<PAGE>

                                                                    EXHIBIT 10.6
================================================================================

                           REVOLVING CREDIT AGREEMENT

                          dated as of October 24, 2005

                                      among

                             RAIT INVESTMENT TRUST,
                             RAIT PARTNERSHIP, L.P.,
                                       AND
                            RAIT ASSET HOLDINGS, LLC,
                                  as Borrowers,

                   THE LENDERS FROM TIME TO TIME PARTY HERETO,

                          KEYBANK NATIONAL ASSOCIATION,
                            as Administrative Agent,

                             BANK OF AMERICA, N.A.,
                              as Syndication Agent,

                                       and

                            KEYBANC CAPITAL MARKETS,
                   as Sole Lead Arranger and Sole Book Manager

================================================================================
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
ARTICLE I DEFINITIONS...........................................................................................  1

    Section 1.1      Definitions................................................................................  1
    Section 1.2      Accounting Terms and Determinations........................................................ 23
    Section 1.3      Types of Borrowings........................................................................ 24

ARTICLE II THE Commitments...................................................................................... 24

    Section 2.1      Commitments to Lend........................................................................ 24
    Section 2.2      Notice of Committed Borrowing.............................................................. 26
    Section 2.3      Notice to Lenders; Funding of Loans........................................................ 28
    Section 2.4      Notes...................................................................................... 29
    Section 2.5      Letters of Credit.......................................................................... 30
    Section 2.6      Method of Electing Interest Rates.......................................................... 32
    Section 2.7      Interest Rates............................................................................. 33
    Section 2.8      Fees....................................................................................... 35
    Section 2.9      Maturity Date.............................................................................. 36
    Section 2.10     Mandatory Prepayment....................................................................... 36
    Section 2.11     Optional Prepayments....................................................................... 37
    Section 2.12     General Provisions as to Payments.......................................................... 38
    Section 2.13     Funding Losses............................................................................. 39
    Section 2.14     Computation of Interest and Fees........................................................... 39
    Section 2.15     Use of Proceeds............................................................................ 39
    Section 2.16     Letter of Credit Usage Absolute............................................................ 39
    Section 2.17     Joint and Several Obligations; Limitation on Liability..................................... 40
    Section 2.18     Increase in Facility Amount................................................................ 42
    Section 2.19     Revolving Facility......................................................................... 44
    Section 2.20     Delinquent Lenders......................................................................... 44

ARTICLE III CONDITIONS.......................................................................................... 45

    Section 3.1      Closing.................................................................................... 45
    Section 3.2      Borrowings................................................................................. 47

ARTICLE IV REPRESENTATIONS AND WARRANTIES....................................................................... 47

    Section 4.1      Existence and Power........................................................................ 48
    Section 4.2      Power and Authority........................................................................ 48
    Section 4.3      No Violation............................................................................... 48
    Section 4.4      Financial Information...................................................................... 49
    Section 4.5      Litigation................................................................................. 49
    Section 4.6      Compliance with ERISA...................................................................... 49
    Section 4.7      Borrowing Base Assets...................................................................... 50
    Section 4.8      Environmental Matters...................................................................... 50
    Section 4.9      Taxes...................................................................................... 50
    Section 4.10     Full Disclosure............................................................................ 51
    Section 4.11     Solvency................................................................................... 51
    Section 4.12     Use of Proceeds; Margin Regulations........................................................ 51
    Section 4.13     Governmental Approvals..................................................................... 51
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<S>                                                                                                              <C>
    Section 4.14     Investment Company Act; Public Utility Holding Company Act................................. 51
    Section 4.15     Principal Offices.......................................................................... 52
    Section 4.16     REIT Status................................................................................ 52
    Section 4.17     Qualified REIT Subsidiary Status........................................................... 52
    Section 4.18     Patents, Trademarks, etc................................................................... 52
    Section 4.19     No Default................................................................................. 52
    Section 4.20     Licenses, etc.............................................................................. 52
    Section 4.21     Compliance With Law........................................................................ 52
    Section 4.22     No Burdensome Restrictions................................................................. 52
    Section 4.23     Brokers' Fees.............................................................................. 53
    Section 4.24     Labor Matters.............................................................................. 53
    Section 4.25     Insurance.................................................................................. 53
    Section 4.26     Organizational Documents................................................................... 53

ARTICLE V AFFIRMATIVE AND NEGATIVE COVENANTS.................................................................... 53

    Section 5.1      Information................................................................................ 53
    Section 5.2      Payment of Obligations..................................................................... 56
    Section 5.3      Maintenance of Property.................................................................... 56
    Section 5.4      Conduct of Business and Maintenance of Existence........................................... 56
    Section 5.5      Compliance with Laws....................................................................... 56
    Section 5.6      Inspection of Books and Records............................................................ 56
    Section 5.7      Existence.................................................................................. 57
    Section 5.8      Financial Covenants........................................................................ 57
    Section 5.9      Restriction on Fundamental Changes......................................................... 58
    Section 5.10     Changes in Business........................................................................ 59
    Section 5.11     Margin Stock............................................................................... 59
    Section 5.12     RAIT, RAIT OP and RAIT SPE Status.......................................................... 59
    Section 5.13     Disposition of Borrowing Base Assets....................................................... 59
    Section 5.14     Liens; Release of Liens.................................................................... 59
    Section 5.15     Business Loans............................................................................. 60
    Section 5.16     Limitation on Changes in Fiscal Year; Accounting Methods; Valuation Methodology............ 60
    Section 5.17     Limitation on Lines of Business............................................................ 60
    Section 5.18     Limitation on Negative Pledge Clauses, Distribution Restrictions........................... 60
    Section 5.19     Addition of Borrowing Base Assets.......................................................... 60
    Section 5.20     Failure of Certain Borrowing Base Assets Representations and Warranties.................... 61
    Section 5.21     Limitation on Transactions with Affiliates................................................. 62

ARTICLE VI DEFAULTS............................................................................................. 62

    Section 6.1      Events of Default.......................................................................... 62
    Section 6.2      Rights and Remedies........................................................................ 64
    Section 6.3      Notice of Default.......................................................................... 65
    Section 6.4      Actions in Respect of Letters of Credit.................................................... 65

ARTICLE VII THE AGENTS.......................................................................................... 67

    Section 7.1      Appointment and Authorization.............................................................. 67
    Section 7.2      Agency and Affiliates...................................................................... 67
    Section 7.3      Action by Administrative Agent............................................................. 67
    Section 7.4      Consultation with Experts.................................................................. 67
    Section 7.5      Liability of Administrative Agent.......................................................... 67
</TABLE>

                                      -ii-
<PAGE>

<TABLE>
<S>                                                                                                                 <C>
    Section 7.6    Indemnification................................................................................. 68
    Section 7.7    Credit Decision................................................................................. 68
    Section 7.8    Successor Administrative Agent.................................................................. 68
    Section 7.9    Receipt of Notices.............................................................................. 69

ARTICLE VIII CHANGE IN CIRCUMSTANCES............................................................................... 69

    Section 8.1    Basis for Determining Interest Rate Inadequate or Unfair........................................ 69
    Section 8.2    Illegality...................................................................................... 69
    Section 8.3    Increased Cost and Reduced Return............................................................... 70
    Section 8.4    Taxes........................................................................................... 71
    Section 8.5    Alternate Base Rate Loans Substituted for Affected Euro-Dollar Loans............................ 73

ARTICLE IX MISCELLANEOUS........................................................................................... 73

    Section 9.1    Notices......................................................................................... 73
    Section 9.2    No Waivers...................................................................................... 74
    Section 9.3    Expenses; Indemnification....................................................................... 74
    Section 9.4    Sharing of Set-Offs............................................................................. 75
    Section 9.5    Amendments and Waivers.......................................................................... 76
    Section 9.6    Successors and Assigns.......................................................................... 76
    Section 9.7    Collateral...................................................................................... 78
    Section 9.8    Governing Law; Submission to Jurisdiction....................................................... 78
    Section 9.9    Marshalling; Recapture.......................................................................... 78
    Section 9.10   Counterparts; Integration; Effectiveness........................................................ 79
    Section 9.11   WAIVER OF JURY TRIAL............................................................................ 79
    Section 9.12   Survival........................................................................................ 79
    Section 9.13   Domicile of Loans............................................................................... 79
    Section 9.14   Limitation of Liability......................................................................... 79
    Section 9.15   Recourse Obligation............................................................................. 79
    Section 9.16   Confidentiality................................................................................. 79
    Section 9.17   Legal Rate...................................................................................... 80
    Section 9.18   Estoppel and Certification...................................................................... 80
</TABLE>

                                     -iii-
<PAGE>

EXHIBITS

Exhibit A-1          -     Form of Note
Exhibit A-2          -     Swing Loan Note
Exhibit B            -     Form of Assignment and Assumption Agreement
Exhibit C            -     Initial Borrowing Base Assets
Exhibit D            -     Form of Borrowing Base Certificate
Exhibit E            -     Form of Continuing Compliance Certificate
Exhibit F            -     First Mortgage Asset Representations and Warranties
Exhibit G            -     Real Property Asset Representations and Warranties
Exhibit H            -     Subordinate Assets Representations and Warranties
Exhibit I            -     Form of Subordination Agreement

SCHEDULES

Schedule 4.3            Litigation
Schedule 4.4(c)         Post-June 30, 2005 Material Indebtedness and Contingent
                        Obligations

                                      -iv-
<PAGE>

                           REVOLVING CREDIT AGREEMENT

THIS REVOLVING CREDIT AGREEMENT (this "Agreement") is dated as of October 24,
2005 among RAIT INVESTMENT TRUST, a Maryland trust ("RAIT"), RAIT PARTNERSHIP,
L.P., a Delaware limited partnership ("RAIT OP"), and RAIT ASSET HOLDINGS, LLC,
a Delaware limited liability company ("RAIT SPE") (RAIT, RAIT OP and RAIT SPE
are hereinafter referred to individually as a "Borrower" and collectively as the
"Borrowers"), the Lenders (as defined herein), KEYBANK NATIONAL ASSOCIATION, as
Administrative Agent, and KEYBANC CAPITAL MARKETS, as Sole Lead Arranger and
Sole Book Manager.

                                    RECITALS

      1.    The Borrowers have requested that the Lenders establish a revolving
credit facility for the Borrowers for the purpose of financing the acquisition
by the Borrowers of finance assets and for other business purposes of the
Borrowers.

      2.    The Borrowers have requested that the Lenders set forth the terms
and conditions upon which the Lenders will provide financing to the Borrowers.

      3.    The Lenders have agreed to provide that financing to Borrowers on,
and subject to, the terms and conditions of, this Agreement.

      NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

                                   ARTICLE I

                                   DEFINITIONS

      Section 1.1 Definitions.The following terms, as used herein, have the
following meanings:

      "Adjusted Earnings" means, for any period, the Net Income for such period
to the extent allocable to the holders of common stock of RAIT, plus, (i)
depreciation and amortization of the Consolidated Parties for such period, in
each case to the extent allocable to the holders of common stock of RAIT, plus,
(ii) without duplication, depreciation and amortization for such period for each
Non-Wholly-Owned Subsidiary to the extent allocable to the proportion thereof
owned by the Consolidated Parties, plus, (iii) an amount equal to one percent
(1%) of Consolidated Tangible Net Worth determined as of the end of such period.

      "Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.7(c).

      "Administrative Agent" shall mean KeyBank National Association in its
capacity as Administrative Agent hereunder, and its permitted successors in such
capacity in accordance with the terms of this Agreement.

      "Administrative Questionnaire" means, with respect to each Lender, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrowers) duly
completed by such Lender.

<PAGE>

      "Advance Rate" means, as to any Borrowing Base Asset at any time of
determination, the maximum aggregate amount of Loans and Letters of Credit which
Borrowers shall be entitled to borrow, draw, or have issued or outstanding
pursuant to the terms of this Agreement with respect to such Borrowing Base
Asset, which Advance Rate shall be (a) for Eligible Real Property Assets,
sixty-five percent (65%) of the Underlying Real Estate Value at such time of
such Eligible Real Property Assets, (b) for any Eligible First Mortgage Asset,
the lesser of (i) sixty-five percent (65%) of the Underlying Real Estate Value
at such time of the Underlying Asset securing such Eligible First Mortgage
Asset, and (ii) the Book Value at such time of such First Mortgage Asset, and
(c) for Eligible Subordinated Assets, fifty percent (50%) of the Book Value at
such time of Eligible Subordinated Assets.

      "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. 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 33 1/3% 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.

      "Agreement" shall mean this Revolving Credit Agreement as the same may
from time to time hereafter be modified, supplemented or amended.

      "Alternate Base Rate" means, for any day, a rate per annum equal to the
sum of (i) greater of (a) the Prime Rate or (b) the Federal Funds Rate plus
one-half percent (0.5%), plus (ii) the Applicable Margin.

      "Alternate Base Rate Loan" means a Committed Loan to be made by a Lender
as an Alternate Base Rate Loan in accordance with the applicable Notice of
Committed Borrowing or pursuant to Article II.

      "Applicable Lending Office" means, with respect to any Lender, (i) in the
case of its Domestic Loans, its Domestic Lending Office, and (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office.

      "Applicable Margin" means, for any day, the rate per annum set forth below
opposite the applicable Leverage Ratio then in effect.

<TABLE>
<CAPTION>
Leverage Ratio (as calculated
pursuant to the most-recently         Applicable Margin for
delivered officer's certificate       Euro-Dollar Loans and    Applicable Margin for
pursuant to Section 7.1(c) hereof)    Letter of Credit Fees    Alternate Base Rate Loans
----------------------------------    ---------------------    -------------------------
<S>                                   <C>                      <C>
      > 0.50                                  1.85%                    0.35%

      > 0.40 to < or = 0.50                   1.65%                    0.15%

      > 0.30 to < or = 0.40                   1.50%                    0.00%

      < or = 0.30                             1.35%                    0.00%
</TABLE>

                                      -2-
<PAGE>

      The Applicable Margin shall be adjusted effective on the next Business Day
following any change in the Leverage Ratio using the information provided in the
most-recently delivered officer's certificate pursuant to Section 5.1(c) hereof.

      Notwithstanding anything to the contrary contained in the foregoing, to
the extent the Borrowers fail to deliver any officer's certificate as of the
date required pursuant to Section 5.1(c), the Applicable Margin as of the date
immediately following such required date of delivery and until the delivery of
such officer's certificate shall be the greatest Applicable Margin specified in
the foregoing chart.

      "Approval Request" has the meaning set forth in Section 5.19(a).

      "Approval Request Package" has the meaning set forth in Section 5.19(b).

      "Approved Uses" has the meaning set forth in Section 2.15.

      "Approved Bank" means a bank or other financial institution which has
(i)(a) a minimum net worth of $500,000,000 and/or (b) total assets of
$10,000,000,000, and (ii) a minimum long term debt rating of (a) BBB+ or higher
by S&P, and (b) Baa1 or higher by Moody's.

      "Arranger" means KeyBanc Capital Markets, in its capacity as Sole Lead
Arranger of the Commitments and Sole Book Manager of the Commitments.

      "Asset Disposition" means the disposition of any assets (including without
limitation the Capital Stock of a Subsidiary) of any Consolidated Party whether
by sale, lease (but excluding the lease of assets in the ordinary course of
business), transfer or otherwise to a Person other than a Consolidated Party.

      "Asset Servicing Agreement" means that certain Asset Servicing Agreement
dated as of October 24, 2005, between RAIT SPE and RAIT OP, pursuant to which
RAIT OP services and manages certain Borrowing Base Assets on behalf of RAIT
SPE, as amended from time to time with the consent of the Administrative Agent.

      "Assignee" has the meaning set forth in Section 9.6(b).

      "Available Commitment" means, with respect to each Lender, at any time,
the amount obtained by multiplying such Lender's Commitment at such time by a
fraction, the numerator of which is the Total Available Commitments at such
time, and the denominator of which is the aggregate of all Commitments at such
time.

      "Bankruptcy Code" means Title 11 of the United States Code, entitled
"Bankruptcy", as amended from time to time, and any successor statute or
statutes.

      "Benefit Arrangement" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise contributed to by any member of the ERISA
Group.

      "Book Value" means as to any asset, the value of such asset determined in
accordance with GAAP, as consistently applied in connection with the preparation
of the financial statements filed by RAIT with the Securities and Exchange
Commission.

                                      -3-
<PAGE>

      "Borrowers" means, collectively, RAIT, RAIT OP, RAIT SPE and each SPE
Subsidiary which may hereafter execute a joinder agreement joining this
Agreement as a "Borrower" hereunder, and "Borrower" means any one of the
foregoing.

      "Borrowing" has the meaning set forth in Section 1.3.

      "Borrowing Base Assets" means assets one hundred percent (100%) owned
(legally and equitably) by RAIT SPE or an SPE Subsidiary and which consist of
Eligible Real Property Assets, Eligible First Mortgage Assets and Eligible
Subordinated Assets.

      "Borrowing Base Assets Pool" means, collectively at any time, all
Borrowing Base Assets.

      "Borrowing Base Availability" means, at any time of determination, an
amount equal to the aggregate of the Advance Rates of all Borrowing Base Assets
in the Borrowing Base Assets Pool at such time; provided, that (x) at no time
shall the Borrowing Base Availability attributable to Eligible Subordinated
Assets exceed twenty-five percent (25%) of Borrowing Base Availability at any
time, and (y) at no time shall Borrowing Base Availability exceed the aggregate
amount that would cause the ratio of (i) the sum of (A) the aggregate Property
NOI of Eligible Real Property Assets during such period, (B) the aggregate cash
interest income actually received from all Eligible First Mortgage Assets and
Subordinated Debt Assets during such period, and (C) the aggregate cash dividend
income actually received from all Preferred Securities during such period, in
each case calculated as of the end of each fiscal quarter for the quarterly
period then ended with respect to Borrowing Base Assets in the Borrowing Base
Pool as of the date of determination as reflected on the most recent Borrowing
Base Certificate, to (ii) Facility Interest Expense for such period, to be not
less than 2:00 to 1:00.

      "Borrowing Base Certificate" has the meaning set forth in Section 2.2.

      "Capitalization Rate" means nine and one-quarter percent (9.25%) per
annum.

      "Capital Replacement Reserve" means, with respect to any Real Property
Asset or Underlying Asset, a normalized annual reserve for replacement reserves,
capital expenditures, tenant improvements, and leasing commissions in the amount
of $0.20 per year per square foot of net leaseable area contained in such Real
Property Asset or Underlying Asset. When the Capital Replacement Reserve is used
in computing an amount with respect to a period which is shorter than a year,
said amount shall be appropriately prorated.

      "Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible into or exchangeable for corporate stock),
warrants or options to purchase any thereof.

      "Cash and Cash Equivalents" means (i) cash, (ii) direct obligations of the
United States Government, including without limitation, treasury bills, notes
and bonds, (iii) interest bearing or discounted obligations of Federal agencies
and Government sponsored entities or pools of such instruments offered by
Approved Banks and dealers, including without limitation, Federal Home Loan
Mortgage Corporation participation sale certificates, Government National
Mortgage Association modified pass through certificates, Federal National
Mortgage Association bonds and notes, and Federal Farm Credit System securities,
(iv) time deposits, Domestic and Eurodollar certificates of deposit, bankers'
acceptances, commercial paper rated at least A-2 by

                                      -4-
<PAGE>

S&P and P-2 by Moody's and/or guaranteed by a Person with an Aa3 rating by
Moody's, an AA- rating by S&P or better rated credit, floating rate notes, other
money market instruments each issued by an Approved Bank (provided that the same
shall cease to be a "Cash or Cash Equivalent" if at any time any such bank shall
cease to be an Approved Bank), (v) obligations of domestic corporations,
including, without limitation, commercial paper, bonds, debentures and loan
participations, each of which is rated at least AA- by S&P and/or Aa3 by Moody's
and/or guaranteed by a Person with an Aa3 rating by Moody's and/or a AA- rating
by S&P or better rated credit, (vi) obligations issued by states and local
governments or their agencies, rated at least MIG-2 by Moody's and/or SP-2 by
S&P, (vii) repurchase agreements with major banks and primary government
security dealers fully secured by the U.S. Government or agency collateral equal
to or exceeding the principal amount on a daily basis and held in safekeeping,
and (viii) real estate loan pool participations, guaranteed by a Person with an
AA- rating given by S&P or Aa3 rating given by Moody's or better rated credit.

      "Charges" has the meaning set forth in Section 9.17.

      "Closing Date" means the date on or after the Effective Date on which the
conditions set forth in Section 3.1 shall have been satisfied to the
satisfaction of the Administrative Agent or waived by the Administrative Agent
in its sole discretion.

      "Code" means the Internal Revenue Code of 1986, as amended, and as it may
be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.

      "Commitment" means, with respect to each Lender, the amount set forth
opposite the name of such Lender on the signature pages hereof (and, for each
Lender which is an Assignee, the amount set forth in the Assignment and
Assumption Agreement entered into pursuant to Section 9.6(b) as the Assignee's
Commitment), as such amount may be reduced from time to time pursuant to Section
2.11(c) or in connection with an assignment to an Assignee, or increased
pursuant to Section 2.18.

      "Commitment Fee Quarterly Period" has the meaning set forth in Section
2.8(c).

      "Committed Loan" means a loan made by a Lender (including the Swing
Lender) pursuant to Section 2.1; provided that, if any such loan or loans (or
portions thereof) are combined or subdivided pursuant to a Notice of Interest
Rate Election, the term "Committed Loan" shall refer to the combined principal
amount resulting from such combination or to each of the separate principal
amounts resulting from such subdivision, as the case may be.

      "Consolidated Parties" means, collectively, RAIT and its Consolidated
Subsidiaries.

      "Consolidated Subsidiary" means at any date any Subsidiary or other entity
which is consolidated with RAIT in accordance with GAAP or which is required
under GAAP to be consolidated with RAIT.

      "Consolidated Tangible Net Worth" means, without duplication, at any date
(a) the Total Assets of the Consolidated Parties, less (b)(i) consolidated
Intangible Assets of the Consolidated Parties, and less (ii) Total Liabilities,
all determined as of such date. For purposes of this definition "Intangible
Assets" means goodwill, patents, trademarks, service marks, trade names,
anticipated future benefit of tax loss carry forwards, copyrights, organization
or developmental expenses and other intangible assets determined in accordance
with GAAP.

                                      -5-
<PAGE>

      "Contingent Obligation" means, as to any Person, without duplication, (i)
any contingent obligation of such Person required to be shown on such Person's
balance sheet in accordance with GAAP, (ii) any obligation (including, without
limitation, any Guarantee Obligation) required to be disclosed in the footnotes
to such Person's financial statements, guaranteeing partially or in whole any
Non-Recourse Debt, lease, dividend or other obligation, exclusive of contractual
indemnities (including, without limitation, any indemnity or price-adjustment
provision relating to the purchase or sale of securities or other assets) and
guarantees of non-monetary obligations which have not yet been called on or
quantified, of such Person or of any other Person, and (iii) any forward
commitment or obligation to fund or provide proceeds with respect to any loan or
other financing which is obligatory and non-discretionary on the part of the
lender. The amount of any Contingent Obligation described in clause (ii) shall
be deemed to be (a) with respect to a guarantee of interest or interest and
principal, or operating income guarantee, the sum of all payments required to be
made thereunder (which in the case of an operating income guarantee shall be
deemed to be equal to the debt service for the note secured thereby), through
(x) in the case of an interest or interest and principal guarantee, the stated
date of maturity of the obligation (and commencing on the date interest could
first be payable thereunder), or (y) in the case of an operating income
guarantee, the date through which such guarantee will remain in effect, and (b)
with respect to all guarantees not covered by the preceding clause (a), an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as recorded on the balance sheet and
on the footnotes to the most recent financial statements of Borrowers required
to be delivered pursuant to Section 5.1 hereof.

      "Credit Rating" means, with respect to any Person, the rating assigned by
the Rating Agencies (one of which, in all instances, must be S&P or Moody's) to
such Person's long-term unsecured indebtedness.

      "Credit Underwriting Documents" has the meaning set forth in Section
5.19(a).

      "Default" means any condition or event which with the giving of notice or
lapse of time or both would, unless cured or waived, become an Event of Default.

      "Default Rate" has the meaning set forth in Section 2.7(d).

      "Derivative Exposure" means, as of any date, the maximum liability
(including costs, fees and expenses), based upon a liquidation or termination as
of such date, of any Person under any interest rate swap, collar, cap or other
interest rate protection agreements, treasury locks, equity forward contracts,
foreign currency exchange agreements, commodity purchase or option agreements or
other interest or exchange rate or commodity price hedging agreements.

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

      "Domestic Lending Office" means, as to each Lender, its office located at
its address in the United States set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Domestic Lending
Office) or such other office as such Lender may hereafter designate as its
Domestic Lending Office by notice to the Borrowers and the Administrative Agent.

      "Domestic Loans" means Alternate Base Rate Loans or Swing Loans.

                                      -6-
<PAGE>

      "EBITDA" means, for any period, the sum of, without duplication, (i)
aggregate Net Income during such period, plus (ii) an amount which, in the
determination of Net Income for such period, has been deducted for (A) Interest
Expense, (B) total federal, state, local and foreign income, value added and
similar taxes and (C) depreciation and amortization expense, plus (iii) losses
from extraordinary items, non-recurring items, Asset Dispositions, or
forgiveness of debt, minus (iv) gains from extraordinary items, non-recurring
items, Asset Dispositions, write-up of assets (including any loan accretion
attributable to any asset), minus (v) interest income accrued but not actually
received in cash, each of the above determined in accordance with GAAP and to
the extent included in the calculation of Net Income and plus, (vi) interest
income received in cash in such period to the extent such interest income had
been subtracted from Net Income pursuant to the foregoing clause (v) with
respect to any earlier period; provided, that such sum shall be exclusive of any
adjustment for such period attributable to the Straight-Lining of Rents, and,
provided further that the foregoing calculations shall be adjusted, without
duplication, to give effect to the proportional ownership of all
Non-Wholly-Owned Subsidiaries.

      "Effective Date" means October 24, 2005.

      "Eligible Assignee" means any Person that is: (a) a Lender; (b) an
Affiliate of a Lender; (c) a commercial bank, trust company, savings and loan
association savings bank, insurance company, investment bank or pension fund
organized under the laws of the United States of America, any state thereof or
the District of Columbia, and having total assets in excess of $5,000,000,000;
or (d) a commercial bank organized under the laws of any other country which is
a member of the Organization for Economic Co-operation and Development, or a
political subdivision of any such country, and having total assets in excess of
$10,000,000,000, provided that such bank is acting through a branch or agency
located in the United States of America. No Borrower and no Affiliate of a
Borrower shall qualify as an Eligible Assignee.

      "Eligible First Mortgage Assets" means First Mortgage Assets that at all
times comply with the First Mortgage Assets Representations and Warranties set
forth on Exhibit "F" attached hereto.

      "Eligible Real Property Assets" means Real Property Assets that at all
times comply with the Real Property Assets Representations and Warranties set
forth on Exhibit "G" attached hereto.

      "Eligible Subordinated Assets" means Subordinated Assets that at all times
comply with the Subordinated Assets Representations and Warranties set forth on
Exhibit "H" attached hereto.

      "Environmental Affiliate" means any partnership, joint venture, trust,
limited liability company, corporation or other entity which is subject to an
Environmental Claim and which is a Consolidated Subsidiary of RAIT or, as to any
partnership, in which RAIT or a Consolidated Subsidiary is a general partner,
either directly or indirectly.

      "Environmental Approvals" means any permit, license, approval, ruling,
variance, exemption or other authorization required under applicable
Environmental Laws.

      "Environmental Claim" means, with respect to any Person, any notice,
claim, demand or similar communication (written or oral) by any other Person
alleging potential liability of such Person for investigatory costs, cleanup
costs, governmental response costs, natural resources damage, property damages,
personal injuries, fines or penalties arising out of, based on or

                                      -7-
<PAGE>

resulting from (i) the presence, or release into the environment, of any
Materials of Environmental Concern at any location, whether or not owned by such
Person or (ii) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law, in each case (with respect to both (i) and
(ii) above) as to which there is a reasonable possibility of an adverse
determination with respect thereto and which, if adversely determined, would
have a Material Adverse Effect on any Borrower.

      "Environmental Laws" means any and all federal, state, and local statutes,
laws, judicial decisions, regulations, ordinances, rules, judgments, orders,
decrees, plans, injunctions, permits, concessions, grants, licenses, agreements
and other governmental restrictions relating to the environment, the effect of
the environment on human health or to emissions, discharges or releases of
pollutants, contaminants, Materials of Environmental Concern or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, Materials of Environmental Concern or wastes or the
clean-up or other remediation thereof.

