RAIT Financial Trust (Form: 8-K, Received: 06/28/2018 16:12:19)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):

June 27, 2018

RAIT Financial Trust

__________________________________________

(Exact name of registrant as specified in its charter)

Maryland	1-14760		23-2919819
_____________________ (State or other jurisdiction	_____________ (Commission		______________ (I.R.S. Employer
of incorporation)	File Number)		Identification No.)

Two Logan Square, 100 N. 18 ^th St., 23 ^rd Floor, Philadelphia, Pennsylvania			19103
_________________________________ (Address of principal executive offices)			___________ (Zip Code)

Registrant’s telephone number, including area code:		(215) 207-2100

N/A

________________________________________________

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growt h company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01

Entry int o a Material Definitive Agreement.

In a Current Report on Form 8-K filed by RAIT Financial Trust (“ RAIT ”) with the Securities and Exchange Commission (the “ SEC ”) on June 13, 2018 (the “ 6/13/18 8K ”), RAIT previously reported that, on June 12, 2018, RAIT, RAIT Partnership, L.P. (“ RAIT Partnership ”), Taberna Realty Finance Trust (“ TRFT ”), and RAIT Asset Holdings IV, LLC (“ NewSub ” and together with RAIT, RAIT Partnership and TRFT, the “ RAIT Parties ”) and ARS VI Investor I, LP, formerly known as ARS VI Investor I, LLC (the “ Investor ”), entered into a previously reported consent and acknowledgment agreement modifying the previously reported Extension Agreement (as modified, the “ Extension Agreement ”) with the Investor, the sole holder of RAIT’s Series D Cumulative Redeemable Preferred Shares (the “ Series D Preferred Shares ”) and NewSub’s linked preferred units (the “ Preferred Units ”). On June 27, 2018, RAIT and certain of its subsidiaries entered into two agreements (the “ Investor Agreements ”) with the Investor setting forth the terms and conditions under which a series of transactions and events (collectively, the “ Extension Agreement Transactions and Events ”) contemplated by the Extension Agreement were to occur and completed the Extension Agreement Transactions and Events, as described below.

One of the Investor Agreements is a Redemption and Exchange Agreement (the “ Redemption and Exchange Agreement ”) dated as of June 27, 2018 among RAIT, NewSub and the Investor which provided for the following Extension Agreement Transactions and Events, among others, which were completed at the closing thereunder on June 27, 2018:

•

the redemption and cancellation by NewSub of 2,270,610 Preferred Units and the redemption and cancellation by RAIT of 2,270,610 Series D Preferred Shares (the “ Preferred Redemption ”) for an aggregate purchase price of $56,765,250 (the “ Redemption Price ”). The Redemption Price was primarily funded by the net proceeds received by NewSub pursuant to the FL5 & FL6 Sale (defined and described below in Item 2.01 of this report and incorporated by reference herein).

•

the exchange (the “ Preferred Exchange ”) of 668,580 Preferred Units and 668,580 Series D Preferred Shares for 383,147 of RAIT’s Series A Cumulative Redeemable Preferred Shares (the “ Series A Preferred Shares ”), 167,828 of RAIT’s Series B Cumulative Redeemable Preferred Shares (the “ Series B Preferred Shares ”), and 117,605 of RAIT’s Series C Cumulative Redeemable Preferred Shares (the “ Series C Preferred Shares ”).

The other Investor Agreement is a Termination Agreement (the “ Termination Agreement ”) dated as of June 27, 2018 among the RAIT Parties and the Investor which provided for the following Extension Agreement Transactions and Events, among others, which became effective June 27, 2018:

•

The termination of the previously reported Securities Purchase Agreement, dated as of October 1, 2012 among the RAIT Parties and the Investor (as amended, the “ Securities Purchase Agreement ”), the Related Documents (as defined in the Securities Purchase Agreement), the Series D Preferred Shares and the Preferred Units, except RAIT Partnership’s interest in NewSub, its subsidiary, remains in effect and the Investor’s obligations under existing confidentiality agreements remains in effect.

•

Mutual releases between the RAIT Parties and the Investor. These releases resolve the previously reported dispute between the Investor and the RAIT Parties referenced in the Extension Agreement.

Effective June 27, 2018, in connection with the consummation of the Extension Agreement Transactions and Events and as contemplated by the Extension Agreement, two Trustees with business relationships with the Investor or its affiliates, Andrew M. Silberstein and Andrew Batinovich, resigned (the “ Trustee Resignations ”) from the Board of Trustees of RAIT (the “ Board ”). The resignations of Mr. Silberstein and Mr. Batinovich were not in connection with a disagreement relating to RAIT’s operations, policies or practices. Mr. Silberstein served as the Investor’s designee on the Board provided for in the Securities Purchase Agreement and Mr. Batinovich had relationships with affiliates of the Investor. Mr. Silberstein was named as a nominee for election to the Board at RAIT’s 2018 Annual Meeting of Shareholders (the “ Annual Meeting ”) in RAIT’s Definitive Proxy Statement filed with the SEC on May 29, 2018 (the “ Proxy Statement ”). As previously reported in the Proxy Statement, the Extension Agreement provided for the Trustee Resignations. Consistent with the disclosure concerning the Trustee Resignations previously reported in the Proxy Statement, upon the occurrence of the Trustee Resignations, the size of the Board was reduced by two to eight Trustees and the nominees for election to the Board at the Annual Meeting are now comprised of the remaining five

nominees named in t he Proxy Statement: Michael J. Malter, Justin P. Klein, John J. Reyle, Jon C. Sarkisian and Thomas D. Wren.

As a result of the completion of the Extension Agreement Transactions and Events, no Series D Preferred Shares or Preferred Units remain outstanding and, apart from the Investor’s holdings of Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares, there are no remaining material relationships between RAIT or its affiliates and the Investor.

The above summary of the Redemption and Exchange Agreement and the Termination Agreement does not purport to be complete and is qualified in its entirety by the Redemption and Exchange Agreement and the Termination Agreement attached to this report as Exhibits 10.1 and 10.2, respectively, and incorporated by reference herein. The foregoing descriptions of the Extension Agreement and the Extension Agreement Transactions and Events described therein do not purport to be complete and are qualified in their entirety by reference to 6/13/18 8K, and the exhibits attached thereto, which are incorporated by reference herein.

Item 1.02

Termination of a Material Definitive Agreement.

The disclosure set forth in Item 1.01 of this report is incorporated herein by reference. A description of the material terms and conditions of the terminated Securities Purchase Agreement and Related Documents is set forth in RAIT’s Current Report on Form 8-K filed with the SEC on October 4, 2012 and the description of those terms and conditions is incorporated herein by reference.

Item 2.01

Completion of Acquisition or Disposition of Assets.

In a Current Report on Form 8-K filed by RAIT with the SEC on June 15, 2018 (the “ 6/15/18 8K ”), RAIT previously reported that, on June 14, 2018, NewSub, as seller, and Melody RE II, LLC (the “ Purchaser ”), as purchaser, entered into a Purchase and Sale Agreement (the “ Sale Agreement ”) setting forth the terms and conditions of a transaction providing for the transfer to the Purchaser of approximately $61.2 million aggregate par amount of the retained interests in two securitizations consolidated by RAIT into its financial statements, RAIT 2015-FL5 Trust (“ FL5 ”) and RAIT 2016-FL6 Trust (“ FL6 ”). On June 27, 2018, the closing (the “ FL5 & FL6 Closing ”) contemplated by the Sale Agreement occurred. As previously reported, prior to the FL5 & FL6 Closing, NewSub was the holder of:

•

60% of the units (the “ FL5 Interests ”) of RAIT – Melody 2016 Holdings, LLC (“ Holdings 2016 ”), which controls RAIT – Melody 2016 Holdings Trust. This trust owns various non-investment grade bonds and the equity of FL5 (the “ JV FL5 Securities ”), with the remaining 40% of the units of Holdings 2016 being held by affiliates of the Purchaser.

•

60% of the units (the “ FL6 Interests ”) of RAIT – Melody 2017 Holdings, LLC (“ Holdings 2017 ”), which controls RAIT – Melody 2017 Holdings Trust. This trust owns various non-investment grade bonds and the equity of FL6 (the “ JV FL6 Securities ”), with the remaining 40% of the units of Holdings 2017 being held by affiliates of the Purchaser.

At the FL5 & FL6 Closing, NewSub sold (the “ FL5 & FL6 Sale ”) to the Purchaser all of the FL5 Interests and the FL6 Interests (collectively, the “ Interests ”). The purchase price paid in cash at the Closing by Purchaser to NewSub for the Interests was: (i) with respect to the FL5 Interests, $32,469,036 (the “ Holdings 2016 Purchase Price ”) and (ii) with respect to the FL6 Interests, $22,163,166 (collectively, with the Holdings 2016 Purchase Price, the “ Purchase Price ”). As disclosed in Item 1.01 of this report above, NewSub applied the net proceeds of the FL5 & FL6 Sale towards paying the Redemption Price. RAIT entered into a servicing agreement with the Purchaser to continue to service and special service the loans in FL5 and FL6 after the sales of the Interests.

