EXHIBIT 10.15
LOAN NO.: 26-5950380 THE MAYFLOWER APARTMENTS
VIRGINIA BEACH, VIRGINIA
INDEMNITY AND GUARANTY AGREEMENT
THIS INDEMNITY AND GUARANTY AGREEMENT (this "Agreement"), made as of
December 12, 2000 by CORNERSTONE REALTY INCOME TRUST, INC., a Virginia
corporation ("Indemnitor"), whose address is 306 East Main Street, Richmond,
Virginia 23219, Attention: Glade M. Knight, in favor of FIRST UNION NATIONAL
BANK, a national banking association ("Lender"), whose address is One First
Union Center, 301 South College Street, Mailcode NC 0166, Charlotte, North
Carolina 28288-0166, Attention: Contract Finance.
W I T N E S S E T H:
WHEREAS, CRIT-VA, INC., a Virginia corporation ("Borrower"), has
obtained a loan (the "Loan") in the principal amount of Ten Million Five Hundred
Thousand and No/100 Dollars ($10,500,000.00) from Lender; and
WHEREAS, the Loan is evidenced by a Promissory Note (the "Note") dated
of even date herewith, executed by Borrower and payable to the order of Lender,
in the stated principal amount of Ten Million Five Hundred Thousand and No/100
Dollars ($10,500,000.00), and is secured by a Deed of Trust and Security
Agreement dated of even date herewith (the "Deed of Trust") from Borrower for
the benefit of Lender, encumbering that certain real property situated in the
Virginia Beach, Commonwealth of Virginia, as more particularly described on
Exhibit A attached hereto and incorporated herein by this reference, together
with the buildings, structures and other improvements now or hereafter located
thereon (the "Property") and by the other Loan Documents (as defined in the Deed
of Trust); and
WHEREAS, as a condition to making the Loan to Borrower, Lender has
required that Indemnitor indemnify Lender from and against and guarantee payment
to Lender of those items for which Borrower has recourse liability and for which
Lender has recourse against Borrower under the terms of Section 2.6 of the Note;
and
WHEREAS, Indemnitor is the sole shareholder of Borrower, the extension
of the Loan to Borrower is of substantial benefit to Indemnitor and, therefore,
Indemnitor desires to indemnify Lender from and against and guarantee payment to
Lender of those items for which Borrower is personally liable and for which
Lender has recourse against Borrower under the terms of the Note and the Deed of
Trust.
NOW, THEREFORE, to induce Lender to extend the Loan to Borrower and in
consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Indemnitor hereby covenants and agrees for the benefit of Lender, as follows:
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1. Indemnity and Guaranty. Indemnitor hereby assumes liability
for, hereby guarantees payment to Lender of, hereby agrees to pay, protect,
defend and save Lender harmless from and against, and hereby indemnifies Lender
from and against any and all liabilities, obligations, losses, damages, costs
and expenses (including, without limitation, reasonable attorneys' fees), causes
of action, suits, claims, demands and judgments of any nature or description
whatsoever (collectively, "Costs") which may at any time be actually imposed
upon, incurred by or awarded against Lender as a result of:
(a) Misapplication or misappropriation by Borrower of
proceeds paid under any insurance policies (or paid to Borrower as a result of
any other claim or cause of action against any person or entity) by reason of
damage, loss or destruction to all or any portion of the Property, to the full
extent of such proceeds not previously delivered to Lender, but which, under the
terms of the Loan Documents, should have been delivered to Lender;
(b) Misapplication or misappropriation by Borrower of
proceeds or awards resulting from the condemnation or other taking in lieu of
condemnation of all or any portion of the Property to the full extent of such
proceeds or awards not previously delivered to Lender, but which, under the
terms of the Loan Documents, should have been delivered to Lender;
(c) Misapplication or misappropriation by Borrower of all
tenant security deposits or other refundable deposits paid to or held by
Borrower or any other person or entity under the control or direction of
Borrower, if any, in connection with leases of all or any portion of the
Property, which are not applied in accordance with the terms of the applicable
lease or other agreement;
(d) Misapplication or misappropriation by Borrower of
rent and other payments received from tenants under leases of all or any portion
of the Property paid more than one (1) month in advance;
