Exhibit 10.1

 

 

 

SECURITIES AND ASSET PURCHASE AGREEMENT

by and among

RAIT FINANCIAL TRUST,

JUPITER COMMUNITIES, LLC,

RAIT TRS, LLC,

THE RAIT SELLING STOCKHOLDERS,

INDEPENDENCE REALTY TRUST, INC.,

and

INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP

Dated as of September 27, 2016

 

 

 

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TABLE OF CONTENTS

 

         

Page

ARTICLE I DEFINITIONS

   2

Section 1.01

   Certain Defined Terms    2

ARTICLE II PURCHASE AND SALE; CLOSING

   2

Section 2.01

   Purchase and Sale of the Membership Interests    2

Section 2.02

   Purchase and Sale of Assets    2

Section 2.03

   Purchase and Sale of IRT Common Stock    6

Section 2.04

   First Closing    6

Section 2.05

   Second Closing    6

ARTICLE III PURCHASE PRICE

   6

Section 3.01

   Purchase Price    6

Section 3.02

   Seller Party First Closing Deliverables    7

Section 3.03

   Buyer Party First Closing Deliverables    7

Section 3.04

   Seller Party Second Closing Deliverables    7

Section 3.05

   Buyer Party Second Closing Deliverables    8

Section 3.06

   Prorations    9

Section 3.07

   Tax Withholding    11

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES

   12

Section 4.01

   Organization, Power and Authority of the Seller Parties and the Advisor    12

Section 4.02

   Capital Structure of the Advisor    12

Section 4.03

   Noncontravention; Consents    13

Section 4.04

   Governmental Authorizations and Consents    13

Section 4.05

   Financial Statements    13

Section 4.06

   Absence of Certain Changes or Events    14

Section 4.07

   Absence of Litigation    15

Section 4.08

   Compliance with Laws; Permits    15

Section 4.09

   Intellectual Property    16

Section 4.10

   Environmental Matters    17

Section 4.11

   Contracts    17

Section 4.12

   Employment and Employee Benefits Matters    18

Section 4.13

   Taxes    20

Section 4.14

   Real Property    22

Section 4.15

   Brokers    23

Section 4.16

   Sufficiency of Transferred Assets; Liens    23

Section 4.17

   Transactions with Affiliates    23

Section 4.18

   Insurance    23

Section 4.19

   Ownership of IRT Common Stock    24

Section 4.20

   No Other Representations or Warranties    24

 

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ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER PARTIES

   24

Section 5.01

   Organization, Power and Authority of the Buyer Parties    24

Section 5.02

   Noncontravention; Consents    25

Section 5.03

   Governmental Authorizations and Consents    25

Section 5.04

   Absence of Restraints; Compliance with Laws    25

Section 5.05

   Securities Matters    25

Section 5.06

   Financial Ability    26

Section 5.07

   Brokers    26

Section 5.08

   No Other Representations or Warranties    26

ARTICLE VI ADDITIONAL AGREEMENTS

   26

Section 6.01

   Conduct of Business Before the Second Closing    26

Section 6.02

   Access to Information    29

Section 6.03

   Confidentiality    29

Section 6.04

   Regulatory and Other Authorizations    30

Section 6.05

   Intercompany Obligations    32

Section 6.06

   Cooperation    32

Section 6.07

   No Solicitation of Alternative Transactions    32

Section 6.08

   Notice of Changes    32

Section 6.09

   Financing Cooperation    33

Section 6.10

   Proceeds of IRT Equity Offering    33

Section 6.11

   Shared Services Agreement    33

ARTICLE VII POST-SECOND CLOSING COVENANTS

   34

Section 7.01

   Access    34

Section 7.02

   Preservation of Original Books and Records    35

Section 7.03

   Non-Solicitation    35

Section 7.04

   Further Assurances    35

ARTICLE VIII EMPLOYEE MATTERS

   36

Section 8.01

   Employee Matters    36

ARTICLE IX TAX MATTERS

   38

Section 9.01

   Preparation and Filing of Tax Returns by the Seller Parties    38

Section 9.02

   Preparation and Filing of Tax Returns by the Buyer Parties    39

Section 9.03

   Straddle Periods    40

Section 9.04

   Tax Proceedings    40

Section 9.05

   Refunds    41

Section 9.06

   Transfer Taxes    42

Section 9.07

   Tax Sharing Agreements    42

 

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Section 9.08

   Tax Cooperation    42

Section 9.09

   Sale as of the Effective Time    43

Section 9.10

   Agreed Tax Treatment; Purchase Price Allocation    43

Section 9.11

   Treatment of Certain Payments    44

ARTICLE X CONDITIONS TO FIRST CLOSING AND SECOND CLOSING

   44

Section 10.01

   Conditions to Obligations of All Parties – First Closing and Second Closing
   44

Section 10.02

   Conditions to Obligations of the Seller Parties – First Closing    45

Section 10.03

   Conditions to Obligations of the Buyer Parties – First Closing    45

Section 10.04

   Conditions to Obligations of the Seller Parties - Second Closing    46

Section 10.05

   Conditions to Obligations of the Buyer Parties-Second Closing    46

ARTICLE XI TERMINATION

   47

Section 11.01

   Termination    47

Section 11.02

   Notice of Termination    48

Section 11.03

   Effect of Termination; Break Up Fee    48

ARTICLE XII INDEMNIFICATION

   49

Section 12.01

   Survival    49

Section 12.02

   Indemnification by the Seller Parties    49

Section 12.03

   Indemnification by the Buyer Parties    51

Section 12.04

   Notification of Claims    53

Section 12.05

   Exclusive Remedies    54

Section 12.06

   Additional Indemnification Provisions    54

Section 12.07

   Mitigation    55

Section 12.08

   Limitation on Liability    55

Section 12.09

   Payments    55

ARTICLE XIII MISCELLANEOUS

   56

Section 13.01

   Rules of Construction    56

Section 13.02

   Expenses    57

Section 13.03

   Notices    57

Section 13.04

   Public Announcements    58

Section 13.05

   Severability    58

Section 13.06

   Assignment    58

Section 13.07

   No Third-Party Beneficiaries    58

Section 13.08

   Entire Agreement    59

Section 13.09

   Amendments    59

Section 13.10

   Waiver    59

Section 13.11

   Governing Law    59

Section 13.12

   Dispute Resolution; Consent to Jurisdiction    59

Section 13.13

   Waiver of Jury Trial    60

Section 13.14

   Admissibility into Evidence    60

Section 13.15

   Remedies; Specific Performance    60

Section 13.16

   Counterparts    61

 

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EXHIBITS

 

Exhibit A  

Definitions

Exhibit B  

Shared Services Agreement

Exhibit C  

Bill of Sale

Exhibit D  

Membership Interest Assignment Agreement

Exhibit E  

Scott Schaeffer Employment Agreement

Exhibit F  

James Sebra Employment Agreement

Exhibit G  

Farrell Ender Employment Agreement

 

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This SECURITIES AND ASSET PURCHASE AGREEMENT, dated as of September 27, 2016
(the “Agreement Date”), is made by and among RAIT Financial Trust, a Maryland
real estate investment trust (“RAIT”), RAIT TRS, LLC, a Delaware limited
liability company (“Interest Seller”), Jupiter Communities, LLC, a Delaware
limited liability company (“Asset Seller”), and the entities set forth on the
signature pages hereto under “RAIT Selling Stockholders” (the “RAIT Selling
Stockholders” and, together with RAIT, Interest Seller and Asset Seller, the
“Seller Parties”), and Independence Realty Trust, Inc., a Maryland corporation
(“IRT”), Independence Realty Operating Partnership, LP, a Delaware limited
partnership, (“IROP” and, together with IRT, the “Buyer Parties”).

RECITALS

WHEREAS, Interest Seller owns all of the issued and outstanding membership
interests (the “Membership Interests”) of Independence Realty Advisors, LLC, a
Delaware limited liability company (the “Advisor”);

WHEREAS, Asset Seller is the owner of all right, title and interest in and to
certain assets used in connection with Asset Seller’s business of managing
multifamily apartment properties (the “Business”);

WHEREAS, the RAIT Selling Stockholders hold, in the aggregate, 7,269,719 shares
of common stock of IRT, par value $0.01 per share (the “IRT Common Stock”);

WHEREAS, at the First Closing, the RAIT Selling Stockholders desire to sell to
IRT, and IRT desires to purchase from the RAIT Selling Stockholders, the shares
of IRT Common Stock held by RAIT and the RAIT Selling Stockholders upon the
terms and subject to the conditions set forth in this Agreement;

WHEREAS, at the Second Closing, the Seller Parties desire to sell to the Buyer
Parties, and the Buyer Parties desire to purchase from the Seller Parties,
(i) all of the Membership Interests and (ii) all of Asset Seller’s business,
assets and properties to the extent constituting the Business, as more
specifically described in this Agreement, and the Buyer Parties desire to assume
certain Liabilities of the Seller Parties, in each case, upon the terms and
subject to the conditions set forth in this Agreement; and

WHEREAS, at the Second Closing, the Seller Parties and the Buyer Parties desire
to enter into the Shared Services Agreement , substantially in the form set
forth in Exhibit B (other than the schedules to such Shared Services Agreement,
which shall be agreed to by the Parties in accordance with Section 6.11) (the
“Shared Services Agreement”).

NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements set forth in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound, agree as follows:

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ARTICLE I

DEFINITIONS

Section 1.01 Certain Defined Terms. Capitalized terms used in this Agreement
have the meanings specified in Exhibit A.

ARTICLE II

PURCHASE AND SALE; CLOSING

Section 2.01 Purchase and Sale of the Membership Interests. On the terms and
subject to the conditions set forth in this Agreement, at the Second Closing,
Interest Seller shall sell, convey, assign, transfer and deliver to IROP, and
IROP shall purchase, acquire and accept from Interest Seller, free and clear of
all Liens other than those arising pursuant to this Agreement, all of Interest
Seller’s right, title and interest in and to the Membership Interests.

Section 2.02 Purchase and Sale of Assets.

(a) Transferred Assets. On the terms and subject to the conditions set forth in
this Agreement, at the Second Closing, Asset Seller shall sell, convey, assign,
transfer and deliver to IROP, and IROP shall purchase, acquire and accept from
Asset Seller, free and clear of all Liens, other than Permitted Liens all of
Asset Seller’s right, title and interest in, to and under the following assets,
properties and rights of Asset Seller, except for the Excluded Assets hereto
(collectively, the “Transferred Assets”):

(i) all rights under (A) the contracts set forth in Section 2.02(a)(i) of the
Seller Disclosure Letter and (B) any other contracts that are Related to the
Business and entered into by a Seller Party in accordance with this Agreement
between the Agreement Date and the Second Closing Date, whether or not such
contracts described in clauses (A) and (B) are considered Material Contracts
(collectively, the contracts described in clauses (A) and (B) are referred to
herein as the “Assumed Contracts”);

(ii) all Tax Returns for the last six (6) years related solely to Taxes payable
in connection with the Business;

(iii) the leasehold interest of Asset Seller under the real property lease
governing the leased real property listed on Section 2.02(a)(iii) of the Seller
Disclosure Letter (the “Transferred Leased Property”);

(iv) all personal property that is Related to the Business;

(v) all Intellectual Property and Technology that is Related to the Business;

(vi) all Permits Related to the Business;

 

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(vii) (A) all corporate minute books (and other similar corporate records) and
stock records of Asset Seller, or (B) any books, records or other materials that
Asset Seller is required by Law to retain;

(viii) all causes of action, lawsuits, judgments, claims and demands of any
nature available to or being pursued by any Seller Party to the extent Related
to the Business, whether arising by way of counterclaim or otherwise, except to
the extent relating to an Excluded Asset or an Excluded Liability; and

(ix) all assets, rights and properties set forth in Section 2.02(a)(ix) of the
Seller Disclosure Letter.

Notwithstanding the foregoing, the transfer of the Transferred Assets pursuant
to this Agreement shall not include the assumption of any Liabilities related to
the Transferred Assets unless IROP expressly assumes that Liability pursuant to
Section 2.02(c) below.

(b) Excluded Assets. Notwithstanding anything else contained in this Agreement,
the Buyer Parties shall not purchase and Asset Seller shall retain, all assets
of Asset Seller not included in Section 2.02(a), including the following assets
of Asset Seller (the “Excluded Assets”):

(i) all rights, claims, causes of action (including counterclaims) and defenses
to the extent relating to the Excluded Assets or Excluded Liabilities;

(ii) any Permits not Related to the Business;

(iii) (A) all Tax Returns other than the Tax Returns described in Section
2.02(a)(ii) and (B) without limiting Section 9.05, all refunds of or credits of
or against any Tax for which Asset Seller, Interest Seller or the Affiliates are
liable pursuant to this Agreement;

(iv) the Parent Plans and other employee benefit plans, programs, arrangements
and agreements (including any retirement benefit and post-retirement health
benefit plans, programs, arrangements and agreements) sponsored or maintained by
the Seller Parties or their respective Affiliates (other than the Advisor), and
any trusts and other assets, properties or rights related thereto, except as
expressly provided in Article VIII;

(v) any assets, rights or properties held on the Agreement Date, or acquired
after the Agreement Date, and sold or otherwise disposed of, in each case not in
violation of Section 6.01 hereof prior to the Second Closing;

(vi) all assets, rights and properties expressly excluded pursuant to Article
VIII;

(vii) any rights of any of the Seller Parties under the Transaction Agreements;

 

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(viii) personnel and employment records for employees and former employees who
are not Transferred Employees;

(ix) (A) any portions of books and records included as Transferred Assets
pursuant to Section 2.02(a)(vii) to the extent relating exclusively to the
Excluded Assets, or (B) any books and records or other materials of or in the
possession of the Asset Seller that (1) are required by Law to retain (copies of
which, to the extent Related to the Business and as permitted by Law, shall be
Transferred Assets), (2) the Seller Parties reasonably believe are necessary to
enable the Seller Parties to prepare and/or file Tax Returns (copies of such
books and records, to the extent Related to the Business and as permitted by
Law, will be made available to the Buyer Parties in accordance with Article VII
and Section 9.08), or (3) any of the Seller Parties are prohibited by Law from
delivering to the Buyer Parties;

(x) (A) any assets, properties, rights, agreements, contracts, instruments and
claims of the Seller Parties set forth in Section 2.02(b)(x) of the Seller
Disclosure Letter and (B) any other assets, properties, rights, agreements,
contracts, instruments and claims of the Asset Seller that are not Related to
the Business, wherever located, whether tangible or intangible, real, personal
or mixed; and

(xi) all records and reports prepared or received by the Seller Parties or any
of their Affiliates in connection with the sale of the Business and the
Transactions, including all analyses relating to the Business or the Buyer
Parties so prepared or received.

(c) Assumed Liabilities. On the terms and subject to the conditions set forth in
this Agreement and subject to the exclusions set forth in Section 2.02(d), Asset
Seller shall, effective at the time of the Second Closing, sell, convey, assign,
transfer and deliver to IROP, and IROP shall assume and agrees to perform and
discharge in accordance with their terms, the following Liabilities of Asset
Seller (the “Assumed Liabilities”):

(i) all Liabilities of Asset Seller under any of the Assumed Contracts, other
than any Liabilities to the extent arising out of or relating to any default,
breach or violation under any Assumed Contract by Asset Seller prior to the
Effective Time;

(ii) all Liabilities expressly transferred to or assumed by the Buyer Parties or
their respective Affiliates pursuant to Article VIII, and all Liabilities
arising from or relating to the employment, termination of employment or
employment practices with respect to the Transferred Employees by the Buyer
Parties or their Affiliates after the Second Closing Date, except as assumed or
retained by the Seller Parties pursuant to Article VIII;

(iii) any accrued and unpaid charges, fees and expenses, to the extent arising
out of activities occurring after the Effective Time related to the Transferred
Assets or the Business; and

(iv) all Liabilities arising out of or relating to the Buyer Parties’ (and the
Buyer Parties’ Affiliate’s) ownership or operation of the Business, the
Transferred Assets or the Assumed Liabilities from and after the Effective Time.

 

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(d) Excluded Liabilities. Notwithstanding any other provision of this Agreement,
the Buyer Parties are not assuming or agreeing to pay or discharge any
Liabilities of the Seller Parties or the Business, other than the Assumed
Liabilities (the “Excluded Liabilities”), which Excluded Liabilities shall be
retained or assumed by the Seller Parties. Without limiting the generality of
the foregoing, the Excluded Liabilities shall include the following Liabilities
of Asset Seller or the Business:

(i) any Debt;

(ii) any Liability to the extent relating to any Excluded Asset or to any other
assets or businesses not transferred to and not purchased by the Buyer Parties;

(iii) any Liability expressly assumed or retained by the Seller Parties pursuant
to this Agreement, including pursuant to Article VIII;

(iv) any Liability relating to the Parent Plans and other employee benefit
plans, programs, arrangements and agreements (including any retirement benefit
and post-retirement health benefit plans, programs, arrangements and agreements)
sponsored or maintained by the Seller Parties or their respective Affiliates
(other than the Advisor), and any trusts and other assets, properties or rights
related thereto, except as assumed by the Buyer Parties pursuant to Article
VIII;

(v) any Liability arising from or relating to the employment, termination of
employment or employment practices with respect to the Business on or before the
Second Closing Date, except as assumed by the Buyer Parties pursuant to
Section 2.02(c)(ii) or Article VIII;

(vi) any Liability owing to a Seller Party or its Affiliates, which Liabilities
(owing from Asset Seller to such Seller Party or its Affiliates) shall be
extinguished at the Second Closing, and any intercompany accounts among the
Seller Parties or their Affiliates;

(vii) any Liability for costs and expenses of the Seller Parties or their
Affiliates (other than pursuant to Section 13.02) in connection with the
negotiation and execution of this Agreement or any other agreement or document
delivered in connection herewith or the consummation of the transactions
contemplated hereby or thereby;

(viii) all Liabilities arising from any pre-Second Closing breach of Law or
Orders in connection with the conduct of the Business, and any Liability under
Environmental Laws that arises before the Second Closing Date; and

(ix) all other Liabilities of the Seller Parties to the extent not arising from
or related to the Transferred Assets or the Business.

 

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Section 2.03 Purchase and Sale of IRT Common Stock. On the terms and subject to
the conditions set forth in this Agreement, at the First Closing, the RAIT
Selling Stockholders shall sell, convey, assign, transfer and deliver to IRT,
and IRT shall, for a cash purchase price equal to the IRT Common Stock Amount,
purchase, acquire and accept from such RAIT Selling Stockholder, all of such
RAIT Selling Stockholder’s right, title and interest in and to the shares of IRT
Common Stock held by such RAIT Selling Stockholder, as applicable, subject to
the use of proceeds of the IRT Equity Offering set forth in Section 6.10.

Section 2.04 First Closing. The closing of the sale and purchase of the IRT
Common Stock (the “First Closing”) shall take place at the offices of Hogan
Lovells US LLP, 555 Thirteenth Street NW, Washington, DC 20004 at 9:00 a.m.
(Eastern time) on the later of the date that is three (3) Business Days after
the satisfaction or written waiver (to the extent permitted by applicable Law)
of the First Closing Conditions in accordance with Article X (other than those
First Closing Conditions that by their nature are to be satisfied at the First
Closing, but subject to the satisfaction or waiver of those First Closing
Conditions at such time), or on such other date or at such other time or place
as the Parties may agree in writing. The date on which the First Closing occurs
is referred to in this Agreement as the “First Closing Date”.

Section 2.05 Second Closing. The closing of the sale and purchase of the
Membership Interests and the Transferred Assets and the assumption of the
Assumed Liabilities (the “Second Closing”) shall take place at the offices of
Hogan Lovells US LLP, 555 Thirteenth Street NW, Washington, DC 20004 at
9:00 a.m. (Eastern time) on the later of the date that is three (3) Business
Days after the satisfaction or written waiver (to the extent permitted by
applicable Law) of the Second Closing Conditions in accordance with Article X
(other than those Second Closing Conditions that by their nature are to be
satisfied at the Second Closing, but subject to the satisfaction or waiver of
those Second Closing Conditions at such time), or on such other date or at such
other time or place as the Parties may agree in writing, but no earlier than
December 20, 2016. The date on which the Second Closing occurs is referred to in
this Agreement as the “Second Closing Date”. For all purposes under this
Agreement and each other Transaction Agreement, (a) all matters at the Second
Closing will be considered to take place simultaneously and (b) the Second
Closing shall be deemed effective as of the Effective Time.

ARTICLE III

PURCHASE PRICE

Section 3.01 Purchase Price. The aggregate consideration to be paid by the Buyer
Parties to the Seller Parties for the sale of the Membership Interests, the
Transferred Assets and the shares of IRT Common Stock shall be an amount in cash
(the “Purchase Price”) equal to the sum of (i) the Membership Interests Amount,
plus (ii) the Transferred Assets Amount, plus (iii) the IRT Common Stock Amount.

 

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Section 3.02 Seller Party First Closing Deliverables. Upon the terms and subject
to the conditions set forth in this Agreement, at or prior to the First Closing,
the Seller Parties shall have delivered, or caused to have been delivered, to
the Buyer Parties all of the following:

(a) a certificate of non-foreign status dated as of the First Closing Date from
each of the RAIT Selling Stockholders, sworn under penalty of perjury and in
form and substance required under the Treasury Regulations issued pursuant to
Code Section 1445;

(b) evidence reasonably satisfactory to the Buyer Parties that none of the IRT
Common Stock is subject to any Liens;

(c) to the extent evidenced by certificates, certificates representing all of
the IRT Common Stock, endorsed in blank or accompanies by duly executed
assignment documents; and

(d) the resolutions of the RAIT Selling Stockholders and their respective boards
of directors (or equivalent governing body) approving this Agreement and
authorizing the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, certified to be accurate and complete and
in full force and effect as of the First Closing.

Section 3.03 Buyer Party First Closing Deliverables. Upon the terms and subject
to the conditions set forth in this Agreement, at or prior to the First Closing,
IRT shall have delivered, or caused to have been delivered, to the RAIT Selling
Stockholders, by wire transfer to an account designated by the RAIT Selling
Stockholders in writing in advance of the First Closing, immediately available
funds in an amount equal to the IRT Common Stock Amount.

Section 3.04 Seller Party Second Closing Deliverables. Upon the terms and
subject to the conditions set forth in this Agreement, at or prior to the Second
Closing, the Seller Parties shall have delivered, or caused to have been
delivered, to the Buyer Parties all of the following:

(a) certified copies of the certificate of formation and operating agreement (or
other governing documents) of the Advisor and the resolutions of the Seller
Parties and their respective boards of directors (or equivalent governing body)
approving this Agreement and authorizing the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby,
certified to be accurate and complete and in full force and effect as of the
Second Closing;

(b) a certificate of good standing of the Advisor issued by the Secretary of
State of the State of Delaware;

(c) all books and records related primarily to the Business or the Advisor,
including all corporate records, minute books, equityholder records (if any),
books of account, contracts, agreements and such other documents or certificates
in the possession of the Seller Parties related to the Business or the Advisor
as the Buyer Parties may reasonably request;

 

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(d) each of the third-party consents and approvals (on terms reasonably
satisfactory to the Buyer Parties) set forth on Schedule 3.04(d);

(e) a certificate of non-foreign status dated as of the Second Closing Date from
each of the Seller Parties, sworn under penalty of perjury and in form and
substance required under the Treasury Regulations issued pursuant to Code
Section 1445;

(f) resignations of the directors and officers of the Advisor (except to the
extent otherwise identified in writing by the Buyer Parties prior to the Second
Closing Date), effective at or prior to the Second Closing;

(g) evidence reasonably satisfactory to the Buyer Parties that none of the
assets of the Advisor are subject to any Liens, other than Permitted Liens;

(h) to the extent evidenced by certificates, certificates representing all of
the Membership Interests, endorsed in blank or accompanied by duly executed
assignment documents;

(i) evidence reasonably satisfactory to the Buyer Parties of the termination of
all agreements, understandings and arrangements identified on Schedule 3.04(i);

(j) a duly executed bill of sale substantially in the for set forth on Exhibit
C, for all Transferred Assets (the “Bill of Sale”), which such Bill of Sale
shall be in full force and effect as of the Second Closing;

(k) a duly executed assignment and assumption agreement, substantially in the
for set forth on Exhibit D, evidencing the assignment by Interest Seller of the
Membership Interests in accordance with the terms herein (the “Membership
Interest Assignment Agreement”), which such Membership Interest Assignment
Agreement shall be in full force and effect as of the Second Closing; and

(l) the Shared Services Agreement executed by the applicable Seller Party, which
such Shared Services Agreement shall be in full force and effect as of the
Second Closing.

Section 3.05 Buyer Party Second Closing Deliverables. Upon the terms and subject
to the conditions set forth in this Agreement, at or prior to the Second
Closing, the Buyer Parties shall have delivered, or caused to have been
delivered, to the Seller Parties all of the following:

(a) by wire transfer to an account designated by the Seller Parties in writing
in advance of the Second Closing, immediately available funds in an amount equal
to the Membership Interests Amount plus the Transferred Assets Amount plus or
minus the net amount of the Proration Items determined in accordance with
Section 3.06;

(b) the Bill of Sale executed by IROP, which such Bill of Sale shall be in full
force and effect as of the Second Closing;

 

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(c) the Membership Interest Assignment Agreement executed by IROP, which such
Membership Interest Assignment Agreement shall be in full force and effect as of
the Second Closing; and

(d) the Shared Services Agreement executed by the applicable Buyer Party, which
such Shared Services Agreement shall be in full force and effect as of the
Second Closing.

Section 3.06 Prorations.

(a) Generally.

(i) All prorations and other adjustments of the items described in this Section
3.06 shall be made at the Second Closing based on the applicable Closing
Statement prepared by the Seller Parties and delivered to the Buyer Parties in
accordance with this Section 3.06. As set forth in Section 3.05, the net amount
of the Proration Items, as reflected on the applicable Closing Statement, shall
be added to or deducted from the sum of the Membership Interests Amount and the
Transferred Assets Amount.

(ii) All items to be prorated and other adjustments to be made pursuant to this
Section 3.06 (the “Proration Items”) shall be prorated as of the Second Closing
Date (the “Adjustment Time”) and the net amount thereof either shall be paid by
the Buyer Parties to the Seller Parties or credited to the Buyer Parties, as the
case may be, at the Second Closing.

(b) Proration of Property Management Fees. All fees paid pursuant to the
contracts set forth on Section 3.06(b) of the Seller Disclosure Letter (the
“Property Management Fees”) shall be prorated as of the Adjustment Time. The
Buyer Parties shall receive a credit at the Second Closing for any Property
Management Fees paid to Asset Seller for the month in which the Second Closing
occurs in an amount equal to the Property Management Fees paid for such month
multiplied by a fraction, the numerator of which is the number of days from and
including the Second Closing Date through and including the last day of the
month in which the Second Closing occurs, and the denominator of which is the
total number of days in the month in which the Second Closing occurs. The Seller
Parties shall receive a credit at the Second Closing for any Property Management
Fees payable in the month in which the Second Closing occurs but not yet
received by Asset Seller in an amount equal to the unpaid Property Management
Fees multiplied by a fraction, the numerator of which is the number of days from
and including the first day of the month in which the Second Closing occurs
through and including the day immediately preceding the Second Closing Date, and
the denominator of which is the total number of days in the month in which the
Second Closing occurs.

(c) Proration of Advisory Fees. All fees payable pursuant to the Advisory
Agreement (the “Advisory Fees”) shall be prorated as of the Adjustment Time. The
Seller Parties shall receive a credit at the Second Closing for any Advisory
Fees payable to the Advisor for the calendar quarter in which the Second Closing
occurs in an amount equal to the Advisory Fees payable for such calendar quarter
multiplied by a fraction, the numerator of which is the number of days from and
including the first day of the calendar quarter in which the Second Closing
occurs through and including the day immediately preceding the Second Closing
Date, and the denominator of which is the total number of days in the calendar
quarter in which the Second Closing occurs.

 

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(d) Estimated Closing Statement; Calculation of Proration Items; Dispute.

(i) Applicable Time Period. The Seller Parties will be charged and credited for
the amounts of all of the Proration Items relating to the period up to and
including the Adjustment Time, and the Buyer Parties will be charged and
credited for all of the Proration Items relating to the period after the
Adjustment Time. Notwithstanding anything herein to the contrary, all prorations
shall be made on the basis of the actual number of days of the time period which
shall have elapsed prior to the Adjustment Time and based upon the actual number
of days in the time period and a three hundred sixty five (365) day year. All
prorations made pursuant to this Section 3.06 shall be made without duplication
whatsoever.

(ii) Estimated Closing Statement. The Seller Parties shall prepare in good faith
and deliver to the Buyer Parties for their review and comment, a statement of
estimated Proration Items, together with all relevant supporting documentation
(the “Closing Statement”), to be submitted to the Buyer Parties no less than
five (5) Business Days before the Second Closing Date (the “Estimated Closing
Statement”). The Proration Items reflected in the Estimated Closing Statement
will be paid at the Second Closing by the Buyer Parties to the Seller Parties by
increasing the cash to be delivered by the Buyer Parties in payment of the
Membership Interests Amount and the Transferred Assets Amount at the Initial
Closing. As soon as practicable following the Second Closing and, in any event,
not later than sixty (60) days after the Second Closing, the Buyer Parties shall
prepare in good faith and deliver to the Seller Parties for their approval,
which approval shall not be unreasonably withheld, delayed or conditioned, an
update to the Estimated Closing Statement (as approved by the Buyer Parties, the
“Adjusted Closing Statement”) which update will reflect the Buyer Parties’
calculation of Proration Items pursuant to this Section 3.06 as of the Second
Closing Date based on the information available as of the preparation date.

(iii) Review by Independent Accounting Firm. If the Seller Parties disagree with
any Proration Items on the Adjusted Closing Statement, they shall provide a
notice to the Buyer Parties within thirty (30) days after the Seller Parties’
receipt of the Adjusted Closing Statement setting forth the items with which
they disagree with reasonable detailed support in respect of such disagreement
(the “Seller Objection Notice”). If the Parties are, after using their
respective good faith efforts, unable to reach agreement on all such items
within thirty (30) calendar days following the receipt by the Buyer Parties of a
Seller Objection Notice, the Parties shall, within fifteen (15) calendar days
after the end of such thirty (30) day period, cause the Independent Accounting
Firm to promptly review this Agreement and the disputed line items in the
Adjusted Closing Statement for the purpose of resolving such dispute. In
performing its review, the Independent Accounting Firm shall (A) apply only the
provisions of this Section 3.06, (B) determine the accurate application of such
provisions to only those line items in the Adjusted Closing Statement as to
which the Seller Parties have disagreed and which the Buyer Parties and the
Seller Parties have been subsequently unable to reach agreement,

 

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and (C) limit its determination of the appropriate amount of each of the line
items in the applicable Seller Objection Notice, and shall make a final
determination in writing, binding on the Parties, of the appropriate amount with
respect to each such line item by selecting either the position initially
submitted to the Independent Accounting Firm by the Buyer Parties or the
position initially submitted to the Independent Accounting Firm by the Seller
Parties pursuant to this Section 3.06(d)(iii) or an amount in between such
amounts, that the Independent Accounting Firm believes is the most accurate
calculation with respect to such disputed line item. The Independent Accounting
Firm shall be required to deliver to the Buyer Parties and the Seller Parties,
as promptly as practicable, but no later than thirty (30) calendar days after
the Independent Accounting Firm is engaged, a written report setting forth their
resolution of the disputed line items. The Buyer Parties and the Seller Parties
shall promptly comply with all reasonable requests by the Independent Accounting
Firm for information, books, records and similar items. The Buyer Parties and
the Seller Parties shall each pay fifty percent (50%) of the Independent
Accounting Firm’s fees and expenses.

(iv) Final Payment. Within three (3) Business Days after (A) approval of the
Adjusted Closing Statement by the Seller Parties pursuant to Section
3.06(d)(ii), (B) the failure of the Seller Parties to deliver a Seller Objection
Notice within thirty (30) days of receipt of the Adjusted Closing Statement, or
(C) the delivery of the Independent Accounting Firm’s written report pursuant to
Section 3.06(d)(iii), (I) the Buyer Parties shall pay to the Seller Parties, by
wire transfer of immediately available funds to an account designated by the
Seller Parties in writing, an amount equal to the amount, if any, by which the
net credit to the Seller Parties is greater, or the net credit to the Buyer
Parties is less, on the Adjusted Closing Statement (as finally determined
pursuant to Section 3.06(d)(iii)) than the applicable credit taken into account
in determining the consideration payable at the Second Closing or (II) the
Seller Parties shall pay to the Buyer Parties, by wire transfer of immediately
available funds to an account designated by the Buyer Parties in writing, an
amount equal to the amount, if any, by which the net credit to the Seller
Parties is less, or the net credit to the Buyer Parties is greater, on the
Adjusted Closing Statement (as finally determined pursuant to Section
3.06(d)(iii)) than the applicable credit taken into account in determining the
consideration payable at the Second Closing.

Section 3.07 Tax Withholding. The Buyer Parties shall be entitled to deduct and
withhold from any payment made pursuant to this Agreement such amounts as are
required to be deducted and withheld with respect to the making of such payment
under any applicable Tax Law, provided, however, that (a) before making any such
deduction or withholding, the Buyer Parties shall give the Seller Parties notice
of the intention to make such deduction or withholding (which notice shall
include the authority, basis and method of calculation for the proposed
deduction or withholding, shall be given within a commercially reasonable period
of time of the Buyer Parties’ determination that it must withhold), (b) the
Buyer Parties shall cooperate with the Seller Parties in efforts to obtain
reduction of or relief from such deduction or withholding and (c) the Buyer
Parties shall timely remit to the appropriate Governmental Authority any and all
amounts so deducted or withheld and timely file all Tax Returns and provide to
the Seller Parties such information statements and other documents required to
be filed or provided under applicable Law To the extent such amounts are so
deducted or withheld

 

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and timely paid over to the appropriate Governmental Authority, such amounts
shall be treated for all purposes of this Agreement as having been paid to the
Person in respect of which such deduction or withholding was made.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES

As a material inducement to the Buyer Parties to enter into and perform their
respective obligations under this Agreement, except as set forth in the Seller
Disclosure Letter, each of the Seller Parties, jointly and severally, represents
and warrants to the Buyer Parties as follows:

Section 4.01 Organization, Power and Authority of the Seller Parties and the
Advisor.

(a) Each Seller Party is a corporation or other entity duly incorporated or
formed, validly existing and, to the extent legally applicable, in good standing
under the Laws of the jurisdiction of its incorporation or organization, and has
all necessary power and authority (i) to enter into the Seller Transaction
Agreements, (ii) to perform its respective obligations thereunder and (iii) to
consummate the Seller Transactions. Each Seller Party is duly qualified as a
foreign entity to do business, and is in good standing, in each jurisdiction
where required, except where the failure to be so qualified would not reasonably
be expected to have a Material Adverse Effect. The execution and delivery by
each Seller Party of this Agreement and all documents contemplated hereunder to
be executed and delivered by such Seller Party and the consummation of the
Transactions have been duly authorized by all necessary corporate or other
entity action, and no other corporate or other action or proceeding is necessary
to authorize any of the foregoing. This Agreement has been, and all documents
contemplated hereunder to be executed by each Seller Party, when executed and
delivered will have been, duly executed and delivered by each Seller Party and
shall constitute the valid and binding obligation of such Seller Party,
enforceable against it in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar Laws relating to the enforcement of creditors’ rights and by
general principles of equity. Each Seller Party has the requisite corporate or
other entity power and authority to own, license, use, lease and operate its
assets and properties and to carry on its business as it is now being conducted.

(b) The Advisor is a limited liability company duly organized, validly existing
and in good standing under the Laws of the State of Delaware. The Advisor is
duly qualified as a foreign entity to do business, and is in good standing, in
each jurisdiction where required, except where the failure to be so qualified
would not reasonably be expected to have a Material Adverse Effect. The Advisor
has the requisite limited liability company power and authority to own, license,
use, lease and operate its assets and properties and to carry on its business as
it is now being conducted.

Section 4.02 Capital Structure of the Advisor. The authorized equity interests,
the number of issued and outstanding equity interests and the record holders of
the issued and outstanding equity interests of the Advisor is set forth in
Section 4.02 of the Seller Disclosure

 

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Letter. Interest Seller owns all of the Membership Interests, free and clear of
all Liens, except (i) any Lien arising out of, under or in connection with the
Securities Act or any other applicable securities Laws or (ii) any Lien arising
out of, under or in connection with this Agreement or any other Seller
Transaction Agreement. All of the Membership Interests have been duly authorized
and validly issued, are fully paid and nonassessable and were not issued in
violation of any preemptive rights. There are no options, warrants or rights of
conversion or other similar rights, agreements, arrangements or commitments
obligating Interest Seller or any other Seller Party to issue or sell any equity
interests or securities convertible into or exchangeable for equity interests or
any other equity interests of any Seller Party, other than this Agreement. There
are no voting trusts, stockholder agreements, proxies or other agreements in
effect with respect to the voting or transfer of the Membership Interests.

Section 4.03 Noncontravention; Consents. Except as set forth in Section 4.03 of
the Seller Disclosure Letter, the execution, delivery and performance by each of
the Seller Parties of this Agreement and the Seller Transaction Agreement to
which such Seller Party is or will be party, consummation of the Transactions
and compliance with the terms of this Agreement and the Seller Transaction
Agreements to which such Seller Party is or will be party will not conflict
with, or result in any violation of, breach or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancelation or acceleration of any obligation or to loss of a benefit under, or
result in the creation of any Liens (other than Permitted Liens) upon any of the
Transferred Assets or any properties or assets of the Advisor under, any
provision of (i) the certificate of incorporation or bylaws (or the comparable
governing instruments) of such Seller Party, (ii) any Material Contract, (iii)
any Order of a Governmental Authority, or, subject to the matters referred to in
Section 4.04 below, Law, other than, in the case of clauses (ii) and (iii)
above, any such items that, would not be reasonably likely to have a Material
Adverse Effect.

Section 4.04 Governmental Authorizations and Consents. The execution, delivery
and performance by the Seller Parties of the Seller Transaction Agreements
(including the consummation of the Seller Transactions) do not and will not
require any Consent, waiver or other action by, or any material filing with or
notification to, any Governmental Authority except (a) in connection with
applicable filing, notification, waiting period or approval requirements under
applicable Antitrust Laws, (b) where the failure to obtain such Consent or
waiver, or to take such action or make such filing or notification would not
materially impair or delay the ability of the Seller Parties to consummate the
Seller Transactions or otherwise in all material respects perform their
respective obligations under the Seller Transaction Agreements, or (c) the
filing of any Consents listed on Section 4.04 of the Seller Disclosure Letter.

Section 4.05 Financial Statements.

(a) Set forth on Section 4.05 of the Seller Disclosure Letter is the following
financial information, including the notes thereto (collectively the “Financial
Statements”):

(i) the unaudited balance sheets of the Business as of December 31, 2015 and
December 31, 2014 and the related statements of operations for each of the
respective fiscal periods then ended;

 

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(ii) the unaudited balance sheet of the Business as of June 30, 2016 and the
related statements of operations and cash flows for the six (6) month period
then ended;

(iii) the unaudited balance sheets of the Advisor as of December 31, 2015 and
December 31, 2014 and the related statements of operations for the respective
fiscal periods then ended; and

(iv) the unaudited balance sheet of the Advisor as of June 30, 2016 and the
related statements of operations and cash flows for the six (6) month period
then ended.

Each of the Financial Statements (including in all cases, the notes thereto, if
any) is based upon and consistent in all material respects with information
contained in the books and records of the applicable Seller Party or the Advisor
and fairly presents in all material respects the financial condition and results
of operations of the Business or the Advisor, as applicable, as of the times and
for the periods referred to therein in accordance with GAAP subject to the
absence of footnote disclosures and other customary year-end adjustments, and
the Financial Statements have been prepared in accordance with GAAP, as
consistently applied by the applicable Seller Party throughout such
periods. Each of the Seller Parties maintains a system of internal accounting
controls sufficient to provide reasonable assurance that transactions are
recorded as reasonably necessary to permit preparation of Financial Statements
in accordance with GAAP and to maintain accountability for earnings and assets.

(b) Other than (i) Liabilities for Taxes, (ii) Liabilities incurred after the
Agreement Date in the ordinary course of business and not in violation of
Section 6.01(a) and (iii) Liabilities owing to the Seller Parties or their
Affiliates (which will constitute Excluded Liabilities), there are no
Liabilities of the Advisor or Asset Seller (with respect to the Business). All
of the Liabilities of the Advisor and Asset Seller (with respect to the
Business) as of the date hereof are listed on Section 4.05(b) of the Seller
Disclosure Letter.

(c) The Advisor does not have any Debt other than pursuant to intercompany
borrowing arrangements that will be settled or repaid in full, or canceled or
terminated, at or before the Second Closing.

Section 4.06 Absence of Certain Changes or Events. Since June 30, 2016, (a)
Asset Seller has conducted the Business in all material respects in the ordinary
course consistent with past practice, (b) the Advisor has conducted its
operation in all material respects in the ordinary course of business, (c) there
has not been any Material Adverse Effect or any event that would materially
impair or delay the ability of the Seller Parties to consummate the Seller
Transactions or otherwise perform their respective obligations under the Seller
Transaction Agreements, (d) Asset Seller has not experienced any material
damage, destruction or loss of any material personal property in the Transferred
Assets (or that would have constituted a material Transferred Asset but for such
destruction or loss), (e) the Advisor has not transferred any of its assets, and
(e) none of the Seller Parties or the Advisor has taken any action that would be
prohibited by Sections 6.01(x), (xi) (with respect to the Membership Interests
only), (xiii), (xvi), (xvii) or (xviii) if taken after the Agreement Date.

 

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Section 4.07 Absence of Litigation. Except as set forth in Section 4.07 of the
Seller Disclosure Letter, no material Actions are pending or, to the Knowledge
of the Seller Parties, threatened against the Seller Parties or any of their
Affiliates (in respect of the Business, the Transferred Assets or the Assumed
Liabilities) or the Advisor.

Section 4.08 Compliance with Laws; Permits.

(a) Except as set forth in Section 4.08 of the Seller Disclosure Letter, Asset
Seller is, and has at all times since January 1, 2013 been, in compliance in all
material respects with all Laws and Orders applicable to the conduct of the
Business. Since January 1, 2013, Asset Seller has not (i) received any written
notice that any Person, the Business, the Transferred Assets or the Assumed
Liabilities have not complied in all material respects with all applicable Laws
and Orders applicable to the conduct of the Business, the Transferred Assets or
the Assumed Liabilities and (ii) been charged or threatened with, and, to the
Knowledge of the Seller Parties, is not under pending investigation by a
Governmental Authority with respect to, any material violation of any Law
related to the ownership or operation of the Business, the Transferred Assets or
the Assumed Liabilities. None of the Seller Parties is party to any Order, nor,
as of the Agreement Date, have any of them been advised in writing by any
Governmental Authority that it intends to seek any Order, in each case
specifically affecting any of the Business, the Transferred Assets or the
Assumed Liabilities that would prevent or delay the consummation of the Seller
Transactions on the terms set forth herein.

(b) The Advisor is, and has at all times since January 1, 2013 been, in
compliance in all material respects with all Laws and Orders applicable to the
conduct of its business. Since January 1, 2013, the Advisor has not (i) received
any written notice that any Person has not complied in all material respects
with all applicable Laws and Orders applicable to the conduct of the business of
the Advisor and (ii) been charged or threatened with, and, to the Knowledge of
the Seller Parties, is not under pending investigation by a Governmental
Authority with respect to, any material violation of any Law related to the
operation of the business of the Advisor. None of the Seller Parties is party to
any Order, nor, as of the Agreement Date, have any of them been advised in
writing by any Governmental Authority that it intends to seek any Order, in each
case specifically affecting the Advisor that would prevent or delay the
consummation of the Seller Transactions on the terms set forth herein.

(c) The Asset Seller and the Advisor hold, and on the Second Closing Date the
Asset Seller and the Advisor will hold, all Material Permits. Neither the Asset
Seller nor the Advisor is in default under or is currently violating any
Material Permit. Since January 1, 2013, neither the Asset Seller nor the Advisor
has received any written notice from any Governmental Authority that it is in
violation of or in default under any Material Permit. None of the Material
Permits will be terminated or become terminable by the applicable Governmental
Authority, in whole or in part, as a result of the consummation of the Seller
Transactions.

 

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Section 4.09 Intellectual Property.

(a) To the Knowledge of the Seller Parties, the Transferred Assets, the rights
of the Seller Parties against a third party (including any Governmental
Authority) associated with any Transferred Asset, the Business Intellectual
Property, the Business Technology, together with all other third-party
Intellectual Property covenants and rights granted to the Asset Seller and the
Advisor and the other applicable provisions of the Transaction Agreements
constitute all material Intellectual Property used by, and necessary to (i) the
conduct of the business of the Advisor as it is conducted on the Agreement Date
and (ii) the operation of the Business as it is conducted on the Agreement Date,
assuming receipt of all relevant Consents relating to the matters set forth in
Section 4.03 of the Seller Disclosure Letter or as contemplated by Section 4.03.

(b) To the Knowledge of the Seller Parties, the operation of the Business as it
is conducted on the Agreement Date does not infringe upon or misappropriate the
Intellectual Property of any third party in each case in any material
respect. To the Knowledge of the Seller Parties, the operation of the business
of the Advisor as it is conducted on the Agreement Date does not infringe upon
or misappropriate the Intellectual Property of any third party in each case in
any material respect.

(c) Asset Seller has not received any written claim or notice from any Person
since January 1, 2013 alleging that the operation of the Business by Asset
Seller infringes upon or misappropriates any Intellectual Property of any third
party. As of the Agreement Date, there are no infringement Actions pending or,
to the Knowledge of the Seller Parties, threatened in writing against the Seller
Parties alleging that the operation of the Business by Asset Seller infringes
upon or misappropriates any Intellectual Property of any third party.

(d) The Advisor has not received any written claim or notice from any Person
since January 1, 2013 alleging that the conduct of the business of the Advisor
infringes upon or misappropriates any Intellectual Property of any third
party. As of the Agreement Date, there are no infringement Actions pending or,
to the Knowledge of the Seller Parties, threatened in writing against the
Advisor alleging that the conduct of the business of the Advisor infringes upon
or misappropriates any Intellectual Property of any third party.

(e) To the Knowledge of the Seller Parties, as of the Agreement Date, no Person
is engaging in any activity that infringes in any material respect upon the
Business Intellectual Property or the Business Technology, except for any such
infringements that do not materially impair the ability of the Advisor to
operate is business as conducted on the Agreement Date. The Business
Intellectual Property and the Business Technology is not subject to any
judgments or limitations or restrictions on use or otherwise. The Business
Intellectual Property is not exclusively licensed to any Person, and none of the
Seller Parties, the Advisor or their respective Affiliates has any obligation to
grant any exclusive license of any Business Intellectual Property to any Person.

(f) Section 4.09(f) of the Seller Disclosure Letter sets forth a true and
complete list of the material Registered IP, including applications therefor, as
of the Agreement Date, and sets forth, for each item that is registered (or
applied for), the full legal name of the owner of record, applicable
jurisdiction, status, application or registration number and date of
application, registration or issuance, as applicable.

 

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Section 4.10 Environmental Matters. Except as would not otherwise reasonably be
expected to have a Material Adverse Effect:

(a) As of the Agreement Date, there are no Actions pending or, to the Knowledge
of the Seller Parties, threatened in writing, against Asset Seller (in respect
of the Business) or the Advisor, alleging that Asset Seller (in respect of the
Business) or the Advisor is in violation of, or responsible for any Liability
under, Environmental Law.

