Document:

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                                                                    EXHIBIT 10.3

           Employment Agreement between Betsy Z. Cohen and Registrant

         THIS EMPLOYMENT AGREEMENT (the "Agreement") entered into as of January
23, 2002 by and between RAIT Investment Trust, a Maryland real estate investment
trust (the "Company"), with a principal office in Philadelphia, Pennsylvania,
and Betsy Cohen ("Executive").

         WHEREAS, Executive desires to continue employment with the Company, and
the Company desires to continue to employ Executive upon the terms and
conditions hereinafter set forth;

         NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:

         1.       Employment. The Company continues to employ Executive, and
Executive hereby accepts such continued employment and agrees to perform
Executive's duties and responsibilities, in accordance with the terms,
conditions and provisions hereinafter set forth.

                  1.1.     Employment Term. This Agreement shall be effective as
of October 1, 2001 (the "Effective Date"), and shall continue for five years,
until September 30, 2006, unless the Agreement is terminated sooner in
accordance with Section 2 or 3 below. In addition, the term of the Agreement
shall automatically renew daily so that it is at all times for a five year
period. The period commencing on the Effective Date and ending on the date on
which the term of Executive's employment under the Agreement shall terminate is
hereinafter referred to as the "Employment Term."

                  1.2.     Duties and Responsibilities. Commencing on the
Effective Date, Executive shall serve as the Chairman of the Board and Chief
Executive Officer of the Company. Executive shall perform all duties and accept
all responsibilities incident to such position as may be reasonably assigned to
her by the Board of Trustees of the Company (the "Board"). In addition, the
Executive shall serve as a member of the Board during the Employment Term.

                  1.3.     Extent of Service. Executive agrees to use
Executive's best efforts to carry out Executive's duties and responsibilities
under Section 1.2 hereof and, consistent with the other provisions of this
Agreement, to devote such business time, attention and energy thereto as is
reasonably necessary to carry out those duties and responsibilities. The
foregoing shall not be construed as preventing Executive from providing service
to, or making investments in, other businesses or enterprises provided there is
no conflict with Executive's ability to satisfy her obligations to the Company.

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                  1.4.     Base Salary. For all the services rendered by
Executive hereunder, the Company shall pay Executive a base salary ("Base
Salary"), commencing on the Effective Date, at the annual rate of $450,000,
payable in installments at such times as the Company customarily pays its other
senior level executives. Executive's Base Salary shall be reviewed annually for
appropriate increases by the Board pursuant to the Board's normal performance
review policies for senior level executives but shall not be decreased.

                  1.5.     Bonus. Executive shall be eligible to receive annual
bonuses in such amounts as the Board may approve in its sole discretion or under
the terms of any annual incentive plan of the Company maintained for other
senior level executives.

                  1.6.     Retirement and Welfare Plans and Perquisites.

                  (a)      Executive shall be entitled to participate in all
employee retirement and welfare benefit plans and programs or executive
perquisites made available to the Company's senior level executives as a group
or to its employees generally, as such retirement and welfare plans or
perquisites may be in effect from time to time and subject to the eligibility
requirements of the plans. Nothing in this Agreement shall prevent the Company
from amending or terminating any retirement, welfare or other employee benefit
plans or programs from time to time as the Company deems appropriate.

                  (b)      The Company shall provide and maintain on Executive's
behalf a supplemental executive retirement plan (the "SERP") in accordance with
the terms and conditions described on Exhibit A attached hereto. Executive shall
be fully vested in the amount of the SERP benefit earned and it shall be fully
accrued upon Executive's attainment of age 65, except as otherwise
provided below. Executive shall also be fully vested in the amount of the SERP
benefit otherwise due at age 65 upon the occurrence of a Change of
Control (as defined in Section 4) or in the event the Executive is terminated
without Cause (as defined in Section 4) or resigns for Good Reason (as defined
in Section 4). The Company shall establish a rabbi trust to serve as the funding
vehicle for the benefits described in this paragraph, and shall make
contributions to the trust in such amounts or in such number of shares of stock
of the Company as the Company reasonably determines to be sufficient to provide
the present value of the benefit as accrued at the time of the contribution, as
determined in accordance with the parameters described in Exhibit A. Upon the
occurrence of a Change of Control, the Company shall immediately contribute to
the trust an amount sufficient to permit the full payment of the benefit due to
Executive at age 65. Notwithstanding the establishment of a rabbi trust, the
Company's obligation to pay the benefit shall constitute a general, unsecured
obligation, payable out of its general assets, and the Executive shall not have
any rights to any specific asset of the Company. The Executive or her
beneficiary shall have only the rights of a general, unsecured creditor against
the Company for any distributions due under this paragraph, and the assets of
the rabbi trust shall be available to pay the claims of the Company's creditors.

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                  1.7.     Reimbursement of Expenses; Vacation. Executive shall
be provided with reimbursement of reasonable expenses related to Executive's
employment by the Company on a basis no less favorable than that which may be
authorized from time to time for senior level executives as a group, and shall
be entitled to vacation and sick leave in accordance with the Company's
vacation, holiday and other pay for time not worked policies.

                  1.8.     Incentive Compensation. Executive shall be entitled
to participate in any short-term and long-term incentive programs (including
without limitation any stock option plans) established by the Company for its
senior level executives generally, at levels commensurate with the benefits
provided to other senior executives and with adjustments appropriate for her
position as Chairman of the Board and Chief Executive Officer.

         2.       Termination. Executive's employment shall terminate upon the
occurrence of any of the following events:

                  2.1.     Termination Without Cause; Resignation for Good
Reason

                  (a)      The Company may remove Executive at any time without
Cause (as defined in Section 4) from the position in which Executive is employed
hereunder upon not less than sixty (60) days' prior written notice to Executive;
provided, however, that, that in the event that such notice is given, Executive
shall be under no obligation to render any additional services to the Company
and shall be allowed to seek other employment. In addition, Executive may
initiate a termination of employment by resigning under this Section 2.1 for
Good Reason (as defined in Section 4). Executive shall give the Company not less
than 60 days' prior written notice of such resignation.

                  (b)      Upon any removal or resignation described in Section
2.1(a) above, Executive shall be entitled to receive only the amount due to
Executive under the Company's then current severance pay plan for employees, if
any. No other payments or benefits shall be due under this Agreement to
Executive, but Executive shall be entitled to any benefits accrued and earned in
accordance with the terms of any applicable benefit plans and programs of the
Company.

                  (c)      Notwithstanding the provisions of Section 2.1(b), in
the event that Executive executes and does not revoke a written mutual release
upon such removal, resignation or Non-Renewal, in a form acceptable to the
Company (the "Release"), of any and all claims against the Company and all
related parties with respect to all matters arising out of Executive's
employment by the Company, or the termination thereof (other than claims for any
entitlements under the terms of this Agreement or under any plans or programs of
the Company under which Executive has accrued and is due a benefit), and any
claims against Executive for actions within the scope of her employment by the
Company, Executive shall be entitled to receive, in lieu of the payment
described in Section 2.1(b), the following:

                           (i)      Executive shall receive a lump sum cash
payment equal to the Executive's Base Salary payable over the remaining portion
of the Employment Term, at the rate in effect immediately before Executive's
termination of employment

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and (y) a pro rated bonus, if any, for the year in which Executive's termination
of employment occurs. The pro rated bonus shall be based on the amount of
Executive's annual bonus, if any, for the fiscal year in which Executive's
termination occurs, multiplied by a fraction, the numerator of which is the
number of days during which Executive was employed by the Company in the fiscal
year of her termination and the denominator of which is three hundred sixty-five
(365). Payment shall be made within thirty (30) days after the effective date of
the termination or the end of the revocation period for the Release, if later.

                           (ii)     For a period of 18-months following the date
of termination, Executive shall continue to receive the medical coverage in
effect at the date of her termination (or generally comparable coverage) for
herself and, where applicable, her spouse and dependents, as the same may be
changed from time to time for employees generally, as if Executive had continued
in employment during such period; or, as an alternative, the Company may elect
to pay Executive cash in lieu of such coverage in an amount equal to Executive's
after-tax cost of continuing such coverage, where such coverage may not be
continued (or where such continuation would adversely affect the tax status of
the plan pursuant to which the coverage is provided). The COBRA health care
continuation coverage period under section 4980B of the Internal Revenue Code of
1986, as amended, shall run concurrently with the foregoing 18-month benefit
period.

                           (iii)    Executive shall also receive any other
amounts earned, accrued and owing but not yet paid under Section 1 above.

                  2.2.     Voluntary Termination. Executive may voluntarily
terminate her employment for any reason upon 30 days' prior written notice. In
such event, after the effective date of such termination, except as provided in
Section 2.1 with respect to a resignation for Good Reason, no further payments
shall be due under this Agreement, except that Executive shall be entitled to
any benefits accrued and due in accordance with the terms of any applicable
benefit plans and programs of the Company.

                  2.3.     Disability. The Company may terminate Executive's
employment if Executive has been unable to perform the material duties of her
employment for a period of ninety (90) consecutive days in any 12-month period
because of physical or mental injury or illness ("Disability"); provided,
however, that the Company shall continue to pay Executive's Base Salary until
the Company acts to terminate Executive's employment. Executive agrees, in the
event of a dispute under this Section 2.3 relating to Executive's Disability, to
submit to a physical examination by a licensed physician jointly selected by the
Board and Executive. If the Company terminates Executive's employment for
Disability, Executive shall be entitled to receive the following:

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                  (a)      If the Executive's employment terminates on account
of Disability on or before the third anniversary of the Executive's Effective
Date, the Company shall continue to pay to Executive the amount of her Base
Salary in effect as of the date of her Disability until December 31, 2006.

                  (b)      If the Executive's employment terminates on account
of Disability at any time after the third anniversary of the Executive's
Effective Date, the vesting of the SERP shall accelerate and the Executive shall
be with credited years of service, for purposes of the SERP, as if she remained
employed by the Company through her sixty-fifth birthday.

                  (c)      Any amounts payable pursuant to this Section 2.3
shall be offset by any amounts the Executive receives under the Company's
long-term disability plan.

                  (d)      Executive shall also receive (i) any other amounts
earned, accrued and owing but not yet paid under Section 1 above and any
benefits accrued and earned in accordance with the terms of any applicable
benefit plans and programs of the Company and (ii) a pro rated bonus, if any,
for the year in which Executive's Disability occurs, which bonus shall be
calculated according to Section 2.1(c)(i) above.

                  2.4.     Death. If Executive dies while employed by the
Company, the Company shall pay to Executive's executor, legal representative,
administrator or designated beneficiary, as applicable, (i) any amounts earned,
accrued and owing but not yet paid under Section 1 above and any benefits
accrued and earned under the Company's benefit plans and programs and (ii) a pro
rated bonus, if any, for the year in which Executive's death occurs, which bonus
shall be calculated according to Section 2.1(c)(i) above. Otherwise, the Company
shall have no further liability or obligation under this Agreement to
Executive's executors, legal representatives, administrators, heirs or assigns
or any other person claiming under or through Executive.

                  2.5.     Cause. The Company may terminate Executive's
employment at any time for Cause upon written notice to Executive, in which
event all payments under this Agreement shall cease, except for Base Salary to
the extent already accrued. Executive shall be entitled to any benefits accrued
and earned before her termination in accordance with the terms of any applicable
benefit plans and programs of the Company.

                  2.6.     Notice of Termination. Any termination of Executive's
employment shall be communicated by a written notice of termination to the other
party hereto given in accordance with Section 10. The notice of termination
shall (i) indicate the specific termination provision in this Agreement relied
upon, (ii) briefly summarize the facts and circumstances deemed to provide a
basis for a termination of employment and the applicable provision hereof, and
(iii) specify the termination date in accordance with the requirements of this
Agreement.

         3.       Change of Control.

                  3.1.     Effect of Change of Control. If a Change of Control
occurs and Executive's employment terminates under the circumstances described
below, the provisions of Section 2.1 shall apply.

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                  3.2.     Termination Without Cause Upon or After a Change of
Control. Upon or after a Change of Control, the Company (by action of the Board)
may remove Executive at any time without Cause from the position in which
Executive is employed hereunder or Executive may initiate termination of
employment by resigning under this Section 3 for Good Reason (as defined in
Section 4) (in either case the Employment Term shall be deemed to have ended)
upon not less than 60 days' prior written notice to Executive (or in the
case of resignation for Good Reason, Executive shall give the Company not less
than 60 days' prior written notice of such resignation); provided,
however, that, in the event that such notice is given, Executive shall be under
no obligation to render any additional services to the Company and shall be
allowed to seek other employment. In any such event, the provisions of Section
2.1(b) or (c), as applicable, shall then apply.

         4.       Definitions.

                  (a)      "Cause" shall mean any of the following grounds for
termination of Executive's employment:

                           (i)      Executive shall have been convicted of a
felony,

                           (ii)     Executive intentionally and continually
fails substantially to perform her reasonably assigned material duties to the
Company (other than a failure resulting from Executive's incapacity due to
physical or mental illness), which failure has been materially and demonstrably
detrimental to the Company and has continued for a period of at least
30 days after a written notice of demand for substantial performance, signed
by a duly authorized officer of the Company, has been delivered to Executive
specifying the manner in which Executive has failed substantially to perform,

                           (iii)    Executive breaches Section 5 of this
Agreement.

