Exhibit 10(a) MASTER LOAN AGREEMENT dated as of August 1, 1997

Exhibit 10(a)

MASTER LOAN AGREEMENT

dated as of August 1, 1997

by and among

INTERSTATE GENERAL COMPANY, L.P.

and

AMERICAN COMMUNITY PROPERTIES TRUST,

ST. ▇▇▇▇▇▇▇ COMMUNITY, LLC

and

BANC ONE CAPITAL PARTNERS IV, LTD

TABLE OF CONTENTS

PAGE

SECTION 1. Definitions 1

1.1. ACPT 1
1.2. Additional Interest Rate 1
1.3. Additional Interest 1
1.4. Architect 1
1.5. Bank One 1
1.6. Bank One Prime Rate 1
1.7. Base Interest 1
1.8. Base Rate 1
1.9. Basis Point 2
1.10. Borrower 2
1.11. Business Day 2
1.12. Closing Date 2
1.13. Collateral 2
1.14. Construction Contracts 2
1.15. Contracts 2
1.16. Contract Assignment 2
1.17. Deed of Trust 2
1.18. Deed of Trust Property 2
1.19. Default 2
1.20. Default Period 2
1.21. Default Rate 2
1.22. Deposit Pledge Agreement 2
1.23. Development Budget 3
1.24. Development Completion Date 3
1.25. Development Escrow Account 3
1.26. Development Period 3
1.27. Enforcement Costs 3
1.28. Event of Default 3
1.29. Fairway Village I Loan Advances 3
1.30. Fairway Village Property 3
1.31. Fairway Village I Project 3
1.32. Financing Documents 3
1.33. Force Majeure 3
1.34. GAAP 3
1.35. General Contractor 3
1.36. Governmental Authority 4
1.37. Guarantee 4
1.38. Guarantor and Guarantors 4
1.39. IGC 4
1.40. IGP 4
1.41. Improvements 4
1.42. Indebtedness 4
1.43. Interest 5
1.44. Interest Period 5
1.45. Key Principals 5
1.46. Key Principals' Guaranty 5
1.47. Land Records 5
1.48. Late Charge 5
1.49. Lien 5
1.50. Loan 6

1.51. Loan Advance and Loan Advances 6
1.52. Lot or Lots 6
1.53. Mirror Note 6
1.54. NationsBank 6
1.55. Note 6
1.56. Obligations 6
1.57. Option Agreement 6
1.58. Pending Litigation 6
1.59. Person or person 6
1.60. Plans and Specifications 6
1.61. Plan of Remediation 6
1.62. Principal Amount 7
1.63. Principal Payment Date 7
1.64. Project 7
1.66. Property Owner 7
1.67. Property Owner Guaranty 7
1.68. Release Payment 7
1.69. Release Payment Proceeds Account 7
1.70. Remediation Costs 7
1.71. Remediation Reserve Account 7
1.72. Requisitions 7
1.73. Scheduled Maturity Date 7
1.74. Structuring Fee 7
1.75. Subcontracts 7
1.76. Subsequent Advance 7
1.77. Title Company 7
1.78. Title Insurance Policy 8
1.79. Trustee 8
1.80. ▇▇▇▇▇▇ Guaranty 8

SECTION 2. The Loan 8

2.1. The Loan Facility 8
2.2. Payoff of NationsBank, Reimbursement and Accounts
Payable 9
2.2.1. Payoff of NationsBank 9
2.2.2. Reimbursement to IGP 9
2.2.3. Payment of Accounts Payable 9
2.3. Establishment of Remediation Reserves and Payment
of Fine 10
2.3.1. Pending Litigation 10
2.3.2. Remediation Reserves 10
2.3.3. Payment of Fine 11
2.4. Infrastructure Development 11
2.4.1. Development of Fairway Village I
Project 11
2.4.2. Loan Proceeds for Fairway Village I 11
2.4.3. Fairway Village I Loan Advances 12
2.4.4. Development and Completion of the
Fairway Village I Project 14
2.4.5. Additional Funds 14
2.4.6. Assignments 14
2.4.7. Assignment of Construction Contracts,
Plans and Specifications 14
2.4.8. No Warranty by the Lender 15
2.4.9. Establishment of Development Escrow
Account 15
2.4.9.1 Development Escrow Account 15

