SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (“Agreement”) dated as of July 31, 2009, between
RAIT FINANCIAL TRUST, a Maryland real estate investment trust, (the “Company”),
and MOSES MARX, an individual (the “Seller”).

W I T N E S S E T H:

WHEREAS, the Seller desires to sell to the Company, and the Company wishes to
purchase from the Seller a 6.875% Convertible Senior Note due 2027 of the
Company in the face amount of $98,280,000 (the “Convertible Note”);

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

ARTICLE I

Purchase of Convertible Note

Section 1.1 Purchase of Convertible Note. Upon the terms and conditions set
forth in this Agreement, the Seller shall sell to the Company, and the Company
shall purchase from the Seller, the Convertible Note.

Section 1.2 Purchase Price; Accrued Interest. The purchase price for the
Convertible Note to be acquired by the Company (the “Purchase Price”) shall be
$53,000,000, payable as follows.

(a) $10,000,000 million in cash; and

(b) $43,000,000 million by delivery of the Company’s 12.5% Senior Secured Note
due 2014 (the “Senior Note”) payable to Seller substantially in the form annexed
hereto as Exhibit A.

In addition to the Purchase Price, the Company shall pay to Seller an amount, in
cash, equal to any accrued but unpaid interest on the Convertible Note through
the Closing Date (the “Convertible Note Accrued Interest”).

Section 1.3 The Closing.

(a) Timing. Subject to the fulfillment or waiver of the conditions set forth in
Article III hereof, the purchase and sale of the Convertible Note shall take
place at a closing (the “Closing”) on or about the date hereof or such other
date as the Seller and the Company may agree upon (the “Closing Date”).

(b) Deliveries. On the Closing Date, the Seller shall deliver the Convertible
Note to the Company through the Depository Trust Corporation (“DTC”) to an
account designated by the Company. On the Closing Date the Company shall deliver
to the Seller (i) for the cash portion of the Purchase Price as set forth in
Section 1.3 (a), above, and for the Convertible Note Accrued Interest, a wire
transfer of immediately available funds to an account designated in writing by
the Seller; (ii) for the portion of the Purchase Price paid by the Senior Note,
physical delivery of a fully executed Senior Note to the Seller or his
designated representative at the address designated by Seller for that purpose;
and (iii) the Transaction Documents (as such term is defined in Section 2.1(c)),
executed by the Company. In addition, each party shall deliver all documents,
instruments and writings required to be delivered by such party pursuant to this
Agreement or the Transaction Documents at or prior to the Closing.

ARTICLE II

Representations and Warranties

Section 2.1 Representations and Warranties of the Company. The Company hereby
makes the following representations and warranties to the Seller as of the date
hereof and the Closing Date:

(a) Organization. The Company has been duly organized and is validly existing as
a real estate investment trust in good standing under the laws of the State of
Maryland.

(b) Subsidiaries. Each of RAIT Asset Holdings II, LLC and RAIT Asset Holdings II
Member, LLC (each a “Subsidiary” and collectively, the “Subsidiary”) is a wholly
owned direct or indirect subsidiary of the Company. There are no liens,
mortgages, pledges, charges, encumbrances, adverse claims or other security
interests (“Liens”) upon or with respect to the ownership interest of each
Subsidiary held by the Company directly and/or, as the case may be, indirectly
through any intermediate subsidiary of the Company.

