Document:

ex4-4.htm

EXHIBIT 4.4

 

ACCO BRANDS CORPORATION

 

INCENTIVE PLAN

 

(As Amended and Restated Effective May 12, 2015)

 

1.           Purpose.  This ACCO Brands Corporation Incentive Plan (the “Plan”) is an amendment and restatement of the 2011 Amended and Restated ACCO Brands Corporation Incentive Plan, as amended.  The purpose of the Plan is to provide incentives linked to value creation for shareholders of ACCO Brands Corporation (“ACCO”) and the achievement of certain short-term and long-term strategic and financial goals through a variety of equity-based and cash Awards designed to attract, retain and motivate the best available Employees and Non-Employee Directors.

 

2.         Definitions.

 

(a)        “Award” includes, without limitation, Stock Option (including Incentive Stock Option), Stock Appreciation Right, Performance Share, Performance Stock Unit, Dividend or Equivalent Right, Stock, Restricted Share, Restricted Stock Unit or Cash Awards or Other Incentive Awards, all on a standalone, combination or tandem basis, as described in or granted under the Plan.

 

(b)        “Award Agreement” means an agreement or other writing, and any amendment or modification thereof (which agreement or other writing may be framed as a subplan, program, notification, statement, resolutions or other document and may be in electronic format), provided by ACCO to each Participant setting forth the terms and conditions of each Award made under the Plan.

 

(c)        “Board” means the Board of Directors of ACCO.

 

(d)        “Cash Award” has the meaning specified in Section 6(h).

 

(e)        “Cause” means if the Participant (i) is a participant in the Company’s Executive Severance Plan on the date of the Participant’s Separation from Service, the meaning ascribed to such term in the Executive Severance Plan as in effect on such date, or (ii) is not on the date of such Separation from Service a participant in the Company’s Executive Severance Plan, such definition as is specified in the Participant’s Award Agreement.

 

(f)         “Change in Control” A “Change in Control” shall be deemed to have occurred if:

 

(i)        Any person (as that term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the beneficial owner (as that term is used in Section 13(d) of the Exchange Act, and the rules and regulations promulgated thereunder), of 30% or more of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of Directors (“Voting Securities”) of ACCO, excluding, however, any acquisition of Voting Securities:  (A) directly from ACCO, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from ACCO, (B) by ACCO or a Subsidiary of

 

  

  

  

ACCO, (C) by an employee benefit plan (or related trust) sponsored or maintained by ACCO or an entity controlled by ACCO, or (D) pursuant to a transaction that complies with clauses (A), (B) and (C) of Section 2(f)(iii);

 

(ii)       Individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any individual becoming a Director subsequent to such Effective Date whose election, or nomination for election by ACCO’s stockholders, was approved by a vote of at least a majority of the Directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election or removal of the directors of ACCO or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board;

 

(iii)      ACCO shall be merged or consolidated with, or, in any transaction or series of transactions, substantially all of the business or assets of ACCO shall be sold or otherwise acquired by, another corporation or entity unless, as a result thereof, (A) the stockholders of ACCO immediately prior thereto shall beneficially own, directly or indirectly, at least 60% of the combined Voting Securities of the surviving, resulting or transferee corporation or entity (including, without limitation, a corporation that as a result of such transaction owns ACCO or all or substantially all of ACCO’s assets either directly or through one or more subsidiaries) (“Newco”) immediately thereafter in substantially the same proportions as their ownership immediately prior to such corporate transaction, (B) no person beneficially owns (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, and the rules and regulations promulgated thereunder), directly or indirectly, 30% or more, of the combined Voting Securities of Newco immediately after such corporate transaction except to the extent that such ownership of ACCO existed prior to such corporate transaction and (C) more than 50% of the members of the board of directors of Newco shall be Incumbent Directors; or

 

(iv)      The stockholders of ACCO approve a complete liquidation or dissolution of ACCO.

 

(g)       “Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

(h)       “Committee” means the Compensation Committee of the Board or such other committee of the Board as may be designated by the Board from time to time to administer the Plan.

 

(i)        “Common Stock” means common stock, par value $.01 per share, of ACCO.

 

(j)        “Company” means, collectively, ACCO and its Subsidiaries.

 

(k)       “Covered Employee” means any Employee who is or is reasonably expected to be a “covered employee” under Section 162(m) of the Code.

 

  

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(l)        “Director” means a member of the Board.

 

(m)      “Director Award” has the meaning specified in Section 6(j).

 

(n)       “Disability” means totally and permanently disabled as from time to time defined under the long-term disability plan of ACCO or a Subsidiary applicable to the Participant or, in the case in which there is no applicable plan, a total and permanent disability as defined in Section 22(e)(3) of the Code (or any successor Section); provided, however, that to the extent an amount payable under the Plan which constitutes a deferral of compensation pursuant to Section 409A would become payable upon Disability, “Disability” for purposes of such payment shall not be deemed to have occurred unless the disability also satisfies the requirements of Treasury Regulation Section 1.409A-3.  Subject to the approval of the Committee, a different definition of Disability may be applicable to a Participant employed outside the United States who is subject to local disability laws and programs.

 

(o)       “Dividend or Equivalent Rights” has the meaning specified in Section 6(f).

 

(p)       “Effective Date” has the meaning specified in Section 17.

 

(q)       “Employee” means an employee of ACCO or a Subsidiary.

 

(r)        “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(s)        “Fair Market Value” means the average of the high and low sales prices of a Share on the New York Stock Exchange, Inc. composite tape (or if Common Stock is not then traded on the New York Stock Exchange, on the stock exchange or over-the-counter market on which Common Stock is principally trading) on the date of measurement, and if there were no trades on such measurement date, on the first day on which a trade occurs next succeeding such measurement date.

 

(t)         “Family Member” has the meaning specified in Section 9(a).

 

(u)        “Full Value Award” means an Award other than a Stock Option, Stock Appreciation Right or a Cash Award (or Other Incentive Award which serves a similar function to a Stock Option, Stock Appreciation Right or Cash Award).

 

(v)        “Good Reason” shall mean, if the Participant (i) is a participant in the Company’s Executive Severance Plan on the date of the Participant’s Separation from Service, the meaning ascribed to such term in the Executive Severance Plan as in effect on such date, or (ii) is not on the date of such Separation from Service a participant in the Company’s Executive Severance Plan, such definition as may be specified in the Participant’s Award Agreement.

 

(w)       “Incentive Stock Option” has the meaning specified in Section 6(b).

 

(x)        “Incumbent Board” has the meaning specified in Section 2(f)(ii).

 

(y)        “Newco” has the meaning specified in Section 2(f)(iii).

 

  

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(z)        “Non-Employee Director” means a Director who is not an employee of ACCO or a Subsidiary.

 

(aa)      “Other Incentive Award” has the meaning specified in Section 6(i).

 

(bb)      “Participant” means an Employee or Non-Employee Director who has been granted an Award under the Plan.

 

(cc)       “Performance Criteria” has the meaning specified in Section 7(a).

 

(dd)       “Performance Period” means the period of time during which specified Performance Criteria are to be measured as determined in accordance with Section 7(a).

 

(ee)        “Performance Share” has the meaning specified in Section 6(d).

 

(ff)          “Performance Stock Unit” has the meaning specified in Section 6(e).

 

(gg)        “Plan” means this ACCO Brands Corporation Incentive Plan (including all amendments and restatements hereof prior to the Effective Date, and as may be amended after the Effective Date in accordance with Section 13).

 

(hh)        “Plan Year” means a twelve-month period beginning with January 1 of each year.

 

(ii)          “Previously-Acquired Shares” means shares of Common Stock acquired by the Participant or any beneficiary of the Participant other than pursuant to an Award under the Plan.

 

(jj)          “Replaced Award” has the meaning specified in Section 12(a).

 

(kk)        “Replacement Award” has the meaning specified in Section 12(a).

 

(ll)           “Restriction Period” means a period of time beginning as of the date upon which an Award subject to restrictions or forfeiture provisions is granted pursuant to the Plan and ending as of the date upon which the Common Stock subject to such Award is no longer restricted or subject to forfeiture provisions.

 

(mm)       “Restricted Share” has the meaning specified in Section 6(d).

 

(nn)         “Restricted Stock Unit” has the meaning specified in Section 6(e).

 

(oo)         “Retirement” means (i) the Participant’s termination of employment on or after attaining age 55 and completion of either (A) at least five years of service with the Company without a break in service (due to a termination of employment and re-employment) of more than one year or (B) at least five years of continuous service with the Company; provided, that Retirement shall not include a termination of employment due to the Participant’s violation of Company policies or dishonesty or other misconduct prejudicial to the Company, as determined in the discretion of the Committee, or (ii) retirement from service as a member of the

 

  

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Board by a Non-Employee Director after five or more years of service as a Non-Employee Director of ACCO (together with any prior service as an Employee).

 

(pp)         “Section 162(m) Award” means an Award that is intended by the Committee to constitute “qualified performance-based compensation” under Section 162(m) of the Code and the regulations thereunder.

 

(qq)         “Separation from Service” means a Participant’s separation from service from the Company and all members of the Company controlled group within the meaning of Treasury Regulation Sections 1.409A-1(g) and (h).

 

(rr)           “Section 409A” means Section 409A of the Code including regulations or other official guidance issued with respect thereto.

 

(ss)           “Stock Appreciation Right” has the meaning specified in Section 6(c).

 

(tt)           “Stock Award” has the meaning specified in Section 6(g).

 

(uu)          “Stock Option” has the meaning specified in Section 6(a).

 

(vv)          “Subsidiary” means any corporation, other than ACCO, in an unbroken chain of corporations beginning with ACCO, if each of the corporations other than the last corporation in the unbroken chain owns 50% or more of the voting stock in one of the other corporations in such chain, except that with respect to Incentive Stock Options, “Subsidiary” means “subsidiary corporation” as defined in Section 424(f) of the Code.  For purposes of this definition of “Subsidiary”, references to a corporation and its voting stock shall also mean any other form of entity and its voting equity interests.

 

(ww)        “Voting Securities” has the meaning specified in Section 2(f)(i).

 

3.         Eligibility.  Any Employee selected by the Committee or Non-Employee Director selected by the Board is eligible to receive an Award.

 

4.         Plan Administration.

 

(a)           Administration; Determinations.  Except as otherwise determined by the Board, the Plan shall be administered by the Committee.  The Committee shall be appointed by the Board, shall consist of three or more outside, independent members of the Board, and in the judgment of the Board, shall be qualified to administer the Plan as contemplated by (i) Rule 16b-3 of the Exchange Act (or any successor rule), (ii) Section 162(m) of the Code and the regulations thereunder (or any successor section and regulations), and (iii) any rules and regulations of the New York Stock Exchange (or such other stock exchange on which Common Stock is traded).  The Committee shall have the power and authority to administer, construe and interpret the Plan, to make rules for carrying it out and to make changes in such rules, and to correct any defect, supply any omission and reconcile any inconsistency in the Plan.  The Committee shall make determinations with respect to the participation of Employees in the Plan and, except as otherwise required by law or the Plan, the terms of Awards and Award Agreements, including vesting schedules, exercise prices, Performance Criteria, Performance Period, Restriction Period, option term, dividend rights, post-retirement and termination rights,

 

  

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payment alternatives such as cash, stock, contingent awards or other means of payment consistent with the purposes of the Plan, and such other terms and conditions as the Committee deems appropriate.  The Committee’s determinations under the Plan need not be uniform and may be made by it selectively among eligible persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated.  Notwithstanding the foregoing provisions of this Section 4(a), Director Awards shall be governed by the Board in accordance with Section 6(j) and references to the Committee under the Plan shall, for all purposes respecting Director Awards, mean exclusively the Board.

 

(b)        Authority; Indemnification. The Committee, by such action at a meeting thereof (or by written consent without a meeting) as is required under its charter, shall have authority to interpret and construe the provisions of the Plan and the Award Agreements, to decide all questions of fact arising in its application and to make all other determinations pursuant to any Plan provision or Award Agreement which shall be final and binding on all persons.  To the extent deemed necessary or advisable for purposes of Section 16 of the Exchange Act or Section 162(m) of the Code, a member or members of the Committee may recuse himself or themselves from any action, in which case action taken by the majority of the remaining members shall constitute action by the Committee.    To the extent deemed necessary or advisable for purposes of Section 16 of the Exchange Act or otherwise, the Board may act as the Committee hereunder.  For purposes of the Plan, references to the Committee shall be deemed to refer to any subcommittee, subcommittees, or other persons or groups of persons to whom the Committee delegates authority pursuant to Section 4(c).  No member of the Committee shall be liable for any action or determination made in good faith, and the members of the Committee shall be entitled to indemnification and reimbursement in the manner provided in ACCO’s certificate of incorporation, by-laws, by agreement or otherwise, as may be amended from time to time.

 

(c)        Authorization of Officers.  To the extent permitted under Delaware law, the Committee may, by a resolution adopted by the Committee, authorize one or more officers of ACCO to do one or more of the following:  (i) designate officers and employees of the Company to be recipients of an Award under this Plan, (ii) determine the amount, terms, conditions, and form of any such Awards and (iii) take any other actions which the Committee is authorized to take under this Plan, including certain administrative, reporting and other similar actions; provided, however, that the resolution so authorizing such officer or officers shall specify the total number of shares of Common Stock or total amount of cash payable under such Awards which such officer or officers may so award. Notwithstanding the foregoing, the Committee shall not delegate to any person the authority to grant Awards to, or take other action with respect to, Participants who at the time of such Awards or action are subject to Section 16 of the Exchange Act or are Covered Employees.  Further, the Committee shall not authorize an officer to designate himself or herself as a recipient of any such Awards.

 

5.         Common Stock Subject to the Provisions of the Plan and Certain Limitations and Conditions.

 

(a)        Common Stock Subject to Awards.  The stock subject to the provisions of the Plan may be shares of authorized but unissued Common Stock, treasury shares of Common Stock held by ACCO or any Subsidiary, or shares of Common Stock acquired by ACCO through open market purchases or otherwise.  Subject to adjustment in accordance with the provisions of

 

  

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Section 10, the total number of shares of Common Stock which may be issued under the Plan or with respect to which Awards may be granted, including Incentive Stock Options, shall not exceed the sum of 11,200,000 shares, plus the number of shares of Common Stock previously authorized by the stockholders for issuance under the Plan which, as of the Effective Date, have not been issued (or which were issued and returned to the Plan and available for reissuance in accordance with the terms of the Plan as in effect on the date so returned) or are not subject to an outstanding award under the Plan.  Awards granted under the Plan on and after the Effective Date shall reduce the number of shares of Common Stock thereafter available for Awards on the basis of:  (i) one share for each such share issued as an Award of Stock Options or Stock Appreciation Rights, or Other Incentive Awards which serve a similar function to Stock Options or Stock Appreciation Rights and (ii) 2.06 shares for each such share issued as a Full Value Award.  To the extent shares of Common Stock subject to a Full Value Award again become available for issuance for reasons described in Section 5(c), such shares of Common Stock shall be available for issuance as Full Value Awards (or as Stock Options or Stock Appreciation Rights, or Other Incentive Awards not constituting Full Value Awards, subject to the foregoing ratio).

