Document:

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                                                                    Exhibit 10.7

                 FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT

      This First Amendment to Loan Agreement (the "First Amendment") is made
this 17th 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"). All capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Loan (herein defined).

                                   BACKGROUND

      The Bank and the Borrower are parties to a certain Loan and Security
Agreement dated October 1, 2002 (the "Loan Agreement"), pursuant to which the
Bank made available to Borrower a Line of Credit in the original principal
amount of Twenty Million Dollars ($20,000,000).

      The Bank and the Borrower are mutually desirous of amending the Loan
Agreement and are entering into this First Amendment to set forth their entire
understanding and agreement with respect thereto.

      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 is hereby mutually acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:

      1.    Section 3.6 of the Loan Agreement is hereby added and shall read as
            follows:

            "Section 3.6. Release of Collateral. At any time that Borrower and
            Bank agree to release or replace Collateral, Bank agrees to
            cooperate in assigning any mortgages and other loan documents back
            to Borrower in a timely manner."

      2. The Bank and the Borrower hereby ratify and confirm the Loan Agreement
and agree that the Loan Agreement as so amended remains in full force and
effect.

               [REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY.]
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      IN WITNESS WHEREOF, Borrower and Bank have executed this Fourth Amendment
on 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

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                                                                    Exhibit 10.8

                         GUARANTEE AND SURETY AGREEMENT

            THIS GUARANTEE and Surety Agreement (the "Agreement" or the
"Guaranty") is made and entered into the 1st day of October, 2002 by the
undersigned (the "Guarantor"), for the benefit of COMMERCE BANK, NATIONAL
ASSOCIATION, a national banking association (the "Bank"). Capitalized terms used
herein and not otherwise defined shall have the meanings set forth in the Note
(as hereinafter defined).

            1. "Obligor" means RAIT PARTNERSHIP, L.P., a limited partnership
organized under the laws of the State of Delaware.

            2. OBLIGATIONS. "Obligations" means all existing and hereafter
incurred or arising indebtedness, obligations and liabilities of the Obligor to
the Bank, whether absolute or contingent, direct or indirect, and arising out
of: (i) the Loan and Security Agreement of even date herewith by and between
Obligor and Bank (the "Loan Agreement") pursuant to which the Bank made a
certain Line of Credit in the amount of Twenty Million Dollars ($20,000,000)
available to Obligor; (ii) Obligor's promissory note of even date herewith in
favor of Bank in the principal amount of Twenty Million ($20,000,000) Dollars
(the "Note"); and (iii) all other documents executed by Obligor in favor of Bank
in connection with the Loan Agreement and the Note.

            3. UNCONDITIONAL GUARANTY. In consideration of the existing
Obligations, Guarantor, intending to be legally bound hereby, absolutely and
unconditionally guarantees to the Bank the indefeasible payment, performance and
satisfaction when due (whether by stated maturity, demand, acceleration or
otherwise) of all Obligations and all sums incurred by Bank in enforcing this
Guaranty. The Obligations of the Guarantor hereunder shall continue in full
force and effect irrespective of the validity, legality or enforceability of any
agreements, notes or documents pursuant to which any of the Obligations arise,
or the existence, value or condition of any collateral for any of the
Obligations, or of any other guarantee of the Obligations, or any other
circumstance which might otherwise constitute a legal or equitable discharge of
a surety or guarantor. This shall be an agreement of suretyship as well as of
guaranty, and the Bank, following the occurrence of an Event of Default, as
defined in the Loan Agreement, or any breach of the Guarantor's representations
and warranties set forth in Section 15 hereof, and prior to making demand upon
Obligor or any other party for payment, performance or satisfaction of any of
the Obligations, may proceed directly against Guarantor.

            4. COST OF ENFORCEMENT. Guarantor agrees to pay the Bank all costs
and expenses (including reasonable attorney's fees) at any time incurred by the
Bank in the enforcement of this Guaranty against Guarantor.

