LOAN AGREEMENT DATED AS OF JULY 31, 1996 BETWEEN

EXHIBIT 10

LOAN AGREEMENT

DATED AS OF

JULY 31, 1996

BETWEEN

SUMMIT PROPERTIES PARTNERSHIP, L.P.

AND

WACHOVIA BANK OF NORTH CAROLINA, N.A.
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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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE II. THE LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.01. The Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.02. Promissory Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.03. Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.04. Payment of Principle 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 Government Authorization: contravention . . . . . . . . . . . . . . . . . . . . . . 12
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

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 of Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

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SECTION 6.05 Ratio of Debt to Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6.06 Maximum Secured Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6.07 Debt Service Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6.08 Status of 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6.16 Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8.06 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 8.12 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

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

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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 Xxxx & Xxxxxx).
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"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 & Xxxxxx).

"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

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Debt of 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 & Xxxxxx" means Duff & Xxxxxx 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.

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"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, 0000
Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000.

"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.

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"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 Xxxx & Xxxxxx).

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

"Multiemployer 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 and other non-cash items,
minus

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(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.

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

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"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
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

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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.

(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.

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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%

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

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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;

(d) receipt by the Bank of an opinion of counsel of Xxxxxxx
Xxxxxxxxx Xxxxxxx & Xxxxxxx, 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;

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14

(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 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.

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15

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.

(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.

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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 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. Section 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;

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17

(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, 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.

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18

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 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.

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19

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
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.

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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.

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

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21

(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

(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

(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,

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22

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:

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23

(a) If to the Borrower:

Summit Properties Partnership, L.P.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Mr. Xxxx Xxxxxx,
Senior Vice President
Fax number: (000) 000-0000

(b) If to the Bank:

Wachovia Bank of North Carolina, N.A.
P. O. Xxx 00000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx,
Senior Vice President
Fax number: (000) 000-0000

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.

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24

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 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. Section 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.

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25

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.

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: (SEAL)
-----------------------------
Xxxxxxx X. Xxxxxx, Senior
Vice President

BANK:

WACHOVIA BANK OF NORTH CAROLINA, N.A.

By:
-----------------------------------------
Title:
--------------------------------------

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EXHIBIT A

TERM LOAN NOTE

$15,000,000.00 July 31, 1996

FOR VALUE RECEIVED, the undersigned SUMMIT PROPERTIES
PARTNERSHIP, L.P., a Delaware Limited Partnership (the "Borrower"), hereby
promises to pay to the order of WACHOVIA BANK OF NORTH CAROLINA, N.A., a
national banking association (together with its endorsees, successors and
assigns, the "Bank"), the principal sum of Fifteen Million and No/100th Dollars
($15,000,000.00), on the date or dates provided for in the Loan Agreement. The
Borrower promises to pay interest on the unpaid principal amount of this Note
on the dates and at the rate or rates provided for in the Loan Agreement.
Interest on any overdue principal of and, to the extent permitted by law,
overdue interest on the principal amount hereof shall bear interest at the rate
or rates as provided for in the Loan Agreement. All such payments of principal
and interest shall be made in lawful money of the United States in Federal or
other funds immediately available at the principal office of the Bank located
at Charlotte, North Carolina, or at such other location as the holder of this
Note may designate in writing.

This Note evidences indebtedness in respect of one of the
Loans made under, is the $15,000,000 Note referred to in and issued pursuant
to, and is subject to the terms and provisions of, the Loan Agreement, dated as
of even date herewith, between the Borrower and the Bank (as the same may be so
modified, amended, supplemented or restated, the "Loan Agreement") to which
Loan Agreement reference is hereby made for a statement of said terms and
provisions. This Note is entitled to the benefits of the Loan Agreement. Any
term used herein that is defined in the Loan Agreement shall have the meaning
afforded it in the Loan Agreement when used herein.

Upon the occurrence and during the continuation of any Event
of Default, the Bank may declare the entire unpaid principal balance hereunder
and all accrued interest to be immediately due and payable in the manner and
with the effect provided in the Loan Agreement, and may thereafter exercise any
of the remedies referred to in the Loan Agreement or existing under applicable
law.

This Note may be prepaid in whole or in part only on the terms
and conditions set forth in the Loan Agreement.