(b) To the Knowledge of the Seller Parties, Asset Seller (in respect of the
Business) and the Advisor are and at all times since January 1, 2013 have been
in compliance in all material respects with applicable Environmental Laws,
including the obligation to obtain, maintain and comply with all Environmental
Permits.

(c) To the Knowledge of the Seller Parties, there has been no Release of
Hazardous Materials by Asset Seller (in respect of the Business), the Advisor,
nor by any other Person acting on behalf of Asset Seller or the Advisor, in, on,
at or under the Real Properties that would reasonably be expected to result in
Asset Seller or the Advisor incurring any Liabilities under Environmental Laws.

Section 4.11 Contracts.

(a) Section 4.11(a) of the Seller Disclosure Letter contains a true, complete
and correct list of all of the Material Contracts in effect on the Agreement
Date. The Seller Parties have made available to the Buyer Parties true and
complete copies of each Material Contract and each Assumed Contract that is
material to the Business (each a “Material Assumed Contract”):

(b) Each Material Contract and each Material Assumed Contract is a legal, valid
and binding obligation of Asset Seller or the Advisor, as the case may be, and,
to the Knowledge of the Seller Parties, each other party to such Material
Contract or such Material Assumed Contract, and is enforceable against Asset
Seller or the Advisor, as the case may be, and, to the Knowledge of the Seller
Parties, each other party to such Material Contract or such Material Assumed
Contract in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar Laws relating to the enforcement of creditors’ rights and by general
principles of equity. Neither Asset Seller nor the Advisor nor, to the Knowledge
of the Seller Parties, any other party to a Material Contract or a Material
Assumed Contract is in material default under or material breach of such
Material Contract or such Material Assumed Contract and, to the Knowledge of the
Seller Parties, no event has occurred which, without written notice or lapse of
time or both, would result in a material default or breach of any such Material
Contract or such Material Assumed Contract. Since January 1, 2013, neither Asset
Seller nor the Advisor has received any written notice from, or given any
written notice to, any other Person indicating that Asset Seller or the Advisor,
or such other applicable party, is in material violation or breach under any
Material Contract or any Material Assumed Contract.

 

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Section 4.12 Employment and Employee Benefits Matters.

(a) Section 4.12(a)(i) of the Seller Disclosure Letter lists, as of the
Agreement Date, each Employee Plan (other than non-material Parent Plans) and
separately identifies whether each such Employee Plan is a Business Plan or a
Parent Plan. Section 4.12(a)(ii) of the Seller Disclosure Letter lists, as of
the Agreement Date, each entity that employs the Business Employees.

(i) With respect to each Business Plan, the Seller Parties have previously made
available to the Buyer Parties a true and complete copy of the following
documents, to the extent applicable: (A) any plan documents, all amendments
thereto and related trust documents and all amendments thereto, (B) a written
description of such Business Plan if such Business Plan is not set forth in a
written document, (C) the most recent Form 5500 and all schedules thereto and
the most recent actuarial report, if any, (D) the most recent IRS determination
or opinion letter, (E) the most recent summary plan description together with
the summary or summaries of all material modifications thereto, and (F) all
material correspondence to or from the IRS, the United States Department of
Labor, the Pension Benefit Guaranty Corporation or any other Governmental
Authority sent or received in the last three years with respect to any Business
Plan.

(ii) With respect to each Parent Plan, the Seller Parties have previously made
available to the Buyer Parties a true and complete copy of, to the extent
applicable, the most recent summary plan description or a summary or written
description of each such plan.

(b) The Advisor does not sponsor, maintain or contribute to, and it is not
required to contribute to, nor in the past six years has the Advisor sponsored,
maintained or contributed to, or been obligated to contribute to, any plan
subject to Title IV of ERISA, including a “multiemployer plan” (within the
meaning of Section 3(37) or 4001(a)(3) of ERISA). No condition exists relevant
to plans subject to Title IV of ERISA that could be reasonably expected to
result in the incurrence by the Buyer Parties and their Affiliates (including,
following the Second Closing, the Advisor) of any Controlled Group Liability.

(c) Each Employee Plan that is intended to be qualified under Section 401(a) of
the Code has received a favorable determination letter, or is entitled to rely
on an opinion letter, from the IRS that it is so qualified, and no condition
exists that would reasonably expected to jeopardize the tax-qualification of any
such plan.

(d) With respect to each Business Plan, neither the Advisor nor any of its ERISA
Affiliates is currently liable for any material Tax arising under Sections 4971,
4972, 4975, 4979, 4980 or 4980B of the Code. Neither the Advisor nor any of its
ERISA Affiliates has incurred any material Liability under or arising out of
Title IV of ERISA that has not been satisfied in full (other than any Liability
for premiums to the Pension Benefit Guaranty Corporation arising in the ordinary
course of business all of which have been timely paid). No Transferred Asset is
the subject of any Lien arising under ERISA or the Code, and neither the Advisor
nor any of its ERISA Affiliates has been required to post any security under
ERISA or Section 401(a)(29) of the Code with respect to any Business Plan, and
no fact or event exists that would reasonably be expected to give rise to any
such Lien or requirement to post any such security.

 

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(e) There are no pending or, to the Knowledge of the Seller Parties, threatened
claims (other than routine claims for benefits) by, on behalf of or against any
Employee Plan or any trust related thereto which could reasonably be expected to
result in any material liability to the Buyer Parties or their respective
Affiliates (including the Advisor following the Second Closing).

(f) Except as required by applicable Law, no Employee Plan provides retiree or
post-employment medical, disability, life insurance or other welfare benefits to
any Business Employee, and none of the Seller Parties or any of their respective
Affiliates has an obligation to provide such benefits to any Business Employee.

(g) Each Employee Plan, to the extent it relates to the Business Employees, that
is a “nonqualified deferred compensation plan” (as such term is defined in
Section 409A(d)(1) of the Code) has been administered in all material respects
in compliance with its terms and the operational and documentary requirements of
Section 409A of the Code and the regulations thereunder. The Advisor does not
have any obligation to gross-up, indemnify or otherwise reimburse any individual
for any excise Taxes, interest or penalties incurred pursuant to Section 409A of
the Code.

(h) Each Employee Plan, to the extent it relates to the Business Employees, has
been operated in accordance with its terms and the requirements of all
applicable Laws in all material respects.

(i) No Actions are pending or, to the Knowledge of the Seller Parties,
threatened in connection with any Employee Plan that could reasonably be
expected to result in any material Liability to the Buyer Parties or their
respective Affiliates (including the Advisor following the Second Closing).

(j) With respect to each Employee Plan, to the extent it relates to the Business
Employees, all material contributions, premiums or payments required to be made
have been made on or before their due dates (including permissible extensions).

(k) Neither the execution and delivery of this Agreement nor the consummation of
the Transactions (either alone or in combination with any other event) will
(i) result in any payment or benefit becoming due to any Business Employee or
satisfy any prerequisite (whether exclusive or non-exclusive) to any payment or
benefit to any Business Employee, (ii) increase any benefits to any Business
Employee under any Employee Plan, (iii) result in the acceleration of the time
of payment, vesting or funding of, or materially increase the amount of, any
payments or benefits to any Business Employee or (iv) result in the payment of
any amount to any Business Employee that could, individually or in combination
with any other such payment, constitute an “excess parachute payment” as defined
in Section 280G(b)(1) of the Code. The Advisor does not have any obligation to
gross-up, indemnify or otherwise reimburse any individual for any excise Taxes,
interest or penalties incurred pursuant to Section 4999 of the Code.

 

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(l) Neither Asset Seller nor the Advisor is a party to a collective bargaining
agreement that is applicable to the Business Employees, and none of the Business
Employees are represented by a labor union or other labor representative with
respect to their services to Asset Seller or the Advisor. There are no formal
organizational campaigns, petitions or other material unionization activities
seeking recognition of a bargaining unit in the Business or the Advisor, and no
material unfair labor practice charges or other complaints or union
representation questions are before the National Labor Relations Board or other
labor board or Governmental Authority that, in either case, would reasonably be
expected to affect the Business Employees. No strikes, slowdowns or work
stoppages are pending or, to the Knowledge of the Seller Parties, threatened
with respect to the Business Employees, and no such strike, slowdown or work
stoppage has occurred within the three years immediately preceding the Agreement
Date.

(m) Except as set forth in Section 4.12(m) of the Seller Disclosure Letter or as
would not reasonably be expected to result in any material liability to the
Advisor or any Buyer Party, with respect to the Business Employees, Asset
Seller, the Advisor and their respective Affiliates are in compliance with all
applicable Laws relating to the employment of the Business Employees and have
paid all wages, salaries, commissions and other compensation and benefits and
all levies, assessments, contributions and payments to third parties due to or
on behalf of such Business Employees. No material claim with respect to payment
of wages, salary or overtime pay is pending or, to the Knowledge of the Seller
Parties, threatened before any Governmental Authority, with respect to current
Business Employees. No material charge of discrimination in employment or
employment practices for any reason, including age, gender, race, religion or
other legally protected category, is pending or, to the Knowledge of the Seller
Parties, threatened before the U.S. Equal Employment Opportunity Commission or
other Governmental Authority by or on behalf of current Business Employees. To
the Knowledge of the Seller Parties, neither Asset Seller nor the Advisor is
subject to any material pending investigation from any labor inspection or
similar Governmental Authority with respect to the Business or the Advisor, as
applicable, and no material Action is currently pending against Asset Seller or
the Advisor with respect to current Business Employees. No obligations to comply
with any Order in respect of any current Business Employees are outstanding or
unsatisfied in any material respect.

Section 4.13 Taxes.

(a) Except as set forth in Section 4.13(a) of the Seller Disclosure Letter, each
of Asset Seller (with respect to the Business) and the Advisor has timely filed,
or has had timely filed on its behalf, all material Tax Returns required to be
filed by it (taking into account extensions of time to file such Tax Returns),
and all such Tax Returns are true, accurate, and complete in all material
respects. All material Taxes required to be paid by Asset Seller (with respect
to the Business) or the Advisor have either been duly paid or adequate provision
therefor in accordance with GAAP has been made in the financial statements or
the books and records of the Business or the Advisor, as applicable;

(b) No claim has been made in writing by any Taxing Authority in a jurisdiction
where Asset Seller (with respect to the Business) or the Advisor has not filed a
Tax Return for a period asserting that Asset Seller (with respect to the
Business) or the Advisor is or may be subject to Tax imposed by such
jurisdiction for such period or otherwise, nor to the Knowledge of the Seller
Parties, has any such claim ever been threatened.

 

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(c) All material Taxes required to be collected, deducted or withheld under any
applicable Law by Asset Seller (with respect to the Business) or the Advisor, in
connection with amounts paid to or received from any employee, contractor,
creditor, shareholder or other third party, have been duly so collected,
deducted or withheld, and timely remitted to the appropriate Governmental
Authorities, and each of Asset Seller and the Advisor has complied with all
applicable Laws relating to the collection, deduction or withholding of Taxes;

(d) No material deficiencies for any Taxes have been proposed, asserted or
assessed in writing by a Taxing Authority against Asset Seller (with respect to
the Business) or the Advisor with respect to Taxes payable by Asset Seller (with
respect to the Business) or the Advisor that are still pending or are otherwise
not yet resolved and there are no Tax Claims pending or threatened in writing
with respect to material Taxes payable by Asset Seller (with respect to the
Business) or the Advisor;

(e) No waiver of any statute of limitations in respect of Taxes and no
extensions of the period for assessment or collection of any Taxes are in effect
with respect to material Taxes payable by Asset Seller (with respect to the
Business) or the Advisor;

(f) No material Tax Return filed by Asset Seller (with respect to the Business)
or the Advisor with respect to Taxes payable by Asset Seller (with respect to
the Business) or the Advisor is under current examination by any Taxing
Authority;

(g) Asset Seller (with respect to the Business) and the Advisor have provided or
made available to the Buyer Parties correct and complete copies of (i) all Tax
Returns filed by Asset Seller (with respect to the Business) and the Advisor for
the prior seven (7) years and (ii) examination reports and statements of
deficiencies assessed against Asset Seller (with respect to the Business) and
the Advisor or agreed to for the prior seven (7) years;

(h) There are no liens for Taxes on any of the Membership Interests, the
Transferred Assets or the IRT Common Stock other than Permitted Liens;

(i) Except as set forth in Section 4.13(i) of the Seller Disclosure Letter,
neither Asset Seller nor the Advisor is or has been a member of any affiliated,
consolidated, combined, unitary, or similar group for Tax purposes other than
any group the parent of which is RAIT or an Affiliate of the Asset Seller,
Advisor or RAIT, and neither Asset Seller nor the Advisor has any Liability for
Taxes of any Person under Treasury Regulations Section 1.1502-6 (or any similar
provision of state, local, or foreign Law), or as a transferee, successor or
otherwise;

(j) Neither Asset Seller nor the Advisor has entered into any “closing
agreement” within the meaning of Section 7121 of the Code (or any similar
provision of state, local or foreign Law) or is subject to, or has any requests
pending for, any rulings or special Tax incentives from any Taxing Authority;

 

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(k) Neither Asset Seller nor the Advisor shall be required to include any
material item of income in, or exclude any material item of deduction from,
taxable income for any period after the Second Closing Date as a result of (A)
an adjustment under Section 481 of the Code (or any similar provision of state,
local or foreign Law) as a result of an accounting method change made prior to
the Second Closing, (B) any “closing agreement” within the meaning of Section
7121 of the Code (or any similar provision of state, local or foreign Law)
entered into prior to the Second Closing, or (C) any prepaid amount received
prior to the Second Closing;

(l) Neither Asset Seller nor the Advisor has been a “distributing corporation”
or a “controlled corporation” in connection with a distribution described in, or
intended to be described in, Section 355(a) of the Code;

(m) Neither Asset Seller nor the Advisor is a party to or bound by any Tax
allocation, Tax indemnity or Tax sharing agreement or arrangement other than any
Tax allocation, indemnity, sharing or gross-up provisions (A) contained in
agreements entered into in the ordinary course of business and not primarily
relating to Taxes (such as supply or other commercial agreements, credit
agreements, employment agreements or leases), (B) contained in any Transferred
Asset or pursuant to any Assumed Liability, or (C) contained in any Material
Contract or Assumed Contract;

(n) Except as set forth in Section 4.13(n) of the Seller Disclosure Letter, each
of Asset Seller and the Advisor, from the date of its formation until
immediately prior to the Effective Time, has been treated as a “disregarded
entity” for U.S. federal income tax purposes; and

(o) Neither Asset Seller nor the Advisor has participated in any “reportable
transaction” within the meaning of Treasury Regulations Section 1.6011-4 (or any
corresponding or similar provision of applicable state, local, or foreign Tax
Law).

Section 4.14 Real Property.

(a) Asset Seller has valid title to the leasehold estate in the Transferred
Leased Property, free and clear of all Liens, except for Permitted Liens.

(b) To Asset Seller’s knowledge, the lease for the Transferred Leased Property
under which Asset Seller is the lessee is in full force and effect and is
enforceable, in all material respects, in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws relating to the enforcement of
creditors’ rights and by general principles of equity.

(c) The Asset Seller has not received any written notice from any Governmental
Authority or other Person asserting any material violation of applicable Laws
with respect to any Real Property that remains uncured as of the Agreement
Date. Neither the whole nor any material portion of the Transferred Leased
Property has been damaged or destroyed by fire or other casualty.

 

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Section 4.15 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission from the Seller Parties or any of
their Affiliates (except any of the Buyer Parties) in connection with any
Transaction, except for such fees or commission for which the Seller Parties are
solely responsible.

Section 4.16 Sufficiency of Transferred Assets; Liens.

(a) On the Second Closing Date (assuming receipt of the Consents referred to in
Section 4.03 and Section 4.04 or identified on Section 4.03 and Section 4.04 of
the Seller Disclosure Letter), the Transferred Assets will, taking into account
all Transaction Agreements (and the rights granted and services to be performed
thereunder), constitute all of the assets, rights and properties that are
necessary to conduct the Business in all material respects as it is conducted on
the Agreement Date.

(b) Except for Permitted Liens or Liens created by or through the Buyer Parties
or any of their Affiliates, the Transferred Assets (other than the leasehold
estate in the Transferred Leased Property, which is the subject of Section 4.14)
are owned by or otherwise made available to the Seller Parties and will be
transferred to the Buyer Parties, free and clear of all Liens.

Section 4.17 Transactions with Affiliates. Except as otherwise contemplated in
the Transaction Agreements, there are no agreements, contracts, plans,
arrangements or other transactions between or among Asset Seller or the Advisor,
on the one hand, and any of the Seller Parties or any of their Affiliates (other
than Asset Seller or the Advisor, as applicable), or any officer, director,
shareholder or member of any Seller Party or any Affiliate of a Seller Party, on
the other hand that will remain in force and effect after the Second Closing.

Section 4.18 Insurance. Section 4.18 of the Seller Disclosure Letter sets forth
a true and complete list of all current policies or binders of fire, Liability,
errors and omissions, product liability, umbrella liability, real and personal
property, workers’ compensation, vehicular, fiduciary liability and other
casualty and property insurance maintained by (a) the Advisor, (b) Asset Seller
(with respect to the Business) or by (c) the Seller Parties or their respective
Affiliates and which may provide coverage with respect to any Actions which are
Assumed Liabilities (collectively, the “Insurance Policies”). The Seller Parties
or their Affiliates, as applicable, have provided all required notices under the
Insurance Policies and have duly made all available claims under all of the
Insurance Policies covering or relevant to such Actions in accordance with the
terms and conditions of such policies. To the Knowledge of the Seller Parties,
there are no claims related to the Advisor, the Business, the Transferred Assets
or the Assumed Liabilities pending under any such Insurance Policies as to which
the Seller Parties or their relevant Affiliates have received written notice
from the insurer that coverage has been denied or disputed or in respect of
which there is an outstanding reservation of rights. Since January 1, 2015,
neither the Seller Parties nor any of their respective Affiliates has received
any written notice of cancellation of, any of such Insurance Policies. All
premiums due on such Insurance Policies have either been paid or, if not yet
due, accrued. All Insurance Policies that cover any Actions and all Insurance
Policies of the Advisor and Asset Seller (with respect to the Business) (a) are
in full force and effect and enforceable in accordance with their terms; (b) are
provided by carriers who are financially solvent; and (c) have not been subject
to any lapse in

 

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coverage. None of the Seller Parties or any of their respective Affiliates is in
default under, or has otherwise failed to comply with, in any material respect,
any provision contained in any such Insurance Policy. True and complete copies
of the Insurance Policies have been made available to the Buyer Parties.

Section 4.19 Ownership of IRT Common Stock. The RAIT Selling Stockholders own
the number of shares of IRT Common Stock set forth opposite their name in
Section 4.19 of the Seller Disclosure Letter. Each of the RAIT Selling
Stockholders owns such shares of IRT Common Stock free and clear of all Liens.

Section 4.20 No Other Representations or Warranties. Except in each case for the
representations and warranties expressly set forth in this Article IV (as
modified by the Seller Disclosure Letter) or in any other Transaction Agreement:
none of the Seller Parties, the Advisor or any other Person has made, makes or
shall be deemed to make any other representation or warranty of any kind
whatsoever, express or implied, written or oral, at law or in equity, on behalf
of any Seller Party, the Advisor or any of their respective Affiliates,
including any representation or warranty regarding any Seller Party, the
Advisor, the Membership Interests, any Transferred Assets, any Liabilities of
any Seller Party, the Advisor, any Assumed Liabilities, the Business, any
Transaction, the success, profitability or value thereof, any other rights or
obligations to be transferred pursuant to the Transaction Agreements or any
other matter, and the Seller Parties hereby disclaim all other representations
and warranties of any kind whatsoever, express or implied, written or oral, at
law or in equity, whether made by or on behalf of any Seller Party, the Advisor
or any other Person and any other representations and warranties for all
projections, forecasts, estimates, appraisals, statements, promises, advice,
data or information made, communicated or furnished (orally or in writing,
including electronically) to the Buyer Parties or any of the Buyer Parties’
Affiliates or any Representatives of the Buyer Parties or any of the Buyer
Parties’ Affiliates, including omissions therefrom.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE BUYER PARTIES

As a material inducement to the Seller Parties to enter into and perform their
respective obligations under this Agreement, except as set forth on the Buyer
Disclosure Letter, each of the Buyer Parties, jointly and severally represents
and warrants to the Seller Parties as follows:

Section 5.01 Organization, Power and Authority of the Buyer Parties. Each Buyer
Party is a corporation or other entity duly incorporated or formed, validly
existing and, to the extent legally applicable, in good standing under the Laws
of the jurisdiction of its incorporation or organization, and has all necessary
power and authority (i) to enter into the Buyer Transaction Agreements, (ii) to
perform its respective obligations thereunder and (iii) to consummate the Buyer
Transactions. The execution and delivery by each Buyer Party of this Agreement
and the other Buyer Transaction Agreements to be executed and delivered by such
Buyer Party and the consummation of the Buyer Transactions have been duly
authorized by all necessary corporate or other entity action, and no other
corporate or other action or proceeding is necessary to authorize any of the
foregoing. This Agreement has been, and the other Buyer

 

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Transaction Agreements to be executed by each Buyer Party, when executed and
delivered will have been, duly executed and delivered by each Buyer Party and
shall constitute the valid and binding obligation of such Buyer Party,
enforceable against it in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar Laws relating to the enforcement of creditors’ rights and by
general principles of equity.

Section 5.02 Noncontravention; Consents. The execution, delivery and performance
by each of the Buyer Parties of this Agreement and the other Buyer Transaction
Agreements to which such Buyer Party is a party, consummation of the Buyer
Transactions and compliance with the terms of this Agreement and the other Buyer
Transaction Agreements to which such Buyer Party is a party will not
(a) conflict with or violate any provision of the certificate of incorporation,
bylaws or similar organizational documents of such Buyer Party, or (b) assuming
that all consents, approvals and authorizations contemplated by Section 5.03
have been obtained and all filings described therein have been made, conflict
with or violate in any material respect any Law applicable to such Buyer Party
or by which its respective properties are bound or affected.

Section 5.03 Governmental Authorizations and Consents. The execution, delivery
and performance by the Buyer Parties of the Buyer Transaction Agreements
(including the consummation of the Buyer Transactions) do not and will not
require any Consent, waiver or other action by, or any material filing with or
notification to, any Governmental Authority except (a) in connection with
applicable filing, notification, waiting period or approval requirements under
applicable Antitrust Laws, (b) where the failure to obtain such Consent or
waiver, or to take such action or make such filing or notification would not
materially impair or delay the ability of the Buyer Parties to consummate the
Buyer Transactions or otherwise in all material respects perform their
respective obligations under the Buyer Transaction Agreements, or (c) the filing
of any Consents listed on Section 5.03 of the Buyer Disclosure Letter.

Section 5.04 Absence of Restraints; Compliance with Laws.

(a) To the Knowledge of the Buyer Parties, no facts or circumstances exist that
would reasonably be expected to impair or delay the ability of the Buyer Parties
to consummate the Buyer Transactions on the terms set forth in this Agreement or
otherwise perform their respective obligations under the Transaction Agreements.

(b) None of the Buyer Parties is in violation of any Laws or Orders applicable
to the conduct of its business, except for violations the existence of which
would not reasonably be expected to impair or delay the ability of such Buyer
Party to consummate the Transactions or otherwise perform its obligations under
the Transaction Agreements.

Section 5.05 Securities Matters. IROP is an “accredited investor” (as such term
is defined in Rule 501 of Regulation D under the Securities Act). The Membership
Interests are being acquired by IROP for its own account, and not with a view
to, or for the offer or sale in connection with, any public distribution or sale
of the Membership Interests or any interest in them. IROP has sufficient
knowledge and experience in financial and business matters to be capable of
evaluating the merits and risks of its investment in the Membership Interests,

 

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including the risk of transacting on the basis of inferior information, and IROP
is capable of bearing the economic risks of such investment, including a
complete loss of its investment in the Membership Interests. IROP acknowledges
that the Membership Interests have not been registered under the Securities Act,
or any securities Laws of any state or other jurisdiction (U.S. or non-U.S.),
and understands and agrees that it may not sell or dispose of any Membership
Interests except pursuant to a registered offering in compliance with, or in a
transaction exempt from, the registration requirements of the Securities Act and
any other applicable securities Laws of any state or other jurisdiction (U.S. or
non-U.S.).

Section 5.06 Financial Ability. Assuming the receipt of the proceeds from the
IRT Equity Offering, the Buyer Parties will have at the First Closing and at the
Second Closing, (a) sufficient funds to pay the Purchase Price and to pay any
expenses incurred by the Buyer Parties in connection therewith and (b) the
resources and capabilities (financial and otherwise) to perform their respective
obligations under the Transaction Agreements and in each case to pay any
expenses incurred by the Buyer Parties in connection therewith.

Section 5.07 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission from the Buyer Parties or any of
their Affiliates in connection with any Transaction, except for such fees or
commission for which the Buyer Parties are solely responsible.

Section 5.08 No Other Representations or Warranties. Except for the
representations and warranties expressly set forth in this Article V, none of
the Buyer Parties or any other Person has made, makes or shall be deemed to make
any other representation or warranty of any kind whatsoever, express or implied,
written or oral, at law or in equity, on behalf of the Buyer Parties or any of
their Affiliates, and each of the Buyer Parties hereby disclaims all other
representations and warranties of any kind whatsoever, express or implied,
written or oral, at law or in equity, whether made by or on behalf of such Buyer
Party.

ARTICLE VI

ADDITIONAL AGREEMENTS

Section 6.01 Conduct of Business Before the Second Closing.

(a) Except as required by applicable Law or as otherwise contemplated by this
Agreement, and except for matters to the extent disclosed in Section 6.01 of the
Seller Disclosure Letter, during the Pre-Second Closing Period unless the Buyer
Parties otherwise consent in advance in writing (not to be unreasonably
withheld, conditioned or delayed), the Asset Seller will, and the Seller Parties
will cause the Advisor to, (x) conduct the Business in the ordinary course of
business, (y) use commercially reasonable efforts consistent with past practice
to preserve intact their business organizations related to the Business and
(z) with respect to the Business and the Advisor, not do any of the following,
unless required pursuant to any Material Contract:

(i) amend the organizational documents of the Advisor or form any Subsidiary of
the Advisor;

 

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(ii) acquire (by merger, consolidation, acquisition of stock or assets or
otherwise) any corporation, partnership or other business organization or
division;

(iii) incur any Debt, issue any debt securities or assume, grant, guarantee or
endorse, or otherwise as an accommodation become responsible for, the
obligations of any Person, or make any loans or advances (in each case, other
than (A) in the ordinary course of business consistent with past practice or
(B) pursuant to intercompany borrowing arrangements that will be settled or
repaid in full, or canceled or terminated, at or before the Second Closing);

(iv) redeem, dispose of, issue or sell any shares of, or other equity interests
in, the Advisor, or securities convertible into or exchangeable for such shares
or equity interests, or redeem, dispose of, issue or grant any options,
warrants, calls, subscription rights or other rights of any kind to acquire such
shares, other equity interests or securities;

(v) sell, transfer, lease, sublease or otherwise dispose of any assets or other
Transferred Assets other than in the ordinary course of business consistent with
past practice;

(vi) enter into any contract with respect to the Business that purports to
limit, curtail or restrict the kinds of businesses which the Business may
conduct, or the Persons with whom the Business can compete;

(vii) enter into or amend or modify in any material respect any contract that
would be a Material Contract if in effect on the date hereof, other than in the
ordinary course of business or consistent with past practice

(viii) (A) grant or announce any increase in the wages, salaries, compensation,
bonuses, incentives, severance, retention or termination pay or benefits payable
to any Business Employee, (B) establish or increase or promise to increase any
benefits for any Business Employee under any Employee Plan, (C) enter into,
adopt, amend, modify or terminate any Business Plan or any other plan, program,
contract or arrangement that would be a Business Plan if it were in existence as
of the date hereof, (D) amend, modify or accelerate the vesting of any
outstanding award held by a Business Employee under any Employee Plan, or (E)
fund any rabbi trust or similar arrangement or take any action to fund or in any
other way secure the payment of compensation or benefits under any Employee Plan
to the extent it would result in any Liability to the Buyer Parties or their
Affiliates (including the Advisor following the Second Closing), except, in any
case, (1) as required by Law or the terms of any Employee Plan or any contract
in existence on the Agreement Date, (2) increases in wages or salaries pursuant
to any regularly scheduled compensation review of the Seller Parties in the
ordinary course of business consistent with past practice, provided that the
aggregate annualized cost of such increases to Business Employees shall not
exceed four percent (4%), and (3) changes to benefits in the ordinary course of
business consistent with past practice that are uniformly applicable to the
covered employees of the Business and the Seller Parties generally;

 

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(ix) enter into or adopt any collective bargaining agreement or other contract
or agreement with any labor representative;

(x) transfer the employment duties of any individual who, as of the Agreement
Date, is a Business Employee out of the Business, transfer the employment duties
of any individual who, as of the Agreement Date, is not a Business Employee to
the Business, or hire or terminate the employment or services (other than for
cause) of any Business Employee or individual who would be a Business Employee
if employed as of the Agreement Date who has annual base compensation greater
than $50,000;

(xi) enter into any settlement or release with respect to any material Action
relating to the Business or the Advisor other than any settlement or release
that contemplates only the payment of money solely by the Seller Parties and not
by the Buyer Parties (which payment obligation shall be an Excluded Liability
hereunder) without ongoing limits on the conduct or operation of the Business or
the Advisor, as applicable, and, to the extent such settlement or release
affects any of the Buyer Parties, the Advisor or the Business after the Second
Closing, results in a full release of the claims (including of the Buyer Parties
and their Affiliates) giving rise to such Action;

(xii) except in the ordinary course of business consistent with past practice,
enter into any transactions, contracts or understandings with Affiliates that
would be binding on the Advisor or the Transferred Assets after the Second
Closing or give rise to any Liability that would be an Assumed Liability;

(xiii) grant any Lien on the Membership Interests or the IRT Common Stock, or
grant any Lien on any other material assets of Asset Seller or the Advisor or
material Transferred Assets (whether tangible or intangible), other than
granting or suffering to exist a Permitted Lien on any such other material
assets of Asset Seller or the Advisor or other material Transferred Assets;

(xiv) make or commit to make any capital expenditures, other than capital
expenditures made in order to continue to operate the Business in the ordinary
course of business;

(xv) change in any material respect the Advisor’s methods of financial
accounting or methods of reporting income or deductions for financial accounting
practice or policy, except in each case as required by applicable law or GAAP,
or as may be required by a policy applicable to all of the Seller Parties’
businesses;

(xvi) with respect to Taxes payable by Asset Seller (with respect to the
Business) and the Advisor, (A) make, change or revoke any material Tax election,
(B) file any amended Tax Return, (C) change any material method of Tax
accounting or take any material position on any Tax Return that is materially
inconsistent with positions taken in preparing or filing similar Tax Returns in
prior periods, (D) change any Tax accounting period, (E) enter into any closing
agreement with a Taxing Authority, (F) surrender any right or claim to a
material refund of Taxes, or (G) settle, compromise or abandon any audit or
other Tax Claim relating to a material amount of Taxes, except in each case, if
doing so

 

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(1) would not be binding on Asset Seller (with respect to the Business) and the
Advisor after the Effective Time and (2) could not reasonably be expected to
result in a material increase in Taxes payable by Asset Seller (with respect to
the Business) and the Advisor for a Post-Second Closing Tax Period or of the
Buyer Parties or any of their Affiliates (other than the Advisor); or

(xvii) enter into any legally binding commitment with respect to any of the
foregoing.

(b) Nothing contained in this Agreement shall give any of the Buyer Parties,
directly or indirectly, rights to control or direct the operations of the
Business or the Advisor prior to the Second Closing Date. Prior to the Second
Closing Date, the Seller Parties shall, and shall cause their respective
Affiliates to, exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision of the Business and the
Advisor. Notwithstanding anything to the contrary in this Agreement, no consent
of the Buyer Parties shall be required with respect to any matter set forth in
this Section 6.01 or elsewhere in this Agreement to the extent that the
requirement of such consent would violate or conflict with any Laws.

Section 6.02 Access to Information.

(a) During the Pre-Second Closing Period, upon reasonable prior notice, the
Seller Parties shall, and shall cause the Advisor to, (i) afford the Buyer
Parties and their respective Affiliates and their respective Representatives
reasonable access, during normal business hours, to the properties, books and
records (including Tax Returns and work papers) and employees of or Related to
the Business or the Advisor and (ii) furnish to the Buyer Parties and their
respective Affiliates and their respective Representatives such additional
financial and operating data and other information regarding the Business or the
Advisor as the Buyer Parties or their respective Affiliates or their respective
Representatives may from time to time reasonably request for purposes of
consummating the Transactions and preparing to operate the Business following
the Second Closing. No such investigation by the Buyer Parties or their
Affiliates or any of their respective Representatives shall constitute a waiver
of or otherwise affect the representations, warranties, covenants or agreements
of the Seller Parties set forth herein.

(b) Notwithstanding anything in this Agreement to the contrary, in no event
shall the Seller Parties, the Advisor or their respective Affiliates be
obligated to provide any (1) access or information that, based on advice of the
Seller Parties’ counsel would, constitute a violation of any applicable Law,
(2) information the disclosure of which would, based on advice of the Seller
Parties’ counsel, jeopardize any applicable privilege (including the
attorney-client privilege) available to the Seller Parties, the Advisor or any
of their respective Affiliates relating to such information, or (3) information
the disclosure of which would cause the Seller Parties, the Advisor or any of
their respective Affiliates to breach a confidentiality obligation to which it
is bound.

Section 6.03 Confidentiality. The Parties shall keep, and shall cause each of
their respective Affiliates, advisors, agents and Representatives to keep,
confidential all information and materials regarding any other Party, except
where such information and

 

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materials are required by applicable Law or stock exchange rules to be
disclosed. None of the Seller Parties shall disclose the terms and provisions of
this Agreement without the prior written consent of the Buyer Parties, except
where required by applicable Law or stock exchange rules. Following the Second
Closing, the Seller Parties shall treat and hold as confidential any information
concerning the Business and/or the affairs of the Advisor, including the terms
and provisions of this Agreement, that is not already generally available to the
public (the “Confidential Information”) and refrain from using any of the
Confidential Information except in connection with this Agreement, and deliver
promptly to the Buyer Parties or destroy, at the request of the Buyer Parties,
all tangible embodiments (and all copies) of the Confidential Information which
are in its possession or under its control. In the event that a Party or any of
its Affiliates is required by Law to disclose any of the information required to
be kept confidential pursuant to this Section 6.03, such Party (for purposes of
this Section 6.03, the “disclosing party”) shall promptly notify the other
Parties in writing (if permitted by applicable Law), which notification shall
include the nature of the requirement imposed by Law and the extent of the
required disclosure, and the disclosing party and its Affiliates shall cooperate
with the other Parties and their Affiliates, at the other Parties’ and their
Affiliates’ expense, to preserve the confidentiality of such information
consistent with applicable Law. Notwithstanding the foregoing provisions of this
Section 6.03 and any other provision of this Agreement, the Parties hereto (and
each of their respective Affiliates and Representatives) may disclose any of the
information required to be kept confidential pursuant to this Section 6.03
(i) to the extent necessary to complete federal, state or local income Tax
Returns, (ii) as required by applicable Law or stock exchange rules and (iii) as
required for the purpose of any action, suit, proceeding, complaint, claim or
demand arising out of or in connection with this Agreement or as required or
expressly permitted by this Agreement.

Section 6.04 Regulatory and Other Authorizations.

(a) Each Party shall use its reasonable best efforts, and shall cause its
respective Affiliates to use reasonable best efforts, to (i) promptly obtain all
Consents, Permits and Orders of all Governmental Authorities that may be, or
become, necessary for its execution and delivery of, and performance of its
obligations pursuant to, the Transaction Agreements (including the consummation
of the Transactions) (collectively, the “Governmental Approvals”), (ii) promptly
secure the issuance, reissuance or transfer of all licenses and Permits,
including Environmental Permits, that may be or become necessary to operate the
Business following the consummation of the Transactions and (iii) subject to
Section 6.04(e), take all such actions as may be requested by any such
Governmental Authority to obtain such Governmental Approvals, licenses and
Permits. Each Party will cooperate with the reasonable requests of the other
Party in seeking promptly to obtain all such Governmental Approvals and the
issuance, reissuance or transfer of such licenses and Permits.

(b) If required by applicable Law, the Seller Parties and the Buyer Parties
shall make an appropriate filing of a notification and report form pursuant to
the HSR Act with respect to the Transactions as promptly as reasonably
practicable after the Agreement Date and shall supply as promptly as practicable
any additional information and documentary material that may be requested
pursuant to the HSR Act. In addition, each Party agrees to make promptly or seek
a waiver from the requirement to make (and in any event within the required time
periods

 

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for filing under applicable Law) any filing that may be required with respect to
the Transactions under any other Antitrust Law, and respond as promptly as
practicable to any inquiries or requests for additional information and
documentary material received from any Governmental Authority in connection
therewith. None of the Parties shall (i) agree to extend any waiting period or
agree to refile under any Antitrust Law (except with the prior written consent
of the other Parties which shall not be unreasonably withheld) or (ii) enter
into any agreement with any Governmental Authority agreeing not to consummate
the Transactions (except with the prior written consent of the other Parties
which shall not be unreasonably withheld). Each Party shall have sole
responsibility for its respective filing fees associated with the HSR Act
filings and any other similar filings required under applicable Antitrust Laws
in any other jurisdictions.

(c) Each Party shall, subject to applicable Law and supervisory confidentiality
requirements imposed by any applicable Governmental Authority, promptly notify
the other Parties of any nonconfidential oral or written communication it
receives from any Governmental Authority relating to the matters that are the
subject of this Section 6.04, permit the other Parties and their Representatives
to review in advance any nonconfidential written communication relating to the
matters that are the subject of this Section 6.04 proposed to be made by such
Party to any Governmental Authority and provide the other Parties with copies of
all nonconfidential correspondence, filings or other communications between them
or any of their Representatives, on the one hand, and any Governmental Authority
or members of its staff, on the other hand, relating to the matters that are the
subject of this Section 6.04. Subject to Section 6.03 and supervisory
confidentiality requirements imposed by any applicable Governmental Authority,
the Parties will coordinate and reasonably cooperate with each other in
exchanging such information and providing such assistance as the other Parties
may reasonably request in connection with the foregoing and in seeking early
termination of any applicable waiting periods under the HSR Act and any other
applicable Antitrust Law.

(d) Without limiting any other provision contained in this Section 6.04, each of
the Buyer Parties and the Seller Parties shall use reasonable best efforts to
resolve such objections, if any, as may be asserted by any Governmental
Authority with respect to the Transactions under the HSR Act and any other
applicable Antitrust Law.

(e) Notwithstanding anything else in this Agreement to the contrary, nothing in
this Agreement will obligate or require the Buyer Parties or their Affiliates to
(and none of the Seller Parties shall without the Buyer Parties’ prior written
consent agree to or permit its Affiliates to agree to) take or cause to be taken
any action (or refrain or cause to refrain from taking any action) or agree or
cause to agree to any term, condition or limitation, as a condition to or in
connection with the expiration or termination of any applicable waiting period
relating to the Transactions under the HSR Act, or in connection with any other
Governmental Approvals and any other permits, consents approvals, nonactions,
authorizations or any other action by a Governmental Authority or under other
applicable Laws, in each case if such action (or refraining from such action),
term, condition or limitation would have or would reasonably be expected to
have, individually or in the aggregate, a material adverse effect (measured on a
scale relative to the size of the Business taken as a whole) on any of the Buyer
Parties or their Subsidiaries.

 

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(f) Each Party shall, upon request, furnish the other Parties with all
information concerning itself, its Affiliates, directors, officers and
shareholders and such other matters as may be reasonably necessary in connection
with any filing, notice or application required to be made by or on behalf of
such Party or any of its Affiliates with any Governmental Authority in
connection with the transactions contemplated hereby, including (with respect to
the Seller Parties) such financial information and data and financial statements
of the Business as may be reasonably requested in connection therewith. Each
Party represents, warrants and agrees that any information furnished by it or
its Affiliates for inclusion in any regulatory application will be true and
complete in all material respects as of the date so furnished (or as of such
other date to which such information speaks).

Section 6.05 Intercompany Obligations. Prior to the Second Closing, the Seller
Parties shall take such action and make such payments as may be necessary so
that, as of the Second Closing, the Seller Parties shall release and terminate,
and there shall be no, obligations (other than (a) pursuant to the Transaction
Agreements or (b) as set forth in Section 6.05 of the Seller Disclosure Letter)
between the Advisor, on the one hand, and a Seller Party and its other
Affiliates, on the other hand; provided, that the Seller Parties shall not
settle or otherwise eliminate any such intercompany obligations in a manner that
would result in a Liability to the Advisor after the Second Closing, or to the
Buyer Parties or any of their other Affiliates.

Section 6.06 Cooperation. During the Pre-Second Closing Period (a) each of the
Seller Parties and the Buyer Parties shall, and shall cause their respective
Affiliates to (i) refrain from taking any actions that would reasonably be
expected to impair, delay or impede the Second Closing and (ii) without limiting
the foregoing, use commercially reasonable efforts to cause all Second Closing
Conditions to be met as promptly as practicable and in any event on or before
the Outside Date and (b) each Party shall keep the other reasonably apprised of
the status of the matters relating to the completion of the Transactions.

Section 6.07 No Solicitation of Alternative Transactions. Between the Agreement
Date and the Second Closing Date, or until this Agreement is terminated in
accordance with its terms, the Seller Parties shall not, and shall cause their
respective Affiliates not to, directly or indirectly, solicit or initiate
discussions or engage in negotiations with, or provide information to, or
authorize any financial advisor or other Representative to solicit or initiate
discussions or engage in negotiations with, or provide information to, any
Person (other than the Buyer Parties or their Representatives) concerning any
potential sale of capital stock of, or merger, consolidation, combination, sale
of assets, reorganization or other similar transaction involving the Business.

Section 6.08 Notice of Changes.

(a) The Buyer Parties shall promptly advise the Seller Parties, and the Seller
Parties shall promptly advise the Buyer Parties of (i) any change or event that
would or would be reasonably likely to cause or constitute a material breach of
any of the Buyer Parties’ or the Seller Parties’, as applicable,
representations, warranties or covenants contained herein which breach
individually or in the aggregate would reasonably be expected to cause any
Second Closing Condition set forth in Section 10.04(a) or Section 10.05(a), as
applicable, not to be satisfied, or (ii) to the extent permitted by applicable
Law and to the Knowledge of the Buyer

 

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Parties or the Seller Parties, as applicable, any governmental complaints, any
change or event, including investigations or hearings (or communications
indicating that the same may be contemplated) or the institution or the threat
of significant litigation, that would reasonably be expected to prevent or
materially delay the consummation of the transactions contemplated hereby.

(b) Notwithstanding anything to the contrary herein, a Party’s good-faith
failure to comply with its obligations under this Section 6.08 shall not provide
the other Party with a right not to effect the transactions contemplated by this
Agreement, except, in each case, to the extent that the underlying material
breach of a representation, warranty or covenant would independently provide
such right.

Section 6.09 Financing Cooperation. Upon the request of IRT, the Seller Parties
shall use their commercially reasonable efforts, at IRT’s sole cost and expense,
to provide such cooperation as may be reasonably requested by IRT in connection
with its efforts to consummate the IRT Equity Offering; provided that such
cooperation does not unreasonably interfere with the ongoing operations of the
Seller Parties. Such commercially reasonable efforts shall include, to the
extent reasonably requested by IRT, (a) making available to IRT appropriate
personnel of the Seller Parties, (b) providing, as promptly as reasonably
practicable, information relating to the Business and the Advisor to the extent
reasonably requested by IRT to assist in preparation of customary offering or
information documents to be used for the completion of the IRT Equity Offering,
and (c) assisting IRT in obtaining customary comfort letters and consents of the
independent accountants of the Seller Parties, including with respect to the
auditor consents in connection with any filings with the U.S. Securities and
Exchange Commission. IRT shall promptly, upon request by the Seller Parties,
reimburse the Seller Parties for all reasonable and documented out of pocket
costs (including reasonable attorneys’ fees) incurred by the Seller Parties or
their respective Representatives in connection with their respective obligations
pursuant to, and in accordance with, this Section 6.09, and shall indemnify and
hold harmless the Seller Parties, the Advisor and their respective Affiliates
and their respective Representatives from and against any and all damages,
losses, costs, liabilities or expenses suffered or incurred by any of them in
connection with the consummation of the IRT Equity Offering and any information
used in connection therewith (other than information provided by the Seller
Parties, the Advisor or any of their respective Affiliates) and all other
actions taken by the Seller Parties, the Advisor and their respective Affiliates
and their respective Representatives pursuant to this Section 6.09.

Section 6.10 Proceeds of IRT Equity Offering. Upon the closing of the IRT Equity
Offering, IRT shall use the proceeds of the IRT Equity Offering as follows:

(a) the first $43,000,000 in cash proceeds shall be reserved to be paid to the
Seller Parties as the Membership Interests Amount and the Transferred Assets
Amount at the Second Closing pursuant to Section 2.02;

(b) fifty percent (50%) of the remainder of any cash proceeds in excess of
$83,000,000 shall be reserved to be paid to the Seller Parties as the IRT Common
Stock Amount at the First Closing pursuant to Section 2.01; provided, that the
remaining fifty percent (50%) shall be paid to repay indebtedness of IRT.

Section 6.11 Shared Services Agreement. Promptly following the Agreement Date,
the Parties shall negotiate in good faith to determine the services to be
provided pursuant to the Shared Services Agreement. Each of the Parties
acknowledges and agrees that the services to be provided pursuant to the Shared
Services Agreement shall relate to, at a minimum, the following functional
areas: human resources, finance (including accounting, treasury and tax),
information technology, investor relations, office space, legal (including
transactional counsel and corporate counsel), administrative functions and
insurance.

 

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ARTICLE VII

POST-SECOND CLOSING COVENANTS

Section 7.01 Access.

(a) For a period of seven (7) years following the Second Closing Date, in
connection with any reasonable non-competitive business purpose, including the
preparation of Tax Returns or the conduct of any Tax Claim, claims relating to
Excluded Liabilities, Assumed Liabilities or Taxes, financial statements,
U.S. Securities and Exchange Commission or other regulatory obligations, or the
determination of any matter relating to the rights or obligations of the Parties
or any of their respective Affiliates under any Transaction Agreement, upon
reasonable prior notice, and except to the extent necessary to (i) ensure
compliance with any applicable Law, (ii) preserve any applicable privilege
(including the attorney-client privilege) or (iii) protect trade secrets or
comply with any contractual confidentiality obligations, each Party shall, and
shall cause its Affiliates and its Representatives to (A) afford the other
Parties and their respective Representatives and their respective Affiliates
reasonable access, during normal business hours, to the properties, books and
records of such Party and its Affiliates in respect of the Advisor and the
Business, the Transferred Employees, the Transferred Assets and the Assumed
Liabilities, (B) furnish to the other Parties and their respective
Representatives and their respective Affiliates such additional financial and
other information regarding the Advisor, the Business, the Transferred
Employees, the Transferred Assets and the Assumed Liabilities as such Party or
its Representatives may from time to time reasonably request and (C) make
available to the other Parties and their respective Representatives and their
respective Affiliates those employees of such Party or its Affiliates whose
assistance, expertise, testimony, notes or recollections or presence may be
necessary and reasonable to assist such Parties, their respective
Representatives or their respective Affiliates in connection with its inquiries
for any purpose referred to above, including the presence of such persons as
witnesses in hearings or trials for such purposes, but excluding any
proceedings, or threatened proceedings, between the Parties or any of their
respective Affiliates, in each case on terms and conditions reasonably
acceptable to the Party providing access; provided, however, that such
investigation shall not unreasonably interfere with the business or operations
of the Party providing such access or any of its Affiliates; provided, further,
that the Party requesting such access agrees to reimburse the other Party for
all reasonable out-of-pocket expenses incurred by the other Party in complying
with this Section 7.01(a); provided, further, that the auditors and accountants
of a Party or its Affiliates shall not be obligated to make any work papers
available to any Person except in accordance with such auditors’ and
accountants’ normal disclosure procedures and then only after such Person has
signed a customary agreement relating to such access to work papers in form and
substance reasonably acceptable to such auditors or accountants.