(c) Authorization; Enforcement. (i) The Company has all requisite trust power
and authority to enter into and perform this Agreement, and the Senior Note, and
the other agreements and documents referred to therein and to issue the Senior
Note in accordance with the terms hereof, (ii) each Subsidiary has all requisite
limited liability company power and authority to enter into and perform the
Guaranty (the “Guaranty”) and (with respect to RAIT Asset Holdings II Member,
LLC) the Subsidiary Collateral Pledge Agreement (the “Pledge Agreement”) from
such Subsidiary in favor of the Seller, and the other agreements and documents
referred to therein to be executed and delivered by it (the Senior Note, the
Guaranties, the Pledge Agreement and such other documents and agreements
referred to therein, collectively, the “Transaction Documents”), (iii) the
execution and delivery of the Transaction Documents by the Company or the,
Subsidiaries, as applicable, and the consummation by each of them of the
transactions contemplated thereby, including the issuance of the Senior Note,
have been duly authorized by all necessary trust or limited liability company
action (including action by the board of trustees of the Company), and no
further consent or authorization of the Company or its shareholders, or any
Subsidiary or its members, is required, (iv) the Transaction Documents have
been, or at the Closing will be, duly executed and delivered by the Company, and
the Subsidiaries, as applicable and (v) assuming due execution and delivery of
this Agreement by the Seller, the Transaction Documents constitute, or at the
Closing will constitute, valid and binding obligations of the Company and each
of the Subsidiaries, as applicable, enforceable against them in accordance with
their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of creditors’
rights and remedies or by other equitable principles of general application.

(d) No Conflicts. The execution, delivery and performance of the Transaction
Documents to which they are parties by the Company and each Subsidiary and the
consummation by the Company and each Subsidiary of the transactions contemplated
hereby and thereby and the issuance of the Senior Note will not (i) result in a
violation of the Company’s Declaration of Trust or other organizational
documents or the certificates of formation and limited liability company
agreements of the Subsidiaries; (ii) conflict with, or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company,
either Subsidiary or any of their subsidiaries is a party, except as would not
reasonably be expected to have a Material Adverse Effect. For purposes of this
Agreement, “Material Adverse Effect” means any adverse effect on the business,
operations, properties or financial condition of the Company that is (either
alone or together with all other adverse effects) material to the Company, and
any material adverse effect on the transactions contemplated under this
Agreement or any other agreement or document contemplated hereby or thereby.
Except as specifically contemplated by this Agreement, neither the Company nor
any Subsidiary is required to obtain any consent, authorization or order of, or
make any filing or registration with, any court, governmental agency or any
regulatory or self-regulatory agency in order for it to execute, deliver or
perform any of its obligations under, or contemplated by, the Transaction
Documents, or (in the case of the Company) to issue the Senior Note, in
accordance with the terms hereof or thereof.

(e) Brokers. Neither the Company nor any Subsidiary has taken any action that
would give rise to any claim by any person for brokerage commissions, finder’s
fees or similar payments by the Company, such Subsidiary or the Seller relating
to this Agreement, the other Transaction Documents or the transactions
contemplated hereby or thereby.

Section 2.2 Representations and Warranties of the Seller. The Seller hereby
makes the following representations and warranties to the Company as of the date
hereof and the Closing Date:

(a) Accredited Investor Status; Sophisticated Purchaser. The Seller is an
“accredited investor” as that term is defined in Rule 501(a) under the
Securities Act of 1933, as amended (the “1933 Act”), is able to bear the risk of
the investment in the Senior Note. The Seller is a “qualified purchaser” as that
term is defined in the Investment Company Act of 1940, as amended. The Seller
has such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of his investment in the Senior Note.

(b) Information. The Seller and his advisors, if any, have been furnished with
all materials relating to the Senior Note and the business, finances and
operations of the Company which have been requested by the Seller. The Seller
and his advisors, if any, have been afforded the opportunity to ask questions of
the Company. Neither such inquiries nor any other due diligence investigations
conducted by the Seller or his advisors, if any, or his representatives shall
modify, amend or affect the Seller’s right to rely on the Company’s
representations and warranties contained in Section 2.1 above. The Seller
understands that his investment in the Senior Note involves a high degree of
risk. The Seller has sought such accounting, legal and tax advice as he has
considered necessary to make an informed investment decision with respect to his
acquisition of the Senior Note. The Seller has not sought nor received from the
Company any investment, legal, tax, accounting or other advice regarding the
transactions contemplated by this Agreement, the Senior Note or the other
Transaction Documents.

(c) No Governmental Review. The Seller understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Senior Note or the fairness or
suitability of the investment in the Senior Note nor have such authorities
passed upon or endorsed the merits thereof.

(d) Legends. The Seller understands that the Company shall issue the Senior Note
without any legend except as described in Article IV below.

