EXHIBIT 5
[LETTERHEAD OF BALLARD SPAHR ANDREWS & INGERSOLL, LLP]
February 10, 2003
Friedman, Billings, Ramsey & Co., Inc.
1001 19th Street North
Arlington, Virginia 22209
Re: RAIT Investment Trust, a Maryland real estate investment trust
(the "Company") - issuance and sale of up to Two Million
Twelve Thousand Five Hundred (2,012,500) common shares of
beneficial interest of the Company, par value one cent ($.01)
per share (the "Shares") pursuant to a Registration Statement
on Form S-3 (Registration No. 333-69422), as amended, and as
supplemented (the "Registration Statement")
Ladies and Gentlemen:
You have requested our opinion as Maryland counsel to the
Company as to certain aspects of Maryland law pursuant to Section 6(c) of the
Agreement, dated as of February 4, 2003 (the "Underwriting Agreement"), by and
among the Company, RAIT Partnership, L.P., a Delaware limited partnership of
which a wholly-owned subsidiary of the Company acts as the general partner (the
"Operating Partnership"), and Friedman, Billings, Ramsey & Co., Inc. (the
"Underwriter"). Unless otherwise defined herein, all capitalized terms shall
have the meanings ascribed to them in the Underwriting Agreement.
In our capacity as Maryland counsel to the Company and for
purposes of this opinion, we have examined the following documents:
(a) the declaration of trust of the Company (the "Declaration of
Trust") represented by Articles of Amendment and Restatement
filed with the State Department of Assessments and Taxation of
Maryland (the "Department") on November 19, 1997, Articles of
Amendment filed with the Department on January 7, 1998 and
September 29, 2000 and a Certificate of Correction filed with
the Department on May 10, 2002;
(b) the Bylaws of the Company, adopted as of August 14, 1997 (the
"Bylaws");
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February 10, 2003
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(c) the Organizational Action by Consent in Writing of the Sole
Trustee of the Company, dated as of August 14, 1997 (the
"Organizational Minutes");
(d) resolutions adopted by the Board of Trustees of the Company,
or committees thereof, as of October 1, 1997, December 5,
1997, December 10, 1997, January 5, 1998, January 8, 1998,
January 9, 1998, June 4, 1998, June 30, 1998, December 10,
1998, March 17, 1999, November 1, 2000, January 24, 2001,
February 12, 2001, April 25, 2001, June 8, 2001, July 12,
2001, July 25, 2001, September 5, 2001, October 5, 2001,
November 14, 2001, December 17, 2001, December 20, 2001,
January 11, 2002, January 23, 2002, March 6, 2002, April 3,
2002, April 22, 2002, August 27, 2002, January 30, 2003 and
February 5, 2003 (together with the Organizational Minutes,
the "Trustees' Resolutions");
(e) the Base Prospectus, dated November 2, 2001 (the "Base
Prospectus"), and the Prospectus Supplement, dated February 4,
2003, filed by the Company with the Securities and Exchange
Commission for the offering by the Company of the Shares (the
"Prospectus Supplement") (the Base Prospectus and the
Prospectus Supplement, including all documents incorporated or
deemed incorporated by reference therein as of February 4,
2003, are hereinafter referred to as, collectively, the
"Prospectus");
(f) a specimen share certificate (the "Specimen Share
Certificate") representing common shares of beneficial
interest of the Company;
(g) a status certificate of the Department, dated February 7,
2003, to the effect that the Company is duly formed and
existing under the laws of the State of Maryland and is duly
authorized to transact business in the State of Maryland;
(h) a fully executed counterpart of the Underwriting Agreement;
(i) a certificate of Betsy Z. Cohen, the Chairman of the Board and
Chief Executive Officer of the Company, and Ellen J.
