UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): December 20, 2016
Independence Realty Trust, Inc.
(Exact name of registrant as specified in its charter)
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Maryland |
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001-36041 |
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26-4567130 |
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(State or other jurisdiction |
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(Commission |
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(I.R.S. Employer |
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of incorporation) |
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File Number) |
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Identification No.) |
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Two Logan Square, 100 N. 18 th Street, 23 rd Floor, Philadelphia, Pennsylvania |
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19103 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (215) 207-2100
N/A
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Independence Realty Trust, Inc. (“ IRT ”) previously disclosed entry into a Securities and Asset Purchase Agreement, dated September 27, 2016, to complete a management internalization (“ Internalization ”) and separation from RAIT Financial Trust (“ RAIT ”) and certain of its affiliates (the “ Purchase Agreement ”). On December 20, 2016, the parties completed the second closing under the Purchase Agreement. Simultaneously with the second closing, IRT entered into a Shared Services Agreement (the “ Shared Services Agreement ”) with RAIT dated December 20, 2016.
Pursuant to the terms of the Shared Services Agreement, RAIT and IRT will provide each other with transitional services, including but not limited to accounting, human resources, information technology, real estate and legal services, for a period of six months. In consideration for the various services provided by IRT and RAIT, IRT shall pay to RAIT net fees of $777,168 for the six-month term (i.e., $129,528 per month).
The foregoing description of the Shared Services Agreement is not complete. Reference is made to the Shared Services Agreement filed as Exhibit 10.1 to this Form 8-K.
On December 21, 2016, Independence Realty Operating Partnership, LP (“ IROP ”), the operating partnership of IRT, entered into an Increase Agreement (the “ Increase Agreement ”) by and among IROP, as borrower, subsidiaries of IROP named therein, KeyBank National Association (“ KeyBank ”), the other lenders party thereto, KeyBank, as administrative agent, The Huntington National Bank (“ HNB ”), as syndication agent and KeyBanc Capital Markets (“ KeyBanc Capital ”) and HNB, as joint lead arrangers and book managers, and Capital One, National Association, as documentation agent, and a Guarantor Confirmation from IRT and IR TS Op Co, LLC (“ Op Co ”). The Increase Agreement amended the terms of the previously disclosed Credit Agreement (as amended, the " Credit Agreement ") dated as of September 17, 2015 and previously amended on October 2, 2015 among the parties to the Increase Agreement and other lenders. The Credit Agreement provided for a revolving line of credit (the “ Revolver ”) and a term loan (the “ Term Loan ”). At December 21, 2016 $10.0 million was outstanding under the Revolver. The Term Loan had been paid down $60.0 million from the $200.0 million originally outstanding to $140.0 million as of December 21, 2016 using a portion of the proceeds of IRT’s October 2016 common stock offering. As a result of this offering and these repayments, the lenders party to the Increase Agreement agreed to increase the Revolver component of the Credit Agreement which IRT believes enhances its liquidity and financial flexibility.
The Increase Agreement amended the Credit Agreement as of December 21, 2016 as follows:
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The commitment of the lenders to make loans under the Revolver was increased $47.5 million from $125.0 million to $172.5 million. |
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The lenders acknowledged and agreed that the right of IROP under the accordion feature of the Credit Agreement to request an increase of the total commitment of the lenders thereunder to up to a maximum of $450.0 million remained in effect and so, after giving effect to the increase in the Revolver, accordion increases in an aggregate amount of $137.5 million remained available to be exercised by IROP. The original amount of available accordion increases under the Credit Agreement was $125.0 million and the $12.5 million increase to the amount of available accordion increases at December 21, 2016 was the result of the amount paid down under the Term Loan referenced above, partially offset by the increase in the Revolver referenced above. |
The foregoing description of the Increase Agreement is not complete. Reference is made to the Increase Agreement filed as Exhibit 10.2 to this Form 8-K.
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Item 1.02 |
Termination of a Material Definitive Agreement. |
Following completion of the Internalization, on December 20, 2016, IRT terminated that certain Second Amended and Restated Advisory Agreement (the “ Advisory Agreement ”) by and among IRT, Independence Realty Operating Partnership, LP (“ IROP ”), and Independence Realty Advisors, LLC (“IRA”), dated May 7, 2013, as amended by the First Amendment dated July 26, 2013 and the Second Amendment dated September 25, 2015. This
termination was accomplished by a Termination Agreement (the “ Termination Agreement ”) dated as of December 20, 2016 entered into by the parties to the Advisory Agreement. There were no termination penalties incurred by IRT as a result of the termination of the Advisory A greement. Under the Advisory Agreement, IRA had previously been responsible for the day-to-day operations of IRT and IROP and performed, as appropriate, services and activities relating to the assets and operations of IRT in exchange for a base fee and a p ossible incentive fee. As a result of the Internalization, IRT acquired IRA and will perform the functions previously performed by IRA internally.
The foregoing description of the Termination Agreement is not complete. Reference is made to the Termination Agreement filed as Exhibit 10.3 to this Form 8-K.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information provided in Item 1.01 above is incorporated by reference into this Item 2.03.
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Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(e)
Simultaneously with the closing under the Purchase Agreement on December 20, 2016, IRT entered into employment agreements with each of Scott F. Schaeffer, IRT’s Chief Executive Officer (“ CEO ”), Farrell Ender, IRT’s President, and James J. Sebra, IRT’s Chief Financial Officer (“ CFO ”). The employment agreements for Messrs. Schaeffer and Ender became effective upon the closing of the Internalization, and the employment agreement for Mr. Sebra will become effective upon the later of March 31, 2017 and the date on which RAIT files its annual report on Form 10-K for the fiscal year ended December 31, 2016.
Each employment agreement will continue until the third anniversary of its effective date (subject to earlier termination as described below), and will remain effective for successive one-year periods unless either party notifies the other party of non-renewal in writing prior to three months before the expiration of the then current term. During the term of each executive’s employment under his employment agreement (the “ Employment Term ”), Messrs. Schaeffer, Ender and Sebra will continue to serve as CEO, President and CFO of IRT, respectively, and Mr. Schaeffer will continue to serve as Chairman of the Board of Directors of IRT (the “ Board ”), subject to the right of the Board to elect a different person to serve as Chairman. During the Employment Term, Mr. Schaeffer will serve as a member of the Board, subject to his election to the Board by the stockholders of IRT during each year of the Employment Term, and IRT will nominate Mr. Schaeffer for election to the Board at any meeting of the stockholders where the election of Board members is included in the purposes of such meeting.
Each executive will receive a base salary, which will be reviewed annually for appropriate increases by the Board (but which may not be decreased), as follows: $618,600 per annum for Mr. Schaeffer; $308,600 per annum for Mr. Ender; and $398,600 per annum for Mr. Sebra . Each executive will be eligible to receive annual bonuses in such amounts as the Board may approve in its sole discretion or under the terms of any annual incentive plan of IRT maintained for other senior level executives. The executives will be entitled to participate in all employee retirement and welfare benefit plans and programs or executive perquisites made available to IRTs senior level executives as a group or to its employees generally. For purposes of any vacation, holiday and sick leave policies of IRT that condition participation or entitlements on duration of service with IRT, each executive’s service with RAIT will be treated as service with IRT. The executives also will be entitled to participate in any short-term and long-term incentive programs established by IRT for its senior level executives generally.
If the executive’s employment is terminated by IRT without “cause,” by the executive for “good reason” (as each such term is defined in the employment agreements), or due to the non-renewal of the employment agreement by IRT, then the executive will be entitled to receive the following payments and benefits, subject to his execution and non-revocation of a release of claims: (i) a lump sum cash payment equal to two and one quarter times (for Mr. Schaeffer) or two times (for Messrs. Ender and Sebra) the sum of (x) the executive’s base salary and (y) the average annual cash bonus earned by the executive for the three year period immediately prior to his
termination of employment or the average annual cash bonus earned by the executive for the actual number of completed fiscal years immediately prior to his termination of employment if less than three, provided t hat if the executive has been employed for less than one completed fiscal year, the amount used for clause (y) will be his target annual cash bonus for the fiscal year of his termination of employment; (ii) a lump sum cash payment equal to a pro rata porti on of the annual cash bonus, if any, that the executive would have earned for the fiscal year of his termination based on achievement of the applicable performance goals for such year; (iii) for a period of 18 months, the executive and his eligible depende nts will continue to receive the medical coverage in effect at the date of his termination of employment (or generally comparable coverage) at the same premium rates as may be charged from time to time for employees of IRT generally, subject to their timel y election of COBRA continuation coverage; and (iv) the executive’s outstanding equity awards will be treated in accordance with the terms of the applicable incentive plan and award agreements, provided that any such equity awards that are subject solely t o time-vesting conditions will become fully vested. The executive will also be entitled to receive any accrued or earned amounts or benefits that remain unpaid as of the date of his termination.
If Mr. Schaeffer’s employment is terminated by IRT without cause or by him for good reason, in each case upon or within eighteen months after a “change in control” (as such term is defined in his employment agreement), then he will be entitled to receive the severance payments and benefits described in the preceding paragraph, except that the severance multiple will be increased from two and one quarter to three.
If, prior to the effective date of Mr. Sebra’s employment agreement, IRT notifies Mr. Sebra that it does not wish for him to commence employment with IRT, then he will be entitled to receive the following payments and benefits, subject to his execution and non-revocation of a release of claims: (i) a lump sum cash payment equal to two times the sum of (x) his base salary and (y) his target annual cash bonus for fiscal year 2017; (ii) a lump sum cash payment equal to a pro rata portion of the annual cash bonus, if any, that he would have earned for fiscal year 2017 had he commenced employment with IRT based on achievement of the applicable performance goals for such year; and (iii) his outstanding equity awards will be treated in accordance with the terms of the applicable incentive plan and award agreements, provided that any such equity awards that are subject solely to time-vesting conditions will become fully vested. Mr. Sebra will not be entitled to receive the foregoing payments or benefits if, at the time IRT notifies Mr. Sebra that it does not wish for him to commence employment with IRT, IRT would have had grounds to terminate Mr. Sebra’s employment for cause had he been an employee of IRT at such time.
If the executive’s employment terminates due to his “disability” (as such term is defined in the employment agreements) or death, then the executive or his executor, legal representative, administrator or designated beneficiary, as applicable, will receive (in addition to any accrued or earned amounts or benefits that remain unpaid as of the date of his termination) a lump sum cash payment equal to a pro rata portion of his target annual cash bonus for the fiscal year of his termination (or, in the absence of a target bonus opportunity for such fiscal year, a pro rata portion of the average annual cash bonus earned by the executive for the three year period immediately prior to his termination of employment or the average annual cash bonus earned by the executive for the actual number of completed fiscal years immediately prior to his termination of employment if less than three).
During the Employment Term and for a period of 12 months after the termination of the Employment Term, without regard to its termination for any reason which does not constitute a breach of the employment agreement by IRT or a resignation by the executive for good reason, the executive is subject to non-competition and non-solicitation (of employees and customers) covenants. The employment agreements also contain customary non-disclosure of confidential information, assignment of intellectual property rights, clawback/recoupment and non-disparagement covenants.
The foregoing description of the employment agreements is not complete and is qualified in its entirety by reference to the employment agreements, which are attached hereto as Exhibits 10.4, 10.5 and 10.6, and are incorporated herein by reference.
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Item 8.01 |
Other Events. |
On December 20, 2016, IRT issued a press release announcing the completion of the Internalization. A copy of the press release is attached as Exhibit 99.1 hereto, and is incorporated herein by reference.
(d) Exhibits.
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Exhibit No. |
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Description |
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10.1 |
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Shared Services Agreement, dated December 20, 2016, by and among Independence Realty Trust, Inc. (“ IRT ”) and RAIT Financial Trust. |
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10.2 |
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Increase Agreement dated as of December 21, 2016 by and among Independence Realty Operating Partnership, LP (“ IROP ”), as borrower, subsidiaries of IROP named therein, KeyBank National Association (“ KeyBank ”), the other lenders party thereto, KeyBank, as administrative agent, The Huntington National Bank (“ HNB ”), as syndication agent and KeyBanc Capital Markets and HNB, as joint lead arrangers and book managers, and Capital One, National Association, as documentation agent, with a guarantor confirmation from IRT and Op Co. |
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10.3 |
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Termination Agreement dated December 20, 2016 IRT, IROP, and Independence Realty Advisors, LLC. |
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10.4 |
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Employment Agreement, dated December 20, 2016, by and between IRT and Scott F. Schaeffer |
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10.5 |
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Employment Agreement, dated December 20, 2016, by and between IRT and James J. Sebra |
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10.6 |
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Employment Agreement, dated December 20, 2016, by and between IRT and Farrell M. Ender |
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99.1 |
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Press Release, dated December 20, 2016 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Independence Realty Trust, Inc. |
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December 21, 2016 |
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By: |
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/s/ Scott F. Schaeffer |
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Name: |
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Scott F. Schaeffer |
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Title: |
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Chief Executive Officer |
Exhibit Index
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Exhibit No. |
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Description |
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10.1 |
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Shared Services Agreement, dated December 20, 2016, by and among Independence Realty Trust, Inc. (“IRT”) and RAIT Financial Trust. |
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10.2 |
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Increase Agreement dated as of December 21, 2016 by and among Independence Realty Operating Partnership, LP (“IROP”), as borrower, subsidiaries of IROP named therein, KeyBank National Association (“KeyBank”), the other lenders party thereto, KeyBank, as administrative agent, The Huntington National Bank (“HNB”), as syndication agent and KeyBanc Capital Markets and HNB, as joint lead arrangers and book managers, and Capital One, National Association, as documentation agent, with a guarantor confirmation from IRT and Op Co. |
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10.3 |
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Termination Agreement dated December 20, 2016 IRT, IROP, and Independence Realty Advisors, LLC. |
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10.4 |
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Employment Agreement, dated December 20, 2016, by and between IRT and Scott F. Schaeffer |
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10.5 |
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Employment Agreement, dated December 20, 2016, by and between IRT and James J. Sebra |
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10.6 |
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Employment Agreement, dated December 20, 2016, by and between IRT and Farrell M. Ender |
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99.1 |
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Press Release, dated December 20, 2016 |
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Exhibit 10.1
SHARED SERVICES AGREEMENT
by and among
INDEPENDENCE REALTY TRUST, INC.
and
RAIT FINANCIAL TRUST
Dated as of December 20, 2016
This SHARED SERVICES AGREEMENT (this “ Agreement ”), dated as of December 20, 2016 (the “ Effective Date ”), is by and among Independence Realty Trust, Inc., a Maryland corporation (“ IRT ”), and RAIT Financial Trust, a Maryland real estate investment trust (“ RAIT ”). IRT and RAIT shall be collectively referred to herein as the “ Parties ,” and each individually a “ Party ”.
WHEREAS, pursuant to that certain Securities and Asset Purchase Agreement, dated as of September 27, 2016, by and among RAIT, Jupiter Communities, LLC, RAIT TRS, LLC, the RAIT Selling Stockholders, IRT and Independence Realty Operating Partnership, LP (the “ Purchase Agreement ”), the Buyer Parties are acquiring from the Seller Parties (i) all of the membership interests of Independence Realty Advisor LLC, a Delaware limited liability company (the “ Advisor ”) and (ii) Asset Seller’s property management business (the “ Business ”);
WHEREAS, following the Closing of the transactions contemplated by the Purchase Agreement, the Advisor and the Business will require certain services, the physical and human resources for the provision of which will remain with RAIT; and RAIT will require certain services, the physical and human resources for the provision of which will have been transferred to IRT; and
WHEREAS, IRT desires to obtain certain services from RAIT for the purpose of enabling IRT to manage an orderly transition in its operation of the Advisor and the Business and retain the benefit of operational efficiencies created by the sharing of such services; and RAIT desires to obtain certain services from IRT for the purpose of enabling RAIT to retain the benefit of operational efficiencies created by the sharing of such services.
NOW THEREFORE, for good and valuable consideration provided under this Agreement, as well as the Purchase Agreement, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions . Capitalized terms used in this Agreement but not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Agreement.
ARTICLE II
SERVICES
Section 2.1. Scheduled Services .
(a) Upon the terms and subject to the conditions set forth in this Agreement, IRT agrees to provide, or to cause one or more of its Affiliates or one or more third parties to provide, to RAIT all services set forth on Schedule A (the “ IRT Services ”).
(b) Upon the terms and subject to the conditions set forth in this Agreement, RAIT agrees to provide, or to cause one or more of its Affiliates or one or more third parties to
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provide, to IRT a ll services in support of the Advisor and the Business set forth on Schedule B (the “ RAIT Services ” and together with the IRT Services, the “ Services ”).
(c) Anything to the contrary notwithstanding, none of the obligations of the Parties under the Purchase Agreement shall constitute Services under this Agreement. To the extent of any conflict between the terms of the Purchase Agreement and this Agreement, the terms of the Purchase Agreement shall be controlling.
(d) Each of the Parties hereby agrees to use its reasonable best efforts to ensure that any financial or other information to be provided to the other Party will be provided to such Party with sufficient time to allow for the review of such financial or other information by the receiving Party prior to the use of such financial or other information in any required tax returns, Securities and Exchange Commission filings or other regulatory filings. In the event either Party becomes aware that it will not be able to timely provide such financial or other information, such Party shall promptly, but in no event later than three (3) Business Days after becoming aware of such inability, give notice to the other Party that it will not be able to timely provide such financial or other information and shall indicate when such financial or other information will be provided.
Section 2.2. Additional Services . Each of the Parties agrees that, if either Party, in consultation with the other Party, identifies within 180 days after the date of this Agreement transition services that such Party believes are necessary for the continued operation of its business that are not identified on Schedule A or Schedule B , as applicable, upon the reasonable request of such Party, the Parties shall cooperate in good faith to modify Schedule A or Schedule B , as applicable, or enter into additional schedules with respect to such transition services, upon terms (including fees) and subject to conditions to be agreed upon in good faith by the Parties. Neither Party shall be obligated to perform or cause to be performed any such additional services unless and until the Parties agree in writing as to the price, specifications and other terms and conditions under which the applicable Party shall provide (or cause to be provided) such other services.
Section 2.3. Service Standards; Level of Service .
(a) The Parties shall provide Services to one another in a prompt, professional and workmanlike manner and shall provide the Services to the other Party at a level of quality, responsiveness and diligence at least equal to the levels provided by such Party over the twelve (12) month period prior to the Closing Date for such Services, but in no event at a quality level lower than that generally provided by such Party to its business (the “ Service Standards ”). In no event shall IRT have an obligation to perform any IRT Service in any other manner, amount or quality unless expressly so specified in Schedule A with respect to a particular IRT Service or mutually agreed upon after good faith discussions by the Parties. In no event shall RAIT have an obligation to perform any RAIT Service in any other manner, amount or quality unless expressly so specified in Schedule B with respect to a particular RAIT Service or mutually agreed upon after good faith discussions by the Parties.
Section 2.4. Disclaimer of Warranties . Each of the Parties acknowledges and agrees that the other Party does not as part of its usual or regular conduct of business provide any
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or all of the Services, or any related services, on a commercial basis. EXCEPT AS OTHERWISE EXPRE SSLY PROVIDED HEREIN, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL REPRESENTATIONS OR WARRANTIES, AT LAW OR IN EQUITY, WITH RESPECT TO THE SERVICES TO BE PROVIDED UNDER THIS AGREEMENT, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PUR POSE, TITLE, NON-INFRINGEMENT AND QUIET ENJOYMENT. NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN BY EITHER PARTY OR ITS AUTHORIZED REPRESENTATIVES SHALL CREATE A WARRANTY OR IN ANY WAY INCREASE THE SCOPE OF THE OTHER PARTY’S OBLIGATIONS UNDER THIS AGREEM ENT.
Section 2.5. Subcontracting . Either Party may, with the written consent of the other Party (which shall not be unreasonably withheld, conditioned or delayed), engage, or cause one of its Affiliates to engage, one or more parties (including third parties and/or Affiliates of such Party) to provide some or all of the applicable Services to be provided by such Party. In the event a Party or its Affiliates so engage any such parties, such Party shall remain responsible for ensuring adherence to the Service Standards in the performance of the applicable Services, compliance by such parties with the applicable terms of this Agreement and for the indemnification obligations set forth in Article VIII. The Parties hereby agree that the delivery of any written consent pursuant to this Section 2.5 shall not be subject to the notice requirements set forth in Section 12.1 and any such written consent may be delivered via electronic mail.
Section 2.6. Cooperation .
(a) Each of the Parties will share information and otherwise cooperate to the extent necessary to facilitate the provision of Services pursuant to this Agreement. The Parties will cooperate in a commercially reasonable manner to facilitate the provision of Services as described herein. Each Party shall, at all reasonable times under the circumstances, make available to the other Party properly authorized personnel for the purpose of consultation and decision.
(b) The Parties shall cooperate fully to facilitate the termination of each Service at the earliest time reasonably practicable, but in no event later than six months after the Effective Date, unless otherwise agreed in writing by the Parties.
(c) Each of the Parties shall follow the policies, procedures and practices of the providing Party and its Affiliates applicable to the Services that are in effect as of the Effective Date, as may be modified from time to time subject to Section 2.2, so long as such Party has been provided with notice (in writing, where available) of such policies, procedures and practices.
(d) A failure of a Party to act in accordance with this Section 2.6 that prevents the other Party or its Affiliates or third parties from providing a Service hereunder shall relieve the other Party of its obligation to provide such Service until such time as the failure has been cured; provided , that such Party has been notified in writing of such failure.
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Section 2.7. Certain Changes . Either Party may change (a) its policies and procedures, (b) any Affiliates and/or third parties that provide any Services or (c) the locat ion from which any Service is provided at any time; provided that each Party shall remain responsible for the performance of the applicable Services in accordance with this Agreement. Each Party shall provide the other Party with prompt written notice of any changes described in the prior sentence. Any such notice shall be provided to such other Party as soon as practicable prior to the effectiveness of such change or, if prior notice of such change is not practicable, as soon as practicable after the eff ectiveness of such change. The Parties shall work together in good faith to minimize any negative impact that any change in the policies, procedures and practices of a Party and its Affiliates may have on the ability of the other Party to use the applicab le Services.
Section 2.8. Timely Transition . Unless otherwise agreed in writing by the Parties, each Party shall use commercially reasonable efforts to transition the applicable Services to its own operations and responsibility as promptly as possible after the Effective Date.
ARTICLE III
LIMITATIONS
Section 3.1. General Limitations .
(a) In no event shall either Party be obligated to maintain the employment of any specific employee or acquire any specific additional equipment or software, unless the other Party agrees to bear its allocated portion of any associated costs; provided that each Party shall remain responsible for the performance of the applicable Services in accordance with this Agreement.
(b) Neither Party shall be obligated to provide, or cause to be provided, any Service to the extent that the provision of such Service would require such Party, any of its Affiliates or any of their respective officers, directors, employees, agents or representatives to violate any applicable Laws.
Section 3.2. Third Party Consents and Limitations .
