Document:

Exhibit

  EXHIBIT 10.5
    
PROMISSORY NOTE

Philadelphia, Pennsylvania
$555,000.00                                Effective Date: August 18, 2016

FOR VALUE RECEIVED, the undersigned, RESOURCE APARTMENT REIT III, INC., a Maryland corporation, having its principal place of business at 1845 Walnut Street, 18th Floor, Philadelphia, PA  19103 (the "Maker"), promises to pay to the order of RESOURCE APARTMENT ADVISOR III, LLC, a Delaware limited liability company with a place of business at One Crescent Drive, Suite 203, Navy Yard Corporate Center, Philadelphia, PA  19112 (the "Payee"), the principal sum of Five Hundred Fifty Thousand and 00/100 Dollars ($555,000.00) in lawful money of the United States of America, together with interest on the outstanding balance thereof, as follows:

(a)INTEREST RATE. The unpaid principal balance of this Note from day to day outstanding which is not past due, shall bear interest at a fluctuating rate of interest per annum equal to the BBA LIBOR Daily Floating Rate for that day plus Three Hundred (300) basis points per annum. The "BBA LIBOR Daily Floating Rate" shall mean a fluctuating rate of interest per annum equal to the British Bankers’ Association LIBOR Rate ("BBA LIBOR"), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as selected by Payee from time to time) as determined for each Business Day at approximately 11:00 a.m. London time two (2) London Banking Days prior to the date in question, for U.S. Dollar deposits (for delivery on the first day of such interest period) with a one month term.  A "London Banking Day" is a day on which banks in London are open for business and dealing in offshore dollars.  Interest shall be computed for the actual number of days which have elapsed, on the basis of a 360-day year.
(b)   PAYMENT TERMS.  The outstanding balance of the principal sum of this Note plus all accrued and unpaid interest shall be due and payable on the date which is six (6) months from the date hereof (the “Maturity Date”).  Notwithstanding the foregoing, Maker shall have the right to extend the Maturity Date for a period not to exceed six (6) months, provided that (i) no Event of Default has occurred and is continuing and (ii) Maker pays to Payee an extension fee equal to one-half of one percent (0.5%) of the outstanding principal amount of the Loan upon such extension.  

(c)    LOAN ORIGINATION FEE.  Maker shall pay to Payee a loan origination fee in the amount of one-half of one percent (0.5%) of the principal amount of the Loan which shall be due and payable on the date hereof.  

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 (d)    PREPAYMENT.  Maker may prepay, in whole or in part, the principal hereon without premium or penalty.  

(e)    PLACE FOR PAYMENT.  Payment shall be made to Payee at the address set forth in the heading of this Note, or at such other place as Payee may designate from time to time.      

(f)    EVENTS OF DEFAULT.  The following shall constitute Events of Default hereunder:

(i) Failure of Maker to pay the sum due hereon on the date when it is due.

(ii) Nonperformance of or noncompliance by Maker with any of the agreements, terms, conditions, covenants, provisions or stipulations contained in this Note.
        
(iii) Maker shall not generally pay its debts as they mature, shall make a general assignment for the benefit of creditors, or shall file or have filed against it or its property, any reorganization or liquidation under the United States Bankruptcy Code or under any other state or federal law for the relief of debtors.
         
(iv) Entry of any judgment against, issuance of attachment or garnishment or filing of a lien against Maker, which judgment, attachment, garnishment or lien would have a material adverse effect on the financial position of Maker.

(g)    LATE PAYMENT - INTEREST ACCELERATION
    
If the payment due hereunder is not paid when due, then until such amount is paid, the entire unpaid balance of this Note, shall bear interest at the rate of five percent (5%) per annum (the "Default Rate").  

It being further understood, however, that should any default be made in the payment of any amount due on the date on which it shall fall due, or in the performance of any of the agreements, conditions, covenants, terms, provisions or stipulations contained herein, or upon the occurrence of any Event of Default hereunder, then Payee, in its sole discretion and without notice to Maker, may declare immediately due and payable the entire unpaid balance of principal with interest accrued thereon at the rate applicable hereunder to the date of default and thereafter at the Default Rate and all other sums due by Maker hereunder, anything herein to the contrary notwithstanding and payment thereof may be enforced and recovered in whole or in part at any time by one or more of the remedies available at law or in equity.  In such case Payee may also recover all costs of suit and other expenses in connection therewith, together with attorney's fees actually incurred, together with interest 

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on any judgment obtained by Payee at the Default Rate until actual payment is made to Payee of the full amount due Payee.

(h)    WAIVER AND RELEASE

Maker hereby waives and releases all errors, defects and imperfections in any proceedings instituted by Payee under the terms of this Note, Maker hereby consents to immediate execution of any judgment.  Maker hereby waives presentment for payment, demand, notice of demand, notice of nonpayment or dishonor, protest and notice of protest of this Note, and all other notices in connection with the delivery, acceptance, performance, default or enforcement of the payment of this Note, and Maker agree that its liability shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee.  Maker hereby consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and agrees that additional makers, endorsers, sureties or guarantors may become bound by the terms of this Note without notice to Maker or affecting its liability hereunder.