As a result of the FL5 & FL6 Sale, RAIT determined that it no longer is the primary beneficiary of Holdings 2016, Holdings 2017, FL5 and FL6 and as a result, RAIT deconsolidated those entities as of June 27, 2018. RAIT is filing this Current Report on Form 8-K and related unaudited pro forma consolidated financial information (the “ Pro Forma Financial Statements ”) as a result of this deconsolidation pursuant to guidance in the Financial Reporting Manual of the Division of Corporation Finance of the SEC. This is a deconsolidation and disposition for accounting purposes for RAIT. RAIT is filing the Pro Forma Financial Statements to provide the pro forma financial information

required by Item 9.01(b) of Form 8-K with respect to this deconsolidation and the Extension Agreement Transactions and Events described in I tem 1.01 of this report above. The Pro Forma Financial Statements are attached as Exhibit 99. 1 to this report.

The foregoing descriptions of the Sale Agreement and the transactions described therein do not purport to be complete and are qualified in their entirety by reference to 6/15/18 8K, and the exhibits attached thereto, which are incorporated by reference herein.

Item 3.02

Unregistered Sales of Equity Securities.

The consummation of the Preferred Exchange was made pursuant to the private placement exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended. The information set forth under Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 3.02.

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b) The disclosure concerning the Trustee Resignations contained in Item 1.01 of this report is incorporated herein by reference.

(c) Prior to the Board action described in this clause (c), John (Jamie) J. Reyle held the titles of Interim Chief Executive Officer and Interim President among his titles as an officer of RAIT and Alfred J. Dilmore held the titles of Interim Chief Financial Officer and Interim Treasurer among his titles as an officer of RAIT. Effective June 27, 2018, in recognition of Mr. Reyle’s and Mr. Dilmore’s respective service to RAIT, the Board approved the modification of those titles to remove the word “Interim” from them. As a result, Mr. Reyle now serves as RAIT’s Chief Executive Officer and President and continues to serve as RAIT’s General Counsel and Mr. Dilmore now serves as RAIT’s Chief Financial Officer and Treasurer and continues to serve as RAIT’s Chief Accounting Officer. The information required by Items 401(b), (d), and (e) and Item 404(a) of Regulation S-K with respect to Mr. Reyle and Mr. Dilmore was previously reported in the Proxy Statement. There was no plan, contract or arrangement to which Mr. Reyle or Mr. Dilmore is a party or in which they participate that was entered into or amended, or any grants or awards to Mr. Reyle and Mr. Dilmore or modifications thereto, in connection with these changes.

Item 5.03

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Pursuant to the Securities Purchase Agreement, RAIT had previously authorized 4,000,000 Series D Preferred Shares and 4,000,000 of RAIT’s Series E Cumulative Redeemable Preferred Shares (the “ Series E Preferred Shares ”) which were exchangeable for Series D Preferred Shares in defined circumstances. As a result of the Preferred Redemption and the Preferred Exchange, no Series D Preferred Shares remain outstanding and no Series E Preferred Shares were ever issued. On June 28, 2018 , RAIT filed Articles Supplementary (the “ Articles Supplementary ”) with the Department of Assessments and Taxation of the State of Maryland reclassifying (the “ Reclassification ”) both the 4,000,000 Series D Preferred Shares and the 4,000,000 Series E Preferred Shares into an aggregate of 8,000,000 of RAIT’s unclassified Preferred Shares (the “ Preferred Shares ”), available for future reclassification and issuance by RAIT in accordance with RAIT’s Declaration of Trust (the “ DOT ”).

The Reclassification decreases the number of shares classified as Series D Preferred Shares from 4,000,000 shares immediately prior to the Reclassification to zero shares immediately after the Reclassification. The Reclassification decreases the number of shares classified as Series E Preferred Shares from 4,000,000 shares immediately prior to the Reclassification to zero shares immediately after the Reclassification. The Reclassification increases the number of unclassified preferred shares from 1,030,712 shares immediately prior to the Reclassification to 9,030,712 shares immediately after the Reclassification.

The foregoing description of the Articles Supplementary is qualified in its entirety by reference to the Articles Supplementary, a copy of which is filed herewith as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 7.01

Regulation FD Disclosure.

On June 28, 2018, RAIT issued a press release. A copy of this press release is furnished with this report as Exhibit 99.2 hereto. The information under Item 7.01 of this Current Report, including Exhibit 99.2 hereto, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in Item 7.01 of this Current Report and Exhibit 99.2 hereto shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

Item 8.01.

Other Events.

Forward-Looking Statements

This report may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by RAIT’s use of forward-looking terminology such as “will,” “expects,” “continue,” “intend,” or other similar words or terms. Such forward-looking statements include, but are not limited to, statements regarding RAIT’s expectations regarding continuing to service and special service the loans in FL5 and FL6 after the sale of the Interests; and RAIT’s expectations regarding the deconsolidation of Holdings 2016, Holdings 2017, FL5 and FL6 upon the sale of the Interests. Such statements are subject to known and unknown risks, uncertainties and contingencies that may cause actual results to differ materially from the expectations, intentions, beliefs, strategies or predictions of the future expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to, whether RAIT will be able to continue to serve as servicer and special servicer for FL5 and FL6 after any sale of the Interests, particularly whether RAIT will adequately address the previously disclosed concerns of a rating agency in RAIT’s continuing as servicer; the impact of any deconsolidation by RAIT of Holdings 2016, Holdings 2017, FL5 and FL6; final accounting determinations on gains or losses realized in the event the Interests are sold for prices that differ from their carrying value or if asset valuations are adjusted in the process of revaluating assets when they are characterized as held for disposition or sale; and other factors described in RAIT’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and in other filings with the SEC. RAIT undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.

Item 9.01.

Financial Statements and Exhibits.

This Current Report on Form 8-K includes unaudited pro forma condensed consolidated financial statements, which reflect the transactions described in the Introduction included in Exhibit 99.1.



(b)	Pro Forma Financial Information.

Introduction to Unaudited Pro Forma Consolidated Financial Information		4
Unaudited Pro Forma Consolidated Balance Sheet as of March 31, 2018		5
Unaudited Pro Forma Consolidated Statement of Operations for the Three-Month Period Ended March 31, 2018		6
Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2017		7
Notes to Unaudited Pro Forma Consolidated Financial Information		8

(d) Exhibits:

Exhibit No.

Description


3.1	Articles Supplementary dated June 27, 2018 filed June 28, 2018.
10.1	Redemption and Exchange Agreement dated as of June 27, 2018 among RAIT Financial Trust (“RAIT”), RAIT Asset Holdings IV, LLC (“NewSub”) and ARS VI Investor I, LP (the “Investor”).
10.2	Termination Agreement dated as of June 27, 2018 among RAIT, RAIT Partnership, L.P., Taberna Realty Finance Trust, NewSub and the Investor.
99.1	Unaudited pro forma condensed consolidated financial statements.
99.2	Press Release.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	RAIT Financial Trust

June 28, 2018	By:	/s/ John J. Reyle
		Name: John J. Reyle
		Title: Chief Executive Officer, President and General Counsel

Exhibit 3.1

ARTICLES SUPPLEMENTARY

RAIT FINANCIAL TRUST

Redesignation and Reclassification of 4,000,000 Series D and 4,000,000 Series E Cumulative Redeemable Preferred Shares of Beneficial Interest

as Unclassified Preferred Shares

RAIT Financial Trust, a Maryland real estate investment trust (the “ Trust ”), hereby certifies to the State Department of Assessments and Taxation of Maryland (“ SDAT ”) that:

FIRST : Under the authority set forth in Article VI, Section 3 of the Declaration of Trust of the Trust (which, as amended, restated or supplemented from time to time, including as supplemented herein, is herein called the “ Declaration of Trust ”) and pursuant to Section 8-203 of the Corporations and Associations Article of the Annotated Code of Maryland, the Board of Trustees of the Trust (the “ Board of Trustees ”) by resolution dated as of September 27, 2012, designated and classified 4,000,000 authorized but unissued, unclassified preferred shares of beneficial interest, par value $0.01 per share, of the Trust as 4,000,000 shares of Series D Cumulative Redeemable Preferred Shares of Beneficial Interest, par value $0.01 per share having the preferences, conversion or other rights, restrictions, including restrictions on transferability or ownership, limitations as to dividends or distributions, qualifications, and terms or conditions of redemption as set forth in the Articles Supplementary filed with SDAT on October 1, 2012 (the “ Series D Preferred Shares ”).