                  (b)      "Good Reason" shall mean the occurrence of any of the
following events or conditions, unless Executive has expressly consented in
writing thereto or unless the event is remedied by the Company promptly after
receipt of notice thereof given by Executive:

                           (i)      a reduction in Executive's Base Salary;

                           (ii)     a demotion of Executive;

                           (iii)    a material reduction of Executive's duties
hereunder;

                           (iv)     the Company's requiring Executive to be
based at a location other than in the Philadelphia, Pennsylvania metropolitan
area;

                           (v)      the failure of the Executive to be elected
to the Board; or

                           (vi)     any material breach of this Agreement by the
Company.

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                  (c)   Change of Control. As used herein, a "Change of Control"
shall be deemed to have occurred if:

                         (i)       Any "person" (as such term is used in
sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Exchange
Act")) (other than persons who are shareholders on the effective date of the
Plan) becomes a "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing more
than 50% of the voting power of the then outstanding securities of the Company;
provided that a Change of Control shall not be deemed to occur as a result of a
change of ownership resulting from the death of a shareholder, and a Change of
Control shall not be deemed to occur as a result of a transaction in which the
Company becomes a subsidiary of another corporation and in which the
shareholders of the Company immediately prior to the transaction, will
beneficially own, immediately after the transaction, shares entitling such
shareholders to more than 50% of all votes to which all shareholders of the
parent corporation would be entitled in the election of directors (without
consideration of the rights of any class of stock to elect directors by a
separate class vote);

                         (ii)      The consummation of (i) a merger or
consolidation of the Company with another corporation where the shareholders of
the Company, immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation, shares
entitling such shareholders to more than 50% of all votes to which all
shareholders of the surviving corporation would be entitled in the election of
directors (without consideration of the rights of any class of stock to elect
directors by a separate class vote), (ii) a sale or other disposition of all or
substantially all of the assets of the Company, or (iii) a liquidation or
dissolution of the Company; or

                         (iii)     The individuals who, as of the date of this
Agreement, are members of the Board (the "Incumbent Board") cease for any
reason to constitute at least two-thirds of the Board; provided, however, that
if either the election of any new trustee or the nomination for election of any
new director by the Company's stockholders was approved by a vote of at least
two-thirds of the Incumbent Board prior to such election or nomination, such
new director shall be considered as a member of the Incumbent Board; provided
further, however, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described in Rule 14a-11
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board (a
"Proxy Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest.

For purposes of the preceding definition, "Company" shall include the Company
and its parent and/or subsidiaries.

         5.    Intellectual Property and Confidentiality. Executive hereby
acknowledges that, during and solely as a result of her employment by the
Company, Executive will receive special training and education with respect to
the operation of the Company's business and other related matters, and access to
confidential information and business and professional contacts. In
consideration of Executive's employment and in consideration of the special and
unique opportunities afforded by the Company to Executive as a result of
Executive's employment, Executive hereby agrees to abide by the terms of the
non-competition, non-solicitation, intellectual property and confidentiality
provisions below. Executive agrees and acknowledges that her employment is full,
adequate and sufficient consideration for the restrictions and obligations set
forth in those provisions.

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                  5.1.     Developments. Executive shall disclose fully,
promptly and in writing to the Company any and all inventions, discoveries,
improvements, modifications and other intellectual property rights, whether
patentable or not, which Executive has conceived, made or developed, solely or
jointly with others, while employed by the Company and which (i) relate to the
business, work or activities of the Company or (ii) result from or are suggested
by the carrying out of Executive's duties hereunder or from or by any
information that Executive may receive as an employee of the Company. Executive
hereby assigns, transfers and conveys to the Company all of Executive's right,
title and interest in and to any and all such inventions, discoveries,
improvements, modifications and other intellectual property rights and agrees to
take all such actions as may be requested by the Company at any time and with
respect to any such invention, discovery, improvement, modification or other
intellectual property rights to

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confirm or evidence such assignment, transfer and conveyance. Furthermore, at
any time and from time to time, upon the request of the Company, Executive shall
execute and deliver to the Company, any and all instruments, documents and
papers, give evidence and do any and all other acts that, in the opinion of
counsel for the Company, are or may be necessary or desirable to document such
assignment, transfer and conveyance or to enable the Company to file and
prosecute applications for and to acquire, maintain and enforce any and all
patents, trademark registrations or copyrights under United States or foreign
law with respect to any such inventions, discoveries, improvements,
modifications or other intellectual property rights or to obtain any extension,
validation, reissue, continuance or renewal of any such patent, trademark or
copyright. The Company shall be responsible for the preparation of any such
instruments, documents and papers and for the prosecution of any such
proceedings and shall reimburse Executive for all reasonable expenses incurred
by Executive in compliance with the provisions of this Section 5.1.

                  5.2.     Confidentiality.

                  (a)      Executive acknowledges that, by reason of Executive's
employment by the Company, Executive will have access to confidential
information of the Company, including, without limitation, information and
knowledge pertaining to products, inventions, discoveries, improvements,
innovations, designs, ideas, trade secrets, proprietary information,
manufacturing, packaging, advertising, distribution and sales methods, sales and
profit figures, customer and client lists and relationships between the Company
and dealers, distributors, sales representatives, wholesalers, customers,
clients, suppliers and others who have business dealings with them
("Confidential Information"). Executive acknowledges that such Confidential
Information is a valuable and unique asset of the Company and covenants that,
both during and after the Employment Term, Executive will not disclose any
Confidential Information to any person (except as Executive's duties as an
officer of the Company may require or as required by law or in a judicial or
administrative proceeding) without the prior written authorization of the Board.
The obligation of confidentiality imposed by this Section 5.2 shall not apply to
information that becomes generally known to the public through no act of
Executive in breach of this Agreement.

                  (b)      Executive acknowledges that all documents, files and
other materials received from the Company during the Employment Term (with the
exception of documents relating to Executive's compensation or benefits to which
Executive is entitled following the Employment Term) are for use of Executive
solely in discharging Executive's duties and responsibilities hereunder and that
Executive has no claim or right to the continued use or possession of such
documents, files or other materials following termination of Executive's
employment by the Company. Executive agrees that, upon termination of
employment, Executive will not retain any such documents, files or other
materials and will promptly return to the Company any documents, files or other
materials in Executive's possession or custody.

                  5.3.     Equitable Relief. Executive acknowledges that the
restrictions contained in Sections 5.1 and 5.2 hereof are, in view of the
nature of the business of the Company, reasonable and necessary to protect the
legitimate interests of the Company, and that any violation of any provision of
those Sections will result in irreparable injury to the Company. Executive also

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acknowledges that in the event of any such violation, the Company shall be
entitled to preliminary and permanent injunctive relief, without the necessity
of proving actual damages, and to an equitable accounting of all earnings,
profits and other benefits arising from any such violation, which rights shall
be cumulative and in addition to any other rights or remedies to which the
Company may be entitled. Executive agrees that in the event of any such
violation, an action may be commenced for any such preliminary and permanent
injunctive relief and other equitable relief in any federal or state court of
competent jurisdiction sitting in Pennsylvania or in any other court of
competent jurisdiction. Executive hereby waives, to the fullest extent permitted
by law, any objection that Executive may now or hereafter have to such
jurisdiction or to the laying of the venue of any such suit, action or
proceeding brought in such a court and any claim that such suit, action or
proceeding has been brought in an inconvenient forum. Executive agrees that
effective service of process may be made upon Executive by mail under the notice
provisions contained in Section 10 hereof.

         6.       Non-Exclusivity of Rights. Nothing in this Agreement shall
prevent or limit Executive's continuing or future participation in or rights
under any benefit, bonus, incentive or other plan or program provided by the
Company and for which Executive may qualify; provided, however, that if
Executive becomes entitled to and receives the payments provided for in Section
2.1(b) or (c) of this Agreement, Executive hereby waives Executive's right to
receive payments under any severance plan or similar program applicable to all
employees of the Company.

         7.       Survivorship. The respective rights and obligations of the
parties under this Agreement shall survive any termination of Executive's
employment to the extent necessary to the intended preservation of such rights
and obligations.

         8.       Mitigation. Executive shall not be required to mitigate the
amount of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise and there shall be no offset against amounts due
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that Executive may obtain.

         9.       Arbitration; Expenses. In the event of any dispute under the
provisions of this Agreement, other than a dispute in which the primary relief
sought is an equitable remedy such as an injunction, the parties shall be
required to have the dispute, controversy or claim settled by arbitration in
Philadelphia, Pennsylvania in accordance with the National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association, before a panel of three arbitrators, two of whom shall be selected
by the Company and Executive, respectively, and the third of whom shall be
selected by the other two arbitrators. Any award entered by the arbitrators
shall be final, binding and nonappealable and judgment may be entered thereon by
either party in accordance with applicable law in any court of competent
jurisdiction. This arbitration provision shall be specifically enforceable. The
arbitrators shall have no authority to modify any provision of this Agreement or
to award a remedy for a dispute involving this Agreement other than a benefit
specifically provided under or by virtue of the Agreement. Each party shall be
responsible for its own expenses relating to the conduct of the arbitration
(including reasonable attorneys' fees and expenses) and shall share the fees of
the American Arbitration Association.

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         10.      Notices. All notices and other communications required or
permitted under this Agreement or necessary or convenient in connection herewith
shall be in writing and shall be deemed to have been given when hand delivered
or mailed by registered or certified mail, as follows (provided that notice of
change of address shall be deemed given only when received):

         IF TO THE COMPANY, TO:

                  RAIT Investment Trust
                  1818 Market Street
                  Philadelphia, PA 19103

         With a required copy to:

                  Morgan, Lewis & Bockius LLP
                  1701 Market Street
                  Philadelphia, PA 19103-2921
                  Attention: Robert J. Lichtenstein, Esquire

         IF TO EXECUTIVE, TO:

                  Betsy Cohen
                  [Address Omitted]

or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.

         11.      Contents of Agreement; Amendment and Assignment.

                  (a)      This Agreement sets forth the entire understanding
between the parties hereto with respect to the subject matter hereof and cannot
be changed, modified, extended or terminated except upon written amendment
approved by the Board and executed on its behalf by a duly authorized officer
and by Executive.

                  (b)      All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective heirs, executors, administrators, legal representatives, successors
and assigns of the parties hereto, except that the duties and responsibilities
of Executive under this Agreement are of a personal nature and shall not be
assignable or delegatable in whole or in part by Executive. The Company shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the
business or assets of the Company, within 15 days of such succession, expressly
to assume and agree to perform this Agreement in the same manner and to the same
extent as the Company would be required to perform if no such succession had
taken place.

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         12.      Severability. If any provision of this Agreement or
application thereof to anyone or under any circumstances is adjudicated to be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect any other provision or application of this
Agreement which can be given effect without the invalid or unenforceable
provision or application and shall not invalidate or render unenforceable such
provision or application in any other jurisdiction. If any provision is held
void, invalid or unenforceable with respect to particular circumstances, it
shall nevertheless remain in full force and effect in all other circumstances.

         13.      Remedies Cumulative; No Waiver. No remedy conferred upon a
party by this Agreement is intended to be exclusive of any other remedy, and
each and every such remedy shall be cumulative and shall be in addition to any
other remedy given under this Agreement or now or hereafter existing at law or
in equity. No delay or omission by a party in exercising any right, remedy or
power under this Agreement or existing at law or in equity shall be construed as
a waiver thereof, and any such right, remedy or power may be exercised by such
party from time to time and as often as may be deemed expedient or necessary by
such party in its sole discretion.

         14.      Beneficiaries/References. Executive shall be entitled, to the
extent permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable under this
Agreement following Executive's death by giving the Company written notice
thereof. In the event of Executive's death or a judicial determination of
Executive's incompetence, reference in this Agreement to Executive shall be
deemed, where appropriate, to refer to Executive's beneficiary, estate or other
legal representative.

         15.      Miscellaneous. All section headings used in this Agreement are
for convenience only. This Agreement may be executed in counterparts, each of
which is an original. It shall not be necessary in making proof of this
Agreement or any counterpart hereof to produce or account for any of the other
counterparts.

         16.      Withholding. All payments under this Agreement shall be made
subject to applicable tax withholding, and the Company shall withhold from any
payments under this Agreement all federal, state and local taxes as the Company
is required to withhold pursuant to any law or governmental rule or regulation.
Except as specifically provided otherwise in this Agreement, Executive shall
bear all expense of, and be solely responsible for, all federal, state and local
taxes due with respect to any payment received under this Agreement.

         17.      Governing Law. This Agreement shall be governed by and
interpreted under the laws of the Commonwealth of Pennsylvania without giving
effect to any conflict of laws provisions.

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         IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first above written.