      "Equity Issuance" means any issuance by a Consolidated Party to any Person
which is not a Consolidated Party of (a) shares of its Capital Stock, (b) any
shares of its Capital Stock pursuant to the exercise of options or warrants or
(c) any shares of its Capital Stock pursuant to the conversion of any debt
securities to equity.

      "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.

      "ERISA Group" means RAIT, any Subsidiary and all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with RAIT or any Subsidiary, are treated as
a single employer under Section 414 of the Code.

      "Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.

      "Euro-Dollar Lending Office" means, as to each Lender, its office, branch
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Lender as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrowers and the Administrative Agent.

      "Euro-Dollar Loan" means a Committed Loan to be made by a Lender as a
Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing.

      "Event of Default" has the meaning set forth in Section 6.1.

      "Excepted Liens" shall mean: (i) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being contested in good
faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP; (ii) Liens in connection with worker's compensation,
unemployment insurance or other social security, old age pension or public
liability obligations not yet due or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in
accordance with GAAP; (iii) vendors', carriers', warehousemen's, repairmen's,
mechanics', workmen's,

                                      -8-
<PAGE>

materialmen's, construction or other like Liens arising by operation of law in
the ordinary course of business, each of which is either (a) subordinate to the
lien of the applicable Borrowing Base Asset or (b) been adequately insured or
bonded or (c) being contested in good faith by appropriate proceedings and for
which adequate reserves have been maintained in accordance with GAAP; (iv)
easements, rights of way, zoning restrictions and other similar Liens relating
to a Real Property Asset or Underlying Asset, which do not individually or in
the aggregate materially impair the use of such Real Property Asset or
Underlying Asset or materially impair the value of such Real Property Asset or
Underlying Asset subject thereto.

      "Exceptions Summary" has the meaning set forth in Section 5.19(a).

      "Expenses" means, when used with respect to any asset, the costs of
maintaining such asset which are the responsibility of the owner thereof,
including, without limitation, taxes, insurance, repairs and maintenance.

      "Extension Fee" means as to the Extension Period, twenty-five hundredths
of one percent (.25%) of the aggregate amount of Commitments then in effect as
of the date on which Borrowers deliver to the Administrative Agent the Notice to
Extend.

      "Extension Option" has the meaning set forth in Section 2.9(b).

      "Extension Period" has the meaning set forth in Section 2.9(b).

      "Facility" means the revolving credit facility established pursuant to
this Agreement.

      "Facility Amount" means two hundred and seventy million dollars
($270,000,000) subject to increase pursuant to Section 2.18 hereof or decrease
pursuant to Section 2.11 hereof.

      "Facility Interest Expense" means, as of any date of determination for a
particular period, an amount equal to the interest that would accrue during such
period on the Outstanding Balance on such date of determination at an interest
rate equal to the sum of (i) the Adjusted London Interbank Offered Rate on such
date of determination for an Interest Period of one (1) month plus (ii) the
Applicable Margin for Euro-Dollar Loans on such date of determination.

      "Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to KeyBank National Association on such day
on such transactions as determined by the Administrative Agent.

      "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System as constituted from time to time.

      "Fee Letter" means, collectively, that certain Fee Letter between the
Borrowers and KeyBank dated on or about the date hereof, as amended,
supplemented or otherwise modified from time to time.

                                      -9-
<PAGE>

      "Fees" means all fees payable or to be payable by the Borrowers as
provided for in Section 2.8 and in the Fee Letter.

      "First Mortgage Asset" means as to any Person, indebtedness owed to such
Person, which is not the subject of a bankruptcy or similar proceeding, is fully
performing as to payment and material nonpayment obligations thereunder and is
secured by a first Lien of a properly recorded mortgage, deed of trust or other
similar security instrument on a fee interest or a leasehold interest in real
property and all collateral security related thereto (regardless of whether such
Person's interest therein is characterized as equity according to GAAP).

      "Fitch" means Fitch, Inc. or any successor thereto.

      "Fixed Charge Coverage Ratio" means, as of the end of each fiscal quarter
of the Consolidated Parties for the quarterly period ending on such date, the
ratio of (a) EBITDA for the applicable period to (b) the sum of (i) Interest
Expense for the applicable period plus (ii) preferred dividends permitted
hereunder for the applicable period plus (iii) Scheduled Amortization Payments
for the applicable period.

      "Floating Rate Indebtedness" means, with respect to any Person,
Indebtedness of such Person which accrues interest at a rate which may vary
during the term of such Indebtedness (other than due solely to a default
thereunder).

      "Floating Rate Assets" means with respect to any Person, the assets of
such Person on the balance sheet of such Person which generate income that
fluctuates based on changes in interest rates.

      "Fronting Lender" means any Lender which is a party hereto which shall
issue a Letter of Credit with respect to such Notice of Borrowing, subject,
however, to the limitations set forth in Section 2.5. For purposes of this
Agreement, the Fronting Lender shall, unless and until the Administrative Agent
shall elect otherwise (subject, except during the continuance of an Event of
Default, to the prior written consent of the Borrower, which consent shall not
be unreasonably withheld, conditioned or delayed), be KeyBank.

      "Funded Indebtedness" means, with respect to any Person, without
duplication, all Indebtedness of such Person other than Indebtedness of the
types referred to in clauses (f) and (h) of the definition of "Indebtedness" set
forth in this Section 1.1.

      "GAAP" means generally accepted accounting principles recognized as such
in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and the Financial Accounting
Standards Board.

      "Group of Loans" means, at any time, a group of Loans consisting of (i)
all Committed Loans which are Alternate Base Rate Loans at such time, or (ii)
all Committed Loans which are Euro-Dollar Loans having the same Interest Period
at such time.

      "Guarantee Obligation" means as to any Person (the "guaranteeing person"),
without duplication, any obligation of (a) the guaranteeing person or (b)
another Person (including, without limitation, any bank under any letter of
credit) guaranteeing any Indebtedness, leases, dividends or other obligations
(the "primary obligations") of any other third Person (the "primary obligor") in
any manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such

                                      -10-
<PAGE>

primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or payment of any
such primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The terms "Guarantee" and
"Guaranteed" used as a verb shall have a correlative meaning.

      "Indebtedness" of any Person, without duplication, means, in each case
whether direct or contingent, (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, or upon which interest payments are customarily made,
(c) all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person, (d) all
obligations of such Person issued or assumed as the deferred purchase price of
property or services purchased by such Person (other than trade debt incurred in
the ordinary course of business and due within six months of the incurrence
thereof) which would appear as liabilities on a balance sheet of such Person,
(e) all indebtedness of others secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on, or payable out of the proceeds of production from, property owned
or acquired by such Person, whether or not the obligations secured thereby have
been assumed, (f) all Guarantee Obligations of such Person, (g) the principal
portion of all obligations of such Person under Capital Leases, (h) all
Derivative Exposure and other obligations of such Person in respect of interest
rate swap, collar, cap or other interest rate protection agreements, treasury
locks, equity forward contracts, foreign currency exchange agreements, commodity
purchase or option agreements or other interest or exchange rate or commodity
price hedging agreements (including, but not limited to, Match Funding
Agreements), (i) all obligations of such Person to repurchase any securities
which repurchase obligation is related to the issuance thereof, (j) the maximum
amount of all letters of credit issued or bankers' acceptances facilities
created for the account of such Person and, without duplication, all drafts
drawn thereunder (to the extent unreimbursed), (k) all preferred Capital Stock
issued by such Person and required by the terms thereof to be redeemed, or for
which mandatory sinking fund payments are due, by a fixed date, (l) all other
obligations of such Person under any arrangement or financing structure
classified as debt (for tax purposes) by any nationally recognized rating
agency, (m) the principal portion of all obligations of such Person for any Off
Balance Sheet Liabilities and (n) the indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer.

      "Indemnitee" has the meaning set forth in Section 9.3(b).

      "Initial Term" means the period of time commencing on the Effective Date
and ending on October 24, 2008.

      "Interest Coverage Ratio" means, with respect to the Consolidated Parties
for the quarterly period ending on the last day of any fiscal quarter of the
Consolidated Parties, the ratio of (a) EBITDA for such period to (b) Interest
Expense for such period.

      "Interest Expense" means, for any period, the sum of (a) interest expense
(including, without limitation, the interest component under Capital Leases and
with respect to Off Balance

                                      -11-
<PAGE>
Sheet Liabilities) of the Consolidated Parties for such period, as determined in
accordance with GAAP, plus (b) an amount equal to the aggregate of interest
expense (including the interest component under Capital Leases and with respect
to any Off Balance Sheet Liabilities), as determined in accordance with GAAP, of
each Non-Wholly-Owned Subsidiary multiplied by the proportion thereof owned by
the Consolidated Parties.

      "Interest Payment Date" means (a) as to Alternate Base Rate Loans, the
first day of each calendar month (as to interest through the end of the prior
calendar month) and the Maturity Date and (b) as to Euro-Dollar Loans, the last
day of each applicable Interest Period and the Maturity Date, and, where the
applicable Interest Period for a Euro-Dollar Loan is greater than three months,
the date that is three months from the beginning of the Interest Period and each
three month anniversary thereof.

      "Interest Period" means:

            (a) with respect to each Euro-Dollar Borrowing, the period
commencing on the date of such Borrowing specified in the applicable Notice of
Borrowing or on the date specified in the applicable Notice of Interest Rate
Election and ending one, two, three or six months thereafter, as the Borrower
may elect in the applicable Notice of Borrowing or Notice of Interest Rate
Election; provided that:

                  (i) any Interest Period which would otherwise end on a day
      which is not a Euro-Dollar Business Day shall be extended to the next
      succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
      falls in another calendar month, in which case such Interest Period shall
      end on the immediately preceding Euro-Dollar Business Day;

                  (ii) any Interest Period which begins on the last Euro-Dollar
      Business Day of a calendar month (or on a day for which there is no
      numerically corresponding day in the calendar month at the end of such
      Interest Period) shall, subject to clause (iii) below, end on the last
      Euro-Dollar Business Day of a calendar month; and

                  (iii) if any Interest Period includes a date on which a
      payment of principal of the Loans is required to be made under Section
      2.10 but does not end on such date, then (x) the principal amount (if any)
      of each Euro-Dollar Loan required to be repaid on such date shall have an
      Interest Period ending on such date and (y) the remainder (if any) of each
      such Euro-Dollar Loan shall have an Interest Period determined as set
      forth above.

            (b) With respect to each Alternate Base Rate Borrowing, the period
commencing on the date of such Borrowing specified in the applicable Notice of
Borrowing or on the date specified (or deemed specified) in the applicable
Notice of Interest Rate Election and ending on the last day of the calendar
month in which such Notice of Borrowing or Notice of Interest Rate Election was
made (or deemed made); provided that if any Interest Period includes a date on
which a payment of principal of the Loans is required to be made under Section
2.13 but does not end on such date, then (i) the principal amount (if any) of
each Alternate Base Rate Loan required to be repaid on such date shall have an
Interest Period ending on such date and (ii) the remainder (if any) of each such
Alternate Base Rate Loan shall have an Interest Period determined as set forth
above.

      "KeyBank" means KeyBank National Association and its successors.


                                      -12-
<PAGE>
      "Legal Rate" has the meaning set forth in Section 9.17.

      "Lender" means each lender listed on the signature pages hereof, each
Assignee which becomes a Lender pursuant to Section 9.6(b), and their respective
successors.

      "Letter(s) of Credit" has the meaning set forth in Section 2.2.

      "Letter of Credit Fee" has the meaning set forth in Section 2.8(b).

      "Letter of Credit Collateral" has the meaning set forth in Section 6.4.

      "Letter of Credit Collateral Account" has the meaning set forth in Section
6.4.

      "Letter of Credit Documents" has the meaning set forth in Section 2.16.

      "Letter of Credit Usage" means at any time the sum of (i) the aggregate
maximum amount available to be drawn under the Letters of Credit then
outstanding, assuming compliance with all requirements for drawing referred to
in such Letters of Credit, and (ii) the aggregate amount which has been drawn
under Letters Credit but for which the applicable Fronting Lender and/or Lenders
have not been reimbursed at such time.

      "Leverage Ratio" means, as of any date of calculation, the ratio of (i)
Total Liabilities to (ii) Total Assets of the Consolidated Parties.

      "Lien" means, with respect to any asset, any mortgage, lien (including any
tax lien or assessment), pledge, charge, security interest or encumbrance of any
kind, or any other type of preferential arrangement that has the effect of
creating a security interest. For purposes of this Agreement, the term "Lien"
shall not include any Excepted Lien. For the purposes of this Agreement, RAIT,
RAIT OP or any Consolidated Subsidiary shall be deemed to own subject to a Lien
any asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional or installment sales agreement, capital lease or
other title retention agreement relating to such asset.

      "Loan" means a Domestic Loan or a Euro-Dollar Loan and "Loans" means
Domestic Loans or Euro-Dollar Loans or any combination of the foregoing.

      "Loan Documents" means a collective reference to this Agreement, the
Notes, the Letter of Credit Documents and all other related agreements and
documents issued or delivered hereunder or thereunder or pursuant hereto or
thereto (in each case, as the same may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time).

      "London Interbank Offered Rate" has the meaning set forth in Section
2.7(c).

      "Margin Stock" has the meaning provided such term in Regulation U of the
Federal Reserve Board.

      "Match Funding Agreements" shall mean any and all agreements, devices or
arrangements, the counterparty to which has a Credit Rating of at least A- by
Standard & Poor's or A3 by Moody's or is otherwise acceptable to the
Administrative Agent, designed to protect any Consolidated Party which is a
party thereto from the fluctuations of interest rate, exchange rate or forward
rate differences between individual assets owned by a Consolidated Party and the
Indebtedness incurred by a Consolidated Party in connection with the origination
or financing of


                                      -13-
<PAGE>
such individual assets, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, Treasury locks, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants.

      "Material Adverse Effect" means an effect resulting from any circumstance
or event or series of circumstances or events, of whatever nature (but excluding
general economic conditions), which, taken as a whole, (i) does materially and
adversely affect the business, operations, properties, assets or financial
condition of RAIT, RAIT OP, RAIT SPE or any SPE Subsidiary or (ii) impairs the
ability of RAIT, RAIT OP, RAIT SPE or any SPE Subsidiary to fulfill its material
obligations, including, if applicable, their ability to perform their respective
obligations under the Loan Documents or which causes a Default under Section 5.8
hereof.

      "Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $1,000,000.

      "Materials of Environmental Concern" means and includes pollutants,
contaminants, wastes, toxic and hazardous substances, petroleum and petroleum
by-products.

      "Maturity Date" means the date when all of the Obligations hereunder shall
be due and payable which shall be October 24, 2008, unless accelerated pursuant
to the terms hereof, or extended pursuant to Section 2.9(b).

      "Moody's" means Moody's Investors Services, Inc. or any successor thereto.

      "Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.

      "Net Equity Proceeds" means the aggregate cash proceeds received by the
Consolidated Parties in respect of any Equity Issuance, net of (a) direct costs
(including, without limitation, legal, accounting and investment banking fees
and sales commissions) and (b) taxes paid or payable as a result thereof; it
being understood, (i) that "Net Equity Proceeds" shall include, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received by the Consolidated Parties in any Equity Issuance, and
(ii) that "Net Equity Proceeds" shall not include cash proceeds that are applied
within thirty (30) days of the date of the related Equity Issuance to retire
Capital Stock.

      "Net Income" means, for any period, net income or loss after taxes for
such period of the Consolidated Parties, as determined in accordance with GAAP.

      "Non-Wholly-Owned Subsidiary" means a Subsidiary which is not a Wholly
Owned Subsidiary.

      "Non-Recourse Debt" as to any Person means Indebtedness (i) for which the
right of recovery of the obligee thereof is limited to recourse against the
asset securing such Indebtedness (subject to such customary carve-out matters
for which such Person has a Guarantee Obligation made in connection with such
Indebtedness, such as fraud, misappropriation, bankruptcy, misapplication and
environmental indemnities, unless, until and for so long as a claim for


                                      -14-
<PAGE>
payment or performance has been made thereunder (which has not been satisfied)
at which time the obligations with respect to any such customary carve-out shall
not be considered Non-Recourse Debt, to the extent that such claim is a
liability of such Person for GAAP purposes) and/or (ii) other Indebtedness for
which such Person has no Guarantee Obligation (other than guarantees of
customary carve-out matters made in connection with such Indebtedness, such as
fraud, misappropriation, bankruptcy and misapplication, unless, until and for so
long as a claim for payment or performance has been made thereunder (which has
not been satisfied), at which time such guarantee of any such customary
carve-out shall not be considered Non-Recourse Debt of such Person, to the
extent that such claim is a liability of such Person for GAAP purposes).

      "Non-RAIT Plan" means any Plan other than a RAIT Plan.

      "Notes" means promissory notes of the Borrowers, substantially in the form
of Exhibit "A-1" hereto, evidencing the obligation of the Borrowers to repay the
Loans (other than Swing Loans), and substantially in the form of Exhibit "A-2"
hereto with respect to the Swing Lender evidencing the obligation of the
Borrowers to repay the Swing Loans, and "Note" means any one of such promissory
notes issued hereunder.

      "Notice of Borrowing" means a Notice of Committed Borrowing (as defined in
Section 2.3).

      "Notice of Interest Rate Election" has the meaning set forth in Section
2.6.

      "Notice to Extend" has the meaning set forth in Section 2.9(b).

      "Obligations" means all obligations, liabilities and indebtedness of every
nature of the Borrowers, from time to time owing to any Lender under or in
connection with this Agreement or any other Loan Document, including, without
limitation, (i) the outstanding principal amount of the Committed Loans at such
time, plus (ii) the Letter of Credit Usage at such time.

      "Off Balance Sheet Liabilities" means, with respect to any Person, any (a)
repurchase obligation or liability, contingent or otherwise, of such Person with
respect to any mortgages, mortgage notes, accounts or notes receivable sold,
transferred or otherwise disposed of by such Person, (b) repurchase obligation
or liability, contingent or otherwise, of such Person with respect to property
or assets leased by such Person as lessee and (c) obligations, contingent or
otherwise, of such Person under any synthetic lease, tax retention operating
lease, off balance sheet loan or similar off balance sheet financing, in each
case, if the transaction giving rise to such obligation (i) is considered
Indebtedness for borrowed money for tax purposes, and (ii) does not (and is not
required pursuant to GAAP to) appear as a liability on the balance sheet of such
Person.

      "Outstanding Balance" means at any time, and from time to time, the sum of
(i) the aggregate outstanding principal balance of all Loans and (ii) the Letter
of Credit Usage.

      "Parent" means, with respect to any Lender, any Person controlling such
Lender.

      "Participant" has the meaning set forth in Section 9.6(c).

      "Partnership" means any general or limited partnership, joint venture,
corporation, limited liability company, limited liability partnership, limited
liability limited partnership or


                                      -15-
<PAGE>
other Person which is not a natural Person or the estate of a deceased natural
Person and which owns directly an interest in real property.

      "PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.

      "Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.

      "Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees of
any member of the ERISA Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person which was at such time a
member of the ERISA Group for employees of any Person which was at such time a
member of the ERISA Group.

      "Preferred Securities" means any stock, shares or other such interests
(which is not the subject of a bankruptcy or similar proceeding) in and to a
Person primarily and directly engaged (directly or through a Subsidiary) in the
business of the ownership, operation and/or management of real property, the
terms of which stock, shares or other interests provide the holders of the
shares thereof with a liquidation preference in the assets of such Person in
relation to the holders of the common stock of such Person.

      "Prime Rate" means the rate of interest publicly announced by KeyBank from
time to time as its Prime Rate.

      "Property Expenses" means, with respect to any applicable time period for
any Real Property Asset, the costs of maintaining such Real Property Asset which
are the responsibility of the owner thereof, including, without limitation,
taxes, insurance, repairs and maintenance during such period.

      "Property NOI" means, with respect to any applicable time period for any
Real Property Asset, (a) Property Revenues for such period with respect to such
Real Property Asset less (b) the sum of (i) Property Expenses for such period
with respect to such Real Property Asset, plus (ii) the Capital Expenditure
Reserve amount for such Real Property Asset during such period, plus (iii) a
management fee in the amount of three percent (3%) of total revenues derived
from the Real Property Asset during such period; provided, that such amount
shall be exclusive of any adjustment for such period attributable to the
Straight-Lining of Rents; provided, further, that, in each case, all amounts
included in the above calculations shall be adjusted to account for any amounts
attributable to any interests held by any Consolidated Party in any
Non-Wholly-Owned Subsidiary.

      "Property Revenues" means, with respect to any applicable time period for
any Real Property Asset, the base rent, expense reimbursement and other
recurring rental income received during such period (other than prepaid rents
and revenues and security deposits except to the extent applied in satisfaction
of tenants' obligations for rent).


                                      -16-
<PAGE>
      "RAIT's 2004 Form 10-K" means RAIT's annual report on Form 10-K for 2004,
as filed with respect to RAIT with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.

      "RAIT's 2005 Form 10-Q" means the quarterly report on Form 10-Q for the
second calendar quarter in 2005, as filed with respect to RAIT with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934.

      "RAIT Plan" means a Plan in the ERISA Group sponsored, maintained or
contributed to by RAIT, RAIT OP or RAIT SPE.

      "Rating Agencies" means, collectively, S&P, Moody's and Fitch.

      "Real Property Assets" means, as of any time, the real property assets in
which RAIT or a Consolidated Subsidiary has a fee title ownership interest or
possesses a financeable leasehold interest at such time.

      "Recourse Debt" as to any Person means all Indebtedness other than
Non-Recourse Debt.

      "Refunded Swing Loan" has the meaning set forth in Section 2.1(c).

      "Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.

      "Required Lenders" means at any time Lenders having at least 66.67% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes and/or participations in Swing Loans and Letters of
Credit evidencing at least 66.67% of the aggregate unpaid principal amount of
the Loans and Letter of Credit Usage.

      "Scheduled Amortization Payments" means, for a given period, the sum of
(a) all scheduled payments of principal on Funded Indebtedness for the
Consolidated Parties for the applicable period ending on such date (including
the principal component of payments due on Capital Leases during the applicable
period), plus (b) an amount equal to the aggregate of all scheduled payments of
principal on Funded Indebtedness for each Non-Wholly-Owned Subsidiary for the
applicable period (including the principal component of payments due on Capital
Leases during the applicable period) multiplied by the proportional interest
thereof owned by each such entity; it being understood that Scheduled
Amortization Payments shall not include any one-time "bullet", "lump sum" or
"balloon" payments due in respect of Funded Indebtedness.

      "Secured Debt" means, for any given calculation date, the total aggregate
principal amount of any Indebtedness of the Consolidated Parties, that is (a)
secured in any manner by any Lien or (b) (other than Indebtedness incurred
hereunder) entitled to the benefit of a provision prohibiting the creation of a
Lien on any assets, plus without duplication, the aggregate of such Indebtedness
of each Non-Wholly-Owned Subsidiary multiplied by the proportional interest
thereof owned by each such entity.

      "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor thereto.


                                      -17-
<PAGE>
      "Solvent" means, with respect to any Person, that (i) the fair saleable
value of such Person's assets exceeds the Indebtedness of such Person, (ii) such
Person has the ability to generally pay its debts and other liabilities as they
become due in ordinary course of business and (iii) such Person has sufficient
capital to conduct its business in the ordinary course of business.

      "Special Purpose Entity" means any entity whose structure and
organizational and governing documents are in form and substance acceptable to
the Administrative Agent and which satisfies all of the following requirements:

                  (i) Its purpose shall be limited solely to, as applicable, (a)
            entering into this Agreement and the related Loan Documents, (b)
            borrowing Loans under this Agreement and obtaining Letters of Credit
            under this Agreement, (c) owning, originating, developing, holding,
            selling, leasing, transferring, exchanging, operating and managing
            the Borrowing Base Assets directly (including pursuant to
            contractual arrangements with servicers, property managers and the
            like, to the extent otherwise permitted pursuant to this Agreement
            and the subject entity's organizational documents) or through a SPE
            Subsidiary, and (d) transacting any and all lawful business for
            which it may be organized under its constitutive law that is
            incident, necessary and appropriate to accomplish the foregoing.

                  (ii) It does not own and will not own any asset or property
            other than (a) the Borrowing Base Assets, and/or (b) incidental
            personalty necessary for and used or to be used in connection with
            the ownership or operation of the Borrowing Base Assets.

                  (iii) It will not engage in any business other than the
            ownership, management, development, leasing, exchanging,
            transferring, origination and operation of the Borrowing Base
            Assets.

                  (iv) It will not enter into any contract or agreement with any
            Affiliate, any constituent party of itself, any of its owners, any
            guarantors of its obligations, or any Affiliate of any constituent
            party, owner or guarantor (collectively, the "Related Parties") of
            itself, other than the Asset Servicing Agreement, except upon terms
            and conditions that are intrinsically fair, commercially reasonable
            and substantially similar to those that would be available on an
            arms-length basis with third parties not so affiliated with itself
            or such Related Parties; provided, however, that loans and advances
            to RAIT SPE by RAIT OP with respect to the acquisition of Borrowing
            Base Assets shall not be subject to the provisions of this
            subsection (iv) (but shall be subject to subsection (v)(e), below).

                  (v) It has not incurred and will not incur any Indebtedness
            other than, as applicable, (a) under this Agreement and the related
            Loan Documents, (b) normal trade payables, (c) obligations to
            tenants of Eligible Real Property Assets to the extent disclosed to
            the Administrative Agent and the Lenders in connection with the
            approval of such Eligible Real Property Assets as Borrowing Base
            Assets, (d) future funding obligations as provided for in any loan
            documentation associated with any Eligible First Mortgage Asset or
            Eligible Subordinated Asset, to the extent disclosed to the
            Administrative Agent and the Lenders in connection with the approval
            of such Eligible First Mortgage Asset or Eligible Subordinated Asset
            as a Borrowing Base Asset, and (e) with respect to RAIT SPE,
            Indebtedness


                                      -18-
<PAGE>
            to RAIT OP under loans made from time to time by RAIT OP to RAIT SPE
            in connection with the acquisition or origination of a Borrowing
            Base Asset, provided that any such Indebtedness is subordinated to
            the Obligations pursuant to a subordination agreement in
            substantially the form of Exhibit I hereto.

                  (vi) It has not made and will not make any loans or advances
            to any Person (other than with respect to the Borrowing Base Assets)
            and shall not acquire obligations or securities of any Related
            Party.

                  (vii) It is and will remain Solvent and it will pay its debts
            and liabilities (including, as applicable, shared personnel and
            overhead expenses) from its assets as the same shall become due.

                  (viii) It has done or caused to be done and will do all things
            necessary to observe organizational formalities and preserve its
            existence, and, it will not, nor will it permit any Related Party
            to, amend, modify or otherwise change the partnership certificate,
            partnership agreement, articles of incorporation and bylaws,
            operating agreement, trust or other organizational documents of such
            entity or such Related Party without the prior written consent of
            the Administrative Agent, which consent shall not be unreasonably
            withheld or delayed unless such proposed amendment, modification or
            change would adversely affect such entity's existence as a single
            purpose entity, or would have a Material Adverse Effect.

                  (ix) It will maintain all of its books, records, financial
            statements and bank accounts separate from those of any other Person
            (except RAIT and RAIT OP) and its assets will not be listed as
            assets on the financial statement of any other Person (except RAIT
            and RAIT OP). It will file its own tax returns (or will be
            consolidated in the tax returns of RAIT) and will not file a
            consolidated federal income tax return with any other Person (except
            RAIT). It shall maintain its books, records, resolutions and
            agreements as official records.

                  (x) It will be a legal entity separate and distinct from any
            other Person (including any Affiliate or other related party), shall
            correct any known misunderstanding regarding its status as a
            separate entity, shall conduct business in its own name, and shall
            not identify itself or any of its Affiliates as a division or part
            of the other.

                  (xi) It will maintain adequate capital for the normal
            obligations reasonably foreseeable in a business of its size and
            character and in light of its contemplated business operations.

                  (xii) Neither it nor any Related Party will seek its own
            dissolution, winding up, liquidation, consolidation or merger in
            whole or in part, or the sale of its material assets to the extent
            that any such sale otherwise violates this Agreement.

                  (xiii) It will not commingle its assets with those of any
            other Person (other than as incidental to any servicing or
            management arrangements permitted by this Agreement and the entity's
            organizational documents), and will hold all of its assets in its
            own name or through a Wholly Owned Subsidiary.


                                      -19-
<PAGE>
                  (xiv) It will not guarantee or, except for its joint and
            several obligations under this Agreement, become obligated for the
            debts of any other Person, and, except for its joint and several
            obligations under this Agreement, does not and will not hold itself
            out as being responsible for the debts or obligations of any other
            Person.

