SERIES A WARRANT AGREEMENT To Purchase 250,000 Common Shares of Beneficial Interest

NEITHER THIS WARRANT NOR THE COMMON SHARES OF BENEFICIAL INTEREST ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE TRANSFERRED IN THE ABSENCE OF REGISTRATION THEREUNDER OR AN EXEMPTION THEREFROM AND ARE SUBJECT TO RESTRICTIONS ON EXERCISE AND TRANSFERS SET FORTH HEREIN. ANY WARRANT SHARES ISSUED PURSUANT HERETO WILL BE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH HEREIN.

SERIES A WARRANT AGREEMENT

To Purchase 250,000 Common Shares of Beneficial Interest of

RAIT FINANCIAL TRUST

As of September 19, 2008

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NEITHER THIS WARRANT NOR THE COMMON SHARES OF BENEFICIAL INTEREST ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE TRANSFERRED IN THE ABSENCE OF REGISTRATION THEREUNDER OR AN EXEMPTION THEREFROM AND ARE SUBJECT TO RESTRICTIONS ON EXERCISE AND TRANSFERS SET FORTH HEREIN. ANY WARRANT SHARES ISSUED PURSUANT HERETO WILL BE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH HEREIN.

SERIES A WARRANT AGREEMENT

To Purchase 250,000 Common Shares of Beneficial Interest of

RAIT FINANCIAL TRUST

as of September 19, 2008

THIS IS TO CERTIFY that, for value received, CEDRIC LLC, a Delaware limited liability company or its registered assigns or successors (collectively, referred to herein as the “ Holder ” or “ Holders ”), is entitled upon the due exercise hereof at any time during the Exercise Period (as hereinafter defined) to purchase, in the aggregate, 250,000 Common Shares of RAIT FINANCIAL TRUST, a Maryland real estate investment trust (the “ Company ”), at an initial Exercise Price of $6.00 per share of Common Shares (such Exercise Price and the number of Common Shares purchasable hereunder being subject to adjustment as provided herein), and to exercise the other rights, powers and privileges hereinafter provided, all on the terms and subject to the conditions hereinafter set forth.

This Series A Warrant Agreement is one of one or more Warrant Agreements (collectively, the “ Warrant Agreement ”) entered into in connection with (i) that certain Agency Agreement, dated as of September 19, 2008 (as amended, restated, supplemented or otherwise modified from time to time, the “ Agency Agreement ”), between Cedric LLC (“ Cedric ”), Cedric LLC as calculation agent, and Wilmington Trust Company (“ WTC ”) and (ii) those certain Repurchase Agreements (as defined below).

1.  Definitions .

1.1 Definitions of Terms . Terms used herein without definition which are defined in the Repurchase Agreement have the meanings ascribed to them therein, unless the context clearly requires otherwise. In addition, the terms defined in this Section 1 , whenever used and capitalized in this Warrant, have, unless the context otherwise requires, the following respective meanings:

“ Accelerated Filer ” has the meaning ascribed to it in Rule 12b-2 to the Rules and Regulations under the Securities Exchange Act.

“ Accredited Investor ” has the meaning ascribed to it in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended.

“ Action ” means any legal, administrative, regulatory or other suit, action, claim, audit, assessment, arbitration or other proceeding, investigation or inquiry.

“ Affiliate ” means as to any Person, any other Person (other than a Subsidiary) which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person; provided , that no shareholder of the Company shall be deemed an Affiliate of any other shareholder solely by reason of any investment in the Company. For purposes of this definition, “control” of a Person (including, with its correlative meanings, “controlled by” and “under common control with”) means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

“ Agency Agreement ” has the meaning specified in the preamble to this Warrant.

“ Assignment ” means the Form of Assignment attached as Exhibit 2 to this Warrant.

“ Black-Scholes Price ” means the value of the Warrant determined by use of the Black-Scholes option pricing model reflecting (a) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of the Warrant as of such date such value is determined and (b) an expected volatility equal to (i) the greater of 60% and, to the extent applicable, the 100-day volatility obtained from the historical price volatility function on Bloomberg, or (ii) if, and only if, such value is determined upon exercise of the put option in connection with a failure to register the Registrable Securities in the time allotted pursuant to Section 6.4(a) , 66%.