 

(b)        Award Limitations.  Not more than 500,000 shares of Common Stock may be made subject to an Award or Awards of Stock Options (including Incentive Stock Options), and not more than 500,000 shares of Common Stock may be made subject to an Award or Awards of Stock Appreciation Rights, under the Plan annually to any Employee.  Not more than 500,000 shares of Common Stock may be made subject to an Award or Awards of Performance Shares or Performance Stock Units, based on maximum performance thereunder, under the Plan annually to any Employee and not more than a maximum aggregate dollar value of $10,000,000 may be made subject to a performance-based Cash Award or Awards under the Plan annually to any Employee; provided, no Employee who is a Covered Employee for an applicable year shall receive a Cash Award or Awards under ACCO’s annual bonus plan, or respecting any other Performance Period of one Plan Year, that exceeds the lesser of (i) 50% of any annual incentive pool established by the Committee hereunder and (ii) $3,000,000.  Not more than 750,000 shares of Common Stock may be made subject to an Award or Awards of Restricted Shares or Restricted Stock Units under the Plan annually to any Employee.  The foregoing limitations on Stock Option, Stock Appreciation Right, Restricted Share, Restricted Stock Unit, Performance Share, Performance Stock Unit and performance-based Cash Awards shall be applied in a manner consistent with the requirements of Section 162(m) of the Code.  The number of shares of Common Stock, and the limitations thereon, which may be issued pursuant to this Section 5(b) shall be subject to adjustment as provided in Section 10.

 

(c)        Share Recycling and Limitations.  Any shares of Common Stock that have been made subject to an Award that are not issued or are cancelled by reason of the failure to achieve applicable performance objectives under, or the forfeiture, termination, surrender, cancellation or expiration of, such Award shall again be available for Award and shall not be considered as having been theretofore made subject to Award.  Shares of Common Stock shall not again be available for award if such shares are surrendered or withheld as payment of either the exercise price of a Stock Option or Stock Appreciation Right or of withholding taxes in respect of the exercise, settlement or payment of, or the lapse of restrictions with respect to, any Award, or are shares repurchased by the Company on the open market with the proceeds of a Stock Option exercise.  The exercise or settlement of a Stock Appreciation Right shall reduce the shares of Common Stock available under the Plan by the total number of shares to which the

 

  

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exercise or settlement of the Stock Appreciation Right relates, not just the net amount of shares actually issued upon exercise or settlement.  Awards settled solely in cash shall not reduce the number of shares of Common Stock available for issuance under the Plan.  Any shares of Common Stock subject to a Stock Option (or part thereof) that is cancelled upon exercise of a tandem Stock Appreciation Right when settled wholly or partially in shares shall to the extent of such settlement in shares be treated as if the Stock Option itself had been exercised and such shares received in settlement of the Stock Appreciation Right shall no longer be available for Award.

 

(d)        Assumed Awards. Shares of Common Stock issued in connection with awards that are assumed, converted or substituted pursuant to a merger, acquisition or similar transaction entered into by ACCO or any of its Subsidiaries shall not reduce the number of shares of Common Stock available under the Plan.

 

(e)        Term of Plan.  No Award shall be made or granted under the Plan after the tenth anniversary of the Effective Date, but the duration of Awards granted on or before the tenth anniversary thereof may extend beyond such expiration.  At the time an Award is granted or amended or the terms or conditions of an Award are changed, the Committee may provide for limitations or conditions on such Award.  The terms of the Plan as in effect prior to the Effective Date shall govern all awards granted under the Plan prior to the Effective Date.

 

(f)         One-Year Minimum Vesting. The period of continuous employment (or service as a Non-Employee Director) required for vesting under an Award of Stock Options, Stock Appreciation Rights, Performance Shares, Performance Stock Units, Restricted Shares, Restricted Stock Units, or other Stock Award shall not be less than one year, except (i) for Awards, in the aggregate, for such number of shares of Common Stock not exceeding 5% of the available shares for Award under the Plan on the Effective Date, (ii) as the Committee shall otherwise specify in the Award Agreement in the case of a termination of an Employee’s employment due to death or Disability, (iii) respecting options or other awards assumed by the Company pursuant to Section 5(d), or (iv) as otherwise may apply pursuant to Section 12 in the event of a Change in Control.

 

(g)        No Fractional Shares.  No fractional shares of Common Stock shall be issued or delivered pursuant to this Plan or any Award.  The Committee shall determine whether cash, Awards or other property shall be issued or paid in lieu of fractional shares or whether such fractional shares of Common Stock or any rights thereto shall be forfeited or otherwise eliminated.

 

(h)        No Repricing.  Notwithstanding the authority granted to the Committee pursuant to Section 4, the Committee shall have no authority to reduce the exercise price of any Stock Option (including any Incentive Stock Option) or any Stock Appreciation Right, nor may any Stock Option (including any Incentive Stock Option) or Stock Appreciation Right granted under the Plan be surrendered to ACCO for cancellation or exchanged for cash or as consideration for the grant of a new Stock Option or Stock Appreciation Right with a lower exercise price than the Stock Option or Stock Appreciation Right so surrendered or exchanged, without the approval of ACCO’s stockholders, and no repricing of a Stock Option or a Stock Appreciation Right shall be permitted without the approval of the Company’s stockholders if such approval otherwise is required under the rules of any stock exchange on which shares of

 

  

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Common Stock are listed, except pursuant to Section 10 related to an adjustment in the number of shares of Common Stock.

 

(i)         Cash Settlement.  To the extent provided by the Committee, any Award may be settled in cash rather than Common Stock.

 

6.         Awards under the Plan.  The following types of Awards may be granted by the Committee under the Plan, on a standalone, combination or tandem basis, on such terms and conditions as the Committee may determine except as otherwise provided in the Plan:

 

(a)        Stock Option.  A right to buy a specified number of shares of Common Stock at a fixed exercise price during a specified period of time; provided that the exercise price of any Stock Option shall not be less than 100% of the Fair Market Value of Common Stock on the date of grant of such Award.  A Stock Option shall be exercisable in whole or in part from time to time during the period beginning at the completion of the required employment period, or service period for a Non-Employee Director, and the satisfaction of any performance objectives as specified, in the discretion of the Committee, in the Award Agreement, and ending at the expiration of seven years from the date of grant of the Option, unless an earlier expiration date shall be stated in the Award Agreement or the Stock Option shall cease to be exercisable pursuant to the terms of the Award Agreement.  To the extent that a Stock Appreciation Right is exercised in whole or in part, a Stock Option (or part thereof) in respect of which such Stock Appreciation Right was granted shall terminate and cease to be exercisable.  The period of required employment (or service as a Non-Employee Director) under an Award of Stock Options shall be determined by the Committee and set forth in the Award Agreement, but shall not be less than one year as provided in Section 5(f).

 

(b)        Incentive Stock Options.  An Award in the form of a Stock Option intended to qualify as an incentive stock option under Section 422 of the Code and which shall comply with the requirements of Section 422 of the Code or any successor Section of the Code as it may be amended from time to time (including the $100,000 limitation thereunder) and otherwise satisfying the provisions of Section 6(a).

 

(c)        Stock Appreciation Right.  A right to receive, during a specified period of time, the excess of the Fair Market Value of a share of Common Stock on the date that the Stock Appreciation Right is exercised over the Fair Market Value of a share of Common Stock on the date the Stock Appreciation Right was granted; provided that the exercise price of any Stock Appreciation Right shall not be less than 100% of the Fair Market Value of Common Stock on the date of grant of such Award. A Stock Appreciation Right shall be exercisable in whole or in part from time to time during the period beginning at the completion of the required employment period, or service period for a Non-Employee Director, and the satisfaction of any performance objectives as specified, in the discretion of the Committee, in the Award Agreement, and ending at the expiration of seven years from the date of grant of the Stock Appreciation Right, unless an earlier expiration date shall be stated in the Award Agreement or the Stock Appreciation Right shall cease to be exercisable pursuant to the terms of the Award Agreement. To the extent that a Stock Option is exercised in whole or in part, any Stock Appreciation Right that is granted in respect of such Stock Option (or part thereof) shall terminate and cease to be exercisable.  The period of required employment (or service as a Non-Employee Director) under an Award of

 

  

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Stock Appreciation Rights shall be determined by the Committee and set forth in the Award Agreement, but shall not be less than one year as provided in Section 5(f).

 

(d)        Restricted and Performance Share.  A transfer of Common Stock to a Participant, subject to such restrictions on transfer or other incidents of ownership, in the case of Performance Shares, Performance Criteria (or other performance criteria) established pursuant to Section 7 for such Performance Periods as the Committee may determine, but having a Restriction Period of not less than one year as provided in Section 5(f) and for Awards of Performance Shares a Performance Period of not less than one year.

 

(e)        Restricted and Performance Stock Unit.  A fixed or variable share denominated unit subject to such conditions of vesting, and time of payment, including in the case of Performance Stock Units Performance Criteria (or other performance criteria) established pursuant to Section 7 for such Performance Periods as the Committee may determine, but having a vesting period of not less than one year as provided in Section 5(f) and for Awards of Performance Stock Units a Performance Period of not less than one year, which Restricted Stock Units or Performance Stock Units are valued at the Committee’s discretion in whole or in part by reference to, or otherwise based on, the Fair Market Value of Common Stock and which may be paid in shares of Common Stock, cash or a combination of both.

 

(f)         Dividends or Dividend Equivalent Rights.  A right to receive dividends or their equivalent in value in Common Stock, cash or in a combination of both with respect to any new or previously existing Award.  For purposes of Section 409A, unless the Committee shall otherwise determine, such rights to dividend equivalents shall be considered separate rights apart from the Award of Restricted Stock Units and Performance Stock Units to which they relate.

 

(g)        Stock Award.  An unrestricted transfer of ownership of shares of Common Stock.

 

(h)        Cash Award.  An award denominated in cash that may be earned pursuant to the achievement of Performance Criteria set forth in Section 7 during the Performance Period determined by the Committee or that may be earned under ACCO’s annual bonus, multi-year bonus or other incentive or bonus plans established hereunder.  Nothing in this Section 6(h) shall preclude the Committee from granting Cash Awards, or from granting any cash incentive awards to any Employee outside of the Plan, that are intended not to constitute a Section 162(m) Award.

 

(i)         Other Incentive Awards.  An Award, other than a Stock Option (including an Incentive Stock Option), Stock Appreciation Right, Performance Share, Performance Stock Unit, Dividend, Dividend Equivalent Right, Stock, Restricted Share, Restricted Stock Unit, or Director Award, that is valued in whole or in part by reference to, or are otherwise based on, Common Stock or other factors which are related to or serve a similar function to those Awards set forth in this Section 6, including, but not limited to, Other Incentive Awards related to the establishment or acquisition by ACCO or any Subsidiary of a new or start-up business or facility.

 

(j)         Director Awards.  At such times and in such amounts as the Board may determine, the Board may, in its sole discretion, grant to Non-Employee Directors, a Director Award which may be an Award of Stock Options (other than Incentive Stock Options), Stock Appreciation Rights, Stock, Restricted Shares, Restricted Stock Units, a Cash Award or any

 

  

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combination thereof.  The terms and conditions of Director Awards shall be as provided in the Award Agreement which shall be consistent with the provisions of this Plan. The Board shall have the exclusive authority to administer and interpret Director Awards and the Plan with respect to Director Awards.

 

7.         Performance-Based Awards.

 

(a)        Performance Period; Performance Criteria.  The Committee may from time to time, establish Performance Criteria with respect to an Award.  The Performance Criteria or standards for an Award shall be determined by the Committee in writing, shall be measured for achievement or satisfaction during the Performance Period in which the Committee permitted such Participant to satisfy or achieve such Performance Criteria and may be absolute in their terms or measured against or in relationship to other companies comparably, similarly or otherwise situated and may be based on or adjusted for any other objective goals, events, or occurrences established by the Committee, provided that such criteria or standards relate to one or more of the following: stock price; revenues; operating income; operating company contribution; cash flow; cash flow from operations; earnings before one or more of interest, taxes, depreciation and amortization; income from continuing operations; net asset turnover; net income; earnings per share; earnings per share from continuing operations; operating margin; return on equity, assets, net assets or net tangible assets; return on invested capital; return on capital employed; return on total capital; economic profit; gross profit; working capital efficiency; cost reductions; improvement in cost of goods sold; inventory sales ratio; return on sales; earnings growth; revenue growth; gross margin; total return to stockholders; debt, net debt; economic value added – or EVA® (net operating profit after tax minus the sum of capital multiplied by the cost of capital), leverage ratio, or  the implementation or completion of critical projects, including acquisitions, divestitures, and other ventures, process improvements, attainment of other strategic objectives, including market penetration, geographic expansion, product development, innovation or research goals or the like. Such Performance Criteria may be particular to a line of business, Subsidiary or other unit or may be based on the performance of ACCO generally, and may, but need not, be based upon a change or an increase or position result. The Performance Criteria shall include a minimum performance standard below which no payment shall be made and a maximum performance standard above which no further amount of payment shall be made.  Performance Periods may overlap and Participants may participate simultaneously with respect to performance-based Awards that are subject to different Performance Periods and different Performance Criteria.

 

(b)        Section 162(m) Awards.  The Committee may determine whether any Award under the Plan is intended to constitute a Section 162(m) Award.  Any Awards intended to constitute Section 162(m) Awards shall be conditioned on the achievement of one or more Performance Criteria to the extent required by Section 162(m) of the Code and shall be subject to all other requirements of Section 162(m) of the Code.   If any provision of an Award Agreement relating to an Award intended to constitute Section 162(m) Award does not satisfy such requirements, such provision shall be construed or deemed amended to the extent necessary to conform with such requirements. For Awards not intended to constitute Section 162(m) Awards, the Committee may establish such performance criteria as it deems appropriate.

 

(c)        Adjustments; Negative Discretion; Certification.  The Committee may at any time adjust the Performance Criteria and measurements applicable to performance-based

 

  

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Awards to take into account changes in law and accounting and tax rules and to make such adjustments as the Committee deems necessary or appropriate to reflect the inclusion or exclusion of the impact of extraordinary or unusual items, events or circumstances, provided that, to the extent that an Award is intended by the Committee to constitute a Section 162(m) Award, no adjustment shall be made which would result in an increase in the compensation of any Covered Employee for the applicable Performance Period.  The Committee also may at any time adjust the Performance Criteria and measurements applicable to performance-based Awards and thereby reduce the amount to be received by any Participant pursuant to such Awards if and to the extent that the Committee deems it appropriate, provided that no such reduction shall be made on or after the date of a Change in Control.  As soon as practicable after the end of the applicable Performance Period, the Committee shall certify as to the achievement or satisfaction of the applicable Performance Criteria pursuant to the Award.

 

8.         Award Agreements.  Each Award under the Plan shall be evidenced by an Award Agreement.  Delivery of an Award Agreement to each Participant shall constitute an agreement, subject to Section 9 hereof, between ACCO and the Participant as to the terms and conditions of the Award.  An Award Agreement, and any required signatures thereon or authorization or acceptance thereof, may be in electronic format.

 

9.         Other Terms and Conditions.

 

(a)        No Assignment; Limited Transferability of Stock Options.  No Award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, except (i) by will or by the laws of descent and distribution and (ii) that a Stock Option (other than an Incentive Stock Option) may be transferred pursuant to a domestic relations order or by gift to a Family Member of the Participant to the extent permitted in the applicable Award.  For the purpose of this provision, a “Family Member” shall have the meaning set forth in the General Instructions to Form S-8 Registration Statement under the Securities Act of 1933.  Following transfer, any such Stock Options shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, provided that for purposes of this Section 9(a), the term “Participant” shall be deemed to refer to the transferee (except for the purposes of subsequent transfers by domestic relations order or gift of the Stock Option pursuant to clause (ii)).  The provisions of the Stock Option relating to the period of exercisability and expiration of the Stock Option shall continue to be applied with respect to the original Participant, and the Stock Option shall be exercisable or received by the transferee only to the extent, and for the periods, set forth in said Stock Option.  References in this Section 9(a) to a Stock Option also refer to any tandem Stock Appreciation Rights.

