Exhibit 10.1

SEPARATION AGREEMENT

This Separation Agreement (“Agreement”), is between Kenneth R. Frappier
(“Executive”) and RAIT Financial Trust (“RAIT”). Executive and RAIT have entered
into this Agreement on December 24, 2014, effective as of December 31, 2014 (the
“Effective Date”).

WHEREAS, Executive has been employed by RAIT); and

WHEREAS, RAIT and Executive are parties to the First Amended and Restated
Employment Agreement entered into as of August 4, 2011, as amended by the
August, 2012 Amendment entered into as of August 2, 2012 (collectively the
“Employment Agreement”); and

WHEREAS, Executive is the Executive Vice President – Portfolio and Risk
Management of RAIT; and

WHEREAS, Executive and RAIT mutually agree that Executive’s employment with RAIT
shall be terminated as of December 31, 2014; and

WHEREAS, this Agreement is intended to set forth the terms and conditions of
that termination of employment;

NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:

1. Executive’s Termination of Employment From RAIT.

(a) Executive’s termination of Employment from RAIT is effective as of
December 31, 2014 (the “Employment Termination Date”), consistent with the
provisions of Paragraph 1(e) below.

(b) In the event that (i) Executive executes this Agreement in accordance with
its provisions, agreeing to be bound by the General Release in Paragraph 3 below
and agreeing to comply with the other terms and conditions of this Agreement,
(ii) Executive does not thereafter revoke the Agreement during the Revocation
Period as defined in Paragraph 7 below (the “Revocation Period”), and
(iii) Executive sends an email to Scott F. Schaeffer (“Mr. Schaeffer”)
immediately upon the expiration of the Revocation Period confirming that he has
not revoked the Agreement, RAIT will:

(i) pay Executive a lump sum cash payment of One Million, Two Hundred and Two
Thousand, Five Hundred Dollars ($1,202,500) (the “Amount”), less withholding of
all applicable federal, state and local taxes and other deductions required by
applicable law), within ten (10) calendar days following the expiration of the
Revocation Period; and

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(ii) for a period of eighteen (18) months commencing January 1, 2015, continue
to cover Executive under its group medical coverage plan in effect on the
Employment Termination Date, provided Executive is eligible for and makes a
timely election for COBRA health care continuation coverage under Section 4980B
of the Internal Revenue Code of 1986, as amended (the “Code”) for himself and,
where applicable, his spouse and dependents, at the same premium rate as may be
charged from time to time for employees generally as if Executive’s employment
had continued in effect with RAIT during such period. The COBRA health care
continuation coverage period under Section 4980B of the Internal Revenue Code of
1986, as amended (the “Code”) shall run concurrently with the foregoing eighteen
(18) month benefit period.

(c) The parties hereto agree that the foregoing commitments set forth in
Paragraph 1(b) above satisfy any and all obligations of RAIT and its
subsidiaries and affiliates to Executive in connection with his employment with
and separation from RAIT, and that RAIT and its subsidiaries and affiliates have
no further obligations to Executive under the Employment Agreement or otherwise,
except that:

(i) Executive shall receive his current Base Salary for the period through the
Employment Termination Date at the annualized rate set forth in Section 1.4 of
the Employment Agreement;

(ii) Executive shall, through the Employment Termination Date, participate in
all employee retirement and welfare benefit plans and programs referenced in
Section 1.6 of the Employment Agreement that currently are in effect. Any rights
of Executive under these plans and programs will be governed by the terms of the
applicable plan documents; and

(iii) Executive may submit a final expense report for reimbursement by RAIT in
accordance with Section 1.7 of the Employment Agreement.

(d) For clarity:

(i) 31,667 share appreciation rights (“SARs”) have vested and may be exercised
in accordance with the terms of the plan under which they were awarded and the
terms of the grant. Executive agrees and acknowledges that RAIT and RAIT’s
subsidiaries and its affiliates have no remaining obligations to him for any
unvested shares of stock or SARs or pursuant to any other equity compensation
awarded to Executive by RAIT or its subsidiaries and affiliates;

(ii) any rights that Executive has under any Indemnification Documents
referenced below in Paragraph 5 (the “Indemnification Documents”) shall continue
in accordance with the terms thereof.

