ENVIRONMENTAL INDEMNITY AGREEMENT

ENVIRONMENTAL INDEMNITY AGREEMENT

THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this “Agreement”), is dated effective as of March 7, 2007, by NNN VF FOUR RESOURCE SQUARE, LLC, a Delaware limited liability company (“Borrower”), and NNN 2003 VALUE FUND, LLC, a Delaware limited liability company (together with Borrower being referred to herein collectively as “Indemnitor”), in favor of RAIT PARTNERSHIP, L.P., a Delaware limited partnership (“Indemnitee”), and other Indemnified Parties (as hereinafter defined).

BACKGROUND

A. Reference is made to the Background set forth in the Loan and Security Agreement of even date herewith between Indemnitee and Borrower (together with any amendments, restatements or other modifications, the “Loan Agreement”), which is hereby incorporated herein. Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Loan Agreement.

B. Indemnitee is unwilling to make the Loan unless Indemnitor executes and delivers this Agreement to Indemnitee.

NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Indemnitor, intending to be legally bound hereby, represents, warrants, covenants and agrees for the benefit of Indemnified Parties as follows:

1. Definitions. As used in this Agreement, the following terms shall have the following meanings:

“Environmental Law” means any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well as common law, relating to protection of human health or the environment, Hazardous Substances, liability for or costs of Remediation or prevention of Releases of Hazardous Substances or other actual or future danger to human health or the environment, any wrongful death, personal injury or property damage that is caused by or related to the presence, growth, proliferation, reproduction, dispersal, or contact with any biological organism or portion thereof, including molds or other fungi, bacteria or other microorganisms or any etiologic agents or materials; includes the following statutes, as amended, any successor thereto, and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances, rules, regulations and the like addressing similar issues: the Comprehensive Environmental Response, Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act (including Subtitle I relating to underground Storage Tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National Environmental Policy Act; and the River and Harbors Appropriation Act; and includes any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well as common law, conditioning transfer of property upon a negative declaration or other approval of a governmental authority of the environmental condition of the Property; requiring notification or disclosure of Releases of Hazardous Substances or other environmental condition of the Property to any governmental authority or other person or entity, whether or not in connection with transfer of title to or interest in property; imposing conditions or requirements in connection with permits or other authorization for lawful activity; relating to nuisance, trespass or other causes of action related to the Property; and relating to wrongful death, personal injury, or property or other damage in connection with any physical condition or the presence of biological or etiologic agents or materials or use, management, or maintenance of the Property.

“Hazardous Substances” includes any and all substances biological and etiologic agents or materials (whether solid, liquid or gas) defined, listed, or otherwise classified as pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, or words of similar meaning or regulatory effect under any present or future Environmental Laws or that may have a negative impact on human health or the environment, including petroleum and petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead, lead-based paints, radon, radioactive materials, flammables and explosives, and any biological organism or portion thereof (living or dead), including molds or other fungi, bacteria or other microorganisms, or any etiologic agents or materials.

“Indemnified Parties” includes Indemnitee, any person who is or will have been involved in originating the Loan or in servicing the Loan, any person in whose name the encumbrance created by the Deed of Trust which is or will have been recorded, and persons who may hold or acquire or will have held a full or partial interest in the Loan (including those who may acquire any interest in mortgage pass through certificates or other securities evidencing a beneficial interest in the Loan offered in a rated or unrated public offering or private investment, as well as custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of third parties), as well as the respective directors, officers, shareholders, partners, employees, agents, servants, representatives, contractors, subcontractors, affiliates, subsidiaries, participants, successors and assigns of any and all of the foregoing (including any other person or entity who holds or acquires or will have held a participation or other full or partial interest in the Loan or the Property, whether during the term of the Loan or as part of or following foreclosure pursuant to the Loan) and including any successors by merger, consolidation or acquisition of all or a substantial part of Indemnitee’s assets and business.

“Legal Action” means any claim, suit or proceeding, whether administrative or judicial in nature.

“Losses” includes any claims, suits, liabilities (including strict liabilities), administrative or judicial actions or proceedings, obligations, debts, damages, losses, costs, expenses, diminutions in value (but only to the extent such diminution is realized by Indemnitee), fines, penalties, charges, reasonable fees, expenses, costs of Remediation (whether or not performed voluntarily), costs of assessing damages or losses, judgments, awards, amounts paid in settlement, private damages foreseeable and unforeseeable consequential damages, litigation costs, reasonable attorneys’ fees, reasonable engineers’ fees, reasonable environmental consultants’ fees, and investigation costs (including costs for reasonable sampling, testing and analysis of soil, water, air, building materials, and other materials and substances whether solid, liquid or gas), of whatever kind or nature, and whether or not incurred in connection with any judicial or administrative proceedings.

“Release” with respect to any Hazardous Substance includes any release, deposit, discharge, emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing, or growth, proliferation, reproduction, or dispersal or other movement or production of Hazardous Substances.

“Remediation” includes any response, remedial, removal, or corrective action; any activity to cleanup, detoxify, decontaminate, contain or otherwise remediate any Hazardous Substance; any actions to prevent, cure or mitigate any Release of any Hazardous Substance; any action to comply with any Environmental Laws or with any permits issued pursuant thereto; and any inspection, investigation, study, monitoring, assessment, audit, sampling and testing, laboratory or other analysis, or evaluation relating to any Hazardous Substances.