(e) Authorization; Enforcement. This Agreement has been duly and validly
executed and delivered by Seller and is a valid and binding agreement of Seller
enforceable against him in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies or by other equitable principles of general application.

(f) Residency. The Seller is a resident of the State of New York.

(g) No Conflicts. The execution, delivery and performance of this Agreement by
the Seller and the consummation by the Seller of the transactions contemplated
hereby will not conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Seller is bound, or result in a
violation of any law, rule, regulation or decree applicable to the Seller,
except as would not reasonably be expected to materially and adversely affect
Seller’s power or ability to perform his obligations under the Transaction
Documents.

(h) Ownership of Convertible Note. As of the date hereof the Seller is, and as
of the Closing Date the Seller shall be the sole owner of the Convertible Note,
and the Convertible Note is and shall be owned by the Seller free and clear of
any Liens, and Seller has not made any assignment of his right, title or
interest in the Convertible Note that will remain in effect on the Closing Date.
Upon delivery to the Company, it will have good title to the Convertible Note,
free and clear of any Liens.

(i) Investment Representation. The Seller is acquiring the Senior Note for his
own account and not with a view to distribution in violation of any securities
laws. The Seller has been advised and understand that the Senior Note has not
been registered under the 1933 Act or under the “blue sky” laws of any
jurisdiction and may be resold only if registered pursuant to the provisions of
the 1933 Act or if Seller delivers an opinion of counsel to the Company that an
exemption from registration is available or that registration not required by
law. The Seller has been advised and understands that the Company, in issuing
the Senior Note, is relying upon, among other things, the representations and
warranties of the Seller contained in this Section 2.2 in concluding that the
issuance of the Senior Note to Seller is a “private offering” and is exempt from
the registration provisions of the 1933 Act.

(j) Rule 144. The Seller understands that there is no public trading market for
all or any portion of the Senior Note, that none is expected to develop, and
that the Senior Note must be held indefinitely unless and until registered under
the 1933 Act or an exemption from registration is available. The Seller has been
advised or is aware of the provisions of Rule 144 promulgated under the 1933
Act.

(k) Brokers. The Seller has not taken any action which would give rise to any
claim by any person for brokerage commissions, finder’s fees or similar payments
by the Company or the Seller relating to this Agreement or the transactions
contemplated hereby.

ARTICLE III

Conditions to Closing

Section 3.1 Conditions Precedent to the Obligation of the Seller to Sell. The
obligation hereunder of the Seller to sell the Convertible Note at the Closing
is subject to the satisfaction, at or before the Closing, of each of the
applicable conditions set forth below. These conditions are for the Seller’s
sole benefit and may be waived by the Seller at any time in its sole discretion.

(a) Accuracy of the Company’s Representations and Warranties. The
representations and warranties of the Company will be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at the Closing Date.

(b) Performance by the Company. The Company shall have performed all agreements
and satisfied all conditions required to be performed or satisfied by the
Company at or prior to the Closing, including payment of the Purchase Price and
Convertible Note Accrued Interest to the Seller as provided herein.

(c) No Injunction. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement or the
other Transaction Documents.

Section 3.2 Conditions Precedent to the Obligation of the Company to Purchase.
The obligation hereunder of the Company to acquire and pay for the Convertible
Note at Closing is subject to the satisfaction, at or before Closing, of each of
the applicable conditions set forth below. These conditions are for the
Company’s sole benefit and may be waived by the Company at any time in its sole
discretion.

(a) Accuracy of the Seller’s Representations and Warranties. The representations
and warranties of the Seller shall be true and correct in all material respects
as of the date when made and as of the Closing Date as though made at the
Closing Date.

(b) Performance by the Seller. The Seller shall have performed all agreements
and satisfied all conditions required to be performed or satisfied by him at or
prior to the Closing, including, without limitation, delivery of the Convertible
Note to the Company.

(c) No Injunction. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement or the
other Transaction Documents.

ARTICLE IV

Legend

Until being registered under the 1933 Act for resale or available for resale
under Rule 144(b)(i) pursuant to the provisions of the last sentence thereof,
the Senior Note shall bear a legend in substantially the following form:

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR AFTER RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT.

