Document:

EXHIBIT 10.14

LOAN NO.: 26-5950380                                    THE MAYFLOWER APARTMENTS
                                                        VIRGINIA BEACH, VIRGINIA

                                 PROMISSORY NOTE

$10,500,000.00                                                 December 12, 2000

         FOR  VALUE  RECEIVED,  the  undersigned,   CRIT-VA,  INC.,  a  Virginia
corporation,  ("Maker"),  having an address at 306 East Main  Street,  Richmond,
Virginia  23219,  promises to pay to the order of FIRST UNION  NATIONAL  BANK, a
national  banking  association  ("Payee"),  at the  office of Payee at One First
Union  Center,  301 South  College  Street,  Mailcode NC 0166  Charlotte,  North
Carolina 28288, Attention:  Contract Finance or at such other place as Payee may
designate  to Maker in  writing  from  time to time,  the  principal  sum of Ten
Million Five Hundred Thousand and No/100 Dollars ($10,500,000.00), together with
interest on so much thereof as is from time to time outstanding and unpaid, from
the date of the advance of the principal  evidenced hereby, at the rate of seven
and  thirty-five  one  hundredths  percent  (7.35%) per annum (the "Note Rate"),
together with all other amounts due hereunder or under the other Loan  Documents
(as defined in the Security Instrument), in lawful money of the United States of
America,  which  shall at the time of payment be legal  tender in payment of all
debts and dues, public and private.

                        ARTICLE I. - TERMS AND CONDITIONS

         1.1.  Computation  of Interest.  Interest  shall be computed  hereunder
based on a 360-day  year and based on the actual  number of days elapsed for any
month in which interest is being calculated. Interest shall accrue from the date
on which funds are advanced  hereunder  (regardless  of the time of day) through
and  including  the day on which  funds are  credited  pursuant  to Section  1.2
hereof.

         1.2.  Payment of  Principal  and  Interest.  Payments in federal  funds
immediately  available  at the place  designated  for payment  received by Payee
prior to 2:00 p.m.  local time at said place of payment on a business  day shall
be credited prior to close of business,  while other payments,  at the option of
Payee, may not be credited until immediately available to Payee in federal funds
at the place  designated for payment prior to 2:00 p.m. local time at said place
of payment on a business  day.  The term  "business  day" when 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.
Interest only shall be payable in consecutive monthly installments in the amount
set forth on Annex 1 attached hereto and incorporated  herein by this reference,
beginning on the first day of the second full calendar month  following the date
of this Note (or on the first day of the first full calendar month following the
date hereof,  in the event the advance of the principal amount evidenced by this
Note is the first day of a calendar  month)  (the  "First  Payment  Date"),  and
continuing on the first day of each and every calendar month thereafter  through
and including December 1, 2010 (each,

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a  "Payment  Date").  On  January  1, 2011 (the  "Maturity  Date"),  the  entire
outstanding  principal  balance  hereof,  together  with all  accrued but unpaid
interest thereon, shall be due and payable in full.

         1.3.  Application  of  Payments.  So long as no  Event of  Default  (as
hereinafter  defined)  exists  hereunder or under any other Loan Document,  each
such  monthly  installment  shall be applied  first,  to any  amounts  hereafter
advanced by Payee  hereunder or under any other Loan  Document,  second,  to any
late fees and other amounts  payable to Payee,  third, to the payment of accrued
interest and last to reduction of principal.

         1.4.  Payment of "Short  Interest".  If the  advance  of the  principal
amount  evidenced  by this Note is made on a date  other than the first day of a
calendar month,  Maker shall pay to Payee  contemporaneously  with the execution
hereof  interest at the Note Rate for a period from the date hereof  through and
including the last day of this calendar month.

         1.5.     Prepayment;  Defeasance.

                  (a) This Note may not be prepaid,  in whole or in part (except
as otherwise specifically provided herein), at any time. In the event that Maker
wishes to have the Security Property (as hereinafter  defined) released from the
lien of the Security  Instrument (as hereinafter  defined),  Maker's sole option
shall be a Defeasance (as  hereinafter  defined) upon  satisfaction of the terms
and conditions  set forth in Section 1.5(d) hereof.  This Note may be prepaid in
whole but not in part without  premium or penalty on any Payment Date  occurring
within three (3) months prior to the Maturity Date  provided (i) written  notice
of such  prepayment  is received by Payee not more than ninety (90) days and not
less than thirty (30) days prior to the date of such  prepayment,  and (ii) such
prepayment  is  accompanied  by  all  interest  accrued  hereunder  through  and
including the date of such  prepayment and all other sums due hereunder or under
the other Loan  Documents.  If, upon any such permitted  prepayment on a Payment
Date occurring within three (3) months prior to the Maturity Date, the aforesaid
prior written notice has not been timely received by Payee, there shall be due a
prepayment  fee equal to, an amount equal to the lesser of (i) thirty (30) days'
interest computed at the Note Rate on the outstanding  principal balance of this
Note so prepaid and (ii) interest  computed at the Note Rate on the  outstanding
principal  balance of this Note so prepaid  that would have been payable for the
period from, and including,  the date of prepayment through the Maturity Date of
this Note as though such prepayment had not occurred.

