8-K

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): December 14, 2016

RAIT Financial Trust

(Exact name of registrant as specified in its charter)

Maryland	001-14760	23-2919819
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)

Two Logan Square, 100 N. 18th Street, 23rd 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))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers, Compensatory Arrangements of Certain Officers.

In its Current Report on Form 8-K filed on September 27, 2016, RAIT Financial Trust (“RAIT”) reported entering into that certain Securities and Asset Purchase Agreement, dated September 27, 2016, by and among RAIT, RAIT TRS, LLC, Jupiter Communities, LLC, the RAIT Selling Stockholders (as defined therein), Independence Realty Trust, Inc. (“IRT”) and Independence Realty Operating Partnership, LP (the “Purchase Agreement”), pursuant to which IRT will complete a management internalization and separation from RAIT and certain of its affliates (the “Internalization”). In connection with the Internalization and the anticipated resignation of Scott F. Schaeffer as Chief Executive Officer (“CEO”) of RAIT, and his subsequent service to RAIT as a consultant, on December 14, 2016, RAIT and Mr. Schaeffer entered into a separation agreement  which provides for his resignation from RAIT, his compensation upon his resignation and other customary matters (the “Schaeffer Separation Agreement”), as well as a consulting agreement which provides the terms of Mr. Schaeffer’s service as a consultant to RAIT (the “Schaeffer Consulting Agreement”). Each of the Schaeffer Separation Agreement and the Schaeffer Consulting Agreement becomes effective as of the Second Closing Date (as defined in the Purchase Agreement).  

The Schaeffer Separation Agreement provides that Mr. Schaeffer will resign as an employee of RAIT on the Second Closing Date, and shall cease to be a director, officer, or manager of RAIT and its subsidiaries and affiliates, as applicable, on such date. Pursuant to the Binding Memorandum of Understanding dated September 26, 2016 between Mr. Schaeffer and RAIT, which was reported on RAIT’s Current Report on Form 8-K filed on September 27, 2016, all equity awards granted to Mr. Schaeffer shall continue to vest in accordance with the applicable vesting schedule, and Mr. Schaeffer shall remain entitled to dividends and dividend equivalents on such equity awards. In addition, options and share appreciation rights may be exercised through the expiration of their original terms, and performance share unit awards granted to Mr. Schaeffer in 2015 and 2016 shall continue to time vest and remain subject to the achievement of relevant performance metrics. Mr. Schaeffer will continue to be bound by Section 5 of the Third Amended and Restated Employment Agreement, entered into as of August 4, 2011 by and between RAIT and Mr. Schaeffer, as amended (the “Schaeffer Employment Agreement”), which contains provisions relating to non-competition, non-solicitation, intellectual property, developments and confidentiality, except that RAIT will waive certain restrictions relating to non-competition and non-solicitation, solely with respect to Mr. Schaeffer’s employment with IRT. Mr. Schaeffer will also sign a general release of RAIT on the Second Closing Date.

The Schaeffer Consulting Agreement provides that Mr. Schaeffer will provide advisory and consulting services to RAIT and its subsidiaries as are reasonably requested for a one-year period beginning on the Second Closing Date. In respect of such services, Mr. Schaeffer will be paid a fixed sum of $375,000 for the one year term, and will be reimbursed for all reasonable out-of-pocket expenses in accordance with RAIT’s reimbursement policies. Mr. Schaeffer will continue to be bound by the intellectual property, development and confidentiality terms of the Schaeffer Employment Agreement during and after the consulting term.

On December 14, 2016, in connection with the anticipated termination of James J. Sebra as Chief Financial Officer (“CFO”) of RAIT, RAIT and Mr. Sebra entered into a separation agreement which provides for Mr. Sebra’s resignation from RAIT, his compensation upon his resignation and other customary matters (the “Sebra Separation Agreement”).

The Sebra Separation Agreement provides that Mr. Sebra will remain CFO of RAIT until the later to occur of March 31, 2017, or the filing of RAIT’s Annual Report on Form 10-K for the fiscal year ending December 31, 2016 with the U.S. Securities and Exchange Commission (the “Resignation Date”), at which time Mr. Sebra shall resign as CFO and from any other positions held by him. If RAIT hires a new CFO prior to the Resignation Date, Mr. Sebra may resign at any time following such hire in the sole discretion of RAIT. Pursuant to the Binding Memorandum of Understanding dated September 26, 2016 between Mr. Sebra and RAIT, which was reported on RAIT’s Current Report on Form 8-K filed on September 27, 2016, in the event that Mr. Sebra remains employed by RAIT after December 31, 2016, he will receive a fixed cash bonus equal to a portion of his 2016 cash bonus, which will be prorated for the period of 2017 that Mr. Sebra is employed by RAIT. In addition, all equity awards granted to Mr. Sebra shall continue to vest in accordance with the applicable vesting schedule, and Mr. Sebra shall remain entitled to dividends and dividend equivalents on such equity awards. Options and share appreciation rights may be exercised through the expiration of their original terms, and performance share unit awards granted to Mr. Sebra in

2015 and 2016 shall continue to time vest and remain subject to the achievement of relevant performance metrics. Mr. Sebra will continue to be bound by Section 5 of the Employment Agreement, entered into as of August 2, 2012 by and between RAIT and Mr. Sebra, which contains provisions relating to non-competition, non-solicitation, intellectual property, developments and confidentiality, except that RAIT will waive certain restrictions relating to non-competition and non-solicitation, solely with respect to Mr. Sebra’s employment with IRT. Mr. Sebra will also sign a general release of RAIT on the Resignation Date.

The foregoing descriptions of the Schaeffer Separation Agreement, the Schaeffer Consulting Agreement and the Sebra Separation Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Schaeffer Separation Agreement, the Schaeffer Consulting Agreement and the Sebra Separation Agreement, filed as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3 hereto, respectively, and each incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

The exhibits filed as part of this Current Report on Form 8-K are identified in the Exhibit Index immediately following the signature page of this report. Such Exhibit Index is incorporated herein by reference.

SIGNATURES

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

	RAIT FINANCIAL TRUST
Date: December 16, 2016	By:	/s/ Scott L. N. Davidson
	Name:	Scott L. N. Davidson
	Title:	President

EXHIBIT INDEX

Exhibit Number	Description
10.1	Separation Agreement, dated as of December 14, 2016, between RAIT Financial Trust and Scott F. Schaeffer
10.2	Consulting Agreement, dated as of December 14, 2016, between RAIT Financial Trust and Scott F. Schaeffer
10.3	Separation Agreement, dated as of December 14, 2016, between RAIT Financial Trust and James J. Sebra

EX-10.1

EXHIBIT 10.1

SEPARATION AGREEMENT

THIS SEPARATION AGREEMENT (the “Agreement”), entered into as of December 14, 2016, by and between RAIT Financial Trust, a Maryland real estate investment trust (the “Company”), with a principal office in Philadelphia, Pennsylvania, and Scott F. Schaeffer (“Executive”).

