Document:

<PAGE>
                                                                    EXHIBIT 10.3

                     PROMISSORY NOTE AND SECURITY AGREEMENT

$750,010.85                                                     JANUARY 31, 2000

         FOR VALUE RECEIVED, KEITH DOWNEY who resides at 2246 Westminister
Place, Charlotte, NC 28207 (hereinafter referred to as the "Employee"), hereby
promises to pay to the order of Summit Properties Inc., a Maryland corporation
with its principal place of business at 212 South Tryon Street, Suite 500,
Charlotte, North Carolina (hereinafter referred to as the "Company"), the
principal amount of $750,010.85 together with interest thereon as provided below
subject to the terms and conditions set forth herein.

         1.       Purpose and Authority. This Promissory Note and Security
Agreement (the "Note") is entered into for the purpose of financing the
Employee's purchase of shares of common stock, par value $0.01 per share, of the
Company ("Common Stock") pursuant to and subject to the terms and conditions of
(i) the Company's Statement of Company Policy on Loans to Executive Officers and
Qualified Employees to Purchase the Company Stock as adopted by the Board of
Directors of the Company on September 8, 1997, as amended from time to time, and
(ii) the Company's 1994 Stock Option and Incentive Plan, as amended from time to
time.

         2.       Security. The Employee hereby grants the Company a security
interest in any and all shares of Common Stock purchased by the Employee with
the proceeds of this Note (hereinafter referred to as the "Collateral Stock")
and in any and all distributions and dividends which may from time to time be,
paid or payable on the Collateral Stock (each, a "Distribution"). Employee
agrees to take all such actions and execute all such documents as may from time
to time be reasonably requested by the Company to perfect and maintain the
validity and priority of any security interest granted to the Company pursuant
to this Note. Employee also agrees that a carbon, photographic or other
reproduction of this Promissory Note and Security Agreement may be filed as a
financing statement to the extent that the Company determines that such filing
is necessary for the Company to establish or maintain its security interest in
the Collateral Stock. The Employee shall cause the Collateral Stock to be
delivered to the Company and the Company may retain possession of the Collateral
Stock until such time as the Note has been paid in full.

         3.       Payment. All Distributions received by the Employee in cash
shall be applied toward repayment of this Note. The Employee agrees that the
Company may establish and institute any procedure that it deems necessary or
advisable to ensure that each such Distribution shall be applied toward
repayment of this Note, including without limitation, the placement of a
restrictive legend on any check representing a Distribution. Each such payment
shall first be applied to the payment of interest accrued as of the date of such
payment and the remainder thereof, if any, shall then be applied to the payment
of outstanding principal. The Note will bear interest at the rate provided in
Section 4 hereof. The entire principal balance and all accrued and unpaid
interest and other charges as may be due hereunder shall be due and payable on
or before the tenth anniversary of the date of this Note (the "Maturity Date").
<PAGE>

         4.       Interest. Interest on this Note will be computed on a simple
interest basis and will accrue on the unpaid principal balance due under the
Note until maturity, whether by reason of Default (as defined below) and
acceleration, lapse of time or otherwise ("Maturity"), at the rate of SIX AND
1/100 PERCENT (6.01%) per annum. Prior to Maturity interest shall be payable
solely from Distributions.

         5.       Prepayment. The Employee may prepay the whole or any part of
the principal amount of this Note from time to time without premium or penalty.

         6.       Default. (a)      The occurrence of any of the following
events shall constitute a Default under this Note:

                                    (i)      the failure by the Employee to
                  deliver or cause to be delivered the Collateral Stock to the
                  Company within three business days after the purchase of any
                  Collateral Stock;

                                    (ii)     retention by the Employee of any
                  Distribution, which retention continues for a period of ten
                  (10) days;

                                    (iii)    the failure by the Employee to pay
                  the entire outstanding balance of this Note and all accrued
                  interest within one hundred and twenty (120) days after
                  termination of the Employee's employment with the Company; or

                                    (iv)     the failure by the Employee to pay
                  the entire outstanding balance of this Note and all accrued
                  interest on or before the Maturity Date.

         (b)      Upon the occurrence of a Default under this Note, the
outstanding principal balance hereof, together with all reasonable costs of
collection and/or enforcement of the Note, including reasonable attorney's fees,
shall at the option of the Company become immediately due and payable.

         (c)      If the Employee is in Default hereunder, the Company may,
except as otherwise provided herein, exercise the rights and remedies accorded a
secured party by the Uniform Commercial Code as enacted in the State of
Maryland.

         7.       Personal Liability. The obligations of the Employee to pay the
unpaid principal balance of this Note, plus accrued interest thereon and other
charges as may be due hereunder, shall be absolute and unconditional, and the
Company shall have full recourse against the Employee's assets (including, but
not limited to, the Collateral Stock) to recover such amounts.

         8.       Modification. Neither this Note nor any provision hereof may
be modified, altered, or amended in any manner or form except by an agreement in
writing, executed by a duly authorized officer of the Company and the Employee,
which writing shall make specific reference hereto.

         9.       Transfer by Employee. Employee will not sell, assign, transfer
or otherwise dispose of, directly or indirectly, nor grant any option with
respect to, or pledge or grant any security

<PAGE>

interest in or otherwise encumber any of the Collateral Stock or any interest
therein, except for the security interest provided for in this Note.

         10.      Severability. If for any reason any provision or provisions
hereof are determined to be invalid, unenforceable or contrary to any existing
or future law, such invalidity or unenforcability shall not impair the operation
or affect those portions of this Note which are valid.

         11.      Usury, etc. All agreements between the Employee and the
Company are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason Maturity of the indebtedness or otherwise, shall
the amount paid or agreed to be paid to the holder for the use, forbearance or
detention of the indebtedness evidenced hereby exceed the maximum amount which
the holder is permitted to receive under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision of this Note, at the time
performance of such provision shall be due, shall involve payments exceeding
such amount, then the obligation to be fulfilled shall automatically be reduced
to the limit of such maximum amount, and if from any circumstances the holder
should ever receive as interest an amount which would exceed such maximum
amount, such amount which would be excessive interest shall be applied to the
reduction of the principal balance evidenced hereby and not to the payment of
interest. As used herein, the term "applicable law" shall mean the law in effect
as of the date hereof; provided, however, that in the event that there is a
change in the law which results in a higher permissible rate of interest, then
this Note shall be governed by such new law as of its effective date. This
provision shall control every other provision of this Note.

         12.      Valuation: Manner of Disposition. Employee acknowledges and
agrees that the Company may not be able to effect a public sale of the
Collateral Stock and, accordingly, agrees that in the event of any sale,
collection, realization or other disposition of or upon the Collateral Stock by
the Company, in lieu of such public sale, the Company may transfer all or any
portion of the Collateral Stock to itself and apply the value of such shares (at
a price per share equal to the average of the daily high and low sales prices,
computed to three decimal places, of the Company's stock as reported on the NYSE
for the ten (10) days on which the NYSE is open and for which trades in the
Company stock are reported immediately preceding the date of such action by the
Company or, if one or more of such days is not a day on which the NYSE is open
or the Company's stock is not traded on the NYSE for the ten (10) days
immediately preceding said action for which the trades are reported) to the
amounts due under or in connection with this Note.

         13.      Governing Law. The execution, delivery and performance of this
Note shall be governed by, construed, and enforced in accordance with the laws
of the State of Maryland.

         14.      Waivers. The failure of the Company at any time to exercise
any option or right hereunder shall not constitute a waiver of the Company's
right to exercise such option or right at any other time.

                  [Remainder of page intentionally left blank]
<PAGE>

IN WITNESS WHEREOF, this Note has been executed and delivered as a sealed
instrument as of the date first set forth above.

