Document:

EX-10.5

AMENDMENT 2008-1

TO THE

EMPLOYMENT AGREEMENT

THIS AMENDMENT, dated as of December 15, 2008, between RAIT Financial Trust, a Maryland real
estate investment trust, (the “Company”) and Plamen Mitrikov (“Executive”).

RECITALS

WHEREAS, the Company and Executive previously entered into that certain Employment Agreement,
dated as of June 8, 2006, (the “Employment Agreement”), which sets forth the terms and
conditions of Executive’s employment with the Company;

WHEREAS, the Company and Executive desire to amend the Employment Agreement to comply with the
requirements of section 409A of the Internal Revenue Code of 1986, as amended, and the final
regulations issued thereunder; and

WHEREAS, Section 7.6 of the Employment Agreement provides that the Employment Agreement may be
amended pursuant to a written agreement between the Company and Executive.

NOW, THEREFORE, the Company and the Executive hereby agree that, effective December 15, 2008,
the Employment Agreement shall be amended as follows:

1. The third sentence of Section 4 of the Employment Agreement is hereby amended in its
entirety, and a new sentence is hereby added after the third sentence of such Section, to read as
follows:

“Upon termination of employment due to death or disability, (i) the Executive (or
the Executive’s estate or beneficiaries in the case of the death of the Executive)
shall be entitled to receive any Annual Salary and other benefits earned and accrued
under this Agreement prior to the date of termination (and reimbursement under this
Agreement for expenses incurred prior to the date of termination); (ii) the
Executive (or the Executive’s estate or beneficiaries in the case of the death of
the Executive) shall be entitled to receive a single-sum payment equal to the value
of his Annual Salary that would have been paid to him for the remainder of the year
in which the termination occurs; (iii) without duplication of any amounts due under
clauses (i) and (ii), the Executive (or the Executive’s estate or beneficiaries in
the case of the death of the Executive) shall receive a single-sum payment equal to
the value of the highest bonus earned by the Executive in the one year period
preceding the date of termination, multiplied by a fraction (x) the numerator of
which is the number of days in the fiscal year preceding the termination and (y) the
denominator of which is 365; (iv) all outstanding unvested equity-based awards
pursuant to the Plan held by the Executive shall fully vest and become immediately
exercisable, as applicable, and subject to the terms of such awards; and (v) the
Executive (or the Executive’s estate or beneficiaries in the case of the death of
the Executive) shall have no further rights to any other compensation or benefits
hereunder, or any other rights hereunder (but, for the avoidance of doubt, shall
receive such disability and death benefits as may be provided under the Company’s
plans and arrangements in accordance with their terms). Unless the payment is
required to be delayed pursuant to Section 7.17(b) below, the cash amounts payable
pursuant to clauses (i), (ii) and (iii) above shall be paid to the Executive (or the
Executive’s estate or beneficiaries in the case of the death of the Executive)
within 60 days following the date of his termination of employment on account of
death or disability.”

2. A new sentence is hereby added to the end of Section 5.1(b) of the Employment Agreement to
read in its entirety as follows:

“Unless the payment is required to be delayed pursuant to Section 7.17(b) below, the
cash amounts payable to the Executive under this Section 5.1(b) shall be paid to the
Executive in a single-sum payment within 60 days following the date of his
termination of employment with the Company pursuant to this Section 5.1(b).”

3. A new sentence is hereby added to the end of Section 5.2(b) of the Employment Agreement to
read as follows:

“Unless the payment is required to be delayed pursuant to Section 7.17(b) below, the
cash amounts payable pursuant to clauses (i) and (ii) above shall be paid to the
Executive (or the Executive’s estate or beneficiaries in the case of the death of
the Executive) within 60 days following the date of his termination of employment
with the Company on account of non-renewal of this Agreement by the Company.”

4. The last sentence of Section 5.2(c) of the Employment Agreement is hereby deleted and
replaced in its entirety with the following:

“Unless the payment is required to be delayed pursuant to Section 7.17(b) below, the
cash amounts payable to the Executive under this Section 5.2(b) shall be paid to the
Executive within 60 days following the date of his termination of employment with
the Company pursuant to this Section 5.2(b).”

5. A new sentence is hereby added to the end of Section 5.4 of the Employment Agreement to
read as follows:

“Unless the payment is required to be delayed pursuant to Section 7.17(b) below, any
additional payment payable to the Executive pursuant to this Section shall be paid
by the Company to the Executive within 5 days of receipt of the Company’s
accountants’ determination, which such determination shall be made to the Company
within 30 days of any event requiring payment to the Executive hereunder.”