                                      RAIT INVESTMENT TRUST

                                      By:  /s/ Scott F. Schaeffer
                                          --------------------------------------
                                      Name:    Scott F. Schaeffer
                                            ------------------------------------
                                      Title:   President
                                             -----------------------------------

                                      /s/ Betsy Z. Cohen
                                      ------------------------------------------
                                      EXECUTIVE

                                       13<PAGE>
                                                                    Exhibit 10.6

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                           LOAN AND SECURITY AGREEMENT

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                                 by and between

                             RAIT PARTNERSHIP, L.P.
                                   as Borrower

                                       and

                               COMMERCE BANK, N.A.
                                    as Lender

                              Dated October 1, 2002

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<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                         <C>
SECTION 1.  DEFINITIONS, CERTAIN RULES OF CONSTRUCTION...................................................    1
     1.1.   Defined Terms................................................................................    1
     1.2.   Maximum Available Credit.....................................................................    7
     1.3.   Accounting Reports and Principles............................................................    7
     1.4.   Business Day.................................................................................    7
     1.5.   Borrower's Authorization to Charge Accounts..................................................    8
     1.6.   Bank's Costs.................................................................................    8

SECTION 2.  LOAN.........................................................................................    8
     2.1.   The Line of Credit...........................................................................    8
     2.2.   Payments.....................................................................................   10
     2.3.   Loan Fees....................................................................................   10
     2.4.   Late Charge; Default Rate of Interest........................................................   10
     2.5.   Maximum Rate of Interest.....................................................................   11
     2.6.   Obligations Absolute.........................................................................   11
     2.7.   Assessment...................................................................................   11

SECTION 3.  COLLATERAL...................................................................................   12
     3.1.   Description..................................................................................   12
     3.2.   Guaranty.....................................................................................   12
     3.3.   Other Actions................................................................................   12
     3.4.   Filing Security Agreement....................................................................   13
     3.5.   Power of Attorney............................................................................   13

SECTION 4.  CONDITIONS PRECEDENT.........................................................................   13
     4.1.   Closing Deliveries...........................................................................   13
     4.2.   Advances After the Date Hereof...............................................................   14

SECTION 5.  REPRESENTATIONS AND WARRANTIES...............................................................   15
     5.1.   Borrower represents and warrants to Bank as follows:.........................................   15

SECTION 6.  AFFIRMATIVE COVENANTS........................................................................   18
     6.1.   Borrower's Covenants.........................................................................   18
     6.2.   Indemnification..............................................................................   20
     6.3.   Post Closing Compliance......................................................................   21

SECTION 7.  NEGATIVE COVENANTS...........................................................................   21
     7.1.   Debt, Liens and Encumbrances.................................................................   21
     7.2.   Environmental Matters........................................................................   22
     7.3.   Non-Assignability of Loan Agreement..........................................................   22
     7.4.   Change in Principal Executive Office.........................................................   22
     7.5.   Fiscal Year..................................................................................   22
     7.6.   Accounting Methods...........................................................................   22
     7.7.   Miscellaneous Covenants......................................................................   22
     7.8.   Jurisdiction of Organization.................................................................   22

SECTION 8.  DEFAULT......................................................................................   22
     8.1.   Events of Default............................................................................   22
</TABLE>

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<TABLE>
<S>                                                                                                         <C>
     8.2.   Remedies on Default..........................................................................   24
     8.3.   Application of Proceeds......................................................................   25
     8.4.   Set-Off Rights...............................................................................   25
     8.5.   Singular or Multiple Exercise; Non-Waiver....................................................   25
     8.6.   Discontinuance of Remedies...................................................................   25
     8.7.   Cumulative Remedies..........................................................................   25
     8.8.   Cure.........................................................................................   26

SECTION 9.  MISCELLANEOUS................................................................................   26
     9.1.   Notices......................................................................................   26
     9.2.   Integration..................................................................................   26
     9.3.   Amendment, Modification......................................................................   26
     9.4.   Survival.....................................................................................   27
     9.5.   Closing......................................................................................   27
     9.6.   Successors and Assigns; Assignment...........................................................   27
     9.7.   CERTAIN WAIVERS..............................................................................   27
     9.8.   Commitment Letter............................................................................   27
     9.9.   Releases.....................................................................................   27
     9.10.  Governing Law................................................................................   28
     9.11.  Consent To Jurisdiction And Venue............................................................   28
     9.12.  Waiver Of Jury Trial.........................................................................   28
     9.13.  Gender.......................................................................................   28
     9.14.  Public Announcement..........................................................................   28
     9.15.  Relationship of Parties......................................................................   28
     9.16.  Participation and Information................................................................   29
     9.17.  Entire Agreement.............................................................................   29
     9.18.  Closing Expenses.............................................................................   29
     9.19.  Severability.................................................................................   29
</TABLE>

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<PAGE>
                           LOAN AND SECURITY AGREEMENT

      This LOAN AND SECURITY AGREEMENT (the "Agreement" or "Loan Agreement") is
made the 1st day of October, 2002 by and between RAIT PARTNERSHIP, L.P., a
limited partnership organized and existing under the laws of the State of
Delaware (the "Borrower") and COMMERCE BANK, N.A., a national banking
association (the "Bank" or the "Lender").

                                   Background

      Bank has agreed to make available to Borrower, subject to the terms and
provisions hereof, a certain Line of Credit, as more fully hereinafter
described.

      NOW, THEREFORE, in consideration of the mutual covenants and premises set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:

      SECTION 1. DEFINITIONS, CERTAIN RULES OF CONSTRUCTION

            1.1. Defined Terms. Each initially capitalized term used herein
shall have the meaning set forth in the recitals hereto, in this Section or as
otherwise set forth herein, for the purposes hereof and for each of the Loan
Documents. All initially-capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Uniform Commercial Code as enacted in
the Commonwealth of Pennsylvania from time to time (the "UCC").

            "Accounts" means all of the "accounts" (as that term is defined in
the UCC) of Borrower, whether now existing or hereafter arising.

            "Advance" means monies advanced or credit extended to Borrower by
Bank under the Line of Credit and shall include each A Advance and each B
Advance.

            "A Advance" means with respect to each Real Property, the amount of
the Advance which is not in excess of the amount necessary in order for the
Borrower to meet the Debt Service Coverage Ratio for such Real Property as
provided in Section 2.1.2 (d) hereof.

            "B Advance" means with respect to each Real Property, the amount of
the Advance in excess of the A Advance.

            "Affiliate" means and refers to, as applied to any Person, any other
Person directly or indirectly controlling, or through one or more Persons
controlled by, controlling or in common control with that Person.

            "Agreement" or "Loan Agreement" means this Loan and Security
Agreement, and all amendments, modifications and restatements hereof.
<PAGE>
            "Bankruptcy Code" means Title 11 of the United States Code as now or
hereafter in effect, or any successor statute.

            "Bank's Costs" means all reasonable costs and expenses of any kind
paid or incurred by Bank in connection with the preparation, execution,
delivery, amendment, modification, restatement, administration or termination of
this Loan Agreement or any other Loan Document, any amendments thereto, any
transaction contemplated herein or in any existing or future related agreements
and the preservation, enforcement, defense and protection of Bank's rights,
remedies, obligations and liabilities in any manner concerning this Loan
Agreement or any other Loan Document, any transaction contemplated herein or any
existing or future related agreements, including but not limited to: (a)
reasonable expenditures of every nature and kind of Borrower, paid or incurred
by Bank pursuant to the provisions of this Loan Agreement; (b) filing,
recording, publication, appraisal, monitoring, and search costs related to the
Collateral, including, but not limited to, costs paid to perfect, maintain
perfected and preserve the existence and priority of Liens on the Collateral;
(c) after the occurrence of an Event of Default, all Bank's reasonable internal
and external administrative costs and costs incurred in collecting and gaining
possession of, maintaining, handling, preserving, storing, shipping, selling,
preparing for sale and advertising to sell the Collateral, including but not
limited to taxes, levies and insurance; (d) all reasonable attorneys' fees and
other fees and expenses paid or incurred by Bank in enforcing, obtaining legal
advice in preparing, reviewing, consummating, amending, restructuring,
extending, terminating, defending, or preserving or protecting Bank's rights,
remedies, obligations or liabilities in any manner concerning, this Loan
Agreement or any of the other Loan Documents, any transaction contemplated
herein or any existing or future related agreements; (e) any reasonable
attorneys' fees and other reasonable fees and expenses incurred by Bank in
connection with any bankruptcy or insolvency proceeding filed by or against
Borrower whether such attorneys' fees, other fees or expenses, incurred in the
sole discretion of Bank, are related to the review, determination, protection,
monitoring (including attendance at meetings or hearings) or enforcement by Bank
of the Obligations, including, but not limited to, the preparation and filing of
any proof of claim and without regard to whether Bank files, responds, or is a
party to any application, motion, or other proceeding; and (f) wire transfer
charges in such amounts as Bank may from time to time establish for such
service.

            "Business Day" means any day other than a Saturday, Sunday or day on
which banking institutions in Pennsylvania are authorized by law or regulation
to close.

            "Capital Lease" means any lease of property (real, personal or
mixed) which, in conformity with GAAP, is or should be accounted for as a
capital lease on the balance sheet of a Person.

            "Capital Lease Obligations" means the aggregate amount of a Person's
obligations under all of such Person's Capital Leases.

            "Capital Stock" means any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all other ownership interests in a Person (other than a corporation) and any
and all warrants or options to purchase any of the foregoing.

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            "Cash" means money, currency or a credit balance in a Deposit
Account.

            "CERCLA/RCRA" means the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, and the Resource
Conservation Recovery Act of 1976, as amended.

            "Closing" and "Closing Date" mean the date hereof.

            "Collateral" means the security for the Loan as provided herein.

            "Commitment Letter" means the letter given by Bank to Borrower,
dated October 1, 2002 with respect to the Loan.

            "Consolidated" or "Consolidating" means, when used with reference to
any financial term in this Agreement, the aggregate for two or more Persons of
the amounts signified by such term for all such Persons determined on a
consolidated basis in accordance with GAAP.

            "Control" (including with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as applied to
any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and/or policies of that Person, whether
through the ownership of voting securities, by contract, or otherwise.

            "Debt" means for any Person at any date, without duplication: (a)
all obligations of such Person for borrowed money; (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments with
an original maturity in excess of one year; (c) all obligations of such Person
to pay the deferred purchase price of property or services, except trade
accounts payable and accrued liabilities arising in the ordinary course of
business; (d) all Capital Lease Obligations of such Person; (e) all indebtedness
of the type described in clauses (a) through (d) above of others secured by a
Lien on any asset of such Person, whether or not such Debt is assumed by such
Person; and (f) all indebtedness of the type described in clauses (a) through
(d) above of others guaranteed by such Person.

            "Debt Service Coverage Ratio" means as to any Advance requested
hereunder, a ratio, the numerator of which is the Net Cash Flow of the Real
Property underlying the Collateral, and the denominator of which is the debt
service (for the same period as the computation of Net Cash Flow) on the amount
of the Advance (for such purpose assuming: level payment amortization of
principal and interest over 25 years (20 years for office and retail
properties)), that the amount of the Advance is not greater than 75% of the
appraised value of the Real Property (determined by an MAI appraisal prepared by
an MAI appraiser satisfactory to the Bank) acquired or the underlying property
for which the loan is made, and a per annum interest rate equal to the Treasury
Rate plus 3% per annum.

            "Deposit Account" means a non-interest bearing demand or like
account with a federally insured Bank or savings and loan association, money
market accounts, certificates of deposit and other interest bearing accounts.

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            "Designated Officer" means Seth Mackler, Vice President, or any
other person designated in writing by Bank as its representative for the purpose
of receiving notice under this Loan Agreement.

            "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.

            "Event of Default" means any event as set forth in Section 8.1
hereof.

            "Fiscal Year" means the fiscal year of the Borrower, which ends on
September 30 of each year.

            "Funding Date" means a Business Day on which an Advance is funded.

            "GAAP" means generally accepted accounting principles as set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board as each may from time
to time be in effect, or as set forth in such other statements by such other
Person as may be approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of the date of determination and
which are applied on a consistent basis.

            "Guarantor" means RAIT Investment Trust, a Maryland real estate
investment trust.

            "Guaranty" means that certain Guarantee and Surety Agreement
executed by Guarantor of even date herewith in favor of Bank.

            "Indebtedness" means all amounts due from Borrower to Bank pursuant
to this Loan Agreement or otherwise arising out of or in connection with this
Agreement, or any other Loan Document.

            "Interest Rate" means the Wall Street Prime Interest Rate and the
LIBOR Interest Rate.

            "LIBOR Rate" means, the per annum rate of interest denominated as
30-day LIBOR, as published in the "Money Rates" section of The Wall Street
Journal on the applicable date as such rate may change from time to time, plus
2.5%. If The Wall Street Journal ceases to publish or does not publish a 30-day
LIBOR Rate, then the Bank shall determine such rate using such other indices as
the Bank shall determine.

            "LIBOR Interest Rate" means Advances which bear interest at the
LIBOR Rate.