                                             /s/ Keith Downey
                                             -------------------------
                                             KEITH DOWNEY

Executed, sealed and
delivered in the
presence of:

/s/ Cheri Loy
-----------------------------
Name of Witness:
<PAGE>

                     PROMISSORY NOTE AND SECURITY AGREEMENT

$90,000.00                                                       January 4, 1999

         FOR VALUE RECEIVED, Keith L. Downey, who resides at 2246 Westminster
Place, Charlotte, North Carolina 28207 (hereinafter referred to as the
"Employee"), hereby promises to pay to the order of Summit Properties Inc., a
Maryland corporation with its principal place of business at 212 South Tryon
Street, Suite 500, Charlotte, North Carolina 28281 (hereinafter referred to as
the "Company"), the principal amount of $90,000.00 together with interest
thereon as provided below subject to the terms and conditions set forth herein.

         1.       Purpose and Authority. This Promissory Note and Security
Agreement (the "Note") is entered into for the purpose of financing the
Employee's purchase of shares of common stock, par value $0.01 per share, of the
Company ("Common Stock") pursuant to and subject to the terms and conditions of
(i) the Company's Statement of Company Policy on Loans to Executive Officers and
Qualified Employees to Purchase the Company Stock as adopted by the Board of
Directors of the Company on September 8, 1997, as amended from time to time, and
(ii) the Company's 1996 Non-Qualified Employee Stock Purchase Plan, as amended
from time to time.

         2.       Security. The Employee hereby grants the Company a security
interest in any and all shares of Common Stock purchased by the Employee with
the proceeds of this Note (hereinafter referred to as the "Collateral Stock")
and in any and all distributions and dividends which may from time to time be,
paid or payable on the Collateral Stock (each, a "Distribution"). Employee
agrees to take all such actions and execute all such documents as may from time
to time be reasonably requested by the Company to perfect and maintain the
validity and priority of any security interest granted to the Company pursuant
to this Note. Employee also agrees that a carbon, photographic or other
reproduction of this Promissory Note and Security Agreement may be filed as a
financing statement to the extent that the Company determines that such filing
is necessary for the Company to establish or maintain its security interest in
the Collateral Stock. The Employee shall cause the Collateral Stock to be
delivered to the Company and the Company may retain possession of the Collateral
Stock until such time as the Note has been paid in full.

         3.       Payment. All Distributions received by the Employee in cash
shall be applied toward repayment of this Note. The Employee agrees that the
Company may establish and institute any procedure that it deems necessary or
advisable to ensure that each such Distribution shall be applied toward
repayment of this Note, including without limitation, the placement of a
restrictive legend on any check representing a Distribution. Each such payment
shall first be applied to the payment of interest accrued as of the date of such
payment and the remainder thereof, if any, shall then be applied to the payment
of outstanding principal. The Note will bear interest at the rate provided in
Section 4 hereof. The entire principal balance and all accrued and unpaid
interest and other charges as may be due hereunder shall be due and payable on
or before the ninth anniversary of the date of this Note (the "Maturity Date").
<PAGE>

         4.       Interest. Interest on this Note will be computed on a simple
interest basis and will accrue on the unpaid principal balance due under the
Note until maturity, whether by reason of Default (as defined below) and
acceleration, lapse of time or otherwise ("Maturity"), at the rate of Four and
64/100 percent (4.64%) per annum. Prior to Maturity interest shall be payable
solely from Distributions.

         5.       Prepayment. The Employee may prepay the whole or any part of
the principal amount of this Note from time to time without premium or
penalty.

         6.       Default. (a)      The occurrence of any of the following
events shall constitute a Default under this Note:

                           (i)      the failure by the Employee to deliver or
         cause to be delivered the Collateral Stock to the Company within three
         business days after the purchase of any Collateral Stock;

                           (ii)     retention by the Employee of any
         Distribution, which retention continues for a period of ten (10) days;

                           (iii)    the failure by the Employee to pay the
         entire outstanding balance of this Note and all accrued interest within
         one hundred and twenty (120) days after termination of the Employee's
         employment with the Company; or

                           (iv)     the failure by the Employee to pay the
         entire outstanding balance of this Note and all accrued interest on or
         before the Maturity Date.

                  (b)      Upon the occurrence of a Default under this Note, the
outstanding principal balance hereof, together with all reasonable costs of
collection and/or enforcement of the Note, including reasonable attorney's fees,
shall at the option of the Company become immediately due and payable.

                  (c)      If the Employee is in Default hereunder, the Company
may, except as otherwise provided herein, exercise the rights and remedies
accorded a secured party by the Uniform Commercial Code as enacted in the State
of Maryland.

         7.       Personal Liability. Except in the case of fraud, willful
misrepresentation or retention of a Distribution by Employee, the Company agrees
that the Employee's personal liability on this Note shall be limited to Twenty
two thousand five hundred dollars and 00/100 ($22,500.00) due hereunder for any
deficiency which may arise upon a foreclosure and sale or other disposition of
the Collateral Stock; provided that, this provision shall not diminish in any
way the powers of the Company to foreclose on the Collateral Stock and to apply
the full value of the Collateral Stock and all related Distributions to the
amount outstanding under this Note in the event of a Default.
<PAGE>

         8.       Modification. Neither this Note nor any provision hereof may
be modified, altered, or amended in any manner or form except by an agreement in
writing, executed by a duly authorized officer of the Company and the Employee,
which writing shall make specific reference hereto.

         9.       Transfer by Employee. Employee will not sell, assign, transfer
or otherwise dispose of, directly or indirectly, nor grant any option with
respect to, or pledge or grant any security interest in or otherwise encumber
any of the Collateral Stock or any interest therein, except for the security
interest provided for in this Note.

         10.      Severability. If for any reason any provision or provisions
hereof are determined to be invalid, unenforceable or contrary to any existing
or future law, such invalidity or unenforceability shall not impair the
operation or affect those portions of this Note which are valid.

         11.      Usury, etc. All agreements between the Employee and the
Company are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason Maturity of the indebtedness or otherwise, shall
the amount paid or agreed to be paid to the holder for the use, forbearance or
detention of the indebtedness evidenced hereby exceed the maximum amount which
the holder is permitted to receive under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision of this Note, at the time
performance of such provision shall be due, shall involve payments exceeding
such amount, then the obligation to be fulfilled shall automatically be reduced
to the limit of such maximum amount, and if from any circumstances the holder
should ever receive as interest an amount which would exceed such maximum
amount, such amount which would be excessive interest shall be applied to the
reduction of the principal balance evidenced hereby and not to the payment of
interest. As used herein, the term "applicable law" shall mean the law in effect
as of the date hereof; provided, however, that in the event that there is a
change in the law which results in a higher permissible rate of interest, then
this Note shall be governed by such new law as of its effective date. This
provision shall control every other provision of this Note.

         12.      Valuation: Manner of Disposition. Employee acknowledges and
agrees that the Company may not be able to effect a public sale of the
Collateral Stock and, accordingly, agrees that in the event of any sale,
collection, realization or other disposition of or upon the Collateral Stock by
the Company, in lieu of such public sale, the Company may transfer all or any
portion of the Collateral Stock to itself and apply the value of such shares (at
a price per share equal to the average of the daily high and low sales prices,
computed to three decimal places, of the Company's stock as reported on the New
York Stock Exchange (the "NYSE") for the ten (10) days on which the NYSE is open
and for which trades in the Company stock are reported immediately preceding the
date of such action by the Company or, if one or more of such days is not a day
on which the NYSE is open or the Company's stock is not traded on the NYSE for
the ten (10) days immediately preceding said action for which the trades are
reported) to the amounts due under or in connection with this Note.

         13.      Governing Law. The execution, delivery and performance of this
Note shall be governed by, construed, and enforced in accordance with the laws
of the State of Maryland.

         14.      Waivers. The failure of the Company at any time to exercise
any option or right hereunder shall not constitute a waiver of the Company's
right to exercise such option or right at any other time.
<PAGE>

         IN WITNESS WHEREOF, this Note has been executed and delivered as a
sealed instrument as of the date first set forth above.