 

(b)        Termination of Employment or Service.  The disposition of each Award of Stock Options, Stock Appreciation Rights, Performance Shares, Performance Stock Units, Restricted Shares, Restricted Stock Units, or other Stock Award in the event of the termination of a Participant’s employment (or service as a Non-Employee Director) shall be determined by the Committee and set forth in the Award Agreement  at the time of grant.  Anything in the Plan to the contrary notwithstanding, the Committee is not authorized to waive or accelerate vesting or the lapse of restrictions under any such Award except upon the death or Disability of the Participant, or in accordance with Section 12 upon the occurrence of a Change in Control of the Company.

 

  

12

  

(c)        Death; Disability; Retirement.  Except as otherwise determined by the Committee in the Award Agreement, or thereafter in the case of death or Disability, if a Participant’s employment with ACCO and its Subsidiaries or status as a Non-Employee Director terminates by reason of death, Disability or Retirement:

 

(i)        The Participant’s Stock Options and Stock Appreciation Rights, to the extent then exercisable, shall continue to be exercisable for five years following such termination, but not after the expiration date stated in the Stock Option and Stock Appreciation Rights Award, and shall cease to be exercisable thereafter; provided, a Stock Option (other than an Incentive Stock Option) and a Stock Appreciation Right may be exercised within one year following the date of death even if later than such expiration date;

 

(ii)       A prorated portion of each of the Participant’s Restricted Share Awards shall become unrestricted, and a prorated portion of each of the Participant’s Restricted Stock Unit Awards shall become nonforfeitable and payable, with such proration to be based on the portion of the Restriction Period elapsed through the date of such termination; as of such termination, the remaining portion of each such Award that does not become unrestricted or nonforfeitable pursuant to this Section 9(c)(ii) shall be forfeited and terminate; and

 

(iii)      Subject to the attainment of the Performance Criteria set forth in the Award, a prorated portion of the Performance Shares under each such Award shall become unrestricted, and a prorated portion of the Performance Stock Units under each such Award shall become nonforfeitable and payable, with such proration to be based on the portion of the Performance Period elapsed through the date of such termination; as of such termination, the remaining portion of such Award that does not become unrestricted or nonforfeitable pursuant to this Section 9(c)(iii) shall be forfeited and terminate.

 

(d)       Rights as a Stockholder.  A Participant shall have no rights as a stockholder with respect to shares of Common Stock covered by an Award until the date the Participant or his nominee, guardian or legal representative is the holder of record; provided, however, that Participants holding Restricted Shares may exercise full voting rights with respect to those shares during the Restriction Period.

 

(e)       Dividends and Dividend Equivalents.  Rights to dividends and Dividend Equivalents may be extended to and made a part of any Award (other than Stock Options, Incentive Stock Options or Stock Appreciation Rights), subject to such terms, conditions and restrictions as the Committee may establish; provided, however, that in no event shall dividends or Dividend Equivalents, if any, credited with respect to performance-based Awards be payable prior to the payment, if any, of such performance-based Award.

 

(f)        Payments by Participants.  The Committee may determine that Awards for which a payment is due from a Participant (other than payments relative to withholding, which are addressed in Section 9(g)) may be payable:  (i) in cash by personal check, bank draft, money order, other money transfers or direct account debits payable to the order of ACCO; (ii) through the delivery or deemed delivery based on attestation to the ownership of Previously-Acquired shares of Common Stock with a Fair Market Value equal to the total payment due from the

 

  

13

  

Participant; (iii) through a simultaneous exercise of the Participant’s Award and sale of the shares thereby acquired pursuant to a brokerage arrangement approved in advance by the Committee to assure its conformity with the terms and conditions of the Plan; (iv) by a combination of the methods described in (i), (ii) and (iii) above; or (v) by such other methods as the Committee may deem appropriate.

 

(g)       Tax Withholding.  Except as otherwise provided by the Committee in the Award Agreement or otherwise (i) the deduction of withholding and any other taxes required by law shall be made from all amounts paid in cash, and (ii) in the case of the exercise of Stock Options or payments of Awards in shares of Common Stock, the Participant shall be required to pay the amount of any taxes required to be withheld in cash prior to receipt of such stock, or alternatively, ACCO may require or permit the Participant to elect to have withheld a number of shares, or deliver such number of Previously-Acquired shares of Common Stock, the Fair Market Value of which equals the minimum statutory withholding tax required be withheld from the shares to be received upon such exercise or payment.

 

(h)       Deferrals.  To the extent provided by the Committee in the Award Agreement or otherwise, a right to receive Common Stock or a fixed or variable share denominated unit Award granted under the Plan, or under any deferred compensation or similar plan established from time to time by ACCO, may provide for the mandatory or elective deferral of the delivery of shares of Common Stock or the payment of cash.  The Committee shall establish rules and procedures relating to any such deferrals and the payment of any withholding tax with respect thereto.  Any such deferral and payment of an Award shall be made at such time (or times) and on such basis as satisfies the provisions of Section 409A.

 

(i)        Other Restrictions, Limitations; Cancellation and Clawback.

 

(i)        All Awards made under the Plan, and shares of Common Stock issued thereunder, shall be subject to any other compensation deduction, cancellation, clawback or recoupment policies that are approved by the Board or the Committee (whether approved prior to, on or after the Effective Date or the date of the Award) as such policies may be applicable to a Participant from time to time, or as may be required to be made pursuant to any applicable currently effective or subsequently adopted law, government regulation or stock exchange listing requirement or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement which provides for such deduction, cancellation, clawback or recovery.  The Committee may legend the certificates issued in connection with an Award to give appropriate notice of any such restrictions.

 

(ii)       The Committee may specify in an Award Agreement that the Participant’s rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture, clawback or recoupment, upon the occurrence of certain specified events or circumstances in addition to any otherwise applicable vesting, performance conditions or delayed or deferred payment or holding period requirements of an Award.  Such events may include, but shall not be limited to, (a) termination of employment for cause, (b) fraudulent, illegal or other misconduct, (c) violation of any ACCO and/or Subsidiary code of ethics, conflict of interest, insider trading or similar policy or code of conduct applicable to the Participant, (d) breach of any noncompetition,

 

  

14

  

nonsolicitation, confidentiality, or other restrictive covenant that may apply to the Participant, (e) other conduct by the Participant that is detrimental to the business or reputation of ACCO and/or its Subsidiaries or (f) requirements of applicable laws, rules or regulations.

 

(j)        Section 409A.  The Plan is intended to comply and shall be administered in a manner that is intended to comply with Section 409A and shall be construed and interpreted in accordance with such intent. To the extent that an Award or the payment, settlement or deferral thereof is subject to Section 409A, the Award shall be granted, paid, settled or deferred in a manner that will comply with Section 409A, except as otherwise determined by the Committee.  Any provision of the Plan that would cause the grant of an Award or the payment, settlement or deferral thereof to fail to satisfy Section 409A shall be amended to comply with Section 409A on a timely basis, which may be made on a retroactive basis, in accordance with regulations and other guidance issued under Section 409A.  In the case of amounts not intended to be deferrals of compensation subject to Section 409A, payment or settlement of amounts under such Awards shall occur not later than March 15 of the taxable year of ACCO following the taxable year of ACCO in which the Participant’s right to payment or settlement is not subject to a substantial risk of forfeiture (within the meaning of Section 409A).  In the case of amounts intended to be deferrals of compensation subject to Section 409A, the initial deferral election shall be made and become irrevocable not later than December 31 of the taxable year of ACCO immediately preceding the year in which the Participant first performs services related to such compensation, provided that the timing of such initial deferral election may be later as provided in Section 409A with respect to initial participation in the Plan and for “performance-based compensation” as defined under Section 409A.   If an amount payable under an Award as a result of the Separation from Service (other than due to death) occurring while the Participant is a “specified employee” constitutes a deferral of compensation subject to Section 409A, then payment of such amount shall not occur until six (6) months and a day after the date of the Participant’s Separation from Service except as permitted under Section 409A.

 

(k)       Uncertificated Shares. To the extent that the Plan provides for issuance of certificates to reflect the transfer of shares of Common Stock, the transfer of such shares may be affected on a noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange.

 

10.       Adjustment.  The aggregate number of shares of Common Stock as to which Awards may be granted to Participants, the number of shares of Common Stock set forth in the limitations in Sections 5(b), the number of shares of Common Stock covered by each outstanding Award, and the exercise price per share of Common Stock in each such Award and the terms and conditions of outstanding Awards, shall all be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a subdivision or consolidation of shares or other capital adjustment, or the payment of a stock dividend or other increase or decrease in such shares, effected without receipt of consideration by ACCO, or other change in corporate or capital structure; provided, however, that any fractional shares resulting from any such adjustment shall be eliminated.  The Committee may also make the foregoing changes and any other changes, including changes in the classes of securities available, to the extent it is deemed necessary or desirable to preserve the intended benefits of the Plan and Awards hereunder for ACCO and the Participants in the event of any other reorganization,

 

  

15

  

recapitalization, merger, consolidation, spin-off, extraordinary dividend or other distribution or similar transaction.

 

11.       Rights as Employees or Directors.  No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of or as a Director of ACCO or a Subsidiary.  Further, ACCO and each Subsidiary expressly reserve the right at any time to dismiss a Participant free from any liability, or any claim under the Plan, except as provided herein or in any Award Agreement issued hereunder.

 

12.       Change in Control.  Notwithstanding anything contained in the Plan to the contrary, the provisions of this Section 12 shall apply in the event of a Change in Control.

 

(a)        Replacement Awards; No Immediate Vesting.

 

(i)         An Award shall not vest upon the occurrence of a Change in Control and shall continue to the extent qualifying as a Replacement Award.

 

(ii)        A “Replacement Award” includes an outstanding Award that continues upon and after the occurrence of a Change in Control and an Award provided to a Participant pursuant to Section 10 in replacement of an outstanding Award (such replaced Award, a “Replaced Award”) in connection with a Change in Control that satisfies the following conditions:

 

(A)       It has a value at least equal to the value of the Replaced Award;

 

(B)       It relates to publicly traded equity securities of ACCO or its successor in the Change in Control or another entity that is affiliated with ACCO or its successor following the Change in Control;

 

(C)       Its other terms and conditions are not less favorable to the Participant than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control); and

 

(D)       Upon an involuntary Separation from Service of a Participant by the Company other than for Cause (and not due to Disability), or a voluntary Separation from Service by the Participant for Good Reason (if applicable), occurring on or during the period of twenty-four (24) months after the Change in Control, the Replacement Award, to the extent not vested and unrestricted as of such Separation from Service, shall become fully vested and (if applicable) exercisable and free of restrictions.

 

The Committee, as constituted immediately before the Change in Control, shall have the discretion to determine whether the conditions of this Section 12(a)(ii) are satisfied.

 

(b)        Vesting if No Replacement Award.  To the extent that a Replacement Award is not provided to the Participant, upon the occurrence of a Change in Control:

 

  

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(i)         Any and all Stock Options and Stock Appreciation Rights granted hereunder shall become immediately exercisable;

 

(ii)        Any restrictions imposed on Restricted Shares shall lapse and become freely transferable, and all Restricted Stock Units shall become fully vested and in full settlement of such Awards paid out in cash, or in the discretion of the Committee, shares of Common Stock with a Fair Market Value equal to the amount of such cash; and

 

(iii)       The payout opportunities attainable at target or, if greater, in the amount determined by the Committee to have been earned thereunder based on performance through the date of the Change in Control, under all outstanding Awards of Performance Stock Units, Performance Shares, Cash Awards and Other Incentive Awards and shall be deemed to have been earned for the entire Performance Period(s) as of the effective date of the Change in Control.  The vesting of all such earned Awards shall be accelerated as of the effective date of the Change in Control, and in full settlement of such Awards, there shall be paid out in cash, or in the discretion of the Committee, shares of Common Stock with a Fair Market Value equal to the amount of such cash.

 

The foregoing provisions of this Section 12(b) shall apply, and a Participant’s outstanding Awards shall not become Replacement Awards, upon the occurrence of a Change in Control following an involuntary Separation from Service of the Participant by the Company other than for Cause (and not due to Disability), or a voluntary Separation from Service for Good Reason by the Participant (if applicable), occurring (x) at the request of a third party who was taking steps reasonably calculated to effect such Change in Control or (y) otherwise in contemplation of and within 180 days before such Change in Control.

 

13.       Amendments, Modification and Termination. The Board may at any time and from time to time, alter, amend, suspend or terminate the Plan in whole or in part, subject to any requirement of stockholder approval imposed by applicable law, rule or regulation or any stock exchange listing requirement.  No termination, amendment, or modification of the Plan shall adversely affect in any material way any Award previously granted under the Plan, without the written consent of the Participant holding such Award.

 

14.       Governing Law.  To the extent that federal laws do not otherwise control, the Plan and all Award Agreements hereunder shall be construed in accordance with and governed by the law of the State of Delaware, provided, however, that in the event ACCO’s state of incorporation shall be changed, then the law of the new state of incorporation shall govern.

 

15.       Securities Law Restrictions.  An Award may not be exercised or settled and no shares of Common Stock may be issued in connection with an Award unless the issuance of such shares (i) has been registered under the Securities Act of 1933, as amended, (ii) has qualified under applicable state “blue sky” laws (or ACCO has determined that an exemption from registration and from qualification under such state “blue sky” laws is available) and (iii) complies with all applicable laws, rules and regulations, including all foreign securities laws.  The Committee may require each Participant purchasing or acquiring shares of Common Stock pursuant to an Award under the Plan to represent to and agree with ACCO in writing that such Participant is acquiring the shares for investment purposes and not with a view to the distribution thereof.  All certificates for shares of Common Stock delivered under the Plan shall be subject to

 

  

17

  

such stock-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any exchange upon which shares of Common Stock are then listed, and any applicable securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

 

16.       Foreign Awards. The Committee or its delegate authorized pursuant to Section 4 may grant Awards to Employees who are domiciled or resident outside the United States, or otherwise subject to the tax laws of nations other than the United States, which Awards may have terms and conditions that differ from the terms thereof as provided elsewhere in the Plan for the purpose of complying with such other nations’ laws, rules and regulations (including compliance to avoid adverse tax consequences to the Employee thereunder). The authority granted under this Section 16 shall include the discretion for the Committee to adopt, on behalf of the Company, one or more sub-plans applicable to separate classes of Employees who are subject to the laws of jurisdictions outside of the United States.

 

17.       Effective Date.  The Plan was originally approved by the Board on August 3, 2005 and approved by the stockholders of ACCO on August 8, 2005.  The Plan was amended and restated and approved by the stockholders of ACCO on May 25, 2006 and subsequently amended on May 13, 2008 and on February 20, 2010.  The Plan was subsequently amended and restated and approved by the stockholders of ACCO on May 17, 2011 and subsequently amended effective May 1, 2012 and again on March 5, 2014.  The Board approved this amendment and restatement of the Plan on March 24, 2015, subject to the approval by the stockholders of ACCO at the 2015 Annual Meeting of Stockholders.  This Amended and Restated Plan shall become effective on the date of such stockholder approval (the “Effective Date”).