WHEREAS, Executive has been employed by the Company as the Chief Executive Officer since February 2009 and as Chairman of the Board of Trustees of the Company (the “Board”);

WHEREAS, the Company and Executive are parties to that certain Third Amended and Restated Employment Agreement entered into as of August 4, 2011, as amended (the “Employment Agreement”);

WHEREAS, the Company and the Executive entered into a Binding Memorandum of Understanding (the “MOU”) on September 26, 2016 that memorialized terms relating to Executive’s resignation from his positions with the Company;

WHEREAS, beginning on the Second Closing Date (as defined in that certain Securities and Asset Purchase Agreement, dated September 27, 2016, by and among the Company, RAIT TRS, LLC, Jupiter Communities, LLC, the RAIT Selling Stockholders (as defined therein), Independence Realty Trust, Inc. (“IRT”) and Independence Realty Operating Partnership, LP (the “Purchase Agreement”)), Executive will provide consulting services to the Company for a period of one (1) year pursuant to the Consulting Agreement (as defined herein);

WHEREAS, Executive acknowledges that the Employment Agreement remains in full force and effect, except as specifically modified by the MOU and except as specifically modified by this Agreement; and

WHEREAS, the parties intend to arrange for Executive’s separation from employment with Company and to enter into this Agreement.

NOW, THEREFORE, intending to be legally bound hereby and in consideration of the mutual promises and obligations expressed herein and other good and valuable consideration, the receipt of which is hereby acknowledged, Executive and Company, agree as follows:

1.Executive’s Resignation.

(a)Executive agrees that he shall resign as an employee of the Company, effective as of the Second Closing Date, as defined in the Purchase Agreement (the “Resignation Date”), unless earlier terminated by the Company.   Executive’s salary and benefits will cease on the Resignation Date, except as set forth below.  In accordance with Company policy, Executive will not be paid for any accrued, unused vacation through the Resignation Date but shall be paid any then unpaid salary earned and owing as of the Resignation Date. Executive shall also be reimbursed any unreimbursed business expenses incurred by Executive prior to the Resignation Date in accordance with Company policy.  

(b)As of the Resignation Date, Executive will cease to be a director, officer or manager of the Company or its subsidiaries and or its affiliates, as applicable, and shall thereafter have no authority to bind the Company or its subsidiaries or its affiliates.

(c)In accordance with Section 2(d) of the MOU, all equity awards previously granted to Executive and equity awards to be granted to Executive pending the completion of fiscal year 2016, if any, shall neither terminate nor accelerate upon Executive’s resignation as an employee and director of the Company, and vesting shall continue to occur in accordance with the applicable vesting schedule, whether or not Executive’s service as a consultant to the Company has ceased on or before the applicable vesting date. In addition: (i) Executive shall remain entitled to accrued dividends and dividend equivalents on all such equity awards, (ii) options and share appreciation rights (“SARs”) held by Executive may be exercised after vesting through the expiration of the original term of such options and SARs and (iii) Performance Share Unit Awards granted to the Executive in 2015 and 2016 (“PSUs”) shall continue to time vest while remaining subject to the achievement of the relevant performance metrics, in each case as if Executive remained employed by the Company throughout the term. Any performance target for PSUs that is determined based on a subjective evaluation of Executive’s performance by the compensation committee of the Company’s board of trustees shall, for purposes of such PSUs, be computed such that the percentile achievement for such subjective target shall equal the weighted average of the percentiles achieved for the objectively evaluated targets applicable to such PSU.

(d)In recognition that time-vested restricted equity awards granted to Executive shall cease to be subject to service based conditions (as contemplated by Section 1(c)) and will, as a result, be taxable at the time of such cessation, the Company is authorized to withhold a number of common shares having a fair market value sufficient to cover any legally required tax withholdings on such equity awards. The PSUs shall remain subject to the relevant performance metrics, as further described herein, and will not be taxable at the time of such cessation.

2.Consulting Arrangement.  Beginning on the Resignation Date, Executive shall perform consulting services for the Company, as requested by the Company (the “Consulting Arrangement”). The specific terms of the Consulting Arrangement shall be memorialized in a separate agreement (the “Consulting Agreement”).  

3.Agreements and Acknowledgements.

(a)Executive acknowledges that the Employment Agreement remains in full force and effect, except as specifically modified by the MOU and except as specifically modified by this Agreement.  

(b)Executive agrees that he remains subject to Section 5 (and its subsections) of the Employment Agreement relating to Non-Competition, Non-Solicitation, Intellectual Property, Developments and Confidentiality, except that the Company waives (i) the non-competition restriction in Section 5.1(a) of the Employment Agreement as of the Resignation Date, only with respect to Executive’s employment with IRT and (ii) the non-solicitation restrictions in Section 5.1(c) of the Employment Agreement with respect to each of the following named individuals and with respect to any additional individuals offered positions at IRT with

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the prior written consent of the Company: James Sebra, Farrell Ender, Mathew Harker, Michael Kernan, Jason Lynch, Jessica Norman, and Michael Hogentogler.  Executive also agrees that the Company may, without limitation, exercise the rights and remedies referenced in Section 5.4 of the Employment Agreement (captioned “Equitable Relief”) in connection with any breach of any of Executive’s continuing restrictions set forth in Section 5 (and its subsections) of the Employment Agreement, excluding, for clarity, the non-competition and non-solicitation restrictions in Section 5.1(a) and Section 5.1(c), respectively, of the Employment Agreement waived by the Company with respect to Executive’s employment with IRT and solicitation of employees as and to the extent permitted herein. The duration of any applicable restrictions contained in Section 5of the Employment Agreement (and its applicable subsections) shall begin at the expiration or earlier termination of the Consulting Agreement.  

General Release By Executive.  In accordance with the requirements of the MOU, and in consideration of the benefits set forth in the MOU, Executive agrees to execute a general release in the form attached hereto as Appendix A on, and not earlier than, the Resignation Date.

5.Return of Company Property.  

(a)On or before the Resignation Date, Executive shall deliver the Company’s (and its subsidiaries’ and its affiliates’) credit cards to the person designated by the Company to receive the same.

(b)At the end of the term of the Shared Services Agreement (as defined in the Purchase Agreement) or the Consulting Agreement, whichever is later, Executive shall deliver all property of the Company, including electronic equipment, such as cellphones, blackberries, and computers, keys, identification cards, the Company’s records and information belonging to the Company and any documents, memoranda or files, stored in whatever media, retaining no copies, to the person designated by the Company to receive the same.  