            5. PAYMENT BY GUARANTOR. Payment by Guarantor is due upon demand by
the Bank and is payable in immediately available funds in lawful money of the
United States of America.
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            6. RELEASE OF GUARANTOR'S LIABILITY. Notwithstanding anything,
including the provisions of Paragraph 3 of this Guaranty but subject to the
provisions of Paragraph 11 of this Guaranty, Guarantor shall be released of all
liability under this Guaranty upon the indefeasible payment by Obligor or
Guarantor, in cash, of the full amount of the Obligations.

            7. CONTINUING GUARANTY. This Guaranty shall continue in full force
and effect with respect to Guarantor and may not be revoked until all
Obligations have been indefeasibly paid, performed and satisfied in full.

            8. WAIVERS AND CONSENTS BY GUARANTOR. Guarantor unconditionally
consents to, and waives as a defense to liability hereunder, each of the
following: (i) any waiver, inaction, delay or lack of diligence by the Bank in
enforcing its rights against Obligor or in any property, or the unenforceability
of any such rights, including any failure to perfect, protect or preserve any
lien or security interest which may be intended directly or indirectly to secure
any of the Obligations, and the absence of notice thereof to Guarantor; (ii) the
absence of any notice of the incurrence or existence of any Obligation; (iii)
any action, and the absence of notice thereof to Guarantor, taken by the Bank or
Obligor with respect to any of the Obligations, including any release,
subordination or substitution of any collateral or release, termination,
compromise, modification or amendment of any instrument executed by or
applicable to Obligor or of any claim, right or remedy against Obligor or any
property; (iv) any impairment of Guarantor's right to reimbursement by way of
subrogation, indemnification or contribution; (v) any other action taken or
omitted by the Bank in good faith with respect to the Obligations; (vi) the
absence or inadequacy of any formalities of every kind in connection with
enforcement of the Obligations, including presentment, demand, notice and
protest; (vii) the waiver of any rights of the Bank under or any action taken or
omitted by the Bank with respect to any other guaranty of the Obligations;
(viii) any amendment to the Loan Agreement, the Note or any other documents
executed in connection therewith, including any increase in the amount of the
Obligations; and (ix) all defenses arising out of suretyship.

            9. OTHER AGREEMENTS BY GUARANTOR. Guarantor agrees that there shall
be no requirement that the Bank document its acceptance of this Guaranty,
evidence its reliance thereon, or that the Bank take any action against any
person or any property prior to taking action against the Guarantor. Guarantor
further agrees that the Bank's rights and remedies hereunder shall not be
impaired or subject to any stay, suspension or other delay as a result of
Obligor's insolvency or as a result of any proceeding applicable to Obligor or
Obligor's property under any bankruptcy or insolvency law. Guarantor also agrees
that payments and other reductions on the Obligations may be applied to such of
the Obligations and in such order as the Bank may elect.

            10. SUBROGATION AND SIMILAR RIGHTS. Guarantor agrees that Guarantor
will not exercise any rights with respect to the Bank or Obligor related to or
acquired in connection with or as a result of its making of this Guaranty which
Guarantor may acquire by way of subrogation, indemnification or contribution, by
reason of payment made by it hereunder or otherwise, until after the date on
which all of the Obligations shall have been indefeasibly paid in full. Until
such time, any such rights against the Obligor shall be fully subordinate in
lien and payment to any claim in connection with the Obligations which the Bank
now or hereafter has

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against the Obligor. If any amount shall be indefeasibly paid to Guarantor on
account of such subrogation, indemnification or contribution at any time when
all of the Obligations and all other expenses guaranteed pursuant hereto shall
not have been paid in full, such amount shall be held in trust for the benefit
of the Bank, shall be segregated from the other funds of Guarantor and shall
forthwith be paid over to the Bank to be applied in whole or in part by the Bank
against the Obligations, whether matured or unmatured, in such order as the Bank
shall determine in its sole discretion. If Guarantor shall make payment to the
Bank of all or any portion of the Obligations and all of the Obligations shall
be paid in full, Guarantor's right of subrogation shall be without recourse to
and without any implied warranties by the Bank and shall remain fully subject
and subordinate to the Bank's right to collect any other amounts which may
thereafter become due to the Bank by the Obligor in connection with the
Obligations.