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

Executed, sealed and
delivered in the
presence of:

/s/ John C. Moore
--------------------------------
Name of Witness
<PAGE>

                     PROMISSORY NOTE AND SECURITY AGREEMENT

$109,843.48                                                     NOVEMBER 7, 2000

         FOR VALUE RECEIVED, KEITH DOWNEY who resides at 2246 Westminister
Place, Charlotte, NC 28207 (hereinafter referred to as the "Employee"), hereby
promises to pay to the order of Summit Properties Inc., a Maryland corporation
with its principal place of business at 309 East Morehead Street, Suite 200,
Charlotte, North Carolina (hereinafter referred to as the "Company"), the
principal amount of $109,843.48 together with interest thereon as provided below
subject to the terms and conditions set forth herein.

         1.       Purpose and Authority. This Promissory Note and Security
Agreement (the "Note") is entered into for the purpose of financing the
Employee's purchase of shares of common stock, par value $0.01 per share, of the
Company ("Common Stock") pursuant to and subject to the terms and conditions of
(i) the Company's Statement of Company Policy on Loans to Executive Officers and
Qualified Employees to Purchase the Company Stock as adopted by the Board of
Directors of the Company on September 8, 1997, as amended from time to time, and
(ii) the Company's 1994 Stock Option and Incentive Plan, as amended from time to
time.

         2.       Security. The Employee hereby grants the Company a security
interest in any and all shares of Common Stock purchased by the Employee with
the proceeds of this Note (hereinafter referred to as the "Collateral Stock")
and in any and all distributions and dividends which may from time to time be,
paid or payable on the Collateral Stock (each, a "Distribution"). Employee
agrees to take all such actions and execute all such documents as may from time
to time be reasonably requested by the Company to perfect and maintain the
validity and priority of any security interest granted to the Company pursuant
to this Note. Employee also agrees that a carbon, photographic or other
reproduction of this Promissory Note and Security Agreement may be filed as a
financing statement to the extent that the Company determines that such filing
is necessary for the Company to establish or maintain its security interest in
the Collateral Stock. The Employee shall cause the Collateral Stock to be
delivered to the Company and the Company may retain possession of the Collateral
Stock until such time as the Note has been paid in full.

         3.       Payment. All Distributions received by the Employee in cash
shall be applied toward repayment of this Note. The Employee agrees that the
Company may establish and institute any procedure that it deems necessary or
advisable to ensure that each such Distribution shall be applied toward
repayment of this Note, including without limitation, the placement of a
restrictive legend on any check representing a Distribution. Each such payment
shall first be applied to the payment of interest accrued as of the date of such
payment and the remainder thereof, if any, shall then be applied to the payment
of outstanding principal. The Note will bear interest at the rate provided in
Section 4 hereof. The entire principal balance and all accrued and unpaid
interest and other charges as may be due hereunder shall be due and payable on
or before the tenth anniversary of the date of this Note (the "Maturity Date").
<PAGE>

         4.       Interest. Interest on this Note will be computed on a simple
interest basis and will accrue on the unpaid principal balance due under the
Note until maturity, whether by reason of Default (as defined below) and
acceleration, lapse of time or otherwise ("Maturity"), at the rate of SIX AND
1/100 PERCENT (6.01%) per annum. Prior to Maturity interest shall be payable
solely from Distributions.

         5.       Prepayment. The Employee may prepay the whole or any part of
the principal amount of this Note from time to time without premium or penalty.

         6.       Default. (a)      The occurrence of any of the following
events shall constitute a Default under this Note:

                                    (i)      the failure by the Employee to
                  deliver or cause to be delivered the Collateral Stock to the
                  Company within three business days after the purchase of any
                  Collateral Stock;

                                    (ii)     retention by the Employee of any
                  Distribution, which retention continues for a period of ten
                  (10) days;

                                    (iii)    the failure by the Employee to pay
                  the entire outstanding balance of this Note and all accrued
                  interest within one hundred and twenty (120) days after
                  termination of the Employee's employment with the Company; or

                                    (iv)     the failure by the Employee to pay
                  the entire outstanding balance of this Note and all accrued
                  interest on or before the Maturity Date.

                  (b)      Upon the occurrence of a Default under this Note, the
outstanding principal balance hereof, together with all reasonable costs of
collection and/or enforcement of the Note, including reasonable attorney's fees,
shall at the option of the Company become immediately due and payable.

                  (c)      If the Employee is in Default hereunder, the Company
may, except as otherwise provided herein, exercise the rights and remedies
accorded a secured party by the Uniform Commercial Code as enacted in the State
of Maryland.

         7.       Personal Liability. The obligations of the Employee to pay the
unpaid principal balance of this Note, plus accrued interest thereon and other
charges as may be due hereunder, shall be absolute and unconditional, and the
Company shall have full recourse against the Employee's assets (including, but
not limited to, the Collateral Stock) to recover such amounts.

         8.       Modification. Neither this Note nor any provision hereof may
be modified, altered, or amended in any manner or form except by an agreement in
writing, executed by a duly authorized officer of the Company and the Employee,
which writing shall make specific reference hereto.

         9.       Transfer by Employee. Employee will not sell, assign, transfer
or otherwise dispose of, directly or indirectly, nor grant any option with
respect to, or pledge or grant any security
<PAGE>

interest in or otherwise encumber any of the Collateral Stock or any interest
therein, except for the security interest provided for in this Note.

         10.      Severability. If for any reason any provision or provisions
hereof are determined to be invalid, unenforceable or contrary to any existing
or future law, such invalidity or unenforcability shall not impair the operation
or affect those portions of this Note which are valid.

         11.      Usury, etc. All agreements between the Employee and the
Company are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason Maturity of the indebtedness or otherwise, shall
the amount paid or agreed to be paid to the holder for the use, forbearance or
detention of the indebtedness evidenced hereby exceed the maximum amount which
the holder is permitted to receive under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision of this Note, at the time
performance of such provision shall be due, shall involve payments exceeding
such amount, then the obligation to be fulfilled shall automatically be reduced
to the limit of such maximum amount, and if from any circumstances the holder
should ever receive as interest an amount which would exceed such maximum
amount, such amount which would be excessive interest shall be applied to the
reduction of the principal balance evidenced hereby and not to the payment of
interest. As used herein, the term "applicable law" shall mean the law in effect
as of the date hereof; provided, however, that in the event that there is a
change in the law which results in a higher permissible rate of interest, then
this Note shall be governed by such new law as of its effective date. This
provision shall control every other provision of this Note.

         12.      Valuation: Manner of Disposition. Employee acknowledges and
agrees that the Company may not be able to effect a public sale of the
Collateral Stock and, accordingly, agrees that in the event of any sale,
collection, realization or other disposition of or upon the Collateral Stock by
the Company, in lieu of such public sale, the Company may transfer all or any
portion of the Collateral Stock to itself and apply the value of such shares (at
a price per share equal to the average of the daily high and low sales prices,
computed to three decimal places, of the Company's stock as reported on the NYSE
for the ten (10) days on which the NYSE is open and for which trades in the
Company stock are reported immediately preceding the date of such action by the
Company or, if one or more of such days is not a day on which the NYSE is open
or the Company's stock is not traded on the NYSE for the ten (10) days
immediately preceding said action for which the trades are reported) to the
amounts due under or in connection with this Note.

         13.      Governing Law. The execution, delivery and performance of this
Note shall be governed by, construed, and enforced in accordance with the laws
of the State of Maryland.

         14.      Waivers. The failure of the Company at any time to exercise
any option or right hereunder shall not constitute a waiver of the Company's
right to exercise such option or right at any other time.

                  [Remainder of page intentionally left blank]
<PAGE>

         IN WITNESS WHEREOF, this Note has been executed and delivered as a
sealed instrument as of the date first set forth above.