                  (xv) If it is a limited partnership, at least one general
            partner, or if it is a general partnership, at least two general
            partners (each, an "SPC Party"), shall be a corporation whose sole
            asset is the interest in the Special Purpose Entity and each such
            SPC Party will at all times comply, and will cause it to comply,
            with each of the representations, warranties, and covenants
            contained in this definition of Special Purpose Entity as if such
            representation, warranty or covenant was made directly by such SPC
            Party. If it is a limited liability company, such limited liability
            company, shall comply with the requirements of part (xvi) of this
            definition of Special Purpose Entity. Upon the withdrawal or the
            disassociation of the SPC Party from the Special Purpose Entity, the
            Special Purpose Entity shall immediately appoint a new member whose
            articles of incorporation are substantially similar to those of the
            SPC Party.

                  (xvi) It shall at all times (except as permitted in the last
            sentence of this part (xvi) of this definition of Special Purpose
            Entity) have (if a corporation) or cause there to be one duly
            appointed member of the board of directors of each SPC Party (if the
            Special Purpose Entity is a limited partnership or, except as
            otherwise provided in this part (xvi) of the definition of Special
            Purpose Entity), if a limited liability company, a duly appointed
            manager, in each instance reasonably satisfactory to the
            Administrative Agent who is not at the time of initial appointment
            and has not been at any time during the preceding five (5) years
            (each an "Independent Director"): (i) a stockholder, director,
            officer, employee, partner, attorney or counsel of the Special
            Purpose Entity or such SPC Party or any Affiliate of either of them;
            provided, however, such Person may serve or have served as a
            director or analogous position with an Affiliate of the Special
            Purpose Entity or SPC Party if serving in a position analogous to
            that of an Independent Director; (ii) a customer, supplier or other
            Person who derives any of its purchases or revenues from its
            activities with the Special Purpose Entity or such SPC Party or any
            Affiliate of either of them; (iii) a Person controlling or under
            common control with any such stockholder, partner, customer,
            supplier or other Person (an employee of CT Corporation or a similar
            entity shall not be deemed to be under such common control with a
            supplier); or (iv) a member of the immediate family of any such
            stockholder, director, officer, employee, partner, customer,
            supplier or other Person. (As used herein, the term "control" means
            the possession, directly or indirectly, of the power to direct or
            cause the direction of management, policies or activities of a
            Person, whether through ownership of voting securities, by contract
            or otherwise). If it does not have an Independent Director because
            of the death, incapacity or resignation of such Independent
            Director, it shall, within ten (10) Business Days from receipt of
            notice or knowledge of such circumstances, cause the Independent
            Director in question to be replaced.

                  (xvii) It shall not cause or permit the board of directors of
            an SPC Party to take any action which, under the terms of any
            certificate of incorporation, by-


                                      -20-
<PAGE>
            laws or any voting trust agreement with respect to any common stock,
            requires the vote of any SPC Party unless at the time of such action
            there shall be at least one member who is an Independent Director.

                  (xviii) It shall not pledge its assets for the benefit of any
            other Person other than with respect to this Agreement and the Loan
            Documents.

                  (xix) It shall not voluntarily file or consent to the filing
            of a petition for bankruptcy, insolvency, reorganization, assignment
            for the benefit of creditors or similar proceeding under any federal
            or state bankruptcy, insolvency, reorganization or other similar law
            or otherwise seek any relief under any laws relating to the relief
            of debts or the protection of debtors generally, or admit in writing
            its inability to pay its debt's generally as they become due, or
            take action in furtherance of any such action, without the consent
            of each holder of any interest in such entity, and without the
            unanimous written consent of each applicable Independent Director.

                  (xxi) In the event that any Special Purpose Entity is a
            limited liability company, it will be a Delaware limited liability
            company having a sole member.

      "SPE Subsidiary" means a Subsidiary, 100% owned by RAIT SPE and which
complies at all times with the requirements of a Special Purpose Entity.

      "Straight-Lining of Rents" means, with respect to any lease, the method by
which rent received with respect to such lease is considered earned equally over
the term of such lease despite the existence of (i) any free rent periods under
such lease and (ii) any rent step-up provisions under such lease.

      "Subordinated Assets" means Subordinated Debt Assets and Preferred
Securities.

      "Subordinated Debt Assets" means as to any Person, mezzanine or other
subordinated indebtedness owed to such Person, which is not the subject of a
bankruptcy or similar proceeding, is fully performing as to payment and material
nonpayment obligations thereunder and is secured by (i) a Lien of a properly
recorded mortgage, deed of trust or other similar security instrument on a fee
interest or a leasehold interest in real property and all collateral security
related thereto, which indebtedness is subject to only to a first Lien of a
recorded mortgage, deed of trust or other similar security instrument or (ii) a
pledge of the direct or indirect ownership interests in the Person owing such
mezzanine or other indebtedness, which ownership interests are subject to no
other Lien.

      "Subsidiary" means any corporation or other entity of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other Persons performing similar functions are at the
time directly or indirectly owned by RAIT (or as to any SPE Subsidiary, RAIT
SPE).

      "Swing Lender" means KeyBank in its capacity as the Swing Lender under the
Swing Loan facility described in Section 2.1(b), and any successor in such
capacity.

      "Swing Loan" means a Loan made by the Swing Lender pursuant to Section
2.1(b).

      "Swing Loan Commitment" means Twenty-Five Million Dollars ($25,000,000).


                                      -21-
<PAGE>
      "Swing Loan Refund Amount" has the meaning set forth in Section 2.1(c).

      "Syndication Agent" means Bank of America, N.A., in its capacity as
Syndication Agent hereunder, and its permitted successors in such capacity in
accordance with the terms of this Agreement.

      "Term" has the meaning set forth in Section 2.9(a).

      "Termination Event" means, with respect to a RAIT Plan, or with respect to
a Non-RAIT Plan (but, as to any Non-RAIT Plan, only to the extent an event
described in (i) through (v) below would result in a Material Adverse Effect),
(i) a "reportable event", as such term is described in Section 4043 of ERISA
(other than a "reportable event" not subject to the provision for 30-day notice
to the PBGC), or an event described in Section 4062(e) of ERISA, (ii) the
withdrawal by any member of the ERISA Group from a Multiemployer Plan during a
plan year in which it is a "substantial employer" (as defined in Section
4001(a)(2) of ERISA), or the incurrence of liability by any member of the ERISA
Group under Section 4064 of ERISA upon the termination of a Multiemployer Plan,
(iii) the filing of a notice of intent to terminate any Plan under Section 4041
of ERISA, other than in a standard termination within the meaning of Section
4041 of ERISA, or the treatment of a Plan amendment as a distress termination
under Section 4041 of ERISA, (iv) the institution by the PBGC of proceedings to
terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or cause a trustee to be appointed to administer, any Plan
or (v) any other event or condition that would constitute grounds for the
termination of, or the appointment of a trustee to administer, any Plan or the
imposition of any liability or encumbrance or Lien on any Real Property Assets
or any member of the ERISA Group under ERISA.

      "Total Available Commitments" means, at any time of determination, the
lesser of (a) the aggregate amount of the Commitments at such time, or (b) the
then Borrowing Base Availability.

      "Total Assets" means, as to any Person as of any date, all assets of such
Person determined in accordance with GAAP, adjusted to give effect to the
proportional ownership of all Non-Wholly-Owned Subsidiaries.

      "Total Liabilities" means the sum of (i) total liabilities of the
Consolidated Parties, as determined in accordance with GAAP, plus (ii) an amount
equal to the aggregate of total liabilities, as determined in accordance with
GAAP, of each Non-Wholly-Owned Subsidiary multiplied by the proportional
interest thereof owned by of each such entity plus (iii) without duplication,
the Indebtedness of the Consolidated Parties plus (iv) without duplication, the
aggregate of Indebtedness of each Non-Wholly-Owned Subsidiary multiplied by the
proportional interest thereof owned by each such entity, as determined in
accordance with GAAP, plus (v) the total Contingent Obligations of the
Consolidated Parties; provided, that in each case, all of the above amounts not
otherwise adjusted to account for the proportional ownership interest of the
Consolidated Parties shall be adjusted to deduct therefrom the pro rata share of
such amounts allocable to the parties other than Consolidated Parties (except to
the extent any Consolidated Party would be legally liable for the full amount of
such liabilities).

      "Underlying Asset" means as to any First Mortgage Asset or Subordinated
Debt Asset, the real property encumbered thereby or, as to any Preferred
Securities, the real property which is owned directly by the Person in which the
Securities are part of the equity structure thereof.


                                      -22-
<PAGE>
      "Underlying Real Estate Value" means as to any Real Property Assets or any
Underlying Assets (a) the appraised value of the real property as reflected in
the most recent MAI appraisal in form and substance acceptable to the
Administrative Agent or (b) where no MAI appraisal is available, (i) the
annualized Property NOI for such property based upon the most recently completed
two fiscal quarters minus the Capital Replacement reserve, divided by (ii) the
Capitalization Rate.

      "Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a reasonably likely liability of a member of the ERISA Group
to the PBGC or any other Person under Title IV of ERISA.

      "United States" means the United States of America, including the fifty
states and the District of Columbia.

      "Unsecured Debt" means, for any given calculation date, the total
aggregate principal amount of Indebtedness of the Consolidated Parties, that is
not Secured Debt, including all Indebtedness in respect of obligations under any
capitalized leases, plus without duplication, the aggregate of such Indebtedness
of each Non-Wholly-Owned Subsidiary multiplied by the proportional interest
thereof owned by each such entity; it being understood that Unsecured Debt shall
not include principal amounts available to be drawn (but not drawn) under
outstanding commitments.

      "Unsecured Leverage Limit" means the sum of, without duplication:

                  (a) sixty-five percent (65%) of the Underlying Real Estate
            Value of all Real Property Assets owned by the Consolidated Parties,
            that are not subject to Liens;

                  (b) the lesser of (i) sixty-five percent (65%) of the
            Underlying Real Estate Value of Underlying Assets securing any First
            Mortgage Assets that are not subject to any Liens, and (ii) the Book
            Value of all First Mortgage Assets that are not subject to any
            Liens; and

                  (c) fifty percent (50%) of the Book Value of all Subordinated
            Assets that are not subject to any Liens.

      "Unused Commitment Fee" has the meaning set forth in Section 2.8(c).

      "Wholly Owned Subsidiary" means a Subsidiary of which one hundred percent
(100%) of the outstanding shares of stock or other equity interests are owned,
directly or indirectly, by a Borrower.

      Section 1.2 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP
applied on a basis consistent (except for changes concurred in by


                                      -23-
<PAGE>
RAIT's independent public accountants) with the most recent audited consolidated
financial statements of RAIT and its Consolidated Subsidiaries delivered to the
Administrative Agent; provided that, if the Borrowers notify the Administrative
Agent that the Borrowers wish to amend any covenant in Article V to eliminate
the effect of any change in GAAP on the operation of such covenant (or if the
Administrative Agent notifies the Borrowers that the Required Lenders wish to
amend Article V for such purpose), then the applicable Person's compliance with
such covenant shall be determined on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective until either such notice is
withdrawn or such covenant is amended in a manner reasonably satisfactory to the
Borrowers and the Required Lenders. All calculations with respect to the defined
terms and the covenants in Article V shall be done without duplication.

      Section 1.3 Types of Borrowings. The term "Borrowing" denotes the
aggregation of Loans of one or more Lenders to be made to the Borrowers pursuant
to Article II on the same date, all of which Loans are of the same type (subject
to Article VIII) and, except in the case of Alternate Base Rate Loans, have the
same Interest Period. Borrowings are classified for purposes of this Agreement
either by reference to the pricing of Loans comprising such Borrowing (e.g., a
"Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans) or by
reference to the provisions of Article II under which participation therein is
determined (i.e., a "Committed Borrowing" is a Borrowing under Section 2.1 in
which all Lenders participate in proportion to their Commitments).

                                   ARTICLE II
                                 THE COMMITMENTS

      Section 2.1 Commitments to Lend.

            (a) Loans. Each Lender severally agrees, on the terms and conditions
set forth in this Agreement, to make Committed Loans to the Borrowers or
participate in Letters of Credit issued by the Fronting Lender on behalf of
Borrowers pursuant to this Article from time to time during the term hereof in
amounts such that the aggregate principal amount of Committed Loans by such
Lender at any one time outstanding plus such Lender's pro rata share (based on
the ratio of its Commitment to the aggregate of all Commitments) of Swing Loans
outstanding and Letter of Credit Usage shall not exceed the amount of its
Available Commitment. The aggregate amount of Committed Loans (including Swing
Loans) together with the Letter of Credit Usage shall not exceed the lesser of
(i) the Facility Amount and (ii) the Total Available Commitments. The aggregate
dollar amount of Letters of Credit Usage shall not at any time exceed
Twenty-five Million Dollars ($25,000,000). Each Borrowing outstanding under this
Section 2.1 (other than a Borrowing in connection with a draw under a Letter of
Credit or a Swing Loan) shall be in an aggregate principal amount of $5,000,000
(for Euro-Dollar Loans) or $1,000,000 (for Alternate Base Rate Loans), or in
each case an integral multiple of $1,000,000 in excess thereof (except that any
such Borrowing may be in the aggregate amount available in accordance with
Section 3.2(c)) and (except for Swing Loans) shall be made from the several
Lenders ratably in proportion to their respective Commitments. Subject to the
limitations set forth herein, any amounts repaid may be reborrowed.

            (b) Swing Loans. During the Term, the Swing Lender agrees, on the
terms and conditions set forth in this Agreement, to make loans to the Borrowers
pursuant to this Section 2.1(b) from time to time in amounts such that (i) the
aggregate principal amount of


                                      -24-
<PAGE>
Swing Loans does not at any time exceed the Swing Loan Commitment, and (ii) the
Loans, together with the Letter of Credit Usage, do not exceed the amount
otherwise available pursuant to Section 2.1(a). Each Borrowing under this
Section 2.1(b) shall be in an aggregate principal amount of $1,000,000 or any
larger multiple of $100,000 (except that any such Borrowing may be in the
aggregate available amount of Swing Loans determined in accordance with the
immediately preceding sentence). Except as is otherwise provided for herein,
each Swing Loan made to the Borrowers by the Swing Lender shall be repaid by the
Borrowers or converted as provided for in Section 2.1(c) not later than the
third (3rd) Domestic Business Day following the date such Swing Loan is funded
by the Swing Lender. Within the foregoing limits, the Borrowers may borrow under
this Section 2.1(b), repay or, to the extent permitted by Section 2.11, prepay
Swing Loans and reborrow at any time during the Term under this Section 2.1(b).
The Borrower shall not be entitled to a Swing Line Advance unless all of the
terms and conditions for an advance (other than the advance notice required by
parts (x) or (y) of Section 2.2 hereof) including, but not limited to, those set
forth in Section 3.2 hereof, have been satisfied.

            (c) Conversion of Swing Loans to Loans. The Swing Lender shall, on
behalf of the Borrowers (which hereby irrevocably direct the Swing Lender to act
on their behalf), on notice given by the Swing Lender no later than 1:00 P.M.
(New York, New York time) on the second Domestic Business Day immediately
following the funding of any Swing Loan, request each Lender to make, and each
Lender hereby agrees to make, a Alternate Base Rate Loan, in an amount (with
respect to each Lender, its "Swing Loan Refund Amount") equal to such Lender's
ratable share of the aggregate Commitments with respect to the aggregate
principal amount of the Swing Loans (the "Refunded Swing Loans") outstanding on
the date of such notice, to repay the Swing Lender. Each Lender shall make such
Alternate Base Rate Loan available to the Administrative Agent at its address
specified in or pursuant to Section 9.1 in immediately available funds, not
later than 1:00 P.M. (New York, New York time), on the Domestic Business Day
immediately following the date of such notice. The Administrative Agent shall
pay the proceeds of such Alternate Base Rate Loans to the Swing Lender which
shall immediately apply such proceeds to repay Refunded Swing Loans. Effective
on the day such Alternate Base Rate Loans are made, the portion of the Swing
Loans so paid shall no longer be outstanding as Swing Loans, shall no longer be
due as Swing Loans under the Notes held by the Swing Lender, and shall be due as
Alternate Base Rate Loans under the respective Notes issued to the Lenders
(including the Swing Lender) in accordance with their ratable share of the
aggregate Commitments. The Borrowers authorize the Swing Lender to charge the
Borrowers' accounts with the Administrative Agent (up to the amount available in
each such account) in order to immediately pay the amount of such Refunded Swing
Loans to the extent amounts received from the Lenders are not sufficient to
repay in full such Refunded Swing Loans.

            (d) Purchase of Participations in Swing Loans. If, prior to the time
Loans would have otherwise been made pursuant to Section 2.1(c), one of the
events described in clause (f) or (g) of Section 6.1 with respect to any
Borrower shall have occurred and be continuing, each Lender shall, on the date
such Loans were to have been made pursuant to the notice referred to in Section
2.1(c) (the "Refunding Date"), purchase an undivided participating interest in
the Swing Loans in an amount equal to such Lender's Swing Loan Refund Amount. On
the Refunding Date, each Lender shall transfer to the Swing Lender, in
immediately available funds, such Lender's Swing Loan Refund Amount, and upon
receipt thereof the Swing Lender shall deliver to such Lender a Swing Loan
participation certificate dated the date of the Swing Lender's receipt of such
funds and in the Swing Loan Refund Amount of such Lender.


                                      -25-
<PAGE>
            (e) Payments on Participated Swing Loans. Whenever, at any time
after the Swing Lender has received from any Lender such Lender's Swing Loan
Refund Amount pursuant to Section 2.1(d), the Swing Lender receives any payment
on account of the Swing Loans in which the Lenders have purchased participations
pursuant to Section 2.1(d), the Swing Lender will promptly distribute to each
such Lender its ratable share (determined on the basis of the Swing Loan Refund
Amounts of all of the Lenders) of such payment (appropriately adjusted, in the
case of interest payments, to reflect the period of time during which such
Lender's participating interest was outstanding and funded); provided, however,
that in the event that such payment received by the Swing Lender is required to
be returned, such Lender will return to the Swing Lender any portion thereof
previously distributed to it by the Swing Lender.

            (f) Obligations to Refund or Purchase Participations in Swing Loans
Absolute. Each Lender's obligation to transfer the amount of a Loan to the Swing
Lender as provided in Section 2.1(c) or to purchase a participating interest
pursuant to Section 2.1(d) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Lender, the
Borrowers or any other Person may have against the Swing Lender or any other
Person, other than resulting from the Swing Lender's gross negligence or willful
misconduct in connection with making any such Swing Loan, (ii) the occurrence or
continuance of a Default or an Event of Default or the termination or reduction
of the Commitments, (iii) any adverse change in the condition (financial or
otherwise) of any Borrower or any other Person, (iv) any breach of this
Agreement by any Borrower, any other Lender or any other Person, or (v) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.

      Section 2.2 Notice of Committed Borrowing. The Borrowers shall give
Administrative Agent notice not later than (A) 12:00 noon (New York, New York
time) (x) one Domestic Business Day before each Alternate Base Rate Borrowing,
or (y) three Euro-Dollar Business Days before each Euro-Dollar Borrowing or (B)
10:00 a.m. (New York, New York time) on the date of each Borrowing of a Swing
Loan, specifying:

                  (i) the date of such Borrowing, which shall be a Domestic
      Business Day in the case of a Domestic Borrowing or a Euro-Dollar Business
      Day in the case of a Euro-Dollar Borrowing,

                  (ii) the aggregate amount of such Borrowing,

                  (iii) whether the Loans comprising such Borrowing are to be
      Alternate Base Rate Loans, Euro-Dollar Loans, or Swing Loans,

                  (iv) in the case of a Euro-Dollar Borrowing, the duration of
      the Interest Period applicable thereto, subject to the provisions of the
      definition of Interest Period,

                  (v) the Total Available Commitments,

                  (vi) the Outstanding Balance.

      Together with the notice to the Administrative Agent as specified
immediately above, the Borrowers shall deliver to the Administrative Agent a
completed, current certificate, identifying the Borrowing Base Assets against
which the Borrowing is being requested, setting forth the calculation of
Borrowing Base Availability, and providing other information concerning the


                                      -26-
<PAGE>
Borrowing Base and the Borrowers, in the form attached hereto as Exhibit D (a
"Borrowing Base Certificate").

      The Borrowers shall give the Administrative Agent and the designated
Fronting Lender, written notice that it desires to have Letters of Credit (a
"Letter of Credit") issued hereunder no later than 10:00 A.M., New York, New
York time, at least five (5) Domestic Business Days prior to the date of such
issuance. Each such notice shall specify (i) the designated Fronting Lender (if
other than KeyBank and, if not KeyBank, such other Fronting Lender shall be
subject to the approval of the Administrative Agent), (ii) the aggregate amount
of the requested Letters of Credit, (iii) the individual amount of each
requested Letter of Credit and the number of Letters of Credit to be issued,
(iv) the date of such issuance (which shall be a Domestic Business Day), (v) the
name and address of the beneficiary, (vi) the expiration date of the Letter of
Credit (which in no event shall be in excess of twelve (12) months from the date
of issuance or less than sixty (60) Domestic Business Days prior to the Maturity
Date), (vii) the purpose and circumstances for which such Letter of Credit is
being issued, (viii) the terms upon which such Letter of Credit may be drawn
down (which terms shall be approved by the Fronting Lender), (ix) the Total
Available Commitments, (x) the Borrowing Base Asset against which the issuance
of the Letter(s) of Credit is being requested and the Advance Rate of such
Letter(s) of Credit with respect to such Borrowing Base Asset (taking into
consideration the amount of all Borrowings and Letter of Credit Usage
outstanding with respect to such Borrowing Base Asset), including a
certification from the chief financial officer or chief accounting officer of
RAIT setting forth in reasonable detail the manner by which the foregoing
calculations have been made, and (xi) the Outstanding Balance. Together with the
notice to the Administrative Agent as specified immediately above, the Borrowers
shall deliver to the Administrative Agent a completed, current Borrowing Base
Certificate stating that, after taking into account the issuance of any such
Letter(s) of Credit, the Borrowers shall be in full compliance with all of the
covenants contained in Section 5.8 of this Agreement and that the requirements
with respect to the Advance Rates shall be met. Each such notice may be revoked
telephonically by Borrowers to each of the applicable Fronting Lender and the
Administrative Agent any time prior to the date of issuance of the Letter of
Credit by the applicable Fronting Lender, provided such revocation is confirmed
in writing by Borrowers to Fronting Lender and the Administrative Agent within
one (1) Domestic Business Day by facsimile. No later than 10:00 A.M. New York,
New York time on the date that is five (5) Domestic Business Days prior to the
date of issuance, Borrowers shall specify a precise description of the documents
and the verbatim text of any certificate to be presented by the beneficiary of
such Letter of Credit, which if presented by such beneficiary prior to the
expiration date of the Letter of Credit would require Fronting Lender to make a
payment under the Letter of Credit; provided that Fronting Lender may, in its
reasonable judgment, require reasonable changes in any such documents and
certificates only in conformity with changes in customary and commercially
reasonable practice or law and provided further, that no Letter of Credit shall
require payment against a conforming draft to be made thereunder on the
following Domestic Business Day that such draft is presented if such
presentation is made later than 10:00 A.M. New York, New York time (except that
if the beneficiary of any Letter of Credit requests at the time of the issuance
of its Letter of Credit that payment be made on the same Domestic Business Day
against a conforming draft, such beneficiary shall be entitled to such a same
day draw, provided such draft is presented to the applicable Fronting Lender no
later than 10:00 A.M. New York, New York time and provided further that, prior
to the issuance of such Letter of Credit, Borrowers shall have requested to
Fronting Lender and the Administrative Agent that such beneficiary shall be
entitled to a same day draw). In determining whether to pay on such Letter of
Credit, Fronting Lender shall be responsible only to determine that the


                                      -27-
<PAGE>
documents and certificates required to be delivered under the Letter of Credit
have been delivered and that they comply on their face with the requirements of
that Letter of Credit.

      Section 2.3 Notice to Lenders; Funding of Loans.

            (a) Upon receipt of a notice from Borrowers in accordance with
Section 2.2 hereof (each such notice being a "Notice of Committed Borrowing"),
the Administrative Agent shall, on the date such Notice of Committed Borrowing
is received by the Administrative Agent, notify each Lender of the contents
thereof and of such Lender's share of such Borrowing, of the interest rate
determined pursuant thereto and the Interest Period(s) (if different from those
requested by the Borrowers) and (unless such Notice of Committed Borrowing is
for the issuance of a Letter of Credit) such Notice of Committed Borrowing shall
not thereafter be revocable by the Borrowers, except as is otherwise
specifically provided for in this Agreement.

            (b) Not later than 1:00 p.m. (New York, New York time) on the date
of each Borrowing (including, without limitation, each Swing Borrowing) as
indicated in the Notice of Committed Borrowing, each Lender (or, in the case of
a Swing Loan, the Swing Lender) shall (except with respect to Notices of
Committed Borrowing for issuances of Letters of Credit) make available its share
of such Borrowing in Federal funds immediately available in New York, New York,
to the Administrative Agent at its address referred to in Section 9.1. If
Borrowers have requested the issuance of a Letter of Credit, no later than 12:00
Noon (New York, New York time) on the date of such issuance as indicated in the
Notice of Committed Borrowing, Fronting Lender shall issue such Letter of Credit
in the amount so requested and deliver the same to Borrower, with a copy thereof
to the Administrative Agent. Immediately upon the issuance of each Letter of
Credit by Fronting Lender, such Fronting Lender shall be deemed to have sold and
transferred to each other Lender, and each such other Lender shall be deemed to,
and hereby agrees to, have irrevocably and unconditionally purchased and
received from Fronting Lender, without recourse or warranty, an undivided
interest and a participation in such Letter of Credit, any drawing thereunder,
and the obligations of Borrowers hereunder with respect thereto, and any
security therefor or guaranty pertaining thereto, in an amount equal to such
Lender's ratable share thereof (based upon the ratio its Commitment bears to the
aggregate of all Commitments). Upon any change in any of the Commitments in
accordance herewith, there shall be an automatic adjustment to such
participations to reflect such changed shares. The applicable Fronting Lender
shall have the primary obligation to fund any and all draws made with respect to
such Letter of Credit notwithstanding any failure of a participating Lender to
fund its ratable share of any such draw. Unless the Administrative Agent
determines that any applicable condition specified in Article III has not been
satisfied, the Administrative Agent will instruct the applicable Fronting Lender
to make such Letter of Credit available to the Borrowers and such Fronting
Lender shall make such Letter of Credit available to the Borrowers at the
Borrowers' aforesaid address on the date of the issuance of such Letter of
Credit. Without in any way implying a right of Fronting Lender not to issue a
Letter of Credit as provided for herein, if a Fronting Lender shall fail to
issue a Letter of Credit (notwithstanding that the applicable conditions
specified in Article III have been satisfied), the Borrowers may designate a
substitute Fronting Lender, provided that the notice periods set forth in
Section 2.2(b) above shall begin anew.

            (c) Unless the Administrative Agent shall have received notice from
a Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (b) of this Section 2.3 and the Administrative Agent may, in


                                      -28-
<PAGE>
reliance upon such assumption, but shall not be obligated to, make available to
the Borrowers on such date a corresponding amount on behalf of such Lender. If
and to the extent that such Lender shall not have so made such share available
to the Administrative Agent, such Lender and, without prejudice with respect to
its rights and remedies against such Lender, the Borrowers, severally agree to
repay to the Administrative Agent, within one (1) Domestic Business Day
following receipt of demand, such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrowers until the date such amount is repaid to the Administrative Agent, at
(i) in the case of the Borrowers, a rate per annum equal to the higher of the
Federal Funds Rate and the interest rate applicable thereto pursuant to Section
2.6 and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender
shall repay to the Administrative Agent such corresponding amount, such amount
so repaid shall constitute such Lender's Loan included in such Borrowing for
purposes of this Agreement. If at any time, any Lender shall fail to make
available to the Administrative Agent such Lender's share of any such Borrowing,
as provided for in this Section 2.3(c), the Borrowers shall have the right, upon
five (5) Domestic Business Day's notice to the Administrative Agent to either
(x) cause a bank, reasonably acceptable to the Administrative Agent, to offer to
purchase the Commitments of such Lender for an amount equal to such Lender's
outstanding Loans, and to become a Lender hereunder, which offer such Lender is
hereby required to accept, or (y) to repay in full all Loans then outstanding of
such Lender, together with interest and all other amounts due thereon, upon
which event, such Lender's Commitment shall be deemed to be cancelled pursuant
to Section 2.11(c) and the Facility Amount shall be reduced by a corresponding
amount.

      Section 2.4 Notes.

            (a) The Loans of each Lender shall be evidenced by a single Note
payable to the order of such Lender for the account of its Applicable Lending
Office.