            11. REINSTATEMENT OF LIABILITY. If any claim is made upon the Bank
for repayment or recovery of any amount or amounts received by the Bank in
payment or on account of any Obligations and the Bank repays all or part of said
amount by reason of: (i) any judgment, decree or order of any court or
administrative body having jurisdiction over the Bank or any of its property; or
(ii) any settlement or compromise in good faith with any such claimant
(including Obligor), then and in such event Guarantor agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon
Guarantor, notwithstanding any termination hereof or the cancellation of any
note or other instrument evidencing any Obligation, and Guarantor shall remain
liable to the Bank hereunder for the amount so repaid or recovered to the same
extent as if such amount had never originally been received by the Bank.

            12. SECURITY; RIGHT OF SET-OFF. Guarantor hereby assigns to the Bank
a security interest in any balance or assets in any deposit account or other
account of Guarantor in or with the Bank other than the specifically excluded
rental collection accounts or lockbox accounts held in connection with the loans
made by Borrower to third parties (the "Accounts") whenever and so long as any
of the Obligations shall be outstanding and unpaid and agrees that the security
interest hereby granted shall be independent of the right of setoff. In
addition, the Bank, in addition to any other remedies set forth in this
Guaranty, shall have the right at any time and from time to time without notice
to Guarantor, any such notice being expressly waived by Guarantor and to the
fullest extent permitted, 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 the Bank to or for the account of Guarantor against any and all
obligations of Guarantor now or hereafter existing under this Guaranty.

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

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            14. EFFECT OF OTHER AGREEMENTS. The provisions of this Guaranty are
cumulative and concurrent with the Bank's rights and remedies against Guarantor
under any existing or future agreement pertaining or evidencing any of the
Obligations. No such additional agreement shall be deemed a modification or
waiver hereof unless expressly so agreed by the Bank in writing. If the Bank
holds any other guaranty or surety agreement applicable to any of the
Obligations, the liability of Guarantor hereunder shall be joint and several
with each party obligated on such other guaranty or surety agreement, unless
otherwise agreed by the Bank in writing.

            15. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor hereby
represents and warrants to the Bank as follows:

                  15.1 Organization, Good Standing, Due Qualification. Guarantor
is a real estate investment trust duly organized, validly existing and in good
standing under the laws of the State of Maryland; 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
Guarantor's business requires such qualification.

                  15.2 Power and Authority. The making, execution, issuance and
performance by the Guarantor of this Agreement is within the powers of the
Guarantor, have been duly authorized by all necessary action and are enforceable
against the Guarantor.

                  15.3 Legally Enforceable Agreement. This Agreement constitutes
the legal, valid and binding obligation of the Guarantor, enforceable against
such Guarantor in accordance with its terms.

                  15.4 Location of Guarantor. Guarantor's principal executive
office is maintained on the date hereof at 1818 Market Street, 28th Floor,
Philadelphia, Pennsylvania 19103. Guarantor agrees immediately to notify Bank in
the event of any change of this address.

                  15.5 No Violation. The execution, delivery and performance by
Guarantor of this Agreement does 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 organizational documents of Guarantor, (iii)
violate any judgment, order, decree, agreement, trust or other indenture or
instrument to which Guarantor 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 Guarantor.

                  15.6 Financial Condition. The financial statements of
Guarantor heretofore furnished to Bank are true, complete and correct in all
material respects, have been prepared in accordance with generally accepted
accounting principles ("GAAP"), consistently applied, and present fairly the
financial condition of Guarantor as of the dates thereof, and the results of
Guarantor's operations for the periods therein ended. Since the date of the most
recent financial statements provided by Guarantor to Bank, there has been no
Material Adverse Change in the financial condition of Guarantor. So long as any
portion of the indebtedness remains outstanding, Guarantor covenants and agrees
to furnish, in form and substance satisfactory to

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

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

                  15.8 Compliance. Guarantor has all authorizations, consents,
approvals, licenses, and exceptions from, and has 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
this Guaranty, 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 the
Guarantor, individually or in the aggregate. The Guarantor does not require any
Governmental Approvals to enter into, or perform under, this Guaranty. 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 Guarantor's business prospects or the ability of
the Guarantor to conduct its business in a manner consistent with past
operations and financial results.

