Grant Date:

[__________]

Number of Performance Share Units:

[__________]

The actual number of Performance Share Units that may vest and be redeemed shall be determined according to the level of achievement of the performance targets (“Performance Targets”) established by the Committee (as defined in the Plan) on [__________] and set forth in Appendix A hereto.

Nature of Units:

Each Unit represents the right to receive one share of RAIT’s Common Shares (the ”Common Shares”) or the cash equivalent based on Fair Market Value (as defined in the Plan) on the date of vesting, pursuant to the terms of this Agreement, and consistent with the provisions of the Plan, including any adjustment hereunder or thereunder, as applicable.  The Committee shall determine, in its sole discretion, at any time and from time to time through the date of vesting of the Unit, whether any or all vested Units shall be redeemed with Common Shares or cash or any combination thereof.

Vesting:

The Performance Share Units awarded pursuant to the terms of this Grant Agreement and the Long Term Equity Plan shall vest 50% upon achievement of the Performance Targets, determined as of the last day of the three (3) year performance period (the “Performance Period”).  The Compensation Committee will make a determination on your satisfaction of Performance Targets within three (3) months of the completion of the Performance Period (the “Determination Date”), which shall also be the initial vesting date of such Units.  The remaining 50% of the Performance Share Units shall vest on the first anniversary of the last day of the Performance Period.  In each case, vesting is contingent upon your continued employment through the vesting date and subject to the terms of any employment agreement between you and RAIT or any subsidiary of RAIT.  The above notwithstanding, if your employment is terminated due to death, or disability, other than

voluntarily or for Cause (as defined in your employment agreement) (a “Qualified Termination”) prior to the conclusion of the Performance Period, then such performance period will be shortened to conclude on the last day of the calendar quarter immediately preceding the date of such Qualified Termination (a “Shortened Performance Period”).  In such event, the Compensation Committee will determine within three (3) months after the date of such Qualified Termination the number of Performance Share Units earned, if any, for such Shortened Performance Period in accordance with the performance criteria established for such award. Your earned Performance Share Units, if any, will vest as of the date that the Compensation Committee determines the achievement of such performance criteria and will not be subject to the additional time based vesting period.  The number of Performance Share Units vested shall be determined on a pro rata basis by multiplying the number of Performance Share Units earned by a fraction, the numerator of which is the number of days in the Shortened Performance Period and the denominator of which is the number of days in the original three (3) year Performance Period.  If the Performance Targets are not met, you will not vest in any Units.

Vesting at Retirement:

If your employment is terminated due to “Retirement” (as defined below) Performance Share Units shall vest in the following manner.   If your Retirement occurs during the Performance Period, the number of Performance Share Units vested shall be determined on a pro rata basis by multiplying the Performance Share Units earned in the Performance Period pursuant to Appendix A by a fraction, the numerator of which is the number of days from the beginning of the Performance Period to the date of your Retirement and the denominator of which is the total number of days in the three (3) year Performance Period. 

If your Retirement occurs after the Performance Period, one hundred percent (100%) of your Performance Share Units earned in the Performance Period shall vest upon Retirement.

The above notwithstanding, in no event shall you vest in any Performance Share Units if the Performance Targets are not met.

For purposes of this section “Retirement” shall mean your voluntary separation of employment following satisfaction of the “Rule of 70.”  The Rule of 70 shall be satisfied upon (1) completion of at least fifteen (15) years of service with RAIT or its related entities; (2) attainment of age 55 and (3) your combined age and service equals at least 70.   You may separate upon Retirement subject to (i) your providing at least six (6) months’ advanced notice to RAIT; and (ii) your consent to enter into a non-compete, non-solicitation agreement with RAIT (including related entities) for a period of up to three (3) years (or such shorter period as permitted under applicable state law); and (iii) your execution of a release in favor of RAIT (including its related entities, officers, directors, members and employees) of all potential claims arising in the context of your employment.  Any or all of the above conditions may be waived or modified at the sole discretion of the Compensation

Committee.

Performance Period:

Fiscal Years 2017, 2018 and 2019.

Voting/Dividend Rights:

Units will not have any voting rights.

