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 Daniel G. Cohen (“ 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 7.16(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 7.16(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. The last sentence of Section 5.2(b) 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 7.16(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).”

4. 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 7.16(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.”

5. A new Section 7.16 is hereby added to the Employment Agreement to read in its entirety as follows:

“7.16. 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.”

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

[SIGNATURE PAGE FOLLOWS]

1

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/ Daniel G. Cohen      

Daniel G. Cohen

2

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 Jack E. Salmon (“ 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 7.16(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 7.16(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(a) of the Employment Agreement to read as follows:

“Unless the payment is required to be delayed pursuant to Section 7.16(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(b) 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 7.16(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 7.16(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 7.16 is hereby added to the Employment Agreement to read in its entirety as follows:

“7.16. 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]

1

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/ Raphael Licht      
Name: Raphael Licht
Title: Chief Administrative Officer,
Chief Legal Officer and Secretary

EXECUTIVE

/s/ Jack E. Salmon      

Jack E. Salmon

2

AMENDMENT 2008-1
TO THE
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

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

RECITALS

WHEREAS , the Company and Executive previously entered into that certain Amended and Restated Employment Agreement, dated as of December 11, 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 11.1 of the Employment Agreement provides that the Employment Agreement may be amended pursuant to a written amendment approved by the Board of Trustees of the Company and executed by the Company and the Executive.

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

1. Section 1.6(b) of the Employment Agreement is hereby amended in its entirety to read as follows:

“Executive shall continue to be entitled to receive a benefit under the RAIT Financial Trust Executive Pension Plan (the “Executive Pension Plan”) in accordance with the terms of the Executive Pension Plan, the terms and conditions of which are described in such plan document and any amendments thereto.”

2. The first sentence of Section 2.1(a) of the Employment Agreement is hereby amended in its entirety to read as follows:

“The Company may remove Executive at any time without Cause (as defined in Section 4) from the position in which Executive is employed hereunder upon not less than sixty (60) days’ prior written notice to Executive.”

3. The last sentence of Section 2.1(c)(i) of the Employment Agreement is hereby amended in its entirety to read as follows:

“Unless the payment is required to be delayed pursuant to Section 18(b) below, the payment described above shall be made within sixty (60) days following Executive’s last day of employment with the Company, provided Executive executes the Release during the sixty (60) day period and the revocation period for the Release has expired without revocation by Executive.”

4. Section 2.1(c)(ii) of the Employment Agreement is hereby amended in its entirety to read as follows:

“For a period of 18 months following the date of termination, Executive shall continue to receive the medical coverage in effect at the date of her termination (or generally comparable coverage) for herself and, where applicable, her 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. 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 18-month benefit period.”

5. Section 2.1(c)(iii) of the Employment Agreement is hereby amended in its entirety to read as follows:

“Executive shall also receive any other amounts earned, accrued and owing but not yet paid under Section 1 above, including a pro rata portion of Executive’s 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 which Executive was employed by the Company in the fiscal year of her termination of employment pursuant to Section 2.1(a) and the denominator of which is three hundred and sixty-five (365). Unless the payment is required to be delayed pursuant to Section 18(b) below, the payment described above shall be made within sixty (60) days following Executive’s last day of employment with the Company, provided Executive executes the Release during the sixty (60) day period and the revocation period for the Release has expired without revocation by Executive.”

6. The third sentence and subsections (a) and (b) of Section 2.3 of the Employment Agreement are hereby deleted in their entirety and replaced with the following:

“If the Company terminates Executive’s employment for Disability, Executive shall be entitled to receive the following: (a) any other amounts earned, accrued and owing but not yet paid under Section 1 above and any benefits accrued and earned in accordance with the terms of any applicable benefit plans and programs of the Company, including, the Company’s long-term disability plan, and (b) a pro rated Cash Bonus for the year in which Executive’s Disability occurs. The pro rated Cash Bonus shall be determined as provided in Section 2.1(c)(iii) above and, unless the payment is required to be delayed pursuant to Section 18(b) below, shall be paid in a lump sum cash payment to Executive within sixty (60) days following Executive’s last day of employment with the Company on account of Disability.”

7. Clause (ii) of Section 2.4 of the Employment Agreement is hereby amended in its entirety to read as follows:

“(ii) a pro rated Cash Bonus for the fiscal year in which Executive’s death occurs, which pro rated Cash Bonus shall be determined as provided in Section 2.1(c)(iii) above and, unless the payment is required to be delayed pursuant to Section 18(b) below, shall be paid in a lump sum cash payment within sixty (60) days following Executive’s death.”

8. The first sentence of Section 3.2 of the Employment Agreement is hereby amended in its entirety to as follows:

“Upon or after a Change of Control, the Company (by action of the Board) may remove Executive at any time without Cause from the position in which Executive is employed hereunder or Executive may initiate 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 60 days’ prior written notice to Executive (or in the case of resignation for Good Reason, Executive shall give the Company not less than 60 days’ prior written notice of such resignation).”