2.4.9.2 Use of Funds 15
2.4.9.3 Disbursements 15
2.4.9.4 Costs 16
2.5. Repayment of the Loan 16
2.5.1. Principal Payment of the Loan 16
2.5.2. Loan Interest 16
2.5.3. Loan Default Rate 16
2.5.4. Loan Interest Payments 17
2.5.5. The Note and the Mirror Note 17
2.5.6. Undisbursed Loan Proceeds 17
2.5.7. Loan Payments 17
2.5.8. Interest Calculation 18
2.5.9. Late Charges 18
2.5.10. Prepayment of Loan 18
2.6. Guaranties, Collateral, etc. 18
2.6.1. Guaranties 18
2.6.1.1. Property Owner Guaranty 18
2.6.1.2. Key Principal Guaranty 19
2.6.1.3. ▇▇▇▇▇▇ Guaranty 19

SECTION 3. Conditions Precedent 21

3.1. Conditions Precedent to the Initial Loan Advance 21
3.1.1. Organizational Documents 21
3.1.1.1. IGC 21
3.1.1.2. ACPT 21
3.1.1.3. Property Owner 21
3.1.2. Financial Statements 22
3.1.3. UCC, Judgment and Lien Searches 22
3.1.4. Architect and Plans and Specifications 22
3.1.5. General Contractor 22
3.1.6. Title Insurance 22
3.1.7. Property and Casualty Insurance 23
3.1.8. Flood Insurance 23
3.1.9. Survey 23
3.1.10. Environmental Audit 23
3.1.11. Appraisal 23
3.1.12. Development Budget, etc. 23
3.1.13. Commencement of Work 23
3.1.14. Leases 24
3.1.15. Opinion of Counsel to the Borrower,
Property Owner and the Guarantors 24
3.1.16. Taxes 24
3.1.17. Other Items 24
3.2. Conditions to the Making of all Fairway Village I
Loan Advances, and Remediation Loan Advances 24
3.2.1. Requisition 24
3.2.2. Time for Completion of Development 24
3.2.3. Waivers of Liens 24
3.2.4. Title Continuation 25
3.2.5. Conformity with Plans and Specifications
or Remediation Plan 25
3.2.6. Site Plan, Public Works Agreements 25
3.2.7. Permits, etc. 25
3.2.8. Utilities 25
3.3. Conditions to Making All Loan Advances 26
3.3.1. Representations and Warranties 26
3.3.2. Legality 26

3.3.3. Order, etc. 26
3.3.4. No Litigation 26
3.3.5. Compliance 26
3.3.6. Default 27

SECTION 4. Representations and Warranties 27

4.1. Authority, etc. 27
4.1.1. IGC 27
4.1.2. ACPT 27
4.1.3. Property Owner 28
4.2. Litigation 28
4.3. Taxes 28
4.4. Title to Property and Collateral 28
4.5. Compliance with Laws, etc. 29
4.5.1. Environmental Laws 29
4.5.2. Hazardous Materials 29
4.6. Material Agreements 29
4.7. Approvals and Consents 29
4.8. Permits,etc. 30
4.9. Construction Contracts 30
4.10. Plans and Specifications 30
4.11. Compliance in Zoning 30
4.12. Utilities 31
4.13. Access; Roads 31
4.14. Violations 31
4.15. Liens 31
4.16. Accuracy of Information 31

SECTION 5. Affirmative Covenants 32

5.1. Payment of Obligations 32
5.2. Financial Statements and Other Reports 32
5.3. Gross Revenues from Sale of Property 32
5.4. Conduct of Business and Maintenance of Existence 22
5.5. Compliance with Laws, etc. 33
5.6. Payment of Liabilities and Taxes 33
5.7. Contractual Obligations 33
5.8. Maintenance of Property 33
5.9. Insurance 33
5.10. Inspection 34
5.11. Development 34
5.12. Payment to General Contractor 34
5.13. Development Progress Report 35
5.14. Inspections; Cooperation 35
5.15. Vouchers and Receipts 35
5.16. Correction of Defects 36
5.17. Notice of Liens 36
5.18. Releases 36
5.19. Compliance with Contracts 36
5.20. Notice 36
5.21. Payment of Release Amount 36
5.22. Resolution of Pending Litigation 37
5.23. Investment Banking Services 37
5.24. Review of Operations 37
5.25. Debt to Worth Ratio 37

