SECURITIES PURCHASE
AGREEMENT
SECURITIES PURCHASE AGREEMENT
(“ Agreement ”) dated as of July 31, 2009,
between RAIT FINANCIAL TRUST, a Maryland real estate investment
trust, (the “ Company ”), and MOSES MARX, an
individual (the “ Seller ”).
W I T N E S S E T H
:
WHEREAS, the Seller desires
to sell to the Company, and the Company wishes to purchase from the
Seller a 6.875% Convertible Senior Note due 2027 of the Company in
the face amount of $98,280,000 (the “ Convertible Note
”);
NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants and
agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the parties hereto
agree as follows:
ARTICLE I
Purchase of
Convertible Note
Section 1.1 Purchase of
Convertible Note . Upon the terms and conditions set forth in
this Agreement, the Seller shall sell to the Company, and the
Company shall purchase from the Seller, the Convertible Note.
Section 1.2 Purchase Price;
Accrued Interest . The purchase price for the Convertible Note
to be acquired by the Company (the “ Purchase Price
”) shall be $53,000,000, payable as follows.
(a) $10,000,000 million in
cash; and
(b) $43,000,000 million by
delivery of the Company’s 12.5% Senior Secured Note due 2014
(the “ Senior Note ”) payable to Seller
substantially in the form annexed hereto as Exhibit A.
In addition to the Purchase Price, the Company shall pay to
Seller an amount, in cash, equal to any accrued but unpaid interest
on the Convertible Note through the Closing Date (the “
Convertible Note Accrued Interest ”).
Section 1.3
The Closing .
(a) Timing . Subject to
the fulfillment or waiver of the conditions set forth in
Article III hereof, the purchase and sale of the Convertible
Note shall take place at a closing (the “ Closing
”) on or about the date hereof or such other date as the
Seller and the Company may agree upon (the “ Closing
Date ”).
(b) Deliveries. On the
Closing Date, the Seller shall deliver the Convertible Note to the
Company through the Depository Trust Corporation
(“DTC”) to an account designated by the Company. On the
Closing Date the Company shall deliver to the Seller (i) for
the cash portion of the Purchase Price as set forth in
Section 1.3 (a), above, and for the Convertible Note Accrued
Interest, a wire transfer of immediately available funds to an
account designated in writing by the Seller; (ii) for the
portion of the Purchase Price paid by the Senior Note, physical
delivery of a fully executed Senior Note to the Seller or his
designated representative at the address designated by Seller for
that purpose; and (iii) the Transaction Documents (as such
term is defined in Section 2.1(c)), executed by the Company. In
addition, each party shall deliver all documents, instruments and
writings required to be delivered by such party pursuant to this
Agreement or the Transaction Documents at or prior to the
Closing.
ARTICLE II
Representations
and Warranties
Section 2.1
Representations and Warranties of the Company . The Company
hereby makes the following representations and warranties to the
Seller as of the date hereof and the Closing Date:
(a) Organization . The
Company has been duly organized and is validly existing as a real
estate investment trust in good standing under the laws of the
State of Maryland.
(b) Subsidiaries . Each
of RAIT Asset Holdings II, LLC and RAIT Asset Holdings II Member,
LLC (each a “ Subsidiary ” and collectively, the
“ Subsidiary ”) is a wholly owned direct or
indirect subsidiary of the Company. There are no liens, mortgages,
pledges, charges, encumbrances, adverse claims or other security
interests (“ Liens ”) upon or with respect to
the ownership interest of each Subsidiary held by the Company
directly and/or, as the case may be, indirectly through any
intermediate subsidiary of the Company.