SECOND : Under the authority set forth in Article VI, Section 3 of the Declaration of Trust and pursuant to Section 8-203 of the Corporations and Associations Article of the Annotated Code of Maryland, the Board of Trustees by resolution dated as of September 27, 2012, designated and classified 4,000,000 authorized but unissued, unclassified preferred shares of beneficial interest, par value $0.01 per share, of the Trust as 4,000,000 shares of Series E Cumulative Redeemable Preferred Shares of Beneficial Interest, par value $0.01 per share having the preferences, conversion or other rights, restrictions, including restrictions on transferability or ownership, limitations as to dividends or distributions, qualifications, and terms or conditions of redemption as set forth in the Articles Supplementary filed with SDAT on November 30, 2012 (the “ Series E Preferred Shares ”).

THIRD : All of the Series D Preferred Shares and all of the Series E Preferred Shares have been redeemed, reacquired or never issued by the Trust, and no Series D Preferred Shares or Series E Preferred Shares remain issued or outstanding as of the date hereof;

FOURTH : Pursuant to the authority expressly vested in the Board of Trustees by Article VI, Section 3 of the Declaration of Trust, the Board of Trustees, by resolutions duly adopted on June __, 2018 by a Special Committee thereof (to which such authority has been delegated), has reclassified both the 4,000,000 Series D Preferred Shares and the 4,000,000 Series E Preferred Shares into an aggregate of 8,000,0000 unclassified Preferred Shares, available for future reclassification and issuance by the Trust in accordance with the Declaration of Trust;

FIFTH : These Articles Supplementary have been approved by the Board of Trustees in the manner and by the vote required by Maryland law; and

SIXTH : These Articles Supplementary shall be effective at the time the SDAT accepts these Articles of Supplementary for record.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Trust has caused these Articles Supplementary to be signed in its name and on its behalf by its Interim Chief Financial Officer, Interim Treasurer and Chief Accounting Officer attested by its Secretary on this 27th day of June, 2018.


ATTEST:	RAIT FINANCIAL TRUST

/s/ Anders Laren _________________	By: /s/ Alfred J. Dilmore ___________
Name: Anders Laren	Name: Alfred J. Dilmore
Title: Secretary	Title: Interim Chief Financial Officer, Interim Treasurer and Chief Accounting Officer

THE UNDERSIGNED, Interim Chief Financial Officer, Interim Treasurer and Chief Accounting Officer of RAIT Financial Trust, who executed on behalf of the Trust the Articles of Supplementary of which this Certificate is made a part, hereby acknowledges in the name and on behalf of the Trust the foregoing Articles Supplementary to be the act of said Trust and hereby certified that the matters and facts set forth herein with respect to the authorization and approval thereof are true in all material respects under penalties of perjury.

/s/ Alfred J. Dilmore ______________________

Name: Alfred J. Dilmore

Title: Interim Chief Financial Officer, Interim

Treasurer and Chief Accounting Officer

Exhibit 10.1

REDEMPTION AND EXCHANGE AGREEMENT

This Redemption and Exchange Agreement (this “ Agreement ”) is made and entered into as of June 27, 2018, by and among RAIT Financial Trust, a real estate investment trust formed and existing under the laws of the State of Maryland (the “ Company ”), RAIT Asset Holdings IV, LLC, a limited liability company formed and existing under the laws of the State of Delaware (“ NewSub ”), and ARS VI Investor I, LP, a limited partnership formed and existing under the laws of the State of Delaware, formerly known as ARS VI Investor I, LLC (“ Investor ”). The Company, NewSub and Investor are collectively referred to herein as the “ Parties ” and individually as a “ Party ,” as the context requires.

WHEREAS, Investor owns 2,939,190 shares of the Company’s Series D Cumulative Redeemable Preferred Shares, par value $0.01 per share (the “ Series D Shares ”), issued pursuant to that certain Securities Purchase Agreement, dated as of October 1, 2012 by and among the Company, RAIT Partnership, L.P., a limited partnership formed and existing under the laws of the State of Delaware (“ RAIT Partnership ”), Taberna Realty Finance Trust, a real estate investment trust formed and existing under the laws of the State of Maryland (“ Taberna ”), and NewSub (together with the Company, RAIT Partnership and Taberna, the “ RAIT Parties ”), and Investor, as amended by the Amendment thereto dated September 30, 2015 (as amended, the “ Securities Purchase Agreement ”);

WHEREAS, the RAIT Parties and Investor are party to that certain Consent and Acknowledgement Dated as of June 12, 2018 re Extension Agreement Dated as of March 12, 2018 (the “ Consent and Acknowledgement ”), modifying that certain Extension Agreement, dated as of March 12, 2018, as amended by the letter agreement dated June 8, 2018 (collectively, the “ Extension Agreement ”), pursuant to which the RAIT Parties and Investor agreed to consummate a series of transactions, including, without limitation: (i) the redemption and cancellation by NewSub of 2,270,610 Subsidiary Preferred Units and the redemption and cancellation by the Company of 2,270,610 Series D Shares (the “ Redemption ”) and (ii) the exchange (the “ Exchange ” and, together with the Redemption, the “ Transactions ”) of 668,580 Subsidiary Preferred Units and 668,580 Series D Shares for shares of the Company’s Series A Cumulative Redeemable Preferred Shares of Beneficial Interest, par value $0.01 per share (the “ Series A Shares ”), Series B Cumulative Redeemable Preferred Shares of Beneficial Interest, par value $0.01 per share (the “ Series B Shares ”), and Series C Cumulative Redeemable Preferred Shares of Beneficial Interest, par value $0.01 per share (the “ Series C Shares ”);

WHEREAS, in order to effectuate the Transactions, subject to the terms and conditions hereof, (i) Investor desires to (A) sell, transfer, assign and convey to NewSub 2,270,610 Subsidiary Preferred Units (the “ Redeemed Units ”), (B) sell, transfer, assign and convey to the Company the Series D Shares linked to the Redeemed Units (the “ Redeemed Series D Shares ”) and (C) exchange 668,580 Subsidiary Preferred Units (the “ Exchanged Units ”) and 668,580 Series D Shares, representing the New Series D Differential (the “ Exchanged Series D Shares ” and, together with the Redeemed Units, the Redeemed Series D Shares and the Exchanged Units, the “ Prior Equity Interests ”), for 383,147 Series A Shares, 167,828 Series B Shares and 117,605 Series C Shares (collectively, the “ New Shares ”) and (ii) (A) NewSub and the Company desire to redeem the Redeemed Units and the Redeemed Series D Shares, respectively, in exchange for an aggregate purchase price of $56,765,260.55 in cash (the “ Redemption Price ”), (B) the Company desires to issue the New Shares in exchange for the Exchanged Series D Shares and Exchanged Units and (C) New Sub and the Company desire to, at their option, cancel the Prior Equity Interests; and

WHEREAS, capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Consent and Acknowledgement or the Securities Purchase Agreement, as

applicable .

NOW, THEREFORE, in consideration of the mutual covenants, agreements and understandings herein contained, the Parties hereby agree as follows:

SECTION 1. Redemption, Cancellation and Exchange . Effective as of the date hereof, (a) Investor (i) hereby acknowledges and confirms receipt of the Redemption Price and (ii) does hereby sell, transfer, assign, convey and deliver to NewSub the Redeemed Units and the Exchanged Units and to the Company the Redeemed Series D Shares and the Exchanged Series D Shares and (b) (i) NewSub and the Company hereby purchase and acquire the Redeemed Units and the Redeemed Series D Shares, respectively, in exchange for the Redemption Price, (ii) the Company hereby issues to Investor the New Shares in the form of book-entry credits (and following such issuance, on the date hereof the Company shall deliver to Investor evidence from the Company’s transfer agent of the issuance of the New Shares in the form of book-entry credits in the name of Investor) and (iii) NewSub and the Company, at their option, may cancel the Prior Equity Interests. The Prior Equity Interests are hereby no longer outstanding, and Investor shall have no further rights, and the Company and NewSub shall have no further obligations, with respect to such Prior Equity Interests. The transactions set forth in this Section 1 shall be deemed to take place concurrently with each other on the date hereof.

SECTION 2. Representations and Warranties of the Company and NewSub . As a material inducement to Investor to enter into this Agreement, the Company and NewSub hereby represent and warrant to Investor as follows:

2.1 Organization; Requisite Authority . The Company is a real estate investment trust, duly organized, validly existing and in good standing under the laws of Maryland. NewSub is a limited liability company, duly organized, validly existing and in good standing under the laws of Delaware. Each of the Company and NewSub possesses all requisite power and authority necessary to consummate the transactions contemplated by this Agreement.