(e) Misapplication or misappropriation by Borrower of
rents, issues, profits and revenues of all or any portion of the Property
received by Borrower or any other person or entity under the control or
direction of Borrower that are applicable to a period after the occurrence and
continuance of an Event of Default under the Loan Documents, or any event which
with notice or the passage of time, or both, would constitute an Event of
Default, which are not either applied to the ordinary and necessary expenses or
capital expenditures in connection with owning and operating the Property or
paid to Lender or otherwise as contemplated or permitted by the Loan Documents;
(f) Waste committed on the Property, or damage to the
Property as a result of the intentional misconduct or gross negligence of
Borrower or any of its officers, general partners or members, as the case may
be, Indemnitor, or any agent or employee of any such persons, or any removal of
any portion of the Property not repaired as required by the Loan Documents in
violation of the terms of the Loan Documents, to the full extent of the losses
or damages actually incurred by Lender on account of such occurrence;
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(g) Failure by Borrower to pay any valid taxes,
assessments, mechanic's liens, materialmen's liens or other liens which could
create liens on any portion of the Property which would be superior to the lien
or security title of the Deed of Trust or the other Loan Documents except, with
respect to any such taxes or assessments, to the extent that funds have been
deposited with Lender pursuant to the terms of the Deed of Trust specifically
for the applicable taxes or assessments and not applied by Lender to pay such
taxes and assessments;
(h) All obligations and indemnities of Borrower under
Section 1.31 of the Deed of Trust and the Environmental Indemnity Agreement (as
defined in the Note) relating to hazardous or toxic substances or radon or
compliance with environmental laws and regulations; and
(i) Fraud, material misrepresentation or failure to
disclose a material fact by Borrower or any of its officers, general partners or
members, as the case may be, Indemnitor, or any agent, employee or other person
authorized to make statements, representations or disclosures on behalf of
Borrower, any officer, general partner or member, as the case may be, of
Borrower, or Indemnitor, to the full extent of any losses, damages and expenses
actually incurred by Lender on account thereof.
This is a guaranty of payment and performance and not of collection.
The liability of Indemnitor for Costs under this Agreement shall be direct and
immediate and not conditional or contingent upon the pursuit of any remedies
against Borrower or any other person (including, without limitation, other
guarantors, if any), nor against the collateral for the Loan. Indemnitor waives
any right to require that an action be brought against Borrower or any other
person or to require that resort be made to any collateral for the Loan or to
any balance of any deposit account or credit on the books of Lender in favor of
Borrower or any other person. In the event, on account of the Bankruptcy Reform
Act of 1978, as amended, or any other debtor relief law (whether statutory,
common law, case law or otherwise) of any jurisdiction whatsoever, now or
hereafter in effect, which may be or become applicable, Borrower shall be
relieved of or fail to incur any debt, obligation or liability as provided in
the Loan Documents, Indemnitor shall nevertheless be fully liable for Costs
hereunder. In the event of a default under the Loan Documents which is not cured
within any applicable grace or cure period, Lender shall have the right to
enforce its rights, powers and remedies (including, without limitation,
foreclosure of all or any portion of the collateral for the Loan) thereunder or
hereunder, in any order, and all rights, powers and remedies available to Lender
in such event shall be non-exclusive and cumulative of all other rights, powers
and remedies provided thereunder or hereunder or by law or in equity. If the
Costs guaranteed hereby are partially paid or discharged by reason of the
exercise of any of the remedies available to Lender, this Agreement shall
nevertheless remain in full force and effect, and Indemnitor shall remain liable
for all remaining Costs guaranteed hereby, even though any rights which
Indemnitor may have against Borrower may be destroyed or diminished by the
exercise of any such remedy.