                  (b) If,  prior to the date  which is two (2)  years  after the
"startup day," within the meaning of Section 860G(a) (9) of the Internal Revenue
Code of  1986,  as  amended  from  time to time or any  successor  statute  (the
"Code"), of a "real estate mortgage investment conduit" (a "REMIC"),  within the
meaning  of  Section  860D of the Code,  that  holds  this  Note  (the  "Lockout
Expiration  Date"),  the  indebtedness  evidenced  by this Note  shall have been
declared  due and  payable  by  Payee  pursuant  to  Article  II  hereof  or the
provisions  of any  other  Loan  Document  due to the  existence  of an Event of
Default (as defined in the Security  Instrument) by Maker,  then, in addition to
the indebtedness evidenced by this Note being immediately due and payable, there
shall also then be immediately due and payable a sum equal to the interest which
would have accrued on the  principal  balance of this Note at the Note Rate

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from the date of such  acceleration to the Lock-out  Expiration  Date,  together
with a prepayment  fee in an amount equal to the Yield  Maintenance  Premium (as
hereinafter  defined)  based  on the  entire  indebtedness  on the  date of such
acceleration.  If such  acceleration is on or following the Lock-out  Expiration
Date,  the Yield  Maintenance  Premium  shall also then be  immediately  due and
payable as though Maker were  prepaying the entire  indebtedness  on the date of
such  acceleration.  In addition to the amounts  described in the two  preceding
sentences,  in the event of any such  acceleration  or tender of payment of such
indebtedness occurs or is made on or prior to the first (1st) anniversary of the
date of this Note,  there  shall  also then be  immediately  due and  payable an
additional prepayment fee of three percent (3%) of the principal balance of this
Note.  The term "Yield  Maintenance  Premium"  shall mean an amount equal to the
greater of (A) two percent (2.0%) of the principal amount being prepaid, and (B)
the present value of a series of payments each equal to the Payment Differential
(as  hereinafter  defined) and payable on each  Payment Date over the  remaining
original  term  of  this  Note  and  on the  Maturity  Date,  discounted  at the
Reinvestment  Yield (as hereinafter  defined) for the number of months remaining
as of the date of such  prepayment  to each such  Payment  Date and the Maturity
Date. The term "Payment Differential" shall mean an amount equal to (i) the Note
Rate less the Reinvestment Yield,  divided by (ii) twelve (12) and multiplied by
(iii) the principal sum  outstanding  under this Note after  application  of the
constant  monthly  payment  due under this Note on the date of such  prepayment,
provided that the Payment  Differential shall in no event be less than zero. The
term  "Reinvestment  Yield"  shall mean an amount equal to the lesser of (i) the
yield on the U.S. Treasury issue (primary issue) with a maturity date closest to
the Maturity Date, or (ii) the yield on the U.S.  Treasury issue (primary issue)
with a term equal to the remaining average life of the indebtedness evidenced by
this Note,  with each such yield  being based on the bid price for such issue as
published  in the Wall  Street  Journal on the date that is  fourteen  (14) days
prior to the date of such  prepayment set forth in the notice of prepayment (or,
if such bid price is not  published  on that date,  the next  preceding  date on
which such bid price is so  published)  and  converted  to a monthly  compounded
nominal yield.  In the event that any  prepayment  fee is due  hereunder,  Payee
shall deliver to Maker a statement setting forth the amount and determination of
the  prepayment  fee, and,  provided that Payee shall have in good faith applied
the formula  described  above,  Maker shall not have the right to challenge  the
calculation or the method of calculation  set forth in any such statement in the
absence of manifest  error,  which  calculation  may be made by Payee on any day
during the fifteen (15) day period preceding the date of such prepayment.  Payee
shall not be  obligated  or required  to have  actually  reinvested  the prepaid
principal  balance at the  Reinvestment  Yield or  otherwise  as a condition  to
receiving the prepayment fee.

                  (c) Partial  prepayments  of this Note shall not be permitted,
except  for  partial  prepayments  resulting  from  Payee's  election  to  apply
insurance or condemnation  proceeds to reduce the outstanding  principal balance
of  this  Note as  provided  in the  Security  Instrument,  in  which  event  no
prepayment  fee or premium  shall be due unless,  at the time of either  Payee's
receipt of such proceeds or the  application of such proceeds to the outstanding
principal  balance of this Note,  an Event of Default,  or an event which,  with
notice or the passage of time,  or both,  would  constitute an Event of Default,
shall have  occurred,  which  default or Event of  Default is  unrelated  to the
applicable  casualty or condemnation,  in which event the applicable  prepayment
fee or premium shall be due and payable based upon the amount of the prepayment.
No notice of prepayment shall be required under the  circumstances  specified in
the preceding sentence.  No

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principal  amount  repaid may be  reborrowed.  Any such partial  prepayments  of
principal shall be applied to the unpaid principal  balance evidenced hereby but
such application  shall not reduce the amount of the fixed monthly  installments
required to be paid pursuant to Section 1.2 above until all principal is paid in
full.  Except as  otherwise  expressly  provided in this  Section  1.5(c) and in
Section 1.5(b) above,  the  prepayment  fees provided above shall be due, to the
extent permitted by applicable law, under any and all circumstances where all or
any  portion  of this Note is paid  prior to the  Maturity  Date,  whether  such
prepayment is voluntary or involuntary,  including,  without limitation, if such
prepayment  results from Payee's  exercise of its rights upon the occurrence and
continuances  of an Event of Default by Maker and  acceleration  of the Maturity
Date of this Note  (irrespective  of whether  foreclosure  proceedings have been
commenced),  and shall be in addition to any other sums due  hereunder  or under
any of the other Loan  Documents.  No tender of a  prepayment  of this Note with
respect  to  which a  prepayment  fee is due  shall  be  effective  unless  such
prepayment is accompanied by the applicable prepayment fee.