            "Lien" means any charge against or interest in property securing
payment of a debt or performance of an obligation owed to any Person, whether
created by agreement, statute, common law or judicial or governmental authority,
legal action or equitable process, or proceeding, including, but not limited to,
any security interest, lien, encumbrance, mortgage, assignment, pledge,
conditional sale, lease, consignment or bailment.

                                       4
<PAGE>
            "Line" or "Line of Credit" or "Loan" means the loan extended by Bank
to Borrower pursuant to Section 2.1 of this Agreement, as the same may hereafter
be modified or amended.

            "Line of Credit Note" or "Note" means that certain Line of Credit
Note in the form of Exhibit 2.1.2 (a) hereof executed by Borrower in favor of
Bank evidencing Borrower's unconditional obligation to repay Advances on the
Line, and any amendments or allonges thereto.

            "Line Termination Date" means October 1, 2003, unless extended by
the Bank in its sole discretion.

            "Loan Documents" means this Agreement, the Note, the Guaranty all
documents executed and delivered in connection with an Advance and to grant
liens and security interests in Collateral in connection therewith, as provided
herein, and all amendments, modifications and restatements hereto and thereto.

            "Loan to Value Ratio" means a ratio, the numerator of which is the
amount of the Advance requested and the denominator of which is the value of the
Collateral (as determined by the Bank) to be given in connection with such
Advance.

            "Material Adverse Change or Effect" means, with respect to any
Person, a material adverse change or effect upon such Person's business, assets,
liabilities, financial condition or results of operations, or such Person's
ability to perform its obligations under the Loan Documents in accordance with
their respective terms, as determined by Bank.

            "Maturity Date" means the date which is twelve (12) months following
the Line Termination Date.

            "Maximum Available Credit" means, with respect to the Line, Twenty
Million ($20,000,000) Dollars of which not more than Five Million ($5,000,000)
Dollars shall at any time be outstanding constituting B Advances.

            "Multi-Employer Plan" means a plan as defined in Section 4001(a)(3)
of ERISA to which the Borrower or any Affiliate is making or accruing an
obligation to make contributions or has within any of the preceding five (5)
years made or accrued an obligation to make contributions.

            "Net Cash Flow" means the net operating income generated from the
Real Property underlying the Collateral, as projected by the Borrower in
accordance with GAAP, for the full Fiscal Year in which the Advance with respect
thereto is made, assuming a minimum 10% vacancy rate or such greater vacancy
rate determined by the Bank in its sole discretion, and a 5% management fee.

            "Obligations" means all existing and future debts, liabilities and
obligations of every kind or nature at any time owing by Borrower to Bank,
whether joint or several, related or unrelated, primary or secondary, matured or
contingent, due or to become due (including debts, liabilities and obligations
obtained by assignment), and whether principal, interest, fees, Bank

                                       5
<PAGE>
Costs or indemnification obligations hereunder (specifically including interest
accruing after the commencement of any bankruptcy, insolvency or similar
proceeding with respect to Borrower, whether or not claim for such
post-commencement interest is allowed), including, without limitation, debts,
liabilities and obligations in respect of the Loan and any extensions,
modifications, substitutions, increases and renewals thereof. "Participation
Agreement" means that certain agreement entered into by and between Bank and
Borrower, dated July 13, 2001.

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

            "Permitted Liens" means: (a) Liens for taxes, assessments or
governmental charges or claims which are not overdue or which are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, if a reserve or other appropriate provision, if any, as
shall be reasonably required by Bank, shall have been made therefor; (b) Liens
of brokers, carriers, warehousemen, mechanics, materialmen, repairmen, suppliers
and other like Liens incurred in the ordinary course of business for sums not
yet delinquent or being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, if a reserve or other appropriate
provision, if any, as shall be reasonably required by Bank, shall have been made
therefor; (c) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business in connection with workers' compensation
or unemployment insurance and other types of social security; (d) Liens incurred
or deposits made to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations incurred in the ordinary
course of business (exclusive of obligations for the payment of borrowed money);
(e) the rights of tenants under leases or subleases not interfering with the
ordinary conduct of the business of Borrower; and (f) easements, rights-of-way,
encroachments, zoning provisions, covenants, conditions, restrictions and other
similar charges, encumbrances and governmental restrictions not interfering with
any Collateral or the ordinary conduct of the business of Borrower.

            "Person" means an individual, corporation, partnership, limited
liability company, joint venture, trust or unincorporated organization, or a
government or any political subdivision thereof.

            "Principal Executive Office" has the meaning given thereto in
Section 5.1.4.

            "Property" means any interest of Borrower in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.

            "Real Property" means property, as contemplated pursuant to Section
2.1.2 (c) hereof for which an Advance is made.

            "Rule" means and includes any law, rule or regulation binding upon,
or applicable to, Bank as well as any guideline or similar directive issued by a
governmental agency having regulatory jurisdiction over Bank which Bank observes
or with which it complies, whether or not such guideline or directive
technically has the force of law.

                                       6
<PAGE>
            "Solvent" means, as to any Person, that such Person: (a) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage; (b) is able to pay its debts as
they mature; or (c) owns property whose fair salable value is greater than the
amount required to pay its debts.

            "Subsidiaries" means any other corporation, association, joint stock
company, business trust, limited liability company or any other business entity
of which more than fifty percent (50%) of the outstanding voting stock, share
capital, membership or other interest, as the case may be, is owned either
directly or indirectly by any Person or one or more of its Subsidiaries, where
the management of which is otherwise controlled, directly or indirectly, through
one or more intermediaries, or both, by any Person and/or its Subsidiaries.

            "Treasury Rate" means the yield on a United States Treasury
obligation as reported in The Wall Street Journal on the date of calculation of
the Debt Service Coverage Ratio with respect to an Advance, maturing as close to
but not later than ten (10) years from the date of calculation.

            "Unmatured Event of Default" or "Potential Event of Default" means
and refers to any event, act or occurrence which, with the passage of time or
giving of notice or both, would become an Event of Default.

            "Wall Street Prime Rate" means the "Prime Rate" per annum rate of
interest as published in the "Money Rates" section of The Wall Street Journal on
the applicable date (or the highest "Prime Rate" if more than one is published)
as such rate may change from time to time. If The Wall Street Journal ceases to
be published or goes on strike or is otherwise not published, Bank may use a
similar published prime or base rate. The Wall Street Prime Rate is not
necessarily the lowest or best rate of interest offered by Bank.

            "Wall Street Prime Interest Rate" means Advances which bear interest
at the Wall Street Prime Rate.

            1.2. Maximum Available Credit. The aggregate outstanding principal
balance of the Line shall not exceed the Maximum Available Credit.

            1.3. Accounting Reports and Principles. The character or amount of
any asset, liability, account or reserve and of any item of income or expense to
be determined, and any consolidation or other accounting computation to be made,
and the construction of any definition containing a financial term, including
but not limited to capitalized terms not otherwise defined herein, pursuant to
this Agreement or any other Loan Document, shall be construed, determined or
made, as the case may be, in accordance with GAAP, consistently applied, unless
such principles are inconsistent with any express provision of this Agreement.

            1.4. Business Day. Whenever any payment or other obligation
hereunder, under the Note or any other Loan Document, is due on a day other than
a Business Day, such shall be paid or performed on the Business Day next
following the prescribed due date, except as otherwise specifically provided for
herein to the contrary, and such extension of time shall be included in the
computation of interest and charges. Any reference made herein or in any other

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<PAGE>
Loan Document to an hour of day shall refer to the then prevailing time in
Philadelphia, Pennsylvania, unless specifically provided herein to the contrary.

            1.5. Borrower's Authorization to Charge Accounts. Whenever Borrower
is obligated hereunder or under the Note or any other Loan Document to make
payments of any nature to Bank, including payments of principal, interest and
Bank's Costs, Bank shall be entitled, and Borrower hereby authorizes Bank, to
debit from Account Number 12001585 (ABA# 031101114) established with The
Bancorp.com Bank (or if such account is closed by the Borrower any Deposit
Account of Borrower at Bank), the amount of such payment due; provided, however,
that in the event there are insufficient funds in such account to pay all
currently due payments to Bank, Borrower shall immediately pay to Bank the
difference.

            1.6. Bank's Costs. Borrower shall pay Bank on demand all Bank's
Costs. Until paid, all past due and owing interest payments, fees and Bank's
Costs shall be deemed to be part of the principal balance of the Line and bear
interest at the highest Interest Rate on Advances from time to time outstanding
or if no Advances are outstanding, the higher of the LIBOR Interest Rate or the
Wall Street Prime Interest Rate. The obligations of Borrower under this Section
shall survive the termination of this Agreement and the payment of the Line of
Credit Note.

      SECTION 2. LOAN

            2.1. The Line of Credit.

                  2.1.1. Line Established. Provided that no Event of Default or
Unmatured Event of Default has occurred and is continuing, and subject to the
terms and conditions set forth herein, commencing on the Closing Date and
expiring on the day next preceding the Line Termination Date, Bank shall, upon
Borrower's requests from time to time, extend one or more Advances to Borrower,
the aggregate of which outstanding at any one time shall not exceed the Maximum
Available Credit. The Line shall be used by the Borrower to refinance existing
indebtedness of the Borrower with Bank, to acquire income producing assets,
including properties purchased by the Borrower and loans and investments by
Borrower in the ordinary course of its business or to replenish funds of the
Borrower which were used for one of the foregoing purposes. Borrower, prior to
the Line Termination Date, may borrow, repay and, subject to the provisions of
this Agreement, re-borrow under the Line.

                  2.1.2. Advances.

                        (a) Subject to compliance with the provisions of this
Agreement, Borrower may request Advances under the Line in such amounts as may
be set forth by Borrower. On the date hereof, Borrower shall execute the Line of
Credit Note.

                        (b) In connection with each Advance, Borrower shall
execute and deliver a Funding Request, in the form of Exhibit 2.1.2(b) attached
hereto

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<PAGE>
                        (c) The Collateral pledged to secure Advances shall
include Real Property (other than land) consisting of apartment units, retail
space, class A or B office space or light industrial properties located in major
metropolitan areas in (i) the so-called Boston, Massachusetts to Northern
Virginia corridor or (ii) the State of Florida. The Borrower shall use an
Advance either to (i) acquire particular Real Property, (ii) to make a loan, in
the ordinary course of Borrower's business to the Person, or an entity related
to such Person, which owns or is acquiring particular Real Property or (iii) to
replenish funds of the Borrower which were used for one of the foregoing
purposes.

                        (d) The underwriting criteria of the Bank with respect
to the Collateral used to secure a requested Advance shall be as follows: (i)
the Debt Service Coverage Ratio shall be not less than 1.30 based on a twenty
(20) year amortization (twenty-five (25) with respect to multi-family
properties), as calculated by the Bank, with respect to the particular Real
Property for which an Advance is requested and (ii) the Loan to Value Ratio
shall be not less than 75%. The amount of the Advance which enables Borrower to
be in compliance with the foregoing covenant shall constitute the A Advance.
Amounts of Advances requested in excess of the A Advance shall constitute the B
Advance; provided however, the aggregate amount of B Advances at any time
outstanding shall not exceed the sum of Five Million ($5,000,000) Dollars and no
B Advance with respect to any Real Property shall be made to the extent that
such B Advance, together with the A Advance for such Real Property exceeds 100%
of the appraised value of such Real Property as determined by the Bank.

                        (e) Borrower shall provide Collateral to Bank in
connection with each Advance. Such Collateral shall be in form and substance
satisfactory to Bank, shall secure all Advances hereunder and shall include,
without limitation (i) if the underlying Collateral is Real Property, (a) a
mortgage constituting a first lien on the Real Property, subject to no other
liens and encumbrances, except as may be approved by Bank, and insured for the
full amount of the Advance by title insurance issued by a reputable title
insurance company doing business in the state in which the Real Property is
located and satisfactory to the Bank and (b) an assignment of rents, leases and
profits with respect to leases at the Real Property; and (ii) if the underlying
Collateral is a loan, an assignment of the Note evidencing the loan and all
security which secures such loan, all in such form and substance as shall be
satisfactory to the Bank. Borrower shall also execute in favor of Bank in
connection with each Advance, such amendments to the Loan Documents and such
additional documents and opinions of counsel as the Bank shall require in order
to create a security interest in and perfect such security interest in the
Collateral. Borrower shall also provide to the Bank evidence of insurance on the
Collateral in such amounts and with such coverages as shall be acceptable to the
Bank, and all environmental assessments with respect to the Real Property as the
Bank shall require.

                        (f) In connection with each Advance, Borrower shall
elect the Interest Rate to be applicable to the Advance, which rate shall be
either the Wall Street Prime Interest Rate or the LIBOR Interest Rate. Such
designation shall be irrevocable as to such Advance.

            2.1.3. Interest Rate. Each Advance hereunder shall bear interest at
a floating rate of interest per annum equal to the LIBOR Interest Rate or the
Wall Street Prime Interest Rate as elected as to such Advance by the Borrower at
the time of such Advance as

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<PAGE>
provided in Section 2.1.2 (f) hereof. If no election is made by Borrower to Bank
with respect to an Advance, such Advance shall bear interest at the Wall Street
Prime Interest Rate. Interest shall be calculated on the basis of a 360-day
year, but charged for the actual number of days elapsed in any particular
period.