Following the three (3) year Performance Period, RAIT shall establish a “Dividend Equivalent Account” with respect to those Performance Share Units that remain unvested. If any dividends are paid with respect to RAIT’s common shares, you will receive a credit to your Performance Share Unit Award Dividend Account equal to the value of the cash dividends that would have been distributed if you held the number of RAIT’s common shares represented by such unvested Units. (No credit shall be made with respect to Performance Share Units vesting at the end of the three (3) year Performance Period.) Within thirty (30) days following the date any such unvested Performance Share Units become vested, a cash payment will be paid to you by RAIT equal to the value of the aggregate amount of cash credited to your Dividend Equivalent Account for the corresponding number of common shares represented by such Performance Share Units. No interest shall accrue with respect to any cash amounts credited to your Dividend Equivalent Account. If any unvested Performance Share Units are forfeited for any reason prior to vesting, the aggregate amount credited to your Dividend Equivalent Account with respect to such unvested Performance Share Units shall also be forfeited and you shall not have any rights with respect to any such amounts.

Tax Liability and Payment of Taxes:

You acknowledge and agree that any income or other taxes due from you with respect to the Award issued pursuant to this Grant Agreement shall be your responsibility.  Upon vesting, you may elect to have a portion of the Units withheld in order to satisfy your tax obligations.

Redemption:

Promptly following the Committee’s determination that any Units have vested, RAIT shall notify you (or your personal representative, heir or legatee in the event of your death or incapacity) that your Units are redeemable pursuant to Section 4.04 of the Plan and shall, upon request by you (or your personal representative, heir or legatee in the event of your death or incapacity), deliver a certificate for such shares; provided, however, that RAIT, in its sole discretion, shall have the option to pay you the fair market value of the shares, which shall be measured as of the date when the right to the shares became vested, in lieu of delivery of the certificate. The Committee may condition delivery of the certificate or cash, as applicable, upon the prior receipt from you of any undertakings which it may determine are required to assure that the certificate or cash, as applicable, is being issued in compliance with federal and state securities laws. The right to payment of any fractional shares shall be satisfied in cash, measured by the product of the fractional amount times the fair market value of a share when the right to the shares became vested.

The above notwithstanding, in the event that the Units vest due to

Retirement, 50% of the earned Units are redeemable as of the Determination Date and the remaining 50% shall be redeemable on the first anniversary of the last day of the Performance Period.  

Transferability:

Except as otherwise provided in this Grant Agreement, until the award vests and become non-forfeitable, you may not transfer or assign the award for any reason, other than under your will or as required by intestate laws.  Any attempted transfer or assignment will be null and void.

Restrictions on Resale:

By accepting this Grant Agreement, you agree to be bound by RAIT’s policies regarding the transfer of the Common Shares and understand that there may be certain times during the year in which you will be prohibited from selling, transferring, pledging, donating, assigning, mortgaging, or encumbering Common Shares.

Clawback:

In addition to, and not in limitation of, the forfeiture of the Award (or any portion thereof) as provided in this Grant Agreement, the Long Term Equity Plan or the Plan, RAIT may recover amounts paid to you pursuant to this Award to the extent that the Committee, following an appropriate investigation and consideration of all relevant circumstances, determines that you have engaged in fraud or willful misconduct that caused the requirement for a material accounting restatement of RAIT’s financial statements due to material noncompliance with any financial reporting requirement (excluding any restatement due solely to a change in accounting rules).

Miscellaneous:

As a condition of the granting of this Award, you agree, for yourself and your legal representatives and/or guardians, that this Grant Agreement shall be interpreted by the Board (or a committee thereof) and that any such interpretation of the terms of this Grant Agreement and any determination made by the Board (or a committee thereof) pursuant to this Grant Agreement shall be final, binding and conclusive.  This Grant Agreement may be executed in counterparts.  This Grant Agreement and the Award granted hereunder shall be governed by Maryland Law.