6.Cooperation Agreement.  During the term of the Consulting Agreement, Executive shall provide reasonable assistance to the Company with the transition of his job responsibilities to other employees of the Company and its subsidiaries and its affiliates and to provide reasonable cooperation to the Company and its attorneys in connection with any investigations, lawsuits, or other proceedings in which the Company or its employees may become involved, in each case with respect to work performed for the Company or its subsidiaries or its affiliates by Executive prior to the Resignation Date.  Executive agrees to comply with the Company’s reasonable requests for information, including, without limitation, with respect to governmental filings and regulatory information requests.  

7.Consideration Period.

(a)Executive acknowledges that he has been provided with a period of at least twenty-one (21) calendar days to consider the terms of this Agreement, including the General Release of Claims attached as Appendix A, from the date this Agreement first was presented to him on October 31, 2016.  Executive agrees that any changes to this Agreement, whether material or immaterial, will not restart the running of the 21-day period.

(b)Executive understands that he may take the entire 21-day period to consider this Agreement.  Executive acknowledges that if he signs and returns this Agreement

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before the end of the consideration period that he will have knowingly and voluntarily waived his right to consider the Agreement for the full consideration period.  He may return this Agreement in less than the full consideration period only if his decision to shorten it was knowing and voluntary and was not induced in any way by the Company.  

8.Indemnification, Litigation and Related Matters.  All applicable indemnification agreements and the provisions of the Company’s Directors and Officers liability insurance policies (“D&O Policies”), Declaration of Trust and Bylaws relating to indemnification and advancement of expenses to officers of the Company shall continue to apply to Executive with respect to work performed for the Company by Executive prior to the Resignation Date and during the term of the Consulting Agreement, if applicable. In addition, any changes to such provisions subsequent to the Resignation Date that are generally applicable to conduct of officers of the Company occurring prior to the Resignation Date shall apply to Executive. The Company shall continue to maintain liability insurance covering Executive with respect to work performed for the Company by Executive prior to the Resignation Date on the same or substantially similar terms as for any other officer. The Company agrees to keep Executive reasonably apprised of the status of any proceedings that may implicate him or his conduct and/or might give rise to a right to indemnification under any applicable indemnification agreements or otherwise, including promptly providing relevant publically available documents such as pleadings and material filings.

9.Effective Date.  This Agreement shall become effective according to its terms immediately upon the Resignation Date, except that Executive shall have seven (7) days following execution of the General Release required by Section 4 herein and attached hereto as Appendix A to revoke his consent thereto.  If Executive does not execute the General Release attached hereto as Appendix A on the Resignation Date, as required by Section 4 herein, or if he revokes it, the Company’s obligations to Executive under Sections 2(b), (c), and (d) of the MOU shall immediately cease and the Company will not waive the non-competition restriction in Section 5.1(a) and Section 5.1(c) of the Employment Agreement.  From the date hereof through the Resignation Date, Executive’s obligations under the Employment Agreement shall continue as set forth therein.

10.Revocation Period. The Revocation Period, for purposes of this Agreement, is the seven (7) day period following Executive’s execution of the General Release attached hereto as Appendix A.  Executive acknowledges that he shall have seven (7) days following his execution of the General Release in Appendix A to revoke the Release.  To revoke the Release, Executive, within seven (7) days of his execution of the Release, must deliver, fax or e-mail, or send a letter via overnight deliver to the attention of Scott L.N. Davidson, the Chief Executive Officer of the Company, at RAIT Financial Trust, Two Logan Square, 100 N. 18th Street, 23rd Floor, Philadelphia, PA 19103. If the seventh day is a Sunday or federal holiday, then the document must be delivered, faxed, e-mailed, or sent by over-night delivery service, as applicable, on the following business day. For a revocation to be effective, Executive must have evidence confirming timely receipt by the Company.

11.Advice to Consult Legal Representative.  The Company recommends that Executive consult with an attorney of his own choosing, at his own expense, with regard to entering into this Agreement.

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12.Executive Certification – Validity of Agreement.  Executive, intending to be legally bound, represents, certifies and acknowledges that he has carefully read this Agreement and has executed it voluntarily and with full knowledge and understanding of its significance, meaning and binding effect and with the advice of counsel.  Executive further declares that he is competent to understand the content and effect of this Agreement and that his decision to enter into this Agreement has not been influenced in any way by fraud, duress, coercion, mistake or misleading information.

13.Integration. This Agreement, as well as the agreements referenced herein, contain the entire agreement and understanding between Executive and the Company.  This Agreement supersedes all other agreements between Executive and the Company, except those referenced herein.  In the event of any inconsistency between this Agreement and any other agreements between the Executive and the Company, the statements in this Agreement shall control, except that the Consulting Agreement shall control the terms of the Consulting Arrangement. The following provisions of the Employment Agreement shall survive Executive’s resignation of his employment with the Company to the extent necessary to achieve the intended preservation of any such rights and obligations: (i) Section 5 (captioned “Non-Competition, Non-Solicitation, Intellectual Property and Confidentiality”) and all of its subsections, other than Section 5.1(a) relating to the non-competition restriction and Section 5.1(c) relating to the non-solicitation restriction which the Company waived as and to the extent set forth in Section 3(b) of this Agreement; (ii) Section 6 (captioned “Non-Exclusivity of Rights”); and (iii) Section 7 (captioned “Survivorship”).

14.Modification. This Agreement shall not be changed unless in writing and signed by both Executive and the Company.

15.Severability.  If any provision of this Agreement is determined by any court of competent jurisdiction to be invalid or unenforceable, such invalidity or unenforceability shall not affect or impair the validity and enforceability of the other provisions of this Agreement, which shall be considered severable and shall remain in full force and effect.

16.Headings.  The headings contained in this Agreement are not a part of the Agreement and are included solely for ease of reference.

17.Governing Law. This Agreement will be construed in accordance with the laws of the Commonwealth of Pennsylvania, which, together with the laws of the United States of America, will control any and all disputes or questions of interpretation arising hereunder.

18.Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which will be deemed to be an original of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.  This Agreement, to the extent signed and delivered by means of a facsimile machine or by other electronic transmission of a manual signature (by portable document format (.pdf) or other method that enables the recipient to reproduce a copy of the manual signature), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.  Neither party hereto shall raise the use of a facsimile machine or other electronic transmission to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated

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through the use of a facsimile machine or other electronic transmission as a defense to the formation of a contract and each such party forever waives any such defense.

[Signature Page Follows]

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IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have executed the foregoing Agreement as of the date first written above.

PLEASE READ CAREFULLY.

/s/ Scott F. Schaeffer

Scott F. Schaeffer

RAIT Financial Trust

By:	/s/ Scott L. N. Davidson
Name:	Scott L. N. Davidson
Title:	President

[Signature Page to Separation Agreement]

APPENDIX A

GENERAL RELEASE OF CLAIMS

This GENERAL RELEASE OF CLAIMS (“Release”) is made by Scott F. Schaeffer (“Executive”), in consideration of the promises and mutual covenants contained in the Separation Agreement (the “Separation Agreement”), dated December 14, 2016, by and between Executive and RAIT Financial Trust (the “Company”).