(e) As of the Employment Termination Date (provided Executive has not revoked
the Agreement during the Revocation Period), Executive will cease to be a
director, officer, employee or manager of RAIT or its subsidiaries and or its
affiliates, as applicable, and shall have no authority to bind RAIT or its
subsidiaries or its affiliates.

 

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2. General Release By Executive.

(a) For the consideration described herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Executive and his heirs, executors and administrators, intending to be legally
bound, hereby release and discharge RAIT, and all of RAIT’s related parties,
including RAIT’s subsidiaries and affiliates and its and their officers,
trustees, directors, shareholders, employees, agents, consultants and other
representatives, successors, assigns, heirs, executors, and administrators
(hereinafter referred to collectively as “Releasees”), from any and all causes
of actions, suits, debts, claims and demands whatsoever, arising out of
Executive’s employment with RAIT or any of the Releasees and the termination of
his employment from RAIT, which he ever had, now has, or may have against RAIT
or any other Releasee.

Particularly, but without limitation, Executive releases any claims relating in
any way to his employment and the termination of his employment from RAIT or any
other Releasee, including any claims:

(i) arising out of the Employment Agreement (and any prior employment agreement
between Executive and RAIT or its subsidiaries or its affiliates);

(ii) under any employment discrimination laws or regulations, including without
limitation, the Age Discrimination in Employment Act and the Older Worker
Benefit Protection Act, Title VII of the Civil Rights Act of 1964, 42 U.S.C.
§2000e et seq., as amended, the Americans with Disabilities Act, 42 U.S.C. §
12101 et seq., the Pennsylvania Human Relations Act and the Philadelphia Fair
Employment Ordinance, including without limitation, any claims of
discrimination, harassment, whistle-blowing or other retaliation under any of
such laws;

(iii) under any other federal, foreign, state or local laws, including without
limitation, the Employee Retirement Income Security Act, 29 U.S.C. §1001 et
seq., as amended, the Family & Medical Leave Act, 29 U.S.C. § 2601 et seq., the
Worker Adjustment and Retraining Notification, 29 U.S.C. § 2101 et seq., the
Sarbanes-Oxley Act, and the Dodd-Frank Wall Street Reform and Consumer
Protection Act, and any regulations promulgated thereunder, including without
limitation any claims of discrimination, harassment, whistle-blowing or other
retaliation under any of such laws;

(iv) any other statutory, regulatory, common law or other claims of any kind,
including without limitation, claims for breach of contract, libel, slander,
fraud, wrongful discharge, promissory estoppel, equitable estoppel,
misrepresentation, emotional distress, or pain and suffering; and

(v) any claims for counsel fees and costs.

 

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(b) Notwithstanding the foregoing, this Release shall not: (i) limit Executive’s
ability to assert a defense or set-off against any claims asserted by any
Releasee in any forum; or (ii) limit Executive’s rights under any applicable
Indemnification Documents.

(c) Executive agrees that neither he, nor any person, organization, or other
entity on his behalf, will share in any remedy against any of the Releasees,
involving any matter occurring at any time in the past up to and including the
date of this Agreement, or involving any continuing effects of any actions or
practices which may have arisen or occurred on or prior to the expiration of the
Revocation Period, including any charge of discrimination or complaint under any
and all federal, state, or local laws, and any common law claims now or
hereafter recognized, as well as all claims for counsel fees and costs;
provided, however, that Executive shall not be prohibited by this Agreement from
filing a discrimination charge with the Equal Employment Opportunity Commission,
the Pennsylvania Human Relations Commission or the Philadelphia Commission on
Human Relations.

(d) This General Release includes all claims known and unknown by Executive,
those that Executive may already have asserted or raised as well as those that
Executive has never asserted or raised.

(e) This General Release does not apply to any claims: (i) for vested benefits
under any RAIT retirement plan; (ii) to require RAIT to honor its commitments
set forth in this Agreement including without limitation, any obligations under
the Indemnification Documents; (iii) to interpret or determine the scope,
meaning or effect of this Agreement; or (iv) that arise after the Employment
Termination Date.

3. General Release by RAIT.

(a) For the General Release by Executive set forth in Paragraph 2 above and
Executive’s additional undertakings set forth in this Agreement, RAIT hereby
releases and discharges Executive, and his heirs, executors and administrators,
intending to be legally bound, from any and all causes of actions, suits, debts,
claims and demands whatsoever, arising out of Executive’s employment with RAIT,
which RAIT ever had, now has, or may have against Executive.