SECTION 6. Negative Covenants 37

6.1. Indebtedness 38
6.2. Liens 38
6.3. Loans and Investments 38
6.4. Mergers, Acquisitions, Restructuring, etc. 38
6.5. Sale of Assets and Liquidation 38
6.6. Change of Business 38
6.7. Lease 39
6.8. Prohibited Distributions 39

SECTION 7. Partial Releases 39

7.1. Sale of Lots 39
7.2. Contract Approval 39
7.3. Subdivision Approval 39
7.4. Additional Conditions to Release 39
7.4.1. Release Payment 39
7.4.2. Remaining Property 40
7.4.3. Notice; Frequency 40
7.4.4. Default 40
7.4.5. Release Payment Proceeds 40

SECTION 8. Events of Default 41

8.1. Payment of Obligations 41
8.2. Perform, etc. Other Provisions of This Agreement
and other Financing Documents 41
8.3. Representations and Warranties 42
8.4. Progress of Development 42
8.5. Completion of Development 42
8.6. Default Under Construction Contracts 42
8.7. Mechanic's Lien 42
8.8. Liquidation, Termination, Dissolution, etc. 42
8.9. Bankruptcy 42
8.10. Receiver, etc. 43
8.11. Payment of Any Other Indebtedness 43
8.12. Material Adverse Change 43

SECTION 9. Rights and Remedies 43

9.1. Rights and Remedies 43
9.2. Liens, Setoff 45
9.3. Enforcement Costs 45
9.4. Application of Proceeds 46
9.5. Remedies, etc. Cumulative 46
9.6. No Waiver, etc. 46

SECTION 10. Restructuring of IGC 47

10.1. Continuation of Lien 47
10.2. Structure of REIT 47
10.3. Opinions of Counsel 47
10.4. Confirmation of Security Interests 47
10.5. Release of IGC from Covenants 47

SECTION 11. Miscellaneous 47

11.1. Course of Dealing; Amendment 47
11.2. Waiver of Default 48
11.3. Notices 48
11.4. Right to Perform 49
11.5. Costs and Expenses 49
11.6. Consent to Jurisdiction 49
11.7. Waiver of Jury Trial 50
11.8. Survival 50
11.9. Binding Effect 50
11.10. Applicable Law and Time of Essence 50
11.11. Duplicate Originals and Counterparts 50
11.12. Headings 50
11.13. Severability 50
11.14. Conflicts 51

MASTER LOAN AGREEMENT

THIS MASTER LOAN AGREEMENT (this "Agreement") is made this 1st
day of August, 1997, by and among INTERSTATE GENERAL COMPANY, L.P., a
Delaware limited partnership ("IGC") and AMERICAN COMMUNITY PROPERTIES
TRUST, a Maryland real estate investment trust ("ACPT") (IGC and ACPT are
collectively herein, the "Borrower"), ST. ▇▇▇▇▇▇▇ COMMUNITY, LLC, a
Delaware limited liability company ("Property Owner") and BANC ONE CAPITAL
PARTNERS IV, LTD., an Ohio limited liability company (the "Lender");
Witnesseth:

RECITALS

WHEREAS, subject to and upon the terms, conditions and provisions
of this Agreement, Borrower may obtain a loan from the Lender, and reloan a
portion of the proceeds to Property Owner.

NOW, THEREFORE, the parties hereto agree as follows:

SECTION 1. Definitions. As used herein, the terms defined
throughout this Agreement shall have the respective meanings
specified therein and the following terms shall have the following
meanings:

1.1. "ACPT" means American Community Properties Trust, a
Maryland real estate investment trust.

1.2. "Additional Interest Rate" means the additional rate of
interest as set forth in the Note.

1.3. "Additional Interest" means an additional amount of
interest calculated at the Additional Interest Rate.

1.4. Architect means collectively, those architects engaged
by the Borrower or Property Owner for the development of the Fairway
Village I Project.

1.5. "Bank One" means Bank One, N.A.

1.6. "Bank One Prime Rate" means the Prime Rate of Interest
bearing that designation which is announced and revised from time to time
by Bank One, which may not be the lowest interest rate charged to customers
of Bank One.

1.7. "Base Interest" means an amount of interest
calculated at the Base Rate or Default Rate, as applicable.

1.8. "Base Rate" means the base interest rate under the Note
equal to the Bank One Prime Rate, as in effect from time to time, plus two
hundred and fifty (250) Basis Points.