1.General Release of Claims.

(a) Executive and his heirs, executors and administrators (collectively, “Releasors”), intending to be legally bound, hereby release and discharge the Company, and all of the Company’s related parties, including the Company’s subsidiaries and affiliates and its and their officers, trustees, directors, shareholders, employees, agents, other representatives, successors, assigns, heirs, executors, and administrators (hereinafter referred to collectively as “Releasees”), from any and all claims, demands, actions, causes of actions, obligations, judgments, rights, fees, damages, debts, obligations, liabilities, and expenses (inclusive of attorneys’ fees) of any kind whatsoever (collectively, “Claims”), whether known or unknown, from the beginning of time to the date of the Executive’s execution of this Release, including, without limitation, any claims under any federal, state, local, or foreign law, that Releasors may have, have ever had or may in the future have arising out of, or in any way related to the Employee’s hire, benefits, employment, termination, or separation from employment with the Company and any actual or alleged act, omission, transaction, practice, conduct, occurrence, or other matter, including, but not limited to any and all claims:  

(i)arising out of the Employment Agreement (and any prior employment agreements between Executive and the Company or its subsidiaries or its affiliates);

(ii)under any federal, foreign, state or local laws, including without limitation, the Age Discrimination in Employment Act and the Older Worker Benefit Protection Act, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., as amended, the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq., as amended, the Family & Medical Leave Act, 29 U.S.C. § 2601 et seq., the Worker Adjustment and Retraining Notification, 29 U.S.C. § 2101 et seq., the Pennsylvania Human Relations Act, the Philadelphia Fair Employment Ordinance, the Sarbanes-Oxley Act, any regulations promulgated under the foregoing laws, and similar state and local statutes, laws and ordinances;

(iii)of discrimination, harassment or retaliation, whether based on race, color, religion, gender, sex, age, sexual orientation, handicap and/or disability, national origin, whistleblowing or any other legally protected class;

(iv)except and as to the extent provided for in or contemplated by the MOU and the Separation Agreement, for compensation of any type whatsoever, including but not limited to claims for salary, wages, bonuses, commissions, incentive compensation, vacation, and severance that may be legally waived and released;

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(v)under any other statutory, regulatory, common law or other claims of any kind, including without limitation, claims for breach of contract, libel, slander, fraud, wrongful discharge, promissory estoppel, equitable estoppel, misrepresentation, emotional distress, or pain and suffering; and

(vi)for counsel fees and costs, except insofar as such fees and costs relate to claims and rights excluded from this Release, including as set forth in Section 2 below.

(b)Releasors’s rights with respect to any and all awards that have been granted or that will be granted to Executive under the Plan shall be governed by Section 1(c) of the Separation Agreement.  

(c)Releasors specifically waive and release any and all claims under Section 2.1(c) of the Employment Agreement.

2.Exclusions.  Notwithstanding any other provision of this Release, the following are not barred by the Release and are excluded from the Release:  (a) claims relating to the validity of this Agreement; (b) claims by either party to enforce its or his rights under this Agreement and/or under the MOI (as defined in the Separation Agreement); (c) claims that legally may not be waived; (d) claims for vested benefits under any Company retirement plan; (e) Executive’s rights and claims to, and relating to, indemnification and directors’ and officers’ liability insurance under the Company’s Bylaws or charter, any indemnification agreement to which Executive is a party or beneficiary or applicable law, as a result of having served as an officer and/or director of, and/or as a consultant for, the Company of any of its subsidiaries or affiliates and (f) claims for workers’ compensation benefits.  In addition, this Release does not bar Executive’s right to file an administrative charge with the Equal Employment Opportunity Commission (the “EEOC”)or analogous state/local agency, prevent Executive from reporting to any government agency any concerns Executive may have regarding the Company’s practices, or preclude Executive from testifying, assisting or participating in an investigation, hearing or proceeding conducted by the EEOC or any other federal, state or local agency.  

Intending to be legally bound, agreed to and executed on this _________________.

Scott F. Schaeffer

A-2

EX-10.2

EXHIBIT 10.2

RAIT FINANCIAL TRUST

CONSULTING AGREEMENT

This Consulting Agreement (“Agreement”) is made and entered into as of December 14, 2016 (the “Effective Date”), by and between RAIT Financial Trust, a Maryland real estate investment trust (the “Company”) and Scott F. Schaeffer (“Consultant”).

WHEREAS, Consultant served as the Chief Executive Officer and Chairman of the Board of Trustees of the Company; and

WHEREAS, in connection with the transactions contemplated by that certain Securities and Asset Purchase Agreement, dated September 27, 2016, by and among the Company, RAIT TRS, LLC, Jupiter Communities, LLC, the RAIT Selling Stockholders (as defined therein), Independence Realty Trust, Inc. (“IRT”) and Independence Realty Operating Partnership, LP (the “Purchase Agreement”), Consultant resigned from his positions with the Company; and

WHEREAS, the Company wishes to engage Consultant to provide transitional consulting services for a period of one (1) year following his resignation; and

WHEREAS, the Company and Consultant desire to memorialize the terms of Consultant’s engagement with the Company.

NOW THEREFORE, in consideration of the mutual promises herein contained, and each intending to be legally bound hereby, the parties agree as follows:

1.Consulting Services.  The Company retains Consultant and Consultant agrees to provide advisory and consulting services to the Company and its subsidiaries (the “Consulting Services”) as may reasonably be requested.  

2.Performance.  Consultant agrees to render the Consulting Services to the Company, its subsidiaries or its designee, (i) at such reasonably convenient times and places as further set forth in Section 4(a), (ii) under the general supervision of the Company, and (iii) on a best efforts basis.  Consultant will comply with all rules, procedures and standards promulgated from time to time by the Company with regard to Consultant’s access to and use of the Company’s property, information, equipment and facilities.

3.Compensation.

(a)In consideration for the Consulting Services rendered by Consultant to the Company, the Company agrees to pay Consultant an aggregate fixed amount of three hundred seventy-five thousand dollars ($375,000) (the “Fee”). The parties acknowledge and agree that the compensation set forth herein represents a fair value for the Consulting Services.

(b)The Fee shall be paid to Consultant monthly in twelve (12) equal installments of thirty-one thousand, two hundred fifty dollars ($31,250).

(c)Consultant shall be entitled to reimbursement for all reasonable and necessary out-of-pocket business, travel or other costs or expenses incurred in connection with the performance of the Consulting Services, in accordance with the Company’s expense reimbursement policies and procedures.

(d)Only compensation that is allowable under applicable law shall be due and payable by the Company.  Any payments made to Consultant which are later disallowed, reduced, regulated or declared unlawful shall be promptly returned by Consultant to the Company.  Any penalties or interest incurred by the Company as a result of such disallowed, reduced, regulated or unlawful payments shall be reimbursed by Consultant.