2.2 Authorization . The execution, delivery and performance of this Agreement have been duly authorized by the Company and NewSub, and do not require any consent or approval of, or notice to or action by, any other Person (other than Investor), including any governmental authority, except with respect to the filing by the Company of a Current Report on Form 8-K with the Securities and Exchange Commission with respect to this Agreement and the notification to the New York Stock Exchange and/or other applicable stock exchange of the issuance of the New Shares. This Agreement, when executed and delivered by the Parties in accordance with the terms hereof, shall constitute a valid and binding obligation of the Company and NewSub, enforceable against the Company and NewSub in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors’ rights generally and by general equitable principles.

2.3 Validity of New Shares . When issued and delivered in accordance with this Agreement, the New Shares to be delivered under this Agreement shall be (i) duly and validly authorized, issued and outstanding, (ii) fully paid and non-assessable, (iii) free and clear of any liens, claims, encumbrances, security interests, options or charges of any kind, (iv) listed on the New York Stock Exchange, and (v) not subject to any preemptive rights or restrictions on transfer, other than any restrictions under state and federal securities Laws applicable to the Investor. The New Shares are being offered and sold pursuant to, and in compliance with, Section 4(a)(2) of the Securities Act of 1933, as amended (the “ Securities Act ”).

2.4 Non-Contravention . Neither the execution, delivery or performance by the Company or NewSub of this Agreement nor the consummation b y the Company or NewSub of the T ransactions will (i) conflict with or result in any breach of any provision of the Organizational Documents of the Company or NewSub, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default or give rise to any right of termination, cancellation or acceleration under, any of the terms, conditions or provisions of any contract, agreement, commitment, lease, license, loan or other arrangement or understanding to which the Company or NewSub is a party, or (iii) violate any Law of any governmental authority having jurisdiction over the Company or NewSub or any of their respective properties or assets , except in the case of (i) and (ii) above, for matters that require the consent of Investor .

SECTION 3. Representations and Warranties of Investor . As a material inducement to the Company and NewSub to enter into this Agreement, Investor hereby represents and warrants to the Company and NewSub as follows:

3.1 Organization; Requisite Authority . Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Investor possesses all requisite power and authority necessary to consummate the transactions contemplated by this Agreement and transfer the Prior Equity Interests to the Company and NewSub, as applicable, free and clear of any lien or encumbrance.

3.2 Authorization . The execution, delivery and performance of this Agreement has been duly authorized by Investor. This Agreement, when executed and delivered by the Parties in accordance with the terms hereof, shall constitute a valid and binding obligation of Investor, enforceable against Investor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors’ rights generally and by general equitable principles.

3.3 Ownership . Investor is the beneficial owner of the Prior Equity Interests. Upon delivery to the Company and NewSub, as applicable, of the Prior Equity Interests, and upon Investor’s receipt of the consideration in respect thereof as set forth herein, in each case, pursuant to this Agreement, good and valid title to the Prior Equity Interests will pass to the Company and NewSub, as applicable, free and clear of any liens, claims, encumbrances, security interests, options or charges of any kind.

3.4 Information; Consultation with Counsel and Advisors; Accredited Investor . Investor is entering into this Agreement as principal (and not as agent or in any other capacity); none of the Company or any of the Company’s affiliates or agents are acting as a fiduciary for it; it is entering into this Agreement with a full understanding of the terms, conditions and risks thereof, including the terms of the New Shares as described in the Company’s reports filed from time to time with the Securities and Exchange Commission. Investor (a) has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisers in connection herewith to the extent Investor has deemed necessary, (b) has received from the Company all necessary information relating to the Company and its business and had a reasonable opportunity to ask questions of and receive answers from officers and representatives of the Company concerning its financial condition and results of operations and the Transactions, and any such questions have been answered to its satisfaction, (c) has had the opportunity to review all publicly available records and filings and all other documents concerning the Company that Investor considers necessary or appropriate in making an investment decision, (d) has reviewed all information that it believes is necessary or appropriate in connection with the Transactions and (e) has conducted its own due diligence on the Company and the Transactions and has made its own investment

decisions based upon its own judgment, due diligence and advice from such advisers as Investor has deemed necessary and not upon any view expressed by or on behalf of the Company. Investor is an “accredited investor” as defined in Rule 501 under the Securities Act.

3.5 Broker’s Fees . Investor has not retained or authorized any investment banker, broker, finder or other intermediary to act on behalf of Investor or incurred any liability for any banker’s, broker’s or finder’s fees or commissions in connection with the transactions contemplated by this Agreement.

SECTION 4. Miscellaneous .

4.1 Further Assurances . In case at any time after the consummation of the transactions contemplated by this Agreement, any further action is necessary or desirable to carry out the purposes of this Agreement or the transactions contemplated hereby, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as any other Party may reasonably request.

4.2 Severability . Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement or the application of any such provision to any Party or circumstance shall be held to be prohibited by, illegal or unenforceable under applicable law in any respect by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

4.3 Counterparts . This Agreement may be executed simultaneously in counterparts (including by means of facsimile transmission or “pdf” file thereof), any one of which need not contain the signatures of more than one Party, but all such counterparts taken together shall constitute one and the same Agreement.

4.4 Descriptive Headings; Interpretation . The headings and captions used in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The Parties intend that each representation, warranty and covenant contained herein shall have independent significance. If any Party has breached any representation, warranty or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of the first representation, warranty or covenant.

4.5 Entire Agreement . This Agreement and the agreements and documents referred to herein contain the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersede all prior agreements and understandings, whether written or oral, relating to such subject matter in any way.

4.6 Amendment . This Agreement may be amended, modified or supplemented but only in writing (including a writing evidenced by a facsimile transmission or “pdf” file thereof) signed by the Party against which enforcement is sought.

4.7 APPLICABLE LAW; WAIVER OF JURY TRIAL; THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH

THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS ENTERED INTO AND TO BE PERFORMED IN SUCH STATE. THE PARTIES HERETO AGREE TO WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY DISPUTE ARISING FROM OR RELATED TO THIS AGREEMENT.

4.8 Submission to Jurisdiction . Each Party agrees that any suit, action or proceeding bought by it against the other Party arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in any state or federal court in The City of New York, New York, and waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such courts in any suit, action or proceeding.

(Signatures on next page)

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above.

RAIT FINANCIAL TRUST

By:

/s/ Jamie Reyle________________
Name: Jamie Reyle, Esq.
Title: Interim CEO, Interim President & General Counsel

RAIT ASSET HOLDINGS IV, LLC,

By:

RAIT Partnership, L.P., a Delaware limited partnership,

its managing member

By:

RAIT General, Inc., a Maryland corporation, its General Partner

By:

/s/ Jamie Reyle________________
Name: Jamie Reyle, Esq.
Title: Interim CEO, Interim President & General Counsel

ARS VI INVESTOR I, LP

By: ARS VI Investor IGP,

LLC, its General Partner

By: Almanac Realty Securities VI,

L.P., its Sole Member

By: Almanac Realty Partners VI,

LLC, its General Partner

By: /s/ Matthew W. Kaplan _____________________

Name: Matthew W. Kaplan

Title: President

Exhibit 10.2

Termination Agreement

This TERMINATION AGREEMENT (this “ Agreement ”) is effective as of the 27th day of June 2018, by and among RAIT Financial Trust, a real estate investment trust formed and existing under the laws of the State of Maryland (“ RAIT ”), RAIT Partnership, L.P., a limited partnership formed and existing under the laws of the State of Delaware (“ RAIT Partnership ”), Taberna Realty Finance Trust, a real estate investment trust formed and existing under the laws of the State of Maryland (“ Taberna ”), and RAIT Asset Holdings IV, LLC, a limited liability company formed and existing under the laws of the State of Delaware (“ NewSub ” and, together with RAIT, RAIT Partnership and Taberna, collectively, the “ RAIT Parties ”), and ARS VI Investor I, LP, a limited partnership formed and existing under the laws of the State of Delaware, formerly known as ARS VI Investor I, LLC (“ Investor ”). Each of the RAIT Parties and Investor is sometimes referred to herein as a “ Party ” and collectively as the “ Parties .”

WHEREAS, reference is made to that certain Securities Purchase Agreement, dated as of October 1, 2012 by and among the RAIT Parties and Investor, as amended by the Amendment thereto dated September 30, 2015 (as amended, the “ Securities Purchase Agreement ”) and (ii) the Related Documents (as defined in the Securities Purchase Agreement);

WHEREAS, in furtherance of the transactions contemplated by the Consent and Acknowledgement and the Extension Agreement (the “ Transactions ”), the RAIT Parties and Investor desire to terminate their respective rights and obligations under the Prior Agreements; and

WHEREAS, capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Securities Purchase Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and provisions herein set forth, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, upon the terms and subject to the conditions contained herein, hereby agree as follows:

Acknowledgement of Transactions . Investor hereby acknowledges (a) payment to the Investor of all amounts to which it is entitled pursuant to the Extension Agreement, as modified by the Consent and Acknowledgment, including, without limitation, under Sections 1.b.) iv. and 1.b.) v. thereof, and (b) the consummation of the transactions contemplated by the Redemption and Exchange Agreement, dated as of the date hereof (the “ Redemption and Exchange

Agreement ”), by and among RAIT, NewSub and the Investor, each of which was a condition precedent to the effectiveness of this Agreement.

