of the Premises, as expanded to include the 2008 Expansion Premises (including but not limited to space in 1 West and 3 East not currently leased by Tenant). 8. Representations and Warranties (a) Each party represents and warrants to the other as follows: (i) this Second Amendment has been duly and validly authorized, executed and delivered by such party and constitutes a legal, valid and binding obligation of such party, enforceable against it in accordance with its respective terms; and (ii) the execution, delivery and performance by such party under this Second Amendment will not: (1) violate or conflict with its charter or bylaws; (2) breach or result in a default under any material agreement to which it is a party; (3) breach or otherwise violate any order, writ, judgment, injunction or decree issued by any governmental person or entity which names such party or is directed to such party or any of its respective properties or assets; (4) violate any laws, rules or regulations of any governmental person or entity; or (5) require any consent, authorization, approval, exemption or other action by, or any filing, registration or qualification with, any governmental person or entity other than those which have been made or obtained prior to the date hereof. (b) As a material inducement for Tenant's agreement to include item 8 in the definition of Foundation Operating Expenses on Schedule 1 1 Landlord hereby covenants, represents and warrants to Tenant that (i) no capital repairs or replacements of the type that would be included in item 8 in the definition of Foundation Operating Expenses on Schedule 1 presently are required (provided that Tenant acknowledges with respect to the elevators that the repair or replacement of a pump is required at the cost estimated by Landlord at $6,000 plus -5- CG 1311026 4 (3) FINAL Second Amendment to the Lease 032408 labor) and (ii) Landlord has no present knowledge or basis for believing that capital repairs or replacements will be required during the remaining initial Term of the Lease (through March 1, 2013) for the Building and Building systems (including but not limited to HVAC, plumbing, electrical, security and elevators) to be and remain in good operating condition and repair. Landlord will cause the major building systems and equipment to be covered by an annual maintenance contract placed by Landlord with a qualified and responsible contractor and to be maintained and monitored by or on behalf of Landlord in a manner consistent with prudent building management, operation and maintenance practices. 9. This Second Amendment will be interpreted according to the Laws of the State of Colorado, without regard to any conflict of law principles. This Second Amendment may be executed in two counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The parties hereto agree to amend the short form lease or enter into an amended and restated short form lease in a manner consistent with this Second Amendment. [signature page follows] !la CG_1311026_4 (3) FINAL. Second Amendment to the Lease 032408 IN WITNESS WHEREOF, the parties have executed this Second Amendment to the Lease Agreement as previously amended, at Pueblo, Colorado, the day and year first above written. PEDCO FOUNDATION, INC., Landlord t3�'t�" Davi B. Shaw Chairman THE RECEIVABLE MANAGEMENT SERVICES CORPORATION, Tenant By Authorized Officer tU IIE CG_1311026 4 (3) FINAL Second Amendment to the Lease 032408 Schedule 1 FOUNDATION OPERATING EXPENSES 1. Maintenance and Management of the Building 2. Building Utilities 3. Repair of Building 4. Use taxes not abated through the Pueblo Urban Enterprise Zone 5. Insurance on the Building 6. Fire Systems / Security 7. Property Taxes on the Building 8. Straight line amortization and/or depreciation over the estimated useful life of the cost to repair or replace fixtures and equipment and repairs to the Building with respect to such repairs or replacements made between January 1, 2008 and March 1, 2013. The foregoing notwithstanding, Tenant's pro rata share of amortization and/or depreciation of such items shall not exceed $62,000 in any calendar year between January 1, 2008 and March 1, 2013 and shall not exceed $180,000 in the aggregate between January 1, 2008 and March 1, 2013. The foregoing limits shall be reduced pro rata based on any reduction in the size of the Premises as permitted under the Lease. The following will be excluded from Foundation Operating Expenses and will not be charged to the Tenant: a. Expenses for repairs for damage caused by an insurable casualty, which expenses are reimbursed by insurance carried by Landlord, or would be reimbursed by insurance required to be carried by Landlord pursuant to this Lease. b. Expenses incurred in leasing or procuring new tenants, including lease commissions, advertising, promotion and entertainment expenses, and expenses for renovating space for new tenants or space vacated by any tenant. c. Interest or principal payments on any mortgages; lease payment for any prime, underlying, or ground lease; and depreciation of the Building. d. Expenses incurred in enforcing the terms of any lease or solving disputes between Landlord and any other tenant of the Building. e. Costs of utilities or services payable by or charged to any tenant other than Tenant in excess of building - standard utilities and services. f. Any cost or expense