4.Representations, Warranties and Covenants.

(a)The Company understands that Consultant shall perform the Consulting Services while serving as the Chief Executive Officer of IRT.  Consultant represents and warrants that he is free to perform the Consulting Services while working for IRT and that his work as a Consultant for the Company will not violate any commitments that he has made to IRT. Consultant will arrange to provide the Consulting Services in such manner and at such times that the Consulting Services will not conflict with Consultant’s responsibilities under any other agreement, arrangement or understanding or pursuant to any employment relationship Consultant has at any time with any third party, including but not limited to IRT.

(b)Consultant further represents, warrants and covenants that:

(i)he has the full right, power and authority to enter into this Agreement, to grant the rights granted herein, and to perform fully all of his obligations hereunder;

(ii)entering into this Agreement with the Company and performance of the Consulting Services hereunder do not, and will not, conflict with or result in any breach or default under any other agreement to which Consultant is subject, and during the Term (as defined herein), Consultant will not enter into any agreement, either written or oral, in conflict with Consultant’s obligations under this Agreement;

(iii)he shall refrain from unethical conduct and perform the Consulting Services in a professional and workmanlike manner in accordance with generally recognized industry standards for similar services, and Consultant shall devote sufficient time, effort and resources as may reasonably be deemed necessary to ensure that the Consulting Services are performed in a timely and reliable manner;

(iv)he shall perform the Consulting Services in compliance with all applicable federal, state, and local laws and regulations; and

(v)he shall comply with Section 5 and Section 6 of the Separation Agreement by and between Executive and the Company, dated December 14, 2016 (the “Separation Agreement”).

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(c)The Company hereby represents and warrants that:

(i)it has the full right, power and authority to enter into this Agreement, to grant the rights granted herein, and to perform fully all of its obligations hereunder; and

(ii)the execution of this Agreement by its representative, whose signature is set forth on the signature page hereto, has been duly authorized by all necessary corporate action.

5.Third Party Confidential Information.  Consultant agrees not to use any trade secrets or other confidential information of any other person, firm, corporation, institution or other entity in connection with the performance of any of the Consulting Services.

6.Confidentiality.  Consultant is party to that certain Third Amended and Restated Employment Agreement, entered into as of August 4, 2011, by and between the Company and Consultant, as amended (the “Employment Agreement”).  The parties agree that Sections 5.2 (Developments) and 5.3 (Confidentiality) of the Employment Agreement shall apply as long as Consultant is providing Consulting Services to the Company, and any post‑termination obligations contained in Sections 5.2 and 5.3 of the Employment Agreement shall begin at termination or expiration of this Agreement.

7.Term and Termination.

(a)The term of this Agreement shall commence on the Second Closing Date (as defined in the Purchase Agreement) and continue for a period of one year thereafter (the “Term”), unless earlier terminated by either party pursuant to this Section 7. Any extension of the Term shall be subject to mutual written agreement between the parties.

(b)If either party breaches, in any material respect, any of its material obligations under this Agreement, in addition to any other right or remedy and provided that such breach is not cured within thirty (30) days after receipt by the breaching party of written notice of the breach, the non-breaching party may terminate this Agreement.

(c)The Company may terminate this Agreement immediately at any time upon written notice to Consultant in the event of a breach of this Agreement by Consultant which cannot be cured (i.e., breach of the confidentiality obligation).

(d)The Company may terminate this Agreement without cause upon seven (7) days’ written notice to Consultant. In the event of termination pursuant to this Section 7(d), the Company shall pay Consultant any unpaid portion of the Fee.

(e)Upon expiration or termination, neither the Company nor Consultant will have any further obligations under this Agreement, except: (i) the liabilities accrued through the date of termination and (ii) the obligations under Sections 6, 8, 10, 13, 15, 17 and 18 and this Section 7(e) shall survive.  Upon expiration or termination, and in any case upon the Company’s request, Consultant shall immediately return to the Company all tangible confidential and/or proprietary information, including all copies and reproductions thereof.

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8.Insider Trading.  Company consultants are prohibited from trading in the Company’s stock or other securities while in possession of material, non-public information about the Company. In addition, Company consultants are prohibited from recommending, “tipping” or suggesting that anyone else buy or sell the Company’s stock or other securities on the basis of material, non-public information. Violation of insider trading laws can result in severe fines and criminal penalties, as well as immediate termination of this Agreement.

9.Independent Contractor.  All Consulting Services will be rendered by Consultant as an independent contractor, and this Agreement does not create an employer-employee relationship between the Company and Consultant.  Consultant shall not be considered an employee of the Company, regardless of his classification under common law principles.  The Company shall have no obligation to treat Consultant as an employee for purposes of fringe or employee benefit participation, coverage or entitlement.  Specifically, the Company shall have no obligation to provide Consultant with any form of fringe or employee benefit, including without limitation, health or other insurance coverage, retirement benefits, paid sick or vacation leave, other paid or unpaid leave or other such benefits that may be available to employees of the Company, and Consultant hereby waives any right or entitlement thereto. Consultant will not in any way represent himself to be an employee, officer, partner, joint venturer, or agent of the Company.  Consultant is not authorized to make any representation, contract, or commitment on behalf of the Company.

10.Taxes.  The Company shall report all amounts paid to Consultant pursuant to this Agreement to the U.S. Internal Revenue Service. Consultant shall pay all required taxes on compensation paid to him under this Agreement.  Consultant agrees to accept exclusive liability for complying with all applicable state and federal laws, including laws governing self-employed individuals, if applicable, and laws related to the payment of taxes, social security, disability, and other contributions based on fees paid to Consultant under this Agreement. The Company will not withhold or make payments for social security, unemployment insurance or disability insurance contributions, or obtain workers’ compensation insurance on Consultant’s behalf.

11.Assignability and Binding Effect.  The Consulting Services to be rendered by Consultant are personal in nature.  Consultant may not assign or transfer this Agreement or any of Consultant’s rights or obligations hereunder.  In no event will Consultant assign or delegate responsibility for actual performance of the Consulting Services to any other natural person.  The Company may assign its rights and/or delegate its obligations hereunder to a subsidiary or any affiliate or any successor in interest. This Agreement will be binding upon and inure to the benefit of the parties and their respective legal representatives, heirs, successors and permitted assigns.  

12.Headings.  The section headings are included solely for convenience of reference and will not control or affect the meaning or interpretation of any of the provisions of this Agreement.

13.Notices.  Written notices shall be hand delivered or sent by registered or certified mail, return receipt requested, or by electronic mail to the following or to such other address of which either party has given the other written notice:

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If to the Company:

RAIT Financial Trust

Two Logan Square

100 N. 18^th Street, 23^rd Floor

Philadelphia, PA 19103

Attention: Scott L.N. Davidson, Chief Executive Officer

If to Consultant:

To Scott F. Schaeffer at the address on file with the Company

14.No Modification.  This Agreement may be changed only by a writing signed by authorized representatives of both parties.