(c) Authorization;
Enforcement . (i) The Company has all requisite trust
power and authority to enter into and perform this Agreement, and
the Senior Note, and the other agreements and documents referred to
therein and to issue the Senior Note in accordance with the terms
hereof, (ii) each Subsidiary has all requisite limited
liability company power and authority to enter into and perform the
Guaranty (the “ Guaranty”) and (with respect to
RAIT Asset Holdings II Member, LLC) the Subsidiary Collateral
Pledge Agreement (the “ Pledge Agreement ”) from
such Subsidiary in favor of the Seller, and the other agreements
and documents referred to therein to be executed and delivered by
it (the Senior Note, the Guaranties, the Pledge Agreement and such
other documents and agreements referred to therein, collectively,
the “ Transaction Documents ”), (iii) the
execution and delivery of the Transaction Documents by the Company
or the, Subsidiaries, as applicable, and the consummation by each
of them of the transactions contemplated thereby, including the
issuance of the Senior Note, have been duly authorized by all
necessary trust or limited liability company action (including
action by the board of trustees of the Company), and no further
consent or authorization of the Company or its shareholders, or any
Subsidiary or its members, is required, (iv) the Transaction
Documents have been, or at the Closing will be, duly executed and
delivered by the Company, and the Subsidiaries, as applicable and
(v) assuming due execution and delivery of this Agreement by
the Seller, the Transaction Documents constitute, or at the Closing
will constitute, valid and binding obligations of the Company and
each of the Subsidiaries, as applicable, enforceable against them
in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally the enforcement of creditors’
rights and remedies or by other equitable principles of general
application.
(d) No Conflicts . The
execution, delivery and performance of the Transaction Documents to
which they are parties by the Company and each Subsidiary and the
consummation by the Company and each Subsidiary of the transactions
contemplated hereby and thereby and the issuance of the Senior Note
will not (i) result in a violation of the Company’s
Declaration of Trust or other organizational documents or the
certificates of formation and limited liability company agreements
of the Subsidiaries; (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company, either
Subsidiary or any of their subsidiaries is a party, except as would
not reasonably be expected to have a Material Adverse Effect. For
purposes of this Agreement, “ Material Adverse Effect
” means any adverse effect on the business, operations,
properties or financial condition of the Company that is (either
alone or together with all other adverse effects) material to the
Company, and any material adverse effect on the transactions
contemplated under this Agreement or any other agreement or
document contemplated hereby or thereby. Except as specifically
contemplated by this Agreement, neither the Company nor any
Subsidiary is required to obtain any consent, authorization or
order of, or make any filing or registration with, any court,
governmental agency or any regulatory or self-regulatory agency in
order for it to execute, deliver or perform any of its obligations
under, or contemplated by, the Transaction Documents, or (in the
case of the Company) to issue the Senior Note, in accordance with
the terms hereof or thereof.
(e) Brokers. Neither
the Company nor any Subsidiary has taken any action that would give
rise to any claim by any person for brokerage commissions,
finder’s fees or similar payments by the Company, such
Subsidiary or the Seller relating to this Agreement, the other
Transaction Documents or the transactions contemplated hereby or
thereby.
Section 2.2 Representations
and Warranties of the Seller . The Seller hereby makes the
following representations and warranties to the Company as of the
date hereof and the Closing Date:
(a) Accredited Investor
Status; Sophisticated Purchaser . The Seller is an
“accredited investor” as that term is defined in Rule
501(a) under the Securities Act of 1933, as amended (the “
1933 Act ”), is able to bear the risk of the
investment in the Senior Note. The Seller is a “qualified
purchaser” as that term is defined in the Investment Company
Act of 1940, as amended. The Seller has such knowledge and
experience in financial and business matters that he is capable of
evaluating the merits and risks of his investment in the Senior
Note.
(b) Information . The
Seller and his advisors, if any, have been furnished with all
materials relating to the Senior Note and the business, finances
and operations of the Company which have been requested by the
Seller. The Seller and his advisors, if any, have been afforded the
opportunity to ask questions of the Company. Neither such inquiries
nor any other due diligence investigations conducted by the Seller
or his advisors, if any, or his representatives shall modify, amend
or affect the Seller’s right to rely on the Company’s
representations and warranties contained in Section 2.1 above.
The Seller understands that his investment in the Senior Note
involves a high degree of risk. The Seller has sought such
accounting, legal and tax advice as he has considered necessar