DiStefano, the Chief Financial Officer and Executive Vice
President of the Company, dated February 10, 2003 (the
"Officers' Certificate"), to the effect that, among other
things, the Declaration of Trust, the Bylaws, and the
Trustees' Resolutions are true, correct and complete, and that
the Declaration of Trust, the Bylaws and the Trustees'
Resolutions have not been rescinded or modified and are in
full force and effect as of the date of the Officers'
Certificate, and certifying as to the manner of adoption of
the Trustees' Resolutions, the authorization for issuance of
the Shares, the due authorization and issuance of the shares
of beneficial interest of the Company issued and outstanding
as of the date of the Officers' Certificate and the receipt of
consideration therefor, the form of the Specimen Share
Certificate, and the form, approval, execution and delivery of
the Underwriting Agreement;
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(j) the corporate charter of RAIT General, Inc., a Maryland
corporation ("RAIT GP"), represented by Articles of
Incorporation filed with the Department on August 14, 1997
(the "RAIT GP Charter");
(k) the Bylaws of RAIT GP, as adopted on August 14, 1997 (the
"RAIT GP Bylaws");
(l) the Organizational Action by Consent in Writing of the Sole
Director of RAIT GP, dated as of August 14, 1997 (the "RAIT GP
Organizational Minutes");
(m) resolutions adopted by the sole Director of RAIT GP on
December 19, 1997 and by the Board of Directors of RAIT GP on
January 30, 2003 (together with the RAIT GP Organizational
Minutes, the "RAIT GP Directors' Resolutions");
(n) a status certificate of the Department, dated February 7,
2003, to the effect that RAIT GP is duly incorporated and
existing under the laws of the State of Maryland and duly
authorized to transact business in the State of Maryland;
(o) a certificate of Betsy Z. Cohen, the Chairman of the Board and
Chief Executive Officer of RAIT GP, and Ellen J. DiStefano,
the Chief Financial Officer, Secretary and Vice President of
RAIT GP, dated February 10, 2003 (the "RAIT GP Officers'
Certificate"), to the effect that, among other things, the
RAIT GP Charter, the RAIT GP Bylaws and the RAIT GP
Organizational Minutes are true, correct and complete and that
the RAIT GP Charter as filed with the Department on August 14,
1997, the RAIT GP Bylaws as adopted on August 14, 1997 and the
RAIT GP Directors' Resolutions have not been rescinded or
modified and are in full force and effect as of the date of
the RAIT GP Officers' Certificate and certifying as to the
manner of adoption of the RAIT GP Directors' Resolutions, and
the due authorization and issuance of the shares of stock of
RAIT GP issued and outstanding as of the date of the RAIT GP
Officers' Certificate, the record owner thereof and the
receipt of the consideration therefor;
(p) the corporate charter of RAIT Limited, Inc., a Maryland
corporation ("RAIT LP"), represented by Articles of
Incorporation filed with the Department on August 14, 1997
(the "RAIT LP Charter");
(q) the Bylaws of RAIT LP, as adopted on August 14, 1997 (the
"RAIT LP Bylaws");
(r) the Organizational Action by Consent in Writing of the Sole
Director of RAIT LP, dated as of August 14, 1997 (the "RAIT LP
Organizational Minutes");
(s) resolutions adopted by the sole Director of RAIT LP on
December 19, 1997 (together with the RAIT LP Organizational
Minutes, the "RAIT LP Director's Resolutions");
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(t) a status certificate of the Department, dated February 7,
2003, to the effect that RAIT LP is duly incorporated and
existing under the laws of the State of Maryland and duly
authorized to transact business in the State of Maryland;
(u) a certificate of Betsy Z. Cohen, the Chairman of the Board and
Chief Executive Officer of RAIT LP, and Ellen J. DiStefano,
the Chief Financial Officer, Secretary and Vice President of
the RAIT LP, dated February 10, 2003 (the "RAIT LP Officers'
Certificate") to the effect that, among other things, the RAIT
LP Charter, the RAIT LP Bylaws and the RAIT LP Organizational
Minutes are true, correct and complete and that the RAIT LP
Charter as filed with the Department on August 14, 1997, the
RAIT LP Bylaws as adopted on August 14, 1997 and the RAIT LP
Directors' Resolutions have not been rescinded or modified and
are in full force and effect as of the date of the RAIT LP
Officers' Certificate and certifying as to the manner of
adoption of the RAIT LP Directors' Resolutions, and the due
authorization and issuance of the shares of stock of RAIT LP
issued and outstanding as of the date of the RAIT LP Officers'
Certificate, the record owner thereof and the receipt of the
consideration therefor; and
(v) such other documents and matters as we have deemed necessary
and appropriate to render the opinions set forth in this
letter, subject to the limitations, assumptions, and
qualifications noted below.
Insofar as the opinions and other matters set forth herein
constitute, or are based upon, factual matters, we have relied solely upon the
Officers' Certificate, the RAIT GP Officers' Certificate, the RAIT LP Officers'
Certificate and our knowledge. The words "our knowledge" signify that, in the
course of our representation of the Company in matters with respect to which we
have been engaged by the Company as Maryland counsel, no information has come to
our attention that would give us actual knowledge or actual notice that any of
the foregoing certificates on which we have relied are not accurate and
complete. We have undertaken no independent investigation or verification of any
such factual matters. The words "our knowledge" and similar language used herein
are intended to be limited to the knowledge of the attorneys within our firm who
have represented the Company as Maryland counsel in connection with the sale of
the Shares.