(b) Notwithstanding the foregoing, this Release shall not: (i) limit RAIT’s
ability to assert a defense or set-off against any claims asserted by Executive
in any forum; or (ii) limit RAIT’s rights under any applicable Indemnification
Documents.

(c) This General Release includes all claims known and unknown by RAIT, those
that RAIT may already have asserted or raised as well as those that RAIT has
never asserted or raised.

(d) This General Release does not apply to any claims: (i) to require Executive
to honor his obligations set forth in this Agreement (including without
limitation, the continuing obligations acknowledged in Section 4 hereof, and any
obligations under the Indemnification Documents); (ii) to interpret or determine
the scope, meaning or effect of this Agreement; or (iii) that arise after the
Employment Termination Date.

 

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4. Agreements and Acknowledgements.

(a) Executive agrees that he remains subject to Sections 5 (and its subsections)
of the Employment Agreement relating to Non-Competition, Non-Solicitation,
Intellectual Property, Developments and Confidentiality as set forth in
Section 5 (and its subsections). Executive agrees also that RAIT may, without
limitation, exercise the rights and remedies referenced in Section 5.4 of the
Employment Agreement in connection with any breach of any of Executive’s
continuing restrictions set forth in Section 5 (and its subsections) of the
Employment Agreement. The duration of any applicable restrictions contained in
Section 5 (and its applicable subsections) shall begin on the Employment
Termination Date;

(b) Executive remains subject to RAIT’s Insider Trading Policy until such time
as he is not aware of any material nonpublic information concerning RAIT, which
will in any event be deemed to be after two (2) business days after RAIT
terminates the “black-out period” then currently in effect (provided, however,
that the “black-out period” shall not prevent Executive from exercising his
SARs);

(c) Executive shall deliver, on or before the Employment Termination Date, all
property of RAIT to the person designated by RAIT to receive same, including
keys, identification cards, RAIT’s (and its subsidiaries’ and its affiliates’)
credit cards and equipment, such as blackberries, computers, records and
information belonging to RAIT, and any documents, memoranda or files, stored in
whatever media, retaining no copies;

(d) Executive promises to assist RAIT with the transition of his job
responsibilities to other employees of RAIT and its subsidiaries and its
affiliates, and to provide reasonable cooperation to RAIT and its attorneys in
connection with any investigations, lawsuits, or other proceedings in which RAIT
or its employees may become involved, in each case with respect to work
performed for RAIT or its subsidiaries or its affiliates by Executive prior to
the Effective Date;

(e) Executive acknowledges and agrees that he will be fully responsible for the
payment of any and all taxes (including, but not limited to, any and all
applicable federal, state, and local income, excise, penalty or other taxes,
plus interest) due and owing by him as a result of RAIT’s payment to him of the
Amount and RAIT’s payment of any amounts or delivery of RAIT common shares or
SARs to him or the exercise of the SARs; however, RAIT shall allow Executive to
satisfy the tax withholding obligations with respect to the exercise of the
Executive’s vested SARs, which exercise is to be settled with common shares of
the issuer, by having common shares withheld from the common shares issued in
connection with such settlement; and

(f) Executive agrees and acknowledges that this Agreement is not and shall not
be construed to be an admission of any violation of any federal, state or local
statute or regulation, or of any duty owed to Executive by RAIT. RAIT agrees and
acknowledges that this Agreement is not and shall not be construed to be an
admission of any violation of any federal, state or local statute or regulation,
or any duty owed to RAIT or its subsidiaries or its affiliates by Executive.

 

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(g) Executive certifies that RAIT has not made any representations, promises or
inducements to Executive concerning this Agreement other than those contained
herein.