(b) Any information disclosed to any Party or its Affiliates or Representatives
pursuant to this Section 7.01 shall be subject to the confidentiality
obligations in Section 6.03.

 

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Section 7.02 Preservation of Original Books and Records.

(a) The Seller Parties and their respective Affiliates shall have the right to
retain copies of books and records of the Business and the Advisor relating to
periods ending on or before the Second Closing Date to the extent necessary to
comply with applicable Law or regulatory obligations. The Buyer Parties agree
that they shall preserve and keep all original books and records in respect of
the Business and the Advisor in the possession of a Buyer Party or its
Affiliates and acquired at the Second Closing in a manner consistent with the
Buyer Parties’ customary document retention policies. Notwithstanding the
foregoing, the Seller Parties shall have the right to retain all original IRS
Forms W-8 and W-9 in respect of the Business and the Advisor relating to periods
ending on or before the Second Closing Date.

(b) During the applicable period set forth in Section 7.01(a), upon reasonable
notice and for any reasonable noncompetitive business purpose, the Buyer Parties
shall provide to the Seller Parties or their respective Affiliates access to
(but not possession of) original books and records of the Advisor or the
Business contemplated in Section 7.02(a) as the Seller Parties or their
respective Affiliates shall reasonably request in connection with any Action to
which any Seller Party or one of its Affiliates is party or in connection with
the requirements of any Law applicable to the Seller Parties or any of their
respective Affiliates; provided, however, that such access shall not
unreasonably interfere with the business or operations of the Buyer Parties or
any of their respective Affiliates; provided, further, that the Seller Parties
agree to reimburse the Buyer Parties for all reasonable out-of-pocket expenses
incurred by the Buyer Parties in complying with this Section 7.02(b). The Seller
Parties or their Affiliates, as applicable, shall return such original books and
records to the Buyer Parties or such Affiliate as soon as such books and records
are no longer needed in connection with the circumstances described in the
immediately preceding sentence or, if earlier, upon the reasonable request of
the Buyer Parties.

Section 7.03 Non-Solicitation. For the period beginning on the Second Closing
Date and ending on the second anniversary of the Second Closing Date, (i) the
Seller Parties shall not, and shall cause their respective Subsidiaries not to,
directly or indirectly solicit, recruit or hire any Transferred Employee and
(ii) the Buyer Parties shall not, and shall cause their respective Subsidiaries
not to, directly or indirectly solicit, recruit or hire and employee of any
Seller Party; provided, that the foregoing shall not prohibit (A) a general
solicitation to the public of general advertising or similar methods of
solicitation by search firms not specifically directed at such employees and the
subsequent hiring of any such employee that responds to such general
solicitation after such two-year period, or (B) any Party or any of its
respective Subsidiaries from soliciting, recruiting or hiring any such employee
who has ceased to be employed or retained by the other Party for at least six
(6) months.

Section 7.04 Further Assurances. From time to time following the Second Closing,
the Parties shall, and shall cause their respective Affiliates to, execute,
acknowledge and deliver all reasonable further conveyances, notices,
assumptions, releases and acquittances and such instruments, and shall take such
reasonable actions as may be necessary or appropriate to make effective the
Transactions as may be reasonably requested by the other Parties; provided,

 

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however, that without limiting the other provisions of this Agreement, nothing
in this Section 7.04 shall require any Party or its Affiliates to pay money to,
commence or participate in any Action with respect to, or offer or grant any
accommodation (financial or otherwise) to, any third party following the Second
Closing.

ARTICLE VIII

EMPLOYEE MATTERS

Section 8.01 Employee Matters.

(a) In the event the employment of any Business Employee will not automatically
transfer to the Buyer Parties or their respective Affiliates upon the occurrence
of the Second Closing by operation of Law (each, an “Offer Employee”), not less
than 5 Business Days prior to the Second Closing, one of the Buyer Parties or
its Affiliates will offer employment, effective at 11:59 p.m., local time, on
the Second Closing Date (the “Transfer Time”), to such Offer Employee in
accordance with this Agreement, subject to the Seller Parties providing the
Buyer Parties with information necessary to make such offers of
employment. Offers pursuant to this Section 8.01(a) shall (i) be for a
comparable position at the same or a nearby geographic work location, in each
case, to those as of the Second Closing Date; and (ii) otherwise comply in all
respects with applicable Law. With respect to any Offer Employee who, as of the
Second Closing Date, is on approved leave of absence from work with the Seller
Parties or their respective Affiliates (each, an “Inactive Business Employee”),
one of the Buyer Parties or its Affiliates shall offer employment to such
individual on the earliest practicable date following the return of such
individual to work with the Seller Parties and their respective Affiliates and
otherwise on terms and conditions consistent with this Section 8.01; provided
that such employee returns to work within 180 calendar days following the Second
Closing Date or such later time as required by applicable Law upon presenting
themselves for duty to the Business. No later than 10 Business Days prior to the
Second Closing, to the extent permitted by applicable Law, the Seller Parties
shall provide the Buyer Parties with a list of all Inactive Business Employees
and the projected end date of each such leave of absence. Following the Second
Closing and while the Buyer Parties have obligations pursuant to this Section
8.01(a), the Seller Parties shall promptly notify the Buyer Parties of the
occurrence of the end of any such leave of absence. In the case of any Inactive
Business Employee who becomes a Transferred Employee on a date following the
Second Closing Date, all references in this Agreement to the Transfer Time shall
be deemed to be references to 11:59 p.m., local time, on the date that such
individual becomes a Transferred Employee.

(b) To the extent permitted by applicable Law and as soon as practicable after
the date of this Agreement, but in no event later than 15 calendar days after
the date of this Agreement, the Seller Parties shall provide the Buyer Parties
with a true and complete list containing the identification number, date of
hire, employer, position, location, status as exempt or non-exempt under the
Fair Labor Standards Act, as amended, status as full-time or part-time, and base
salary, wage rate and bonus opportunity, as applicable, of each Business
Employee, and the Seller Parties shall update such information periodically
prior to the Second Closing Date to reflect new hires, leaves of absence and
employment terminations and any other material changes thereto and provide
copies of such updated lists and information to the Buyer Parties.

 

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(c) With respect to each Transferred Employee, for the 12-month period
immediately following the Second Closing Date or such longer period required by
applicable Law, a Buyer Party or one of its Affiliates shall provide to each
such Transferred Employee (i) no less favorable base salary or wage rates, as
applicable, than the base salary or wage rates, as applicable, provided by the
Seller Parties and their respective Affiliates to the Transferred Employee
immediately prior to the Second Closing; (ii) employee benefits under plans,
programs and arrangements that will provide benefits to such Transferred
Employee that are substantially comparable in the aggregate to the employee
benefits provided by the Seller Parties and their respective Affiliates to the
Transferred Employee immediately prior to the Second Closing (excluding any
defined benefit pension, retiree welfare, incentive, equity or transaction-based
compensation or benefits); and (iii) an office within a commute of no more than
50 miles from the Transferred Employee’s office as of immediately prior to the
Second Closing Date, in each case subject to applicable Law. Notwithstanding the
foregoing, nothing contemplated by this Agreement shall be construed as
requiring the Buyer Parties or their respective Affiliates to continue the
employment of any Transferred Employee for any period after the Second Closing
Date.

(d) With respect to each Transferred Employee, effective from and after the
Transfer Time, a Buyer Party or one of its Affiliates shall (i) recognize, for
all purposes (other than benefit accrual under a defined benefit pension plan)
under all plans, programs and arrangements established or maintained by the
Buyer Parties or their respective Affiliates for the benefit of such Transferred
Employees, service with the Seller Parties and their respective Affiliates prior
to the Second Closing to the extent such service was recognized under the
corresponding Employee Plan covering such Transferred Employee, including for
purposes of eligibility, vesting and benefit levels and accruals (other than
benefit accrual under a defined benefit pension plan), in each case, except
where it would result in a duplication of benefits, (ii) use commercially
reasonably efforts to waive any pre-existing condition exclusion,
actively-at-work requirement or waiting period under all employee health and
other welfare benefit plans established or maintained by the Buyer Parties or
their respective Affiliates for the benefit of the Transferred Employees, except
to the extent such pre-existing condition, exclusion, requirement or waiting
period would have applied to such individual under the corresponding Employee
Plan and (iii) use commercially reasonably efforts to provide full credit for
any co-payments, deductibles or similar payments made or incurred prior to the
Second Closing for the plan year in which the Second Closing occurs.

(e) The Seller Parties and their respective Affiliates shall retain all
Liability and responsibility for any and all employment and employee-benefit
related Liabilities, obligations, claims or losses that relate to (i) any
Transferred Employee (and his or her dependents and beneficiaries) and that
arise as a result of an event or events that occur prior to the Transfer Time,
(ii) each current and former employee (and their dependents and beneficiaries)
of the Seller Parties and their respective Affiliates, other than the
Transferred Employees and their dependents and beneficiaries, in each case, that
arise out of an event or events that occur at any time, (iii) any Employee Plans
that are not Business Plans, and (iv) all Controlled Group Liabilities. The
Buyer Parties and their respective Affiliates shall assume and be solely
responsible for any and all employment and employee-benefits related
Liabilities, obligations, claims or losses that relate to (A) any Transferred
Employee (and his or her dependents and beneficiaries) and that arise as a
result of an event or events that occur as of or after the Transfer Time and (B)
any Business Plan.

 

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(f) The Seller Parties shall take all action necessary to fully vest any
Transferred Employee in any unvested amounts in the any Employee Plan that
contains a cash or deferred arrangement intended to qualify under Section 401(k)
of the Code as of or prior to the Transfer Time.

(g) The Seller Parties hereby waive, effective as of the Effective Time, all
non-competition and non-solicitation covenants in favor of the Seller Parties
that are contained in the Employment Agreements.

(h) The provisions contained in this Agreement with respect to any Business
Employee are included for the sole benefit of the respective parties hereto and
shall not create any right in any other Person, including any Business Employee
(or dependent or beneficiary of any of the foregoing). Nothing herein shall be
deemed an amendment of any plan providing benefits to any employee of the Seller
Parties, the Buyer Parties or any of their respective Affiliates.

ARTICLE IX

TAX MATTERS

Section 9.01 Preparation and Filing of Tax Returns by the Seller Parties.

(a) The Seller Parties shall (i) prepare (or cause to be prepared) all Tax
Returns that are required to be filed by or with respect to the Transferred
Assets, the Business and the Advisor on an affiliated, consolidated, combined or
unitary basis with a Seller Party or with at least one Affiliate of a Seller
Party other than the Advisor, and (ii) timely prepare (or cause to be timely
prepared) all other Tax Returns required to be filed by Asset Seller (with
respect to the Business) or the Advisor for any taxable period ending on or
before the Second Closing Date (a “Pre-Second Closing Separate Return”). Except
to the extent otherwise required by applicable Law, the Seller Parties shall
prepare (or cause to be prepared) all Pre-Second Closing Separate Returns in a
manner consistent with past practices with respect to Asset Seller (with respect
to the Business) or the Advisor (if any).

(b) The Seller Parties shall timely file (or cause to be timely filed) (taking
into account extensions) all Pre-Second Closing Separate Returns required to be
filed on or before the Second Closing Date, and the Seller Parties shall timely
remit (or cause to be timely remitted) any Taxes shown as due on such Pre-Second
Closing Separate Returns.

(c) The Seller Parties shall deliver (or cause to be delivered) a draft of each
Pre-Second Closing Separate Return that is required to be filed by a Buyer Party
after the Second Closing Date to the Buyer Parties for the Buyer Parties’ review
and comment at least thirty (30) days prior to the due date (taking into account
extensions) for filing such Tax Return (or, if such due date is within
forty-five (45) days following the Second Closing Date, as promptly as
practicable following the Second Closing Date), and the Seller Parties shall
consider in good

 

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faith any comments to such Pre-Second Closing Separate Return received from the
Buyer Parties reasonably in advance of such due date for filing such Tax
Return. The Buyer Parties shall timely file (or cause to be timely filed)
(taking into account extensions) any such Pre-Second Closing Separate
Return. Notwithstanding anything herein to the contrary, the Buyer Parties shall
not be required to file any Pre-Second Closing Separate Return reflecting a
material position for which there is no reasonable basis.

(d) Each Party shall promptly provide (or cause to be promptly provided) (but in
any event, no later than sixty (60) days before the due date (taking into
account extensions) of the relevant Tax Return) to the other Parties any
information within its possession reasonably requested by such other Parties
relating to Asset Seller (with respect to the Business) or the Advisor to
facilitate the preparation and filing of the Tax Returns described in
Sections 9.01(a) and 9.02(a).

Section 9.02 Preparation and Filing of Tax Returns by the Buyer Parties.

(a) Except for the Tax Returns described in Section 9.01(a), the Buyer Parties
shall timely prepare and file (or cause to be timely prepared and filed) all Tax
Returns of the Advisor in accordance with the provisions of this Section
9.02. In the case of any such Tax Return of the Advisor that is a Straddle
Period (a “Straddle Period Return”), (i) except to the extent otherwise required
by applicable Law, the Buyer Parties shall prepare (or cause to be prepared)
such Tax Return in accordance with the past practices with respect to the
Advisor (if any), (ii) the Buyer Parties shall deliver a draft of such Straddle
Period Return, together with a pro forma return for the portion of the Straddle
Period ending on the Second Closing Date, to the Seller Parties for Seller
Parties’ review and comment not later than thirty (30) days before the due date
(taking into account extensions) for filing such Straddle Period Tax Return (or,
if such due date is within forty-five (45) days following the Second Closing
Date, as promptly as practicable following the Second Closing Date), and (iii)
the Buyer Parties shall consider in good faith any comments to such Straddle
Period Return received from the Seller Parties reasonably in advance of such due
date for filing such Tax Return. If the Buyer Parties disagree with any comments
provided by the Seller Parties in accordance with clause (iii) of the
immediately preceding sentence, then the Buyer Parties and the Seller Parties
shall negotiate in good faith to resolve any disagreement and revise the
relevant Straddle Period Return accordingly before the due date for filing such
Tax Return (taking into account extensions). If the Buyer Parties and the Seller
Parties are unable to reach such agreement, then such Straddle Period Return
shall be filed as prepared by the Buyer Parties (as revised to reflect any
comments received from the Seller Parties with which the Buyer Parties agree)
and the Seller Parties and the Buyer Parties shall promptly cause Ernst & Young
LLP or such other globally recognized accounting firm as shall be agreed upon in
writing by the Seller Parties and the Buyer Parties (the “Independent Accounting
Firm”) to resolve any remaining disagreement. Any decision of the Independent
Accounting Firm shall be in accordance with the terms of this Agreement and
shall be binding on all parties, and the Buyer Parties shall promptly amend (or
cause to be amended) the relevant Straddle Period Return to reflect the decision
of the Independent Accounting Firm, and further return any excess amounts paid
by the Seller Parties pursuant to Section 9.02(b). The fees and expenses of the
Independent Accounting Firm shall be borne equally by the Buyer Parties, on the
one hand, and the Seller Parties, on the other hand.

 

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(b) Without limiting the obligations of the Seller Parties under Article XII,
the Buyer Parties shall remit (or cause to be remitted) any Taxes shown as due
on any Pre-Second Closing Separate Return required to be filed by the Buyer
Parties pursuant to Section 9.01(c) and any Straddle Period Return. The Seller
Parties shall reimburse the Buyer Parties for any Taxes shown as due on any such
Tax Return for which the Seller Parties are liable pursuant to Article XII (but
which are payable with such Tax Return filed by the Buyer Parties pursuant to
this Section 9.02(b) within fifteen (15)) days after written request by the
Buyer Parties, but in no event earlier than ten (10) days before the due date
for the payment of such Taxes.

(c) Except upon the Seller Parties written request pursuant to Section 9.05,
neither the Buyer Parties nor any Affiliate of the Buyer Parties shall (or shall
cause or permit the Advisor to) amend, refile or otherwise modify (or grant an
extension of any statute of limitations with respect to) any Tax Return of the
Advisor (or a group the parent of which is the Advisor) with respect to any
taxable year or period ending on or before the Second Closing Date (or with
respect to any Straddle Period) without the prior written consent of the Seller
Parties, which consent may be withheld in the sole discretion of the Seller
Parties.

Section 9.03 Straddle Periods. For all purposes under this Agreement, in the
case of any Tax period of Asset Seller (with respect to the Business) or the
Advisor that includes but does not end at the Effective Time (a “Straddle
Period”), the portion of Taxes (or any Tax refund and amount credited against
any Tax) that are allocable to the portion of the Straddle Period ending at the
Effective Time shall (A) in the case of any Property Taxes (and any similar
Taxes imposed on a periodic basis by reference to a level of an item, such as
franchise Taxes imposed based on number of shares and similar Taxes), be equal
to the amount of such Taxes for the entire Straddle Period multiplied by a
fraction, the numerator of which is the number of calendar days in the portion
of such Straddle Period ending on (and including) the Second Closing Date and
the denominator of which is the number of calendar days in the entire Straddle
Period and (B) in the case of Taxes not described in clause (A), be determined
as though the taxable year of Asset Seller (with respect to the Business) or the
Advisor terminated at the Effective Time; provided, that exemptions, allowances
or deductions that are calculated on an annual basis (including depreciation and
amortization deductions) shall be allocated between the period ending at the
Effective Time and the period beginning after the Effective Time using the
fraction described in clause (A).

Section 9.04 Tax Proceedings.

(a) Each Party shall promptly notify the other Parties in writing upon receipt
of notice by it or any of its Affiliates of any pending or threatened audit,
claim, demand or administrative or judicial proceeding (a “Tax Claim”) that
could reasonably be expected to give rise to an indemnification claim hereunder,
and to the extent known, describing in reasonable detail the facts and
circumstances with respect to the subject matter of such Tax Claim and will
provide the other party with all written correspondence from such Taxing
Authority; provided, however, that the failure of the Parties receiving such
notice to provide such notice to the other party shall not release such first
party from any of its obligations under this Agreement except to the extent the
other party is prejudiced by such failure.

 

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(b) The Seller Parties shall have the right to control any Tax Claim and prepare
(or cause to be prepared) any amended Tax Returns, to the extent that such Tax
Return or Tax Claim is in respect of a taxable year or period ending on or
before the Second Closing Date. Upon the Seller Parties’ request and at the
Seller Parties’ expense, the Buyer Parties shall file (or caused to be filed)
any amended Tax Return described in the immediately preceding sentence and shall
execute any powers of attorney or similar documents that may be required to
effectuate the intent of this Section 9.04(b). If such Tax Claim could
reasonably be expected to (x) be binding on the Buyer Parties or any of their
Affiliates (including the Advisor after the Second Closing) or (y) result in a
material increase in the Tax Liability of the Advisor for a Post-Second Closing
Tax Period or of the Buyer Parties or any of their Affiliates (other than the
Advisor) then the Seller Parties shall (i) provide the Buyer Parties with a
timely and reasonably detailed account of each stage of such Tax Claim (and
copies of all relevant written correspondence) and (ii) not settle or compromise
any such Tax Claim without obtaining the prior written consent of the Buyer
Parties, which consent shall not be unreasonably withheld, conditioned or
delayed. Nothing in this Agreement shall obligate the Seller Parties or any of
their Affiliates to provide any information with respect to a Tax Claim, or to
obtain the Buyer Parties’ consent, with respect to a Tax Claim relating in whole
or in part to any affiliated, combined, unitary, consolidated or similar group
filing Tax Returns with Asset Seller (with respect to the Business) or the
Advisor that includes the Seller Parties or any of their Affiliates (other than
the Advisor).

(c) The Buyer Parties shall have the right to control any Tax Claim with respect
to the Transferred Assets or the Advisor for any Straddle Period; provided,
however, that (i) the Buyer Parties shall provide the Seller Parties with a
timely and reasonably detailed account of each stage of such Tax Claim (and
copies of all relevant written correspondence), (ii) the Buyer Parties shall
consult with the Seller Parties before taking any significant action in
connection with such Tax Claim, (iii) the Buyer Parties shall defend such Tax
Claim diligently and in good faith as if it were the only party in interest in
connection with such Tax Claim, and (iv) the Buyer Parties shall not settle or
compromise any such Tax Claim without obtaining the prior written consent of the
Seller Parties, which consent shall not be unreasonably withheld, conditioned or
delayed.

(d) The Buyer Parties shall have the right to control any Tax Claim with respect
to the Transferred Assets or the Advisor other than any Tax Claim described in
Section 9.04(b) or Section 9.04(c). Nothing in this Agreement shall obligate the
Buyer Parties or any of their Affiliates to provide any information with respect
to a Tax Claim, or to obtain the Seller Parties’ consent, with respect to a Tax
Claim relating whole or in part to any affiliated, combined, unitary,
consolidated or similar group filing Tax Returns with Asset Seller (with respect
to the Business) or the Advisor that includes the Buyer Parties or any of their
Affiliates.

Section 9.05 Refunds. The Buyer Parties shall pay (or cause to be paid) to the
Seller Parties any Tax refunds that are received by the Advisor, the Buyer
Parties or any Affiliate of the Buyer Parties on their behalf, and any amounts
credited against Tax to which the Advisor, the Buyer Parties or any Affiliate of
the Buyer Parties become entitled, for which the Seller Parties are liable under
Article XII (in each case, including any interest paid thereon and net of any
Taxes incurred in respect of the receipt or accrual of the refund or credit and
any reasonable costs and expenses incurred by the Buyer Parties or any of their
Affiliates in obtaining or

 

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securing such refund or credit). Upon the Seller Parties’ request and at the
Seller Parties’ sole expense, the Buyer Parties shall file (or cause to be
filed) all Tax Returns (including amended Tax Returns) or other documents
claiming any refunds or credits to which the Seller Parties are entitled
pursuant to the immediately preceding sentence. Any payments required to be made
under this Section 9.05 shall be made in immediately available funds, to an
account or accounts as directed by the Seller Parties, within fifteen (15) days
of the receipt of the refund or the application of any such refunds as a credit
against Tax.

Section 9.06 Transfer Taxes. Notwithstanding anything to the contrary in this
Agreement, the Buyer Parties, on the one hand, and the Seller Parties, on the
other hand, shall each be liable for fifty percent (50%) of any Transfer Taxes
imposed or arising with respect to the Transactions. The Party required by Law
to file a Tax Return with respect to any Transfer Taxes shall timely prepare,
with the other Parties’ cooperation, and file such Tax Return and timely pay the
amount of Tax shown due (provided that the other Party shall promptly reimburse
such Party for its share of any Transfer Taxes paid by such first Party pursuant
to this sentence). The Buyer Parties and the Seller Parties each agree to timely
sign and deliver (or to cause to be timely signed and delivered) such
certificates or forms as may be necessary or appropriate and otherwise to
cooperate to establish any available exemption from (or otherwise reduce) any
Transfer Taxes. For the avoidance of doubt, the presentation or acceptance of
any exemption certificate or forms, shall not relieve any Party from its
obligations with respect to Transfer Taxes pursuant to this Section 9.06.

Section 9.07 Tax Sharing Agreements. To the extent relating to the Advisor, the
Seller Parties shall terminate (or cause to be terminated) on or before the
Second Closing Date all Tax sharing agreements or arrangements (other than this
Agreement) entered into by the Advisor, and the Advisor will not have any
Liability or entitlement to any right thereunder to each other on or after the
Second Closing Date.

Section 9.08 Tax Cooperation. Without limiting the obligations set forth in
Sections 6.02, 7.01 and 7.05, the Parties shall furnish or cause to be furnished
to each other, upon request, as promptly as practicable, such information and
assistance relating to the Transferred Assets, the Assumed Liabilities, the
Business, the Advisor or their assets or businesses (including access to books
and records) as is reasonably necessary for the filing of any Tax Returns, the
making of any election related to Taxes, the preparation for any audit by any
Taxing Authority, the prosecution or defense of any audit, proposed adjustment
or deficiency, assessment, claim, suit or other proceeding relating to any Taxes
or Tax Return; provided, however, that neither the Seller Parties nor the Buyer
Parties shall be obligated to furnish or cause to be furnished any information
with respect to a consolidated, combined, affiliated or unitary Tax group of
which the Advisor, on one hand, and the Seller Parties or the Buyer Parties, as
the case may be, or any of their Affiliates (other than the Advisor), on the
other hand, are members. The Parties shall cooperate with each other in the
conduct of any audit or other proceeding related to Taxes and all other Tax
matters relating to Asset Seller (with respect to the Business) or the Advisor,
or their assets or businesses and each shall execute and deliver such powers of
attorney and other documents as are necessary to carry out the intent of this
Article IX. The Buyer Parties, Advisor and the Seller Parties agree, upon
request, to use their reasonable best efforts to obtain any certificate or other
document from any Governmental Authority or any other Person as may be necessary
to mitigate, reduce or eliminate any Tax that could be imposed (including with
respect to the transactions contemplated hereby).

 

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Section 9.09 Sale as of the Effective Time. For all income and other relevant
Tax purposes, the sale of the Membership Interests, the Transferred Assets and
the IRT Common Stock pursuant to this Agreement shall be deemed to occur at the
Effective Time, and the Parties shall not (and shall cause their respective
Affiliates not to) file any Tax Return or otherwise take any position for Tax
purposes inconsistent with the foregoing except to the extent otherwise required
pursuant to a “determination” within the meaning of Section 1313(a) of the Code
(or any similar provision of state, local or foreign Law).

Section 9.10 Agreed Tax Treatment; Purchase Price Allocation.

(a) For U.S. federal income Tax purposes, the Parties intend that the sale of
the Membership Interests pursuant to this Agreement shall be treated as a sale
of the assets held by the Advisor and that the sale of the Transferred Assets by
Asset Seller shall be treated as a sale of the Transferred Assets and the
parties shall not (and shall cause their respective Affiliates not to) file any
Tax Return or otherwise take any position for Tax purposes inconsistent with the
foregoing except to the extent otherwise required pursuant to a “determination”
within the meaning of Section 1313(a) of the Code (or any similar provision of
state, local or foreign Law).

(b) The Parties agree that the Purchase Price, the Assumed Liabilities and any
other items constituting consideration within the meaning of Section 1060 of the
Code and the regulations thereunder shall be allocated (i) to the Transferred
Assets in the aggregate based on the Transferred Assets Amount and among the
Transferred Assets in accordance with Schedule 9.10(b), (ii) to the assets of
the Advisor in the aggregate based on the Membership Interests Amount and among
the assets of the Advisor in accordance with Schedule 9.10(b), and (iii) to the
IRT Common Stock based on the IRT Common Stock Amount. Within thirty (30) days
after the Second Closing Date, the Seller Parties shall prepare an allocation
(the “Allocation”) that is consistent with Schedule 9.10(b) and allocates the
Purchase Price, Assumed Liabilities and other items constituting consideration
within the meaning of Section 1060 of the Code and the regulations thereunder
further among all acquired rights and assets. The Allocation shall become final
and binding on the Parties twenty (20) days after the Seller Parties provide it
to the Buyer Parties, unless the Buyer Parties object in writing to the Seller
Parties, specifying the basis for the objection and preparing an alternative
allocation. If the Buyer Parties do object, the Seller Parties and the Buyer
Parties shall in good faith attempt to resolve the dispute within twenty (20)
days after written notice to the Seller Parties of the Buyer Parties’
objection. Any such resolution shall be final and binding on the Parties. Any
unresolved disputes shall be promptly submitted to the Independent Accounting
Firm for determination, which determination shall be final and binding on the
Parties. The final version of the Allocation shall become part of this Agreement
for all purposes. Each of the Parties agrees, unless otherwise required by law,
to (a) prepare and timely file all Tax Returns (and all supplements thereto) in
a manner consistent with the Allocation and this Section 9.10(b) and Schedule
9.10(b) and (b) act in accordance with the Allocation and this Section 9.10(b)
and Schedule 9.10(b) for all financial accounting and Tax purposes. The Parties
will revise the Allocation to the extent necessary to reflect any post-Closing
payment made pursuant to or in connection with this Agreement. In the case of
any payment referred to in the preceding sentence, the Seller Parties shall
revise the Allocation for

 

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the review of the Buyer Parties within thirty (30) days after the Closing
Date. The revised Allocation shall become final and binding on the Parties
twenty (20) days after the Seller Parties provide it to the Buyer Parties,
unless the Buyer Parties object in writing to the Seller Parties, specifying the
basis for the objection and preparing an alternative allocation. If the Buyer
Parties do object, the Seller Parties and the Buyer Parties shall in good faith
attempt to resolve the dispute within twenty (20) days after written notice to
the Seller Parties of the Buyer Parties’ objection. Any such resolution shall be
final and binding on the Parties. Any unresolved disputes shall be promptly
submitted to the Independent Accounting Firm for determination, which
determination shall be final and binding on the Parties. The final version of
the revised Allocation shall become part of this Agreement for all purposes.

Section 9.11 Treatment of Certain Payments. The Parties shall (and shall cause
their respective Affiliates to) treat any payment pursuant to this Article IX or
Article XII as an adjustment to the Purchase Price for all Tax purposes except
to the extent otherwise required pursuant to a “determination” within the
meaning of Section 1313(a) of the Code (or any similar provision of state, local
or foreign Law).

ARTICLE X

CONDITIONS TO FIRST CLOSING AND SECOND CLOSING

Section 10.01 Conditions to Obligations of All Parties – First Closing and
Second Closing. The obligations of the Parties to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction or waiver by
the Seller Parties, in their sole discretion, and the Buyer Parties, in their
sole discretion, to the extent permitted by applicable Law, at or before each of
the First Closing, and the Second Closing, of each of the following conditions:

(a) No Injunction. No Governmental Authority of competent jurisdiction shall
have enacted, adopted, issued, promulgated, enforced or entered any statute,
rule, regulation, Order, or other notice (whether temporary, preliminary or
permanent) (collectively, the “Restraints”), in any case which is in effect and
which prevents or prohibits consummation of the transactions contemplated by
this Agreement; provided, that (i) each of the Parties shall use its
commercially reasonable efforts to cause any such Restraint to be vacated or
lifted, and (ii) a Party shall not be entitled to rely on the failure of this
condition to be satisfied if such Order or other notice was initiated by such
Party or an Affiliate of such Party.

(b) Government Approvals. All (i) Required Approvals shall have been obtained,
(ii) Required Notices shall have been made and (iii) Required Waiting Periods
shall have expired or shall have been waived or terminated.

 

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Section 10.02 Conditions to Obligations of the Seller Parties – First
Closing. The obligations of the Seller Parties to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction or the
Seller Parties’ waiver, in their sole discretion to the extent permitted by
applicable Law, at or before the First Closing, of each of the following
conditions:

(a) Representations and Warranties; Covenants. (i) The representations and
warranties of the Buyer Parties contained in this Agreement shall be true and
correct in all material respects as of the First Closing as if made on the First
Closing Date (other than representations and warranties that are made as of a
specific date, which representations and warranties shall have been true and
correct as of such date); (ii) the covenants contained in this Agreement
required to be complied with by the Buyer Parties on or before the First Closing
shall have been complied with in all material respects; and (iii) the Seller
Parties shall have received a certificate signed by an authorized officer of
IRT, dated the First Closing Date, with respect to the matters set forth in the
foregoing clauses (i) and (ii); provided, however, that for purposes of
determining the satisfaction of the condition in this clause (i), no effect
shall be given to any “material”, “Material Adverse Effect”, or other similar
qualifier in such representations and warranties.

(b) Buyer Party First Closing Deliverables. The Seller Parties shall have
received the Buyer Party deliverables set forth in Section 3.03.

Section 10.03 Conditions to Obligations of the Buyer Parties – First
Closing. The obligations of the Buyer Parties to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment or the Buyer
Parties’ waiver, in their sole discretion to the extent permitted by applicable
Law, at or before the First Closing, of each of the following conditions:

(a) Representations and Warranties; Covenants. (i) (A) the representations and
warranties of the RAIT Selling Stockholders contained in Sections 4.01(a)
(Organization, Power and Authority of the Seller Parties) and 4.15 (Brokers)
shall be true and correct as written as of the First Closing as if made on the
First Closing Date (other than representations and warranties that are made as
of a specific date, which representations and warranties shall have been true
and correct as of such date); (B) the representations and warranties of the RAIT
Selling Stockholders contained in 4.03 (Noncontravention) of this Agreement
shall be true and correct in all material respects as of the First Closing as if
made on the First Closing Date (other than representations and warranties that
are made as of a specific date, which representations and warranties shall have
been true and correct as of such date); and (C) the representations and
warranties of the RAIT Selling Stockholders contained in Sections 4.04
(Governmental Authorizations and Consents), 4.19 (Ownership of IRT Common
Stock), and 4.20 (No Other Representations and Warranties) shall be true and
correct as of the First Closing as if made on the First Closing Date (other than
representations and warranties that are made as of a specific date, which
representations and warranties shall have been true and correct as of such
date); except with respect to this clause (C) for breaches or inaccuracies, as
the case may be, as to matters that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect; provided, however,
that for purposes of determining the satisfaction of the condition in this
clause (i), no effect shall be given to any “material”, “Material Adverse
Effect”, or other similar qualifier in such representations and warranties;
(ii) the covenants contained in this Agreement required to be complied with by
the RAIT Selling Stockholders on or before the First Closing shall have been
complied with in all material respects; and (iii) the Buyer Parties shall have
received a certificate signed by an authorized officer of RAIT, dated the First
Closing Date, with respect to the matters set forth in the foregoing clauses (i)
and (ii).

 

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(b) Seller Party First Closing Deliverables. The Buyer Parties shall have
received the Seller Party deliverables set forth in Section 3.02.

(c) IRT Equity Offering. IRT shall have closed and received the net proceeds
from the IRT Equity Offering.

Section 10.04 Conditions to Obligations of the Seller Parties - Second
Closing. The obligations of the Seller Parties to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction or the
Seller Parties’ waiver, in their sole discretion to the extent permitted by
applicable Law, at or before the Second Closing, of each of the following
conditions:

(a) Representations and Warranties; Covenants. (i) The representations and
warranties of the Buyer Parties contained in this Agreement shall be true and
correct in all material respects as of the Second Closing as if made on the
Second Closing Date (other than representations and warranties that are made as
of a specific date, which representations and warranties shall have been true
and correct as of such date); (ii) the covenants contained in this Agreement
required to be complied with by the Buyer Parties on or before the Second
Closing shall have been complied with in all material respects; and (iii) the
Seller Parties shall have received a certificate signed by an authorized officer
of IRT, dated the Second Closing Date, with respect to the matters set forth in
the foregoing clauses (i) and (ii); provided, however, that for purposes of
determining the satisfaction of the condition in this clause (i), no effect
shall be given to any “material”, “Material Adverse Effect”, or other similar
qualifier in such representations and warranties.

(b) Buyer Party Second Closing Deliverables. The Seller Parties shall have
received the Buyer Party deliverables set forth in Section 3.05.

Section 10.05 Conditions to Obligations of the Buyer Parties-Second Closing. The
obligations of the Buyer Parties to consummate the transactions contemplated by
this Agreement shall be subject to the fulfillment or the Buyer Parties’ waiver,
in their sole discretion to the extent permitted by applicable Law, at or before
the Second Closing, of each of the following conditions:

(a) Representations and Warranties; Covenants. (i) (A) the representations and
warranties of the Seller Parties contained in Sections 4.01 (Organization, Power
and Authority of the Seller Parties), 4.02 (Capital Structure of the Advisor)
and 4.15 (Brokers) shall be true and correct as written as of the Second Closing
as if made on the Second Closing Date (other than representations and warranties
that are made as of a specific date, which representations and warranties shall
have been true and correct as of such date); (B) the representations and
warranties of the Seller Parties contained in Sections 4.02(c) and (d) (Capital
Structure of the Advisor), 4.03 (Noncontravention) and 4.16(a) (Sufficiency of
Transferred Assets) of this Agreement shall be true and correct in all material
respects as of the Second Closing as if made on the Second Closing Date (other
than representations and warranties that are made as of a specific date, which
representations and warranties shall have been true and correct as of such
date); and (C) the other representations and warranties of the Seller Parties
contained in this Agreement shall be true and correct as of the Second Closing
as if made on the

 

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Second Closing Date (other than representations and warranties that are made as
of a specific date, which representations and warranties shall have been true
and correct as of such date); except with respect to this clause (C) for
breaches or inaccuracies, as the case may be, as to matters that, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect; provided, however, that for purposes of determining the satisfaction of
the condition in this clause (i), no effect shall be given to any “material”,
“Material Adverse Effect”, or other similar qualifier in such representations
and warranties; (ii) the covenants contained in this Agreement required to be
complied with by the Seller Parties on or before the Second Closing shall have
been complied with in all material respects; and (iii) the Buyer Parties shall
have received a certificate signed by an authorized officer of RAIT, dated the
Second Closing Date, with respect to the matters set forth in the foregoing
clauses (i) and (ii).

(b) Seller Party Second Closing Deliverables. The Buyer Parties shall have
received the Seller Party deliverables set forth in Section 3.04.

(c) IRT Equity Offering. IRT shall have closed and received the net proceeds
from the IRT Equity Offering.

(d) Employment Agreements. IRT or one of its Affiliates shall have entered into
employment agreements with each of Scott Schaeffer, James Sebra and Farrell
Ender, substantially in the forms set forth on Exhibits E, F and G,
respectively.

(e) Consents. The Parties shall have received all of the Consents set forth on
Schedule 10.05(e).

ARTICLE XI

TERMINATION

Section 11.01 Termination. This Agreement may only be terminated before the
Second Closing:

(a) by the mutual written consent of the Seller Parties and the Buyer Parties;

(b) by the Seller Parties, if the Buyer Parties shall have breached any
representation or warranty or failed to comply with any covenant or agreement
applicable to the Buyer Parties that individually or in the aggregate with all
other such breaches or failures to comply would cause any Closing Condition set
forth in Section 10.04(a) not to be satisfied and such breach is not cured
within thirty (30) days following written notice to the Buyer Parties or is
incapable of being cured by the Outside Date; provided, however, that the Seller
Parties are not then in material breach of this Agreement;

(c) by the Buyer Parties, if the Seller Parties shall have breached any
representation or warranty or failed to comply with any covenant or agreement
applicable to the Seller Parties that individually or in the aggregate with all
other such breaches or failures to comply would cause any Closing Condition set
forth in Section 10.05(a) not to be satisfied, and such breach is not cured
within thirty (30) days following written notice to the Seller Parties or is
incapable of being cured by the Outside Date; provided, however, that the Buyer
Parties are not then in material breach of this Agreement;

 

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(d) by either the Seller Parties or the Buyer Parties if the Second Closing
shall not have occurred by January 31, 2017 (the “Outside Date”); provided,
however, that the right to terminate this Agreement under this Section 11.01(d)
shall not be available to a Party whose material and uncured breach of any
representation, warranty or covenant in this Agreement shall have been the cause
of, or shall have resulted in, the failure of the Second Closing to occur by
such date; and provided further, that the Outside Date shall automatically be
extended to March 1, 2017 if the IRT Equity Offering has closed on or prior to
the Outside Date; or

(e) by either the Seller Parties or the Buyer Parties in the event (i) of the
issuance of a final, nonappealable Order permanently restraining or prohibiting
the consummation of the Transactions; or (ii) the denial of a Required Approval
by any Governmental Authority that must grant such Required Approval if such
denial has become final and nonappealable;

Section 11.02 Notice of Termination. A Party desiring to terminate this
Agreement pursuant to Section 11.01 shall give written notice of such
termination to the other Parties.

Section 11.03 Effect of Termination; Break Up Fee.

(a) If this Agreement is terminated by the Seller Parties pursuant to Section
11.01(b) due to a material breach of the Agreement by the Buyer Parties, or, if
the Second Closing does not occur prior to the Outside Date because an equity
offering of IRT common stock does not result in net proceeds of at least
$83,000,000, the Parties agree that the Seller Parties shall have suffered a
loss and value of an incalculable nature and amount, unrecoverable in law, and
the Buyer Parties shall pay to the Seller Parties an amount equal to actual
documented expenses incurred in connection with this Agreement or the
Transactions contemplated hereby, including employee-related expenses
(“Employee-Related Expenses”), in an amount not to exceed $3,400,0000 (the
“Buyer Break Up Fee”). For the avoidance of doubt, “Employee-Related Expenses”
shall consist solely of payments made or required to be made to RAIT executive
officers as a result of the termination of the Transactions and which exceed
normal and customary compensation. The Buyer Break Up Fee shall be payable in
cash by wire transfer no later than three (3) Business Days after such
termination or the Outside Date.

(b) If this Agreement is terminated by the Buyer Parties pursuant to Section
11.01(c) due to a material breach of the Agreement by the Seller Parties, the
Parties agree that the Buyer Parties shall have suffered a loss and value of an
incalculable nature and amount, unrecoverable in law, and the Seller Parties
shall pay to the Buyer Parties an amount equal to actual documented expenses
incurred in connection with this Agreement or the Transactions contemplated
hereby, including employee-related expenses, in an amount not to exceed
$3,400,000 (the “Seller Termination Fee”). The Seller Termination Fee shall be
payable in cash by wire transfer no later than three (3) Business Days after
such termination.

(c) If this Agreement is terminated pursuant to Section 11.01, this Agreement
shall thereupon become null and void and of no further force and effect, except
for the provisions of (a) Section 6.03, (b) Section 11.01 and this Section 11.03
and (c) Article XIII. Nothing in this Section 11.03 shall be deemed to release
any Party from any Liability for any breach by such Party of any term of this
Agreement or impair the right of any party to compel specific performance by any
other party of any term of this Agreement; provided, however, that, if this
Agreement is validly terminated pursuant to this Article XI, no Party shall have
any remedy or right to recover for any Liabilities resulting from any breach of
this Agreement unless such breach was a knowing and intentional breach or
intentional fraud on the part of the breaching Party.

 

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ARTICLE XII

INDEMNIFICATION

Section 12.01 Survival. The representations and warranties of the Seller Parties
and the Buyer Parties contained in or made pursuant to this Agreement shall
survive in full force and effect until twenty-four (24) months following the
Second Closing Date, at which time they shall terminate and no claims shall be
made for indemnification under Sections 12.02 or 12.03 thereafter; provided,
however, that that the Seller Fundamental Representations and the Buyer
Fundamental Representations shall survive in full force and effect for the
applicable statute of limitations with respect thereto, at which time they shall
terminate (and no claims shall be made for indemnification under Sections 12.02
or 12.03 thereafter); it being understood that in the event notice of any claim
for indemnification under Sections 12.02 or 12.03 shall have been given within
the applicable survival period, the representations and warranties that are the
subject of such indemnification claim shall survive with respect to such claim
until such time as such claim is finally resolved. The agreements and covenants
contained in this Agreement that by their terms contemplate performance after
the Second Closing (including Article XIII) shall survive the Second Closing in
accordance with their terms, and the covenants and agreements of the Parties
contained herein that by their terms are to be performed prior to the Second
Closing Date shall not survive the Second Closing; it being understood that in
the event notice of any claim for indemnification under Sections 12.02 or 12.03
shall have been given within the applicable survival period, the agreements and
covenants that are the subject of such indemnification claim shall survive with
respect to such claim until such time as such claim is finally resolved.

Section 12.02 Indemnification by the Seller Parties.

(a) From and after the First Closing, RAIT and the RAIT Selling Shareholders
shall, with respect to the purchase and sale of the IRT Common Stock, or the
Second Closing, RAIT, Asset Seller, and Interest Seller shall, with respect to
the purchase and sale of the Membership Interests and the Transferred Assets, on
the terms and subject to the conditions of this Agreement, jointly and
severally, indemnify and hold harmless the Buyer Parties and their Affiliates
(collectively, the “Buyer Indemnified Parties”) from and against, and reimburse
any Buyer Indemnified Party for, all Losses that such Buyer Indemnified Party
may suffer or incur, or become subject to, resulting or arising from:

(i) prior to their expiration in accordance with Section 12.01, the failure of
any representations or warranties made by the Seller Parties in this Agreement
to be true and correct as of the date hereof or as of the First Closing Date or
Second Closing Date, as applicable (or, if such representations or warranties
are made as of a specific date, as of such date) (it being understood that for
purposes of this Section 12.02 and solely for purposes of determining Losses
(but not determining the failure to be true and correct of any representation or
warranty), any qualifications in the text of any such representation or warranty
relating to materiality, Material Adverse Effect, or similar qualification shall
be disregarded for purposes of determining whether such representation or
warranty was true and correct);

 

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(ii) any breach or failure by any of the Seller Parties to perform any of its
covenants or agreements contained in this Agreement;

(iii) any Excluded Liability; or

(iv) (A) any Taxes for which Asset Seller (with respect to the Business) or the
Advisor is liable as a result of Asset Seller (with respect to the Business) or
the Advisor being a member of any affiliated, consolidated, combined, unitary or
similar Tax group at any time on or prior to the Second Closing Date pursuant to
Treasury Regulation Section 1.1502-6 (or under any similar provision of Law),
(B) any Taxes imposed on Asset Seller (with respect to the Business) or the
Advisor (including as transferee or successor) for taxable years or periods
ending at or before the Effective Time, (C) in the case of any Straddle Period,
any Taxes imposed on Asset Seller (with respect to the Business) or the Advisor
for the portion of such Straddle Period ending at the Effective Time, as
determined in accordance with Section 9.03, (D) any Taxes attributable to the
Excluded Assets or the Excluded Liabilities, (E) any Transfer Taxes that are the
Seller Parties’ responsibility pursuant to Section 9.06 and (F) any Taxes
imposed on Asset Seller (with respect to the Business) or the Advisor, the Buyer
Parties or any of their respective Affiliates as a result of any action taken by
the Seller Parties or any of their respective Affiliates (including the Advisor)
on the Closing Date before the Closing other than in the ordinary course of
business (except to the extent contemplated by this Agreement and the other
Transaction Agreements), provided, however, that any indemnification under
Section 12.02(a)(iv) shall be limited to Taxes relating to Pre-Second Closing
Tax Periods.