incurred by Landlord for performing work of services for any other tenant which Landlord does not perform to the same degree for Tenant under this Lease, including without limitation any "above- standard" cleaning. g. Any cost or expense which Landlord incurs in connection with the operation of the Building charged directly to the tenant on whose behalf it is incurred (whether or not the same is finally paid). CG_1311026_4 (3) FINAL Second Amendment to the Lease 032408 h. Any cost or expense incurred by Landlord relating to any non - compliance of the Building with applicable Laws (including Environmental Laws) that exists on the Commencement Date, including penalties or damages incurred due to such non - compliance. i. Costs associated with the operation of the business of the Landlord as the same are distinguished from the costs or operation of the Building, including accounting and legal matters, general corporate overhead and general and administrative expenses including costs relating to accounting, payroll, legal and computer services. j. The cost of electrical power used by any tenant in the Building within such tenant's premises in excess of the Building - standard amount, or electrical costs for which any tenant directly contracts with the local public service company or of which any tenant is separately metered or sub metered and pays Landlord directly. k. The cost of providing to tenants of the Building any utility service, cleaning service, trash, recycling or shredding service, security service of any similar service for which Tenant provides on its own or contracts separately and directly with the service provider. 1. Reserves for bad debts or lost rent or any similar charge not involving the payment of money to third parties. -2- PARKING PERMIT THIS PARKING PERMIT ( "Permit ") entered into as of March 24, 2008 by and between the City of Pueblo, a municipal corporation, 1 City Hall Place, Pueblo, Colorado, 81003 ( "City ") and The Receivable Management Services Corporation, 240 Emery Street, Bethlehem, Pennsylvania, 18015 ( "Permittee "). WHEREAS, Permittee occupies space in the building located at 317 N. Main Street, Pueblo, Colorado (the "Building ") under lease arrangements with PEDCO Foundation, Inc. (the "Lease "), and WHEREAS, Permittee now employs 500 full -time employees (the "Employees ") in the Building and is expected in the immediate future to employ an additional 250 Employees in the Building, and WHEREAS, Permittee represents that it will need at least 522 off - street parking spaces (the "Parking Spaces ") for its Employees ( "Permittee's Employees "), and WHEREAS, City and Permittee are desirous of entering into an agreement with respect to such Parking Spaces, and WHEREAS, the use of the Parking Spaces by Permittee will promote the public welfare, enhance economic development, and create new employment opportunities within the downtown area of the City. NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained herein, City and Permittee agree as follows: 1. Available Parking Spaces City, subject to the terms and conditions set forth herein, will make available for use by Permittee's Employees five hundred twenty -two (522) Parking Spaces as follows: — 237 uncovered Parking Spaces in the Weisbrod Parking Structure — 133 covered Parking Spaces in the Weisbrod Parking Structure — 103 uncovered Parking Spaces in the parking lot at 7` and Court Streets — 39 uncovered Parking Spaces in the parking lot located in the 100 block of East 4` Street — 10 uncovered Parking Spaces in the 300 Court Street parking lot located adjacent to the Building. City will work with Permittee to include within the Parking Spaces a reasonable number of handicapped spaces as necessary to accommodate the needs of Permittee's Employees eligible for such spaces. 2. Parking Fees In consideration of City making available the 522 Parking Spaces for use by Permittee's Employees, except as otherwise may be provided in paragraph 7(b) below, Permittee will monthly pay to City at the office of City's Director of Finance, in advance, without notice, deduction or set -off, parking fees in the amount of Sixteen Thousand Nine Hundred Seventy Dollars ($16,970.00) (the "Monthly Payment "). The Monthly Payment will commence on April 1, 2008 and continue to be paid on the first day of each month thereafter during the effective term of this Permit. Parking Fees and Monthly Payment shall be increased or decreased on the first day of April of each calendar year starting April 1, 2009 by the percentage increase or decrease in the consumer price index during the prior calendar year. The phrase "consumer price index" means the consumer price index for the Denver - Boulder consolidated metropolitan statistical area for all consumers, all goods, as published by the United States Department of Labor, Bureau of Labor Statistics, or its successor index. All past due Monthly Payments shall bear interest at the rate of eight percent (8 %) per annum. 