                  (d) (i) At any time after the  Lockout  Expiration  Date,  and
provided no Event of Default has occurred and is  continuing  hereunder or under
any of the other  Loan  Documents,  at Maker's  option,  Payee  shall  cause the
release of the Security  Property from the lien of the Security  Instrument  and
the other Loan Documents specifically related to this Note (a "Defeasance") upon
the satisfaction of the following conditions:

                      (A) Maker  shall give not more than  ninety  (90) days' or
                  less than  sixty  (60)  days'  prior  written  notice to Payee
                  specifying  the date Maker  intends for the  Defeasance  to be
                  consummated  (the  "Release  Date"),  which  date  shall  be a
                  Payment Date.

                      (B) All accrued and unpaid interest and all other sums due
                  under   this  Note  and  under   the  other   Loan   Documents
                  specifically  related  to this  Note up to and  including  the
                  Release  Date shall be paid in full on or prior to the Release
                  Date.

                      (C)  Maker  shall  deliver  to  Payee  on or  prior to the
                  Release Date:

                      (1)  a sum of money in  immediately  available  funds (the
                           "Defeasance    Deposit")   equal   to   one   hundred
                           twenty-five   percent   (125%)  of  the   outstanding
                           principal  balance  of this Note plus an  amount,  if
                           any,  which together with the  outstanding  principal
                           balance of this Note,  shall be  sufficient to enable
                           Payee  to   purchase,   through   means  and  sources
                           customarily  employed and available to Payee, for the
                           account of Maker, direct, non-callable obligations of
                           the  United   States  of  America  that  provide  for
                           payments  prior,  but as  close as  possible,  to all
                           successive  monthly Payment Dates occurring after the
                           Release Date and to the Maturity Date, with each such
                           payment  being equal to or greater than the amount of
                           the  corresponding  installment  of principal  and/or
                           interest   required   to  be  paid  under  this  Note
                           (including,  but not  limited  to, all amounts due on
                           the Maturity

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                           Date)  for  the  balance  of  the  term  hereof  (the
                           "Defeasance Collateral"), each of which shall be duly
                           endorsed  by the holder  thereof as directed by Payee
                           or accompanied by a written instrument of transfer in
                           form and substance  satisfactory to Payee in its sole
                           discretion  (including,   without  limitation,   such
                           instruments  as may  be  required  by the  depository
                           institution  holding  such  securities  or the issuer
                           thereof, as the case may be, to effectuate book-entry
                           transfers   and  pledges   through   the   book-entry
                           facilities of such  institution)  in order to perfect
                           upon  the   delivery  of  the   Defeasance   Security
                           Agreement (as hereinafter defined) the first priority
                           security  interest in the  Defeasance  Collateral  in
                           favor  of  Payee in  conformity  with all  applicable
                           state and  federal  laws  governing  granting of such
                           security interests.

                      (2)  A  pledge  and  security   agreement,   in  form  and
                           substance   satisfactory   to   Payee   in  its  sole
                           discretion,   creating  a  first  priority   security
                           interest   in  favor  of  Payee  in  the   Defeasance
                           Collateral  (the  "Defeasance  Security  Agreement"),
                           which shall  provide,  among other  things,  that any
                           excess   received   by  Payee  from  the   Defeasance
                           Collateral   over  the   amounts   payable  by  Maker
                           hereunder  shall be refunded to Maker  promptly after
                           each monthly Payment Date.

                      (3)  A  certificate  of Maker  certifying  that all of the
                           requirements  of Maker set  forth in this  subsection
                           1.5(d)(i) have been satisfied.

                      (4)  An opinion of counsel for Maker in form and substance
                           and delivered by counsel  reasonably  satisfactory to
                           Payee in its sole  discretion  stating,  among  other
                           things, that (w) Payee has a perfected first priority
                           security interest in the Defeasance  Collateral,  (x)
                           the  Defeasance  Security  Agreement  is  enforceable
                           against Maker in accordance  with its terms,  (y) the
                           contemplated defeasance will not result in any deemed
                           exchange of the Note  pursuant to Section 1001 of the
                           Code and will not adversely  affect the Note's status
                           as  indebtedness  for Federal income tax purposes and
                           (z) any trust formed as a REMIC in connection  with a
                           Secondary  Market  Transaction  (as  defined  in  the
                           Security  Instrument)  will not fail to maintain  its
                           status as REMIC as a result of such  defeasance or be
                           subject to a tax on a  prohibited  transaction  under
                           Section 860(f)(a) of the Code.