(b) Notwithstanding anything in this Agreement to the contrary,

(i) The Seller Parties shall not be required to indemnify or hold harmless any
Buyer Indemnified Party against, or reimburse any Buyer Indemnified Party for,
any Losses pursuant to Section 12.02(a)(i) (other than with respect to the
Seller Fundamental Representations) until the aggregate amount of the Buyer
Indemnified Parties’ Losses exceeds $200,000 (the “Deductible Amount”), at which
point the Seller Parties shall be obligated to indemnify the Buyer Indemnified
Parties for the entire amount of any such Losses;

(ii) the cumulative indemnification obligation of the Seller Parties under
Section 12.02(a)(i) (other than with respect to the Seller Fundamental
Representations) shall in no event exceed $5,000,000 (the “Cap”);

 

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(iii) the cumulative indemnification obligation of the Seller Parties under
Sections 12.02(a)(i), (ii) and (iv) with respect to the purchase and sale of the
Membership Interests and the Transferred Assets shall in no event exceed the
Membership Interests Amount, plus the Transferred Assets Amount;

(iv) the cumulative indemnification obligation of the Seller Parties under
Sections 12.02(a)(i), (ii) and (iv) with respect to the purchase and sale of the
IRT Common Stock shall in no event exceed the IRT Common Stock Amount; and

(v) the Buyer Indemnified Parties shall not have any right to indemnification
under this Agreement with respect to, or based on, Taxes to the extent such
Taxes (A) are attributable to Tax periods (or portions thereof) beginning after
the Effective Time except in the case of any Taxes arising out of a failure of
any representation or warranty contained in Section 4.13 or (B) are due to the
unavailability in any Tax period (or portion thereof) beginning after the
Effective Time of any Tax basis, net operating losses, credits or other Tax
attribute from a Tax period (or portion thereof) ending at or before the
Effective Time except for any unavailability of any Tax basis, net operating
losses, credits or other Tax attribute arising out of a failure of any
representation or warranty contained in Section 4.13.

(c) The limitations set forth in Section 12.02(b) shall not apply in the event
of fraud or willful misconduct by a Seller Party.

Section 12.03 Indemnification by the Buyer Parties.

(a) From and after the First Closing, with respect to the purchase and sale of
the IRT Common Stock, or the Second Closing, with respect to the purchase and
sale of the Membership Interests and the Transferred Assets, on the terms and
subject to the conditions of this Agreement, the Buyer Parties shall, jointly
and severally, indemnify and hold harmless the Seller Parties and their
respective Affiliates (collectively, the “Seller Indemnified Parties”) against,
and reimburse any Seller Indemnified Party for, all Losses that such Seller
Indemnified Party may suffer or incur, or become subject to, resulting or
arising from:

(i) prior to their expiration in accordance with Section 12.01, the failure of
any representations or warranties made by the Buyer Parties in this Agreement to
be true and correct as of the Second Closing Date (or, if such representations
or warranties are made as of a specific date, as of such date) (it being
understood that for purposes of this Section 12.03 and solely for purposes of
determining Losses (but not determining the failure to be true and correct of
any representation or warranty), any qualifications in the text of any such
representation or warranty relating to materiality or similar qualification
shall be disregarded for purposes of determining whether such representation or
warranty was true and correct);

 

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(ii) any breach or failure by the Buyer Parties to perform any of their
covenants or agreements contained in this Agreement;

(iii) (A) any Taxes imposed on the Advisor (including as transferee or
successor) for taxable years or periods beginning after the Effective Time, (B)
in the case of any Straddle Period, any Taxes imposed on the Advisor for the
portion of such Straddle Period beginning after the Effective Time, (C) any
Taxes imposed on or with respect to the Business, the Transferred Assets or the
Assumed Liabilities for any Post-Second Closing Tax Period (other than any such
Taxes imposed on the Advisor), and (D) any Transfer Taxes that are the Buyer
Parties’ responsibility pursuant to Section 9.06;

(iv) any Assumed Liability (other than items for which the Seller Parties are
obligated to indemnify the Buyer Indemnified Parties pursuant to Section 12.02);
or

(v) any obligation of IRT or one of its Subsidiaries to indemnify Asset Seller
pursuant to the property management agreements set forth on Schedule 12.03(a)(v)
for losses occurring prior to the Closing Date.

(b) Notwithstanding anything in this Agreement to the contrary:

(i) The Buyer Parties shall not be required to indemnify or hold harmless any
Seller Indemnified Party against, or reimburse any Seller Indemnified Party for,
any Losses pursuant to Section 12.03(a)(i) (other than with respect to the Buyer
Fundamental Representations) until the aggregate amount of Seller Indemnified
Parties’ Losses exceeds the Deductible Amount, at which point the Buyer Parties
shall be obligated to indemnify the Seller Indemnified Parties for the entire
amount of any such Losses;

(ii) the cumulative indemnification obligation of the Buyer Parties under
Section 12.03(a)(i) (other than with respect to the Buyer Fundamental
Representations) shall in no event exceed the Cap;

(iii) the cumulative indemnification obligation of the Buyer Parties under
Sections 12.03(a)(i), (ii) and (iv) with respect to the purchase and sale of the
Membership Interests and the Transferred Assets shall in no event exceed the
Membership Interests Amount, plus the Transferred Assets Amount;

(iv) the cumulative indemnification obligation of the Buyer Parties under
Sections 12.03(a)(i), (ii) and (iv) with respect to the purchase and sale of the
IRT Common Stock shall in no event exceed the IRT Common Stock Amount; and

(v) the Seller Indemnified Parties shall not have any right to indemnification
under this Agreement with respect to, or based on, Taxes to the extent such
Taxes are attributable to any action taken by a Seller Party or any of its
Affiliates (including the Advisor) on the Second Closing Date before the Second
Closing other than in the ordinary course of business (except to the extent
contemplated by this Agreement and the other Transaction Agreements).

 

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Section 12.04 Notification of Claims.

(a) If any written claim or demand for which an indemnifying party (an
“Indemnifying Party”) may have liability to any Person entitled to be
indemnified under this Agreement (the “Indemnified Party”) is asserted against
or sought to be collected from any Indemnified Party by a third party (a “Third
Party Claim”), such Indemnified Party shall promptly notify the Indemnifying
Party in writing of such Third Party Claim, describing in reasonable detail the
facts and circumstances (to the extent known to the Indemnified Party) with
respect to the subject matter of such Third Party Claim; provided, however, that
the failure to provide such notice shall not release the Indemnifying Party from
any of its obligations under this Article XII except to the extent the
Indemnifying Party is prejudiced by such failure, it being understood that
notices for claims in respect of a breach of a representation, warranty,
covenant or agreement must be delivered before the expiration of any applicable
survival period specified in Section 12.01 for such representation, warranty,
covenant or agreement.

(b) Upon receipt of a notice of a claim for indemnity from an Indemnified Party
pursuant to Section 12.04(a), the Indemnifying Party shall reasonably promptly
after receipt of such notice have the right (but not the obligation) to assume
the defense and control of such Third Party Claim. If the Indemnifying Party
shall assume the defense of such Third Party Claim, it shall allow the
Indemnified Party a reasonable opportunity to participate in the defense of such
Third Party Claim with its own counsel and at its own expense, except that the
Indemnifying Party shall bear the expense of such separate counsel for the
Indemnified Party if (i) the Indemnifying Party requests the Indemnified Party
to participate, (ii) the Indemnifying Party and the Indemnified Party are both
named parties to the proceedings (including any impleaded parties) and the
Indemnified Party shall have reasonably concluded, based on the advice of
counsel, that there may be one or more legal defenses available to the
Indemnified Party that are different from or additional to those available to
the Indemnifying Party or that representation of both parties by the same
counsel would be inadvisable due to an actual or potential conflict, or (iii)
the amount of the monetary recovery is reasonably expected to exceed the amount
the Indemnifying Party is otherwise obligated to provide for under this
Agreement (without giving effect, for this purpose to Section 12.02(b)(i) or
Section 12.03(b)(i), if applicable). The Person that shall control the defense
of any such Third Party Claim (the “Controlling Party”) shall select counsel,
contractors and consultants of recognized standing and competence after
consultation with the other Party (the “Non-Controlling Party”) and shall take
all steps reasonably necessary in the defense or settlement of such Third Party
Claim, subject to Section 12.04(c).

(c) The Non-Controlling Party shall, and shall cause each of its Affiliates and
Representatives to, cooperate reasonably and in good faith with the Controlling
Party in the defense of any Third Party Claim. The Indemnifying Party shall not
consent to a settlement of, or the entry of any judgment arising from, any Third
Party Claim, without the prior written consent of the Indemnified Party, unless
(i) such settlement or judgment involves only the payment of monetary damages,
(ii) the Indemnifying Party shall pay all amounts arising out of such settlement
or judgment concurrently with the effectiveness of such settlement (subject to

 

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Section 12.02(b) or Section 12.03(b), if applicable) and (iii) the Indemnifying
Party shall obtain, as a condition of any settlement or other resolution, a
complete and unconditional release by the Person asserting such Third Party
Claim from all liability of all Indemnified Parties and their respective
Affiliates.

(d) If the Indemnifying Party elects not to defend the Indemnified Party against
a Third Party Claim, the Indemnified Party shall have the right to conduct its
own defense and the Indemnified Party shall be entitled to indemnification for
such Third Party Claim (including the reasonable, actual costs and expenses of
such defense) to the extent otherwise provided in this Agreement.

Section 12.05 Exclusive Remedies. Except (a) as otherwise expressly set forth in
this Agreement, (b) with respect to matters for which the remedy of specific
performance, injunctive relief or other non-monetary equitable remedies are
available, or (c) in the case of intentional fraud or willful misconduct: the
indemnification provisions of this Article XII shall be the sole and exclusive
remedies of any Seller Indemnified Party and any Buyer Indemnified Party,
respectively, for any Losses (including any Losses from claims for breach of
contract, warranty or negligence, and whether predicated on common law, statute,
strict liability or otherwise) that it may at any time suffer or incur, or
become subject to, as a result of, or in connection with, any breach of or
inaccuracy with respect to any representation or warranty set forth in this
Agreement by the Buyer Parties or the Seller Parties, respectively, or any
breach or failure by the Buyer Parties or the Seller Parties, respectively, to
perform or comply with any covenant or agreement set forth herein.

Section 12.06 Additional Indemnification Provisions.

(a) With respect to each indemnification obligation contained in this Article
XII: (i) each such obligation shall be reduced to take account of any net Tax
benefit actually realized by the Buyer Parties or any of their respective
Affiliates in cash or a reduction in Taxes otherwise payable in the tax year in
which such indemnification payment is made or any preceding tax year; (ii) all
Losses shall be net of any amounts actually recovered by the Indemnified Party
pursuant to any indemnification by, or indemnification agreement with, any third
party or any insurance policy or other cash receipts or sources of reimbursement
in respect of such Loss (net of any reasonable, actual costs, expenses, Taxes,
deductibles or premiums incurred in connection with securing or obtaining such
proceeds); and (iii) the Seller Parties shall not be liable for any Losses to
the extent that such Losses suffered or incurred by any Buyer Indemnified Party
result from the operation of the Advisor or the Business after the Second
Closing.

(b) If an Indemnified Party recovers an amount from a third party in respect of
a Loss that is the subject of indemnification hereunder after all or a portion
of such Loss has been paid by an Indemnifying Party pursuant to this Article
XII, the Indemnified Party shall promptly remit to the Indemnifying Party the
excess (if any) of (i) the amount paid by the Indemnifying Party in respect of
such Loss, plus the amount received from the third party in respect thereof (net
of any reasonable, actual costs, expenses, Taxes, deductibles or premiums
incurred in connection with securing or obtaining such proceeds), less (ii) the
full amount of such Loss. Each Indemnified Party shall use commercially
reasonable efforts to recover all such amounts

 

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from third parties and shall notify the Indemnifying Party of such rights and
keep the Indemnifying Party reasonably informed of the efforts employed by such
Indemnified Party in recovering any such amounts from third parties.

(c) If an Indemnifying Party makes any payment for any Losses suffered or
incurred by an Indemnified Party pursuant to the provisions of this Article XII,
such Indemnifying Party shall be subrogated, to the extent of such payment, to
all rights and remedies of the Indemnified Party to any insurance benefits or
other claims of the Indemnified Party with respect to such Losses.

Section 12.07 Mitigation. Each Party shall, and shall cause its applicable
Affiliates and Representatives to, take commercially reasonable steps to
mitigate their respective Losses upon and after becoming aware of any fact,
event, circumstance or condition that has given rise to any Losses for which it
would have the right to seek indemnification hereunder.

Section 12.08 Limitation on Liability. Notwithstanding anything in this
Agreement to the contrary, in no event shall either Party have any Liability
under this Agreement for (a) any consequential Losses that are not the
reasonably foreseeable consequence of the breach giving rise to such Losses as
of the time of such breach or (b) any punitive damages; provided, however, that
the limitations set forth in this sentence shall not apply to any damages to the
extent awarded by a court of competent jurisdiction in connection with a third
party claim; provided, further, that such limitations shall not limit either
Party’s right to recover contract damages in connection with the other Party’s
failure to close in breach or violation of this Agreement.

Section 12.09 Payments. The Indemnifying Party shall pay all amounts payable
pursuant to this Article XII, by wire transfer of immediately available funds,
promptly following receipt from an Indemnified Party of a bill, together with
reasonably detailed back-up documentation, for a Loss that is the subject of
indemnification hereunder, unless the Indemnifying Party in good faith disputes
whether such Loss is properly subject to indemnification hereunder or the amount
thereof, in which event it shall so notify the Indemnified Party. In any event,
the Indemnifying Party shall pay to the Indemnified Party, by wire transfer of
immediately available funds, the amount of any Loss for which it is liable
hereunder no later than three (3) Business Days following any final
determination of such Loss and the Indemnifying Party’s liability therefor. A
“final determination” shall exist when (a) the parties to the dispute have
executed and delivered an agreement in writing, (b) a court of competent
jurisdiction shall have entered a final and non-appealable order or judgment or
(c) an arbitration or like panel shall have rendered a final non-appealable
determination with respect to disputes the parties have agreed to submit
thereto.

 

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ARTICLE XIII

MISCELLANEOUS

Section 13.01 Rules of Construction. The following rules of construction shall
govern the interpretation of this Agreement:

(a) references to “applicable” Law or Laws with respect to a particular Person,
thing or matter means only such Law or Laws as to which the Governmental
Authority that enacted or promulgated such Law or Laws has jurisdiction over
such Person, thing or matter; references to any statute, rule, regulation or
form (including in the definition thereof) shall be deemed to include references
to such statute, rule, regulation or form as amended, modified, supplemented or
replaced from time to time (and, in the case of any statute, include any rules
and regulations promulgated under such statute), and all references to any
section of any statute, rule, regulation or form include any successor to such
section;

(b) when calculating the period of time before which, within which or following
which any act is to be done or step taken pursuant to this Agreement, the date
that is referenced in beginning the calculation of such period will be excluded
(for example, if an action is to be taken within two (2) days after a triggering
event and such event occurs on a Tuesday, then the action must be taken by
Thursday); if the last day of such period is a non-Business Day, the period in
question will end on the next succeeding Business Day;

(c) whenever the context requires, words in the singular shall be held to
include the plural and vice versa, and words of one gender shall be held to
include the other gender as the context requires;

(d) (i) the provision of a table of contents, the division into Articles,
Sections and other subdivisions and the insertion of headings are for
convenience of reference only and shall not affect or be utilized in construing
or interpreting this Agreement; and (ii) references to the terms “Article”,
“Section”, “subsection”, “subclause”, “clause”, “Schedule” and “Exhibit” are
references to the Articles, Sections, subsections, subclauses, clauses,
Schedules and Exhibits to this Agreement unless otherwise specified;

(e) (i) the terms “hereof”, “herein”, “hereby”, “hereto”, and derivative or
similar words refer to this entire Agreement, including the Schedules and
Exhibits hereto; (ii) the terms “include”, “includes”, “including” and words of
similar import when used in this Agreement mean “including, without limitation”
unless otherwise specified; (iii) the term “any” means “any and all”; and
(iv) the term “or” shall not be exclusive and shall mean “and/or”;

(f) (i) references to “days” means calendar days unless Business Days are
expressly specified; (ii) references to “written” or “in writing” include in
electronic form; and (iii) references to “$” mean U.S. dollars;

(g) references to any Person includes such Person’s successors and permitted
assigns; and

(h) each Party has participated in the negotiation and drafting of this
Agreement and if an ambiguity or question of interpretation should arise, this
Agreement shall be construed as if drafted jointly by the Parties and no
presumption or burden of proof shall arise favoring or burdening either Party by
virtue of the authorship of any provision in this Agreement; the language used
herein will be deemed to be the language chosen by the Parties to express their
mutual intent, and no rule of strict construction will be applied against either
Party. Further, prior drafts of this Agreement or the other Transaction
Agreements or the fact that any

 

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clauses have been added, deleted or otherwise modified from any prior drafts of
this Agreement or the other Transaction Agreements shall not be used as an aide
of construction or otherwise constitute evidence of the intent of the Parties;
and no presumption or burden of proof shall arise favoring or disfavoring any
Party by virtue of such prior drafts.

Section 13.02 Expenses. Except as otherwise specified in the Transaction
Agreements, each Party shall pay its own costs and expenses, including legal,
consulting, financial advisor and accounting fees and expenses, incurred in
connection with the Transactions and the Transaction Agreements, irrespective of
when incurred or whether or not the First Closing or Second Closing occurs.

Section 13.03 Notices. All notices and other communications under or by reason
of the Transaction Agreements shall be in writing and shall be deemed to have
been duly given or made (a) when personally delivered, (b) when delivered by
e-mail transmission with receipt confirmed (followed by delivery of an original
by another delivery method provided for in this Section 13.03), (c) one Business
Day after deposit with overnight courier service or (d) when delivered by
registered or certified mail (return receipt requested) or by a national courier
service, in each case to the addresses and attention parties indicated below (or
such other address, e-mail address or attention party as the recipient party has
specified by prior notice given to the sending party in accordance with this
Section 13.03):

 

If to Seller, to:  

RAIT Financial Trust

Two Logan Square

100 N. 18th Street, 23rd Floor

Philadelphia, PA 19103

Attention: Chief Executive Officer

E-mail: sdavidson@rait.com

with a copy (which will not constitute notice) to:  

RAIT Financial Trust

Two Logan Square

100 N. 18th Street, 23rd Floor

Philadelphia, PA 19103

Attention: Chief Legal Officer

E-mail: jreyle@rait.com

with a copy (which will not constitute notice) to:  

Ballard Spahr LLP

1735 Market Street, 51st Floor

Philadelphia, PA 19103

Attention: Justin Klein

E-mail: kleinj@ballardspahr.com

If to Buyer, to:  

Independence Realty Trust, Inc.

Two Logan Square

100 N. 18th Street, 23rd Floor

Philadelphia, PA 19103

Attention: Chief Executive Officer

E-mail: sschaeffer@rait.com

 

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with a copy (which will not constitute notice) to:  

Hogan Lovells US LLP

555 Thirteenth Street NW

Washington, DC 20004

Attention: Stuart Barr

E-mail: stuart.barr@hoganlovells.com

Section 13.04 Public Announcements. Neither any Party nor any Affiliate or
Representative of any Party shall issue or cause the publication of any press
release or public announcement or otherwise communicate with any news media in
respect of the Transaction Agreements or the Transactions without the prior
written consent of the other Parties (which consent shall not be unreasonably
withheld or delayed), except to the extent that such Party is required by
applicable Law or by applicable rules of any stock exchange or quotation system
on which such Party or its Affiliates lists or trades securities (in which case
the disclosing Party will use its commercially reasonable efforts, if permitted
by applicable Law, to (a) advise the other Party before making such disclosure
and (b) provide such other Party a reasonable opportunity to review and comment
on such release or announcement and consider in good faith any comments with
respect thereto).

Section 13.05 Severability. If any term or provision hereof is held invalid,
illegal or unenforceable in any respect under any applicable Law or as a matter
of public policy, the validity, legality and enforceability of all other terms
and provisions hereof shall not in any way be affected or impaired. If the final
judgment of a court of competent jurisdiction or other Governmental Authority
declares that any term or provision hereof is invalid, illegal or unenforceable,
the Parties agree that the court making such determination shall have the power
to reduce the scope, duration, area or applicability of the term or provision,
to delete specific words or phrases, or to replace any invalid, illegal or
unenforceable term or provision with a term or provision that is valid, legal
and enforceable and that comes closest to expressing the intention of the
invalid, illegal or unenforceable term or provision.

Section 13.06 Assignment. This Agreement will be binding upon and inure to the
benefit of and be enforceable by the respective successors and permitted assigns
of the Parties. None of the Parties may assign (whether by operation of Law or
otherwise) this Agreement or any rights, interests or obligations provided by
this Agreement without the prior written consent of the other Parties; provided,
however, that the Buyer Parties may assign (whether by operation of Law or
otherwise) this Agreement and any or all rights and obligations under this
Agreement to any of their respective Affiliates upon prior written notice to the
Seller Parties; provided, further, that no such assignment shall release such
Buyer Party from any Liability under this Agreement. Any attempted assignment in
violation of this Section 13.06 shall be void ab initio.

Section 13.07 No Third-Party Beneficiaries. This Agreement and the other
Transaction Agreements are for the sole benefit of the parties hereto and
thereto and their respective successors and permitted assigns, and, except with
respect to the Buyer Indemnified Parties and the Seller Indemnified Parties
pursuant to Article XII, or as expressly set forth in the applicable Transaction
Agreement, nothing in the Transaction Agreements shall create or be deemed to
create any third-party beneficiary rights in any Person not a party to the
Transaction Agreements, including any Affiliates of any party.

 

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Section 13.08 Entire Agreement. This Agreement (including the Seller Disclosure
Letter) and the other Transaction Agreements (and all exhibits and schedules
hereto and thereto) collectively constitute and contain the entire agreement and
understanding of the Parties with respect to the subject matter hereof and
thereof and supersede all prior negotiations, correspondence, understandings,
agreements and contracts, whether written or oral, among the Parties respecting
the subject matter hereof and thereof.

Section 13.09 Amendments. The Transaction Agreements (including all exhibits and
schedules thereto) may only be amended, restated supplemented or otherwise
modified by written agreement making specific reference to the applicable
Transaction Agreement to be amended, restated, supplemented or otherwise
modified, in each case duly executed by each party to such Transaction
Agreement. No Consent from any Indemnified Party under Article XII (in each case
other than the Parties) shall be required to amend this Agreement.

Section 13.10 Waiver. At any time before the First Closing or Second Closing,
either the Seller Parties or the Buyer Parties may (a) extend the time for the
performance of any obligation or other acts of the other Parties, (b) waive any
breaches or inaccuracies in the representations and warranties of the other
Parties contained in this Agreement or in any document delivered pursuant to
this Agreement, or (c) waive compliance with any covenant, agreement or
condition contained in this Agreement but such waiver of compliance with any
such covenant, agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Any such waiver shall
be in a written instrument duly executed by the waiving Party. No failure on the
part of any Party to exercise, and no delay in exercising, any right, power or
remedy under any Transaction Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of such right, power or remedy by such
Party preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.

Section 13.11 Governing Law. The Transaction Agreements, and any Action that may
be based upon, arise out of or relate or be incidental to any Transaction, any
Transaction Agreement, the negotiation, execution, performance or consummation
thereof or the inducement of any Party to enter therein, whether for breach of
contract, tortious conduct or otherwise, and whether now existing or hereafter
arising (each, a “Transaction Dispute”), shall be governed by and construed and
enforced in accordance with the internal Laws of the State of New York, without
giving effect to any Law or rule that would cause the Laws of any jurisdiction
other than the State of New York to be applied.

Section 13.12 Dispute Resolution; Consent to Jurisdiction.

(a) Any Transaction Dispute shall exclusively be brought and resolved in the
U.S. District Court for the Southern District of New York (where federal
jurisdiction exists) or the Commercial Division of the Supreme Court of the
State of New York sitting in the County of New York (where federal jurisdiction
does not exist), and the appellate courts having jurisdiction of appeals in such
courts. In that context, and without limiting the generality of the foregoing,
each Party irrevocably and unconditionally:

(i) submits for itself and its property to the exclusive jurisdiction of such
courts with respect to any Transaction Dispute and for recognition and
enforcement of any judgment resulting from any Transaction Dispute, and agrees
that all claims in respect of any Transaction Dispute shall be exclusively heard
and determined in such courts;

 

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(ii) agrees that venue would be proper in such courts, and waives any objection
that it may now or hereafter have that any such court is an improper or
inconvenient forum for the resolution of any Transaction Dispute; and

(iii) agrees that the mailing by certified or registered mail, return receipt
requested, to the Persons listed in Section 13.03 of any process required by any
such court, will be effective service of process; provided, however, that
nothing herein will be deemed to prevent a Party from making service of process
by any means authorized by the Laws of the State of New York.

(b) The foregoing consent to jurisdiction shall not constitute submission to
jurisdiction or general consent to service of process in the State of New York
for any purpose except with respect to any Transaction Dispute.

Section 13.13 Waiver of Jury Trial. To the maximum extent permitted by Law, each
Party irrevocably and unconditionally waives any right to trial by jury in any
forum in respect of any Transaction Dispute and covenants that neither it nor
any of its Affiliates will assert (whether as plaintiff, defendant or otherwise)
any right to such trial by jury. Each Party certifies and acknowledges that (a)
such Party has considered the implications of this waiver, (b) such Party makes
this waiver voluntarily and (c) such waiver constitutes a material inducement
upon which such Party is relying and will rely in entering into the Transaction
Agreements. Each Party may file an original counterpart or a copy of this
Section 13.13 with any court as written evidence of the consent of each Party to
the waiver of its right to trial by jury.

Section 13.14 Admissibility into Evidence. All offers of compromise or
settlement among the Parties or their Representatives in connection with the
attempted resolution of any Transaction Dispute (a) shall be deemed to have been
delivered in furtherance of a Transaction Dispute settlement, (b) shall be
exempt from discovery and production and (c) shall not be admissible into
evidence (whether as an admission or otherwise) in any proceeding for the
resolution of the Transaction Dispute.

Section 13.15 Remedies; Specific Performance.

(a) Except to the extent set forth otherwise in this Agreement (including in
Section 12.05), all remedies under this Agreement expressly conferred upon a
Party will be deemed cumulative with and not exclusive of any other remedy
conferred hereby, or by Law or equity upon such Party, and the exercise by a
Party of any one remedy shall not preclude the exercise of any other remedy.

 

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(b) Each Party agrees that irreparable damage would occur and the Parties would
not have an adequate remedy at Law if any provision of this Agreement is not
performed in accordance with its specific terms or is otherwise
breached. Accordingly, each Party agrees that the other Parties will be entitled
to injunctive relief from time to time to prevent breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in each case (i) without the requirement of posting any bond or other
indemnity, and (ii) in addition to any other remedy to which it may be entitled,
at law or in equity. Furthermore, each Party agrees not to raise any objections
to the availability of the equitable remedy of specific performance to prevent
or restrain breaches of this Agreement, and to specifically enforce the terms of
this Agreement to prevent breaches or threatened breaches of, or to enforce
compliance with, the covenants and obligations of such Party under this
Agreement. Each Party agrees that any Actions pursuant to this Section 13.15 for
Seller Parties’ breach of Sections 2.01, 2.02, or 2.03 must be brought within 90
days of discovery of such breach.

Section 13.16 Counterparts. Each Transaction Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument. Facsimiles, e-mail
transmission of .pdf signatures or other electronic copies of signatures shall
be deemed to be originals.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be executed
on the date first written above by their respective duly authorized officers.

 

SELLER PARTIES: RAIT FINANCIAL TRUST By:  

/s/ Scott L.N. Davidson

  Name:   Scott L. N. Davidson   Title:   President RAIT TRS, LLC, By:   RAIT JV
TRS SUB, LLC, Its sole Member, By:   RAIT JV TRS, LLC, Its sole Member, By:  
its members:     RAIT Partnership, L.P., Its Member     By:   RAIT General,
Inc., Its General Partner,     By:  

/s/ Scott L.N. Davidson

      Name:   Scott L. N. Davidson       Title:   President     Taberna Realty
Finance Trust, Its Member,     By:  

/s/ Scott L.N. Davidson

      Name:   Scott L. N. Davidson       Title:   President JUPITER COMMUNITIES,
LLC By:  

/s/ Matthew Harker

  Name:   Matthew Harker   Title:   President

--------------------------------------------------------------------------------

RAIT SELLING STOCKHOLDERS: BELLE CREEK MEMBER, LLC, By:   Belle Creek IR
Holdings, LLC, Its sole Member and Manager, By:   RAIT NTR Holdings, LLC, Its
sole Member and Manager, By:   RAIT Partnership, L.P., Its sole Member and
Manager, By:   RAIT General, Inc., Its General Partner, By:  

/s/ Scott L.N. Davidson

  Name:   Scott L. N. Davidson   Title:   President CENTREPOINT MEMBER, LLC, By:
  Centerpoint IR Holdings, LLC, Its sole Member and Manager, By:   RAIT NTR
Holdings, LLC, Its sole Member and Manager, By:   RAIT Partnership, L.P., Its
sole Member and Manager, By:   RAIT General, Inc., Its General Partner, By:  

/s/ Scott L.N. Davidson

  Name:   Scott L. N. Davidson   Title:   President

--------------------------------------------------------------------------------

COPPER MILL MEMBER, LLC, By:   Copper Mill IR Holdings, LLC, Its sole Member and
Manager, By:   Taberna IR Holdings Member, LLC, Its sole Member and Manager, By:
  Taberna Realty Finance Trust, Its sole Member and Manager, By:  

/s/ Scott L.N. Davidson

  Name:   Scott L. N. Davidson   Title:   President CRESTMONT MEMBER, LLC, By:  
Crestmont IR Holdings, LLC, Its sole Member and Manager, By:   Taberna IR
Holdings Member, LLC, Its sole Member and Manager, By:   Taberna Realty Finance
Trust, Its sole Member and Manager, By:  

/s/ Scott L.N. Davidson

  Name:   Scott L. N. Davidson   Title:   President CUMBERLAND MEMBER, LLC, By:
  Cumberland IR Holdings, LLC, Its sole Member and Manager, By:   Taberna IR
Holdings Member, LLC, Its sole Member and Manager, By:   Taberna Realty Finance
Trust, Its sole Member and Manager, By:  

/s/ Scott L.N. Davidson

  Name:   Scott L. N. Davidson   Title:   President

--------------------------------------------------------------------------------

HERITAGE TRACE MEMBER, LLC, By:   Heritage Trace IR Holdings, LLC, Its sole
Member and Manager, By:   Taberna IR Holdings Member, LLC, Its sole Member and
Manager, By:   Taberna Realty Finance Trust, Its sole Member and Manager, By:  

/s/ Scott L.N. Davidson

  Name:   Scott L. N. Davidson   Title:   President RAIT NTR HOLDINGS, LLC, By:
  RAIT Partnership, L.P., Its sole Member and Manager, By:   RAIT General, Inc.,
Its General Partner, By:  

/s/ Scott L.N. Davidson

  Name:   Scott L. N. Davidson   Title:   President TABERNA IR HOLDINGS MEMBER,
LLC, By:   Taberna Realty Finance Trust, Its sole Member   and Manager, By:  

/s/ Scott L.N. Davidson

  Name:   Scott L. N. Davidson   Title:   President

--------------------------------------------------------------------------------

TRESA AT ARROWHEAD MEMBER, LLC, By:   Tresa IR Holdings, LLC, Its sole Member
and Manager, By:   RAIT NTR Holdings, LLC, Its sole Member and Manager, By:  
RAIT Partnership, L.P., Its sole Member and Manager, By:   RAIT General, Inc.,
Its General Partner, By:  

/s/ Scott L.N. Davidson

  Name:   Scott L. N. Davidson   Title:   President BUYER PARTIES: INDEPENDENCE
REALTY TRUST, INC. By:  

/s/ Scott F. Schaeffer

  Name:   Scott F. Schaeffer   Title:   Chief Executive Officer INDEPENDENCE
REALTY OPERATING PARTNERSHIP, LP By:   Independence Realty Trust, Inc., its
general partner By:  

/s/ Scott F. Schaeffer

  Name:   Scott F. Schaeffer   Title:   Chief Executive Officer

--------------------------------------------------------------------------------

EXHIBIT A

DEFINITIONS

“Action” means any action, suit, arbitration, proceeding or investigation by or
before any Governmental Authority.

“Affiliate” means, with respect to any specified Person, any other Person that,
at the time of determination, directly or indirectly through one or more
intermediaries, Controls, is Controlled by or is under common Control with such
specified Person; provided, however, that for the purposes of this Agreement
(a) no Seller Party shall be deemed an Affiliate of a Buyer Party, or, after the
Second Closing, of the Advisor and (b) after the Second Closing, each Buyer
Party shall be deemed an Affiliate of the Advisor.

“Agreement” means this Securities and Asset Purchase Agreement, dated as of
September 27, 2016, by and among the Seller Parties and the Buyer Parties,
including the Seller Disclosure Letter and the Exhibits, and any amendments to
such agreement made in accordance with Section 13.09.

“Antitrust Laws” means the HSR Act and any other Laws applicable to any Buyer
Party, any Seller Party or the Advisor under any applicable jurisdiction that
are designed to prohibit, restrict or regulate actions having the purpose or
effect of monopolization or restraint of trade.

“Business Day” means any day that is not a Saturday, a Sunday or other day on
which commercial banks in the City of New York, New York are required or
authorized by Law to be closed.

“Business Employees” means each employee of a Seller Party or one of its
Affiliates (i) who on the Second Closing Date spends substantially all of his or
her work time in the operation of the Business or (ii) whose employment is
expected to transfer to the Buyer Parties or their respective Affiliates on the
Second Closing Date by operation or applicable Law, including each such employee
who as of the Second Closing Date is on leave of absence (including medical
leave, military leave, workers’ compensation leave and short-term or long-term
disability) or vacation.

“Business Intellectual Property” means (a) the Registered IP and (b) all other
Intellectual Property, other than the Registered IP, that is owned by the
Advisor as of the Second Closing Date or used exclusively by any Seller Party in
the Business.

“Business Plan” means each Employee Plan (i) that is sponsored or maintained by
the Advisor or (ii) for which Liabilities or assets transfer to the Buyer
Parties or their respective Affiliates under applicable Law as a result of the
transactions contemplated by this Agreement.

“Business Technology” means all Technology owned by any Seller Party or the
Advisor and used in the Business.

 

Exhibit A-6

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“Buyer Disclosure Letter” means the disclosure letter dated as of the Agreement
Date delivered by the Buyer Parties to the Seller Parties, and which forms a
part of this Agreement.

“Buyer Fundamental Representations” means the representations and warranties
made in Sections 5.01 (Organization, Power and Authority of the Buyer Parties),
5.02 (Noncontravention; Consents) and 5.07 (Brokers).

“Buyer Transaction Agreements” means this Agreement and each other Transaction
Agreement to which a Buyer Party is named as a party on the signature pages
thereto.

“Buyer Transactions” means the transactions contemplated by the Buyer
Transaction Agreements.

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Consent” means any consent, approval or authorization.

“Control” means, as to any Person, the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise. The terms “Controlled by,”
“Controlled”, “under common Control with” and “Controlling” shall have
correlative meanings.

“Controlled Group Liability” means any and all liabilities (i) under Title IV of
ERISA, (ii) under Section 302 of ERISA, (iii) under Sections 412, 430 and 4971
of the Code, (iv) as a result of a failure to comply with the continuation
coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the
Code, or (v) under corresponding or similar provisions of foreign Laws.

“Debt” means (a) all indebtedness for borrowed money, whether or not contingent,
including accrued but unpaid interest thereon, excluding (for the avoidance of
doubt) trade accounts payable, (b) all obligations for the deferred purchase
price of property or services, (c) all obligations evidenced by notes, bonds,
debentures or other similar instruments, including, in each case, accrued but
unpaid interest thereon, and (d) all Debt of another Person (as described in
clauses (a) through (c)) directly or indirectly guaranteed by the applicable
Person.

“Effective Time” means 11:59 p.m. (New York time) on the Closing Date.

“Employee Plans” means (a) all “employee benefit plans” (within the meaning of
Section 3(3) of ERISA), (b) all retirement, welfare benefit,

 

Exhibit A-7

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bonus, stock option, stock purchase, restricted stock, stock-based, incentive,
supplemental retirement, deferred compensation, retiree health, life insurance,
severance, Code Section 125 flexible benefit, fringe benefit, or vacation plans,
programs, practices, policies or agreements and (c) all individual employment,
termination, severance, retention, change in control or other similar
agreements, in each case, whether or not in writing, that is sponsored,
contributed to or maintained by any Seller Party or any of its Affiliates, to
which any Seller Party or any of its Affiliates is obligated to contribute or
with respect to which any Seller Party or any of its Affiliates has any
Liability, contingent or otherwise, in each case, in which any Business Employee
is eligible to participate or to which he or she is a party, other than
governmental plans or arrangements (including governmental plans or arrangements
that constitute severance, termination indemnities or other similar benefits
maintained for employees outside of the U.S.).

“Employment Agreements” means the Third Amended and Restated Employment
Agreement, entered into as of August 4, 2011, by and between RAIT and Scott F.
Schaeffer, as amended, and the Employment Agreement, entered into as of August
2, 2012, by and between RAIT and James J. Sebra.

“Environmental Law” means any applicable Law concerning protection of the
environment or the handling, use, management, transportation, storage, disposal
or Release of Hazardous Materials.

“Environmental Permit” means any Permit required by Environmental Law and
necessary to the operation of the Business as of the Agreement Date.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means, with respect to any entity, trade or business, any
other entity, trade or business that is, or was at the relevant time, a member
of a group described in Section 414(b), (c), (m) or (o) of the Code or Section
4001(b)(1) of ERISA that includes or included the first entity, trade or
business, or that is, or was at the relevant time, a member of the same
“controlled group” as the first entity, trade or business pursuant to Section
4001(a)(14) of ERISA.

“First Closing Conditions” means conditions to the respective obligations of the
Parties to consummate the transactions contemplated by this Agreement, as set
forth in Sections 10.1, 10.2, and 10.3.

“GAAP” means U.S. generally accepted accounting principles.

“Governmental Authority” means any U.S. federal, state or local or any
supra-national or non-U.S. government, political subdivision, governmental,
regulatory or administrative authority, instrumentality, agency, body or
commission, self-regulatory organization or any court, tribunal, or judicial or
arbitral body.

 

Exhibit A-8

--------------------------------------------------------------------------------

“Hazardous Materials” means any substance, material or waste that is defined or
regulated as “hazardous”, “toxic”, “dangerous”, a “pollutant”, a “contaminant”
or words of similar effect under any applicable Environmental Law, including
asbestos, polychlorinated biphenyls, radioactive materials, petroleum and
petroleum by-products and distillates.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

“Intellectual Property” means all of the following intellectual property and
similar rights, title, or interest in or arising under Law: (a) patents, patent
applications, and patent rights, including any such rights granted upon any
reissue, reexamination, division, extension, provisional, continuation, or
continuation-in-part applications, (b) copyrights, moral rights, mask work
rights, database rights and design rights, in each case, (i) other than rights
to Software and (ii) whether or not registered, and registrations and
applications for registration thereof, and all rights therein provided by
international treaties or conventions and (c) Trade Secrets.

“IRS” means the U.S. Internal Revenue Service.

“IRT Common Stock Amount” means an amount in cash equal to the product of (i)
the number of shares of IRT Common Stock to be acquired by the Buyer Parties
pursuant to this Agreement multiplied by (ii) the price per share of IRT Common
Stock sold in the IRT Equity Offering after deducting all underwriting discounts
and commissions.

“IRT Equity Offering” means the underwritten public offering of shares of IRT
Common Stock with net proceeds in an amount equal to at least Eighty Three
Million Dollars ($83,000,000).

“Knowledge of the Buyer Parties” means the actual knowledge of the Persons
listed on Section 1.01(b) of the Buyer Disclosure Letter.

“Knowledge of the Seller Parties” means the actual knowledge of the Persons
listed on Section 1.01(c) of the Seller Disclosure Letter.

“Law” means any U.S. federal, state, local or non-U.S. statute, law, ordinance,
regulation, rule, code, Order or other requirement or rule of law (including
common law) promulgated by any Governmental Authority.

“Liabilities” means any liability, debt, guarantee, claim, demand, expense,
commitment or obligation (whether direct or indirect, absolute or contingent,
accrued or unaccrued, liquidated or unliquidated, or due or to become due) of
every kind and description, including all costs and expenses related thereto.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, security
interest, encumbrance, claim, lien or charge of any kind.

 

Exhibit A-9

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“Loss” or “Losses” means all losses, damages, costs, expenses, taxes,
settlements, assessments, deficiencies, interest, fines, penalties and other
Liabilities actually suffered or incurred and paid (including removal costs,
remediation costs, closure costs, expenses of investigation and ongoing
monitoring, reasonable attorneys’ fees and reasonable out of pocket
disbursements.

“Material Adverse Effect” means any fact, occurrence, condition, development,
circumstance, effect or change that, individually or taken together with all
such other facts, occurrences, conditions, developments, circumstances, effects
or changes, (1) is or would reasonably be expected to have a material adverse
effect on the Advisor, the Transferred Assets, the Assumed Liabilities or the
business, financial condition, or results of operations of the Business, taken
as a whole, or (2) prevents or would reasonably be expected to prevent the
Seller Parties from timely consummating the Seller Transactions or performing
their respective obligations hereunder; provided, however, that with respect to
the foregoing clause (1) any adverse effect to the extent arising out of,
resulting from or attributable to (a) an event or circumstances or series of
events or circumstances after the Agreement Date affecting (i) the U.S. or the
global economy generally or capital, financial, banking, credit or securities
markets generally, including changes in interest or exchange rates,
(ii) political conditions generally of the U.S. or any other country or
jurisdiction in which any Seller Party, the Advisor or their respective
Affiliates operates or (iii) any industry generally in which the Advisor
operates or in which products or services of the Business are used or
distributed; (b) the negotiation, pendency or announcement of the Transactions
or the performance of obligations under this Agreement or any other Transaction
Agreement, or the identity of the Buyer Parties or their Affiliates; (c) any
changes in applicable Law or GAAP, or accounting principles, practices or
policies the any of the Seller Parties or the Advisor is required to adopt, or
the enforcement or interpretation thereof; (d) actions required to be taken
pursuant to this Agreement or actions taken or omitted to be taken at the
written request of the Buyer Parties; (e) any acts of God, including any
earthquakes, hurricanes, tornadoes, floods, tsunami, or other natural disasters,
or any other damage to or destruction of assets caused by casualty; or (f) any
hostilities, acts of war (whether or not declared), sabotage, terrorism or
military actions, or any escalation or worsening of any such hostilities, act of
war, sabotage, terrorism or military actions or (g) any failure to meet internal
or published projections, estimates or forecasts of revenues, earnings, or other
measures of financial or operating performance for any period (provided that the
underlying causes of such failures (subject to the other provisions of this
definition) shall not be excluded) shall not constitute or be deemed to
contribute to a Material Adverse Effect, and otherwise shall not be taken into
account in determining whether a Material Adverse Effect has occurred or would
be reasonably likely to occur; provided that any adverse effect arising out of,
resulting from or attributable to the foregoing clauses (a), (c), (e) and (f)
may be taken into account in determining whether a Material Adverse Effect has
occurred or would be reasonably likely to occur to the extent such adverse
effect has a disproportionate impact on the Business, taken as a whole, relative
to other similarly situated businesses in the same industry.

“Material Contract” means any contract, agreement, license, lease, arrangement
or commitment (including all amendments, supplements and modifications thereto)
to which a Seller Party or the Advisor is a party or otherwise bound that
(a) contains a legal obligation of such Seller Party or the Advisor to purchase
goods, products or services that are Related to the Business from a supplier
that the

 

Exhibit A-10

--------------------------------------------------------------------------------

Seller Parties reasonably expect will result in purchases in an aggregate amount
that exceeds $100,000 in the calendar year of 2016 or any subsequent calendar
year, (b) is a contract for the purchase or sale of real property by the Advisor
or the Seller Parties that is Related to the Business, (c) is a contract for the
acquisition or disposition of any business or material amount of the equity
ownership interests or assets of any other Person (whether by merger, sale of
stock, sale of assets or otherwise) by the Advisor or Seller Party that is
Related to the Business, (d) is a joint venture, strategic alliance, partnership
or similar contract, in each case, that is Related to the Business, (e) is a
collective bargaining agreement applicable to the Business Employees, (f) is a
settlement, conciliation or similar agreement with any Governmental Authority in
its capacity as such that is applicable to the Advisor or Related to the
Business, (g) is a contract pursuant to which the Advisor or a Seller Party
provides property management services, (h) is a contract to which the Advisor or
a Seller Party is a party to lease or sublease, whether as lessor, lessee,
sublessor, sublessee or otherwise, any real property (including the Transferred
Leased Property), (i) creates any material Lien (other than a Permitted Lien)
over any of the Transferred Assets, (j) relates to any incurrence, assumption or
guarantee of Debt that would constituted an Assumed Liability or (k) that
contains any non-competition requirement, requirement limiting the ability of
the Seller Parties (with respect to the Business) or the Advisor to engage in
any line of business, “most favored nation requirement,” or non-solicitation
requirement.

“Material Permits” means the material Permits required to conduct the Business
as conducted on the Agreement Date.

“Membership Interests Amount” means $40,000,000.

“Order” means any order, writ, judgment, injunction, temporary restraining
order, decree, stipulation, determination or award entered by or with any
Governmental Authority.

“Parent Plans” means each Employee Plan that is not a Business Plan.

“Parties” means, collectively, the Seller Parties and the Buyer Parties, with
each being a “Party.”

“Permits” means all permits, licenses, Consents, registrations, concessions,
grants, franchises, certificates, identification numbers exemptions, waivers,
and filings issued or required by any Governmental Authority or any other Person
under applicable Law.

“Permitted Liens” means the following Liens: (a) Liens for Taxes, assessments or
other governmental charges or levies that are not yet due or payable or that are
being contested in good faith by appropriate proceedings and for which adequate
reserves have been established; (b) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen, workmen, repairmen and other
Liens imposed by Law and on a basis consistent with past practice; (c) Liens
incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance or other types of social security;
(d) zoning, entitlement, building and other generally applicable land use and
environmental restrictions by a Governmental Authority; and (e) Liens incurred
in the ordinary course of business securing Liabilities that are not material to
the Transferred Assets.

 

Exhibit A-11

--------------------------------------------------------------------------------

“Person” means any natural person, general or limited partnership, corporation,
company, trust, limited liability company, limited liability partnership, firm,
association or organization or other legal entity.

“Post-Second Closing Tax Period” means any taxable period beginning after the
Effective Time and, in the case of any Straddle Period, the portion of such
Straddle Period beginning after the Effective Time.

“Pre-Second Closing Period” means the period beginning on the Agreement Date and
ending on the earlier of the Closing Date or the date this Agreement is
terminated in accordance with its terms.

“Pre-Second Closing Tax Period” means any taxable period ending on or before the
Effective Time, and in the case of any Straddle Period, the portion of such
Straddle Period ending at the Effective Time.

“Property Taxes” means real, personal and intangible ad valorem property Taxes.

“Real Properties” means the Transferred Leased Property.

“Registered IP” means the patents, patent applications, and copyright
registrations that are Related to the Business.

“Related to the Business” means (a) exclusively used in, or (b) exclusively
arising, directly or indirectly, out of, the operation or conduct of, the
Business.

“Release” means any actual or threatened discharging, depositing, dispersing,
disposing, dumping, emitting, emptying, escaping, injecting, leaching, leaking,
pouring, pumping, releasing or spilling of any hazardous substance into or
through the environment.

“Representative” of a Person means the directors, officers, employees, advisors,
agents, consultants, attorneys, accountants, investment bankers or other
representatives of such Person.

“Required Approvals” means the approvals set forth in Section 10.01(b) of the
Seller Disclosure Letter.

“Required Notices” means the notifications set forth in Section 10.01(b) of the
Seller Disclosure Letter.

 

Exhibit A-12

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“Required Waiting Periods” means the waiting periods set forth in Section
10.01(b) of the Seller Disclosure Letter.

“Second Closing Conditions” means conditions to the respective obligations of
the Parties to consummate the transactions contemplated by this Agreement, as
set forth in Sections 10.1, 10.4, and 10.5.