2. Indemnification Procedures.
(a) If any action shall be brought against Lender based
upon any of the Costs for which Lender is indemnified hereunder, Lender shall
notify Indemnitor in writing thereof and
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Indemnitor shall promptly assume the defense thereof, including, without
limitation, the employment of counsel reasonably acceptable to Lender and the
negotiation of any settlement; provided, however, that any failure of Lender to
notify Indemnitor of such matter shall not impair or reduce the obligations of
Indemnitor hereunder. In the event Indemnitor shall fail to discharge or
undertake to defend Lender against any Costs for which Lender is indemnified
hereunder, Lender may, at its sole option and election, defend or settle such
claim, loss or liability, and, upon reasonable prior written notice to
Indemnitor, Lender shall have the right, at the expense of Indemnitor (which
expense shall be included in Costs), to employ separate counsel in any such
action and to participate in the defense thereof. The liability of Indemnitor to
Lender hereunder shall be conclusively established by such settlement (absent
manifest error), provided such settlement is made in good faith, the amount of
such liability to include both the settlement consideration and the costs and
expenses, including, without limitation, reasonable attorneys' fees and
disbursements, actually incurred by Lender in effecting such settlement. In such
event, such settlement consideration, costs and expenses shall be included in
Costs and Indemnitor shall pay the same as hereinafter provided.
(b) Indemnitor shall not, without the prior written
consent of Lender, such consent not to be unreasonably withheld or delayed: (i)
settle or compromise any action, suit, proceeding or claim or consent to the
entry of any judgment that does not include as an unconditional term thereof the
delivery by the claimant or plaintiff to Lender of a full and complete written
release of Lender (in form, scope and substance satisfactory to Lender in its
sole discretion) from all liability in respect of such action, suit, proceeding
or claim and a dismissal with prejudice of such action, suit, proceeding or
claim; or (ii) settle or compromise any action, suit, proceeding or claim in any
manner that may adversely affect Lender or obligate Lender to pay any sum or
perform any obligation as reasonably determined by Lender.
(c) All Costs shall be immediately reimbursable to Lender
when and as incurred and, in the event of any litigation, claim or other
proceeding, without any requirement of waiting for the ultimate outcome of such
litigation, claim or other proceeding, and Indemnitor shall pay to Lender any
and all Costs within ten (10) days after receipt of written notice from Lender
itemizing in reasonable detail the amounts thereof incurred to the date of such
notice. In addition to any other remedy available for the failure of Indemnitor
to periodically pay such Costs, such Costs, if not paid within said ten-day
period, shall bear interest at the Default Interest Rate (as defined in the
Note).
3. Reinstatement of Obligations. If at any time all or any part
of any payment made by Indemnitor or received by Lender from Indemnitor under or
with respect to this Agreement is or must be rescinded or returned for any
reason whatsoever (including, but not limited to, the insolvency, bankruptcy or
reorganization of Indemnitor or Borrower), then the obligations of Indemnitor
hereunder shall, to the extent of the payment rescinded or returned, be deemed
to have continued in existence, notwithstanding such previous payment made by
Indemnitor, or receipt of payment by Lender, and the obligations of Indemnitor
hereunder shall continue to be effective or be reinstated, as the case may be,
as to such payment, all as though such previous payment by Indemnitor had never
been made.
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4. Waivers by Indemnitor. To the fullest extent permitted by law,
Indemnitor hereby waives and agrees not to assert or take advantage of:
(a) Any right to require Lender to proceed against
Borrower or any other person or to proceed against or exhaust any security held
by Lender at any time or to pursue any other remedy in Lender's power or under
any other agreement before proceeding against Indemnitor hereunder;
(b) Any defense that may arise by reason of the
incapacity, lack of authority, death or disability of any other person or
persons or the failure of Lender to file or enforce a claim against the estate
(in administration, bankruptcy or any other proceeding) of any other person or
persons;
(c) Except as expressly provided herein, demand,
presentment for payment, notice of nonpayment, protest, notice of protest and
all other notices of any kind, or the lack of any thereof, including, without
limiting the generality of the foregoing, notice of the existence, creation or
incurring of any new or additional indebtedness or obligation or of any action
or non-action on the part of Borrower, Lender, any endorser or creditor of
Borrower or of Indemnitor or on the part of any other person whomsoever under
this or any other Loan Document held by Lender;
(d) Any defense based upon an election of remedies by
Lender;
(e) Any right or claim or right to cause a marshalling of