“ Bloomberg ” has the meaning set forth in Section 1.1 within the definition of “Market Price”.

“ Business Day ” means any day except a Saturday, a Sunday or other day on which commercial banks in New York are authorized by law to close.

“ Change of Control ” means the occurrence of any of the following:

(a) a merger, consolidation, reorganization, recapitalization or share exchange (whether or not the Company is the surviving and continuing entity) in which the shareholders of the Company immediately prior to such transaction receive, in exchange for securities of the Company owned by them (whether alone or together with cash, property or other securities), cash, property or securities of the resulting or surviving entity and, as a result thereof, Persons who were holders of voting securities of the Company immediately prior to such transaction hold less than fifty percent (50%) of the equity securities, calculated on a fully diluted basis, of the resulting or surviving entity entitled to vote in the election of directors, managers or similar governing body or otherwise; and

(b) a sale, transfer or other disposition in a single transaction or series of related transactions of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole.

“ Common Shares ” means the common shares of beneficial interest, par value of $0.01 per share, of the Company and any capital stock into which such common shares of beneficial interest hereafter may be changed.

“ Company ” has the meaning specified in the preamble to this Warrant.

“ Company Competitor ” means any Person who is engaged or who has an Affiliate that is engaged in the business of real estate finance or investment in real estate securities, or any other business that is then being conducted by the Company.

“ Confidential Information ” has the meaning specified in Section 6.3(c) .

“ Convertible Securities ” means evidences of indebtedness, Equity Securities or other securities which are convertible into or exchangeable or exercisable for, with or without payment of additional consideration, Common Shares, either immediately or upon the arrival of a specified date or the happening of a specified event.

“ Designated Transferee ” has the meaning specified in Section 2.3 .

“ Effective Date ” means December 19, 2008.

“ Equity Securities ” means, without duplication with any Common Shares or other equity securities, any rights, warrant, options, phantom shares, phantom units, convertible debt instruments and other convertible securities, Purchase Rights or indebtedness, exchangeable securities or indebtedness, or other rights, exercisable for or convertible or exchangeable into, directly or indirectly, Common Shares, whether at the time of issuance or upon the passage of time or the occurrence of some future event.

“ Exercise Period ” means the period commencing on the Effective Date and terminating on September 19, 2011.

“ Exercise Price ” means $6.00 per Common Share, as such price may be adjusted pursuant to Section 4 .

“ Holder ” has the meaning specified in the preamble to this Warrant.

“ Issuance Agreement ” has the meaning specified in Section 4.1(c) .

“ Issuer Free Writing Prospectus ” means an issuer free writing prospectus, as defined in Rule 433 under the Securities Act, relating to an offer of the Registrable Securities.

“ Large Accelerated Filer ” has the meaning ascribed to it in Rule 12b-2 to the Rules and Regulations under the Securities Exchange Act.

“ Market Price ” means, for any security as of any date, the summary volume-weighted average price, rounded to four decimal places, for such security on all reported exchanges during the period beginning at 9:30 a.m., New York City Time, and ending at the closing of such exchange, at or about 4:00 p.m., New York City Time, as reported by Bloomberg, L.P. (or any successor thereto, “ Bloomberg ”) through its “Volume at Price” functions, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in OTC Bulletin Board or, if unavailable, as reported in the “pink sheets” by the National Quotation Bureau, Inc. If the Market Price for any security as of a date must be calculated for purposes of this Warrant and cannot be calculated on any of the foregoing bases, then the Market Price for such security will be determined as promptly as practicable, but in no event later than fifteen (15) Business Days after such date, in good faith by the Board of Trustees after consulting with a nationally recognized financial advisor appointed to appraise the value of such security.

“ Notice of Exercise ” means the Form of Notice of Exercise attached as Exhibit 1 hereto.