(h) Executive acknowledges and agrees as follows:

(1) That he has read the terms of this Agreement, that he was offered forty-five
(45) calendar days to review it (which he confirms was a reasonable and
sufficient amount of time for him to do so, but he may elect not to use the
entire review period that has been offered) and that he understands its terms
and effects, including the fact that he has agreed to RELEASE AND FOREVER
DISCHARGE RAIT and the other Releasees from any legal action arising out of his
employment relationship with RAIT or any of the Releasees or the Employment
Agreement, the terms and conditions of that employment relationship, and his
termination of employment from RAIT;

(2) That he has signed this Agreement voluntarily and knowingly in exchange for
the consideration described herein, which he acknowledges is adequate and
satisfactory to him;

(3) That he has been advised and is hereby advised in writing to consult with
his attorney prior to signing this Agreement; and

(4) That he has adequate information to make a knowing and voluntary waiver of
any and all claims as set forth in Paragraph 3 above, he understands that he is
waiving those claims, including without limitation, any claims for age
discrimination under the Age Discrimination in Employment Act, as amended by the
Older Worker Benefit Protection Act (“OWBPA”), and he confirms that he has
received Attachment A to this Agreement.

(i) Cooperation.

(1) Executive agrees to cooperate and comply with RAIT’s reasonable requests:
(A) for information, including, without limitation, with respect to governmental
filings and regulatory information requests, and agrees further that nothing in
this Agreement affects RAIT’s ability to report to or cooperate with financial
industry regulators; and (B) to participate in the preparation for, response to,
prosecution and/or defense of any pending, actual or threatened governmental or
private-party investigation, proceeding or litigation involving RAIT or any
Releasee, including, without limitation, by meeting with counsel and providing
information and documents requested.

(2) RAIT will indemnify Executive for all reasonable out-of-pocket expenses, and
for Executive’s time at an hourly rate of one hundred eighty-five dollars
($185), in complying with RAIT’s requests pursuant to Paragraph 4(i)(1) above.
Nothing in this Agreement is intended, or shall be interpreted, to restrict
Executive’s right and/or obligation: (A) to provide information or testify
truthfully; or (B) to contact, cooperate with, or provide information to any
government agency or commission.

 

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5. Indemnification, Litigation and Related Matters. The provisions of RAIT’s
directors and officers liability insurance policies (“D&O Policies”) and errors
and omissions policies (“E&O Policies), the Resolutions of the Board of Trustees
Adopted June 12, 2014, the Declaration of Trust, the Bylaws relating to
indemnification and advancement of expenses to officers of RAIT, the
Indemnification Agreement among Executive, RAIT, RAIT General, Inc. and RAIT
Limited, Inc., and the Indemnitee’s Affirmation and Undertaking to Repay
executed by Executive on July 1, 2014 (collectively the “Indemnification
Documents”) shall continue to apply to Executive with respect to work performed
for RAIT by Executive prior to the Employment Termination Date. RAIT shall
continue to maintain directors and officers insurance and errors and omissions
insurance covering Executive with respect to work performed for RAIT by
Executive prior to the Employment Termination Date on the same or substantially
similar terms as for any other officer. RAIT agrees to keep Executive reasonably
apprised of the status of any proceedings that may implicate him or his conduct
and/or might give rise to a right to indemnification under any applicable
Indemnification Documents or otherwise, including promptly providing relevant
publicly available documents such as pleadings and material filings.

6. Offer Expiration Date.

(a) Executive has forty-five (45) calendar days from the date he has received
this Agreement (the “Offer Expiration Date”) to decide whether or not to execute
this Agreement.

(b) This Agreement will become effective as of the Effective Date, provided
Executive executes the Agreement on or before the Offer Expiration Date and does
not revoke it prior the expiration of the Revocation Period.

(c) RAIT’s offer as set forth in this Agreement both expires and is withdrawn by
RAIT in the event that Executive elects not to execute this Agreement on or
before the Offer Expiration Date or the Executive revokes the Agreement in
accordance with Paragraph 7 below after executing it.

7. Revocation Period. The “Revocation Period,” for purposes of this Agreement,
is the seven (7) day period following Executive’s execution of this Agreement,
during which Executive may change his mind and decide that he does not want to
be legally bound by the Agreement. The Agreement shall not be effective until
after the Revocation Period has expired without Executive having revoked it. To
revoke the Agreement, Executive, within seven (7) days of his execution of the
Agreement, must email a letter to Mr. Schaeffer informing him that he has
revoked the Agreement; provided, however, that, in lieu of an email in the event
that Executive does not have access to email, Executive may send Mr. Schaeffer a
letter via over-night delivery service to his attention at RAIT Financial Trust,
2929 Arch Street, Philadelphia, PA 19104 and simultaneously telephone
Mr. Schaeffer. For a revocation to be effective, Executive must have evidence
confirming timely receipt by RAIT.

