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:


<PAGE>

         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;



                                      -2-
<PAGE>

                  (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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<PAGE>

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.



                                       4
<PAGE>

         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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<PAGE>

                  (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.



                                       6
<PAGE>

                  (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



                                       7
<PAGE>

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.



                                       8
<PAGE>

                  (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.



                                       9
<PAGE>

                  (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,



                                       10
<PAGE>

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]