the assets of Indemnitor;
(f) Any principle or provision of law, statutory or
otherwise, which is or might be in conflict with the terms and provisions of
this Agreement;
(g) Any duty on the part of Lender to disclose to
Indemnitor any facts Lender may now or hereafter know about Borrower or the
Property, regardless of whether Lender has reason to believe that any such facts
materially increase the risk beyond that which Indemnitor intends to assume or
has reason to believe that such facts are unknown to Indemnitor or has a
reasonable opportunity to communicate such facts to Indemnitor, it being
understood and agreed that Indemnitor is fully responsible for being and keeping
informed of the financial condition of Borrower, of the condition of the
Property and of any and all circumstances bearing on the risk that liability may
be incurred by Indemnitor hereunder;
(h) Any lack of notice of disposition or of manner of
disposition of any collateral for the Loan;
(i) Any invalidity, irregularity or unenforceability, in
whole or in part, of any one or more of the Loan Documents;
(j) Any lack of commercial reasonableness in dealing with
the collateral for the Loan;
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(k) Any deficiencies in the collateral for the Loan or
any deficiency in the ability of Lender to collect or to obtain performance from
any persons or entities now or hereafter liable for the payment and performance
of any obligation hereby guaranteed;
(l) An assertion or claim that the automatic stay
provided by 11 U.S.C. Section 362 (arising upon the voluntary or involuntary
bankruptcy proceeding of Borrower) or any other stay provided under any other
debtor relief law (whether statutory, common law, case law or otherwise) of any
jurisdiction whatsoever, now or hereafter in effect, which may be or become
applicable, shall operate or be interpreted to stay, interdict, condition,
reduce or inhibit the ability of Lender to enforce any of its rights, whether
now or hereafter required, which Lender may have against Indemnitor or the
collateral for the Loan;
(m) Any modifications of the Loan Documents or any
obligation of Borrower relating to the Loan by operation of law or by action of
any court, whether pursuant to the Bankruptcy Reform Act of 1978, as amended, or
any other debtor relief law (whether statutory, common law, case law or
otherwise) of any jurisdiction whatsoever, now or hereafter in effect, or
otherwise; and
(n) Any action, occurrence, event or matter consented to
by Indemnitor under Section 6(h) hereof, under any other provision hereof, or
otherwise.
5. Representation and Warranty. Indemnitor hereby represents,
warrants and covenants that Indemnitor's net worth is, and at all times while
this Agreement shall be in effect, shall be not less than $500,000, as
determined in accordance with generally accepted accounting principles
consistently applied.
6. General Provisions.
(a) Fully Recourse. All Costs guaranteed hereunder are
recourse obligations of Indemnitor and not restricted by any limitation on
recourse liability set forth in any of the Loan Documents.
(b) Unsecured Obligations. Indemnitor hereby acknowledges
that Lender's appraisal of the Property is such that Lender is not willing to
accept the consequences of the inclusion of Indemnitor's indemnity set forth
herein among the obligations secured by the Deed of Trust and the other Loan
Documents and that Lender would not make the Loan but for the unsecured recourse
liability undertaken by Indemnitor herein.
(c) Survival. This Agreement shall be deemed to be
continuing in nature and shall remain in full force and effect and shall survive
the exercise of any remedy by Lender under the Deed of Trust or any of the other
Loan Documents, including, without limitation, any foreclosure or deed in lieu
thereof, even if, as a part of such remedy, the Loan is paid or satisfied in
full.
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(d) No Subrogation; No Recourse Against Lender.
Notwithstanding the satisfaction by Indemnitor of any liability hereunder,
Indemnitor shall not have any right of subrogation, contribution, reimbursement
or indemnity whatsoever or any right of recourse to or with respect to the
assets or property of Borrower or to any collateral for the Loan. In connection
with the foregoing, Indemnitor expressly waives any and all rights of
subrogation to Lender against Borrower, and Indemnitor hereby waives any rights
to enforce any remedy which Lender may have against Borrower and any right to
participate in any collateral for the Loan. In addition to and without in any
way limiting the foregoing, Indemnitor hereby subordinates any and all
indebtedness of Borrower now or hereafter owed to Indemnitor to all indebtedness
of Borrower to Lender, and agrees with Lender that Indemnitor shall not demand
or accept any payment of principal or interest from Borrower, shall not claim
any offset or other reduction of Indemnitor's obligations hereunder because of
any such indebtedness and shall not take any action to obtain any of the
collateral from the Loan. Further, Indemnitor shall not have any right of
recourse against Lender by reason of any action Lender may take or omit to take
under the provisions of this Agreement or under the provisions of any of the
Loan Documents.