Termination of Prior Agreements . Effective as of the date hereof, (a) each of the Prior Agreements is hereby terminated in full, and none of the Parties will have any rights or obligations thereunder; and (b) the Parties hereby irrevocably and unconditionally waive and relinquish their rights under each Prior Agreement, provided , however , that RAIT Partnership’s interest in the LLC Agreement shall remain in full force and effect. For the avoidance of doubt, nothing in this Section 2 shall be deemed to terminate any confidentiality obligations of Investor in favor of any of the RAIT Parties contained in the confidentiality agreements dated as of January 19, 2018 and February 22, 2018, which shall survive in accordance with their respective terms.

3.	Notice Requirements . The Parties acknowledge and agree that all advance notice requirements, if any, under any Prior Agreement have been satisfied or otherwise waived by the Parties as of the date hereof.

4. Release by RAIT Parties . Effective as of the date hereof, the RAIT Parties, for themselves and their past, present and future Affiliates and their and such Affiliates’ respective past, present and future officers, directors, employees, members, partners, equityholders, managers, agents, heirs, executors, legal and other representatives, predecessors, successors and assigns, and any and all other persons claiming rights through the RAIT Parties (the RAIT Parties and such other persons, collectively, the “ RAIT Releasing Parties ” and, each, a “ RAIT Releasing Party ”) hereby forever fully and irrevocably release and discharge Investor and each of its predecessors, successors, direct or indirect subsidiaries and past and present equityholders (direct and indirect), members, managers, directors, officers, employees, agents, representatives and Affiliates (collectively, the “ Investor Released Parties ”) from any and all claims, rights, demands, offsets, causes of action, losses, damages, actions, suits, proceedings, controversies, disputes, agreements, obligations, liabilities, duties, remedies, accounts, sums of money, indebtedness, expenses (including, without limitation, attorneys’ fees and costs), covenants, contracts, agreements and indemnities (hereinafter collectively referred to as “ Claims ”), of any and every kind and description, whether known or unknown, suspected or unsuspected, foreseen or unforeseen, real or imaginary, actual or potential, whether or not well founded in fact or in law, and whether arising at law or equity, in each case which any and/or all of the RAIT Releasing Parties ever had, now have or hereafter can, shall or may have under or otherwise in connection with the Existing Agreements, and hereby irrevocably agrees to refrain from directly or indirectly asserting any claim or demand or commencing (or causing to be commenced) any proceeding of any kind against any Investor Released Party based upon any such Claim; provided that nothing set forth herein shall impair or otherwise affect in any way the rights of the RAIT Parties under this Agreement, the Extension Agreement, as modified by the Consent and Acknowledgement, or the Redemption and Exchange Agreement.

5. Release by Investor . Effective as of the date hereof, Investor, for itself and its past, present and future Affiliates and its and such Affiliates’ respective past, present and future officers, directors, employees, members, partners, equityholders, managers, agents, heirs, executors, legal and other representatives, predecessors, successors and assigns, and any and all other persons claiming rights through Investor (Investor and such other persons, collectively, the “ Investor Releasing Parties ” and, each, an “ Investor Releasing Party ”) hereby forever fully and irrevocably

release and discharge the RAIT Parties and each of their respective predecessors, successors, direct or indirect subsidiaries and past and present equityholders (direct and indirect), members, managers, directors, officers, employees, agents, representatives and Affiliates (collectively, the “ RAIT Released Parties ”) from any and all Claims, of any and every kind and description, whether known or unknown, suspected or unsuspected, foreseen or unforeseen, real or imaginary, actual or potential, whether or not well founded in fact or in law, and whether arising at law or equity, in each case which any and/or all of the Investor Releasing Parties ever had, now have or hereafter can, shall or may have under or otherwise in connection with the Existing Agreements, and hereby irrevocably agrees to refrain from directly or indirectly asserting any claim or demand or commencing (or causing to be commenced) any proceeding of any kind against any RAIT Released Party based upon any such Claim ; provided that nothing set forth herein shall impair or otherwise affect in any way (i) the rights of the Investor under this Agreement, the Extension Agreement, as modified by the Consent and Acknowledgment, including, without limitation, the right of the Investor to the payment of all amounts to which it is entitled pursuant to the terms thereof, and the Redemption and Exchange Agreement, (ii) the rights of the Investor in respect of the New Shares issued to the Investor pursuant to the terms of (and as defined in) the Redemption and Exchange Agreement, or (iii ) the rights of the Investor Board Designee under the Trustee Indemnification Agreement between RAIT and the Inve stor Board Designee, as well as any other rights of the Investor Board Designee to indemnification, exculpation and advancement of expenses now existing in favor of the Investor Board Designee under RAIT’s Organizational D ocuments , in each case, with respect to any matters occurring on or prior to the date hereof .

Consideration . The Parties each acknowledge and agree that the amounts and benefits received by the respective Parties pursuant to the Transactions are independent and adequate consideration for entering into this Agreement, and for waiving and releasing the Claims as set forth in Section 4 and Section 5 .

Non-Disparagement . Effective as of the date hereof, until the third anniversary of the date of this Agreement, (a) Investor shall not, and shall cause its Affiliates not to, make any oral or written statement that disparages or places any of the RAIT Parties or any of their respective Affiliates in a false or negative light and (b) the RAIT Parties shall not, and shall cause their respective Affiliates not to, make any oral or written statement that disparages or places Investor or any of its Affiliates in a false or negative light. Nothing in this Section 7 shall limit any Party’s ability to make true and accurate statements or communications in connection with any disclosure such person reasonably believes is required pursuant to applicable Law.

8.	Miscellaneous .

a. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

b. This Termination Agreement supersedes any other oral or written agreements between the Parties regarding the subject matter hereof.

c. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each Party. No waiver by any Party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the Party so waiving. No

waiver by any Party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. This Termination Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.

d. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction).

e. ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF NEW YORK, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

f. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT: (i) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION; (ii) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (iii) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY; AND (iv) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8(f) .

g. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the Parties have executed and delivered this Termination Agreement as of the date first set forth above

RAIT FINANCIAL TRUST

By:

/s/ Jamie Reyle________________
Name: Jamie Reyle, Esq.
Title: Interim CEO, Interim President & General Counsel

RAIT PARTNERSHIP, L.P.

By:

RAIT General, Inc., a Maryland corporation, its General Partner

By:

/s/ Jamie Reyle________________
Name: Jamie Reyle, Esq.
Title: Interim CEO, Interim President & General Counsel

TABERNA REALTY FINANCE TRUST

By:

/s/ Jamie Reyle________________
Name: Jamie Reyle, Esq.
Title: Interim CEO, Interim President & General Counsel

[ Signature Page to Termination Agreement ]

RAIT ASSET HOLDINGS IV, LLC,

By:

RAIT Partnership, L.P., a Delaware limited partnership,

its managing member

By:

RAIT General, Inc., a Maryland corporation, its General Partner

By:

/s/ Jamie Reyle________________
Name: Jamie Reyle, Esq.
Title: Interim CEO, Interim President & General Counsel

[ Signature Page to Termination Agreement ]

INVESTOR :

ARS VI INVESTOR I, LP

By: ARS VI Investor I GP,

LLC, its General Partner

By: Almanac Realty Securities VI,

L.P., its Sole Member

By: Almanac Realty Partners VI,

LLC, its General Partner

By: _ /s/ Matthew W. Kaplan _______________

Name: Matthew W. Kaplan
Title: President

[ Signature Page to Termination Agreement ]

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Introduction

The following unaudited pro forma condensed consolidated financial statements are based on RAIT’s historical consolidated financial statements incorporated by reference. The unaudited pro forma condensed consolidated statements of income for the three months ended March 31, 2018 and the year ended December 31, 2017 give effect to the following transactions as if they had occurred on January 1, 2017, the beginning of the earliest period presented:

•

the sale by RAIT Asset Holdings IV, LLC (“ RAIT IV ”), a subsidiary of RAIT, of its retained 60% interests in two ventures ( RAIT – Melody 2016 Holdings, LLC, and RAIT – Melody 2017 Holdings, LLC) that own two securitizations consolidated by RAIT, RAIT 2015-FL5 Trust (“ FL5 ”) and RAIT 2016-FL6 Trust (“ FL6 ”);

•

the use of proceeds received from the sale discussed above and defined available cash held by RAIT IV to redeem a portion of the preferred units of RAIT IV and a corresponding portion of Series D preferred shares of RAIT; and

•

the exchange of the remaining amount of preferred units of RAIT IV and the remaining corresponding Series D preferred shares of RAIT for a corresponding amount, based on liquidation preference, of newly issued Series A preferred shares, Series B preferred shares, and Series C preferred shares, in each case, of RAIT.

