Contract - KR Acquisitions - Kalahari - 10/24/2019COMMERCIAL LEASE AGREEMENT
This Commercial Lease Agreement is made and entered into by and between Lessor, CITY
OF ROUND ROCK, TEXAS, a Texas home rule city, (hereinafter referred to as "City") and
Lessee, KR Acquisitions LLC, a Delaware limited liability company (hereinafter referred to as
"KR Acquisitions").
Date: October �, 2019
Lessor: CITY OF ROUND ROCK, TEXAS, a municipal corporation
Lessor's Address: 221 East Main Street
Round Rock, Texas 78664
Lessee: KR Acquisitions LLC, a Delaware limited liability company
Lessee's Address: P.O. Box 590
1305 Kalahari Drive
Wisconsin Dells, WI 53965
Lease Space: The building located at 2008 Enterprise in Round Rock, Williamson
County, Texas (the "Primary Building") and a smaller building
located in the parking lot of the Primary Building (the "Second
Building"; hereinafter the Primary Building and the Second
Building are referred to as the "Lease Space"), along with
appurtenant parking facilities.
Lease Commencement
Date (Initial Term):
Lease Expiration
Date (Initial Term):
Lease Term:
Lease Rent:
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December 1, 2019 or such earlier date agreed to by the City and KR
Acquisitions; provided that the lease shall not commence with
respect to the Second Building until February 1, 2020 or such earlier
date agreed to by the City and KR Acquisitions in writing
December 31, 2020
From the Lease Commencement Date (Initial Term) through the
Lease Expiration Date
Monthly Lease Rent S 1.00.
Permitted Uses: Office use and storage space for items associated with the Kalahari
Resort being built in Round Rock
ARTICLE I
Consideration. The parties hereto expressly stipulate that this Commercial Lease
Agreement is entered into in consideration of the sums of money recited herein, the use of the
Lease Space as recited herein, the value to City of ensuring occupancy and use of its property
inventory, and other good and valuable consideration given, the receipt and sufficiency all of
which is hereby acknowledged.
Leasine of Premises. Subject to and upon the terms and conditions herein set forth, and
each in consideration of the duties, covenants and obligations of the other hereunder, City hereby
leases to, and KR Acquisitions hereby leases from City, the Lease Space. The parties hereto
expressly stipulate that the Lease Space is not a dwelling as defined in V.T.C.A., Property Code
§92.001(1).
KR Acquisitions understands that the Lease Space does not include a computer server room
located in the interior of the building. Authorized city employees shall have access to the computer
server room on a 24/7 basis. Notwithstanding the foregoing, KR Acquisitions shall also have
access to the computer room, including all access to the IT infrastructure of the Primary Building
and the Second Building.
Furnishines. The City will be vacating the Lease Space and moving its employees to a
new building with new furniture. The furniture that is not being moved to the new building or
elsewhere by the City will remain in the Lease Space for use by KR Acquisitions. However, the
furniture will remain the property of the City.
ARTICLE II
Performance Representations by Lessee KR Acquisitions. KR Acquisitions hereby
covenants and agrees to do the following:
1. Lease the premises for the Lease Term, on the terms and conditions
enumerated herein, beginning on the Lease Commencement Date and ending on
the Lease Expiration Date (which may include extensions of the Lease Expiration
Date (Initial Term), as provided for in Article III).
2. Pay the Lease Rent per month to City at its offices in Round Rock, Texas,
or elsewhere within the United States as City may from time to time designate in
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writing, payable in advance no later than the first day of each full calendar month,
in legal tender for the payment of public and private debts, without set-off or
deduction, the sum of One Dollar and No/100 ($1.00) per month. All payments of
Lease Rent and other amounts becoming due and payable from KR Acquisitions to
City under and in connection with this lease may be made by delivering to City, at
the then -applicable address provided for herein, KR Acquisitions' check in the
amount of such payment, on or before the due date thereof under the terms of this
lease.
3. Independently arrange to have any utilities needed by KR Acquisitions to
be provided by utility service providers, and KR Acquisitions shall pay for all such
utility services used by KR Acquisitions which are not provided by City.
4. Pay all operating expenses for the Lease Space, including cleaning and
"ordinary course of business" maintenance of the building consistent with
obligations of a tenant in a short-term lease, maintaining landscaping and repair and
"ordinary course of business" maintenance of the parking lot consistent with
obligations of a tenant in a short-term lease.
5. Pay any and all property taxes assessed against the Lease Space and
personal property owned by KR Acquisitions.
6. Obey all laws, rules, regulations, and terms of the lease and of the use,
condition, and occupancy of the Lease Space, including the rules and regulations
of the building, if any, adopted by City from time to time.
