Document:

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                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (the "Agreement"), is made and entered into
as of the 24th day of February 1994, by and between SUMMIT MANAGEMENT COMPANY, a
Maryland corporation, and Keith Downey ("Employee").

                              STATEMENT OF PURPOSE

         The "Company" (as hereinafter defined) is principally engaged in the
business of real estate acquisition, development, construction, management,
leasing and brokerage. The Company desires to employ Employee and Employee
desires to be employed in the business of the Company in the manner hereinafter
specified in order to obtain for the Company the benefit of Employee's
experience and expertise and also to make provision for payment of reasonable
and proper compensation to Employee for such services. For purposes of this
Agreement, the term "Company" means and refers to (i) Summit Management Company,
(ii) Summit Properties, Inc., (iii) any business entity that is, directly or
indirectly, controlled by or under common control with Summit Properties, Inc.
or (iv) any of their respective successors.

         As previously agreed between the parties, this Agreement is being
executed as a condition precedent to the commencement of the employment of
Employee with the Company, and Employee has agreed to accept initial employment
subject to and in accordance with all the terms of this Agreement.

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained and the aforesaid Statement of Purpose, the Company and Employee
hereby agree as follows:

         1.       Employment and Employee's Duties. The Company employs Employee
to assist the Company in expanding, developing, operating and managing its
business operations, primarily in the field of acquisition, development,
management, leasing and construction of real estate, and specifically, the
acquisition, development, management, leasing and construction of multi-family
housing developments and other commercial real estate projects. In such
capacity, Employee shall perform the duties and have responsibilities as may be
assigned to Employee from time to time by the Company. In the performance of
Employee's duties hereunder, Employee shall at all times be under the
supervision, control and direction of the Company, and Employee shall perform
Employee's duties hereunder in accordance with, and at all times strictly adhere
to, all such reasonable rules, regulations, guidelines and instructions as may
be adopted from time to time by the Company.

         2.       Sole Employment. Employee agrees to devote Employee's full
time during the customary business hours of the company and give Employee's best
efforts to the business of the

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Company and, during the period of Employee's employment by the Company, Employee
shall not engage in any manner, whether as an officer, employee, owner, partner,
stockholder, director, consultant or otherwise, directly or indirectly, in any
business other than as provided for herein without the prior written approval of
the President of the Company, and shall not accept any other employment
whatsoever from any other person, firm, corporation or entity; provided,
however, that Employee may acquire an interest in a business entity so long as
such interest is a passive investment of Employee not exceeding ten percent
(10%) of the total ownership interest in such entity.

         3.       Term. The employment relationship under the Agreement shall
commence as of the date (the "Effective Date") Summit Properties, Inc.
successfully consummates an initial public offering of its Common Stock and
shall continue until the date ten (10) business days after written notice is
given to the other party by either the Company or Employee that the employment
relationship shall terminate. Such termination notice may be given by either
party without cause and for any or no reason.

         4.       Compensation.

                  (a)      Base Salary. Commencing on the Effective Date (as
defined in paragraph 3), the Company shall pay Employee during the term of
Employee's employment under this Agreement, a base salary equal to $78,300.00
per annum (the "Base Salary"), which amount shall be subject to adjustment, if
any, in accordance with this paragraph 4(a). The Company shall review Employee's
Base Salary on an annual basis, and the Company upon such review and in its sole
discretion, may increase or decrease Employee's Base Salary by an amount which
the Company deems appropriate in light of the Company's and Employee's
performance during the period covered by such review. The Base Salary, less all
applicable withholding taxes, shall be paid to Employee in accordance with the
payroll procedures in effect with respect to officers of the Company.

                  (b)      Incentive Compensation. In addition to the Base
Salary payable to Employee pursuant to paragraph 4(a) and any special
compensatory arrangements which the Company provides for Employee, effective as
of the Effective Date, Employee shall be entitled to participate in any
incentive compensation plans in effect with respect to employees of the Company
whose positions in the Company are commensurate to Employee's, with the criteria
for Employee's participation in such plans to be established by the Company in
its sole discretion.

                  (c)      Stock Options. Employee shall be entitled to
participate in employee stock option plans from time to time established for the
benefit of employees of the Company in accordance with the terms and conditions
of such plans.