1.9. "Basis Point" means one one-hundredth (1/100) of one
percent (1%)

1.10. "Borrower" means individually and collectively, IGC and
ACPT.

1.11. "Business Day" means (a) for all purposes other than
those covered by clause (b) below, any day except Saturday, Sunday and any
day which shall be in Columbus, Ohio a legal holiday or a day on which
banking institutions are authorized or required to close.

1.12. "Closing Date" means the date of this Agreement.

1.13. "Collateral" has the meaning set forth in Section
2.6.2 hereof.

1.14. "Construction Contracts" has the meaning set forth in
Section 2.4.1 hereof.

1.15. "Contracts" has the meaning set forth in Section
2.6.2 hereof.

1.16. "Contract Assignment" has the meaning set forth in
Section 2.6.2.

1.17. "Deed of Trust" has the meaning set forth in Section
2.6.2 hereof.

1.18. "Deed of Trust Property" has the meaning set forth in
Section 2.6.2 hereof.

1.19. "Default" means an event or condition which
constitutes, or which after giving of notice or lapse of time, or both,
would constitute, an Event of Default.

1.20. "Default Period" means, with respect to the Loan, (i)
any period of time commencing with the maturity of the Loan (whether by
acceleration or otherwise) and continuing until the unpaid principal amount
of the Loan, together with all interest accrued and unpaid thereon, is paid
in full, and/or (ii) any period of time during which an Event of Default
(as described in Section 8.1) has occurred and is continuing hereunder
irrespective of whether or not the maturity of the Loan has been
accelerated or the payment of the Loan has been demanded.

1.21. "Default Rate" means the Base Rate in effect from time
to time, plus four hundred (400) Basis Points.

1.22. "Deposit Pledge Agreement" means that certain Deposit
Pledge Agreement dated as of the date hereof, by and between Borrower and
Lender.

1.23. "Development Budget" has the meaning set forth in
Section 2.4.2(c) hereof.

1.24. "Development Completion Date" has the meaning set forth
in Section 2.4.2 hereof.

1.25. "Development Escrow Account" has the meaning set forth
in Section 2.4.9 hereof.

1.26. "Development Period" has the meaning set forth in
Section 2.4.1 hereof.

1.27. "Enforcement Costs" has the meaning set forth in
Section 9.3 hereof.

1.28. "Event of Default" has the meaning set forth in Section
8 hereof.

1.29. "Fairway Village I Loan Advances" shall have the
meaning set forth in Section 2.4.3.

1.30. "Fairway Village Property" has the meaning set forth in
Section 2.1 hereof.

1.31. "Fairway Village I Project" shall mean the
development of Seventy-Nine (79) individual residential lots within Fairway
Village, the completion of ▇▇▇▇▇▇▇▇▇▇▇ Road through Fairway Village and the
adjacent business park, and the construction of a water sewer station on
the Fairway Village Property.

1.32. "Financing Documents" as used in this Agreement means
collectively and includes this Agreement, the Note, Mirror Note, Property
Owner Guaranty, Key Principals Guaranty, ▇▇▇▇▇▇ Guaranty, the Deed of
Trust, the Assignment Agreement, the Contract Assignment, the Deposit
Pledge Agreement, and any other instrument, document, certificate or
agreement both now and hereafter executed, delivered or furnished by the
Borrower, the Property Owner, the Guarantors, or any other person (as
hereinafter defined) evidencing, guaranteeing, securing or in connection
with this Agreement or all or any part of the Obligations.

1.33. "Force Majeure" has the meaning set forth in Section
2.4.4 hereof.

1.34. "GAAP" means generally accepted accounting
principles in the United States of America in effect as of the date of this
Agreement, consistently applied.

1.35. "General Contractor" means collectively, those general
contractors engaged by Borrower and/or Property Owner for the development
of the Fairway Village I Project.

1.36. "Governmental Authority" means any nation or
government, any state or other politiCal subdivision thereof and any entity
or person exercising applicable executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government,
including, without limitation, any department, commission, board,
bureau, agency, administration, official, service or other
instrumentality of the United States of America, of any state, the District
of Columbia, municipality or any other governmental entity.