7. Vacate the Lease Space upon termination of this lease, and surrender all key
cards to the Lease Space.
8. Allow City to enter the premises to perform City's obligations, or to
reasonably inspect the premises, or at reasonable times to show the premises to
prospective purchasers or tenants.
9. Submit written notifications and/or requests to City relative to any events
of consequence involving the premises.
10. Maintain general liability insurance for the Lease Space, with City named
as additional insured, in the amount of $2,000,000, and provide the City with an
Insurance Certificate.
11. Maintain appropriate insurance on KR Acquisitions' personal property
located within the Lease Space.
12. Deliver certificates of insurance to City.
13. Indemnify, defend, and hold City harmless from any loss or claim arising
out of KR Acquisitions' use of the Lease Space or resulting from KR Acquisitions'
failure to comply with applicable provisions of the lease.
14. Upon request of City, execute an estoppel certificate stating the
commencement and expiration dates of the lease, identifying any amendments to
the lease, describing any rights to extend the lease term, listing defaults, and
providing any other related information reasonably requested.
Prohibition Representations by Lessee KR Acquisitions. KR Acquisitions hereby
covenants and agrees not to do the following:
1. Use the Lease Space for purposes other than the Permitted Lease Use.
2. Create a nuisance.
3. Interfere with City's ownership or management of the building.
4. Permit any waste.
5. Use the Lease Space in a way that is extra -hazardous, that would increase
insurance premiums, or that would void insurance on the building.
6. Change City's lock system, except as permitted in writing.
7. Alter the Lease Space, except as provided herein for statutorily -mandated
alterations, or place any exterior sign on the premises unless such exterior sign
complies with all applicable laws, ordinances, orders, rules and regulations or is
otherwise approved by the City.
8. Allow a lien to be placed on the Lease Space.
9. Assign this lease or sublet any portion of the Lease Space without City's
prior written consent.
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ARTICLE III
Performance Representations by Lessor City. City hereby covenants and agrees to do
the following:
1. Lease the Lease Space to KR Acquisitions for the Lease Initial Term, on the
terms and conditions enumerated herein, beginning on the Lease Commencement
Date (Initial Term) and ending on the Lease Expiration Date (Initial Term), or
ending on the last day of any allowed month-to-month tenancy after the Lease
Expiration Date (Initial Term).
2. Adequately insure the building and parking facilities against risks of direct
physical loss. The parties agree that KR Acquisitions shall have no claim to any
proceeds of City's insurance policy.
Prohibition Representations by Lessor City. City hereby covenants and agrees not to
interfere with KR Acquisitions' possession of the premises so long as KR Acquisitions is not in
default.
ARTICLE IV
Default by KR Acquisitions.
1. Default by KR Acquisitions shall be defined as KR Acquisitions failing to
begin a reasonable attempt to comply, within ten (10) days of receiving written
notice from City, with any substantive provision of this lease.
2. City's remedies for KR Acquisitions' default are to (a) enter and take
possession of the Lease Space, after which City may relet the Lease Space and
receive the Lease Rent directly by reason of the reletting; or (b) enter the Lease
Space and perform KR Acquisitions' obligations; or (c) terminate this lease by
proper written notice and sue for damages.
Default by City
1. Default by City shall be defined as City failing to begin a reasonable attempt
to comply with any substantive provision of this lease within ten (10) days of
receiving proper written notice.
2. KR Acquisitions' remedies for City's default is limited to only terminating
this lease.
It is not a waiver of default if the non -defaulting party fails to declare immediately a default
or delays in taking any action. Pursuit of any remedies set forth in this lease does not preclude
pursuit of other remedies in this lease or as provided by law. City and KR Acquisitions have a
duty to mitigate damages.
ARTICLE V
Kevs. City will provide KR Acquisitions with an adequate number of key cards to the
Lease Space. No additional locks shall be allowed in the premises without City's consent. Upon
termination of this lease, KR Acquisitions shall surrender to City all key cards to the Lease Space.
ARTICLE VI
Abatement. KR Acquisitions' covenant to pay rent and City's covenants hereunder are
independent of each other. Except as otherwise provided herein or by law, KR Acquisitions shall
not be entitled to abate rent for any reason.
ARTICLE VII
Use. KR Acquisitions will use the premises only for office and storage purposes which are
consistent with such reasonable rules and regulations as are imposed from time to time by City
with respect to the space leased. Any use of the premises which will affect the appearance of the
building, exceed structural loads of floors or walls, affect the mechanical, plumbing or electrical
systems of the building, affect ventilation in other areas of the building, or interfere with other
tenants of the building must have City's prior written approval.