In reaching the opinions set forth below, we have assumed the
following:
(i) each person executing any instrument, document or agreement on
behalf of any party (other than the Company, RAIT GP or RAIT
LP) is duly authorized to do so;
(ii) each natural person executing any instrument, document or
agreement is legally competent to do so;
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(iii) there are no material modifications of, or amendments to, the
pertinent sections of the Prospectus or to the Underwriting
Agreement;
(iv) all documents submitted to us as originals are authentic; all
documents submitted to us as certified, facsimile or
photostatic copies conform to the original document; all
signatures on all documents submitted to us for examination
are genuine; and all public records reviewed are accurate and
complete;
(v) the actions documented by the Trustees' Resolutions were taken
at duly called meetings at which a quorum of the incumbent
trustees, or in the case of a committee of the board of
trustees, a quorum of the incumbent members of the committee,
was present and acting throughout, or by unanimous written
consent of all incumbent trustees, or in the case of a
committee of the board of trustees, all incumbent members of
the committee, all in accordance with the Declaration of Trust
and the Bylaws of the Company and applicable law;
(vi) the Officers' Certificate, the RAIT GP Officers' Certificate,
the RAIT LP Officers' Certificate and all other certificates
submitted to us are true and correct both when made and as of
the date hereof;
(vii) the Company has not, and is not required to be, registered
under the Investment Company Act of 1940;
(viii) the issuance and sale, or any subsequent transfer, of the
shares of beneficial interest certified as issued and
outstanding in the Officers' Certificate (excluding the
Shares) did not violate any restriction or limitation
contained in Article VII of the Declaration of Trust;
(ix) the issuance and sale of the Shares to the Underwriter
pursuant to the Underwriting Agreement will not violate any
restriction or limitation contained in Article VII of the
Declaration of Trust;
(x) each of the parties thereto (other than the Company, RAIT GP
and RAIT LP) have duly and validly authorized, executed and
delivered each instrument, document and agreement, including
but not limited to, the Underwriting Agreement, executed in
connection with the transactions contemplated by the
Underwriting Agreement to which such party is a signatory and
such party's obligations set forth therein are its legal,
valid and binding obligations, enforceable in accordance with
their respective terms;
(xi) none of the shares of beneficial interest of the Company
certified as issued and outstanding in the Officers'
Certificate were issued to an Interested Stockholder of the
Company or an Affiliate thereof, all as defined in Subtitle 6
of Title 3 of the
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Maryland General Corporation Law (the "MGCL"), in violation of
Section 3-602 of the MGCL;
(xii) the Shares will not be issued to an Interested Stockholder of
the Company or an Affiliate thereof in violation of Section
3-602 of the MGCL;
(xiii) at all times from and after their date of issuance through the
date of issuance of the Shares, all shares of beneficial
interest of the Company (including the Shares) constitute, and
will constitute, "transferable shares" under Section 856(a)(2)
of the Internal Revenue Code of 1986, as amended; and
(xiv) the issued and outstanding common shares of beneficial
interest of the Company as of January 28, 2003, consisting of
18,822,305 common shares of beneficial interest of the
Company, par value one cent ($.01) per share, are as certified
in the Officers' Certificate.
Based on our review of the foregoing and subject to the
assumptions and qualifications set forth herein, it is our opinion that, as of
the date of this letter:
1) The Company has been duly formed and is validly existing as a
real estate investment trust in good standing under the laws
of the State of Maryland.
2) The Company has the requisite power and authority to own,
lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus,
and to enter into the Underwriting Agreement and to issue,
sell and deliver the Shares to the Underwriter pursuant to the
Underwriting Agreement and to consummate the transactions
contemplated by the Underwriting Agreement.
3) RAIT GP has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of
Maryland.
4) RAIT GP has the requisite corporate power and corporate
authority to own, lease and operate its properties and conduct
its business as described in the Registration Statement and
the Prospectus.
5) RAIT LP has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of
Maryland.
6) RAIT LP has the requisite corporate power and corporate
authority to own, lease and operate its properties and conduct
its business as described in the Registration Statement and
the Prospectus.
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7) The issued and outstanding shares of beneficial interest of
the Company as of January 28, 2003, consisting of 18,822,305
common shares of beneficial interest, have been duly
authorized and validly issued and are fully paid and
non-assessable.