“Securities Act” means the Securities Act of 1933.

“Seller Disclosure Letter” means the disclosure letter dated as of the Agreement
Date delivered by the Seller Parties to the Buyer Parties, and which forms a
part of this Agreement.

“Seller Fundamental Representations” means the representations and warranties
made in Sections 4.01 (Organization, Power and Authority of the Seller Parties
and the Advisor), 4.03 (Noncontravention; Consents), 4.13 (Taxes) and 4.15
(Brokers).

“Seller Transaction Agreements” means this Agreement and each other Transaction
Agreement to which any Seller Party is named as a party on the signature pages
thereto.

“Seller Transactions” means the transactions contemplated by the Seller
Transaction Agreements.

“Software” means all (a) computer programs, including all software
implementation of algorithms, models and methodologies, whether in source code,
object code, human readable form or other form, (b) databases and compilations,
including all data and collections of data, whether machine readable or
otherwise, (c) descriptions, flow charts and other work products used to design,
plan, organize and develop any of the foregoing, screens, user interfaces,
report formats, firmware, development tools, templates, menus, buttons and
icons, and (d) all documentation including user manuals and other training
documentation relating to any of the foregoing.

“Subsidiary” of any specified Person means any other Person of which such first
Person owns (either directly or through one or more other Subsidiaries) a
majority of the outstanding equity securities or securities carrying a majority
of the voting power in the election of the board of directors or other governing
body of such Person.

“Tax” or “Taxes” means any federal, state, local or foreign income, net income,
excise, gross receipts, ad valorem, value-added, sales, use, employment,
franchise, profits, gains, property, transfer, payroll, intangibles, license,
stamp, occupation, environmental, windfall profit, or alternative or add-on
minimum tax, or any other tax of any kind whatsoever (whether payable directly
or by withholding) and any similar imposts, levies and assessments imposed by
any Taxing Authority, together with any interest and any penalties, additions to
tax or additional amounts imposed with respect thereto.

 

Exhibit A-13

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“Tax Returns” means all returns and reports (including elections, declarations,
disclosures, schedules, estimates, claims for refunds and information returns)
filed or supplied or required to be filed or supplied to a Taxing Authority
relating to Taxes.

“Taxing Authority” means any U.S. federal, state or local or non-U.S.
jurisdiction (including any subdivision and any revenue agency of a
jurisdiction) imposing Taxes and the agencies, if any, charged with the
collection of such Taxes for such jurisdiction.

“Technology” means, collectively, all technology, designs, formulae, algorithms,
procedures, methods, discoveries, processes, techniques, ideas, know-how,
research and development, technical data, tools, materials, specifications,
processes, inventions (whether patentable or unpatentable and whether or not
reduced to practice) apparatus, creations, improvements, works of authorship in
any media, confidential, proprietary or non-public information, and other
similar materials, and all tangible embodiments of the foregoing in any form
whether or not listed herein, and all related technology, other than Software.

“Trade Secrets” means confidential and proprietary information, including rights
relating to know-how or trade secrets, including ideas, concepts, methods,
techniques, inventions (whether patentable or unpatentable), and other works,
whether or not developed or reduced to practice, rights in industrial property,
customer, vendor, and prospect lists, and all associated information or
databases, and other confidential or proprietary information, other than
Software.

“Transaction Agreements” means this Agreement, the Shared Services Agreement,
the Membership Interest Assignment Agreement and the Bill of Sale, in each case
including all exhibits and schedules thereto and all amendments thereto made in
accordance with the respective terms thereof.

“Transactions” means the transactions contemplated by this Agreement and the
other Transaction Agreements.

“Transfer Taxes” means any sales Tax, use Tax, direct or indirect real property
transfer or gains Tax, documentary stamp Tax, mortgage recording or transfer
Tax, value added Tax or similar Taxes.

“Transferred Assets Amount” means $3,000,000.

“Transferred Employee” means each Business Employee who, as of the Second
Closing Date (or, if applicable, such later date that such employee commences
employment with the Buyer Parties or their respective Affiliates pursuant to
Section 8.01), becomes an employee of the Buyer Parties or their respective
Affiliates whether by operation of Law or by acceptance of an offer of
employment from a Buyer Party or one of its Affiliates pursuant to Section 8.01.

“U.S.” means the United States of America.

 

Exhibit A-14

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Other Defined Terms

 

Action    Exhibit A Affiliate    Exhibit A Agreement    Exhibit A Agreement Date
   Preamble Antitrust Laws    Exhibit A Assumed Contracts    Section
2.02(a)(iii) Business Day    Exhibit A Business Employees    Exhibit A Business
Plans    Exhibit A Buyer    Preamble Buyer Disclosure Letter    Exhibit A Buyer
Fundamental Representations    Exhibit A Buyer Indemnified Parties    Section
12.02(a) Buyer Termination Fee    Section 11.03(a) Buyer Transaction Agreements
   Exhibit A Buyer Transactions    Exhibit A Cap    Section 12.02(b)(ii) Code   
Exhibit A Company Equity Interests    Preliminary Statements Company Technology
   Exhibit A Consent    Exhibit A Control    Exhibit A Controlled Group
Liability    Exhibit A Controlling Party    Section 12.04(b) Debt    Exhibit A
Deductible Amount    Section 12.02(b)(i)(B) Disclosure Letter    Exhibit A
Effective Time    Exhibit A Employee Plans    Exhibit A Environmental Law   
Exhibit A Environmental Permit    Exhibit A ERISA    Exhibit A ERISA Affiliate
   Exhibit A Excluded Assets    Section 2.02(b) Excluded Liabilities    Section
2.02(d) First Closing    Section 2.05 First Closing Conditions    Exhibit A
First Closing Date    Section 2.05 GAAP    Exhibit A Government Approvals   
Section 6.04(a) Government Authority    Exhibit A Hazardous Materials    Exhibit
A HSR Act    Exhibit A Indemnified Party    Section 12.04

 

Exhibit A-15

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Indemnifying Party    Section 12.04 Intellectual Property    Exhibit A IRS   
Exhibit A Knowledge of Buyer    Exhibit A Knowledge of Seller    Exhibit A Law
   Exhibit A Liabilities    Exhibit A Lien    Exhibit A Losses    Exhibit A
Material Adverse Effect    Exhibit A Material Contract    Exhibit A Material
Permits    Exhibit A Non-Controlling Party    Section 12.04(b) Order    Exhibit
A Outside Date    Section 11.01(d) Parent Companies    Preliminary Statements
Parent Plans    Exhibit A Parties    Exhibit A Permits    Exhibit A Permitted
Liens    Exhibit A Person    Exhibit A Post-Second Closing Tax Period    Exhibit
A Pre-Second Closing Period    Exhibit A Property Taxes    Exhibit A Purchase
Price    Section 3.01 Real Properties    Exhibit A Registered IP    Exhibit A
Related to the Business    Exhibit A Release    Exhibit A Representative   
Exhibit A Required Approvals    Exhibit A Required Notices    Exhibit A Required
Waiting Periods    Exhibit A Second Closing    Section 2.05 Second Closing
Conditions    Exhibit A Second Closing Date    Section 2.05 Securities Act   
Exhibit A Seller    Preamble, Preamble Seller Fundamental Representations   
Exhibit A Seller Indemnified Parties    Section 12.03(a) Seller Parties   
Preamble Seller Termination Fee    Section 11.03(b) Seller Transaction
Agreements    Exhibit A Seller Transactions    Exhibit A Software    Exhibit A
Straddle Period    Section 9.03

 

Exhibit A-16

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Straddle Period Return    Section 9.02(a) Subsidiary    Exhibit A Tax    Exhibit
A Tax Claim    Section 9.04(a) Tax Returns    Exhibit A Taxes    Exhibit A
Taxing Authority    Exhibit A Technology    Exhibit A Third Party Claim   
Section 12.04(a) Trade Secrets    Exhibit A Transaction Agreements    Exhibit A
Transaction Dispute    Section 13.11 Transactions    Exhibit A Transfer Taxes   
Exhibit A Transferred Employees    Exhibit A Transferred Leased Property   
Section 2.02(a)(vii) Transitional Services Agreement    Preliminary Statements
U.S.    Exhibit A

 

Exhibit A-17

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EXHIBIT B

SHARED SERVICES AGREEMENT

 

Exhibit B-1

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SHARED SERVICES AGREEMENT

by and among

INDEPENDENCE REALTY TRUST, INC.

and

RAIT FINANCIAL TRUST

Dated as of [●]

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SHARED SERVICES AGREEMENT

This SHARED SERVICES AGREEMENT (this “Agreement”), dated as of [●] (the
“Effective Date”), is by and among Independence Realty Trust, Inc., a Maryland
corporation (“IRT”), and RAIT Financial Trust, a Maryland real estate investment
trust (“RAIT”). IRT and RAIT shall be collectively referred to herein as the
“Parties,” and each individually a “Party”.

WHEREAS, pursuant to that certain Securities and Asset Purchase Agreement, dated
as of September 27, 2016, by and among RAIT, Jupiter Communities, LLC, RAIT TRS,
LLC, the RAIT Selling Stockholders, IRT and Independence Realty Operating
Partnership, LP (the “Purchase Agreement”), the Buyer Parties are acquiring from
the Seller Parties (i) all of the membership interests of Independence Realty
Advisor LLC, a Delaware limited liability company (the “Advisor”) and (ii) Asset
Seller’s property management business (the “Business”);

WHEREAS, following the Closing of the transactions contemplated by the Purchase
Agreement, the Advisor and the Business will require certain services, the
physical and human resources for the provision of which will remain with RAIT;
and RAIT will require certain services, the physical and human resources for the
provision of which will have been transferred to IRT; and

WHEREAS, IRT desires to obtain certain services from RAIT for the purpose of
enabling IRT to manage an orderly transition in its operation of the Advisor and
the Business and retain the benefit of operational efficiencies created by the
sharing of such services; and RAIT desires to obtain certain services from IRT
for the purpose of enabling RAIT to retain the benefit of operational
efficiencies created by the sharing of such services.

NOW THEREFORE, for good and valuable consideration provided under this
Agreement, as well as the Purchase Agreement, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1. Definitions. Capitalized terms used in this Agreement but not
otherwise defined herein shall have the meanings ascribed thereto in the
Purchase Agreement.

ARTICLE II

SERVICES

Section 2.1. Scheduled Services.

(a) Upon the terms and subject to the conditions set forth in this Agreement,
IRT agrees to provide, or to cause one or more of its Affiliates or one or more
third parties to provide, to RAIT all services set forth on Schedule A (the “IRT
Services”).

(b) Upon the terms and subject to the conditions set forth in this Agreement,
RAIT agrees to provide, or to cause one or more of its Affiliates or one or more
third parties to provide, to IRT all services in support of the Advisor and the
Business set forth on Schedule B (the “RAIT Services” and together with the IRT
Services, the “Services”).

(c) Anything to the contrary notwithstanding, none of the obligations of the
Parties under the Purchase Agreement shall constitute Services under this
Agreement. To the extent of any conflict between the terms of the Purchase
Agreement and this Agreement, the terms of the Purchase Agreement shall be
controlling.

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Section 2.2. Additional Services. Each of the Parties agrees that, if either
Party, in consultation with the other Party, identifies within 180 days after
the date of this Agreement transition services that such Party believes are
necessary for the continued operation of its business that are not identified on
Schedule A or Schedule B, as applicable, upon the reasonable request of such
Party, the Parties shall cooperate in good faith to modify Schedule A or
Schedule B, as applicable, or enter into additional schedules with respect to
such transition services, upon terms (including fees) and subject to conditions
to be agreed upon in good faith by the Parties. Neither Party shall be obligated
to perform or cause to be performed any such additional services unless and
until the Parties agree in writing as to the price, specifications and other
terms and conditions under which the applicable Party shall provide (or cause to
be provided) such other services.

Section 2.3. Service Standards; Level of Service.

(a) The Parties shall provide Services to one another in a prompt, professional
and workmanlike manner and shall provide the Services to the other Party at a
level of quality, responsiveness and diligence at least equal to the levels
provided by such Party over the twelve (12) month period prior to the Closing
Date for such Services, but in no event at a quality level lower than that
generally provided by such Party to its business (the “Service Standards”). In
no event shall IRT have an obligation to perform any IRT Service in any other
manner, amount or quality unless expressly so specified in Schedule A with
respect to a particular IRT Service or mutually agreed upon after good faith
discussions by the Parties. In no event shall RAIT have an obligation to perform
any RAIT Service in any other manner, amount or quality unless expressly so
specified in Schedule B with respect to a particular RAIT Service or mutually
agreed upon after good faith discussions by the Parties.

Section 2.4. Disclaimer of Warranties. Each of the Parties acknowledges and
agrees that the other Party does not as part of its usual or regular conduct of
business provide any or all of the Services, or any related services, on a
commercial basis. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, EACH PARTY
EXPRESSLY DISCLAIMS ANY AND ALL REPRESENTATIONS OR WARRANTIES, AT LAW OR IN
EQUITY, WITH RESPECT TO THE SERVICES TO BE PROVIDED UNDER THIS
AGREEMENT, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR
PURPOSE, TITLE, NON-INFRINGEMENT AND QUIET ENJOYMENT. NO ORAL OR WRITTEN
INFORMATION OR ADVICE GIVEN BY EITHER PARTY OR ITS AUTHORIZED REPRESENTATIVES
SHALL CREATE A WARRANTY OR IN ANY WAY INCREASE THE SCOPE OF THE OTHER PARTY’S
OBLIGATIONS UNDER THIS AGREEMENT.

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Section 2.5. Subcontracting. Either Party may, with the written consent of the
other Party (which shall not be unreasonably withheld, conditioned or delayed),
engage, or cause one of its Affiliates to engage, one or more parties (including
third parties and/or Affiliates of such Party) to provide some or all of the
applicable Services to be provided by such Party. In the event a Party or its
Affiliates so engage any such parties, such Party shall remain responsible for
ensuring adherence to the Service Standards in the performance of the applicable
Services, compliance by such parties with the applicable terms of this Agreement
and for the indemnification obligations set forth in Article VIII. The Parties
hereby agree that the delivery of any written consent pursuant to this Section
2.4(a) shall not be subject to the notice requirements set forth in Section 12.1
and any such written consent may be delivered via electronic mail.

Section 2.6. Cooperation.

(a) Each of the Parties will share information and otherwise cooperate to the
extent necessary to facilitate the provision of Services pursuant to this
Agreement. The Parties will cooperate in a commercially reasonable manner to
facilitate the provision of Services as described herein. Each Party shall, at
all reasonable times under the circumstances, make available to the other Party
properly authorized personnel for the purpose of consultation and decision.

(b) The Parties shall cooperate fully to facilitate the termination of each
Service at the earliest time reasonably practicable, but in no event later than
six months after the Effective Date, unless otherwise agreed in writing by the
Parties.

(c) Each of the Parties shall follow the policies, procedures and practices of
the providing Party and its Affiliates applicable to the Services that are in
effect as of the Effective Date, as may be modified from time to time subject to
Section 2.2, so long as such Party has been provided with notice (in writing,
where available) of such policies, procedures and practices.

(d) A failure of a Party to act in accordance with this Section 2.6 that
prevents the other Party or its Affiliates or third parties from providing a
Service hereunder shall relieve the other Party of its obligation to provide
such Service until such time as the failure has been cured; provided, that such
Party has been notified in writing of such failure.

Section 2.7. Certain Changes. Either Party may change (a) its policies and
procedures, (b) any Affiliates and/or third parties that provide any Services or
(c) the location from which any Service is provided at any time; provided that
each Party shall remain responsible for the performance of the applicable
Services in accordance with this Agreement. Each Party shall provide the other
Party with prompt written notice of any changes described in the prior
sentence. Any such notice shall be provided to such other Party as soon as
practicable prior to the effectiveness of such change or, if prior notice of
such change is not practicable, as soon as practicable after the effectiveness
of such change. The Parties shall work together in good faith to minimize any
negative impact that any change in the policies, procedures and practices of a
Party and its Affiliates may have on the ability of the other Party to use the
applicable Services.

Section 2.8. Timely Transition. Unless otherwise agreed in writing by the
Parties, each Party shall use commercially reasonable efforts to transition the
applicable Services to its own operations and responsibility as promptly as
possible after the Effective Date.

--------------------------------------------------------------------------------

ARTICLE III

LIMITATIONS

Section 3.1. General Limitations.

(a) In no event shall either Party be obligated to maintain the employment of
any specific employee or acquire any specific additional equipment or software,
unless the other Party agrees to bear its allocated portion of any associated
costs; provided that each Party shall remain responsible for the performance of
the applicable Services in accordance with this Agreement.

(b) Neither Party shall be obligated to provide, or cause to be provided, any
Service to the extent that the provision of such Service would require such
Party, any of its Affiliates or any of their respective officers, directors,
employees, agents or representatives to violate any applicable Laws.

Section 3.2. Third Party Consents and Limitations.

(a) Prior to the Effective Date, each Party will have obtained, with the
reasonably requested cooperation of the other Party any third party consents
necessary for provision of the applicable Services during the Term. The costs
associated with obtaining any third party consents shall be borne by the Party
receiving the applicable Service.

(b) Each Party acknowledges and agrees that any Services provided through third
parties or using third party Intellectual Property are subject to the terms and
conditions of any applicable agreements between the applicable Party or its
Affiliate and such third parties, copies of which have been made available to
the other Party.

Section 3.3. Force Majeure. In the event that either Party is wholly or
partially prevented from, or delayed in, providing one or more Services, or one
or more Services are interrupted or suspended, by reason of events beyond its
reasonable control (including acts of God, acts, orders, restrictions or
interventions of any civil, military or government authority, fire, explosion,
accident, floods, earthquakes, embargoes, epidemics, war (declared or
undeclared), acts of terrorism, hostilities, invasions, revolutions, rebellions,
insurrections, sabotages, nuclear disaster, labor strikes, civil unrest, riots,
power or other utility failures, disruptions or other failures in internet or
other telecommunications lines, networks and backbones, delay in transportation,
loss or destruction of property and/or changes in Laws) (each, a “Force Majeure
Event”), provided that such Party is taking commercially reasonable steps to
minimize the impact and duration of such Force Majeure Event, such Party shall
not be obligated to deliver the affected Services during such period, and the
other Party shall not be obligated to pay for any Services not delivered.

--------------------------------------------------------------------------------

ARTICLE IV

PAYMENT

Section 4.1. Fees.

(a) In consideration for each IRT Service, RAIT shall pay to IRT an amount for
such IRT Service calculated as set forth in Schedule A.

(b) In consideration for each RAIT Service, IRT shall pay to RAIT an amount for
such RAIT Service calculated as set forth in Schedule B.

Section 4.2. Billing and Payment Terms. Each Party shall invoice the other Party
for costs payable hereunder in arrears on a monthly basis and such other Party
shall remit full payment within thirty (30) days after the date of such
invoice. Any late payment of an amount under this Agreement to be paid by the
relevant Party shall bear simple interest from and including the date such
payment is due under this provision until, but excluding, the date of payment,
at a rate per annum equal to the rate announced by Citibank, N.A. as its “Base
Rate” plus two percent (2%).

Section 4.3. Sales Taxes. All consideration under this Agreement is exclusive of
any sales, transfer, value-added, goods or services tax or similar gross
receipts based tax (excluding all other taxes including taxes based upon or
calculated by reference to income, receipts or capital) imposed against or on
the Services (“Sales Taxes”). The Party receiving Services shall be responsible
for, and shall indemnify and hold the other Party harmless from and against, any
such Sales Taxes.

Section 4.4. Record Keeping and Audit Right.

(a) Each Party shall keep, and, as applicable, cause its Affiliates to keep,
complete and accurate books and records relating to the costs charged to the
other Party hereunder, including the basis for calculating such costs (the
“Transition Books and Records”) for a period of one (1) year following the
expiration of the Term (“Audit Period”).

(b) During the Term and the Audit Period, each Party, at its own cost and
expense, shall have the right to inspect the Transition Books and Records of the
other Party (upon reasonable, prior written notice, during normal business
hours), for the purposes of verifying the accuracy of the invoices provided to
such Party hereunder. Each Party may only exercise the foregoing inspection
right once during any calendar quarter, except in the event that such Party
reasonably believes represents there is a material discrepancy in the invoices
that it has been provided.

(c) In the event the audit produces a discrepancy between the fees and expenses
invoiced to a Party and the actual Services performed by the other Party, the
Party receiving the applicable Services shall immediately notify the other Party
of such difference and indicate the amount by which it believes the fees and
expenses invoiced exceed the Services performed. Within twenty (20) business
days of receipt of notice of a discrepancy from the Party receiving the
applicable Services, the other Party shall (i) reimburse such Party for the
amount of

--------------------------------------------------------------------------------

the discrepancy arising out of the audit or (ii) notify such Party that it
disputes the results of the audit. If a Party notifies the Party receiving
Services of a dispute, such dispute shall be resolved in accordance with the
procedures set forth in Article X hereof. Any Transition Books and Records that
relate to any dispute under this Section 4.4 shall continue to be kept by the
applicable Party until a complete and final resolution has been reached by the
Parties.

(d) The expenses of the audit inspection shall be paid by the Party receiving
the applicable Services; provided, however, that if the results of such audit,
as finally determined pursuant to Section 4.4(c), reveal that the other Party
has inaccurately calculated the fees and expenses resulting in an overcharge of
such fees and expenses by more than five percent (5%) of the actual fees and
expenses for the Services provided herein, the expenses of the audit inspection
shall be paid by the Party providing the applicable Services.

(e) Anything to the contrary notwithstanding, each Party shall, and shall cause
its Affiliates to, keep books and records relating to the performance of
Services hereunder (the “Service Records”) consistent with their document and
information retention policies in effect as of the Closing Date. During the Term
and the Audit Period, each Party shall have the right, at its own cost and
expense, to inspect the Service Records of the other Party (upon reasonable,
prior written notice, during normal business hours), for the purpose of
confirming that the applicable Services are being performed in accordance with
the Service Standards, or to address any error in the product of any
Services. Each Party may only exercise the foregoing inspection right once
during any calendar quarter, except to address any matter that such Party
reasonably believes represents material non-compliance by the other Party or its
Affiliates with any Service Standards or any material error in the product of
any Services.

ARTICLE V

CONFIDENTIALITY

Section 5.1. Confidentiality. Each Party acknowledges that the other possesses,
and will continue to possess, information that has been created, discovered or
developed by them and/or in which property rights have been assigned or
otherwise conveyed to them, which information has commercial value and is not in
the public domain. The proprietary information of each Party will be and remain
the sole property of such Party and its assigns. Each Party shall use the same
degree of care that it normally uses to protect its own proprietary information
to prevent the disclosure to third parties of information that has been
identified as proprietary by written notice to such Party from the other Party,
or that can be reasonably inferred by such Party to be proprietary due to its
content or the circumstances under which it was provided. Neither Party shall
make any use of the information on the other which has been identified as
proprietary except as contemplated or required by the terms of this Agreement.
Notwithstanding the foregoing, this Section 5.1 shall not apply to any
information that a Party can demonstrate: (a) was, at the time of disclosure to
it, in the public domain through no fault of such Party; (b) was received after
disclosure to it from a third party who had a lawful right to disclose such
information to it; or (c) was independently developed by the receiving Party.

--------------------------------------------------------------------------------

ARTICLE VI

INTELLECTUAL PROPERTY

Section 6.1. Ownership of Intellectual Property.

(a) Each Party acknowledges and agrees that the Parties shall each retain
exclusive rights to and ownership of their own Intellectual Property, and no
other license or other right, express or implied (except as provided in the last
sentence of each of Section 6.1(b) and Section 6.1(c)), is granted hereunder by
either Party to its Intellectual Property.

(b) As between IRT and RAIT, IRT shall exclusively own all right, title and
interest throughout the world in and to all business processes and other
Intellectual Property rights created by it in connection with the performance of
the IRT Services (“IRT Intellectual Property”), and RAIT hereby assigns any and
all right, title or interest it may have in any such IRT Intellectual Property
to IRT. RAIT shall execute any documents and take any other actions reasonably
requested by IRT to effectuate the purposes of the preceding sentence. IRT
hereby grants to RAIT a royalty-free, fully paid-up, non-exclusive license to
use the IRT Intellectual Property during the Term, solely to the extent
necessary for RAIT to receive the benefit of the IRT Services.

(c) As between IRT and RAIT, RAIT shall exclusively own all right, title and
interest throughout the world in and to all business processes and other
Intellectual Property rights created by it in connection with the performance of
the RAIT Services (“RAIT Intellectual Property”), and IRT hereby assigns any and
all right, title or interest it may have in any such RAIT Intellectual Property
to RAIT. IRT shall execute any documents and take any other actions reasonably
requested by RAIT to effectuate the purposes of the preceding sentence. RAIT
hereby grants to IRT a royalty-free, fully paid-up, non-exclusive license to use
the RAIT Intellectual Property during the Term, solely to the extent necessary
for IRT to receive the benefit of the RAIT Services.

ARTICLE VII

LIMITATION OF LIABILITY

Section 7.1. Limitation of Liability. In no event shall any Party hereto be
liable under or in connection with this Agreement for consequential, incidental,
special, indirect, treble or punitive Losses, Losses based on either the reduced
current or future profitability or earnings or Losses based on a multiple of
such profitability, earnings or other factor, or reduction therein (it being
understood that all Losses shall for purposes of Article VII be determined and
calculated on a direct, dollar-for-dollar basis), except in the case of
liabilities arising from third-party claims. The liability of either Party to
the other Party hereunder shall not exceed the aggregate amounts actually due
and payable pursuant to Article IV hereunder from the Effective Date through the
date the claim accrued.

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ARTICLE VIII

INDEMNIFICATION

Section 8.1. Indemnification of RAIT. Subject to the terms of this Article VIII,
IRT agrees from and after the Effective Date to indemnify, defend and hold
harmless RAIT from and against any and all Losses arising out of, resulting from
or relating to third party claims arising out of (a) a material breach by IRT of
any provision of this Agreement, or (b) any breach of an agreement between RAIT
and any third Person in relation to the RAIT Services caused by IRT.

Section 8.2. Indemnification of IRT. Subject to the terms of this Article VIII,
RAIT agrees from and after the Effective Date to indemnify, defend and hold
harmless IRT from and against any and all Losses arising out of, resulting from
or relating to third party claims arising out of (a) a material breach by RAIT
of any provision of this Agreement, or (b) any breach of an agreement between
IRT and any third Person in relation to the IRT Services caused by RAIT.

Section 8.3. Indemnification Procedures. In the event either IRT or RAIT shall
have a claim for indemnity against the other Party, the Parties shall follow the
procedures set forth in Section 12.04 of the Purchase Agreement.

ARTICLE IX

TERM AND TERMINATION

Section 9.1. Term of Agreement. The term of this Agreement shall commence on the
Effective Date and shall terminate on the date that is six months from the
Effective Date (such period, the “Term”), unless earlier terminated as provided
in this Article IX.

Section 9.2. Termination. In the event: (i) either Party shall fail to pay for
any or all Services in accordance with the terms of this Agreement; (ii) of any
default by either Party, in any material respect, in the due performance or
observance by it of any of the other terms, covenants or agreements contained in
this Agreement; or (iii) either Party shall become or be adjudicated insolvent
and/or bankrupt, or a receiver or trustee shall be appointed for either Party or
its property or a petition for reorganization or arrangement under any
bankruptcy or insolvency Law shall be approved, or either Party shall file a
voluntary petition in bankruptcy or shall consent to the appointment of a
receiver or trustee (in each such case, the “Defaulting Party”); then the
non-Defaulting Party shall have the right, at its sole discretion, (A) in the
case of a default under clause (iii), to terminate immediately the applicable
Service(s) and/or this Agreement and its participation with the Defaulting Party
under this Agreement; and (B) in the case of a default under clause (i) or (ii),
to terminate the applicable Service(s) and/or this Agreement and its
participation with the Defaulting Party under this Agreement if the Defaulting
Party has failed to (x) cure the default within thirty (30) days after receiving
written notice of such default, or (y) take substantial steps towards and
diligently pursue the curing of the default.

--------------------------------------------------------------------------------

Section 9.3. Effect of Termination. In the event that this Agreement or a
Service is terminated:

(a) Each Party agrees and acknowledges that the obligation of the other Party to
provide the terminated Services, or to cause the terminated Services to be
provided, hereunder shall immediately cease. Upon cessation of a Party’s
obligation to provide any Service, the other Party shall stop using, directly or
indirectly, such Service.

(b) Upon request, each Party shall return to the other Party all tangible
personal property and books, records or files owned by such other Party and used
in connection with the provision of Services that are in its possession as of
the termination date.

(c) The following matters shall survive the termination of this Agreement: (i)
the rights and obligations of each Party under Articles V, VI, VII, VIII, this
Section 9.3, Article X and Article XI and (ii) the obligations under Article IV
of the Parties to pay the applicable fees for Services furnished prior to the
effective date of termination.

ARTICLE X

DISPUTE RESOLUTION

Section 10.1. Party Representatives. Each Party will appoint a representative (a
“Service Representative”) responsible for coordinating and managing the delivery
and receipt of the Services, which Service Representative will have authority to
act on such Party’s behalf with respect to matters relating to this
Agreement. The Service Representatives will work in good faith to address any
issues involving the Parties’ relationship under this Agreement (including,
without limitation, any pricing and other Service related matters).

Section 10.2. Escalation Procedure. The Parties shall attempt to resolve any
dispute, controversy or claim arising out of, in connection with, or relating to
this Agreement, whether sounding in contract or tort and whether arising during
or after termination of this Agreement (each, a “Dispute”) in accordance with
the following procedures: Upon the written request of either Party, a senior
executive officer of IRT or a designee of such person and a senior executive
officer of RAIT or that person’s designee shall meet and attempt to resolve any
Dispute between them. If such Dispute is not resolved by discussions between
such officers within ten (10) days after a Party’s written request was made,
then either Party may commence a proceeding relating to such Dispute in
accordance with Section 11.8. No Party may commence a proceeding with respect to
a Dispute unless and until the foregoing procedure has been concluded with
respect to the underlying Dispute.

--------------------------------------------------------------------------------

ARTICLE XI

MISCELLANEOUS

Section 11.1. Notices.

(a) All notices, requests, claims, demands and other communications under this
Agreement will be in writing (including a writing delivered by facsimile
transmission) and shall be deemed given (i) when delivered, if sent by
registered or certified mail (return receipt requested); (ii) when delivered, if
delivered personally or sent by facsimile (with proof of transmission); or (iii)
on the Business Day after deposit (with proof of deposit), if sent by overnight
mail or overnight courier; in each case, unless otherwise specified or provided
in this Agreement, to the Parties at the following addresses (or at such other
address or fax number for a Party as will be specified by like notice):

As to RAIT:

RAIT Financial Trust

Two Logan Street

100 N. 18th Street, 23rd Floor

Philadelphia, PA 19103

Attention: Chief Executive Officer

Facsimile: [●]

Email: sdavidson@rait.com

With a copy (which will not constitute notice) to:

RAIT Financial Trust

Two Logan Street

100 N. 18th Street, 23rd Floor

Philadelphia, PA 19103

Attention: Chief Legal Officer

Facsimile: (215) 207-2786

Email: jreyle@rait.com

With a copy (which will not constitute notice) to:

Ballard Spahr LLP

1735 Market Street, 51 Floor

Philadelphia, PA 19103

Attention: Justin Klein

Facsimile: (215) 864-8999

Email: kleinj@ballardsparh.com

As to IRT:

Independence Realty Trust, Inc.

Two Logan Square

100 N. 18th Street, 23rd Floor

Philadelphia, PA 19103

Attention: Chief Executive Officer

Facsimile: [●]

Email: sschaeffer@rait.com

--------------------------------------------------------------------------------

With a copy (which shall not constitute notice) to:

Hogan Lovells US LLP

555 13th Street, NW

Washington, DC 20004

Attention: Stuart Barr

Facsimile: (202) 637-5910

Email: stuart.barr@hoganlovells.com

(b) The inability to deliver any notice, demand or request because the Party to
whom it is properly addressed in accordance with this Section 11.1 refused
delivery thereof or no longer can be located at that address shall constitute
delivery thereof to such Party.

(c) Each Party shall have the right from time to time to designate by written
notice to the other Party hereto such other person or persons and such other
place or places as said Party may desire written notices to be delivered or sent
in accordance herewith.

(d) Notices and consents signed and given by an attorney for a Party shall be
effective and binding upon that Party.

Section 11.2. Amendment. Except as set forth in Sections 2.2 and 9.2(a) hereof,
no provision of this Agreement or of any documents or instrument entered into,
given or made pursuant to this Agreement may be amended, changed, waived,
discharged or terminated except by an instrument in writing, signed by the Party
against whom enforcement of the amendment, change, waiver, discharge or
termination is sought.

Section 11.3. Entire Agreement. This Agreement and the other Transaction
Agreements (and all exhibits and schedules hereto and thereto) collectively
constitute and contain the entire agreement and understanding of the Parties
with respect to the subject matter hereof and thereof and supersede all prior
negotiations, correspondence, understandings, agreements and contracts, whether
written or oral, among the Parties respecting the subject matter hereof and
thereof. No representation, promise, inducement or statement of intention has
been made by IRT or RAIT which is not embodied in this Agreement, or in the
attached schedules or the written certificates or instruments of assignment or
conveyance delivered pursuant to this Agreement, and neither IRT nor RAIT shall
be bound by or liable for any alleged representations, promise, inducement or
statement of intention not therein so set forth.

Section 11.4. No Waiver. No failure of any Party to exercise any power given
such Party hereunder or to insist upon strict compliance by the other Party with
its obligations hereunder shall constitute a waiver of any Party’s right to
demand strict compliance with the terms of this Agreement.

Section 11.5. Counterparts. This Agreement, any document or instrument entered
into, given or made pursuant to this Agreement or authorized hereby, and any
amendment or supplement thereto may be executed in two or more counterparts,
and, when so executed, will have the same force and effect as though all
signatures appeared on a single document. Any signature page of this Agreement
or of such an amendment, supplement, document or instrument may be detached from
any counterpart without impairing the legal effect of any signatures thereon,
and may be attached to another counterpart identical in form thereto but having
attached to it one or more additional signature pages. Any counterpart
transmitted via email in format in portable document format (.pdf) shall be
treated as originals for all purposes as to the parties so transmitting.

--------------------------------------------------------------------------------

Section 11.6. Payments. Except as otherwise provided herein, payment of all
amounts required by the terms of this Agreement shall be made in the United
States and in immediately available funds of the United States of America which,
at the time of payment, is accepted for the payment of all public and private
obligations and debts.

Section 11.7. Successors and Assigns. This Agreement shall be binding upon and
insure to the benefit of the successors and permitted assigns of the respective
Parties hereto. No assignment of this Agreement, in whole or in part, shall be
made without the prior written consent of the non-assigning Party (and shall not
relieve the assigning party from liability hereunder) and any purposed
assignment of this Agreement in contravention of the foregoing shall be null and
void ab initio.

Section 11.8. Applicable Law; Venue.

(a) This Agreement shall be governed by and construed and enforced in accordance
with the laws of the Commonwealth of Pennsylvania without giving effect to the
conflict of law rules and principles of that state. To the fullest extent
permitted by Law, the Parties hereby unconditionally and irrevocably waive and
release any claim that the Law of any other jurisdiction governs this Agreement
and this Agreement shall be governed and construed in accordance with the laws
of the Commonwealth of Pennsylvania.

(b) To the maximum extent permitted by applicable Law, any legal suit, action or
proceeding against either of the Parties hereto arising out of or relating to
this Agreement shall be instituted in any federal or state court in
Philadelphia, Pennsylvania, and each of the Parties hereby irrevocably submits
to the exclusive jurisdiction of any such court in any such suit, action or
proceeding. Each of the Parties hereby agrees to venue in such courts and hereby
waives, to the fullest extent permitted by law, any claim that any such action
or proceeding was brought in an inconvenient forum.

(c) Each of the Parties hereto irrevocably waives its right to a trial by jury
with respect to any action, proceeding or claim arising out of or relating to
this Agreement.

Section 11.9. Construction of Agreement. The language in all parts of this
Agreement shall be in all cases construed simply according to its fair meaning
and not strictly for or against either of the Parties hereto. Headings at the
beginning of sections of this Agreement are solely for the convenience of the
Parties and are not a part of this Agreement. When required by the context,
whenever the singular number is used in this Agreement, the same shall include
the plural, and the plural shall include the singular, the masculine gender
shall include the feminine and neuter genders, and vice versa. As used in this
Agreement, the term “IRT” shall include the respective permitted successors and
assigns of IRT, and the term “RAIT” shall include the permitted successors and
assigns of RAIT, if any.

Section 11.10. Severability. If any term or provision of this Agreement is
determined to be illegal, unconscionable or unenforceable, all of the other
terms, provisions and sections hereof will nevertheless remain effective and be
in force to the fullest extent permitted by Law.

--------------------------------------------------------------------------------

Section 11.11. Further Assurances. Each of the Parties agrees to execute such
instruments and take such further actions after the Effective Date as may be
reasonably necessary to carry out the provisions of this Agreement provided that
no material additional cost or liability shall be created thereby.

Section 11.12. No Third Party Beneficiary. It is specifically understood and
agreed that no person shall be a third party beneficiary under this Agreement,
and that none of the provisions of this Agreement shall be for the benefit of or
be enforceable by anyone other than the Parties hereto and their assignees, and
that only the Parties hereto and their permitted assignees shall have rights
hereunder.

Section 11.13. Binding Agreement. Subject to the foregoing limitations, this
Agreement shall extend to, and shall bind, the respective heirs, executors,
personal representatives, successors and assigns of IRT and RAIT.

[Remainder of page intentionally left blank]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be duly
executed on its behalf as of the day and year first above written.

 

INDEPENDENCE REALTY TRUST, INC. By:  

 

Name:   Title:   RAIT FINANCIAL TRUST By:  

 

Name:   Title:  

--------------------------------------------------------------------------------

EXHIBIT C

BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT

This Bill of Sale, Assignment and Assumption Agreement (this “Agreement”), dated
as of [●], 2016, is made by and among Jupiter Communities, LLC, a Delaware
limited liability company (collectively, the “Assignor”), and Independence
Realty Trust Operating Partnership, LP, a Delaware limited partnership (the
“Assignee”). The Assignor and the Assignee are sometimes referred to herein as a
“Party” or collectively as the “Parties.”

W I T N E S S E T H:

WHEREAS, the Assignor and the Assignee are parties to that certain Securities
and Asset Purchase Agreement, dated as of 27, 2016 (the “Purchase Agreement”),
pursuant to which, among other things, Assignor has agreed to transfer to
Assignee all of the Transferred Assets, and to assign the Assumed Liabilities to
Assignee, and Assignee has agreed to receive such Transferred Assets and assume
such Assumed Liabilities; and

WHEREAS, the Assignor and the Assignee desire to enter into this Agreement
simultaneously with the Second Closing to effect certain transactions referred
to in and contemplated by the Purchase Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties, intending to be legally bound,
agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions. Capitalized terms used in this Agreement but not
defined herein shall have the meanings given to them in the Purchase Agreement.

ARTICLE II

TRANSFER OF ASSETS

Section 2.01 Transfer of Assets. Effective at the Effective Time, upon the terms
and subject to the conditions set forth in the Purchase Agreement, the Assignor
hereby sells, conveys, assigns, transfers and delivers to the Assignee, and the
Assignee hereby purchases, acquires and accepts from the Assignor, all of the
Assignor’s rights, title and interest in, to and under each Transferred Asset.

Section 2.02 Excluded Assets. Notwithstanding the provisions of Section 2.01 of
this Agreement, the Excluded Assets are excluded from the Transferred Assets and
shall remain the property of the Assignor after the Second Closing.

 

Exhibit C-1

--------------------------------------------------------------------------------

ARTICLE III

ASSUMPTION OF LIABILITIES

Section 3.01 Assumption of Liabilities. Effective at the Effective Time, upon
the terms and subject to the conditions set forth in the Purchase Agreement, the
Assignee hereby assumes and agrees to timely pay, discharge and perform in
accordance with their terms, the Assumed Liabilities.

Section 3.02 Excluded Liabilities. Nothing expressed or implied in this
Agreement shall be deemed to be an assumption by the Assignee of the Excluded
Liabilities of the Assignor, and such Excluded Liabilities shall remain the
liabilities of the Assignor after the Second Closing.

ARTICLE IV

MISCELLANEOUS

Section 4.01 Further Assurances. From time to time following the Second Closing,
the Parties shall, and shall cause their respective Affiliates to, execute,
acknowledge and deliver all reasonable further conveyances, notices,
assumptions, releases and acquittances and such instruments, and shall take such
reasonable actions, as may be necessary or appropriate to make effective the
transactions contemplated hereby and as may be reasonably requested by the other
Party; provided, however, that except for Assignee’s obligations to discharge an
Assumed Liability, nothing in this Section 4.01 shall require either Party or
its Affiliates to pay money to, commence or participate in any Action with
respect to, or offer or grant any accommodation (financial or otherwise) to, any
third party following the Second Closing.

Section 4.02 Severability. If any term or provision of this Agreement is held
invalid, illegal or unenforceable in any respect under any applicable Law, as a
matter of public policy or on any other grounds, the validity, legality and
enforceability of all other terms and provisions of this Agreement will not in
any way be affected or impaired. If the final judgment of a court of competent
jurisdiction or other Governmental Authority declares that any term or provision
hereof is invalid, illegal or unenforceable, the Parties agree that the court
making such determination will have the power to reduce the scope, duration,
area or applicability of the term or provision, to delete specific words or
phrases, or to replace any invalid, illegal or unenforceable term or provision
with a term or provision that is valid, legal and enforceable and that comes
closest to expressing the intention of the invalid, illegal or unenforceable
term or provision.

Section 4.03 Assignment. This Agreement will be binding upon and inure to the
benefit of and be enforceable by the respective successors and permitted assigns
of the Parties. Neither Party may assign (whether by operation of Law or
otherwise) this Agreement or any rights, interests or obligations provided by
this Agreement without the prior written consent of the other Party; provided,
however, that either Party may assign this Agreement and any or all rights and
obligations under this Agreement to any of its Affiliates upon prior written
notice to the other Party; provided, further, that no such assignment shall
release either Party from any Liability under this Agreement. Any attempted
assignment in violation of this Section 4.03 shall be void ab initio.

 

Exhibit C-2

--------------------------------------------------------------------------------

Section 4.04 No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the Parties and their respective successors and permitted assigns,
and, except as expressly set forth in this Agreement, nothing in this Agreement
shall create or be deemed to create any third-party beneficiary rights in any
Person not a party to this Agreement, including any Affiliates of any Party.

Section 4.05 Entire Agreement. This Agreement and the other Transaction
Agreements (and all exhibits and schedules thereto) collectively constitute and
contain the entire agreement and understanding of the Parties with respect to
the subject matter hereof and thereof and supersede all prior negotiations,
correspondence, understandings, agreements and contracts, whether written or
oral, between the Parties respecting the subject matter hereof and thereof.

Section 4.06 Amendments. This Agreement may be amended, restated, supplemented
or otherwise modified, only by written agreement making specific reference to
this Agreement, duly executed by each Party.

Section 4.07 Waiver. No failure on the part of either Party to exercise, and no
delay in exercising, any right, power or remedy under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of such
right, power or remedy by such Party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.

Section 4.08 Governing Law. This Agreement will be exclusively governed by and
construed and enforced in accordance with the internal Laws of the State of New
York, without giving effect to any Law or rule that would cause the Laws of any
jurisdiction other than the State of New York to be applied.

Section 4.09 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which when taken together shall
constitute one and the same instrument. Facsimiles, e-mail transmission of .pdf
signatures or other electronic copies of signatures shall be deemed to be
originals.

Section 4.10 No Amendment or Modification to Purchase Agreement. Each Party, by
its execution of this Agreement, hereby acknowledges and agrees that neither the
representations and warranties nor the rights, remedies or obligations of any
Party under the Purchase Agreement shall be deemed to be enlarged, modified or
altered in any way by this Agreement. In the event of any inconsistency or
conflict between the terms of this Agreement and the Purchase Agreement, the
terms of the Purchase Agreement shall control. For the avoidance of doubt, each
Party further acknowledges and agrees that the Assignee’s sole recourse for the
breach of any representations, warranties, covenants and agreements relating to
the Transferred Assets and Assumed Liabilities shall be as set forth in the
Purchase Agreement.

[SIGNATURE PAGE FOLLOWS]

 

Exhibit C-3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Parties have caused this Bill of Sale, Assignment and
Assumption Agreement to be duly executed and delivered on the day and year first
above written.

 

ASSIGNOR: JUPITER COMMUNITIES, LLC, a Delaware limited liability company By  

 

  Name:     Title:   ASSIGNEE: INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP, a
Delaware limited partnership By: Independence Realty Trust, Inc., its general
partner By:  

 

  Name:     Title:  

 

Exhibit C-4

--------------------------------------------------------------------------------

EXHIBIT D

MEMBERSHIP INTEREST ASSIGNMENT AND ASSUMPTION AGREEMENT

This MEMBERSHIP INTEREST ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”)
is made and entered into as of [●], by and between RAIT TRS, LLC, a Delaware
limited liability company (“Assignor”), and Independence Realty Trust Operating
Partnership, LP, a Delaware limited partnership (“Assignee”). The Assignor and
the Assignee are sometimes referred to herein as a “Party” or collectively as
the “Parties.”

RECITALS:

A. Assignor owns all of the membership interests (the “Assigned Interests”) in
Independence Realty Advisors, LLC, a Delaware limited liability company (the
“Company”).

B. Assignor desires to transfer, assign and convey to Assignee, and Assignee
desires to acquire and accept, the Assigned Interests as set forth herein.

C. The execution and delivery of this Agreement is a condition to the
consummation of the Second Closing (as defined therein) pursuant to the
Securities and Asset Purchase Agreement, dated as of September 27, 2016 (the
“Purchase Agreement”), by and among Assignor, RAIT Financial Trust, Jupiter
Communities, LLC, the RAIT Selling Stockholders names therein, Independence
Realty Trust, Inc. and Assignee.

D. Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Purchase Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:

1. Assignment. Effective as of the Effective Time, Assignor does hereby convey,
assign, transfer and deliver to Assignee the Assigned Interests, free and clear
of all Liens and, upon delivery of the Assigned Interests, Assignee accepts from
Assignor all right, title and interest in and to the Assigned Interests.

2. Acceptance. Assignee hereby accepts the assignment of the Assigned Interests
and expressly assumes the obligations of Assignor with respect to the Assigned
Interests accruing from and after the date hereof, subject to and in accordance
with the terms of the Purchase Agreement.

3. Subsequent Documents. From time to time following the Second Closing Date,
each of the Parties agrees to execute and deliver and cause their respective
affiliates to execute and deliver to the other Party such additional documents
and instruments and to perform such additional acts as such Parties or their
respective affiliates may determine to be necessary or appropriate to
effectuate, carry out and perform all of the terms, provisions and conditions of
this Agreement.

 

Exhibit D-1

--------------------------------------------------------------------------------

4. Governing Law. This Agreement will be exclusively governed by and construed
and enforced in accordance with the internal Laws of the State of New York,
without giving effect to any Law or rule that would cause the Laws of any
jurisdiction other than the State of New York to be applied.

5. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which when taken together shall
constitute one and the same instrument. Facsimiles, e-mail transmission of .pdf
signatures or other electronic copies of signatures shall be deemed to be
originals.