3. Adiustment in Parking Fees If Permittee notifies City in writing at least thirty (30) days in advance of the commencement of any Month that Permittee does not need the 522 Parking Spaces and specifies the number and location of the Parking Spaces not needed, Parking Fees and Monthly Payments for each subsequent Month will be proportionally reduced by the number of Parking Spaces specified by Permittee as not needed in such notice. For example, if Permittee notifies City it does not need 22 Parking Spaces and the location of such Parking Spaces, the amount of the subsequent Monthly Payment would be reduced by an amount computed as follows: Monthly Payment for the prior Month divided by 522, or the then applicable number of Parking Spaces if previously reduced from 522, times 22. However, if Permittee furnishes City with such notice, the Parking Spaces and location thereof specified in the notice as not needed by Permittee shall no longer be made available to Permittee under this Permit. Such specified Parking Spaces will become public parking spaces subject to use on a monthly permit fee basis through City's normal permitting procedure for parking spaces. 4. Uses of Parking Spaces (a) Parking Spaces shall be used only for the parking of motor vehicles in compliance with City's applicable rules and regulations. Motor vehicles shall only be parked within marked spaces and shall display an appropriate identification permit furnished by Permittee and approved by City that the operator thereof is a Permittee Employee. Parking Spaces shall be made available for Permittee's Employees 24 hours per day, 7 days per week, provided that City may obstruct or deny access to or use of the Parking Spaces during emergencies, major City events, and during reasonable periods for maintenance and repairs to the Parking Spaces. Permittee shall not make any repairs, alterations or improvements to or upon the Parking Spaces or Wei sbrod Parking Structure or parking lots. (b) Maintenance and Related Obligations of the City. City will maintain the Parking Spaces in conjunction with its maintenance and repair program for City's public parking areas and structures. With respect to motor vehicles parked in Parking Spaces signed "Reserved For RMS" which do not display an appropriate permit identifying the operator thereof as a Permittee Employee, the City will issue parking violation notices in the same manner as the City enforces restricted parking in other City owned parking facilities. -2- r e: 5. Assignment Permittee shall not assign or otherwise transfer this Permit or any of Permittee's interest herein, or sublease the Parking Spaces or any part thereof. Permittee's merger or consolidation with or into another entity, or sale of all or substantially all of its assets to another entity of equivalent or greater financial status shall not constitute an assignment hereunder, provided, however, that such merged, consolidated or acquiring entity shall agree in writing to perform and comply with all covenants and provisions of this Permit. 6. Signs Permittee shall not place, install, affix or use any sign, advertising, or identifying media on or within the Parking Spaces, parking lots, or Weisbrod Parking Structure. City will designate by signs indicating "Reserved For RMS" as follows: (a) at the entrance of the parking ramp to the second floor of the Weisbrod Parking Structure, (b) approximately 36 Parking Spaces on the first floor of the Weisbrod Parking Structure as determined by City, (c) at the entrance and exit to the parking lots located at 7` and Court Streets and 100 Block of East 4` Street, and (d) a bank of 10 Parking Spaces in the 300 Court Street parking lot. 7. Default by Permittee (a) Time is of the essence hereof. If Permittee defaults in the payment of any Monthly Payment or fails to perform or observe any of the conditions and covenants on its part to be performed or observed hereunder; and such default or failure shall continue for a period of thirty (30) days after written notice thereof is given by City to Permittee, then and in that event, City, in addition to other remedies available at law or in equity, may terminate this Permit and forthwith take possession of the Parking Spaces. Failure or delay by City in taking any action in connection with a default or failure of Permittee, or accepting partial or full payment of Monthly Payments with knowledge or such default or failure, shall not waive such default or failure, and City shall have the right at any time to take such action as may be lawful or authorized hereunder. All remedies are cumulative. (b) Default by City. Subject to the limitations set forth in paragraphs 11 and 12 of this Agreement, if City defaults in making available the Parking Spaces as set forth in this Agreement, and such default is not cured within thirty (30) days after written notice of such default is given by Permittee to City, or, if the default cannot be reasonably cured within said 30 -day period, and the cure thereof is not commenced within such period and thereafter diligently prosecuted to completion by City, Permittee, in addition to other remedies available at law or in equity, may obtain other parking spaces at higher parking permit fees or charges, and City will pay to Permittee or Permittee may withhold from future Monthly Payment due the City under this Agreement, the difference between the parking fees specified herein and the higher parking permit fees or charges required to be paid by Permittee for such other parking spaces. All remedies are cumulative. 