15.Severability. In the event that any one or more of the provisions contained in this Agreement is, for any reason, held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and all other provisions shall remain in full force and effect.  If any provision of this Agreement is held to be excessively broad, it shall be reformed and construed by limiting and reducing it so as to be enforceable to the maximum extent permitted by law.

16.Entire Agreement.  This Agreement constitutes the entire agreement of the parties with regard to its subject matter and supersedes all previous written or oral representations, agreements and understandings between the parties, except that the Separation Agreement and the other agreements referenced therein shall remain in full force and effect. In the event of any inconsistency between this Agreement and any other agreements between Consultant and the Company, the statements in such other Agreement shall control, as applicable, except that this Agreement shall control with respect to Consultant’s engagement by the Company to provide the Consulting Services. This Agreement provides for full payment for all services to be rendered by Consultant to the Company, and the Company shall not be liable to Consultant, other than to the extent and in the amounts expressly provided herein.

17.Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the Commonwealth of Pennsylvania, without giving effect to the principles thereof relating to the conflict of laws.

18.Remedies.  Consultant agrees that, in addition to any other rights and remedies available to the Company for any breach or threatened breach by Consultant of Consultant’s obligations hereunder, the Company will be entitled to enforcement of Consultant’s obligations hereunder by whatever means are at the Company’s disposal, including court injunction.

19.Waiver.  The failure by a party to this Agreement to assert any and all of its rights upon any breach of this Agreement by the other party shall not be deemed a waiver of such rights, either with respect to such breach or any subsequent breach, nor shall any waiver be implied from the acceptance of any payment or service. No written waiver of any right shall extend to or affect any other right such party may possess, nor shall such written waiver extend to any subsequent similar or dissimilar breach.

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20.Counterparts.  This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the Effective Date.

RAIT FINANCIAL TRUST

By:  /s/ Scott L.N. Davidson

  Name:  Scott L.N Davidson

Title:  President

CONSULTANT

/s/ Scott F. Schaeffer

  Scott F. Schaeffer

[Signature Page to Schaeffer Consulting Agreement]

EX-10.3

EXHIBIT 10.3

SEPARATION AGREEMENT

THIS SEPARATION AGREEMENT (the “Agreement”), entered into as of December 14, 2016, by and between RAIT Financial Trust, a Maryland real estate investment trust (the “Company”), with a principal office in Philadelphia, Pennsylvania, and James J. Sebra (“Executive”).

WHEREAS, Executive has been employed by the Company as the Chief Financial Officer and Treasurer since May 2012;

WHEREAS, the Company and Executive are parties to that certain Employment Agreement entered into as of August 2, 2012 (the “Employment Agreement”);

WHEREAS, the Company and the Executive entered into a Binding Memorandum of Understanding (the “MOU”) on September 26, 2016 that memorialized terms relating to Executive’s resignation from his positions with the Company;  

WHEREAS, Executive acknowledges that the Employment Agreement remains in full force and effect, except as modified by the MOU and except as modified by this Agreement; and

WHEREAS, the parties intend to arrange for Executive’s separation from employment with Company and to enter into this Agreement.

NOW, THEREFORE, intending to be legally bound hereby and in consideration of the mutual promises and obligations expressed herein and other good and valuable consideration, the receipt of which is hereby acknowledged, Executive and Company agree as follows:

1.Executive’s Resignation.

(a)Executive shall remain in his current position as CFO of the Company until the later to occur of March 31, 2017 or the filing of the Company’s Form 10-K for the fiscal year ending December 31, 2016 with the U.S. Securities and Exchange Commission (the “Resignation Date”), at which time Executive shall resign from his CFO position and any other positions held by him. In the event the Company hires a new CFO, Executive may resign prior to the Resignation Date, provided, however, that any early resignation shall be at the option and in the sole discretion of the Company. If the Company requires Executive’s service after the Resignation Date, Executive shall work in good faith with the Company to accommodate such request by modifying the Shared Services Agreement entered into by the Company and IRT.    Executive’s salary and benefits will cease on the Resignation Date, except as set forth below.  In accordance with Company policy, Executive will not be paid for any accrued, unused vacation through the Resignation Date but shall be paid any then unpaid salary earned and owing as of the Resignation Date. Executive shall also be reimbursed any unreimbursed business expenses incurred by Executive prior to the Resignation Date in accordance with Company policy.

(b)As of the Resignation Date, Executive will cease to be a director, officer or manager of the Company or its subsidiaries and or its affiliates, as applicable, and shall thereafter have no authority to bind the Company or its subsidiaries or its affiliates.

(c)Executive’s annual cash bonus and any other award granted to Executive under the RAIT Financial Trust 2012 Incentive Award Plan (the “Plan”) as compensation for performance during fiscal year 2016, if any, shall be determined by the Board of Trustees of the Company, in its sole discretion, and awarded to Executive in a manner consistent with past practices for determining and awarding such bonuses or awards.

(d)In accordance with Section 2(c) of the MOU, in the event that Executive remains in the employ of the Company after December 31, 2016, he shall receive a fixed cash bonus equal to the portion of his 2016 cash bonus, if any, prorated based on the period that Executive was employed by the Company during 2017.  By way of example, if Executive remained in the employ of the Company until March 31, 2017, Executive would be entitled to a fixed cash bonus of 25% of his 2016 cash bonus.  Such bonus shall be paid to Executive no later than June 1, 2017.

(e)In accordance with Section 2(d) of the MOU, all equity awards previously granted to Executive and equity awards to be granted to Executive pending the completion of fiscal year 2016, if any, shall neither terminate nor accelerate upon Executive’s resignation as an employee of the Company, and vesting shall continue to occur in accordance with the applicable vesting schedule. In addition: (i) Executive shall remain entitled to accrued dividends and dividend equivalents on all such equity awards, (ii) options and share appreciation rights (“SARs”) held by Executive may be exercised after vesting through the expiration of the original term of such options and SARs and (iii) Performance Share Unit Awards granted to the Executive in 2015 and 2016 (“PSUs”) shall continue to time vest while remaining subject to the achievement of the relevant performance metrics, in each case as if Executive remained employed by the Company throughout the term. Any performance target for PSUs that is determined based on a subjective evaluation of Executive’s performance by the compensation committee of the Company’s board of trustees shall, for purposes of such PSUs, be computed such that the percentile achievement for such subjective target shall equal the weighted average of the percentiles achieved for the objectively evaluated targets applicable to such PSU.

(f)In recognition that time-vested restricted equity awards granted to Executive shall cease to be subject to service based conditions (as contemplated by Section 1(c)) and will, as a result, be taxable at the time of such cessation, the Company is authorized to withhold a number of common shares having a fair market value sufficient to cover any legally required tax withholdings on such equity awards. The PSUs shall remain subject to the relevant performance metrics and will not be taxable at the time of such cessation.