                      (5)  Maker and any  guarantor  or  indemnitor  of  Maker's
                           obligations  under the Loan Documents for which Maker
                           has recourse liability executes and delivers to Payee
                           such   documents   and   agreements  as  Payee  shall
                           reasonably  require to evidence  and  effectuate  the
                           ratification of such recourse  liability and guaranty
                           or indemnity,

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                           respectively;  provided  that  Maker  and  each  such
                           guarantor  or   indemnitor   shall  be  released  and
                           relieved from any of its obligations  under this Note
                           and the other Loan  Documents  and under any guaranty
                           or indemnity  agreement  executed in connection  with
                           the  loan  evidenced  by this  Note  for any  acts or
                           events  occurring  or  obligations  arising  after  a
                           Defeasance  which are not caused by or arising out of
                           an  any  acts  or  events  occurring  or  obligations
                           arising prior to or simultaneously with a Defeasance.

                      (6)  Evidence  from any Rating  Agency (as  defined in the
                           Security Instrument)  confirming that such Defeasance
                           and release of the Security Property from the lien of
                           the Security  Instrument  and the  cross-default  and
                           cross-collateralization     provisions     of     the
                           Contemporaneous Mortgages (as defined in the Security
                           Instrument)  and   Contemporaneous   Assignments  (as
                           defined in the Security  Instrument) shall not result
                           in  a  requalification,   reduction,   downgrade,  or
                           withdrawal of any rating initially  assigned or to be
                           assigned in a Secondary Market Transaction,  or if no
                           such rating has been  issued,  in Payee's  good faith
                           judgment,  such Defeasance  shall not have an adverse
                           affect  on  the  level  of   rating   obtainable   in
                           connection with the loan evidenced hereby.

                      (7)  Such other certificates,  documents or instruments as
                           Payee may reasonably require.

                      (8)  Payment of all reasonable fees,  costs,  expenses and
                           charges  incurred  by  Payee in  connection  with the
                           Defeasance of the Security  Property and the purchase
                           of  the  Defeasance  Collateral,  including,  without
                           limitation,  all reasonable  legal fees and costs and
                           expenses   incurred   by  Payee  or  its   agents  in
                           connection  with  release of the  Security  Property,
                           review  of the  proposed  Defeasance  Collateral  and
                           preparation of the Defeasance  Security Agreement and
                           related  documentation,   any  revenue,  documentary,
                           stamp, intangible or other taxes, charges or fees due
                           in connection  with  substitution  of the  Defeasance
                           Collateral for the Security Property shall be paid on
                           or before the Release Date.  Without limiting Maker's
                           obligations  with  respect  thereto,  Payee  shall be
                           entitled to deduct all such fees, costs, expenses and
                           charges from the Defeasance  Deposit to the extent of
                           any portion of the  Defeasance  Deposit which exceeds
                           the  amount  necessary  to  purchase  the  Defeasance
                           Collateral.

                      (9)  Evidence  in  writing  from  the  applicable   rating
                           agencies  stating that the defeasance will not result
                           in downgrading,  withdrawal,  or qualification of the
                           respective rating in effect immediately prior to

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                           such  defeasance  event for any securities  issued in
                           connection  with the  securitization  which  are then
                           outstanding.

                      (D)  In  connection  with  the  Defeasance  Deposit, Maker
                  hereby  authorizes  and  directs  Payee  using  the  means and
                  sources customarily employed and available to Payee to use the
                  Defeasance  Deposit to  purchase  for the account of Maker the
                  Defeasance Collateral.  Furthermore, the Defeasance Collateral
                  shall be  arranged  such  that  payments  received  from  such
                  Defeasance  Collateral  shall be paid  directly to Payee to be
                  applied on account of the  indebtedness of this Note. Any part
                  of the Defeasance Deposit in excess of the amount necessary to
                  purchase the  Defeasance  Collateral  and to pay the other and
                  related costs Maker is obligated to pay under this Section 1.5
                  shall be refunded to Maker.

                      (E) After giving effect, and as a condition precedent,  to
                  the release of the Security Property from the lien of the Deed
                  of Trust,  (x) the debt service  coverage ratio, as determined
                  by  Payee  in  connection  with  its  customary   underwriting
                  practices and procedures  with respect to the Other  Mortgaged
                  Properties  (as  defined  in the  Security  Instrument)  which
                  remain  subject to the lien of the  Contemporaneous  Mortgages
                  after the  release of the  Security  Property is not less than
                  the  greater of (1) the debt  service  coverage  ratio for the
                  Security  Property and all of the Other  Mortgaged  Properties
                  immediately  prior  to the  release  or (2) the  debt  service
                  coverage  ratio  of  the  Security   Property  and  all  Other
                  Mortgaged  Properties  at the  time  of  closing  of the  loan
                  evidenced  hereby (but in no event less than 1.60:1),  and (y)
                  the loan to  value  ratio of the  Other  Mortgaged  Properties
                  which remain encumbered by the Contemporaneous Mortgages after
                  the release of the Security Property, as reasonably determined
                  by Payee based on an  appraisal  prepared by an MAI  appraiser
                  satisfactory  to Payee at Maker's  cost (and when  determining
                  the  value,  talking  into  account  any  limitations  in  the
                  Security  Instrument or any  Contemporaneous  Mortgages on the
                  principal  amount  secured by the Security  Instrument  or any
                  Contemporaneous Mortgage), is not greater than 60%.