(a) Prior to th e Effective Date, each Party will have obtained, with the reasonably requested cooperation of the other Party any third party consents necessary for provision of the applicable Services during the Term. The costs associated with obtaining any third party consents shall be borne by the Party receiving the applicable Service.
(b) Each Party acknowledges and agrees that any Services provided through third parties or using third party Intellectual Property are subject to the terms and conditions of any appl icable agreements between the applicable Party or its Affiliate and such third parties, copies of which have been made available to the other Party.
Section 3.3. Force Majeure . In the event that either Party is wholly or partially prevented from, or delayed in, providing one or more Services, or one or more Services are interrupted or suspended, by reason of events beyond its reasonable control (including acts of God, acts, orders, restrictions or interventions of any civil, military or government authority, fire,
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expl osion, accident, floods, earthquakes, embargoes, epidemics, war (declared or undeclared), acts of terrorism, hostilities, invasions, revolutions, rebellions, insurrections, sabotages, nuclear disaster, labor strikes, civil unrest, riots, power or other uti lity failures, disruptions or other failures in internet or other telecommunications lines, networks and backbones, delay in transportation, loss or destruction of property and/or changes in Laws) (each, a “ Force Majeure Event ”), provided that such Party i s taking commercially reasonable steps to minimize the impact and duration of such Force Majeure Event, such Party shall not be obligated to deliver the affected Services during such period, and the other Party shall not be obligated to pay for any Service s not delivered.
ARTICLE IV
PAYMENT
Section 4.1. Fees . In consideration for the Services, IRT shall pay to RAIT net fees of $777,168 for the Term (i.e., $129,528 monthly).
Section 4.2. Billing and Payment Terms . IRT shall remit full payment within thirty (30) days after the end of each calendar month. Any late payment of an amount under this Agreement to be paid by IRT shall bear simple interest from and including the date such payment is due under this provision until, but excluding, the date of payment, at a rate per annum equal to the rate announced by Citibank, N.A. as its “Base Rate” plus two percent (2%).
Section 4.3. Sales Taxes . All consideration under this Agreement is exclusive of any sales, transfer, value-added, goods or services tax or similar gross receipts based tax (excluding all other taxes including taxes based upon or calculated by reference to income, receipts or capital) imposed against or on the Services (“ Sales Taxes ”). The Party receiving Services shall be responsible for, and shall indemnify and hold the other Party harmless from and against, any such Sales Taxes.
Section 4.4. Record Keeping and Audit Right . Anything to the contrary notwithstanding, each Party shall, and shall cause its Affiliates to, keep books and records relating to the performance of Services hereunder (the “ Service Records ”) consistent with their document and information retention policies in effect as of the Closing Date. During the Term and for the one (1) year period following the expiration of the Term, each Party shall have the right, at its own cost and expense, to inspect the Service Records of the other Party (upon reasonable, prior written notice, during normal business hours), for the purpose of confirming that the applicable Services are being performed in accordance with the Service Standards, or to address any error in the provision of any Services. Each Party may only exercise the foregoing inspection right once during any calendar quarter, except to address any matter that such Party reasonably believes represents material non-compliance by the other Party or its Affiliates with any Service Standards or any material error in the provision of any Services.
ARTICLE V
CONFIDENTIALITY
Section 5.1. Confidentiality . Each Party acknowledges that the other possesses and will continue to possess information, and may, during the Term, obtain additional
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information, that has been created, discovered or developed by them and/or in which property rights have been assigned or otherwise conveyed to them, which information has commercial value and is not in the public domain. The proprieta ry information of each Party will be and remain the sole property of such Party and its assigns. Each Party shall use the same degree of care that it normally uses to protect its own proprietary information to prevent the disclosure to third parties of inf ormation that has been identified as proprietary by written notice to such Party from the other Party, or that can be reasonably inferred by such Party to be proprietary due to its content or the circumstances under which it was provided. Neither Party sha ll make any use of the information on the other which has been identified as proprietary except as contemplated or required by the terms of this Agreement. Notwithstanding the foregoing, this Section 5.1 shall not apply to any information that a Party can demonstrate: (a) was, at the time of disclosure to it, in the public domain through no fault of such Party; (b) was received after disclosure to it from a third party who had a lawful right to disclose such information to it; or (c) was independently devel oped by the receiving Party.
ARTICLE VI
INTELLECTUAL PROPERTY
Section 6.1. Ownership of Intellectual Property .
(a) Each Party acknowledges and agrees that the Parties shall each retain exclusive rights to and ownership of their own Intellectual Property, and no other license or other right, express or implied (except as provided in the last sentence of each of Section 6.1(b) and Section 6.1(c)), is granted hereunder by either Party to its Intellectual Property.
(b) As between IRT and RAIT, IRT shall exclusively own all right, title and interest throughout the world in and to all business processes and other Intellectual Property rights created by it in connection with the performance of the IRT Services (“ IRT Intellectual Property ”), and RAIT hereby assigns any and all right, title or interest it may have in any such IRT Intellectual Property to IRT. RAIT shall execute any documents and take any other actions reasonably requested by IRT to effectuate the purposes of the preceding sentence. IRT hereby grants to RAIT a royalty-free, fully paid-up, non-exclusive license to use the IRT Intellectual Property during the Term, solely to the extent necessary for RAIT to receive the benefit of the IRT Services.
(c) As between IRT and RAIT, RAIT shall exclusively own all right, title and interest throughout the world in and to all business processes and other Intellectual Property rights created by it in connection with the performance of the RAIT Services (“ RAIT Intellectual Property ”), and IRT hereby assigns any and all right, title or interest it may have in any such RAIT Intellectual Property to RAIT. IRT shall execute any documents and take any other actions reasonably requested by RAIT to effectuate the purposes of the preceding sentence. RAIT hereby grants to IRT a royalty-free, fully paid-up, non-exclusive license to use the RAIT Intellectual Property during the Term, solely to the extent necessary for IRT to receive the benefit of the RAIT Services.
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ARTICLE VII
LIMITATION OF LIABILITY
Section 7.1. Limitation of Liability . In no event shall any Party hereto be liable under or in connection with this Agreement for consequential, incidental, special, indirect, treble or punitive Losses, Losses based on either the reduced current or future profitability or earnings or Losses based on a multiple of such profitability, earnings or other factor, or reduction therein (it being understood that all Losses shall for purposes of Article VIII be determined and calculated on a direct, dollar-for-dollar basis), except in the case of liabilities arising from third-party claims. The liability of either Party to the other Party hereunder shall not exceed the aggregate amounts actually due and payable pursuant to Article IV hereunder from the Effective Date through the date the claim accrued.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Indemnification of RAIT . Subject to the terms of this Article VIII, IRT agrees from and after the Effective Date to indemnify, defend and hold harmless RAIT from and against any and all Losses arising out of, resulting from or relating to third party claims arising out of (a) a material breach by IRT of any provision of this Agreement, or (b) any breach of an agreement between RAIT and any third Person in relation to the RAIT Services caused by IRT.
Section 8.2. Indemnification of IRT . Subject to the terms of this Article VIII, RAIT agrees from and after the Effective Date to indemnify, defend and hold harmless IRT from and against any and all Losses arising out of, resulting from or relating to third party claims arising out of (a) a material breach by RAIT of any provision of this Agreement, or (b) any breach of an agreement between IRT and any third Person in relation to the IRT Services caused by RAIT.
Section 8.3. Indemnification with respect to the Premises .
(a) As set forth on Schedule B , the RAIT Services include IRT’s use of RAIT’s office space located at Two Logan Square, 100 N. 18 th Street, 23 rd Floor, Philadelphia, Pennsylvania (the “Premises”). Subject to the terms of this Article VIII, IRT agrees from and after the Effective Date to indemnify, defend and hold harmless RAIT from and against any and all Losses incurred by RAIT arising out of, resulting from, or relating to any and all third-party claims: (i) arising from IRT’s occupancy of, conduct in or operation of, the Premises, or (ii) under the law, or arising from any act, neglect or negligence of IRT, or any of IRT’s agents, contractors, subtenants, servants, employees, or licensees, or arising from any accident, injury or damage whatsoever caused by IRT or such persons to any person, entity or property occurring after the Effective Date, in or about the Premises.
(b) Subject to the terms of this Article VIII, RAIT agrees from and after the Effective Date to indemnify, defend and hold harmless IRT from and against any and all Losses incurred by IRT arising out of, resulting from, or relating to any and all third-party claims: (i) arising from RAIT’s occupancy of, conduct in or operation of, the Premises, or (ii) under the
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law, or arising from any act, neglect or negligence of RAIT, or any of RAIT’s agents, contractors, subtenants (other than IRT), servants, employees, or licensees, or arising f rom any accident, injury or damage whatsoever caused by RAIT or such persons to any person, entity or property occurring after the Effective Date, in or about the Premises.
Section 8.4. Indemnification Procedures . In the event either IRT or RAIT shall have a claim for indemnity against the other Party, the Parties shall follow the procedures set forth in Section 12.04 of the Purchase Agreement.
ARTICLE IX
TERM AND TERMINATION
Section 9.1. Term of Agreement . The term of this Agreement shall commence on the Effective Date and shall terminate on the date that is six months from the Effective Date (such period, the “ Term ”), unless earlier terminated as provided in this Article IX.
Section 9.2. Termination . In the event: (i) IRT shall fail to pay for the Services in accordance with the terms of this Agreement; (ii) of any default by either Party, in any material respect, in the due performance or observance by it of any of the other terms, covenants or agreements contained in this Agreement; or (iii) either Party shall become or be adjudicated insolvent and/or bankrupt, or a receiver or trustee shall be appointed for either Party or its property or a petition for reorganization or arrangement under any bankruptcy or insolvency Law shall be approved, or either Party shall file a voluntary petition in bankruptcy or shall consent to the appointment of a receiver or trustee (in each such case, the “ Defaulting Party ”); then the non-Defaulting Party shall have the right, at its sole discretion, (A) in the case of a default under clause (iii), to terminate immediately this Agreement and its participation with the Defaulting Party under this Agreement; and (B) in the case of a default under clause (i) or (ii), to terminate this Agreement and its participation with the Defaulting Party under this Agreement if the Defaulting Party has failed to (x) cure the default within thirty (30) days after receiving written notice of such default, or (y) take substantial steps towards and diligently pursue the curing of the default.
Section 9.3. Effect of Termination . In the event that this Agreement is terminated:
(a) Each Party agrees and acknowledges that the obligation of the other Party to provide the terminated Services, or to cause the terminated Services to be provided, hereunder shall immediately cease. Upon cessation of a Party’s obligation to provide any Service, the other Party shall stop using, directly or indirectly, such Service.
(b) Upon request, each Party shall return to the other Party all tangible personal property and books, records or files owned by such other Party and used in connection with the provision of Services that are in its possession as of the termination date.
(c) The following matters shall survive the termination of this Agreement: (i) the rights and obligations of each Party under Articles V, VI, VII, VIII, this Section 9.3, Article X and Article XI and (ii) the obligations under Article IV of the Parties to pay the applicable fees for Services furnished prior to the effective date of termination.
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Section 10.1. Party Representatives . Each Party will appoint a representative (a “ Service Representative ”) responsible for coordinating and managing the delivery and receipt of the Services, which Service Representative will have authority to act on such Party’s behalf with respect to matters relating to this Agreement. The Service Representatives will work in good faith to address any issues involving the Parties’ relationship under this Agreement (including, without limitation, any pricing and other Service related matters).
Section 10.2. Escalation Procedure . The Parties shall attempt to resolve any dispute, controversy or claim arising out of, in connection with, or relating to this Agreement, whether sounding in contract or tort and whether arising during or after termination of this Agreement (each, a “ Dispute ”) in accordance with the following procedures: Upon the written request of either Party, a senior executive officer of IRT or a designee of such person and a senior executive officer of RAIT or that person’s designee shall meet and attempt to resolve any Dispute between them. If such Dispute is not resolved by discussions between such officers within ten (10) days after a Party’s written request was made, then either Party may commence a proceeding relating to such Dispute in accordance with Section 11.8. No Party may commence a proceeding with respect to a Dispute unless and until the foregoing procedure has been concluded with respect to the underlying Dispute.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Notices .
(a) All notices, requests, claims, demands and other communications under this Agreement will be in writing (including a writing delivered by facsimile transmission) and shall be deemed given (i) when delivered, if sent by registered or certified mail (return receipt requested); (ii) when delivered, if delivered personally or sent by facsimile (with proof of transmission); or (iii) on the Business Day after deposit (with proof of deposit), if sent by overnight mail or overnight courier; in each case, unless otherwise specified or provided in this Agreement, to the Parties at the following addresses (or at such other address or fax number for a Party as will be specified by like notice):
As to RAIT:
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RAIT Financial Trust |
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Two Logan Square |
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100 N. 18th Street, 23rd Floor |
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Philadelphia, PA 19103 |
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Attention: Chief Executive Officer |
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Facsimile: (215) 207-2803 |
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Email: sdavidson@rait.com |
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With a copy (which will not constitute notice) to:
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RAIT Financial Trust |
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Two Logan Square |
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100 N. 18th Street, 23rd Floor |
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Philadelphia, PA 19103 |
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Attention: Chief Legal Officer |
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Facsimile: (215) 207-2786 |
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Email: jreyle@rait.com |
With a copy (which will not constitute notice) to:
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Ballard Spahr LLP |
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1735 Market Street, 51st Floor |
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Philadelphia, PA 19103 |
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Attention: Justin Klein |
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Facsimile: (215) 864-8999 |
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Email: kleinj@ballardspahr.com |
As to IRT:
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Independence Realty Trust, Inc. |
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Two Logan Square |
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100 N. 18th Street, 23rd Floor |
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Philadelphia, PA 19103 |
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Attention: Chief Executive Officer |
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Facsimile: (215) 207-2803 |
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Email: sschaeffer@rait.com |
With a copy (which shall not constitute notice) to:
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Hogan Lovells US LLP |
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555 13th Street, NW |
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Washington, DC 20004 |
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Attention: Stuart Barr |
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Facsimile: (202) 637-5910 |
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Email: stuart.barr@hoganlovells.com |
(b) The inability to deliver any notice, demand or request because the Party to whom it is properly addressed in accordance with this Section 11.1 refused delivery thereof or no longer can be located at that address shall constitute delivery thereof to such Party.
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(c) Each Party shall have the right from time to time to designate by written notice to the othe r Party hereto such other person or persons and such other place or places as said Party may desire written notices to be delivered or sent in accordance herewith.
(d) Notices and consents signed and given by an attorney for a Party shall be effective and binding upon that Party.
Section 11.2. Amendment . Except as set forth in Sections 2.2 and 9.2(a) hereof, no provision of this Agreement or of any documents or instrument entered into, given or made pursuant to this Agreement may be amended, changed, waived, discharged or terminated except by an instrument in writing, signed by the Party against whom enforcement of the amendment, change, waiver, discharge or termination is sought.
Section 11.3. Entire Agreement . This Agreement and the other Transaction Agreements (and all exhibits and schedules hereto and thereto) collectively constitute and contain the entire agreement and understanding of the Parties with respect to the subject matter hereof and thereof and supersede all prior negotiations, correspondence, understandings, agreements and contracts, whether written or oral, among the Parties respecting the subject matter hereof and thereof. No representation, promise, inducement or statement of intention has been made by IRT or RAIT which is not embodied in this Agreement, or in the attached schedules or the written certificates or instruments of assignment or conveyance delivered pursuant to this Agreement, and neither IRT nor RAIT shall be bound by or liable for any alleged representation, promise, inducement or statement of intention not therein so set forth.
Section 11.4. No Waiver . No failure of any Party to exercise any power given such Party hereunder or to insist upon strict compliance by the other Party with its obligations hereunder shall constitute a waiver of any Party’s right to demand strict compliance with the terms of this Agreement.
Section 11.5. Counterparts . This Agreement, any document or instrument entered into, given or made pursuant to this Agreement or authorized hereby, and any amendment or supplement thereto may be executed in two or more counterparts, and, when so executed, will have the same force and effect as though all signatures appeared on a single document. Any signature page of this Agreement or of such an amendment, supplement, document or instrument may be detached from any counterpart without impairing the legal effect of any signatures thereon, and may be attached to another counterpart identical in form thereto but having attached to it one or more additional signature pages. Any counterpart transmitted via email in format in portable document format (.pdf) shall be treated as originals for all purposes as to the parties so transmitting.
Section 11.6. Payments . Except as otherwise provided herein, payment of all amounts required by the terms of this Agreement shall be made in the United States and in immediately available funds of the United States of America which, at the time of payment, is accepted for the payment of all public and private obligations and debts.
Section 11.7. Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the respective Parties hereto.
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No assignment of this Agreement, in whole or in part, shall be made without the prior written consent of the non-assigning Party (and shall not relieve the assigning party from liability hereunder) and any purported assignment of this Agreement in contravention of the foregoing shall be null and void ab initio.
Section 11.8. Applicable Law; Venue .
(a) This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania without giving effect to the conflict of law rules and principles of that state. To the fullest extent permitted by Law, the Parties hereby unconditionally and irrevocably waive and release any claim that the Law of any other jurisdiction governs this Agreement and this Agreement shall be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania.
(b) To the maximum extent permitted by applicable Law, any legal suit, action or proceeding against either of the Parties hereto arising out of or relating to this Agreement shall be instituted in any federal or state court in Philadelphia, Pennsylvania, and each of the Parties hereby irrevocably submits to the exclusive jurisdiction of any such court in any such suit, action or proceeding. Each of the Parties hereby agrees to venue in such courts and hereby waives, to the fullest extent permitted by law, any claim that any such action or proceeding was brought in an inconvenient forum.
(c) Each of the Parties hereto irrevocably waives its right to a trial by jury with respect to any action, proceeding or claim arising out of or relating to this Agreement.
Section 11.9. Construction of Agreement . The language in all parts of this Agreement shall be in all cases construed simply according to its fair meaning and not strictly for or against either of the Parties hereto. Headings at the beginning of sections of this Agreement are solely for the convenience of the Parties and are not a part of this Agreement. When required by the context, whenever the singular number is used in this Agreement, the same shall include the plural, and the plural shall include the singular, the masculine gender shall include the feminine and neuter genders, and vice versa. As used in this Agreement, the term “IRT” shall include the respective permitted successors and assigns of IRT, and the term “RAIT” shall include the permitted successors and assigns of RAIT, if any.
Section 11.10. Severability . If any term or provision of this Agreement is determined to be illegal, unconscionable or unenforceable, all of the other terms, provisions and sections hereof will nevertheless remain effective and be in force to the fullest extent permitted by Law.
Section 11.11. Further Assurances . Each of the Parties agrees to execute such instruments and take such further actions after the Effective Date as may be reasonably necessary to carry out the provisions of this Agreement provided that no material additional cost or liability shall be created thereby.
Section 11.12. No Third Party Beneficiary . It is specifically understood and agreed that no person shall be a third party beneficiary under this Agreement, and that none of the provisions of this Agreement shall be for the benefit of or be enforceable by anyone other
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than the Parties hereto and t heir assignees, and that only the Parties hereto and their permitted assignees shall have rights hereunder.
Section 11.13. Binding Agreement . Subject to the foregoing limitations, this Agreement shall extend to, and shall bind, the respective heirs, executors, personal representatives, successors and assigns of IRT and RAIT.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, each Party hereto has caus ed this Agreement to be duly executed on its behalf as of the day and year first above written.
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INDEPENDENCE REALTY TRUST, INC. |
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By: |
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/s/ Scott Schaeffer |
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Name: |
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Scott Schaeffer |
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Title: |
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Chief Executive Officer |
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RAIT FINANCIAL TRUST |
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By: |
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/s/ Scott Davidson |
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Name: |
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Scott Davidson |
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Title: |
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Chief Executive Officer |
[Signature page to Shared Services Agreement]
The following list of IRT Services is a representative list of services expected to be provided by IRT to RAIT. This list does not include all of the services that may be required by RAIT during the Term. IRT acknowledges the limitations of this list and agrees to cooperate with RAIT in good faith in accordance with Section 2.2 of the Agreement to provide such services requested by RAIT that are not specified herein.
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Function |
Service |
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Legal |
Provide legal services relating to financing transactions, including drafting, reviewing and negotiating transaction documents. |
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Provide legal services relating to real estate transactions, including drafting, reviewing and negotiating transaction documents. |
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Real Estate |
Review performance of the RAIT real estate portfolio. |
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Manage day to day cash management of the real estate properties, including the monthly waterfall distributions. |
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Provide quarterly reporting on performance. |
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Yardi Support
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Provide customary YARDI support to RAIT employees using Yardi, including password resets, trouble shooting of errors, help with upgrades, etc. |
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CFO (after March 31, 2017, if needed) |
Provide all services related to the customary function of RAIT’s CFO. |
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Manage the accounting function. |
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Manage the tax function. |
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Manage the finance function. |
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Monitor and manage RAIT’s liquidity. |
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Review transaction documents, if needed. |
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Oversee orientation and training of new RAIT CFO. |
The following list of RAIT Services is a representative list of services expected to be provided by RAIT to IRT. This list does not include all of the services that may be required by IRT in order to provide for an orderly transition to an internalized management structure of IRT during the Term. RAIT acknowledges the limitations of this list and agrees to cooperate with IRT in good faith in accordance with Section 2.2 of the Agreement to provide such services requested by IRT that are not specified herein.