                  (d)      Participation in Employee Benefit Plans. Employee
shall be entitled to participate in such medical, dental, disability,
hospitalization, life insurance, profit sharing and other benefit plans as the
Company shall maintain from time to time for the benefit of executive officers
of the Company, on the terms and subject to the conditions set forth in such
plans.

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                  (e)      Compensation upon Termination of Employment. If
Employee's employment under this Agreement is terminated for any reason
whatsoever, Employee shall not thereafter be entitled to receive any Base Salary
for periods following such termination; provided, however, that Employee shall
be entitled to receive any Base Salary which may be owed to Employee but is
unpaid as of the date on which Employee's employment is terminated. The
benefits, if any, payable to or on behalf of Employee upon Employee's
termination of employment from the Company under any employee benefit plans and
incentive compensation and other compensatory arrangements shall be governed by
the terms and conditions for benefit payments set forth in such plans and
arrangements.

         5.       Employee's Obligations upon Termination of Employment.

                  (a)      Definitions. For purposes of this paragraph 5, the
following terms shall have the following meanings:

                           "Affiliate" means (i) any entity directly or
         indirectly controlling (including without limitation an entity for
         which Employee serves as an officer, director, employee, consultant or
         other agent), controlled by, or under common control with Employee, and
         (ii) each other entity in which Employee, directly or indirectly, owns
         any controlling interest or of which Employee serves as a general
         partner.

                           "Company Project" means any Multifamily Property that
         the Company owns, operates or manages as of the date of Employee's
         termination of employment with the Company or that the Company has in
         any manner taken steps to acquire, develop, construct, operate, manage
         or lease (including without limitation making market surveys of a site,
         talking to the owner or his agent concerning the purchase or joint
         venture of a site, optioning or contracting to buy a site or
         discussions with the owner or his agent regarding managing or leasing a
         property) during the twelve (12) month period immediately preceding
         Employee's termination of employment with the Company.

                           "Multifamily Property" means any real property on
         which multifamily residential-use development has been constructed or
         is now or hereafter proposed to be constructed (for example, and not by
         way of limitation, a property of the type managed by the Company).

                  (b)      Anti-Pirating of Employees. For a two (2) year period
immediately following the termination of Employee's employment with the Company,
Employee agrees not to hire, directly or indirectly, or entice or participate in
any efforts to entice to leave the Company's employ, any person who was or is an
employee of the Company at any time during the twelve (12) month period
immediately preceding the termination date of Employee's employment with the
Company.

                  (c)      Anti-Pirating of Company Projects. For a period of
one (1) year immediately following the termination of Employee's employment with
the Company, Employee agrees not to engage in any manner, whether as an officer,
employee, owner, partner, stockholder, director, consultant or otherwise ,
directly or indirectly, in any business which engages or attempts to engage,
directly or indirectly, in the acquisition, development,

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construction, operation, management or leasing of any Company Project.
Notwithstanding the foregoing, the provisions of this paragraph 5(c) shall not
apply with respect to Employee's engagement in such a business to the extent
that Employee demonstrates to the Company's satisfaction (as determined by the
Company in its sole discretion) that Employee has no involvement whatsoever in
such business's activities with respect to any Company Project.

                  (d)      Trade Secrets and Confidential Information. Employee
hereby agrees that Employee will hold in a fiduciary capacity for the benefit of
the Company, and shall not directly or indirectly use or disclose any Trade
Secret, as defined hereinafter, that Employee may have acquired during the term
of Employee's employment by the company for so long as such information remains
a Trade Secret. The term "Trade Secret" as used in this Agreement shall mean
information including, but not limited to, technical or nontechnical data, a
formula, a pattern, a compilation, a program, a device, a method, a technique, a
drawing, a process, financial data, financial plans, product plans, or a list of
actual or potential customers or suppliers which:

                  derives economic value, actual or potential from not being
                  generally known to, and not being readily ascertainable by
                  proper means by, other persons who can obtain economic value
                  from `its disclosure or use; and is the subject of reasonable
                  efforts by the Company to maintain its secrecy.