                  (ii)  Upon  compliance  with the  requirements  of  subsection
         1.5(d)(i), the Security Property shall be released from the lien of the
         Security  Instrument and the other Loan Documents,  including,  without
         limitation the cross-default and cross-collateralization  provisions of
         the Contemporaneous Mortgages and Contemporaneous  Assignments, and the
         Defeasance  Collateral shall  constitute  collateral which shall secure
         this Note and all other obligations under the Loan Documents, including
         without  limitation  the  Contemporaneous  Notes  (as  defined  in  the
         Security Instrument), the Contemporaneous Mortgages and Contemporaneous
         Assignments.  Payee will, at Maker's  reasonable  expense,  execute and
         deliver any  agreements  reasonably  requested  by Maker to release the
         lien of the Security Instrument from the Security Property.

                  (iii) Upon the release of the Security  Property in accordance
         with this Section  1.5(d),  Maker shall assign all its  obligations and
         rights  under  this  Note,   together   with  the  pledged   Defeasance
         Collateral, to a newly created successor entity which complies with

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         the terms of Section  1.33 of the  Security  Instrument  designated  by
         Maker and  approved  by Payee in its sole  discretion.  Such  successor
         entity shall  execute an  assumption  agreement  in form and  substance
         satisfactory to Payee in its sole discretion pursuant to which it shall
         assume Maker's  obligations under this Note and the Defeasance Security
         Agreement. As conditions to such assignment and assumption, Maker shall
         (x)  deliver to Payee an opinion of counsel in form and  substance  and
         delivered  by  counsel  satisfactory  to Payee  in its sole  discretion
         stating,   among  other  things,  that  such  assumption  agreement  is
         enforceable  against Maker and such successor entity in accordance with
         its terms and that this Note and the Defeasance  Security  Agreement as
         so assumed, are enforceable against such successor entity in accordance
         with  their  respective  terms,  and  (y) pay all  costs  and  expenses
         (including,  but not limited  to,  reasonable  legal fees)  incurred by
         Payee or its agents in connection  with such  assignment and assumption
         (including,  without limitation,  the review of the proposed transferee
         and  the   preparation   of  the   assumption   agreement  and  related
         documentation).  Upon such  assumption,  Maker shall be relieved of its
         obligations  hereunder,  under the other Loan  Documents  other than as
         specified  in  Section  1.5(d)(C)(5)  above and  under  the  Defeasance
         Security Agreement.

                  (iv) As  consideration  for  Payee's  agreement  to modify the
         single asset provisions of Section 1.33 of the Security Instrument, and
         permit  Maker  to own  all of  the  Security  Property  and  the  Other
         Mortgaged  Properties,  in the event of a Defeasance in accordance with
         this  Section  1.5(d),  Maker must  convey the  Security  Property to a
         different  ownership entity (with neither the Security Property nor the
         proposed new ownership entity being owned by Maker).

         1.6. Security;  Cross-Collateralization.  The indebtedness evidenced by
this Note and the obligations created hereby are secured by, among other things,
that  certain  mortgage,  deed of trust  or deed to  secure  debt  and  security
agreement (the "Security Instrument") from Maker for the benefit of Payee, dated
of  even  date  herewith,  covering  property  located  in the  Virginia  Beach,
Virginia, and the Contemporaneous Mortgages and the Contemporaneous Assignments.
Some of the Loan  Documents  are to be filed  for  record  on or about  the date
hereof in the appropriate public records. Maker acknowledges that Payee has made
the loan  evidenced  by this Note to Maker upon the  security of its  collective
interest in the Security  Property  and the Other  Mortgaged  Properties  and in
reliance  upon the  aggregate of the Security  Property and the Other  Mortgaged
Properties taken together being of greater value as collateral security than the
sum of the Security  Property and Other Mortgaged  Properties taken  separately.
Maker  agrees  that  this  Note  and the  Security  Instrument  are and  will be
cross-collateralized  and cross-defaulted  with the  Contemporaneous  Notes, the
Contemporaneous Mortgages and Contemporaneous Assignments.

                              ARTICLE II. - DEFAULT

         2.1. Events of Default;  Cross-Default.  It is hereby  expressly agreed
that  should any  default  occur in the  payment of  principal  or  interest  as
stipulated  above and such payment is not made within seven (7) days of the date
such payment is due  (provided  that no grace period is provided for the payment
of principal and interest due on the Maturity  Date),  or should any other Event
of Default occur and be continuing, the indebtedness evidenced hereby, including
all sums

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<PAGE>

advanced or accrued  hereunder or under any other Loan Document,  and all unpaid
interest  accrued  thereon,  shall, at the option of Payee and without notice to
Maker, at once become due and payable and may be collected forthwith, whether or
not there has been a prior demand for payment and  regardless of the  stipulated
date of maturity.

         2.2.  Late  Charges.  In the event that any payment is not  received by
Payee  within  seven (7) days of the date when due,  then,  in  addition  to any
default  interest  payments due hereunder,  Maker shall also pay to Payee a late
charge in an amount  equal to five  percent  (5%) of the amount of such  overdue
payment.

         2.3.  Default  Interest  Rate.  So long as any Event of Default  exists
hereunder,  regardless of whether or not there has been an  acceleration  of the
indebtedness   evidenced  hereby,  and  at  all  times  after  maturity  of  the
indebtedness  evidenced hereby (whether by acceleration or otherwise),  interest
shall accrue on the  outstanding  principal  balance of this Note, from the date
due until the date  credited,  at a rate per annum equal to four percent (4%) in
excess of the Note  Rate,  or, if such  increased  rate of  interest  may not be
collected under  applicable  law, then at the maximum rate of interest,  if any,
which may be collected from Maker under  applicable  law (the "Default  Interest
Rate"), and such default interest shall be immediately due and payable.