6. Severability. If any term or provision of this Agreement is held invalid,
illegal or unenforceable in any respect under any applicable Law, as a matter of
public policy or on any other grounds, the validity, legality and enforceability
of all other terms and provisions of this Agreement will not in any way be
affected or impaired. If the final judgment of a court of competent jurisdiction
or other Governmental Authority declares that any term or provision hereof is
invalid, illegal or unenforceable, the Parties agree that the court making such
determination will have the power to reduce the scope, duration, area or
applicability of the term or provision, to delete specific words or phrases, or
to replace any invalid, illegal or unenforceable term or provision with a term
or provision that is valid, legal and enforceable and that comes closest to
expressing the intention of the invalid, illegal or unenforceable term or
provision.

7. Entire Agreement. This Agreement and the other Transaction Agreements (and
all exhibits and schedules thereto) collectively constitute and contain the
entire agreement and understanding of the Parties with respect to the subject
matter hereof and thereof and supersede all prior negotiations, correspondence,
understandings, agreements and contracts, whether written or oral, between the
Parties respecting the subject matter hereof and thereof. Nothing in this
Agreement shall be construed to amend or modify the Purchase Agreement, any
other Transaction Agreement or any of their respective terms in any manner and,
notwithstanding the execution and delivery of this Agreement, the Purchase
Agreement shall remain in full force and effect in accordance with its terms and
shall not be superseded by this Agreement.

8. Assignment. This Agreement will be binding upon and inure to the benefit of
and be enforceable by the respective successors and permitted assigns of the
Parties. Neither Party may assign (whether by operation of Law or otherwise)
this Agreement or any rights, interests or obligations provided by this
Agreement without the prior written consent of the other Party; provided,
however, that either Party may assign this Agreement and any or all rights and
obligations under this Agreement to any of its Affiliates upon prior written
notice to the other Party; provided, further, that no such assignment shall
release either Party from any Liability under this Agreement. Any attempted
assignment in violation of this Section 8 shall be void ab initio.

 

Exhibit D-2

--------------------------------------------------------------------------------

9. No Amendment or Modification to Purchase Agreement. Each Party, by its
execution of this Agreement, hereby acknowledges and agrees that neither the
representations and warranties nor the rights, remedies or obligations of any
Party under the Purchase Agreement shall be deemed to be enlarged, modified or
altered in any way by this Agreement. In the event of any inconsistency or
conflict between the terms of this Agreement and the Purchase Agreement, the
terms of the Purchase Agreement shall control. For the avoidance of doubt, each
Party further acknowledges and agrees that the Assignee’s sole recourse for the
breach of any representations, warranties, covenants and agreements relating to
the Membership Interests shall be as set forth in the Purchase Agreement

10. Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of the Parties and their respective successors and permitted assigns.

[SIGNATURE PAGE FOLLOWS]

 

Exhibit D-3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Parties have caused this Membership Interest Assignment
and Assumption Agreement to be duly executed and delivered as of the date first
written above.

 

ASSIGNOR: RAIT TRS, LLC, By: RAIT JV TRS SUB, LLC, Its sole Member, By: RAIT JV
TRS, LLC, Its sole Member, By: its members:   RAIT Partnership, L.P., Its Member
  By: RAIT General, Inc., Its General Partner,   By:  

 

    Name:     Title:   Taberna Realty Finance Trust, Its Member,   By:  

 

  Name:     Title:   ASSIGNEE: INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP, a
Delaware limited partnership By: Independence Realty Trust, Inc., its general
partner By:  

 

Name:     Title:    

 

Exhibit D-4

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EXHIBIT E

SCOTT SCHAEFFER EMPLOYMENT AGREEMENT

 

Exhibit E-1

--------------------------------------------------------------------------------

EXECUTION COPY

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of             ,
2016, by and between Independence Realty Trust, Inc., a Maryland corporation
(the “Company”), and Scott F. Schaeffer (“Executive”).

WHEREAS, the Company, Independence Realty Operating Partnership, LP, a Delaware
limited partnership (“IROP”), RAIT Financial Trust, a Maryland real estate
investment trust (“RAIT”), RAIT TRS, LLC, a Delaware limited liability company
(“Interest Seller”), Jupiter Communities, LLC, a Delaware limited liability
company (“Asset Seller”), and the entities set forth on the signature pages of
the Purchase Agreement have entered into that certain Securities and Asset
Purchase Agreement, dated as of September     , 2016 (the “Purchase Agreement”);

WHEREAS, pursuant to the Purchase Agreement, at the Second Closing (as defined
in the Purchase Agreement), and on the terms and subject to the conditions set
forth in the Purchase Agreement, Interest Seller shall sell, convey, assign,
transfer and deliver to IROP, and IROP shall purchase, acquire and accept from
Interest Seller, all of Interest Seller’s right, title and interest in and to
the Membership Interests (as defined in the Purchase Agreement), and Asset
Seller shall sell, convey, assign, transfer and deliver to IROP, and IROP shall
purchase, acquire and accept from Asset Seller, all of Asset Seller’s right,
title and interest in, to and under the Transferred Assets (as defined in the
Purchase Agreement);

WHEREAS, Executive is currently employed by RAIT and serves as the Chief
Executive Officer of the Company; and

WHEREAS, in connection with and subject to the Second Closing, the Company
wishes to employ Executive in the position of Chief Executive Officer of the
Company, and Executive wishes to accept such employment, on the terms set forth
below, effective as of the Effective Date (as defined below).

NOW, THEREFORE, in consideration of the Recitals, the mutual promises and
covenants set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

 

1. Employment. The Company agrees to employ Executive, and Executive hereby
accepts such employment and agrees to perform Executive’s duties and
responsibilities, in accordance with the terms, conditions and provisions
hereinafter set forth.

 

  1.1 Employment Term. This Agreement shall become effective from and after the
Second Closing (the “Effective Date”); provided, that, in the event the Second
Closing does not occur by the Outside Date (as defined in the Purchase
Agreement) or the Purchase Agreement is otherwise terminated, this Agreement
shall thereupon become null and void. This Agreement shall continue until the
third anniversary of the Effective Date, unless the Agreement is terminated
sooner in accordance with Section 2 below; and shall be effective for successive
one-year periods in accordance with the terms of this Agreement (subject to
termination as aforesaid) unless either party notifies the other party of
non-renewal in writing prior to three months before the expiration of the then
current term. The period commencing on the Effective Date and ending on the date
on which the term of Executive’s employment under this Agreement shall terminate
is hereinafter referred to as the “Employment Term.”

 

  1.2

Duties and Responsibilities. Executive shall continue to serve as the Chief
Executive Officer of the Company during the Employment Term. Executive also
agrees to continue to serve as the Chairman (the “Chairman”) of the Board of
Directors of the Company (the “Board”), subject to the Board’s right to elect a
different person to serve as Chairman. Executive shall perform all duties and
accept all responsibilities incident to such positions as may be reasonably
assigned to him by the Board. Executive shall serve as a member of the Board
during the Employment Term, subject to the stockholders’ election of Executive
to the Board and reelection of Executive to the

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  Board during each year of the Employment Term. During the Employment Term, the
Company agrees to nominate Executive for election to the Board at any meeting of
the stockholders of the Company where the election of the members of the Board
is included in the purposes of such meeting. Executive shall not receive any
additional compensation for services as a member of the Board.

 

  1.3 Extent of Service. Executive agrees to use Executive’s best efforts to
carry out Executive’s duties and responsibilities under Section 1.2 hereof and,
consistent with the other provisions of this Agreement, to devote substantially
all of Executive’s business time, attention and energy to the performance of
Executive’s duties and responsibilities hereunder. Subject to the requirements
of Section 5.1, the foregoing shall not be construed as preventing Executive
from making investments in other businesses or enterprises provided there is no
conflict with Executive’s ability to satisfy his obligations to the Company.

 

  1.4 Base Salary. For all of the services rendered by Executive hereunder, the
Company shall pay Executive a base salary (“Base Salary”), which shall be at the
annual rate of Six Hundred Ten Thousand Dollars ($610,000) beginning as of the
Effective Date, payable in installments at such times as the Company customarily
pays its other senior level executives. Executive’s Base Salary shall be
reviewed annually for appropriate increases by the Board pursuant to the Board’s
normal performance review policies for senior level executives but shall not be
decreased.

 

  1.5 Bonus. Executive shall be eligible to receive annual bonuses in such
amounts as the Board may approve in its sole discretion or under the terms of
any annual incentive plan of the Company maintained for other senior level
executives.

 

  1.6 Retirement and Welfare Plans and Perquisites. Executive shall be entitled
to participate in all employee retirement and welfare benefit plans and programs
or executive perquisites made available to the Company’s senior level executives
as a group or to its employees generally, as such retirement and welfare plans
or perquisites may be in effect from time to time and subject to the eligibility
requirements of the plans and applicable law. For purposes of any such benefit
plans and programs or executive perquisites that condition participation or
entitlements thereunder on duration of service with the Company, Executive’s
service with RAIT shall be treated as service to the Company. Nothing in this
Agreement shall prevent the Company from amending or terminating any retirement,
welfare or other employee benefit plans or programs from time to time as the
Company deems appropriate.

 

  1.7 Reimbursement of Expenses; Vacation. Executive shall be provided with
reimbursement of reasonable expenses related to Executive’s employment by the
Company on a basis no less favorable than that which may be authorized from time
to time for senior level executives as a group, and shall be entitled to
vacation and sick leave in accordance with the Company’s vacation, holiday and
other pay for time not worked policies. For purposes of any such vacation,
holiday and sick leave policies that condition participation or entitlements
thereunder on duration of service with the Company, Executive’s service with
RAIT shall be treated as service to the Company.

 

  1.8 Incentive Compensation. Executive shall be entitled to participate in any
short-term and long-term incentive programs (including without limitation any
equity compensation plans) established by the Company for its senior level
executives generally.

 

  1.9

Clawback/Recoupment. Notwithstanding any other provision in this Agreement to
the contrary, any compensation paid to Executive pursuant to this Agreement or
any other agreement or arrangement with the Company shall be subject to
mandatory repayment by Executive to the Company if and to the extent any such
compensation paid to Executive is, or in the future becomes, subject to (i) any
“clawback” or recoupment policy that is applicable to all senior executives of
the Company and is limited to the recovery of incentive-based compensation
which, as a result of an accounting restatement by the Company, is in excess of
the compensation which

 

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  should have been received by Executive, or (ii) any law, rule, requirement or
regulation which imposes mandatory recoupment, under circumstances set forth in
such law, rule, requirement or regulation.

 

2. Termination. The Employment Term and Executive’s employment hereunder shall
terminate upon the occurrence of any of the following events:

 

  2.1 Termination Without Cause; Resignation for Good Reason; Non-Renewal by the
Company.

 

  (a) The Company may terminate Executive’s employment at any time without Cause
(as defined in Section 4) upon not less than sixty (60) days’ prior written
notice to Executive. In addition, Executive may initiate a termination of
employment by resigning under this Section 2.1 for Good Reason (as defined in
Section 4). Executive shall give the Company not less than sixty (60) days’
prior written notice of such resignation. In addition, the Company may initiate
a termination of employment by sending a notice of non-renewal of this Agreement
to Executive, as described in Section 1.1.

 

  (b) Upon any termination or resignation described in Section 2.1(a) above,
Executive shall be entitled to receive only the amount due to Executive under
the Company’s then current severance pay plan for employees, if any. No other
payments or benefits shall be due under this Agreement to Executive, but
Executive shall be entitled to receive (i) Executive’s Base Salary due through
his date of termination, (ii) any earned but unpaid annual bonus for the year
preceding the fiscal year of termination, (iii) any amounts owing to Executive
for reimbursement of expenses properly incurred by Executive prior to his date
of termination and which are reimbursable in accordance with Section 1.7; and
(iv) any benefits accrued and earned in accordance with the terms and conditions
of any applicable benefit plans and programs of the Company in which Executive
participated prior to his termination of employment (collectively, the “Accrued
Benefits”).

 

  (c) Notwithstanding the provisions of Section 2.1(b), in the event that
Executive executes and does not revoke the release described in Section 2.7,
Executive shall be entitled to receive, in lieu of any payments or benefits due
to him under the Company’s then current severance pay plan for employees (if
any), the following:

 

  (i) Executive shall receive a lump sum cash payment equal to two and one
quarter times the sum of (x) Executive’s Base Salary, as in effect immediately
prior to his termination of employment and (y) the average annual cash bonus
earned by Executive for the three year period immediately prior to his
termination of employment, or the average annual cash bonus earned by Executive
for the actual number of completed fiscal years immediately prior to his
termination of employment if less than three; provided, however, that if
Executive has been employed by the Company for less than one completed fiscal
year prior to his termination of employment, then the amount used for clause (y)
shall be Executive’s target annual cash bonus for the fiscal year of his
termination of employment. One half of the amount described in the preceding
sentence shall be consideration for Executive’s entering into the restrictive
covenants described in Section 5 below. Unless the payment is required to be
delayed pursuant to Section 18.2 below, the payment shall be made within fifteen
(15) days of the Release Effective Date (as defined below).

 

  (ii)

Executive shall receive a lump sum cash payment equal to a pro rata portion of
the annual cash bonus, if any, that Executive would have earned for the fiscal
year of his termination based on achievement of the applicable performance goals
for such year (the “Cash Bonus”). The pro-rated Cash Bonus shall be determined
by multiplying the Cash Bonus by a fraction, the numerator of which is the
number of days during which Executive was employed by the Company in

 

3

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  the fiscal year of his termination of employment and the denominator of which
is three hundred sixty-five (365). Unless the payment is required to be delayed
pursuant to Section 18.2 below, the payment shall be made on the date that
annual bonuses are paid to similarly situated executives, but in no event later
than two-and-a-half months following the end of the calendar year in which
Executive’s termination date occurs.

 

  (iii) For a period of eighteen (18) months following Executive’s date of
termination, provided Executive and his eligible dependents timely and properly
elect to continue health care coverage under COBRA, Executive shall continue to
receive the medical coverage in effect at the date of his termination of
employment (or generally comparable coverage) for himself and, where applicable,
his spouse and dependents, at the same premium rates as may be charged from time
to time for employees of the Company generally, as if Executive had continued in
employment with the Company during such period.

 

  (iv) The treatment of any outstanding equity awards held by Executive shall be
determined in accordance with the terms of the applicable incentive plan and the
applicable award agreements; provided, however, that any such equity awards that
are subject solely to time-vesting conditions shall become fully vested as of
the date of Executive’s termination of employment.

 

  2.2 Voluntary Termination. Executive may voluntarily terminate his employment
for any reason upon sixty (60) days’ prior written notice or by sending a notice
of non-renewal of this Agreement to the Company, as described in Section 1.1. In
any such event, after the effective date of such termination, except as provided
in Section 2.1 with respect to a resignation for Good Reason, no further
payments shall be due under this Agreement, except that Executive shall be
entitled to receive the Accrued Benefits.

 

  2.3 Disability. The Company may terminate Executive’s employment, to the
extent permitted by applicable law, if Executive (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, or (ii) is, by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than three months under an accident and health plan covering
employees of the Company (“Disability”). If the Company terminates Executive’s
employment for Disability, Executive shall be entitled to receive the following:

 

  (a) Executive shall receive a lump sum cash payment equal to a pro rata
portion of Executive’s target annual cash bonus for the fiscal year of his
termination (or, in the absence of a target bonus opportunity for the fiscal
year, a pro rata portion of the average annual cash bonus earned by Executive
for the three year period immediately prior to his termination of employment or
the average annual cash bonus earned by Executive for the actual number of
completed fiscal years immediately prior to his termination of employment if
less than three) (the “Target Cash Bonus”). The pro-rated Target Cash Bonus
shall be determined by multiplying the Target Cash Bonus by a fraction, the
numerator of which is the number of days during which Executive was employed by
the Company, prior to his termination of employment, in the Company’s fiscal
year in which his termination of employment occurs and the denominator of which
is three hundred sixty-five (365). Except as otherwise required to comply with
the requirements of Section 18 below, payment shall be made on the sixtieth
(60th) day following Executive’s last day of employment with the Company on
account of Disability.

 

  (b) The Company shall pay to Executive the Accrued Benefits.

 

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  2.4 Death. If Executive dies while employed by the Company, the Company shall
pay to Executive’s executor, legal representative, administrator or designated
beneficiary, as applicable, (i) the Accrued Benefits and (ii) a pro-rated Target
Cash Bonus (determined according to Section 2.3(a) above) for the Company’s
fiscal year in which Executive’s death occurs and, except as otherwise required
to comply with the requirements of Section 18 below, shall be paid in a lump sum
cash payment on the sixtieth (60th) day following the date of Executive’s death.
Otherwise, the Company shall have no further liability or obligation under this
Agreement to Executive’s executors, legal representatives, administrators, heirs
or assigns or any other person claiming under or through Executive.

 

  2.5 Cause. The Company may terminate Executive’s employment at any time for
Cause upon written notice to Executive, in which event all payments under this
Agreement shall cease, except for Base Salary to the extent already accrued.
Executive shall be entitled to receive the Accrued Benefits. Whether a
termination is for Cause, as such term is defined in Section 4.1, shall be
determined by the Board in its sole discretion.

 

  2.6 Notice of Termination. Any termination of Executive’s employment shall be
communicated by a written notice of termination to the other party hereto given
in accordance with Section 10. The notice of termination shall (i) indicate the
specific termination provision in this Agreement relied upon, (ii) briefly
summarize the facts and circumstances deemed to provide a basis for a
termination of employment and the applicable provision hereof, and (iii) specify
the termination date in accordance with the requirements of this Agreement.

 

  2.7 Release. Executive agrees that, as a condition to receiving the severance
payments and benefits set forth in Section 2.1, Executive will execute a release
of claims substantially in the form of the release attached hereto as Exhibit A.
Within two business days of Executive’s date of termination, the Company shall
deliver to Executive the release for Executive to execute. Executive will
forfeit all rights to the severance payments and benefits set forth in Section
2.1 unless, within fifty-five (55) days of delivery of the release by the
Company to Executive, Executive executes and delivers the release to the Company
and such release has become irrevocable by virtue of the expiration of the
revocation period without the release having been revoked (the first such date,
the “Release Effective Date”). The Company’s obligation to pay the severance
payments and benefits set forth in Section 2.1 is subject to the occurrence of
the Release Effective Date, and if the Release Effective Date does not occur,
then the Company shall have no obligation to pay the severance payments and
benefits set forth in Section 2.1. To the extent that the Release Effective Date
could occur in one of two (2) taxable years of Executive depending on when
Executive executes and delivers the release, any deferred compensation payment
(which is subject to Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”)) that is conditioned on execution of the release shall be
made no earlier than the first business day of the later of such taxable years.

 

  2.8 Resignation of All Other Positions. Upon termination of Executive’s
employment for any reason, Executive shall be deemed to have resigned from all
positions that Executive holds as an officer of the Company or any affiliate of
the Company, and from all position that he holds as a member of the board of
directors (or a committee thereof) of the Company or any affiliate of the
Company, unless otherwise mutually agreed with the Board.

 

3. Change in Control.

 

  3.1 Effect of Change in Control. If a Change in Control occurs and Executive’s
employment terminates under the circumstances described below, the provisions of
Section 2.1 shall apply.

 

  3.2

Termination Without Cause or Resignation for Good Reason Upon or After a Change
in Control. Upon or within eighteen (18) months after a Change in Control, the
Company (by action of the Board) may terminate Executive’s employment at any
time without Cause or Executive may initiate a termination of employment by
resigning under this Section 3 for Good Reason (as defined in Section 4) (in
either case the Employment Term shall be deemed to have ended) upon

 

5

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  not less than sixty (60) days’ prior written notice to Executive (or in the
case of resignation for Good Reason, Executive shall give the Company not less
than sixty (60) days’ prior written notice of such resignation). In any such
event, the provisions of Section 2.1(b) or (c), as applicable, shall then apply,
except that the severance multiple for purposes of Section 2.1(c)(i) shall be
three.

 

  3.3 Code Section 280G.

 

  (a) Executive shall bear all expense of, and be solely responsible for, all
federal, state, local or foreign taxes due with respect to any amount payable to
or other benefit receivable by Executive hereunder, including, without
limitation, any excise tax imposed by Section 4999 of the Code; provided,
however, that any such amount or benefit deemed to be a Parachute Payment (as
defined below) alone or when added to any other amount payable or paid to or
other benefit receivable or received by Executive which is deemed to constitute
a Parachute Payment (whether or not under an existing plan, arrangement or other
agreement), and would result in the imposition on Executive of an excise tax
under Section 4999 of the Code (all such amounts and benefits being hereinafter
called “Total Payments”), shall be reduced to the extent necessary so that no
portion thereof shall be subject to the excise tax imposed by Section 4999 of
the Code but only if, by reason of such reduction, the net after-tax benefit
received by Executive shall exceed the net after-tax benefit received by
Executive if no such reduction was made. For purposes of this Section 3.3, “net
after-tax benefit” shall mean (i) the total of all payments and the value of all
benefits which Executive receives or is then entitled to receive from the
Company that would constitute Parachute Payments, less (ii) the amount of all
federal, state and local income taxes payable with respect to the foregoing
calculated at the maximum marginal income tax rate for each year in which the
foregoing shall be paid to Executive (based on the rate in effect for such year
as set forth in the Code as in effect at the time of the first payment of the
foregoing) and the amount of applicable employment taxes, less (iii) the amount
of excise taxes imposed with respect to the payments and benefits described in
(i) above by Section 4999 of the Code. For purposes of this Section 3.3,
“Parachute Payment” shall mean a “parachute payment” as defined in Section 280G
of the Code.

 

  (b) The foregoing determination shall be made by tax counsel appointed by the
Company (the “Tax Counsel”). The Tax Counsel shall submit its determination and
detailed supporting calculations to both Executive and the Company within 15
days after receipt of a notice from either the Company or Executive that
Executive may receive payments which may be Parachute Payments. If the Tax
Counsel determines that such reduction is required by this Section 3.3, the
Total Payments shall be reduced to the extent necessary so that no portion
thereof shall be subject to the excise tax imposed by Section 4999 of the Code,
and the Company shall pay such reduced amount to Executive. The manner in which
the Total Payments are reduced shall be mutually agreed to by the Company and
Executive and approved by Tax Counsel; provided, however, that if the Company
and Executive do not agree within 15 days of the receipt of the Tax Counsel’s
determination, the reduction shall be accomplished by, first, reducing any lump
sum cash payments included in the Total Payments and, if further reductions are
necessary, by such other reductions as shall be recommended by Tax Counsel.
Executive and the Company shall each provide the Tax Counsel access to and
copies of any books, records, and documents in the possession of Executive or
the Company, as the case may be, reasonably requested by the Tax Counsel, and
otherwise cooperate with the Tax Counsel in connection with the preparation and
issuance of the determinations and calculations contemplated by this Section
3.3. The fees and expenses of the Tax Counsel for its services in connection
with the determinations and calculations contemplated by this Section 3.3 shall
be borne by the Company.

 

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4. Definitions.

 

  4.1 “Cause” shall mean any of the following grounds for termination of
Executive’s employment:

 

  (a) Executive’s conviction of, or plea of guilty or nolo contendere to, a
felony, any crime of moral turpitude or any crime involving the Company;

 

  (b) Executive’s engagement in fraud, misappropriation or embezzlement;

 

  (c) Executive’s material breach of any published code of conduct or code of
ethics of the Company or any affiliate of the Company;

 

  (d) Executive’s gross negligence or willful misconduct in the performance of
his duties;

 

  (e) Executive’s continual failure to substantially perform his duties to the
Company (other than a failure resulting from Executive’s incapacity due to
physical or mental illness), and such failure has continued for a period of at
least 30 days after a written notice of demand for substantial performance,
signed by a duly authorized officer of the Company, has been delivered to
Executive specifying the manner in which Executive has failed to substantially
perform; or

 

  (f) Executive’s breach of Section 5 of this Agreement.

 

  4.2 “Good Reason” shall mean, without Executive’s consent:

 

  (a) a significant adverse alteration in the nature or status of Executive’s
authority, duties or responsibilities (and the removal of Executive from the
position of Chief Executive Officer or requiring Executive to report to any
employee of the Company shall be deemed to be a significant adverse alteration
in the nature or status of Executive’s responsibilities); provided, however,
that the election by the Board of a different person to serve as Chairman shall
not be deemed to be such an alteration so long as (i) Executive continues to
have his duties assigned to him by the Board and (ii) no executive officers or
other employees of the Company have their duties assigned to them by the
Chairman;

 

  (b) a reduction in Base Salary of Executive;

 

  (c) the Company’s material and willful breach of this Agreement; or

 

  (d) the relocation (without the written consent of Executive) of Executive’s
principal place of employment by more than thirty-five (35) miles from its
location on the Effective Date.

Notwithstanding the foregoing, (i) Good Reason shall not be deemed to exist
unless notice of termination on account thereof (specifying a termination date
of at least 60 days but no more than 90 days from the date of such notice) is
given no later than 90 days after the time at which the event or condition
purportedly giving rise to Good Reason first occurs or arises and (ii) if there
exists (without regard to this clause (ii)) an event or condition that
constitutes Good Reason, the Company shall have 30 days from the date notice of
such a termination is given to cure such event or condition and, if the Company
does so, such event or condition shall not constitute Good Reason hereunder.

 

  4.3 “Change in Control” shall mean the occurrence of any of the following:

 

  (a) The acquisition (other than from the Company), by any person (as such term
is defined in Section 13(c) or 14(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of
the combined voting power of the Company’s then outstanding voting securities;

 

7

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  (b) The individuals who, as of the Effective Date, are members of the Board
(the “Incumbent Board”), cease for any reason during any twelve (12) month
period to constitute at least a majority of the Board, unless the election, or
nomination for election by the Company’s stockholders, of any new director was
approved by a vote of at least a majority of the Incumbent Board, and such new
director shall be considered as a member of the Incumbent Board;

 

  (c) The closing of a reorganization, merger, consolidation or similar form of
corporate transaction (each, an “Business Combination”) involving the Company if
(i) the stockholders of the Company, immediately before such Business
Combination, do not, as a result of such Business Combination, own, directly or
indirectly, more than fifty percent (50%) of the combined voting power of the
then outstanding voting securities of the entity resulting from such Business
Combination in substantially the same proportion as their ownership of the
combined voting power of the voting securities of the Company outstanding
immediately before such Business Combination or (ii) immediately following the
Business Combination, the individuals who comprised the Board immediately prior
thereto do not constitute at least a majority of the board of directors of the
entity resulting from such Business Combination (or, if the entity resulting
from such Business Combination is then a subsidiary, the ultimate parent
thereof);

 

  (d) The sale or other disposition of all or substantially all of the assets of
the Company; or

 

  (e) The consummation of a complete liquidation or dissolution of the Company.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because fifty percent (50%) or more of the combined voting power of the
Company’s then outstanding securities is acquired by (i) a trustee or other
fiduciary holding securities under one or more employee benefit plans maintained
by the Company or any of its subsidiaries or (ii) any corporation which,
immediately prior to such acquisition, is owned directly or indirectly by the
stockholders of the Company in the same proportion as their ownership of shares
in the Company immediately prior to such acquisition.

Notwithstanding the foregoing, a Change in Control shall not occur unless such
transaction constitutes a change in the ownership of the Company, a change in
effective control of the Company, or a change in the ownership of a substantial
portion of the Company’s assets under Section 409A of the Code.

 

5. Non-Competition, Non-Solicitation, Intellectual Property and Confidentiality.
Executive hereby acknowledges that, during and solely as a result of his
employment by the Company, Executive will receive special training, education
and information with respect to the operation of the businesses of the Company,
and/or its affiliates, and other related matters, and access to confidential
information and business and professional contacts. In consideration of
Executive’s employment and in consideration of the special and unique
opportunities afforded by the Company to Executive as a result of Executive’s
employment, Executive hereby agrees to abide by the terms of the
non-competition, non-solicitation, intellectual property and confidentiality
provisions below. Executive agrees and acknowledges that his employment is full,
adequate and sufficient consideration for the restrictions and obligations set
forth in those provisions.

 

  5.1 Non-Competition and Non-Solicitation. In consideration of the Company’s
entering into this Agreement, Executive agrees that during the Employment Term
and for a period of twelve (12) months after the termination of the Employment
Term, without regard to its termination for any reason which does not constitute
a breach of this Agreement by the Company or a resignation for Good Reason by
Executive, Executive shall not, unless acting pursuant hereto or with the prior
written consent of the Board:

 

  (a)

directly or indirectly, own, manage, operate, finance, join, control or
participate in the ownership, management, operation, financing or control of, or
be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with, or use or permit Executive’s name
to be used in connection with any Competing Business

 

8

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  (defined below) within any state in which the Company, and/or its affiliates,
currently engage in any Substantial Business Activity (defined below) or any
state in which the Company, and/or its affiliates, engaged in any Substantial
Business Activity during the thirty-six month period preceding the date
Executive’s employment terminates; provided, however, that notwithstanding the
foregoing, this provision shall not be construed to prohibit the passive
ownership by Executive of not more than five percent (5%) of the capital stock
of any corporation which is engaged in any Competing Business having a class of
securities registered pursuant to the Exchange Act; or

 

  (b) solicit or divert to any Competing Business any individual or entity which
is an active or prospective customer of the Company, and/or its affiliates, or
was such an active or prospective customer at any time during the preceding
twelve (12) months; or

 

  (c) employ, attempt to employ, solicit or assist any Competing Business in
employing any employee of the Company, and/or its affiliates, whether as an
employee or consultant.

The phrase “Competing Business” shall mean: any entity or enterprise actively
engaged in any business or businesses the Company and/or its affiliates are
actively engaged in (or are expected to be actively engaged in within twelve
(12) months) at the time of termination. The phrase “Substantial Business
Activity” shall mean that the Company, and/or its affiliates (i) has a business
office, (ii) owns, services or manages real estate, or (iii) has a recorded and
unsatisfied mortgage or other lien upon real estate or personal property.

In the event that the provisions of this Section 5.1 should ever be adjudicated
to exceed the time, geographic, product or other limitations permitted by
applicable law in any jurisdiction, then such provisions shall be deemed
reformed in such jurisdiction to the maximum time, geographic, product or other
limitations permitted by applicable law.

 

  5.2 Developments. Executive shall disclose fully, promptly and in writing to
the Company any and all inventions, discoveries, improvements, modifications and
other intellectual property rights, whether patentable or not, which Executive
has conceived, made or developed, solely or jointly with others, while employed
by the Company and which (i) relate to the businesses, work or activities of the
Company, and/or its affiliates or (ii) result from or are suggested by the
carrying out of Executive’s duties hereunder or from or by any information that
Executive may receive as an employee of the Company. Executive hereby assigns,
transfers and conveys to the Company all of Executive’s right, title and
interest in and to any and all such inventions, discoveries, improvements,
modifications and other intellectual property rights and agrees to take all such
actions as may be requested by the Company at any time and with respect to any
such invention, discovery, improvement, modification or other intellectual
property rights to confirm or evidence such assignment, transfer and conveyance.
Furthermore, at any time and from time to time, upon the request of the Company,
Executive shall execute and deliver to the Company, any and all instruments,
documents and papers, give evidence and do any and all other acts that, in the
opinion of counsel for the Company, are or may be necessary or desirable to
document such assignment, transfer and conveyance or to enable the Company to
file and prosecute applications for and to acquire, maintain and enforce any and
all patents, trademark registrations or copyrights under United States or
foreign law with respect to any such inventions, discoveries, improvements,
modifications or other intellectual property rights or to obtain any extension,
validation, reissue, continuance or renewal of any such patent, trademark or
copyright. The Company shall be responsible for the preparation of any such
instruments, documents and papers and for the prosecution of any such
proceedings and shall reimburse Executive for all reasonable expenses incurred
by Executive in compliance with the provisions of this Section 5.2.

 

  5.3 Confidentiality.

 

  (a)

Executive acknowledges that, by reason of Executive’s employment by the Company,
Executive will have access to confidential information of the Company, and/or
its affiliates, including, without limitation, information and knowledge
pertaining to

 

9

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  products, inventions, discoveries, improvements, innovations, designs, ideas,
trade secrets, proprietary information, manufacturing, packaging, advertising,
distribution and sales methods, sales and profit figures, customer and client
lists and relationships between the Company, and/or its affiliates, and dealers,
distributors, sales representatives, wholesalers, customers, clients, suppliers
and others who have business dealings with them (“Confidential Information”).
Executive acknowledges that such Confidential Information is a valuable and
unique asset of the Company, and/or its affiliates, and covenants that, both
during and after the Employment Term, Executive will not disclose any
Confidential Information to any person (except as Executive’s duties as an
officer of the Company may require or as required by law or in a judicial or
administrative proceeding) without the prior written authorization of the Board.
The obligation of confidentiality imposed by this Section 5.3 shall not apply to
information that becomes generally known to the public through no act of
Executive in breach of this Agreement. The Company and Executive acknowledge
that, notwithstanding anything to the contrary contained in this Agreement,
pursuant to 18 USC § 1833(b), an individual may not be held liable under any
criminal or civil federal or state trade secret law for disclosure of a trade
secret: (x) made in confidence to a government official, either directly or
indirectly, or to an attorney, solely for the purpose of reporting or
investigating a suspected violation of law or (y) in a complaint or other
document filed in a lawsuit or other proceeding, if such filing is made under
seal. The Company and Executive further acknowledge that an individual suing an
employer for retaliation based on the reporting of a suspected violation of law
may disclose a trade secret to his or her attorney and use the trade secret
information in the court proceeding, so long as any document containing the
trade secret is filed under seal and the individual does not disclose the trade
secret except pursuant to court order.

 

  (b) Executive acknowledges that all documents, files and other materials
received from the Company, and/or its affiliates, during the Employment Term
(with the exception of documents relating to Executive’s compensation or
benefits to which Executive is entitled following the Employment Term) are for
use of Executive solely in discharging Executive’s duties and responsibilities
hereunder and that Executive has no claim or right to the continued use or
possession of such documents, files or other materials following termination of
Executive’s employment by the Company. Executive agrees that, upon termination
of employment, Executive will not retain any such documents, files or other
materials and will promptly return to the Company any documents, files or other
materials in Executive’s possession or custody.

 

  5.4 Non-Disparagement. Executive agrees and covenants that Executive will not
at any time make, publish or communicate to any person or entity or in any
public forum any defamatory or disparaging remarks, comments or statements
concerning the Company or its businesses, or any of its employees, officers, and
existing and prospective customers, suppliers, investors and other associated
third parties. The Company agrees and covenants that it will not authorize the
making, publishing or communicating of, nor will the Board or any executive
officers of the Company at any time make, publish or communicate to any person
or entity or in any public forum any defamatory or disparaging remarks, comments
or statements concerning Executive.

 

  5.5 Cooperation. The parties agree that certain matters in which Executive
will be involved during the Employment Term may necessitate Executive’s
cooperation in the future. Accordingly, following the termination of Executive’s
employment for any reason, to the extent reasonably requested by the Board and
subject to Executive’s professional commitments, Executive shall cooperate with
the Company in connection with matters arising out of Executive’s service to the
Company; provided that, the Company shall make reasonable efforts to minimize
disruption of Executive’s other activities. The Company shall pay Executive a
reasonable per diem and reimburse Executive for reasonable expenses incurred in
connection with such cooperation.

 

10

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  5.6 Equitable Relief. Executive acknowledges that the restrictions contained
in Sections 5.1, 5.2, 5.3, 5.4 and 5.5 hereof are, in view of the nature of the
businesses of the Company and/or its affiliates, reasonable and necessary to
protect the legitimate interests of the Company and/or its affiliates, and that
any violation of any provision of those Sections will result in irreparable
injury to the Company, and/or its affiliates. Executive also acknowledges that
in the event of any such violation, the Company shall be entitled to preliminary
and permanent injunctive relief, without the necessity of proving actual
damages, and to an equitable accounting of all earnings, profits and other
benefits arising from any such violation, which rights shall be cumulative and
in addition to any other rights or remedies to which the Company may be
entitled. Executive agrees that in the event of any such violation, an action
may be commenced for any such preliminary and permanent injunctive relief and
other equitable relief in any federal or state court of competent jurisdiction
sitting in Pennsylvania or in any other court of competent jurisdiction.
Executive hereby waives, to the fullest extent permitted by law, any objection
that Executive may now or hereafter have to such jurisdiction or to the laying
of the venue of any such suit, action or proceeding brought in such a court and
any claim that such suit, action or proceeding has been brought in an
inconvenient forum. Executive agrees that effective service of process may be
made upon Executive by mail under the notice provisions contained in Section 10
hereof.

 

6. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Executive’s continuing or future participation in or rights under any benefit,
bonus, incentive or other plan or program provided by the Company and for which
Executive may qualify; provided, however, that if Executive becomes entitled to
and receives the payments provided for in Section 2.1(c) of this Agreement,
Executive hereby waives Executive’s right to receive payments under any
severance plan or similar program applicable to all employees of the Company.

 

7. Survivorship. The respective rights and obligations of the parties under this
Agreement shall survive any termination of Executive’s employment to the extent
necessary to the intended preservation of such rights and obligations.

 

8. Mitigation. Executive shall not be required to mitigate the amount of any
payment or benefit provided for in this Agreement by seeking other employment or
otherwise and there shall be no offset against amounts due Executive under this
Agreement on account of any remuneration attributable to any subsequent
employment that Executive may obtain.

 

9. Arbitration; Expenses. In the event of any dispute under the provisions of
this Agreement, other than a dispute in which the primary relief sought is an
equitable remedy such as an injunction, the parties shall be required to have
the dispute, controversy or claim settled by arbitration in Philadelphia,
Pennsylvania in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association,
before a panel of three arbitrators, two of whom shall be selected by the
Company and Executive, respectively, and the third of whom shall be selected by
the other two arbitrators. Any award entered by the arbitrators shall be final,
binding and nonappealable and judgment may be entered thereon by either party in
accordance with applicable law in any court of competent jurisdiction. This
arbitration provision shall be specifically enforceable. The arbitrators shall
have no authority to modify any provision of this Agreement or to award a remedy
for a dispute involving this Agreement other than a benefit specifically
provided under or by virtue of the Agreement. Each party shall be responsible
for its own expenses relating to the conduct of the arbitration (including
reasonable attorneys’ fees and expenses) and shall share the fees of the
American Arbitration Association.

 

11

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10. Notices. All notices and other communications required or permitted under
this Agreement or necessary or convenient in connection herewith shall be in
writing and shall be deemed to have been given when hand delivered or mailed by
registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):

If to the Company, to:

Independence Realty Trust, Inc.

Two Logan Square

100 North 18th Street, 23rd floor

Philadelphia, Pennsylvania 19103

Attention: General Counsel

If to Executive, to:

Scott F. Schaeffer at his most recent home address set forth in the records of
the Company.

or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.

 

11. Contents of Agreement; Amendment and Assignment.

 

  11.1 This Agreement sets forth the entire understanding between the parties
hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment approved by the
Board and executed on its behalf by a duly authorized officer and by Executive.
This Agreement supersedes the provisions of any employment or other agreement
between Executive and the Company that relate to any matter that is also the
subject of this Agreement and such provisions in such other agreements will be
null and void.

 

  11.2 All of the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Executive under
this Agreement are of a personal nature and shall not be assignable or delegable
in whole or in part by Executive. The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, reorganization
or otherwise) to all or substantially all of the business or assets of the
Company, within fifteen (15) days of such succession, expressly to assume and
agree to perform this Agreement in the same manner and to the same extent as the
Company would be required to perform if no such succession had taken place.

 

12. Severability. If any provision of this Agreement or application thereof to
anyone or under any circumstances is adjudicated to be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect any
other provision or application of this Agreement which can be given effect
without the invalid or unenforceable provision or application and shall not
invalidate or render unenforceable such provision or application in any other
jurisdiction. If any provision is held void, invalid or unenforceable with
respect to particular circumstances, it shall nevertheless remain in full force
and effect in all other circumstances.

 

13. Remedies Cumulative; No Waiver. No remedy conferred upon a party by this
Agreement is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to any other remedy
given under this Agreement or now or hereafter existing at law or in equity. No
delay or omission by a party in exercising any right, remedy or power under this
Agreement or existing at law or in equity shall be construed as a waiver
thereof, and any such right, remedy or power may be exercised by such party from
time to time and as often as may be deemed expedient or necessary by such party
in its sole discretion.

 

14. Beneficiaries/References. Executive shall be entitled, to the extent
permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable under this
Agreement following Executive’s death by giving the Company written notice
thereof. In the event of Executive’s death or a judicial determination of
Executive’s incompetence, reference in this Agreement to Executive shall be
deemed, where appropriate, to refer to Executive’s beneficiary, estate or other
legal representative.

 

12

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15. Miscellaneous. All section headings used in this Agreement are for
convenience only. This Agreement may be executed in counterparts, each of which
is an original. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other counterparts.

 

16. Withholding. All payments under this Agreement shall be made subject to
applicable tax withholding, and the Company shall withhold from any payments
under this Agreement all federal, state and local taxes as the Company is
required to withhold pursuant to any law or governmental rule or regulation.
Except as specifically provided otherwise in this Agreement, Executive shall
bear all expense of, and be solely responsible for, all federal, state and local
taxes due with respect to any payment received under this Agreement.

 

17. Governing Law. This Agreement shall be governed by and interpreted under the
laws of the Commonwealth of Pennsylvania without giving effect to any conflict
of laws provisions.

 

18. Section 409A.

 

  18.1 Interpretation. Notwithstanding the other provisions hereof, this
Agreement is intended to comply with the requirements of Section 409A of the
Code, to the extent applicable, and this Agreement shall be interpreted to avoid
any penalty sanctions under Section 409A of the Code. Accordingly, all
provisions herein, or incorporated by reference, shall be construed and
interpreted to comply with Section 409A and, if necessary, any such provision
shall be deemed amended to comply with Section 409A of the Code and regulations
thereunder. If any payment or benefit cannot be provided or made at the time
specified herein without incurring sanctions under Section 409A of the Code,
then such benefit or payment shall be provided in full at the earliest time
thereafter when such sanctions will not be imposed. For purposes of Section 409A
of the Code, each payment made under this Agreement shall be treated as a
separate payment. In no event may Executive, directly or indirectly, designate
the calendar year of payment. Executive will be deemed to have a termination of
employment for purposes of determining the timing of any payments or benefits
hereunder that are classified as deferred compensation only upon a “separation
from service” within the meaning of Section 409A of the Code.

 

  18.2 Payment Delay. Notwithstanding any provision to the contrary in this
Agreement, if on the date of Executive’s termination of employment, Executive is
a “specified employee” (as such term is defined in Section 409A(a)(2)(B)(i) of
the Code and its corresponding regulations) as determined by the Board (or its
delegate) in its sole discretion in accordance with its “specified employee”
determination policy, then all cash severance payments payable to Executive
under this Agreement that are deemed as deferred compensation subject to the
requirements of Section 409A of the Code shall be postponed for a period of six
months following Executive’s “separation from service” with the Company (or any
successor thereto). The postponed amounts shall be paid to Executive in a lump
sum on the date that is six (6) months and one (1) day following Executive’s
“separation from service” with the Company (or any successor thereto). If
Executive dies during such six-month period and prior to payment of the
postponed cash amounts hereunder, the amounts delayed on account of Section 409A
of the Code shall be paid to the personal representative of Executive’s estate
on the sixtieth (60th) day after Executive’s death. If any of the cash payments
payable pursuant to this Agreement are delayed due to the requirements of
Section 409A of the Code, there shall be added to such payments interest during
the deferral period at an annualized rate of interest equal to the prime rate as
reported in the Wall Street Journal (or, if unavailable, a comparable source) at
the relevant time.

 

  18.3 Reimbursements. All reimbursements provided under this Agreement shall be
made or provided in accordance with the requirements of Section 409A of the
Code, including, where applicable, the requirement that (i) any reimbursement is
for expenses incurred during Executive’s lifetime (or during a shorter period of
time specified in this Agreement), (ii) the amount of expenses eligible for
reimbursement during a calendar year may not affect the expenses eligible for
reimbursement in any other calendar year, (iii) the reimbursement of an eligible
expense will be made on or before the last day of the taxable year following the
year in which the expense is incurred, and (iv) the right to reimbursement is
not subject to liquidation or exchange for another benefit.

[SIGNATURE PAGE FOLLOWS]

 

13

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IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.

 

INDEPENDENCE REALTY TRUST, INC. By:  

 

  Name:     Title:   EXECUTIVE By:  

 

  Name:   Scott F. Schaeffer

 

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EXHIBIT A

Release

You, for yourself, your spouse and your agents, successors, heirs, executors,
administrators and assigns, hereby irrevocably and unconditionally forever
release and discharge Independence Realty Trust, Inc. (the “Corporation”), its
parents, divisions, subsidiaries and affiliates and its and their current and
former owners, directors, officers, stockholders, insurers, benefit plans,
representatives, agents and employees, and each of their predecessors,
successors, and assigns (collectively, the “Releasees”), from any and all actual
or potential claims or liabilities of any kind or nature, including, but not
limited to, any claims arising out of or related to your employment and
separation from employment with the Corporation and any services that you
provided to the Corporation; any claims for salary, commissions, bonuses, other
severance pay, vacation pay, allowances or other compensation, or for any
benefits under the Employee Retirement Income Security Act of 1974 (“ERISA”)
(except for vested ERISA benefits); any claims for discrimination, harassment or
retaliation of any kind or based upon any legally protected classification or
activity; any claims under Title VII of the Civil Rights Acts of 1964, the Civil
Rights Act of 1866 and 1964, as amended, 42 U.S.C. § 1981, the Age
Discrimination in Employment Act, the Older Workers Benefit Protection Act, the
Americans with Disabilities Act, 42 U.S.C. §1981, 42 U.S.C. § 1983, the Family
Medical Leave Act and any similar state law, the Fair Credit Reporting Act and
any similar state law, the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq.,
the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, et
seq., the Equal Pay Act and any similar state law, any claims for discrimination
in violation of the Pennsylvania Human Relations Act, and any claims for
wrongful discharge, discrimination, retaliation, or other violation of the
Pennsylvania Whistleblower Law, as well as any amendments to any such laws; any
claims for any violation of any federal or state constitutions or executive
orders; any claims for wrongful or constructive discharge, violation of public
policy, breach of contract or promise (oral, written, express or implied),
personal injury not covered by workers’ compensation benefits,
misrepresentation, negligence, fraud, estoppel, defamation, infliction of
emotional distress, contribution and any claims under any other federal, state
or local law, including those not specifically listed in this Release, that you,
your heirs, executors, administrators, successors, and assigns now have, ever
had or may hereafter have, whether known or unknown, suspected or unsuspected,
up to and including the date of your execution of this Release.

For the purpose of implementing a full and complete release and discharge of the
Releasees as set forth above, you acknowledge that this Release is intended to
include in its effect, without limitation, all claims known or unknown that you
have or may have against the Releasees which arise out of or relate to your
employment, including but not limited to compensation, performance or
termination of employment with the Corporation, except for, and notwithstanding
anything in this Release to the contrary, claims which cannot be released solely
by private agreement. This Release also excludes any claims relating to any
right you may have to payments pursuant to Section 2.1(c) of the Employment
Agreement, entered into as of                     , 2016, by and between the
Corporation and you, any claim for workers’ compensation benefits and any rights
you may have to indemnification or directors’ and officers’ liability insurance
under the Corporation’s bylaws or certificate of incorporation, any
indemnification agreement to which you are a party or beneficiary or applicable
law, as a result of having served as an officer, director or employee of the
Corporation or any of its affiliates. You further acknowledge and agree that you
have received all leave, compensation and reinstatement benefits to which you
were entitled through the date of your execution of this Release, and that you
were not subjected to any improper treatment, conduct or actions as a result of
a request for leave, compensation or reinstatement.