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Function |
Service |
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Human Resources |
Assist with the transfer and establishment of all IRT sponsored benefit plans and programs for IRT employees, including, without limitation, equity compensation plans, medical, dental, vision, flexible spending accounts, Health Savings Accounts, COBRA, life and accidental death and dismemberment insurance, short term disability and long-term disability. |
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Assist with establishment of the IRT sponsored 401(k) plan. |
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Assist with the administration of employee equity compensation plans. |
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Assist with the preparation and establishment of the policies and procedures applicable to IRT employees, including the preparation of the IRT employee handbook. |
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Provide accounting, analysis and processing support for IRT’s benefit plans and programs, file applicable quarterly and annual reports and provide actuarial forecasts. |
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Manage the payroll process for IRT through December 31, 2016 as currently delivered. |
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Provide any other HR assistance, as necessary. |
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Information Technology |
Assist in IRT’s conversion of data to new systems. |
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Provide IRT with a full complement of IT support, including IT Help Desk services, IT network support and end use support services in the case of issues with remote access, user account logins and passwords or other issues associated with application access and usage. |
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Assist with the selection, installation and operation of servers to support IRT’s operations. |
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Provide ordinary course IT systems maintenance, including implementing appropriate system and software upgrades. |
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Provide access to existing enterprise applications and services including Yardi. |
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Provide access to, use of and support for IRT telephone services. |
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Function |
Service |
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Provide customary corporate accounting services. |
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Prepare monthly reports. |
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Maintaining the internal controls function of IRT. |
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Assisting with the preparation and review of all Exchange Act and Securities Act filings |
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REIT testing compliance, including preparation and review of quarterly REIT tests. |
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Investment Company Act testing compliance, including preparation and review of all required Investment Company Act tests. |
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Provide customary corporate tax services. |
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Process all IRT corporate payables. |
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Income tax compliance, including preparation, review and filing of all income tax returns. |
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Indirect tax compliance, including preparation, review and filing of all indirect tax returns including sales and use taxes and personal and real tax returns. |
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Support to register to file income and indirect taxes as necessary. |
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Management of tax (both income and non-income) audits (whether open on the Effective Date or arising thereafter but within the term of the Agreement and general advice and support gathering information on dispute resolution relating to other tax (both income and non-income) audits. |
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Finance |
Assistance with budgeting and forecasting support. |
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Prepare and maintain corporate model for IRT. |
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Administrative |
Provide customary secretarial support. |
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Investor Relations |
Provide customary investor relations support. |
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Review and prepare IRT corporate presentations. |
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Prepare for, coordinate, and host IRT quarterly earnings calls. |
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Assist, interact with and respond to requests of IRT shareholders. |
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Insurance |
Provide support for and manage IRT’s corporate insurance policies, including D&O liability, fiduciary liability and workers’ compensation. |
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Review and manage all insurance claims. |
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Assist with the negotiation and renewal of corporate insurance policies. |
Exhibit 10.2
INCREASE AGREEMENT
This Increase Agreement (this “ Agreement ”) is made as of this 21st day of December, 2016, by and among INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP , a Delaware limited partnership (“ Parent Borrower ”), the Subsidiary Borrowers which are, or may become from time to time, parties to the Credit Agreement (as defined below), KEYBANK NATIONAL ASSOCIATION (together with any successor in interest, “ KeyBank ”), the other lending institutions which are, or may become from time to time, parties to the Credit Agreement as “Lenders” (as defined in the Credit Agreement and as further referenced in the recitals below) , KEYBANK NATIONAL ASSOCIATION , as administrative agent for the Lenders (the “ Agent ”) and as Issuing Lender and as Swing Loan Lender, THE HUNTINGTON NATIONAL BANK , as Syndication Agent (“ Syndication Agent ”), KEYBANC CAPITAL MARKETS and THE HUNTINGTON NATIONAL BANK , as Joint Lead Arranger and Joint Book Managers, and CAPITAL ONE, NATIONAL ASSOCIATION , as Documentation Agent (“ Documentation Agent ”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Loan Parties, the Agent, and the Lenders have entered into a certain Credit Agreement dated as of September 17, 2015, as amended by that certain First Amendment to Credit Agreement dated October 2, 2015 (as amended and as the same may be further amended, restated, supplemented or modified from time to time, the “ Credit Agreement ”) with respect to certain financial accommodations to be provided by the Agent and the Lenders to the Borrower;
WHEREAS, the Borrowers have requested a Commitment Increase, in accordance with the terms of §2.11 of the Credit Agreement, such that the Revolving Credit Facility Amount shall be increased to $172,500,000.00; and
WHEREAS, the Lenders executing this Agreement have agreed to increase their respective Revolving Credit Commitment as more particularly set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed by and among the Borrower, the Agent, and the Lenders, as follows:
1. Effective upon the date hereof, the Revolving Credit Facility Amount shall be increased to $172,500,000.00. In connection therewith, (a) KeyBank National Association, in its capacity as a Lender, hereby increases its Revolving Credit Commitment to $27,039,000.00, (b) The Huntington National Bank, in its capacity as Lender, hereby increases its Revolving Credit Commitment to $27,039,000.00, (c) Capital One, National Association, in its capacity as Lender, hereby increases its Revolving Credit Commitment to $25,617,000.00, (d) Deutsche Bank AG New York Branch, in its capacity as Lender, hereby increases its Revolving Credit Commitment to $19,922,000.00, (e) MidFirst Bank, a federally chartered savings association in its capacity as Lender, hereby increases its Revolving Credit Commitment to $14,234,000.00, (f) Comerica Bank, in its capacity as Lender, hereby increases its Revolving Credit Commitment to
$14,230,500.00, (g) Citizens Bank, N.A., in its capacity as Lender, hereby increases its Revolving Credit Commitment to $11,885,500.00, and (h) Associat ed Bank, National Association, in its capacity as Lender, hereby increases its Revolving Credit Commitment to $11,383,000.00. The Revolving Credit Commitment of The PrivateBank will remain $7,690,000.00 and the Revolving Credit Commitment of Bank of Ameri ca, N.A. will remain $ 13,460,000.00.
2. The portion of Schedule 1.1 of the Credit Agreement which lists the Revolving Credit Commitments and Revolving Credit Commitment Percentages is hereby deleted in its entirety and shall be replaced by Schedule 1.1 annexed hereto. Given the prior reduction of the Term Loan Commitment as a result of the paydown of outstanding Term Loans in the amount of $60,000,000.00, the Lenders acknowledge and agree that, after giving effect to the increases in the Revolving Credit Commitment set forth in Paragraph 1 above, accordion increases in an aggregate amount of $137,500,000.00 remain available to be exercised by the Borrower under Section 2.11 of the Credit Agreement.
3. The parties hereto acknowledge and agree that all of the terms and conditions of the Loan Documents shall remain in full force and effect, except as expressly provided in this Agreement or in any other document executed in connection with this Agreement.
4. Borrower hereby ratifies, confirms and reaffirms all of the terms and conditions of the Loan Documents, and that the obligations of Borrower under the Loan Documents, as amended as provided for herein, are evidenced by the Loan Documents.
5. Borrower acknowledges, confirms and agrees that to Borrower’s actual knowledge, Borrower does not have any offsets, defenses, claims or counterclaims against Agent and/or the Lenders with respect to any of Borrower's liabilities and obligations to Agent and the Lenders.
6. The execution of this Agreement and acceptance of any documents related hereto shall not be deemed to be a waiver of any breach, Default or Event of Default under the Loan Documents, whether or not known to Agent or the Lenders and whether or not existing on the date of this Agreement.
7. This Agreement, and all other documents, instruments and agreements relating thereto, as same may be amended hereby, constitute the legal, valid and binding obligations of Borrower, enforceable in accordance with their respective terms, except as such may be limited by the application of bankruptcy, moratorium, reorganization and other laws affecting the rights of creditors generally or by general equitable principles.
8. Borrower warrants and represents that Borrower has consulted with independent legal counsel of Borrower's selection in connection with this Agreement and is not relying on any representations or warranties of Agent and/or Lenders or its counsel in entering into this Agreement.
9. This Agreement shall constitute a Loan Document.
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10. The Borrower hereby confirms that the provisions of Section 2.11 of the Credit Agreement have been satisfied with the exception of the provisions of Section 2.11(d)(i)(A) of the Credit Agreement which have been waived.
11. Any determination that any provision of this Agreement or any application hereof is invalid, illegal or unenforceable in any respect and in any instance shall not affect the validity, legality, or enforceability of such provision in any other instance, or the validity, legality or enforceability of any other provisions of this Agreement.
12. This Agreement shall be binding upon Borrower, Agent, the Lenders and their respective successors and assigns and shall inure to the benefit of Borrower, Agent, the Lenders and their respective successors and assigns.
13. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and performed in such State (without regard to principles of conflict laws) and any applicable law of the United States of America.
14. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging transmission (e.g. pdf by email) shall be effective as delivery of a manually executed counterpart of this Agreement. Said counterparts shall constitute but one and the same instrument and shall be binding upon each of the undersigned individually as fully and completely as if all had signed but one instrument and shall be unaffected by the failure of any of the undersigned to execute any or all of said counterparts.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Increase A greement to be executed under seal as of the day and year first above written.
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PARENT BORROWER: |
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INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP , a Delaware limited partnership |
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By: |
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Independence Realty Trust, Inc., a Maryland corporation, its general partner |
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By: |
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/s/ James Sebra |
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Name: |
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James Sebra |
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Title: |
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Chief Financial Officer |
[Increase Agreement – Signature Page]
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SUBSIDIARY BORROWERS: |
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BAYVIEW CLUB APARTMENTS INDIANA, LLC , a Delaware limited liability company |
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Independence Realty Operating Partnership, LP, a Delaware limited partnership, its sole member |
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Independence Realty Trust, Inc., a Maryland corporation, its general partner |
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/s/ James Sebra |
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Name: |
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James Sebra |
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Chief Financial Officer |
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TS VINTAGE, LLC, a Delaware limited liability company |
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IR TS Op Co, LLC, a Delaware limited liability company, its sole member |
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Independence Realty Operating Partnership, LP, a Delaware limited partnership, its sole member |
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Independence Realty Trust, Inc., a Maryland corporation, its general partner |
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/s/ James Sebra |
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Name: |
James Sebra |
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Chief Financial Officer |
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[Increase Agreement – Signature Page]
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TS GOOSE CREEK, LLC , a Delaware limited liability company |
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IR TS Op Co, LLC, a Delaware limited liability company, its sole member |
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Independence Realty Operating Partnership, LP, a Delaware limited partnership, its sole member |
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Independence Realty Trust, Inc., a Maryland corporation, its general partner |
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/s/ James Sebra |
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Name: |
James Sebra |
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Chief Financial Officer |
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TS WESTMONT, LLC , a Delaware limited liability company |
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IR TS Op Co, LLC, a Delaware limited liability company, its sole member |
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Independence Realty Operating Partnership, LP, a Delaware limited partnership, its sole member |
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By: |
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Independence Realty Trust, Inc., a Maryland corporation, its general partner |
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/s/ James Sebra |
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Name: |
James Sebra |
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Chief Financial Officer |
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[Increase Agreement – Signature Page]
[Increase Agreement – Signature Page]
[Increase Agreement – Signature Page]
[Increase Agreement – Signature Page]
[Increase Agreement – Signature Page]
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IRT OKC PORTFOLIO OWNER, LLC , a Delaware limited liability company |
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By: |
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IRT OKC Portfolio Member, LLC, a Delaware limited liability company, its sole member |
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Independence Realty Operating Partnership, LP, a Delaware limited partnership, its sole member |
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By: |
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Independence Realty Trust, Inc., a Maryland corporation, its general partner |
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By: |
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/s/ James Sebra |
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James Sebra |
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Chief Financial Officer |
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[Increase Agreement – Signature Page]
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AGENT and LENDER: |
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KEYBANK NATIONAL ASSOCIATION |
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By: |
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/s/ Christopher T. Neil |
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Name: |
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Christopher T. Neil |
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Title: |
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Vice President |
[Increase Agreement – Signature Page]
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LENDERS: |
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THE HUNTINGTON NATIONAL BANK |
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By: |
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/s/ Michael Mitro |
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Name: |
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Michael Mitro |
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Title: |
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Senior Vice President |
[Increase Agreement – Signature Page]
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CAPITAL ONE, NATIONAL ASSOCIATION |
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By: |
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/s/ Ashish Tandon |
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Ashish Tandon |
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Title: |
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Director |
[Increase Agreement – Signature Page]
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MIDFIRST BANK, A FEDERALLY CHARTERED SAVINGS ASSOCIATION |
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By: |
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/s/ Todd Wright |
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Name: |
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Todd Wright |
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Title: |
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Senior Vice President |
[Increase Agreement – Signature Page]
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DEUTSCHE BANK AG NY BRANCH |
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By: |
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/s/ James Rolison |
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Name: |
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James Rolison |
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Managing Director |
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By: |
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/s/ Joanna Soliman |
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Name: |
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Joanna Soliman |
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Title: |
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Vice President |
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[Increase Agreement – Signature Page]
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COMERICA BANK |
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By: |
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/s/ Charles Weddell |
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Name: |
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Charles Weddell |
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Title: |
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Alt Group Manager-VP |
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[Increase Agreement – Signature Page]
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CITIZENS BANK, N.A. |
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By: |
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/s/ Nan E. Delahunt |
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Name: |
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Nan E. Delahunt |
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Title: |
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Vice President |
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[Increase Agreement – Signature Page]
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ASSOCIATED BANK, NATIONAL ASSOCIATION |
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By: |
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/s/ Greg Conner |
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Name: |
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Greg Conner |
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Title: |
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Vice-President |
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[Increase Agreement – Signature Page]
The undersigned Guarantors hereby expressly acknowledge and consent to the foregoing Increase Agreement and acknowledge and agree that each Guarantor remains jointly and severally obligated for the various obligations and liabilities of the Borrower to the Agent and the Lenders under the Credit Agreement as provided in the Guaranty dated September 17, 2015
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INDEPENDENCE REALTY TRUST, INC. , a Maryland corporation |
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By: |
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/s/ James Sebra |
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Name: |
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James Sebra |
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Title: |
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Chief Financial Officer |
[Increase Agreement – Signature Page]
SCHEDULE 1.1
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Name and Address |
Revolving Credit Commitment |
Revolving Credit Commitment Percentage |
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KeyBank National Association
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$27,039,000 |
15.674783% |
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The Huntington National Bank
200 Public Square, CM17
Facsimile: 888-987-9315 |
$27,039,000 |
15.674783% |
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Capital One, National Association 1680 Capital One Drive, 10th Floor McLean, VA 22102
Attention: Yakovia Jackson
Facsimile: 703 ‐ 720 ‐ 2032
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$25,617,000 |
14.850435% |
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Bank of America, N.A. One Bryant Park New York, New York 10036 Attention: Jonathan J. Salinger Telephone: 646 ‐ 855 ‐ 3541 Facsimile: 312 ‐ 453 ‐ 6052
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$13,460,000 |
7.802899% |
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MidFirst Bank, a federally chartered Savings Association 501 NW Grand Blvd. Oklahoma City, OK 73118 Attention: Todd Wright Telephone: 405-767-7108 Facsimile: 405-767-5478
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$14,234,000 |
8.251594% |
Schedule 1.1
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Name and Address |
Revolving Credit Commitment |
Revolving Credit Commitment Percentage |
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NY BRANCH 60 Wall Street, 10 th Floor New York, NY 10005 Attention: Joanna Soliman Telephone: 212-250-5345 Facsimile: 212-797-8988
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$19,922,000 |
11.548986% |
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Comerica Bank 3551 Hamlin Road MC2390 Auburn Hills Michigan 48326 Attention: Charles Weddell Telephone: 248-371-6283 Facsimile: 248-371-7920
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$14,230,500 |
8.249565% |
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Citizens Bank, N.A. 1215 Superior Avenue Cleveland, Ohio 44114 Attention: Nan E. Delahunt Telephone: 617-725-5240 Facsimile: 216-277-7106
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$11,885,500 |
6.890145% |
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Associated Bank, National Association 525 W. Monroe, 24th floor, Chicago, IL 60661 Attention: Ben Paolone Telephone: 312-544-4651 Facsimile: 312-544-4667
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$11,383,000 |
6.598841% |
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The PrivateBank 120 S. LaSalle St. Chicago, IL 60603 Attention: Erica Knight Telephone: 312-564-1258 Facsimile: 312-564-1794
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$7,690,000 |
4.457971% |
Schedule 1.1
Exhibit 10.3
TERMINATION OF ADVISORY AGREEMENT
This TERMINATION OF ADVISORY AGREEMENT (this “Agreement ”) is made and entered into as of the 20 th day of December, 2016 (the “ Effective Date ”), by and among Independence Realty Trust, Inc., a Maryland corporation (“ IRT ”), Independence Realty Operating Partnership, LP, a Delaware limited partnership (“ IROP ”), and Independence Realty Advisors, LLC, a Delaware limited liability company (“ IRA ”). Each of IRT, IROP and IRA is sometimes referred to individually in this Agreement as a “Party” and collectively they are sometimes referred to as the “Parties.”
WITNESSETH:
WHEREAS, on May 7, 2013, the parties entered into that certain Second Amended and Restated Advisory Agreement, as amended by the First Amendment thereto dated as of July 26, 2013 and the Second Amendment thereto dated as of September 25, 2015 (the “ Advisory Agreement ”);
WHEREAS, IRT and IROP are parties to that certain Securities and Asset Purchase Agreement, dated as of September 27, 2016, by and among RAIT Financial Trust, RAIT TRS, LLC, Jupiter Communities, LLC, the entities set forth on the signature pages thereto under “RAIT Selling Stockholders,” IRT and IROP (the “ Purchase Agreement ”);
WHEREAS, all capitalized terms used but not defined herein shall have the meanings given to such terms in the Purchase Agreement;
WHEREAS, pursuant to the Purchase Agreement IROP acquired all of the issued and outstanding membership interests of IRA and IRA became a subsidiary of IRT and IROP; and
WHEREAS, each of the Parties desires to terminate the Advisory Agreement.
NOW, THEREFORE in consideration of the recitals and other consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the Parties agree as follows:
1. Termination of Advisory Agreement . The Parties hereby agree that, notwithstanding anything to the contrary in the Advisory Agreement, the Advisory Agreement shall terminate and be of no further force or effect as of the Effective Date and none of the Parties shall have any further obligations thereunder.
2. Further Assurances . Each Party shall, at the request of any other Party, execute and deliver such additional documentation, instruments and other assurances and perform or cause to be performed such further and other acts or things as may be reasonably required to give full effect to, and carry out the intent of, this Agreement.
3. Governing Law . This Agreement shall be governed by and construed and enforced in accordance with the internal Laws of the State of New York, without giving effect to
any Law or rule that would cause the Laws of any jurisdiction other than the State of New York to be a pplied.
4. Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument. Facsimiles, e-mail transmission of .pdf signatures or other electronic copies of signatures shall be deemed to be originals.
5. Severability . If any term or provision hereof is held invalid, illegal or unenforceable in any respect under any applicable Law or as a matter of public policy, the validity, legality and enforceability of all other terms and provisions hereof shall not in any way be affected or impaired. If the final judgment of a court of competent jurisdiction or other Governmental Authority declares that any term or provision hereof is invalid, illegal or unenforceable, the Parties agree that the court making such determination shall have the power to reduce the scope, duration, area or applicability of the term or provision, to delete specific words or phrases, or to replace any invalid, illegal or unenforceable term or provision with a term or provision that is valid, legal and enforceable and that comes closest to expressing the intention of the invalid, illegal or unenforceable term or provision.
6. Entire Agreement . This Agreement constitutes and contains the entire agreement and understanding of the Parties with respect to the subject matter hereof and supersedes all prior negotiations, correspondence, understandings, agreements and contracts, whether written or oral, between the Parties respecting the subject matter hereof.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their respective authorized officers on the day and year first above written.
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INDEPENDENCE REALTY TRUST, INC . |
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By: |
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/s/ Farrell Ender |
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Name: |
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Farrell Ender |
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Title: |
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President |
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INDEPENDENCE REALTY OPERATING PARTNERSHIP, LP |
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By: |
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Independence Realty Trust, Inc., its general partner |
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By: |
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/s/ Farrell Ender |
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Name: |
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Farrell Ender |
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Title: |
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President |
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INDEPENDENCE REALTY ADVISORS, LLC |
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By: |
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Independence Realty Operating Partnership, LP, its sole member |
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By: |
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Independence Realty Trust, Inc., its general partner |
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By: |
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/s/ Farrell Ender |
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Name: |
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Farrell Ender |
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Title: |
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President |
Exhibit 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “ Agreement ”) is entered into as of December 20, 2016, by and between Independence Realty Trust, Inc., a Maryland corporation (the “ Company ”), and Scott F. Schaeffer (“ Executive ”).
WHEREAS , the Company, Independence Realty Operating Partnership, LP, a Delaware limited partnership (“ IROP ”), RAIT Financial Trust, a Maryland real estate investment trust (“ RAIT ”), RAIT TRS, LLC, a Delaware limited liability company (“ Interest Seller ”), Jupiter Communities, LLC, a Delaware limited liability company (“ Asset Seller ”), and the entities set forth on the signature pages of the Purchase Agreement have entered into that certain Securities and Asset Purchase Agreement, dated as of September 27, 2016 (the “ Purchase Agreement ”);
WHEREAS , pursuant to the Purchase Agreement, at the Second Closing (as defined in the Purchase Agreement), and on the terms and subject to the conditions set forth in the Purchase Agreement, Interest Seller shall sell, convey, assign, transfer and deliver to IROP, and IROP shall purchase, acquire and accept from Interest Seller, all of Interest Seller’s right, title and interest in and to the Membership Interests (as defined in the Purchase Agreement), and Asset Seller shall sell, convey, assign, transfer and deliver to IROP, and IROP shall purchase, acquire and accept from Asset Seller, all of Asset Seller’s right, title and interest in, to and under the Transferred Assets (as defined in the Purchase Agreement);
WHEREAS , Executive is currently employed by RAIT and serves as the Chief Executive Officer of the Company; and
WHEREAS , in connection with and subject to the Second Closing, the Company wishes to employ Executive in the position of Chief Executive Officer of the Company, and Executive wishes to accept such employment, on the terms set forth below, effective as of the Effective Date (as defined below).