            (b) Each Lender may, by notice to the Borrowers and the
Administrative Agent, request that its Loans be evidenced by a separate Note in
an amount equal to the aggregate unpaid principal amount of such Loans. Any
additional costs incurred by the Administrative Agent, the Borrowers or the
Lenders in connection with preparing such a Note shall be at the sole cost and
expense of the Lender requesting such Note. In the event any Loans evidenced by
such a Note are paid in full prior to the Maturity Date, any such Lender shall
return such Note to the Borrowers. Each such Note shall be in substantially the
form of Exhibit A-1 hereto with appropriate modifications to reflect the fact
that it evidences solely Loans of the relevant type, or Exhibit A-2 with respect
to the Swing Lender. Each reference in this Agreement to the "Note" of such
Lender shall be deemed to refer to and include any or all of such Notes, as the
context may require.

            (c) Upon receipt of each Lender's Note pursuant to Section 3.1(a),
the Administrative Agent shall forward such Note to such Lender. Each Lender
shall record in its records the date, amount, type and maturity of each Loan
made by it and the date and amount of each payment of principal made by the
Borrowers with respect thereto, and may, if such Lender so elects in connection
with any transfer or enforcement of its Note, endorse on the appropriate
schedule appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding; provided that the failure of any
Lender to make any such recordation or endorsement shall not affect the
obligations of the Borrowers hereunder or under the Notes. Each Lender is hereby
irrevocably authorized by the Borrowers so to endorse its Note and to attach to
and make a part of its Note a continuation of any such schedule as and when
required.


                                      -29-
<PAGE>
            (d) The Loans shall mature, and the remaining principal amount
thereof shall be due and payable by the Borrowers, on the Maturity Date.

            (e) There shall be no more than eight (8) Interest Periods
applicable to the Euro-Dollar Loans outstanding at any one time. Notwithstanding
the foregoing, subject to the approval of the Administrative Agent, in the event
the Borrowers wish to combine one or more Euro-Dollar Loans into a single
Interest Period, the Borrowers may from time to time be entitled to select an
Interest Period of less than one month, with interest at a rate per annum equal
to the sum of (i) the Adjusted London Interbank Offered Rate on the date of
determination for an Interest Period of one (1) month plus (ii) the Applicable
Margin for Euro-Dollar Loans on such date of determination.

      Section 2.5 Letters of Credit.

            (a) Subject to the terms contained in this Agreement and the other
Loan Documents, upon the receipt of a Notice of Committed Borrowing requesting
the issuance of a Letter of Credit, Fronting Lender shall issue a Letter of
Credit or Letters of Credit in such form as is reasonably acceptable to
Borrowers, in an aggregate amount equal to the amount requested, provided that
after the issuance of such Letters of Credit, (i) the aggregate amount of issued
and outstanding Letters of Credit shall not exceed Twenty-Five Million Dollars
($25,000,000), and (ii) the Letter of Credit Usage, when added to the aggregate
principal amount of the Loans outstanding, shall not exceed the lesser of (y)
the Total Available Commitments, and (z) the Facility Amount. Fronting Lender
shall promptly notify Administrative Agent and each Lender of the issuance of
any such Letter of Credit, together with the amount thereof, simultaneously
therewith.

            (b) Each Letter of Credit shall be issued in the minimum aggregate
amount of One Million Dollars ($1,000,000) or any amount in excess thereof.

            (c) In the event of any request for a drawing under any Letter of
Credit by the beneficiary thereunder, Fronting Lender shall promptly notify
Borrowers and the Administrative Agent (and the Administrative Agent shall
promptly notify each Lender thereof) on or before the date on which Fronting
Lender intends to honor such drawing, and, except as provided in this subsection
(c), Borrowers shall reimburse Fronting Lender, in immediately available funds,
on the same day on which such drawing is honored in an amount equal to the
amount of such drawing. Notwithstanding anything contained herein to the
contrary, however, unless Borrowers shall have notified the Administrative Agent
and Fronting Lender prior to 10:00 a.m. (New York, New York time) on the date of
such drawing (provided that the same shall be a Domestic Business Day) that
Borrowers intend to reimburse Fronting Lender for the amount of such drawing
with funds other than the proceeds of the Loans, Borrowers shall be deemed to
have timely given a Notice of Committed Borrowing pursuant to Section 2.2 to the
Administrative Agent, requesting a Borrowing of Alternate Base Rate Loans on the
date on which such drawing is honored and in an amount equal to the amount of
such drawing. Each Lender shall, in accordance with Section 2.3(b), make
available its share of such Borrowing to the Administrative Agent, the proceeds
of which shall be applied directly by the Administrative Agent to reimburse
Fronting Lender for the amount of such draw. In the event that any Lender fails
to make available to Fronting Lender the amount of such Lender's participation
on the date of a drawing, Fronting Lender shall be entitled to recover such
amount on demand from such Lender together with interest at the Federal Funds
Rate commencing on the date of drawing.


                                      -30-
<PAGE>
            (d) If, after the date hereof, any change in any law or regulation
or in the interpretation thereof by any court or administrative or governmental
authority charged with the administration thereof shall either (a) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against letters of credit issued by, or assets held by, or deposits in or for
the account of, or participations in any letter of credit, upon any Lender
(including Fronting Lender) or (b) impose on any Lender any other condition
regarding this Agreement or such Lender (including Fronting Lender) as it
pertains to the Letters of Credit or any participation therein and the result of
any event referred to in the preceding clause (a) or (b) shall be to increase
the cost to the Fronting Lender or any Lender of issuing or maintaining any
Letter of Credit or participating therein then the Borrowers shall pay to the
Fronting Lender or such Lender, upon written demand therefor to the Borrowers
from the Administrative Agent (provided such demand is received by the Borrowers
within one hundred twenty (120) days following the date on which such increased
cost becomes effective as against the Fronting Lender or such Lender), such
additional amounts as shall be required to compensate the Fronting Lender or
such Lender for such increased costs or reduction in amounts received or
receivable hereunder together with interest thereon at the Federal Funds Rate
plus the Applicable Margin on Alternate Base Rate Loans at such time. The amount
specified in the written demand shall be conclusive in the absence of
demonstrable error.

            (e) Borrower hereby agrees to protect, indemnify, pay and save
Fronting Lender harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable,
actual attorneys' fees and disbursements) which Fronting Lender may incur or be
subject to as a result of (i) the issuance of the Letters of Credit, other than
as a result of the gross negligence or willful misconduct of Fronting Lender or
(ii) the failure of Fronting Lender to honor a drawing under any Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental authority
(collectively, "Governmental Acts"). As between Borrowers or any Fronting
Lender, Borrowers assume all risks of the acts and omissions of, or misuses of
the Letters of Credit issued by Fronting Lender by, the beneficiaries of such
Letters of Credit. In furtherance and not in limitation of the foregoing,
Fronting Lender shall not be responsible (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of such Letters of
Credit, even if it should in fact prove to be in any and all respects invalid,
insufficient, inaccurate, fraudulent or forged unless the Fronting Lender's
payment of under such Letter of Credit constitutes gross negligence or willful
misconduct; (ii) for the validity or insufficiency of any instrument
transferring or assigning or purporting to transfer or assign any such Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (iii) for
failure of the beneficiary of any such Letter of Credit to comply fully with
conditions required in order to draw upon such Letter of Credit unless the
Fronting Lender's acquiescence to such noncompliance constitutes gross
negligence or willful misconduct; (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any message, by mail, cable, telegraph,
telex, facsimile transmission, or otherwise; (v) for errors in interpretation of
any technical terms; (vi) for any loss or delay in the transmission or otherwise
of any documents required in order to make a drawing under any such Letter of
Credit or of the proceeds thereof; (vii) for the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of such Letter of
Credit; and (viii) for any consequence arising from causes beyond the control of
Fronting Lender including any Government Acts. None of the above shall affect,
impair or prevent the vesting of Fronting Lender's rights and powers hereunder.
In furtherance and extension and not in limitation of the specific provisions
hereinabove set forth, any action taken or omitted by Fronting Lender under or
in connection


                                      -31-
<PAGE>
with the Letters of Credit issued by it or the related certificates, if taken or
omitted in good faith, shall not put Fronting Lender under any resulting
liability to Borrowers.

            (f) If Fronting Lender or the Administrative Agent is required at
any time, pursuant to any bankruptcy, insolvency, liquidation or reorganization
law or otherwise, to return to any Borrower any reimbursement by any Borrower of
any drawing under any Letter of Credit, each Lender shall pay to Fronting Lender
or the Administrative Agent, as the case may be, its share of such payment, but
without interest thereon unless Fronting Lender or the Administrative Agent is
required to pay interest on such amounts to the person recovering such payment,
in which case with interest thereon, computed at the same rate, and on the same
basis, as the interest that Fronting Lender or the Administrative Agent is
required to pay.

      Section 2.6 Method of Electing Interest Rates.

            (a) The Loans included in each Borrowing shall bear interest
initially at the type of rate specified by the Borrowers in the applicable
Notice of Committed Borrowing. Thereafter, the Borrowers may from time to time
elect to change or continue the type of interest rate borne by each Group of
Loans (subject in each case to the provisions of Article VIII and except for any
Swing Loans), as follows:

                  (i) if such Loans are Alternate Base Rate Loans, the Borrowers
      may elect to convert such Loans to Euro-Dollar Loans as of any Euro-Dollar
      Business Day; or

                  (ii) if such Loans are Euro-Dollar Loans, the Borrowers may
      elect to convert such Loans to Alternate Base Rate Loans or elect to
      continue such Loans as Euro-Dollar Loans for an additional Interest
      Period, in each case effective on the last day of the then current
      Interest Period applicable to such Loans, or on such other date designated
      by Borrowers in the Notice of Interest Rate Election, provided Borrowers
      shall pay any losses pursuant to Section 2.13.

Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Administrative Agent at least three (3) Euro-Dollar
Business Days before the conversion or continuation selected in such notice is
to be effective. A Notice of Interest Rate Election may, if it so specifies,
apply to only a portion of the aggregate principal amount of the relevant Group
of Loans; provided that (i) such portion is allocated ratably among the Loans
comprising such Group, (ii) the portion to which such Notice of Interest Rate
Election applies, and the remaining portion to which it does not apply, are each
$500,000 or any larger multiple of $100,000, (iii) there shall be no more than
eight (8) Interest Periods applicable to the Euro-Dollar Loans outstanding at
any one time, (iv) no Loan may be continued as, or converted into, a Euro-Dollar
Loan when any Event of Default has occurred and is continuing, and (v) no
Interest Period shall extend beyond the Maturity Date.

      (b) Each Notice of Interest Rate Election shall specify:

                  (i) the Group of Loans (or portion thereof) to which such
      notice applies;

                  (ii) the date on which the conversion or continuation selected
      in such notice is to be effective, which shall comply with the applicable
      clause of subsection (a) above;


                                      -32-
<PAGE>
                  (iii) if the Loans comprising such Group of Loans are to be
      converted, the new type of Loans and, if such new Loans are Euro-Dollar
      Loans, the duration of the initial Interest Period applicable thereto; and

                  (iv) if such Loans are to be continued as Euro-Dollar Loans
      for an additional Interest Period, the duration of such additional
      Interest Period.

      Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.

            (c) Upon receipt of a Notice of Interest Rate Election from the
Borrowers pursuant to subsection (a) above, the Administrative Agent shall
notify each Lender the same day as it receives such Notice of Interest Rate
Election of the contents thereof, the interest rates determined pursuant thereto
and the Interest Periods (if different from those requested by the Borrowers)
and such Notice of Interest Rate Election shall not thereafter be revocable by
the Borrowers. If the Borrowers fail to deliver a timely Notice of Interest Rate
Election to the Administrative Agent for any Group of Euro-Dollar Loans, such
Loans shall be converted into a Euro-Dollar Loan with an Interest Period
applicable thereto of one (1) month.

      Section 2.7 Interest Rates.

            (a) Each Alternate Base Rate Loan shall bear interest on the
outstanding principal amount thereof, for each day from the date such Loan is
made until the date it is repaid or converted into a Euro-Dollar Loan pursuant
to Section 2.6 or at the Maturity Date, at a rate per annum equal to the
Alternate Base Rate for Alternate Base Rate Loans for such day. Such interest
shall be payable for each Interest Period on each Interest Payment Date.

            (b) Each Swing Loan shall bear interest on the outstanding principal
amount thereof at the rate applicable to Alternate Base Rate Loans.

            (c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin for
Euro-Dollar Loans for such day plus the Adjusted London Interbank Offered Rate
applicable to such Interest Period. Such interest shall be payable for each
Interest Period on each Interest Payment Date.

      The "Adjusted London Interbank Offered Rate" applicable to a particular
Interest Period shall mean a rate per annum equal to the product arrived at by
multiplying the London Interbank Offered Rate applicable to such Interest Period
by a fraction (expressed as a decimal), the numerator of which shall be the
number one and the denominator of which shall be the number one minus the
aggregate reserve percentages (expressed as a decimal) from time to time
established by the Board of Governors of the Federal Reserve System of the
United States and any other banking authority to which the Administrative Agent
is now or hereafter subject, including, but not limited to, any reserve on
Eurocurrency Liabilities as defined in Regulation D of the Board of Governors of
the Federal Reserve System of the United States at the ratios provided in such
Regulation from time to time, it being agreed that each Euro-Dollar Loan shall
be deemed to constitute Eurocurrency Liabilities, as defined by such Regulation,
and it being further agreed that such Eurocurrency Liabilities shall be deemed
to be subject to such reserve requirements without benefit of or credit for
prorations, exceptions or offsets that may be available to the Administrative
Agent from time to time under such Regulation and irrespective of whether the
Administrative Agent actually maintains all or any portion of such reserve.


                                      -33-
<PAGE>
      The "London Interbank Offered Rate" applicable to a particular Interest
Period shall mean a rate per annum equal to the rate for U.S. dollar deposits
with maturities comparable to such Interest Period as shown in Dow Jones Markets
(formerly Telerate) (Page 3750) as of 11:00 a.m., London time, two (2)
Euro-Dollar Business Days prior to the commencement of such Interest Period;
provided, however, that if such rate does not appear on Telerate Page 3750, the
"London Interbank Offered Rate" applicable to a particular Interest Period shall
mean a rate per annum equal to the rate at which U.S. dollar deposits in an
amount approximately equal to the applicable Euro-Dollar Loan(s), and with
maturities comparable to the last day of the Interest Period with respect to
which such London Interbank Offered Rate is applicable, are offered in
immediately available funds in the London Interbank Market to the London office
of the Administrative Agent by leading banks in the Eurodollar market at 11:00
a.m., London time, two (2) Euro-Dollar Business Days prior to the commencement
of the Interest Period to which such London Interbank Offered Rate is
applicable.

      "Telerate Page 3750" means the display designated as "Page 3750" on the
Bridge Telerate Capital Markets Report (or such other page as may replace Page
3750 on the Bridge Telerate Capital Markets Report or such other service as may
be nominated by the British Bankers' Association as the information vendor for
the purpose of displaying British Banker's Association interest settlement rates
for U.S. Dollar deposits). Any London Interbank Offered Rate determined on the
basis of the rate displayed on Telerate Page 3750 in accordance with the
provisions hereof shall be subject to corrections, if any, made in such rate and
displayed by the Bridge Telerate Capital Markets Report within one hour of the
time when such rate is first displayed by such Service.

            (d) In the event that, and for so long as, any Event of Default
shall have occurred and be continuing, the outstanding principal amount of the
Loans, and, to the extent permitted by applicable law, overdue interest in
respect of all Loans shall bear interest at the annual rate equal to the sum of
three percent (3%) plus the rate applicable to Alternate Base Rate Loans (the
"Default Rate"). Any amounts due and unpaid hereunder shall be payable upon
demand therefor.

            (e) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give prompt
notice to the Borrowers and the Lenders of each rate of interest so determined,
and its determination thereof shall be conclusive in the absence of demonstrable
error. The Administrative Agent shall send an invoice to the Borrowers setting
forth the interest due at least five (5) Domestic Business Days prior to any
Interest Payment Date, provided that failure to do so shall not affect the
Borrowers' obligations hereunder to pay interest. It is understood that the
Borrowers shall not be in Default under Section 6.1(a) as to interest for so
long as it shall pay in accordance with the provisions hereof any amounts
indicated on any such invoices or revised invoices.

      Section 2.8 Fees.

            (a) Fees. The Borrowers shall pay to the Administrative Agent (when
and as due for the benefit of KeyBank or KeyBanc Capital Markets, as applicable)
the Fees as provided for in the Fee Letter.

            (b) Letter of Credit Fee. During the Term, the Borrowers shall pay
to the Administrative Agent, for the account of the Lenders in proportion to
their interests in respective undrawn issued Letters of Credit, a fee (the
"Letter of Credit Fee") in an amount equal to the rate


                                      -34-
<PAGE>
per annum of the Applicable Margin for Euro-Dollar Loans on the daily average of
the amount undrawn and available under issued Letters of Credit, which fee shall
be payable, in arrears, on the first Domestic Business Day of each January,
April, July and October and on the Maturity Date, provided, that, from the
occurrence and during the continuance of an Event of Default, the Letter of
Credit Fee shall be increased to such Applicable Margin plus three percent (3%)
per annum on the daily average amount of such issued and undrawn Letters of
Credit.

            (c) Unused Commitment Fee. During the Term, the Borrowers shall pay
Administrative Agent for the account of the Lenders, ratably in proportion to
their respective Commitments and with respect to that period of time during any
applicable Commitment Fee Quarterly Period for which any such Lender or Lenders
had its respective Commitment or Commitments outstanding to the effect that the
Unused Commitment Fee shall be duly prorated, an annual commitment fee (the
"Unused Commitment Fee") in quarterly amounts equal to the product of (i) the
average daily difference during the three (3) month period immediately preceding
the due date of the Unused Commitment Fee installment (each such three month
period being the "Commitment Fee Quarterly Period") between (A) the aggregate
amount of the Commitments in effect from time to time, as such may be increased
or decreased from time to time pursuant to the terms of this Agreement, and (B)
the Outstanding Balance, multiplied by (ii) twenty-five basis points (.25%)
(fifteen basis points (.15%) if the resulting amount of (A) less (B) is less
than or equal to fifty percent (50%) of the Facility Amount) per annum (in each
case based upon a 360 day year) and (iii) the actual number of days in such
three (3) month period. For purposes of calculating the Unused Commitment Fee
hereunder, all Letters of Credit outstanding during the applicable Commitment
Fee Quarterly Period under this Agreement shall be deemed to be drawn. The
Unused Commitment Fee shall be payable quarterly, in arrears, on the first
Domestic Business Day of each January, April, July, and October during the Term
and on the Maturity Date. Notwithstanding the foregoing, (i) the installment of
the Unused Commitment Fee payable on January 1, 2006 shall be prorated for the
period commencing on the Closing Date and ending on December 31, 2005, and (ii)
the installment of the Unused Commitment Fee payable on the Maturity Date shall
be prorated for the period commencing on the payment date of the last quarterly
installment of the Unused Commitment Fee and ending on the Maturity Date.

            (d) Extension Fee. The Borrowers shall pay to the Administrative
Agent for the account of the Lenders ratably in proportion to their Commitments
the Extension Fee (provided, with respect to any Lender's share of such fee,
such Lender has honored its Commitment in accordance herewith) at the time, if
applicable, specified in Section 2.9(b).

            (e) Fronting Fee. In addition to the Letter of Credit Fee payable
pursuant to clause (b) above and in addition to all other fees payable pursuant
to the terms of this Agreement, the Borrowers promise, with respect to each
Letter of Credit, to pay to the Fronting Lender (i) a letter of credit fronting
fee (payable upon issuance or extension of each Letter of Credit) equal to the
greater of (A) of one-eighth of one percent (0.125%) on the maximum amount
available to be drawn under such Letter of Credit (whether or not such maximum
amount is then in effect under such Letter of Credit), and (B) $500, and (ii)
the customary charges from time to time of the Fronting Lender with respect to
the issuance, amendment, transfer, administration, cancellation and conversion
of, and drawings under, such Letters of Credit. Such fees shall be due and
payable on demand, shall be fully earned when paid and shall not be refundable
for any reason whatsoever. For purposes of this Section 2.8(e), each renewal of
any Letter of Credit, including an auto-renewal of any Letter of Credit, shall
be considered an issuance of a new Letter of Credit.


                                      -35-
<PAGE>
            (f) Fees Non-Refundable. All Fees set forth in this Section 2.8 and
in the Fee Letter shall be deemed to have been earned on the date payment is due
in accordance with the provisions hereof and thereof and shall be
non-refundable. The obligation of the Borrowers to pay such Fees in accordance
with the provisions hereof shall be binding upon the Borrowers and shall inure
to the benefit of the Administrative Agent and the Lenders regardless of whether
any Loans are actually made.

      Section 2.9 Maturity Date.

            (a) The term (the "Term") of the Commitments and the Swing Line
Commitments shall terminate and expire on the Maturity Date. Upon the date of
the termination of the Term, any Loans then outstanding (together with accrued
interest thereon) shall be due and payable on such date.

            (b) The Borrowers shall have one option (the "Extension Option") to
extend the Maturity Date for a period of one (1) year (the "Extension Period").
Subject to the conditions set forth below, the Borrowers may exercise the
Extension Option by delivering a written notice to the Administrative Agent not
more than ninety (90) days or less than sixty (60) days prior to the Maturity
Date (a "Notice to Extend"), stating that the Borrowers have elected to extend
the Maturity Date for one (1) year. The Borrowers delivery of the Notice to
Extend shall be irrevocable. The Borrowers' right to exercise the Extension
Option shall be subject to the following terms and conditions: (i) no Default or
Event of Default shall have occurred and be continuing either on the date the
Borrowers deliver the Notice to Extend to the Administrative Agent or on the
date that this Agreement would otherwise have terminated, (ii) the Borrowers
shall have paid the Extension Fee simultaneously with delivery of the Notice to
Extend, (iii) the Borrowers shall be in compliance with the provisions of
Section 5.8 hereof, and (iv) delivery by the Borrowers to the Administrative
Agent not less than ten (10) Domestic Business Days prior to the date on which
the Extension Period is to commence of a fully completed Continuing Compliance
Certificate of the chief financial officer or the chief accounting officer of
the Borrowers, in the form required pursuant to Section 5.1(c) and containing,
among other things, a certification that no Default or Event of Default shall
have occurred and be continuing. In the event that all of the terms and
conditions to the Borrowers' right to exercise the Extension Option are met
(including, without limitation, the timely delivery of the Notice to Extend),
the Maturity Date shall be extended to the final day of the Extension Period.

      Section 2.10 Mandatory Prepayment.

            (a) If at any time during the Term, the Outstanding Balance at such
time exceeds the amount of the Total Available Commitments (with the amount of
any such excess being referred to herein as the "Borrowing Base Deficit"), then
the Borrowers shall (provided no Event of Default then exists, in which event
this section shall be subject to the terms and provisions of Section 6.2) either
(i) immediately deliver to the Administrative Agent an Approval Request
proposing one or more additional assets for inclusion in the Borrowing Base
Assets Pool (subject to the approval of the Administrative Agent and Required
Lenders pursuant to Section 5.19), which, if accepted as Borrowing Base Assets,
would eliminate the Borrowing Base Deficit, or (ii) within two (2) Domestic
Business Days following the occurrence of such event, pay to the Administrative
Agent in cash, for the account of the Lenders, an amount equal to the Borrowing
Base Deficit, or (iii) undertake a combination of the alternatives permitted by
the foregoing clauses (i) and (ii), such that such combination would eliminate
the Borrowing Base Deficit. In the event that any asset proposed as a Borrowing
Base Asset in any Approval


                                      -36-
<PAGE>
Request submitted by the Borrowers pursuant to the foregoing sentence is not
approved in accordance with Section 5.19, the Borrowers shall immediately pay,
within two (2) Domestic Business Days following the date on which such Approval
Request is denied (or deemed denied), in cash, the amount such that, upon such
payment, no Borrowing Base Deficit will exist.

            (b) The Borrowers shall not sell, or voluntarily permit the full or
partial redemption, prepayment or refinancing of a Borrowing Base Asset unless,
after giving effect to such transaction, either (i) Borrowers shall remain in
compliance with the provisions hereof, including without limitation, the
Outstanding Balance will not exceed the Total Available Commitments, or (ii)
Borrowers shall, on or before such sale, prepay the Loans in an amount at least
equal to the amount required such that the Outstanding Balance will not exceed
the Total Available Commitments.

      Section 2.11 Optional Prepayments.

            (a) The Borrowers may, upon at least one (1) Domestic Business Day's
notice to the Administrative Agent, prepay any Alternate Base Rate Borrowing or
Swing Loan Borrowing in whole at any time, or from time to time in part in
amounts aggregating One Million Dollars ($1,000,000) or any larger multiple of
One Hundred Thousand Dollars ($100,000), by paying the principal amount to be
prepaid together with accrued interest thereon to the date of prepayment. Each
such optional prepayment shall be applied to prepay ratably the Loans of the
several Lenders included in such Borrowing.

            (b) The Borrowers may, upon at least three (3) Euro-Dollar Business
Days' notice to the Administrative Agent, prepay any Euro-Dollar Loan as of the
last day of the Interest Period applicable thereto. Except as provided in
Article VIII, the Borrowers may not prepay all or any portion of the principal
amount of any Euro-Dollar Loan prior to the end of the Interest Period
applicable thereto unless the Borrowers shall also pay any applicable expenses
pursuant to Section 2.13. The Administrative Agent shall notify the Borrowers of
any amounts due pursuant to Section 2.13 in connection with such prepayment
within one (1) Euro-Dollar Business Days after receipt of such notice of
prepayment from the Borrowers (but subject to the right to submit subsequently a
corrected statement). Each such optional prepayment shall be in the amounts set
forth in Section 2.11(a) above and shall be applied to prepay ratably the Loans
of the Lenders included.

            (c) The Borrowers may at any time and from time to time cancel all
or any part of the Commitments or Swing Line Commitments, in a minimum amount of
Ten Million Dollars ($10,000,000) or any larger multiple of One Million Dollars
($1,000,000), by the delivery to the Administrative Agent of a notice of
cancellation within the applicable time periods set forth in Sections 2.12(a)
and (b) if there are Loans then outstanding or, if there are no Loans
outstanding at such time as to which the Commitments with respect thereto are
being cancelled, upon at least one (1) Domestic Business Day's notice to the
Administrative Agent and the Swing Lender, if applicable, whereupon, in either
event, all or such portion of the Commitments, as applicable, shall terminate as
to the Lenders, pro rata on the date set forth in such notice of cancellation
(or, in the case of the Swing Line Commitment, all or such portion of the Swing
Line Commitment shall terminate as to the Swing Line Lender on the date set
forth in the such notice of cancellation), and, if there are any Loans or Swing
Loans then outstanding, Borrowers shall prepay, as applicable, all or such
portion of Loans outstanding on such date in accordance with the requirements of
Section 2.11(a) and (b). The Commitments may not be reduced to an amount less
than $100,000,000 except in the event of the termination of the


                                      -37-
<PAGE>
Commitments in full. Borrowers shall be permitted to designate in its notice of
cancellation which Loans, if any, are to be prepaid. In no event shall Borrowers
be permitted to cancel Commitments for which a Letter of Credit has been issued
and is outstanding unless Borrowers return such Letter of Credit, undrawn, to
the applicable Fronting Lender. The Facility Amount shall be reduced by the
dollar amount of any reduction of the Commitments pursuant to this Section
2.11(c).

            (d) The Borrowers may at any time return any undrawn Letters of
Credit to the Fronting Lender in whole, but not in part, and the Fronting Lender
shall promptly cancel such returned Letters of Credit and give the Borrowers,
the Administrative Agent and each of the Lenders notice of such cancellation.

            (e) Upon receipt of a notice of prepayment or cancellation or a
return of an undrawn Letter of Credit pursuant to this Section, the
Administrative Agent shall promptly notify each Lender of the contents thereof
and of such Lender's ratable share (if any) of such prepayment or cancellation
and such notice shall not thereafter be revocable by the Borrowers.

            (f) Any amounts so prepaid pursuant to Section 2.11(a) or (b) may be
reborrowed. In the event Borrowers elect to cancel all or any portion of the
Commitments pursuant to Section 2.11(c) hereof, such amounts may not be
reborrowed.

      Section 2.12 General Provisions as to Payments.

            (a) The Borrowers shall make each payment of interest on the Loans
and of Fees hereunder, not later than 12:00 noon (New York, New York time) on
the date when due, in Federal or other funds immediately available in New York,
New York, to the Administrative Agent at its address referred to in Section 9.1.
Such payments and all other payments made on account of the Loan Documents to
the Administrative Agent (provided such payments are made in accordance with
terms hereof) shall be deemed to have been properly made. The Administrative
Agent will promptly distribute to each Lender its ratable share of each such
payment received by the Administrative Agent for the account of the Lenders.
Whenever any payment of principal of, or interest on the Alternate Base Rate
Loans or of Fees shall be due on a day which is not a Domestic Business Day, the
date for payment thereof shall be extended to the next succeeding Domestic
Business Day. Whenever any payment of principal of, or interest on, the
Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day,
the date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon shall be payable for
such extended time.

