Document:

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                                                                EXHIBIT 10.9.5
                                     AMENDED
                          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 Doug Brout 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 July 1, 1996 (as such agreement may
be in effect from time to time, and including any replacement employment
agreement and/or any amendments and/or addenda thereto, 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 either such case other
         than as a result of an acquisition of securities directly from the
         Company; or

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                  (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 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

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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:

                  (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

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                  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
majority of the executive officers 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.

         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

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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 for such year in the state and
locality of the Executive's residence [for the calendar year in which the
Gross-Up Payment is to be made], net of the maximum reduction in federal income
taxes 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

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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 waives, fails to exercise or 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 tax, 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 of its and the Executive's costs and expenses (including their
respective attorneys fees and expenses and 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 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

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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. Without limiting the Company's right to control the
proceedings as described above, the Executive shall have the right, at the
Company's expense, to participate with the Company in such proceedings and any
negotiations with respect thereto.

         (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.

         (e)      Notwithstanding anything in paragraph (c) above to the
                  contrary, no failure or delay of the Executive in the
                  performance of his obligations under said paragraph (c) shall
                  reduce or otherwise affect the obligations or liabilities of
                  the Company pursuant to this Section 5, except to the extent
                  that such failure or delay shall have adversely affected the
                  Company's ability to defend against any liability or claim for
                  Excise Taxes that the Company is obligated to pay hereunder.

         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.

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         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.

         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).

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Judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof.

         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.

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         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/ Doug Brout
                                     -------------------------------------------
                                     Doug Brout

                                       10<PAGE>

                                 LOAN AGREEMENT

                                   DATED AS OF

                                  JULY 31, 1996

                                     BETWEEN

                       SUMMIT PROPERTIES PARTNERSHIP, L.P.

                                       AND

                      WACHOVIA BANK OF NORTH CAROLINA, N.A.

<PAGE>

                                TABLE OF CONTENTS

                          [Not a part of the Agreement]

ARTICLE I - DEFINITIONS......................................................1
    SECTION 1.01. Definitions................................................1
    SECTION 1.02. Accounting Terms and Determinations........................7
    SECTION 1.03. References.................................................7

ARTICLE II - THE LOANS.......................................................8
    SECTION 2.01. The Loans..................................................8
    SECTION 2.02. Promissory Notes...........................................8
    SECTION 2.03. Interest Rates.............................................8
    SECTION 2.04. Payment of Principal and Interest..........................9
    SECTION 2.05. Prepayment.................................................9

ARTICLE III - GENERAL PROVISIONS CONCERNING PAYMENTS AND FEE................10
    SECTION 3.01. Commitment Fee............................................10
    SECTION 3.02. General Provisions Concerning Payments....................10
    SECTION 3.03. Computation of Interest and Fees..........................10

ARTICLE IV - CONDITIONS PRECEDENT...........................................10
    SECTION 4.01. Conditions to Loans.......................................10

ARTICLE V - REPRESENTATIONS AND WARRANTIES..................................11
    SECTION 5.01. Existence and Power.......................................11
    SECTION 5.02. Power and Governmental Authorization; Contravention.......11
    SECTION 5.03. Binding Effect............................................12
    SECTION 5.04. Financial Information.....................................12
    SECTION 5.05. Litigation................................................12
    SECTION 5.06. Compliance with ERISA.....................................12
    SECTION 5.07. Taxes.....................................................13
    SECTION 5.08. Subsidiaries..............................................13
    SECTION 5.09. Not an Investment Company.................................13
    SECTION 5.10. Ownership of Property, Liens..............................13
    SECTION 5.11. No Default................................................13
    SECTION 5.12. Full Disclosure...........................................13
    SECTION 5.13. Environmental Matters.....................................13

ARTICLE VI - COVENANTS......................................................14
    SECTION 6.01. Information...............................................14
    SECTION 6.02. Inspection of Property Books and Records..................15
    SECTION 6.03. No Liens on the Collateral................................16
    SECTION 6.04. Ratio of Unencumbered Assets to Debt......................16
    SECTION 6.05. Ratio of Debt to Assets...................................16
    SECTION 6.06. Maximum Secured Debt......................................16
    SECTION 6.07. Debt Service Ratio........................................16

                                       i
<PAGE>

    SECTION 6.08. Status as REIT............................................16
    SECTION 6.09. Maintenance of Existence..................................16
    SECTION 6.10. Dissolution...............................................16
    SECTION 6.11. Consolidations. Mergers and Sales of Assets...............17
    SECTION 6.12. Use of Proceeds...........................................17
    SECTION 6.13. Compliance with Laws Payment of Taxes.....................17
    SECTION 6.14. Insurance.................................................17
    SECTION 6.15. Change in Fiscal Year.....................................17
    SECTION 6.16. Maintenance of Property...................................17
    SECTION 6.17. Environmental Notices.....................................18
    SECTION 6.18. Environmental Matters.....................................18
    SECTION 6.19. Environmental Release.....................................18

ARTICLE VII - DEFAULTS......................................................18
    SECTION 7.01. Events of Default.........................................18
    SECTION 7.02. Remedies on Default.......................................20

ARTICLE VIII - MISCELLANEOUS................................................20
    SECTION 8.01. Notices...................................................20
    SECTION 8.02. No Waivers................................................21
    SECTION 8.03. Expenses: Documentary Taxes...............................21
    SECTION 8.04. Amendments and Waivers....................................21
    SECTION 8.05. Successors and Assigns....................................21
    SECTION 8.06. Confidentiality...........................................21
    SECTION 8.07. Interest Limitation.......................................22
    SECTION 8.08. Governing Law.............................................22
    SECTION 8.09. Counterparts..............................................22
    SECTION 8.10. Consent to Jurisdiction...................................22
    SECTION 8.11. Severability..............................................22
    SECTION 8.12. Captions..................................................22

EXHIBIT A         Form of $15,000,000 Note
EXHIBIT B         Form of $16,000,000 Note
EXHIBIT C         Form of Opinion of Counsel for the Borrower
EXHIBIT D         Form of Guaranty Agreement
EXHIBIT E         Description of Required Collateral
EXHIBIT F         Form of Escrow Agreement

                                       ii
<PAGE>

                                 LOAN AGREEMENT

         THIS LOAN AGREEMENT, made as of the 31st day of July, 1996, by and
between SUMMIT PROPERTIES PARTNERSHIP, L.P., a Delaware limited partnership
(together with its successors, the "Borrower"), and WACHOVIA BANK OF NORTH
CAROLINA, N.A., a national banking association (together with endorsees,
successors and assigns, the "Bank").

                                   BACKGROUND

         The Borrower has requested the Bank to make two term loans to the
Borrower, one in the principal amount of $15,000,000.00 and the second in the
principal amount of $16,000,000.00, and the Bank is willing to do so on the
terms and conditions hereinafter set forth.

         NOW, THEREFORE, in consideration of the premises and the promises
herein contained, and each intending to be legally bound hereby, the parties
agree as follows:

                            ARTICLE I - DEFINITIONS

         SECTION 1.01. DEFINITIONS. The terms as defined in this Section 1.01
shall, for all purposes of this Agreement and any amendment hereto (except as
herein otherwise expressly provided or unless the context otherwise requires),
have the meanings set forth herein (terms defined in the singular to have the
same meanings when used in the plural and vice versa):

         "Affiliate" of any Person means (i) any other Person which directly, or
indirectly through one or more intermediaries, controls such Person, (ii) any
other Person which directly, or indirectly through one or more intermediaries,
is controlled by or is under common control with such Person, or (iii) any other
Person of which such Person owns, directly or indirectly, 50% or more of the
common stock or equivalent equity interests. As used herein, the term "control"
means possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

         "Applicable Term' has the meaning set forth in Section 2.05.