 

  

18EX-10.1

 Exhibit 10.1 

EXECUTION VERSION 

May 11, 2015 
 CONFIDENTIAL

 Independence Realty Trust, Inc. 
 Cira Centre 

2929 Arch Street, 17th Floor 
 Philadelphia, PA 19104 

Attn: Farrell Ender 
 Re: Up to $500 Million
Senior Secured Term Loan Facility 
 Ladies and Gentlemen: 

Deutsche Bank AG New York Branch (“DBNY” and in its capacity as the initial lender under the term loan facility described
below, the “Initial Lender”) is pleased to provide Independence Realty Trust, Inc., a Maryland corporation (the “Parent Guarantor” or “you”), with a financing commitment
(“Commitment”) with respect to a one-year senior secured term loan facility in an aggregate amount of up to $500,000,000 (subject to extension as provided in the Term Sheet referenced below) (the “Credit Facility”),
which Credit Facility shall be used on the Closing Date (as defined in the Term Sheet referenced below) to consummate the Transactions (as defined in the Term Sheet referenced below). In connection with the Credit Facility, Deutsche Bank Securities
Inc. is pleased to act as the lead arranger and book runner (in such capacity, the “Lead Arranger” and together with DBNY, the “Commitment Parties”), and DBNY is pleased to act as administrative agent (in such
capacity, “Administrative Agent”). 
 Subject solely to the satisfaction of the conditions described in Section 1 of
this letter agreement (together with the schedules and exhibits hereto, “Commitment Letter”), DBNY commits to lend up to $500,000,000 under the Credit Facility on the terms and conditions referred to herein. 

Capitalized terms used but not otherwise defined herein have the meanings set forth in the Summary of Terms and Conditions attached hereto as
Exhibit A (the “Term Sheet”), which is incorporated herein by reference and attached hereto as Exhibit A. 

1. Commitment Conditions. The Commitment of the applicable Commitment Parties hereunder and their respective agreements to perform the
initial services described herein are subject solely to (i) the conditions set forth under the heading “Conditions Precedent to all Credit Extensions” in the Term Sheet, (ii) the conditions set forth in the “Conditions to
Closing” attached as Schedule B to the Term Sheet (the “Closing Conditions  

 Schedule”) and (iii) the negotiation, execution and delivery of definitive documentation in
respect of the Credit Facility consistent with the terms provided for in the Term Sheet (the “Loan Documents”), subject in each case to the Mortgageability Provisions set forth in the Term Sheet; provided that,
notwithstanding anything in this Commitment Letter, the Fee Letter (as defined below), the Loan Documents or any other letter agreement or undertaking concerning the financing of the Transactions to the contrary, (a) the only representations
the accuracy of which will be a condition to the availability of the Credit Facility on the Closing Date will be (i) the representations made by or with respect to the Seller or the Target or its subsidiaries in the Acquisition Agreement that
are material to the interests of the Lenders and DBNY (but only to the extent that you or your affiliates have the right not to consummate the Acquisition as a result of a breach of such representations, or to terminate your or their obligations
under the Acquisition Agreement as a result of a failure of such representations in the Acquisition Agreement to be true and correct) (the “Acquisition Agreement Representations”) and (ii) the Specified Representations (as
defined below), and (b) the terms of the Loan Documents will be such that they do not impair the availability of the Credit Facility on the Closing Date if the conditions described in this Section 1 are satisfied (it being understood that
to the extent any security interest in the intended collateral (other than (i) any collateral the security interest in which may be perfected by the delivery of stock certificates or similar instruments and/or the filing of a financing
statement under the applicable Uniform Commercial Code and (ii) the Mortgaged Properties, for which the Mortgage Condition (as defined in the Closing Conditions Schedule) and the Title Condition (as defined in the Closing Conditions Schedule)
must be satisfied, in each case, subject to the Mortgageability Provisions) is not perfected on the Closing Date after your use of commercially reasonable efforts to do so, the perfection of such security interest(s) will not constitute a condition
precedent to the availability of the Credit Facility on the Closing Date but such security interest(s) will be required to be perfected after the Closing Date pursuant to arrangements to be mutually agreed by DBNY and you). As used herein,
“Specified Representations” means representations made by the Borrower and the Guarantors set forth in the Loan Documents relating to incorporation or formation and good standing; organizational power and authority to enter into the
documentation relating to the Credit Facility; due execution, delivery and enforceability of such documentation; solvency as of the Closing Date of the Parent Guarantor and its subsidiaries on a consolidated basis (to be determined in a manner
consistent with the solvency certificate to be delivered in the form set forth on Annex I attached to Schedule B to the Term Sheet); no conflicts with laws or material agreements of the Loan Documents, in each case except as would not
reasonably be expected to have a Company Material Adverse Effect (as defined in the Acquisition Agreement); no conflicts with charter documents of the Loan Documents; Federal Reserve margin regulations; the Investment Company Act; OFAC, the PATRIOT
Act, FCPA and other anti-terrorism laws; status of the Credit Facility as first lien senior debt; use of proceeds; and, subject to the limitations on perfection of security interests set forth in the preceding sentence and permitted liens, the
creation, perfection and priority of the security interests granted in the proposed collateral, subject to the Mortgageability Provisions. The provisions of this paragraph are referred to as the “Funds Certain Provisions.” 

  
 2 

 2. Syndication and Cooperation. The Initial Lender may assign all or any portion of its
Commitment to additional lenders reasonably acceptable to you (such acceptance not to be unreasonably withheld or delayed) that will become parties to the Loan Documents (together with the Initial Lender, “Lenders”) and may
syndicate the Credit Facility in consultation with you, before or after the Closing Date (subject to the restrictions on transfers to eligible assignees to be set forth in the Loan Documents and subject to the restrictions set forth below). Any such
assignment and/or syndication of its commitment hereunder prior to the Closing Date shall not be a condition to, and shall not relieve the Initial Lender of, its obligations set forth herein (including its obligations to fund the Credit Facility on
the Closing Date on the terms and conditions set forth in this Commitment Letter) and, unless you agree in writing, the Initial Lender shall retain exclusive control over all rights and obligations with respect to its commitments, including all
rights with respect to consents, modifications, waivers and amendments, until after the initial funding of the Credit Facility on the Closing Date has occurred. The Lead Arranger will manage all aspects of the syndication, including the timing of
all offers to potential Lenders and the acceptance of commitments, the amounts offered and the compensation provided. The Lead Arranger and each Lender shall have the right, after the Closing Date to sell, assign, syndicate, participate, or transfer
any portion of the Credit Facility and the Loan Documents to one or more investors; provided that, in any event, the Lead Arranger and the Initial Lender shall not syndicate any of the Commitment with respect to the Credit Facility to any
Disqualified Lenders. “Disqualified Lenders” shall mean not more than ten (10) publicly traded real estate investment entities that invest primarily in multi-family housing that are identified in writing to the Lead Arranger
within ten (10) business days of the date of this Commitment Letter. 
 Whether prior to or after the Closing Date, you agree to take
all commercially reasonable actions as the Lead Arranger may reasonably request to assist it in forming a syndicate reasonably acceptable to it and you. Your assistance in forming such a syndicate shall include but not be limited to: (i) making
your senior management and representatives available to participate in informational meetings with potential Lenders (and your using commercially reasonable efforts to ensure such contact between the senior management of the Target, on the one hand,
and the potential Lenders, on the other hand) at such times and places as the Initial Lender may reasonably request; (ii) using your commercially reasonable efforts to ensure that the syndication efforts benefit from the existing lending and
investment banking relationships of you and the Target; and (iii) your assistance (and using your commercially reasonable efforts to cause the Target to assist), in the preparation of customary confidential information memoranda for the Credit
Facility and other customary marketing materials to be used in connection with the syndication of the Credit Facility. You, the Initial Lender, and the Lead Arranger agree that no other agents, co-agents, bookrunners or arrangers will be appointed,
no other titles will be awarded, and no compensation (other than that expressly contemplated by the Term Sheet and the Fee Letter referred to below) will be paid in connection with the Credit Facility unless you, the Initial Lender, and the Lead
Arranger shall so agree in writing; provided that your consent shall not be required for the Initial Lender or its affiliates to pay the compensation received by them to any or all of the Lenders. 

  
 3 

 Subject to the third paragraph of Section 5 hereof, the Commitment Parties and each other
Lender, if any, may freely discuss the Credit Facility contemplated hereby and any other potential transactions with any and all of its affiliates, any prospective Lender or participant, and may freely disclose to any such affiliate, prospective
Lender or participant and permit any such affiliate, prospective Lender or participant, from time to time, to use for any lawful purpose, any and all information at any time provided to the Administrative Agent or any other Lender by or on behalf of
the Parent Guarantor or the Target or any of their respective subsidiaries or affiliates. 
 You hereby represent, warrant and covenant that
from and after the date hereof and prior to and during the syndication of the Credit Facility, there shall be no other person engaged to effect, and neither you, the Target nor any of your respective affiliates shall effect, any competing offering,
placement or arrangement of any debt securities or bank financing by or on behalf of the Borrower or the Target or any of their respective affiliates, as determined in the good faith judgment of the Initial Lender and the Lead Arranger, in each
case, other than the Specified Financing, any other financing having a term of not less than four (4) years, any revolving lines of credit or any permanent debt financing in addition to, substitution or replacement for the Credit Facility, the
facilities contemplated by Schedule E to the Term Sheet, any replacements, extensions and renewals of any existing indebtedness of the Parent Guarantor, the Target and their respective subsidiaries that matures prior to the Closing Date, any
indebtedness incurred in the ordinary course of business of the Parent Guarantor, the Target and their respective subsidiaries for capital expenditures and working capital purposes and any other indebtedness of the Parent Guarantor, the Target and
their respective subsidiaries permitted to be incurred pursuant to the Acquisition Agreement. 
 3. Fees. You agree to pay the fees
set forth in the separate fee letter (the “Fee Letter”) dated the date hereof with the Initial Lender, the Administrative Agent, and the Lead Arranger in accordance with the terms of the Fee Letter. 

4. Indemnification; Expenses. You agree to indemnify and hold harmless the Administrative Agent, the Lead Arranger, the Initial Lender,
and each of the other Indemnified Persons identified and as set forth in the indemnification provisions attached as Exhibit B hereto (the “Indemnification Provisions”) and hereby made a part hereof as though fully set forth
herein. 
 In further consideration of the issuance of this Commitment Letter, and recognizing that in connection herewith the Initial
Lender, the Lead Arranger and the Administrative Agent are incurring substantial costs and expenses in connection with the documentation of the Commitment and the Credit Facility, due diligence, syndication, and

  
 4 

 
underwriting with respect to the proposed Credit Facility, including, without limitation, fees and expenses of counsel, transportation, duplication and printing, third party consultant costs, and
search fees, you agree to pay such reasonable and documented costs and expenses incurred in connection with the preparation, negotiation and delivery of this Commitment Letter (whether incurred before or after the date hereof and regardless of
whether any of the Loan Documents are entered into, the Closing Date occurs, or the transactions contemplated hereunder are consummated), the Loan Documents and any security arrangements in connection therewith; provided that fees and
expenses of counsel shall be limited to one counsel (and, if reasonably necessary, a single local counsel in each relevant jurisdiction and, solely in the case of a conflict of interest, one additional primary counsel and one additional counsel in
each relevant jurisdiction to each group of similarly situated affected persons, taken as a whole). 
 The indemnity provisions set forth in
this Section 4 shall supersede in their entirety the indemnity provisions set forth in that certain letter agreement among the Parent Guarantor and DBNY dated as of May 8, 2015. 

5. Disclosure. You agree that each of this Commitment Letter and the Fee Letter is for your confidential use only and will not be
disclosed by you to any person other than to your affiliates, officers, directors, agents, accountants, attorneys and other advisors, and then only on a “need to know” basis in connection with the Credit Facility and on a confidential
basis. Notwithstanding the foregoing, following your acceptance hereof, and subject to the following sentence, you may: (i) make public disclosure of (A) the existence of the Commitment or (B) to the extent the terms of this
Commitment Letter have become publicly available as a result of disclosures thereof by persons other than you or other persons that have confidentiality obligations under this Commitment Letter, the terms and conditions of this Commitment Letter,
(ii) file a copy of this Commitment Letter (or disclose the content and/or existence of this Commitment Letter) in any public record in which it is required by law to be filed (including, without limitation, in any proxy, 8-K or other public
filing relating to the Acquisition), (iii) make such other public disclosures of the terms and conditions hereof as required by law or regulation or requested by any governmental agency or other regulatory authority and (iv) disclose this
Commitment Letter (and to the extent redacted in a manner reasonably acceptable to the Initial Lender, the Fee Letter) to the Target and its owners, officers, directors, employees, accountants, attorneys and other professional advisors on a
confidential and “need to know” basis in connection with the Acquisition who are informed of the confidential nature of such information. Under no circumstances shall you issue any press release or similar public disclosure with respect to
this Commitment Letter or the transactions contemplated hereby without the prior written consent of the Initial Lender, which consent shall not be unreasonably withheld to the extent that such press release or other public disclosure is required by
law (but which may be withheld in the sole and absolute discretion of the Initial Lender in all other cases). The foregoing shall not be deemed to restrict you from disclosing this Commitment Letter (a) pursuant to subpoena or other court
process or (b) to the extent required in connection with any litigation or proceeding to which the Commitment Parties or their affiliates may be a party. 

  
 5 

 You represent and warrant that (but subject to Section 1 hereof, the accuracy of which shall
not be a condition to the Commitment hereunder or the funding of the Credit Facility on the Closing Date) (and to the best of your knowledge, in the case of information regarding the Target or any of its subsidiaries): (i) all written
information (other than Projections (as defined below) and information of a general economic or industry nature) that has been or will hereafter be made available by you or any of your representatives in connection with the Credit Facility to any
Commitment Party or any of its representatives, any Lender, or any potential Lender in the case of information relating to you, the Borrower, the Target and your or their respective affiliates, taken as a whole, is and will be complete and correct
in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances
under which such statements were or are made; and (ii) all written financial projections (the “Projections”), if any, that have been or will be prepared by you or your representatives and made available to any Commitment Party
or any of its representatives, any Lender, or any potential Lender in connection with the financing contemplated hereby have been or will be prepared in good faith based upon assumptions that are reasonable at the time made and at the time prepared
(it being understood that such Projections are subject to significant uncertainties and contingencies, many of which are beyond your control, and no assurance can be given that any particular Projection will be realized). If at any time from the
date hereof until the earlier of (i) a Successful Syndication (as defined in the Fee Letter) (which, for purposes of this sentence only, shall not occur prior to the Closing Date) and (ii) 90 days following the Closing Date, you become
aware that any of the representations and warranties in the preceding sentence would be incorrect if the information or Projections were being furnished, and such representations and warranties were being made, at such time, then you will (and you
will use commercially reasonable efforts to cause the Target to) promptly supplement the information and the financial projections so that such representations and warranties will be correct under those circumstances. 

