CM-2018-1719 - 5/11/2018KR ACQUISITIONS, LLC AND KR CC, INC.
F.O. Box 590, 1305 Kalahari Drive
Wisconsin Dells, WI 53965
City of Round Rock
221 E. Main Street
Round Rock, TX 78664
Attention: City Manager
May 10, 2018
With copy to:
Sheets & Crossfield
309 E. Main Street
Round Rock, TX 78664
Attention: Stephan L. Sheets
Re: Economic Development Program Agreement dated as of December 15, 2016 (as amended,
the "Economic Development Program Agreement") by and between KR Acquisitions LLC,
a Delaware limited liability company, ("KR Acquisitions") and KR CC, Inc., a Delaware
corporation ("KR CC"', which together with KR Acquisitions, is collectively referred to
herein as the "Company"), the City of Round Rock, Texas, a Texas home rule municipal
corporation (the "City"), and the Round Rock Transportation and Economic Development
Corporation, a "Type B" corporation created under the authority of Chapter 501, Texas
Local Government Code (the "TED Corp. ", which together with the City, is collectively
referred to herein as "Round Rock"), and that certain Master Development Agreement
dated as of December 15, 2016 ("Development Agreement") by and between the City, the
TED Corp., KR Acquisitions, and KR CC.
Dear Sir/Madam:
The Company, the City, and the TED Corp. are collectively referred to as the "parties" and
individually referred to as a "parry". Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Economic Development Program Agreement.
This Letter Agreement is intended to confirm and ratify agreements within the Economic
Development Program Agreement and the Development Agreement and further clarify the specific
means and methods of the obligations of the Parties thereunder:
Round Rock will defer the issuance of the first Bonds to April 2019 and the balance of the
Bonds are expected to be issued consistent with the Round Rock model shared with
Company in March 2018. The parties understand that these are target dates subject to
change if necessary to best meet project needs and/or changes in the municipal bond
market. The parties agree that all notice provisions related to the issuance of the bonds
have been satisfied.
• For the time prior to April 2019 when Round Rock issues the first Bonds, and between
Bond issuances, Round Rock will provide interim financing through cash reserves for out-
of-pocket design, engineering, construction and other costs for the Round Rock -funded
portions of construction of the Convention Center and the offsite Public Improvements (the
"Interim Financing").
Zl''-204- /7 /1
• Round Rock's financing charge for the Interim Financing will be adjusted monthly based
on the following: (i) actual cumulative amounts paid by Round Rock which have not been
reimbursed by the Bonds; plus (ii) cumulative interest paid.
+ The Round Rock monthly financing charge for the Interim Financing will be determined
monthly based on the City's average monthly portfolio rate of return for such month plus
fifty (50)basis points, which the City will provide to the Company within 115] days after
the end of each month. The City's average monthly portfolio rate of return for March 2018
was 1.637%. Round Rock's financing charge for the Interim Financing will compound
monthly (subject to the following sentence), and begin to be paid to Round Rock on a
monthly basis once the Project has opened to the public over a several year period not less
than three (3) years and not more than five (5) years, as to be mutually determined by the
Parties, and in no event earlier than six months after the resort has opened. Interest shall
cease to accrue/compound on the Interim Financing balances on the earlier of (i) such time
the last payment is made by Round Rock with respect to each tranche of interim Financing
(the Convention Center and offsite Public Improvements) and (ii) such time Round Rock
ceases to provide such Interim Financing.
• The parties will work together to improve the timing of annual debt service payment
accumulation as required by Section 5.03 (a) and (b) of the Development Agreement to
allow more even monthly cash flows.
• For purposes of depositing an irrevocable letter of credit or another form of security
acceptable to the City under Section 4.09, the Parties agree that May 15, 2018 shall be the
triggering date of the 18 month period referred to in the first sentence of Section 4.09.
The Project complies with the terms, conditions, provisions, and requirements of the
Economic Development Program Agreement and the Development Agreement.
[SIGNATURE PAGE(S) FOLLOW]
2
Very Truly Yours,
KR ACQUISITIONS LLC,
a Delaware limited Iiability company
By: 7;&-��
Todd Nelson, President
KR CC, INC.,
a Delaware corporation
By: -7
Todd Nelson, President
ACKNOWLEDGED BY THE CITY AND THE TED CORP.
CITY OF ROUND ROCK, TEXAS,
a home rule city and municipal corporation
ay.a
Laurie Hadle , dity Mana r
Date: —/t—,/
Appro ed s to fo
Steph L. Sheets, City Attorney
ROUND ROCK TRANSPORTATION
AND ECONOMIC DEVELOPMENT
CORPORATION
By:"CityManaor
Laurie Had
Date:
Appro ed as to farm:
Stephan Sheets, City Atto ey
Signature Page to Side Letter Agreement
City of Round Rock
f.
Rou�toRocic Agenda Item Summary
7rXA'S
Agenda Number:
Title: Consider executing a letter agreement with KR Acquisitions, LLC and KR
CC, Inc. regarding the Economic Development Program Agreement and the
Development Agreement
Type: City Manager Item
Governing Body: City Manager Approval
Agenda Date: 5/11/2018
Dept Director: Steve Sheets
Cost:
Indexes:
Attachments: LAF - Letter Agreement with KR Acquisitions, LLC and KR CC, Inc.
regarding the Economic Development Program Agreement and the Dev
(00401032xA08F8), SKM_C36818051011060
Department: Legal
Text of Legislative File CM -2018-4719
Consider executing a letter agreement with KR Acquisitions, LLC and KR CC, Inc.
regarding the Economic Development Program Agreement and the Development
Agreement
This letter agreement confirms and ratifies agreements within the Economic Development
Program Agreement and the Development Agreement and further clarify the specific
means and methods of the obligations of each involved party.
Cost: NIA
Source of Funds: NIA
City o! Round Rack Page 1 Printed on 511112016