2.Agreements and Acknowledgements.

(a)Executive acknowledges that the Employment Agreement remains in full force and effect, except as modified by the MOU and except as modified by this Agreement.  

(b)Executive agrees that he remains subject to Section 5 (and its subsections) of the Employment Agreement relating to Non-Competition, Non-Solicitation, Intellectual Property, Developments and Confidentiality, except that the Company waives (i) the non-competition restriction in Section 5.1(a) of the Employment Agreement as of the Resignation Date, only with respect to Executive’s employment with Independence Realty Trust, Inc. (“IRT”) and (ii) the non-solicitation restrictions in Section 5.1(c) of the Employment Agreement

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with respect to each of the following named individuals, and with respect to any additional individuals offered positions at IRT with the prior written consent of the Company: Scott Schaeffer, Farrell Ender, Matthew Harker, Michael Kernan, Jason Lynch, Jessica Norman, and Michael Hogentogler.  Executive also agrees that the Company may, without limitation, exercise the rights and remedies referenced in Section 5.4 of the Employment Agreement (captioned “Equitable Relief”) in connection with any breach of any of Executive’s continuing restrictions set forth in Section 5 (and its subsections) of the Employment Agreement, excluding, for clarity, the non-competition and non-solicitation restrictions in Section 5.1(a) and Section 5.1(c), respectively, of the Employment Agreement waived by the Company with respect to Executive’s employment with IRT and solicitation of employees as and to the extent permitted herein. The duration of any applicable restrictions contained in Section 5 of the Employment Agreement (and its applicable subsections) shall begin on the Resignation Date.  

3.General Release By Executive. In accordance with the requirements of the MOU, and in consideration of the benefits set forth in the MOU, Executive agrees to execute a general release in the form attached hereto as Appendix A on, and not earlier than, the Resignation Date.  

4.Return of Company Property. Executive shall deliver, on or before the Resignation Date, all property of the Company to the person designated by the Company to receive the same, including keys, identification cards, the Company’s (and its subsidiaries’ and its affiliates’) credit cards and equipment, such as cellphones, blackberries, computers, records and information belonging to the Company, and any documents, memoranda or files, stored in whatever media, retaining no copies.

5.Cooperation Agreement. For so long as any applicable indemnification agreements (the “Indemnification Agreements”) remain in effect and Executive is indemnified thereunder, Executive promises to assist the Company with the transition of his job responsibilities to other employees of the Company and its subsidiaries and its affiliates and to provide reasonable cooperation to the Company and its attorneys in connection with any investigations, lawsuits, or other proceedings in which the Company or its employees may become involved, in each case with respect to work performed for the Company or its subsidiaries or its affiliates by Executive prior to the Resignation Date. Executive agrees to comply with the Company’s reasonable requests for information, including, without limitation, with respect to governmental filings and regulatory information requests.   Executive shall not be obligated to incur any out-of-pocket expenses in assisting the Company under this Section 5 unless the Company agrees to reimburse him for such expenses.

6.Consideration Period.

(a)Executive acknowledges that he has been provided with a period of at least twenty-one (21) calendar days to consider the terms of this Agreement, including the General Release of Claims attached as Appendix A, from the date this Agreement first was presented to him on November 15, 2016.  Executive agrees that any changes to this Agreement, whether material or immaterial, will not restart the running of the 21-day period.

(b)Executive understands that he may take the entire 21-day period to consider this Agreement.  Executive acknowledges that if he signs and returns this Agreement before the end of the consideration period that he will have knowingly and voluntarily waived

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his right to consider the Agreement for the full consideration period.  He may return this Agreement in less than the full consideration period only if his decision to shorten it was knowing and voluntary and was not induced in any way by the Company.  

7.Indemnification, Litigation and Related Matters.  All applicable Indemnification Agreements and the provisions of the Company’s Directors and Officers liability insurance policies (“D&O Policies”), Declaration of Trust and Bylaws relating to indemnification and advancement of expenses to officers of the Company shall continue to apply to Executive with respect to work performed for the Company by Executive prior to the Resignation Date. In addition, any changes to such provisions subsequent to the Resignation Date that are generally applicable to conduct of officers of the Company occurring prior to the Resignation Date shall apply to Executive. The Company shall continue to maintain liability insurance covering Executive with respect to work performed for the Company by Executive prior to the Resignation Date on the same or substantially similar terms as for any other officer. The Company agrees to keep Executive reasonably apprised of the status of any proceedings that may implicate him or his conduct and/or might give rise to a right to indemnification under any applicable Indemnification Agreements or otherwise, including promptly providing relevant publically available documents such as pleadings and material filings.

8.Effective Date.  This Agreement shall become effective according to its terms immediately upon the Second Closing Date (as defined in that certain Securities and Asset Purchase Agreement, dated September 27, 2016, by and among the Company, RAIT TRS, LLC, Jupiter Communities, LLC, the RAIT Selling Stockholders (as defined therein), IRT and Independence Realty Operating Partnership, LP), except that Executive shall have seven (7) days following execution of the General Release required by Section 3 herein and attached hereto as Appendix A to revoke his consent thereto.  If Executive does not execute the General Release attached hereto as Appendix A on the Resignation Date, as required by Section 4 herein, or if he revokes it, the Company’s obligations to Executive under Sections 2(c) and (d) of the MOU shall immediately cease and the Company will not waive the non-competition restriction in Section 5.1(a) and Section 5.1(c) of the Employment Agreement.  From the date hereof through the Resignation Date, Executive’s obligations under the Employment Agreement shall continue as set forth therein.

9.Revocation Period. The Revocation Period, for purposes of this Agreement, is the seven (7) day period following Executive’s execution of the General Release attached hereto as Appendix A.  Executive acknowledges that he shall have seven (7) days following his execution of the General Release in Appendix A to revoke the Release.  To revoke the Release, Executive, within seven (7) days of his execution of the Release, must deliver, fax or e-mail, or send a letter via overnight deliver to the attention of Scott L.N. Davidson, the Chief Executive Officer of the Company, at RAIT Financial Trust, Two Logan Square, 100 N. 18th Street, 23rd Floor, Philadelphia, PA 19103. If the seventh day is a Sunday or federal holiday, then the document must be delivered, faxed, e-mailed, or sent by over-night delivery service, as applicable, on the following business day. For a revocation to be effective, Executive must have evidence confirming timely receipt by the Company.

10.Advice to Consult Legal Representative.  The Company recommends that Executive consult with an attorney of his own choosing, at his own expense, with regard to entering into this Agreement.

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11.Executive Certification – Validity of Agreement.  Executive, intending to be legally bound, represents, certifies and acknowledges that he has carefully read this Agreement and has executed it voluntarily and with full knowledge and understanding of its significance, meaning and binding effect and with the advice of counsel.  Executive further declares that he is competent to understand the content and effect of this Agreement and that his decision to enter into this Agreement has not been influenced in any way by fraud, duress, coercion, mistake or misleading information.