                                     /s/ Keith Downey
                                     -------------------------------
                                     KEITH DOWNEY

Executed, sealed and
delivered in the
presence of:

/s/ Cheri Loy
--------------------------
Name of Witness:
<PAGE>

                     PROMISSORY NOTE AND SECURITY AGREEMENT

$15,000                                                             July 1, 1999

         FOR VALUE RECEIVED, Keith L. Downey who resides at 2246 Westminster
Place, Charlotte, North Carolina 28207, (hereinafter referred to as the
"Employee") hereby promises to pay to the order of Summit Properties Inc., a
Maryland corporation with its principal place of business at 212 South Tryon
Street, Suite 500, Charlotte, North Carolina (hereinafter referred to as the
"Company"), the principal amount of $15,000 together with interest thereon as
provided below subject to the terms and conditions set forth herein.

         1.       Purpose and Authority. This Promissory Note and Security
Agreement (the "Note") is entered into for the purpose of financing the
Employee's purchase of shares of common stock, par value $0.01 per share, of the
Company ("Common Stock") pursuant to and subject to the terms and conditions of
(i) the Company's Statement of Company Policy on Loans to Executive Officers and
Qualified Employees to Purchase the Company Stock as adopted by the Board of
Directors of the Company on September 8, 1997, as amended from time to time, and
(ii) the Company's 1994 Stock Option and Incentive Plan, as amended from time to
time.

         2.       Security. The Employee hereby grants the Company a security
interest in any and all shares of Common Stock purchased by the Employee with
the proceeds of this Note (hereinafter referred to as the "Collateral Stock")
and in any and all distributions and dividends which may from time to time be,
paid or payable on the Collateral Stock (each, a "Distribution"). Employee
agrees to take all such actions and execute all such documents as may from time
to time be reasonably requested by the Company to perfect and maintain the
validity and priority of any security interest granted to the Company pursuant
to this Note. Employee also agrees that a carbon, photographic or other
reproduction of this Promissory Note and Security Agreement may be filed as a
financing statement to the extent that the Company determines that such filing
is necessary for the Company to: establish or maintain its security interest in
the Collateral Stock. The Employee shall cause the Collateral Stock to be
delivered to the Company and the Company may retain possession of the Collateral
Stock until such time as the Note has been paid in full.

         3.       Payment. All Distributions received by the Employee in cash
shall be applied toward repayment of this Note. The Employee agrees that the
Company may establish and institute any procedure that it deems necessary or
advisable to ensure that each such Distribution shall be applied toward
repayment of this Note, including without limitation, the placement of a
restrictive legend on any check representing a Distribution. Each such payment
shall first be applied to the payment of interest accrued as of the date of such
payment and the remainder thereof, if any, shall then be applied to the payment
of outstanding principal. The Note will bear interest at the rate provided in
Section 4 hereof. The entire principal balance and all accrued and
<PAGE>

unpaid interest and other charges as may be due hereunder shall be due and
payable on or before the tenth anniversary of the date of this Note (the
"Maturity Date").

         4.       Interest. Interest on this Note will be computed on a simple
interest basis and will accrue on the unpaid principal balance due under the
Note until maturity, whether by reason of Default (as defined below) and
acceleration, lapse of time or otherwise ("Maturity"), at the rate of Five and
27/100 percent (5.27%) per annum. Prior to Maturity interest shall be payable
solely from Distributions.

         5.       Prepayment. The Employee may prepay the whole or any part of
the principal amount of this Note from time to time without premium or penalty.

         6.       Default.

                  (a)      The occurrence of any of the following events and the
expiration of the applicable cure period without such event having been cured,
shall constitute a Default under this Note:

                           (i)      the failure by the Employee to deliver or
         cause to be delivered the Collateral Stock to the Company within three
         business days after the purchase of any Collateral Stock;

                           (ii)     retention by the Employee of any
         Distribution, which retention continues for a period of ten (10) days;

                           (iii)    the failure by the Employee to pay the
         entire outstanding balance of this Note and all accrued interest within
         one hundred and twenty (120) days after termination of the Employee's
         employment with the Company; or

                           (iv)     the failure by the Employee to pay the
         entire outstanding balance of this Note and all accrued interest on or
         before the Maturity Date.

                  (b)      Upon the occurrence of a Default under this Note, the
outstanding principal balance hereof, together with all reasonable costs of
collection and/or enforcement of the Note, including reasonable attorney's fees,
shall at the option of the Company become immediately due and payable.

                  (c)      If the Employee is in Default hereunder, the Company
may, except as otherwise provided herein, exercise the rights and remedies
accorded a secured party by the Uniform Commercial Code as enacted in the State
of Maryland.

         7.       Notice and Cure Periods. Notwithstanding any term or provision
to the contrary in this Note or any other document or instrument evidencing or
securing the loan (collectively the "Loan Documents"), Employee shall have
thirty (30) days following written notice to the Employee of Employee's default
under any provision of the Loan Documents, including, without limitation, the
Note, in which to cure any such default before the Company may exercise any
remedies for said default as provided in this Note or any other Loan Documents.

         8.       Personal Liability. Except in the case of fraud, willful
misrepresentation or retention of a Distribution by Employee, the Company agrees
that the Employee's personal liability on this Note shall be limited to
twenty-five percent (25%) of the then current
<PAGE>

outstanding principle balance due hereunder for any deficiency which may arise
upon a foreclosure and sale or other disposition of the Collateral Stock;
provided that, this provision shall not diminish in any way the powers of the
Company to foreclose on the Collateral Stock and to apply the full value of the
Collateral Stock and all related Distributions to the amount outstanding under
this Note in the event of a Default.

         9.       Modification. Neither this Note nor any provision hereof may
be modified, altered, or amended in any manner or form except by an agreement in
writing, executed by a duly authorized officer of the Company and the Employee,
which writing shall make specific reference hereto.

         10.      Transfer by Employ. Employee will not sell, assign, transfer
or otherwise dispose of, directly or indirectly, nor grant any option with
respect to, or pledge or grant any security interest in or otherwise encumber
any of the Collateral Stock or any interest therein, except for the security
interest provided for in this Note.

         11.      Severability. If for any reason any provision or provisions
hereof are determined to be invalid, unenforceable or contrary to any existing
or future law, such invalidity or unenforceability shall not impair the
operation or affect those portions of this Note which are valid.

         12.      Usurer. All agreements between the Employee and the Company
are hereby expressly limited so that in no contingency or event whatsoever,
whether by reason Maturity of the indebtedness or otherwise, shall the amount
paid or agreed to be paid to the holder for the use, forbearance or detention of
the indebtedness evidenced hereby exceed the maximum amount which the holder is
permitted to receive under applicable law. If, from any circumstances
whatsoever, fulfillment of any provision of this Note, at the time performance
of such provision shall be due, shall involve payments exceeding such amount,
then the obligation to be fulfilled shall automatically be reduced to the limit
of such maximum amount, and if from any circumstances the holder should ever
receive as interest an amount which would exceed such maximum amount, such
amount which would be excessive interest shall be applied to the reduction of
the principal balance evidenced hereby and not to the payment of interest. As
used herein, the term "applicable law" shall mean the law in effect as of the
date hereof; provided, however, that in the event that there is a change in the
law which results in a higher permissible rate of interest, then this Note shall
be governed by such new law as of its effective date. This provision shall
control every other provision of this Note.

         13.      Valuation: Manner of Disposition. Employee acknowledges and
agrees that the Company may not be able to effect a public sale of the
Collateral Stock and, accordingly, agrees that in the event of any sale,
collection, realization or other disposition of or upon the Collateral Stock by
the Company, in lieu of such public sale, the Company may transfer all or any
portion of the Collateral Stock to itself and apply the value of such shares (at
a price per share equal to the average of the daily high and low sales prices,
computed to three decimal places, of the Company's stock as reported on the New
York Stock Exchange (the "NYSE") for the ten (10) days on which the NYSE is open
and for which trades in the Company stock are reported immediately preceding the
date of such action by the Company or, if one or more of such days is not a day
on which the NYSE is open or the Company's stock is not traded on the NYSE for
the
<PAGE>

ten (10) days immediately preceding said action for which the trades are
reported) to the amounts due under or in connection with this Note.