8. Attorney Fees In the event of any litigation arising out of this Permit, the Court shall award to the prevailing party its costs and expense of litigation including reasonable attorney fees. Exclusive venue for such litigation shall be Pueblo County, Colorado. All such litigation shall be filed in the District Court, County of Pueblo, Colorado, and each party submits to the jurisdiction -3- of such District Court. To the extent allowed bylaw, each party waives its right to a jury trial. 9. Term. The Term of this Permit shall commence April 1, 2008 and terminate upon the date the Lease is terminated or cancelled. 10. Notices Any notice required, or permitted, under this Permit, shall be in writing and shall be effective upon personal delivery, or three (3) days after mailing by certified mail, postage prepaid, if to the City: City Manager, City of Pueblo, I City Hall Place, Pueblo, Colorado, 81003, or if to the Permittee: 240 Emery Street, Bethlehem, Pennsylvania, 18015; or to such other address as either party may specify in writing given to the other party as herein provided. 11. City's Financial Obligations Any provision of this Permit which imposes upon City any financial obligation payable after the current fiscal year is expressly contingent upon funds for such financial obligation being budgeted, appropriated, and otherwise made available. 12. Governmental Immunity The City does not by entering into this Permit nor by any provision hereof waive or intend to waive any rights, immunities, conditions or protection under the Colorado Governmental Act, C.R.S. §24 -10 -101, et seq., or otherwise available or provided under any other law to the City and its officers and employees. 13. Miscellaneous (a) This Permit shall be binding upon and inure to the benefit of Permittee and City and, subject to the limitations of Paragraph 5 hereof, their respective successors. (b) This Permit shall be governed by and interpreted in accordance with the law of the State of Colorado without regard to conflict of law principles. (c) This Permit expresses the entire understanding of the parties and supersedes any and all prior dealings and commitments with respect to the subject matter of this Permit and may not be altered, changed, or amended except by an instrument in writing signed by Permittee and City. (d) If any provision of this Permit is declared by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the other provisions of this Permit which shall remain in full force and effect. (e) The article and section headings used herein are for reference and convenience only, and shall not enter into the interpretation hereof. Executed in Pueblo, Colorado the day and years first above written. PUEBLO CITY OF PUEBLO, A MUNICIPAL CORPORATION -4- i ATTEST: Cit y Clerk -- . ATTEST: By a Name: P6-n21 ci A- A AUr u.2 R _ Title: EXcu -taVt= Ac1tm�NiSIKhhVG As5r5dPrnr+' NOTARIAL SEAL PATRICIA A FIGURA NomIY Public 11MLEHEM CITY, LENIGN COUNTY My Comm"m Bores 00 11, 2010 By �{ Y� President of the City Council PERMITTEE THE RECEIVABLE MANAGEMENT SERVI ES CORPORATION By - Name: ry r Title: / b4 l>vrc. P ;04 CVP -5- y i T c By �{ Y� President of the City Council PERMITTEE THE RECEIVABLE MANAGEMENT SERVI ES CORPORATION By - Name: ry r Title: / b4 l>vrc. P ;04 CVP -5- FIRST AMENDMENT TO PARKING PERMIT THIS FIRST AMENDMENT TO PARKING PERMIT ( "First Amendment') is entered into as of April 1, 2008 by and between the City of Pueblo, a municipal corporation, 1 City Hall Place, Pueblo, Colorado, 81003 ( "City ") and The Receivable Management Services Corporation, 240 Emery Street, Bethlehem, Pennsylvania, 18015 ( "Permittee "). WHEREAS, City and Permittee are parties to that certain Parking Permit dated March 24, 1008 (as amended hereby, the "Parking Permit') and the parties now desire to amend the Parking Permit; NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained herein, City and Permittee agree as follows with the intent to be legally bound: L Change to Effective Date The effective date of the Parking Permit hereby is amended and changed from April 1, 2008 to May 1, 2008. The Term of the Parking Permit shall commence May 1, 2008 and terminate upon the date the Lease is terminated or cancelled. The Monthly Payment will commence on May 1, 2008 and continue to be paid on the first day of each month thereafter during the effective term of the Parking Permit. Parking Fees and Monthly Payment shall be increased or decreased on the first day of May of each calendar year starting May 1, 2009 by the percentage increase or decrease in the consumer price index during the prior calendar year as otherwise provided in the Parking Permit. 2. Miscellaneous Except as modified herein, the terms of the Parking Permit remain in full force and effect. In the event of a conflict between the terms of the Parking Permit and the terms of this First Amendment, the terms of this First Amendment shall control. Capitalized terms used herein and not otherwise defined shall have the meanings used in the Parking Permit. This First Amendment will be interpreted according to the Laws of the State of Colorado, without regard to any conflict of law principles. This First Amendment may be executed in two counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Executed in Pueblo, Colorado the day and years first above written. PUEBLO AT ; UST_ ATTEST: CITY OF PUEBLO, A MUNICIPAL CORPORATION B President of the City Council PERMITTEE THE RECEIVABLE MANAGEMENT SERVIC CORPO TION By Name: Title: uTW46 NOTARIAL SE4 pAmICTA A FIGURA Nomy RAft 9 *"HEM CM. LENIGN CNMRt 0 W commiswn ExPWA Oct 11 , 201