“ Other Securities ” means with reference to the exercise privilege of the Holder, any Equity Securities (other than Common Shares) and any other securities of the Company or of any other Person which the Holder at any time shall be entitled to receive, or shall have received, upon the exercise or partial exercise of the Warrant, in lieu of or in addition to Common Shares, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Shares (or Other Securities) pursuant to the terms of this Warrant or otherwise.

“ Person ” means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization, estate, association or other entity or any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in such capacity on behalf of any of the foregoing.

“ Promissory Note ” means a promissory note issued by the Company in favor of the Holder pursuant to Section 3.2 (i) payable on the one year anniversary of the Repurchase Date (or the final repurchase or maturity date under any successor agreement); (ii) bearing interest at a fixed rate equal to the greater of (x) 13.5% per annum and (y) 1% higher than the highest per annum rate of interest then payable in respect of any tranche of senior, second lien or subordinated debt of the Company; (iii) secured by the Equity Securities that were the subject of the Put Option for which the Promissory Note is given; and (iv) subordinated to any and all indebtedness for borrowed money of the Company.

“ Prospectus ” means the prospectus included in any Registration Statement (including a prospectus that discloses information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A or Rule 430B promulgated under the Securities Act), as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement, any Issuer Free Writing Prospectus related thereto, and all other amendments and supplements to such prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such prospectus.

“ Public Offering ” means the offer or sale of shares of any Equity Securities subject to an effective registration statement under the Securities Act.

“ Purchase Rights ” means the Warrant and any other warrant, options or other rights to subscribe for, purchase or otherwise acquire any Common Shares or any Convertible Securities, either immediately or upon the arrival of a specified date or the happening of a specified event.

“ Put Notice ” has the meaning specified in Section 3.2(b) .

“ Put Option ” has the meaning specified in Section 3.2(a) .

“ Put Redemption Price ” has the meaning specified in Section 3.2(a) .

“ Registrable Securities ” has the meaning specified in Section 6.4(a) .

“ Registration Statement ” means any registration statement of the Company under the Securities Act which permits the public offering of any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, post-effective amendments, and all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

“ Repurchase Agreements ” means the Master Repurchase Agreement, dated as of September 19, 2008, between Taberna Loan Holdings I, L.L.C. as seller, and Wilmington Trust Company, as agent for Cedric LLC, as buyer, together with any amendments, annexes, exhibits, schedules or supplements and the Master Repurchase Agreement, dated as of September 19, 2008, between RAIT CRE Holdings, LLC as seller, and Wilmington Trust Company, as agent for Cedric LLC, as buyer, together with any amendments, annexes, exhibits, schedules or supplements.

“ SEC ” means the Securities and Exchange Commission.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder.

“ Securities Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Subsidiary ” means as to any Person, a corporation, partnership, limited liability company or other entity of which (i) a majority of the equity of such entity is owned or (ii) Voting Stock to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned (or the management of which is otherwise controlled), directly or indirectly through one or more intermediaries, or both, by such Person.

“ Third Party ” means a prospective purchaser of this Warrant or Warrant Shares from the Holder in a bona-fide, arm’s length transaction.

“ Transfer ” means any sale, transfer or assignment of this Warrant (whether with or without consideration, whether voluntarily or involuntarily or by operation of law) or the acts thereof; provided that in no event shall “Transfer” include the exercise of this Warrant. The terms “ Transferee ,” “ Transferor ,” “ Transferred ,” and other forms of the word “ Transfer ” shall have the correlative meanings.

“ Voting Stock ” means securities of any class or classes of a corporation, limited partnership or limited liability company or any other entity the holders of which are ordinarily, in the absence of contingencies, entitled to vote with respect to the election of corporate directors (or Persons performing similar functions).

“ Warrant ” means this Warrant, dated the date hereof, of the Company for the issuance of Common Shares, as adjusted herein and any Warrant issued after the date hereof that evidences all or a portion of the Warrant evidenced hereby.

“ Warrant Agreement ” has the meaning specified in the preamble to this Warrant.

“ Warrant Shares ” means the Common Shares (and/or Other Securities) issued or issuable, as the case may be, from time to time upon exercise of the Warrant, including, without limitation, any Common Shares (and/or Other Securities) issued or issuable with respect thereto by way of a dividend or split or in connection with a combination of any Common Shares, recapitalization, merger, consolidation, reorganization or otherwise.