         2.4. Maker's Agreements.  Maker acknowledges that it would be extremely
difficult or  impracticable to determine  Payee's actual damages  resulting from
any late  payment or default,  and such late  charges and default  interest  are
reasonable  estimates  of those  damages and do not  constitute  a penalty.  The
remedies of Payee in this Note or in the Loan Documents, or at law or in equity,
shall be cumulative and concurrent,  and may be pursued singly,  successively or
together, in Payee's discretion.

         2.5.  Maker to Pay  Costs.  In the event  that this  Note,  or any part
hereof, is collected by or through an  attorney-at-law,  Maker agrees to pay all
costs of collection, including, but not limited to, reasonable attorneys' fees.

         2.6.  Exculpation.  Notwithstanding  anything  in this Note or the Loan
Documents to the contrary,  but subject to the  qualifications  hereinbelow  set
forth, Payee agrees that:

               (a) Maker shall be liable upon the indebtedness  evidenced hereby
and for the  other  obligations  arising  under the Loan  Documents  to the full
extent  (but  only to the  extent)  of the  security  provided  for in the  Loan
Documents,  the same being all  properties  (whether real or personal),  rights,
estates and interests now or at any time hereafter  securing the payment of this
Note and/or the other obligations of Maker under the Loan Documents  pursuant to
the terms thereof (collectively, the "Security Property");

               (b) if a default  occurs in the timely and proper  payment of all
or any part of such  indebtedness  evidenced  hereby or in the timely and proper
performance  of the other  obligations  of Maker under the Loan  Documents,  any
judicial  proceedings  brought by Payee  against  Maker  shall be limited to the
preservation,  enforcement  and  foreclosure,  or any  thereof,  of  the  liens,
security titles, estates,  assignments,  rights and security interests now or at
any  time  hereafter  securing  the  payment  of  this  Note  and/or  the  other
obligations of Maker under the Loan

                                       9
<PAGE>

Documents pursuant to the terms thereof,  and no attachment,  execution or other
writ of process shall be sought, issued or levied upon any assets, properties or
funds of Maker other than the  Security  Property,  except  with  respect to the
liability described below in this section; and

               (c) in the event of a foreclosure of such liens, security titles,
estates, assignments,  rights or security interests with respect to the Security
Property securing the payment of this Note and/or the other obligations of Maker
under the Loan Documents,  no judgment for any deficiency upon the  indebtedness
evidenced hereby shall be sought or obtained by Payee against Maker, except with
respect to the liability  described  below in this section;  provided,  however,
that,  notwithstanding the foregoing provisions of this section,  Maker shall be
fully and personally  liable and subject to legal action (i) for  misapplication
or  misappropriation  by Maker of proceeds paid under any insurance policies (or
paid to Maker 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 Security  Property,  to the full extent of such  proceeds not  previously
delivered to Payee,  but which,  under the terms of the Loan  Documents,  should
have been delivered to Payee,  (ii) for  misapplication or  misappropriation  by
Maker of proceeds or awards  resulting from the  condemnation or other taking in
lieu of condemnation of all or any portion of the Security Property, to the full
extent of such proceeds or awards not previously  delivered to Payee, but which,
under the terms of the Loan  Documents,  should  have been  delivered  to Payee,
(iii) for  misapplication  or  misappropriation  by Maker of all tenant security
deposits  or other  refundable  deposits  paid to or held by Maker or any  other
person or entity under the control or direction of Maker,  if any, in connection
with leases of all or any portion of the Security Property which are not applied
in accordance with the terms of the applicable  lease or other  agreement,  (iv)
for misapplication or  misappropriation of rent and other payments received from
tenants  under leases of all or any portion of the Security  Property  paid more
than one (1) month in advance,  (v) for  misapplication or  misappropriation  by
Maker of rents,  issues,  profits  and  revenues  of all or any  portion  of the
Security  Property  received  by Maker or any other  person or entity  under the
control  or  direction  of Maker  that are  applicable  to a  period  after  the
occurrence  and  continuance  of any Event of Default or any event  which,  with
notice or the passage of time,  or both,  would  constitute an Event of Default,
hereunder  or under the Loan  Documents  which  are not  either  applied  to the
ordinary and  necessary  expenses or capital  expenditures  in  connection  with
owning and  operating  the  Security  Property or paid to Payee or  otherwise as
contemplated or permitted by the Loan Documents, (vi) for waste committed on the
Security  Property,  damage  to  the  Security  Property  as  a  result  of  the
intentional  misconduct  or gross  negligence  of Maker or any of its  officers,
general partners or members,  as the case may be,  Indemnitor (as defined in the
Indemnity Agreement (as hereinafter  defined)),  or any agent or employee of any
such  persons,  or any  removal of any  portion  of the  Security  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
Payee on account of such occurrence, (vii) for failure by Maker to pay any valid
taxes, assessments,  mechanic's liens,  materialmen's liens or other liens which
could  create  liens on any  portion of the  Security  Property  which  would be
superior to the lien or security  title of the Security  Instrument or the other
Loan Documents  except,  with respect to any such taxes or  assessments,  to the
extent that funds have been  deposited  with Payee  pursuant to the terms of the
Security Instrument specifically for the applicable taxes or assessments and not
applied by Payee to pay such taxes and  assessments,  (viii) for all obligations
and  indemnities of Maker under Section 1.31 of the Security  Instrument and the
Environmental Indemnity