8) The Shares have been duly authorized for issuance by the
Company, and the Shares, when issued and delivered in exchange
for payment of the consideration therefor as contemplated by
the Underwriting Agreement, will be validly issued, fully paid
and non-assessable.
9) RAIT GP has a total of 99 shares of stock ("the RAIT GP
Shares") issued and outstanding, all of which is common stock,
par value one cent ($.01) per share; all necessary corporate
action required under the RAIT GP Charter, the RAIT GP Bylaws
and the MGCL was taken in order to duly authorize the issuance
of such shares, and such shares are validly issued and fully
paid and nonassessable. The RAIT GP Shares are directly owned
of record by the Company.
10) RAIT LP has a total of 99 shares of stock (the "RAIT LP
Shares") issued and outstanding, all of which is common stock,
par value one cent ($.01) per share; all necessary corporate
action required under the RAIT LP Charter, the RAIT LP Bylaws
and the MGCL was taken in order to duly authorize the issuance
of such shares, and such shares are validly issued and fully
paid and nonassessable. The RAIT LP Shares are directly owned
of record by the Company.
11) The execution and delivery by the Company of the Underwriting
Agreement have been duly authorized by all necessary real
estate investment trust action required under the Declaration
of Trust, the Bylaws, and other applicable Maryland law. The
Underwriting Agreement has been duly executed and delivered by
the Company.
12) The statements under the captions "Certain Provisions of
Maryland Law and of our Declaration of Trust and Bylaws" and
"Description of Shares of Beneficial Interest" in the
Registration Statement and the Prospectus, insofar as such
statements constitute matters of Maryland corporate law or
Maryland real estate investment trust law, have been reviewed
by us and are a fair summary of such matters.
13) Except as disclosed in the Prospectus, and assuming compliance
with Sections 2-311 and 2-419 of the MGCL and approval by the
directors and the stockholder of RAIT GP as required by the
RAIT GP Charter, the RAIT GP Bylaws or the MGCL, RAIT GP is
not prohibited or restricted by the MGCL, the RAIT GP Charter
or the RAIT GP Bylaws from paying dividends to the Company or
from making any other distribution with respect to its capital
stock or from repaying the Company, or any other Subsidiary,
for any loans or advances to RAIT GP, or
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from transferring RAIT GP's property or assets to the Company
or to any other Subsidiary in exchange for fair consideration.
14) Except as disclosed in the Prospectus, and assuming compliance
with Sections 2-311 and 2-419 of the MGCL and approval by the
directors and the stockholder of RAIT LP as required by the
RAIT LP Charter, the RAIT LP Bylaws or the MGCL, RAIT LP is
not prohibited or restricted by the MGCL, the RAIT LP Charter
or the RAIT LP Bylaws from paying dividends to the Company or
from making any other distribution with respect to its capital
stock or from repaying the Company, or any other Subsidiary,
for any loans or advances to RAIT LP, or from transferring
RAIT LP's property or assets to the Company or to any other
Subsidiary in exchange for fair consideration.
The opinions presented in this letter are limited to the law
of the State of Maryland, and we do not express any opinions herein concerning
any law other than the law of the State of Maryland. Furthermore, the opinions
presented in this letter are limited to the matters specifically set forth
herein and no other opinion shall be inferred beyond the matters expressly
stated. Without limiting the generality of the foregoing sentence, we express no
opinion with respect to the applicability or effect of any state or federal
securities laws or federal or state laws regarding fraudulent transfers.
This letter is issued as of the date hereof and the opinions
presented herein are necessarily limited to laws now in effect and facts and
circumstances presently existing and brought to our attention. We assume no
obligation to supplement the opinions presented herein if any applicable laws
change after the date hereof or if we become aware of any facts or circumstances
which now exist or which occur or arise in the future that may change the
opinions presented herein after the date hereof.
The opinions presented in this letter are solely for the use
of: (i) the Underwriter in connection with the transactions contemplated by the
Underwriting Agreement; (ii) Ledgewood Law Firm, as securities counsel for the
Company in rendering its opinion under Section 6(b) of the Underwriting
Agreement; and (iii) Hunton & Williams as counsel to the Underwriter in
rendering its opinion under Section 6(e) of the Underwriting Agreement. The
opinions presented herein may not be relied upon by any other person or by you,
Ledgewood Law Firm or Hunton & Williams for any other purpose, without our prior
written consent.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll, LLP