(e) Reservation of Rights. Nothing contained in this
Agreement shall prevent or in any way diminish or interfere with any rights or
remedies, including, without limitation, the right to contribution, which Lender
may have against Borrower, Indemnitor or any other party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (codified at
Title 42 U.S.C. Section 9601 et seq.), as it may be amended from time to time,
or any other applicable federal, state or local laws, all such rights being
hereby expressly reserved.
(f) Financial Statements. Indemnitor hereby agrees, as a
material inducement to Lender to make the Loan to Borrower, to comply with the
provisions of Section 1.18(f) of the Deed of Trust as concerns Indemnitor.
Indemnitor hereby warrants and represents unto Lender that any and all financial
data which have heretofore been given or may hereafter be given to Lender with
respect to Indemnitor did or will at the time of such delivery fairly and
accurately present the financial condition of Indemnitor.
(g) Rights Cumulative; Payments. Lender's rights under
this Agreement shall be in addition to all rights of Lender under the Note, the
Deed of Trust and the other Loan Documents. FURTHER, PAYMENTS MADE BY INDEMNITOR
UNDER THIS AGREEMENT SHALL NOT REDUCE IN ANY RESPECT BORROWER'S OBLIGATIONS AND
LIABILITIES UNDER THE NOTE, THE DEED OF TRUST AND THE OTHER LOAN DOCUMENTS
EXCEPT WITH RESPECT TO, AND TO THE EXTENT OF, BORROWER'S OBLIGATION AND
LIABILITY FOR THE PAYMENT MADE BY INDEMNITOR.
(h) No Limitation on Liability. Indemnitor hereby
consents and agrees that Lender may at any time and from time to time without
further consent from Indemnitor do any of the following events, and the
liability of Indemnitor under this Agreement shall be unconditional and absolute
and shall in no way be impaired or limited by any of the following events,
whether occurring with or without notice to Indemnitor or with or without
consideration unless the same shall have the effect of satisfying Borrower's
obligations under the Loan Documents: (i) any extensions of time for performance
required by any of the Loan Documents or extension or renewal of the Note; (ii)
any sale, assignment or foreclosure of the Note, the Deed of Trust or
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any of the other Loan Documents or any sale or transfer of the Property (but
subject to the provisions of Section 1.5(d)(C)(5) of the Note and Section
1.13(b)(10) of the Deed of Trust); (iii) any change in the composition of
Borrower, including, without limitation, the withdrawal or removal of Indemnitor
from any current or future position of ownership, management or control of
Borrower; (iv) the accuracy or inaccuracy of the representations and warranties
made by Indemnitor herein or by Borrower in any of the Loan Documents; (v) the
release of Borrower or of any other person or entity from performance or
observance of any of the agreements, covenants, terms or conditions contained in
any of the Loan Documents by operation of law, Lender's voluntary act or
otherwise; (vi) the release or substitution in whole or in part of any security
for the Loan; (vii) Lender's failure to record the Deed of Trust or to file any
financing statement (or Lender's improper recording or filing thereof) or to
otherwise perfect, protect, secure or insure any lien or security interest given
as security for the Loan; or (viii) the modification of the terms of any one or
more of the Loan Documents. No such action which Lender shall take or fail to
take in connection with the Loan Documents or any collateral for the Loan, nor
any course of dealing with Borrower or any other person, shall limit, impair or
release Indemnitor's obligations hereunder, affect this Agreement in any way or
afford Indemnitor any recourse against Lender. Nothing contained in this Section
shall be construed to require Lender to take or refrain from taking any action
referred to herein.
(i) Entire Agreement; Amendment; Severability. This
Agreement contains the entire agreement between the parties respecting the
matters herein set forth and supersedes all prior agreements, whether written or
oral, between the parties respecting such matters. Any amendments or
modifications hereto, in order to be effective, shall be in writing and executed
by the parties hereto. A determination that any provision of this Agreement is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision, and any determination that the application of any provision of
this Agreement to any person or circumstance is illegal or unenforceable shall
not affect the enforceability or validity of such provision as it may apply to
any other persons or circumstances.