Maker hereby consents to the exclusive jurisdiction of the Courts of the Commonwealth of Pennsylvania and the United States District Court for the Eastern District of Pennsylvania, in any and all actions or proceedings arising hereunder or pursuant hereto, and further consents that any process or notice in connection therewith may be served by certified mail, return receipt requested, or personal service, within or without the Commonwealth of Pennsylvania.  Maker, as an independent covenant, waives a jury trial and the right thereto in any action or proceeding between such Maker and Payee, whether hereunder or otherwise.
 
(i)    WAIVER BY PAYEE

Payee shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by Payee, and then only to the extent specifically set forth in writing.  A waiver by Payee with respect to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy with respect to a subsequent event.

(j)    SEVERABILITY 

If any one or more of the provisions contained in this Note shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Note, but this Note shall be construed as if such provision had never been contained herein, and Payee may, at its option and without notice to Maker, declare immediately due and payable the entire unpaid balance of principal with accrued interest thereof and all other sums due hereunder.

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(k)    AMENDMENT OR MODIFICATION

The provisions of this Note may be changed only by a written agreement signed by Maker and Payee.

(l)    GOVERNING LAW

This Note shall be governed by and construed according to the laws of the Commonwealth of Pennsylvania.

(m)    TERMINOLOGY

Whenever used, the singular number shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders, and the words "Payee" and "Maker" shall be deemed to include their respective heirs, personal representatives, successors and assigns.  The term "Payee" shall be deemed to include the Payee specifically named herein as "Payee" or any subsequent holder or assignee of this Note.

IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has duly executed this Note under seal, on August 18, 2016.

        

RESOURCE APARTMENT REIT III, INC.
      
                        
By:    /s/ Kevin Finkel                                                 
Name: _Kevin Finkel __________________    
Title:  CEO                                            
                        

 -  -Exhibit 4.3

 

IN THE COUNTY COURT IN AND FOR DOUGLAS COUNTY, NEBRASKA

 

	
IN THE MATTER OF THE: 
    	
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CASE NO. PR 16 - 1041
    
	
 
    	
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ORDER APPROVING MODIFICATION OF
    
	
KIEWIT   ROYALTY TRUST
    	
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TRUST   AGREEMENT
    
	
 
    	
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FILED
    	
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Judge
    	
 
    	
McDermott
    
	
 
    	
COUNTY COURT
    	
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PROBATE DIVISION
    	
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AUG 16 2016
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Clerk of Court
    	
 
    	
 
    
	
 
    	
DOUGLAS COUNTY COURT
    	
 
    	
 
    
	
 
    	
OMAHA, NEBRASKA
    	
 
    	
 
    

 

THIS MATTER came before the Court upon the Application for Modification of Trust Agreement in the matter of the Kiewit Royalty Trust Indenture, dated May 17, 1982 and restated on June 10, 1982 (the “Trust”) by the Trustee, U.S. Bank, NA, and the Court hereby finds that the proposed modification of the Trust is justified for the reasons set forth in the Application.

 

IT IS, THEREFORE, ORDERED THAT:

 

FIRST, Section 1.10 of the Trust is hereby deleted, and in lieu thereof, the following new Section 1.10 is substituted:

 

“Section 1.10. ‘Biannual Distribution Amount’ means, the excess of the amount of cash received by the Trust over all expenses paid by the Trust during the six (6) month period ending on the applicable Biannual Record Date; with such excess reduced by an amount determined by the Trustee that should be added to the Trust’s cash reserves for payment of any future or contingent liabilities.”

 

SECOND, Section 1.11 of the Trust is hereby deleted, and in lieu thereof, the following new Section 1.11 is substituted:

 

“Section 1.11. ‘Biannual Record Date’ means June 30th and December 31st of each calendar year.”

 

THIRD, Section 1.12 of the Trust is hereby deleted, and in lieu thereof, the following new Section 1.12 is substituted:

 

“Section 1.12. ‘Payment Date’ means a date selected by the Trustee that is no later than ten (10) days after the end of each Biannual Record Date.”

 

FOURTH, Section 4.02 of the Trust is hereby deleted, and in lieu thereof, the following new Section 4.02 is substituted:

 

“4.02 RIGHTS OF CERTIFICATE HOLDERS. The Certificate Holders shall own pro rata the Beneficial Interest and shall be entitled to participate pro rata in the rights and benefits of the Certificate Holders under this Indenture. A Transferee takes and holds the same subject to all the terms and provisions of this Indenture, which shall be binding upon and inure to the benefit of the successors, assigns, legatees, heirs and personal representatives of the Certificate Holder. By a transfer of one or more Units represented by a Certificate, the Transferor thereby shall, with

 

 