         In addition to the foregoing and not in limitation thereof, Employee
agrees that during the period of Employee's employment by the Company and for a
period of one (1) year thereafter, Employee will hold in a fiduciary capacity
for the benefit of the Company and shall not directly or indirectly use or
disclose, any Confidential or Proprietary Information, as defined hereinafter,
that Employee may have acquired (whether or not developed or compiled by
Employee and whether or not Employee was authorized to have access to such
Information) during the term of, in the course of or as a result of Employee's
employment by the Company. The term "Confidential or Proprietary Information" as
used in this Agreement means any secret, confidential or proprietary information
of the Company not otherwise included in the definition of "Trade Secret" above.
The term "Confidential and Proprietary Information" does not include information
that has become generally available to the public by the act of one who has the
right to disclose such information without violating any right of the Company.

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                  (e)      Return of Information. Upon termination of Employee's
employment relationship with the Company, Employee agrees to turn over and
return to the Company all property in Employee's possession which belongs to the
Company and all files, information and data received, held or developed by
Employee while employed by the Company.

                  (f)      Reasonable and Necessary Restrictions. Employee
acknowledges that the restrictions, prohibitions and other provisions of this
paragraph 5, including without limitation the various periods of restrictions
set forth in paragraphs 5(b), 5(c) and 5(d), are reasonable, fair and equitable
in scope, terms and duration, are necessary to protect the legitimate business
interests of the Company, and are a material inducement to the Company to enter
into this Agreement. Employee covenants that Employee will not challenge the
enforceability of this Agreement nor will Employee raise any equitable defense
to its enforcement.

                  (g)      Specific Performance. Employee acknowledges that the
obligations undertaken by Employee pursuant to this paragraph 5 are unique and
that the Company likely will have no adequate remedy at law if Employee shall
fail to perform any of Employee's obligations hereunder, and Employee therefore
confirms that the Company's right to specific performance of the terms of this
paragraph 5 is essential to protect the rights and interests of the Company.
Accordingly, in addition to any other remedies that the Company may have at law
or in equity, the Company shall have the right to have all obligations,
covenants, agreements and other provisions of this paragraph 5 specifically
performed by Employee, and the Company shall have the right to obtain
preliminary and permanent injunctive relief to secure specific performance and
to prevent a breach or contemplated breach of this paragraph 5 by Employee, and
Employee submits to the jurisdiction of the courts of the State of North
Carolina for this purpose.

                  (h)      Operations of Affiliates. Employee agrees that
Employee will refrain from (i) authorizing any Affiliate to perform or (ii)
assisting in any manner any Affiliate in performing any activities that would be
prohibited by the terms of this paragraph 5 if they were performed by Employee.

                  (i)      Survival. The provisions of this paragraph 5 shall
survive the termination of this Agreement regardless of the date, cause or
manner of such termination.

         6.       Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to be given
when delivered personally or mailed first class, registered or certified mail,
postage prepaid, in either case, addressed as follows:

                  (a)      If to Employee:

                           Keith Downey
                           2307 Occident St.
                           Tampa, Fla  33629

                  (b)      If to the Company, addressed to:

                           Summit Management Company
                           212 South Tryon Street, Suite 500
                           Charlotte, North Carolina  28281

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         7.       Non-waiver. No waiver by a party hereto of any breach by
another party to this Agreement of any provision hereof, shall be deemed to be a
waiver of any later or other breach thereof or as a waiver of any such other
provisions of this Agreement.

         8.       Severability. Should any provision of this Agreement be
declared invalid or unenforceable as a matter of law, such invalidity or
unenforceability shall not affect or impair the validity or enforceability of
any other provision of this Agreement or the remainder of this Agreement as a
whole.

         9.       Entire Agreement. This Agreement constitutes the entire
Agreement and sets forth all the terms of the understanding between the parties
hereto with respect to the subject matter hereof, and any amendment, change or
modification in any provision of this Agreement or any waiver of this Agreement
shall be in writing signed by the parties hereto.

         10.      Section Headings. The section headings inserted in this
Agreement are for convenience of reference only and shall not be deemed to have
any legal effect whatsoever on the interpretation of this Agreement.

         11.      Applicable Law. This Agreement shall be governed, enforced and
construed according to the laws of the State of North Carolina.