Each Commitment Party shall use all confidential information provided to it by or on behalf of you hereunder solely for the purpose of
providing the services which are the subject of this Commitment Letter and otherwise in connection with the Transactions, and shall keep all such information confidential in accordance with the Commitment Parties’ customary procedures for
transactions similar to those contemplated hereby, except to the extent such information (i) was or becomes generally available to the public other than as a result of a disclosure by such Commitment Party or its affiliates, officers,
directors, employees, accountants, attorneys or other professional advisors, or (ii) was or becomes available from a source other than by or on behalf of the Parent Guarantor or its affiliates, officers, directors, employees, accountants,
attorneys or other professional advisors not known to such Commitment Party to be in breach of an obligation of confidentiality to the Parent Guarantor or its affiliates in the disclosure of such information. The foregoing shall not be deemed to
restrict any Commitment Party from disclosing such information (a) at the request or pursuant to any requirement of any 

  
 6 

 
governmental authority; (b) pursuant to subpoena or other court process or the upon the request of any regulatory authority (including self-regulatory) having jurisdiction over the
Commitment Parties or any of their respective affiliates; (c) when required to do so in accordance with the provisions of applicable law; (d) to the extent required in connection with any litigation or proceeding to which such Commitment
Party or its affiliate may be a party; (e) to the extent required in connection with the exercise of any remedy hereunder or under any Loan Document; (f) to such Commitment Party’s officers, directors, employees, accountants,
attorneys, independent auditors and other professional advisors, in each case, who need to know such information in connection with the Transactions, and then only on a confidential and “need to know” basis in connection with the
transactions contemplated hereby; (g) for purposes of establishing a “due diligence” defense; and (h) to any prospective participant or assignee (other than, in any case, a Disqualified Lender) in connection with a syndication or
hedging counterparties, subject to the confidentiality provisions contained herein (and, in the case of providing access to such information through Intralinks or similar internet-based access, shall require persons accessing the site to agree to
maintain confidentiality as contemplated above). 
 Each of the parties hereto agrees that this Commitment Letter is a binding and
enforceable agreement with respect to the subject matter herein (including an obligation to negotiate in good faith) notwithstanding that the funding of the Credit Facility is subject to the conditions specified herein, including the execution and
delivery of the Loan Documents by the Borrower and Guarantors in a manner consistent with this Commitment Letter (including the Funds Certain Provisions); it being acknowledged and agreed that the Commitment provided hereunder is subject only to
those conditions set forth in Section 1 of this Commitment Letter. 
 6. Expiration and Termination of Commitment. The
Commitment shall: (i) expire if this Commitment Letter is not countersigned and returned to the undersigned prior to the Expiration Date; and (ii) terminate if the Closing Date does not occur on or prior to the earliest to occur of
(w) October 15, 2015 (or such later date as may be agreed to, in good faith, by the Commitment Parties to the extent the outside termination date of the Acquisition Agreement is extended), (x) the date on which the Acquisition
Agreement terminates, (y) the date of closing of the Acquisition without the use of the Credit Facility or (z) the date on which the Acquisition Agreement expires in accordance with its terms. Your obligations under Sections 3, 4, and 5
relating to fees, indemnification, costs and expenses and confidentiality shall survive the expiration or termination of the Commitment; provided that such obligations shall be superseded by the corresponding provisions contained in the Loan
Documents from and after the Closing Date. 
 7. Miscellaneous: The following provisions shall be applicable both to this Commitment
Letter and to the Fee Letter. 

  
 7 

 (a) Reliance on Information. In undertaking the Commitment, the Commitment Parties are
relying and will continue to rely, without independent verification, thereof, on the accuracy of the information furnished to them by you, the Borrower, the Target and your or their respective subsidiaries, or on your or their behalf, and the
representations and warranties made by the Parent Guarantor herein. The Commitment Parties may also rely on any publicly available information issued or authorized to be issued by you or the Target or any of your and their respective subsidiaries or
affiliates. The Commitment Parties have no obligation to investigate, and have not undertaken any independent investigation of, any information or materials, public or otherwise, made available by you, the Target, or any of your or their respective
subsidiaries or affiliates. 
 (b) Complete Agreement; Waivers and Other Changes to be in Writing. This Commitment Letter, together
with the Fee Letter, supersedes all previous negotiations, agreements and other understandings relating to the Credit Facility, including, without limitation, previous discussions regarding the terms contained herein. Those matters that are not
covered or made clear in this Commitment Letter are subject to mutual agreement of the parties in good faith; provided nothing in the Loan Documents shall increase or expand the conditions to initial funding set forth in Section 1 of this
Commitment Letter and, in all other respects, that such mutual agreement shall be in a manner that is consistent with the Term Sheet and, with respect to other terms, the Documentation Principles. No alteration, waiver, amendment or supplement of or
to this Commitment Letter or the Fee Letter shall be binding or effective unless the same is set forth in a writing signed by a duly authorized representative of each party hereto or thereto. 

(c) Power, Authority and Binding Effect. Each of the parties hereto represents and warrants to each of the other parties hereto that
(i) it has all requisite power and authority to enter into this Commitment Letter and the Fee Letter and (ii) each of this Commitment Letter and the Fee Letter has been duly and validly authorized by all necessary corporate action on the
part of such party, has been duly executed and delivered by such party and constitutes a legally valid and binding agreement of such party, enforceable against it in accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally. 
 (d)
Time of Essence. Time shall be of the essence whenever and wherever a date or period of time is prescribed or referred to in this Commitment Letter. 

(e) Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Commitment Letter shall be governed by and construed in
accordance with the law of the State of New York without regard to principles of conflicts of law to the extent that the application of the law of another jurisdiction will be required thereby; provided that (A) the interpretation of the
definition of “Company Material Adverse Effect” and whether there shall have occurred a “Company Material Adverse Effect”, (B) whether the Acquisition has been consummated as contemplated by the Acquisition Agreement and
(C) whether the 

  
 8 

 
representations and warranties made by or with respect to the Seller or the Target or its subsidiaries in the Acquisition Agreement are accurate and whether as a result of any inaccuracy thereof
you or your affiliates have the right not to consummate the Acquisition or the right to terminate your or your affiliates’ obligations under the Acquisition Agreement, shall be determined in accordance with the laws of the State of Maryland,
without giving effect to any choice or conflict of laws provision or rule (whether of the State of Maryland or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Maryland. 

EACH PARTY HERETO IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS
COMMITMENT OR THE TRANSACTIONS OR THE MATTERS CONTEMPLATED BY THIS COMMITMENT. EACH PARTY HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY DISPUTE RELATED TO THIS
COMMITMENT, THE TRANSACTIONS CONTEMPLATED BY THIS COMMITMENT OR ANY MATTERS RELATED TO THIS COMMITMENT. IN THE EVENT OF LITIGATION, THIS LETTER MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 

(f) Additional Disclaimers. You acknowledge and agree that: 

(i) DBNY, DBSI and certain of their affiliates (the “DB Entities”) are full service financial services firms engaged, either
directly or through affiliates, in various activities, including securities trading, investment banking and financial advisory, investment management, principal investment, hedging, financing and brokerage activities and financial planning and
benefits counseling for both companies and individuals. In the ordinary course of these activities, such Persons may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) or
financial instruments (including bank loans) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities or instruments. Such investment and other activities may involve
securities and instruments of you, the Target or your or their respective affiliates as well as of other entities and persons and their affiliates which may (i) be involved in transactions arising from or relating to the engagement contemplated
by this Commitment Letter, (ii) be customers or competitors of you or the Target or your or their respective affiliates, or (iii) have other relationships with you or the Target or your or their respective affiliates. In addition, the DB
Entities may provide investment banking, underwriting and financial advisory services to such other entities and persons. The DB Entities may also co-invest with, make direct investments in, and invest or co-invest client monies in or with funds or
other investment vehicles managed by other parties, and such funds or other investment vehicles may trade or make investments in securities of you, the Target, your or their respective affiliates, or such other entities. The transactions
contemplated by this Commitment Letter may have a 

  
 9 

 
direct or indirect impact on the investments, securities or instruments referred to in this paragraph. Although the DB Entities in the course of such other activities and relationships may
acquire information about the transaction contemplated by this Commitment Letter or other entities and persons which may be the subject of the transactions contemplated by this Commitment Letter, the DB Entities shall have no obligation to disclose
such information, or the fact that they are in possession of such information, to you, the Target, or your or their respective affiliates or to use such information on the behalf of them. Consistent with the DB Entities’ policies to hold in
confidence the affairs of their customers, the DB Entities will not furnish confidential information obtained from you by virtue of the transactions contemplated by this Commitment Letter to any of their other customers. Furthermore, you acknowledge
that none of the DB Entities or any of their respective affiliates has an obligation to use in connection with the transactions contemplated by this Commitment Letter, or to furnish to you, confidential information obtained or that may be obtained
by them from any other person. 
 (ii) The DB Entities may have economic interests that conflict with those of you, the Target, or certain
of each of your or their respective equity holders or affiliates. You agree that the DB Entities will act hereunder as an independent contractor and that nothing herein or otherwise will be deemed to create an advisory, fiduciary or agency
relationship or fiduciary or other implied duty between the DB Entities and you, the Target, or any of your or their respective equity holders or affiliates. You acknowledge and agree that the transactions contemplated hereby (including the exercise
of rights and remedies hereunder and thereunder) are arm’s-length commercial transactions between the DB Entities, on the one hand, and you and the other Loan Parties (as defined in the Term Sheet), on the other, and in connection therewith and
with the process leading thereto, (i) the DB Entities have not assumed (A) an advisory responsibility in favor of you or your equity holders or affiliates with respect to the financing transactions contemplated hereby or (B) a
fiduciary responsibility in favor of the you, the Target, or any of your or their respective equity holders or affiliates with respect to the financing transactions contemplated hereby, or in each case, the exercise of rights or remedies with
respect thereto or the process leading thereto (irrespective of whether the DB Entities have advised, are currently advising or will advise the such Persons on other matters) or any other obligation to you or the Target except the obligations
expressly set forth in this Commitment Letter and the Fee Letter and (ii) each Commitment Party is acting solely as a principal and not as the agent or fiduciary of you, the Target, your or their respective management, equity holders,
affiliates, or creditors or any other person. You acknowledge and agree that you have consulted your own legal and financial advisors to the extent deemed appropriate and that you are responsible for making your own independent judgment with respect
to such transactions and the process leading thereto. You waive, to the fullest extent permitted by law, any claims you or any other Loan Party may have against the DB Entities for breach of fiduciary duty or alleged breach of fiduciary duty and
agree that the DB Entities will have no liability (whether direct or indirect) to you or the Target in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of you, the Target, or your or their
affiliates, including a fiduciary duty claim made by any equity holders, employees or creditors of you or your affiliates. In 

  
 10 

 
addition, the DB Entities may employ the services of their affiliates in providing services or performing their obligations hereunder and may exchange with such affiliates information concerning
you and other companies that may be the subject of this arrangement, and such affiliates will be entitled to the benefits afforded to the DB Entities hereunder. 

(iii) Notwithstanding the foregoing, as you know, DB has been retained by the Parent Guarantor (or one of its affiliates) as financial advisor
(in such capacity, the “Financial Advisor”) in connection with the Acquisition. Each of the parties hereto agree to such retention, and further agree not to assert any claim you might allege based on any actual or potential
conflicts of interest that might be asserted to arise or result from, on the one hand, the engagement of the Financial Advisor or DB and/or one or more of its affiliates arranging or providing or contemplating arranging or providing financing for a
competing bidder and, on the other hand, our and our affiliates’ relationships with you as described and referred to herein. 
 (g)
No Rights or Liability. Neither this Commitment Letter nor the Fee Letter create, nor shall any of them be construed as creating, any rights enforceable by a person or entity not a party hereto, except as provided in the indemnification
provisions. You, on behalf of yourself and each other Loan Party, acknowledge and agree that (i) none of the Administrative Agent, the Lead Arranger, the Initial Lender, or the Lenders shall have any liability (including, without limitation,
liability for any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements resulting from any negligent act or omission of any of them), whether direct or indirect, in contract, tort or
otherwise, to the Parent Guarantor or any Loan Party (including, without limitation, their respective equity holders and creditors) or any other person for or in connection with this Commitment Letter, the Fee Letter or the Credit Facility, except
that a claim in contract for actual direct damages directly and proximately caused by a breach of any contractual obligation expressly set forth in any written agreement signed by the party against which enforcement of such claim is sought shall not
be impaired hereby and (ii) the Commitment Parties were induced to enter into this Commitment Letter and the Fee Letter by, inter alia, the provisions in Sections 3, 4, 5 and 7 herein. 

(h) No Liability for Special, Indirect, Consequential or Punitive Damages. No party hereto shall be liable for any special, indirect or
consequential damages or, to the fullest extent that a claim for punitive damages may lawfully be waived, for any punitive damages on any claim (whether founded in contact, tort, legal duty or any other theory of liability) arising from or related
in any manner to this Commitment Letter or the negotiation, execution, administration, performance, breach, or enforcement of this Commitment Letter or the instruments and agreements evidencing, governing or relating to the Credit Facility
contemplated hereby or any amendment thereto or the consummation of, or any failure to consummate, the Credit Facility or any act, omission, breach or wrongful conduct in any manner related thereto. 

  
 11 

 (i) Counterparts. This Commitment Letter may be executed in one or more counterparts,
each of which shall constitute an original, and all of which together shall constitute one and the same agreement. Delivery of an executed counterpart of this Commitment Letter by facsimile shall be effective as delivery of a manually executed
counterpart of this Commitment Letter. 

  
 12 

 Please evidence your acceptance of the provisions of this Commitment Letter by (i) signing
the enclosed copy of this Commitment Letter; and (ii) returning the signed Commitment Letter and Fee Letter to the undersigned, at or before 9:30 A.M. (New York City time) on May 11, 2015 (the “Expiration
Date”), the time at which the Commitment (if not so accepted prior thereto) will expire. 
  

			
	Very truly yours,
	
	DEUTSCHE BANK AG NEW YORK BRANCH
		
	By:		 /s/ James Rolison

	Name:		James Rolison
	Title:		Managing Director
		
	By:		 /s/ Joanna Soliman

	Name:		Joanna Soliman
	Title:		Vice President
	
	DEUTSCHE BANK SECURITIES INC.
		
	By:		 /s/ James Rolison

	Name:		James Rolison
	Title:		Managing Director
		
	By:		 /s/ Darrell Gustafson

	Name:		Darrell Gustafson
	Title:		Managing Director

 Signature Page to Commitment Letter (Independence Realty Trust) 

			
	ACCEPTED this 11th day of May, 2015
	
	INDEPENDENCE REALTY TRUST, INC.
		
	By:		 /s/ James J. Sebra

	Name:		James J. Sebra
	Title:		Chief Financial Officer

 Signature Page to Commitment Letter (Independence Realty Trust) 

 EXHIBIT A 

Summary of Terms and Conditions 

Strictly private & confidential 

Up to $500 million Senior Secured Term Loan Facility 

Exhibit A – Summary of Terms and Conditions 

Capitalized terms used but not defined in this Exhibit A shall have the meanings given to them in the Commitment Letter to which this Exhibit A is
attached, including the other exhibits attached thereto. In the case of any such capitalized term that is subject to multiple and differing definitions, the appropriate meaning thereof in this Exhibit A shall be determined by reference to the
context in which it is used. 
  