         "Applicable Treasury Rate" has the meaning set forth in Section 2.05.

         "Assets" means the sum of (i) the Undepreciated Real Estate Assets for
all completed properties of the Borrower and the Guarantor plus (ii) 75% of the
actual cost incurred for the properties of the Borrower and Guarantor under
development and land purchase plus (iii) the actual cost of all other tangible
assets of the Borrower and Guarantor on a consolidated basis.

         "BBB Rated Period" means any period when the rating by S&P of the
Borrower's senior unsecured debt is BBB or better (and when the Borrower has
received a comparable rating by at least one of the following: Moody's, Fitch or
Duff & Phelps).

<PAGE>

         "BBB-Rated Period" means any period when the rating by S&P of the
Borrower's senior unsecured debt is BBB- (and when the Borrower has received a
comparable rating by at least one of the following: Moody's, Fitch or Duff &
Phelps).

         "Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in North Carolina are authorized by law to close.

         "CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act.

         "CERCLIS" means the Comprehensive Environmental Response Compensation
and Liability Inventory System established pursuant to CERCLA.

         "Change of Control" for purposes of this Agreement shall be deemed to
have occurred and shall mean when (i) any five or fewer Persons acting in
concert shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 50% or more of the outstanding shares of the voting stock of the
Guarantor; or (ii) as of any date a majority of the Board of Directors of the
Guarantor consists of individuals who were not either (A) directors of the
Guarantor as of the corresponding date of the previous year, (B) selected or
nominated to become directors by the Board of Directors of the Guarantor of
which a majority consisted of individuals described in clause (A), or (C)
selected or nominated to become directors by the Board of Directors of the
Guarantor of which a majority consisted of individuals described in clause (A)
and individuals described in clause (B).

         "Closing Date" means the date of this Agreement.

         "Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code.

         "Commitment Fee" has the meaning set forth in Section 3.01.

         "Contract Interest Rate" means the interest rates set forth in Section
2.03 (a) and (b).

         "Controlled Group" means any and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.

         "Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee under capital leases,
(v) all obligations of such Person to reimburse any bank or other Person in
respect of amounts payable under a banker's acceptance, (vi) all Redeemable
Preferred Stock of such Person (in the event such Person is a corporation),
(vii) all obligations of such Person to reimburse any bank or other Person in
respect of amounts paid under a letter of credit or similar instrument, (viii)
all Debt of

                                       2
<PAGE>

others secured by a Lien on any asset of such Person, whether or not such Debt
is assumed by such Person, and (ix) all Debt of others Guaranteed by such
Person.

         "Debt Service" means for any period principal and interest scheduled to
be paid by the Borrower and the Guarantor during such period in respect of Debt.

         "Debt Service Ratio" means the ratio of Net Operating Income to Debt
Service, calculated quarterly based on an annualization of the Fiscal Quarter
then ended.

         "Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.

         "Depreciation" means for any period the sum of all depreciation
expenses of the Borrower and the Guarantor for such period, as determined in
accordance with generally accepted accounting principles consistently applied.

         "Dollars" or "$" means dollars in lawful currency of the United States
of America.

         "Duff & Phelps" means Duff & Phelps Credit Rating Co.

         "Environmental Authorizations" means all licenses, permits, orders,
approvals, notices, registrations or other legal prerequisites for conducting
the business of the Borrower required by any Environmental Requirement.

         "Environmental Authority" means any foreign, federal, state, local or
regional government that exercises any form of jurisdiction or authority under
any Environmental Requirement.

         "Environmental Judgments and Orders" means all judgments, decrees or
orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements with an
Environmental Authority or other entity arising from or in any way associated
with any Environmental Requirement, whether or not incorporated in a judgment,
decree or order.

         "Environmental Liabilities" means any liabilities, whether accrued,
contingent or otherwise, arising from and in any way associated with any
Environmental Requirements.

         "Environmental Notice" means notice from any Environmental Authority or
by any other person or entity, of possible or alleged noncompliance with any
Environmental Requirement, including without limitation any complaints,
citations, demands or requests from any Environmental Authority or from any
other person or entity for correction of any violation of any Environmental
Requirement or any investigations concerning any violation of any Environmental
Requirement.

         "Environmental Proceedings" means any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.

                                       3
<PAGE>

         "Environmental Releases" means releases as defined in CERCLA or under
any applicable state or local environmental law or regulation.

         "Environmental Requirements" means any legal requirement relating to
health, safety or the environment and applicable to the Borrower, any Subsidiary
or the Properties, including but not limited to any such requirement under
CERCLA or similar state legislation.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor law, including any rules or
regulations promulgated thereunder. Any reference to any provision of ERISA
shall also be deemed to be a reference to any successor provision or provisions
thereof.

         "Escrow Agent" means Chicago Title Insurance Company, 1465 Charlotte
Plaza, Charlotte, North Carolina 28244.

         "Escrow Agreement" means an Escrow agreement substantially in the form
of Exhibit F attached hereto executed by the Borrower, the Bank and the Escrow
Agent.

         "Event of Default" has the meaning set forth in Section 7.01.

         "$15,000,000 Note" has the meaning set forth in Section 2.02.

         "First Maturity Date" means the fourth anniversary of the Closing Date.

         "Fiscal Quarter" means any fiscal quarter of the Borrower or Guarantor,
as the case may be.

         "Fiscal Year" means any fiscal year of the Borrower or Guarantor, as
the case may be.

         "Fitch" means Fitch Investors Service, Inc.

         "Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.

         "Guarantor" means Summit Properties.

         "Guaranty Agreement" means a Guaranty Agreement substantially in the
form of Exhibit D attached hereto executed by the Guarantor.

                                       4
<PAGE>

         "Hazardous Materials" includes, without limitation, (a) solid or
hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, or in any applicable state or local law or regulation, (b) hazardous
substances, as defined in CERCLA, or in any applicable state or local law or
regulation, (c) gasoline, or any other petroleum product or by-product, (d)
toxic substances, as defined in the Toxic Substances Control Act of 1976, or in
any applicable state or local law or regulation or (e) insecticides, fungicides,
or rodenticides, as defined in the Federal Insecticide, Fungicide, and
Rodenticide Act of 1975, or in any applicable state or local law or regulation,
as each such Act, statute or regulation may be amended from time to time.

         "Interest Payment Date" means the fifteenth day of each January, April,
July and October.

         "Investment Grade Rating" means a rating by S&P of the Borrower's
senior unsecured debt of BBB- or better (and when the Borrower has received a
comparable rating by at least one of the following: Moody's, Fitch or Duff &
Phelps).

         "Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Borrower or Guarantor shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
         "Loan" or "Loans" means, individually or collectively as the context
may require, the two term loans made by the Bank to the Borrower pursuant to
Article II hereof, one in the principal amount of $15,000,000.00 and the second
in the principal amount of $16,000,000.00.

         "Loan Documents" means this Agreement, the Notes, any other document
evidencing or securing the Loans.

         "Margin Stock" means "margin stock" as defined in Regulations G, T, U
or X of the Board of Governors of the Federal Reserve System, as in effect from
time to time, together with all official rulings and interpretations issued
thereunder.