2.  Exercise of Warrant .

2.1 Right to Exercise; Notice . On the terms and subject to the conditions of this Section 2 , the Holder hereof shall have the right, at its option, to exercise this Warrant in whole or in part at any time or from time to time during the Exercise Period, all as more fully specified below, provided that a partial exercise of this Warrant for less than the entire remaining amount of Warrant Shares issuable under this Warrant shall be made only for a whole number of Warrant Shares. In the event that the Holder has submitted a Notice of Exercise on or prior to the last day of the Exercise Period, the exercise of the Warrant as contemplated by such Notice of Exercise shall be permitted hereunder.

2.2 Vesting . (a)  This Warrant will vest and become exercisable with respect to the purchase of (pursuant to Section 2.3 ), or conversion into (pursuant to Section 2.4 ), 250,000 Warrant Shares on the Effective Date.

(b) The number of Warrant Shares that the Holder may purchase, or into which this Warrant may be converted, upon exercise of this Warrant is subject to, and may be adjusted pursuant to, the anti-dilution provisions contained in Sections 4.1 through 4.3 , regardless of whether this Warrant has vested and become exercisable with respect to the purchase of, or conversion into, any such Warrant Shares.

2.3 Cash Exercise . To exercise any or all of this Warrant, the Holder hereof shall deliver to the Company (a) a Notice of Exercise (substantially in the form of Exhibit 1 attached hereto) duly executed by the Holder hereof (or its attorney) specifying the number of Warrant Shares to be purchased, (b) an amount equal to the aggregate Exercise Price for all Warrant Shares as to which this Warrant is then being exercised, (c) subject to the restrictions set forth in Section 3 , in the event all or a portion of the Warrant Shares are to be issued to a Person other than the Holder, the name of the Person which will acquire Warrant Shares in connection with the issuance thereof (such Person, a “ Designated Transferee ”) together with payment of transfer taxes, if any, and (d) this Warrant. At the option of the Holder hereof, payment of the Exercise Price shall be made (x) by wire transfer of funds to an account in a bank located in the United States designated by the Company for such purpose, (y) by bank check from a financial institution in the Automated Clearing House network or other form of immediately available funds payable to the order of the Company, or (z) by any combination of such methods. If all or a portion of the Warrant Shares are to be issued to a Designated Transferee, the exercise of the Warrant for such Warrant Shares shall be considered a proposed Transfer of such Warrant Shares by the Holder to such Designated Transferee and shall be subject to the restrictions on Transfer specified in Section 3 of this Warrant.

2.4 Conversion . Instead of exercising this Warrant pursuant to the terms of Section 2.3 , the Holder may elect to convert any or all of this Warrant into Warrant Shares. Upon such election the Holder shall deliver to the Company (A) a Notice of Exercise (substantially in the form of Exhibit 1 attached hereto) duly executed by the Holder hereof (or its attorney) specifying the number of Warrant Shares to be converted, (B) subject to the restrictions set forth in Section 3 , the name of any Designated Transferee, and (C) this Warrant. Upon delivery of such items (A) through (C), the Holder, or the Designated Transferee (if any), shall be entitled to receive a number of duly authorized Warrant Shares equal to the quotient of:

(a) the difference between:

(i) the product of (x) the number of Warrant Shares which the Holder, or the Designated Transferee (if any), would be entitled to receive upon exercise of this Warrant for the number of Warrant Shares designated in such conversion notice multiplied by (y) the Market Price of each such Warrant Share so receivable upon exercise.

minus

(ii) the product of (x) the number of Warrant Shares (without giving effect to any adjustments thereof) designated in such conversion notice multiplied by (y) the Exercise Price.

divided by

(b) the average Market Price per Warrant Share which the Holder, or the Designated Transferee (if any), would be entitled to receive upon exercise of this Warrant.