                  15.9 Taxes. Guarantor's Federal EIN is 23-2919819. Guarantor
has paid, when due, all taxes, governmental charges and assessments levied
against Guarantor 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.

                  15.10 Environmental. The Guarantor 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.

                  15.11 Debt. Except as reflected in the Financial Statements
furnished to Bank or in the notes thereto, Guarantor has no Debt, nor has
Guarantor 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 Guarantor's business or
debts from time to time of its subsidiaries or any entities under its control.

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                  15.12 Solvent. Guarantor is currently Solvent. "Solvent" means
that Guarantor: (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.

            If any of the foregoing representations and warranties are breached
by the Guarantor, then the Bank may make immediate demand against the Guarantor
for payment under this Guaranty, whether or not any Obligations are then due and
owing.

            16. MISCELLANEOUS.

                  16.1 No amendment of any provision of this Guaranty shall be
effective unless it is in writing and signed by the Guarantor and the Bank, and
no waiver of any provisions of this Guaranty, and no waiver or consent to any
departure by Guarantor therefrom, shall be effective unless it is in writing and
signed by the Bank, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

                  16.2 Any provision of this Guaranty which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or affecting the validity or enforceability of such
provisions in any other jurisdiction.

                  16.3 The obligations of Guarantor hereunder shall not be
subject to any counterclaim, setoff, deduction or defense based upon any related
or unrelated claim which Guarantor may now or hereafter have against Bank or
Obligor, except payment of the Obligations, and shall not be affected by any
change in Obligor's legal status or ownership or by any change in corporate,
partnership or other organizational structure applicable to Obligor.

                  16.4 This Guaranty shall; (i) be binding on Guarantor and its
successors and assigns; and (ii) inure, together with all rights and remedies of
Bank hereunder, to the benefit of the Bank and its successors, transferees and
assigns. Notwithstanding the foregoing clause (i), none of the rights or
obligations of any of the Guarantor hereunder may be assigned or otherwise
transferred without the prior written consent of the Bank.

                  16.5 This Guaranty shall be governed by and construed in
accordance with the internal laws, and not the law of conflicts, of the
Commonwealth of Pennsylvania.

            17. LIMITATION ON INDIVIDUAL LIABILITY. No recourse shall be had by
the Bank for any claims based on this Agreement or otherwise against any member,
officer, employee, partner, trustee or agent of the Guarantor or of the Obligor
in his or her individual capacity, except to the extent arising out of a breach
of a fiduciary duty, all such liabilities, if any, being expressly waived and
released by the Bank.

            18. 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 GUARANTOR HEREBY IRREVOCABLY
SUBMITS TO

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THE NONEXCLUSIVE JURISDICTION OF ANY STATE COURT LOCATED IN THE COMMONWEALTH OF
PENNSYLVANIA IN ANY COUNTY IN WHICH THE BANK HAS AN OFFICE OR A 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 GUARANTOR 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 GUARANTOR.

            19. WAIVER OF JURY TRIAL. THE GUARANTOR AND THE BANK EACH KNOWINGLY
AND WITH FULL CONSENT DO HEREBY WAIVE AND RELEASE ALL RIGHTS TO A 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 GUARANTY OR THE RELATIONSHIP EVIDENCED HEREBY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE BANK TO ENTER INTO, ACCEPT OR RELY UPON THIS GUARANTY.

            IN WITNESS WHEREOF, Guarantor has executed this Guaranty as an
instrument under seal as of the day and year above written, intending to be
legally bound hereby.

                                             RAIT INVESTMENT TRUST

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

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