9. A new sentence is hereby added to the end of Section 3.3 of the Employment Agreement to read in its entirety as follows:

“Unless the payment is required to be delayed pursuant to Section 18(b) below, any additional payment payable to the Executive pursuant to this Section shall be paid by the Company to the Executive within five (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.”

10. Section 18 of the Employment Agreement is hereby amended in its entirety to read as follows:

“18. 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 thirty (30) days after the date that is six (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 sixty (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.”

11. Exhibit A to the Employment Agreement is hereby deleted in its entirety.

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

[SIGNATURE PAGE FOLLOWS]

1

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/       Betsy Z. Cohen      

Betsy Z. Cohen

2

AMENDMENT 2008-1
TO THE
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

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

RECITALS

WHEREAS , the Company and Executive previously entered into that certain Second Amended and Restated Employment Agreement, dated as of December 11, 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 11.1 of the Employment Agreement provides that the Employment Agreement may be amended pursuant to a written amendment approved by the Board of Trustees of the Company and executed by the Company and the 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 first sentence of Section 2.1(a) of the Employment Agreement is hereby amended in its entirety to read as follows:

“The Company may remove Executive at any time without Cause (as defined in Section 4) from the position in which Executive is employed hereunder upon not less than sixty (60) days’ prior written notice to Executive.”

2. The last sentence of Section 2.1(c)(i) of the Employment Agreement is hereby amended in its entirety to read as follows:

“Unless the payment is required to be delayed pursuant to Section 18(b) below, the payment described above shall be made within sixty (60) days following Executive’s last day of employment with the Company, provided Executive executes the Release during the sixty (60) day period and the revocation period for the Release has expired without revocation by Executive.”

3. Section 2.1(c)(ii) of the Employment Agreement is hereby amended in its entirety to read as follows:

“For a period of 18 months following the date of termination, Executive shall continue to receive the medical coverage in effect at the date of his termination (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. 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 18-month benefit period.”

4. Section 2.1(c)(iii) of the Employment Agreement is hereby amended in its entirety to read as follows:

“Executive shall also receive any other amounts earned, accrued and owing but not yet paid under Section 1 above, including 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, 100% of Executive’s Base Salary) (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 and the denominator of which is three hundred and sixty-five (365). Unless the payment is required to be delayed pursuant to Section 18(b) below, the payment described above shall be made within sixty (60) days following Executive’s last day of employment with the Company, provided Executive executes the Release during the sixty (60) day period and the revocation period for the Release has expired without revocation by Executive.”

5. The last sentence of Section 2.3(a) of the Employment Agreement is hereby amended in its entirety to read as follows:

“The pro rated Cash Bonus shall be determined as provided in Section 2.1(c)(iii) above and, unless the payment is required to be delayed pursuant to Section 18(b) below, shall be paid in a lump sum cash payment to Executive within sixty (60) days following Executive’s last day of employment with the Company on account of Disability.”

6. Clause (ii) of Section 2.4 of the Employment Agreement is hereby amended in its entirety to read as follows:

“(ii) a pro rated Cash Bonus for the fiscal year in which Executive’s death occurs, which pro rated Cash Bonus shall be determined as provided in Section 2.1(c)(iii) above and, unless the payment is required to be delayed pursuant to Section 18(b) below, shall be paid in a lump sum cash payment within sixty (60) days following Executive’s death.”

7. The first sentence of Section 3.2 of the Employment Agreement is hereby amended in its entirety to read as follows:

“Upon or after a Change of Control, the Company (by action of the Board) may remove Executive at any time without Cause from the position in which Executive is employed hereunder or Executive may initiate 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).”

8. A new sentence is hereby added to the end of Section 3.3 of the Employment Agreement to read in its entirety as follows:

“Unless the payment is required to be delayed pursuant to Section 18(b) below, any additional payment payable to the Executive pursuant to this Section shall be paid by the Company to the Executive within five (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.”

9. Section 18 of the Employment Agreement is hereby amended in its entirety to read as follows:

“18. 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 thirty (30) days after the date that is six (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 sixty (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.”

10. 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/ Scott F. Schaeffer      

Scott F. Schaeffer

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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

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[ RAIT Letterhead ]

December 15, 2008

Betsy Z. Cohen
c/o RAIT Financial Trust
2929 Arch Street, 17 ^th Floor
Philadelphia, PA 19104

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

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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.

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[ RAIT FINANCIAL TRUST LETTERHEAD ]

As of December15, 2008

To All Holders of RAIT Officer Restricted Units:

As you are aware, the phantom units that have been awarded to you as Restricted Units under the RAIT Financial Trust 2008 Incentive Award Plan (previously known as the RAIT Investment Trust 2005 Equity Compensation Plan) (the “ Plan ”) are subject to the requirements of section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”) because they constitute deferred compensation. As a consequence, in order to comply with the requirements of section 409A of the Code and its corresponding regulations, the terms of the Unit Award Agreements (collectively, the “ Agreements ”) covering your currently outstanding Restricted Units (collectively, the “ Grants ”) must be amended by December 31, 2008 to be in documentary compliance with such requirements. As a result, the purpose of this letter is to amend the Agreements covering these outstanding Grants so that they will be in compliance with such requirements.