                  Notwithstanding anything to the contrary set fort in the
preceding paragraph, the interest rate for any day as to any Advance shall not
be less than 4.75% per annum.

            2.1.4. Principal and Interest Payments. Interest on the Line shall
be due and payable (i) monthly, in arrears, on the first day of each month,
commencing on November 1, 2002, (ii) on the Line Termination Date, (iii) on the
date of the payment of the principal amount of any Advance on the amount of such
Advance and (iv) on the Maturity Date. The principal amount outstanding on the
Line shall be due and payable, subject to the provisions of Section 8 hereof, as
follows:

                        (a) A Advances shall be payable on the earlier of (i)
the sale or refinancing of the Real Property which is underlying Collateral
pledged to secure the A Advance or the loan made by the Borrower in the ordinary
course of its business with respect to such Real Property which is underlying
Collateral pledged to secure the A Advance or (ii) twelve (12) months following
the Line Termination Date.

                        (b) B Advances shall be payable at the same times as are
set forth in Section 2.1.4 (a) hereof; provided, however, that in connection
with an event set forth in Section 2.1.4 (a)(i) hereof, the Borrower may request
a sixty (60) day extension to pay the principal of such B Advance, such
extension shall be at the sole discretion of the Bank.

                        (c) Notwithstanding anything to the contrary set forth
herein, the principal of all Advances shall be due and payable, if not paid
earlier by operation of (a) and (b) hereof, on the Maturity Date.

            2.2. Payments. All payments hereunder shall be made by Borrower
without defense, setoff or counterclaim, in immediately available funds and
delivered to Bank not later than 12:00 noon on the date due, at Bank's address
set forth in Section 9.1 hereof, or such other place as shall be designated in
writing by Bank. Funds received by Bank after that time shall be deemed to have
been paid on the next succeeding Business Day.

            2.3. Loan Fees. There shall be an initial fee for the Loan of Two
Hundred Thousand ($200,000) Dollars which shall be paid by the Borrower to the
Bank simultaneously with the execution of this Agreement. Simultaneously with
and as a condition to each extension, if any, of the Line Termination Date, the
Borrower shall pay to the Bank an extension fee of One Hundred Thousand
($100,000) Dollars. All loan fees shall be deemed fully earned when paid, shall
be non-refundable and shall not be subject to refund or rebate.

            2.4. Late Charge; Default Rate of Interest. Borrower shall pay Bank
a late charge of five percent (5%) of any payment of principal, interest, fees,
charges or Bank's Costs which is more than fifteen (15) days past due. In
addition, any principal payment on the Loan

                                       10
<PAGE>
not paid when due, and to the extent permitted by applicable law, any interest
payment on the Loan not paid when due, and any other amount due to Bank under
this Agreement or any other Loan Document not paid when due (including Bank's
Costs), in any case whether at stated maturity, demand, acceleration or
otherwise, shall thereafter bear interest payable upon demand at a rate per
annum equal to three percent (3%) plus the applicable Interest Rate on Advances
from time to time outstanding.

            2.5. Maximum Rate of Interest. Notwithstanding anything to the
contrary herein or in any other Loan Document, no effective rate of interest
hereunder shall exceed the maximum effective rate of interest permitted by
applicable law or regulation. Borrower hereby agrees to give Bank written notice
in the event that Borrower has actual knowledge that any interest payment made
to Bank hereunder or under any other Loan Document will cause the total interest
payments collected in any one year to be usurious under applicable law, and Bank
hereby agrees not to knowingly collect any interest from Borrower in the form of
fees or otherwise which would render the Loan or the Note usurious. In the event
that interest hereunder or under any other Loan Document would be usurious in
the opinion of Bank, Bank reserves the right to reduce the interest payable by
Borrower. This Section shall survive closing and the repayment of the Loan.

            2.6. Obligations Absolute. The obligations of the Borrower under
this Agreement shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms hereof, under all circumstances
whatsoever, including without limitation the following circumstances: (i) any
lack of validity or enforceability of the Loan Documents or any other agreement
or document relating thereto; (ii) any amendment or waiver of or any consent to
or departure from the Loan Documents or any document relating thereto; (iii) the
existence of any claim, defense or other right which the Borrower may have at
any time against the Bank or any other person or entity, whether in connection
with this Agreement, the transactions described herein or any unrelated
transaction. Borrower understands and agrees that no payment by it under any
other agreement (whether voluntary or otherwise) shall constitute a defense to
its Obligations hereunder.

            2.7. Assessment. If Bank shall determine that (i) any current Rule,
the adoption or imposition of any Rule, any change in any Rule, or the adoption,
imposition or change in the interpretation or administration thereof by a
governmental authority, central bank or comparable agency charged with the
interpretation and administration thereof, or (ii) compliance with any guideline
or directive generally applicable to national banks whether or not having the
force of law, including without limitation with respect to special deposit,
capital adequacy, risk based capital, capital or reserve maintenance, capital
ratio, or similar requirements, or any deposits or other liabilities taken or
entered into by Bank (including the capital adequacy guidelines promulgated by
the Board of Governors of the Federal Reserve System) may result in (x) an
increase to Bank of the cost of making or maintaining the Loan, or to impose
upon Bank or increase any capital requirement applicable as a result of the
making or maintenance of the Loan, or (y) a reduction of the rate of return or
amounts receivable hereunder as a consequence of its obligations pursuant to
this Agreement to a level below that which Bank could have achieved but for such
adoption, imposition, change or compliance, taking into consideration Bank's
policies with respect to capital adequacy, (which adoption, imposition, change,
or increase in capital requirements or reduction in amounts receivable may be

                                       11
<PAGE>
determined by Bank's reasonable allocation of the aggregate of such cost
increase, capital increase or imposition or reductions in amounts receivable
resulting from such events), or (z) subjecting the Bank to any tax, duty, charge
or withholding on or from payments due from the Borrower (excluding federal
taxation of the overall net income of the Bank), or changes the basis of
taxation of payments to the Bank in respect of the Loan or other amounts due to
the Bank hereunder, then, from time to time, Borrower shall pay to Bank, within
ten (10) Business Days of demand by Bank, such additional amounts as will be
necessary to restore the rate of return to Bank from the date of such change,
together with interest on such amount from the tenth (10th) Business Day after
demand until payment thereof in full at highest Interest Rate on Advances from
time to time outstanding or if no Advances are outstanding, the higher of the
LIBOR Interest Rate or the Wall Street Prime Interest Rate. Bank shall be
entitled to compensation pursuant to this Section by submitting a certificate
claiming compensation and setting forth (accompanied by calculations in
reasonable detail) the increased cost, reduction in amounts receivable or
additional amount or amounts necessary to compensate Bank hereunder for any
reduction in return on capital, which certificate shall be conclusive absent
manifest error. Failure on the part of Bank to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
Bank's right to demand compensation with respect to such period or any other
period. The protection of this Section shall be available to Bank regardless of
any possible contention of the invalidity or inapplicability of the Rule or
other change or condition which shall have occurred or been imposed.

      SECTION 3. COLLATERAL

            3.1. Description. As security for the payment of the Indebtedness,
and satisfaction by Borrower of all covenants and undertakings contained in this
Agreement and the other Loan Documents, the Borrower shall, as provided in
Section 2.1.2 (e) hereof, provide Collateral as contemplated therein.

            3.2. Guaranty. The payment, performance and discharge of the
Indebtedness shall be secured by the Guaranty executed by the Guarantor.

            3.3. Other Actions.

                  3.3.1. Bank is hereby authorized to file financing statements
and amendments to financing statements without Borrower's signature in
accordance with the UCC. Borrower hereby authorizes Bank to file all financing
statements and amendments to financing statements describing the Collateral in
any filing office as Bank, in its sole discretion may determine. Borrower agrees
to comply with the requirements of all state and federal laws and requests of
Bank in order for Bank to have and maintain a valid and perfected first security
interest in the Collateral.

                  3.3.2. In addition to the foregoing, Borrower shall do
anything further that may be reasonably required by Bank to secure Bank and
effectuate the intentions and objects of this Agreement, including, without
limitation, the execution and delivery of security agreements, contracts and any
other documents required hereunder. At Bank's request, Borrower shall also
immediately deliver (with execution by Borrower of all necessary documents or
forms

                                       12
<PAGE>
to reflect, implement or enforce the Liens described herein) to Bank all items
of which Bank must receive possession to obtain a perfected security interest.

            3.4. Filing Security Agreement. A carbon, photographic or other
reproduction or other copy of this Agreement or of a financing statement is
sufficient as and may be filed in lieu of a financing statement.

            3.5. Power of Attorney. Each of the officers of Bank is hereby
irrevocably made, constituted and appointed the true and lawful attorney for
Borrower (without requiring any of them to act as such) with full power of
substitution to do the following: (a) in the event Borrower fails or refuses to
do so, execute in the name of Borrower any schedules, assignments, instruments,
documents and statements that Borrower is obligated to give Bank hereunder or is
necessary to perfect (or continue or evidence the perfection of such security
interest or Lien) Bank's security interest or Lien in the Collateral; (b) during
the continuance of an Event of Default, endorse the name of Borrower upon any
and all checks, drafts, money orders and other instruments for the payment of
monies that are payable to Borrower and constitute collections on such
Borrower's Accounts or proceeds of other Collateral; and (c) during the
continuance of an Event of Default, do such other and further acts in the name
of Borrower that Bank may reasonably deem necessary or desirable to enforce any
Account or other Collateral.

      SECTION 4. CONDITIONS PRECEDENT

      The performance by Bank of any of its obligations hereunder are subject to
the following conditions precedent:

            4.1. Closing Deliveries. At or prior to Closing, Borrower shall
deliver or cause to be delivered to Bank, executed where applicable and in form
and substance satisfactory to Bank and its counsel, in addition to this
Agreement, the following documents and instruments, and the following conditions
shall have been satisfied:

                  4.1.1. The Line of Credit Note.

                  4.1.2. Good standing certificates showing Borrower and
Guarantor to be in good standing in Borrower's and Guarantor's state of
organization and in each other state in which such entities are doing and
presently intend to do business for which qualification is required.

                  4.1.3. A certificate of an authorized officer of the Borrower
certifying to and attaching the (i) resolutions authorizing the execution and
delivery of the Loan Documents, (ii) its formation documents, (iii) its
operating documents and (iv) incumbency and signatures of the officers of
Borrower authorized to execute the Loan Documents.

                  4.1.4. A certificate of an authorized officer of the Guarantor
certifying to and attaching the (i) resolutions authorizing the execution and
delivery of the Loan Documents, (ii) its formation documents, (iii) its
operating documents and (iv) incumbency and signatures of the officers of the
Guarantor authorized to execute the Loan Documents.

                  4.1.5. UCC searches for the Borrower.

                                       13
<PAGE>
                  4.1.6. An Opinion of Borrower's and Guarantor's counsel.

                  4.1.7. If an Advance is requested an Executed Funding Request
and the other items required under Section 2.1.2 (d) and Section 2.1.2 (e)
hereof.

                  4.1.8. All reasonable costs, charges, expenses and fees
incurred in connection with the transactions contemplated by this Agreement,
including without limitation the fees and expenses of Bank's counsel and search
costs to be paid by Borrower. Borrower authorizes Bank to deduct such costs,
charges, expenses and fees from the Advance, if any made on the Closing Date and
agrees to indemnify and hold Bank harmless from and against any and all claims
for any such costs, charges, expenses and fees.

                  4.1.9. All documents evidencing the Collateral.

                  4.1.10. Such additional documents or instruments as Bank may
reasonably require.

                  4.2. Advances After the Date Hereof. Bank shall not make any
requested Advance, unless on each Funding Date, Borrower shall deliver or cause
to be delivered to Bank executed, where applicable, and in form and substance
satisfactory to Bank and its counsel, the following documents and instruments
and the following conditions shall have been satisfied:

                  4.2.1. An executed Funding Request and the other items
required under Section 2.1.2 (d) and Section 2.1.2 (e) hereof.

                  4.2.2. The representations and warranties set forth in Section
5 of this Agreement shall be true and correct in all material respects on and as
of such date with the same effect as though made on and as of such date, and
each Funding Request shall be deemed a reaffirmation thereof.

                  4.2.3. Borrower shall be in compliance with all of the
covenants set forth in this Agreement.

                  4.2.4. No Event of Default or Unmatured Event of Default shall
have occurred and be continuing under this Agreement or under any other Loan
Document.

                  4.2.5. No Material Adverse Change with respect to the Borrower
or Guarantor shall have occurred and then be in existence.

                  4.2.6. All reasonable costs, charges, expenses and fees
incurred in connection with such Advance shall be paid by Borrower. Borrower
authorizes Bank to deduct such costs, charges, expenses and fees from the
Advance and agrees to indemnify and hold Bank harmless from and against any and
all claims for any such costs, charges, expenses and fees.

                  4.2.7. All documents evidencing the Collateral.

                  4.2.8. Such additional documents or instruments as Bank may
reasonably require.

                                       14
<PAGE>
      SECTION 5. REPRESENTATIONS AND WARRANTIES.