         "Moody's" means Moody's Investors Service, a corporation organized and
existing under the laws of the State of Delaware, its legal successors and
assigns.

         "Muldemployer Plan" has the meaning set forth in Section 4001(a)(3) of
ERISA.

         "Net Income" means, as applied to any Person for any period, the
aggregate amount of net income of such Person, after income taxes, for such
period, as determined in accordance with generally accepted accounting
principles consistently applied.

         "Net Interest Rate Differential Percentage" has the meaning set forth
in Section 2.05.

         "Net Operating Income" shall mean (i) the aggregate Net Income of the
Borrower and Guarantor, before minority interests and extraordinary items, plus
(ii) Depreciation and amortization, plus (iii) losses from sales or joint
ventures, plus (iv) increases in deferred taxes

                                       5
<PAGE>

and other non-cash items, minus (v) gains from sales or joint ventures, minus
(vi) decreases in deferred taxes and other non-cash items, plus (vii) interest
expense, plus (viii) income taxes.

         "Notes" means, collectively, the two promissory notes, either as
originally executed or as may from time to time be supplemented, modified,
amended, renewed or extended, executed by the Borrower and together evidencing
the Loans.

         "Obligations" means all indebtedness, obligations and liabilities to
the Bank existing on the date of this Agreement or arising thereafter, direct or
indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract, operation
of law or otherwise, of the Borrower under this Agreement or any other Loan
Document.

         "PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.

         "Person" means any individual, joint venture, corporation, company,
voluntary association, partnership, trust, joint stock company, unincorporated
organization, association, government, or any agency, instrumentality, or
political subdivision thereof, or any other form of entity or organization.

         "Plan" means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions.

         "Prime Rate" means that interest rate so denominated and set by
Wachovia from time to time as an interest rate basis for borrowings. The Prime
Rate is but one of several interest rate bases used by Wachovia. Wachovia lends
at interest rates above and below the Prime Rate. A change in the Prime Rate
shall be effective on the date of such change.

         "Properties" means all real property owned, leased or otherwise used or
occupied by the Borrower or any Subsidiary of the Borrower, wherever located.
The term "Properties" includes the Required Collateral.

         "Redeemable Preferred Stock" of any Person means any preferred stock
issued by such Person which is at any time prior to the Second Maturity Date
either (i) mandatorily redeemable (by sinking fund or similar payments or
otherwise) or (ii) redeemable at the option of the holder thereof.

         "Reportable Event" has the meaning set forth in Section 4043(b) of
Title V of ERISA.

         "Required Collateral" means those real estate assets of the Borrower
more particularly described in Exhibit E attached hereto.

                                       6
<PAGE>

         "S&P" means Standard & Poor's Ratings Services, a Division of the
McGraw-Hill Companies, Inc., or its legal successors or assigns.

         "Second Maturity Date" means the sixth anniversary of the Closing Date.

         "Secured Debt" means all Debt of the Borrower and the Guarantor which
is secured by a Lien on any real or personal property of the Borrower or the
Guarantor.

         "$16,000,000 Note" has the meaning set forth in Section 2.02 hereof.

         "Subsidiary" of a Person means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.

         "Summit Properties" means Summit Properties Inc., a Maryland
corporation.

         "Third Parties" means all lessees, sublessees, licensees and other
users of the Properties, excluding those users of the Properties in the ordinary
course of the Borrower's business and on a temporary basis.

         "Undepreciated Real Estate Assets" means the cost (original plus
capital improvements, if any) of the real estate assets of the Borrower and the
Guarantor and their Wholly-Owned Subsidiaries, before Depreciation and
amortization, determined on a consolidated basis.

         "Unrated Period" means any period when neither the Borrower nor Summit
Properties has an Investment Grade Rating.

         "Wachovia" means Wachovia Bank of North Carolina, N.A., a national
banking association, together with its successors.

         "Wholly Owned Subsidiary" means any Subsidiary all of the shares of
capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Borrower
or by the Borrower and Guarantor together.

         SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all terms of an accounting character used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder (other than any monthly
or quarterly balance sheets and operating statements of any of the Required
Collateral) shall be prepared in accordance with generally accepted accounting
principles as in effect from time to time, applied on a basis consistent (except
for changes concurred in by the Borrower's independent public accountants) with
the most recent audited financial statements of the Borrower delivered to the
Bank.

         SECTION 1.03. REFERENCES. Except as otherwise expressly provided in
this Agreement: the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole, including any Schedule or
Exhibit hereto which is a part hereof, and not to any particular Section,
Article, paragraph or other subdivision; the singular includes the

                                       7
<PAGE>

plural and the plural includes the singular; "or" is not exclusive; the words
"include," "includes" and "including" are not limiting; a reference to any
agreement or other contract includes past and future permitted supplements,
amendments, modifications and restatements thereto or thereof; a reference to an
Article, Section, paragraph or other subdivision is a reference to an Article,
Section, paragraph or other subdivision' of this Agreement; a reference to any
law includes any amendment or modification to such law and any rules and
regulations promulgated thereunder; a reference to a Person includes its
permitted successors and assigns; any right may be exercised at any time and
from time to time; and, except as otherwise expressly provided therein, all
obligations under any agreement or other contract are continuing obligations
throughout the term of such agreement or contract.

                             ARTICLE II - THE LOANS

         SECTION 2.01. THE LOANS.

                  (a) Subject to the terms and conditions of this Agreement, on
         the Closing Date, the Bank agrees to lend to the Borrower, and the
         Borrower agrees to borrow from the Bank, the aggregate principal sum of
         $31,000,000 (the "Loans").

                  (b) The closing of the Loans hereunder shall take place at the
         office of the Bank in Charlotte, North Carolina, or such other place as
         the parties may agree, on the Closing Date. On or within three (3)
         Business Days after the Closing Date as requested by the Borrower, upon
         receipt of the documents required by, and satisfaction of the
         conditions specified in, Article IV, the Bank will advance, in
         immediately available funds, the aggregate amount of the Loans to the
         Borrower.

         SECTION 2.02. PROMISSORY NOTES. The Loans shall be evidenced by two
promissory notes of the Borrower (the "Notes") in the aggregate principal amount
of Thirty-one Million and No/100 Dollars ($31,000,000.00), one of such Notes to
be for the principal sum of $15,000,000.00 and in the form of Exhibit A hereto,
with appropriate insertions, payable to the order of the Bank and dated the
Closing Date (the "$15,000,000 Note") and the other of said Notes to be for the
principal sum of $16,000,000.00 and in the form of Exhibit B hereto, with
appropriate insertions, payable to the order of the Bank and dated the Closing
Date (the "$16,000,000 Note").

         SECTION 2.03. INTEREST RATES.

                  (a) The $15,000,000 Note shall bear interest from the Closing
         Date (or, if later, from the date of advancement of the Loans to the
         Borrower) at a rate per annum equal to 7.71% during any Unrated Period,
         7.61% during any BBB-Rated Period and 7.51% during any BBB Rated
         Period.

                  (b) The $16,000,000 Note shall bear interest from the Closing
         Date (or, if later, from the date of advancement of the Loans to the
         Borrower) at a rate per annum equal to 7.95% during any Unrated Period,
         7.85% during any BBB-Rated Period and 7.75% during any BBB Rated
         Period.

                                       8
<PAGE>

                  (c) Any overdue principal of, and to the extent permitted by
         law, overdue interest on the Loans shall bear interest, payable on
         demand for each day until paid at a rate per annum equal to 150% of the
         Prime Rate.