The unaudited pro forma condensed consolidated balance sheet as of March 31, 2018 gives effect to the above transactions as if they had occurred on March 31, 2018.

The pro forma adjustments as presented are based on certain assumptions and information that is currently available. As a result of the foregoing, the pro forma adjustments are subject to change. The pro forma adjustments have been made solely for the purpose of providing the unaudited pro forma condensed consolidated financial statements presented below. Assumptions and estimates underlying the unaudited adjustments to the unaudited pro forma condensed consolidated financial statements are described in the accompanying notes. This information is presented for illustrative purposes only and is not indicative of the consolidated operating results or financial position of RAIT if such transactions had occurred on the dates described above and in accordance with the assumptions described below, nor is it indicative of future operating results or financial position.

The unaudited pro forma condensed consolidated financial statements have been developed from and should be read in conjunction with:

•

the accompanying notes to the unaudited pro forma condensed consolidated financial statements; and

•

the historical audited consolidated financial statements of RAIT as of and for the year ended December 31, 2017 incorporated by reference herein from RAIT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, and the historical unaudited consolidated financial statements as of and for the three months ended March 31, 2018 incorporated by reference herein from RAIT’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2018.

RAIT FINANCIAL TRUST

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of March 31, 2018

(Dollars in thousands)

				Pro Forma Adjustments
	RAIT Historical			Sale of FL5 and FL6 Interests			Series D Redemption and Exchange			Consolidated Pro Forma
Assets	(A)			(B)			(C)
Investment in mortgage loans, held for investment:
Commercial mortgage loans, mezzanine loans, and preferred equity interests	$	1,047,284		$	(277,554	)	$	-		$	769,730
Allowance for loan losses		(13,732	)		-			-			(13,732	)
Total investment in mortgage loans, held for investment, net		1,033,552			(277,554	)		-			755,998
Investment in mortgage loans, held for sale		38,394			-			-			38,394
Investments in real estate, net		235,148			-			-			235,148
Cash and cash equivalents		84,483			54,444			(57,183	)		81,744
Restricted cash		152,962			(73,069	)		-			79,893
Accrued interest receivable		29,347			(1,191	)		-			28,156
Other assets		25,268			(1,233	)		-			24,035
Intangible assets, net		4,949			-			-			4,949
Total assets	$	1,604,103		$	(298,604	)	$	(57,183	)	$	1,248,316
Liabilities and Equity
Indebtedness	$	1,272,006		$	(262,469	)	$	-		$	1,009,537
Accrued interest payable		5,735			(753	)		-			4,982
Accounts payable and accrued expenses		8,211			(3	)		-			8,208
Borrowers' escrows		91,583			(25,807	)		-			65,776
Deferred taxes and other liabilities		6,350			(557	)		-			5,793
Total liabilities		1,383,885			(289,589	)		-			1,094,296
Series D cumulative redeemable preferred shares, $0.01 par value per share		73,480			-			(73,480	)		-
Equity:
Shareholders’ equity:
Preferred shares, $0.01 par value per share:
7.75% Series A cumulative redeemable preferred shares		53			-			11			64
8.375% Series B cumulative redeemable preferred shares		23			-			5			28
8.875% Series C cumulative redeemable preferred shares		17			-			4			21
Series E cumulative redeemable preferred shares		-			-			-			-
Common shares, $0.03 par value per share		2,777			-			-			2,777
Additional paid in capital		2,097,447			-			4,078			2,101,525
Accumulated other comprehensive income (loss)		10,523			-						10,523
Retained earnings (deficit)		(1,964,228	)		(8,889	)		12,199			(1,960,917	)
Total shareholders’ equity		146,612			(8,889	)		16,297			154,020
Noncontrolling interests		126			(126	)		-			-
Total equity		146,738			(9,015	)		16,297			154,020
Total liabilities and equity	$	1,604,103		$	(298,604	)	$	(57,183	)	$	1,248,316

See the accompanying Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

RAIT FINANCIAL TRUST

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT

FOR THE THREE MONTHS ENDED MARCH 31, 2018

(Dollars in thousands, except per share data)

				Pro Forma Adjustments
	RAIT Historical			Sale of FL5 and FL6 Interests			Series D Redemption and Exchange		Consolidated Pro Forma
Revenue:	(D)			(E)			(F)
Investment interest income	$	18,865		$	(5,537	)	$	-	$	13,328
Investment interest expense		(10,549	)		4,280			-		(6,269	)
Net interest margin		8,316			(1,258	)		-		7,058
Property income		8,816			-			-		8,816
Fee and other income		1,209			-			-		1,209
Total revenue		18,341			(1,258	)		-		17,083
Expenses:										-
Interest expense		6,771			-			-		6,771
Real estate operating expense		5,790			-			-		5,790
Property management expenses		1,931			-			-		1,931
General and administrative expenses:										-
Compensation expense		2,925			-			-		2,925
Other general and administrative expense		6,338			(20	)		-		6,318
Total general and administrative expenses		9,263			(20	)		-		9,243
Acquisition and integration expenses		133			-			-		133
Provision for loan losses		8,032			-			-		8,032
Depreciation and amortization expense		3,443			-			-		3,443
Total expenses		35,363			(20	)		-		35,343
Operating (Loss) Income		(17,022	)		(1,237	)		-		(18,259	)
Interest and other income (expense), net		349			-			-		349
Gains (losses) on assets		(937	)		-			-		(937	)
Gains (losses) on deconsolidation of VIEs		-			-			-		-
Gains (losses) on extinguishments of debt		(991	)		261			-		(730	)
Asset impairment		(9,191	)		-			-		(9,191	)
Change in fair value of financial instruments		87			-			-		87
Income (loss) before taxes		(27,705	)		(977	)		-		(28,682	)
Income tax benefit (provision)		-			-			-		-
Net income (loss)		(27,705	)		(977	)		-		(28,682	)
(Income) loss allocated to preferred shares		(6,389	)		-			1,326		(5,063	)
(Income) loss allocated to noncontrolling interests		-			-			-		-
Net income (loss) allocable to common shares	$	(34,094	)	$	(977	)	$	1,326	$	(33,745	)
Earnings (loss) per share-Basic:
Earnings (loss) per share-Basic	$	(0.37	)						$	(0.37	)
Weighted-average shares outstanding-Basic		91,874,670								91,874,670
Earnings (loss) per share-Diluted:
Earnings (loss) per share-Diluted	$	(0.37	)						$	(0.37	)
Weighted average shares outstanding-Diluted		91,874,670								91,874,670

See the accompanying Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

RAIT FINANCIAL TRUST

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2017

(Dollars in thousands, except per share data)

				Pro Forma Adjustments
	RAIT Historical			Sale of FL5 and FL6 Interests			Series D Redemption and Exchange		Consolidated Pro Forma
Revenue:	(G)			(H)			(I)
Investment interest income	$	70,215		$	(29,391	)	$	—	$	40,824
Investment interest expense		(40,932	)		24,399			—		(16,533	)
Net interest margin		29,283			(4,993	)		—		24,290
Property income		64,184			—			—		64,184
Fee and other income		6,251			—			—		6,251
Total revenue		99,718			(4,993	)		—		94,725
Expenses:
Interest expense		35,544			—			—		35,544
Real estate operating expense		37,198			—			—		37,198
Property management expenses		8,853			—			—		8,853
General and administrative expenses:										—
Compensation expense		13,426			—			—		13,426
Other general and administrative expense		11,816			(131	)		—		11,685
Total general and administrative expenses		25,242			(131	)		—		25,111
Acquisition and integration expenses		455			—			—		455
Provision for loan losses		45,614			—			—		45,614
Depreciation and amortization expense		28,173			—			—		28,173
IRT internalization and management transition expenses		736			—			—		736
Shareholder activism expense		2,464			—			—		2,464
Employee separation expenses		575			—			—		575
Total expenses		184,854			(131	)		—		184,723
Operating (Loss) Income		(85,136	)		(4,862	)		—		(89,998	)
Interest and other income (expense), net		100			—			—		100
Gain (losses) on assets		23,439			—			—		23,439
Gain (losses) on extinguishment of debt		488			1,234			—		1,722
Asset impairment		(102,490	)		—			—		(102,490	)
Gain (losses) on deconsolidation of VIEs		5,855			(8,889	)		—		(3,034	)
Goodwill impairment		(8,342	)		—			—		(8,342	)
Change in fair value of financial instruments		13,422			—			—		13,422
Income (loss) before taxes		(152,664	)		(12,516	)		—		(165,180	)
Income tax benefit (provision)		861			—			—		861
Net income (loss)		(151,803	)		(12,516	)		—		(164,319	)
(Income) loss allocated to preferred shares		(32,816	)		—			12,550		(20,266	)
(Income) loss allocated to noncontrolling interests		(76	)		—			—		(76	)
Net income (loss) allocable to common shares	$	(184,695	)	$	(12,516	)	$	12,550	$	(184,661	)
Earnings (loss) per share-Basic:
Earnings (loss) per share-Basic	$	(2.02	)						$	(2.02	)
Weighted-average shares outstanding-Basic		91,479,533								91,479,533
Earnings (loss) per share-Diluted:
Earnings (loss) per share-Diluted	$	(2.02	)						$	(2.02	)
Weighted average shares outstanding-Diluted		91,479,533								91,479,533