NOW , THEREFORE , in consideration of the Recitals, the mutual promises and covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
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1. |
Employment . The Company agrees to employ Executive, and Executive hereby accepts such employment and agrees to perform Executive’s duties and responsibilities, in accordance with the terms, conditions and provisions hereinafter set forth. |
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1.1 |
Employment Term . This Agreement shall become effective from and after the Second Closing (the “ Effective Date ”); provided, that, in the event the Second Closing does not occur by the Outside Date (as defined in the Purchase Agreement) or the Purchase Agreement is otherwise terminated, this Agreement shall thereupon become null and void. This Agreement shall continue until the third anniversary of the Effective Date, unless the Agreement is terminated sooner in accordance with Section 2 below; and shall be effective for successive one-year periods in accordance with the terms of this Agreement (subject to termination as aforesaid) unless either party notifies the other party of non-renewal in writing prior to three months before the expiration of the then current term. The period commencing on the Effective Date and ending on the date on which the term of Executive’s employment under this Agreement shall terminate is hereinafter referred to as the “ Employment Term .” |
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Board during each year of the Employment Term. During the Employment Term, the Company agrees to nominate Executive for election to the Board at any meeting of the stockholders of the Company where t he election of the members of the Board is included in the purposes of such meeting. Executive shall not receive any additional compensation for services as a member of the Board. |
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1.3 |
Extent of Service . Executive agrees to use Executive’s best efforts to carry out Executive’s duties and responsibilities under Section 1.2 hereof and, consistent with the other provisions of this Agreement, to devote substantially all of Executive’s business time, attention and energy to the performance of Executive’s duties and responsibilities hereunder. Subject to the requirements of Section 5.1 , the foregoing shall not be construed as preventing Executive from making investments in other businesses or enterprises provided there is no conflict with Executive’s ability to satisfy his obligations to the Company. The Company understands that Executive has entered into a consulting agreement with RAIT whereby Executive has agreed to render consulting services to RAIT, its subsidiaries or designee, for a one-year period beginning on the date of the Second Closing at reasonably convenient times or places. |
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1.4 |
Base Salary . For all of the services rendered by Executive hereunder, the Company shall pay Executive a base salary (“ Base Salary ”), which shall be at the annual rate of Six Hundred Eighteen Thousand Six Hundred Dollars ($618,600) beginning as of the Effective Date, payable in installments at such times as the Company customarily pays its other senior level executives. Executive’s Base Salary shall be reviewed annually for appropriate increases by the Board pursuant to the Board’s normal performance review policies for senior level executives but shall not be decreased. |
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1.5 |
Bonus . Executive shall be eligible to receive annual bonuses in such amounts as the Board may approve in its sole discretion or under the terms of any annual incentive plan of the Company maintained for other senior level executives. |
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1.6 |
Retirement and Welfare Plans and Perquisites . Executive shall be entitled to participate in all employee retirement and welfare benefit plans and programs or executive perquisites made available to the Company’s senior level executives as a group or to its employees generally, as such retirement and welfare plans or perquisites may be in effect from time to time and subject to the eligibility requirements of the plans and applicable law. For purposes of any such benefit plans and programs or executive perquisites that condition participation or entitlements thereunder on duration of service with the Company, Executive’s service with RAIT shall be treated as service to the Company. Nothing in this Agreement shall prevent the Company from amending or terminating any retirement, welfare or other employee benefit plans or programs from time to time as the Company deems appropriate. |
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1.7 |
Reimbursement of Expenses; Vacation . Executive shall be provided with reimbursement of reasonable expenses related to Executive’s employment by the Company on a basis no less favorable than that which may be authorized from time to time for senior level executives as a group, and shall be entitled to vacation and sick leave in accordance with the Company’s vacation, holiday and other pay for time not worked policies. For purposes of any such vacation, holiday and sick leave policies that condition participation or entitlements thereunder on duration of service with the Company, Executive’s service with RAIT shall be treated as service to the Company. |
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1.8 |
Incentive Compensation . Executive shall be entitled to participate in any short-term and long-term incentive programs (including without limitation any equity compensation plans) established by the Company for its senior level executives generally. |
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1.9 |
Clawback/Recoupment . Notwithstanding any other provision in this Agreement to the contrary, any compensation paid to Executive pursuant to this Agreement or any other agreement or |
2
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arrangement with the Company shall be subject to mandatory repayment by Executive to the Company if and to the extent any such compensation paid to Executive is, or in the future becomes, su bject to (i) any “clawback” or recoupment policy that is applicable to all senior executives of the Company and is limited to the recovery of incentive-based compensation which, as a result of an accounting restatement by the Company, is in excess of the c ompensation which should have been received by Executive, or (ii) any law, rule, requirement or regulation which imposes mandatory recoupment, under circumstances set forth in such law, rule, requirement or regulation. |
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Termination . The Employment Term and Executive’s employment hereunder shall terminate upon the occurrence of any of the following events: |
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2.1 |
Termination Without Cause; Resignation for Good Reason; Non-Renewal by the Company . |
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(a) |
The Company may terminate Executive’s employment at any time without Cause (as defined in Section 4 ) upon not less than sixty (60) days’ prior written notice to Executive. In addition, Executive may initiate a termination of employment by resigning under this Section 2.1 for Good Reason (as defined in Section 4 ). Executive shall give the Company not less than sixty (60) days’ prior written notice of such resignation. In addition, the Company may initiate a termination of employment by sending a notice of non-renewal of this Agreement to Executive, as described in Section 1.1 . |
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(b) |
Upon any termination or resignation described in Section 2.1(a) above, Executive shall be entitled to receive only the amount due to Executive under the Company’s then current severance pay plan for employees, if any. No other payments or benefits shall be due under this Agreement to Executive, but Executive shall be entitled to receive (i) Executive’s Base Salary due through his date of termination, (ii) any earned but unpaid annual bonus for the year preceding the fiscal year of termination, (iii) any amounts owing to Executive for reimbursement of expenses properly incurred by Executive prior to his date of termination and which are reimbursable in accordance with Section 1.7 ; and (iv) any benefits accrued and earned in accordance with the terms and conditions of any applicable benefit plans and programs of the Company in which Executive participated prior to his termination of employment (collectively, the “ Accrued Benefits ”). |
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(c) |
Notwithstanding the provisions of Section 2.1(b) , in the event that Executive executes and does not revoke the release described in Section 2.7 , Executive shall be entitled to receive, in lieu of any payments or benefits due to him under the Company’s then current severance pay plan for employees (if any), the following: |
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(i) |
Executive shall receive a lump sum cash payment equal to two and one quarter times the sum of (x) Executive’s Base Salary, as in effect immediately prior to his termination of employment and (y) the average annual cash bonus earned by Executive for the three year period immediately prior to his termination of employment, or the average annual cash bonus earned by Executive for the actual number of completed fiscal years immediately prior to his termination of employment if less than three; provided, however, that if Executive has been employed by the Company for less than one completed fiscal year prior to his termination of employment, then the amount used for clause (y) shall be Executive’s target annual cash bonus for the fiscal year of his termination of employment. One half of the amount described in the preceding sentence shall be consideration for Executive’s entering into the restrictive covenants described in Section 5 below. Unless the payment is required to be delayed pursuant to Section 18.2 below, the payment shall be made within fifteen (15) days of the Release Effective Date (as defined below). |
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(iii) |
For a period of eighteen (18) months following Executive’s date of termination, provided Executive and his eligible dependents timely and properly elect to continue health care coverage under COBRA, Executive shall continue to receive the medical coverage in effect at the date of his termination of employment (or generally comparable coverage) for himself and, where applicable, his spouse and dependents, at the same premium rates as may be charged from time to time for employees of the Company generally, as if Executive had continued in employment with the Company during such period. |
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(iv) |
The treatment of any outstanding equity awards held by Executive shall be determined in accordance with the terms of the applicable incentive plan and the applicable award agreements ; provided, however, that any such equity awards that are subject solely to time-vesting conditions shall become fully vested as of the date of Executive’s termination of employment. |
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2.2 |
Voluntary Termination . Executive may voluntarily terminate his employment for any reason upon sixty (60) days’ prior written notice or by sending a notice of non-renewal of this Agreement to the Company, as described in Section 1.1 . In any such event, after the effective date of such termination, except as provided in Section 2.1 with respect to a resignation for Good Reason, no further payments shall be due under this Agreement, except that Executive shall be entitled to receive the Accrued Benefits. |
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2.3 |
Disability . The Company may terminate Executive’s employment, to the extent permitted by applicable law, if Executive (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company (“ Disability ”). If the Company terminates Executive’s employment for Disability, Executive shall be entitled to receive the following: |
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his termination of employment occurs and the denominator of which is three hundred sixty-five (365). Except as otherwise requ ired to comply with the requirements of Section 18 below, payment shall be made on the sixtieth (60th) day following Executive’s last day of employment with the Company on account of Disability. |
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(b) |
The Company shall pay to Executive the Accrued Benefits. |
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2.4 |
Death . If Executive dies while employed by the Company, the Company shall pay to Executive’s executor, legal representative, administrator or designated beneficiary, as applicable, (i) the Accrued Benefits and (ii) a pro-rated Target Cash Bonus (determined according to Section 2.3(a) above) for the Company’s fiscal year in which Executive’s death occurs and, except as otherwise required to comply with the requirements of Section 18 below, shall be paid in a lump sum cash payment on the sixtieth (60th) day following the date of Executive’s death. Otherwise, the Company shall have no further liability or obligation under this Agreement to Executive’s executors, legal representatives, administrators, heirs or assigns or any other person claiming under or through Executive. |
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2.5 |
Cause . The Company may terminate Executive’s employment at any time for Cause upon written notice to Executive, in which event all payments under this Agreement shall cease, except for Base Salary to the extent already accrued. Executive shall be entitled to receive the Accrued Benefits. Whether a termination is for Cause, as such term is defined in Section 4.1 , shall be determined by the Board in its sole discretion. |
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2.6 |
Notice of Termination . Any termination of Executive’s employment shall be communicated by a written notice of termination to the other party hereto given in accordance with Section 10 . The notice of termination shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) briefly summarize the facts and circumstances deemed to provide a basis for a termination of employment and the applicable provision hereof, and (iii) specify the termination date in accordance with the requirements of this Agreement. |
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2.7 |
Release . Executive agrees that, as a condition to receiving the severance payments and benefits set forth in Section 2.1 , Executive will execute a release of claims substantially in the form of the release attached hereto as Exhibit A . Within two business days of Executive’s date of termination, the Company shall deliver to Executive the release for Executive to execute. Executive will forfeit all rights to the severance payments and benefits set forth in Section 2.1 unless, within fifty-five (55) days of delivery of the release by the Company to Executive, Executive executes and delivers the release to the Company and such release has become irrevocable by virtue of the expiration of the revocation period without the release having been revoked (the first such date, the “ Release Effective Date ”). The Company’s obligation to pay the severance payments and benefits set forth in Section 2.1 is subject to the occurrence of the Release Effective Date, and if the Release Effective Date does not occur, then the Company shall have no obligation to pay the severance payments and benefits set forth in Section 2.1 . To the extent that the Release Effective Date could occur in one of two (2) taxable years of Executive depending on when Executive executes and delivers the release, any deferred compensation payment (which is subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”)) that is conditioned on execution of the release shall be made no earlier than the first business day of the later of such taxable years. |
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2.8 |
Resignation of All Other Positions . Upon termination of Executive’s employment for any reason, Executive shall be deemed to have resigned from all positions that Executive holds as an officer of the Company or any affiliate of the Company, and from all position that he holds as a member of the board of directors (or a committee thereof) of the Company or any affiliate of the Company, unless otherwise mutually agreed with the Board. |
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3.1 |
Effect of Change in Control . If a Change in Control occurs and Executive’s employment terminates under the circumstances described below, the provisions of Section 2.1 shall apply. |
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3.2 |
Termination Without Cause or Resignation for Good Reason Upon or After a Change in Control . Upon or within eighteen (18) months after a Change in Control, the Company (by action of the Board) may terminate Executive’s employment at any time without Cause or Executive may initiate a termination of employment by resigning under this Section 3 for Good Reason (as defined in Section 4 ) (in either case the Employment Term shall be deemed to have ended) upon not less than sixty (60) days’ prior written notice to Executive (or in the case of resignation for Good Reason, Executive shall give the Company not less than sixty (60) days’ prior written notice of such resignation). In any such event, the provisions of Section 2.1(b) or (c) , as applicable, shall then apply, except that the severance multiple for purposes of Section 2.1(c)(i) shall be three. |
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3.3 |
Code Section 280G . |
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(a) |
Executive shall bear all expense of, and be solely responsible for, all federal, state, local or foreign taxes due with respect to any amount payable to or other benefit receivable by Executive hereunder, including, without limitation, any excise tax imposed by Section 4999 of the Code; provided, however, that any such amount or benefit deemed to be a Parachute Payment (as defined below) alone or when added to any other amount payable or paid to or other benefit receivable or received by Executive which is deemed to constitute a Parachute Payment (whether or not under an existing plan, arrangement or other agreement), and would result in the imposition on Executive of an excise tax under Section 4999 of the Code (all such amounts and benefits being hereinafter called “ Total Payments ”), shall be reduced to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code but only if, by reason of such reduction, the net after-tax benefit received by Executive shall exceed the net after-tax benefit received by Executive if no such reduction was made. For purposes of this Section 3.3 , “net after-tax benefit” shall mean (i) the total of all payments and the value of all benefits which Executive receives or is then entitled to receive from the Company that would constitute Parachute Payments, less (ii) the amount of all federal, state and local income taxes payable with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to Executive (based on the rate in effect for such year as set forth in the Code as in effect at the time of the first payment of the foregoing) and the amount of applicable employment taxes, less (iii) the amount of excise taxes imposed with respect to the payments and benefits described in (i) above by Section 4999 of the Code. For purposes of this Section 3.3 , “ Parachute Payment ” shall mean a “parachute payment” as defined in Section 280G of the Code. |
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reductions as shall be recommended by Tax Counsel. Executive and the Company shall each provide the Tax Counsel access to and copies of any books, records, and documents in the possession of Executive or the Company, as the case may be, rea sonably requested by the Tax Counsel, and otherwise cooperate with the Tax Counsel in connection with the preparation and issuance of the determinations and calculations contemplated by this Section 3.3 . The fees and expenses of the Tax Counsel for its ser vices in connection with the determinations and calculations contemplated by this Section 3.3 shall be borne by the Company. |
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4. |
Definitions . |
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4.1 |
“ Cause ” shall mean any of the following grounds for termination of Executive’s employment: |
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(a) |
Executive’s conviction of, or plea of guilty or nolo contendere to, a felony, any crime of moral turpitude or any crime involving the Company; |
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(b) |
Executive’s engagement in fraud, misappropriation or embezzlement; |
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(c) |
Executive’s material breach of any published code of conduct or code of ethics of the Company or any affiliate of the Company; |
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(d) |
Executive’s gross negligence or willful misconduct in the performance of his duties; |
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(e) |
Executive’s continual failure to substantially perform his duties to the Company (other than a failure resulting from Executive’s incapacity due to physical or mental illness), and such failure has continued for a period of at least 30 days after a written notice of demand for substantial performance, signed by a duly authorized officer of the Company, has been delivered to Executive specifying the manner in which Executive has failed to substantially perform; or |
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(f) |
Executive’s breach of Section 5 of this Agreement. |
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4.2 |
“ Good Reason ” shall mean, without Executive’s consent: |
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(a) |
a significant adverse alteration in the nature or status of Executive’s authority, duties or responsibilities (and the removal of Executive from the position of Chief Executive Officer or requiring Executive to report to any employee of the Company shall be deemed to be a significant adverse alteration in the nature or status of Executive’s responsibilities); provided , however , that the election by the Board of a different person to serve as Chairman shall not be deemed to be such an alteration so long as (i) Executive continues to have his duties assigned to him by the Board and (ii) no executive officers or other employees of the Company have their duties assigned to them by the Chairman; |
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(b) |
a reduction in Base Salary of Executive; |
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(c) |
the Company’s material and willful breach of this Agreement; or |
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(d) |
the relocation (without the written consent of Executive) of Executive’s principal place of employment by more than thirty-five (35) miles from its location on the Effective Date. |
Notwithstanding the foregoing, (i) Good Reason shall not be deemed to exist unless notice of termination on account thereof (specifying a termination date of at least 60 days but no more than 90 days from the date of such notice) is given no later than 90 days after the time at which the event or condition purportedly giving rise to Good Reason first occurs or arises and (ii) if there exists (without regard to this clause (ii)) an event or condition that constitutes
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Good Reason, the Company shall have 30 days from the date notice of such a termination is given to cure such event or condition and, i f the Company does so, such event or condition shall not constitute Good Reason hereunder.
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4.3 |
“ Change in Control ” shall mean the occurrence of any of the following: |
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(a) |
The acquisition (other than from the Company), by any person (as such term is defined in Section 13(c) or 14(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of the combined voting power of the Company’s then outstanding voting securities; |
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(b) |
The individuals who, as of the Effective Date, are members of the Board (the “ Incumbent Board ”), cease for any reason during any twelve (12) month period to constitute at least a majority of the Board, unless the election, or nomination for election by the Company’s stockholders, of any new director was approved by a vote of at least a majority of the Incumbent Board, and such new director shall be considered as a member of the Incumbent Board; |
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(c) |
The closing of a reorganization, merger, consolidation or similar form of corporate transaction (each, an “ Business Combination ”) involving the Company if (i) the stockholders of the Company, immediately before such Business Combination, do not, as a result of such Business Combination, own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting securities of the entity resulting from such Business Combination in substantially the same proportion as their ownership of the combined voting power of the voting securities of the Company outstanding immediately before such Business Combination or (ii) immediately following the Business Combination, the individuals who comprised the Board immediately prior thereto do not constitute at least a majority of the board of directors of the entity resulting from such Business Combination (or, if the entity resulting from such Business Combination is then a subsidiary, the ultimate parent thereof); |
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(d) |
The sale or other disposition of all or substantially all of the assets of the Company; or |
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(e) |
The consummation of a complete liquidation or dissolution of the Company. |
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities is acquired by (i) a trustee or other fiduciary holding securities under one or more employee benefit plans maintained by the Company or any of its subsidiaries or (ii) any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the stockholders of the Company in the same proportion as their ownership of shares in the Company immediately prior to such acquisition.
Notwithstanding the foregoing, a Change in Control shall not occur unless such transaction constitutes a change in the ownership of the Company, a change in effective control of the Company, or a change in the ownership of a substantial portion of the Company’s assets under Section 409A of the Code.
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5. |
Non-Competition, Non-Solicitation, Intellectual Property and Confidentiality . Executive hereby acknowledges that, during and solely as a result of his employment by the Company, Executive will receive special training, education and information with respect to the operation of the businesses of the Company, and/or its affiliates, and other related matters, and access to confidential information and business and professional contacts. In consideration of Executive’s employment and in consideration of the special and unique opportunities afforded by the Company to Executive as a result of Executive’s employment, Executive hereby agrees to abide by the terms of the non-competition, non-solicitation, intellectual property and confidentiality provisions below. Executive agrees and acknowledges that his employment is full, adequate and sufficient consideration for the restrictions and obligations set forth in those provisions. |
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(a) |
directly or indirectly, own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing or control of, or be connected as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise with, or use or permit Executive’s name to be used in connection with any Competing Business (defined below) within any state in which the Company, and/or its affiliates, currently engage in any Substantial Business Activity (defined below) or any state in which the Company, and/or its affiliates, engaged in any Substantial Business Activity during the thirty-six month period preceding the date Executive’s employment terminates; provided, however, that notwithstanding the foregoing, this provision shall not be construed to prohibit the passive ownership by Executive of not more than five percent (5%) of the capital stock of any corporation which is engaged in any Competing Business having a class of securities registered pursuant to the Exchange Act; provided, further, that notwithstanding the foregoing, the Company recognizes that Executive currently has an ownership position in two multifamily rental properties; provided, further, that Executive may invest in additional commercial real estate properties but only after giving the Company the right to make the investment on the same terms and conditions as Executive; or |
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(b) |
solicit or divert to any Competing Business any individual or entity which is an active or prospective customer of the Company, and/or its affiliates, or was such an active or prospective customer at any time during the preceding twelve (12) months; or |
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(c) |
employ, attempt to employ, solicit or assist any Competing Business in employing any employee of the Company, and/or its affiliates, whether as an employee or consultant. |
The phrase “Competing Business” shall mean: any entity or enterprise actively engaged in any business or businesses the Company and/or its affiliates are actively engaged in (or are expected to be actively engaged in within twelve (12) months) at the time of termination. The phrase “Substantial Business Activity” shall mean that the Company, and/or its affiliates (i) has a business office , (ii) owns, services or manages real estate, or (iii) has a recorded and unsatisfied mortgage or other lien upon real estate or personal property.
In the event that the provisions of this Section 5.1 should ever be adjudicated to exceed the time, geographic, product or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, product or other limitations permitted by applicable law.
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the request of the Company, Executive shall execute and deliver to the Company, any and all instruments, documents and papers, give evidence and do any and all other acts that, in the opinion of counsel for the Company, are or may be necessary or desirable to document such assignment, transfer and conveyance or to enable the Company to file and prosecute applications for and to acquire, maintain and enforce any and all patents, trademark registrations or copyrights under United States or foreign law with respect to any such inventions, discoveries, improvements, modifications or other intellectual property rights or to obtain any extension, validation , reissue, continuance or renewal of any such patent, trademark or copyright. The Company shall be responsible for the preparation of any such instruments, documents and papers and for the prosecution of any such proceedings and shall reimburse Executive f or all reasonable expenses incurred by Executive in compliance with the provisions of this Section 5.2 . |
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5.3 |
Confidentiality . |
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(a) |
Executive acknowledges that, by reason of Executive’s employment by the Company, Executive will have access to confidential information of the Company, and/or its affiliates, including, without limitation, information and knowledge pertaining to products, inventions, discoveries, improvements, innovations, designs, ideas, trade secrets, proprietary information, manufacturing, packaging, advertising, distribution and sales methods, sales and profit figures, customer and client lists and relationships between the Company, and/or its affiliates, and dealers, distributors, sales representatives, wholesalers, customers, clients, suppliers and others who have business dealings with them (“ Confidential Information ”). Executive acknowledges that such Confidential Information is a valuable and unique asset of the Company, and/or its affiliates, and covenants that, both during and after the Employment Term, Executive will not disclose any Confidential Information to any person (except as Executive’s duties as an officer of the Company may require or as required by law or in a judicial or administrative proceeding) without the prior written authorization of the Board. The obligation of confidentiality imposed by this Section 5.3 shall not apply to information that becomes generally known to the public through no act of Executive in breach of this Agreement. The Company and Executive acknowledge that, notwithstanding anything to the contrary contained in this Agreement, pursuant to 18 USC § 1833(b), an individual may not be held liable under any criminal or civil federal or state trade secret law for disclosure of a trade secret: (x) made in confidence to a government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law or (y) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. The Company and Executive further acknowledge that an individual suing an employer for retaliation based on the reporting of a suspected violation of law may disclose a trade secret to his or her attorney and use the trade secret information in the court proceeding, so long as any document containing the trade secret is filed under seal and the individual does not disclose the trade secret except pursuant to court order. |
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(b) |
Executive acknowledges that all documents, files and other materials received from the Company, and/or its affiliates, during the Employment Term (with the exception of documents relating to Executive’s compensation or benefits to which Executive is entitled following the Employment Term) are for use of Executive solely in discharging Executive’s duties and responsibilities hereunder and that Executive has no claim or right to the continued use or possession of such documents, files or other materials following termination of Executive’s employment by the Company. Executive agrees that, upon termination of employment, Executive will not retain any such documents, files or other materials and will promptly return to the Company any documents, files or other materials in Executive’s possession or custody. |
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5.5 |
Cooperation . The parties agree that certain matters in which Executive will be involved during the Employment Term may necessitate Executive’s cooperation in the future. Accordingly, following the termination of Executive’s employment for any reason, to the extent reasonably requested by the Board and subject to Executive’s professional commitments, Executive shall cooperate with the Company in connection with matters arising out of Executive’s service to the Company; provided that, the Company shall make reasonable efforts to minimize disruption of Executive’s other activities. The Company shall pay Executive a reasonable per diem and reimburse Executive for reasonable expenses incurred in connection with such cooperation. |
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5.6 |
Equitable Relief. Executive acknowledges that the restrictions contained in Sections 5.1 , 5.2 , 5.3 , 5.4 and 5.5 hereof are, in view of the nature of the businesses of the Company and/or its affiliates, reasonable and necessary to protect the legitimate interests of the Company and/or its affiliates, and that any violation of any provision of those Sections will result in irreparable injury to the Company, and/or its affiliates. Executive also acknowledges that in the event of any such violation, the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, and to an equitable accounting of all earnings, profits and other benefits arising from any such violation, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled. Executive agrees that in the event of any such violation, an action may be commenced for any such preliminary and permanent injunctive relief and other equitable relief in any federal or state court of competent jurisdiction sitting in Pennsylvania or in any other court of competent jurisdiction. Executive hereby waives, to the fullest extent permitted by law, any objection that Executive may now or hereafter have to such jurisdiction or to the laying of the venue of any such suit, action or proceeding brought in such a court and any claim that such suit, action or proceeding has been brought in an inconvenient forum. Executive agrees that effective service of process may be made upon Executive by mail under the notice provisions contained in Section 10 hereof. |
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6. |
Non-Exclusivity of Rights . Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in or rights under any benefit, bonus, incentive or other plan or program provided by the Company and for which Executive may qualify; provided, however, that if Executive becomes entitled to and receives the payments provided for in Section 2.1(c) of this Agreement, Executive hereby waives Executive’s right to receive payments under any severance plan or similar program applicable to all employees of the Company. |
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7. |
Survivorship . The respective rights and obligations of the parties under this Agreement shall survive any termination of Executive’s employment to the extent necessary to the intended preservation of such rights and obligations. |
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8. |
Mitigation . Executive shall not be required to mitigate the amount of any payment or benefit provided for in this Agreement by seeking other employment or otherwise and there shall be no offset against amounts due Executive under this Agreement on account of any remuneration attributable to any subsequent employment that Executive may obtain. |
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accordance with the National Rules for the Resolution of Employment Disputes then in effec t of the American Arbitration Association, before a panel of three arbitrators, two of whom shall be selected by the Company and Executive, respectively, and the third of whom shall be selected by the other two arbitrators. Any award entered by the arbitra tors shall be final, binding and nonappealable and judgment may be entered thereon by either party in accordance with applicable law in any court of competent jurisdiction. This arbitration provision shall be specifically enforceable. The arbitrators shall have no authority to modify any provision of this Agreement or to award a remedy for a dispute involving this Agreement other than a benefit specifically provided under or by virtue of the Agreement. Each party shall be responsible for its own expenses re lating to the conduct of the arbitration (including reasonable attorneys’ fees and expenses) and shall share the fees of the American Arbitration Association. |
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10. |
Notices . All notices and other communications required or permitted under this Agreement or necessary or convenient in connection herewith shall be in writing and shall be deemed to have been given when hand delivered or mailed by registered or certified mail, as follows (provided that notice of change of address shall be deemed given only when received): |
If to the Company, to:
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Independence Realty Trust, Inc. |
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Two Logan Square |
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100 North 18 th Street, 23 rd floor |
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Philadelphia, Pennsylvania 19103 |
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Attention: General Counsel |
If to Executive, to:
Scott F. Schaeffer at his most recent home address set forth in the records of the Company.
or to such other names or addresses as the Company or Executive, as the case may be, shall designate by notice to each other person entitled to receive notices in the manner specified in this Section.