(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS
LOCATED, EXCEPT TO THE EXTENT THAT THE APPLICABILITY OF ANY OF SUCH LAWS MAY NOW
OR HEREAFTER BE PREEMPTED BY FEDERAL LAW, IN WHICH CASE SUCH FEDERAL LAW SHALL
SO GOVERN AND BE CONTROLLING.
(k) Binding Effect; Waiver of Acceptance. This Agreement
shall bind Indemnitor and its heirs, personal representatives, successors and
assigns and shall inure to the benefit of Lender and the officers, directors,
shareholders, agents and employees of Lender and their respective heirs,
successors and assigns. Notwithstanding the foregoing, Indemnitor shall not
assign any of its rights or obligations under this Agreement without the prior
written consent of Lender, which consent may be withheld by Lender in its sole
discretion. Indemnitor hereby waives any acceptance of this Agreement by Lender,
and this Agreement shall immediately be binding upon Indemnitor.
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(l) Notice. All notices, demands, requests or other
communications to be sent by one party to the other hereunder or required by law
shall be in writing and shall be deemed to have been validly given or served by
delivery of the same in person to the intended addressee, or by depositing the
same with Federal Express or another reputable private courier service for next
business day delivery to the intended addressee at its address set forth on the
first page of this Agreement or at such other address as may be designated by
such party as herein provided, or by depositing the same in the United States
mail, postage prepaid, registered or certified mail, return receipt requested,
addressed to the intended addressee at its address set forth on the first page
of this Agreement or at such other address as may be designated by such party as
herein provided. All notices, demands and requests shall be effective upon such
personal delivery, or one (1) business day after being deposited with the
private courier service, or two (2) business days after being deposited in the
United States mail as required above. Rejection or other refusal to accept or
the inability to deliver because of changed address of which no notice was given
as herein required shall be deemed to be receipt of the notice, demand or
request sent. By giving to the other party hereto at least fifteen (15) days'
prior written notice thereof in accordance with the provisions hereof, the
parties hereto shall have the right from time to time to change their respective
addresses and each shall have the right to specify as its address any other
address within the United States of America.
(m) No Waiver; Time of Essence; Business Day. The failure
of any party hereto to enforce any right or remedy hereunder, or to promptly
enforce any such right or remedy, shall not constitute a waiver thereof nor give
rise to any estoppel against such party nor excuse any of the parties hereto
from their respective obligations hereunder. Any waiver of such right or remedy
must be in writing and signed by the party to be bound. This Agreement is
subject to enforcement at law or in equity, including actions for damages or
specific performance. Time is of the essence hereof. The term "business day" as
used herein shall mean a weekday, Monday through Friday, except a legal holiday
or a day on which banking institutions in New York, New York are authorized by
law to be closed.
(n) Captions for Convenience. The captions and headings
of the sections and paragraphs of this Agreement are for convenience of
reference only and shall not be construed in interpreting the provisions hereof.
(o) Reasonable Attorney's Fees. In the event it is
necessary for Lender to retain the services of an attorney or any other
consultants in order to enforce this Agreement, or any portion thereof,
Indemnitor agrees to pay to Lender any and all costs and expenses, including,
without limitation, reasonable attorneys' fees, incurred by Lender as a result
thereof and such costs, fees and expenses shall be included in Costs.
(p) Successive Actions. A separate right of action
hereunder shall arise each time Lender acquires knowledge of any matter
indemnified or guaranteed by Indemnitor under this Agreement. Separate and
successive actions may be brought hereunder to enforce any of the provisions
hereof at any time and from time to time. No action hereunder shall preclude any
subsequent action, and Indemnitor hereby waives and covenants not to assert any
defense in the nature of splitting of causes of action or merger of judgments.
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(q) Reliance. Lender would not make the Loan to Borrower
without this Agreement. Accordingly, Indemnitor intentionally and
unconditionally enters into the covenants and agreements as set forth above and
understands that, in reliance upon and in consideration of such covenants and
agreements, the Loan shall be made and, as part and parcel thereof, specific
monetary and other obligations have been, are being and shall be entered into
which would not be made or entered into but for such reliance.