Access. KR Acquisitions and its employees shall have access to the premises at all times.
KR Acquisitions' invitees and customers and the general public shall have access to the premises
during normal business hours and, at KR Acquisitions' election, after business hours if they shall
comply with such security procedures as City shall reasonably promulgate from time to time.
The City shall also have access to the premises at all times.
ARTICLE VIII
Lessee KR Acquisitions' Oblizations. KR Acquisitions covenants and agrees that it will
not injure the building or the premises but will take the same care thereof which a reasonably
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prudent person would take of his/her own property, and upon termination of this lease, KR
Acquisitions will surrender and deliver up the premises to City in as nearly identical condition the
premises were in on the commencement date of this lease; subject, however, and except for
ordinary wear and tear and damage arising from fire or other casualty. KR Acquisitions agrees, at
its cost and expense, to repair or replace any part of the premises damaged as a proximate result
of negligent or wrongful acts or omissions of KR Acquisitions or its agents, employees,
representatives, invitees, licensees or visitors and to repair damage to the building proximately
caused by the negligence or wrongdoing of KR Acquisitions or its agents, employees or
representatives acting within the scope of their agency, employment or representation; provided,
however, that if KR Acquisitions should fail or refuse to make such repairs or replacements with
reasonable promptness after written notice from City (having due regard to the nature of the
required repairs or replacements and the effect of delay in making same on the appearance of the
building or danger of injury to or interferences with others), then City may, at its option but without
any obligation to do so, enter the premises and make such repairs or replacements on the premises,
should they be required, and KR Acquisitions shall repay the actual and reasonable costs thereof
upon demand.
ARTICLE IX
Alterations by Lessee KR Acquisitions. KR Acquisitions shall not make any alterations
to or additions to the building or premises without City's prior written consent to and approval
thereof.
City's Rights Upon Termination of Lease. All of KR Acquisitions' improvements,
fixtures and equipment of every description (unless such improvements, fixtures and equipment
are removable without damage to the premises), any alterations or additions to the premises
including those made with written consent, and any other article incorporated in or permanently
affixed to the floor, wall or ceiling of the premises, shall become the property of City and shall be
and remain upon and be surrendered with the premises as a part thereof at the termination of this
lease, KR Acquisitions hereby waiving all rights to any payment or compensation therefor. In the
event City requests that KR Acquisitions remove any of KR Acquisitions' removable fixtures,
equipment or property located in or about the premises or the building at the termination of this
lease, KR Acquisitions shall promptly remove same at its sole risk, cost and expense, and upon
KR Acquisitions' failure to remove same, City may remove same at KR Acquisitions' expense.
ARTICLE X
Lessee KR Acquisitions' Compliance With Laws. KR Acquisitions will at its own cost
and expense comply with all laws, ordinances, orders, rules and regulations (state, federal,
municipal or promulgated by other agencies or bodies having jurisdiction thereof) relating to the
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use, condition or occupancy of the premises, excluding having any responsibility or liability for
making improvements to the building which make it ADA compliant; will install, remove or alter
such of KR Acquisitions' fixtures, equipment and facilities in the premises as may be necessary
so to comply; and will not engage in any activity which would cause City's fire and extended
coverage insurance to be canceled or the rate therefor to be increased over the rate which would
have been charged had such activity not been engaged in by KR Acquisitions (or in such event, at
KR Acquisitions' option, KR Acquisitions will pay the amount of any such increase).
ARTICLE XI
Release of Claims/Subrogation. City and KR Acquisitions hereby release each other
from any claim, by subrogation or otherwise, for any damage to the premises, the building, the
parking facilities, or personal property within the building, by reason of fire or the elements,
regardless of cause, including negligence of either party. This release applies only to the extent
that it is permitted by law, the damage is covered by insurance proceeds, and the release does not
adversely affect any insurance coverage.
Notice to Insurance Companies. City and KR Acquisitions shall notify the issuing
insurance companies of the release set forth in the first paragraph of this Article XI, and shall have
the insurance policies endorsed, if necessary, to prevent invalidation of coverage.
ARTICLE XII
Casualty/Total or Partial Destruction. If the premises are damaged by casualty, the
City may, at its sole option, choose not to restore the premises. In that case, this lease agreement
will terminate or, if practical, remain in effect with respect to the premises that have not been
damaged by casualty.
ARTICLE XIII
Condemnation/Substantial or Partial Taking. If the premises cannot be used for the
purposes contemplated by this lease because of condemnation or purchase in lieu of condemnation,
then this lease will terminate. KR Acquisitions shall have no claim to the condemnation award or
proceeds in lieu of condemnation.