You affirm, by signing this Release, that you have not suffered any unreported
injury or illness arising from your employment, and that you have not filed,
with any federal, state, or local court or agency, any actions or charges
against the Releasees relating to or arising out of your employment with or
separation from the Corporation. You further agree that while this Release does
not preclude you from filing a charge with the National Labor Relations Board
(“NLRB”), the Equal Employment Opportunity Commission (“EEOC”) or a similar
state or local agency, or from participating in any investigation or proceeding
with them, you do waive your right to personally recover monies or reinstatement
as a result of any complaint or charge filed against the Corporation with the
NLRB, EEOC or any federal, state or local court or agency, except as to any
action to enforce or challenge this Release, to recover any vested benefits
under ERISA, or to recover workers’ compensation benefits. Nothing in this
Release prohibits or restricts you (or your attorney) from initiating
communications directly with, responding to an inquiry from, or providing
testimony before the Securities and Exchange Commission (“SEC”), the Financial
Industry Regulatory Authority (“FINRA”), any other self-regulatory organization
or any other federal or state regulatory authority regarding this Release or its
underlying facts or circumstances or a possible securities law violation.

 

15

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You acknowledge:

 

  (a) That you were provided [twenty-one (21) / forty-five (45)] full days
during which to consider whether to sign this Release. If you have signed this
Release prior to the expiration of the [21-day / 45-day] period, you have
voluntarily elected to forego the remainder of that period.

 

  (b) That you have carefully read and fully understand all of the terms of this
Release[, including its Attachment A].

 

  (c) That you understand that by signing this Release, you are waiving your
rights under the Age Discrimination in Employment Act, as amended by the Older
Workers Benefit Protection Act, 29 U.S.C. § 621, et seq., and that you are not
waiving any rights arising after the date that this Release is signed.

 

  (d) That you have been given an opportunity to consult with anyone you choose,
including an attorney, about this Release.

 

  (e) That you understand fully the terms and effect of this Release and know of
no claim that has not been released by this Release. And, you further
acknowledge that you are not aware of, or that you have fully disclosed to the
Corporation, any matters for which you are responsible or which has come to your
attention as an employee of the Corporation that might give rise to, evidence,
or support any claim of illegal conduct, regulatory violation, unlawful
discrimination, or other cause of action against the Corporation.

 

  (f) That these terms are final and binding on you.

 

  (g) That you have signed this Release voluntarily, and not in reliance on any
representations or statements made to you by any employee or officer of the
Corporation or any of its subsidiaries.

 

  (h) That you have seven (7) days following your execution of this Release to
revoke it in writing, and that this Release is not effective or enforceable
until after this seven (7) day period has expired without revocation. If you
wish to revoke this Release after signing it, you must provide written notice of
your decision to revoke this Release to the Corporation, to the attention of the
General Counsel, Two Logan Square, 100 North 18th Street, 23rd floor,
Philadelphia, Pennsylvania 19103, by no later than 11:59 p.m. on the seventh
calendar day after the date on which you have signed this Release.

PLEASE READ CAREFULLY. THIS RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS.

ACKNOWLEDGED AND AGREED

 

 

Scott F. Schaeffer   Date        

 

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EXHIBIT F

JAMES SEBRA EMPLOYMENT AGREEMENT

 

Exhibit F-1

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EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of
                    , 2016, by and between Independence Realty Trust, Inc., a
Maryland corporation (the “Company”), and James J. Sebra (“Executive”).

WHEREAS, the Company, Independence Realty Operating Partnership, LP, a Delaware
limited partnership (“IROP”), RAIT Financial Trust, a Maryland real estate
investment trust (“RAIT”), RAIT TRS, LLC, a Delaware limited liability company
(“Interest Seller”), Jupiter Communities, LLC, a Delaware limited liability
company (“Asset Seller”), and the entities set forth on the signature pages of
the Purchase Agreement have entered into that certain Securities and Asset
Purchase Agreement, dated as of September     , 2016 (the “Purchase Agreement”);

WHEREAS, pursuant to the Purchase Agreement, at the Second Closing (as defined
in the Purchase Agreement), and on the terms and subject to the conditions set
forth in the Purchase Agreement, Interest Seller shall sell, convey, assign,
transfer and deliver to IROP, and IROP shall purchase, acquire and accept from
Interest Seller, all of Interest Seller’s right, title and interest in and to
the Membership Interests (as defined in the Purchase Agreement), and Asset
Seller shall sell, convey, assign, transfer and deliver to IROP, and IROP shall
purchase, acquire and accept from Asset Seller, all of Asset Seller’s right,
title and interest in, to and under the Transferred Assets (as defined in the
Purchase Agreement);

WHEREAS, Executive is currently employed by RAIT and serves as the Chief
Financial Officer of the Company; and

WHEREAS, in connection with and subject to the Second Closing, the Company
wishes to employ Executive in the position of Chief Financial Officer of the
Company, and Executive wishes to accept such employment, on the terms set forth
below, effective as of the Effective Date (as defined below).

NOW, THEREFORE, in consideration of the Recitals, the mutual promises and
covenants set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

 

1. Employment. The Company agrees to employ Executive, and Executive hereby
accepts such employment and agrees to perform Executive’s duties and
responsibilities, in accordance with the terms, conditions and provisions
hereinafter set forth.

 

  1.1 Employment Term. This Agreement shall become effective from and after the
later of (i) March 31, 2017 and (ii) the date on which RAIT files its annual
report on Form 10-K for the fiscal year ended December 31, 2016 (the “Effective
Date”); provided, that, in the event the Second Closing does not occur by the
Outside Date (as defined in the Purchase Agreement) or the Purchase Agreement is
otherwise terminated, this Agreement shall thereupon become null and void. This
Agreement shall continue until the third anniversary of the Effective Date,
unless the Agreement is terminated sooner in accordance with Section 2 below;
and shall be effective for successive one-year periods in accordance with the
terms of this Agreement (subject to termination as aforesaid) unless either
party notifies the other party of non-renewal in writing prior to three months
before the expiration of the then current term. The period commencing on the
Effective Date and ending on the date on which the term of Executive’s
employment under this Agreement shall terminate is hereinafter referred to as
the “Employment Term.”

 

  1.2 Duties and Responsibilities. Executive shall continue to serve as the
Chief Financial Officer of the Company during the Employment Term. Executive
shall perform all duties and accept all responsibilities incident to such
position as may be reasonably assigned to him by the Board of Directors of the
Company (the “Board”) or the Chief Executive Officer of the Company.

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  1.3 Extent of Service. Executive agrees to use Executive’s best efforts to
carry out Executive’s duties and responsibilities under Section 1.2 hereof and,
consistent with the other provisions of this Agreement, to devote substantially
all of Executive’s business time, attention and energy to the performance of
Executive’s duties and responsibilities hereunder. Subject to the requirements
of Section 5.1, the foregoing shall not be construed as preventing Executive
from making investments in other businesses or enterprises provided there is no
conflict with Executive’s ability to satisfy his obligations to the Company.

 

  1.4 Base Salary. For all of the services rendered by Executive hereunder, the
Company shall pay Executive a base salary (“Base Salary”), which shall be at the
annual rate of Three Hundred Ninety Thousand Dollars ($390,000) beginning as of
the Effective Date, payable in installments at such times as the Company
customarily pays its other senior level executives. Executive’s Base Salary
shall be reviewed annually for appropriate increases by the Board pursuant to
the Board’s normal performance review policies for senior level executives but
shall not be decreased.

 

  1.5 Bonus. Executive shall be eligible to receive annual bonuses in such
amounts as the Board may approve in its sole discretion or under the terms of
any annual incentive plan of the Company maintained for other senior level
executives.

 

  1.6 Retirement and Welfare Plans and Perquisites. Executive shall be entitled
to participate in all employee retirement and welfare benefit plans and programs
or executive perquisites made available to the Company’s senior level executives
as a group or to its employees generally, as such retirement and welfare plans
or perquisites may be in effect from time to time and subject to the eligibility
requirements of the plans and applicable law. For purposes of any such benefit
plans and programs or executive perquisites that condition participation or
entitlements thereunder on duration of service with the Company, Executive’s
service with RAIT shall be treated as service to the Company. Nothing in this
Agreement shall prevent the Company from amending or terminating any retirement,
welfare or other employee benefit plans or programs from time to time as the
Company deems appropriate.

 

  1.7 Reimbursement of Expenses; Vacation. Executive shall be provided with
reimbursement of reasonable expenses related to Executive’s employment by the
Company on a basis no less favorable than that which may be authorized from time
to time for senior level executives as a group, and shall be entitled to
vacation and sick leave in accordance with the Company’s vacation, holiday and
other pay for time not worked policies. For purposes of any such vacation,
holiday and sick leave policies that condition participation or entitlements
thereunder on duration of service with the Company, Executive’s service with
RAIT shall be treated as service to the Company.

 

  1.8 Incentive Compensation. Executive shall be entitled to participate in any
short-term and long-term incentive programs (including without limitation any
equity compensation plans) established by the Company for its senior level
executives generally.

 

  1.9 Clawback/Recoupment. Notwithstanding any other provision in this Agreement
to the contrary, any compensation paid to Executive pursuant to this Agreement
or any other agreement or arrangement with the Company shall be subject to
mandatory repayment by Executive to the Company if and to the extent any such
compensation paid to Executive is, or in the future becomes, subject to (i) any
“clawback” or recoupment policy that is applicable to all senior executives of
the Company and is limited to the recovery of incentive-based compensation
which, as a result of an accounting restatement by the Company, is in excess of
the compensation which should have been received by Executive, or (ii) any law,
rule, requirement or regulation which imposes mandatory recoupment, under
circumstances set forth in such law, rule, requirement or regulation.

 

2

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2. Termination. The Employment Term and Executive’s employment hereunder shall
terminate upon the occurrence of any of the following events:

 

  2.1 Termination Without Cause; Resignation for Good Reason; Non-Renewal by the
Company.

 

  (a) The Company may terminate Executive’s employment at any time without Cause
(as defined in Section 4) upon not less than sixty (60) days’ prior written
notice to Executive. In addition, Executive may initiate a termination of
employment by resigning under this Section 2.1 for Good Reason (as defined in
Section 4). Executive shall give the Company not less than sixty (60) days’
prior written notice of such resignation. In addition, the Company may initiate
a termination of employment by sending a notice of non-renewal of this Agreement
to Executive, as described in Section 1.1.

 

  (b) Upon any termination or resignation described in Section 2.1(a) above,
Executive shall be entitled to receive only the amount due to Executive under
the Company’s then current severance pay plan for employees, if any. No other
payments or benefits shall be due under this Agreement to Executive, but
Executive shall be entitled to receive (i) Executive’s Base Salary due through
his date of termination, (ii) any earned but unpaid annual bonus for the year
preceding the fiscal year of termination, (iii) any amounts owing to Executive
for reimbursement of expenses properly incurred by Executive prior to his date
of termination and which are reimbursable in accordance with Section 1.7; and
(iv) any benefits accrued and earned in accordance with the terms and conditions
of any applicable benefit plans and programs of the Company in which Executive
participated prior to his termination of employment (collectively, the “Accrued
Benefits”).

 

  (c) Notwithstanding the provisions of Section 2.1(b), in the event that
Executive executes and does not revoke the release described in Section 2.7,
Executive shall be entitled to receive, in lieu of any payments or benefits due
to him under the Company’s then current severance pay plan for employees (if
any), the following:

 

  (i) Executive shall receive a lump sum cash payment equal to two times the sum
of (x) Executive’s Base Salary, as in effect immediately prior to his
termination of employment and (y) the average annual cash bonus earned by
Executive for the three year period immediately prior to his termination of
employment, or the average annual cash bonus earned by Executive for the actual
number of completed fiscal years immediately prior to his termination of
employment if less than three; provided, however, that if Executive has been
employed by the Company for less than one completed fiscal year prior to his
termination of employment, then the amount used for clause (y) shall be
Executive’s target annual cash bonus for the fiscal year of his termination of
employment. One half of the amount described in the preceding sentence shall be
consideration for Executive’s entering into the restrictive covenants described
in Section 5 below. Unless the payment is required to be delayed pursuant to
Section 18.2 below, the payment shall be made within fifteen (15) days of the
Release Effective Date (as defined below).

 

  (ii) Executive shall receive a lump sum cash payment equal to a pro rata
portion of the annual cash bonus, if any, that Executive would have earned for
the fiscal year of his termination based on achievement of the applicable
performance goals for such year (the “Cash Bonus”). The pro-rated Cash Bonus
shall be determined by multiplying the Cash Bonus by a fraction, the numerator
of which is the number of days during which Executive was employed by the
Company in the fiscal year of his termination of employment and the denominator
of which is three hundred sixty-five (365). Unless the payment is required to be
delayed pursuant to Section 18.2 below, the payment shall be made on the date
that annual bonuses are paid to similarly situated executives, but in no event
later than two-and-a-half months following the end of the calendar year in which
Executive’s termination date occurs.

 

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  (iii) For a period of eighteen (18) months following Executive’s date of
termination, provided Executive and his eligible dependents timely and properly
elect to continue health care coverage under COBRA, Executive shall continue to
receive the medical coverage in effect at the date of his termination of
employment (or generally comparable coverage) for himself and, where applicable,
his spouse and dependents, at the same premium rates as may be charged from time
to time for employees of the Company generally, as if Executive had continued in
employment with the Company during such period.

 

  (iv) The treatment of any outstanding equity awards held by Executive shall be
determined in accordance with the terms of the applicable incentive plan and the
applicable award agreements; provided, however, that any such equity awards that
are subject solely to time-vesting conditions shall become fully vested as of
the date of Executive’s termination of employment.

 

  2.2 Voluntary Termination. Executive may voluntarily terminate his employment
for any reason upon sixty (60) days’ prior written notice or by sending a notice
of non-renewal of this Agreement to the Company, as described in Section 1.1. In
any such event, after the effective date of such termination, except as provided
in Section 2.1 with respect to a resignation for Good Reason, no further
payments shall be due under this Agreement, except that Executive shall be
entitled to receive the Accrued Benefits.

 

  2.3 Disability. The Company may terminate Executive’s employment, to the
extent permitted by applicable law, if Executive (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, or (ii) is, by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than three months under an accident and health plan covering
employees of the Company (“Disability”). If the Company terminates Executive’s
employment for Disability, Executive shall be entitled to receive the following:

 

  (a) Executive shall receive a lump sum cash payment equal to a pro rata
portion of Executive’s target annual cash bonus for the fiscal year of his
termination (or, in the absence of a target bonus opportunity for the fiscal
year, a pro rata portion of the average annual cash bonus earned by Executive
for the three year period immediately prior to his termination of employment or
the average annual cash bonus earned by Executive for the actual number of
completed fiscal years immediately prior to his termination of employment if
less than three) (the “Target Cash Bonus”). The pro-rated Target Cash Bonus
shall be determined by multiplying the Target Cash Bonus by a fraction, the
numerator of which is the number of days during which Executive was employed by
the Company, prior to his termination of employment, in the Company’s fiscal
year in which his termination of employment occurs and the denominator of which
is three hundred sixty-five (365). Except as otherwise required to comply with
the requirements of Section 18 below, payment shall be made on the sixtieth
(60th) day following Executive’s last day of employment with the Company on
account of Disability.

 

  (b) The Company shall pay to Executive the Accrued Benefits.

 

  2.4 Death. If Executive dies while employed by the Company, the Company shall
pay to Executive’s executor, legal representative, administrator or designated
beneficiary, as applicable, (i) the Accrued Benefits and (ii) a pro-rated Target
Cash Bonus (determined according to Section 2.3(a) above) for the Company’s
fiscal year in which Executive’s death occurs and, except as otherwise required
to comply with the requirements of Section 18 below, shall be paid in a lump sum
cash payment on the sixtieth (60th) day following the date of Executive’s death.
Otherwise, the Company shall have no further liability or obligation under this
Agreement to Executive’s executors, legal representatives, administrators, heirs
or assigns or any other person claiming under or through Executive.

 

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  2.5 Cause. The Company may terminate Executive’s employment at any time for
Cause upon written notice to Executive, in which event all payments under this
Agreement shall cease, except for Base Salary to the extent already accrued.
Executive shall be entitled to receive the Accrued Benefits. Whether a
termination is for Cause, as such term is defined in Section 4.1, shall be
determined by the Board in its sole discretion.

 

  2.6 Notice of Termination. Any termination of Executive’s employment shall be
communicated by a written notice of termination to the other party hereto given
in accordance with Section 10. The notice of termination shall (i) indicate the
specific termination provision in this Agreement relied upon, (ii) briefly
summarize the facts and circumstances deemed to provide a basis for a
termination of employment and the applicable provision hereof, and (iii) specify
the termination date in accordance with the requirements of this Agreement.

 

  2.7 Release. Executive agrees that, as a condition to receiving the severance
payments and benefits set forth in Section 2.1, Executive will execute a release
of claims substantially in the form of the release attached hereto as Exhibit A.
Within two business days of Executive’s date of termination, the Company shall
deliver to Executive the release for Executive to execute. Executive will
forfeit all rights to the severance payments and benefits set forth in Section
2.1 unless, within fifty-five (55) days of delivery of the release by the
Company to Executive, Executive executes and delivers the release to the Company
and such release has become irrevocable by virtue of the expiration of the
revocation period without the release having been revoked (the first such date,
the “Release Effective Date”). The Company’s obligation to pay the severance
payments and benefits set forth in Section 2.1 is subject to the occurrence of
the Release Effective Date, and if the Release Effective Date does not occur,
then the Company shall have no obligation to pay the severance payments and
benefits set forth in Section 2.1. To the extent that the Release Effective Date
could occur in one of two (2) taxable years of Executive depending on when
Executive executes and delivers the release, any deferred compensation payment
(which is subject to Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”)) that is conditioned on execution of the release shall be
made no earlier than the first business day of the later of such taxable years.

 

  2.8 Resignation of All Other Positions. Upon termination of Executive’s
employment for any reason, Executive shall be deemed to have resigned from all
positions that Executive holds as an officer of the Company or any affiliate of
the Company, unless otherwise mutually agreed with the Board.

 

3. Change in Control.

 

  3.1 Effect of Change in Control. If a Change in Control occurs and Executive’s
employment terminates under the circumstances described below, the provisions of
Section 2.1 shall apply.

 

  3.2 Termination Without Cause or Resignation for Good Reason Upon or After a
Change in Control. Upon or within eighteen (18) months after a Change in
Control, the Company (by action of the Board) may terminate Executive’s
employment at any time without Cause or Executive may initiate a termination of
employment by resigning under this Section 3 for Good Reason (as defined in
Section 4) (in either case the Employment Term shall be deemed to have ended)
upon not less than sixty (60) days’ prior written notice to Executive (or in the
case of resignation for Good Reason, Executive shall give the Company not less
than sixty (60) days’ prior written notice of such resignation). In any such
event, the provisions of Section 2.1(b) or (c), as applicable, shall then apply.

 

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  3.3 Code Section 280G.

 

  (a) Executive shall bear all expense of, and be solely responsible for, all
federal, state, local or foreign taxes due with respect to any amount payable to
or other benefit receivable by Executive hereunder, including, without
limitation, any excise tax imposed by Section 4999 of the Code; provided,
however, that any such amount or benefit deemed to be a Parachute Payment (as
defined below) alone or when added to any other amount payable or paid to or
other benefit receivable or received by Executive which is deemed to constitute
a Parachute Payment (whether or not under an existing plan, arrangement or other
agreement), and would result in the imposition on Executive of an excise tax
under Section 4999 of the Code (all such amounts and benefits being hereinafter
called “Total Payments”), shall be reduced to the extent necessary so that no
portion thereof shall be subject to the excise tax imposed by Section 4999 of
the Code but only if, by reason of such reduction, the net after-tax benefit
received by Executive shall exceed the net after-tax benefit received by
Executive if no such reduction was made. For purposes of this Section 3.3, “net
after-tax benefit” shall mean (i) the total of all payments and the value of all
benefits which Executive receives or is then entitled to receive from the
Company that would constitute Parachute Payments, less (ii) the amount of all
federal, state and local income taxes payable with respect to the foregoing
calculated at the maximum marginal income tax rate for each year in which the
foregoing shall be paid to Executive (based on the rate in effect for such year
as set forth in the Code as in effect at the time of the first payment of the
foregoing) and the amount of applicable employment taxes, less (iii) the amount
of excise taxes imposed with respect to the payments and benefits described in
(i) above by Section 4999 of the Code. For purposes of this Section 3.3,
“Parachute Payment” shall mean a “parachute payment” as defined in Section 280G
of the Code

 

  (b) The foregoing determination shall be made by tax counsel appointed by the
Company (the “Tax Counsel”). The Tax Counsel shall submit its determination and
detailed supporting calculations to both Executive and the Company within 15
days after receipt of a notice from either the Company or Executive that
Executive may receive payments which may be Parachute Payments. If the Tax
Counsel determines that such reduction is required by this Section 3.3, the
Total Payments shall be reduced to the extent necessary so that no portion
thereof shall be subject to the excise tax imposed by Section 4999 of the Code,
and the Company shall pay such reduced amount to Executive. The manner in which
the Total Payments are reduced shall be mutually agreed to by the Company and
Executive and approved by Tax Counsel; provided, however, that if the Company
and Executive do not agree within 15 days of the receipt of the Tax Counsel’s
determination, the reduction shall be accomplished by, first, reducing any lump
sum cash payments included in the Total Payments and, if further reductions are
necessary, by such other reductions as shall be recommended by Tax Counsel.
Executive and the Company shall each provide the Tax Counsel access to and
copies of any books, records, and documents in the possession of Executive or
the Company, as the case may be, reasonably requested by the Tax Counsel, and
otherwise cooperate with the Tax Counsel in connection with the preparation and
issuance of the determinations and calculations contemplated by this Section
3.3. The fees and expenses of the Tax Counsel for its services in connection
with the determinations and calculations contemplated by this Section 3.3 shall
be borne by the Company.

 

4. Definitions.

 

  4.1 “Cause” shall mean any of the following grounds for termination of
Executive’s employment:

 

  (a) Executive’s conviction of, or plea of guilty or nolo contendere to, a
felony, any crime of moral turpitude or any crime involving the Company;

 

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  (b) Executive’s engagement in fraud, misappropriation or embezzlement;

 

  (c) Executive’s material breach of any published code of conduct or code of
ethics of the Company or any affiliate of the Company;

 

  (d) Executive’s gross negligence or willful misconduct in the performance of
his duties;

 

  (e) Executive’s continual failure to substantially perform his duties to the
Company (other than a failure resulting from Executive’s incapacity due to
physical or mental illness), and such failure has continued for a period of at
least 30 days after a written notice of demand for substantial performance,
signed by a duly authorized officer of the Company, has been delivered to
Executive specifying the manner in which Executive has failed to substantially
perform; or

 

  (f) Executive’s breach of Section 5 of this Agreement.

 

  4.2 “Good Reason” shall mean, without Executive’s consent:

 

  (a) a significant adverse alteration in the nature or status of Executive’s
authority, duties or responsibilities;

 

  (b) a reduction in Base Salary of Executive;

 

  (c) the Company’s material and willful breach of this Agreement; or

 

  (d) the relocation (without the written consent of Executive) of Executive’s
principal place of employment by more than thirty-five (35) miles from its
location on the Effective Date.

Notwithstanding the foregoing, (i) Good Reason shall not be deemed to exist
unless notice of termination on account thereof (specifying a termination date
of at least 60 days but no more than 90 days from the date of such notice) is
given no later than 90 days after the time at which the event or condition
purportedly giving rise to Good Reason first occurs or arises and (ii) if there
exists (without regard to this clause (ii)) an event or condition that
constitutes Good Reason, the Company shall have 30 days from the date notice of
such a termination is given to cure such event or condition and, if the Company
does so, such event or condition shall not constitute Good Reason hereunder.

 

  4.3 “Change in Control” shall mean the occurrence of any of the following:

 

  (a) The acquisition (other than from the Company), by any person (as such term
is defined in Section 13(c) or 14(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of
the combined voting power of the Company’s then outstanding voting securities;

 

  (b) The individuals who, as of the Effective Date, are members of the Board
(the “Incumbent Board”), cease for any reason during any twelve (12) month
period to constitute at least a majority of the Board, unless the election, or
nomination for election by the Company’s stockholders, of any new director was
approved by a vote of at least a majority of the Incumbent Board, and such new
director shall be considered as a member of the Incumbent Board;

 

  (c)

The closing of a reorganization, merger, consolidation or similar form of
corporate transaction (each, an “Business Combination”) involving the Company if
(i) the stockholders of the Company, immediately before such Business
Combination, do not, as a result of such Business Combination, own, directly or
indirectly, more than fifty percent (50%) of the combined voting power of the
then outstanding voting securities of the

 

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  entity resulting from such Business Combination in substantially the same
proportion as their ownership of the combined voting power of the voting
securities of the Company outstanding immediately before such Business
Combination or (ii) immediately following the Business Combination, the
individuals who comprised the Board immediately prior thereto do not constitute
at least a majority of the board of directors of the entity resulting from such
Business Combination (or, if the entity resulting from such Business Combination
is then a subsidiary, the ultimate parent thereof);

 

  (d) The sale or other disposition of all or substantially all of the assets of
the Company; or

 

  (e) The consummation of a complete liquidation or dissolution of the Company.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because fifty percent (50%) or more of the combined voting power of the
Company’s then outstanding securities is acquired by (i) a trustee or other
fiduciary holding securities under one or more employee benefit plans maintained
by the Company or any of its subsidiaries or (ii) any corporation which,
immediately prior to such acquisition, is owned directly or indirectly by the
stockholders of the Company in the same proportion as their ownership of shares
in the Company immediately prior to such acquisition.

Notwithstanding the foregoing, a Change in Control shall not occur unless such
transaction constitutes a change in the ownership of the Company, a change in
effective control of the Company, or a change in the ownership of a substantial
portion of the Company’s assets under Section 409A of the Code.

 

5. Non-Competition, Non-Solicitation, Intellectual Property and Confidentiality.
Executive hereby acknowledges that, during and solely as a result of his
employment by the Company, Executive will receive special training, education
and information with respect to the operation of the businesses of the Company,
and/or its affiliates, and other related matters, and access to confidential
information and business and professional contacts. In consideration of
Executive’s employment and in consideration of the special and unique
opportunities afforded by the Company to Executive as a result of Executive’s
employment, Executive hereby agrees to abide by the terms of the
non-competition, non-solicitation, intellectual property and confidentiality
provisions below. Executive agrees and acknowledges that his employment is full,
adequate and sufficient consideration for the restrictions and obligations set
forth in those provisions.

 

  5.1 Non-Competition and Non-Solicitation. In consideration of the Company’s
entering into this Agreement, Executive agrees that during the Employment Term
and for a period of twelve (12) months after the termination of the Employment
Term, without regard to its termination for any reason which does not constitute
a breach of this Agreement by the Company or a resignation for Good Reason by
Executive, Executive shall not, unless acting pursuant hereto or with the prior
written consent of the Board:

 

  (a) directly or indirectly, own, manage, operate, finance, join, control or
participate in the ownership, management, operation, financing or control of, or
be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with, or use or permit Executive’s name
to be used in connection with any Competing Business (defined below) within any
state in which the Company, and/or its affiliates, currently engage in any
Substantial Business Activity (defined below) or any state in which the Company,
and/or its affiliates, engaged in any Substantial Business Activity during the
thirty-six month period preceding the date Executive’s employment terminates;
provided, however, that notwithstanding the foregoing, this provision shall not
be construed to prohibit the passive ownership by Executive of not more than
five percent (5%) of the capital stock of any corporation which is engaged in
any Competing Business having a class of securities registered pursuant to the
Exchange Act; or

 

  (b) solicit or divert to any Competing Business any individual or entity which
is an active or prospective customer of the Company, and/or its affiliates, or
was such an active or prospective customer at any time during the preceding
twelve (12) months; or

 

  (c) employ, attempt to employ, solicit or assist any Competing Business in
employing any employee of the Company, and/or its affiliates, whether as an
employee or consultant.

 

8

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The phrase “Competing Business” shall mean: any entity or enterprise actively
engaged in any business or businesses the Company and/or its affiliates are
actively engaged in (or are expected to be actively engaged in within twelve
(12) months) at the time of termination. The phrase “Substantial Business
Activity” shall mean that the Company, and/or its affiliates (i) has a business
office, (ii) owns, services or manages real estate, or (iii) has a recorded and
unsatisfied mortgage or other lien upon real estate or personal property.

In the event that the provisions of this Section 5.1 should ever be adjudicated
to exceed the time, geographic, product or other limitations permitted by
applicable law in any jurisdiction, then such provisions shall be deemed
reformed in such jurisdiction to the maximum time, geographic, product or other
limitations permitted by applicable law.

 

  5.2 Developments. Executive shall disclose fully, promptly and in writing to
the Company any and all inventions, discoveries, improvements, modifications and
other intellectual property rights, whether patentable or not, which Executive
has conceived, made or developed, solely or jointly with others, while employed
by the Company and which (i) relate to the businesses, work or activities of the
Company, and/or its affiliates or (ii) result from or are suggested by the
carrying out of Executive’s duties hereunder or from or by any information that
Executive may receive as an employee of the Company. Executive hereby assigns,
transfers and conveys to the Company all of Executive’s right, title and
interest in and to any and all such inventions, discoveries, improvements,
modifications and other intellectual property rights and agrees to take all such
actions as may be requested by the Company at any time and with respect to any
such invention, discovery, improvement, modification or other intellectual
property rights to confirm or evidence such assignment, transfer and conveyance.
Furthermore, at any time and from time to time, upon the request of the Company,
Executive shall execute and deliver to the Company, any and all instruments,
documents and papers, give evidence and do any and all other acts that, in the
opinion of counsel for the Company, are or may be necessary or desirable to
document such assignment, transfer and conveyance or to enable the Company to
file and prosecute applications for and to acquire, maintain and enforce any and
all patents, trademark registrations or copyrights under United States or
foreign law with respect to any such inventions, discoveries, improvements,
modifications or other intellectual property rights or to obtain any extension,
validation, reissue, continuance or renewal of any such patent, trademark or
copyright. The Company shall be responsible for the preparation of any such
instruments, documents and papers and for the prosecution of any such
proceedings and shall reimburse Executive for all reasonable expenses incurred
by Executive in compliance with the provisions of this Section 5.2.

 

  5.3 Confidentiality.

 

  (a)

Executive acknowledges that, by reason of Executive’s employment by the Company,
Executive will have access to confidential information of the Company, and/or
its affiliates, including, without limitation, information and knowledge
pertaining to products, inventions, discoveries, improvements, innovations,
designs, ideas, trade secrets, proprietary information, manufacturing,
packaging, advertising, distribution and sales methods, sales and profit
figures, customer and client lists and relationships between the Company, and/or
its affiliates, and dealers, distributors, sales representatives, wholesalers,
customers, clients, suppliers and others who have business dealings with them
(“Confidential Information”). Executive acknowledges that such Confidential
Information is a valuable and unique asset of the Company, and/or its
affiliates, and covenants that, both during and after the Employment Term,
Executive will not disclose any Confidential Information to any person (except
as Executive’s duties as an officer of the Company may require or as required by
law or in a judicial or administrative proceeding) without the prior written
authorization of the Board. The obligation of confidentiality imposed by this
Section 5.3 shall not apply to information that becomes generally known to the
public through no act of Executive in breach of this Agreement.

 

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  The Company and Executive acknowledge that, notwithstanding anything to the
contrary contained in this Agreement, pursuant to 18 USC § 1833(b), an
individual may not be held liable under any criminal or civil federal or state
trade secret law for disclosure of a trade secret: (x) made in confidence to a
government official, either directly or indirectly, or to an attorney, solely
for the purpose of reporting or investigating a suspected violation of law or
(y) in a complaint or other document filed in a lawsuit or other proceeding, if
such filing is made under seal. The Company and Executive further acknowledge
that an individual suing an employer for retaliation based on the reporting of a
suspected violation of law may disclose a trade secret to his or her attorney
and use the trade secret information in the court proceeding, so long as any
document containing the trade secret is filed under seal and the individual does
not disclose the trade secret except pursuant to court order.

 

  (b) Executive acknowledges that all documents, files and other materials
received from the Company, and/or its affiliates, during the Employment Term
(with the exception of documents relating to Executive’s compensation or
benefits to which Executive is entitled following the Employment Term) are for
use of Executive solely in discharging Executive’s duties and responsibilities
hereunder and that Executive has no claim or right to the continued use or
possession of such documents, files or other materials following termination of
Executive’s employment by the Company. Executive agrees that, upon termination
of employment, Executive will not retain any such documents, files or other
materials and will promptly return to the Company any documents, files or other
materials in Executive’s possession or custody.

 

  5.4 Non-Disparagement. Executive agrees and covenants that Executive will not
at any time make, publish or communicate to any person or entity or in any
public forum any defamatory or disparaging remarks, comments or statements
concerning the Company or its businesses, or any of its employees, officers, and
existing and prospective customers, suppliers, investors and other associated
third parties. The Company agrees and covenants that it will not authorize the
making, publishing or communicating of, nor will the Board or any executive
officers of the Company at any time make, publish or communicate to any person
or entity or in any public forum any defamatory or disparaging remarks, comments
or statements concerning Executive.

 

  5.5 Cooperation. The parties agree that certain matters in which Executive
will be involved during the Employment Term may necessitate Executive’s
cooperation in the future. Accordingly, following the termination of Executive’s
employment for any reason, to the extent reasonably requested by the Board and
subject to Executive’s professional commitments, Executive shall cooperate with
the Company in connection with matters arising out of Executive’s service to the
Company; provided that, the Company shall make reasonable efforts to minimize
disruption of Executive’s other activities. The Company shall pay Executive a
reasonable per diem and reimburse Executive for reasonable expenses incurred in
connection with such cooperation.

 

  5.6

Equitable Relief. Executive acknowledges that the restrictions contained in
Sections 5.1, 5.2, 5.3, 5.4 and 5.5 hereof are, in view of the nature of the
businesses of the Company and/or its affiliates, reasonable and necessary to
protect the legitimate interests of the Company and/or its affiliates, and that
any violation of any provision of those Sections will result in irreparable
injury to the Company, and/or its affiliates. Executive also acknowledges that
in the event of any such violation, the Company shall be entitled to preliminary
and permanent injunctive relief, without the necessity of proving actual
damages, and to an equitable accounting of all earnings, profits and other
benefits arising from any such violation, which rights shall be cumulative and
in addition to any other rights or remedies to which the Company may be
entitled. Executive agrees that in the event of any such violation, an action
may be commenced for any such preliminary and permanent injunctive relief and
other equitable relief in any federal or state court of competent jurisdiction
sitting in Pennsylvania or in any other court of competent jurisdiction.
Executive hereby waives, to the fullest extent permitted by law, any objection
that Executive may now or hereafter have to such jurisdiction or to the laying
of the venue of any such suit, action or proceeding brought in

 

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  such a court and any claim that such suit, action or proceeding has been
brought in an inconvenient forum. Executive agrees that effective service of
process may be made upon Executive by mail under the notice provisions contained
in Section 10 hereof.

 

6. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Executive’s continuing or future participation in or rights under any benefit,
bonus, incentive or other plan or program provided by the Company and for which
Executive may qualify; provided, however, that if Executive becomes entitled to
and receives the payments provided for in Section 2.1(c) of this Agreement,
Executive hereby waives Executive’s right to receive payments under any
severance plan or similar program applicable to all employees of the Company.

 

7. Survivorship. The respective rights and obligations of the parties under this
Agreement shall survive any termination of Executive’s employment to the extent
necessary to the intended preservation of such rights and obligations.

 

8. Mitigation. Executive shall not be required to mitigate the amount of any
payment or benefit provided for in this Agreement by seeking other employment or
otherwise and there shall be no offset against amounts due Executive under this
Agreement on account of any remuneration attributable to any subsequent
employment that Executive may obtain.

 

9. Arbitration; Expenses. In the event of any dispute under the provisions of
this Agreement, other than a dispute in which the primary relief sought is an
equitable remedy such as an injunction, the parties shall be required to have
the dispute, controversy or claim settled by arbitration in Philadelphia,
Pennsylvania in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association,
before a panel of three arbitrators, two of whom shall be selected by the
Company and Executive, respectively, and the third of whom shall be selected by
the other two arbitrators. Any award entered by the arbitrators shall be final,
binding and nonappealable and judgment may be entered thereon by either party in
accordance with applicable law in any court of competent jurisdiction. This
arbitration provision shall be specifically enforceable. The arbitrators shall
have no authority to modify any provision of this Agreement or to award a remedy
for a dispute involving this Agreement other than a benefit specifically
provided under or by virtue of the Agreement. Each party shall be responsible
for its own expenses relating to the conduct of the arbitration (including
reasonable attorneys’ fees and expenses) and shall share the fees of the
American Arbitration Association.

 

10. Notices. All notices and other communications required or permitted under
this Agreement or necessary or convenient in connection herewith shall be in
writing and shall be deemed to have been given when hand delivered or mailed by
registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):

If to the Company, to:

Independence Realty Trust, Inc.

Two Logan Square

100 North 18th Street, 23rd floor

Philadelphia, Pennsylvania 19103

Attention: General Counsel

If to Executive, to:

James J. Sebra at his most recent home address set forth in the records of the
Company.

or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.

 

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11. Contents of Agreement; Amendment and Assignment.

 

  11.1 This Agreement sets forth the entire understanding between the parties
hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment approved by the
Board and executed on its behalf by a duly authorized officer and by Executive.
This Agreement supersedes the provisions of any employment or other agreement
between Executive and the Company that relate to any matter that is also the
subject of this Agreement and such provisions in such other agreements will be
null and void.

 

  11.2 All of the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Executive under
this Agreement are of a personal nature and shall not be assignable or delegable
in whole or in part by Executive. The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, reorganization
or otherwise) to all or substantially all of the business or assets of the
Company, within fifteen (15) days of such succession, expressly to assume and
agree to perform this Agreement in the same manner and to the same extent as the
Company would be required to perform if no such succession had taken place.

 

12. Severability. If any provision of this Agreement or application thereof to
anyone or under any circumstances is adjudicated to be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect any
other provision or application of this Agreement which can be given effect
without the invalid or unenforceable provision or application and shall not
invalidate or render unenforceable such provision or application in any other
jurisdiction. If any provision is held void, invalid or unenforceable with
respect to particular circumstances, it shall nevertheless remain in full force
and effect in all other circumstances.

 

13. Remedies Cumulative; No Waiver. No remedy conferred upon a party by this
Agreement is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to any other remedy
given under this Agreement or now or hereafter existing at law or in equity. No
delay or omission by a party in exercising any right, remedy or power under this
Agreement or existing at law or in equity shall be construed as a waiver
thereof, and any such right, remedy or power may be exercised by such party from
time to time and as often as may be deemed expedient or necessary by such party
in its sole discretion.

 

14. Beneficiaries/References. Executive shall be entitled, to the extent
permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable under this
Agreement following Executive’s death by giving the Company written notice
thereof. In the event of Executive’s death or a judicial determination of
Executive’s incompetence, reference in this Agreement to Executive shall be
deemed, where appropriate, to refer to Executive’s beneficiary, estate or other
legal representative.

 

15. Miscellaneous. All section headings used in this Agreement are for
convenience only. This Agreement may be executed in counterparts, each of which
is an original. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other counterparts.

 

16. Withholding. All payments under this Agreement shall be made subject to
applicable tax withholding, and the Company shall withhold from any payments
under this Agreement all federal, state and local taxes as the Company is
required to withhold pursuant to any law or governmental rule or regulation.
Except as specifically provided otherwise in this Agreement, Executive shall
bear all expense of, and be solely responsible for, all federal, state and local
taxes due with respect to any payment received under this Agreement.

 

17. Governing Law. This Agreement shall be governed by and interpreted under the
laws of the Commonwealth of Pennsylvania without giving effect to any conflict
of laws provisions.

 

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18. Section 409A.

 

  18.1 Interpretation. Notwithstanding the other provisions hereof, this
Agreement is intended to comply with the requirements of Section 409A of the
Code, to the extent applicable, and this Agreement shall be interpreted to avoid
any penalty sanctions under Section 409A of the Code. Accordingly, all
provisions herein, or incorporated by reference, shall be construed and
interpreted to comply with Section 409A and, if necessary, any such provision
shall be deemed amended to comply with Section 409A of the Code and regulations
thereunder. If any payment or benefit cannot be provided or made at the time
specified herein without incurring sanctions under Section 409A of the Code,
then such benefit or payment shall be provided in full at the earliest time
thereafter when such sanctions will not be imposed. For purposes of Section 409A
of the Code, each payment made under this Agreement shall be treated as a
separate payment. In no event may Executive, directly or indirectly, designate
the calendar year of payment. Executive will be deemed to have a termination of
employment for purposes of determining the timing of any payments or benefits
hereunder that are classified as deferred compensation only upon a “separation
from service” within the meaning of Section 409A of the Code.

 

  18.2 Payment Delay. Notwithstanding any provision to the contrary in this
Agreement, if on the date of Executive’s termination of employment, Executive is
a “specified employee” (as such term is defined in Section 409A(a)(2)(B)(i) of
the Code and its corresponding regulations) as determined by the Board (or its
delegate) in its sole discretion in accordance with its “specified employee”
determination policy, then all cash severance payments payable to Executive
under this Agreement that are deemed as deferred compensation subject to the
requirements of Section 409A of the Code shall be postponed for a period of six
months following Executive’s “separation from service” with the Company (or any
successor thereto). The postponed amounts shall be paid to Executive in a lump
sum on the date that is six (6) months and one (1) day following Executive’s
“separation from service” with the Company (or any successor thereto). If
Executive dies during such six-month period and prior to payment of the
postponed cash amounts hereunder, the amounts delayed on account of Section 409A
of the Code shall be paid to the personal representative of Executive’s estate
on the sixtieth (60th) day after Executive’s death. If any of the cash payments
payable pursuant to this Agreement are delayed due to the requirements of
Section 409A of the Code, there shall be added to such payments interest during
the deferral period at an annualized rate of interest equal to the prime rate as
reported in the Wall Street Journal (or, if unavailable, a comparable source) at
the relevant time.

 

  18.3 Reimbursements. All reimbursements provided under this Agreement shall be
made or provided in accordance with the requirements of Section 409A of the
Code, including, where applicable, the requirement that (i) any reimbursement is
for expenses incurred during Executive’s lifetime (or during a shorter period of
time specified in this Agreement), (ii) the amount of expenses eligible for
reimbursement during a calendar year may not affect the expenses eligible for
reimbursement in any other calendar year, (iii) the reimbursement of an eligible
expense will be made on or before the last day of the taxable year following the
year in which the expense is incurred, and (iv) the right to reimbursement is
not subject to liquidation or exchange for another benefit.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.

 

INDEPENDENCE REALTY TRUST, INC. By:  

 

  Name:     Title:   EXECUTIVE By:  

 

  Name:   James J. Sebra

 

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EXHIBIT A

Release

You, for yourself, your spouse and your agents, successors, heirs, executors,
administrators and assigns, hereby irrevocably and unconditionally forever
release and discharge Independence Realty Trust, Inc. (the “Corporation”), its
parents, divisions, subsidiaries and affiliates and its and their current and
former owners, directors, officers, stockholders, insurers, benefit plans,
representatives, agents and employees, and each of their predecessors,
successors, and assigns (collectively, the “Releasees”), from any and all actual
or potential claims or liabilities of any kind or nature, including, but not
limited to, any claims arising out of or related to your employment and
separation from employment with the Corporation and any services that you
provided to the Corporation; any claims for salary, commissions, bonuses, other
severance pay, vacation pay, allowances or other compensation, or for any
benefits under the Employee Retirement Income Security Act of 1974 (“ERISA”)
(except for vested ERISA benefits); any claims for discrimination, harassment or
retaliation of any kind or based upon any legally protected classification or
activity; any claims under Title VII of the Civil Rights Acts of 1964, the Civil
Rights Act of 1866 and 1964, as amended, 42 U.S.C. § 1981, the Age
Discrimination in Employment Act, the Older Workers Benefit Protection Act, the
Americans with Disabilities Act, 42 U.S.C. §1981, 42 U.S.C. § 1983, the Family
Medical Leave Act and any similar state law, the Fair Credit Reporting Act and
any similar state law, the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq.,
the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, et
seq., the Equal Pay Act and any similar state law, any claims for discrimination
in violation of the Pennsylvania Human Relations Act, and any claims for
wrongful discharge, discrimination, retaliation, or other violation of the
Pennsylvania Whistleblower Law, as well as any amendments to any such laws; any
claims for any violation of any federal or state constitutions or executive
orders; any claims for wrongful or constructive discharge, violation of public
policy, breach of contract or promise (oral, written, express or implied),
personal injury not covered by workers’ compensation benefits,
misrepresentation, negligence, fraud, estoppel, defamation, infliction of
emotional distress, contribution and any claims under any other federal, state
or local law, including those not specifically listed in this Release, that you,
your heirs, executors, administrators, successors, and assigns now have, ever
had or may hereafter have, whether known or unknown, suspected or unsuspected,
up to and including the date of your execution of this Release.

For the purpose of implementing a full and complete release and discharge of the
Releasees as set forth above, you acknowledge that this Release is intended to
include in its effect, without limitation, all claims known or unknown that you
have or may have against the Releasees which arise out of or relate to your
employment, including but not limited to compensation, performance or
termination of employment with the Corporation, except for, and notwithstanding
anything in this Release to the contrary, claims which cannot be released solely
by private agreement. This Release also excludes any claims relating to any
right you may have to payments pursuant to Section 2.1(c) of the Employment
Agreement, entered into as of             , 2016, by and between the Corporation
and you, any claim for workers’ compensation benefits and any rights you may
have to indemnification or directors’ and officers’ liability insurance under
the Corporation’s bylaws or certificate of incorporation, any indemnification
agreement to which you are a party or beneficiary or applicable law, as a result
of having served as an officer, director or employee of the Corporation or any
of its affiliates. You further acknowledge and agree that you have received all
leave, compensation and reinstatement benefits to which you were entitled
through the date of your execution of this Release, and that you were not
subjected to any improper treatment, conduct or actions as a result of a request
for leave, compensation or reinstatement.

You affirm, by signing this Release, that you have not suffered any unreported
injury or illness arising from your employment, and that you have not filed,
with any federal, state, or local court or agency, any actions or charges
against the Releasees relating to or arising out of your employment with or
separation from the Corporation. You further agree that while this Release does
not preclude you from filing a charge with the National Labor Relations Board
(“NLRB”), the Equal Employment Opportunity Commission (“EEOC”) or a similar
state or local agency, or from participating in any investigation or proceeding
with them, you do waive your right to personally recover monies or reinstatement
as a result of any complaint or charge filed against the Corporation with the
NLRB, EEOC or any federal, state or local court or agency, except as to any
action to enforce or challenge this Release, to recover any vested benefits
under ERISA, or to recover workers’ compensation benefits. Nothing in this
Release prohibits or restricts you (or your attorney) from initiating
communications directly with, responding to an inquiry from, or providing
testimony before the Securities and Exchange Commission (“SEC”), the Financial
Industry Regulatory Authority (“FINRA”), any other self-regulatory organization
or any other federal or state regulatory authority regarding this Release or its
underlying facts or circumstances or a possible securities law violation.

 

15

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You acknowledge:

 

  (a) That you were provided [twenty-one (21) / forty-five (45)] full days
during which to consider whether to sign this Release. If you have signed this
Release prior to the expiration of the [21-day / 45-day] period, you have
voluntarily elected to forego the remainder of that period.

 

  (b) That you have carefully read and fully understand all of the terms of this
Release[, including its Attachment A].

