[BALLARD SPAHR LETTERHEAD]
May 1, 2002
U.S. Bancorp Piper Jaffray Inc.
800 Nicollet Mall
Mail Station J101 2005
Minneapolis, Minnesota 55402-7020
Re: RAIT Investment Trust, a Maryland real estate investment trust
(the "Company") - issuance and sale of up to One Million One
Hundred Fifty Thousand (1,150,000) 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 April 25, 2002 (the "Purchase 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 U.S. Bancorp Piper Jaffray Inc. (the
"Underwriter"). Unless otherwise defined herein, all capitalized terms shall
have the meanings ascribed to them in the Purchase 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");
U.S. Bancorp Piper Jaffray Inc.
May 1, 2002
Page 2
(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, 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 and April 22, 2002 (together
with the Organizational Minutes, the "Trustees' Resolutions");
(e) the Base Prospectus, dated November 2, 2001 (the "Base
Prospectus"), and the Prospectus Supplement, dated April 25,
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 April 25, 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 April 30,
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 Purchase Agreement;
(i) a Supplemental Certificate of Officers of the Company, dated
May 1, 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
Purchase Agreement;
U.S. Bancorp Piper Jaffray Inc.
May 1, 2002
Page 3
(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
October 5, 2001, March 6, 2002 and April 22, 2002 (together
with the RAIT GP Organizational Minutes, the "RAIT GP
Directors' Resolutions");
(n) a status certificate of the Department, dated April 30, 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 May
1, 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");
U.S. Bancorp Piper Jaffray Inc.
May 1, 2002
Page 4
(t) a status certificate of the Department, dated April 30, 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;
(u) a Supplemental Certificate of Officer of RAIT LP, dated May 1,
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 Purchase
Agreement;
U.S. Bancorp Piper Jaffray Inc.
May 1, 2002
Page 5
(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 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 Underwriter
pursuant to the Purchase 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 Purchase Agreement, executed in
connection with the transactions contemplated by the Purchase
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;
U.S. Bancorp Piper Jaffray Inc.
May 1, 2002
Page 6
(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 April 17, 2002, consisting of
16,776,846 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
Purchase Agreement and to issue, sell and deliver the
Shares to the Underwriter pursuant to the Purchase
Agreement and to consummate the transactions
contemplated by the Purchase 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 April 17, 2002,
consisting of 16,776,846 common shares of beneficial
interest, have been duly authorized and validly
issued and are fully paid and non-assessable.
U.S. Bancorp Piper Jaffray Inc.
May 1, 2002
Page 7
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
Purchase 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
Purchase 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 Purchase
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.
U.S. Bancorp Piper Jaffray Inc.
May 1, 2002
Page 8
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
Purchase Agreement; (ii) Ledgewood Law Firm, as securities counsel for the
Company in rendering its opinion under Section 6(b) of the Purchase Agreement;
and (iii) Hunton & Williams as counsel to the Underwriter in rendering its
opinion under Section 6(e) of the Purchase 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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