         SECTION 2.04. PAYMENT OF PRINCIPAL AND INTEREST. The Borrower promises
and agrees to pay to the Bank the principal and interest on the Loans and Notes
as follows:

                  (a) Interest shall be payable quarterly in arrears on each
         Interest Payment Date commencing with the first of such dates after the
         Closing Date.

                  (b) The principal of the $15,000,000 Note shall be payable in
         full on the First Maturity Date; and the principal of the $16,000,000
         Note shall be payable in full on the Second Maturity Date.

         SECTION 2.05. PREPAYMENT. The Borrower shall have the privilege to
prepay the principal amount of the Loans in full, but not in part, subject to a
prepayment premium calculated as follows:

         The product (discounted back to a net present value at the Applicable
         Treasury Rate) determined by multiplying the outstanding principal
         amount being prepaid times the Net Interest Rate Differential
         Percentage times the number of years (whole or partial) remaining until
         the First Maturity Date, if the prepayment relates to the $15,000,000
         Note, or until the Second Maturity Date, if the prepayment relates to
         the $16,000,000 Note. The "Net Interest Rate Differential Percentage"
         shall be the difference between the then applicable Contract Interest
         Rate on the $15,000,000 Note or the $16,000,000 Note, as the case may
         be, and the Applicable Treasury Rate. The "Applicable Treasury Rate"
         shall mean the per annum spot rate adjusted to a constant maturity for
         a term equal to the number of months from the date of prepayment to the
         First Maturity Date, in the case of the $15,000,000 Note, or from the
         date of prepayment to the Second Maturity Date, in the case of the
         $16,000,000 Note (the "Applicable Term"), as of five (5) Business Days
         prior to the prepayment. The product shall never be a negative amount.

Example:

         Outstanding principal balance of applicable Loan:       $1,000,000
         Contract Interest Rate on such Loan:                         8.25%
         48 months remaining from the date
         of prepayment until maturity of
         such Loan (therefore, the "Applicable
         Treasury Rate" is the 4 year Treasury Rate):                 6.00%

Therefore:

         Contract Interest Rate                                       8.25%
         - Applicable Treasury Rate                                   6.00%
         --------------------------                            ------------
         = Net Interest Rate Differential Percentage                  2.25%

                                       9
<PAGE>

         Thus, the Net Interest Rate Differential Percentage times the principal
         amount of such Loan to be prepaid times the number of years (whole or
         partial) remaining from the date of prepayment until the First Maturity
         Date or the Second Maturity Date, as the case may be = prepayment
         premium for such Loan Calculation: 2.25% X $1,000,000 X 4 years =
         $90,000 prepayment premium (which shall be discounted back to a net
         present value at the Applicable Treasury Rate).

                  NOTWITHSTANDING the foregoing provisions of this paragraph,
         the Borrower, without payment of any prepayment premium or penalty, may
         (a) within the sixty (60) days period prior to the First Maturity Date,
         repay in full but not in part the $15,000,000 Note and (b) within the
         sixty (60) days period prior to the Second Maturity Date, repay in full
         but not in part the $16,000,000 Note.

          ARTICLE III - GENERAL PROVISIONS CONCERNING PAYMENTS AND FEE

         SECTION 3.01. COMMITMENT FEE. On or before the Closing Date the
Borrower shall pay to the Bank a-commitment fee (the "Commitment Fee") equal to
$155,000.00.

         SECTION 3.02. GENERAL PROVISIONS CONCERNING PAYMENTS.

                  (a) All payments and prepayments of principal of, or interest
         on, the Notes and of the Commitment Fee shall be made in Federal or
         other funds immediately available to the Bank at its office in
         Charlotte, North Carolina not later than 2:00 p.m., Charlotte, North
         Carolina time. Funds received after 2:00 p.m. shall be deemed to have
         been paid on the next following Business Day.

                  (b) Whenever any payment of principal of, or interest on, the
         Loans shall be due on a day which is not a Business Day, the date for
         payment thereof shall be extended to the next succeeding Business Day.
         If the date for any payment of principal is extended by operation of
         law or otherwise, interest thereon shall be payable for such extended
         time.

         SECTION 3.03. COMPUTATION OF INTEREST AND FEES. Interest shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed, calculated as to each interest period from and including the first
day thereof to but excluding the last day thereof.

                       ARTICLE IV - CONDITIONS PRECEDENT

         SECTION 4.01. CONDITIONS TO LOANS. The obligation of the Bank to make
the Loans is subject to the satisfaction of the following conditions:

                  (a) receipt by the Bank from the Borrower of a duly executed
         counterpart of this Agreement signed by the Borrower;

                  (b) receipt by the Bank of the duly executed Notes;

                                       10
<PAGE>

                  (c) receipt by the Bank of the duly executed Guaranty
         Agreement and Escrow Agreement;

                  (d) receipt by the Bank of an opinion of counsel of Kennedy
         Covington Lobdell & Hickman, L.L.P. counsel for the Borrower and
         Guarantor, substantially in the form of Exhibit C hereto, and covering
         such additional matters relating to the transactions contemplated
         hereby as the Bank may reasonably request;

                  (e) receipt by the Bank of a certificate, dated the Closing
         Date (or, if later, the date of advancement of the Loans), signed by
         the general partner of the Borrower to the effect that (i) no Default
         hereunder has occurred and is continuing on such date and (ii) the
         representations and warranties of the Borrower contained in Article V
         are true on and as of such date;

                  (f) receipt by the Bank of all documents which the Bank may
         reasonably request relating to the existence of the Borrower and of the
         Guarantor, the authority for and the validity of this Agreement, the
         Notes, the other Loan Documents and any other matters relevant hereto,
         all in form and substance satisfactory to the Bank, such documents to
         include without limitation a copy of the Partnership Agreement and
         Certificate of Limited Partnership of the Borrower and copies of the
         Guarantor's Articles of Incorporation and By-laws;

                  (g) a certificate of the Secretary of State of Delaware as to
         the existence of the Borrower as a limited partnership in such
         jurisdiction and of the Secretary of State of North Carolina as to the
         qualification of the Borrower to transact business in such
         jurisdiction;

                  (h) a certificate of the Secretary of State of Maryland as to
         the existence of the Guarantor as a corporation in such jurisdiction
         and of the Secretary of State of the State of North Carolina as to the
         qualification of the Guarantor to transact business in such
         jurisdiction; and

                  (i) such other items as the Bank may reasonably require after
         receipt and review of the documents and agreements referred to above.

                   ARTICLE V - REPRESENTATIONS AND WARRANTIES

         The Borrower represents and warrants that:

         SECTION 5.01. EXISTENCE AND POWER. The Borrower is a limited
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware, is duly qualified to transact business in every
jurisdiction where, by the nature of its business, such qualification is
necessary, and has all powers and all governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.

         SECTION 5.02. POWER AND GOVERNMENTAL AUTHORIZATION; CONTRAVENTION. The
execution, delivery and performance by the Borrower of this Agreement, the Notes
and the other Loan Documents (i) are within the Borrower's powers, (ii) have
been duly authorized by all

                                       11
<PAGE>

necessary partnership action, (iii) require no action by or in respect of, or
filing with, any governmental body, agency or official other than ordinary
filings with the Securities and Exchange Commission, (iv) do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the Partnership Agreement or Certificate of the Borrower or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Borrower, and (v) do not result in the creation or imposition of any Lien on any
asset of the Borrower.