Nothing herein shall limit the right of any holder to pledge the Senior Note
pursuant to a bona fide margin account or lending arrangement entered into in
compliance with law, including applicable securities laws.

ARTICLE V

Termination

Section 5.1 Termination. This Agreement, may be terminated by the Company or by
the Seller at any time if the Closing shall not have been consummated on or
before five business days following the date of this Agreement.

ARTICLE VI

Governing Law; Miscellaneous

Section 6.1 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY
OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
DISCUSSED HEREIN, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY
SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT
IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
MAILING A COPY THEREOF TO SUCH PARTY AT THE ADDRESS FOR SUCH NOTICES TO IT UNDER
THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED
TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
IF ANY PROVISION OF THIS AGREEMENT SHALL BE INVALID OR UNENFORCEABLE IN ANY
JURISDICTION, SUCH INVALIDITY OR UNENFORCEABILITY SHALL NOT AFFECT THE VALIDITY
OR ENFORCEABILITY OF THE REMAINDER OF THIS AGREEMENT IN THAT JURISDICTION OR THE
VALIDITY OR ENFORCEABILITY OF ANY PROVISION OF THIS AGREEMENT IN ANY OTHER
JURISDICTION. EACH PARTY HERETO IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY.

Section 6.2 Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.

Section 6.3 Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

Section 6.4 Entire Agreement; Amendments; Waivers. This Agreement supersedes all
other prior oral or written agreements between the Seller, the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
(including the other Transaction Documents) contain the entire understanding of
the parties with respect to the matters covered herein and therein and, except
as specifically set forth herein or therein, neither the Company nor the Seller
makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be amended other than by an
instrument in writing signed by the Company and the Seller, and no provision
hereof may be waived other than by an instrument in writing signed by the party
against whom enforcement is sought.

Section 6.5 Notices. All notices, consents, approvals and requests required or
permitted hereunder (a “Notice”) shall be given in writing and shall be
effective for all purposes if (i) hand delivered, or (ii) sent by (A) certified
or registered United States mail, postage prepaid, (B) expedited prepaid
delivery service, either commercial or United States Postal Service, with proof
of attempted delivery, or (C) telecopier (confirmed electronically), in any case
addressed as follows (or to such other address or person as a party shall
designate from time to time by notice to the other party):

     
If to the Company:
 

RAIT Financial Trust
Cira Centre
2929 Arch Street
 

Philadelphia, PA 19104

Telephone:
Facsimile:
Attention:
  (215) 243-9033
(215) 243-9039
Raphael Licht

         
If to the Seller:
       
Mr. Moses Marx 160 Broadway New York, NY 10038 Telephone:
    (212) 349-2875  
Facsimile:
    (212) 227-3208  

A Notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a business day; in the case of
expedited prepaid delivery, upon the first attempted delivery on a business day;
or in the case of telecopier, on the date confirmed electronically.

Section 6.6 Successors and Assigns. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns; provided, however, that neither this
Agreement, the Senior Note nor the other Transaction Documents may be
transferred to any person which is not an accredited investor, a QIB and a
qualified purchaser, as such terms are used in Section 2.2 (a) of this
Agreement, and that any such transfer must otherwise comply with the indentures
and other agreements pursuant to which any collateral securing the Senior Note
was issued unless the Senior Note is no longer secured by any such collateral.

Section 6.7 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

Section 6.8 Survival. The representations, warranties and agreements of the
Company and the Seller contained in the Agreement shall survive the Closing.

Section 6.9 Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

Section 6.10 No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

Section 6.11 Seller‘s Legal Fees. The Company shall pay all legal fees and
related expenses in excess of the aggregate amount of $25,000 incurred by Seller
in connection with the negotiation and execution of this Agreement and the
Transaction Documents and the consummation of the transactions contemplated
herein and thereby.

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[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed as of the date and year first above written.

     
COMPANY:
  SELLER:
RAIT FINANCIAL TRUST
By: /s/ James J. Sebra
  MOSES MARX

 
 

Name: James J. Sebra
Title: SVP & CAO
  /s/ Moses Marx

 
   

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