            (b) Unless the Administrative Agent shall have received notice from
the Borrowers prior to the date on which any payment is due to the Lenders
hereunder that the Borrowers will not make such payment in full, the
Administrative Agent may assume that the Borrowers have made such payment in
full to the Administrative Agent on such date and the Administrative Agent may,
in reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrowers shall not have so made such payment, each Lender shall
repay to the Administrative Agent forthwith on demand such amount distributed to
such Lender together with


                                      -38-
<PAGE>
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.

      Section 2.13 Funding Losses. If (i) the Borrowers make any payment of
principal with respect to any Euro-Dollar Loan (pursuant to Article II, VI, VIII
or otherwise) on any day other than the last day of the Interest Period
applicable thereto (subject to Section 2.12(a) hereof), or (ii) the Borrowers
fail to borrow any Euro-Dollar Loans after notice has been given to any Lender
in accordance with Section 2.3(a), or (iii) Borrowers shall deliver a Notice of
Interest Rate Election specifying that a Euro-Dollar Loan shall be converted on
a date other than the last day of the then current Interest Period applicable
thereto, the Borrowers shall reimburse each Lender within three (3) Domestic
Business Days after Borrowers' receipt from the Administrative Agent of a
certification of such Lender of such loss or expense (which shall be delivered
by each such Lender to Administrative Agent for delivery to Borrowers not later
than ten (10) Domestic Business Days after such Lender incurred such loss or
expense) for any resulting loss or expense incurred by it (or by an existing or
prospective Participant in the related Loan), including (without limitation) any
loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after any such payment or
failure to borrow, provided that such Lender shall have delivered to
Administrative Agent and Administrative Agent shall have delivered to the
Borrowers a certification as to the amount of such loss or expense, which
certification shall set forth the basis for such loss or expense and shall be
conclusive in the absence of demonstrable error. Failure or delay on the part of
any Lender to demand compensation within the time periods set forth in this
Section shall constitute a waiver of such right to demand compensation.

      Section 2.14 Computation of Interest and Fees. All interest and Fees
payable under the Loan Documents shall be computed on the basis of a year of 360
days and paid for the actual number of days elapsed (including the first day but
excluding the last day).

      Section 2.15 Use of Proceeds. The Borrowers shall use the proceeds of the
Loans made hereunder and shall use the Letters of Credit issued hereunder only
for (i) the acquisition, financing or refinancing of direct or indirect
interests in real estate, (ii) the repayment of debt, and (iii) other general
corporate, partnership or limited liability company purposes (exclusive of the
purchase of Margin Stock) (the "Approved Uses").

      Section 2.16 Letter of Credit Usage Absolute. The reimbursement
obligations of the Borrowers under this Agreement in respect of any Letter of
Credit shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement and such other agreement or
instrument under all circumstances, including, without limitation, to the extent
permitted by law, the following circumstances:

            (a) any lack of validity or enforceability of any Letter of Credit
or any other agreement or instrument relating thereto (collectively, the "Letter
of Credit Documents") or any Loan Document;

            (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations of the Borrowers in respect of the
Letters of Credit or any other amendment or waiver of or any consent by the
Borrowers to departure from all or any of the Letter of Credit Documents or any
Loan Document, provided that no Fronting Lender shall consent to any such change
or amendment unless previously consented to in writing by the Borrowers;


                                      -39-
<PAGE>
            (c) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure from any guaranty,
for all or any of the obligations of the Borrowers in respect of the Letters of
Credit;

            (d) the existence of any claim, set-off, defense or other right that
the Borrowers may have at any time against any beneficiary or any transferee of
a Letter of Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), the Administrative Agent or any Lender (other than a
defense based on the gross negligence or willful misconduct of the
Administrative Agent, Fronting Lender or such Lender) or any other Person,
whether in connection with the Loan Documents, the transactions contemplated
hereby or by the Letters of Credit Documents or any unrelated transaction;

            (e) any draft or any other document presented under or in connection
with any Letter of Credit or other Loan Document proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; provided that payment by the Fronting
Lender under such Letter of Credit against presentation of such draft or
document shall not have constituted gross negligence or willful misconduct of
the Fronting Lender;

            (f) payment by the Fronting Lender against presentation of a draft
or certificate that does not comply with the terms of the Letter of Credit;
provided that such payment shall not have constituted gross negligence or
willful misconduct of the Fronting Lender; and

            (g) any other circumstance or happening whatsoever other than the
payment in full of all obligations hereunder in respect of any Letter of Credit
or any agreement or instrument relating to any Letter of Credit, whether or not
similar to any of the foregoing, that might otherwise constitute a defense
available to, or a discharge of, the Borrowers; provided that such other
circumstance or happening shall not have been the result of gross negligence or
willful misconduct of the Fronting Lender or any issuing Lender.

      Section 2.17 Joint and Several Obligations; Limitation on Liability.

            (a) The Obligations constitute the joint and several obligations of
each Borrower hereunder. Each Borrower hereby assumes, guarantees and agrees to
discharge all Obligations of each other Borrower hereunder. Anything herein or
in any other Loan Document to the contrary notwithstanding, the maximum
liability of each Borrower hereunder and under the other Loan Documents shall in
no event exceed the amount for which such Borrower can be liable under
applicable federal and state laws relating to the insolvency of debtors.

            (b) Notwithstanding any payment or payments made by any Borrower
(the "paying Borrower") hereunder or any set-off or application of funds of the
paying Borrower by any Lender, the paying Borrower shall not be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the other Borrower or any collateral security or guarantee or right of
offset held by any Lender for the payment of the Obligations, nor shall the
paying Borrower seek or be entitled to seek any contribution or reimbursement
from the other Borrower in respect of payments made by the paying Borrower
hereunder, until all amounts owing to the Administrative Agent and the Lenders
by the Borrowers on account of the Obligations are paid in full. If any amount
shall be paid to the paying Borrower on account of such subrogation rights at
any time when all of the Obligations shall not have been paid in full, such
amount shall be held by the paying Borrower in trust for the Administrative
Agent and the


                                      -40-
<PAGE>
Lenders, segregated from other funds of the paying Borrower, and shall,
forthwith upon receipt by the paying Borrower, be turned over to the
Administrative Agent in the exact form received by the paying Borrower (duly
indorsed by the paying Borrower to the Administrative Agent, if required), to be
applied against the Obligations, whether matured or unmatured, in such order as
the Administrative Agent may determine.

            (c) Each Borrower shall remain obligated hereunder notwithstanding
that, without any reservation of rights against such Borrower and without notice
to or further assent by such Borrower, any demand for payment of any of the
Obligations made by the Administrative Agent or any Lender may be rescinded by
such party and any of the Obligations continued, and the Obligations, or the
liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Lender, and this Agreement, the Notes and the other Loan Documents
and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Administrative Agent (or the Required Lenders, as the case may be) may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by the Administrative Agent or any Lender for the
payment of the Obligations may be sold, exchanged, waived, surrendered or
released. Neither of the Administrative Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Obligations or any property subject thereto. When making any
demand hereunder against any Borrower, the Administrative Agent or any Lender
may, but shall be under no obligation to, make a similar demand on the other
Borrower or any guarantor, and any failure by the Administrative Agent or any
Lender to make any such demand or to collect any payments from such other
Borrower or any guarantor or any release of such other Borrower or guarantor
shall not relieve the Borrower in respect of which a demand or collection is not
made or the Borrower not so released of its obligations or liabilities
hereunder, and shall not impair or affect the rights and remedies, express or
implied, or as a matter of law, of the Administrative Agent or any Lender
against any Borrower. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.

            (d) Each Borrower waives any and all notice of the creation,
renewal, extension or accrual of any of the Obligations and notice of or proof
of reliance by the Administrative Agent or any Lender upon such Borrower or
acceptance of the obligations of such Borrower under this Agreement, and the
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon the obligations of each Borrower under this Agreement; and all dealings
between the Borrowers, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon the obligations of all of the Borrowers.
Except as is otherwise specifically provided for in this Agreement or in the
other Loan Documents, each of the Borrowers waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
other Borrower or such Borrower with respect to the Obligations. Each Borrower
understands and agrees that it shall continue to be jointly and severally liable
under this Agreement and the other Loan Documents without regard to (a) the
validity, regularity or enforceability of this Agreement, any Note or any other
Loan Document, any of the Obligations or any other collateral security therefor
or guarantee or, except as is otherwise specifically provided for in this
Agreement or the other Loan Documents, right of offset with respect thereto at
any time or from time to time held by the Administrative Agent or any Lender,
(b) any


                                      -41-
<PAGE>
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the other
Borrower against the Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of such Borrower
or the other Borrower) which constitutes, or might be construed to constitute,
an equitable or legal discharge of the other Borrower for the Obligations, or of
such Borrower under this Agreement, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against any Borrower, the
Administrative Agent and any Lender may, but shall be under no obligation to,
pursue such rights and remedies as it may have against the other Borrower or any
other Person or against any collateral security or guarantee for the Obligations
or any right of offset with respect thereto, and any failure by the
Administrative Agent or any Lender to pursue such other rights or remedies or to
collect any payments from the other Borrower or any such other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the other Borrower or any such other Person
or any such collateral security, guarantee or right of offset, shall not relieve
such Borrower of any liability hereunder, and shall not impair or affect the
rights and remedies, whether express, implied or available as a matter of law,
of the Administrative Agent and the Lenders against such Borrower.

      Section 2.18 Increase in Facility Amount.

            (a) Request for Increase. Provided there exists no Default or Event
of Default, upon notice to the Administrative Agent (which shall promptly notify
the Lenders), the Borrowers may request an increase in the Facility Amount by an
aggregate amount not exceeding $80,000,000; provided that any such request for
an increase shall be in a minimum amount of $10,000,000. At the time of sending
such notice, the Borrowers (in consultation with the Administrative Agent) shall
specify the time period within which each Lender is requested to respond as to
whether such Lender agrees to increase the amount of its Commitment in
accordance with Section 2.18(b).

            (b) Lender Elections to Increase. Each Lender shall notify the
Administrative Agent within such time period whether or not it agrees to
increase its Commitment and, if so, by what amount (which need not be its pro
rata share thereof). Any Lender not responding within such time period shall be
deemed to have declined to increase its Commitment.

            (c) Notification by Administrative Agent; Additional Lenders. The
Administrative Agent shall notify the Borrowers and each Lender of the Lenders'
responses to each request made hereunder. To achieve the full amount of a
requested increase in the Facility Amount and subject to the approval of the
Administrative Agent and the Fronting Bank (which approvals shall not be
unreasonably withheld), the Borrowers may also invite additional Eligible
Assignees to become Lenders pursuant to a joinder agreement in form and
substance reasonably satisfactory to the Administrative Agent and its counsel.

            (d) Effective Date and Allocations. If the aggregate Commitments
(including due to new Commitments by additional Lenders) are increased in
accordance with this Section 2.18, the Administrative Agent and the Borrowers
shall determine the effective date (the "Increase Effective Date") and the final
allocation of such increase. The Administrative Agent shall promptly notify the
Borrowers and the Lenders (including any additional Lenders) of the final
allocation of such increase and the Increase Effective Date.


                                      -42-
<PAGE>
            (e) Conditions to Effectiveness of Increase. Any increase in the
Facility Amount pursuant to this Section 2.18 shall be subject to the following
conditions:

                  (i) The Borrowers shall have paid to (A) the Administrative
      Agent, such fees as shall be due to Administrative Agent at such time
      under the Fee Letter, and (B) to each Lender, such fees, if any, as shall
      have been agreed upon by the Borrower and the Administrative Agent.

                  (ii) As of the Increase Effective Date, no Default or Event of
      Default then exists or would result from such increase in the Facility
      Amount (including on a pro forma basis relative to financial covenant
      compliance).

                  (iii) The Borrowers shall have delivered to the Administrative
      Agent a certificate dated as of the Increase Effective Date (in sufficient
      copies for each Lender) (A) certifying and attaching the resolutions
      adopted by the Borrowers approving or consenting to such increase, and (B)
      certifying that, before and after giving effect to such increase, (1) the
      representations and warranties of the Borrowers in this Agreement and in
      each other Loan Document are true and correct on and as of the Increase
      Effective Date, except to the extent that such representations and
      warranties specifically refer to an earlier date, in which case, to the
      knowledge of the Borrowers, they are true and correct as of such earlier
      date, and except to the extent of changes resulting from transactions
      contemplated and permitted by this Agreement and changes occurring in the
      ordinary course of business (in each case to the extent not constituting a
      Default or Event of Default), (2) no Default or Event of Default exists or
      would result from such increase in the Facility Amount (including on a pro
      forma basis relative to financial covenant compliance), and (3) the
      incurrence of Indebtedness in an aggregate principal amount equal to the
      full Facility Amount after giving effect to all Commitment increases and
      new Commitments would not result in a breach of, or a default under, any
      agreement to which any Borrower is a party.

                  (iv) The Borrowers shall prepay any Committed Loans
      outstanding on the Increase Effective Date (and pay any additional amounts
      required pursuant to Section 2.13) to the extent necessary to keep the
      outstanding Committed Loans ratable with any revised Commitment
      allocations arising from any nonratable increase in the Commitments under
      this Section 2.18. Notwithstanding any provisions of this Agreement to the
      contrary, the Borrowers may borrow from the Lenders providing such
      increase in the Commitments (on a non pro rata basis with Lenders not
      providing such increase) in order to fund such prepayment.

                  (v) The Borrowers will execute and deliver to each applicable
      Lender a new Note in the appropriate stated amount, and will execute and
      deliver or otherwise provide to the Administrative Agent and the Lenders
      such other documents and instruments as the Administrative Agent or
      Lenders reasonably may require.

            (f) The provisions of this Section 2.18 shall not constitute a
"commitment" to lend, and the Commitments of the Lenders shall not be increased
until satisfaction of the provisions of this Section 2.18 and actual increase of
the Commitments as provided herein.

      Section 2.19 Revolving Facility. Except as otherwise specifically provided
for herein, the Facility is a revolving credit facility and, accordingly,
subject to the terms, provisions and conditions set forth in this Agreement,
amounts borrowed and repaid may be reborrowed.


                                      -43-
<PAGE>
      Section 2.20 Delinquent Lenders.

            (a) If for any reason any Lender shall fail or refuse to abide by
its obligations under this Agreement, including without limitation its
obligation to make available to the Administrative Agent its pro rata share of
any Loans, expenses or setoff (a "Delinquent Lender") and such failure is not
cured within two (2) Domestic Business Days of receipt from the Administrative
Agent of written notice thereof, then, in addition to the rights and remedies
that may be available to the Administrative Agent, the other Lenders, or the
Borrowers at law or in equity, and not in limitation thereof, (i) such
Delinquent Lender's right to participate in the administration of, or
decision-making rights related to, the Loans, this Loan Agreement or the other
Loan Documents shall be suspended during the pendency of such failure or
refusal, and (ii) a Delinquent Lender shall be deemed to have assigned any and
all payments due to it from the Borrowers, whether on account of outstanding
Loans, interest, fees or otherwise, to the non-delinquent Lenders for
application to, and reduction of, their proportionate shares of all outstanding
Loans until, as a result of application of such assigned payments the Lenders'
respective pro rata shares of all outstanding Loans shall have returned to those
in effect immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency. The Delinquent Lender's decision-making and
participation rights and rights to payments as set forth in clauses (i) and (ii)
hereinabove shall be restored only upon the payment by the Delinquent Lender of
its pro rata share of any Loans or expenses as to which it is delinquent,
together with interest thereon at the Default Rate from the date when originally
due until the date upon which any such amounts are actually paid.

            (b) The non-delinquent Lenders shall also have the right, but not
the obligation, in their respective, sole and absolute discretion, to acquire
for no cash consideration, (pro rata, based on the respective Commitments of
those Lenders electing to exercise such right) the Delinquent Lender's
Commitment to fund future Loans (the "Future Commitment"). Upon any such
purchase of the pro rata share of any Delinquent Lender's Future Commitment, the
Delinquent Lender's share in future Loans and its rights under the Loan
Documents with respect thereto shall terminate on the date of purchase, and the
Delinquent Lender shall promptly execute all documents reasonably requested to
surrender and transfer such interest, including, if so requested, an Assignment
and Acceptance. Each Delinquent Lender shall indemnify the Administrative Agent
and each non-delinquent Lender from and against any and all loss, damage or
expenses, including but not limited to reasonable attorneys' fees and funds
advanced by the Administrative Agent or by any non-delinquent Lender, on account
of a Delinquent Lender's failure to timely fund its pro rata share of a Loan or
to otherwise perform its obligations under the Loan Documents.

                                  ARTICLE III

                                   CONDITIONS

      Section 3.1 Closing. The closing hereunder shall occur on the date (the
"Closing Date") when each of the following conditions is satisfied (or waived by
the Administrative Agent and the Lenders), each document to be dated the Closing
Date unless otherwise indicated:

            (a) the Borrowers shall have executed and delivered to the
Administrative Agent a Note for the account of each Lender dated on or before
the Closing Date complying with the provisions of Section 2.4;


                                      -44-
<PAGE>
            (b) the Borrowers, the Administrative Agent and each of the Lenders
shall have executed and delivered to the Borrowers and the Administrative Agent
a duly executed original of this Agreement;

            (c) [reserved];

            (d) the Administrative Agent shall have received an opinion of
Ledgewood, counsel for the Borrowers, with respect to the Borrowers' due
authorization, execution and delivery of the Loan Documents, the enforceability
of the Loan Documents, and such other matters reasonably requested by the
Administrative Agent, such opinion to be reasonably acceptable to the
Administrative Agent and its counsel;

            (e) the Administrative Agent shall have received all documents the
Administrative Agent may reasonably request relating to the existence of the
Borrowers, the authority for and the validity of this Agreement and the other
Loan Documents, and any other matters relevant hereto, all in form and substance
satisfactory to the Administrative Agent. Such documentation shall include,
without limitation, (i) the organizational documents of RAIT, as amended,
modified or supplemented to the Closing Date, certified to be true, correct and
complete by an officer of RAIT as of a date not more than ten (10) days prior to
the Closing Date, together with a good standing certificate as to RAIT from the
Secretary of State (or the equivalent thereof) of Maryland, to be dated not more
than forty-five (45) days prior to the Closing Date, (ii) the partnership
agreement of RAIT OP, certified as of a date not more than ten (10) days prior
to the Closing Date, together with a certificate of existence as to RAIT OP from
the Secretary of State of Delaware, to be dated not more than forty-five (45)
days prior to the Closing Date, and (iii) the limited liability company
agreement of SPE, certified to be true, correct and complete by an officer of
RAIT SPE as of a date not more than ten (10) days prior to the Closing Date,
together with a certificate of existence as to RAIT SPE from the Secretary of
State of Delaware, to be dated not more than forty-five (45) days prior to the
Closing Date;

            (f) the Administrative Agent shall have received all certificates,
agreements and other documents and papers referred to in this Section 3.1 and
the Notice of Borrowing referred to in Section 3.2, if applicable, unless
otherwise specified, in sufficient counterparts, satisfactory in form and
substance to the Administrative Agent in its sole discretion;

            (g) the Administrative Agent shall have received a certificate or
certificates executed by an authorized officer of RAIT as of the Closing Date
stating that (A) each Consolidated Party is in compliance with all existing
financial obligations, (B) all governmental, shareholder and third party
consents and approvals necessary for the Borrowers to enter into the Loan
Documents and fully perform thereunder, if any, have been obtained, (C) no
action, suit, investigation or proceeding is pending or threatened in any court
or before any arbitrator or governmental instrumentality that purports to affect
any Consolidated Party or any transaction contemplated by the Loan Documents, if
such action, suit, investigation or proceeding could reasonably be expected to
have a Material Adverse Effect, and (D) immediately after giving effect to this
Loan Agreement, the other Loan Documents and all the transactions contemplated
therein to occur on such date, (1) each of the Borrowers is Solvent, (2) no
Default or Event of Default exists, (3) all representations and warranties
contained herein and in the other Loan Documents are true and correct in all
material respects, and (4) the Borrowers are in compliance with each of the
financial covenants set forth in Section 5.8 hereof.


                                      -45-
<PAGE>
            (h) the Borrowers shall have taken all actions required to authorize
the execution and delivery of this Agreement and the other Loan Documents and
the performance thereof by the Borrowers;

            (i) no development or event which has had or could reasonably be
expected to have a Material Adverse Effect shall have occurred since December
31, 2004;

            (j) the Administrative Agent shall have received wire transfer
instructions in connection with the Loans, if any, to be made on the Closing
Date;

            (k) the Administrative Agent shall have received, for its and any
other Lender's account, all Fees due and payable pursuant to Section 2.8 hereof
or pursuant to the Fee Letter on or before the Closing Date, and the Fees and
expenses accrued through the Closing Date of counsel to the Administrative Agent
with respect to the transactions contemplated hereby;

            (l) the Administrative Agent shall have received copies of all
consents, licenses and approvals, if any, required in connection with the
execution, delivery and performance by RAIT and the applicable Consolidated
Subsidiaries, and the validity and enforceability, of the Loan Documents, or in
connection with any of the transactions contemplated thereby, and such consents,
licenses and approvals shall be in full force and effect;

            (m) the Administrative Agent shall have received all available
financial information with respect to RAIT reasonably requested by it or any
Lender;

            (n) the Administrative Agent shall have received a completed current
Borrowing Base Certificate and a completed current Continuing Compliance
Certificate; and

            (o) the Administrative Agent shall have received satisfactory
reports (collectively, the "UCC Searches"), of UCC, tax lien, judgment and
litigation searches conducted by a search firm reasonably acceptable to
Administrative Agent with respect to the Borrowers, such searches to be
conducted by Borrowers' counsel in each of the locations specified by the
Administrative Agent.

      Section 3.2 Borrowings. The obligation of any Lender to make a Loan, other
than a Refunding Swing Loan, or to participate in any Letter of Credit issued by
the Fronting Lender and the obligation of the Fronting Lender to issue a Letter
of Credit is subject to the satisfaction of the following conditions (as
reasonably determined by the Administrative Agent):

            (a) receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.2 and 2.3;

            (b) receipt by the Administrative Agent of a fully completed
Borrowing Base Certificate stating that, after taking into account any such
Loan, the Borrowers shall be in full compliance with all of the covenants
contained in Section 5.8 of this Agreement and that the requirements with
respect to the Advance Rates shall be met;

            (c) immediately after such Borrowing or issuance of such Letter of
Credit, the Outstanding Balance will not exceed the aggregate amount of the
Total Available Commitments;


                                      -46-
<PAGE>
            (d) immediately before and after such Borrowing or issuance of such
Letter of Credit, no Default or Event of Default shall have occurred and be
continuing both before and after giving effect to the making of such Loans or
issuing of such Letters of Credit;

            (e) the representations and warranties of the Borrowers contained in
this Agreement shall be true and correct in all material respects on and as of
the date of such Borrowing both before and after giving effect to the making of
such Loans, except to the extent any such representation or warranty relates
solely to an earlier date;

            (f) no law or regulation shall have been adopted, no order, judgment
or decree of any governmental authority shall have been issued, and no
litigation shall be pending, which does or seeks to enjoin, prohibit or
restrain, the making or repayment of the Loans, the issuance of any Letter of
Credit or any participations therein or the consummation of the transactions
contemplated by this Agreement;

            (g) no event, act or condition shall have occurred after the Closing
Date which, in the reasonable judgment of the Administrative Agent or the
Required Lenders, as the case may be, has had or is likely to have a Material
Adverse Effect; and

            (h) immediately after such Borrowing or issuance of such Letter of
Credit, the aggregate outstanding undrawn issued Letters of Credit shall not
exceed Twenty-five Million Dollars ($25,000,000).

Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrowers on the date of such Borrowing as to the facts specified in clauses
(d), (e), (f), (g), and (h) (to the extent that Borrowers are aware of any
Material Adverse Effect) of this Section.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

      In order to induce the Administrative Agent and each of the Lenders which
is or may become a party to this Agreement to make the Loans, the Borrowers make
the following representations and warranties as of the Closing Date. Such
representations and warranties shall survive the effectiveness of this
Agreement, the execution and delivery of the other Loan Documents and the making
of the Loans.

      Section 4.1 Existence and Power. RAIT is a trust, duly formed, validly
existing and in good standing as a corporation under the laws of Maryland and
has all powers and all material governmental licenses, authorizations, consents
and approvals required to own its property and assets and carry on its business
as now conducted or as it presently proposes to conduct and has been duly
qualified and is in good standing in every jurisdiction except where the failure
to have such licenses, authorizations, consents or approvals or to be so
qualified and/or in good standing is not likely to have a Material Adverse
Effect. RAIT OP is a limited partnership, duly formed, validly existing and in
good standing as a limited partnership under the laws of Delaware and has all
powers and all material governmental licenses, authorizations, consents and
approvals required to own its property and assets and carry on its business as
now conducted or as it presently proposes to conduct and has been duly qualified
and is in good standing in every jurisdiction except where the failure to have
such licenses, authorizations, consents or approvals or to be so qualified
and/or in good standing is not likely to have a Material Adverse Effect. RAIT
SPE is a single-purpose limited liability company, wholly-owned by RAIT OP and
duly


                                      -47-
<PAGE>
formed and validly existing as a limited liability company under the laws of
Delaware and has all powers and all material governmental licenses,
authorizations, consents and approvals required to own its property and assets
and carry on its business as now conducted or as it presently proposes to
conduct and has been duly qualified and is in good standing in every
jurisdiction except where the failure to have such licenses, authorizations,
consents or approvals or to be so qualified and/or in good standing is not
likely to have a Material Adverse Effect. RAIT SPE's sole purpose is, and shall
remain, the ownership of the Borrowing Base Assets from time to time in the
Borrowing Base Assets Pool.

      Section 4.2 Power and Authority. Each Borrower has the trust, corporate,
partnership or limited liability company power, as applicable, and authority to
execute, deliver and carry out the terms and provisions of each of the Loan
Documents to which it is a party and has taken all necessary trust, corporate,
partnership or limited liability company action, as applicable, to authorize the
execution and delivery on behalf of such Borrower and the performance by such
Borrower of such Loan Documents. Each Borrower has duly executed and delivered
each Loan Document to which it is a party in accordance with the terms of this
Agreement, and each such Loan Document constitutes the legal, valid and binding
obligation of such Borrower, enforceable in accordance with its terms, except as
enforceability may be limited by applicable insolvency, bankruptcy or other laws
affecting creditors rights generally, or general principles of equity, whether
such enforceability is considered in a proceeding in equity or at law.

      Section 4.3 No Violation. Neither the execution, delivery or performance
by or on behalf of any Borrower of the Loan Documents to which it is a party,
nor compliance by any Borrower with the terms and provisions thereof nor the
consummation of the transactions contemplated by the Loan Documents, (i) will
materially contravene any applicable provision of any law, statute, rule,
regulation, order, writ, injunction or decree of any court or governmental
instrumentality, or (ii) will materially conflict with or result in any breach
of, any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of such Borrower
or any Consolidated Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, or other agreement or other instrument to which such
Borrower (or of any partnership of which such Borrower is a partner) or any
Consolidated Subsidiaries is a party or by which it or any of its property or
assets is bound or to which it is subject, or (iii) will cause a material
default by such Borrower under any organizational document of any Person in
which such Borrower has an interest, or cause a material default under such
Borrowers' limited liability company agreement, partnership agreement, trust
agreement or articles of incorporation or by-laws, as applicable.

      Section 4.4 Financial Information

            (a) The consolidated balance sheet of RAIT and its Consolidated
Subsidiaries dated as of December 31, 2004 and the related consolidated
statements of RAIT's financial position for the fiscal year then ended, audited
by Grant Thorton LLP and set forth in RAIT's 2004 Form 10-K, a copy of which has
been delivered to the Administrative Agent, fairly present, in conformity with
GAAP, the consolidated financial position of RAIT and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such fiscal year.

            (b) The consolidated statements of RAIT's financial position as set
forth in RAIT's 2005 Form 10-Q for the second calendar quarter of 2005, a copy
of which has been


                                      -48-
<PAGE>
delivered to the Administrative Agent, fairly present, in conformity with GAAP,
the consolidated financial position of RAIT and its Consolidated Subsidiaries as
of such dates and their consolidated results of operations and cash flows for
such periods.

            (c) Since RAIT's most recent Form 10-Q, (i) nothing has occurred
having a Material Adverse Effect, and (ii) except as set forth on Schedule
4.4(c), RAIT has not incurred any material Indebtedness or Contingent
Obligation.

      Section 4.5 Litigation. Except as disclosed in Schedule 4.5 attached
hereto, there is no action, suit or proceeding pending against, or to the
knowledge of the Borrowers threatened against or affecting, (i) any Borrower or
any Consolidated Subsidiary, (ii) the Loan Documents or any of the transactions
contemplated by the Loan Documents or (iii) any of their assets, before any
court or arbitrator or any governmental body, agency or official in which there
is a reasonable possibility of an adverse decision which could, individually, or
in the aggregate have a Material Adverse Effect or which in any manner draws
into question the validity of this Agreement or the other Loan Documents.