         SECTION 5.03. BINDING EFFECT. This Agreement constitutes a valid and
binding agreement of the Borrower enforceable in accordance with its terms, and
the Notes and the other Loan Documents, when executed and delivered in
accordance with this Agreement, will constitute valid and binding obligations of
the Borrower enforceable in accordance with their respective terms, provided
that the enforceability hereof and thereof is subject in each case to general
principles of equity and to bankruptcy, insolvency and similar laws affecting
the enforcement of creditors' rights generally.

         SECTION 5.04. FINANCIAL INFORMATION.

                  (a) The financial statements of the Borrower and its
         Subsidiaries as of December 31, 1995, and the related statements of
         income, and cash flows for the Fiscal Year then ended, audited by
         Deloitte & Touche LLP, copies of which have been delivered to the Bank,
         and the unaudited financial statements of the Borrower and its
         Subsidiaries for the interim period ended March 31, 1996, copies of
         which have been delivered to the Bank, fairly present the financial
         position of the Borrower and its Subsidiaries as of such dates and the
         Borrower's results of operations and cash flows for such periods
         stated. Such annual financial statements have been prepared in
         conformity with generally accepted accounting principles.

                  (b) Since March 31, 1996, there has been no material adverse
         change in the business, financial position, results of operations or
         prospects of the Borrower and its Subsidiaries.

         SECTION 5.05. LITIGATION. There is no action, suit or proceeding
pending, or to the knowledge of the Borrower threatened, against or affecting
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which could materially adversely affect
the business, consolidated financial position or consolidated results of
operations of the Borrower and its Subsidiaries, or which could reasonably
impair the ability of the Borrower to perform its obligations under, this
Agreement, the Notes or any of the other Loan Documents.

         SECTION 5.06. COMPLIANCE WITH ERISA.

                  (a) The Borrower and each member of the Controlled Group have
         fulfilled their obligations under the minimum funding standards of
         ERISA and the Code with respect to each Plan and are in compliance in
         all material respects with the presently applicable provisions of ERISA
         and the Code, and have not incurred any liability to the PBGC or a Plan
         under Title IV of ERISA.

                                       12
<PAGE>

                  (b) Neither the Borrower nor any member of the Controlled
         Group is or ever has been obligated to contribute to any Multiemployer
         Plan.

         SECTION 5.07. TAXES. There have been filed on behalf of the Borrower
all Federal, state and local income, excise, property and other tax returns
which are required to be filed by it and any and all taxes due pursuant to such
returns or pursuant to any assessment received by or on behalf of the Borrower
have been paid, other than taxes being contested in good faith and against
which, if requested by the Bank, adequate reserves for the payment of such taxes
have been established by the Borrower. The charges, accruals and reserves on the
books of the Borrower in respect of taxes or other governmental charges are, in
the opinion of the Borrower, adequate.

         SECTION 5.08. SUBSIDIARIES. Each of the Borrower's Subsidiaries is a
corporation, partnership or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, and has all powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.

         SECTION 5.09. NOT AN INVESTMENT COMPANY. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.

         SECTION 5.10. OWNERSHIP OF PROPERTY, LIENS. The Borrower has title to
its properties (including without limitation the Required Collateral) sufficient
for the conduct of its business, and none of the Required Collateral is subject
to any Lien.

         SECTION 5.11. NO DEFAULT. The Borrower is not in default under or with
respect to any agreement, instrument or undertaking to which it is a party or by
which it or any of its property is bound which will be materially adverse to the
business, operations, property or financial or other condition of the Borrower,
or which will materially adversely affect the ability of the Borrower to perform
its obligations under the Loan Documents. No Default has occurred and is
continuing.

         SECTION 5.12. FULL DISCLOSURE. All information heretofore furnished by
the Borrower to the Bank for purposes of or in connection with this Agreement or
any transaction contemplated hereby is, and all such information hereafter
furnished by the Borrower to the Bank will be, true, accurate and complete in
every material respect or based on reasonable estimates on the date as of which
such information is stated or certified. The Borrower has disclosed to the Bank
in writing any and all facts which materially and adversely affect or may affect
(to the extent the Borrower can now reasonably foresee), the business,
operations, prospects or condition, financial or otherwise, of the Borrower, the
Guarantor and their Subsidiaries or the ability of the Borrower to perform its
obligations under this Agreement or of the Guarantor to perform its obligations
under the Guaranty Agreement.

         SECTION 5.13. ENVIRONMENTAL MATTERS.

                  (a) To the best of the knowledge of the Borrower, the Borrower
         is not subject to any Environmental Liability which is likely to have a
         material adverse effect on the business, financial position, results of
         operations or prospects of the Borrower and

                                       13
<PAGE>

         the Borrower has not been designated as a potentially responsible party
         under CERCLA or under any state statute similar to CERCLA. None of the
         Properties have been identified on any current or proposed (i) National
         Priorities List under 40 C.F.R. ss. 300, (ii) CERCLIS list or (iii) any
         list arising from a state statute similar to CERCLA.

                  (b) No Hazardous Materials have been or are being used,
         produced, manufactured, processed, generated, stored, disposed of,
         managed at, or shipped or transported to or from the Properties or are
         otherwise present at, on, in or under the Properties, or, to the best
         of the knowledge of the Borrower, at or from any adjacent site or
         facility, except for Hazardous Materials, such as cleaning solvents,
         pesticides and other materials used, produced, manufactured, processed,
         generated, stored, disposed of, and managed in the ordinary course of
         business in compliance with all applicable Environmental Requirements.

                             ARTICLE VI - COVENANTS

         The Borrower agrees that, so long as the Commitment is in effect
hereunder or any amount payable under this Agreement remains unpaid:

         SECTION 6.01. INFORMATION. The Borrower will deliver to the Bank:

                  (a) as soon as available and in any event within 90 days after
         the end of each Fiscal Year, a consolidated balance sheet of the
         Borrower and its Subsidiaries as of the end of such Fiscal Year and the
         related consolidated statements of income, shareholders' equity and
         cash flows for such Fiscal Year, setting forth in each case in
         comparative form the figures for the previous fiscal year, all in
         accordance with generally accepted accounting principles and audited
         and certified by Deloitte & Touche LLP or another independent certified
         public accountant acceptable to the Bank, with such certification to be
         free of exceptions and qualifications not acceptable to Bank;

                  (b) as soon as available and in any event within 45 days after
         the end of each of the first three Fiscal Quarters of each Fiscal Year,
         a consolidated balance sheet of the Borrower and its Subsidiaries as of
         the end of such Fiscal Quarter and the related statement of income and
         statement of cash flows for such Fiscal Quarter and for the portion of
         the Fiscal Year ended at the end of such Fiscal Quarter, setting forth
         in each case in comparative form the figures for the corresponding
         Fiscal Quarter and the corresponding portion of the previous Fiscal
         Year, all certified (subject to normal year-end adjustments) as to
         fairness of presentation and consistency by the chief financial officer
         or the chief accounting officer of the Borrower;

                  (c) simultaneously with the delivery of each set of financial
         statements referred to in clauses (a) and (b) above, a certificate of
         the chief financial officer or the chief accounting officer of the
         Borrower (i) setting forth in reasonable detail the calculations
         required to establish whether the Borrower was in compliance with the
         requirements of Sections 6.04 through 6.07, inclusive, on the date of
         such financial statements and (ii) stating whether any Default exists
         on the date of such certificate and,