			
	Transactions:		Independence Realty Trust, Inc. (the “Parent Guarantor”) intends to acquire (the “Acquisition”) 100% of the equity interests of Trade Street Residential, Inc. (the “Target”)
pursuant to that certain Agreement and Plan of Merger dated as of May 11, 2015 (including the exhibits and schedules thereto, the “Acquisition Agreement”) entered into among the Parent Guarantor, Borrower (as defined below),
Adventure Merger Sub LLC, a newly formed Delaware limited liability company wholly-owned by the Borrower (“OP MergerSub”), IRT Limited Partner, LLC, a Delaware limited liability company wholly-owned by the Parent Guarantor
(“IRT LP LLC”), the Target and Trade Street Operating Partnership, LP (the “Target OP”). In connection with the Acquisition, (a) OP MergerSub will merge with and into the Target OP, with the Target OP as the
surviving entity of such merger, (b) Target will merge with and into IRT LP LLC, with IRT LP LLC as the surviving entity of such merger, (c) as a result of the transactions described in (a) and (b), the Parent Guarantor will become the owner of the
Target and the Target OP, with the Target’s stockholders receiving the aggregate amount of consideration set forth in the Acquisition Agreement, (c) the Borrower will obtain the senior secured term loan facility described below under the
caption “Credit Facility Amount/Type”, (d) all indebtedness and commitments in respect of the debt for borrowed money described on Schedule D hereto (the “Specified Existing Debt”) shall be repaid in full and all
commitments with respect thereto shall be terminated (collectively, the “Refinancing”) and (e) fees and expenses incurred in connection with the foregoing (the “Transaction Costs”) will be paid. The transactions
described in this paragraph are collectively referred to herein as the “Transactions”.
		
	Borrower		Independence Realty Operating Partnership, LP (the “Borrower”).
		
	Guarantors		The Credit Facility shall be unconditionally guaranteed by the Parent Guarantor, IRT Limited Partner, LLC (“IRT LP”) and all subsidiaries of the Borrower that directly own the Mortgaged Properties (as defined below)
(the “Subsidiary Guarantors” and, together with the Parent Guarantor and IRT LP, the “Guarantors”; the Guarantors together with the Borrower, the “Loan Parties”) (the guarantees of the Parent
Guarantor, IRT LP and the Subsidiary Guarantors, the “Guarantees”).
		
	Lead Arranger and Bookrunner		Deutsche Bank Securities Inc. (“DBSI” or the “Lead Arranger”).
		
	Administrative Agent		Deutsche Bank AG New York Branch (“DBNY” or the “Administrative Agent”).
		
	Lenders		DBNY (in such capacity, the “Initial Lender”) and a syndicate of lenders reasonably acceptable to the Borrower and arranged by the Lead Arranger, other than, in any case, Disqualified Lenders (collectively, the
“Lenders”).

  
 Confidential 

Page 1 

 Strictly private & confidential 

Up to $500 million Senior Secured Term Loan Facility 
  

			
		
	Credit Facility Amount/Type		 Up to $500,000,000 senior secured term loan facility (the “Credit Facility”). The amount of the Credit Facility made
available to the Borrower on the Closing Date shall not exceed (A) the lesser of (i) an amount equal to 80% multiplied by the aggregate appraised value of all Mortgaged Properties (as defined below) and (ii) an amount such that the Debt Yield (to be
defined as Net Operating Income (as defined below) divided by the original principal amount of the Credit Facility on the Closing Date) after giving effect to the borrowing of the Credit Facility and the consummation of the Transactions on the
Closing Date is not less than 7.0% minus (B) the total aggregate amount of equity issuance proceeds received by the Parent Guarantor (and contributed to the Borrower) following the date of the Commitment Letter that are in excess of $50,000,000 (the
“Maximum Borrowing Amount”). For purposes hereof, (i) “Net Operating Income” shall mean, with respect to the Mortgaged Properties, the annualized amount of the most recently completed trailing three months of (a)
“property, rental and other income” (as determined by GAAP); minus (b) the amount of all expenses (as determined in accordance with GAAP) incurred in connection with and directly attributable to the ownership and operation of the Mortgaged
Properties for such period, including, without limitation, Management Fees (as defined below) and amounts accrued for the payment of ground rent, real estate taxes and insurance premiums, but excluding any general and administrative expenses related
to the operation of the Borrower, any interest expense or other debt service charges, any amortization related to above and below market leases, any straight-lining of rents under GAAP, impairment charges and any non-cash charges such as
depreciation or amortization of financing costs; minus (c) a rental replacement reserve equal to $62.50 per unit and (ii) “Management Fees” shall mean, with respect to the Mortgaged Properties, the lesser of (a) the annualized
amount of the most recently completed trailing three months of actual management fees payable with respect thereto and (b) three percent (3%) multiplied by the annualized amount of the most recently completed trailing three months of the gross
revenues derived from the Mortgaged Properties.
  
 Notwithstanding the foregoing, if, on
or prior to the Closing Date, there exists material defects, environmental conditions or other due diligence shortfalls, if any, with respect to any parcel of real property owned by a Subsidiary Guarantor in fee simple and specified on Schedule
C hereto, whereby such parcel of real property would not otherwise meet the Mortgageability Criteria (as defined below) and/or satisfy the Conditions to Closing set forth in items (viii), (xi), (xii) (xiii), (xiv), (xv), (xvi), (xvii), (xviii)
and/or (xix) on Schedule B hereto: (i) the Credit Facility will nevertheless be funded, (ii) the Borrower will be required to use commercially reasonable efforts to correct such defects following the Closing Date, and (iii) the Borrower will
establish one or more special reserves (the “Special Reserves”) and fund to the Administrative Agent in an amount sufficient to correct or collateralize such defects, environmental conditions or shortfalls (not to exceed the
allocated loan amount for the real property in question in the determination of the Maximum Borrowing Amount), which funds will serve as collateral for the Credit Facility. If any such issue is not curable by the payment of money, or the amount
required is not determinable, the amount of the Special Reserves will be an amount reasonably agreed upon by the Borrower and the Administrative Agent prior to the Closing Date not to exceed the allocated loan amount for the real property in
question in the determination of the Maximum Borrowing Amount. The parcel of real property in question may be removed from the collateral for the Credit Facility with a reduction in the Maximum Borrowing Amount in accordance with the preceding
sentences. The Borrower and the Administrative Agent will cooperate in good faith to establish a mechanism for the release and use of the funds from the Special Reserves to address the issues for which the same is established. The provisions in this
paragraph are hereinafter referred to as the “Mortgageability Provisions”.

  
 Confidential 

Page 2 

 Strictly private & confidential 

Up to $500 million Senior Secured Term Loan Facility 
  

			
		
	Closing Date		The date of the initial borrowing under the Credit Facility (the “Closing Date”).
		
	Purpose		The proceeds of the Credit Facility shall be used on the Closing Date to (i) effectuate the Refinancing, (ii) pay a portion of the purchase price for the Acquisition and/or (iii) pay the Transaction Costs.
		
	Maturity Date		The Credit Facility shall terminate and all amounts outstanding thereunder shall be due and payable on the nine (9) month anniversary of the Closing Date (the “Initial Maturity Date”), subject to the Maturity
Extension Option described below.
		
	Maturity Extension Option		The Borrower shall have the right on one occasion to extend the maturity date of the Credit Facility to the date that is twelve (12) months following the Closing Date (the “Extended Maturity Date”), provided that
(i) the Administrative Agent shall have received written notice of the extension at least 30 days prior to the Initial Maturity Date, (ii) the Borrower shall have provided evidence of the existence of a LIBOR interest rate cap having terms
acceptable to the Administrative Agent and (iii) on the extension date, (a) the Borrower shall have paid the Facility Extension Fee set forth on Schedule A hereto and (b) the Administrative Agent shall have received a certificate signed by a
duly authorized officer of the Borrower stating that (1) no event of default has occurred and is continuing or would result from such extension, (2) the Borrower is in compliance with all financial covenants both immediately before and after giving
effect to such extension, and (3) the representations and warranties contained in the Loan Documents are true and correct in all material respects as though made on and as of the extension date (except to the extent that any such representations and
warranties are stated to relate solely to an earlier date, in which case such representations and warranties are true and correct in all material respects as of such earlier date), provided that any such representations and warranties that are
qualified as to “materiality” or “material adverse effect” are true and correct in all respects.
		
	Interest Rate, Fees, etc.		As set forth on Schedule A hereto.
		
	Security		 The Credit Facility will be secured solely by:
  

(i)     first priority mortgages (subject to Permitted Encumbrances (to be defined)) over (x) the
parcels of real property owned by a Subsidiary Guarantor in fee simple and specified in Part I of Schedule C hereto, fixtures thereon and improvements thereto and (y) if the Borrower elects not to assume the debt with respect to the parcels
of real property owned by a Subsidiary Guarantor in fee simple and specified in Part II of Schedule C hereto and instead to refinance such debt with proceeds of the Credit Facility, the parcels of real property owned by a Subsidiary Guarantor
in fee simple and specified in Part II of Schedule C hereto, fixtures thereon and improvements thereto, in each case, subject to the Mortgageability Provisions (collectively, the “Mortgaged Properties”);

 
 (ii)    a first priority
assignment (subject to Permitted Encumbrances (to be defined)) of all agreements, leases, rents, revenues, contracts, licenses and permits relating to the Mortgaged Properties;

  
 Confidential 

Page 3 

 Strictly private & confidential 

Up to $500 million Senior Secured Term Loan Facility 
  

			
			 (iii)  a first lien pledge (subject to non-consensual liens imposed by law) of the
Borrower’s direct and indirect ownership interests in each Subsidiary Guarantor; and
  

(iv)  in addition to the pledges contemplated by the foregoing clause (iii), a first lien pledge (subject to
non-consensual liens imposed by law) of the Borrower’s ownership interests in each of its other directly owned subsidiaries, provided that (i) the maximum legal and/or equitable equity interests of any such subsidiary that are required to be
pledged pursuant to this clause (iv) shall not exceed 49% of the total legal and equitable equity interests in such subsidiary that are owned directly by the Borrower and (ii) if (x) the Borrower elects to assume the debt with respect to any parcel
of real property owned by a subsidiary of the Borrower in fee simple and specified in Part II of Schedule C hereto in lieu of refinancing such debt with proceeds of the Credit Facility, (y) the equity interests of such subsidiary are held by
a holding company that is a direct subsidiary of the Borrower that does not own, directly or indirectly, any other subsidiary that owns a Mortgaged Property or any other real property that is not being acquired in connection with the Acquisition and
(z) the definitive documents governing such assumed debt of such subsidiary restrict the pledge and perfection of the equity interests in such holding company contemplated by this clause (iv), no such pledge and perfection of the equity interests of
such holding company held directly by the Borrower shall be required.

		
	Conditions Precedent to Initial Borrowing		The making of the term loan under the Credit Facility on the Closing Date shall be subject solely to satisfaction of the applicable conditions set forth on Schedule B hereto.
		
	Funding		The Credit Facility shall be funded in single borrowing on the Closing Date. Commitments with respect to the Credit Facility that are not drawn on the Closing Date shall automatically expire on the Closing Date and amounts repaid
under the Credit Facility may not be reborrowed.
		
	Mortgageability Criteria		 In order to be included in the calculation of the Maximum Borrowing Amount, a Mortgaged Property must at all times satisfy the following
criteria, subject in any case to the Mortgageability Provisions (the “Mortgageability Criteria”):
  

(i)   a multi-family rental property;

 
 (ii)   located in the United
States;
  
 (iii)  wholly-owned in fee
simple by a Subsidiary Guarantor organized under the laws of a State of the United States that is wholly-owned, directly or indirectly, by the Borrower;
  

(iv)  subject to valid and enforceable collateral documents for the benefit of the Administrative Agent, as
described in the “Security” section above;
  

(v)   free of material structural defects and material environmental issues, and not subject to any material
condemnation proceedings; and

  
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			 (vi)  free of any debt or encumbrances other than Permitted Debt and Permitted Encumbrances (to be defined in the Loan
Documents).

		
	Mortgage Releases		The Borrower may obtain the release of (i) any Mortgaged Property from the mortgage thereon (and from any cash management arrangements applicable thereto), (ii) any property-owning subsidiary guarantees issued in connection with an
advance under the Credit Facility related to a specified Mortgaged Property (provided such subsidiary owns no other Mortgaged Properties than those getting released), and (iii) any pledge of equity in respect of any person holding such Mortgaged
Property or other security granted in connection therewith (provided such subsidiary owns no other Mortgaged Properties than those getting released), in each case, at any time in connection with a sale or refinancing, provided that both immediately
before and after giving effect to such sale or refinancing (x) no default or event of default then exists and (y) the Borrower shall use the net proceeds of any such sale or refinancing to prepay the Credit Facility in accordance with the provisions
described below under “Mandatory Prepayment”.
		
	Appraisals		At least 10 business days prior to the Closing Date, the Administrative Agent shall receive appraisals for each of the initial Mortgaged Properties, each of which shall be in form and substance reasonably acceptable to the
Administrative Agent. In addition, the appraisal for any Mortgaged Property shall be updated (i) at the expense of the Borrower, at any time that an event of default exists and the Administrative Agent (or the Requisite Lenders) desire to update the
appraisals, (ii) at the expense of the Borrower, at any time that the Borrower desires to update the appraisals (but no more frequently than once per year), and (iii) at the expense of the Lenders, at any other time that the Administrative Agent (or
the Requisite Lenders) desire to update the appraisals (but no more frequently than once per year).
		
	Voluntary Prepayment / Commitment Reduction		The Borrower may prepay the Credit Facility in whole, or, subject to the requirements of the immediately following sentence, in part, at any time without penalty, subject to (i) reimbursement of the Lenders’ LIBOR breakage
costs and (ii) a 1.0% call premium for any amounts under the Credit Facility that are repaid during the first 6 months from sources other than (w) asset sales, (x) proceeds of any financing provided by the Federal Home Loan Mortgage Corporation
and/or the Federal National Mortgage Association (collectively, the “Specified Financing”) or any other financing having a term of not less than four (4) years, (y) any revolving lines of credit, letter of credit facilities or any
other permanent debt financing and (z) proceeds of equity issuances. In connection with any partial voluntary prepayment of the Credit Facility, such prepayment shall only be permitted (i) in the case of any such prepayment where the remaining
outstanding principal amount of the Credit Facility is $250,000,000 or greater after giving effect to such prepayment and the release of any Mortgaged Properties in connection therewith, such remaining outstanding principal amount of the Credit
Facility does not exceed an amount equal to 70% multiplied by the aggregate “as-is” appraised value of all Mortgaged Properties (based upon the most recent appraisals received by the Administrative Agent in accordance with the provisions
under the heading “Appraisals” above) and (ii) in the case of any such prepayment where the remaining outstanding principal amount of the Credit Facility is less than

  
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			$250,000,000 after giving effect to such prepayment and the release of any Mortgaged Properties in connection therewith, such remaining outstanding principal amount of the Credit Facility does not exceed an amount equal to 65%
multiplied by the aggregate “as-is” appraised value of all Mortgaged Properties (based upon the most recent appraisals received by the Administrative Agent in accordance with the provisions under the heading “Appraisals”
above).
		
	Mandatory Prepayment		The Borrower must promptly prepay the Credit Facility in the case of a sale of a Mortgaged Property, in an amount equal to the greater of (x) 100% of the net proceeds of the sale of such Mortgaged Property and (y) 120% of the value
assigned to such Mortgaged Property in determining the Maximum Borrowing Amount.
		