         12.      Assignment. The benefits hereunder with respect to the rights
of the Company may be assigned by the Company to any other corporation acquiring
all or substantially all of the assets of the Company or to any other
corporation into which the Company may be liquidated or with which the Company
may be merged or consolidated. The rights of the Company under this Agreement,
as well as the obligations and the liabilities of the Company hereunder, shall
inure to and be binding upon any successors-in-interest or transferees of the
business or assets of the Company, and Employee agrees on demand to execute any
and all documents in connection therewith. Employee may not assign this
Agreement or any rights or benefits hereunder, whether for collateral purposes
or otherwise.

         13.      Freedom of the Company to Act. No provision of this Agreement
shall be deemed to restrict the absolute right of the Company, at any time, to
sell or dispose of all or any part of its assets, or reconstitute the same into
any one or more subsidiary corporations, or to merge, consolidate, sell or to
otherwise dispose of said subsidiary corporation or any of the assets thereof.

         14.      Execution. This Agreement is executed in duplicate originals,
one of which is being retained by each of the parties hereto, and each of which
shall be deemed an original hereof.

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         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                    SUMMIT MANAGEMENT COMPANY

                                    By: /S/ John T. Gray
                                      --------------------------------
                                         John T. Gray, President

                                    /S/ Keith Downey [SEAL]
                                    ----------------------------------
                                    [Name]

                                    "Employee"

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                                                                    Exhibit 10.2

                          EXECUTIVE SEVERANCE AGREEMENT

         AGREEMENT made as of this 17th day of December 2001 by and between
Summit Properties Inc., a Maryland corporation with its principal place of
business in Charlotte, North Carolina (the "Company"), and Keith L. Downey of
Charlotte, North Carolina (the "Executive").

         1.       Purpose. The Company considers it essential to the best
interests of its stockholders to foster the continuous employment of key
management personnel. The Board of Directors of the Company (the "Board")
recognizes, however, that, as is the case with many publicly held corporations,
the possibility of a Change in Control (as defined in Section 2 hereof) exists
and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its stockholders. Therefore, the
Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Company's
management, including the Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change in Control. Nothing in this Agreement shall be construed
as creating an express or implied contract of employment or any right to be
retained in the employ of the Company. The Company and the Executive have
entered into an Employment Agreement dated February 24, 1994 (as such agreement
may be in effect from time to time, and including any replacement employment
agreement, the "Employment Agreement") that provides for compensation to the
Executive under certain circumstances in the event that the Executive's
employment is terminated. This Agreement is intended to supplement the
Employment Agreement without duplicating payments in the event of the
termination of the Executive's employment.

         2.       Change in Control and Combination Transactions.

         (a)      A "Change in Control" shall be deemed to have occurred in any
one of the following events:

                  (i)      any "person," as such term is used in Sections 13(d)
         and 14(d) of the Securities Exchange Act of 1934 (the "Act") (other
         than the Company, Summit Properties Partnership, L.P. (together with
         any other subsidiaries of the Company, the "Subsidiaries"), or any
         trustee, fiduciary or other person or entity holding securities under
         any employee benefit plan or trust of the Company or any of its
         Subsidiaries), together with all "affiliates" and "associates" (as such
         terms are defined in Rule 12b-2 under the Act) of such person, shall
         become the "beneficial owner" (as such term is defined in Rule13d-3
         under the Act), directly or indirectly, of securities of the Company
         representing 40% or more of either (A) the combined voting power of the
         Company's then outstanding securities having the right to vote in an
         election of the Board ("Voting Securities") or (B) the then outstanding
         shares of stock of the Company ("Stock"), in

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         either such case other than as a result of an acquisition of securities
         directly from the Company; or

         (ii)     persons who, as of the date hereof, constitute the Board(the
         "Incumbent Directors") cease for any reason, including, without
         limitation, as a result of a tender offer, proxy contest, merger or
         similar transaction, to constitute at least a majority of the Board,
         provided that any person becoming a director of the Company subsequent
         to the date hereof whose election or nomination for election was
         approved by a vote of at least a majority of the Incumbent Directors
         shall, for purposes of this Agreement, be considered an Incumbent
         Director; or

         (iii)    the stockholders of the Company shall approve (A) any
         consolidation or merger of the Company or any Subsidiary where the
         stockholders of the Company, immediately prior to the consolidation or
         merger, would not, immediately after the consolidation or merger,
         beneficially own (as such term is defined in Rule 13d-3 under the Act),
         directly or indirectly, shares representing in the aggregate fifty
         percent (50%) or more of the voting shares of the corporation issuing
         cash or securities in the consolidation or merger (or of its ultimate
         parent corporation, if any), (B) any sale, lease, exchange or other
         transfer (in one transaction or a series of transactions contemplated
         or arranged by any party as a single plan) of all or substantially all
         of the assets of the Company or (C) any plan or proposal for the
         liquidation or dissolution of the Company.