                                       14
<PAGE>

         if any Default then exists, setting forth the details thereof and the
         action which the Borrower is taking or proposes to take with respect
         thereto;

                  (d) within five Domestic Business Days after the Borrower
         becomes aware of the occurrence of any Default, a certificate of the
         chief financial officer or the chief accounting officer of the Borrower
         setting forth the details thereof and the action which the Borrower is
         taking or proposes to take with respect thereto;

                  (e) promptly upon the mailing thereof to the partners of the
         Borrower generally, copies of all financial statements, reports and
         proxy statements so mailed;

                  (f) promptly upon the filing thereof, copies of any and all
         registration statements (other than the exhibits thereto and any
         registration statements on Form S-8 or its equivalent) and annual,
         quarterly or monthly reports which the Borrower shall have filed with
         the Securities and Exchange Commission;

                  (g) if and when any member of the Controlled Group (i) gives
         or is required to give notice to the PBGC of any Reportable Event with
         respect to any Plan which might constitute grounds for a termination of
         such Plan under Title IV of ERISA, or knows that the plan administrator
         of any Plan has given or is required to give notice of any such
         Reportable Event, a copy of the notice of such Reportable Event given
         or required to be given to the PBGC; (ii) receives notice of complete
         or partial withdrawal liability under Title IV of ERISA, a copy of such
         notice; or (iii) receives notice from the PBGC under Title IV of ERISA
         of an intent to terminate or appoint a trustee to administer any Plan,
         a copy of such notice;

                  (h) within 30 days after the end of each Fiscal Quarter,
         quarterly operating statements for each of the properties comprising
         the Required Collateral; provided that this requirement shall terminate
         at such time prior to the occurrence of a "Payment Default" or
         "Covenant Violation" (as those terms are defined in the Escrow
         Agreement) as the Borrower shall have received an Investment Grade
         Rating.

                  (i) from time to time such additional information regarding
         the financial position or business of the Borrower and its Subsidiaries
         as the Bank may reasonably request.

         SECTION 6.02. INSPECTION OF PROPERTY BOOKS AND RECORDS. The Borrower
will keep, and will cause each of its Subsidiaries to keep, proper books of
record and account in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities; and will
permit, and will cause its Subsidiaries to permit, representatives of the Bank
at the Bank's expense prior to the occurrence of an Event of Default and at the
Borrower's expense after the occurrence of an Event of Default to visit and
inspect any of their respective properties (including without limitation the
Required Collateral), to examine and make abstracts from any of their respective
books and records and to discuss their respective affairs, finances and accounts
with their respective officers, employees and independent public accountants.
The Borrower agrees to cooperate and assist in such visits and inspections, in
each case at such reasonable times and as often as may reasonably be desired;
provided, however, that

                                       15
<PAGE>

prior to the occurrence of an Event of Default, the Bank shall give the Borrower
not less than twenty-four (24) hours' notice of any such visit or inspection.

         SECTION 6.03. NO LIENS ON THE COLLATERAL. The Borrower will not place
or permit to exist any lien on any of the Required Collateral except those, if
any, approved by the Bank in writing; provided, however, that this covenant
shall terminate at such time prior to the occurrence of a "Payment Default" or
"Covenant Violation" (as those terms are defined in the Escrow Agreement) as the
Borrower shall have received an Investment Grade Rating.

         SECTION 6.04. RATIO OF UNENCUMBERED ASSETS TO DEBT. The collective
unencumbered Assets of the Borrower and Guarantor, tested as of the last day of
each Fiscal Quarter, shall at all times equal or exceed 150% of the aggregate
outstanding unsecured Debt of such entities.

         SECTION 6.05. RATIO OF DEBT TO ASSETS. The aggregate Debt of the
Borrower and the Guarantor, tested as of the last day of each Fiscal Quarter,
shall at no time exceed 60% of the total collective Assets of the Borrower and
the Guarantor.

         SECTION 6.06. MAXIMUM SECURED DEBT. The aggregate Secured Debt of the
Borrower and the Guarantor, tested as of the last day of each Fiscal Quarter,
shall at no time exceed the lesser of (i) $350,000,000 or (ii) 60% of total
collective Assets of the Borrower and the Guarantor until the earlier of (a)
such time as the Borrower shall have received an Investment Grade Rating or (b)
June 30, 1997, at and after which time aggregate Secured Debt of the Borrower
and the Guarantor, tested as of the last day of each Fiscal Quarter, shall not
exceed 40% of total collective Assets of the Borrower and the Guarantor.

         SECTION 6.07. DEBT SERVICE RATIO. The Debt Service Ratio, tested as of
the last day of each Fiscal Quarter, shall at no time be less than 1.75 to 1.

         SECTION 6.08. STATUS AS REIT. The Borrower shall maintain at all times
its status as a real estate investment trust under the Code.

         SECTION 6.09. MAINTENANCE OF EXISTENCE. The Borrower shall, and shall
cause each Subsidiary to, maintain its existence and carry on its business in
substantially the same manner and in substantially the same fields as such
business is now carried on and maintained; provided, however, that nothing
contained in this Section shall preclude the Borrower from dissolving a
Subsidiary of the Borrower so long as the assets of such Subsidiary have
theretofore been transferred to the Borrower or another Subsidiary of the
Borrower.

         SECTION 6.10. DISSOLUTION. Neither the Borrower nor any of its
Subsidiaries shall suffer or permit dissolution or liquidation either in whole
or in part or redeem or retire any shares of its own stock or any of its own
securities or other ownership interests or that of any Subsidiary, except (a)
through corporate reorganization to the extent permitted by Section 6.11 and (b)
so long as after giving pro forma effect thereto, the Borrower will not be in
violation of the terms of this Agreement, pursuant to Section 8.6 of the
Agreement of Limited Partnership of the Borrower as amended through the Closing
Date or as amended subsequent to the Closing Date if the sole purpose of the
amendment is to specify a date through which a limited partner's ownership
interest must be held prior to such redemption; provided, however, that nothing

                                       16
<PAGE>

contained in this Section shall preclude the Borrower from dissolving a
Subsidiary of the Borrower so long as the assets of such Subsidiary have
theretofore been transferred to the Borrower or another Subsidiary of the
Borrower.

         SECTION 6.11. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. The Borrower
will not, nor will it permit any Subsidiary to, consolidate or merge with or
into, or sell, lease or otherwise transfer all or substantially all of its
assets to, any other Person, or discontinue or eliminate any business line or
segment, provided that

                  (a) the Borrower may merge with another Person if (i) such
         Person was organized under the laws of the United States of America or
         one of its states, (ii) the Borrower is the corporation surviving such
         merger and (iii) immediately after giving effect to such merger, no
         Default shall have occurred and be continuing, and

                  (b) Subsidiaries of the Borrower may merge with one another.

         SECTION 6.12. USE OF PROCEEDS. The proceeds of the Loans will be used
by the Borrower (i) to refinance existing indebtedness of the Borrower, and (ii)
for general business and working capital purposes. No portion of the proceeds of
the Loans will be used by the Borrower (a) in connection with any tender offer
for, or other acquisition of, stock of any corporation with a view towards
obtaining control of such other corporation, (b) directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of purchasing or carrying
any Margin Stock, or (c) for any purpose in violation of any applicable law or
regulation.