            5.1. Borrower represents and warrants to Bank as follows:

                  5.1.1. Organization, Good Standing, Due Qualification.
Borrower is a limited partnership, duly organized, validly existing and in good
standing under the laws of the State of Delaware; has full power and authority
necessary to own and operate its properties and to carry on its business as it
is now engaged and where and as contemplated; and is duly qualified to do
business in, and is in good standing in every jurisdiction where the nature of
Borrower's business requires such qualification.

                  5.1.2. Power and Authority. The making, execution, issuance
and performance by Borrower of this Loan Agreement, the Note and the other Loan
Documents are within the powers of Borrower, have been duly authorized by all
necessary action and are enforceable against Borrower.

                  5.1.3. Legally Enforceable Agreement. This Agreement is, and
each of the other Loan Documents to which Borrower is a party, when delivered
under this Agreement, will constitute the legal, valid and binding obligations
of the Borrower, enforceable against such Borrower in accordance with their
respective terms.

                  5.1.4. Location of Borrower. Borrower's principal executive
office is maintained on the date hereof at 1818 Market Street, 28th Floor,
Philadelphia, Pennsylvania 19103 (the "Principal Executive Office").

                  5.1.5. Owner of Collateral. Borrower will be on the date of
each Advance the owner of the Collateral, free and clear of all liens and
encumbrances.

                  5.1.6. No Violation. The execution, delivery and performance
by Borrower of the Loan Documents do not, and will not by the passage of time,
the giving of notice or otherwise, (i) violate any provision of any law or
regulation, (ii) violate the formation documents of the Borrower, (iii) violate
any judgment, order, decree, agreement, trust or other indenture or instrument
to which Borrower is a party or by which any of its property is bound or (iv)
result in or require the creation or imposition of any Lien with respect to any
property now owned or hereafter acquired by Borrower.

                  5.1.7. Financial Condition. The financial statements of
Borrower heretofore furnished to Bank are true, complete and correct in all
material respects, have been prepared in accordance with GAAP, consistently
applied, and present fairly the financial condition of Borrower as of the dates
thereof, and the results of Borrower's operations for the periods therein ended.
Since the date of the most recent financial statements provided by Borrower to
Bank, there has been no Material Adverse Change in the financial condition of
Borrower.

                  5.1.8. No Litigation, Employee Relations. There are no
actions, suits or proceedings pending, or, threatened against or affecting the
Borrower or any of its assets, and the Borrower is not in default in the
performance of any agreement to which Borrower is a party or is bound, or with
respect to any order, writ, injunction, or any decree of any court, or any
federal,

                                       15
<PAGE>
state, municipal or other government agency or instrumentality, domestic or
foreign, which if adversely determined with respect to any of the foregoing
suits, proceedings, defaults, orders, writings, injunctions or decrees would
have a Material Adverse Effect. Borrower's relations with its employees are
satisfactory and Borrower is not subject to any collective bargaining agreement
or other like agreement with any labor unions or bargaining units thereof.

                  5.1.9. Compliance. Borrower has all authorizations, consents,
approvals, licenses, and exceptions from, and have made all registrations and
filings with, and all reports to, all federal, state and local governmental
bodies and agencies (collectively referred to as "Governmental Approvals")
necessary for the conduct of its business and in connection with the making of
the Loan, and the conduct of its business is not and has not been in violation
of any such Governmental Approvals or any applicable federal or state law, rule
or regulation, including ERISA, the failure of which to obtain or to comply with
would, in any such case, have a Material Adverse Effect on Borrower,
individually or in the aggregate. The Borrower does not require any Governmental
Approvals to enter into, or perform under, this Agreement, the Note or any other
Loan Document. There are no actions or investigations pending or threatened
against or affecting the Borrower before any governmental authority which could
result in a Material Adverse Change in any of the Borrower's business prospects
or the ability of the Borrower to conduct its business in a manner consistent
with past operations and financial results.

                  5.1.10. Compliance with Regulations T, U and X. The Borrower
is not engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meanings of Regulations T, U and X of the Board of Governors
of the Federal Reserve System).

                  5.1.11. Taxes. Borrower's Federal EIN is 23-2919594 and
Guarantor's Federal EIN is 23-2919819. Borrower's UCC Organizational Number is
2785695 and Guarantor's UCC Organizational Number is D04761789. Borrower has
paid, when due, all taxes, governmental charges and assessments levied against
Borrower or any of its assets, except for taxes, charges or assessments which
are not overdue or which are being contested in good faith and by appropriate
proceedings with adequate reserves therefor being available or having been set
aside.

                  5.1.12. Environmental. The Borrower has, in the conduct of its
business and the ownership and use of all real property, complied, in all
material respects, with all federal, state and local laws, rules, regulations,
judicial decisions and decrees pertaining to the use, storage, transportation or
disposal of hazardous waste or toxic materials.

                  5.1.13. Debt. Except as reflected in the Financial Statements
furnished pursuant to Section 6.1.1 hereof or in the notes thereto, Borrower has
no Debt, nor has Borrower guaranteed the payment or performance of any debts or
obligations of any other Person except for the guarantee of checks or other
negotiable instruments for collection in the ordinary course of Borrower's
business.

                  5.1.14. Solvent. Borrower is currently, and on the funding of
each Advance, will be, Solvent.

                                       16
<PAGE>
                  5.1.15. Labor Disputes and Acts of God. The business and
properties of Borrower are not currently affected by any fire, explosion,
accident, strike, lockout or other labor disputes, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy, or other casualty
(whether or not covered by insurance) that could have a Material Adverse Effect.

                  5.1.16. Other Agreements. Borrower is not in default in any
respect in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in a material contract, agreement or
instrument to which it is a party or by which it is bound.

                  5.1.17. ERISA. Borrower is in compliance in all material
respects with all applicable provisions of ERISA. Neither a Reportable Event nor
a Prohibited Transaction has occurred and is continuing with respect to any
Plan; no notice of intent to terminate a Plan has been filed, nor has any plan
been terminated; no circumstances exist that constitute grounds under Section
4042 of ERISA entitling the PBGC to institute proceedings to terminate, or
appoint a trustee to administrate, a Plan, nor has the PBGC instituted any such
proceedings; neither Borrower nor any ERISA Affiliate has completely or
partially withdrawn under Section 4201 or 4204 of ERISA from a Multi-Employer
Plan; Borrower and each ERISA Affiliate have met their minimum funding
requirements under ERISA with respect to all of their Plans and the present fair
market value of all Plan assets exceeds the present value of all vested benefits
under each Plan, as determined on the most recent valuation date of the Plan and
in accordance with the provisions of ERISA and the regulations thereunder for
calculating the potential liability of Borrower or any ERISA Affiliate to the
PBGC or the Plan under the Title IV of ERISA; and neither Borrower, nor any
ERISA Affiliate has incurred any liability to the PBGC under ERISA.

                  5.1.18. Operation of Business. Borrower possesses all material
licenses, permits, franchises, patents, copyrights, trademarks, and trade names
or rights thereto, to conduct its business substantially as now conducted and as
presently proposed to be conducted, and Borrower is not in violation of any
rights of others with respect to any of the foregoing.

                  5.1.19. Fiscal Year. The Fiscal Year of Borrower ends on
September 30 of each calendar year.

                  5.1.20. Accuracy of Representations; No Default. The
information set forth herein and on each of the Schedules hereto, in the
Commitment Letter, in the other materials submitted with or in Borrower's
application(s) to the Bank, and in each of the other Loan Documents is complete
and accurate in all material respects and contains full and complete disclosure
of all pertinent information in connection with the Borrower. None of such
information contains any untrue statement of a material fact or omits to state a
material fact necessary to make the information contained herein or therein not
misleading or not incomplete. No Event of Default or Unmatured Event of Default
hereunder, or under any other Loan Document, has occurred.

                  5.1.21. Perfection and Priority. When Collateral is provided
to the Bank, the provision thereof, together with this Agreement and other Loan
Documents will be effective to create in favor of Bank legal, valid and
enforceable first liens (subject to no other liens) in all right, title and
interest of Borrower in the Collateral, and when appropriate financing
statements

                                       17
<PAGE>
have been filed, Borrower will have granted to Bank and Bank will have perfected
first priority liens in the Collateral.

      SECTION 6. AFFIRMATIVE COVENANTS

            6.1. Borrower's Covenants. So long as any portion of the
Indebtedness remains outstanding and unpaid or Bank has any obligation to extend
Advances hereunder, Borrower covenants and agrees as follows:

                  6.1.1. Financial Information. To furnish or cause to be
furnished, in form and substance satisfactory to Bank:

                        (a) not later than ninety (90) days following the close
of each Fiscal Year of Borrower and Guarantor, income and expense statements, a
balance sheet and changes in cash flow of Borrower and Guarantor, in addition to
any other information requested by the Bank at the end of the Fiscal Year of
Borrower and Guarantor (with comparative figures for the periods in the prior
Fiscal Year of Borrower). Such statements shall be prepared in accordance with
GAAP and certified, without qualification by an independent certified public
accountant, satisfactory to Bank;

                        (b) not later than fifteen (15) days after the date
filed but in no event later than one hundred fifty (150) days following the end
of such parties Fiscal Year, all tax returns of Borrower and Guarantor;

                        (c) not later than fifteen (15) days following each
quarter, a schedule reflecting the Collateral (and the assets related thereto)
and the portfolio of all other assets of Borrower as of the preceding quarter.

                        (d) All financial information provided pursuant to
Section 6.1.1 hereof shall be accompanied by a written statement signed by the
Chief Financial Officer of Borrower stating that all information is true,
correct and complete in all material respects and that Borrower has not
committed an Event of Default or Unmatured Event of Default under the Loan
Agreement or any other Loan Document.

                  6.1.2. Insurance.

                        (a) Maintain, or cause to be maintained at all times, in
full force and effect: (i) worker's compensation insurance, in amounts required
under applicable law; (ii) general liability insurance; (iii) automobile
liability insurance; and (iv) broad form fire, theft and extended coverage
covering all of Borrower's real and personal property on a replacement basis in
amounts not less than the amounts sufficient to prevent the imputation of any
co-insurance provisions.

                        (b) Maintain or cause to be maintained insurance on the
Collateral or the Real Property, including (i) broad form in fire and extended
coverage on a replacement basis in amounts not less than the Advance related
thereto and sufficient to prevent the imputation of any co-insurance provisions
and (ii) such other insurance as the Bank shall require.

                                       18
<PAGE>
                        (c) Each policy of insurance hereunder shall be in
amounts satisfactory to Bank, shall name Bank as a mortgagee or loss payee or in
such other capacity as determined by Bank, and shall be issued by a company
reasonably satisfactory to Bank, and Borrower shall furnish Bank with copies of
each such policy. All such policies shall be in form satisfactory to Bank. Such
policies shall expressly provide that the requisite insurance cannot be altered
or canceled without thirty (30) days prior written notice to Bank and shall
insure Bank notwithstanding the act, omission or neglect of Borrower. If the
insurance, or any part thereof, shall expire, or be withdrawn, or become void or
unsafe by reason of a Borrower's breach of any condition thereof, or become void
or unsafe by reason of the value or impairment of the capital of any company in
which the insurance may then be carried, or if for any reason whatever the
insurance shall be unsatisfactory to Bank, Borrower shall, at its own expense,
place new or additional insurance satisfactory to Bank.

                  6.1.3. Taxes. Cause the prompt payment and discharge of all
taxes, governmental charges and assessments levied and assessed or imposed upon
Borrower or any of its assets, except as may be contested in good faith, with
adequate reserves satisfactory to Bank having been set aside therefor.

                  6.1.4. Litigation.

                        (a) Promptly defend all actions, proceedings or claims
which could result in a Material Adverse Change; and

                        (b) In the event any order, judgment or lien which could
constitute a Material Adverse Change is filed, while any portion of the
Indebtedness remains outstanding and unpaid, that has not been vacated or the
execution of which has not been stayed within thirty (30) days (or immediately
if a writ of execution is filed) following the entry thereof, or that is not
fully covered by insurance satisfactory to Bank, Borrower shall furnish to Bank
(i) a bond, satisfactory to Bank, from an independent, financially responsible
corporate surety company, naming the Borrower and Bank as co-obligees, or (ii)
establish an escrow account with Bank, in either event in an amount equal to or
greater than the amount of such order, judgment or lien, plus costs.

                  6.1.5. Maintenance of Records. Keep adequate records and books
of account, in which complete entries shall be made in accordance with GAAP
consistently applied, effecting all of Borrower's financial transactions.

                  6.1.6. Maintenance of Properties. Maintain, keep and preserve
all of its properties necessary or useful in the proper conduct of their
business in good working order and condition, ordinary wear and tear excepted.