      Section 4.6 Compliance with ERISA(a) With respect to each RAIT Plan, and
each Non-RAIT Plan (but , as to any Non-RAIT Plan, only to the extent that the
failure to do so would have a Material Adverse Effect), each member of the ERISA
Group has fulfilled its obligations under the minimum funding standards of ERISA
and the Code with respect to each Plan and is in compliance in all material
respects with the presently applicable provisions of ERISA and the Code with
respect to each Plan. With respect to each RAIT Plan, and each Non-RAIT Plan
(but, as to any Non-RAIT Plan, only to the extent that the occurrence of any of
(i) through (iii) below would cause a Material Adverse Effect), no member of the
ERISA Group has (i) sought a waiver of the minimum funding standard under
Section 412 of the Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or made any amendment
to any Plan, which failure to make contribution or payment or making of any
amendment has resulted or would result in the imposition of a Lien or the
posting of a bond or other security under ERISA or the Code or (iii) incurred
any liability under Title IV of ERISA other than liability to the PBGC for
premiums under Section 4007 of ERISA.

            (b) The transactions contemplated by the Loan Documents will not
constitute a nonexempt prohibited transaction (as such term is defined in
Section 4975 of the Code or Section 406 of ERISA) that could subject the
Administrative Agent or the Lenders to any tax or penalty or prohibited
transactions imposed under Section 4975 of the Code or Section 502(i) of ERISA
by reason of the assets of any Borrower being plan assets within the meaning of
the Department of Labor Regulation Section 2510.3-101 of Section 401 of ERISA or
in connection with any Plan or Benefit Arrangement.

      Section 4.7 Borrowing Base Assets. Each and every representation and
warranty with respect to (i) First Mortgage Assets within the Borrowing Base
Assets Pool as set forth on "Exhibit "F" hereto are true and correct as of the
date hereof, (ii) the Real Property Assets within the Borrowing Base Assets Pool
as set forth on Exhibit "G" hereto are true and correct as of the date hereof,
and (iii) Subordinated Assets within the Borrowing Base Assets Pool as set forth
on Exhibit "H" hereto are true and correct as of the date hereof.

      Section 4.8 Environmental Matters. In the ordinary course of its business,
the Borrowers conduct periodic reviews of the effect of Environmental Laws on
the business, operations and properties of the Borrowers and the Consolidated
Subsidiaries, including without


                                      -49-
<PAGE>
limitation, the Real Property Assets and the Underlying Assets, in the course of
which it identifies and evaluates associated liabilities and costs (including,
without limitation, any capital or operating expenditures required for clean-up
or closure of properties presently owned, any capital or operating expenditures
required to achieve or maintain compliance with environmental protection
standards imposed by law or as a condition of any license, permit or contract,
any related constraints on operating activities, and any actual or potential
liabilities to third parties, including employees, and any related costs and
expenses). On the basis of this review, the Borrowers have reasonably concluded
that such associated liabilities and costs, including the costs of compliance
with Environmental Laws, are unlikely to have a Material Adverse Effect on the
Borrowers and their Consolidated Subsidiaries.

      Section 4.9 Taxes. United States Federal income tax returns of the
Borrowers and the Consolidated Subsidiaries have been prepared and filed through
the fiscal year ended December 31, 2004. The Borrowers and their Consolidated
Subsidiaries have filed all United States Federal income tax returns and all
other material tax returns which are required to be filed by them and have paid
all taxes due pursuant to such returns or pursuant to any assessment received by
the Borrowers or any Consolidated Subsidiary. The charges, accruals and reserves
on the books of the Borrowers and the Consolidated Subsidiaries in respect of
taxes or other governmental charges are, in the opinion of the Borrowers,
adequate.

      Section 4.10 Full Disclosure. All information furnished in writing by the
Borrowers to the Administrative Agent or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby (i) if
prepared by the Borrowers or any Affiliate of the Borrowers is true and accurate
in all material respects on the date as of which such information is stated or
certified and (ii) if prepared by any Person other than the Borrowers or any
Affiliate of the Borrowers, to the best of Borrowers' knowledge, after the
Borrowers have conducted reasonable investigation with due diligence, is true
and accurate in all material respects on the date as of which such information
is stated or certified; provided, that, with respect to projected financial
information, the Borrowers represent and warrant only that such information
represents the Borrowers expectations regarding future performance based upon
historical information and reasonable assumptions, it being understood, however,
that actual results may differ from the projected results described in the
financial projections. The Borrowers have disclosed to the Administrative Agent
and the Lenders in writing any and all facts which have or may have (to the
extent the Borrowers can now reasonably foresee) a Material Adverse Effect.

      Section 4.11 Solvency. On the Closing Date and after giving effect to the
transactions contemplated by the Loan Documents occurring on the Closing Date,
each of the Borrowers will be Solvent.

      Section 4.12 Use of Proceeds; Margin Regulations. All proceeds of the
Loans will be used by the Borrowers and all Letters of Credit shall be issued
for the Borrowers only in accordance with the provisions hereof. No part of the
proceeds of any Loan or any Letter of Credit will be used by the Borrowers to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any Margin Stock. Neither the making of any Loan, the
issuance of any Letter of Credit, nor the use of the proceeds of the foregoing
will violate or be inconsistent with the provisions of Regulations T, U or X of
the Federal Reserve Board.

      Section 4.13 Governmental Approvals. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any


                                      -50-
<PAGE>
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with the execution, delivery
and performance of any Loan Document or the consummation of any of the
transactions contemplated thereby other than those that have already been duly
made or obtained and remain in full force and effect or those which, if not made
or obtained, would not have a Material Adverse Effect.

      Section 4.14 Investment Company Act; Public Utility Holding Company Act.
Neither the Borrowers nor any Consolidated Subsidiary is (x) an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended, (y) a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or (z) subject to any
other federal or state law or regulation which purports to restrict or regulate
its ability to borrow money.

      Section 4.15 Principal Offices. As of the Closing Date, the principal
office, chief executive office and principal place of business of each of the
Borrowers is 1818 Market Street, 28th Floor, Philadelphia, Pennsylvania 19103.
No Borrower shall change its principal office or state of formation without
having given the Administrative Agent at least thirty (30) days prior written
notice.

      Section 4.16 REIT Status. For its first fiscal year and continuously
thereafter RAIT has qualified, and RAIT shall continue to qualify, as a real
estate investment trust under the Code.

      Section 4.17 Qualified REIT Subsidiary Status. Each of RAIT OP and RAIT
SPE qualify as of the Closing Date, and intend to continue to qualify, as a
qualified real estate investment subsidiary under the Code.

      Section 4.18 Patents, Trademarks, etc. The Borrowers have obtained and
hold in full force and effect all patents, trademarks, servicemarks, trade
names, copyrights and other such rights, free from burdensome restrictions,
which are necessary for the operation of its business as presently conducted,
the impairment of which is likely to have a Material Adverse Effect.

      Section 4.19 No Default. No Event of Default or, to the best of the
Borrowers' knowledge, Default exists under or with respect to any Loan Document
and the Borrowers are not in default in any material respect beyond any
applicable grace period under or with respect to any other material agreement,
instrument or undertaking to which it is a party or by which it or any of its
property is bound in any respect, the existence of which default is likely to
result in a Material Adverse Effect.

      Section 4.20 Licenses, etc. The Borrowers have obtained and do hold in
full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditation, easements, rights of way and
other consents and approvals which are necessary for the operation of its
businesses as presently conducted, the absence of which is likely to have a
Material Adverse Effect.

      Section 4.21 Compliance With Law. Each of the Borrowers and, to best of
the Borrowers' knowledge, each of the Borrowing Base Assets, are in compliance
with all laws, rules, regulations, orders, judgments, writs and decrees,
including, without limitation, all building and zoning ordinances and codes, the
failure to comply with which is likely to have a Material Adverse Effect.


                                      -51-
<PAGE>
      Section 4.22 No Burdensome Restrictions. Except as may have been disclosed
by the Borrowers in writing to the Administrative Agent, no Borrower is a party
to any agreement or instrument or subject to any other obligation or any charter
or corporate or partnership restriction, as the case may be, which, individually
or in the aggregate, is likely to have a Material Adverse Effect.

      Section 4.23 Brokers' Fees. The Borrowers have not dealt with any broker
or finder with respect to the transactions contemplated by this Agreement or
otherwise in connection with this Agreement, and the Borrowers have not done any
act, had any negotiations or conversation, or made any agreements or promises
which will in any way create or give rise to any obligation or liability for the
payment by the Borrowers of any brokerage fee, charge, commission or other
compensation to any party with respect to the transactions contemplated by the
Loan Documents, other than the Fees payable to the Administrative Agent and the
Lenders, and certain other Persons as previously disclosed in writing to the
Administrative Agent.

      Section 4.24 Labor Matters. There are no collective bargaining agreements
or Multiemployer Plans covering the employees of the Borrowers as of the Closing
Date and the Borrowers have not suffered any strikes, walkouts, work stoppages
or other material labor difficulty within the last five years which,
individually or in the aggregate, are likely to have a Material Adverse Effect.

      Section 4.25 Insurance. As to each Borrowing Base Asset, the Borrowers (or
an SPE Subsidiary) maintain (or require that the borrower thereunder to
maintain) insurance in amounts that a prudent owner of such assets would
maintain.

      Section 4.26 Organizational Documents. The documents delivered pursuant to
Section 3.1(i) constitute, as of the Closing Date, all of the organizational
documents (together with all amendments and modifications thereof) of the
Borrowers. The Borrowers represent that it has delivered to the Administrative
Agent true, correct and complete copies of each of the documents set forth in
this Section 4.26.

                                    ARTICLE V

                       AFFIRMATIVE AND NEGATIVE COVENANTS

      The Borrowers covenant and agree that, so long as any Lender has any
Commitment hereunder or any Obligations remain unpaid:

      Section 5.1 Information. The Borrowers will deliver to the Administrative
Agent, in a manner satisfactory to Administrative Agent:

            (a) As soon as available, and in any event within 120 days after the
close of each fiscal year of the Consolidated Parties, a consolidated balance
sheet and income statement of the Consolidated Parties, as of the end of such
fiscal year, together with related consolidated statements of operations and
retained earnings and of cash flows for such fiscal year, setting forth in
comparative form consolidated figures for the preceding fiscal year, all such
financial information described above to be in reasonable form and detail and
audited by independent certified public accountants of recognized national
standing reasonably acceptable to the Administrative Agent and whose opinion
shall be to the effect that such financial statements have been prepared in
accordance with GAAP (except for changes with which such accountants


                                      -52-
<PAGE>
concur) and shall not be limited as to the scope of the audit or qualified as to
the status of the Consolidated Parties as a going concern.

            (b) As soon as available, and in any event within 45 days after the
close of each fiscal quarter of the Consolidated Parties, a consolidated balance
sheet and income statement of the Consolidated Parties, as of the end of such
fiscal quarter, together with related consolidated statements of operations and
retained earnings and of cash flows for such fiscal quarter in each case setting
forth in comparative form consolidated figures for the corresponding period of
the preceding fiscal year, all such financial information described above to be
in reasonable form and detail and reasonably acceptable to the Administrative
Agent, and accompanied by a certificate of the chief financial officer of the
Principal Borrower to the effect that such quarterly financial statements fairly
present in all material respects the financial condition of the Consolidated
Parties and have been prepared in accordance with GAAP, subject to changes
resulting from audit and normal year-end audit adjustments and the omission of
footnotes.

            (c) As soon as available, and in any event within 45 days after the
close of each fiscal quarter of the Consolidated Parties (including the fourth
fiscal quarter), and at such other times as is required pursuant to the terms of
this Agreement, (i) a fully completed current Borrowing Base Certificate and
(ii) a fully completed certificate of the chief financial officer or the chief
accounting officer of RAIT (the "Continuing Compliance Certificate") in the form
attached hereto as Exhibit "E." Upon the request of the Administrative Agent or
any Lender, the Borrowers shall, with the Continuing Compliance Certificate,
also deliver (i) four (4) quarter proforma covenant compliance projections for
RAIT, RAIT OP and RAIT SPE, (ii) four (4) quarter Borrowing Base Asset repayment
projections for RAIT SPE, (iii) prior quarter loan loss results for RAIT, RAIT
OP and RAIT SPE, (iv) prior quarter loan loss reserves and adjustments for RAIT,
RAIT OP and RAIT SPE, (v) a prior quarter Borrowing Base Asset disposition
status report for RAIT SPE or (vi) a report of current Derivative Exposure of
RAIT, RAIT OP and RAIT SPE;

            (d) (i) within five (5) Domestic Business Days after any officer of
any Borrower obtains knowledge of any Default, if such Default is then
continuing, a certificate of the chief financial officer, the chief accounting
officer, controller, or other executive officer of RAIT setting forth the
details thereof and the action which the Borrowers are taking or propose to take
with respect thereto; and (ii) promptly and in any event within five (5)
Domestic Business Days after the Borrowers obtain knowledge thereof, notice of
(x) any litigation or governmental proceeding pending or threatened against any
Borrower or the Borrowing Base Assets as to which there is a reasonable
possibility of an adverse determination and which, if adversely determined, is
likely to individually or in the aggregate result in a Material Adverse Effect,
(y) any other event, act or condition which is likely to result in a Material
Adverse Effect, and (z) any event giving rise to a mandatory prepayment pursuant
to Section 2.10;

            (e) promptly upon the mailing thereof to the shareholders of RAIT
generally, copies of all financial statements, reports and proxy statements so
mailed;

            (f) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) (other than the exhibits thereto, which exhibits will be provided
upon request therefor by any Lender) which RAIT shall have filed with the
Securities and Exchange Commission;


                                      -53-
<PAGE>
            (g) if and when any member of the ERISA Group, with respect to a
RAIT Plan, or a Non-RAIT Plan (but, as to any Non-RAIT Plan, only to the extent
the occurrence of any of the following would cause a Material Adverse Effect),
(i) gives or is required to give notice to the PBGC of any "reportable event"
(as defined in Section 4043 of ERISA) with respect to any Plan which would
constitute reasonable grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is required
to give notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii) receives notice
of complete or partial withdrawal liability under Title IV of ERISA or notice
that any Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the PBGC under
Title IV of ERISA of an intent to terminate, impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver of the
minimum funding standard under Section 412 of the Code, a copy of such
application; (v) gives notice of intent to terminate any Plan under Section
4041(c) of ERISA, a copy of such notice and other information filed with the
PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of
ERISA, a copy of such notice; or (vii) fails to make any payment or contribution
to any Plan or Multiemployer Plan or makes any amendment to any Plan that has
resulted or will result in the imposition of a Lien or the posting of a bond or
other security, a certificate of the chief financial officer or the chief
accounting officer of RAIT setting forth details as to such occurrence and
action, if any, which RAIT or the applicable member of the ERISA Group is
required or proposes to take;

            (h) promptly and in any event within five (5) Domestic Business Days
after any Borrower obtains actual knowledge of any of the following events, a
certificate of RAIT, executed by an officer of RAIT, specifying the nature of
such condition, and the Borrowers' or, if the Borrowers have actual knowledge
thereof, the Environmental Affiliate's proposed initial response thereto: (i)
the receipt by any Borrower, or, if any Borrower has actual knowledge thereof,
any of the Environmental Affiliates of any written communication, whether from a
governmental authority, citizens group, employee or otherwise, that alleges that
any Borrower, or, if any Borrower has actual knowledge thereof, any of the
Environmental Affiliates, is not in compliance with applicable Environmental
Laws, and such noncompliance is likely to have a Material Adverse Effect, (ii)
any Borrower shall obtain actual knowledge that there exists any Environmental
Claim pending against any Borrower or any Environmental Affiliate and such
Environmental Claim is likely to have a Material Adverse Effect or (iii) any
Borrower obtains actual knowledge of any release, emission, discharge or
disposal of any Material of Environmental Concern that is likely to form the
basis of any Environmental Claim against any Borrower or any Environmental
Affiliate which in any such event is likely to have a Material Adverse Effect;

            (i) promptly and in any event within ten (10) Domestic Business Days
after receipt of any material notices or correspondence from any company or
agent for any company providing insurance coverage to any Borrower relating to
any loss in excess of $5,000,000 of the Borrower, copies of such notices and
correspondence; and

            (j) from time to time such additional information regarding the
financial position or business of the Borrowers and their Subsidiaries as the
Administrative Agent, at the request of any Lender, may reasonably request in
writing.

      Section 5.2 Payment of Obligations. The Borrowers will pay and discharge,
at or before maturity, all of their respective material obligations and
liabilities including, without


                                      -54-
<PAGE>
limitation, any obligation pursuant to any agreement by which it or any of its
properties is bound and any liabilities, except where such liabilities may be
contested in good faith by appropriate proceedings, and will maintain in
accordance with GAAP, appropriate reserves for the accrual of any of the same.

      Section 5.3 Maintenance of Property. The Borrowers will keep, and will
cause each Consolidated Subsidiary to keep, all property useful and necessary in
its business insured in an amount not less than a commercially reasonable amount
and in good order and repair, ordinary wear and tear and loss by condemnation or
casualty excepted.

      Section 5.4 Conduct of Business and Maintenance of Existence. Each
Borrower will continue to engage in business of the same general type as now
conducted by such Borrower, and will preserve, renew and keep in full force and
effect, its trust, corporate, partnership or limited liability company
existence, as applicable, and its respective rights, privileges and franchises
necessary for the normal conduct of business.

      Section 5.5 Compliance with Laws. Each Borrower will comply in all
material respects with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities (including, without limitation,
Environmental Laws, and all federal securities laws) except where the necessity
of compliance therewith is contested in good faith by appropriate proceedings or
where the failure to comply would not be likely to have a Material Adverse
Effect. Each Borrower shall (i) ensure that no Person having a legal or
beneficial title to a controlling interest in such Borrower or a right to
acquire such an interest (each an "Owner") shall be listed on the Specially
Designated Nationals and Blocked Person List or other similar lists maintained
by the Office of Foreign Assets Control ("OFAC"), the Department of the Treasury
or included in any Executive Orders, (ii) not use or permit the use of the
proceeds of the Facility or any other financial accommodation from the
Administrative Agent or the Lenders to violate any of the foreign asset control
regulations of OFAC or other applicable law, (iii) comply with all applicable
Bank Secrecy Act laws and regulations, as amended from time to time, and (iv)
otherwise comply with the USA Patriot Act as required by federal law.

      Section 5.6 Inspection of Books and Records. Each Borrower will keep
proper books of record and account in which full, true and correct entries shall
be made of all dealings and transactions in relation to its business and
activities; and will permit representatives of Administrative Agent at the
expense of the Administrative Agent or the Lender requesting the Administrative
Agent to conduct such visit and inspection, to visit and inspect any of its
properties, to examine and make abstracts from any of its books and records and
to discuss its affairs, finances and accounts with its officers and independent
public accountants, all at such reasonable times, upon reasonable prior notice
and as often as may reasonably be desired, but conducted in such a manner as to
not unreasonably interfere with the conduct of Borrowers' business.

      Section 5.7 Existence. Each Borrower shall do or cause to be done, all
things necessary to preserve and keep in full force and effect its and the
Consolidated Subsidiaries' existence and its patents, trademarks, servicemarks,
tradenames, copyrights, franchises, licenses, permits, certificates,
authorizations, qualifications, accreditation, easements, rights of way and
other rights, consents and approvals the nonexistence of which is likely to have
a Material Adverse Effect.


                                      -55-
<PAGE>
      Section 5.8 Financial Covenants.

            (a) Leverage Ratio. At all times (i) the Leverage Ratio will be less
than or equal to sixty percent (60%) and (ii) Total Liabilities shall not exceed
the sum of (A) sixty-five percent (65%) of the Underlying Real Estate Value of
all Real Property Assets owned by the Consolidated Parties, (B) the lesser of
(1) sixty-five (65%) of the Underlying Real Estate Value of Underlying Asset
securing any First Mortgage Assets and (2) the Book Value of all First Mortgage
Assets and (C) fifty percent (50%) of the Book Value of all Subordinated Assets.

            (b) Minimum Interest Coverage Ratio. At no time, the Interest
Coverage Ratio shall be less than 2.00 to 1.00.

            (c) Fixed Charge Coverage Ratio. At no time, the Fixed Charge
Coverage Ratio shall be less than 1.50 to 1.00.

            (d) Secured Debt to Total Assets. At all times, the ratio of (i) the
Secured Debt of the Consolidated Parties to (ii) the Total Assets of the
Consolidated Parties shall be less than or equal to 0.40 to 1.00.

            (e) Secured Recourse Debt to Total Assets. At all times, the ratio
of (i) the Secured Debt of the Consolidated Parties that is Recourse Debt to
RAIT or RAIT OP to (ii) the Total Assets of the Consolidated Parties shall be
less than or equal to 0.20 to 1.00.

            (f) Unsecured Leverage Limit. At all times the Unsecured Debt of the
Consolidated Parties shall not exceed the Unsecured Leverage Limit of the
Consolidated Parties.

            (g) Consolidated Tangible Net Worth. At all times the Consolidated
Tangible Net Worth shall be greater than or equal to the sum of (i)
$500,000,000.00, plus (ii) an amount equal to 75.0% of the Net Equity Proceeds
received by the Consolidated Parties in connection with any Equity Issuance
subsequent to the Closing Date calculated on a cumulative basis as of the end of
each fiscal quarter of the Consolidated Parties following the Closing Date.

            (h) Dividends. RAIT will not, during any four (4) consecutive
calendar quarter period, pay any dividends on RAIT's common stock in excess of
100% of RAIT's Adjusted Earnings for such four (4) consecutive calendar quarter
period, unless necessary to maintain its status as a real estate investment
trust under the Code. During the continuance of a monetary Event of Default,
RAIT shall pay no dividends.

            (i) Prohibition on Additional Indebtedness. Except as permitted
pursuant to the definition of Special Purpose Entity, neither RAIT SPE nor any
SPE Subsidiary shall at any time owe, create, incur or assume any Indebtedness
except Indebtedness under this Agreement and the Notes.

            (j) Interest Rate Exposure. The Consolidated Parties will at all
times maintain a notional amount of Match Funding Agreements in effect such that
fluctuations (increases or decreases) in interest rates of 100 basis points or
more in any fiscal quarter in respect of the Floating Rate Indebtedness and/or
Floating Rate Assets of the Consolidated Parties will not impact negatively Net
Income in such fiscal quarter annualized by greater than 2.5%, provided,
however, if (i) this covenant otherwise would be breached with respect to a
particular fiscal quarter, (ii) the Borrowers furnish to the Administrative
Agent, with the Continuing Compliance Certificate for such fiscal quarter
pursuant to Section 5.1(c), a proposed plan,


                                      -56-
<PAGE>
acceptable to the Administrative Agent, in its discretion, for curing such
breach within thirty days from the date of the delivery of such Continuing
Compliance Certificate, and (iii) such breach is in fact cured within such
thirty day period, then the Borrowers shall be deemed to have been, and to be,
in compliance with the within covenant respect to such fiscal quarter.

      Notwithstanding that the Financial Covenants set forth in this Section 5.8
may be tested on a quarterly (or, in some cases, more frequent) basis, the
Person to which such Financial Covenants apply must be in full and complete
compliance with such Financial Covenants at all times.

      Section 5.9 Restriction on Fundamental Changes.

            (a) Neither RAIT OP, RAIT SPE nor any SPE Subsidiary shall enter
into any merger or consolidation without the prior written consent of the
Required Lenders, which consent may be withheld by the Required Lenders in their
respective sole and absolute discretion. RAIT shall not enter into any merger or
consolidation unless (i) RAIT is the surviving entity, (ii) the nature of RAIT's
business following such merger or consolidation shall remain substantially the
same as the nature of RAIT's business immediately prior to such merger or
consolidation, (iii) RAIT, as the surviving entity, shall, at the time of such
merger or consolidation and at all times thereafter, be and remain in compliance
with all of the terms and conditions of this Agreement including, without
limitation, the Financial Covenants set forth in Section 5.8, (iv) at the time
of such merger or consolidation, RAIT shall deliver to the Administrative Agent
a fully completed Continuing Compliance Certificate, together with a proforma
(with respect to the four (4) consecutive calendar quarters immediately
following such merger or consolidation) cash flow and Financial Covenant
compliance projection, in form, content and detail reasonably acceptable to the
Administrative Agent, (v) RAIT, as the surviving entity, shall execute and
deliver to the Administrative Agent at the time of such merger or consolidation
a ratification and reaffirmation of all its Obligations under this Agreement and
the other Loan Documents, in form, content and detail acceptable to the
Administrative Agent, (vi) no Default or Event of Default shall have occurred
and be continuing at the time of such merger or consolidation, and (vii) such
merger or consolidation shall be accomplished in accordance with all terms,
conditions and restrictions being imposed thereon by the Securities and Exchange
Commission and/or any other applicable regulatory agency having jurisdiction
with respect to such merger or consolidation.

            (b) RAIT shall not amend its trust agreement, bylaws or other
organizational documents so as to change the purpose or business of RAIT without
the Administrative Agent's consent, which shall not be unreasonably withheld.

            (c) RAIT OP shall not amend its partnership agreement or other
organizational documents in any manner which could have a Material Adverse
Effect.

            (d) Neither RAIT SPE nor any SPE Subsidiary shall amend its limited
liability company agreement or other organizational documents without the
Administrative Agent's consent, which shall not be unreasonably withheld.

            (e) Each Borrower shall deliver to Administrative Agent copies of
all amendments to its trust agreement, articles of incorporation, by-laws,
limited liability company agreement or other organizational documents, as
applicable, no less than ten (10) Domestic Business Days after the effective
date of any such amendment.


                                      -57-
<PAGE>
      Section 5.10 Changes in Business. No Borrower shall enter into any
business which is substantially different from that conducted by such Borrower
on the Closing Date after giving effect to the transactions contemplated by the
Loan Documents. Each Borrower shall carry on its business operations through
itself, its Subsidiaries or otherwise.

      Section 5.11 Margin Stock. None of the proceeds of the Loan will be used,
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying any Margin Stock.

      Section 5.12 RAIT, RAIT OP and RAIT SPE Status. RAIT shall at all times
(i) remain a publicly traded company listed, quoted or traded on the New York
Stock Exchange, NASDAQ or any such other nationally recognized stock exchange,
and (ii) maintain its status as a self-directed and self-administered real
estate investment trust under the Code. RAIT OP, RAIT SPE and each SPE
Subsidiary shall at all times (i) maintain their status as qualified real estate
investment trust subsidiaries under the Code, and (ii) remain one hundred
percent (100%) owned (beneficially and equitably) by RAIT. RAIT SPE and each SPE
Subsidiary shall at all times maintain its status as a Special Purpose Entity.
Each SPE Subsidiary shall be a Wholly-Owned Subsidiary of RAIT SPE.

      Section 5.13 Disposition of Borrowing Base Assets. Prior to the sale,
liquidation, disposition or transfer of, or the release or termination of a
Borrower's interest in, any Borrowing Base Asset, (i) the Borrowers shall
deliver prior written notice to the Administrative Agent and the Lenders, and
(ii) the Borrowers shall deliver to the Administrative Agent a completed,
current Borrowing Base Certificate.

      Section 5.14 Liens; Release of Liens. The Borrowers shall not at any time
during the Term directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any Borrowing Base Asset or any Capital Stock of
RAIT OP, RAIT SPE or any SPE Subsidiary for borrowed monies or any other Lien,
unless the same is being contested in good faith or the same is discharged,
bonded off or paid within thirty (30) days of filing of such Lien.

      Section 5.15 Business Loans. The Borrowers acknowledge that all of the
Loans are business loans and no portion of the proceeds of the Loans will be
used for personal, family or household purposes.

      Section 5.16 Limitation on Changes in Fiscal Year; Accounting Methods;
Valuation Methodology. No Borrower shall (i) permit the fiscal year of such
Borrower to end on a day other than December 31, (ii) change its method or
procedures of accounting from those in effect as of the Closing Date; or (iii)
change in any material respect its current methodology by which it values the
Borrowing Base Assets.

      Section 5.17 Limitation on Lines of Business. Neither RAIT, RAIT OP, RAIT
SPE nor any SPE Subsidiary shall enter into any business, either directly or
through any Subsidiary, except for those businesses in which RAIT OP are engaged
on the Closing Date. Neither RAIT SPE nor any SPE Subsidiary shall at any time
own any assets other than Borrowing Base Assets and all Borrowing Base Assets
shall be owned by RAIT SPE or an SPE Subsidiary.