                                       10
<PAGE>

Agreement (as hereinafter  defined) relating to hazardous or toxic substances or
radon or compliance with environmental laws and regulations, and (ix) for fraud,
material  misrepresentation  or failure to disclose a material  fact by Maker 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 Maker, any officer,  general partner
or member, as the case may be, of Maker or Indemnitor, to the full extent of any
losses,  damages and  expenses  actually  incurred by Payee on account  thereof.
Nothing  contained  in this  section  shall (1) be  deemed  to be a  release  or
impairment of the indebtedness  evidenced by this Note or the other  obligations
of Maker under the Loan  Documents  or the lien of the Loan  Documents  upon the
Security Property,  or (2) preclude Payee from foreclosing the Loan Documents in
case of any Event of Default or from  enforcing any of the other rights of Payee
except as stated in this section,  or (3) limit or impair in any way  whatsoever
(A) the Indemnity and Guaranty Agreement (the "Indemnity  Agreement") or (B) the
Environmental  Indemnity  Agreement (the "Environmental  Indemnity  Agreement"),
each of even  date  herewith  executed  and  delivered  in  connection  with the
indebtedness evidenced by this Note or release, relieve, reduce, waive or impair
in any way whatsoever, any obligation of any party to the Indemnity Agreement or
the Environmental Indemnity Agreement.

         Notwithstanding  anything to the  contrary in this Note,  the  Security
Instrument or any of the other Loan Documents, Payee shall not be deemed to have
waived any right which Payee may have under Section 506(a),  506(b),  1111(b) or
any other  provisions of the U.S.  Bankruptcy  Code to file a claim for the full
amount  of  the  indebtedness  evidenced  hereby  or  secured  by  the  Security
Instrument or any of the other Loan  Documents or to require that all collateral
shall  continue to secure all of the  indebtedness  owing to Payee in accordance
with this Note, the Security Instrument and the other Loan Documents.

                        ARTICLE III. - GENERAL CONDITIONS

         3.1. No Waiver;  Amendment.  No failure to accelerate the  indebtedness
evidenced hereby by reason of default hereunder, acceptance of a partial or past
due payment,  or indulgences granted from time to time shall be construed (i) as
a novation  of this Note or as a  reinstatement  of the  indebtedness  evidenced
hereby or as a waiver  of such  right of  acceleration  or of the right of Payee
thereafter to insist upon strict compliance with the terms of this Note, or (ii)
to prevent the exercise of such right of acceleration or any other right granted
hereunder  or by any  applicable  laws;  and Maker hereby  expressly  waives the
benefit  of any  statute  or rule of law or equity  now  provided,  or which may
hereafter be provided,  which would produce a result  contrary to or in conflict
with the foregoing. No extension of the time for the payment of this Note or any
installment  due  hereunder  made by agreement  with any person now or hereafter
liable for the payment of this Note shall operate to release, discharge, modify,
change or affect the  original  liability  of Maker  under this Note,  either in
whole or in part, unless Payee agrees otherwise in writing. This Note may not be
changed orally,  but only by an agreement in writing signed by the party against
whom enforcement of any waiver, change, modification or discharge is sought.

         3.2. Waivers.  Presentment for payment,  demand,  protest and notice of
demand, protest and nonpayment and all other notices are hereby waived by Maker.
Maker hereby further waives and  renounces,  to the fullest extent  permitted by
law, all rights to the benefits of any

                                       11
<PAGE>

moratorium, reinstatement,  marshaling, forbearance, valuation, stay, extension,
redemption,  appraisement,  exemption and homestead now or hereafter provided by
the  Constitution  and laws of the United  States of  America  and of each state
thereof, both as to itself and in and to all of its property, real and personal,
against the enforcement and collection of the obligations evidenced by this Note
or the other Loan Documents.

         3.3.  Limit  of  Validity.  The  provisions  of  this  Note  and of all
agreements  between Maker and Payee,  whether now existing or hereafter  arising
and whether written or oral, including,  but not limited to, the Loan Documents,
are hereby  expressly  limited so that in no  contingency  or event  whatsoever,
whether  by reason of demand or  acceleration  of the  maturity  of this Note or
otherwise,  shall the amount contracted for, charged,  taken, reserved,  paid or
agreed to be paid to Payee for the use,  forbearance  or  detention of the money
loaned under this Note ("Interest")  exceed the maximum amount permissible under
applicable law. If, from any circumstance whatsoever, performance or fulfillment
of any provision  hereof or of any agreement  between Maker and Payee shall,  at
the time  performance or fulfillment of such provision  shall be due, exceed the
limit  for  Interest  prescribed  by law or  otherwise  transcend  the  limit of
validity  prescribed by applicable law, then,  ipso facto,  the obligation to be
performed  or  fulfilled  shall  be  reduced  to such  limit,  and if,  from any
circumstance  whatsoever,  Payee shall ever  receive  anything  of value  deemed
Interest by applicable  law in excess of the maximum  lawful  amount,  an amount
equal  to any  excessive  Interest  shall be  applied  to the  reduction  of the
principal  balance  owing under this Note in the inverse  order of its  maturity
(whether or not then due) or, at the option of Payee, be paid over to Maker, and
not to the payment of Interest.  All Interest (including any amounts or payments
judicially  or otherwise  under the law deemed to be Interest)  contracted  for,
charged,  taken,  reserved,  paid or  agreed to be paid to Payee  shall,  to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout  the full term of this Note,  including any  extensions  and renewals
hereof until payment in full of the  principal  balance of this Note so that the
Interest  thereon  for such full term  will not  exceed at any time the  maximum
amount  permitted by applicable law.  Additionally,  to the extent  permitted by
applicable  law now or  hereafter  in effect,  Payee may, at its option and from
time to time,  implement any other method of computing  the maximum  lawful rate
under the law of the State in which the  Security  Property  is located or under
other  applicable  law by giving  notice,  if required,  to Maker as provided by
applicable  law now or  hereafter  in effect.  This Section 3.3 will control all
agreements between Maker and Payee.