Specifically, as of the date of this letter, each Agreement is hereby amended as follows, except to the extent already provided in your Agreement for such Grant (all capitalized terms not defined in this letter, shall have the meaning set forth in the Agreements):

•

The conversion of Redeemed Units to an equivalent number of Common Shares shall occur within thirty (30) days following the designated Redemption Date or Deferred Date, as applicable.

•

You may elect to make an one-time irrevocable election to further defer the Redemption Date of any of the Redeemed Units that are redeemable on the Vesting Date, provided that (i) the election shall not take effect until at least twelve (12) months after the date on which the election is made, (ii) the new Redemption Date must be at least five (5) years later than the first anniversary of the Vesting Date ( i.e. , no sooner than the sixth anniversary of the Vesting Date), and (iii) the election must be made at least twelve (12) months prior to the first anniversary of the Vesting Date. Notwithstanding your election, your Redemption Date will be the date of your death or becoming disabled (within the meaning of section 409A(a)(2)(C) of the Code) if such event occurs prior to your Deferred Date.

•

If your Agreement provides that dividend equivalents will be credited to a Dividend Equivalent Account until the corresponding Restricted Units vest, the cash payment that will be paid to you for such amounts if the Restricted Units vest will be paid to you within thirty (30) days following the applicable Vesting Date.

•

If your Agreement provides that dividend equivalents will be paid to you when dividends are declared with respect to the Common Shares, the cash payment for such dividend equivalents will be paid to you at the same time that the dividends are paid to the shareholders holding Common Shares.

•

If a Change of Control occurs, upon such occurrence, unless the Committee determines otherwise in accordance with the requirements of section 409A of the Code: (i) all of your then outstanding Restricted Units shall continue to vest in accordance with their terms; (ii) your outstanding Redeemed Units shall be distributed to you in accordance with the terms of your Agreement; and (iii) all dividend equivalents credited to your Dividend Equivalent Account, if any, shall be paid to you in cash in accordance with the terms of your Agreement.

•

You Agreements are intended to comply with the requirements of section 409A of the Code and shall in all respects be administered in accordance with section 409A of the Code. Notwithstanding any provision in your Agreements to the contrary, distribution and payment may only be made under the Agreements upon an event and in a manner permitted by section 409A of the Code or an applicable exemption. Each distribution and payment made under the Agreements shall be treated as a separate distribution and payment for purposes of section 409A of the Code. Except as permitted pursuant to a valid deferral election, in no event may you, directly or indirectly, designate the calendar year of a distribution or payment.

•

The Subsequent Deferral Election Form attached as Exhibit A to the Agreements shall be replaced in its entirety by the Subsequent Deferral Election Form attached hereto as Exhibit A.

•

In all respects not modified herein, your Agreements are hereby ratified and confirmed.

• * * *

As this letter amends the terms of your Agreements, you should retain this letter with your Agreements. Should you have any questions regarding this letter, please contact Jack E. Salmon, RAIT’s Chief Financial Officer and Treasurer, at (215) 243-9032. Should you have any questions about how section 409A of the Code applies to you and your Grants you should contact your personal tax advisor.

Sincerely,

/s/ Jack E. Salmon _
Jack E. Salmon

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EXHIBIT A

SUBSEQUENT DEFERRAL ELECTION FORM

PART A. TIME OF REDEMPTION

I,       , (the “ Participant ”) hereby irrevocably elect to have the following Restricted Units (the “ Deferred Units ”) that were granted to me pursuant to the Unit Award Agreement, dated as of       , 200       , (the “ Agreement ”) under the RAIT Financial Trust 2008 Incentive Award Plan (the “ Plan ”) that would have been redeemed by RAIT Financial Trust (“ RAIT ”) on the redemption date (the “ Redemption Date ”) set forth below instead be redeemed on the deferred date designated (the “ Deferred Date ”), which date must be at least five (5) years later than the Redemption Date, and this election is at least twelve (12) months prior to the Redemption Date (fully complete the table below designating the Restricted Units to be deferred, since the Restricted Units are redeemed on different Redemption Dates a separate row must be completed for each Redemption Date):

PART B. ACKNOWLEDGMENT

I understand and expressly agree that (i) the Deferred Date for the Deferred Units shall be the date I specified in Part A above (which is a date that is at least five (5) years later than the original Redemption Date), and (ii) I will not be entitled to receive redemption of the Deferred Units on an earlier date, except in the event of my death or I become disabled (within the meaning of section 409A(a)(2)(C) of the Code). I also understand and expressly agree that this deferral election is irrevocable, is being made at least twelve (12) months prior to the original Redemption Date, and shall not take effect until twelve (12) months after the date on which I make this election.

PARTICIPANT SIGNATURE

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