Long Term Equity Awards

•

“2017 Performance Share Unit Awards” — 75%, in the case of Mr. Davidson, and 65%, in the case of the other Eligible Officers,  of the target value of each Eligible Officer’s annual 2017 Long Term Equity Award consist of Performance Share Unit Awards (the “2017 PSUs”) authorized by the Compensation Committee under the Long Term Equity Plan adopted pursuant to the 2012 Plan, with the number of RAIT common shares of beneficial interest (“Common Shares”) issued or their equivalent value in cash paid, at the Compensation Committee’s option, at the conclusion of the relevant performance period. The number of 2017 PSUs earned will be determined 100% by RAIT’s performance for the three- year period commencing January 1, 2017 and ending December 31, 2019 relative to three long term performance metrics established by the Compensation Committee, as described in greater detail below. The Compensation Committee did not allocate any portion of the 2017 PSUs to subjective factors.  

The actual number of 2017 PSUs earned by a participant may range from 0% to 150% of target based on actual performance for the performance period. The performance based awards vest 50% at December 31, 2019 based on performance for 2017-2019, and the 50% balance, consisting of the same number of shares that were awarded at December 31, 2019, become time vesting and vest one year thereafter, subject to forfeiture in such year only in the event RAIT has terminated the Eligible Officer’s employment for cause or the Eligible Officer has resigned without good reason as determined, in each situation, under such Eligible Officer’s employment agreement. The Compensation Committee currently intends to redeem any vested 2017 PSUs with Common Shares, subject to the availability of Common Shares under the 2012 Plan at the time of vesting.

•

“Annual Restricted Share Awards” – 25%, in the case of Mr. Davidson, and 35%, in the case of the other Eligible Officers, of the target value of each Eligible Officer’s 2017 Long Term Equity Awards consists of a grant of time-vesting Restricted Shares determined by dividing the dollar value of that portion of the annual 2017 Long Term Equity Award allocated to such Restricted Shares by the closing price of a Common Share on the New York Stock Exchange on the date of grant.

•

The number of 2017 PSUs was determined by dividing the maximum dollar value of that portion of the annual 2017 Long Term Equity Award allocated to such 2017 PSUs by the closing price of a Common Share on the New York Stock Exchange on the date of grant.

•

The number of Common Shares issued, or their equivalent value in cash paid, at the Compensation

Committee’s option, to an Eligible Officer upon the maturity of a Performance Share Unit Award at the end of the relevant performance period will depend on RAIT’s achievement of at least a “Threshold” level of two metrics: (1)  TSR as compared to the TSR for the FTSE NAREIT Mortgage REIT Index (the “NAREIT Mortgage Index”), and (2) TSR for holders of Common Shares on an absolute basis.

Metric

Weighting

Threshold
0.5x Payout

Target
1x Payout

Maximum
1.5x Payout

Relative 3-Year TSR vs. NAREIT Mortgage Index

50%

35^th

Percentile

55^th

Percentile

85^th

Percentile

Absolute 3-Year TSR

50%

33%

42%

58%

•

At the initial date of grant, 25%, in the case of Mr. Davidson, and 35%, in the case of the other Eligible Officers, of the target value of each Eligible Officer’s 2017 Long Term Equity Awards will be allocated to an Annual Restricted Share Award.

•

The number of shares issued with respect to the time-vesting Annual Restricted Share component of each 2017 Long Term Equity Award will be determined by dividing the dollar value of that portion of the annual 2017 Long Term Equity Award allocated to such Restricted Shares by the closing price of a Common Share on the New York Stock Exchange on the date of grant.

•

Common Shares subject to the Annual Restricted Share Awards will vest 25% per annum on the first four anniversaries from the date of grant.

Target Value of
Initial Long
Term
Equity Award

Target Value of
Performance
Share Units Award

Number of
Performance
Share
Units
Issued (1)

Target Value of
Annual Restricted
Award

Number of Shares
Issued for Annual
Restricted Share
Award(2)

[GRANTEE]

$[_______]

$[_______]

[_______]

$[_______]

[_____]

[Grantee Title]

(1)

The number of Performance Share Units granted in relation to the target value of each 2017 Performance Share Unit Award was determined by multiplying such value by the maximum payout ratio of 1.5 and dividing the

result by the closing price of a Common Share on the New York Stock Exchange on the date of grant, $3.07.

(2)

The number of Common Shares issued in relation to each Annual Restricted Share Award was determined by dividing the dollar value of that portion of the 2017 Long Term Equity Award allocated to such Restricted Shares by the closing price of a Common Share on the New York Stock Exchange on the date of grant, $3.07.