      Section 5.18 Limitation on Negative Pledge Clauses, Distribution
Restrictions. Neither RAIT SPE nor any SPE Subsidiary shall enter into with any
Person any agreement which prohibits or limits the ability of RAIT SPE or such
SPE Subsidiary to create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or


                                      -58-
<PAGE>
hereafter acquired, nor will RAIT, RAIT OP, or RAIT SPE, as applicable, enter
into any such agreement with respect to the Capital Stock of RAIT OP, RAIT SPE
or any SPE Subsidiary.

      Section 5.19 Addition of Borrowing Base Assets.

            (a) With the approval of the Administrative Agent and the Required
Lenders, the Borrowers may from time to time have included as Borrowing Base
Assets eligible assets not included as initial Borrowing Base Assets hereunder
as set forth on the schedule of initial Borrowing Base Assets annexed hereto as
Exhibit "C". In such event, the Borrowers shall provide to the Administrative
Agent written notice thereof (each an "Approval Request") no later than 10:00
a.m. (New York, New York time) on the Business Day that is at least twelve (12)
Business Days prior to the date on which Borrowers wish to have such asset
included within the Borrowing Base Assets Pool, such Approval Request to state
(i) whether such asset is proposed to be a First Mortgage Asset, a Real Property
Asset, or a Subordinated Asset, (ii) the value of such asset as proposed to be
reflected on a Borrowing Base Certificate, and (iii) that such asset complies
with all of the representations and warranties applicable to such asset
contained in Exhibit F, Exhibit G or Exhibit H, as the case may be, and if not,
a detailed description of each exception to such compliance (each an "Exceptions
Summary"). Together with the Approval Request, the Borrowers shall deliver to
the Administrative Agent a completed, (i) a current Borrowing Base Certificate,
(ii) the Borrowers' credit write-up and approval memo relating to such
prospective Borrowing Base Asset, and (iii) if requested by the Administrative
Agent or any Lender, (A) an appraisal report relating to any Real Property Asset
or Underlying Asset relating to such prospective Borrowing Base Asset, (B) a
copy of any mortgage note relating to such prospective Borrowing Base Asset, (C)
a copy of the documents establishing the rights of any Preferred Securities, (D)
a copy of the deed to any Real Property Asset, and (E) such other documents as
the Administrative Agent or any Lender may request from time to time
(collectively, the "Credit Underwriting Documents"). With respect to any asset
which Borrowers have requested be added to the Borrowing Base Assets Pool,
Borrowers shall be deemed to represent and warrant hereunder that, except as
specified in the Exceptions Summary, if any, with respect to such asset (i) all
of the First Mortgage Asset Representations and Warranties as set forth on
Exhibit "F" hereto are true and correct as to any such asset which is to be a
First Mortgage Asset, (ii) all of the Real Property Asset Representations and
Warranties as set forth on Exhibit "G" hereto are true and correct as to any
such asset which is to be a Real Property Asset, and (iii) all of the
Subordinated Assets Representations and Warranties as set forth on Exhibit "H"
hereto are true and correct as to any such assets which are to be Subordinated
Assets.

            (b) Promptly upon receipt of an Approval Request and all related
Credit Underwriting Documents (collectively, each, an "Approval Request
Package"), the Administrative Agent shall provide copies thereof to each Lender.
Within ten (10) Domestic Business Days after its receipt of an Approval Request
Package, each Lender shall advise the Administrative Agent as to whether such
Lender approves the Approval Request. If a Lender fails to respond to the
Administrative Agent within such ten (10) Domestic Business Day period, such
Lender shall be deemed to have approved such Approval Request.

            (c) On or before 5:00 P.M., New York time, on the twelfth (12th)
Domestic Business Day following the Administrative Agent's receipt of an
Approved Request Package, the Administrative Agent will advise the Borrowers as
to whether the Administrative Agent and the Required Lenders have approved the
Approval Request. If the Administrative Agent does not respond to the Approval
Request within the time period set forth herein, the Approval Request


                                      -59-
<PAGE>
shall be deemed denied and the prospective Borrowing Base Asset identified in
the Approval Request shall not be included in the Borrowing Base Asset Pool. If
an Approval Request has been approved, the subject asset shall thereupon become
a Borrowing Base Asset hereunder.

            (d) All determinations by the Administrative Agent and the Lenders
as to whether to approve any Approval Request shall be in their individual sole
and absolute discretion.

      Section 5.20 Failure of Certain Borrowing Base Assets Representations and
Warranties. If at any time Borrowers shall become aware that (a) as to any First
Mortgage Asset in the Borrowing Base Asset Pool, any First Mortgage Asset
Representation or Warranty is no longer true and correct, (b) as to any Real
Property Asset in the Borrowing Base Assets Pool, any Real Property Asset
Representation or Warranty is no longer true and correct, or (c) as to
Subordinated Asset in the Borrowing Base Assets Pool, any Subordinated Assets
Representation or Warranty is no longer true and correct, Borrowers shall
immediately notify the Administrative Agent in writing of such event, together
with a detailed description of the factual circumstances giving rise thereto. If
the event relates to any breach arising as a result of any payment default in
respect of the applicable Borrowing Base Asset whereby any payment in respect of
the applicable Borrowing Base Asset is past due for more than thirty (30) but
less than forty-five (45) days, the Administrative Agent may, and at the
direction of the Required Lenders shall, require that the asset no longer be
considered a Borrowing Base Asset for purposes hereof and require that such
asset be removed from the Borrowing Base Assets Pool. If the event relates to
any breach arising as a result of any payment default in respect of the
applicable Borrowing Base Asset whereby any payment in respect of the applicable
Borrowing Base Asset is past due for more than forty-five (45) days, the asset
shall automatically no longer be considered a Borrowing Base Asset for purposes
hereof and such asset shall be removed from the Borrowing Base Assets Pool. If
the event relates to any breach other than any breach arising as a result of any
payment default in respect of the applicable Borrowing Base Asset the
Administrative Agent may, and at the direction of the Required Lenders shall,
require that the asset no longer be considered a Borrowing Base Asset for
purposes hereof and require that such asset be removed from the Borrowing Base
Assets Pool. Upon the determination that an asset shall no longer be considered
a Borrowing Base Asset for purposes hereof, the provisions of Section 2.10(a)
shall apply.

      Section 5.21 Limitation on Transactions with Affiliates. No Borrower nor
any Subsidiary shall enter into any transaction, including, without limitation,
any purchase, sale, lease or exchange of property or other assets or the
rendering of any service, with any Affiliate unless such transaction is (a)
otherwise permitted under this Agreement or (b) upon fair and reasonable terms
no less favorable to Borrowers or such Subsidiary, as the case may be, than it
would obtain in a comparable arm's length transaction with a Person which is not
an Affiliate.

      Section 5.22 Joinder of SPE Subsidiaries. Any SPE Subsidiary that shall
own any Borrowing Base Asset shall, prior to obtaining ownership of such
Borrowing Base Asset, execute and deliver to the Administrative Agent and the
Lenders a joinder to this Agreement in form and substance satisfactory to the
Administrative Agent agreeing to be bound by the terms of this Agreement as a
"Borrower" hereunder.

                                   ARTICLE VI

                                    DEFAULTS


                                      -60-
<PAGE>
      Section 6.1 Events of Default. The occurrence and continuation of one or
more of the following events (each, an "Event of Default") shall constitute an
event of default hereunder:

            (a) (i) the Borrowers shall fail to pay when due any principal of
any Loan, (ii) the Borrowers shall fail to pay when due interest on any Loan and
such failure continues for a period of three (3) Domestic Business Days, or
(iii) the Borrowers shall fail to pay any Fees or any other amount payable
hereunder or, as to Fees, under the Fee Letter, and the same shall continue for
a period of five (5) Domestic Business Days after Borrowers have received notice
thereof;

            (b) any Borrower shall fail to observe or perform any covenant
contained in Section 5.1 and Sections 5.8 to 5.21, inclusive;

            (c) any Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a) or
(b) above) for thirty (30) days after written notice thereof has been given to
such Borrower by the Administrative Agent, or if such default is of such a
nature that is capable of being remedied but that cannot with reasonable effort
be completely remedied within said period of thirty (30) days, such additional
period of time as may be reasonably necessary to cure same, provided such
Borrower commence such cure within said thirty (30) day period and diligently
prosecutes same, until completion, but in no event shall such extended period
exceed one hundred twenty (120) days;

            (d) any representation, warranty, certification or statement made by
any Borrower in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made) and such
representation, warranty, certification or statement is not made correct in all
material respects within thirty (30) days after the earlier to occur of (i) the
date on which the Administrative Agent notifies the Borrowers of such incorrect
representation, warranty, certification or statement, and (ii) the date on which
any Borrower first becomes aware of any such incorrect representation, warranty,
certification or statement;

            (e) a default (however defined) shall occur with respect to any
Indebtedness of any Borrower or any Consolidated Subsidiary the aggregate
outstanding principal amount of which is in excess of $5,000,000 (other than the
Obligations);

            (f) any Borrower shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the foregoing;

            (g) an involuntary case or other proceeding shall be commenced
against any Borrower seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of ninety (90) days; or an order for
relief shall be entered against any Borrower under the federal bankruptcy laws
as now or hereafter in effect;


                                      -61-
<PAGE>
            (h) one or more final, non-appealable judgments or decrees in an
aggregate amount of $5,000,000 or more shall be entered by a court or courts of
competent jurisdiction against any Borrower (other than any judgment as to
which, and only to the extent, a reputable insurance company has acknowledged
coverage of such claim in writing) and (i) any such judgments or decrees shall
not be stayed, discharged, paid, bonded or vacated within thirty (30) days or
(ii) enforcement proceedings shall be commenced by any creditor on any such
judgments or decrees;

            (i) without the Required Lenders' prior written consent (which the
Required Lenders may withhold in their respective sole and absolute discretion),
there shall be a change in the majority of the Board of Directors of RAIT during
any twelve (12) month period;

            (j) without the Required Lenders' prior written consent (which the
Required Lenders may withhold in their respective sole and absolute discretion),
any Person (including affiliates of such Person) or "group" (as such term is
defined in applicable federal securities laws and regulations) shall acquire
more than thirty percent (30%) of the common shares of RAIT;

            (k) RAIT shall cease at any time to qualify as a real estate
investment trust under the Code and/or either of RAIT OP or RAIT SPE shall cease
at any time to qualify as qualified real estate investment trust subsidiaries
under the Code, or RAIT SPE shall fail to be a Special Purpose Entity;

            (l) if any Termination Event with respect to a Plan shall occur as a
result of which Termination Event or Events any member of the ERISA Group has
incurred or will incur any liability to the PBGC or any other Person and the sum
(determined as of the date of occurrence of such Termination Event) of the
insufficiency of such Plan and the insufficiency of any and all other Plans with
respect to which such a Termination Event shall occur and be continuing at the
same time (or, in the case of a Multiple Employer Plan with respect to which a
Termination Event described in clause (ii) of the definition of Termination
Event shall occur and be continuing at the same time, the liability of any
Borrower) is equal to or greater than $5,000,000;

            (m) if, any member of the ERISA Group shall commit a failure
described in Section 402(f)(1) of ERISA or Section 412(n)(1) of the Code and the
amount of the lien determined under Section 402(f)(3) of ERISA or Section
412(n)(3) of the Code that will be imposed on any member of the ERISA Group or
their assets in respect of such failure shall be, in the case of a RAIT Plan,
equal to or greater than $5,000,000 or, in the case of a Non-RAIT Plan, an
amount that would result in a Material Adverse Effect;

            (n) at any time, for any reason any Borrower, any Consolidated
Subsidiary or any other party (other than any Lender, the Administrative Agent
or the Arranger) which is a party to a Loan Document seeks to repudiate its
obligations under any Loan Document; or

            (o) a default beyond any applicable notice or grace period under any
of the other Loan Documents.

      Section 6.2 Rights and Remedies.

            (a) Upon the occurrence of any Event of Default described in
Sections 6.1(f) or (g), the Commitments shall immediately terminate and the
unpaid principal amount of, and any and all accrued interest on, the Loans and
any and all accrued Fees and other Obligations


                                      -62-
<PAGE>
hereunder shall automatically become immediately due and payable, with all
additional interest from time to time accrued thereon and, except as is
otherwise specifically set forth in this Agreement or the other Loan Documents,
without presentation, demand, or protest or other requirements of any kind
(including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrowers; and
upon the occurrence and during the continuance of any other Event of Default,
the Administrative Agent may (and upon the demand of the Required Lenders
shall), by written notice to the Borrowers, terminate the Commitments and may
(and upon the demand of the Required Lenders shall), in addition to the exercise
of all of the rights and remedies permitted the Administrative Agent and the
Lenders at law or equity or under any of the other Loan Documents, declare the
unpaid principal amount of and any and all accrued and unpaid interest on the
Loans and any and all accrued Fees and other Obligations hereunder to be, and
the same shall thereupon be, immediately due and payable with all additional
interest from time to time accrued thereon and, except as is otherwise
specifically set forth in this Agreement or the other Loan Documents, without
presentation, demand, or protest or other requirements of any kind other than as
provided in the Loan Documents (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and notice of acceleration), all of which are hereby expressly waived by the
Borrowers.

            (b) Notwithstanding anything to the contrary contained in this
Agreement or in any other Loan Document, the Administrative Agent and the
Lenders each agree that any exercise or enforcement of the rights and remedies
granted to the Administrative Agent or the Lenders under this Agreement or at
law or in equity with respect to this Agreement or any other Loan Documents
shall be commenced and maintained by the Administrative Agent on behalf of the
Administrative Agent and/or the Lenders. The Administrative Agent shall act at
the direction of the Required Lenders in connection with the exercise of any and
all remedies at law, in equity or under any of the Loan Documents or, if the
Required Lenders are unable to reach agreement, then, from and after an Event of
Default, the Administrative Agent may pursue such rights and remedies as it may
determine.

      Section 6.3 Notice of Default. The Administrative Agent shall give notice
to the Borrowers under Section 6.1(c) promptly upon being requested to do so by
the Required Lenders and shall thereupon notify all the Lenders thereof.

      Section 6.4 Actions in Respect of Letters of Credit.

            (a) If, at any time and from time to time, any Letter of Credit
shall have been issued hereunder and an Event of Default shall have occurred and
be continuing, then, upon the occurrence and during the continuation thereof,
the Administrative Agent may, whether in addition to the taking by the
Administrative Agent of any of the actions described in this Article or
otherwise, make a demand upon the Borrowers to, and immediately upon such
demand, the Borrowers shall pay to the Administrative Agent, on behalf of the
Lenders, in same day funds at the Administrative Agent's office designated in
such demand, for deposit in a special cash collateral account (the "Letter of
Credit Collateral Account") to be maintained in the name of the Administrative
Agent (on behalf of the Lenders) and under its sole dominion and control at such
place as shall be designated by the Administrative Agent, an amount equal to the
amount of the Letter of Credit Usage under the Letters of Credit.


                                      -63-
<PAGE>
            (b) The Borrowers hereby pledge, grant and assign to the
Administrative Agent, as Administrative Agent, for its benefit and for the
ratable benefit of the Lenders a lien on and a security interest in, the
following collateral (the "Letter of Credit Collateral"):

                  (i) the Letter of Credit Collateral Account, all cash
      deposited therein and all certificates and instruments, if any, from time
      to time representing or evidencing the Letter of Credit Collateral
      Account;

                  (ii) all notes, certificates of deposit and other instruments
      from time to time hereafter delivered to or otherwise possessed by the
      Administrative Agent for or on behalf of the Borrowers in substitution for
      or in respect of any or all of the then existing Letter of Credit
      Collateral;

                  (iii) all interest, dividends, cash, instruments and other
      property from time to time received, receivable or otherwise distributed
      in respect of or in exchange for any or all of the then existing Letter of
      Credit Collateral; and

                  (iv) to the extent not covered by the above clauses, all
      proceeds of any or all of the foregoing Letter of Credit Collateral.

      The lien and security interest granted hereby secures the payment of all
obligations of the Borrowers now or hereafter existing hereunder and under any
other Loan Document.

            (c) The Borrowers hereby authorize the Administrative Agent for the
ratable benefit of the Lenders to apply, from time to time after funds are
deposited in the Letter of Credit Collateral Account, funds then held in the
Letter of Credit Collateral Account to the payment of any amounts, in such order
as the Administrative Agent may elect, as shall have become or shall become due
and payable by the Borrowers to the Lenders in respect of the Letters of Credit.

            (d) Neither the Borrowers nor any Person claiming or acting on
behalf of or through the Borrowers shall have any right to withdraw any of the
funds held in the Letter of Credit Collateral Account, except as provided in
Section 6.4(h).

            (e) The Borrowers agree that they will not (i) sell or otherwise
dispose of any interest in the Letter of Credit Collateral or (ii) create or
permit to exist any lien, security interest or other charge or encumbrance upon
or with respect to any of the Letter of Credit Collateral, except for the
security interest created by this Section 6.4.

            (f) If any Event of Default shall have occurred and be continuing:

                  (i) The Administrative Agent may, in its sole discretion,
      without notice to the Borrowers except as required by law and at any time
      from time to time, charge, set off or otherwise apply all or any part of
      first, (x) amounts previously drawn on any Letter of Credit that have not
      been reimbursed by the Borrowers and (y) any Letter of Credit Usage
      described in clause (ii) of the definition thereof that are then due and
      payable and second, any other unpaid Obligations then due and payable,
      against the Letter of Credit Collateral Account or any part thereof, in
      such order as the Administrative Agent shall elect. The rights of the
      Administrative Agent under this Section 6.4 are in addition to any rights
      and remedies which any Lender may have.


                                      -64-
<PAGE>
                  (ii) The Administrative Agent may also exercise, in its sole
      discretion, in respect of the Letter of Credit Collateral Account, in
      addition to the other rights and remedies provided herein or otherwise
      available to it, all the rights and remedies of a secured party upon
      default under the Uniform Commercial Code in effect in the State of New
      York at that time.

            (g) The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Letter of Credit
Collateral if the Letter of Credit Collateral is accorded treatment
substantially equal to that which the Administrative Agent accords its own
property, it being understood that, assuming such treatment, the Administrative
Agent shall not have any responsibility or liability with respect thereto.

            (h) At such time as all Events of Default have been cured or waived
in writing, all amounts remaining in the Letter of Credit Collateral Account
shall be promptly returned to the Borrowers upon the written request of the
Borrower. Absent such cure or written waiver, any surplus of the funds held in
the Letter of Credit Collateral Account and remaining after payment in full of
all of the Obligations of the Borrowers hereunder and under any other Loan
Document after the Maturity Date shall be paid to the Borrowers or to whomsoever
may be lawfully entitled to receive such surplus.

                                  ARTICLE VII

                                   THE AGENTS

      Section 7.1 Appointment and Authorization. Each Lender irrevocably
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms hereof or
thereof, together with all such powers as are reasonably incidental thereto.

      Section 7.2 Agency and Affiliates. KeyBank and Syndication Agent shall
have the same rights and powers under this Agreement as any other Lender and may
exercise or refrain from exercising the same as though it were not the
Administrative Agent, and KeyBank and its affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with any Borrower or
any Subsidiary or affiliate of any Borrower as if it were not the Administrative
Agent hereunder, and the term "Lender" and "Lenders" shall include KeyBank in
its individual capacity. Syndication Agent is an agent hereunder in title only
and such designation shall impose no obligations on it.

      Section 7.3 Action by Administrative Agent. The obligations of the
Administrative Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Administrative Agent shall
not be required to take any action with respect to any Default or Event of
Default, except as expressly provided in Article VI.

      Section 7.4 Consultation with Experts. The Administrative Agent may
consult with legal counsel, independent public accountants and other independent
experts selected by it and shall not be liable for any action taken or omitted
to be taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.

      Section 7.5 Liability of Administrative Agent. Neither the Administrative
Agent nor any of its Affiliates nor any of their respective directors, officers,
agents or employees shall be


                                      -65-
<PAGE>
liable for any action taken or not taken by it in connection herewith (i) with
the consent or at the request of the Required Lenders or (ii) in the absence of
its own gross negligence or willful misconduct. Neither the Administrative Agent
nor any of its directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this Agreement or any
Borrowing hereunder; (ii) the performance or observance of any of the covenants
or agreements of the Borrowers; (iii) the satisfaction of any condition
specified in Article III, except receipt of items required to be delivered to
the Administrative Agent; or (iv) the validity, effectiveness or genuineness of
this Agreement, the other Loan Documents or any other instrument or writing
furnished in connection herewith. The Administrative Agent shall not incur any
liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex or similar writing)
believed by it to be genuine or to be signed by the proper party or parties.

      Section 7.6 Indemnification. Each Lender shall, ratably in accordance with
its Commitment, indemnify the Administrative Agent and its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrowers) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitee's gross negligence or willful misconduct) that such
indemnitee may suffer or incur in connection with this Agreement, the other Loan
Documents or any action taken or omitted by such indemnitee hereunder. In the
event that the Administrative Agent shall, subsequent to its receipt of
indemnification payment(s) from Lenders in accordance with this section, recoup
any amount from the Borrowers, or any other party liable therefor in connection
with such indemnification, the Administrative Agent shall promptly reimburse the
Lenders which previously made the payment(s) pro rata, based upon the actual
amounts which were theretofore paid by each Lender.

      Section 7.7 Credit Decision. Each Lender acknowledges that (i) it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement, and (ii) it has conducted its own independent investigation of the
financial condition, creditworthiness, affairs and status of RAIT and the
Consolidated Subsidiaries and that it has not relied on any materials or
information furnished to it by the Administrative Agent, the Arranger or any of
their respective Affiliates which, if so furnished, is hereby acknowledged by
each Lender as having been furnished without representation or warranty of any
kind. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking any action under this
Agreement.

      Section 7.8 Successor Administrative Agent. The Administrative Agent may
resign at any time by giving notice thereof to the Lenders and the Borrowers and
the Administrative Agent shall resign in the event its Commitment is reduced to
zero. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor Administrative Agent, which successor Administrative Agent
shall, provided no Event of Default has occurred and is then continuing, be
subject to Borrowers' approval, which approval shall not be unreasonably
withheld, conditioned or delayed. If no successor Administrative Agent shall
have been so appointed by the Required Lenders and approved by the Borrowers,
and shall have accepted such appointment, within thirty (30) days after the
retiring Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a


                                      -66-
<PAGE>
successor Administrative Agent, which shall be the Administrative Agent who
shall act until the Required Lenders shall appoint a Administrative Agent. Upon
the acceptance of its appointment as the Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation hereunder, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Administrative Agent.

      Section 7.9 Receipt of Notices. Except as otherwise expressly provided
herein, all material notices, reports and information received by the
Administrative Agent with respect to the Borrowers and not otherwise delivered
to the Lenders by the Borrowers, shall be delivered to the Lenders within ten
(10) Domestic Business Days of the Administrative Agent's receipt thereof.

                                  ARTICLE VIII

                             CHANGE IN CIRCUMSTANCES

      Section 8.1 Basis for Determining Interest Rate Inadequate or Unfair. If
on or prior to the first day of any Interest Period for any Euro-Dollar
Borrowing:

            (a) the Administrative Agent is advised that deposits in dollars (in
the applicable amounts) are not being offered in the relevant market for such
Interest Period, or

            (b) Lenders having fifty percent (50%) or more of the aggregate
principal amount of the affected loans advise the Administrative Agent that the
Adjusted London Interbank Offered Rate, as determined by the Administrative
Agent, will not adequately and fairly reflect the cost to such Lenders of
funding their Euro-Dollar Loans for such Interest Period, the Administrative
Agent shall forthwith give notice thereof to the Borrowers and the Lenders,

whereupon until the Administrative Agent notifies the Borrowers that the
circumstances giving rise to such results set forth in Section 8.1(a) or (b)
above no longer exist, (i) the obligations of the Lenders to make Euro-Dollar
Loans or to continue or convert outstanding Loans as or into Euro-Dollar Loans
shall be suspended and (ii) each outstanding Euro-Dollar Loan shall be converted
into a Alternate Base Rate Loan on the last day of the then current Interest
Period applicable thereto. Unless the Borrowers notify the Administrative Agent
at least two (2) Domestic Business Days before the date of any Euro-Dollar
Borrowing for which a Notice of Borrowing has previously been given that it
elects not to borrow on such date, such Borrowing shall be an Alternate Base
Rate Borrowing.

      Section 8.2 Illegality. If, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for any Lender (or its
Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans or
to issue any Letter of Credit as a Fronting Lender or to participate in any
Letter of Credit issued by a Fronting Lender, the Administrative


                                      -67-
<PAGE>
Agent shall forthwith give notice thereof to the other Lenders and the
Borrowers, whereupon until such Lender notifies the Borrowers and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Lender to make or convert Euro-Dollar Loans
or to issue Letters of Credit shall be suspended. With respect to Euro-Dollar
Loans, before giving any notice to the Administrative Agent pursuant to this
Section, such Lender shall designate a different Euro-Dollar Lending Office if
such designation will avoid the need for giving such notice and will not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender. If such
Lender shall determine that it may not lawfully continue to maintain and fund
any of its outstanding Euro-Dollar Loans to maturity and shall so specify in
such notice, the Borrowers shall be deemed to have delivered a Notice of
Interest Rate Election and such Euro-Dollar Loan shall be converted as of such
date to a Alternate Base Rate Loan (without payment of any amounts that
Borrowers would otherwise be obligated to pay pursuant to Section 2.13 hereof
with respect to Loans converted pursuant to this Section 8.2) and, in the case
of Euro-Dollar Loans, in an equal principal amount from such Lender (on which
interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Lenders), and such Lender shall make such a
Alternate Base Rate Loan.

      If at any time, it shall be unlawful or impossible for any Lender to make,
maintain or fund its Euro-Dollar Loans, the Borrowers shall have the right, upon
five (5) Domestic Business Day's notice to the Administrative Agent, to either
(x) cause a bank, reasonably acceptable to the Administrative Agent, to offer to
purchase the Commitments of such Lender for an amount equal to such Lender's
outstanding Loans, together with all fees, accrued interest and other amounts
payable to such Lender and to become a Lender hereunder, which offer such Lender
is hereby required to accept, or (y) to repay in full all Loans then outstanding
of such Lender, together with interest and all other amounts due thereon, upon
which event, such Lender's Commitments shall be deemed to be cancelled pursuant
to Section 2.11(c).

      Section 8.3 Increased Cost and Reduced Return.

            (a) If on or after the date hereof the adoption of any applicable
law, rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency shall
impose, modify or deem applicable any reserve (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Euro-Dollar Loan any such requirement
with respect to which such Lender is entitled to compensation during the
relevant Interest Period under Section 2.7), special deposit, insurance
assessment or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (or its Applicable Lending Office)
or shall impose on any Lender (or its Applicable Lending Office) or on the
United States market for certificates of deposit or the London interbank market
any other condition affecting its Euro-Dollar Loans, its Note or its obligation
to make such Loans and the result of any of the foregoing is to increase the
cost to such Lender (or its Applicable Lending Office) of making or maintaining
any such Loan, or to reduce the amount of any sum received or receivable by such
Lender (or its Applicable Lending Office) under this Agreement or under its Note
with respect thereto, by an amount deemed by such Lender to be material, then,
within fifteen (15) days after demand by such Lender (with a copy to the
Administrative Agent), the Borrowers shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such increased cost or
reduction.


                                      -68-
<PAGE>
            (b) If any Lender shall have reasonably determined that, after the
date hereof, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change in any such law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Lender (or its Parent) as a consequence of such Lender's
obligations hereunder to a level below that which such Lender (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
reasonably deemed by such Lender to be material, then from time to time, within
fifteen (15) days after demand by such Lender (with a copy to the Administrative
Agent), the Borrowers shall pay to such Lender such additional amount or amounts
as will compensate such Lender (or its Parent) for such reduction.

            (c) Each Lender will promptly notify the Borrowers and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
Section and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender. A certificate of any Lender claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
demonstrable error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.

            (d) If at any time, any Lender shall be owed amounts pursuant to
this Section 8.3, unless such Lender shall elect to waive the right to be paid
the same, the Borrowers shall have the right, upon five (5) Domestic Business
Day's notice to the Administrative Agent to either (x) cause a bank, reasonably
acceptable to the Administrative Agent, to offer to purchase the Commitments of
such Lender for an amount equal to such Lender's outstanding Loans, together
with all fees, accrued interest and other amounts payable to such Lender, and to
become a Lender hereunder, which offer such Lender is hereby required to accept,
or (y) to repay in full all Loans then outstanding of such Lender, together with
all fees, accrued interest and other amounts payable to such Lender, upon which
event, such Lender's Commitment shall be deemed to be cancelled pursuant to
Section 2.11(c).

      Section 8.4 Taxes.