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11. |
Contents of Agreement; Amendment and Assignment . |
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11.1 |
This Agreement sets forth the entire understanding between the parties hereto with respect to the subject matter hereof and cannot be changed, modified, extended or terminated except upon written amendment approved by the Board and executed on its behalf by a duly authorized officer and by Executive. This Agreement supersedes the provisions of any employment or other agreement between Executive and the Company that relate to any matter that is also the subject of this Agreement and such provisions in such other agreements will be null and void. |
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11.2 |
All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Executive under this Agreement are of a personal nature and shall not be assignable or delegable in whole or in part by Executive. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, within fifteen (15) days of such succession, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform if no such succession had taken place. |
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13. |
Remedies Cumulative; No Waiver . No remedy conferred upon a party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission by a party in exercising any right, remedy or power under this Agreement or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by such party from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. |
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14. |
Beneficiaries/References . Executive shall be entitled, to the extent permitted under any applicable law, to select and change a beneficiary or beneficiaries to receive any compensation or benefit payable under this Agreement following Executive’s death by giving the Company written notice thereof. In the event of Executive’s death or a judicial determination of Executive’s incompetence, reference in this Agreement to Executive shall be deemed, where appropriate, to refer to Executive’s beneficiary, estate or other legal representative. |
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15. |
Miscellaneous . All section headings used in this Agreement are for convenience only. This Agreement may be executed in counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. |
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16. |
Withholding . All payments under this Agreement shall be made subject to applicable tax withholding, and the Company shall withhold from any payments under this Agreement all federal, state and local taxes as the Company is required to withhold pursuant to any law or governmental rule or regulation. Except as specifically provided otherwise in this Agreement, Executive shall bear all expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment received under this Agreement. |
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17. |
Governing Law . This Agreement shall be governed by and interpreted under the laws of the Commonwealth of Pennsylvania without giving effect to any conflict of laws provisions. |
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18. |
Section 409A . |
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18.1 |
Interpretation . Notwithstanding the other provisions hereof, this Agreement is intended to comply with the requirements of Section 409A of the Code, to the extent applicable, and this Agreement shall be interpreted to avoid any penalty sanctions under Section 409A of the Code. Accordingly, all provisions herein, or incorporated by reference, shall be construed and interpreted to comply with Section 409A and, if necessary, any such provision shall be deemed amended to comply with Section 409A of the Code and regulations thereunder. If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under Section 409A of the Code, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed. For purposes of Section 409A of the Code, each payment made under this Agreement shall be treated as a separate payment. In no event may Executive, directly or indirectly, designate the calendar year of payment. Executive will be deemed to have a termination of employment for purposes of determining the timing of any payments or benefits hereunder that are classified as deferred compensation only upon a “separation from service” within the meaning of Section 409A of the Code. |
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18.3 |
Reimbursements . All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the taxable year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit. |
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned, intending to be legall y bound, have executed this Agreement as of the date first above written.
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INDEPENDENCE REALTY TRUST, INC. |
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By: |
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/s/ Farrell Ender |
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Name: |
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Farrell Ender |
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Title: |
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President |
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EXECUTIVE. |
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By: |
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/s/ Scott F. Schaeffer |
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Name: |
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Scott F. Schaeffer |
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Release
You, for yourself, your spouse and your agents, successors, heirs, executors, administrators and assigns, hereby irrevocably and unconditionally forever release and discharge Independence Realty Trust, Inc. (the “ Corporation ”), its parents, divisions, subsidiaries and affiliates and its and their current and former owners, directors, officers, stockholders, insurers, benefit plans, representatives, agents and employees, and each of their predecessors, successors, and assigns (collectively, the “ Releasees ”), from any and all actual or potential claims or liabilities of any kind or nature, including, but not limited to, any claims arising out of or related to your employment and separation from employment with the Corporation and any services that you provided to the Corporation; any claims for salary, commissions, bonuses, other severance pay, vacation pay, allowances or other compensation, or for any benefits under the Employee Retirement Income Security Act of 1974 (“ERISA”) (except for vested ERISA benefits); any claims for discrimination, harassment or retaliation of any kind or based upon any legally protected classification or activity; any claims under Title VII of the Civil Rights Acts of 1964, the Civil Rights Act of 1866 and 1964, as amended, 42 U.S.C. § 1981, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Americans with Disabilities Act, 42 U.S.C. §1981, 42 U.S.C. § 1983, the Family Medical Leave Act and any similar state law, the Fair Credit Reporting Act and any similar state law, the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. , the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, et seq. , the Equal Pay Act and any similar state law, any claims for discrimination in violation of the Pennsylvania Human Relations Act, and any claims for wrongful discharge, discrimination, retaliation, or other violation of the Pennsylvania Whistleblower Law, as well as any amendments to any such laws; any claims for any violation of any federal or state constitutions or executive orders; any claims for wrongful or constructive discharge, violation of public policy, breach of contract or promise (oral, written, express or implied), personal injury not covered by workers’ compensation benefits, misrepresentation, negligence, fraud, estoppel, defamation, infliction of emotional distress, contribution and any claims under any other federal, state or local law, including those not specifically listed in this Release, that you, your heirs, executors, administrators, successors, and assigns now have, ever had or may hereafter have, whether known or unknown, suspected or unsuspected, up to and including the date of your execution of this Release.
For the purpose of implementing a full and complete release and discharge of the Releasees as set forth above, you acknowledge that this Release is intended to include in its effect, without limitation, all claims known or unknown that you have or may have against the Releasees which arise out of or relate to your employment, including but not limited to compensation, performance or termination of employment with the Corporation, except for, and notwithstanding anything in this Release to the contrary, claims which cannot be released solely by private agreement. This Release also excludes any claims relating to any right you may have to payments pursuant to Section 2.1(c) of the Employment Agreement, entered into as of December __, 2016, by and between the Corporation and you, any claim for workers’ compensation benefits and any rights you may have to indemnification or directors’ and officers’ liability insurance under the Corporation’s bylaws or certificate of incorporation, any indemnification agreement to which you are a party or beneficiary or applicable law, as a result of having served as an officer, director or employee of the Corporation or any of its affiliates. You further acknowledge and agree that you have received all leave, compensation and reinstatement benefits to which you were entitled through the date of your execution of this Release, and that you were not subjected to any improper treatment, conduct or actions as a result of a request for leave, compensation or reinstatement.
You affirm, by signing this Release, that you have not suffered any unreported injury or illness arising from your employment, and that you have not filed, with any federal, state, or local court or agency, any actions or charges against the Releasees relating to or arising out of your employment with or separation from the Corporation. You further agree that while this Release does not preclude you from filing a charge with the National Labor Relations Board (“NLRB”), the Equal Employment Opportunity Commission (“EEOC”) or a similar state or local agency, or from participating in any investigation or proceeding with them, you do waive your right to personally recover monies or reinstatement as a result of any complaint or charge filed against the Corporation with the NLRB, EEOC or any federal, state or local court or agency, except as to any action to enforce or challenge this Release, to recover any vested benefits under ERISA, or to recover workers’ compensation benefits. Nothing in this Release prohibits or restricts you (or your attorney) from initiating communications directly with, responding to an inquiry from, or
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providing testimony before the Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”), any other self-regulatory org anization or any other federal or state regulatory authority regarding this Release or its underlying facts or circumstances or a possible securities law violation.
You acknowledge:
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(a) |
That you were provided [ twenty-one (21) / forty-five (45) ] full days during which to consider whether to sign this Release. If you have signed this Release prior to the expiration of the [ 21-day / 45-day ] period, you have voluntarily elected to forego the remainder of that period. |
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(b) |
That you have carefully read and fully understand all of the terms of this Release [ , including its Attachment A ] . |
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(c) |
That you understand that by signing this Release, you are waiving your rights under the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act, 29 U.S.C. § 621, et seq., and that you are not waiving any rights arising after the date that this Release is signed. |
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(d) |
That you have been given an opportunity to consult with anyone you choose, including an attorney, about this Release. |
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(e) |
That you understand fully the terms and effect of this Release and know of no claim that has not been released by this Release. And, you further acknowledge that you are not aware of, or that you have fully disclosed to the Corporation, any matters for which you are responsible or which has come to your attention as an employee of the Corporation that might give rise to, evidence, or support any claim of illegal conduct, regulatory violation, unlawful discrimination, or other cause of action against the Corporation. |
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(f) |
That these terms are final and binding on you. |
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(g) |
That you have signed this Release voluntarily, and not in reliance on any representations or statements made to you by any employee or officer of the Corporation or any of its subsidiaries. |
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(h) |
That you have seven (7) days following your execution of this Release to revoke it in writing, and that this Release is not effective or enforceable until after this seven (7) day period has expired without revocation. If you wish to revoke this Release after signing it, you must provide written notice of your decision to revoke this Release to the Corporation, to the attention of the General Counsel, Two Logan Square, 100 North 18th Street, 23rd floor, Philadelphia, Pennsylvania 19103, by no later than 11:59 p.m. on the seventh calendar day after the date on which you have signed this Release. |
PLEASE READ CAREFULLY. THIS RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
ACKNOWLEDGED AND AGREED
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Scott F. Schaeffer |
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17
Exhibit 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “ Agreement ”) is entered into as of December 20, 2016, by and between Independence Realty Trust, Inc., a Maryland corporation (the “ Company ”), and James J. Sebra (“ Executive ”).
WHEREAS , the Company, Independence Realty Operating Partnership, LP, a Delaware limited partnership (“ IROP ”), RAIT Financial Trust, a Maryland real estate investment trust (“ RAIT ”), RAIT TRS, LLC, a Delaware limited liability company (“ Interest Seller ”), Jupiter Communities, LLC, a Delaware limited liability company (“ Asset Seller ”), and the entities set forth on the signature pages of the Purchase Agreement have entered into that certain Securities and Asset Purchase Agreement, dated as of September 27, 2016 (the “ Purchase Agreement ”);
WHEREAS , pursuant to the Purchase Agreement, at the Second Closing (as defined in the Purchase Agreement), and on the terms and subject to the conditions set forth in the Purchase Agreement, Interest Seller shall sell, convey, assign, transfer and deliver to IROP, and IROP shall purchase, acquire and accept from Interest Seller, all of Interest Seller’s right, title and interest in and to the Membership Interests (as defined in the Purchase Agreement), and Asset Seller shall sell, convey, assign, transfer and deliver to IROP, and IROP shall purchase, acquire and accept from Asset Seller, all of Asset Seller’s right, title and interest in, to and under the Transferred Assets (as defined in the Purchase Agreement);
WHEREAS , Executive is currently employed by RAIT and serves as the Chief Financial Officer of the Company; and
WHEREAS , in connection with and subject to the Second Closing, the Company wishes to employ Executive in the position of Chief Financial Officer of the Company, and Executive wishes to accept such employment, on the terms set forth below, effective as of the Effective Date (as defined below).
NOW , THEREFORE , in consideration of the Recitals, the mutual promises and covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
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1. |
Employment . The Company agrees to employ Executive, and Executive hereby accepts such employment and agrees to perform Executive’s duties and responsibilities, in accordance with the terms, conditions and provisions hereinafter set forth. |
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1.1 |
Employment Term . This Agreement shall become effective from and after the later of (i) March 31, 2017 and (ii) the date on which RAIT files its annual report on Form 10-K for the fiscal year ended December 31, 2016 (the “ Effective Date ”); provided, that, in the event the Second Closing does not occur by the Outside Date (as defined in the Purchase Agreement) or the Purchase Agreement is otherwise terminated, this Agreement shall thereupon become null and void. This Agreement shall continue until the third anniversary of the Effective Date, unless the Agreement is terminated sooner in accordance with Section 2 below; and shall be effective for successive one-year periods in accordance with the terms of this Agreement (subject to termination as aforesaid) unless either party notifies the other party of non-renewal in writing prior to three months before the expiration of the then current term. The period commencing on the Effective Date and ending on the date on which the term of Executive’s employment under this Agreement shall terminate is hereinafter referred to as the “ Employment Term .” |
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1.2 |
Duties and Responsibilities . Executive shall continue to serve as the Chief Financial Officer of the Company during the Employment Term. Executive shall perform all duties and accept all responsibilities incident to such position as may be reasonably assigned to him by the Board of Directors of the Company (the “ Board ”) or the Chief Executive Officer of the Company. |
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1.4 |
Base Salary . For all of the services rendered by Executive hereunder, the Company shall pay Executive a base salary (“ Base Salary ”), which shall be at the annual rate of Three Hundred Ninety Eight Thousand Six Hundred Dollars ($398,600) beginning as of the Effective Date, payable in installments at such times as the Company customarily pays its other senior level executives. Executive’s Base Salary shall be reviewed annually for appropriate increases by the Board pursuant to the Board’s normal performance review policies for senior level executives but shall not be decreased. |
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1.5 |
Bonus . Executive shall be eligible to receive annual bonuses in such amounts as the Board may approve in its sole discretion or under the terms of any annual incentive plan of the Company maintained for other senior level executives. |
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1.6 |
Retirement and Welfare Plans and Perquisites . Executive shall be entitled to participate in all employee retirement and welfare benefit plans and programs or executive perquisites made available to the Company’s senior level executives as a group or to its employees generally, as such retirement and welfare plans or perquisites may be in effect from time to time and subject to the eligibility requirements of the plans and applicable law. For purposes of any such benefit plans and programs or executive perquisites that condition participation or entitlements thereunder on duration of service with the Company, Executive’s service with RAIT shall be treated as service to the Company. Nothing in this Agreement shall prevent the Company from amending or terminating any retirement, welfare or other employee benefit plans or programs from time to time as the Company deems appropriate. |
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1.7 |
Reimbursement of Expenses; Vacation . Executive shall be provided with reimbursement of reasonable expenses related to Executive’s employment by the Company on a basis no less favorable than that which may be authorized from time to time for senior level executives as a group, and shall be entitled to vacation and sick leave in accordance with the Company’s vacation, holiday and other pay for time not worked policies. For purposes of any such vacation, holiday and sick leave policies that condition participation or entitlements thereunder on duration of service with the Company, Executive’s service with RAIT shall be treated as service to the Company. |
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1.8 |
Incentive Compensation . Executive shall be entitled to participate in any short-term and long-term incentive programs (including without limitation any equity compensation plans) established by the Company for its senior level executives generally. |
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1.9 |
Clawback/Recoupment . Notwithstanding any other provision in this Agreement to the contrary, any compensation paid to Executive pursuant to this Agreement or any other agreement or arrangement with the Company shall be subject to mandatory repayment by Executive to the Company if and to the extent any such compensation paid to Executive is, or in the future becomes, subject to (i) any “clawback” or recoupment policy that is applicable to all senior executives of the Company and is limited to the recovery of incentive-based compensation which, as a result of an accounting restatement by the Company, is in excess of the compensation which should have been received by Executive, or (ii) any law, rule, requirement or regulation which imposes mandatory recoupment, under circumstances set forth in such law, rule, requirement or regulation. |
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2. |
Termination . The Employment Term and Executive’s employment hereunder shall terminate upon the occurrence of any of the following events: |
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2.1 |
Termination Without Cause; Resignation for Good Reason; Non-Renewal by the Company . |
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(a) |
The Company may terminate Executive’s employment at any time without Cause (as defined in Section 4 ) upon not less than sixty (60) days’ prior written notice to Executive. In addition, Executive may initiate a termination of employment by resigning under this Section 2.1 for Good Reason (as defined in Section 4 ). Executive shall give the Company not less than sixty (60) days’ prior written notice of such resignation. In addition, the Company may initiate a termination of employment by sending a notice of non-renewal of this Agreement to Executive, as described in Section 1.1 . |
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(b) |
Upon any termination or resignation described in Section 2.1(a) above, Executive shall be entitled to receive only the amount due to Executive under the Company’s then current severance pay plan for employees, if any. No other payments or benefits shall be due under this Agreement to Executive, but Executive shall be entitled to receive (i) Executive’s Base Salary due through his date of termination, (ii) any earned but unpaid annual bonus for the year preceding the fiscal year of termination, (iii) any amounts owing to Executive for reimbursement of expenses properly incurred by Executive prior to his date of termination and which are reimbursable in accordance with Section 1.7 ; and (iv) any benefits accrued and earned in accordance with the terms and conditions of any applicable benefit plans and programs of the Company in which Executive participated prior to his termination of employment (collectively, the “ Accrued Benefits ”). |
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(c) |
Notwithstanding the provisions of Section 2.1(b) , in the event that Executive executes and does not revoke the release described in Section 2.8 , Executive shall be entitled to receive, in lieu of any payments or benefits due to him under the Company’s then current severance pay plan for employees (if any), the following: |
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(i) |
Executive shall receive a lump sum cash payment equal to two times the sum of (x) Executive’s Base Salary, as in effect immediately prior to his termination of employment and (y) the average annual cash bonus earned by Executive for the three year period immediately prior to his termination of employment, or the average annual cash bonus earned by Executive for the actual number of completed fiscal years immediately prior to his termination of employment if less than three; provided, however, that if Executive has been employed by the Company for less than one completed fiscal year prior to his termination of employment, then the amount used for clause (y) shall be Executive’s target annual cash bonus for the fiscal year of his termination of employment. One half of the amount described in the preceding sentence shall be consideration for Executive’s entering into the restrictive covenants described in Section 5 below. Unless the payment is required to be delayed pursuant to Section 18.2 below, the payment shall be made within fifteen (15) days of the Release Effective Date (as defined below). |
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annual bonuses are paid to similarly situated executives, but in no event later than two-and-a-half months following the end of the calendar year in w hich Executive’s termination date occurs. |
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(iii) |
For a period of eighteen (18) months following Executive’s date of termination, provided Executive and his eligible dependents timely and properly elect to continue health care coverage under COBRA, Executive shall continue to receive the medical coverage in effect at the date of his termination of employment (or generally comparable coverage) for himself and, where applicable, his spouse and dependents, at the same premium rates as may be charged from time to time for employees of the Company generally, as if Executive had continued in employment with the Company during such period. |
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(iv) |
The treatment of any outstanding equity awards held by Executive shall be determined in accordance with the terms of the applicable incentive plan and the applicable award agreements; provided, however, that any such equity awards that are subject solely to time-vesting conditions shall become fully vested as of the date of Executive’s termination of employment. |
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2.2 |
Voluntary Termination . Executive may voluntarily terminate his employment for any reason upon sixty (60) days’ prior written notice or by sending a notice of non-renewal of this Agreement to the Company, as described in Section 1.1 . In any such event, after the effective date of such termination, except as provided in Section 2.1 with respect to a resignation for Good Reason, no further payments shall be due under this Agreement, except that Executive shall be entitled to receive the Accrued Benefits. |
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2.3 |
Disability . The Company may terminate Executive’s employment, to the extent permitted by applicable law, if Executive (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company (“ Disability ”). If the Company terminates Executive’s employment for Disability, Executive shall be entitled to receive the following: |
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(a) |
Executive shall receive a lump sum cash payment equal to a pro rata portion of Executive’s target annual cash bonus for the fiscal year of his termination (or, in the absence of a target bonus opportunity for the fiscal year, a pro rata portion of the average annual cash bonus earned by Executive for the three year period immediately prior to his termination of employment or the average annual cash bonus earned by Executive for the actual number of completed fiscal years immediately prior to his termination of employment if less than three) (the “ Target Cash Bonus ”). The pro-rated Target Cash Bonus shall be determined by multiplying the Target Cash Bonus by a fraction, the numerator of which is the number of days during which Executive was employed by the Company, prior to his termination of employment, in the Company’s fiscal year in which his termination of employment occurs and the denominator of which is three hundred sixty-five (365). Except as otherwise required to comply with the requirements of Section 18 below, payment shall be made on the sixtieth (60th) day following Executive’s last day of employment with the Company on account of Disability. |
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(b) |
The Company shall pay to Executive the Accrued Benefits. |
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2.4 |
Death . If Executive dies while employed by the Company, the Company shall pay to Executive’s executor, legal representative, administrator or designated beneficiary, as applicable, (i) the |
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Accrued Benefits and (ii) a pro-rated Target Cash Bonu s (determined according to Section 2.3(a) above) for the Company’s fiscal year in which Executive’s death occurs and, except as otherwise required to comply with the requirements of Section 18 below, shall be paid in a lump sum cash payment on the sixtieth (60th) day following the date of Executive’s death. Otherwise, the Company shall have no further liability or obligation under this Agreement to Executive’s executors, legal representatives, administrators, heirs or assigns or any other person claiming un der or through Executive. |
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2.5 |
Cause . The Company may terminate Executive’s employment at any time for Cause upon written notice to Executive, in which event all payments under this Agreement shall cease, except for Base Salary to the extent already accrued. Executive shall be entitled to receive the Accrued Benefits. Whether a termination is for Cause, as such term is defined in Section 4.1 , shall be determined by the Board in its sole discretion. |
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2.6 |
Termination Prior to Effective Date . If, following the Second Closing and prior to the Effective Date, the Company or any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, notifies Executive that it does not wish for Executive to commence employment with the Company or such successor, then Executive shall be entitled to receive, subject to Executive’s execution and non-revocation of the release described in Section 2.8 , the following: |
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(a) |
Executive shall receive a lump sum cash payment equal to two times the sum of (x) Executive’s Base Salary and (y) Executive’s target annual cash bonus for fiscal year 2017; provided, however, that if a target bonus opportunity has not been established for Executive for fiscal year 2017, then the Compensation Committee of the Board (the “ Committee ”) shall determine, in its sole discretion, the amount to be used for clause (y). Unless the foregoing payment is required to be delayed pursuant to Section 18.2 below, it shall be made within fifteen (15) days of the Release Effective Date. |
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(b) |
Executive shall receive a lump sum cash payment equal to a pro rata portion of the annual cash bonus, if any, that Executive would have earned for fiscal year 2017 had he commenced employment with the Company (or its successor) based on achievement of the applicable performance goals for such year (the “ 2017 Bonus ”); provided, however, that if a target bonus opportunity or performance goals have not been established for Executive for fiscal year 2017, then the Committee shall determine, in its sole discretion, Executive’s target bonus opportunity and the performance goals for purposes of the 2017 Bonus. The pro-rated 2017 Bonus shall be determined by multiplying the 2017 Bonus by a fraction, the numerator of which is the number of days during the period commencing on January 1, 2017 and ending on the date on which the Company (or its successor) notifies Executive that it does not wish for Executive to commence employment with the Company (or its successor) and the denominator of which is three hundred sixty-five (365). Unless the foregoing payment is required to be delayed pursuant to Section 18.2 below, it shall be made on the date that annual bonuses are paid to similarly situated executives, but in no event later than March 31, 2018. |
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(c) |
The treatment of any outstanding equity awards held by Executive shall be determined in accordance with the terms of the applicable incentive plan and the applicable award agreements; provided, however, that any such equity awards that are subject solely to time-vesting conditions shall become fully vested as of the date of Executive’s termination of employment. |
Notwithstanding the foregoing, Executive shall not be entitled to receive any payments or benefits under this Section 2.6 if, at the time the Company or its successor notifies Executive that it does not wish for Executive to commence employment with the Company or such successor, the Company or its successor would have had grounds to
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termin ate Executive’s employment for Cause had Executive been an employee of the Company or such successor at such time.