6. A new Section 7.17 is hereby added to the Employment Agreement to read in its entirety as
follows:

“7.17. Section 409A.

(a) 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 the Executive,
directly or indirectly, designate the calendar year of payment.

(b) Payment Delay. Notwithstanding any provision to the contrary in
this Agreement, if on the date of the Executive’s termination of employment, the
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 the
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 the Executive’s “separation from service” with the Company (or any
successor thereto). The postponed amounts shall be paid to the Executive in a lump
sum within 30 days after the date that is 6 months following the Executive’s
“separation from service” with the Company (or any successor thereto). If the
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 the Executive’s estate within 60
days 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 5%.

(c) Reimbursements. All reimbursements provided under this Agreement
shall be made or provided in accordance with the requirements of section 409A,
including, where applicable, the requirement that (i) any reimbursement is for
expenses incurred during the 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. Any tax gross up payments
to be made hereunder shall be made not later than the end of the Executive’s taxable
year next following the Executive’s taxable year in which the related taxes are
remitted to the taxing authority.”

7. In all respects not modified by this Amendment 2008-1, the Employment Agreement is hereby
ratified and confirmed.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Company and the Executive agree to the terms of the foregoing
Amendment 2008-1, effective as of the date set forth above.

RAIT FINANCIAL TRUST

By: _/s/ Jack E. Salmon      

Name: Jack E. Salmon

Title: Chief Financial Officer & Treasurer

EXECUTIVE

/s/      Plamen Mitrikov     

Plamen Mitrikov

2EX-10.6

 [RAIT Letterhead]

December 15, 2008

Betsy Z. Cohen

c/o RAIT Financial Trust

2929 Arch Street, 17th Floor

Philadelphia, PA 19104

	 	 	 
	Re:

	 	Change in Payment Form and Time of Cash Benefit Under the
	
 
	 	 
	
 
	 	RAIT Investment Trust Executive Pension Plan
	
 
	 	 

Dear Betsy,

The purpose of this letter is to memorialize your election to change the form and time of the
Cash Benefit (as defined in the Plan) that is payable to you under the RAIT Investment Trust
Executive Pension Plan (the “Plan”), as authorized by RAIT Financial Trust’s Compensation Committee
and permitted by the transition relief set forth in the Proposed Regulations under Section 409A of
the Internal Revenue Code of 1986, as amended, and IRS Notice 2007-86. Specifically, you have
elected to have the portion of the Cash Benefit that is payable to you for the 2009 tax year and
later as an Actuarial Equivalent (as defined in the Plan) lump sum cash payment that will be paid
to you in January 2009. Based on the actuarial factors set forth in the Plan, the amount that will
be paid to you as a lump sum as a result of this election is equal to $4,389,607. Payment of this
amount to you in January 2009 will fully satisfy RAIT Financial Trust’s (“RAIT”) obligations to you
under the Plan and neither you nor your beneficiaries will have any rights to any future benefits
under the Plan. Please note that this election does not change the portion of the Cash Benefit
that is payable to you as a 50% joint and survivor annuity during the 2008 calendar year, which
will continue to be paid to you in accordance with the terms of the Plan.

Please sign below where indicated and return an executed copy of this letter to Jack E.
Salmon, the Chief Financial Officer of RAIT and the Plan Administrator (as defined in the Plan), no
later than December 31, 2008. You should also sign the extra copy of this letter and keep it with
your files. Please note that this election is a one-time opportunity to change the form of your
Cash Benefit. If you do not return an executed copy of this letter to me by December 31, 2008, you
will be deemed to not have made the election to convert the Cash Benefit to a lump sum payment as
provided in this letter, and the Cash Benefit that is payable to you for tax years 2009 and later
will continue in its current form of a 50% joint and survivor annuity.

Please call me with any questions.

Sincerely,

/s/     Jack E. Salmon_

Jack E. Salmon

1

I hereby elect to have the portion of the Cash Benefit that is payable to me for calendar
years 2009 and later as an Actuarial Equivalent lump sum cash payment that will be paid to me in
January 2009. I understand and agree that, once paid, this lump such cash payment is full
satisfaction of RAIT Financial Trust’s obligations to me under the Plan and neither I nor my
eligible beneficiaries shall have any future claim to a benefit under the Plan. I also understand
and agree that this election does not change the form and time of payment of the portion of the
Cash Benefit that is otherwise payable to me during the 2008 calendar year.

	 	 	 
	/s/     Betsy Z. Cohen _

	 	December 15, 2008
	 

	 	 
	Betsy Z. Cohen

	 	Date 

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