         14.      Governing Law. The execution, delivery and performance of this
Note shall be governed by, construed, and enforced in accordance with the laws
of the State of Maryland.

         15.      Waivers. The failure of the Company at any time to exercise
any option or right hereunder shall not constitute a waiver of the Company's
right to exercise such option or right at any other time.

                  [Remainder of page intentionally left blank.]
<PAGE>

         IN WITNESS WHEREOF, this Note has been executed and delivered as a
sealed instrument as of the date first set forth above.

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

Executed, sealed and
delivered in the
presence of:

/s/ John C. Moore
------------------------------------
Name of Witness:
<PAGE>

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

For Value Received, the undersigned Keith L. Downey does hereby sell, assign and
transfer unto Summit Properties Inc. (the "Corporation") 1136 Shares of Common
Stock, par value $.01 per share, of the Corporation standing in his/her name on
the books of the Corporation represented by Stock Certificate No. SMT16276,
delivered herewith, and does hereby irrevocably constitute and appoint the
Corporation attorney to transfer the said stock on the books of the Corporation
with full power of substitution in the premises.

DATE  June 30, 1999

SIGNATURE(S) GUARANTEED /s/ Keith Downey          (SEAL)
                        --------------------------
                                (Signature)

Summit Properties Inc.                             (SEAL)
                       ----------------------------
                                (Signature)

By  /s/Michael Malone
    -------------------------
               (Title)
<PAGE>

                          FIRST AMENDMENT TO PROMISSORY
                           NOTE AND SECURITY AGREEMENT

         THIS FIRST AMENDMENT TO PROMISSORY NOTE AND SECURITY AGREEMENT (this
"Amendment") is made and entered into as of the 29th day of December, 2000 by
and between Summit Properties Inc., a Maryland corporation (the "Company"), and
Keith L. Downey ("Employee").

                              STATEMENT OF PURPOSE

         The Company has agreed to amend the Promissory Note and Security
Agreement entered into between the Company and Employee as of July 1, 1999 and
in original principal amount of 15,000.00 (the "Note") to reduce the number of
shares of Common Stock serving as collateral for Employee's obligations
thereunder in exchange for Employee's agreement to amend the Note to eliminate
the provisions thereof that limit Employee's personal liability thereunder.

         NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:

         1.       Capitalized Terms. All capitalized undefined terms used in
this Amendment shall have the meanings assigned thereto in the Note.

         2.       Partial Release of Collateral. Pursuant to Section 2 of the
Note 1,136 shares of Common Stock (the "Shares") currently constitute Collateral
Stock under the Note, certificate(s) for which are in the possession of the
Company. The Company hereby releases its security interest pursuant to the Note
in 595 of the Shares (the "Released Shares") so that hereafter the term
"Collateral Stock" shall mean 541 shares of Common Stock and any and all
distributions and dividends which may from time to time be paid or payable on
such shares. The Company and Employee agree to take any and all actions
necessary (including executing suitable stock powers) to enable the Company to
issue separate stock certificates) evidencing the Released Shares and the
Collateral Stock and to enable the Company to perfect and maintain the validity
and priority of the security interest granted to the Company pursuant to the
Note. The Company shall cause the certificates) evidencing the Released Shares
to be released to Employee and pursuant to Section 2 of the Note shall retain
the certificate(s) evidencing the Collateral Stock. Except for the definition of
"Collateral Stock" which is being modified hereby, the provisions of Section 2
of the Note shall remain unaltered and in full force and effect.

         3.       Deletion of Section 7. Section 7 of the Note is hereby deleted
in its entirety so that Employee's personal liability under the Note shall no
longer be limited thereby. Employee hereby acknowledges and agrees that Employee
shall be personally liable for one hundred percent (100%) of Employee's
obligations under the Note.

         4.       Continued Viability of the Note. The Note, as amended by this
Amendment, shall remain in full force and effect, and this Amendment shall be
deemed to be incorporated into the Note and made a part thereof. Accordingly,
the applicable provisions of Sections 8, 10, 13 and 14
<PAGE>

of the Note shall have equal force and effect with respect to the construction
and interpretation of this Amendment. To the extent of any conflict between the
provisions of this Amendment and those of the Note as heretofore in effect, this
Amendment shall control and otherwise govern and supersede such provisions.

                            [SIGNATURE PAGE FOLLOWS]
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed under seal as of the date first above written.

                                            SUMMIT PROPERTIES INC.

                                            By:/s/ John C. Moore
                                              ----------------------------------
                                               Name:
                                               Title

                                            EMPLOYEE

                                            /s/ Keith L. Downey           [SEAL]
                                            ------------------------------
                                            Keith L. Downey<PAGE>
                                                                  EXHIBIT 4.1(f)

              THIS DOCUMENT IS SUBJECT TO A CONFIDENTIAL TREATMENT
                      REQUEST PURSUANT TO RULE 24b-2 UNDER
                 THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                            AMENDMENT AGREEMENT NO. 6
                             TO CREDIT AGREEMENT AND
                      EQUITY APPRECIATION RIGHTS AGREEMENT

         THIS AMENDMENT AGREEMENT (this "Amendment Agreement") is made and
entered into as of this 10th day of May, 2002, by and among INSTEEL INDUSTRIES,
INC., a North Carolina corporation (herein called the "Borrower"), BANK OF
AMERICA, N.A., a national banking association (the "Agent"), as Agent for the
lenders (the "Lenders") party to the Credit Agreement dated January 31, 2000 as
amended by the Amendment Agreement No. 1 to Credit Agreement dated January 12,
2001, by the Supplement to Amendment Agreement No. 1 to the Credit Agreement
effective January 12, 2001, by the Amendment Agreement No. 2 to Credit Agreement
dated May 21, 2001, by Amendment Agreement No. 3 to Credit Agreement dated
August 9, 2001, by Amendment Agreement No. 4 to Credit Agreement dated November
16, 2001 and by Amendment Agreement No. 5 to Credit Agreement dated January 28,
2002 (collectively the "Agreement"), and the Equity Appreciation Rights
Agreement dated May 21, 2001 (the "EAR Agreement"), among the Borrower, the
Agent, and the Lenders, and the UNDERSIGNED LENDERS.

                                  WITNESSETH:

         WHEREAS, the parties hereto have entered into the Agreement pursuant
to which the Lenders have agreed to make loans to the Borrower as evidenced by
the Notes (as defined in the Agreement) and to issue Letters of Credit for the
benefit of the Borrower; and

         WHEREAS, as a condition to the making of the loans pursuant to the
Agreement the Lenders have required that the Subsidiaries of the Borrower
guarantee payment of all Obligations of the Borrower arising under the
Agreement; and

         WHEREAS, the Borrower has requested that the Lenders further amend the
Agreement and amend the EAR Agreement in the manner described herein; and

         WHEREAS, the Lenders are willing to further amend the Agreement and
amend the EAR Agreement subject to the terms and conditions set forth herein;

         NOW, THEREFORE, the Borrower, the Agent and the Lenders do hereby
agree as follows:

         1.       Definitions. The term "Agreement" as used herein and in the
Loan Documents (as defined in the Agreement) shall mean the Agreement as
hereinafter amended and modified. The term "EAR Agreement" as used herein and
in the Loan Documents (as defined in the Agreement) shall mean the EAR
Agreement as hereinafter amended and modified. Unless the

                                       1
<PAGE>

context otherwise requires, other than paragraph 6, all terms used herein
without definition shall have the definition provided therefor in the
Agreement. Unless the context requires otherwise, all terms used herein in
paragraph 6 without definition shall have the definition provided therefor in
the EAR Agreement.