            (a) Any and all payments by the Borrowers under any Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of each Lender, the
Fronting Lender and the Administrative Agent, taxes imposed on its income, and
franchise or similar taxes imposed on it, by (i) any jurisdiction (or political
subdivision thereof) of which the Administrative Agent, the Fronting Lender or
such Lender, as the case may be, is a citizen or resident or in which such
Person has an Applicable Lending Office, (ii) the jurisdiction (or any political
subdivision thereof) in which the Administrative Agent, the Fronting Lender or
such Lender is organized, or (iii) any jurisdiction (or political subdivision
thereof) in which such Lender, the Fronting Lender or the Administrative Agent
is presently doing business which taxes are imposed solely as a result of doing
business in such jurisdiction (all such non excluded taxes, duties, levies,
imposts,


                                      -69-
<PAGE>
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrowers shall be required by law to deduct any Taxes from
or in respect of any sum payable under any Loan Document to the Lenders, the
Fronting Lender or the Administrative Agent (i) the sum payable shall be
increased by the amount necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
8.4) such Lender, the Fronting Lender or the Administrative Agent (as the case
may be) shall receive an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrowers shall make such deductions and
(iii) the Borrowers shall pay the full amount deducted to the relevant taxing
authority or other governmental authority in accordance with applicable law.

            (b) In addition, the Borrowers agree to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges or
similar levies which arise from any payment made hereunder or under any Note or
Letter of Credit or participation therein or from the execution or delivery of,
or otherwise with respect to, this Agreement or any Note (hereinafter referred
to as "Other Taxes").

            (c) The Borrowers agree to indemnify each Lender, and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 8.4) paid by such Lender or
the Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
This indemnification shall be made within fifteen (15) days from the date such
Lender or the Administrative Agent (as the case may be) makes demand therefor.

            (d) Each Lender organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the
Borrowers (but only so long as such Lender remains lawfully able to do so),
shall provide the Borrowers with Internal Revenue Service form W8-ECI or W8BEN,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the United States. If the form provided by a Lender at the time
such Lender first becomes a party to this Agreement indicates a United States
interest withholding tax rate in excess of zero, withholding tax at such rate
shall be considered excluded from "Taxes" as defined in Section 8.4(a).

            (e) For any period with respect to which a Lender has failed to
provide the Borrowers with the appropriate form pursuant to Section 8.4(d)
(unless such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under Section 8.4(a) with
respect to Taxes imposed by the United States; provided, however, that should a
Lender, which is otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to Taxes because of its failure to deliver a
form required hereunder, the Borrowers shall take such steps as such Lender
shall reasonably request to assist such Lender to recover such Taxes.


                                      -70-
<PAGE>
            (f) If the Borrowers are required to pay additional amounts to or
for the account of any Lender pursuant to this Section 8.4, then such Lender
will change the jurisdiction of its Applicable Lending Office so as to eliminate
or reduce any such additional payment which may thereafter accrue if such
change, in the judgment of such Lender, is not otherwise disadvantageous to such
Lender.

            (g) If at any time, any Lender shall be owed amounts pursuant to
this Section 8.4, unless such Lender shall elect to waive the right to be paid
the same, the Borrowers shall have the right, upon five (5) Domestic Business
Day's notice to the Administrative Agent to either (x) cause a bank, reasonably
acceptable to the Administrative Agent, to offer to purchase the Commitments of
such Lender for an amount equal to such Lender's outstanding Loans, together
with all fees, accrued interest and other amounts payable to such Lender, and to
become a Lender hereunder, which offer such Lender is hereby required to accept,
or (y) to repay in full all Loans then outstanding of such Lender, together with
interest and all other amounts due thereon, upon which event, such Lender's
Commitment shall be deemed to be cancelled pursuant to Section 2.11(c).

      Section 8.5 Alternate Base Rate Loans Substituted for Affected Euro-Dollar
Loans. If (i) the obligation of any Lender to make, or convert outstanding Loans
to, Euro-Dollar Loans has been suspended pursuant to Section 8.2 or (ii) any
Lender has demanded compensation under Section 8.3 or 8.4 with respect to its
Euro-Dollar Loans and the Borrowers shall, by at least five (5) Euro-Dollar
Business Days' prior notice to such Lender through the Administrative Agent,
have elected that the provisions of this Section shall apply to such Lender,
then, unless and until such Lender notifies the Borrowers that the circumstances
giving rise to such suspension or demand for compensation no longer exist:

            (a) Borrowers shall be deemed to have delivered a Notice of Interest
Rate Election with respect to such affected Euro-Dollar Loans and thereafter all
Loans which would otherwise be made (or continued as or converted into, as the
case may be) by such Lender as Euro-Dollar Loans shall be made instead as
Alternate Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Lenders); and

            (b) after each of its Euro-Dollar Loans (as the case may be) has
been repaid (or converted to a Alternate Base Rate Loan), all payments of
principal which would otherwise be applied to repay such Loans shall be applied
to repay its Alternate Base Rate Loans instead, and

            (c) Borrowers will not be required to make any payment which would
otherwise be required by Section 2.13 with respect to such Euro-Dollar Loans
converted to Alternate Base Rate Loans pursuant to clause (a) above.

                                   ARTICLE IX

                                  MISCELLANEOUS

      Section 9.1 Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telex, facsimile
transmission followed by telephonic confirmation or similar writing) and shall
be given to such party: (x) in the case of the Borrowers, KeyBank (in its
capacity as a Lender and the Swing Lender hereunder) and the Administrative
Agent, at its address, telex number or facsimile number set forth on the
signature


                                      -71-
<PAGE>
pages hereof with a duplicate copy thereof, in the case of the Borrowers, to the
Borrowers, at 1818 Market Street, 28th Floor, Philadelphia, PA 19103 Attn: Mr.
Kenneth Frappier, and with a duplicate copy, in the case of the Borrowers, to
Ledgewood 1521 Locust Street, 8th Floor, Philadelphia, PA 19102-3727, Attn:
Jeffrey F. Brotman, Esq., (y) in the case of any Lender, at its address, telex
number or facsimile number set forth in its Administrative Questionnaire or (z)
in the case of any party, such other address, telex number or facsimile number
as such party may hereafter specify for the purpose by notice to the
Administrative Agent and the Borrowers. Each such notice, request or other
communication shall be effective (i) if given by telex or facsimile
transmission, when such telex or facsimile is transmitted to the telex number or
facsimile number specified in this Section and the appropriate answerback or
facsimile confirmation is received, (ii) if given by mail, three (3) Domestic
Business Days after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid, (iii) if given by a nationally
recognized overnight carrier, the next Domestic Business Day after such
communication is deposited with such carrier with postage prepaid, or (iv) if
given by any other means, when delivered at the address specified in this
Section; provided that notices to the Administrative Agent under Article II or
Article VIII shall not be effective until received.

      Section 9.2 No Waivers. No failure or delay by the Administrative Agent or
any Lender in exercising any right, power or privilege hereunder or under any
Note shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.

      Section 9.3 Expenses; Indemnification.

            (a) The Borrowers shall pay (i) all reasonable out-of-pocket costs
and expenses of the Administrative Agent (including reasonable fees and
disbursements of counsel to the Administrative Agent in connection with the
preparation of this Agreement, the Loan Documents and the documents and
instruments referred to therein, or any waiver or consent hereunder or any
amendment hereof or any Default or alleged Default hereunder) and (ii) if an
Event of Default occurs, all reasonable out-of-pocket expenses incurred by the
Administrative Agent and each Lender, including reasonable, actual fees and
disbursements of counsel for the Administrative Agent and each of the Lenders in
connection with the enforcement of the Loan Documents and the instruments
referred to therein and such Event of Default and collection, bankruptcy,
insolvency and other enforcement proceedings resulting therefrom.

            (b) The Borrowers agree to indemnify the Administrative Agent and
each Lender, their respective affiliates and the respective directors, officers,
agents and employees of the foregoing (each an "Indemnitee") and hold each
Indemnitee harmless from and against any and all actual liabilities, losses,
damages, costs and expenses of any kind, including, without limitation, the
reasonable fees and disbursements of counsel, which may be incurred by such
Indemnitee in connection with any investigative, administrative or judicial
proceeding (whether or not such Indemnitee shall be designated a party thereto)
that may at any time (including, without limitation, at any time following the
payment of the Obligations) be imposed on, asserted against or incurred by any
Indemnitee but excluding those liabilities, losses, damages, costs and expenses
incurred solely by reason of the gross negligence or willful misconduct of any
Indemnitee as finally determined by a court of competent jurisdiction, as a
result of, or arising out of, or in any way related to or by reason of, (i) any
of the transactions contemplated by the Loan Documents or the execution,
delivery or performance of any Loan Document, (ii) any violation by the
Borrowers or the Environmental Affiliates of any applicable Environmental


                                      -72-
<PAGE>
Law, (iii) any Environmental Claim arising out of the management, use, control,
ownership or operation of property or assets by the Borrowers or any of the
Environmental Affiliates, including, without limitation, all on-site and
off-site activities involving Materials of Environmental Concern, (iv) the
breach of any environmental representation or warranty set forth herein, (v) the
grant to the Administrative Agent and the Lenders of any Lien in any property or
assets of the Borrowers or any stock or other equity interest in any Borrower,
and (vi) the exercise by the Administrative Agent and the Lenders of their
rights and remedies (including, without limitation, foreclosure) under any
agreements creating any such Lien. The Borrowers' obligations under this Section
shall survive the termination of this Agreement and the payment of the
Obligations.

      Section 9.4 Sharing of Set-Offs. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized at any time or from time
to time, without presentment, demand, protest or other notice of any kind to the
Borrowers or to any other Person, any such notice being hereby expressly waived,
but subject to the prior consent of the Administrative Agent and to the terms
and provisions of this Agreement and the other Loan Documents, to set off and to
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final) and any other indebtedness at any time held or owing by
such Lender (including, without limitation, by branches and agencies of such
Lender wherever located) to or for the credit or the account of the Borrowers
against and on account of the Obligations of the Borrowers then due and payable
to such Lender under this Agreement or under any of the other Loan Documents,
including, without limitation, all interests in Obligations purchased by such
Lender; provided, however, notwithstanding the foregoing or anything else in
this Agreement or any other Loan Document to the contrary, neither any of the
Lenders nor the Administrative Agent shall have the right of set off with
respect to any account or deposits to the extent that such account or deposits
are not the exclusive property of RAIT or a Consolidated Subsidiary or are
accounts in which any Person (other than the Person with which such account has
been established) which is not Affiliated with RAIT, RAIT OP or RAIT SPE has
rights. Each Lender agrees that if it shall, by exercising any right of set-off
or counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of principal and interest due with respect to any Note held by it or
Letter of Credit issued by it (in its capacity as a Fronting Lender) or
participation therein which is greater than the proportion received by any other
Lender in respect of the aggregate amount of principal and interest due with
respect to any Note held by such other Lender or Letter of Credit issued by such
other Lender (in its capacity as a Fronting Lender) or participated in by such
other Lender, the Lender receiving such proportionately greater payment shall
purchase such participations in the Notes held by the other Lenders, and such
other adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Notes held by the Lenders shall be
shared by the Lenders pro rata; provided that nothing in this Section shall
impair the right of any Lender to exercise any right of set-off or counterclaim
it may have to any deposits not received in connection with the Loans and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrowers other than its indebtedness under the Notes. The Borrowers agree, to
the fullest extent they may effectively do so under applicable law, that any
holder of a participation in a Note, whether or not acquired pursuant to the
foregoing arrangements, may exercise rights of set-off or counterclaim and other
rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrowers in the amount of such
participation. Notwithstanding anything to the contrary contained herein, any
Lender may, by separate agreement with the Borrowers, waive its right to set off
contained herein or granted by law and any such written waiver shall be
effective against such Lender under this Section 9.4.


                                      -73-
<PAGE>
      Section 9.5 Amendments and Waivers. Any provision of this Agreement or the
Notes or other Loan Documents may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrowers and the
Required Lenders (and, if the rights or duties of the Administrative Agent are
affected thereby, by the Administrative Agent) except that, to the extent
provided for in this Agreement, certain amendments and/or waivers may be
consented to by the Borrowers and the Administrative Agent without the necessity
of obtaining the consent of the Required Lenders; provided that, except to
reflect or implement matters otherwise specifically provided for in this
Agreement, no such amendment or waiver with respect to this Agreement, the Notes
or any other Loan Documents shall, unless signed by the Lenders affected
thereby, (i) increase or decrease the Commitment of any Lender or subject any
Lender to any additional obligation, (ii) reduce the principal of or rate of
interest on any Loan or any Fees hereunder, (iii) postpone the date fixed for
any payment of principal of or interest on any Loan or any Fees hereunder or for
any reduction or termination of any Commitment, (iv) change the percentage of
the Commitments or of the aggregate unpaid principal amount of the Notes, or the
number of Lenders, which shall be required for the Lenders or any of them to
take any action under this Section or any other provision of this Agreement
(including any amendment of the term "Required Lenders") , (v) modify the
provisions of Section 9.15, (vi) permit Liens on the Borrowing Base Assets
(other than Liens in favor of the Administrative Agent for the ratable benefit
of the Lenders), (vii) modify the provisions of this Section 9.5. In addition,
no such amendment or waiver shall, unless signed by the Swing Lender and each
other Lender affected thereby, increase the Swing Loan Commitment or otherwise
affect any rights or obligations of the Swing Lender hereunder relating to the
Swing Loan Commitment or the Swing Loans.

      Section 9.6 Successors and Assigns.

            (a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrowers may not assign or otherwise transfer any of
their rights under this Agreement or the other Loan Documents without the prior
written consent of all Lenders and the Administrative Agent. The Administrative
Agent and the Lenders shall not assign their respective interests under this
Agreement except as set forth in Section 7.8 (with respect to the Administrative
Agent) and this Article IX (with respect to the Lenders).

            (b) Any Lender may, with the prior written consent of the
Administrative Agent and the Borrowers (which consent in each case shall not
unreasonably be withheld, delayed or conditioned) at any time assign to one or
more Eligible Assignees (each, an "Assignee") all, or a portion of, its rights
and obligations under this Agreement, its Note and the other Loan Documents,
provided, however, (i) no such consent by the Borrowers shall be required (x) if
a Default or Event of Default exists, or (y) in the case of an assignment to
another Lender or to an Affiliate of another Lender, (ii) any partial assignment
shall be in an amount at least equal to $5,000,000 and, after giving effect to
such assignment, the assigning Lender (unless it has sold its entire remaining
Commitment and outstanding Loans) holds a Commitment of at least $5,000,000, and
(iii) such Assignee shall assume the assigned rights and obligations, pursuant
to an Assignment and Assumption Agreement in substantially the form of Exhibit
"B" hereto, executed by such Assignee and such transferor Lender. Upon execution
and delivery of an Assignment and Assumption Agreement and payment by such
Assignee to such transferor Lender of an amount equal to the purchase price
agreed between such transferor Lender and such Assignee, such Assignee shall be
a Lender party to this Agreement and shall have all the rights and obligations
of a Lender with a Commitment as set forth in the applicable Assignment and
Assumption Agreement, and no further consent or action by any party shall be
required and the


                                      -74-
<PAGE>
transferor Lender shall be released from its obligations hereunder to a
corresponding extent. Upon the consummation of any assignment pursuant to this
subsection (b), the transferor Lender, the Administrative Agent and the
Borrowers shall make appropriate arrangements so that, if required, a new Note
is issued to the Assignee upon the return to the Borrowers of the old Note
marked "cancelled". In connection with any such assignment, the transferor
Lender shall pay to the Administrative Agent an administrative fee for
processing such assignment in the amount of $3,500. If the Assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrowers and the Administrative Agent certification as
to exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 8.4. Any assignment made during the
continuation of an Event of Default shall not be affected by any subsequent cure
or waiver of such Event of Default.

            (c) Any Lender may at any time grant to one or more banks or other
financial institutions (in each case, a "Participant") participating interests
in its Commitment or any or all of its Loans. In the event of any such grant by
a Lender of a participating interest to a Participant, whether or not upon
notice to the Borrowers and the Administrative Agent, such Lender shall remain
responsible for the performance of its obligations hereunder, and the Borrowers
and the Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement pursuant to which any Lender may grant such a
participating interest shall provide that such Lender shall retain the sole
right and responsibility to enforce the obligations of the Borrowers hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such participation
agreement may provide that such Lender will not agree to any modification,
amendment or waiver of this Agreement described in clause (i), (ii), or (iii) of
Section 9.5 without the consent of the Participant. The Borrowers agree that
each Participant shall, to the extent provided in its participation agreement,
be entitled to the benefits of Article VIII with respect to its participating
interest. An assignment or other transfer which is not permitted by subsection
(b), above, or (d), below, shall be given effect for purposes of this Agreement
only to the extent of a participating interest granted in accordance with this
subsection (c).

            (d) Any Lender may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Lender from its obligations hereunder.

            (e) No Assignee, Participant or other transferee of any Lender's
rights shall be entitled to receive any greater payment under Section 8.3 or 8.4
than such Lender would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrowers' prior written
consent or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such
Lender to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.

      Section 9.7 Collateral. Each of the Lenders represents to the
Administrative Agent and each of the other Lenders that it in good faith is not
relying upon any "margin stock" (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for in this Agreement.

      Section 9.8 Governing Law; Submission to Jurisdiction.


                                      -75-
<PAGE>
            (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

            (b) Any legal action or proceeding with respect to this Agreement or
any other Loan Document and any action for enforcement of any judgment in
respect thereof shall be brought non-exclusively in the courts of the State of
New York or of the United States of America for the Southern District of New
York, and, by execution and delivery of this Agreement, the Borrowers hereby
accept for themselves and in respect of their property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
appellate courts. The Borrowers irrevocably consent to the service of process
out of any of the aforementioned courts in any such action or proceeding by the
hand delivery, or mailing of copies thereof by registered or certified mail,
postage prepaid, to the Borrowers at their address set forth below. The
Borrowers hereby irrevocably waive any objection which they may now or hereafter
have to the laying of venue of any of the aforesaid actions or proceedings
arising out of or in connection with this Agreement or any other Loan Document
brought in the courts referred to above and hereby further irrevocably waive and
agree not to plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum. Nothing
herein shall affect the right of the Administrative Agent to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Borrowers in any other jurisdiction.

      Section 9.9 Marshalling; Recapture. Neither of the Administrative Agent
nor any Lender shall be under any obligation to marshal any assets in favor of
the Borrowers or any other party or against or in payment of any or all of the
Obligations. To the extent any Lender receives any payment by or on behalf of
the Borrowers in connection with this Agreement, which payment or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to the Borrowers or their estate, trustee,
receiver, custodian or any other party under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such payment
or repayment, the Obligation or part thereof which has been paid, reduced or
satisfied by the amount so repaid shall be reinstated by the amount so repaid
and shall be included within the liabilities of the Borrowers to such Lender as
of the date such initial payment, reduction or satisfaction occurred.

      Section 9.10 Counterparts; Integration; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective upon receipt by the Administrative Agent and
the Borrowers of counterparts hereof signed by each of the parties hereto (or,
in the case of any party as to which an executed counterpart shall not have been
received, receipt by the Administrative Agent in form satisfactory to it of
telegraphic, telex or other written confirmation from such party of execution of
a counterpart hereof by such party).

      Section 9.11 WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING


                                      -76-
<PAGE>
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

      Section 9.12 Survival. All indemnities set forth herein shall survive the
execution and delivery of this Agreement and the other Loan Documents and the
making and repayment of the Loans hereunder.

      Section 9.13 Domicile of Loans. Each Lender may transfer and carry its
Loans at, to or for the account of any domestic or foreign branch office,
subsidiary or affiliate of such Lender.

      Section 9.14 Limitation of Liability. No claim may be made by the
Borrowers or any other Person acting by or through Borrowers against the
Administrative Agent or any Lender or the affiliates, directors, officers,
employees, attorneys or agent of any of them for any consequential or punitive
damages in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Agreement or by the other Loan Documents, or any act, omission or event
occurring in connection therewith; and the Borrowers hereby waive, release and
agree not to sue upon any claim for any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor.

      Section 9.15 Recourse Obligation. This Agreement and the Obligations
hereunder are fully recourse to the Borrowers. Notwithstanding the foregoing, no
recourse under or upon any obligation, covenant, or agreement contained in this
Agreement shall be had against any officer, director, shareholder or employee of
the Borrowers except for damages, losses, costs and expenses incurred by any
Lender or the Administrative Agent with respect to any fraud or misappropriation
of funds on the part of such officer, director, shareholder or employee.

      Section 9.16 Confidentiality. The Administrative Agent and each Lender
(each, a "Lending Party") agrees to keep confidential any information furnished
or made available to it by the Borrowers pursuant to this Agreement; provided
that nothing herein shall prevent any Lending Party from disclosing such
information (a) to any other Lending Party, or any officer, director, employee,
agent, or advisor of any Lending Party, (b) to any other Person if reasonably
incidental to the administration of the Facility provided herein such as an
attorney or accountant for a Lending Party, provided such Person agrees to
maintain the confidentiality of such information and uses same only in
connection with the administration or enforcement of the Facility, (c) as
required by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority, (f) that is or becomes available to the public or that is or
becomes available to any Lending Party other than as a result of a disclosure by
any Lending Party prohibited by this Agreement, (g) in connection with any
litigation to which such Lending Party or any of its affiliates may be a party,
(h) to the extent necessary in connection with the exercise of any remedy under
this Agreement or any other Loan Document, and (i) subject to provisions
substantially similar to those contained in this Section, to any actual or
proposed participant or assignee.

      Section 9.17 Legal Rate. Notwithstanding anything in this Agreement or any
Loan Document to the contrary, if at any time the interest rate applicable to
the Notes, together with all fees and charges which are treated as interest
under applicable law (collectively, the "Charges"), as provided for in this
Agreement or in any other document executed in connection herewith, or otherwise
contracted for, charged, received, taken or reserved by the Administrative
Agent, on behalf of the Lenders, shall exceed the maximum lawful rate (the
"Legal Rate") which may be contracted for, charged, taken, received or reserved
by the Administrative Agent, on


                                      -77-
<PAGE>
behalf of the Lenders in accordance with applicable law, the rate of interest
payable under such Notes, together with all Charges payable, shall be limited to
the Legal Rate and any interest or Charges not so charged, taken, received or
reserved by Administrative Agent, on behalf of the Lenders at such time shall be
spread, prorated or amortized over the term of such Notes to the fullest extent
permitted by law.

      Section 9.18 Estoppel and Certification. The Borrowers hereby certify to
the Administrative Agent and to the Lenders the following facts knowing that the
Administrative Agent and the Lenders require, and are relying upon, the
representations contained in Section 9.18 as a condition to entering into this
Agreement:

                  (i) All interest due to the Lenders through and including the
      date hereof has been paid;

                  (ii) There are no existing uncured Defaults or Events of
      Default under any of the Loan Documents;

                  (iii) As of the date of execution hereof, the Borrowers have
      no, and waive any, defenses, rights of setoff, counterclaims, claims or
      causes of action of any kind or description against the Administrative
      Agent or against the Lenders as holders of the Notes, as regards the (a)
      payment of the principal sums described therein, (b) payment of interest
      thereon, (c) payment of any other sums due and payable under this
      Agreement, the Notes or any of the Loan Documents, and (d) the performance
      of any obligations under the Loan Documents;

                  (iv) This Agreement, the Notes and the Loan Documents are
      valid and enforceable against the Borrowers in accordance with their
      respective terms;

                  (v) It is understood and agreed that neither the
      Administrative Agent nor the Lenders, by virtue of executing this
      Agreement, are waiving any of their respective rights under any of the
      Loan Documents with respect to any Defaults or Events of Default which may
      occur or arise from and after the date hereof; and

                  (vi) Upon acceptance hereof, the Administrative Agent and the
      Lenders will be in full compliance with the Administrative Agent's and the
      Lenders' undertakings and obligations under this Agreement and the other
      Loan Documents.

      Section 9.19 USA Patriot Act Notice. Each Lender that is subject to the
Act (as hereinafter defined) and the Administrative Agent (for itself and not on
behalf of any Lender) hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "Act"), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender or
the Administrative Agent, as applicable, to identify the Borrower in accordance
with the Act.

                  [Remainder of page intentionally left blank]


                                      -78-
<PAGE>
      IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Agreement to be duly executed and delivered as of the date first above
written.

                                        BORROWERS:

                                        RAIT INVESTMENT TRUST, a Maryland trust


                                        By: /s/ Ellen J. DiStefano
                                           -------------------------------------
                                        Name: Ellen J. DiStefano
                                        Title: Executive Vice President
                                               and Chief Financial Officer

                                        RAIT PARTNERSHIP, L.P., a Delaware
                                            limited partnership


                                        By: RAIT General, Inc., a Maryland
                                            corporation, its general partner


                                        By: /s/ Ellen J. DiStefano
                                           -------------------------------------
                                        Name: Ellen J. DiStefano
                                        Title: Executive Vice President
                                               and Chief Financial Officer


                                        RAIT ASSET HOLDINGS, LLC

                                        By: RAIT Partnership, L.P., its sole
                                            member

                                        By: RAIT General, Inc., a Maryland
                                            Corporation, its general partner


                                        By: /s/ Ellen J. DiStefano
                                           -------------------------------------
                                        Name: Ellen J. DiStefano
                                        Title: Executive Vice President
                                               and Chief Financial Officer


                                      S-1
<PAGE>
                                            KEYBANK NATIONAL ASSOCIATION, as
                                            Administrative Agent

Facsimile Number: 617-385-6293              By: /s/ Kathleen M. Ahern
                                               ---------------------------------
Address: 225 Franklin Street, 18th Floor    Name: Kathleen M. Ahern
         Boston, Massachusetts 02110        Title: Senior Banker

Attn:    Ms. Kathleen Ahern


                                      S-2
<PAGE>
Commitment
      $50,000,000.00

                                       KEYBANK NATIONAL ASSOCIATION, as a Lender
                                       and as Swing Lender

                                       By: /s/ Kathleen M. Ahern
                                           -------------------------------------
                                           Name: Kathleen M. Ahern
                                           Title: Senior Banker


                                      -3-
<PAGE>
Commitment
      $50,000,000.00

                                        BANK OF AMERICA, N.A., as a Lender


                                        By: /s/ Michael W. Edwards
                                            ------------------------------------
                                            Name:  Michael W. Edwards
                                            Title: SVP; Portfolio Manager


                                      -4-
<PAGE>
Commitment
      $25,000,000.00

                                       CITICORP NORTH AMERICA, INC., as a Lender


                                       By: /s/ Jeanne Craig
                                           -------------------------------------
                                           Name:  Jeanne Craig
                                           Title: Vice President


                                      -5-
<PAGE>
Commitment
      $25,000,000.00

                                        EMIGRANT SAVINGS BANK, as a Lender


                                        By: /s/ Patricia Goldstein
                                            ------------------------------------
                                            Name:  Patricia Goldstein
                                            Title: Senior Executive Vice
                                                   President


                                      -6-
<PAGE>
Commitment
      $25,000,000.00

                                        HARRIS NA, as a Lender


                                        By: /s/ Michael S. Cameli
                                            ------------------------------------
                                            Name:  Michael S. Cameli
                                            Title: Director


                                      -7-
<PAGE>
Commitment
      $25,000,000.00

                                        SIGNATURE BANK, as a Lender


                                        By: /s/ Susan M. Duggan
                                            ------------------------------------
                                            Name:  Susan M. Duggan
                                            Title: Senior Lender & Vice
                                                   President


                                      -8-
<PAGE>
Commitment
      $20,000,000.00

                                        HUDSON UNITED BANK, as a Lender


                                        By: /s/ Eugene A. Winski
                                            ------------------------------------
                                            Name:  Eugene A. Winski
                                            Title: Vice President


                                      -9-
<PAGE>
Commitment
      $20,000,000.00

                                        RAYMOND JAMES BANK, FSB, as a Lender


                                        By: /s/ Thomas F. Macina
                                            ------------------------------------
                                            Name:  Thomas F. Macina
                                            Title: Senior Vice President


                                      -10-
<PAGE>
Commitment
      $10,000,000.00

                                        FIRST COMMERCIAL BANK NEW YORK AGENCY,
                                        as a Lender

                                        By: /s/ Bruce M.J. Ju
                                            ------------------------------------
                                            Name:  Bruce M.J. Ju
                                            Title: VP and General Manager


                                      -11-
<PAGE>
Commitment
      $10,000,000.00

                                        THE INTERNATIONAL COMMERCIAL BANK OF
                                        CHINA, NEW YORK AGENCY, as a Lender


                                        By: /s/ Nae-Yee Lung
                                            ------------------------------------
                                            Name: Nae-Yee Lung
                                            Title: EVP & General Manager


                                      -12-
<PAGE>
Commitment
      $10,000,000.00

                                        TD BANKNORTH, N.A., as a Lender


                                        By: /s/ John Mercier
                                            ------------------------------------
                                            Name:  John Mercier
                                            Title: Senior Vice President


                                      -13-