Notwithstanding the foregoing, a "Change of Control" shall not be deemed to have
occurred for purposes of the foregoing clause (i) solely as the result of an
acquisition of securities by the Company which, by reducing the number of shares
of Stock or other Voting Securities outstanding, increases (x) the proportionate
number of shares of Stock beneficially owned by any person to 40% or more of the
shares of Stock then outstanding or (y) the proportionate voting power
represented by the Voting Securities beneficially owned by any person to 40% or
more of the combined voting power of all then outstanding Voting Securities;
provided, however, that if any person referred to in clause (x) or (y) of this
sentence shall thereafter become the beneficial owner of any additional shares
of Stock or other Voting Securities (other than pursuant to a stock split, stock
dividend, or similar transaction), then a "Change of Control" shall be deemed to
have occurred for purposes of the foregoing clause (i).

         (b)      A "Combination Transaction" shall be deemed to have occurred
if the Company shall consummate any consolidation or merger of the company or
any Subsidiary where the stockholders of the Company, immediately prior to the
consolidation or merger, would not, immediately after the consolidation or
merger, beneficially own (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, shares representing in the aggregate 75% or more of
either (i) the combined voting power of the company's then outstanding Voting
Securities or (ii) the then outstanding shares of Stock.

         (c)      For purposes of determining whether a Change in Control or a
Combination Transaction has occurred, all outstanding options, warrants and
other convertible securities that are then exchangeable or convertible into
Voting Securities of the Company, including, without

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limitation, all partnership units of any Subsidiary that are convertible into
Voting Securities of the Company at the option of the holder or the Company,
shall be deemed to have been converted into the applicable number of shares of
Voting Securities of the Company immediately prior to making such determination.

         3.       Terminating Event. A "Terminating Event" shall mean any of the
following events:

         (a)      termination occurring subsequent to a Change of Control or a
Combination Transaction by the Company of the employment of the Executive with
the Company for any reason other than:

                  (i) the death of the Executive (which shall be referred to as
                  a "Death Termination") or total disability of the Executive
                  (total disability meaning the inability of the Executive to
                  perform his normal required services under this Agreement for
                  a period of six consecutive months during the term of this
                  agreement by reason of the Executive's mental or physical
                  disability, as determined by the board in good faith in its
                  sole discretion) (which shall be referred to as a "Disability
                  Termination") or the retirement of the Executive;

                  (ii) if the Executive is convicted of, pleads guilty to, or
                  confesses to any felony or any act of fraud, misappropriation
                  or embezzlement which has an immediate and materially adverse
                  effect on the Company, any Subsidiary or any affiliate of the
                  Company, as determined by the Board in good faith in its sole
                  discretion;

                  (iii) if the Executive engaged in a fraudulent act to the
                  material damage or prejudice of the Company, any Subsidiary or
                  any affiliate of the Company or in conduct or activities
                  materially damaging to the property, business or reputation of
                  the Company, any Subsidiary or any affiliate of the Company,
                  all as determined by the Board in good faith in its sole
                  discretion;

                  (iv) in the event of any material act or omission by the
                  Executive involving malfeasance or negligence in the
                  performance of the Executive's duties to the Company to the
                  material detriment of the Company, any Subsidiary or any
                  affiliate of the Company, as determined by the Board in good
                  faith in its sole discretion, which has not been corrected by
                  the Executive within thirty (30) days after written notice
                  from the Company of any such act or omission:

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                  (v) failure by the Executive to comply in any material respect
                  with the terms of the Employment Agreement or any written
                  policies or directives of the Board as determined by the Board
                  in good faith in its sole discretion, which has not been
                  corrected by the Executive within thirty (30) days after
                  written notice from the Company of such failure; or

                  (vi) a material breach by the Executive of the non-competition
                  provisions of the Employment Agreement, as determined by the
                  Board in good faith in its sole discretion.