         2.       Amendment to Agreement. Subject to the conditions set forth
herein, the Agreement is hereby amended, effective as of the date of this
Amendment No. 6 as follows:

                  (a)      Section 1.1 is hereby amended by adding the
         following new definitions thereto in the appropriate alphabetical
         order:

                  "`Amendment No. 6' means Amendment Agreement No. 6 to Credit
         Agreement and Equity Appreciation Rights Agreement which Amendment No.
         6 is dated May 10, 2002;"

                  "`Applicable Period' means, (x) with respect to the
         calculation of Consolidated EBITDA for purposes of determining the
         Applicable Margin, the Four-Quarter Period most recently ended for
         which the Borrower has delivered a certificate pursuant to Section
         9.1(a)(ii) and (b)(ii), (y) with respect to the calculation of
         Consolidated EBITDA for purposes of determining Excess EBITDA at any
         date, the Fiscal Year ending on such date, and (z) with respect to the
         calculation of Consolidated EBITDA for purposes of determining
         compliance with Section 10.1(b) as at each of the dates set forth
         below, the following periods of time ending at such date:

         Date                 Applicable Period
         ----                 -----------------
         June 1, 2002         The 1 month period then ended
         June 29, 2002        The 2 month period then ended
         August 3, 2002       and each The 3 month period then ended
         fiscal month end
         thereafter "

                  "`Excess EBITDA' means, for each of the Applicable Periods
         set forth below, 75% of the amount by which Consolidated EBITDA
         exceeds the amount set forth below opposite each such period:

         Applicable Period                  Amount
         -----------------                  ------

         Fiscal Year ending
         September 28, 2002                 $[*]

         Fiscal Year ending
         September 27, 2003                 $[*]"

[*] Confidential portion has been omitted and filed separately with the
    Commission.

                                       2
<PAGE>

                  (b)      The definition of "Applicable Margin" in Section 1.1
         is hereby further amended in its entirety so that as amended it shall
         read as follows:

                           "`Applicable Margin' means (a) with respect to the
                  Revolving Credit Facility, the following percentages per
                  annum based upon the Consolidated Leverage Ratio for the
                  Applicable Period as set forth in the most recent compliance
                  certificate received by the Agent:

                     Pricing                                     Applicable
                      Level      Consolidated Leverage Ratio       Margin
                     -------     ---------------------------     ----------
                        1                    < 4.00:1               2.00%
                                             -
                        2             >4.00:1 but < 4.50:1          2.50%
                                                  -
                        3             >4.50:1 but < 5.00:1          3.00%
                                                   -
                        4                    >5.00:1                3.50%

                                Any increase or decrease in the Applicable
                                Margin resulting from a change in the
                                Consolidated Leverage Ratio shall become
                                effective as of the first Business Day
                                immediately following the date a compliance
                                certificate is delivered pursuant to Section
                                9.1(a); provided, however, that if a compliance
                                certificate is not delivered when due in
                                accordance with such Section, then Pricing Level
                                4 shall apply as of the first Business Day after
                                the date on which such compliance certificate
                                was required to have been delivered. The
                                Applicable Margin in effect from May 6, 2002
                                through July 15, 2002 shall be determined based
                                upon Pricing Level 2, and

                  (b) with respect to the Term Loan Credit Facility, 7% per
                  annum for any Term Loan Outstandings in excess of $40,635,000
                  and for each of the periods set forth below that percent per
                  annum set forth opposite each such period for all other Term
                  Loan Outstandings:

                                   Period                     Applicable Margin
                                   ------                     -----------------
                  May 6, 2002 through December 31, 2002             3.75%

                  January 1, 2003 through October 15, 2003          4.00%

                  (c)      The definition of "Consolidated EBITDA" in Section
         1.1 is hereby amended in its entirety so that as amended it shall read
         as follows:

                           "`Consolidated EBITDA' means, with respect to the
                           Borrower and its Subsidiaries for any Applicable
                           Period ending on the date of computation thereof, the
                           sum of, without duplication, (i) Consolidated Net
                           Income, plus any losses or minus any gains [*] (ii)
                           Consolidated Interest Expense,

[*] Confidential portion has been omitted and filed separately with the
    Commission.

                                       3
<PAGE>

(iii) taxes on income, (iv) amortization, (v) depreciation, (vi) Amendment Fees
payable to Lenders when and to the extent actually paid and other actual cash
expenses paid in each case in connection with Amendment No. 6, the aggregate of
such fees and expenses not to exceed $[*], all determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis."

                  (d)      The definition of "Stated Termination Date" in
         Section 1.1 is hereby further amended in its entirety so that as
         amended it shall read as follows:

                           "`Stated Termination Date' means October 15, 2003."

                  (e)      The definition of "Term Loan Maturity Date" in
         Section 1.1 is hereby amended in its entirety so that as amended it
         shall read as follows:

                           "`Term Loan Maturity Date' means October 15, 2003."

                  (f)      The definition of "Total Revolving Credit
         Commitment" in Section 1.1 is hereby amended in its entirety so that
         as amended it shall read as follows:

                           "`Total Revolving Credit Commitment' means
                           $50,000,000 and shall be subject to reduction from
                           time to time in accordance with Section 2.2(e) and
                           subject to further reduction by $8,000,000 on the
                           earlier to occur of (i) [*] and (ii) July 31, 2002."

                  (g)      Section 2.1(c) is hereby amended in its entirety so
         that as amended it shall read as follows:

                           "(c)     Payment of Principal. The principal amount
                  of the Term Loan shall be repaid in monthly installments on
                  the dates and in the amounts set forth below:

                             Date                        Amount
                             ----                        ------
                             May 31, 2002                $300,000
                             June 30, 2002               $300,000
                             July 31, 2002               $700,000
                             August 31, 2002             $700,000
                             September 30, 2002          $700,000
                             October 31, 2002            $100,000
                             November 30, 2002           $100,000
                             December 31, 2002           $100,000
                             January 31, 2003            $200,000
                             February 28, 2003           $200,000
                             March 31, 2003              $200,000
                             April 30, 2003              $300,000
                             May 31, 2003                $300,000
                             June 30, 2003               $300,000
                             July 31, 2003               $400,000
                             August 31, 2003             $400,000
                             September 30, 2003          $400,000

[*] Confidential portion has been omitted and filed separately with the
    Commission.

                                       4
<PAGE>

                  provided, however, that the entire amount of Term Loan
                  Outstandings shall be due and payable in full on the Term
                  Loan Termination Date."

                  (h)      Section 2.1(e) is hereby amended in its entirety so
         that as amended it shall read as follows:

                           "(e)     Mandatory Prepayments. In addition to the
                  required payments of principal of the Term Loan set forth in
                  Section 2.1(c) and any optional payments of principal of the
                  Term Loan or reductions of the Revolving Credit Facility
                  effected under Section 2.1(d) or Section 2.2(e), the Borrower
                  shall make, or shall cause each applicable Subsidiary to
                  make, a prepayment from the proceeds of (i) each private or
                  public offering of equity securities of the Borrower or any
                  Subsidiary (other than securities issued to the Borrower or a
                  Guarantor) in an amount equal to fifty percent (50%) of the
                  Net Proceeds of each issuance of equity securities of the
                  Borrower or any Subsidiary (including without limitation any
                  security not constituting Indebtedness exchangeable,
                  exercisable or convertible for or into equity securities),
                  (ii) the issuance of any Indebtedness for Money Borrowed
                  permitted by the Required Lenders, in an amount equal to one
                  hundred percent (100%) of the Net Proceeds from the issuance
                  of such Indebtedness excluding Indebtedness permitted to be
                  issued under Section 10.5(a), (iii) each Asset Disposition
                  permitted under Section 10.6(b), (c), (f) and (g) in an
                  amount equal to one hundred percent (100%) of the Net
                  Proceeds of such Asset Disposition, (iv) one hundred percent
                  (100%) of the amount of any Price Adjustment received by the
                  Borrower, (v) one hundred percent (100%) of the amount of any
                  tax refund from all federal, state and local tax returns
                  filed by the Borrower and each of its Subsidiaries, and (vi)
                  seventy-five percent (75%) of the Excess EBITDA, each such
                  prepayment (other than Excess EBITDA) to be made within
                  fifteen (15) Business Days of receipt of such proceeds, and
                  with respect to (vi), within fifteen (15) Business Days after
                  the delivery of the financial statements pursuant to Section
                  9.1(a), and upon not less than five (5) Business Days'
                  written notice to the Agent, which notice shall include a
                  certificate of an Authorized Representative setting forth in
                  reasonable detail the calculations utilized in computing the
                  amount of such prepayment; provided, that the required Excess
                  EBITDA payment due within such 15 day period shall be an
                  amount equal to the sum of cash and cash equivalents of the
                  Borrower and its Subsidiaries and availability under the
                  Revolving Credit Facility minus $8,500,000, with the balance
                  of such Excess EBITDA to be due and payable in three equal
                  installments on the first Business Day of April, May and
                  June.