12.Integration.  This Agreement, as well as the agreements referenced herein, contain the entire agreement and understanding between Executive and the Company. This Agreement supersedes all other agreements between Executive and the Company, except those referenced herein.  In the event of any inconsistency between this Agreement and any other agreements between the Executive and the Company, the statements in this Agreement shall control. The following provisions of the Employment Agreement shall survive Executive’s resignation of his employment with the Company to the extent necessary to achieve the intended preservation of any such rights and obligations: (i) Section 5 (captioned “Non-Competition, Non-Solicitation, Intellectual Property and Confidentiality”) and all of its subsections, other than Section 5.1(a) relating to the non-competition restriction and Section 5.1(c) relating to the non-solicitation restriction which the Company waived as and to the extent set forth in Section 2(b) of this Agreement; (ii) Section 6 (captioned “Non-Exclusivity of Rights”); and (iii) Section 7 (captioned “Survivorship”).  

13.Modification.  This Agreement shall not be changed unless in writing and signed by both Executive and the Company.

14.Severability.  If any provision of this Agreement is determined by any court of competent jurisdiction to be invalid or unenforceable, such invalidity or unenforceability shall not affect or impair the validity and enforceability of the other provisions of this Agreement, which shall be considered severable and shall remain in full force and effect.

15.Headings.  The headings contained in this Agreement are not a part of the Agreement and are included solely for ease of reference.

16.Governing Law.  This Agreement will be construed in accordance with the laws of the Commonwealth of Pennsylvania, which, together with the laws of the United States of America, will control any and all disputes or questions of interpretation arising hereunder.

17.Counterparts.  This Agreement may be executed in two (2) or more counterparts, each of which will be deemed to be an original of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.  This Agreement, to the extent signed and delivered by means of a facsimile machine or by other electronic transmission of a manual signature (by portable document format (.pdf) or other method that enables the recipient to reproduce a copy of the manual signature), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.  Neither party hereto shall raise the use of a facsimile machine or other electronic transmission to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated

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through the use of a facsimile machine or other electronic transmission as a defense to the formation of a contract and each such party forever waives any such defense.

[Signature Page Follows]

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IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have executed the foregoing Agreement as of the date first written above.

PLEASE READ CAREFULLY.

/s/ James J. Sebra

James J. Sebra

RAIT Financial Trust

By:	/s/ Scott L. N. Davidson
Name:	Scott L. N. Davidson
Title:	President

[Signature Page to Separation Agreement]

APPENDIX A

GENERAL RELEASE OF CLAIMS

This GENERAL RELEASE OF CLAIMS (“Release”) is made by James J. Sebra (“Executive”), in consideration of the promises and mutual covenants contained in the Separation Agreement (the “Separation Agreement”), dated December 14, 2016, by and between Executive and RAIT Financial Trust (the “Company”).

1.General Release of Claims.

(a) Executive and his heirs, executors and administrators (collectively, “Releasors”), intending to be legally bound, hereby release and discharge the Company, and all of the Company’s related parties, including the Company’s subsidiaries and affiliates and its and their officers, trustees, directors, shareholders, employees, agents, other representatives, successors, assigns, heirs, executors, and administrators (hereinafter referred to collectively as “Releasees”), from any and all claims, demands, actions, causes of actions, obligations, judgments, rights, fees, damages, debts, obligations, liabilities, and expenses (inclusive of attorneys’ fees) of any kind whatsoever (collectively, “Claims”), whether known or unknown, from the beginning of time to the date of the Executive’s execution of this Release, including, without limitation, any claims under any federal, state, local, or foreign law, that Releasors may have, have ever had or may in the future have arising out of, or in any way related to the Employee’s hire, benefits, employment, termination, or separation from employment with the Company and any actual or alleged act, omission, transaction, practice, conduct, occurrence, or other matter, including, but not limited to any and all claims:  

(i) arising out of the Employment Agreement (and any prior employment agreements between Executive and the Company or its subsidiaries or its affiliates);

(ii) under any federal, foreign, state or local laws, including without limitation, the Age Discrimination in Employment Act and the Older Worker Benefit Protection Act, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., as amended, the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq., as amended, the Family & Medical Leave Act, 29 U.S.C. § 2601 et seq., the Worker Adjustment and Retraining Notification, 29 U.S.C. § 2101 et seq., the Pennsylvania Human Relations Act, the Philadelphia Fair Employment Ordinance, the Sarbanes-Oxley Act, any regulations promulgated under the foregoing laws, and similar state and local statutes, laws and ordinances;

(iii) of discrimination, harassment or retaliation, whether based on race, color, religion, gender, sex, age, sexual orientation, handicap and/or disability, national origin, whistleblowing or any other legally protected class;

(iv) except and as to the extent provided for in or contemplated by the MOU and the Separation Agreement, for compensation of any type whatsoever,

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including but not limited to claims for salary, wages, bonuses, commissions, incentive compensation, vacation, and severance that may be legally waived and released;

(v) under any other statutory, regulatory, common law or other claims of any kind, including without limitation, claims for breach of contract, libel, slander, fraud, wrongful discharge, promissory estoppel, equitable estoppel, misrepresentation, emotional distress, or pain and suffering; and

(vi) for counsel fees and costs, except insofar as such fees and costs relate to claims and rights excluded from this Release, including as set forth in Section 2 below.

(b)Releasors’s rights with respect to any and all awards that have been granted or that will be granted to Executive under the Plan shall be governed by Section 1(c) of the Separation Agreement.  

(c)Releasors specifically waive and release any and all claims under Section 2.1(c) of the Employment Agreement.

2.Exclusions.  Notwithstanding any other provision of this Release, the following are not barred by the Release and are excluded from the Release:  (a) claims relating to the validity of this Agreement; (b) claims by either party to enforce its or his rights under this Agreement and/or under the MOU (as defined in the Separation Agreement); (c) claims that legally may not be waived; (d) claims for vested benefits under any Company retirement plan; (e) Executive’s rights and claims to, and relating to, indemnification and directors’ and officers’ liability insurance under the Company’s Bylaws or charter, any indemnification agreement to which Executive is a party or beneficiary or applicable law, as a result of having served as an officer and/or director of the Company of any of its subsidiaries or affiliates and (f) claims for workers’ compensation benefits.  In addition, this Release does not bar Executive’s right to file an administrative charge with the Equal Employment Opportunity Commission (the “EEOC”)or analogous state/local agency, prevent Executive from reporting to any government agency any concerns Executive may have regarding the Company’s practices, or preclude Executive from testifying, assisting or participating in an investigation, hearing or proceeding conducted by the EEOC or any other federal, state or local agency.  

Intending to be legally bound, agreed to and executed on this ________________.

James J. Sebra

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