For all purposes of this Warrant (other than Section 2.3 ), any reference herein to the exercise of this Warrant shall be deemed to include a reference to the conversion of this Warrant into Warrant Shares in accordance with the terms of this Section 2.4 . If all or a portion of the Warrant Shares are to be issued to a Designated Transferee, the exercise of the Warrant for such Warrant Shares shall be considered a proposed Transfer of such Warrant Shares by the Holder to such Designated Transferee and shall be subject to the restrictions on Transfer specified in Section 3 of this Warrant.

2.5 Issuance of Warrant Shares . In the event that at the time of exercise of this Warrant the Common Shares are certificated, then upon receipt of the items referred to in either Sections 2.3 or 2.4 , the Company shall, as promptly as practicable, and in any event within three (3) Business Days thereafter, cause to be issued and delivered to the Holder hereof (or its nominee) or the Designated Transferee (if any), a certificate or certificates representing the number of Warrant Shares specified in the Notice of Exercise (but not exceeding the maximum number of Warrant Shares issuable upon exercise of this Warrant if the Warrant is exercised pursuant to Section 2.3 or the number of Warrant Shares the Holder is entitled to receive pursuant to Section 2.4 if the Warrant is exercised pursuant to Section 2.4 ). Such certificates shall be registered in the name of the Holder hereof (or its nominee) or in the name of such transferee, as the case may be.

If this Warrant is exercised in part, the Company shall issue and deliver to the Holder hereof or the transferee, so designated in the Notice of Exercise, within three (3) Business Days, a new Warrant, materially identical hereto, evidencing the right of the Holder hereof or such transferee to purchase at the Exercise Price then in effect the aggregate number of Warrant Shares for which this Warrant shall not have been exercised and this Warrant shall be cancelled.

The Company shall assist and cooperate with any Holder required to make any governmental filings or obtain any governmental approvals prior to or in connection with any exercise of this Warrant (including, without limitation, making any filings required to be made by the Company).

Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a Public Offering, a Change of Control or with the sale or Transfer of other Equity Securities of the Company, the exercise of any portion of this Warrant may, at the election of the Holder hereof, be conditioned upon the consummation of such Public Offering or Change of Control or sale or Transfer, in which case such exercise shall not be deemed to be effective until the consummation of such transaction.

2.6 Effectiveness of Exercise . Unless otherwise requested by the Holder hereof, this Warrant shall be deemed to have been exercised and such certificate or certificates (if any) representing Warrant Shares shall be deemed to have been issued, and the Holder or Designated Transferee (if any) shall be deemed to have become the holder of record of such Warrant Shares for all purposes, as of the time on the date on which the Notice of Exercise, the Exercise Price and this Warrant shall have been received by the Company.

2.7 Fractional Shares . The Company shall not issue fractional Warrant Shares upon any exercise of this Warrant. As to any fractional Warrant Shares which the Holder hereof would otherwise be entitled to purchase from the Company upon such exercise, the Company shall pay such Holder a cash adjustment for such fraction in an amount equal to the same fraction of the Market Price of a Common Share as of the date of the Notice of Exercise.

2.8 Warrant Share Rights . A Holder of Warrant Shares issued upon the exercise of this Warrant, in whole or in part, shall be entitled to the rights set forth in Section 6.4 only.

3.  Registration, Transfer, Exchange and Replacement of Securities; Legends .

3.1 Warrant Transferable . Subject to the transfer conditions referred to in the legend endorsed hereon and the other terms and conditions of this Section 3 , this Warrant, the Warrant Shares and all rights hereunder are transferable, in whole or in part, without charge to the Holder, upon surrender of this Warrant with a properly executed Assignment (in the form of Exhibit 2 hereto) at the principal office of the Company provided , however , that, unless otherwise stated, any such assignment is conditioned upon such assignee’s execution of an agreement to be bound to this Warrant by executing a joinder hereto.

3.2 Put Option .

(a)  Put Option . Subject to the limitations provided in this Section 3.2 , (i) upon a Change of Control, (ii) if the Registrable Securities are not registered within the time allotted pursuant to Section 6.4(a), (iii) if the Registrable Securities cease to be subject to an effective registration statement after registration pursuant to Section 6.4 or (iv)&n