                           The Agent shall give each Lender, within one (1)
                  Business Day, telefacsimile notice of each notice of
                  prepayment described in this Section 2.1(e). All mandatory
                  prepayments made pursuant to this Section 2.1(e) shall be
                  applied (i) to installments of principal of the Term Loan in
                  inverse order of their maturities (as adjusted to give effect
                  to any prior payments or prepayments of principal), and (ii)
                  in the event that the Term Loan shall have been fully repaid,
                  to the Revolving Credit Outstandings; provided that the Total
                  Revolving Credit Commitment shall not be permanently reduced
                  by any such prepayment except

                                       5
<PAGE>

                  that prepayments of Revolving Credit Outstandings pursuant to
                  Section 2.1(e)(iii) above shall permanently reduce the Total
                  Revolving Credit Commitment by the amount of such prepayment.

                           Notwithstanding the foregoing, (x) the Net Proceeds
                  received from the sale of Inventory, other than in the
                  ordinary course of business, or Accounts Receivable shall be
                  applied as repayments of the Revolving Credit Outstandings to
                  permanently reduce the Total Revolving Credit Commitment, and
                  (y) the Net Proceeds received from [*] shall be applied in the
                  following manner: first, $[*] shall be applied as a prepayment
                  to the Term Loan Outstandings, and second, the remaining Net
                  Proceeds from such [*] shall be applied as repayments of the
                  Revolving Credit Outstandings."

                  (i)      Section 9.1(g) is amended in its entirety so that as
         amended it shall read as follows:

                           "(g) as soon as practicable and in any event within
                           15 days after the end of each fiscal month deliver to
                           the Agent (i) an Accounts Receivable trial balance
                           aged from the date of invoice, (ii) an accounts
                           payable trial balance aged from the date of invoice,
                           (iii) a list of the Inventory summarized as required
                           by the Agent, and (iv) a compliance certificate of an
                           Authorized Representative demonstrating compliance
                           with Sections 10.1(a) and (b), each of the foregoing
                           to be in form and detail acceptable to the Agent;"

                  (j)      Section 10.1(a) is amended in its entirety so that
         as amended it shall read as follows:

                           "(a) Consolidated Net Worth. Permit Consolidated Net
                           Worth to be less than (i) $[*] and (ii) as at the
                           last day of each fiscal quarter of the Borrower
                           ending after March 30, 2002 and until (but excluding)
                           the last day of the next following fiscal quarter of
                           the Borrower, the sum of (A) the amount of
                           Consolidated Net Worth required to be maintained
                           pursuant to this Section 10.1(a) as at the end of the
                           immediately preceding fiscal quarter (or, in the case
                           of the computation for the quarter ended March 30,
                           2002, $[*], plus (B) 50% of Consolidated Net Income
                           (with no reduction for net losses during any period)
                           for the fiscal quarter of the Borrower ending on such
                           day (including within "Consolidated Net Income"
                           certain items otherwise excluded, as provided for in
                           the definition of "Consolidated Net Income"), plus
                           (C) 100% of the aggregate amount of all increases in
                           the stated capital and additional paid-in capital
                           accounts of the Borrower resulting from the issuance
                           of equity securities or other capital investments."

[*] Confidential portion has been omitted and filed separately with the
    Commission.

                                       6
<PAGE>

                  (k)      Section 10.1(b) is amended in its entirety so that
         as amended it shall read as follows:

                           "(b)     Consolidated EBITDA. Permit Consolidated
                  EBITDA for each of the Applicable Periods ending on the dates
                  set forth below to be less than the amount set forth opposite
                  each such date:

                            APPLICABLE PERIOD          AMOUNT
                            -----------------          ------
                            June 1, 2002                $[*]
                            June 29, 2002                [*]
                            August 3, 2002               [*]
                            August 31, 2002              [*]
                            September 28, 2002           [*]
                            November 2, 2002             [*]
                            November 30, 2002            [*]
                            December 28, 2002            [*]
                            February 1, 2003             [*]
                            March 1, 2003                [*]
                            March 29, 2003               [*]
                            May 3, 2003                  [*]
                            May 31, 2003                 [*]
                            June 28, 2003                [*]
                            August 2, 2003               [*]
                            August 30, 2003              [*]
                            September 27, 2003           [*]

         (l)      Section 10.3 is hereby amended in its entirety so that as
         amended it shall read as follows:

                  "Capital Expenditures. Make or become committed to make
                  Capital Expenditures which exceed in the aggregate $2,000,000
                  for the Fiscal Year 2002, and $3,000,000 for the Fiscal Year
                  2003."

         3.       Subsidiary Consents. Each Subsidiary of the Borrower that has
delivered a Guaranty to the Agent has joined in the execution of this Amendment
Agreement for the purpose of (i) agreeing to the amendment to the Agreement and
(ii) confirming its guarantee of payment of all the Obligations.

         4.       Representations and Warranties. The Borrower hereby
represents and warrants that:

                  (a)      The representations and warranties made by Borrower
         in Article VIII of the Agreement are true on and as of the date hereof
         except that the financial statements referred to in Section 8.6(a)
         shall be those most recently furnished to each Lender pursuant to
         Section 9.1;

[*] Confidential portion has been omitted and filed separately with the
    Commission.

                                       7
<PAGE>

                  (b)      There has been no material adverse change in the
         condition, financial or otherwise, of the Borrower and its
         Subsidiaries since the date of the most recent financial reports of
         the Borrower received by each Lender under Section 9.1 thereof, other
         than changes in the ordinary course of business, none of which has
         been a material adverse change;

                  (c)      The business and properties of the Borrower and its
         Subsidiaries are not and have not been adversely affected in any
         substantial way as the result of any fire, explosion, earthquake,
         accident, strike, lockout, combination of workers, flood, embargo,
         riot, activities of armed forces, war or acts of God or the public
         enemy, or cancellation or loss of any major contracts; and

                  (d)      After giving effect to this Amendment Agreement
         (including the waivers by the Lenders set forth herein), no event has
         occurred and no condition exists which, upon the consummation of the
         transaction contemplated hereby, constitutes a Default or an Event of
         Default on the part of the Borrower under the Agreement, the Notes or
         any other Loan Document either immediately or with the lapse of time
         or the giving of notice, or both.

         5.       Deferral of Amendment Fee under Amendment No. 5. The
provisions regarding the Amendment Fee as set forth in paragraph 5 of Amendment
No. 5 are modified as follows: (i) payment of $[*] is due on each of July 31,
2002, October 31, 2002 and January 31, 2003 and (ii) payment of $[*] is due on
April 30, 2003. In the event all Obligations have been paid in full prior to
the date each payment shall be due, payment of such fees shall be waived.

         6.       Amendment to EAR Agreement. Subject to the conditions set
forth herein, the EAR Agreement is hereby amended, effective as of the date of
this Amendment No. 5 as follows:

                  (a)      Section 1.01 is hereby amended by adding the
         following new definition thereto in the appropriate alphabetical
         order:

                           "Amendment No. 6" means Amendment Agreement No. 6 to
                  Credit Agreement and Equity Appreciation Rights Agreement
                  which Amendment No. 6 is dated May 6, 2002;"

                  (b)      The definition of "Exercise Period" in Section 1.01
         is hereby amended in its entirety so that as amended it shall read as
         follows:

                           "Exercise Period" means the period (a) beginning and
                  ending in the case of Section 2.02(b) and (c), upon payment
                  in full of all the Loans or (b) beginning on the earlier to
                  occur of (i) July 15, 2003 or (ii) occurrence of an Event of
                  Default under the Credit Agreement and ending on July 15,
                  2005;"

[*] Confidential portion has been omitted and filed separately with the
    Commission.

