EX-10.1






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.



* * * *

[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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