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ARTICLE XIV
No Arbitration. In the event of any dispute regarding terms or performance of terms of
this lease, it is agreed by all parties that such dispute shall not be subject to arbitration.
ARTICLE XV
As Is, Where Is. KR Acquisitions acknowledges that it has been provided sufficient
opportunity to inspect, examine, and investigate the Lease Space. KR Acquisitions warrants,
acknowledges, and agrees that it is relying solely on its own inspections, examinations, and
investigations of the property in making the decision to lease the property and is accepting the
property in its "as is, where is" condition "with all faults" and defects and specifically and
expressly without any warranties, representations, or guarantees, either express or implied, as to
its condition, fitness for any particular purpose, or any other warranty of any kind, nature, or type
whatsoever from or on behalf of City. City specifically disclaims any warranty, guaranty, or
representation, oral or written, past or present, express or implied, concerning (a) the nature,
quality, or condition of the property, including without limitation, structural integrity; (b) the
suitability of the property for any and all activities and uses which KR Acquisitions may conduct
on the property; (c) the habitability, or fitness for a particular purpose of the property; (d) the
manner or quality of the construction or materials, if any, incorporated into the property, (e) the
manner, quality, state of repair or lack of repair of the property, (f) the presence or absence of
hazardous materials at, on, under, or adjacent to the property or any other environmental matter or
condition of the property, or (g) any other matter with respect to the property. KR Acquisitions
further acknowledges that it is a sophisticated and experienced lessee of properties such as the
property.
ARTICLE XVI
Abandoned Property. City may retain, destroy, or dispose of any property left and
abandoned on the premises at the end of the lease term and any renewals.
ARTICLE XVII
Severability Clause. If any term, covenant, condition or provision of this lease, or the
application thereof to any person or circumstance, shall ever be held to be invalid or unenforceable,
then in each such event the remainder of this lease or the application of such term, covenant,
condition or provision to any other person or any other circumstance (other than such as to which
it shall have been invalid or unenforceable) shall not be thereby affected, and each term, covenant,
condition and provision hereof shall remain valid and enforceable to the fullest extent permitted
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by law.
ARTICLE XVIII
Notices. Any notice or communication to parties required or permitted to be given under
this lease shall be effectively given only if in writing and such notice shall be considered received
three (3) days after depositing such notice in the U.S. registered or certified mails, postage prepaid,
return receipt requested, or by commercial overnight courier service, addressed as follows:
(a) If addressed to Lessor City:
City of Round Rock, Texas
221 East Main Street
Round Rock, TX 78664
Attention: City Manager
With a copy to:
Stephan L. Sheets
Sheets & Crossfield, PLLC
309 East Main Street
Round Rock, TX 78664
(b) If addressed to Lessee KR Acquisitions:
KR Acquisitions LLC
P.O. Box 590
Wisconsin Dells, WI 53965
Attention: Ralph Gundrum
provided, however, that any party shall have the right to change the address to which notices shall
thereafter be sent by giving notice to the other party as aforesaid, but not more than two addresses
shall be in effect at any given time for City and KR Acquisitions hereunder.
ARTICLE XIX
Attorneys' Fees. In the event of litigation between City and KR Acquisitions wherein one
or both parties is seeking to enforce any right or remedy hereunder, the prevailing party shall be
entitled to recover its reasonable attorneys' fees incurred in connection with such litigation from
the other party.
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ARTICLE XX
Applicable Law. This lease shall be governed by and construed in accordance with the
laws of the state of Texas, and venue shall lie in Williamson County, Texas.
ARTICLE XXI
Miscellaneous Provisions. The parties hereto agree as follows:
(a) Binding Effect. The covenants and agreements herein contained shall inure to and be
binding upon City, its successors and assigns, and KR Acquisitions, its successors and assigns;
provided such reference to assigns is not intended to imply or grant any right on the part of either
party to assign this lease.
(b) Entire Agreement. This lease constitutes the entire agreement of the parties with respect
to the subject mater hereof, and all prior correspondence, memoranda, agreements or
understandings (written or oral) with respect hereto are merged into and superseded by this lease.
This lease is executed and delivered effective as of the date and year first above written.
LESSOR
CITY OFN ROCK, TEXAS
a municipal o po ion
By:
Mayor WV -1 T SA656, AAAYOR-PRO TEM
Date: 1 p /zq
ATTEST:
aan wK5
APPROVED A O
ry �,
Stephant. Sheets, City Attorney
LESSEE
KR UIS NS LLC
By i
Name: M ry B me Spath
Title: S cretar and Treasurer
Date: October 4, 019
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