TIME IS OF THE ESSENCE OF THIS CONTRACT. In addition and not
in limitation of the foregoing and the provisions of the Loan Agreement, the
Borrower further agrees to pay all expenses of collection, including reasonable
attorneys' fees, if this Note shall be collected by law or through an attorney
at law, or in bankruptcy, receivership or other court proceedings. As used
herein, reasonable attorneys' fees 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 this Note.

A-1
27

This Note shall be governed by and construed under the
internal laws of the State of North Carolina, without giving effect to
principles of conflicts of laws. This Note is intended to be effective as an
instrument executed under seal.

PRESENTMENT, DEMAND, PROTEST AND NOTICE OF DISHONOR ARE HEREBY
WAIVED BY THE BORROWER.

Executed under hand and seal of the Borrower on the date first above written.

SUMMIT PROPERTIES PARTNERSHIP, L.P.,
a Delaware Limited Partnership (SEAL)

By: Summit Properties Inc.,
Sole General Partner

By: (SEAL)
----------------------------
Xxxxxxx X. Xxxxxx, Senior
Vice President
Attest:

--------------------------------
(Assistant) Secretary

[Corporate Seal]

A-2
28

EXHIBIT B

TERM LOAN NOTE

$16,000,000.00 July 31, 1996

FOR VALUE RECEIVED, the undersigned SUMMIT PROPERTIES
PARTNERSHIP, L.P., a Delaware Limited Partnership (the "Borrower"), hereby
promises to pay to the order of WACHOVIA BANK OF NORTH CAROLINA, N.A., a
national banking association (together with its endorsees, successors and
assigns, the "Bank"), the principal sum of Sixteen Million and No/100th Dollars
($16,000,000.00), on the date or dates provided for in the Loan Agreement. The
Borrower promises to pay interest on the unpaid principal amount of this Note
on the dates and at the rate or rates provided for in the Loan Agreement.
Interest on any overdue principal of and, to the extent permitted by law,
overdue interest on the principal amount hereof shall bear interest at the rate
or rates as provided for in the Loan Agreement. All such payments of principal
and interest shall be made in lawful money of the United States in Federal or
other funds immediately available at the principal office of the Bank located
at Charlotte, North Carolina, or at such other location as the holder of this
Note may designate in writing.

This Note evidences indebtedness in respect of one of the
Loans made under, is the $16,000,000 Note referred to in and issued pursuant
to, and is subject to the terms and provisions of, the Loan Agreement, dated as
of even date herewith, between the Borrower and the Bank (as the same may be so
modified, amended, supplemented or restated, the "Loan Agreement") to which
Loan Agreement reference is hereby made for a statement of said terms and
provisions. This Note is entitled to the benefits of the Loan Agreement. Any
term used herein that is defined in the Loan Agreement shall have the meaning
afforded it in the Loan Agreement when used herein.

This Note may be prepaid in whole or in part only on the terms
and conditions set forth in the Loan Agreement.

B-1
29

PRESENTMENT, DEMAND, PROTEST AND NOTICE OF DISHONOR ARE HEREBY
WAIVED BY THE BORROWER.

Executed under hand and seal of the Borrower on the date first above written.

SUMMIT PROPERTIES PARTNERSHIP, L.P.,
a Delaware Limited Partnership (SEAL)

By: Summit Properties Inc.,
Sole General Partner

By: (SEAL)
---------------------------------
Xxxxxxx X. Xxxxxx, Senior
Vice President
Attest:

---------------------------------
(Assistant) Secretary

[Corporate Seal]

B-2
30

EXHIBIT C

OPINION OF BORROWER'S COUNSEL

to be provided by

XXXXXXX XXXXXXXXX XXXXXXX & XXXXXXX, L.L.P.

Based on form provided by Bank's counsel.
31

EXHIBIT D

FORM OF GUARANTY AGREEMENT
32

EXHIBIT E

DESCRIPTION OF REQUIRED COLLATERAL

1. Summit Highland (Raleigh): See Exhibit E-1 attached.

2. Summit Creek (Charlotte): See Exhibit E-2 attached.

3. Summit Hill (Durham): See Exhibit E-3 attached.

4. Summit Aventura (Florida) - See Exhibit E-4 attached.
33

EXHIBIT F

FORM OF ESCROW AGREEMENT

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Table of Contents

LOAN AGREEMENT DATED AS OF JULY 31, 1996 BETWEEN

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