“Storage Tanks” includes any underground or aboveground storage tanks, whether filled, empty, or partially filled with any substance.

2. Environmental Representations and Warranties. Indemnitor represents and warrants to Indemnified Parties that:

(a) Hazardous Substances. Based on its review of the environmental assessment of the Property delivered to Indemnitee by Indemnitor prior to the date hereof (the “Environmental Report”), there are no Hazardous Substances or Storage Tanks in, on, above, or under the Property, except those that are either (i) of such types and in such quantities as are customarily used or stored or generated for offsite disposal or otherwise present in or at properties of the relevant property type, and in compliance with all Environmental Laws and with permits issued pursuant thereto, or (ii) fully disclosed to and approved by Indemnitee in writing.

(b) No Releases. Based on its review of the Environmental Report, there are no past (during Indemnitor’s period of ownership only), present or to Indemnitor’s knowledge, threatened Releases of Hazardous Substances in, on, above, under or from the Property, except as described in the Environmental Report.

(c) No Migration. Based on its review of the Environmental Report, to Indemnitor’s knowledge, there is no threat of any Release of Hazardous Substances migrating to the Property, except as described in the Environmental Report.

(d) No Violations. There is no past (during Borrower’s period of ownership only) or present non-compliance with Environmental Laws, or with permits issued pursuant thereto, in connection with the Property, except as described in the Environmental Report.

(e) No Notice. Indemnitor does not know of, and Indemnitor has not received, any written or oral notice or other communication from any person (including a governmental entity) relating to the presence of Hazardous Substances in, on, above, under or from the Property or Remediation thereof, possible liability of any person pursuant to any Environmental Law or other environmental conditions in connection with the Property, or any actual or potential administrative or judicial proceedings in connection with any of the foregoing.

(f) Complete Disclosure. Indemnitor has truthfully and fully provided to Indemnitee, in writing, any and all information relating to environmental conditions in, on, above, under or from the Property that is known to Indemnitor and that is contained in files and records of Indemnitor.

(g) Authorizations. To the best of Indemnitor’s knowledge, all notices, permits, licenses, registrations, or similar authorizations, if any, required to be obtained or filed in connection with the ownership, operation, or use of the Property, including in connection with the existence of any Storage Tanks at the Property or the past or present generation, treatment, storage, disposal, or Release of a Hazardous Substance into the environment, have been duly obtained or filed and have been duly renewed or maintained.

(h) Property Compliance. To the best of Indemnitor’s knowledge, the Property and the operations conducted thereon do not violate any applicable law, statute, ordinance, rule, regulation, order, or determination of any governmental authority or any restrictive covenant or deed restriction (recorded or otherwise), including all applicable zoning ordinances and building codes, flood disaster laws and Environmental Laws. Furthermore, to Indemnitor’s knowledge, the Property is maintained and has been maintained in such a manner as to prevent excess humidity or accumulation of moisture that may promote the growth of molds or other fungi and other microorganisms.

(i) Indemnitor’s Investigation. Indemnitor has obtained an Environmental Phase I Site Assessment Report, and has determined, that no Hazardous Substances are or have been generated, treated, stored, used, disposed of or Released in, on, above, under, from or about the Property, except in compliance with applicable Environmental Laws.

(j) Other Properties. Neither Indemnitor, nor, to the best knowledge of Indemnitor, any other person, including any predecessor owner, tenant, licensee, occupant, user, or operator of all or any portion of the Property, has ever caused, permitted, authorized or suffered, and Indemnitor will not cause, permit, authorize, or suffer, any Hazardous Substance to be placed, held, located, or disposed of, on, under or about any other real property, all or any portion of which is legally or beneficially owned (or any interest or estate therein which is owned) by Indemnitor in any jurisdiction now or hereafter having in effect a so-called superlien law or ordinance, the effect of which law or ordinance would be to create a lien on the Property to secure any obligation in connection with the superlien law of such other jurisdiction.

(k) No Litigation. Except as otherwise previously disclosed to Indemnitee in writing, there is no pending or, to the best of Indemnitor’s knowledge, threatened litigation, proceedings, or investigations before or by any administrative agency in which any person alleges or is investigating any alleged presence, Release, threat of Release, placement on, under, from or about the Property, or the manufacture, handling, generation, transportation, storage, treatment, discharge, burial, or disposal on, under, from or about the Property, or the transportation to or from the Property, of any Hazardous Substance.

(l) No Communications. To Indemnitor’s knowledge, there have been no communications or agreements with any governmental authority or any private entity, including any prior owners or operators of the Property, relating in any way to the presence, Release, threat of Release, placement on, under or about the Property, or the use, manufacture, handling, generation, transportation, storage, treatment, discharge, burial, or disposal on, under or about the Property, or the transportation to or from the Property, of any Hazardous Substance, except for communications made in the ordinary course of business in connection with permits, reports, and routine inspections issued, prepared or conducted by government agencies or authorities having jurisdiction over the Property, whic