EXHIBIT 10.21
LOAN NO.: 26-5950380 THE MAYFLOWER APARTMENTS
VIRGINIA BEACH, VIRGINIA
RECEIPT AND CLOSING CERTIFICATE
Dated: December 12, 2000
In connection with the extension by FIRST UNION NATIONAL BANK
("Lender"), to CRIT-VA, INC., a Virginia corporation ("Borrower"), of that
certain first priority loan in the original principal amount of Ten Million Five
Hundred Thousand and No/100 Dollars ($10,500,000.00) (the "Loan") pursuant to
the terms of that certain Loan Application dated October 23, 2000, by and
between Lender and Cornerstone Realty Income Trust, Inc., a Virginia corporation
(the "Application") which Loan relates to and is secured by that certain real
property situated in the Virginia Beach, Commonwealth of Virginia, as is 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 (said real property, buildings, structures and
other improvements being hereinafter collectively referred to as the
"Property"), and by the limited guaranty of certain of Borrower's obligation by
CORNERSTONE REALTY INCOME TRUST, INC., a Virginia corporation ("Guarantor")
pursuant to an Indemnity and Guaranty Agreement and Environmental Indemnity
Agreement, each dated December 12, 2000, Borrower hereby agrees as follows:
1. Borrower hereby certifies to Lender as follows:
a. Borrower has received from Lender, without offset,
counterclaim or defense, the entire Ten Million Five Hundred Thousand and No/100
Dollars ($10,500,000.00) of loan proceeds under the Application, which loan
proceeds were directed by Borrower to the Account of Union Commerce Title
Company, LLC (the "Disbursing Agent"), for application as set forth in the
Disbursement Authorization signed by Borrower, a copy of which is attached
hereto as Exhibit B and incorporated herein by this reference.
b. The undersigned is an officer of Borrower, with full power
and authority to execute this Receipt and Closing Certificate on behalf of
Borrower.
c. No Event of Default exists under the Loan Documents (as
hereinafter defined) executed by Borrower or the Guarantor and no event has
occurred which with the giving of notice or the passage of time, or both, could
constitute an Event of Default under the Loan Documents.
d. Since the date of the Application, no material portion of
the Property has been damaged and not repaired and restored to Lender's
satisfaction or been taken in condemnation or other similar proceedings, and no
such proceeding is pending. Since the date of
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the Application, there has been no structural change in the physical condition
of any portion of the Property other than those changes actually discovered
during the course of Property inspections by Lender.
e. Neither the Borrower nor the Borrower's general partner, or
Guarantor is the subject of any bankruptcy, reorganization or insolvency
proceeding.
f. Since the date of the Application, no materials containing
more than 1% asbestos, toxic waste or other hazardous substance has been placed
on or discovered on the Property, except those used in the ordinary course of
the business conducted on the Property and in compliance with applicable
environmental laws.
g. Since the date of the Application, no material adverse
change has occurred in the current net operating income for the Property.
2. Borrower agrees that, in connection with the closing and
disbursement of the Loan, from and after the date upon which the Loan Funds are
placed on the wire by Lender in accordance with the wire instructions of the
Disbursing Agent for Borrower and Lender, the full amount of the Loan thereupon
shall be deemed to be disbursed to Borrower and evidenced by the Promissory Note
executed by Borrower in evidence of the Loan (the "Note") and shall bear
interest at the rate provided in the Note.
3. Borrower agrees that in the event Lender decides to include
the Loan as an asset of a securitization, Borrower, prior to such
securitization, will (i) deliver any documents and information reasonably
required by the rating agencies engaged in connection with such securitization
(collectively, the "Rating Agency") in connection with such a securitization
provided, that, Borrower shall not be required to incur any material cost or
expense, (ii) at Lender's request, meet at the Property or at Borrower's offices
with representatives of the Rating Agency to discuss the business and operations
of the Property, and (iii) cooperate with any reasonable requests of the Rating
Agency, provided that it is at no cost to the Borrower or Lender. Without
limiting the foregoing, in connection with the sale, transfer and delivery of
the Loan Documents to one or more investors in the secondary mortgage market,
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.
4. If Lender determines at any time to sell, transfer or
assign the Note, the mortgage, deed of trust or deed to secure debt securing the
Note (the "Security Instrument") and other Loan Documents (as defined in the
Security Instrument), 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 "Investors") or any Rating Agency 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 Debt (as defined in the Security Instrument),
and to Borrower, any guarantor, any indemnitor and the Property, which shall
have been furnished by Borrower, any guarantor and any indemnitor, as Lender
determines necessary or desirable.
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5. Borrower and Guarantor each hereby certifies and represents
to Lender that neither Borrower, Guarantor nor any director or executive officer
of Borrower, Guarantor or Borrower's general partner has ever been convicted of
a felony nor is any criminal felony proceeding currently pending or to the best
of knowledge of undersigned threatened.
6. The certifications and agreements contained herein shall
survive the disbursement and closing of the Loan.
7. Lender shall be entitled to act in reliance upon the
certifications herein contained without further inquiry of any kind and
notwithstanding anything to the contrary contained in any other agreements or
document.
8. Borrower hereby acknowledges and understands that it is
anticipated that after the closing of the Loan, the Loan may be sold by Lender
to a third party and, in connection therewith, all of the documents evidencing,
securing, guaranteeing and/or relating to the Loan Documents (as defined in the
Security Instrument) shall be assigned by Lender to said third party. Borrower
hereby agrees that, upon assignment of the Loan Documents by Lender to said
third party as aforesaid, Lender shall have no obligations or liabilities under
the Loan Documents, said third party shall be substituted as the lender under
the Loan Documents for all purposes and Borrower shall look solely to said third
party for the performance of any obligations of the Lender under the Loan
Documents except with respect to any liability incurred prior to such
assignment.
9. Notwithstanding anything contained in this Receipt and
Closing Certificate to the contrary, the liability of Borrower and its officer,
directors, general partners, managers, members and principals for the
indebtedness secured hereby and for the performance of the other agreements,
covenants and obligations contained herein and in the Loan Documents shall be
limited as set forth in Section 2.6 of the Note.
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IN WITNESS WHEREOF, Borrower and Guarantor have caused this
Receipt and Closing Certificate to be executed as of the day and year first
above written.
BORROWER:
CRIT-VA, INC.,
a Virginia corporation
By: /s/ Stanley J. Olander, Jr.
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Name: Stanley J. Olander, Jr.
Title: Vice President
GUARANTOR:
CORNERSTONE REALTY INCOME TRUST,
INC., a Virginia corporation
By: /s/ Stanley J. Olander, Jr.
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Name: Stanley J. Olander, Jr.
Title: Executive Vice President
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EXHIBIT A
Legal Description
[OMITTED]
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EXHIBIT B
Disbursement Authorization
[OMITTED]
