[BALLARD SPAHR LETTERHEAD]
March 13, 2002
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 One Million Three
Hundred Eighty Thousand (1,380,000) 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")
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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 March 7, 2002 (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, and Articles of Amendment filed
with the Department on January 7, 1998 and September 29, 2000;
(b) the Bylaws of the Company, adopted as of August 14, 1997 (the
"Bylaws");
(c) the Organizational Action by Consent in Writing of the Sole Trustee of
the Company, dated as of August 14, 1997 (the "Organizational
Minutes");
BALLARD SPAHR ANDREWS & INGERSOLL, LLP
Friedman, Billings, Ramsey & Co., Inc.
March 13, 2002
Page 2
(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, 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 and March 6,
2002 (together with the Organizational Minutes, the "Trustees'
Resolutions");
(e) the Base Prospectus, dated November 2, 2001 (the "Base Propectus"),
and the Prospectus Supplement, dated March 8, 2002, 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 March
8, 2002, 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 March 12, 2002, 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 Supplemental Certificate of Officers of the Company, dated March 13,
2002 (the "Supplemental 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 Supplemental 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 Supplemental Officers'
Certificate and the receipt of consideration therefor, the form of the
Specimen Share Certificate, and the form, execution and delivery of
the Underwriting Agreement;
(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");
BALLARD SPAHR ANDREWS & INGERSOLL, LLP
Friedman, Billings, Ramsey & Co., Inc.
March 13, 2002
Page 3
(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 October 5, 2001 and
March 6, 2002 (together with the RAIT GP Organizational Minutes, the
"RAIT GP Directors' Resolutions");
(n) a status certificate of the Department, dated March 12, 2002, 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 Supplemental Certificate of Officers of RAIT GP, dated March 13,
2002 (the "RAIT GP Supplemental 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 Supplemental
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 Supplemental 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");
(t) a status certificate of the Department, dated March 12, 2002, 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;
BALLARD SPAHR ANDREWS & INGERSOLL, LLP
Friedman, Billings, Ramsey & Co., Inc.
March 13, 2002
Page 4
(u) a Supplemental Certificate of Officer of RAIT LP, dated March 13, 2002
(the "RAIT LP Supplemental 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 Supplemental
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 Supplemental 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 Supplemental
Officers' Certificate, the RAIT GP Supplemental Officers' Certificate, the RAIT
LP Supplemental 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;
(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;
BALLARD SPAHR ANDREWS & INGERSOLL, LLP
Friedman, Billings, Ramsey & Co., Inc.
March 13, 2002
Page 5
(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, were 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 Supplemental Officers' Certificate, the RAIT GP Supplemental
Officers' Certificate, the RAIT LP Supplemental 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
Supplemental 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 Underwriters 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 Supplemental 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 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;
BALLARD SPAHR ANDREWS & INGERSOLL, LLP
Friedman, Billings, Ramsey & Co., Inc.
March 13, 2002
Page 6
(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 March 6, 2002, consisting of 15,324,442 common shares of
beneficial interest of the Company, par value one cent ($.01) per
share, are as certified in the Supplemental 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.
7) The issued and outstanding shares of beneficial interest of the
Company as of March 6, 2002, consisting of 15,324,442 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.
BALLARD SPAHR ANDREWS & INGERSOLL, LLP
Friedman, Billings, Ramsey & Co., Inc.
March 13, 2002
Page 7
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 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.
BALLARD SPAHR ANDREWS & INGERSOLL, LLP
Friedman, Billings, Ramsey & Co., Inc.
March 13, 2002
Page 8
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 Underwriters 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
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