	Documentation Principles		The Loan Documents shall be negotiated in good faith giving effect to the Funds Certain Provisions and the Mortgageability Provisions, as promptly as reasonably practicable, and shall contain the terms and conditions set forth in
this Exhibit A and such other provisions as may be agreed to by the Borrower and the Lenders (it being understood the Term Sheet contains all conditions to funding related to the Credit Facility), with provisions to reflect the operational and
strategic requirements of the Borrower and the Guarantors in light of their size, practices and matters disclosed in the disclosure schedules to the Acquisition Agreement (collectively, the “Documentation Principles”). The Loan
Documents shall contain only those payments, conditions to borrowing, mandatory prepayments, representations and warranties, covenants and events of default expressly set forth in this Exhibit A, in each case, applicable to the Loan Parties and
their respective subsidiaries and with standards, qualifications, thresholds, exceptions, “baskets” and grace and cure periods consistent with the Documentation Principles.
		
	Representations & Warranties		Limited to the following: organizational status; authority; execution; delivery and enforceability; no violation of, or conflict with law or charter documents; litigation; margin regulations; governmental approvals; Investment
Company Act; PATRIOT Act; OFAC; labor matters and ERISA; REIT status; use of proceeds; subsidiaries and capitalization; intellectual property; accuracy of disclosure; no material adverse change; no undisclosed liabilities; taxes; creation and
perfection of security interests; environmental laws; properties; and consolidated closing date solvency, subject, in the case of each of the foregoing representations and warranties, to qualifications and limitations for knowledge and materiality
consistent with the Documentation Principles. The foregoing representations and warranties shall apply to the Borrower and the Guarantors and their subsidiaries.
		
	Affirmative Covenants		Limited to the following: maintenance of organizational existence and rights and privileges, maintenance of insurance, payment of taxes and other material obligations, corporate franchises, compliance with laws (including
environmental laws and ERISA), maintenance of properties in good repair, inspections and maintenance of books and records, use of proceeds, customary notice and reporting requirements, a requirement to enter into a LIBOR interest rate cap of 3.5%
with respect to the Credit Facility having a term of at least nine (9) months and further assurances on guarantees and collateral matters, subject, in the case of each of the foregoing covenants, to exceptions and qualifications consistent with the
Documentation Principles. The foregoing affirmative covenants shall apply to the Borrower and the Guarantors and their subsidiaries.

  
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	Negative Covenants		Limited to the following: liens; indebtedness; mergers and acquisitions; asset sales; investments and loans; development and capital expenditures; restricted payments including dividends and stock repurchases; changes in fiscal
periods; negative pledges; modifications to organizational documents; changes in nature of business; and transactions with affiliates, in the case of each of the foregoing covenants subject to exceptions, qualifications and baskets consistent with
the Documentation Principles. The foregoing negative covenants shall apply to the Borrower and the Guarantors and their subsidiaries.
		
	Consolidated Financial Covenants		Maximum Leverage Ratio. As of the last day of each fiscal quarter, the ratio of Total Indebtedness of the Parent Guarantor and its subsidiaries to Gross Asset Value (to be defined using a 6.25% cap rate) of the Parent
Guarantor and its subsidiaries shall not exceed (i) for any such fiscal quarter ending on or prior to the six month anniversary of the Closing Date, 75% and (ii) for any such fiscal quarter ending after the six month anniversary of the Closing Date,
65%.
		
			Minimum Fixed Charge Coverage Ratio. As of the last day of each fiscal quarter, the ratio of Consolidated EBITDA (to be defined) of the Parent Guarantor and its subsidiaries for the four fiscal quarters then ended to
Consolidated Fixed Charges (to be defined) of the Parent Guarantor and its subsidiaries for such four fiscal quarters, shall not be less than 1.5x.
		
			Minimum Net Worth. As of any date, Consolidated Tangible Net Worth (to be defined) of the Parent Guarantor and its subsidiaries shall not be less than 75% of Consolidated Tangible Net Worth of the Parent Guarantor and its
subsidiaries on the Closing Date plus an amount equal to 75% of the net cash proceeds received by the Parent Guarantor of any new issuances of common stock.
		
			 Maximum Dividend Payout Ratio. Dividends shall be limited to 110% of CORE FFO (to be defined in a manner consistent with how such term
is defined in the Parent Guarantor’s public filings) but no less than $0.18 cents per quarter or an amount necessary to maintain REIT status.
  

Notwithstanding the foregoing, in no event shall the financial covenants described above be less restrictive than any such financial covenants contained in the
facility contemplated by item 1 on Schedule E hereto (and to the extent such facility has any financial covenants in addition to those outlined above, the Credit Facility shall also contain such additional financial covenants).

 
 The financial covenants set forth above shall be measured on a quarterly basis starting
with the first full fiscal quarter after the Closing Date.

		
	Events of Default		Limited to the following: nonpayment of principal, interest or fees (with grace periods for interest, fees and other amounts); failure to perform negative covenants and the Consolidated Financial Covenants referenced above (and
affirmative covenants to provide notice of default or maintain the Borrower’s existence); failure to perform other covenants subject to a 30 day cure period after notice by the Administrative Agent; incorrectness of representations and
warranties in any material respect; cross event of default (after expiration of any grace periods) and cross acceleration to material indebtedness; bankruptcy and insolvency of Borrower or Guarantors; material monetary judgments; ERISA events; and
invalidity of material guarantees or security documents, subject to materiality, threshold, notice and grace period provisions consistent with the Documentation Principles.

  
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	Assignments and Participations		Each Lender will be permitted to make assignments and to sell participations in respect of the Credit Facility as set forth in the Loan Documents, except to Disqualified Lenders.
		
	Indemnification		The Borrower and the Guarantors will indemnify and hold harmless each of the Initial Lender, the Lead Arranger, the Administrative Agent and the Lenders, and their affiliated entities, directors, officers, employees, agents, and
controlling persons (within the meaning of the federal securities laws) (all of the foregoing, collectively, the “Indemnified Persons”), from and against any and all losses, claims, damages, obligations, penalties, judgments,
awards, liabilities, costs, reasonable expenses and disbursements, including, but not limited to, reasonable and documented attorneys’ fees, legal costs, expenses and disbursements of a single counsel to the Indemnified Persons taken as a whole
(and, if reasonably necessary, a single local counsel for all Indemnified Persons taken as a whole in each relevant jurisdiction, and, solely in the case of a conflict of interest, one additional primary counsel and one additional counsel in each
relevant jurisdiction to each group of similarly situated affected Indemnified Persons, taken as a whole), incurred in respect of any and all actions, suits, proceedings and investigations, directly or indirectly, caused by, relating to, based upon,
arising out of or in connection with the Credit Facility or any of the transactions contemplated thereby or the use or proposed use of proceeds thereof; except to the extent such loss, claim, damage, obligation, penalty, judgment, award, liability,
cost, expense or disbursement (a) is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted from (i) such Indemnified Person’s or any of its Related Persons’ bad faith, gross
negligence or willful misconduct or (ii) such Indemnified Person’s material breach of its obligations under this Commitment Letter or (b) results from any action, suit, proceeding or investigation solely among Indemnified Persons (other than
any claims against any Commitment Party in its capacity or in fulfilling its role as an administrative agent, syndication agent or lead arranger or any similar role contemplated hereby) and not arising out of or in connection with any act or
omission of Parent Guarantor, the Target or any of their respective affiliates. These Indemnification Provisions shall be in addition to any liability which the Borrower or any other Loan Party may have to the Indemnified Persons. For purposes
hereof, a “Related Person” of any Indemnified Person means its affiliated entities, directors, officers, employees and agents, in each case that are controlled by such Indemnified Person. This indemnification shall survive and
continue for the benefit of all such persons or entities.
		
	Patriot Act		The Lenders and the Administrative Agent hereby notify the Borrower and the Guarantors that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001), they are required to
obtain, verify and record information that identifies the Borrower and the Guarantors, which information includes the name and address of the Borrower and the Guarantors and other information that will allow the Lenders and the Administrative Agent
to identify the Borrower and the Guarantors in accordance with such Act.

  
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	Administrative Agent’s Counsel		Latham & Watkins LLP.
		
	Governing Law		State of New York, or as is necessary to enforce and perfect any security documents.

  
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	 Schedule A – Interest Rate, Fees, etc.

		
	Interest Rate	  	 Borrowings under the Credit Facility will bear interest at a rate equal to: (i) LIBOR, plus the applicable margin per annum or (ii) the Base
Rate, plus the applicable margin per annum.
  
 If the Mortgaged Property advance rate
(which shall be determined as the initial funded amount of the Credit Facility on the Closing Date divided by the aggregate “as-is” appraised value of all of the Mortgaged Properties on the Closing Date)) is greater than 70% and/or the
Debt Yield after giving effect to the borrowing of the Credit Facility and the consummation of the Transactions on the Closing Date is less than 8.0%, the applicable margin shall be determined in accordance with the following pricing
grid:

  

					
	 Time Period
	  	LIBOR Spread /
Base Rate Spread	 
	 From and after the Closing Date and prior to the 6 month anniversary of the Closing Date
	  	 	450 bps / 350 bps	  
	 From and after the 6 month anniversary of the Closing Date and through but not including the Initial Maturity Date
	  	 	600 bps / 500 bps	  
	 If the Maturity Extension Option described in the Term Sheet is elected, from and after the Initial Maturity Date through and including
the Extended Maturity Date
	  	 	900 bps / 800 bps	  

  

			
		
		  	 If the Mortgaged Property advance rate (which shall be determined as the initial funded amount of the Credit Facility on the Closing Date
divided by the aggregate “as-is” appraised value of all of the Mortgaged Properties on the Closing Date)) is less than or equal to 70% and the Debt Yield after giving effect to the borrowing of the Credit Facility and the consummation of
the Transactions on the Closing Date is greater than or equal to 8.0%, the applicable margin for LIBOR loans shall be 2.50% and the applicable margin for Base Rate loans shall be 1.50%.

 
 Provided no event of default has occurred and is continuing, Borrower may elect to incur
LIBOR based borrowings or Base Rate borrowings. With respect to LIBOR borrowings, the Borrower may select interest periods of 1, 2, 3 or 6 months, subject to availability. The Base Rate shall be the highest of (a) the prime rate as declared by the
Administrative Agent from time to time, (b) the Federal Funds rate plus 0.50%, and (c) the 1-month LIBOR rate plus 1.00%. LIBOR shall not be less than zero.

  
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			Interest shall be payable at the end of the selected interest period, but no less frequently than quarterly. During the continuance of a default, the interest rate on all outstanding obligations will be equal to the Base Rate plus
the applicable margin for Base Rate borrowings plus 2% per annum.
		
	Extension Fee		0.25% of the outstanding principal amount of the Credit Facility at the time of extension (the “Facility Extension Fee”).
		
	Calculation of Interest & Fees		Other than calculations in respect of interest at the Base Rate (which shall be made on the basis of actual number of days elapsed in a 365/366 day year), all calculations of interest and fees shall be made on the basis of actual
number of days elapsed in a 360 day year.
		
	Cost and Yield Protection		The Loan Documents will include customary provisions (i) protecting the Lenders against increased costs or loss of yield resulting from changes in reserve, tax, capital adequacy and other requirements of law (including with respect
to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III Accord) and (ii) indemnifying the Lenders for breakage costs incurred in connection with among other things, any failure to borrow a LIBOR loan, or any repayment of a
LIBOR loan on a day other than the last day of an interest period with respect thereto.
		
	Expenses		All reasonable and documented or invoiced out-of-pocket expenses incurred by (a) DBSI, DBNY and their affiliates relating to the origination and the original syndication of the Credit Facility and (b) the Administrative Agent and
the Lenders relating to (i) the preparation, execution, delivery, administration, amendment or waiver of the Loan Documents and (ii) the enforcement of the Loan Documents (collectively, the “Agent Costs”) are payable by the
Borrower. Agent Costs shall include but not be limited to Lead Arranger’s and Administrative Agent’s reasonable and documented or invoiced out-of-pocket due diligence costs, and other reasonable and documented third party expenses related
to the closing of the Credit Facility and, as to legal expenses, shall be limited to (A) reasonable and documented or invoiced fees and expenses of a single counsel (and, if reasonably necessary, a single local counsel in each relevant jurisdiction)
to the Lead Arranger, the Administrative Agent and the Initial Lender in connection with clause (a) above and (B) reasonable and documented and invoiced fees and expenses of a single counsel to the Administrative Agent and the Lenders taken as a
whole (and, if reasonably necessary, a single local counsel for the Administrative Agent and the Lenders taken as a whole in each relevant jurisdiction, and, solely in the case of a conflict of interest, one additional primary counsel and one
additional counsel in each relevant jurisdiction to each group of similarly situated persons, taken as a whole) in connection with clause (b) above. In the event the closing of the Credit Facility does not occur, Borrower will fully indemnify DBSI,
DBNY and their affiliates for all such Agent Costs.
		
	Upfront Fee		As set forth in the Fee Letter.
		
	Administrative Agent Fee		As set forth in the Fee Letter.
		
	Market Flex		As set forth in the Fee Letter.

  
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Schedule B – Conditions to Closing 

The closing of the Credit Facility on the Closing Date will be subject to the satisfaction or waiver of the following conditions (subject, in any case, as to
the Mortgaged Properties, the Mortgageability Provisions): 
  

	 	(i)	The Acquisition shall have been consummated or shall be consummated substantially simultaneously with the advances under the Credit Facility in accordance with the Acquisition Agreement (without amendment, modification
or waiver thereof, or the granting of a consent thereunder, which is materially adverse to the Lenders and the Lead Arranger, without the consent of the Lead Arranger, which consent shall not be unreasonably withheld, conditioned or delayed) (it
being understood and agreed that (a) any amendment, modification or waiver to the definition of “Material Adverse Effect” in the Acquisition Agreement shall be deemed to be materially adverse to the Lenders and the Lead Arranger,
(b) any reduction in the purchase price under the Acquisition Agreement of 10% or greater shall be deemed to be materially adverse to the interests of the Lenders and the Lead Arranger and (c) any reduction in the purchase price under the
Acquisition Agreement of less than 10% shall not be deemed to be materially adverse to the interests of the Lenders and the Lead Arranger so long as any such reduction pursuant to this clause (c) is applied to reduce the Credit Facility.

  

	 	(ii)	The Initial Lender shall have received (a) audited consolidated balance sheets at December 31, 2014 and the related statements of income, partners’ capital and cash flows of (x) the Parent Guarantor
and its subsidiaries and (y) the Target and its subsidiaries, in each case, for the fiscal year ended December 31, 2014, which financial statements will be audited and prepared in accordance with GAAP, (b) unaudited consolidated
balance sheets and related statements of income and cash flows of (x) the Target and its subsidiaries and (y) the Parent Guarantor and its subsidiaries, in each case, for the fiscal quarter ended March 31, 2015 and for each fiscal
quarter thereafter ended at least forty-five (45) days prior to the Closing Date and (c) a pro forma consolidated balance sheet and related statement of income of the Parent Guarantor and its Subsidiaries (as of and for the twelve-month
period ending on the last day of the most recently completed four-fiscal quarter period ended at least forty-five (45) days prior to the Closing Date), prepared after giving effect to the Transactions and such other adjustments as shall have
been agreed between the Borrower and the Administrative Agent as if the Transactions had occurred at the beginning of such period. 

  

	 	(iii)	Since December 31, 2014, there has not been any Company Material Adverse Effect (as defined in the Acquisition Agreement). 