                  6.1.7. Notice of Events. Promptly give written notice to Bank
of the occurrence or imminent occurrence of any event which causes or would
imminently cause: (i) any representation or warranty made in Section 5 hereof to
be untrue, incomplete or misleading in any material respect; (ii) an Event of
Default or Unmatured Event of Default hereunder or under any other Loan
Document; (iii) any Material Adverse Change; (iv) any material casualty to any
property of Borrower; (v) the institution of, or the issuance of any order,

                                       19
<PAGE>
judgment, decree or other process in, any litigation, investigation,
prosecution, proceeding or other action by any governmental authority or other
Person against Borrower, that does, or could, cause a Material Adverse Change;
and (vi) any material change in the senior management, directors or officers of
Borrower.

                  6.1.8. Fiscal Year; Principal Executive Office; Existence.
Promptly notify Bank in writing of a change in the Fiscal Year of Borrower;
notify Bank at least thirty (30) days prior to a change in the state of
organization or Principal Executive Office of Borrower; and maintain in good
standing the existence of Borrower as a limited partnership and all necessary
foreign qualifications, where the failure to do so could constitute a Material
Adverse Effect.

                  6.1.9. Compliance with Laws; Licenses; Agreements. Comply in
all material respects with all applicable statutes, rules and regulations with
respect to the conduct of Borrower's business including but not limited to ERISA
and CERCLA/RCRA; maintain in all material respects such necessary licenses and
permits required for the conduct of Borrower's business; and comply in all
material respects with all agreements (including without limitation, collective
bargaining agreements with all labor unions) to which Borrower is or may become
a party.

                  6.1.10. Business. Maintain (i) all licenses in full force and
effect where the failure to do so could constitute a Material Adverse Effect,
and (ii) the general character of Borrower's business in which it is currently
engaged, and engage only in businesses in substantially the same fields as the
businesses conducted on the Closing Date and in lines of business reasonably
related thereto.

                  6.1.11. Maintain Accounts with Bank. Open and maintain at Bank
satisfactory and meaningful Deposit Accounts with average daily collected
balances of not less than Two Million ($2,000,000) Dollars.

                  6.1.12. Operation of Business; Collection of Accounts.
Diligently operate the Borrower's business and take all reasonable commercial
action to collect all Accounts in connection therewith.

                  6.1.13. Performance of Obligations. Perform as and when due,
and pay and discharge at or before maturity, all obligations and liabilities,
except where the same may be contested in good faith by appropriate proceedings,
and appropriate reserves for the accrual of any of the same shall have been
established to the satisfaction of Bank.

            6.2. Indemnification. Borrower hereby agrees to indemnify and to
protect, defend, and hold harmless Bank, its parent, subsidiaries and/or
Affiliates and its or their directors, officers, employees, agents, attorneys
and shareholders, from and against any and all losses, damages, expenses or
liabilities of any kind or nature and from any suits, claims, or demands,
including all reasonable counsel fees incurred in investigating, evaluating or
defending such claim, suffered by any of them and caused by, relating to,
arising out of, resulting from, or in any way connected with this Agreement, the
Note, or the other Loan Documents and any transaction contemplated herein or
therein or arising out of the Borrower's business, including,

                                       20
<PAGE>
but not limited to, claims based upon any act or failure to act by Bank in
connection with this Agreement, or the other Loan Documents and any transaction
contemplated herein or therein, except to the extent arising solely out of the
gross negligence or willful misconduct of the Bank. If Borrower shall have
knowledge of any claim or liability hereby indemnified against, they shall
promptly give written notice thereof to Bank. THIS COVENANT SHALL SURVIVE
PAYMENT OF THE INDEBTEDNESS AND THE TERMINATION OR SATISFACTION OF THIS
AGREEMENT.

                  6.2.1. Bank shall promptly give Borrower written notice of all
suits or actions instituted against Bank with respect to which Borrower has
agreed to indemnify Bank, and Borrower shall timely proceed to defend any such
suit or action. Bank shall also have the right, at the expense of Borrower, to
participate in, or at Bank's election and at Borrower's expense, assume the
defense or prosecution of, such suit, action, or proceeding, and in the latter
event, Borrower may employ counsel and participate therein. Bank shall have the
right to adjust, settle, or compromise any claim, suit, or judgment after notice
to Borrower, unless Borrower desires to litigate such claim, defend such suit,
or appeal such judgment and simultaneously therewith deposit with Bank
additional collateral security sufficient to pay any judgment rendered, with
interest, costs, legal fees and expenses; and the right of Bank to
indemnification under this Agreement shall extend to any money paid by Bank in
settlement or compromise of any such claims, suits, and judgments in good faith,
after notice to Borrower.

                  6.2.2. If any suit, action, or other proceeding is brought by
Bank against Borrower for breach of Borrower's covenant of indemnity herein
contained, separate suits may be brought as causes of action accrue, without
prejudice or bar to the bringing of subsequent suits on any other cause or
causes of action, whether theretofore or thereafter accruing.

            6.3. Post Closing Compliance. Borrower agrees to execute any Loan
Documents necessary in connection with the provision of Collateral and to
execute and re-execute, and to use reasonable efforts to cause any applicable
third party to execute any Loan Documents necessary in connection with the
provision of Collateral and to execute and re-execute and to deliver to Bank any
document or instrument signed in connection herewith or with any other Loan
Document which was incorrectly drafted and/or signed, as well as any document or
instrument which should have been signed at or prior to Closing but which was
not so signed. Borrower agrees to comply with any written request of Bank to
cause the foregoing to be done not later than ten (10) days after Borrower's
receipt thereof, and failure by Borrower to so comply shall, at the option of
Bank, constitute an Event of Default hereunder.

      SECTION 7. NEGATIVE COVENANTS

            So long as any portion of the Indebtedness shall remain outstanding
and unpaid or Bank has any obligation to make Advances to Borrower hereunder,
Borrower agrees that, in the absence of prior written consent of Bank, it will
not:

            7.1. Debt, Liens and Encumbrances. Create, incur, assume or permit
to exist any Lien upon the Collateral, except Permitted Liens.

                                       21
<PAGE>
            7.2. Environmental Matters. Use, generate, treat, transport, store,
dispose of or otherwise introduce or permit generation, use, transportation,
storing, disposing or other introduction by any Person of fuel or any other
hazardous substances, pollutants, contaminants, hazardous waste, residual waste
or solid waste into or on any Collateral or real property owned, leased or
occupied by Borrower, or any Real Property for which an Advance is made, in
violation of any applicable statute, law, ordinance rule or regulation or permit
the Mortgagors to suffer or commit any of the foregoing with respect to the Real
Property.

            7.3. Non-Assignability of Loan Agreement. Assign this Loan Agreement
or any interest herein or in any of the Loan Documents.

            7.4. Change in Principal Executive Office. Change the Principal
Executive Office, except upon prior compliance with Section 6.1.8 hereof.

            7.5. Fiscal Year. Change its Fiscal Year without giving prompt
written notice to Bank.

            7.6. Accounting Methods. Make or consent to a material change in
structure of the Borrower or in its method of accounting, as applicable.

            7.7. Miscellaneous Covenants.

            (a) Become or be a party to any contract or agreement which at the
time of becoming a party to such contract or agreement materially impairs
Borrower's ability to perform under this Agreement, or under any other
instrument, agreement or document to which Borrower is a party or by which it is
or may be bound.

            (b) carry or purchase any "margin stock" within the meaning of
Regulations U, T or X of the Board of Governors of the Federal Reserve System 12
C.F.R., Chapter II.

            7.8. Jurisdiction of Organization. If a Registered Organization (as
defined in the UCC), Borrower shall not change its jurisdiction of organization.

      SECTION 8. DEFAULT

            8.1. Events of Default. The occurrence of any one or more of the
following events, conditions or states of affairs, shall constitute an "Event of
Default" hereunder, under the Note and under each of the other Loan Documents:

                  8.1.1. Failure by Borrower to pay any principal of any of the
Indebtedness, or any portion thereof when the same becomes due;

                  8.1.2. Failure by Borrower to pay any interest on any of the
Indebtedness when due or failure to pay any Bank's Costs within three (3) days
following the due date thereof or demand therefore;

                                       22
<PAGE>
                  8.1.3. Failure by Borrower to observe or perform any
agreement, condition, undertaking or covenant in (i) this Loan Agreement, the
Commitment Letter or any other Loan Document, or in any other agreement by and
between Borrower and Bank, or (ii) any other material agreement, lease,
mortgage, note or other obligation to which Borrower is a party or by which
Borrower is bound; the failure of which, taken as a whole, could have a Material
Adverse Effect on the Borrower; provided, however, if such default is capable of
being cured, it shall not constitute an Event of Default if corrective action is
instituted by the Borrower within fifteen (15) days of the default and
diligently pursued until the default is cured and such default is cured within
thirty (30) days.

                  8.1.4. Any representation or warranty of the Borrower made in
this Loan Agreement or any other Loan Document or any statement or information
in any report, certificate, financial statement or other instrument furnished by
Borrower in connection with making this Loan Agreement, the establishment of the
Loan or in compliance with the provisions hereof or any other Loan Document
shall have been false or misleading in any material respect when so made, deemed
made or furnished;

                  8.1.5. Borrower shall become insolvent or unable to pay its
debts as they mature, or file a voluntary petition or proceeding seeking
liquidation, reorganization or other relief with respect to itself under any
provision of the Bankruptcy Code or any state bankruptcy or insolvency statute,
or make an assignment or any other transfer of assets for the benefit of its
creditors, or apply for or consent to the appointment of a receiver for its
assets, or an involuntary case or other proceeding shall be commenced against
Borrower seeking liquidation, reorganization or other relief with respect to its
debts under the Bankruptcy Code or any other bankruptcy, insolvency or similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of its or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of sixty (60) days (it being
understood that no delay period applies with respect to any default arising
under this Section by reason of the filing of a voluntary petition by the
Borrower under the Bankruptcy Code or any state bankruptcy or insolvency statute
or the making of an assignment or other transfer of assets for the benefit of
Borrower's creditors or by reason of Borrower applying for or consenting to the
appointment of a receiver for Borrower's assets); or an order for relief shall
be entered against Borrower under any provision of the Bankruptcy Code or any
state bankruptcy or insolvency statute as now or hereafter in effect;

                  8.1.6. Entry of a final judgment or judgments against Borrower
by a court of law in an aggregate amount which would constitute a Material
Adverse Effect, enforcement of which judgment or judgments has not been stayed,
bonded or dismissed prior to commencement of any execution thereon.

                  8.1.7. Except for Permitted Liens, imposition of any Lien or
series of Liens against the Collateral, whether by operation of law or by
consent;

                  8.1.8. The occurrence of an event of default (as therein
defined) under any other document which constitutes Collateral after expiration
of applicable grace and cure periods;

                                       23
<PAGE>
                  8.1.9. If any material breach or default occurs under the
Guaranty, or any obligation of the Guarantor to perform thereunder is
terminated, or the Guarantor asserts that it is no longer liable under the
Guaranty or that the Guaranty is no longer enforceable, or if the Guarantor is
dissolved, liquidated or ceases to do business;

                  8.1.10. Borrower shall (i) fail to pay any indebtedness for
borrowed money when due, whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise; or (ii) fail to perform or observe any term,
covenant or condition on its part to be performed or observed under any
agreement or instrument relating to any such indebtedness, when required to be
performed or observed, if the effect of such failure to perform or observe is to
accelerate, or to permit the acceleration after the giving of notice, the
passage of time, or both, of the maturity of such indebtedness, or such
indebtedness shall be declared to be due and payable or required to be prepaid
prior to the date of maturity thereof; or (iii) be in default under any other
indebtedness of the Borrower to the Bank, whether now in existence or hereafter
created and whether under the Loan Documents or otherwise.

                  8.1.11. If there is any change in Borrower's financial
condition which, in Bank's reasonable opinion, has or would be reasonably likely
to have a Material Adverse Effect.

            8.2. Remedies on Default.

                  8.2.1. Upon the occurrence of any Event of Default:

                        (a) Bank may at its election forthwith suspend all
Advances and declare all Indebtedness to be immediately due and payable or in
the event of the occurrence of any event set forth in Section 8.1.5 hereof,
notwithstanding the lack of any declaration by Bank, all sums shall be
immediately due and payable, without protest, demand or other notice (which are
hereby expressly waived by Borrower) and, in addition to the rights specifically
granted hereunder or now or hereafter existing in equity, at law, by virtue of
statute or otherwise (each of which rights may be exercised at any time and from
time to time), Bank may exercise the rights and remedies available to Bank at
law or in equity or under this Agreement, the Note, any of the other Loan
Documents, the Collateral or any other agreement by and between Borrower and
Bank in accordance with the respective provisions thereof.

                        (b) In addition to all other rights, options and
remedies granted or available to Bank under this Agreement or the Loan Documents
(each of which is also then exercisable by Bank), or the Collateral or otherwise
available at law or in equity, upon or at any time after the acceleration of the
Obligations following the occurrence of an Event of Default, Bank may, in its
discretion, exercise all rights under the UCC and any other applicable law or in
equity, and under all Loan Documents and the Collateral permitted to be
exercised after the occurrence of an Event of Default.