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2.7 |
Notice of Termination . Any termination of Executive’s employment shall be communicated by a written notice of termination to the other party hereto given in accordance with Section 10 . The notice of termination shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) briefly summarize the facts and circumstances deemed to provide a basis for a termination of employment and the applicable provision hereof, and (iii) specify the termination date in accordance with the requirements of this Agreement. |
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2.8 |
Release . Executive agrees that, as a condition to receiving the severance payments and benefits set forth in Section 2.1 or Section 2.6 , as applicable, Executive will execute a release of claims substantially in the form of the release attached hereto as Exhibit A . Within two business days of Executive’s date of termination, the Company shall deliver to Executive the release for Executive to execute. Executive will forfeit all rights to the severance payments and benefits set forth in Section 2.1 or Section 2.6 , as applicable, unless, within fifty-five (55) days of delivery of the release by the Company to Executive, Executive executes and delivers the release to the Company and such release has become irrevocable by virtue of the expiration of the revocation period without the release having been revoked (the first such date, the “ Release Effective Date ”). The Company’s obligation to pay the severance payments and benefits set forth in Section 2.1 or Section 2.6 , as applicable, is subject to the occurrence of the Release Effective Date, and if the Release Effective Date does not occur, then the Company shall have no obligation to pay the severance payments and benefits set forth in Section 2.1 or Section 2.6 , as applicable. To the extent that the Release Effective Date could occur in one of two (2) taxable years of Executive depending on when Executive executes and delivers the release, any deferred compensation payment (which is subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”)) that is conditioned on execution of the release shall be made no earlier than the first business day of the later of such taxable years. |
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2.9 |
Resignation of All Other Positions . Upon termination of Executive’s employment for any reason, Executive shall be deemed to have resigned from all positions that Executive holds as an officer of the Company or any affiliate of the Company, unless otherwise mutually agreed with the Board. |
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3. |
Change in Control. |
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3.1 |
Effect of Change in Control . If a Change in Control occurs and Executive’s employment terminates under the circumstances described below, the provisions of Section 2.1 shall apply. |
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3.2 |
Termination Without Cause or Resignation for Good Reason Upon or After a Change in Control . Upon or within eighteen (18) months after a Change in Control, the Company (by action of the Board) may terminate Executive’s employment at any time without Cause or Executive may initiate a termination of employment by resigning under this Section 3 for Good Reason (as defined in Section 4) (in either case the Employment Term shall be deemed to have ended) upon not less than sixty (60) days’ prior written notice to Executive (or in the case of resignation for Good Reason, Executive shall give the Company not less than sixty (60) days’ prior written notice of such resignation). In any such event, the provisions of Section 2.1(b) or (c), as applicable, shall then apply. |
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3.3 |
Code Section 280G. |
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or paid to or other benefit receivable or received by Executive which is deemed to constitute a Parachute Payment (whether or not under an existing plan, arrangement or other agreement), and would result in the imposition on Executive of an excise tax under Section 4999 of the Code (all such a mounts and benefits being hereinafter called “Total Payments”), shall be reduced to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code but only if, by reason of such reduction, the net aft er-tax benefit received by Executive shall exceed the net after-tax benefit received by Executive if no such reduction was made. For purposes of this Section 3.3 , “net after-tax benefit” shall mean (i) the total of all payments and the value of all benefit s which Executive receives or is then entitled to receive from the Company that would constitute Parachute Payments, less (ii) the amount of all federal, state and local income taxes payable with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to Executive (based on the rate in effect for such year as set forth in the Code as in effect at the time of the first payment of the foregoing) and the amount of applicable employment taxe s, less (iii) the amount of excise taxes imposed with respect to the payments and benefits described in (i) above by Section 4999 of the Code. For purposes of this Section 3.3 , “Parachute Payment” shall mean a “parachute payment” as defined in Section 280G of the Code |
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(b) |
The foregoing determination shall be made by tax counsel appointed by the Company (the “ Tax Counsel ”). The Tax Counsel shall submit its determination and detailed supporting calculations to both Executive and the Company within 15 days after receipt of a notice from either the Company or Executive that Executive may receive payments which may be Parachute Payments. If the Tax Counsel determines that such reduction is required by this Section 3.3 , the Total Payments shall be reduced to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code, and the Company shall pay such reduced amount to Executive. The manner in which the Total Payments are reduced shall be mutually agreed to by the Company and Executive and approved by Tax Counsel; provided, however, that if the Company and Executive do not agree within 15 days of the receipt of the Tax Counsel’s determination, the reduction shall be accomplished by, first, reducing any lump sum cash payments included in the Total Payments and, if further reductions are necessary, by such other reductions as shall be recommended by Tax Counsel. Executive and the Company shall each provide the Tax Counsel access to and copies of any books, records, and documents in the possession of Executive or the Company, as the case may be, reasonably requested by the Tax Counsel, and otherwise cooperate with the Tax Counsel in connection with the preparation and issuance of the determinations and calculations contemplated by this Section 3.3 . The fees and expenses of the Tax Counsel for its services in connection with the determinations and calculations contemplated by this Section 3.3 shall be borne by the Company. |
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4. |
Definitions. |
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4.1 |
“ Cause ” shall mean any of the following grounds for termination of Executive’s employment: |
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(a) |
Executive’s conviction of, or plea of guilty or nolo contendere to, a felony, any crime of moral turpitude or any crime involving the Company; |
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(b) |
Executive’s engagement in fraud, misappropriation or embezzlement; |
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(c) |
Executive’s material breach of any published code of conduct or code of ethics of the Company or any affiliate of the Company; |
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(d) |
Executive’s gross negligence or willful misconduct in the performance of his duties; |
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(f) |
Executive’s breach of Section 5 of this Agreement. |
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4.2 |
“ Good Reason ” shall mean, without Executive’s consent: |
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(a) |
a significant adverse alteration in the nature or status of Executive’s authority, duties or responsibilities; |
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(b) |
a reduction in Base Salary of Executive; |
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(c) |
the Company’s material and willful breach of this Agreement; or |
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(d) |
the relocation (without the written consent of Executive) of Executive’s principal place of employment by more than thirty-five (35) miles from its location on the Effective Date. |
Notwithstanding the foregoing, (i) Good Reason shall not be deemed to exist unless notice of termination on account thereof (specifying a termination date of at least 60 days but no more than 90 days from the date of such notice) is given no later than 90 days after the time at which the event or condition purportedly giving rise to Good Reason first occurs or arises and (ii) if there exists (without regard to this clause (ii)) an event or condition that constitutes Good Reason, the Company shall have 30 days from the date notice of such a termination is given to cure such event or condition and, if the Company does so, such event or condition shall not constitute Good Reason hereunder.
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4.3 |
“ Change in Control ” shall mean the occurrence of any of the following: |
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(a) |
The acquisition (other than from the Company), by any person (as such term is defined in Section 13(c) or 14(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of the combined voting power of the Company’s then outstanding voting securities; |
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(b) |
The individuals who, as of the Effective Date, are members of the Board (the “ Incumbent Board ”), cease for any reason during any twelve (12) month period to constitute at least a majority of the Board, unless the election, or nomination for election by the Company’s stockholders, of any new director was approved by a vote of at least a majority of the Incumbent Board, and such new director shall be considered as a member of the Incumbent Board; |
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the entity resulting from such Business Combination (or, if the entity resulting from such Business Combination is then a subsidiary, the ultimate parent thereof); |
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(d) |
The sale or other disposition of all or substantially all of the assets of the Company; or |
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(e) |
The consummation of a complete liquidation or dissolution of the Company. |
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities is acquired by (i) a trustee or other fiduciary holding securities under one or more employee benefit plans maintained by the Company or any of its subsidiaries or (ii) any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the stockholders of the Company in the same proportion as their ownership of shares in the Company immediately prior to such acquisition.
Notwithstanding the foregoing, a Change in Control shall not occur unless such transaction constitutes a change in the ownership of the Company, a change in effective control of the Company, or a change in the ownership of a substantial portion of the Company’s assets under Section 409A of the Code.
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5. |
Non-Competition, Non-Solicitation, Intellectual Property and Confidentiality . Executive hereby acknowledges that, during and solely as a result of his employment by the Company, Executive will receive special training, education and information with respect to the operation of the businesses of the Company, and/or its affiliates, and other related matters, and access to confidential information and business and professional contacts. In consideration of Executive’s employment and in consideration of the special and unique opportunities afforded by the Company to Executive as a result of Executive’s employment, Executive hereby agrees to abide by the terms of the non-competition, non-solicitation, intellectual property and confidentiality provisions below. Executive agrees and acknowledges that his employment is full, adequate and sufficient consideration for the restrictions and obligations set forth in those provisions. |
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5.1 |
Non-Competition and Non-Solicitation . In consideration of the Company’s entering into this Agreement, Executive agrees that during the Employment Term and for a period of twelve (12) months after the termination of the Employment Term, without regard to its termination for any reason which does not constitute a breach of this Agreement by the Company or a resignation for Good Reason by Executive, Executive shall not, unless acting pursuant hereto or with the prior written consent of the Board: |
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(a) |
directly or indirectly, own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing or control of, or be connected as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise with, or use or permit Executive’s name to be used in connection with any Competing Business (defined below) within any state in which the Company, and/or its affiliates, currently engage in any Substantial Business Activity (defined below) or any state in which the Company, and/or its affiliates, engaged in any Substantial Business Activity during the thirty-six month period preceding the date Executive’s employment terminates; provided, however, that notwithstanding the foregoing, this provision shall not be construed to prohibit the passive ownership by Executive of not more than five percent (5%) of the capital stock of any corporation which is engaged in any Competing Business having a class of securities registered pursuant to the Exchange Act; or |
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(b) |
solicit or divert to any Competing Business any individual or entity which is an active or prospective customer of the Company, and/or its affiliates, or was such an active or prospective customer at any time during the preceding twelve (12) months; or |
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(c) |
employ, attempt to employ, solicit or assist any Competing Business in employing any employee of the Company, and/or its affiliates, whether as an employee or consultant. |
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The phrase “Competing Business” shall mean: any entity or enterprise actively engaged in any business or businesses the Company and/or its affiliates are actively eng aged in (or are expected to be actively engaged in within twelve (12) months) at the time of termination. The phrase “Substantial Business Activity” shall mean that the Company, and/or its affiliates (i) has a business office , (ii) owns, services or manag es real estate, or (iii) has a recorded and unsatisfied mortgage or other lien upon real estate or personal property.
In the event that the provisions of this Section 5.1 should ever be adjudicated to exceed the time, geographic, product or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, product or other limitations permitted by applicable law.
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5.2 |
Developments . Executive shall disclose fully, promptly and in writing to the Company any and all inventions, discoveries, improvements, modifications and other intellectual property rights, whether patentable or not, which Executive has conceived, made or developed, solely or jointly with others, while employed by the Company and which (i) relate to the businesses, work or activities of the Company, and/or its affiliates or (ii) result from or are suggested by the carrying out of Executive’s duties hereunder or from or by any information that Executive may receive as an employee of the Company. Executive hereby assigns, transfers and conveys to the Company all of Executive’s right, title and interest in and to any and all such inventions, discoveries, improvements, modifications and other intellectual property rights and agrees to take all such actions as may be requested by the Company at any time and with respect to any such invention, discovery, improvement, modification or other intellectual property rights to confirm or evidence such assignment, transfer and conveyance. Furthermore, at any time and from time to time, upon the request of the Company, Executive shall execute and deliver to the Company, any and all instruments, documents and papers, give evidence and do any and all other acts that, in the opinion of counsel for the Company, are or may be necessary or desirable to document such assignment, transfer and conveyance or to enable the Company to file and prosecute applications for and to acquire, maintain and enforce any and all patents, trademark registrations or copyrights under United States or foreign law with respect to any such inventions, discoveries, improvements, modifications or other intellectual property rights or to obtain any extension, validation, reissue, continuance or renewal of any such patent, trademark or copyright. The Company shall be responsible for the preparation of any such instruments, documents and papers and for the prosecution of any such proceedings and shall reimburse Executive for all reasonable expenses incurred by Executive in compliance with the provisions of this Section 5.2 . |
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5.3 |
Confidentiality. |
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held liable under any criminal or civil federal or state trade secret law for disclosure of a trade secret: (x) made in confidence to a government official, either di rectly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law or (y) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. The Company and E xecutive further acknowledge that an individual suing an employer for retaliation based on the reporting of a suspected violation of law may disclose a trade secret to his or her attorney and use the trade secret information in the court proceeding, so lon g as any document containing the trade secret is filed under seal and the individual does not disclose the trade secret except pursuant to court order. |
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(b) |
Executive acknowledges that all documents, files and other materials received from the Company, and/or its affiliates, during the Employment Term (with the exception of documents relating to Executive’s compensation or benefits to which Executive is entitled following the Employment Term) are for use of Executive solely in discharging Executive’s duties and responsibilities hereunder and that Executive has no claim or right to the continued use or possession of such documents, files or other materials following termination of Executive’s employment by the Company. Executive agrees that, upon termination of employment, Executive will not retain any such documents, files or other materials and will promptly return to the Company any documents, files or other materials in Executive’s possession or custody. |
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5.4 |
Non-Disparagement . Executive agrees and covenants that Executive will not at any time make, publish or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments or statements concerning the Company or its businesses, or any of its employees, officers, and existing and prospective customers, suppliers, investors and other associated third parties. The Company agrees and covenants that it will not authorize the making, publishing or communicating of, nor will the Board or any executive officers of the Company at any time make, publish or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments or statements concerning Executive. |
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5.5 |
Cooperation . The parties agree that certain matters in which Executive will be involved during the Employment Term may necessitate Executive’s cooperation in the future. Accordingly, following the termination of Executive’s employment for any reason, to the extent reasonably requested by the Board and subject to Executive’s professional commitments, Executive shall cooperate with the Company in connection with matters arising out of Executive’s service to the Company; provided that, the Company shall make reasonable efforts to minimize disruption of Executive’s other activities. The Company shall pay Executive a reasonable per diem and reimburse Executive for reasonable expenses incurred in connection with such cooperation. |
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inconvenient forum. Executive agrees that effective service of process may be made upon Executive by mail under the notice provisions contained in Section 10 hereof. |
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6. |
Non-Exclusivity of Rights . Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in or rights under any benefit, bonus, incentive or other plan or program provided by the Company and for which Executive may qualify; provided, however, that if Executive becomes entitled to and receives the payments provided for in Section 2.1(c) of this Agreement, Executive hereby waives Executive’s right to receive payments under any severance plan or similar program applicable to all employees of the Company. |
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7. |
Survivorship . The respective rights and obligations of the parties under this Agreement shall survive any termination of Executive’s employment to the extent necessary to the intended preservation of such rights and obligations. |
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8. |
Mitigation . Executive shall not be required to mitigate the amount of any payment or benefit provided for in this Agreement by seeking other employment or otherwise and there shall be no offset against amounts due Executive under this Agreement on account of any remuneration attributable to any subsequent employment that Executive may obtain. |
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9. |
Arbitration; Expenses . In the event of any dispute under the provisions of this Agreement, other than a dispute in which the primary relief sought is an equitable remedy such as an injunction, the parties shall be required to have the dispute, controversy or claim settled by arbitration in Philadelphia, Pennsylvania in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association, before a panel of three arbitrators, two of whom shall be selected by the Company and Executive, respectively, and the third of whom shall be selected by the other two arbitrators. Any award entered by the arbitrators shall be final, binding and nonappealable and judgment may be entered thereon by either party in accordance with applicable law in any court of competent jurisdiction. This arbitration provision shall be specifically enforceable. The arbitrators shall have no authority to modify any provision of this Agreement or to award a remedy for a dispute involving this Agreement other than a benefit specifically provided under or by virtue of the Agreement. Each party shall be responsible for its own expenses relating to the conduct of the arbitration (including reasonable attorneys’ fees and expenses) and shall share the fees of the American Arbitration Association. |
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10. |
Notices . All notices and other communications required or permitted under this Agreement or necessary or convenient in connection herewith shall be in writing and shall be deemed to have been given when hand delivered or mailed by registered or certified mail, as follows (provided that notice of change of address shall be deemed given only when received): |
If to the Company, to:
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Independence Realty Trust, Inc. |
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Two Logan Square |
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100 North 18 th Street, 23 rd floor |
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Philadelphia, Pennsylvania 19103 |
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Attention: General Counsel |
If to Executive, to:
James J. Sebra at his most recent home address set forth in the records of the Company.
or to such other names or addresses as the Company or Executive, as the case may be, shall designate by notice to each other person entitled to receive notices in the manner specified in this Section.
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11. |
Contents of Agreement; Amendment and Assignment. |
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11.2 |
All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Executive under this Agreement are of a personal nature and shall not be assignable or delegable in whole or in part by Executive. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, within fifteen (15) days of such succession, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform if no such succession had taken place. |
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12. |
Severability . If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. If any provision is held void, invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances. |
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13. |
Remedies Cumulative; No Waiver . No remedy conferred upon a party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission by a party in exercising any right, remedy or power under this Agreement or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by such party from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. |
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14. |
Beneficiaries/References . Executive shall be entitled, to the extent permitted under any applicable law, to select and change a beneficiary or beneficiaries to receive any compensation or benefit payable under this Agreement following Executive’s death by giving the Company written notice thereof. In the event of Executive’s death or a judicial determination of Executive’s incompetence, reference in this Agreement to Executive shall be deemed, where appropriate, to refer to Executive’s beneficiary, estate or other legal representative. |
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15. |
Miscellaneous . All section headings used in this Agreement are for convenience only. This Agreement may be executed in counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. |
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16. |
Withholding . All payments under this Agreement shall be made subject to applicable tax withholding, and the Company shall withhold from any payments under this Agreement all federal, state and local taxes as the Company is required to withhold pursuant to any law or governmental rule or regulation. Except as specifically provided otherwise in this Agreement, Executive shall bear all expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment received under this Agreement. |
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17. |
Governing Law . This Agreement shall be governed by and interpreted under the laws of the Commonwealth of Pennsylvania without giving effect to any conflict of laws provisions. |
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18. |
Section 409A . |
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18.2 |
Payment Delay . Notwithstanding any provision to the contrary in this Agreement, if on the date of Executive’s termination of employment, Executive is a “specified employee” (as such term is defined in Section 409A(a)(2)(B)(i) of the Code and its corresponding regulations) as determined by the Board (or its delegate) in its sole discretion in accordance with its “specified employee” determination policy, then all cash severance payments payable to Executive under this Agreement that are deemed as deferred compensation subject to the requirements of Section 409A of the Code shall be postponed for a period of six months following Executive’s “separation from service” with the Company (or any successor thereto). The postponed amounts shall be paid to Executive in a lump sum on the date that is six (6) months and one (1) day following Executive’s “separation from service” with the Company (or any successor thereto). If Executive dies during such six-month period and prior to payment of the postponed cash amounts hereunder, the amounts delayed on account of Section 409A of the Code shall be paid to the personal representative of Executive’s estate on the sixtieth (60th) day after Executive’s death. If any of the cash payments payable pursuant to this Agreement are delayed due to the requirements of Section 409A of the Code, there shall be added to such payments interest during the deferral period at an annualized rate of interest equal to the prime rate as reported in the Wall Street Journal (or, if unavailable, a comparable source) at the relevant time. |
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18.3 |
Reimbursements . All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the taxable year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit. |
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHE REOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first above written.