                                       8
<PAGE>

                  (c)      Section 2.02(a) is hereby amended in its entirety so
         that as amended is shall read as follows:

                           "(a) The Borrower agrees to pay to the Agent for the
                           benefit of the Lenders the Rights Fee not later than
                           ninety (90) days next following the Exercise Date,
                           provided the Agent shall have given the Borrower
                           notice of the Exercise Date within ten (10) business
                           days next following delivery by the Borrower to the
                           Agent of the financial information required to be
                           delivered to the Agent pursuant to Section 9.1 of the
                           Credit Agreement for the period ending on such
                           Exercise Date. The Rights Fee shall be in a maximum
                           amount of $[*] but in no event less than the greater
                           of

                                    (i)      [*]; or

                                    (ii)    $[*];

                  (d)      Section 2.02(b) is hereby amended in its entirety so
         that as amended it shall read as follows:

                           "(b)     In the event all Obligations (as defined in
                  the Credit Agreement) have been paid in full by April 15,
                  2003 and the Facility Termination Date (as defined in the
                  Credit Agreement) shall have occurred by April 15, 2003, the
                  Rights Fee shall be $[*];"

                  (e)      Section 2.02(c) is hereby amended in its entirety so
         that as amended it shall read as follows:

                           "(c)     In the event all Obligations (as defined in
                  the Credit Agreement) have not been paid in full by April 15,
                  2003 but are paid in full by July 15, 2003 and the Facility
                  Termination Date (as defined in the Credit Agreement) shall
                  have occurred by July 15, 2003, the Rights Fee shall be in a
                  maximum amount of $[*] but in no event less than the greater
                  of:

                                    (i)      [*]; or

                                    (ii)    $[*]; and"

         7.       Conditions. This Amendment Agreement shall become effective
upon the Borrower delivering or causing to be delivered to the Agent the
following:

                  (i)      five (5) counterparts of this Amendment Agreement
         duly executed by the Borrower, the Agent and the Required Lenders and
         consented to by each of the Subsidiaries;

[*] Confidential portion has been omitted and filed separately with the
    Commission.

                                       9
<PAGE>

                  (ii)     copy of resolutions adopted by the Board of
         Directors of the Borrower and each Guarantor approving this Amendment
         Agreement and authorizing its execution certified by the Secretary or
         Assistant Secretary to be a true and correct copy duly adopted; and

                  (iii)    all other fees and expenses, including the Agent's
         fees, due in connection with this Amendment Agreement.

         8.       Acknowledgment; Release. The Borrower and the Guarantors
acknowledge that they have no existing defense, counterclaim, offset,
cross-complaint, claim or demand of any kind or nature whatsoever that can be
asserted to reduce or eliminate all or any part of any of their respective
liability to pay the full indebtedness outstanding under the terms of the
Agreement and any other Loan Documents which evidence, guaranty or secure the
Obligations. The Borrower and the Guarantors hereby release and forever
discharge the Agent, the Lenders and all of their officers, directors,
employees, attorneys, consultants and agents from any and all actions, causes
of action, debts, dues, claims, demands, liabilities and obligations of every
kind and nature, both in law and in equity, known or unknown, whether matured
or unmatured, absolute or contingent.

         9.       Costs and Expenses. The Borrower agrees to pay all costs and
expenses associated with the preparation, due diligence, administration and
enforcement of all documentation executed in connection with the Amendment
Agreement, including without limitation, the legal fees and out-of-pocket
expenses of counsel to the Agent. The Borrower also agrees to pay the expenses
of the Agent and the Lenders in connection with Collateral review, field audits
and retention of consultants.

         10.      Entire Agreement. This Amendment Agreement sets forth the
entire understanding and agreement of the parties hereto in relation to the
subject matter hereof and supersedes any prior negotiations and agreements
among the parties relative to such subject matter. No promise, conditions,
representation or warranty, express or implied, not herein set forth shall bind
any party hereto, and no one of them has relied on any such promise, condition,
representation or warranty. Each of the parties hereto acknowledges that,
except as in this Amendment Agreement otherwise expressly stated, no
representations, warranties or commitments, express or implied, have been made
by any other party to the other. None of the terms or conditions of this
Amendment Agreement may be changed, modified, waived or canceled orally or
otherwise, except by writing, in the manner provided in the Agreement,
specifying such change, modification, waiver or cancellation of such terms or
conditions, or of any proceeding or succeeding breach thereof.

         11.      Full Force and Effect of Agreement. Except as hereby
specifically amended, modified or supplemented, the Agreement and all of the
other Loan Documents are hereby confirmed and ratified in all respects and
shall remain in full force and effect according to their respective terms.

                 [Remainder of page intentionally left blank.]

                                      10
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Agreement to be duly executed by their duly authorized officers, all as of the
day and year first above written.

                                       BORROWER:

                                       INSTEEL INDUSTRIES, INC.
WITNESS:

/s/ Howard O. Woltz, Jr.               By:    /s/ H.O. Woltz III
-----------------------------------           ----------------------------------

Print Name: Howard O. Woltz, Jr.       Name:  H.O. Woltz III
            -----------------------           ----------------------------------

                                       Title: President
                                              ----------------------------------

/s/ Michael C. Gazmarian
-----------------------------------

Print Name: Michael C. Gazmarian
            -----------------------

                                      11
<PAGE>

                                       GUARANTORS:

                                       INSTEEL WIRE PRODUCTS COMPANY
                                       INTERCONTINENTAL METALS CORPORATION
                                       FLORIDA WIRE AND CABLE, INC.

WITNESS:

/s/ Howard O. Woltz, Jr.               By:    /s/ H.O. Woltz III
-----------------------------------           ----------------------------------

Print Name: Howard O. Woltz, Jr.       Name:  H.O. Woltz III
            -----------------------           ----------------------------------

                                       Title: President
                                              ----------------------------------

/s/ Michael C. Gazmarian
-----------------------------------

Print Name: Michael C. Gazmarian
            -----------------------

                                      12
<PAGE>

                                       BANK OF AMERICA, N.A.,
                                       as Agent for the Lenders

                                       By:    /s/ Michael J. Fey
                                          --------------------------------------
                                       Name:  Michael J. Fey
                                            ------------------------------------
                                       Title: Senior Vice President
                                             -----------------------------------

                                       BANC OF AMERICA STRATEGIC SOLUTIONS,
                                       INC., as a Lender

                                       By:    /s/ Michael J. Fey
                                          --------------------------------------
                                       Name:  Michael J. Fey
                                            ------------------------------------
                                       Title: Senior Vice President
                                             -----------------------------------

                                      13
<PAGE>

                                       BRANCH BANKING AND TRUST COMPANY

                                       By:    /s/ Richard C.F. Spencer
                                          --------------------------------------
                                       Name:  Richard C.F. Spencer
                                            ------------------------------------
                                       Title: Senior Vice President
                                             -----------------------------------

                                      14
<PAGE>

                                       WACHOVIA BANK, NATIONAL ASSOCIATION,
                                       as successor in interest to First
                                       Union National Bank

                                       By:    /s/ Elizabeth D. Morris
                                          --------------------------------------
                                       Name:  Elizabeth D. Morris
                                            ------------------------------------
                                       Title: Director
                                             -----------------------------------

                                      15
<PAGE>

                                       PNC BANK, N.A., as successor in interest
                                       to National Bank of Canada,
                                       a Canadian chartered bank

                                       By:    /s/ Jay Stein
                                          --------------------------------------
                                       Name:  Jay Stein
                                            ------------------------------------
                                       Title: Vice President
                                             -----------------------------------

                                      16

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