Exhibit 10.4
AGREEMENT AND
BILL OF TRANSFER AND ASSIGNMENT
This AGREEMENT AND BILL OF TRANSFER AND ASSIGNMENT ("Bill of Transfer")
is made as of this 1st day of October, 1996, between Cornerstone Management
Group, Inc., a Virginia corporation (the "Company"), and Cornerstone Realty
Income Trust, Inc., a Virginia corporation (the "Acquiror").
RECITALS
A. The Company was engaged to serve as property manager to the Acquiror
pursuant to various management agreements listed on Exhibit A, each between the
Company and the Acquiror and dated various dates (the "Management Agreements")
in exchange for payment by the Acquiror of monthly management fees and the
reimbursement of certain expenses.
B. The Company has agreed to transfer all of the assets of the Company
to the Acquiror for 1,400,000 shares of common stock of the Acquiror.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged:
1. The Company hereby transfers, conveys, assigns and delivers to the
Acquiror all of the material assets of the Company as follows: All of the
Company's rights and interests in, to and under the Management Agreements
(collectively, the "Transferred Assets"). The Company hereby represents, and the
Acquiror hereby acknowledges, that the Transferred Assets are
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free of all liens and other encumbrances and comprise all of the material assets
of the Company. Further, the Company acknowledges that it is entitled only to
management fees and expense reimbursements under the Management Agreements
earned during the period preceding September 1, 1996.
2. In exchange for the Transferred Assets, the Acquiror agrees to
transfer to the Company 1,400,000 shares of common stock of the Acquiror (the
"REIT Common Stock"). The REIT Common Stock shall be issued as follows: 700,000
shares at closing, and 700,000 shares one year less one day later. No dividends
shall be payable with respect to the REIT Common Stock until such shares are
issued. There are no conditions to the issuance of the deferred REIT Common
Stock other than the passage of time.
3. The right to be issued the REIT Common Stock may be distributed by
the Company to its shareholders, but shall not otherwise be voluntarily assigned
or transferred.
4. The holders of the REIT Common Stock shall have "piggyback"
registration rights with respect thereto which are reasonable and customary. The
Acquiror shall pay the reasonable and customary expenses of any such piggyback
registration.
5. Except as set forth in Paragraph 6 below, nothing in this Agreement,
express or implied, is intended or shall be construed to confer upon any person,
firm or corporation other than the parties hereto any remedy or claim.
6. The provisions of this Agreement are intended to be binding upon the
Company, its successors and permitted assigns,
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and are for the benefit of the Acquiror, its successors and
assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement and Bill
of Transfer and Assignment as of the date set forth above.
The Company:
CORNERSTONE MANAGEMENT GROUP, INC.
By: /s/ Glade M. Knight
- ------------------------
Title: President
The Acquiror:
CORNERSTONE REALTY INCOME TRUST, INC.
By: /s/ S. J. Olander, Jr.
- --------------------------
Title: Vice President
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Exhibit A
List of Management Agreements between Cornerstone Management
Group, Inc. and Cornerstone Realty Income Trust, Inc.:
Date of Agreement Property Covered
----------------- ----------------
1. June 1, 1993 The Hollows
2. June 1, 1993 Polo Club
3. October 1, 1993 Mayflower Seaside Tower
4. December 7, 1993 Stone Ridge
5. December 15, 1993 County Green
6. February 1, 1994 Wimbledon Chase
7. April 29, 1994 Harbour Club
8. August 1, 1994 Chase Mooring
9. December 9, 1994 The Trestles
10. April 1, 1995 Wind Lake
11. June 21, 1995 Breckinridge
12. June 29, 1995 Magnolia Run
13. July 18, 1995 Bay Watch Pointe
14. August 22, 1995 Hanover Landing
15. September 22, 1995 Mill Creek
16. October 26, 1995 Glen Eagles
17. November 1, 1995 Osprey Landing
18. November 1, 1995 Tradewinds
19. November 1, 1995 Sailboat Bay
20. February 25, 1996 The Meadows
21. March 1, 1996 West Eagle Greens
22. March 1, 1996 Ashley Park
23. March 1, 1996 Arbor Trace
24. April 1, 1996 Longmeadow
25. April 1, 1996 Trophy Chase
26. May 1, 1996 Beacon Hill
27. May 1, 1996 Summer Walk
28. May 1, 1996 Willow Creek
29. May 31, 1996 Meadow Creek
30. June 26, 1996 Lexington Towers
31. July 1, 1996 Oak Park
32. July 19, 1996 Paces Glen
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