 

  (c) That you understand that by signing this Release, you are waiving your
rights under the Age Discrimination in Employment Act, as amended by the Older
Workers Benefit Protection Act, 29 U.S.C. § 621, et seq., and that you are not
waiving any rights arising after the date that this Release is signed.

 

  (d) That you have been given an opportunity to consult with anyone you choose,
including an attorney, about this Release.

 

  (e) That you understand fully the terms and effect of this Release and know of
no claim that has not been released by this Release. And, you further
acknowledge that you are not aware of, or that you have fully disclosed to the
Corporation, any matters for which you are responsible or which has come to your
attention as an employee of the Corporation that might give rise to, evidence,
or support any claim of illegal conduct, regulatory violation, unlawful
discrimination, or other cause of action against the Corporation.

 

  (f) That these terms are final and binding on you.

 

  (g) That you have signed this Release voluntarily, and not in reliance on any
representations or statements made to you by any employee or officer of the
Corporation or any of its subsidiaries.

 

  (h) That you have seven (7) days following your execution of this Release to
revoke it in writing, and that this Release is not effective or enforceable
until after this seven (7) day period has expired without revocation. If you
wish to revoke this Release after signing it, you must provide written notice of
your decision to revoke this Release to the Corporation, to the attention of the
General Counsel, Two Logan Square, 100 North 18th Street, 23rd floor,
Philadelphia, Pennsylvania 19103, by no later than 11:59 p.m. on the seventh
calendar day after the date on which you have signed this Release.

PLEASE READ CAREFULLY. THIS RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS.

ACKNOWLEDGED AND AGREED

 

 

James J. Sebra   Date

 

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EXHIBIT G

FARRELL ENDER EMPLOYMENT AGREEMENT

 

Exhibit G-1

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EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of             ,
2016, by and between Independence Realty Trust, Inc., a Maryland corporation
(the “Company”), and Farrell M. Ender (“Executive”).

WHEREAS, the Company, Independence Realty Operating Partnership, LP, a Delaware
limited partnership (“IROP”), RAIT Financial Trust, a Maryland real estate
investment trust (“RAIT”), RAIT TRS, LLC, a Delaware limited liability company
(“Interest Seller”), Jupiter Communities, LLC, a Delaware limited liability
company (“Asset Seller”), and the entities set forth on the signature pages of
the Purchase Agreement have entered into that certain Securities and Asset
Purchase Agreement, dated as of September     , 2016 (the “Purchase Agreement”);

WHEREAS, pursuant to the Purchase Agreement, at the Second Closing (as defined
in the Purchase Agreement), and on the terms and subject to the conditions set
forth in the Purchase Agreement, Interest Seller shall sell, convey, assign,
transfer and deliver to IROP, and IROP shall purchase, acquire and accept from
Interest Seller, all of Interest Seller’s right, title and interest in and to
the Membership Interests (as defined in the Purchase Agreement), and Asset
Seller shall sell, convey, assign, transfer and deliver to IROP, and IROP shall
purchase, acquire and accept from Asset Seller, all of Asset Seller’s right,
title and interest in, to and under the Transferred Assets (as defined in the
Purchase Agreement);

WHEREAS, Executive is currently employed by RAIT and serves as the President of
the Company; and

WHEREAS, in connection with and subject to the Second Closing, the Company
wishes to employ Executive in the position of President of the Company, and
Executive wishes to accept such employment, on the terms set forth below,
effective as of the Effective Date (as defined below).

NOW, THEREFORE, in consideration of the Recitals, the mutual promises and
covenants set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

 

1. Employment. The Company agrees to employ Executive, and Executive hereby
accepts such employment and agrees to perform Executive’s duties and
responsibilities, in accordance with the terms, conditions and provisions
hereinafter set forth.

 

  1.1 Employment Term. This Agreement shall become effective from and after the
Second Closing (the “Effective Date”); provided, that, in the event the Second
Closing does not occur by the Outside Date (as defined in the Purchase
Agreement) or the Purchase Agreement is otherwise terminated, this Agreement
shall thereupon become null and void. This Agreement shall continue until the
third anniversary of the Effective Date, unless the Agreement is terminated
sooner in accordance with Section 2 below; and shall be effective for successive
one-year periods in accordance with the terms of this Agreement (subject to
termination as aforesaid) unless either party notifies the other party of
non-renewal in writing prior to three months before the expiration of the then
current term. The period commencing on the Effective Date and ending on the date
on which the term of Executive’s employment under this Agreement shall terminate
is hereinafter referred to as the “Employment Term.”

 

  1.2 Duties and Responsibilities. Executive shall continue to serve as the
President of the Company during the Employment Term. Executive shall perform all
duties and accept all responsibilities incident to such position as may be
reasonably assigned to him by the Board of Directors of the Company (the
“Board”) or the Chief Executive Officer of the Company.

 

  1.3

Extent of Service. Executive agrees to use Executive’s best efforts to carry out
Executive’s duties and responsibilities under Section 1.2 hereof and, consistent
with the other provisions of this Agreement, to devote substantially all of
Executive’s business time, attention and energy to the

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  performance of Executive’s duties and responsibilities hereunder. Subject to
the requirements of Section 5.1, the foregoing shall not be construed as
preventing Executive from making investments in other businesses or enterprises
provided there is no conflict with Executive’s ability to satisfy his
obligations to the Company.

 

  1.4 Base Salary. For all of the services rendered by Executive hereunder, the
Company shall pay Executive a base salary (“Base Salary”), which shall be at the
annual rate of Three Hundred Thousand Dollars ($300,000) beginning as of the
Effective Date, payable in installments at such times as the Company customarily
pays its other senior level executives. Executive’s Base Salary shall be
reviewed annually for appropriate increases by the Board pursuant to the Board’s
normal performance review policies for senior level executives but shall not be
decreased.

 

  1.5 Bonus. Executive shall be eligible to receive annual bonuses in such
amounts as the Board may approve in its sole discretion or under the terms of
any annual incentive plan of the Company maintained for other senior level
executives.

 

  1.6 Retirement and Welfare Plans and Perquisites. Executive shall be entitled
to participate in all employee retirement and welfare benefit plans and programs
or executive perquisites made available to the Company’s senior level executives
as a group or to its employees generally, as such retirement and welfare plans
or perquisites may be in effect from time to time and subject to the eligibility
requirements of the plans and applicable law. For purposes of any such benefit
plans and programs or executive perquisites that condition participation or
entitlements thereunder on duration of service with the Company, Executive’s
service with RAIT shall be treated as service to the Company. Nothing in this
Agreement shall prevent the Company from amending or terminating any retirement,
welfare or other employee benefit plans or programs from time to time as the
Company deems appropriate.

 

  1.7 Reimbursement of Expenses; Vacation. Executive shall be provided with
reimbursement of reasonable expenses related to Executive’s employment by the
Company on a basis no less favorable than that which may be authorized from time
to time for senior level executives as a group, and shall be entitled to
vacation and sick leave in accordance with the Company’s vacation, holiday and
other pay for time not worked policies. For purposes of any such vacation,
holiday and sick leave policies that condition participation or entitlements
thereunder on duration of service with the Company, Executive’s service with
RAIT shall be treated as service to the Company.

 

  1.8 Incentive Compensation. Executive shall be entitled to participate in any
short-term and long-term incentive programs (including without limitation any
equity compensation plans) established by the Company for its senior level
executives generally.

 

  1.9 Clawback/Recoupment. Notwithstanding any other provision in this Agreement
to the contrary, any compensation paid to Executive pursuant to this Agreement
or any other agreement or arrangement with the Company shall be subject to
mandatory repayment by Executive to the Company if and to the extent any such
compensation paid to Executive is, or in the future becomes, subject to (i) any
“clawback” or recoupment policy that is applicable to all senior executives of
the Company and is limited to the recovery of incentive-based compensation
which, as a result of an accounting restatement by the Company, is in excess of
the compensation which should have been received by Executive, or (ii) any law,
rule, requirement or regulation which imposes mandatory recoupment, under
circumstances set forth in such law, rule, requirement or regulation.

 

2. Termination. The Employment Term and Executive’s employment hereunder shall
terminate upon the occurrence of any of the following events:

 

  2.1 Termination Without Cause; Resignation for Good Reason; Non-Renewal by the
Company.

 

  (a) The Company may terminate Executive’s employment at any time without Cause
(as defined in Section 4) upon not less than sixty (60) days’ prior written
notice to Executive. In addition, Executive may initiate a termination of
employment by resigning under this Section 2.1 for Good Reason (as defined in
Section 4). Executive shall give the Company not less than sixty (60) days’
prior written notice of such resignation. In addition, the Company may initiate
a termination of employment by sending a notice of non-renewal of this Agreement
to Executive, as described in Section 1.1.

 

2

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  (b) Upon any termination or resignation described in Section 2.1(a) above,
Executive shall be entitled to receive only the amount due to Executive under
the Company’s then current severance pay plan for employees, if any. No other
payments or benefits shall be due under this Agreement to Executive, but
Executive shall be entitled to receive (i) Executive’s Base Salary due through
his date of termination, (ii) any earned but unpaid annual bonus for the year
preceding the fiscal year of termination, (iii) any amounts owing to Executive
for reimbursement of expenses properly incurred by Executive prior to his date
of termination and which are reimbursable in accordance with Section 1.7; and
(iv) any benefits accrued and earned in accordance with the terms and conditions
of any applicable benefit plans and programs of the Company in which Executive
participated prior to his termination of employment (collectively, the “Accrued
Benefits”).

 

  (c) Notwithstanding the provisions of Section 2.1(b), in the event that
Executive executes and does not revoke the release described in Section 2.7,
Executive shall be entitled to receive, in lieu of any payments or benefits due
to him under the Company’s then current severance pay plan for employees (if
any), the following:

 

  (i) Executive shall receive a lump sum cash payment equal to two times the sum
of (x) Executive’s Base Salary, as in effect immediately prior to his
termination of employment and (y) the average annual cash bonus earned by
Executive for the three year period immediately prior to his termination of
employment, or the average annual cash bonus earned by Executive for the actual
number of completed fiscal years immediately prior to his termination of
employment if less than three; provided, however, that if Executive has been
employed by the Company for less than one completed fiscal year prior to his
termination of employment, then the amount used for clause (y) shall be
Executive’s target annual cash bonus for the fiscal year of his termination of
employment. One half of the amount described in the preceding sentence shall be
consideration for Executive’s entering into the restrictive covenants described
in Section 5 below. Unless the payment is required to be delayed pursuant to
Section 18.2 below, the payment shall be made within fifteen (15) days of the
Release Effective Date (as defined below).

 

  (ii) Executive shall receive a lump sum cash payment equal to a pro rata
portion of the annual cash bonus, if any, that Executive would have earned for
the fiscal year of his termination based on achievement of the applicable
performance goals for such year (the “Cash Bonus”). The pro-rated Cash Bonus
shall be determined by multiplying the Cash Bonus by a fraction, the numerator
of which is the number of days during which Executive was employed by the
Company in the fiscal year of his termination of employment and the denominator
of which is three hundred sixty-five (365). Unless the payment is required to be
delayed pursuant to Section 18.2 below, the payment shall be made on the date
that annual bonuses are paid to similarly situated executives, but in no event
later than two-and-a-half months following the end of the calendar year in which
Executive’s termination date occurs.

 

  (iii)

For a period of eighteen (18) months following Executive’s date of termination,
provided Executive and his eligible dependents timely and properly elect to

 

3

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  continue health care coverage under COBRA, Executive shall continue to receive
the medical coverage in effect at the date of his termination of employment (or
generally comparable coverage) for himself and, where applicable, his spouse and
dependents, at the same premium rates as may be charged from time to time for
employees of the Company generally, as if Executive had continued in employment
with the Company during such period.

 

  (iv) The treatment of any outstanding equity awards held by Executive shall be
determined in accordance with the terms of the applicable incentive plan and the
applicable award agreements; provided, however, that any such equity awards that
are subject solely to time-vesting conditions shall become fully vested as of
the date of Executive’s termination of employment.

 

  2.2 Voluntary Termination. Executive may voluntarily terminate his employment
for any reason upon sixty (60) days’ prior written notice or by sending a notice
of non-renewal of this Agreement to the Company, as described in Section 1.1. In
any such event, after the effective date of such termination, except as provided
in Section 2.1 with respect to a resignation for Good Reason, no further
payments shall be due under this Agreement, except that Executive shall be
entitled to receive the Accrued Benefits.

 

  2.3 Disability. The Company may terminate Executive’s employment, to the
extent permitted by applicable law, if Executive (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, or (ii) is, by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than three months under an accident and health plan covering
employees of the Company (“Disability”). If the Company terminates Executive’s
employment for Disability, Executive shall be entitled to receive the following:

 

  (a) Executive shall receive a lump sum cash payment equal to a pro rata
portion of Executive’s target annual cash bonus for the fiscal year of his
termination (or, in the absence of a target bonus opportunity for the fiscal
year, a pro rata portion of the average annual cash bonus earned by Executive
for the three year period immediately prior to his termination of employment or
the average annual cash bonus earned by Executive for the actual number of
completed fiscal years immediately prior to his termination of employment if
less than three) (the “Target Cash Bonus”). The pro-rated Target Cash Bonus
shall be determined by multiplying the Target Cash Bonus by a fraction, the
numerator of which is the number of days during which Executive was employed by
the Company, prior to his termination of employment, in the Company’s fiscal
year in which his termination of employment occurs and the denominator of which
is three hundred sixty-five (365). Except as otherwise required to comply with
the requirements of Section 18 below, payment shall be made on the sixtieth
(60th) day following Executive’s last day of employment with the Company on
account of Disability.

 

  (b) The Company shall pay to Executive the Accrued Benefits.

 

  2.4 Death. If Executive dies while employed by the Company, the Company shall
pay to Executive’s executor, legal representative, administrator or designated
beneficiary, as applicable, (i) the Accrued Benefits and (ii) a pro-rated Target
Cash Bonus (determined according to Section 2.3(a) above) for the Company’s
fiscal year in which Executive’s death occurs and, except as otherwise required
to comply with the requirements of Section 18 below, shall be paid in a lump sum
cash payment on the sixtieth (60th) day following the date of Executive’s death.
Otherwise, the Company shall have no further liability or obligation under this
Agreement to Executive’s executors, legal representatives, administrators, heirs
or assigns or any other person claiming under or through Executive.

 

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  2.5 Cause. The Company may terminate Executive’s employment at any time for
Cause upon written notice to Executive, in which event all payments under this
Agreement shall cease, except for Base Salary to the extent already accrued.
Executive shall be entitled to receive the Accrued Benefits. Whether a
termination is for Cause, as such term is defined in Section 4.1, shall be
determined by the Board in its sole discretion.

 

  2.6 Notice of Termination. Any termination of Executive’s employment shall be
communicated by a written notice of termination to the other party hereto given
in accordance with Section 10. The notice of termination shall (i) indicate the
specific termination provision in this Agreement relied upon, (ii) briefly
summarize the facts and circumstances deemed to provide a basis for a
termination of employment and the applicable provision hereof, and (iii) specify
the termination date in accordance with the requirements of this Agreement.

 

  2.7 Release. Executive agrees that, as a condition to receiving the severance
payments and benefits set forth in Section 2.1, Executive will execute a release
of claims substantially in the form of the release attached hereto as Exhibit A.
Within two business days of Executive’s date of termination, the Company shall
deliver to Executive the release for Executive to execute. Executive will
forfeit all rights to the severance payments and benefits set forth in Section
2.1 unless, within fifty-five (55) days of delivery of the release by the
Company to Executive, Executive executes and delivers the release to the Company
and such release has become irrevocable by virtue of the expiration of the
revocation period without the release having been revoked (the first such date,
the “Release Effective Date”). The Company’s obligation to pay the severance
payments and benefits set forth in Section 2.1 is subject to the occurrence of
the Release Effective Date, and if the Release Effective Date does not occur,
then the Company shall have no obligation to pay the severance payments and
benefits set forth in Section 2.1. To the extent that the Release Effective Date
could occur in one of two (2) taxable years of Executive depending on when
Executive executes and delivers the release, any deferred compensation payment
(which is subject to Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”)) that is conditioned on execution of the release shall be
made no earlier than the first business day of the later of such taxable years.

 

  2.8 Resignation of All Other Positions. Upon termination of Executive’s
employment for any reason, Executive shall be deemed to have resigned from all
positions that Executive holds as an officer of the Company or any affiliate of
the Company, unless otherwise mutually agreed with the Board.

 

3. Change in Control.

 

  3.1 Effect of Change in Control. If a Change in Control occurs and Executive’s
employment terminates under the circumstances described below, the provisions of
Section 2.1 shall apply.

 

  3.2 Termination Without Cause or Resignation for Good Reason Upon or After a
Change in Control. Upon or within eighteen (18) months after a Change in
Control, the Company (by action of the Board) may terminate Executive’s
employment at any time without Cause or Executive may initiate a termination of
employment by resigning under this Section 3 for Good Reason (as defined in
Section 4) (in either case the Employment Term shall be deemed to have ended)
upon not less than sixty (60) days’ prior written notice to Executive (or in the
case of resignation for Good Reason, Executive shall give the Company not less
than sixty (60) days’ prior written notice of such resignation). In any such
event, the provisions of Section 2.1(b) or (c), as applicable, shall then apply.

 

  3.3 Code Section 280G.

 

  (a)

Executive shall bear all expense of, and be solely responsible for, all federal,
state, local or foreign taxes due with respect to any amount payable to or other
benefit receivable by Executive hereunder, including, without limitation, any
excise tax imposed by Section 4999 of the Code; provided, however, that any such
amount or benefit deemed to be a Parachute Payment (as defined below) alone or
when added to any other amount payable

 

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  or paid to or other benefit receivable or received by Executive which is
deemed to constitute a Parachute Payment (whether or not under an existing plan,
arrangement or other agreement), and would result in the imposition on Executive
of an excise tax under Section 4999 of the Code (all such amounts and benefits
being hereinafter called “Total Payments”), shall be reduced to the extent
necessary so that no portion thereof shall be subject to the excise tax imposed
by Section 4999 of the Code but only if, by reason of such reduction, the net
after-tax benefit received by Executive shall exceed the net after-tax benefit
received by Executive if no such reduction was made. For purposes of this
Section 3.3, “net after-tax benefit” shall mean (i) the total of all payments
and the value of all benefits which Executive receives or is then entitled to
receive from the Company that would constitute Parachute Payments, less (ii) the
amount of all federal, state and local income taxes payable with respect to the
foregoing calculated at the maximum marginal income tax rate for each year in
which the foregoing shall be paid to Executive (based on the rate in effect for
such year as set forth in the Code as in effect at the time of the first payment
of the foregoing) and the amount of applicable employment taxes, less (iii) the
amount of excise taxes imposed with respect to the payments and benefits
described in (i) above by Section 4999 of the Code. For purposes of this Section
3.3, “Parachute Payment” shall mean a “parachute payment” as defined in Section
280G of the Code.

 

  (b) The foregoing determination shall be made by tax counsel appointed by the
Company (the “Tax Counsel”). The Tax Counsel shall submit its determination and
detailed supporting calculations to both Executive and the Company within 15
days after receipt of a notice from either the Company or Executive that
Executive may receive payments which may be Parachute Payments. If the Tax
Counsel determines that such reduction is required by this Section 3.3, the
Total Payments shall be reduced to the extent necessary so that no portion
thereof shall be subject to the excise tax imposed by Section 4999 of the Code,
and the Company shall pay such reduced amount to Executive. The manner in which
the Total Payments are reduced shall be mutually agreed to by the Company and
Executive and approved by Tax Counsel; provided, however, that if the Company
and Executive do not agree within 15 days of the receipt of the Tax Counsel’s
determination, the reduction shall be accomplished by, first, reducing any lump
sum cash payments included in the Total Payments and, if further reductions are
necessary, by such other reductions as shall be recommended by Tax Counsel.
Executive and the Company shall each provide the Tax Counsel access to and
copies of any books, records, and documents in the possession of Executive or
the Company, as the case may be, reasonably requested by the Tax Counsel, and
otherwise cooperate with the Tax Counsel in connection with the preparation and
issuance of the determinations and calculations contemplated by this Section
3.3. The fees and expenses of the Tax Counsel for its services in connection
with the determinations and calculations contemplated by this Section 3.3 shall
be borne by the Company.

 

4. Definitions.

 

  4.1 “Cause” shall mean any of the following grounds for termination of
Executive’s employment:

 

  (a) Executive’s conviction of, or plea of guilty or nolo contendere to, a
felony, any crime of moral turpitude or any crime involving the Company;

 

  (b) Executive’s engagement in fraud, misappropriation or embezzlement;

 

  (c) Executive’s material breach of any published code of conduct or code of
ethics of the Company or any affiliate of the Company;

 

  (d) Executive’s gross negligence or willful misconduct in the performance of
his duties;

 

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  (e) Executive’s continual failure to substantially perform his duties to the
Company (other than a failure resulting from Executive’s incapacity due to
physical or mental illness), and such failure has continued for a period of at
least 30 days after a written notice of demand for substantial performance,
signed by a duly authorized officer of the Company, has been delivered to
Executive specifying the manner in which Executive has failed to substantially
perform; or

 

  (f) Executive’s breach of Section 5 of this Agreement.

 

  4.2 “Good Reason” shall mean, without Executive’s consent:

 

  (a) a significant adverse alteration in the nature or status of Executive’s
authority, duties or responsibilities;

 

  (b) a reduction in Base Salary of Executive;

 

  (c) the Company’s material and willful breach of this Agreement; or

 

  (d) the relocation (without the written consent of Executive) of Executive’s
principal place of employment by more than thirty-five (35) miles from its
location on the Effective Date.

Notwithstanding the foregoing, (i) Good Reason shall not be deemed to exist
unless notice of termination on account thereof (specifying a termination date
of at least 60 days but no more than 90 days from the date of such notice) is
given no later than 90 days after the time at which the event or condition
purportedly giving rise to Good Reason first occurs or arises and (ii) if there
exists (without regard to this clause (ii)) an event or condition that
constitutes Good Reason, the Company shall have 30 days from the date notice of
such a termination is given to cure such event or condition and, if the Company
does so, such event or condition shall not constitute Good Reason hereunder.

 

  4.3 “Change in Control” shall mean the occurrence of any of the following:

 

  (a) The acquisition (other than from the Company), by any person (as such term
is defined in Section 13(c) or 14(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of
the combined voting power of the Company’s then outstanding voting securities;

 

  (b) The individuals who, as of the Effective Date, are members of the Board
(the “Incumbent Board”), cease for any reason during any twelve (12) month
period to constitute at least a majority of the Board, unless the election, or
nomination for election by the Company’s stockholders, of any new director was
approved by a vote of at least a majority of the Incumbent Board, and such new
director shall be considered as a member of the Incumbent Board;

 

  (c) The closing of a reorganization, merger, consolidation or similar form of
corporate transaction (each, an “Business Combination”) involving the Company if
(i) the stockholders of the Company, immediately before such Business
Combination, do not, as a result of such Business Combination, own, directly or
indirectly, more than fifty percent (50%) of the combined voting power of the
then outstanding voting securities of the entity resulting from such Business
Combination in substantially the same proportion as their ownership of the
combined voting power of the voting securities of the Company outstanding
immediately before such Business Combination or (ii) immediately following the
Business Combination, the individuals who comprised the Board immediately prior
thereto do not constitute at least a majority of the board of directors of the
entity resulting from such Business Combination (or, if the entity resulting
from such Business Combination is then a subsidiary, the ultimate parent
thereof);

 

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  (d) The sale or other disposition of all or substantially all of the assets of
the Company; or

 

  (e) The consummation of a complete liquidation or dissolution of the Company.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because fifty percent (50%) or more of the combined voting power of the
Company’s then outstanding securities is acquired by (i) a trustee or other
fiduciary holding securities under one or more employee benefit plans maintained
by the Company or any of its subsidiaries or (ii) any corporation which,
immediately prior to such acquisition, is owned directly or indirectly by the
stockholders of the Company in the same proportion as their ownership of shares
in the Company immediately prior to such acquisition.

Notwithstanding the foregoing, a Change in Control shall not occur unless such
transaction constitutes a change in the ownership of the Company, a change in
effective control of the Company, or a change in the ownership of a substantial
portion of the Company’s assets under Section 409A of the Code.

 

5. Non-Competition, Non-Solicitation, Intellectual Property and Confidentiality.
Executive hereby acknowledges that, during and solely as a result of his
employment by the Company, Executive will receive special training, education
and information with respect to the operation of the businesses of the Company,
and/or its affiliates, and other related matters, and access to confidential
information and business and professional contacts. In consideration of
Executive’s employment and in consideration of the special and unique
opportunities afforded by the Company to Executive as a result of Executive’s
employment, Executive hereby agrees to abide by the terms of the
non-competition, non-solicitation, intellectual property and confidentiality
provisions below. Executive agrees and acknowledges that his employment is full,
adequate and sufficient consideration for the restrictions and obligations set
forth in those provisions.

 

  5.1 Non-Competition and Non-Solicitation. In consideration of the Company’s
entering into this Agreement, Executive agrees that during the Employment Term
and for a period of twelve (12) months after the termination of the Employment
Term, without regard to its termination for any reason which does not constitute
a breach of this Agreement by the Company or a resignation for Good Reason by
Executive, Executive shall not, unless acting pursuant hereto or with the prior
written consent of the Board:

 

  (a) directly or indirectly, own, manage, operate, finance, join, control or
participate in the ownership, management, operation, financing or control of, or
be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with, or use or permit Executive’s name
to be used in connection with any Competing Business (defined below) within any
state in which the Company, and/or its affiliates, currently engage in any
Substantial Business Activity (defined below) or any state in which the Company,
and/or its affiliates, engaged in any Substantial Business Activity during the
thirty-six month period preceding the date Executive’s employment terminates;
provided, however, that notwithstanding the foregoing, this provision shall not
be construed to prohibit the passive ownership by Executive of not more than
five percent (5%) of the capital stock of any corporation which is engaged in
any Competing Business having a class of securities registered pursuant to the
Exchange Act; or

 

  (b) solicit or divert to any Competing Business any individual or entity which
is an active or prospective customer of the Company, and/or its affiliates, or
was such an active or prospective customer at any time during the preceding
twelve (12) months; or

 

  (c) employ, attempt to employ, solicit or assist any Competing Business in
employing any employee of the Company, and/or its affiliates, whether as an
employee or consultant.

The phrase “Competing Business” shall mean: any entity or enterprise actively
engaged in any business or businesses the Company and/or its affiliates are
actively engaged in (or are expected to be actively engaged in within twelve
(12) months) at the time of termination. The phrase “Substantial Business
Activity” shall mean that the Company, and/or its affiliates (i) has a business
office, (ii) owns, services or manages real estate, or (iii) has a recorded and
unsatisfied mortgage or other lien upon real estate or personal property.

 

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In the event that the provisions of this Section 5.1 should ever be adjudicated
to exceed the time, geographic, product or other limitations permitted by
applicable law in any jurisdiction, then such provisions shall be deemed
reformed in such jurisdiction to the maximum time, geographic, product or other
limitations permitted by applicable law.

 

  5.2 Developments. Executive shall disclose fully, promptly and in writing to
the Company any and all inventions, discoveries, improvements, modifications and
other intellectual property rights, whether patentable or not, which Executive
has conceived, made or developed, solely or jointly with others, while employed
by the Company and which (i) relate to the businesses, work or activities of the
Company, and/or its affiliates or (ii) result from or are suggested by the
carrying out of Executive’s duties hereunder or from or by any information that
Executive may receive as an employee of the Company. Executive hereby assigns,
transfers and conveys to the Company all of Executive’s right, title and
interest in and to any and all such inventions, discoveries, improvements,
modifications and other intellectual property rights and agrees to take all such
actions as may be requested by the Company at any time and with respect to any
such invention, discovery, improvement, modification or other intellectual
property rights to confirm or evidence such assignment, transfer and conveyance.
Furthermore, at any time and from time to time, upon the request of the Company,
Executive shall execute and deliver to the Company, any and all instruments,
documents and papers, give evidence and do any and all other acts that, in the
opinion of counsel for the Company, are or may be necessary or desirable to
document such assignment, transfer and conveyance or to enable the Company to
file and prosecute applications for and to acquire, maintain and enforce any and
all patents, trademark registrations or copyrights under United States or
foreign law with respect to any such inventions, discoveries, improvements,
modifications or other intellectual property rights or to obtain any extension,
validation, reissue, continuance or renewal of any such patent, trademark or
copyright. The Company shall be responsible for the preparation of any such
instruments, documents and papers and for the prosecution of any such
proceedings and shall reimburse Executive for all reasonable expenses incurred
by Executive in compliance with the provisions of this Section 5.2.

 

  5.3 Confidentiality.

 

  (a)

Executive acknowledges that, by reason of Executive’s employment by the Company,
Executive will have access to confidential information of the Company, and/or
its affiliates, including, without limitation, information and knowledge
pertaining to products, inventions, discoveries, improvements, innovations,
designs, ideas, trade secrets, proprietary information, manufacturing,
packaging, advertising, distribution and sales methods, sales and profit
figures, customer and client lists and relationships between the Company, and/or
its affiliates, and dealers, distributors, sales representatives, wholesalers,
customers, clients, suppliers and others who have business dealings with them
(“Confidential Information”). Executive acknowledges that such Confidential
Information is a valuable and unique asset of the Company, and/or its
affiliates, and covenants that, both during and after the Employment Term,
Executive will not disclose any Confidential Information to any person (except
as Executive’s duties as an officer of the Company may require or as required by
law or in a judicial or administrative proceeding) without the prior written
authorization of the Board. The obligation of confidentiality imposed by this
Section 5.3 shall not apply to information that becomes generally known to the
public through no act of Executive in breach of this Agreement. The Company and
Executive acknowledge that, notwithstanding anything to the contrary contained
in this Agreement, pursuant to 18 USC § 1833(b), an individual may not be held
liable under any criminal or civil federal or state trade secret law for
disclosure of a trade secret: (x) made in confidence to a government official,
either directly or indirectly, or to an attorney, solely for the purpose of
reporting or investigating a suspected violation of law or (y) in a complaint or
other document filed in a lawsuit or other proceeding, if

 

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  such filing is made under seal. The Company and Executive further acknowledge
that an individual suing an employer for retaliation based on the reporting of a
suspected violation of law may disclose a trade secret to his or her attorney
and use the trade secret information in the court proceeding, so long as any
document containing the trade secret is filed under seal and the individual does
not disclose the trade secret except pursuant to court order.

 

  (b) Executive acknowledges that all documents, files and other materials
received from the Company, and/or its affiliates, during the Employment Term
(with the exception of documents relating to Executive’s compensation or
benefits to which Executive is entitled following the Employment Term) are for
use of Executive solely in discharging Executive’s duties and responsibilities
hereunder and that Executive has no claim or right to the continued use or
possession of such documents, files or other materials following termination of
Executive’s employment by the Company. Executive agrees that, upon termination
of employment, Executive will not retain any such documents, files or other
materials and will promptly return to the Company any documents, files or other
materials in Executive’s possession or custody.

 

  5.4 Non-Disparagement. Executive agrees and covenants that Executive will not
at any time make, publish or communicate to any person or entity or in any
public forum any defamatory or disparaging remarks, comments or statements
concerning the Company or its businesses, or any of its employees, officers, and
existing and prospective customers, suppliers, investors and other associated
third parties. The Company agrees and covenants that it will not authorize the
making, publishing or communicating of, nor will the Board or any executive
officers of the Company at any time make, publish or communicate to any person
or entity or in any public forum any defamatory or disparaging remarks, comments
or statements concerning Executive.

 

  5.5 Cooperation. The parties agree that certain matters in which Executive
will be involved during the Employment Term may necessitate Executive’s
cooperation in the future. Accordingly, following the termination of Executive’s
employment for any reason, to the extent reasonably requested by the Board and
subject to Executive’s professional commitments, Executive shall cooperate with
the Company in connection with matters arising out of Executive’s service to the
Company; provided that, the Company shall make reasonable efforts to minimize
disruption of Executive’s other activities. The Company shall pay Executive a
reasonable per diem and reimburse Executive for reasonable expenses incurred in
connection with such cooperation.

 

  5.6 Equitable Relief. Executive acknowledges that the restrictions contained
in Sections 5.1, 5.2, 5.3, 5.4 and 5.5 hereof are, in view of the nature of the
businesses of the Company and/or its affiliates, reasonable and necessary to
protect the legitimate interests of the Company and/or its affiliates, and that
any violation of any provision of those Sections will result in irreparable
injury to the Company, and/or its affiliates. Executive also acknowledges that
in the event of any such violation, the Company shall be entitled to preliminary
and permanent injunctive relief, without the necessity of proving actual
damages, and to an equitable accounting of all earnings, profits and other
benefits arising from any such violation, which rights shall be cumulative and
in addition to any other rights or remedies to which the Company may be
entitled. Executive agrees that in the event of any such violation, an action
may be commenced for any such preliminary and permanent injunctive relief and
other equitable relief in any federal or state court of competent jurisdiction
sitting in Pennsylvania or in any other court of competent jurisdiction.
Executive hereby waives, to the fullest extent permitted by law, any objection
that Executive may now or hereafter have to such jurisdiction or to the laying
of the venue of any such suit, action or proceeding brought in such a court and
any claim that such suit, action or proceeding has been brought in an
inconvenient forum. Executive agrees that effective service of process may be
made upon Executive by mail under the notice provisions contained in Section 10
hereof.

 

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6. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Executive’s continuing or future participation in or rights under any benefit,
bonus, incentive or other plan or program provided by the Company and for which
Executive may qualify; provided, however, that if Executive becomes entitled to
and receives the payments provided for in Section 2.1(c) of this Agreement,
Executive hereby waives Executive’s right to receive payments under any
severance plan or similar program applicable to all employees of the Company.

 

7. Survivorship. The respective rights and obligations of the parties under this
Agreement shall survive any termination of Executive’s employment to the extent
necessary to the intended preservation of such rights and obligations.

 

8. Mitigation. Executive shall not be required to mitigate the amount of any
payment or benefit provided for in this Agreement by seeking other employment or
otherwise and there shall be no offset against amounts due Executive under this
Agreement on account of any remuneration attributable to any subsequent
employment that Executive may obtain.

 

9. Arbitration; Expenses. In the event of any dispute under the provisions of
this Agreement, other than a dispute in which the primary relief sought is an
equitable remedy such as an injunction, the parties shall be required to have
the dispute, controversy or claim settled by arbitration in Philadelphia,
Pennsylvania in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association,
before a panel of three arbitrators, two of whom shall be selected by the
Company and Executive, respectively, and the third of whom shall be selected by
the other two arbitrators. Any award entered by the arbitrators shall be final,
binding and nonappealable and judgment may be entered thereon by either party in
accordance with applicable law in any court of competent jurisdiction. This
arbitration provision shall be specifically enforceable. The arbitrators shall
have no authority to modify any provision of this Agreement or to award a remedy
for a dispute involving this Agreement other than a benefit specifically
provided under or by virtue of the Agreement. Each party shall be responsible
for its own expenses relating to the conduct of the arbitration (including
reasonable attorneys’ fees and expenses) and shall share the fees of the
American Arbitration Association.

 

10. Notices. All notices and other communications required or permitted under
this Agreement or necessary or convenient in connection herewith shall be in
writing and shall be deemed to have been given when hand delivered or mailed by
registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):

If to the Company, to:

Independence Realty Trust, Inc.

Two Logan Square

100 North 18th Street, 23rd floor

Philadelphia, Pennsylvania 19103

Attention: General Counsel

If to Executive, to:

Farrell M. Ender at his most recent home address set forth in the records of the
Company.

or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.

 

11. Contents of Agreement; Amendment and Assignment.

 

  11.1 This Agreement sets forth the entire understanding between the parties
hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment approved by the
Board and executed on its behalf by a duly authorized officer and by Executive.
This Agreement supersedes the provisions of any employment or other agreement
between Executive and the Company that relate to any matter that is also the
subject of this Agreement and such provisions in such other agreements will be
null and void.

 

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  11.2 All of the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Executive under
this Agreement are of a personal nature and shall not be assignable or delegable
in whole or in part by Executive. The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, reorganization
or otherwise) to all or substantially all of the business or assets of the
Company, within fifteen (15) days of such succession, expressly to assume and
agree to perform this Agreement in the same manner and to the same extent as the
Company would be required to perform if no such succession had taken place.

 

12. Severability. If any provision of this Agreement or application thereof to
anyone or under any circumstances is adjudicated to be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect any
other provision or application of this Agreement which can be given effect
without the invalid or unenforceable provision or application and shall not
invalidate or render unenforceable such provision or application in any other
jurisdiction. If any provision is held void, invalid or unenforceable with
respect to particular circumstances, it shall nevertheless remain in full force
and effect in all other circumstances.

 

13. Remedies Cumulative; No Waiver. No remedy conferred upon a party by this
Agreement is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to any other remedy
given under this Agreement or now or hereafter existing at law or in equity. No
delay or omission by a party in exercising any right, remedy or power under this
Agreement or existing at law or in equity shall be construed as a waiver
thereof, and any such right, remedy or power may be exercised by such party from
time to time and as often as may be deemed expedient or necessary by such party
in its sole discretion.

 

14. Beneficiaries/References. Executive shall be entitled, to the extent
permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable under this
Agreement following Executive’s death by giving the Company written notice
thereof. In the event of Executive’s death or a judicial determination of
Executive’s incompetence, reference in this Agreement to Executive shall be
deemed, where appropriate, to refer to Executive’s beneficiary, estate or other
legal representative.

 

15. Miscellaneous. All section headings used in this Agreement are for
convenience only. This Agreement may be executed in counterparts, each of which
is an original. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other counterparts.

 

16. Withholding. All payments under this Agreement shall be made subject to
applicable tax withholding, and the Company shall withhold from any payments
under this Agreement all federal, state and local taxes as the Company is
required to withhold pursuant to any law or governmental rule or regulation.
Except as specifically provided otherwise in this Agreement, Executive shall
bear all expense of, and be solely responsible for, all federal, state and local
taxes due with respect to any payment received under this Agreement.

 

17. Governing Law. This Agreement shall be governed by and interpreted under the
laws of the Commonwealth of Pennsylvania without giving effect to any conflict
of laws provisions.

 

18. Section 409A.

 

  18.1

Interpretation. Notwithstanding the other provisions hereof, this Agreement is
intended to comply with the requirements of Section 409A of the Code, to the
extent applicable, and this Agreement shall be interpreted to avoid any penalty
sanctions under Section 409A of the Code. Accordingly,

 

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  all provisions herein, or incorporated by reference, shall be construed and
interpreted to comply with Section 409A and, if necessary, any such provision
shall be deemed amended to comply with Section 409A of the Code and regulations
thereunder. If any payment or benefit cannot be provided or made at the time
specified herein without incurring sanctions under Section 409A of the Code,
then such benefit or payment shall be provided in full at the earliest time
thereafter when such sanctions will not be imposed. For purposes of Section 409A
of the Code, each payment made under this Agreement shall be treated as a
separate payment. In no event may Executive, directly or indirectly, designate
the calendar year of payment. Executive will be deemed to have a termination of
employment for purposes of determining the timing of any payments or benefits
hereunder that are classified as deferred compensation only upon a “separation
from service” within the meaning of Section 409A of the Code.

 

  18.2 Payment Delay. Notwithstanding any provision to the contrary in this
Agreement, if on the date of Executive’s termination of employment, Executive is
a “specified employee” (as such term is defined in Section 409A(a)(2)(B)(i) of
the Code and its corresponding regulations) as determined by the Board (or its
delegate) in its sole discretion in accordance with its “specified employee”
determination policy, then all cash severance payments payable to Executive
under this Agreement that are deemed as deferred compensation subject to the
requirements of Section 409A of the Code shall be postponed for a period of six
months following Executive’s “separation from service” with the Company (or any
successor thereto). The postponed amounts shall be paid to Executive in a lump
sum on the date that is six (6) months and one (1) day following Executive’s
“separation from service” with the Company (or any successor thereto). If
Executive dies during such six-month period and prior to payment of the
postponed cash amounts hereunder, the amounts delayed on account of Section 409A
of the Code shall be paid to the personal representative of Executive’s estate
on the sixtieth (60th) day after Executive’s death. If any of the cash payments
payable pursuant to this Agreement are delayed due to the requirements of
Section 409A of the Code, there shall be added to such payments interest during
the deferral period at an annualized rate of interest equal to the prime rate as
reported in the Wall Street Journal (or, if unavailable, a comparable source) at
the relevant time.

 

  18.3 Reimbursements. All reimbursements provided under this Agreement shall be
made or provided in accordance with the requirements of Section 409A of the
Code, including, where applicable, the requirement that (i) any reimbursement is
for expenses incurred during Executive’s lifetime (or during a shorter period of
time specified in this Agreement), (ii) the amount of expenses eligible for
reimbursement during a calendar year may not affect the expenses eligible for
reimbursement in any other calendar year, (iii) the reimbursement of an eligible
expense will be made on or before the last day of the taxable year following the
year in which the expense is incurred, and (iv) the right to reimbursement is
not subject to liquidation or exchange for another benefit.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.

 

INDEPENDENCE REALTY TRUST, INC. By:  

 

  Name:   Title: EXECUTIVE By:  

 

  Name: Farrell M. Ender

 

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EXHIBIT A

Release

You, for yourself, your spouse and your agents, successors, heirs, executors,
administrators and assigns, hereby irrevocably and unconditionally forever
release and discharge Independence Realty Trust, Inc. (the “Corporation”), its
parents, divisions, subsidiaries and affiliates and its and their current and
former owners, directors, officers, stockholders, insurers, benefit plans,
representatives, agents and employees, and each of their predecessors,
successors, and assigns (collectively, the “Releasees”), from any and all actual
or potential claims or liabilities of any kind or nature, including, but not
limited to, any claims arising out of or related to your employment and
separation from employment with the Corporation and any services that you
provided to the Corporation; any claims for salary, commissions, bonuses, other
severance pay, vacation pay, allowances or other compensation, or for any
benefits under the Employee Retirement Income Security Act of 1974 (“ERISA”)
(except for vested ERISA benefits); any claims for discrimination, harassment or
retaliation of any kind or based upon any legally protected classification or
activity; any claims under Title VII of the Civil Rights Acts of 1964, the Civil
Rights Act of 1866 and 1964, as amended, 42 U.S.C. § 1981, the Age
Discrimination in Employment Act, the Older Workers Benefit Protection Act, the
Americans with Disabilities Act, 42 U.S.C. §1981, 42 U.S.C. § 1983, the Family
Medical Leave Act and any similar state law, the Fair Credit Reporting Act and
any similar state law, the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq.,
the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, et
seq., the Equal Pay Act and any similar state law, any claims for discrimination
in violation of the Pennsylvania Human Relations Act, and any claims for
wrongful discharge, discrimination, retaliation, or other violation of the
Pennsylvania Whistleblower Law, as well as any amendments to any such laws; any
claims for any violation of any federal or state constitutions or executive
orders; any claims for wrongful or constructive discharge, violation of public
policy, breach of contract or promise (oral, written, express or implied),
personal injury not covered by workers’ compensation benefits,
misrepresentation, negligence, fraud, estoppel, defamation, infliction of
emotional distress, contribution and any claims under any other federal, state
or local law, including those not specifically listed in this Release, that you,
your heirs, executors, administrators, successors, and assigns now have, ever
had or may hereafter have, whether known or unknown, suspected or unsuspected,
up to and including the date of your execution of this Release.

For the purpose of implementing a full and complete release and discharge of the
Releasees as set forth above, you acknowledge that this Release is intended to
include in its effect, without limitation, all claims known or unknown that you
have or may have against the Releasees which arise out of or relate to your
employment, including but not limited to compensation, performance or
termination of employment with the Corporation, except for, and notwithstanding
anything in this Release to the contrary, claims which cannot be released solely
by private agreement. This Release also excludes any claims relating to any
right you may have to payments pursuant to Section 2.1(c) of the Employment
Agreement, entered into as of                     , 2016, by and between the
Corporation and you, any claim for workers’ compensation benefits and any rights
you may have to indemnification or directors’ and officers’ liability insurance
under the Corporation’s bylaws or certificate of incorporation, any
indemnification agreement to which you are a party or beneficiary or applicable
law, as a result of having served as an officer, director or employee of the
Corporation or any of its affiliates. You further acknowledge and agree that you
have received all leave, compensation and reinstatement benefits to which you
were entitled through the date of your execution of this Release, and that you
were not subjected to any improper treatment, conduct or actions as a result of
a request for leave, compensation or reinstatement.

You affirm, by signing this Release, that you have not suffered any unreported
injury or illness arising from your employment, and that you have not filed,
with any federal, state, or local court or agency, any actions or charges
against the Releasees relating to or arising out of your employment with or
separation from the Corporation. You further agree that while this Release does
not preclude you from filing a charge with the National Labor Relations Board
(“NLRB”), the Equal Employment Opportunity Commission (“EEOC”) or a similar
state or local agency, or from participating in any investigation or proceeding
with them, you do waive your right to personally recover monies or reinstatement
as a result of any complaint or charge filed against the Corporation with the
NLRB, EEOC or any federal, state or local court or agency, except as to any
action to enforce or challenge this Release, to recover any vested benefits
under ERISA, or to recover workers’ compensation benefits. Nothing in this
Release prohibits or restricts you (or your attorney) from initiating
communications directly with, responding to an inquiry from, or providing
testimony before the Securities and Exchange Commission (“SEC”), the Financial
Industry Regulatory Authority (“FINRA”), any other self-regulatory organization
or any other federal or state regulatory authority regarding this Release or its
underlying facts or circumstances or a possible securities law violation.

 

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You acknowledge:

 

  (a) That you were provided [twenty-one (21) / forty-five (45)] full days
during which to consider whether to sign this Release. If you have signed this
Release prior to the expiration of the [21-day / 45-day] period, you have
voluntarily elected to forego the remainder of that period.

 

  (b) That you have carefully read and fully understand all of the terms of this
Release[, including its Attachment A].

 

  (c) That you understand that by signing this Release, you are waiving your
rights under the Age Discrimination in Employment Act, as amended by the Older
Workers Benefit Protection Act, 29 U.S.C. § 621, et seq., and that you are not
waiving any rights arising after the date that this Release is signed.

 

  (d) That you have been given an opportunity to consult with anyone you choose,
including an attorney, about this Release.

 

  (e) That you understand fully the terms and effect of this Release and know of
no claim that has not been released by this Release. And, you further
acknowledge that you are not aware of, or that you have fully disclosed to the
Corporation, any matters for which you are responsible or which has come to your
attention as an employee of the Corporation that might give rise to, evidence,
or support any claim of illegal conduct, regulatory violation, unlawful
discrimination, or other cause of action against the Corporation.

 

  (f) That these terms are final and binding on you.

 

  (g) That you have signed this Release voluntarily, and not in reliance on any
representations or statements made to you by any employee or officer of the
Corporation or any of its subsidiaries.

 

  (h) That you have seven (7) days following your execution of this Release to
revoke it in writing, and that this Release is not effective or enforceable
until after this seven (7) day period has expired without revocation. If you
wish to revoke this Release after signing it, you must provide written notice of
your decision to revoke this Release to the Corporation, to the attention of the
General Counsel, Two Logan Square, 100 North 18th Street, 23rd floor,
Philadelphia, Pennsylvania 19103, by no later than 11:59 p.m. on the seventh
calendar day after the date on which you have signed this Release.

PLEASE READ CAREFULLY. THIS RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS.

ACKNOWLEDGED AND AGREED

 

 

  Farrell M. Ender   Date  

 

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