Each of the events described in the foregoing clauses (ii) through (vi) shall be
referred to individually and collectively as a "For Cause Termination."
Notwithstanding any other provision of this Section 3(a), a Terminating Event
shall not be deemed to have occurred pursuant to this Section 3(a) solely as a
result of the Executive being an employee of any direct or indirect successor to
the business or assets of the Company, rather that continuing as an employee of
the Company following a Change in Control or A Combination Transaction. For
purposes of clause (i) of this Section 3(a), "retirement" shall mean termination
of the Executive's employment in accordance with the Company's normal retirement
policy, generally applicable to its salaried employees, as in effect immediately
prior to the change in Control or Combination Transaction, or in accordance with
any retirement arrangement established with respect to the Executive with the
Executive's express written consent; or

         (b)      termination occurring subsequent to a Change in Control or a
Combination Transaction by the Executive of the Executive's employment with the
company for Good Reason. "Good Reason" shall mean the occurrence of any of the
following, provided that in either case the Board has not corrected such
material reduction described below within thirty (30) days after written notice
by the Executive of such material reduction: (i) there is a material reduction
in the Executive's duties, rights or responsibilities under the Employment
Agreement without his consent, or (ii) there is a material decrease in the
aggregate value of the Executive's compensation and benefits package from the
Company under the Employment Agreement without his consent, other than a
reduction in the Executive's base salary that is permitted under the Employment
Agreement and other than a reduction in compensation and/or benefits affecting a
broad group of employees of the Company as determined by the Board in good faith
in its sole discretion; (iii) there is a relocation of the Company's offices at
which the Executive is principally employed immediately prior to the date of a
Change in Control or Combination Transaction to a location more than fifty (50)
miles from such offices, or the requirement by the Company for the Executive to
be based anywhere other than the Company's offices at such location, except for
required travel on the Company's business to an extent substantially consistent
with the Executive's business travel obligations immediately prior to the Change
in Control or a Combination Transaction; or

         (c)      termination occurring subsequent to a Change of Control by the
Executive of the Executive's employment with the Company for any reason, unless
an event that would constitute grounds for a For Cause Termination of the
Executive's employment has occurred.

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         4.       Severance Payment. In the event that either a Terminating
Event described in Section 3(a), 3(b), or 3(c) occurs within twelve (12) months
after a Change in Control, or a Terminating Event described in Section 3(a) or
3(b) occurs within twelve (12) months after a Combination Transaction:

         (a)      the Company shall pay to the Executive an amount equal to the
difference between (i) three (3) times the Executive's salary and cash bonus
paid (including amounts that were deferred by the Executive but would have been
paid in the absence of such deferral) with respect to the fiscal year
immediately preceding the year in which the Terminating Event occurred and (ii)
any amount of severance or other cash compensation paid to the Executive
pursuant to the Employment Agreement as a result of the termination of the
Executive's employment. Said amount shall be paid in one lump sum payment no
later than thirty-one (31) days following the Date of Termination (as such term
is defined in Section 8(b); and

         (b)      the Company shall pay to the Executive all reasonable legal
and arbitration fees and expenses incurred by the Executive in obtaining or
enforcing any right or benefit provided by this Agreement, except in cases
involving frivolous or bad faith litigation.

         5.       Additional Benefits.

         (a)      Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment or distribution by the Company
to or for the benefit of the Executive, whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise (the
"Severance Payments"), would be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended, ("the Code"), or any
interest or penalties are incurred by the Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment (a "Gross-Up Payment") such
that the net amount retained by the Executive, after deduction of any Excise Tax
on the Severance Payments, any Federal, state and local income tax, employment
tax and Excise Tax upon the payment provided by this subsection, and any
interest and/or penalties assessed with respect to such Excise Tax, shall be
equal to the Severance Payments.