                        (c) Borrower will pay, as part of the Indebtedness and
Obligations hereby secured, all of the Bank's Costs, with per annum interest on
all of same at the highest Interest Rate on Advances outstanding (or if no
Advances are outstanding, the higher of the LIBOR Interest Rate or the Wall
Street Prime Interest Rate) plus three percent (3%), from and after demand for
the payment thereof until paid.

                                       24
<PAGE>
            8.3. Application of Proceeds. Any amounts received by Bank upon an
Event of Default shall be applied in the following order:

                  8.3.1. To Bank's Costs;

                  8.3.2. To the payment of interest due pursuant to the Loan
Documents;

                  8.3.3. To the payment of principal due pursuant to the Loan
Documents;

                  8.3.4. Any surplus then remaining to Borrower or whomever may
be lawfully entitled thereto.

            8.4. Set-Off Rights. Borrower hereby grants and assigns to Bank a
security interest in all Deposit Accounts now or hereafter maintained by the
Borrower at the Bank other than the rental collection accounts or lockbox
accounts held in connection with the loans made by the Borrower to third parties
(the "Accounts") and agrees that such security interest shall be independent of
the right of setoff. In addition to all liens and rights of set-off against
Borrower's money, securities or other property given to the Bank by law,
Borrower acknowledges and agrees that Bank, in addition to any remedies set
forth above, shall have the right at any time and from time to time without
notice to Borrower to the extent permitted by law (any such notice being
expressly waived by Borrower) and to the fullest extent permitted by applicable
rules, to set off, to exercise any banker's lien or any right of attachment or
garnishment and apply any and all balances, credits, deposits (general or
special, time or demand, provisional or final), accounts or monies at any time
held by the Bank in the Accounts and other indebtedness at any time owing by
Bank to or for the account of Borrower against any and all Indebtedness or other
obligations of Borrower, now or hereafter existing under this Agreement, the
Note or any other Loan Document, regardless of whether Bank shall have made any
demand hereunder or thereunder. Every such right of set-off shall be deemed to
have been exercised, immediately upon the occurrence of an Event of Default
without any action by Bank, although the Bank may enter such set-off on its
books and records at a later time.

            8.5. Singular or Multiple Exercise; Non-Waiver. The remedies
provided herein, in the Note and in the other Loan Documents or otherwise
available to Bank at law or in equity and any powers of attorney therein
contained, shall be cumulative and concurrent, and may be pursued singly,
successively or together at the sole discretion of Bank, and may be exercised as
often as occasion therefor shall occur; and the failure to exercise any such
right or remedy shall in no event be construed as a waiver or release of the
same.

            8.6. Discontinuance of Remedies. In the event that the Bank shall
have proceeded to enforce any right under this Agreement and such proceedings
shall have been discontinued or abandoned for any reason, then and in every such
case, the rights, remedies and obligations of the parties hereto shall remain in
full force and effect.

            8.7. Cumulative Remedies. No delay or omission of the Bank to
exercise any right or power arising under this Agreement, the Note or any other
Loan Document or from any Event of Default or Unmatured Event of Default shall
exhaust or impair any such right or power or prevent its exercise during the
occurrence of any other Event of Default or Unmatured Event

                                       25
<PAGE>
of Default. No waiver by the Bank of any Event of Default, whether such waiver
be full or partial, shall extend to or be taken to effect any subsequent Event
of Default, or to impair the rights resulting therefrom except as may otherwise
be provided herein. The remedies provided in the Loan Documents are cumulative
and are not exclusive of any remedies provided by law.

            8.8. Cure. Nothing contained in this Loan Agreement, or any other
Loan Document shall be deemed to compel Bank to accept a cure of any Event of
Default hereunder.

      SECTION 9. MISCELLANEOUS

            9.1. Notices. Any notice or other communication hereunder or under
any of the Loan Documents by one party to another shall be in writing and shall
be deemed to have been validly given upon receipt if by hand delivery, overnight
delivery or facsimile, or two (2) days after mailing if mailed by certified or
registered mail, to the addresses as follows, unless such address is changed by
written notice hereunder:

If to Borrower:                          With a copy to:

Scott F. Schaeffer, President            Jeffrey F. Brotman, Esquire
RAIT Partnership                         Ledgewood Law Firm
1818 Market Street, 28th Floor           1521 Locust Street, 8th Floor
Philadelphia, PA 19103                   Philadelphia, PA 19102
Facsimile: (215) 861-7920                Facsimile: (215) 735-2513

If to Bank:                              With a copy to:

Seth Mackler                             Robert I. Tuteur, Esquire
Vice President                           Blank Rome Comisky & McCauley, LLP
Commerce Bank, N.A.                      One Logan Square, 11th Floor
3220 Tillman Drive, Suite 407            Philadelphia, PA 19103
Bensalem, PA 19020                       Facsimile: (215) 832-5687

            9.2. Integration. This Agreement and the other Loan Documents shall
be construed as one agreement; in the event of any inconsistency, this Agreement
shall control over any other Loan Document. Except as provided in Section 9.8
hereof, this Agreement and the other Loan Documents contain all the agreements
of the parties hereto with respect to the subject matter of each thereof and
supersede all prior or contemporaneous discussions and agreements with respect
to such subject matter.

            9.3. Amendment, Modification. Modifications or amendments of or to
the provisions of this Agreement or any other Loan Document shall be effective
only if set forth in a written instrument signed by Bank and the Borrower.

                                       26
<PAGE>
            9.4. Survival. The terms of this Agreement and all agreements,
representations, warranties and covenants made by Borrower in any other Loan
Document shall survive the issuance and payment of the Note and all sums due
hereunder and shall continue so long as any portion of the Indebtedness shall
remain outstanding and unpaid; provided, however, that the covenants set forth
in Sections 6.2 (with respect to indemnification), 9.11 and 9.12 (with respect
to jurisdiction, venue and jury trial) hereof shall survive the payment of the
Indebtedness and the termination of this Agreement. Borrower hereby acknowledges
that Bank has relied upon the foregoing in making available the Loan.

            9.5. Closing. Closing hereunder shall occur at 10 a.m. on October 1,
2002 at the offices of Blank Rome Comisky & McCauley, LLP, One Logan Square,
Philadelphia, Pennsylvania, or at such other time and place as the parties
hereto may determine.

            9.6. Successors and Assigns; Assignment. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the parties hereto; provided, however that Borrower shall not assign this
Agreement, or any rights or duties arising hereunder, without the express prior
written consent of Bank, which may be withheld by Bank in its absolute
discretion, and Bank may assign all or any part of its rights or duties
hereunder without the consent of Borrower.

            9.7. CERTAIN WAIVERS. NEITHER BANK NOR ANY AGENT OR ATTORNEY OF BANK
SHALL BE LIABLE TO BORROWER OR ANY AFFILIATE FOR CONSEQUENTIAL DAMAGES ARISING
FROM ANY BREACH OF CONTRACT, TORT OR OTHER WRONG RELATING TO THE ESTABLISHMENT,
ADMINISTRATION OR COLLECTION OF THE OBLIGATIONS RELATING IN ANY WAY TO THIS
AGREEMENT, THE NOTE OR ANY OF THE OTHER LOAN DOCUMENTS OR THE ACTION OR INACTION
OF ANY SUCH PERSONS UNDER ANY ONE OR MORE HEREOF OR THEREOF. IN THE EVENT BANK
SEEKS TO TAKE POSSESSION OF ANY OR ALL OF THE COLLATERAL BY COURT PROCESS OR
OTHER METHOD AVAILABLE UNDER THE LAW, BORROWER IRREVOCABLY WAIVES ANY BOND OR
ANY SURETY OR SECURITY RELATING THERETO REQUIRED BY ANY STATUTE, COURT RULE OR
OTHERWISE AS AN INCIDENT TO SUCH POSSESSION AND WAIVES ANY DEMAND FOR POSSESSION
PRIOR TO THE COMMENCEMENT OF ANY SUIT OR ACTION TO RECOVER WITH RESPECT THERETO.
BORROWER FURTHER WAIVES THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND
EXEMPTIONS LAWS.

            9.8. Commitment Letter. The Commitment Letter is hereby incorporated
by reference and shall remain in full force and effect except to the extent that
the terms and provisions thereof are otherwise set forth in this Agreement.

            9.9. Releases. Borrower acknowledges that it has been represented by
competent counsel in connection with the transaction contemplated hereby and has
been fully advised by such counsel of the full range of rights and obligations
possessed by the Borrower and undertaken and received pursuant to the terms of
this Agreement and, specifically, the provisions of this Section 9.9 of the
Agreement. Borrower hereby knowingly and, after consultation with counsel,
freely acknowledges and agrees that it does not now have nor know of

                                       27
<PAGE>
any basis for any claim in tort, contract or otherwise against the Bank for
breach of any of the terms of the documents evidencing or securing the Loan and
hereby remises, releases and forever discharges Bank from all claims now
existing or hereafter arising out of this Agreement, the Loan or any transaction
now or hereafter between Borrower and Bank. Borrower acknowledges and agrees
that this Agreement was negotiated, executed and delivered freely and with full
and informed knowledge of the consequences of this Agreement and that it has
executed this Agreement without duress, and that the Bank has proceeded in a
commercially reasonable manner in light of all of the facts and circumstances
surrounding the transactions that are the subject of this Agreement.

            9.10. Governing Law. This Agreement shall be construed and enforced
in accordance with the laws of the Commonwealth of Pennsylvania without regard
to its internal conflict of law principles.

            9.11. Consent To Jurisdiction And Venue. IN ANY LEGAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE RELATIONSHIP EVIDENCED HEREBY, THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE COURT LOCATED IN THE
COMMONWEALTH OF PENNSYLVANIA IN ANY COUNTY IN WHICH BANK HAS AN OFFICE OR
BRANCH, AND THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF
PENNSYLVANIA AND AGREES NOT TO RAISE ANY OBJECTION TO SUCH JURISDICTION OR TO
THE LAYING OR MAINTAINING OF THE VENUE OF ANY SUCH PROCEEDING. THE BORROWER
AGREES THAT SERVICE OF PROCESS IN ANY SUCH PROCEEDING MAY BE DULY EFFECTED UPON
IT BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID, TO BORROWER.

            9.12. Waiver Of Jury Trial. THE BORROWER HEREBY WAIVES, AND BANK BY
ITS ACCEPTANCE HEREOF THEREBY WAIVES, TRIAL BY JURY IN ANY LEGAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE RELATIONSHIP EVIDENCED HEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
BANK TO ENTER INTO, ACCEPT OR RELY UPON THIS AGREEMENT.

            9.13. Gender. All references to any gender, including the neuter
gender, shall be deemed to incorporate all other genders.

            9.14. Public Announcement. Bank may announce and publicize the
existence of this Agreement and the extension of credit by Bank to Borrower, in
such media as Bank may, in its sole discretion, from time to time determine.

            9.15. Relationship of Parties. The relationship of Bank and Borrower
will at all times be that of creditor and obligor. Under no circumstances shall
this Agreement or the Loan Documents be construed as creating a partnership or
joint venture between Borrower and Bank.

                                       28
<PAGE>
            9.16. Participation and Information. Bank may in its sole discretion
enter into participation arrangements with respect to this Agreement, and may
provide all information in its possession relating to Borrower or this
Agreement: (i) to any current or prospective participating Bank; (ii) to its
affiliates, employees, directors, agents, attorneys, accountants and other
professional advisors; (iii) upon the request or demand of any governmental
authority; (iv) in response to any order of court or as may otherwise be
required pursuant to any requirement of applicable law; (v) which has been
publicly disclosed; or (vi) in connection with the exercise of any remedy or
other enforcement of the rights of Bank hereunder or under any of the Loan
Documents.

            9.17. Entire Agreement. This Agreement (including the Exhibits
hereto) constitutes the entire agreement and understanding between the parties
hereto relating to the subject matter hereof and except as provided in Section
9.8 hereof, supersedes all prior oral or written understandings, except as set
forth herein.

            9.18. Closing Expenses. Borrower agrees to pay upon the execution
hereof, the Bank's Costs incurred in connection with the preparation, execution
and delivery of this Agreement and any other documents prepared in connection
herewith, and the consummation of the transactions contemplated hereby.

            9.19. Severability. The invalidity, illegality or unenforceability
in any jurisdiction of any provision in or obligation under this Agreement, the
Note or the other Loan Documents shall not affect or impair the validity,
legality or enforceability of the remaining provisions or obligations thereunder
in any other jurisdiction.

                         [SIGNATURES BEGIN ON NEXT PAGE]

                                       29
<PAGE>
            IN WITNESS WHEREOF, Borrower and Bank have executed this Agreement
under seal, intending to be legally bound hereby, the day and year first above
written.

                                           BORROWER:

                                           RAIT PARTNERSHIP, L.P.
                                           BY: RAIT GENERAL, INC.

                                           By: /s/ Scott Schaeffer
                                               --------------------------------
                                               Name: Scott Schaeffer
                                               Title: President

                                           BANK:

                                           COMMERCE BANK, N.A.

                                           By: /s/ Seth Mackler
                                               --------------------------------
                                               Name: Seth Mackler
                                               Title:  Vice President

                                       30

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