         3.4. Use of Funds. Maker hereby warrants, represents and covenants that
the funds disbursed hereunder shall be used for business purposes.

         3.5.  Unconditional  Payment.  Maker is and shall be  obligated  to pay
principal, interest and any and all other amounts which become payable hereunder
or under the other Loan Documents absolutely and unconditionally and without any
abatement,  postponement,  diminution or deduction and without any reduction for
counterclaim  or setoff.  In the event that at any time any payment  received by
Payee  hereunder  shall be deemed by a court of competent  jurisdiction  to have
been a  voidable  preference  or  fraudulent  conveyance  under any  bankruptcy,
insolvency or other debtor relief law, then the  obligation to make such payment
shall survive any cancellation or satisfaction of this Note or return thereof to
Maker and shall not be discharged or satisfied with any prior payment thereof or
cancellation  of this  Note,  but shall  remain a valid and

                                       12
<PAGE>

binding  obligation  enforceable  in  accordance  with the terms and  provisions
hereof, and such payment shall be immediately due and payable upon demand.

         3.6.  Governing  Law.  THIS NOTE SHALL BE  INTERPRETED,  CONSTRUED  AND
ENFORCED  ACCORDING TO THE LAWS OF THE STATE IN WHICH THE  SECURITY  PROPERTY IS
LOCATED.

         3.7. Waiver of Jury Trial.  MAKER, 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 THE DEBT  EVIDENCED BY THIS NOTE OR ANY CONDUCT,  ACT OR OMISSION OF
PAYEE  OR  MAKER,  OR ANY OF THEIR  RESPECTIVE  DIRECTORS,  OFFICERS,  PARTNERS,
MEMBERS,  EMPLOYEES,  AGENTS OR ATTORNEYS,  OR ANY OTHER PERSONS AFFILIATED WITH
PAYEE OR MAKER, IN EACH OR THE FOREGOING  CASES,  WHETHER  SOUNDING IN CONTRACT,
TORT OR OTHERWISE.

         3.8.  Secondary Market.  Payee may sell,  transfer and deliver the Loan
Documents  to  one or  more  investors  in the  secondary  mortgage  market.  In
connection  with such  sale,  Payee may  retain  or  assign  responsibility  for
servicing  the loan  evidenced by this Note 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.

         3.9.  Dissemination of Information.  If Payee determines at any time to
sell,  transfer or assign this Note, the Security  Instrument 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"),  Payee 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 Security  Instrument) rating such Securities,  each prospective Investor and
each of the foregoing's  respective counsel, all documents and information which
Payee now has or may hereafter  acquire  relating to the debt  evidenced by this
Note and to Maker,  Indemnitor and the Security Property,  which shall have been
furnished by Maker or Indemnitor as Payee determines necessary or desirable.

                     ARTICLE IV. - MISCELLANEOUS PROVISIONS

         4.1. The terms and provisions hereof shall be binding upon and inure to
the  benefit of Maker and Payee and their  respective  heirs,  executors,  legal
representatives,   successors,   successors-in-title  and  assigns,  whether  by
voluntary  action of the parties or by operation  of law. All personal  pronouns
used herein,  whether used in the masculine,  feminine or neuter  gender,  shall
include all other genders; the singular shall include the plural and vice versa.
Titles of articles and sections are for  convenience  only and in no way define,
limit, amplify or describe the scope or intent of any provisions hereof. Time is
of the essence with respect to all provisions of

                                       13
<PAGE>

this Note. This Note and the other Loan Documents  contain the entire agreements
between the parties hereto relating to the subject matter hereof and thereof and
all prior agreements  relative hereto and thereto which are not contained herein
or therein are terminated.

         4.2. Maker's Tax Identification Number is 54-2014536

             [THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       14
<PAGE>

         IN WITNESS  WHEREOF,  Maker has executed this Note as of the date first
written above.

                                     MAKER:

                                     CRIT-VA, INC.,
                                     a Virginia corporation

                                     By:/s/ Stanley J. Olander, Jr.
                                        ----------------------------------------
                                        Name:   Stanley J. Olander, Jr.
                                        Title:  Vice President

<PAGE>

                                     ANNEX 1
                                       TO
                                 PROMISSORY NOTE
                               LOAN NO. 26-5950380

                                    [OMITTED]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

                                       3
<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;

                                       5
<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]

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