         (b)      Subject to the provisions of Section 5(c), all determinations
required to be made under this Section 5, including whether a Gross-Up Payment
is required and the amount of such Gross-Up Payment, shall be made by the
Company's independent certified public accounting firm (the "Accounting Firm"),
which shall provide detailed supporting calculations both to the Company and the
Executive within 15 business days of the Date of Termination, if applicable, or
at such earlier time as is reasonably requested by the Company or the Executive.
For purposes of determining the amount of the Gross-Up Payment, the Executive
shall be deemed to pay federal income taxes at the highest marginal rate of
federal income taxation applicable to individuals for the calendar year in which
the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rates of individual taxation in the state and locality of the
Executive's residence on the Date of Termination, net of the maximum reduction
in federal income taxes

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which could be obtained from deduction of such state and local taxes. The
initial Gross-Up Payment, if any, as determined pursuant to this Section 5(b),
shall be paid to the Executive within five days of the receipt of the Accounting
Firm's determination. If the Accounting Firm determines that no Excise Tax is
payable by the Executive, the Company shall furnish the Executive with an
opinion of counsel that failure to report the Excise Tax on the Executive's
applicable federal income tax return would not result in the imposition of a
negligence or similar penalty. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made (an
"Underpayment"). In the event that the Company exhausts its remedies pursuant to
Section 5(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred, consistent with the calculations required to be made
hereunder, and any such Underpayment, and any interest and penalties imposed on
the Underpayment and required to be paid by the Executive in connection with the
proceedings described in Section 5(c), shall be promptly paid by the Company to
or for the benefit of the Executive.

         (c)      The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-up Payment. Such notification shall be given as soon
as practicable but no later than 10 business days after the Executive knows of
such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day period following the date on
which he gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:

                  (i)      give the Company any information reasonably requested
by the Company relating to such claim,

                  (ii)     take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney selected by the Company,

                  (iii)    cooperate with the Company in good faith in order
effectively to contest such claim, and

                  (iv)     permit the Company to participate in any proceedings
relating to such claim; provided, however that the Company shall bear and pay
directly all costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold the
Executive harmless, on an after-tax basis, for any Excise Tax or income tax,
including interest and penalties with respect thereto, imposed as a result of
such representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 5(c), the Company shall control all
proceedings taken in connection

                                       6
<PAGE>

with such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income
tax, including interest or penalties with respect thereto, imposed with respect
to such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as the case
may be, any other issues raised by the Internal Revenue Service or any other
taxing authority.

         (d)      If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 5(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
the Company's complying with the requirements of Section 5(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 5(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

         6.       Term. This Agreement shall take effect on the date first set
forth above and shall terminate upon the earlier of (a) immediately prior to a
For Cause Termination by the Company of the employment of the Executive, (b) the
termination of employment of the Executive by the Company or the Executive for
any reason prior to a Change in Control or a Combination Transaction, (c) the
resignation of the Executive other than for Good Reason after a Combination
transaction, but prior to a Change in Control, or (d) immediately prior to the
resignation of the Executive after a Change in Control if any event that would
constitute grounds for a For Cause Termination of the Executive's employment has
occurred.

         7.       Withholding. All payments made by the Company under this
Agreement shall be net of any tax or other amounts required to be withheld by
the Company under applicable law.

                                       7
<PAGE>

         8.       Notice and Date of Termination; Disputes; Etc.

         (a)      Notice of Termination. After a Change in Control or
Combination Transaction and during the term of this Agreement, any purported
termination of the Executive's employment (other than by reason of a Death
Termination) shall be communicated by written Notice of Termination from one
party hereto to the other party hereto in accordance with this Section 8. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and the Date of Termination.

         (b)      Date of Termination. "Date of Termination", with respect to
any purported termination of the Executive's employment after a Change in
Control or Combination Transaction and during the term of this Agreement, shall
mean (i) if there is a Disability Termination, thirty (30) days after Notice of
Termination is given (provided that the Executive shall not have returned to the
full-time performance of the Executive's duties during such thirty (30) day
period) and (ii) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination. In the case of a
termination by the Company other than a For Cause Termination (which may be
effective immediately), the Date of Termination shall not be less than thirty
(30) days after the Notice of Termination is given. In the case of a termination
by the Executive, the Date of Termination shall not be less than fifteen (15)
days from the date such Notice of Termination is given. Notwithstanding Section
3(a) of this Agreement, in the event that the Executive gives a Notice of
Termination to the Company, the Company may unilaterally accelerate the Date of
Termination and such acceleration shall not result in a Terminating Event for
purposes of Section 3(a) of this Agreement.

