RAIT Financial Trust (NYSE:RAS) Files An 8-K Entry into a Material Definitive Agreement

RAIT Financial Trust (NYSE:RAS) Files An 8-K Entry into a Material Definitive Agreement

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Item1.01

Entry into a Material Definitive Agreement.

On May25, 2017, RAIT Financial Trust, a Maryland real estate
investment trust (RAIT or the Company), entered
into a Cooperation Agreement (the Cooperation Agreement)
with Highland Capital Management, L.P. (Highland) and each
of the other persons set forth on the page of the Cooperation
Agreement (each, an Investor and collectively, the
Investors or the Investor Group).

to the Cooperation Agreement, the Investor Group has agreed to
terminate its pending proxy contest against the Company and
withdraw the notice of nomination submitted by a Highland
affiliate proposing to seek the election of five candidates to
the RAIT Board of Trustees (the Board) at RAITs 2017
Annual Meeting of Shareholders (the 2017 Annual Meeting).

to the Cooperation Agreement, RAIT has agreed that (i)following
the certification of the vote of RAITs shareholders at the 2017
Annual Meeting, but no later than forty-five (45)calendar days
from the date of execution of the Cooperation Agreement, the
Board shall appoint either Nancy Jo Kuenstner or Andrew C.
Richardson to its membership (the New Trustee) to serve on
the Board until the 2018 Annual Meeting of Shareholders (the
2018 Annual Meeting), (ii)within one hundred twenty
(120)calendar days from the execution of the Cooperation
Agreement, the RAIT Board shall appoint a new trustee (the
Second New Trustee) who shall not be an Affiliate or
Associate (as such terms are defined in Rule 12b-2 of the
Securities Exchange Act of 1934, as amended) of the Investor
Group (or a previous member of a Schedule 13D group with any
member of the Investor Group) to serve on the Board until the
2018 Annual Meeting, provided that the Investor Group will have
one veto right with respect to the person chosen by the RAIT
Board to serve as the Second New Trustee, (iii)during the
Cooperation Period (as defined below), no less frequently than
once every sixty (60)days, one or more members of RAITs
management shall use its commercially reasonable efforts to
schedule a telephonic meeting with a representative of the
Investor Group to discuss information regarding RAIT that RAIT
has, prior to such meeting, publicly disclosed, and (iv)RAIT will
reimburse the Investor Group $250,000 for its out-of-pocket
expenses, including legal fees and expenses, as actually incurred
by the Investor Group in connection with the matters related to
the 2017 Annual Meeting, the filing of a Schedule13D amendment in
connection with the 2017 Annual Meeting and the negotiation and
execution of the Cooperation Agreement.

Under the terms of the Cooperation Agreement, the Investor Group
has agreed to certain standstill provisions with respect to the
Investor Groups actions with regard to RAIT and its Common Shares
of Beneficial Interest, $0.03 par value per share (the Common
Shares
), RAITs 7.75% Series A cumulative redeemable preferred
shares, liquidation preference $25.00 per share, $0.01 par value
per share, RAITs 8.375% Series B cumulative redeemable preferred
shares, liquidation preference $25.00 per share, $0.01 par value
per share, and RAITs 8.875% Series C cumulative redeemable
preferred shares, liquidation preference $25.00 per share, $0.01
par value per share. A majority of the standstill provisions
would be in effect for a standstill period commencing on the date
of the Cooperation Agreement and ending two years from the date
of the Cooperation Agreement. The other standstill provisions
would be in effect for a cooperation period that commenced on the
date of the Cooperation Agreement and ends at 11:59 p.m. Eastern
Time on the date of the certification of the vote of shareholders
at the 2018 Annual Meeting (the Cooperation Period).

2

to the Cooperation Agreement, each of the Investors has agreed,
at each annual and special meeting of shareholders held prior to
the expiration of the Cooperation Period, to (A)appear, in person
or by execution of the Companys proxy card, at such shareholders
meeting or otherwise cause all Common Shares beneficially owned
by each Investor and their respective Affiliates and Associates
to be counted as present thereat for purposes of establishing a
quorum; (B)vote, or cause to be voted, all Common Shares
beneficially owned by each Investor and their respective
Affiliates and Associates on the Companys proxy card or voting
instruction form (1)in favor of each of the nominees for election
as trustees nominated by the Board and recommended by the Board
(and not in favor of any other nominees to serve on the Board),
and (2)in accordance with the Boards recommendations with respect
to each of the proposals listed on the Companys proxy card or
voting instruction form as identified in the Companys definitive
proxy statement and any supplements thereto, including in favor
of all matters recommended by the Board for shareholder approval
and against all matters which the Board recommends against
shareholder approval; provided however that, in connection with
any matter (other than the election of nominees to the Board) to
be voted upon by the Companys shareholders, after the
certification of the vote of the Companys shareholders at the
2017 Annual Meeting, to the extent that the recommendation of
Institutional Shareholder Services Inc. (ISS) differs from
the Boards recommendation with respect to such matter, the
Investors may vote on the Companys proxy card or voting
instruction form in accordance with the recommendation of ISS;
and (C)not execute any proxy card or voting instruction form in
respect of such shareholders meeting other than the proxy card
and related voting instruction form being solicited by or on
behalf of the Company or the Board.