(r) Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be effective only upon delivery and
thereafter shall be deemed an original, and all of which shall be taken to be
one and the same instrument, for the same effect as if all parties hereto had
signed the same signature page. Any signature page of this Agreement may be
detached from any counterpart of this Agreement without impairing the legal
effect of any signatures thereon and may be attached to another counterpart of
this Agreement identical in form hereto but having attached to it one or more
additional signature pages.
(s) SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
(1) INDEMNITOR, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF
COMPETENT COUNSEL, (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE IN
WHICH THE PROPERTY IS LOCATED OVER ANY SUIT, ACTION OR PROCEEDING BY
ANY PERSON ARISING FROM OR RELATING TO THIS AGREEMENT, (B) AGREES THAT
ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN THE COUNTY AND STATE
IN WHICH THE PROPERTY IS LOCATED, (C) SUBMITS TO THE JURISDICTION OF
SUCH COURTS, AND (D) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES
THAT INDEMNITOR WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING IN ANY
OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF LENDER TO
BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM).
(2) INDEMNITOR, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF
COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT
OF, OR IN ANY WAY RELATING TO THIS AGREEMENT OR ANY CONDUCT, ACT OR
OMISSION OF LENDER OR INDEMNITOR, OR ANY OF THEIR DIRECTORS, OFFICERS,
PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS
AFFILIATED WITH LENDER OR INDEMNITOR, IN EACH OF THE FOREGOING CASES,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
(t) Waiver by Indemnitor. Indemnitor covenants and agrees
that, upon the commencement of a voluntary or involuntary bankruptcy proceeding
by or against Borrower,
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Indemnitor shall not seek or cause Borrower or any other person or entity to
seek a supplemental stay or other relief, whether injunctive or otherwise,
pursuant to 11 U.S.C. Section 105 or any other provision of the Bankruptcy
Reform Act of 1978, as amended, or any other debtor relief law, (whether
statutory, common law, case law or otherwise) of any jurisdiction whatsoever,
now or hereafter in effect, which may be or become applicable, to stay,
interdict, condition, reduce or inhibit the ability of Lender to enforce any
rights of Lender against Indemnitor or the collateral for the Loan by virtue of
this Agreement or otherwise.
(u) Secondary Market. Lender may sell, transfer and
deliver the Loan Documents to one or more investors in the secondary mortgage
market. In connection with such sale, Lender may retain or assign responsibility
for servicing the Loan or may delegate some or all of such responsibility and/or
obligations to a servicer, including, but not limited to, any subservicer or
master servicer, on behalf of the investors.
(v) Dissemination of Information. If Lender determines at
any time to sell, transfer or assign the Note, the Deed of Trust and the other
Loan Documents, and any or all servicing rights with respect thereto, or to
grant participations therein (the "Participations") or issue mortgage
pass-through certificates or other securities evidencing a beneficial interest
in a rated or unrated public offering or private placement (the "Securities"),
Lender may forward to each purchaser, transferee, assignee, servicer,
participant, investor, or their respective successors in such Participations
and/or Securities (collectively, the "Investor") or any Rating Agency (as
defined in the Deed of Trust) rating such Securities, each prospective Investor
and each of the foregoing's respective counsel, all documents and information
which Lender now has or may hereafter acquire relating to the Loan and to
Borrower, any Indemnitor and the Property, which shall have been furnished by
Borrower, or any Indemnitor as Lender determines necessary or desirable.
[THE BALANCE OF THIS PAGE WAS LEFT BLANK INTENTIONALLY]
11
<PAGE>
IN WITNESS WHEREOF, Indemnitor has executed this Indemnity Agreement as
of the day and year first written above.
INDEMNITOR:
CORNERSTONE REALTY INCOME TRUST, INC.,
a Virginia corporation
By: /s/ Stanley J. Olander, Jr.
---------------------------------------
Name: Stanley J. Olander, Jr.
Title: Executive Vice President
<PAGE>
EXHIBIT A
Legal Description
[OMITTED]