 

respect to such transferred Unit or Units, part with (i) all his Beneficial Interest attributable thereto (except as may be provided in Section 4.04 with respect to a transfer of Units after a Biannual Record Date but prior to the Payment Date); (ii) all his rights in, to and under such Certificate; and (iii) all interests, rights and benefits under this Trust of a Certificate Holder which are attributable to such Unit or Units as against all other Certificate Holders and the Trustee. The Certificates, the Units, and the rights, benefits and interests evidenced by either or both (including without limiting the foregoing, the entire Beneficial Interest) are and shall be held and construed to be in all respects intangible personal property, and the Certificates and Units evidenced thereby shall be bequeathed, assigned, disposed of and distributed as intangible personal property. No Certificate Holder as such shall have any legal title in or to any property interest which is a part of the Trust Estate, including, without limiting the foregoing, the Royalties or any part thereof, but the sole interest of each Certificate Holder shall be his interest in the Beneficial Interest and the obligation of the Trustee to hold, manage and dispose of the Trust Estate and to account for the same as in this Indenture provided. No Certificate Holder shall have the right to call for or demand or secure any partition of the royalties during the continuance of the Trust or during the period of liquidation and winding up under Section 9.03.”

 

FIFTH, Section 4.04 of the Trust is hereby deleted, and in lieu thereof, the following new Section 4.04 is substituted:

 

“4.04 REGISTRATION AND TRANSFER OF UNITS. The Units shall be transferable as against the Trustee only on the records of the Trustee upon the surrender of Certificates and compliance with such reasonable regulations as it may prescribe, including regulations designed to ensure compliance with any laws or governmental regulations restricting ownership of interests in federal or state coal leases. Where a Transferor has been the owner of record for a period of less than three years, or in any other circumstance involving a transfer where the Trustee deems it appropriate, the Trustee shall, prior to effecting a transfer involving a purchase of Units, be provided by the Transferor, at the Transferor’s expense, with an opinion of counsel satisfactory to the Trustee that the Units will be transferred in compliance with federal and state securities law requirements. No service charge shall be made to the Transferor or Transferee for any transfer of a Unit, but the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. Until any such transfer the Trustee may treat the owner of any Certificate as shown by its records as the owner of the Units evidenced thereby and shall not be charged with notice of any claim or demand respecting such Certificate or the interest represented thereby by any other party. Any such transfer of a Unit shall, as to the Trustee, transfer to the Transferee as of the close of business on the date of transfer all of the undivided right, title and interest of the Transferor in and to the Beneficial Interest with respect to such unit. Notwithstanding anything in this Indenture to the contrary, Certificate Holders of record on a Biannual Record Date shall be entitled to the Biannual Distribution Amount on the applicable Payment Date without regard to whether a transfer of Certificates occurred after the Biannual

 

 

Record Date but prior to the Payment Date. In addition, any transfer of Certificates before the Biannual Record Date shall not entitled the Transferor to a pro rata amount of the Biannual Distribution Amount, but all such amounts shall be paid to the holder of such Certificates on the Biannual Record Date. In the event that a Certificate Holder transfers, in accordance with the following, less than all of the Units evidenced by a Certificate, the Trustee shall reissue a Certificate to the Transferor evidencing the number of Units retained by the Transferor and shall issue a new Certificate to each Transferee evidencing the Units transferred to such Transferee. As to matters affecting the title, ownership, warranty or transfer of Certificates, Article 8 of the Uniform Commercial Code and other statutes and rules with respect to the transfer of securities, each as adopted and then in force in the State of Nebraska, shall govern and apply. The death of any Certificate Holder shall not entitle the Transferee to an account or valuation for any purpose, but such Transferee shall succeed to all rights of the deceased Certificate Holder under this Indenture upon proper proof of title, satisfactory to the Trustee.”

 

SIXTH, Section 5.02 of the Trust is hereby deleted, and in lieu thereof, the following new Section 5.02 is substituted:

 

“Section 5.02. DISTRIBUTIONS. On each Payment Date, the Trustee shall distribute the Biannual Distribution Amount pro rata to the Certificate Holders of record on the most recent Biannual Record Date.”

 

SEVENTH, Section 5.03 of the Trust is hereby deleted, and in lieu thereof, the following new Section 5.03 is substituted:

 

“Section 5.03. FEDERAL INCOME TAX REPORTING. For federal income tax purposes, the Trustee shall file such returns and statements as in its judgment are required to comply with applicable provisions of the Code and regulations and to permit each Certificate Holder correctly to report his or her share of the income and deductions of the Trust.”

 

DATED this 16th day of August, 2016.

 

 

	
 
    	
 
    	
BY THE COURT:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ [ILLEGIBLE]
    
	
 
    	
 
    	
 
    	
County Judge
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
FILED
    
	
 
    	
 
    	
 
    	
COUNTY COURT
    
	
 
    	
 
    	
 
    	
PROBATE DIVISION
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
AUG 16 2016
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Clerk of Court
    
	
 
    	
 
    	
 
    	
DOUGLAS COUNTY COURT
    
	
 
    	
 
    	
 
    	
OMAHA, NEBRASKA
    

 

Prepared and submitted by:

 

Jonathan L. Grob - #23726

McGrath North Mullin & Kratz, PC LLO

First National Tower, Suite 3700

1601 Dodge Street

Omaha, NE 68102

(402) 341-3070

Fax (402) 341-0216

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