to the Cooperation Agreement, each of the Investors has agreed,
in connection with any action by written consent that is sought
to be taken by any party other than the Company or the Board
prior to the expiration of the Cooperation Period, not to vote
and to take all necessary action, including, without limitation,
the execution and completion of any consent revocation card
solicited by the Company or the Board, in accordance with the
recommendation of the Board, to cause not to be voted, any of the
Common Shares beneficially owned by each Investor and/or their
respective Affiliates and Associates on any consent card related
to or affecting the removal, replacement or election of Board
members and solicited by any party, other than the Company or the
Board.

to the Cooperation Agreement, each of the Investors has agreed,
in connection with any demand by a shareholder of the Company
that the Company call a special meeting of shareholders made
prior to the expiration of the Cooperation Period, not to vote
and to take all necessary action, including, but not limited to,
the execution and completion of any consent revocation card
solicited by the Company or the Board in accordance with the
recommendation of the Board, to cause not to be voted, any of the
Common Shares beneficially owned by each Investor and/or their
respective Affiliates and Associates for any special meeting
demand proposed or sought to be made by any party.

3

The Company and the Investor Group have also agreed tocertain
mutual non-disparagement and mutual release of claimsprovisions.

The foregoing description of the Cooperation Agreement is
qualified in its entirely by reference to the full text of the
Cooperation Agreement, which is filed herewith as Exhibit 10.1
and incorporated herein by reference.

Item8.01 Other Events.

A copy of the press release issued by RAIT on May26, 2017
announcing the execution of the Cooperation Agreement is attached
hereto as Exhibit 99.1 and is incorporated herein by reference.

Item9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit

No.

Exhibit Title

10.1 Cooperation Agreement dated May 25, 2017 by and among RAIT
Financial Trust and Highland Capital Management, L.P. and
each of the other persons set forth on the page of the
Cooperation Agreement
99.1 RAIT Financial Trust Press Release issued on May 26, 2017

4

Important Additional Information And Where To Find
It

RAIT, its trustees and certain of its executive officers are
deemed to be participants in the solicitation of proxies from
RAITs shareholders in connection with the matters to be
considered at RAITs 2017 Annual Meeting of Shareholders. On
May15, 2017, RAIT filed a definitive proxy statement and
accompanying definitiveWHITEproxy card
with the SEC in connection with the solicitation of proxies from
RAIT shareholders in connection with the matters to be considered
at RAITs 2017 Annual Meeting of Shareholders. Information
regarding the names of RAITs trustees and executive officers and
their respective interests in RAIT by security holdings or
otherwise are set forth in such definitive proxy statement,
including the schedules and appendices thereto. INVESTORS
AND SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ ANY SUCH PROXY
STATEMENT AND THE ACCOMPANYING WHITE PROXY CARD AND OTHER
DOCUMENTS FILED BY RAIT WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN
IMPORTANT INFORMATION
. Shareholders will be able to
obtain the Proxy Statement, any amendments or supplements to the
Proxy Statement, the accompanying WHITE
proxy card, and other documents filed by RAIT with the SEC for no
charge at the SECs website at www.sec.gov. Copies will also be
available at no charge at the Investor Relations section of RAITs
corporate website at www.RAIT.com, by writing to RAITs
Corporate Secretary at RAIT Financial Trust, Two Logan Square,
100 N. 18th Street, 23rd Floor, Philadelphia, PA 19103, or by
calling RAITs Secretary at (215) 207.2100.

5

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
Date: May26, 2017 By:

/s/ Scott L.N. Davidson

Name: Scott L.N. Davidson
Title: Chief Executive Officer and President

6

EXHIBIT INDEX

Exhibit

No.

Exhibit Title

10.1 Cooperation Agreement dated May 25, 2017 by and among RAIT
Financial Trust and Highland Capital Management, L.P. and
each of the other persons set forth on the


About RAIT Financial Trust (NYSE:RAS)

RAIT Financial Trust (RAIT) is a self-managed and self-advised real estate investment trust (REIT). RAIT uses its vertically integrated platform and relationships to originate commercial real estate loans, acquire commercial real estate properties and invest in, manage and service commercial real estate assets. The Company’s segments are real estate lending, owning and managing segment, Independence Realty Trust, Inc. (IRT) segment and Taberna Securitization segment. The Company’s real estate lending, owning and managing segment concentrates on lending, owning and managing commercial real estate assets throughout the United States. The Company’s IRT segment concentrates on the ownership of apartment properties in opportunistic markets throughout the United States. The Company’s Taberna Securitization segment includes the ownership and management of approximately three real estate trust preferred securitizations.

RAIT Financial Trust (NYSE:RAS) Recent Trading Information

RAIT Financial Trust (NYSE:RAS) closed its last trading session down -0.01 at 2.31 with 597,821 shares trading hands.

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