         SECTION 6.13. COMPLIANCE WITH LAWS PAYMENT OF TAXES. The Borrower will,
and will cause each of its Subsidiaries and each member of the Controlled Group
to, comply with applicable laws (including but not limited to ERISA),
regulations and similar requirements of governmental authorities (including but
not limited to PBGC), except where the necessity of such compliance is being
contested in good faith through appropriate proceedings. The Borrower will, and
will cause each of its Subsidiaries to, pay promptly when due all taxes,
assessments, governmental charges, claims for labor, supplies, rent and other
obligations which, if unpaid, might become a lien against the property of the
Borrower or any Subsidiary, except liabilities being contested in good faith and
against which, if reasonably requested by the Bank, the Borrower will set up
reserves reasonably satisfactory to the Bank.

         SECTION 6.14. INSURANCE. The Borrower will maintain, and will cause
each of its Subsidiaries to maintain (either in the name of the Borrower or in
such Subsidiary's own name), with financially sound and reputable insurance
companies, insurance on all its property in at least such amounts and against at
least such risks as are usually insured against in the same general area by
companies of established repute engaged in the same or similar business.

         SECTION 6.15. CHANGE IN FISCAL YEAR. The Borrower will not change its
Fiscal Year without the consent of the Bank.

         SECTION 6.16. MAINTENANCE OF PROPERTY. The Borrower shall, and shall
cause each Subsidiary to, maintain all of its properties and assets in good
condition, repair and working order, ordinary wear and tear excepted.

                                       17
<PAGE>

         SECTION 6.17. ENVIRONMENTAL NOTICES. The Borrower shall furnish to the
Bank prompt written notice of all Environmental Liabilities, pending, or, to the
best knowledge of Borrower, threatened or anticipated Environmental Proceedings,
Environmental Notices, Environmental Judgments and Orders, and Environmental
Releases at, on, in, under or in any way affecting the Properties or any
adjacent property (to the extent Borrower has actual knowledge with respect to
such adjacent property), and all facts, events, or conditions that could lead to
any of the foregoing.

         SECTION 6.18. ENVIRONMENTAL MATTERS. The Borrower will not, and will
not permit any Third Party to, use, produce, manufacture, process, generate,
store, dispose of, manage at, or ship or transport to or from the Properties any
Hazardous Materials except for Hazardous Materials such as cleaning solvents,
pesticides and other similar materials used, produced, manufactured, processed,
generated, stored, disposed or managed in the ordinary course of business in
compliance with all applicable Environmental Requirements.

         SECTION 6.19. ENVIRONMENTAL RELEASE. The Borrower agrees that upon the
occurrence of an Environmental Release it will act immediately to investigate
the extent of, and to take appropriate remedial action to eliminate, such
Environmental Release, whether or not ordered or otherwise directed to do so by
any Environmental Authority.

                             ARTICLE VII - DEFAULTS

         SECTION 7.01. EVENTS OF DEFAULT. The occurrence of any one or more of
the following events shall constitute an Event of Default by the Borrower under
this Agreement:

                  (a) the Borrower shall fail to pay when due any principal of
         any Loan or shall fail to pay any interest on any Loan within five
         Domestic Business Days after such interest shall become due, or shall
         fail to pay any fee or other amount payable hereunder within five
         Domestic Business Days after such fee or other amount becomes due; or

                  (b) the Borrower shall fail to observe or perform any covenant
         contained in Sections 6.03 through 6.12, inclusive; or

                  (c) the Borrower shall fail to observe or perform any covenant
         or agreement contained in this Agreement (other than those covered by
         clause (a) or (b) above), and such failure shall not be cured within
         thirty days after written notice thereof has been given to the Borrower
         by the Bank (or such longer period of time as is reasonably necessary
         to cure such failure if such failure is not possible to cure within
         such thirty (30) day period and the Borrower is making a good faith
         diligent effort to cure, but in no event more than sixty (60) days
         after such notice without the written consent of the Bank); or

                  (d) any representation, warranty, certification or statement
         made by the Borrower in Article V or in any certificate, financial
         statement or other document delivered pursuant to this Agreement shall
         prove to have been incorrect in any material respect when made (or
         deemed made); or

                                       18
<PAGE>

                  (e) the Borrower or Guarantor or any Subsidiary of the
         Borrower or Guarantor shall fail to make any payment in respect of Debt
         outstanding to the Bank when due or within any applicable grace period;
         or

                  (f) any event or condition shall occur which results either
         (i) in the acceleration of the maturity of recourse Debt outstanding of
         the Borrower, the Guarantor or any Subsidiary of the Borrower or
         Guarantor to any Person other than the Bank or (ii) the required
         purchase of such recourse Debt by the Borrower (or its designee), the
         Guarantor (or its designee) or such Subsidiary (or its designee) prior
         to the scheduled maturity thereof;

                  (g) the Borrower and/or Guarantor shall default in any payment
         in respect of or otherwise default with respect to non-recourse Debt in
         the aggregate principal amount of $20,000,000 or more;

                  (h) a Change of Control shall occur;

                  (i) the Borrower, the Guarantor or any Subsidiary of the
         Borrower or Guarantor shall commence a voluntary case or other
         proceeding seeking liquidation, reorganization or other relief with
         respect to itself or its debts under any bankruptcy, insolvency or
         other similar law now or hereafter in effect or seeking the appointment
         of a trustee, receiver, liquidator, custodian or other similar official
         of it or any substantial part of its property, or shall consent to any
         such relief or to the appointment of or taking possession by any such
         official in an involuntary case or other proceeding commenced against
         it, or shall make a general assignment for the benefit of creditors, or
         shall fail generally to pay its debts as they become due, or shall take
         any corporate action to authorize any of the foregoing; or

                  (j) an involuntary case or other proceeding shall be commenced
         against the Borrower, the Guarantor, or any Subsidiary of the Borrower
         or Guarantor seeking liquidation, reorganization or other relief with
         respect to it or its debts under any bankruptcy, insolvency or other
         similar law now or hereafter in effect or seeking the appointment of a
         trustee, receiver, liquidator, custodian or other similar official of
         it or any substantial part of its property, and such involuntary case
         or other proceeding shall remain undismissed and unstayed for a period
         of 90 days; or an order for relief shall be entered against the
         Borrower, the Guarantor, or any Subsidiary of the Borrower or Guarantor
         under the federal bankruptcy laws as now or hereafter in effect; or

                  (k) the Borrower or any member of the Controlled Group shall
         fail to pay when due any material amount which it shall have become
         liable to pay to the PBGC or to a Plan under Title IV of ERISA; or the
         PBGC shall institute proceedings under Title IV of ERISA to terminate
         or to cause a trustee to be appointed to administer any such Plan or
         Plans or a proceeding shall be instituted by a fiduciary of any such
         Plan or Plans to enforce Section 515 or 4219(c)(5) of ERISA and such
         proceeding shall not have been dismissed within 60 days thereafter; or
         a condition shall exist by reason of which the PBGC would be entitled
         to obtain a decree adjudicating that any such Plan or Plans must be
         terminated; or

                                       19
<PAGE>

                  (l) one or more judgments or orders for the payment of money
         in an aggregate amount in excess of $500,000.00 (not covered by
         insurance) shall be rendered against the Borrower, the Guarantor, or
         any Subsidiary of the Borrower or Guarantor and such judgment or order
         shall not be appealed, shall become final and shall continue
         unsatisfied and unstayed for a period of 30 days; or

                  (m) a federal tax lien shall be filed against the Borrower or
         Guarantor under Section 6323 of the Code or a lien of the PBGC shall be
         filed against the Borrower or Guarantor under Section 4068 of ERISA and
         in either case such lien shall remain undischarged for a period of 25
         days after the date of filing; or

                  (n) the Guarantor shall fail to comply with the provisions of
         the Guaranty Agreement or the Borrower shall fail to comply with the
         provisions of the Escrow Agreement.