See the accompanying Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

RAIT FINANCIAL TRUST

NOTES TO UNAUDITED PRO FORMA

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Overview

On June 27, 2018, pursuant to the Purchase and Sale Agreement (the “ Sale Agreement ”) between RAIT Asset Holdings IV, LLC (“ RAIT IV ”), a subsidiary of RAIT, and Melody RE II, LLC (the “ Purchaser ”), RAIT IV sold all of its FL5 Interests, as defined below, and FL6 Interests, as defined below (collectively, the “ Interests ”), for $32,469 and $22,163, respectively, to the Purchaser.

Prior to the sale, RAIT, through its subsidiary RAIT IV, wa s the holder of:

•

60% of the units (the “ FL5 Interests ”) of RAIT – Melody 2016 Holdings, LLC (“ Holdings 2016 ”), which controls RAIT – Melody 2016 Holdings Trust. This trust owns various classes of non-investment grade bonds and the equity of RAIT 2015-FL5 (“ FL5 ”) (the “ JV FL5 Securities ”), with the remaining 40% of the units of Holdings 2016 being held by affiliates of the Purchaser.

•

60% of the units (the “ FL6 Interests ”) of RAIT – Melody 2017 Holdings, LLC (“ Holdings 2017 ”), which controls RAIT – Melody 2017 Holdings Trust. This trust owns various classes of non-investment grade bonds and the equity of RAIT 2016-FL6 (“ FL6 ”) (the “ JV FL6 Securities ”), with the remaining 40% of the units of Holdings 2017 being held by affiliates of the Purchaser

Prior to the sale, RAIT consolidated Holdings 2016 and FL5 and also consolidated Holdings 2017 and FL6 in its consolidated financial statements as RAIT was the primary beneficiary of these variable interest entities (“ VIEs ”). Holdings 2016 and Holdings 2017 have been referred to as the RAIT Venture VIEs in its consolidated financial statements. As a result of the sale, RAIT will no longer be considered the primary beneficiary of these entities and will deconsolidate these entities from its consolidated financial statements.

Pursuant to the previously disclosed Extension Agreement and the Consent and Acknowledgement Dated June 12, 2018 Re Extension Agreement Dated As of March 12, 2018 between RAIT, several of RAIT’s subsidiaries, and ARS VI Investor I, LP (formerly known as ARS VI Investor I, LLC) (the “ Investor” ), the following transactions occurred [on June 27, 2018]:

•

The proceeds from the sale of the FL5 Interests and FL6 Interests and defined available cash held by RAIT IV were used to redeem $56,765 of the preferred units of RAIT IV and the corresponding Series D preferred shares of RAIT held by the Investor.

•

The remaining $16,715 of preferred units of RAIT IV and corresponding Series D preferred shares of RAIT held by the Investor were exchanged for a corresponding amount, based on liquidation preference, of RAIT’s publicly traded Series A preferred shares, Series B preferred shares and Series C preferred shares, in each case, of RAIT as follows:

$9,579 of liquidation preference of Series A preferred shares;

$4,196 of liquidation preference of Series B preferred shares; and

$2,940 of liquidation preference of Series C preferred shares.

The pro forma financial statements have been prepared assuming the exchange of the preferred units of RAIT IV and corresponding Series D preferred shares of RAIT for Series A, Series B and Series C preferred shares, in each case, of RAIT is accounted for as an equity transaction and an extinguishment of the preferred units of RAIT IV and corresponding Series D preferred shares of RAIT and issuance of Series A, Series B and Series C preferred shares, in each case, of RAIT. Accordingly, the difference between the fair value of the consideration transferred to the Investor (i.e., the Series A, Series B and Series C preferred shares, in each case, of RAIT) and the carrying amount of the preferred units of RAIT IV and corresponding Series D preferred shares of RAIT that were redeemed represents a return from the Investor.

January 1, 2017, the beginning of the earliest period presented. The unaudited pro forma condensed consolidated balance sheet as of March 31, 2018 gives effect to the above transactions as if they had occurred on March 31, 2018.

Unless otherwise noted, all dollar amounts are in thousands, except per share amounts.

Balance Sheet Adjustments

(A)

Represents the historical balance sheet of RAIT at March 31, 2018, included in RAIT's Quarterly Report on Form 10-Q filed on May 10, 2018.

(B)

Represents the effects of deconsolidation of the two RAIT Venture VIEs, Holdings 2016 and Holdings 2017, which consolidate FL5 and FL6, respectively, as a result of the sale of 100% of RAIT IV’s interests in Holdings 2016 and Holdings 2017 as of March 31, 2018. The summary of the sale and resulting deconsolidation of the two RAIT Venture VIEs, Holdings 2016 and Holdings 2017, which consolidate FL5 and FL6, respectively, is as follows:

Cash received for sale of RAIT IV’s interests in Holdings 2016 and Holdings 2017	$	54,632

Effects of deconsolidation:
Decrease to assets	$	353,236		(1	)
Decrease to liabilities		289,589
Decrease to noncontrolling interests		126
Decrease in net assets	$	63,521

Loss on deconsolidation	$	(8,889	)

(1)

Includes the deconsolidation of $188 of cash held by Holdings 2016 and Holdings 2017

(C)

Represents the redemption of the preferred units of RAIT IV and corresponding Series D preferred shares of RAIT in exchange for (i) cash proceeds received from the sale of RAIT IV’s interests in Holdings 2016 and Holdings 2017 of $54,632, (ii) defined available cash held by RAIT IV of $2,133 and (iii) $16,715, based on liquidation preference, of RAIT’s publicly traded Series A preferred shares, Series B preferred shares and Series C preferred shares. In addition, RAIT paid an exchange fee of $418 to the Investor.

Par amount of preferred units of RAIT IV and corresponding Series D preferred shares of RAIT					$	73,480

Cash received for sale of RAIT IV’s interests in Holdings 2016 and Holdings 2017	$	54,632
Defined available cash held by RAIT IV		2,133
Total par amount of preferred units of RAIT IV and corresponding Series D preferred shares of RAIT redeemed	$	56,765

Fair value of Series A preferred shares of RAIT issued in exchange		2,586	(1	)
Fair value of Series B preferred shares of RAIT issued in exchange		1,141	(2	)
Fair value of Series C preferred shares of RAIT issued in exchange		788	(3	)
Total fair value of preferred shares of RAIT exchanged for remaining preferred units of RAIT IV and corresponding Series D preferred shares of RAIT	$	4,515

Cash exchange fee	$	418

Total consideration transferred in preferred units of RAIT IV and corresponding Series D preferred shares redemption and exchange					$	61,699

Net increase to equity as a result of redemption					$	11,781	(4)

(1)

Represents the fair value of 383,147 shares of Series A preferred of RAIT that were issued to the Investor. The fair value is based upon $6.75 per share, which was the closing price of the Series A preferred shares of RAIT on June 26, 2018.

(2)

Represents the fair value of 167,828 shares of Series B preferred of RAIT that were issued to the Investor. The fair value is based upon $6.80 per share, which was the closing price of the Series B preferred shares of RAIT on June 26, 2018.

(3)

Represents the fair value of 117,605 shares of Series C preferred of RAIT that were issued to the Investor. The fair value is based upon $6.70 per share, which was the closing price of the Series C preferred shares of RAIT on June 26, 2018.

(4)

The composition of the net increase to equity as a result of the redemption is an increase to retained earnings of $12,199 (par amount less redeemed amount less fair value of shares issued in exchange) offset by a decrease to additional paid-in capital of $418 (the exchange fee).

Income Statement Adjustments for the Three Months Ended March 31, 2018 and Year Ended December 31, 2017

(D)

Represents the historical income statement of RAIT for the three months ended March 31, 2018, included in RAIT's Quarterly Report on Form 10-Q filed on May 10, 2018.