         (c)      No Mitigation. The Company agrees that, if the Executive's
employment by the Company is terminated during the term of this Agreement, the
Executive is not required to seek other employment or to attempt in any way to
reduce any amounts payable to the Executive by the Company pursuant to Sections
4(a) and (b) hereof. Further, the amount of any payment provided for in this
Agreement shall not be reduced by any compensation earned by the Executive as
the result of employment by another employer, but shall be subject to reduction
by certain amounts received under the Employment Agreement as provided in
Section 4(a) hereof.

         (d)      Settlement and Arbitration of Disputes. Any controversy or
claim arising out of or relating to this Agreement or the breach thereof shall
be settled exclusively by arbitration in accordance with the laws of the State
of North Carolina by three arbitrators, one of whom shall be appointed by the
Company, one by the Executive and the third by the first two arbitrators. If the
first two arbitrators cannot agree on the appointment of a third arbitrator,
then the third arbitrator shall be appointed by the American Arbitration
Association in the City of Charlotte, North Carolina. Such arbitration shall be
conducted in the City of Charlotte, North Carolina in accordance with the rules
of the American Arbitration Association for commercial arbitrations, except with
respect to the selection of arbitrators which shall be as provided in this
Section 8(d). Judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof.

                                       8
<PAGE>

         9.       Assignment; Prior Agreements. Neither the Company nor the
Executive may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party, and without such consent any attempted transfer shall be null and void
and of no effect. This Agreement shall inure to the benefit of and be binding
upon the Company and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns. In the event of the Executive's
death after a Terminating Event but prior to the completion by the Company of
all payments due him under Section 4(a) and (b) of this Agreement, the Company
shall continue such payments to the Executive's beneficiary designated in
writing to the Company prior to his death (or to his estate, if the Executive
fails to make such designation).

         10.      Enforceability. If any portion or provision of this Agreement
shall to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.

         11.      Waiver. No waiver of any provision hereof shall be effective
unless made in writing and signed by the waiving party. The failure of any party
to require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.

         12.      Notices. Any notices, requests, demands and other
communications provided for by this Agreement shall be sufficient if in writing
and delivered in person or sent by registered or certified mail, postage
prepaid, to the Executive at the last address the Executive has filed in writing
with the Company, or to the Company at its main office, attention of the Board.

         13.      Effect on Other Plans. An election by the Executive to resign
after a Change in Control under the provisions of this Agreement shall not be
deemed a voluntary termination of employment by the Executive for the purpose of
interpreting the provisions of any of the Company's benefit plans, programs or
policies. Nothing in this Agreement shall be construed to limit the rights of
the Executive under the Company's benefit plans, programs or policies except as
otherwise provided in Section 5 hereof, and except that the Executive shall have
no rights to any severance benefits under any severance pay plan other than cash
amounts specifically set forth in the Employment Agreement or this Agreement.

         14.      Amendment. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly authorized ---------
representative of the Company.

         15.      Governing Law. This Agreement shall be construed under and be
governed in all respects by the laws of the State of North Carolina.

                                       9
<PAGE>

         16.      Obligations of Successors. In addition to any obligations
imposed by law upon any successor to the Company, the Company will use its best
efforts to require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Company to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform if no such succession had taken place.

         17.      Confidential Information. The Executive shall never use,
publish or disclose in a manner adverse to the Company's interests, any
proprietary or confidential information relating to (a) the business, operations
or properties of the Company or any Subsidiary or other affiliate of the
Company, or (b) any materials, processes, business practices, technology,
know-how, research, programs or other information used in the business of the
Company or any Subsidiary or other affiliate of the Company, provided, however,
that no breach or alleged breach of this Section 17 shall entitle the Company to
fail to comply fully and in a timely manner with any other provision hereof.
Nothing in this Agreement shall preclude the Company from seeking money damages,
or equitable relief by injunction or otherwise without the necessity of proving
actual damage to the Company, for any breach by the Executive hereunder.

         IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Company by its duly authorized officer, and by the Executive,
as of the date first above written.

                                    COMPANY:
                                        SUMMIT PROPERTIES INC.

                                        By:   /s/ Michael G. Malone
                                              ----------------------------------
                                              Name:  Michael G. Malone
                                              Title: Senior Vice President
                                                     Secretary & General Counsel

                                    EXECUTIVE:

                                              /s/Keith L. Downey
                                              ----------------------------------
                                              Keith L. Downey

                                       10

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