 

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8. Miscellaneous.

(a) Executive and RAIT hereby certify that each has read the terms of this
Agreement, and that each understands this Agreement’s terms and effects.

(b) The parties acknowledge that the performance of the promises of each are
expressly contingent upon the fulfillment and satisfaction of the obligations of
the other party as set forth in this Agreement. This Agreement contains the
entire agreement and understanding between Executive and RAIT with respect to
any and all disputes or claims that Executive has, or could have had, against
RAIT and/or the other Releasees as of the date this Agreement is executed, and
supersedes all other agreements between Executive and RAIT with regard to such
disputes or claims, except that: (i) the provisions of the Employment Agreement
shall survive the termination of Executive’s employment with RAIT to the extent
necessary to the intended preservation of any such right and obligations under
Section 5 (captioned “Non-Competition, Non-Solicitation, Developments and
Confidentiality”) and all of its subsections; and (ii) the Indemnification
Documents shall survive the termination of Executive’s Employment.

(c) Interpretation of Agreement. Nothing in this Agreement is intended to
violate any law or shall be interpreted to violate any law. If any paragraph or
part or subpart of any paragraph in this Agreement or the application thereof is
construed to be overbroad and/or unenforceable, then the court making such
determination shall have the authority to narrow the paragraph or part or
subpart of the paragraph as necessary to make it enforceable and the paragraph
or part or subpart of the paragraph shall then be enforceable in its/their
narrowed form. Moreover, each paragraph or part or subpart of each paragraph in
this Agreement is independent of and severable (separate) from each other. In
the event that any paragraph or part or subpart of any paragraph in this
Agreement is determined to be legally invalid or unenforceable by a court and is
not modified by the court to be enforceable, the affected paragraph or part or
subpart of such paragraph shall be stricken from the Agreement, and the
remaining paragraphs or parts or subparts of such paragraphs of this Agreement
shall remain in full, force and effect.

(d) This Agreement shall not be changed unless in writing and signed by both
Executive and RAIT, and this provision requiring amendment in writing shall not
be waived except in writing.

(e) This Agreement will be construed in accordance with the laws of the
Commonwealth of Pennsylvania, which, together with the laws of the United States
of America, will control any and all disputes or questions of interpretation
arising hereunder.

 

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IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have
executed the foregoing Agreement on the day signed and dated by each of them as
set forth.

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

 

/s/ Kenneth R. Frappier     December 23, 2014 Kenneth R. Frappier     Date RAIT
Financial Trust     By: /s/ James J. Sebra     December 24, 2014     Date Name:
James J. Sebra     Title: CFO    

 

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ATTACHMENT A

INFORMATION MADE AVAILABLE PURSUANT TO THE

OLDER WORKER BENEFIT PROTECTION ACT OF 1990

The following information is provided in accordance with the Older Worker
Benefit Protection Act of 1990 to permit affected employees age forty (40) and
older to evaluate whether to execute a Separation Agreement in return for the
receipt of certain benefits.

(A) RAIT has decided to end the employment of its executives whose ability to
perform their job duties, in RAIT’s estimation, has been impacted by an
investigation of RAIT conducted by the Securities and Exchange Commission. For
purposes of this attachment, the Decisional Unit consists of those executives
who meet this criterion.

(B) All executives in the Decisional Unit defined in Paragraph (A) above whose
employment is ending are eligible for and have been selected to receive
severance benefits as set forth in their respective Separation Agreements.
However, to receive those severance benefits, the executive must sign the
Separation Agreement and return it to Scott Schaeffer within the time period
provided in the Agreement. The Separation Agreement will become effective only
after seven (7) days following the date on which the executive signs it, and
only if the executive does not revoke it during this seven (7) day period.

(C) All executives in the Decisional Unit have been selected for termination of
employment and are eligible for the severance benefits set forth in their
Separation Agreement, as per Paragraph (B) above. The job titles and ages of
these executives are as follows:

 

Job Title

   Age   

Executives in the Decisional Unit Who Have
Been Selected for Termination of Employment
and Who Are Eligible for the
Severance Benefits.

  

Executives in the Decisional Unit

Who Have Not Been Selected for

Termination of Employment

Executive VP — Portfolio and Risk
Management

   62    X   

Managing Director — Business
Development, General Counsel and
Secretary

   46    X   

 

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