(E)

Represents the effect of selling 100% of RAIT IV’s interests in Holdings 2016 and Holdings 2017 for the three months ended March 31, 2018. The sale results in our deconsolidation of the two RAIT Venture VIEs, Holdings 2016 and Holdings 2017, which consolidate FL5 and FL6, respectively.

(F)

Represents the effect of the redemption of the preferred units of RAIT IV and corresponding Series D preferred shares of RAIT and issuance of additional Series A, B and C preferred shares, in each case, of RAIT for the three months ended March 31, 2018.

Effect of redemption of preferred units of RAIT IV and corresponding Series D preferred shares of RAIT	1,665		(1	)
Effect of issuance of Series A, B and C preferred shares, in each case, of RAIT	(339	)	(2	)
Increase to net income allocable to common shares	1,326

(1)

Represents dividends on the redeemed Series D preferred shares.

(2)

Represents dividends on newly issued Series A, B and C preferred shares.

(G)

Represents the historical income statement of RAIT for the year ended December 31, 2017 included in RAIT's Annual Report on Form 10-K filed on March 16, 2018.

(H)

Represents the effect of selling 100% of RAIT IV’s interests in Holdings 2016 and Holdings 2017 for the year ended December 31, 2017. The sale results in our deconsolidation of the two RAIT Venture VIEs, Holdings 2016 and Holdings 2017, which consolidate FL5 and FL6, respectively.

(I )

Effect of redemption of preferred units of RAIT IV and corresponding Series D preferred shares of RAIT	13,905		(1	)
Effect of issuance of Series A, B and C preferred shares, in each case, of RAIT	(1,355	)	(2	)
Increase to net income allocable to common shares	12,550

(1)

Represents dividends on the redeemed Series D preferred shares of RAIT.

(2)

Represents dividends on newly issued Series A, B and C preferred shares, in each case, of RAIT.

Exhibit 99.2

RAIT Financial Trust Announces Progress on Its Strategic Steps

PHILADELPHIA, PA – June 28, 2018 – RAIT Financial Trust (OTCQB: RASF) (“RAIT”) is pleased to provide an update on its previously announced strategy of taking steps to increase liquidity and better position RAIT to meet its financial obligations as they come due. These steps are referred to as the 2018 strategic steps and they include, but are not limited to:

The suspension of our lending business along with the implementation of other steps to reduce costs within our other operating businesses; and

The continuation of the process of selling our owned real estate (“REO”) portfolio and selling certain of our commercial real estate (“CRE”) loans, while continuing to service and manage our existing CRE loan portfolio.

Key progress related to our 2018 strategic steps include the following:

Asset Monetization Plan and Liquidity Position

As of June 27, 2018, RAIT’s year to date REO and CRE loan divestitures, totaled $182.7 million. After repayment of obligations secured by these assets and related transaction costs of $88.9 million, RAIT received net proceeds of approximately $93.8 million.

As summarized below, on June 27, 2018, a RAIT subsidiary (“RAIT IV”), sold (the “FL Sale”) its interests (the “FL5/6 Interests”) in joint ventures which held securities with a $61.2 million aggregate par amount in two floating rate securitizations, which RAIT has referred to as RAIT FL5 and RAIT FL6 in its public filings, to an affiliate (the “FL5/6 Purchaser”) of the other members of these joint ventures.

RAIT’s cash and cash equivalents balance as of June 27, 2018 was $73 million.

Debt Reductions

During 2018, RAIT repurchased $42.3 million of its outstanding 4% convertible senior notes, leaving $68.2 million outstanding. Additionally, during 2018, RAIT redeemed $2.0 million of its senior secured notes, leaving $9.5 million outstanding.

RAIT completes the FL Sale, the Preferred Redemption (as defined below) and the Preferred Exchange (as defined below)

As detailed in the Form 8-K filed on June 28, 2018, on June 27, 2018, RAIT and RAIT IV closed on (1) the redemption (the “Preferred Redemption”) of a portion of RAIT IV’s preferred units (the “Units”) held by an investor (the “Preferred Investor”), resulting in the cancellation of the linked RAIT Series D Preferred

Shares (the “Series D Preferred Shares”) held by the Preferred Investor; and (2) the exchange (the “Preferred Exchange”) of the remaining Units and linked Series D Preferred Shares held by the Preferred Investor for newly issued shares of RAIT’s publically traded Series A, B and C Preferred Shares, resulting in the cancellation of all of the outstanding Units and linked Series D Preferred Shares . RAIT IV, which owned specified assets required to be held by RAIT IV under the Series D Documents (as defined below) to support the redemption of the Units and the Series D Preferred Shares, closed on its sale to the FL5/6 Purchaser of the FL5/6 Interests. As described below, t he proceeds from the sale were used to redeem certain of the Units, which resulted in the cancellation of the Series D Preferred S hares linked to such Units. RAIT IV utilized approximately $ 54.6 million in net proceeds from FL Sale plus $2.2 million of other cash held by RAIT IV to redeem $ 56.8 million of the Units and the Series D Preferred Shares linked to such Units having an aggregate liquidation preference of $ 56.8 million. The remaining balance of the Units and Series D Preferred Share s, with an aggregate liquidation preference of $ 16.7 million , was exchanged for 383,147 RAIT Series A Preferred Shares, 167,828 RAIT Series B Preferred Shares and 117,605 RAIT Series C Preferred Shares , having an aggregate liquidation preference of $16.7 million .

Key effects of the transactions for RAIT include:

The resolution of the previously disclosed dispute between the Preferred Investor and RAIT and the termination of the previously disclosed securities purchase agreement related to the Series D Preferred Shares and Units and related documents governing the Series D Preferred Shares and Units (collectively, the “Series D Documents”) and the operating covenants therein;

The release back to RAIT from RAIT IV’s assets of the remaining $28.2 million par amount of assets held by RAIT IV as part of the assets supporting the redemption of the Units and cancellation of the linked Series D Preferred Shares, making these assets available for RAIT’s future liquidity needs; and

The reduction in the size of RAIT’s Board of Trustees (the “Board”) thru the resignation from the Board of the Preferred Investor’s designated Board member and another Board member with business relationships with the Preferred Investor.

Please see the Form-8K filed on June 28, 2018 for further details.

Michael Malter, RAIT’s Chairman of the Board said, “With the combination of our current cash balance of $73 million, $44 million of corporate recourse debt reductions and completion of transactions resulting in the cancellation of the Series D Preferred Shares, we believe RAIT has mitigated the most significant immediate risks it faced during the first half of 2018. At this time, we anticipate RAIT’s liquidity position will be sufficient to meet its 2018 financial obligations as we expect them to come due.”

About RAIT Financial Trust

RAIT Financial Trust is an internally-managed real estate investment trust focused on providing debt financing options to owners of commercial real estate throughout the United States. For more information, please visit www.rait.com or call Investor Relations at 215.207.2100.

Forward-Looking Statements

This press release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “strategic steps,” “expect,” “believe,” “anticipate,” or other similar words or terms. Such forward-looking statements include, but are not limited to, statements regarding RAIT’s 2018 strategic steps and RAIT’s expectations as to the impact of the 2018 strategic steps; statements regarding the mitigation of risks to RAIT; and statements regarding the anticipated sufficiency of RAIT’s liquidity position. Such forward-looking statements are based upon RAIT’s historical performance and its current strategies and expectations and are not a representation that such strategies or expectations will be achieved. Such statements are subject to known and unknown risks, uncertainties and contingencies that may cause actual results to differ materially from the expectations, intentions, beliefs, strategies or predictions of the future expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to, whether of risks to RAIT have been mitigated by the 2018 strategic steps taken to date; whether RAIT’s liquidity position will be sufficient for its 2018 financial obligations as they come due; whether RAIT will be able to continue to implement the 2018 strategic steps to increase liquidity and better position RAIT to meet its financial obligations as they come due; whether RAIT will be able to continue to monetize its assets, including, without limitation, RAIT’s legacy REO, CRE loans, the majority of RAIT’s non-lending assets and existing property management operations, and repay any related debt, for amounts and on the schedule currently expected by RAIT management; whether any indebtedness or other obligations of RAIT will become due and payable sooner than expected by RAIT; final accounting determinations on gains or losses realized in the event properties and/or loans are sold or divested for prices that differ from their carrying value or if property and/or loan valuations are adjusted in the process of revaluating properties and/or loans when they are characterized as held for sale; and other factors described in RAIT’s Annual Report on Form 10-K, Quarterly Report on Form 10-Q and in other filings with the SEC. RAIT undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.

RAIT Financial Trust Contact

Andres Viroslav

215-207-2100

aviroslav@rait.com