  

	 	(iv)	To the extent reasonably requested by the Lead Arranger at least 10 days in advance of the Closing Date, receipt by the Lead Arranger, at least five business days prior to the Closing Date, of all documentation and
other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act. 

 

	 	(v)	[Reserved]. 

  

	 	(vi)	Subject in all respects to the Funds Certain Provisions, (a) the Guarantees shall have been executed and be in full force and effect or, substantially simultaneous with the initial borrowing under the Credit
Facility, shall be executed and become in full force and effect and (b) all documents and instruments required to perfect the Administrative Agent’s first priority security interest in the required collateral (subject to Permitted
Encumbrances and non-consensual liens imposed by law) of the Guarantors and the Borrower shall have been executed and delivered and, if applicable, be in proper form for filing. 

  
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	 	(vii)	The Administrative Agent shall have received (a) customary legal opinions of counsel to the Borrower and the Guarantors, (b) a solvency certificate from a senior financial officer of the Parent Guarantor
substantially in the form attached as Annex I to this Schedule B, confirming the solvency of the Parent Guarantor and its subsidiaries after giving effect to the Transactions and (c) other customary closing corporate documents,
organizational documents certified by public officials, resolutions, pay-off letters (including lien terminations) with respect to the Specified Existing Debt and notices of borrowing. 

 

	 	(viii)	Evidence of satisfactory flood, liability and casualty insurance related to the Mortgaged Properties. 

  

	 	(ix)	Subject to the Funds Certain Provisions, (i) the Acquisition Agreement Representations shall be true and correct in all respects and (ii) the Specified Representations shall be true and correct in all material
respects, provided that any such Specified Representations that are by their terms already qualified as to “materiality” or “material adverse effect” are true and correct in all respects (for the avoidance of doubt, after giving
effect to such “materiality” or “material adverse effect” qualifiers). 

  

	 	(x)	Payment of all fees and expenses payable to the Lead Arranger, the Administrative Agent and/or the Lenders on or prior to the Closing Date, including but not limited to the fees payable under the Fee Letter (to the
extent invoiced at least one business day prior to the Closing Date). 

  

	 	(xi)	On the Closing Date after giving effect to the Transactions, neither the Parent Guarantor, the Target nor any of their respective subsidiaries shall have outstanding any unaffiliated third party indebtedness for
borrowed money other than (i) the Credit Facility, (ii) the indebtedness for borrowed money described on Schedule E to the Term Sheet, (iii) if the Borrower elects to assume the debt with respect to the parcels of real property
owned by a Subsidiary Guarantor in fee simple and specified in Part II of Schedule C to the Term Sheet in lieu of refinancing such debt with proceeds of the Credit Facility, debt with respect to the parcels of real property specified in Part
II of Schedule C to the Term Sheet and (iv) other debt for borrowed money in amounts to be reasonably agreed by the Initial Lender. The Refinancing shall have been consummated, and all outstanding amounts under the refinanced
indebtedness shall have been paid and commitments, liens and guarantees with respect thereto terminated or released, substantially concurrently with the initial borrowing under the Credit Facility. 

 

	 	(xii)	The mortgages in respect to the Mortgaged Properties described in the Term Sheet (the “Mortgages”) shall be in recordable form with all conditions to recordation substantially concurrently satisfied,
and upon recordation shall constitute a valid first priority lien on the good and marketable title to the Mortgaged Properties, except for Permitted Encumbrances, and free and clear of any mechanics or materialmen’s liens or special assessments
for work completed or in progress on the Closing Date which have not been adequately provided for. This item (xii) is referred to in the Commitment Letter as the “Mortgage Condition”. 

 

	 	(xiii)	The Initial Lender shall have received an irrevocable (subject only to payment of premiums and delivery of customary deliverables to the title company) title commitment in form and substance, and issued by a title
insurance company (with appropriate reinsurance or coinsurance), reasonably satisfactory to the Initial Lender reflecting the first lien priority (subject to Permitted Encumbrances) of the Mortgages as set forth above. This item (xiii) is
referred to in the Commitment Letter as the “Title Condition”. 

  

	 	(xiv)	The Initial Lender shall have received a Phase I environmental report and surveys with respect to the Mortgaged Properties from a firm reasonably satisfactory to the Initial Lender (which may include those initially
issued to other persons for which acceptable reliance provisions in favor of the Initial Lender have been provided), all in form and substance reasonably satisfactory to the Initial Lender. 

  
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	 	(xv)	Receipt of property condition reports with respect to each Mortgaged Property from a firm, and in form and substance reasonably satisfactory to the Initial Lender (which may include those initially issued to other
persons for which acceptable reliance provisions in favor of the Initial Lender have been provided). 

  

	 	(xvi)	Receipt of copies of all management agreements affecting the Mortgaged Properties, along with a certified rent roll of the Mortgaged Properties as of a current date. 

 

	 	(xvii)	Receipt of a FIRREA-compliant appraisal of the Mortgaged Properties commissioned by the Initial Lender (or otherwise commissioned by another person for which acceptable reliance provisions in favor of the Initial Lender
have been provided) and otherwise in form and substance reasonably satisfactory to the Initial Lender. 

  

	 	(xviii)	Receipt of judgment, bankruptcy, UCC, litigation and lien searches showing no material monetary encumbrances with respect to the Mortgaged Properties (if applicable) or other collateral for the Credit Facility or
material liabilities of the Loan Parties other than as contemplated by the Term Sheet or the Loan Documents. 

  

	 	(xix)	The Borrower’s ownership of the Mortgaged Properties shall be evidenced by an owners’ title policy or title commitment in form and substance, and issued by a title insurance company (with appropriate
reinsurance or coinsurance), reasonably satisfactory to the Initial Lender. 

  
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ANNEX I TO SCHEDULE B 
 SOLVENCY
CERTIFICATE 
 Reference is made to (a) the [Credit Agreement], dated as of
[            ] (the “Credit Agreement”; unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings set forth in the Credit
Agreement), among [            ] and [(b) the [            ], dated as of
[            ], among [            ]. 

The undersigned hereby certifies as follows: 

1. I am the [Chief Financial Officer] of Parent Guarantor. 

2. I have reviewed the terms of the Credit Agreement and the definitions and provisions contained in the Credit Agreement relating thereto and,
in my opinion, have made, or have caused to be made under my supervision, such examination or investigation as is necessary to enable me to express an informed opinion as to the matters referred to herein. 

3. Based upon my review and examination described in paragraph 2 above, I certify that as of the date hereof, Parent Guarantor and its
Subsidiaries, on a consolidated basis, are, and after giving effect to the Transactions and the other transactions contemplated by the Credit Agreement, will be, Solvent.1 

The foregoing certifications are made and delivered as of [            ]. 

This certificate is being signed by the undersigned in his capacity as [Chief Financial Officer] of Parent Guarantor and not in his individual
capacity. 
 IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the date first written above. 

 

			
	[                                    
    ]
		
	By:		  

			Name: [                ]
			Title: [Chief Financial Officer]

  
  

	1 	“Solvent” shall mean, with respect to Parent Guarantor and its consolidated subsidiaries (the “Consolidated Group”), that (a) the fair value of the property of the Consolidated Group is greater
than the total amount of liabilities, including contingent liabilities, of the Consolidated Group, (b) the present fair salable value of the assets of the Consolidated Group is not less than the amount that will be required to pay the probable
liability of the Consolidated Group on its debts as they become absolute and matured, (c) the Consolidated Group does not intend to, and does not believe that it will, incur debts or liabilities beyond the Consolidated Group’s ability to
pay such debts and liabilities as they mature and (d) the Consolidated Group is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which the Consolidated Group’s property would constitute
an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability. 

  
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Up to $500 million Senior Secured Term Loan Facility 
  

Schedule C – Mortgaged Properties 

Part I 
  

			
	Waterstone at Big Creek		Alpharetta, GA
		
	Millenia 700		Orlando, FL
		
	Fountains Southend		Charlotte, NC
		
	Fox Trails		Plano, TX
		
	Arbors River Oaks		Memphis, TN
		
	Mercé		Addison, TX
		
	Trails of Signal Mountain		Chattanooga, TN
		
	Lakeshore on the Hill		Chattanooga, TN
		
	Bridge Pointe		Huntsville, AL
		
	Pointe at Canyon Ridge		Sandy Springs, GA

 Part II 
  

			
	Talison Row at Daniel Island		Charleston, SC
		
	Creekstone at RTP		Durham, NC
		
	Miller Creek at Germantown		Memphis, TN
		
	Aventine Greenville		Greenville, SC
		
	Avenues at Craig Ranch		Dallas, TX
		
	Estates at Wake Forest		Wake Forest, NC
		
	Waterstone at Brier		Creek Raleigh, NC
		
	St. James at Goose Creek		Charleston, SC
		
	Westmont Commons		Asheville, NC

  
 Confidential 

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 Strictly private & confidential 

Up to $500 million Senior Secured Term Loan Facility 
  

Schedule D – Refinancing 
  

	 	1.	To the extent the Borrower elects to terminate such facility, the $75 million senior secured credit facility pursuant to that Credit Agreement, dated January 31, 2014, by and among Trade Street Operating
Partnership, LP, as borrower, Trade Street Residential, Inc., as parent, the financial institutions party thereto, as lenders, Regions Bank, as administrative agent, and Regions Capital Markets, LLC, as sole lead arranger and sole bookrunner, as
amended by that First Amendment to Credit Agreement dated February 24, 2014, as further amended by that Second Amendment to Credit Agreement dated April 7, 2014, as further amended by that Third Amendment to Credit Agremeent dated
August 5, 2014, and effective as of January 31, 2014, as further amended by that Fourth Amendment to Credit Agreement dated October 16, 2014. 

  

	 	2.	The existing indebtedness and commitments associated with the Mortgaged Properties listed in Part I of Schedule C to the Term Sheet. 

 

	 	3.	To the extent the Borrower elects to refinance such indebtedness with the proceeds of the Credit Facility, the existing indebtedness and commitments associated with the Mortgaged Properties listed in Part II of
Schedule C to the Term Sheet. 

  

	 	4.	Indebtedness for borrowed money incurred pursuant to the Secured Revolving Credit Agreement dated as of October 25, 2013 among the Borrower and The Huntington National Bank, as amended by the First Amendment to
Senior Revolving Credit Agreement dated as of September 9, 2014, or any replacement secured revolving credit facility incurred by the Borrower in an amount not to exceed $30,000,000 having terms and conditions reasonably acceptable to the Lead
Arranger. 

  
 Confidential 

Page 17 

 Strictly private & confidential 

Up to $500 million Senior Secured Term Loan Facility 
  

Schedule E – Indebtedness for Borrowed Money 
  

	 	1.	To the extent the Borrower elects to amend and/or extend such facility, the $75 million senior secured credit facility pursuant to that Credit Agreement, dated January 31, 2014, by and among Trade Street Operating
Partnership, LP, as borrower, Trade Street Residential, Inc., as parent, the financial institutions party thereto, as lenders, Regions Bank, as administrative agent, and Regions Capital Markets, LLC, as sole lead arranger and sole bookrunner, as
amended by that First Amendment to Credit Agreement dated February 24, 2014, as further amended by that Second Amendment to Credit Agreement dated April 7, 2014, as further amended by that Third Amendment to Credit Agremeent dated
August 5, 2014, and effective as of January 31, 2014, as further amended by that Fourth Amendment to Credit Agreement dated October 16, 2014. 

  
 Confidential 

Page 18 

 EXHIBIT B 

INDEMNIFICATION PROVISIONS 

Capitalized terms used and not otherwise defined herein are used with the meanings attributed thereto in the Commitment Letter dated
May 11, 2015 among Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc. and Independence Realty Trust, Inc., of which these Indemnification Provisions form an integral part. 

To the fullest extent permitted by applicable law, you agree that you will indemnify and hold harmless each of the Initial Lender, the Lead
Arranger, and the Administrative Agent, and their affiliated entities, directors, officers, employees, agents, and controlling persons (within the meaning of the federal securities laws) (all of the foregoing, collectively, the “Indemnified
Persons”), from and against any and all losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, reasonable expenses and disbursements, including, but not limited to, reasonable and documented attorneys’
fees, legal costs, expenses and disbursements of a single counsel to the Indemnified Persons taken as a whole (and, if reasonably necessary, a single local counsel for all Indemnified Persons taken as a whole in each relevant jurisdiction, and,
solely in the case of a conflict of interest, one additional primary counsel and one additional counsel in each relevant jurisdiction to each group of similarly situated affected Indemnified Persons, taken as a whole), incurred in respect of any and
all actions, suits, proceedings and investigations, directly or indirectly, caused by, relating to, based upon, arising out of or in connection with the Credit Facility, the Commitment Letter, the Fee Letter or any of the transactions contemplated
thereby or the use or proposed use of proceeds thereof; except to the extent such loss, claim, damage, obligation, penalty, judgment, award, liability, cost, expense or disbursement (a) is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) to have resulted from (i) such Indemnified Person’s or any of its Related Persons’ bad faith, gross negligence or willful misconduct or (ii) such Indemnified Person’s material
breach of its obligations under this Commitment Letter or (b) results from any action, suit, proceeding or investigation solely among Indemnified Persons (other than any claims against any Commitment Party in its capacity or in fulfilling its
role as an administrative agent, syndication agent or lead arranger or any similar role contemplated hereby) and not arising out of or in connection with any act or omission of Parent Guarantor, the Target or any of their respective affiliates.
These Indemnification Provisions shall be in addition to any liability which you, the Borrower or any other Loan Party may have to the Indemnified Persons. For purposes hereof, a “Related Person” of any Indemnified Person means its
affiliated entities, directors, officers, employees and agents, in each case that are controlled by such Indemnified Person. 
 If any
action, suit, proceeding or investigation is commenced, as to which any of the Indemnified Persons proposes to demand indemnification, they shall notify the Parent Guarantor with reasonable promptness; provided, however, that any failure by
any of the Indemnified Persons to so notify the Parent Guarantor shall not relieve you from your obligations hereunder (except to the extent that you are prejudiced by the failure to so promptly notify). Subject to the limitations set forth in the
preceding paragraph, the Initial Lender, on behalf of the Indemnified Persons, shall have the right to retain counsel of its choice to represent the Indemnified Persons; and such counsel shall, to the extent consistent with its professional
responsibilities, cooperate 

 
with you and any counsel designated by you. You shall not be liable for any settlement of any action effected without your consent (which consent shall not be unreasonably withheld, delayed or
conditioned), but if settled with your written consent or if there is a final judgment for the plaintiff in any such actions, you agree to indemnify and hold harmless each Indemnified Person from and against any and all losses, claims, damages,
liabilities and expenses by reason of such settlement or judgment in accordance with (and subject to the limitations provided in) this Exhibit B. You shall not, without the prior written consent of an Indemnified Person (which consent shall
not be unreasonably withheld, delayed or conditioned), effect any settlement of any pending or threatened actions in respect of which indemnity could have been sought hereunder by such Indemnified Person unless such settlement (a) includes an
unconditional release of such Indemnified Person in form and substance reasonably satisfactory to such Indemnified Person (which approval shall not be unreasonably withheld, delayed or conditioned) from all liability on claims that are the subject
matter of such actions and (b) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of such Indemnified Person. 

Neither expiration nor termination of the Commitment shall affect these Indemnification Provisions which shall then remain operative and in
full force and effect, subject to the provisions of Section 6 of the Commitment Letter.

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