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INDEPENDENCE REALTY TRUST, INC. |
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By: |
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/s/ Farrell Ender |
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Name: |
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Farrell Ender |
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Title: |
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President |
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EXECUTIVE |
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By: |
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/s/ James Sebra |
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Name: |
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James J. Sebra |
15
Release
You, for yourself, your spouse and your agents, successors, heirs, executors, administrators and assigns, hereby irrevocably and unconditionally forever release and discharge Independence Realty Trust, Inc. (the “ Corporation ”), its parents, divisions, subsidiaries and affiliates and its and their current and former owners, directors, officers, stockholders, insurers, benefit plans, representatives, agents and employees, and each of their predecessors, successors, and assigns (collectively, the “ Releasees ”), from any and all actual or potential claims or liabilities of any kind or nature, including, but not limited to, any claims arising out of or related to your employment and separation from employment with the Corporation and any services that you provided to the Corporation; any claims for salary, commissions, bonuses, other severance pay, vacation pay, allowances or other compensation, or for any benefits under the Employee Retirement Income Security Act of 1974 (“ERISA”) (except for vested ERISA benefits); any claims for discrimination, harassment or retaliation of any kind or based upon any legally protected classification or activity; any claims under Title VII of the Civil Rights Acts of 1964, the Civil Rights Act of 1866 and 1964, as amended, 42 U.S.C. § 1981, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Americans with Disabilities Act, 42 U.S.C. §1981, 42 U.S.C. § 1983, the Family Medical Leave Act and any similar state law, the Fair Credit Reporting Act and any similar state law, the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. , the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, et seq. , the Equal Pay Act and any similar state law, any claims for discrimination in violation of the Pennsylvania Human Relations Act, and any claims for wrongful discharge, discrimination, retaliation, or other violation of the Pennsylvania Whistleblower Law, as well as any amendments to any such laws; any claims for any violation of any federal or state constitutions or executive orders; any claims for wrongful or constructive discharge, violation of public policy, breach of contract or promise (oral, written, express or implied), personal injury not covered by workers’ compensation benefits, misrepresentation, negligence, fraud, estoppel, defamation, infliction of emotional distress, contribution and any claims under any other federal, state or local law, including those not specifically listed in this Release, that you, your heirs, executors, administrators, successors, and assigns now have, ever had or may hereafter have, whether known or unknown, suspected or unsuspected, up to and including the date of your execution of this Release.
For the purpose of implementing a full and complete release and discharge of the Releasees as set forth above, you acknowledge that this Release is intended to include in its effect, without limitation, all claims known or unknown that you have or may have against the Releasees which arise out of or relate to your employment, including but not limited to compensation, performance or termination of employment with the Corporation, except for, and notwithstanding anything in this Release to the contrary, claims which cannot be released solely by private agreement. This Release also excludes any claims relating to any right you may have to payments pursuant to Section 2.1(c) or Section 2.6, as applicable, of the Employment Agreement, entered into as of December __, 2016, by and between the Corporation and you, any claim for workers’ compensation benefits and any rights you may have to indemnification or directors’ and officers’ liability insurance under the Corporation’s bylaws or certificate of incorporation, any indemnification agreement to which you are a party or beneficiary or applicable law, as a result of having served as an officer, director or employee of the Corporation or any of its affiliates. You further acknowledge and agree that you have received all leave, compensation and reinstatement benefits to which you were entitled through the date of your execution of this Release, and that you were not subjected to any improper treatment, conduct or actions as a result of a request for leave, compensation or reinstatement.
You affirm, by signing this Release, that you have not suffered any unreported injury or illness arising from your employment, and that you have not filed, with any federal, state, or local court or agency, any actions or charges against the Releasees relating to or arising out of your employment with or separation from the Corporation. You further agree that while this Release does not preclude you from filing a charge with the National Labor Relations Board (“NLRB”), the Equal Employment Opportunity Commission (“EEOC”) or a similar state or local agency, or from participating in any investigation or proceeding with them, you do waive your right to personally recover monies or reinstatement as a result of any complaint or charge filed against the Corporation with the NLRB, EEOC or any federal, state or local court or agency, except as to any action to enforce or challenge this Release, to recover any vested benefits under ERISA, or to recover workers’ compensation benefits. Nothing in this Release prohibits or restricts you (or your attorney) from initiating communications directly with, responding to an inquiry from, or
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providing testimony before the Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”), any other self-regulatory organization or any other federal or state regulatory authority regarding this Release or its underlying facts or circumstances or a possible securities law violation.
You acknowledge:
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(a) |
That you were provided [ twenty-one (21) / forty-five (45) ] full days during which to consider whether to sign this Release. If you have signed this Release prior to the expiration of the [ 21-day / 45-day ] period, you have voluntarily elected to forego the remainder of that period. |
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(b) |
That you have carefully read and fully understand all of the terms of this Release [ , including its Attachment A ] . |
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(c) |
That you understand that by signing this Release, you are waiving your rights under the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act, 29 U.S.C. § 621, et seq., and that you are not waiving any rights arising after the date that this Release is signed. |
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(d) |
That you have been given an opportunity to consult with anyone you choose, including an attorney, about this Release. |
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(e) |
That you understand fully the terms and effect of this Release and know of no claim that has not been released by this Release. And, you further acknowledge that you are not aware of, or that you have fully disclosed to the Corporation, any matters for which you are responsible or which has come to your attention as an employee of the Corporation that might give rise to, evidence, or support any claim of illegal conduct, regulatory violation, unlawful discrimination, or other cause of action against the Corporation. |
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(f) |
That these terms are final and binding on you. |
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(g) |
That you have signed this Release voluntarily, and not in reliance on any representations or statements made to you by any employee or officer of the Corporation or any of its subsidiaries. |
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(h) |
That you have seven (7) days following your execution of this Release to revoke it in writing, and that this Release is not effective or enforceable until after this seven (7) day period has expired without revocation. If you wish to revoke this Release after signing it, you must provide written notice of your decision to revoke this Release to the Corporation, to the attention of the General Counsel, Two Logan Square, 100 North 18th Street, 23rd floor, Philadelphia, Pennsylvania 19103, by no later than 11:59 p.m. on the seventh calendar day after the date on which you have signed this Release. |
PLEASE READ CAREFULLY. THIS RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
ACKNOWLEDGED AND AGREED
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James J. Sebra |
Date |
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17
Exhibit 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “ Agreement ”) is entered into as of December 20, 2016, by and between Independence Realty Trust, Inc., a Maryland corporation (the “ Company ”), and Farrell M. Ender (“ Executive ”).
WHEREAS , the Company, Independence Realty Operating Partnership, LP, a Delaware limited partnership (“ IROP ”), RAIT Financial Trust, a Maryland real estate investment trust (“ RAIT ”), RAIT TRS, LLC, a Delaware limited liability company (“ Interest Seller ”), Jupiter Communities, LLC, a Delaware limited liability company (“ Asset Seller ”), and the entities set forth on the signature pages of the Purchase Agreement have entered into that certain Securities and Asset Purchase Agreement, dated as of September 27, 2016 (the “ Purchase Agreement ”);
WHEREAS , pursuant to the Purchase Agreement, at the Second Closing (as defined in the Purchase Agreement), and on the terms and subject to the conditions set forth in the Purchase Agreement, Interest Seller shall sell, convey, assign, transfer and deliver to IROP, and IROP shall purchase, acquire and accept from Interest Seller, all of Interest Seller’s right, title and interest in and to the Membership Interests (as defined in the Purchase Agreement), and Asset Seller shall sell, convey, assign, transfer and deliver to IROP, and IROP shall purchase, acquire and accept from Asset Seller, all of Asset Seller’s right, title and interest in, to and under the Transferred Assets (as defined in the Purchase Agreement);
WHEREAS , Executive is currently employed by RAIT and serves as the President of the Company; and
WHEREAS , in connection with and subject to the Second Closing, the Company wishes to employ Executive in the position of President of the Company, and Executive wishes to accept such employment, on the terms set forth below, effective as of the Effective Date (as defined below).
NOW , THEREFORE , in consideration of the Recitals, the mutual promises and covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
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1. |
Employment . The Company agrees to employ Executive, and Executive hereby accepts such employment and agrees to perform Executive’s duties and responsibilities, in accordance with the terms, conditions and provisions hereinafter set forth. |
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1.1 |
Employment Term . This Agreement shall become effective from and after the Second Closing (the “ Effective Date ”); provided, that, in the event the Second Closing does not occur by the Outside Date (as defined in the Purchase Agreement) or the Purchase Agreement is otherwise terminated, this Agreement shall thereupon become null and void. This Agreement shall continue until the third anniversary of the Effective Date, unless the Agreement is terminated sooner in accordance with Section 2 below; and shall be effective for successive one-year periods in accordance with the terms of this Agreement (subject to termination as aforesaid) unless either party notifies the other party of non-renewal in writing prior to three months before the expiration of the then current term. The period commencing on the Effective Date and ending on the date on which the term of Executive’s employment under this Agreement shall terminate is hereinafter referred to as the “ Employment Term .” |
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1.2 |
Duties and Responsibilities . Executive shall continue to serve as the President of the Company during the Employment Term. Executive shall perform all duties and accept all responsibilities incident to such position as may be reasonably assigned to him by the Board of Directors of the Company (the “ Board ”) or the Chief Executive Officer of the Company. |
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performance of Executive’s duties and responsibilities hereunde r. Subject to the requirements of Section 5.1 , the foregoing shall not be construed as preventing Executive from making investments in other businesses or enterprises provided there is no conflict with Executive’s ability to satisfy his obligations to the Company. |
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1.4 |
Base Salary . For all of the services rendered by Executive hereunder, the Company shall pay Executive a base salary (“ Base Salary ”), which shall be at the annual rate of Three Hundred Eight Thousand Six Hundred Dollars ($308,600) beginning as of the Effective Date, payable in installments at such times as the Company customarily pays its other senior level executives. Executive’s Base Salary shall be reviewed annually for appropriate increases by the Board pursuant to the Board’s normal performance review policies for senior level executives but shall not be decreased. |
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1.5 |
Bonus . Executive shall be eligible to receive annual bonuses in such amounts as the Board may approve in its sole discretion or under the terms of any annual incentive plan of the Company maintained for other senior level executives. |
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1.6 |
Retirement and Welfare Plans and Perquisites . Executive shall be entitled to participate in all employee retirement and welfare benefit plans and programs or executive perquisites made available to the Company’s senior level executives as a group or to its employees generally, as such retirement and welfare plans or perquisites may be in effect from time to time and subject to the eligibility requirements of the plans and applicable law. For purposes of any such benefit plans and programs or executive perquisites that condition participation or entitlements thereunder on duration of service with the Company, Executive’s service with RAIT shall be treated as service to the Company. Nothing in this Agreement shall prevent the Company from amending or terminating any retirement, welfare or other employee benefit plans or programs from time to time as the Company deems appropriate. |
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1.7 |
Reimbursement of Expenses; Vacation . Executive shall be provided with reimbursement of reasonable expenses related to Executive’s employment by the Company on a basis no less favorable than that which may be authorized from time to time for senior level executives as a group, and shall be entitled to vacation and sick leave in accordance with the Company’s vacation, holiday and other pay for time not worked policies. For purposes of any such vacation, holiday and sick leave policies that condition participation or entitlements thereunder on duration of service with the Company, Executive’s service with RAIT shall be treated as service to the Company. |
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1.8 |
Incentive Compensation . Executive shall be entitled to participate in any short-term and long-term incentive programs (including without limitation any equity compensation plans) established by the Company for its senior level executives generally. |
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1.9 |
Clawback/Recoupment . Notwithstanding any other provision in this Agreement to the contrary, any compensation paid to Executive pursuant to this Agreement or any other agreement or arrangement with the Company shall be subject to mandatory repayment by Executive to the Company if and to the extent any such compensation paid to Executive is, or in the future becomes, subject to (i) any “clawback” or recoupment policy that is applicable to all senior executives of the Company and is limited to the recovery of incentive-based compensation which, as a result of an accounting restatement by the Company, is in excess of the compensation which should have been received by Executive, or (ii) any law, rule, requirement or regulation which imposes mandatory recoupment, under circumstances set forth in such law, rule, requirement or regulation. |
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Termination . The Employment Term and Executive’s employment hereunder shall terminate upon the occurrence of any of the following events: |
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(a) |
The Company may terminate Executive’s employment at any time without Cause (as defined in Section 4 ) upon not less than sixty (60) days’ prior written notice to Executive. In addition, Executive may initiate a termination of employment by resigning under this Section 2.1 for Good Reason (as defined in Section 4 ). Executive shall give the Company not less than sixty (60) days’ prior written notice of such resignation. In addition, the Company may initiate a termination of employment by sending a notice of non-renewal of this Agreement to Executive, as described in Section 1.1 . |
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(b) |
Upon any termination or resignation described in Section 2.1(a) above, Executive shall be entitled to receive only the amount due to Executive under the Company’s then current severance pay plan for employees, if any. No other payments or benefits shall be due under this Agreement to Executive, but Executive shall be entitled to receive (i) Executive’s Base Salary due through his date of termination, (ii) any earned but unpaid annual bonus for the year preceding the fiscal year of termination, (iii) any amounts owing to Executive for reimbursement of expenses properly incurred by Executive prior to his date of termination and which are reimbursable in accordance with Section 1.7 ; and (iv) any benefits accrued and earned in accordance with the terms and conditions of any applicable benefit plans and programs of the Company in which Executive participated prior to his termination of employment (collectively, the “ Accrued Benefits ”). |
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(c) |
Notwithstanding the provisions of Section 2.1(b) , in the event that Executive executes and does not revoke the release described in Section 2.7 , Executive shall be entitled to receive, in lieu of any payments or benefits due to him under the Company’s then current severance pay plan for employees (if any), the following: |
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(i) |
Executive shall receive a lump sum cash payment equal to two times the sum of (x) Executive’s Base Salary, as in effect immediately prior to his termination of employment and (y) the average annual cash bonus earned by Executive for the three year period immediately prior to his termination of employment, or the average annual cash bonus earned by Executive for the actual number of completed fiscal years immediately prior to his termination of employment if less than three; provided, however, that if Executive has been employed by the Company for less than one completed fiscal year prior to his termination of employment, then the amount used for clause (y) shall be Executive’s target annual cash bonus for the fiscal year of his termination of employment. One half of the amount described in the preceding sentence shall be consideration for Executive’s entering into the restrictive covenants described in Section 5 below. Unless the payment is required to be delayed pursuant to Section 18.2 below, the payment shall be made within fifteen (15) days of the Release Effective Date (as defined below). |
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(ii) |
Executive shall receive a lump sum cash payment equal to a pro rata portion of the annual cash bonus, if any, that Executive would have earned for the fiscal year of his termination based on achievement of the applicable performance goals for such year (the “ Cash Bonus ”). The pro-rated Cash Bonus shall be determined by multiplying the Cash Bonus by a fraction, the numerator of which is the number of days during which Executive was employed by the Company in the fiscal year of his termination of employment and the denominator of which is three hundred sixty-five (365). Unless the payment is required to be delayed pursuant to Section 18.2 below, the payment shall be made on the date that annual bonuses are paid to similarly situated executives, but in no event later than two-and-a-half months following the end of the calendar year in which Executive’s termination date occurs. |
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(iv) |
The treatment of any outstanding equity awards held by Executive shall be determined in accordance with the terms of the applicable incentive plan and the applicable award agreements; provided, however, that any such equity awards that are subject solely to time-vesting conditions shall become fully vested as of the date of Executive’s termination of employment. |
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2.2 |
Voluntary Termination . Executive may voluntarily terminate his employment for any reason upon sixty (60) days’ prior written notice or by sending a notice of non-renewal of this Agreement to the Company, as described in Section 1.1 . In any such event, after the effective date of such termination, except as provided in Section 2.1 with respect to a resignation for Good Reason, no further payments shall be due under this Agreement, except that Executive shall be entitled to receive the Accrued Benefits. |
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2.3 |
Disability . The Company may terminate Executive’s employment, to the extent permitted by applicable law, if Executive (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company (“ Disability ”). If the Company terminates Executive’s employment for Disability, Executive shall be entitled to receive the following: |
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(a) |
Executive shall receive a lump sum cash payment equal to a pro rata portion of Executive’s target annual cash bonus for the fiscal year of his termination (or, in the absence of a target bonus opportunity for the fiscal year, a pro rata portion of the average annual cash bonus earned by Executive for the three year period immediately prior to his termination of employment or the average annual cash bonus earned by Executive for the actual number of completed fiscal years immediately prior to his termination of employment if less than three) (the “ Target Cash Bonus ”). The pro-rated Target Cash Bonus shall be determined by multiplying the Target Cash Bonus by a fraction, the numerator of which is the number of days during which Executive was employed by the Company, prior to his termination of employment, in the Company’s fiscal year in which his termination of employment occurs and the denominator of which is three hundred sixty-five (365). Except as otherwise required to comply with the requirements of Section 18 below, payment shall be made on the sixtieth (60th) day following Executive’s last day of employment with the Company on account of Disability. |
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(b) |
The Company shall pay to Executive the Accrued Benefits. |
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Company shall have no further liability or obligation under this Agreement to Executive’s executors, legal representatives, administrators, heirs or assigns or any other person claiming un der or through Executive. |
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2.5 |
Cause . The Company may terminate Executive’s employment at any time for Cause upon written notice to Executive, in which event all payments under this Agreement shall cease, except for Base Salary to the extent already accrued. Executive shall be entitled to receive the Accrued Benefits. Whether a termination is for Cause, as such term is defined in Section 4.1 , shall be determined by the Board in its sole discretion. |
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2.6 |
Notice of Termination . Any termination of Executive’s employment shall be communicated by a written notice of termination to the other party hereto given in accordance with Section 10 . The notice of termination shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) briefly summarize the facts and circumstances deemed to provide a basis for a termination of employment and the applicable provision hereof, and (iii) specify the termination date in accordance with the requirements of this Agreement. |
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2.7 |
Release . Executive agrees that, as a condition to receiving the severance payments and benefits set forth in Section 2.1 , Executive will execute a release of claims substantially in the form of the release attached hereto as Exhibit A . Within two business days of Executive’s date of termination, the Company shall deliver to Executive the release for Executive to execute. Executive will forfeit all rights to the severance payments and benefits set forth in Section 2.1 unless, within fifty-five (55) days of delivery of the release by the Company to Executive, Executive executes and delivers the release to the Company and such release has become irrevocable by virtue of the expiration of the revocation period without the release having been revoked (the first such date, the “ Release Effective Date ”). The Company’s obligation to pay the severance payments and benefits set forth in Section 2.1 is subject to the occurrence of the Release Effective Date, and if the Release Effective Date does not occur, then the Company shall have no obligation to pay the severance payments and benefits set forth in Section 2.1 . To the extent that the Release Effective Date could occur in one of two (2) taxable years of Executive depending on when Executive executes and delivers the release, any deferred compensation payment (which is subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”)) that is conditioned on execution of the release shall be made no earlier than the first business day of the later of such taxable years. |
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2.8 |
Resignation of All Other Positions . Upon termination of Executive’s employment for any reason, Executive shall be deemed to have resigned from all positions that Executive holds as an officer of the Company or any affiliate of the Company, unless otherwise mutually agreed with the Board. |
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3. |
Change in Control . |
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3.1 |
Effect of Change in Control . If a Change in Control occurs and Executive’s employment terminates under the circumstances described below, the provisions of Section 2.1 shall apply. |
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3.2 |
Termination Without Cause or Resignation for Good Reason Upon or After a Change in Control . Upon or within eighteen (18) months after a Change in Control, the Company (by action of the Board) may terminate Executive’s employment at any time without Cause or Executive may initiate a termination of employment by resigning under this Section 3 for Good Reason (as defined in Section 4) (in either case the Employment Term shall be deemed to have ended) upon not less than sixty (60) days’ prior written notice to Executive (or in the case of resignation for Good Reason, Executive shall give the Company not less than sixty (60) days’ prior written notice of such resignation). In any such event, the provisions of Section 2.1(b) or (c), as applicable, shall then apply. |
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3.3 |
Code Section 280G . |
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(b) |
The foregoing determination shall be made by tax counsel appointed by the Company (the “ Tax Counsel ”). The Tax Counsel shall submit its determination and detailed supporting calculations to both Executive and the Company within 15 days after receipt of a notice from either the Company or Executive that Executive may receive payments which may be Parachute Payments. If the Tax Counsel determines that such reduction is required by this Section 3.3 , the Total Payments shall be reduced to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code, and the Company shall pay such reduced amount to Executive. The manner in which the Total Payments are reduced shall be mutually agreed to by the Company and Executive and approved by Tax Counsel; provided, however, that if the Company and Executive do not agree within 15 days of the receipt of the Tax Counsel’s determination, the reduction shall be accomplished by, first, reducing any lump sum cash payments included in the Total Payments and, if further reductions are necessary, by such other reductions as shall be recommended by Tax Counsel. Executive and the Company shall each provide the Tax Counsel access to and copies of any books, records, and documents in the possession of Executive or the Company, as the case may be, reasonably requested by the Tax Counsel, and otherwise cooperate with the Tax Counsel in connection with the preparation and issuance of the determinations and calculations contemplated by this Section 3.3 . The fees and expenses of the Tax Counsel for its services in connection with the determinations and calculations contemplated by this Section 3.3 shall be borne by the Company. |
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4. |
Definitions . |
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4.1 |
“ Cause ” shall mean any of the following grounds for termination of Executive’s employment: |
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(a) |
Executive’s conviction of, or plea of guilty or nolo contendere to, a felony, any crime of moral turpitude or any crime involving the Company; |
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(b) |
Executive’s engagement in fraud, misappropriation or embezzlement; |
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(c) |
Exe cutive’s material breach of any published code of conduct or code of ethics of the Company or any affiliate of the Company; |
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(d) |
Executive’s gross negligence or willful misconduct in the performance of his duties; |
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(e) |
Executive’s continual failure to substantially perform his duties to the Company (other than a failure resulting from Executive’s incapacity due to physical or mental illness), and such failure has continued for a period of at least 30 days after a written notice of demand for substantial performance, signed by a duly authorized officer of the Company, has been delivered to Executive specifying the manner in which Executive has failed to substantially perform; or |
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(f) |
Executive’s breach of Section 5 of this Agreement. |
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4.2 |
“ Good Reason ” shall mean, without Executive’s consent: |
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(a) |
a significant adverse alteration in the nature or status of Executive’s authority, duties or responsibilities; |
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(b) |
a reduction in Base Salary of Executive; |
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(c) |
the Company’s material and willful breach of this Agreement; or |
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(d) |
the relocation (without the written consent of Executive) of Executive’s principal place of employment by more than thirty-five (35) miles from its location on the Effective Date. |
Notwithstanding the foregoing, (i) Good Reason shall not be deemed to exist unless notice of termination on account thereof (specifying a termination date of at least 60 days but no more than 90 days from the date of such notice) is given no later than 90 days after the time at which the event or condition purportedly giving rise to Good Reason first occurs or arises and (ii) if there exists (without regard to this clause (ii)) an event or condition that constitutes Good Reason, the Company shall have 30 days from the date notice of such a termination is given to cure such event or condition and, if the Company does so, such event or condition shall not constitute Good Reason hereunder.
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4.3 |
“ Change in Control ” shall mean the occurrence of any of the following: |
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(a) |
The acquisition (other than from the Company), by any person (as such term is defined in Section 13(c) or 14(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of the combined voting power of the Company’s then outstanding voting securities; |
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(b) |
The individuals who, as of the Effective Date, are members of the Board (the “ Incumbent Board ”), cease for any reason during any twelve (12) month period to constitute at least a majority of the Board, unless the election, or nomination for election by the Company’s stockholders, of any new director was approved by a vote of at least a majority of the Incumbent Board, and such new director shall be considered as a member of the Incumbent Board; |
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outstanding immediately before such Business Combination or (ii) immediately following the Business Combination, the individuals who comprised the Board immediately prior thereto do not const itute at least a majority of the board of directors of the entity resulting from such Business Combination (or, if the entity resulting from such Business Combination is then a subsidiary, the ultimate parent thereof); |
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(d) |
The sale or other disposition of all or substantially all of the assets of the Company; or |
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(e) |
The consummation of a complete liquidation or dissolution of the Company. |
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities is acquired by (i) a trustee or other fiduciary holding securities under one or more employee benefit plans maintained by the Company or any of its subsidiaries or (ii) any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the stockholders of the Company in the same proportion as their ownership of shares in the Company immediately prior to such acquisition.