         SECTION 7.02. REMEDIES ON DEFAULT. Upon the occurrence of an Event of
Default, the Bank, in addition to having the rights and remedies given it by
this Agreement, the Escrow Agent and the other Loan Documents may, by notice to
the Borrower, declare the Notes (together with accrued interest thereon) to be,
and the Notes and all outstanding Loans shall thereupon become immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; provided that if any Event of
Default specified in clause' (i) or (j) above occurs with respect to the
Borrower or Guarantor, without any notice to the Borrower or any other act by
the Bank, the Notes and all outstanding Loans (together with accrued interest
thereon) and fees shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.

                          ARTICLE VIII - MISCELLANEOUS

         SECTION 8.01. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, facsimile
transmission or similar writing) and shall be given to such party at its address
or facsimile number set forth below or such other address or facsimile number as
such party may hereafter specify for the purpose by notice to the other party:

                  (a) If to the Borrower:

                      Summit Properties Partnership, L.P.
                      212 South Tryon Street
                      Charlotte, North Carolina 28281
                      Attention: Mr. Mike Malone, Senior Vice President
                      Fax number: (704) 333-8340

                  (b) If to the Bank:

                      Wachovia Bank of North Carolina, N. A.
                      P. O. Box 31608

                                       20
<PAGE>

                      Charlotte, North Carolina 28231-6071
                      Attention: Wayne A. Osella, Senior Vice President
                      Fax number: (704) 378-5181

Each such notice, request or other communication shall be effective (i) if given
by mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or (ii) if given by any other
means, when delivered at the address specified in this Section.

         SECTION 8.02. NO WAIVERS. No failure or delay by the Bank in exercising
any right, power or privilege hereunder or under the Notes or other Loan
Documents shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.

         SECTION 8.03. EXPENSES: DOCUMENTARY TAXES. The Borrower shall pay (i)
all out-of-pocket expenses of the Bank, including reasonable fees and
disbursements of counsel for the Bank, in connection with the preparation of
this Agreement and the other Loan Documents, any waiver or consent hereunder or
any modification or amendment hereof or any Default hereunder and (ii) if an
Event of Default occurs, all out-of-pocket expenses incurred by the Bank,
including reasonable fees and disbursements of counsel, in connection with such
Event of Default and collection and other enforcement proceedings resulting
therefrom, including out-of-pocket expenses incurred in enforcing this Agreement
and the other Loan Documents. Reasonable fees and disbursements of counsel shall
mean actual fees and disbursements incurred by the Bank charged to it by counsel
at ordinary and customary rates and shall not be calculated on the basis of the
percentage of the outstanding balance of the Loans. The Borrower shall indemnify
the Bank against any transfer taxes, documentary taxes, assessments or charges
made by any governmental authority by reason of the execution and delivery of
this Agreement or the other Loan Documents.

         SECTION 8.04. AMENDMENTS AND WAIVERS. Any provision of this Agreement,
the Notes or any other Loan Documents may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed by the Borrower and the
Bank.

         SECTION 8.05. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement.

         SECTION 8.06. CONFIDENTIALITY. The Bank agrees to exercise its best
efforts to keep any information delivered or made available by the Borrower,
confidential from any one other than persons employed or retained by the Bank
who are or are expected to become engaged in evaluating, approving, structuring
or administering the Loans; provided, however, that nothing herein shall prevent
the Bank from disclosing such information (i) upon the order of any court or
administrative agency, (ii) upon the formal demand of any regulatory agency or
authority having jurisdiction over the Bank, (iii) which has been publicly
disclosed, (iv) to the extent reasonably required in connection with any
litigation to which the Bank or their respective Affiliates may be

                                       21
<PAGE>

a party, (v) to the extent reasonably required in connection with the exercise
of any remedy hereunder, and (vi) to the Bank's legal counsel and independent
auditors. The Bank, however, shall use reasonable efforts to notify the Borrower
regarding any proposed disclosure pursuant to clauses (i), (ii) and (iv) of this
Section (unless, in the case of clause (iv), such litigation is between the
Borrower and the Bank) prior to such proposed disclosure so that the Borrower
shall have an opportunity to contest such proposed disclosure by proper means.

         SECTION 8.07. INTEREST LIMITATION. Notwithstanding any other term of
this Agreement, the Notes or any other Loan Document, the maximum amount of
interest which may be charged to or collected from any person liable hereunder
or under the Notes by the Bank shall be absolutely limited to, and shall in no
event exceed, the maximum amount or interest which could lawfully be charged or
collected under applicable law (including, to the extent applicable, the
provisions of section 5197 of the Revised Statutes of the United States of
America, as amended, 12 U.S.C. ss.85, as amended), so that the maximum of all
amounts constituting interest under applicable law, howsoever computed, shall
never exceed as to any Person liable therefor such lawful maximum, and any term
of this Agreement, the Notes or any other Loan Document which could be construed
as providing for interest in excess of such lawful maximum shall be and hereby
is made expressly subject to and modified by the provisions of this paragraph.

         SECTION 8.08. GOVERNING LAW. This Agreement and the Notes shall be
construed in accordance with and governed by the law of the State of North
Carolina. This Agreement and the Notes are intended to be effective as
instruments executed under seal.

         SECTION 8.09. COUNTERPARTS. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

         SECTION 8.10. CONSENT TO JURISDICTION. The Borrower (a) submits to
personal jurisdiction in the State of North Carolina, the courts thereof and the
United States District Courts sitting therein, for the enforcement of this
Agreement, the Notes and the other Loan Documents, (b) waives any and all
personal rights under the law of any jurisdiction to object on any basis
(including, without limitation, inconvenience of forum) to jurisdiction or venue
within the State of North Carolina for the purpose of litigation to enforce this
Agreement, the Notes or the other Loan Documents, and (c) agrees that service of
process may be made upon it in the manner prescribed in Section 8.01 for the
giving of notice to the Borrower. Nothing herein contained, however, shall
prevent the Bank from bringing any action or exercising any rights against any
security and against the Borrower personally, and against any assets of the
Borrower, within any other state or jurisdiction.

         SECTION 8.11. SEVERABILITY. If any provisions of this Agreement shall
be held invalid under any applicable laws, such invalidity shall not affect any
other provision of this Agreement that can be given effect without the invalid
provision, and, to this end, the provisions hereof are severable.

         SECTION 8.12. CAPTIONS. Captions in this Agreement are for the
convenience of reference only and shall not affect the meaning or interpretation
of the provisions hereof.

                                       22
<PAGE>

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

                                      BORROWER:

                                      SUMMIT PROPERTIES PARTNERSHIP, L.P.
                                      a Delaware Limited Partnership

                                      By: Summit Properties Inc.
                                          Sole General Partner

                                      By:  /s/ MICHAEL G. MALONE (SEAL)
                                           ----------------------------
                                      Michael G. Malone,
                                      Senior Vice President

                                       BANK:

                                       WACHOVIA BANK OF NORTH CAROLINA, N.A.

                                       By: /s/ WAYNE A. OSELLA  (SEAL)
                                           ---------------------------
                                       Name: Wayne A. Osella
                                       Title:  Senior Vice President

                                       23

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