Notwithstanding the foregoing, a Change in Control shall not occur unless such transaction constitutes a change in the ownership of the Company, a change in effective control of the Company, or a change in the ownership of a substantial portion of the Company’s assets under Section 409A of the Code.
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5. |
Non-Competition, Non-Solicitation, Intellectual Property and Confidentiality . Executive hereby acknowledges that, during and solely as a result of his employment by the Company, Executive will receive special training, education and information with respect to the operation of the businesses of the Company, and/or its affiliates, and other related matters, and access to confidential information and business and professional contacts. In consideration of Executive’s employment and in consideration of the special and unique opportunities afforded by the Company to Executive as a result of Executive’s employment, Executive hereby agrees to abide by the terms of the non-competition, non-solicitation, intellectual property and confidentiality provisions below. Executive agrees and acknowledges that his employment is full, adequate and sufficient consideration for the restrictions and obligations set forth in those provisions. |
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5.1 |
Non-Competition and Non-Solicitation . In consideration of the Company’s entering into this Agreement, Executive agrees that during the Employment Term and for a period of twelve (12) months after the termination of the Employment Term, without regard to its termination for any reason which does not constitute a breach of this Agreement by the Company or a resignation for Good Reason by Executive, Executive shall not, unless acting pursuant hereto or with the prior written consent of the Board: |
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(a) |
directly or indirectly, own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing or control of, or be connected as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise with, or use or permit Executive’s name to be used in connection with any Competing Business (defined below) within any state in which the Company, and/or its affiliates, currently engage in any Substantial Business Activity (defined below) or any state in which the Company, and/or its affiliates, engaged in any Substantial Business Activity during the thirty-six month period preceding the date Executive’s employment terminates; provided, however, that notwithstanding the foregoing, this provision shall not be construed to prohibit the passive ownership by Executive of not more than five percent (5%) of the capital stock of any corporation which is engaged in any Competing Business having a class of securities registered pursuant to the Exchange Act; or |
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(b) |
solicit or divert to any Competing Business any individual or entity which is an active or prospective customer of the Company, and/or its affiliates, or was such an active or prospective customer at any time during the preceding twelve (12) months; or |
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(c) |
employ, attempt to employ, solicit or assist any Competing Business in employing any emp loyee of the Company, and/or its affiliates, whether as an employee or consultant. |
The phrase “Competing Business” shall mean: any entity or enterprise actively engaged in any business or businesses the Company and/or its affiliates are actively engaged in (or are expected to be actively engaged in within twelve (12) months) at the time of termination. The phrase “Substantial Business Activity” shall mean that the Company, and/or its affiliates (i) has a business office , (ii) owns, services or manages real estate, or (iii) has a recorded and unsatisfied mortgage or other lien upon real estate or personal property.
In the event that the provisions of this Section 5.1 should ever be adjudicated to exceed the time, geographic, product or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, product or other limitations permitted by applicable law.
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5.2 |
Developments . Executive shall disclose fully, promptly and in writing to the Company any and all inventions, discoveries, improvements, modifications and other intellectual property rights, whether patentable or not, which Executive has conceived, made or developed, solely or jointly with others, while employed by the Company and which (i) relate to the businesses, work or activities of the Company, and/or its affiliates or (ii) result from or are suggested by the carrying out of Executive’s duties hereunder or from or by any information that Executive may receive as an employee of the Company. Executive hereby assigns, transfers and conveys to the Company all of Executive’s right, title and interest in and to any and all such inventions, discoveries, improvements, modifications and other intellectual property rights and agrees to take all such actions as may be requested by the Company at any time and with respect to any such invention, discovery, improvement, modification or other intellectual property rights to confirm or evidence such assignment, transfer and conveyance. Furthermore, at any time and from time to time, upon the request of the Company, Executive shall execute and deliver to the Company, any and all instruments, documents and papers, give evidence and do any and all other acts that, in the opinion of counsel for the Company, are or may be necessary or desirable to document such assignment, transfer and conveyance or to enable the Company to file and prosecute applications for and to acquire, maintain and enforce any and all patents, trademark registrations or copyrights under United States or foreign law with respect to any such inventions, discoveries, improvements, modifications or other intellectual property rights or to obtain any extension, validation, reissue, continuance or renewal of any such patent, trademark or copyright. The Company shall be responsible for the preparation of any such instruments, documents and papers and for the prosecution of any such proceedings and shall reimburse Executive for all reasonable expenses incurred by Executive in compliance with the provisions of this Section 5.2 . |
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5.3 |
Confidentiality . |
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generally known to the public through no act of Executive in breach of this Agreement. The Company and Executive acknowledge that, notwithstanding anything to the contrary c ontained in this Agreement, pursuant to 18 USC § 1833(b), an individual may not be held liable under any criminal or civil federal or state trade secret law for disclosure of a trade secret: (x) made in confidence to a government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law or (y) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. The Company and Executiv e further acknowledge that an individual suing an employer for retaliation based on the reporting of a suspected violation of law may disclose a trade secret to his or her attorney and use the trade secret information in the court proceeding, so long as an y document containing the trade secret is filed under seal and the individual does not disclose the trade secret except pursuant to court order. |
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(b) |
Executive acknowledges that all documents, files and other materials received from the Company, and/or its affiliates, during the Employment Term (with the exception of documents relating to Executive’s compensation or benefits to which Executive is entitled following the Employment Term) are for use of Executive solely in discharging Executive’s duties and responsibilities hereunder and that Executive has no claim or right to the continued use or possession of such documents, files or other materials following termination of Executive’s employment by the Company. Executive agrees that, upon termination of employment, Executive will not retain any such documents, files or other materials and will promptly return to the Company any documents, files or other materials in Executive’s possession or custody. |
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5.4 |
Non-Disparagement . Executive agrees and covenants that Executive will not at any time make, publish or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments or statements concerning the Company or its businesses, or any of its employees, officers, and existing and prospective customers, suppliers, investors and other associated third parties. The Company agrees and covenants that it will not authorize the making, publishing or communicating of, nor will the Board or any executive officers of the Company at any time make, publish or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments or statements concerning Executive. |
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5.5 |
Cooperation . The parties agree that certain matters in which Executive will be involved during the Employment Term may necessitate Executive’s cooperation in the future. Accordingly, following the termination of Executive’s employment for any reason, to the extent reasonably requested by the Board and subject to Executive’s professional commitments, Executive shall cooperate with the Company in connection with matters arising out of Executive’s service to the Company; provided that, the Company shall make reasonable efforts to minimize disruption of Executive’s other activities. The Company shall pay Executive a reasonable per diem and reimburse Executive for reasonable expenses incurred in connection with such cooperation. |
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to the fullest extent permitted by law, any objection that Executive may now or hereafter have to such jurisdiction or to the laying of the venue of any such suit, action or proceeding brought in such a court and any claim that such suit, action or proceeding has been brought in an inconvenient forum. Executive agrees that effective service of process may be made upon Executive by mail under the notice provisions contained in Section 10 hereof. |
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6. |
Non-Exclusivity of Rights . Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in or rights under any benefit, bonus, incentive or other plan or program provided by the Company and for which Executive may qualify; provided, however, that if Executive becomes entitled to and receives the payments provided for in Section 2.1(c) of this Agreement, Executive hereby waives Executive’s right to receive payments under any severance plan or similar program applicable to all employees of the Company. |
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7. |
Survivorship . The respective rights and obligations of the parties under this Agreement shall survive any termination of Executive’s employment to the extent necessary to the intended preservation of such rights and obligations. |
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8. |
Mitigation . Executive shall not be required to mitigate the amount of any payment or benefit provided for in this Agreement by seeking other employment or otherwise and there shall be no offset against amounts due Executive under this Agreement on account of any remuneration attributable to any subsequent employment that Executive may obtain. |
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9. |
Arbitration; Expenses . In the event of any dispute under the provisions of this Agreement, other than a dispute in which the primary relief sought is an equitable remedy such as an injunction, the parties shall be required to have the dispute, controversy or claim settled by arbitration in Philadelphia, Pennsylvania in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association, before a panel of three arbitrators, two of whom shall be selected by the Company and Executive, respectively, and the third of whom shall be selected by the other two arbitrators. Any award entered by the arbitrators shall be final, binding and nonappealable and judgment may be entered thereon by either party in accordance with applicable law in any court of competent jurisdiction. This arbitration provision shall be specifically enforceable. The arbitrators shall have no authority to modify any provision of this Agreement or to award a remedy for a dispute involving this Agreement other than a benefit specifically provided under or by virtue of the Agreement. Each party shall be responsible for its own expenses relating to the conduct of the arbitration (including reasonable attorneys’ fees and expenses) and shall share the fees of the American Arbitration Association. |
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10. |
Notices . All notices and other communications required or permitted under this Agreement or necessary or convenient in connection herewith shall be in writing and shall be deemed to have been given when hand delivered or mailed by registered or certified mail, as follows (provided that notice of change of address shall be deemed given only when received): |
If to the Company, to:
Independence Realty Trust, Inc.
Two Logan Square
100 North 18 th Street, 23 rd floor
Philadelphia, Pennsylvania 19103
Attention: General Counsel
If to Executive, to:
Farrell M. Ender at his most recent home address set forth in the records of the Company.
or to such other names or addresses as the Company or Executive, as the case may be, shall designate by notice to each other person entitled to receive notices in the manner specified in this Section.
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11.1 |
This Agreement sets forth the entire understanding between the parties hereto with respect to the subject matter hereof and cannot be changed, modified, extended or terminated except upon written amendment approved by the Board and executed on its behalf by a duly authorized officer and by Executive. This Agreement supersedes the provisions of any employment or other agreement between Executive and the Company that relate to any matter that is also the subject of this Agreement and such provisions in such other agreements will be null and void. |
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11.2 |
All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Executive under this Agreement are of a personal nature and shall not be assignable or delegable in whole or in part by Executive. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, within fifteen (15) days of such succession, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform if no such succession had taken place. |
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12. |
Severability . If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. If any provision is held void, invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances. |
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13. |
Remedies Cumulative; No Waiver . No remedy conferred upon a party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission by a party in exercising any right, remedy or power under this Agreement or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by such party from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. |
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14. |
Beneficiaries/References . Executive shall be entitled, to the extent permitted under any applicable law, to select and change a beneficiary or beneficiaries to receive any compensation or benefit payable under this Agreement following Executive’s death by giving the Company written notice thereof. In the event of Executive’s death or a judicial determination of Executive’s incompetence, reference in this Agreement to Executive shall be deemed, where appropriate, to refer to Executive’s beneficiary, estate or other legal representative. |
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15. |
Miscellaneous . All section headings used in this Agreement are for convenience only. This Agreement may be executed in counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. |
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16. |
Withholding . All payments under this Agreement shall be made subject to applicable tax withholding, and the Company shall withhold from any payments under this Agreement all federal, state and local taxes as the Company is required to withhold pursuant to any law or governmental rule or regulation. Except as specifically provided otherwise in this Agreement, Executive shall bear all expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment received under this Agreement. |
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17. |
Governing Law . This Agreement shall be governed by and interpreted under the laws of the Commonwealth of Pennsylvania without giving effect to any conflict of laws provisions. |
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18.1 |
Interpretation . Notwithstanding the other provisions hereof, this Agreement is intended to comply with the requirements of Section 409A of the Code, to the extent applicable, and this Agreement shall be interpreted to avoid any penalty sanctions under Section 409A of the Code. Accordingly, all provisions herein, or incorporated by reference, shall be construed and interpreted to comply with Section 409A and, if necessary, any such provision shall be deemed amended to comply with Section 409A of the Code and regulations thereunder. If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under Section 409A of the Code, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed. For purposes of Section 409A of the Code, each payment made under this Agreement shall be treated as a separate payment. In no event may Executive, directly or indirectly, designate the calendar year of payment. Executive will be deemed to have a termination of employment for purposes of determining the timing of any payments or benefits hereunder that are classified as deferred compensation only upon a “separation from service” within the meaning of Section 409A of the Code. |
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18.2 |
Payment Delay . Notwithstanding any provision to the contrary in this Agreement, if on the date of Executive’s termination of employment, Executive is a “specified employee” (as such term is defined in Section 409A(a)(2)(B)(i) of the Code and its corresponding regulations) as determined by the Board (or its delegate) in its sole discretion in accordance with its “specified employee” determination policy, then all cash severance payments payable to Executive under this Agreement that are deemed as deferred compensation subject to the requirements of Section 409A of the Code shall be postponed for a period of six months following Executive’s “separation from service” with the Company (or any successor thereto). The postponed amounts shall be paid to Executive in a lump sum on the date that is six (6) months and one (1) day following Executive’s “separation from service” with the Company (or any successor thereto). If Executive dies during such six-month period and prior to payment of the postponed cash amounts hereunder, the amounts delayed on account of Section 409A of the Code shall be paid to the personal representative of Executive’s estate on the sixtieth (60th) day after Executive’s death. If any of the cash payments payable pursuant to this Agreement are delayed due to the requirements of Section 409A of the Code, there shall be added to such payments interest during the deferral period at an annualized rate of interest equal to the prime rate as reported in the Wall Street Journal (or, if unavailable, a comparable source) at the relevant time. |
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18.3 |
Reimbursements . All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the taxable year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit. |
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first above written.
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INDEPENDENCE REALTY TRUST, INC. |
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By: |
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/s/ Scott Schaeffer |
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Name: |
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Scott Schaeffer |
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Title: |
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Chief Executive Officer |
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EXECUTIVE |
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By: |
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/s/ Farrell M. Ender |
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Name: |
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Farrell M. Ender |
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Release
You, for yourself, your spouse and your agents, successors, heirs, executors, administrators and assigns, hereby irrevocably and unconditionally forever release and discharge Independence Realty Trust, Inc. (the “ Corporation ”), its parents, divisions, subsidiaries and affiliates and its and their current and former owners, directors, officers, stockholders, insurers, benefit plans, representatives, agents and employees, and each of their predecessors, successors, and assigns (collectively, the “ Releasees ”), from any and all actual or potential claims or liabilities of any kind or nature, including, but not limited to, any claims arising out of or related to your employment and separation from employment with the Corporation and any services that you provided to the Corporation; any claims for salary, commissions, bonuses, other severance pay, vacation pay, allowances or other compensation, or for any benefits under the Employee Retirement Income Security Act of 1974 (“ERISA”) (except for vested ERISA benefits); any claims for discrimination, harassment or retaliation of any kind or based upon any legally protected classification or activity; any claims under Title VII of the Civil Rights Acts of 1964, the Civil Rights Act of 1866 and 1964, as amended, 42 U.S.C. § 1981, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Americans with Disabilities Act, 42 U.S.C. §1981, 42 U.S.C. § 1983, the Family Medical Leave Act and any similar state law, the Fair Credit Reporting Act and any similar state law, the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. , the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, et seq. , the Equal Pay Act and any similar state law, any claims for discrimination in violation of the Pennsylvania Human Relations Act, and any claims for wrongful discharge, discrimination, retaliation, or other violation of the Pennsylvania Whistleblower Law, as well as any amendments to any such laws; any claims for any violation of any federal or state constitutions or executive orders; any claims for wrongful or constructive discharge, violation of public policy, breach of contract or promise (oral, written, express or implied), personal injury not covered by workers’ compensation benefits, misrepresentation, negligence, fraud, estoppel, defamation, infliction of emotional distress, contribution and any claims under any other federal, state or local law, including those not specifically listed in this Release, that you, your heirs, executors, administrators, successors, and assigns now have, ever had or may hereafter have, whether known or unknown, suspected or unsuspected, up to and including the date of your execution of this Release.
For the purpose of implementing a full and complete release and discharge of the Releasees as set forth above, you acknowledge that this Release is intended to include in its effect, without limitation, all claims known or unknown that you have or may have against the Releasees which arise out of or relate to your employment, including but not limited to compensation, performance or termination of employment with the Corporation, except for, and notwithstanding anything in this Release to the contrary, claims which cannot be released solely by private agreement. This Release also excludes any claims relating to any right you may have to payments pursuant to Section 2.1(c) of the Employment Agreement, entered into as of December __, 2016, by and between the Corporation and you, any claim for workers’ compensation benefits and any rights you may have to indemnification or directors’ and officers’ liability insurance under the Corporation’s bylaws or certificate of incorporation, any indemnification agreement to which you are a party or beneficiary or applicable law, as a result of having served as an officer, director or employee of the Corporation or any of its affiliates. You further acknowledge and agree that you have received all leave, compensation and reinstatement benefits to which you were entitled through the date of your execution of this Release, and that you were not subjected to any improper treatment, conduct or actions as a result of a request for leave, compensation or reinstatement.
You affirm, by signing this Release, that you have not suffered any unreported injury or illness arising from your employment, and that you have not filed, with any federal, state, or local court or agency, any actions or charges against the Releasees relating to or arising out of your employment with or separation from the Corporation. You further agree that while this Release does not preclude you from filing a charge with the National Labor Relations Board (“NLRB”), the Equal Employment Opportunity Commission (“EEOC”) or a similar state or local agency, or from participating in any investigation or proceeding with them, you do waive your right to personally recover monies or reinstatement as a result of any complaint or charge filed against the Corporation with the NLRB, EEOC or any federal, state or local court or agency, except as to any action to enforce or challenge this Release, to recover any vested benefits under ERISA, or to recover workers’ compensation benefits. Nothing in this Release prohibits or restricts you (or your attorney) from initiating communications directly with, responding to an inquiry from, or
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providing testimony before the Securities and Exchang e Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”), any other self-regulatory organization or any other federal or state regulatory authority regarding this Release or its underlying facts or circumstances or a possible securities law violation.
You acknowledge:
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(a) |
That you were provided [ twenty-one (21) / forty-five (45) ] full days during which to consider whether to sign this Release. If you have signed this Release prior to the expiration of the [ 21-day / 45-day ] period, you have voluntarily elected to forego the remainder of that period. |
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(b) |
That you have carefully read and fully understand all of the terms of this Release [ , including its Attachment A ] . |
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(c) |
That you understand that by signing this Release, you are waiving your rights under the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act, 29 U.S.C. § 621, et seq., and that you are not waiving any rights arising after the date that this Release is signed. |
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(d) |
That you have been given an opportunity to consult with anyone you choose, including an attorney, about this Release. |
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(e) |
That you understand fully the terms and effect of this Release and know of no claim that has not been released by this Release. And, you further acknowledge that you are not aware of, or that you have fully disclosed to the Corporation, any matters for which you are responsible or which has come to your attention as an employee of the Corporation that might give rise to, evidence, or support any claim of illegal conduct, regulatory violation, unlawful discrimination, or other cause of action against the Corporation. |
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(f) |
That these terms are final and binding on you. |
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(g) |
That you have signed this Release voluntarily, and not in reliance on any representations or statements made to you by any employee or officer of the Corporation or any of its subsidiaries. |
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(h) |
That you have seven (7) days following your execution of this Release to revoke it in writing, and that this Release is not effective or enforceable until after this seven (7) day period has expired without revocation. If you wish to revoke this Release after signing it, you must provide written notice of your decision to revoke this Release to the Corporation, to the attention of the General Counsel, Two Logan Square, 100 North 18th Street, 23rd floor, Philadelphia, Pennsylvania 19103, by no later than 11:59 p.m. on the seventh calendar day after the date on which you have signed this Release. |
PLEASE READ CAREFULLY. THIS RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
ACKNOWLEDGED AND AGREED
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Farrell M. Ender |
Date |
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Exhibit 99.1
Independence Realty Trust Completes Management Internalization
PHILADELPHIA, PA – December 20, 2016 – Independence Realty Trust, Inc. (“IRT”) (NYSE MKT: IRT) today announced that IRT had successfully completed internalizing its management at a closing contemplated by IRT’s previously announced Securities and Asset Purchase Agreement (the “Purchase Agreement”) with RAIT Financial Trust and certain of its subsidiaries (“RAIT”) (NYSE: RAS). At the closing, IRT acquired its external advisor, which was previously a subsidiary of RAIT, and certain assets relating to the multifamily property management business of RAIT, including property management contracts relating to apartment properties owned by IRT, RAIT and third parties, for the purchase price of $43 million, subject to pro-rations, plus the assumption of certain liabilities relating to the multifamily property management business.
Effective as of the closing, each of Scott F. Schaeffer, IRT’s Chairman and Chief Executive Officer, Farrell Ender, IRT’s President, and James J. Sebra, IRT’s Chief Financial Officer (“CFO”), entered into employment agreements with IRT. Messrs. Schaeffer and Ender ended their employment with RAIT and are now solely employees of IRT. Mr. Sebra is expected to remain the CFO of both IRT and RAIT until the later to occur of March 31, 2017 or the filing of RAIT’s Annual Report on Form 10-K for the fiscal year ending December 31, 2016 with the U.S. Securities and Exchange Commission, after which time, he will end his employment with RAIT and become the full-time CFO of IRT. At the closing under the Purchase Agreement, IRT and RAIT entered into a shared services agreement pursuant to which RAIT and IRT will provide each other certain transitional services such as information technology, human resources, insurance, investor relations, legal, tax and accounting for a six-month transition period after the closing. As previously announced, pursuant to the Purchase Agreement, IRT repurchased all 7.3 million shares of IRT common stock owned by certain RAIT subsidiaries for $62.2 million on October 5, 2016, which represented a portion of the proceeds derived from a public offering of shares of common stock of IRT, which closed the same day.
About Independence Realty Trust, Inc.
Independence Realty Trust, Inc. (NYSE MKT: IRT) is an internally-managed real estate investment trust that seeks to own well-located apartment properties in geographic submarkets that it believes support strong occupancy and the potential for growth in rental rates. IRT seeks to provide stockholders with attractive risk-adjusted returns, with an emphasis on distributions and capital appreciation.
Forward Looking Statements
Certain statements in this press release, other than purely historical information, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally are identified by the use of the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “plan,” “may,” “will,” “will continue,” “intend,” “should,” “may” or similar expressions. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and our actual results could differ materially from those set forth in the forward-looking statements. One factor that might cause such a difference is whether IRT and RAIT will adequately provide each other certain transitional services under the shared services agreement . A discussion of this risk and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in “Risk Factors” of IRT’s Annual Report on Form 10-K for the year ended December 31, 2015 and in IRT’s subsequent filings with the Securities and Exchange Commission. Given these uncertainties, undue reliance should not be place on such statements. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Independence Realty Trust, Inc. Contact
Andres Viroslav
215.207.2100
aviroslav@irtreit.com