1.37. "Guarantee" means any obligation, contingent or
otherwise, of any Person guaranteeing or having the economic effect of
guaranteeing any indebtedness, liabilities or obligations of any other
Person in any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such indebtedness, liabilities and obligations or to
purchase (or to advance or supply funds for the purchase of) any security
for the payment of such Indebtedness, (b) to purchase property, securities
or services for the purpose of assuring the owner of such indebtedness,

liabilities and obligations of the payment of such indebtedness,
liabilities and obligations, (c) to maintain working capital, equity
capital or other financial statement condition of the primary obligor or to
make loans or advances to the primary obligor so as to enable the primary
obligor to pay such indebtedness, liabilities and obligations, or (d)
incurred for the purpose of assuring in any other manner the obligee of
such indebtedness, liabilities and obligations or other obligation of the
payment thereof or to protect such obligee against loss in respect there
(provided however, that the position of any Person, as a general partner,
in and of itself, shall not be a "Guarantee" as defined hereunder)

1.38. "Guarantor" and "Guarantors" shall mean Property Owner,
Key Principals, and/or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as the case may be.

1.39. "IGC" means Interstate General Company, L.P., a
Delaware limited partnership.

1.40. "IGP" means Interstate General Properties Limited
Partnership S.E., a Maryland limited partnership, of which IGC is general
partner and holds a 1% general and 99% limited partnership interest and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ is an additional general partner without a percentage
interest.

1.41. "Improvements" has the meaning set forth in Section
2.1 hereof.

1.42. "Indebtedness" means, with respect to any Person, all
liabilities, obligations and indebtedness of such Person of any nature
whatsoever, whether matured or unmatured, direct or contingent, liquidated
or unliquidated, joint or several, including, without limitation (a) such
liabilities, obligations and indebtedness which, in accordance with GAAP,
should be included on the liability side of such Person's balance sheet,

or to which reference should be made by footnotes thereto, (b) all
liabilities, obligations and indebtedness of such Person for borrowed
money, whether or not evidenced by bonds, debentures, notes or similar
instruments, (c) the face amount of all letters of credit issued for the
account of such Person, (d) all indebtedness, liabilities and obligations
secured by any Lien on any property owned or acquired by such Person,
whether or not such Person has assumed or become liable for the payment of
such indebtedness, liabilities and obligations, (e) all Guarantees and
endorsements of such Person, (f) all obligations of such Person under any
conditional sale or other title retention agreement relating to property
purchased by such Person, and (g) all obligations of such Person issued or
assumed for the deferred purchase price of property or services.

1.43. "Interest" means the interest payable hereunder or
under the Note at the Base Rate or Default Rate, as applicable, and
Additional Interest.

1.44. "Interest Period" means, with respect to the principal
amount of the Loan which is to bear interest at the Base Rate, initially,
the period commencing on the date hereof and ending on the last calendar
day of this month, and thereafter, each period commencing on the first
day of the calendar month immediately following the previous Interest
Period and ending on the last calendar day of such month, but in no event
after the Scheduled Maturity Date.

1.45. "Key Principals" means collectively, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇▇ ▇. ▇▇▇▇▇.

1.46. "Key Principals' Guaranty" has the meaning set forth in
Section 2.6.1.2.

1.47. "Land Records" means the Land Records of ▇▇▇▇▇▇▇
County, Maryland.

1.48. "Late Charge" has the meaning set forth in Section
2.5.9 hereof.

1.49. "Lien" means any interest in property securing any
obligation owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law, statute or
contract, and including but not limited to the lien or security interest
arising from a deed of trust, mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes. For the purposes of this Agreement, the
Borrower shall be deemed to be the owner of any property which it ha~
acquired or holds subject to a conditional sale agreement, financing
lease, or other arrangement pursuant to which title to the property has
been retained by or vested in some other Person for security purposes.

1.50. "Loan" has the meaning set forth in Section 2.1.

1.51. "Loan Advance" and "Loan Advances" have the
meanings set forth in Section 2.1 hereof.

1.52. "Lot" or "Lots" have the meanings set forth in SeCtion
7.1 hereof.

1.53. "Mirror Note" has the meaning set forth in Section
2.5.5.

1.54. "NationsBank" means NationsBank, N.A.

1.55. "Note" has the meaning set forth in Section 2.5.5.

1.56. "Obligations" means collectively and includes (i) all
present and future liabilities and obligations of any kind and nature
whatsoever of the Borrower to the Lender both now existing and hereafter
arising under, as a result of, on account of, or in connection with, the
Loan, this Agreement and any and all amendments thereto, restatements
thereof, supplements thereto and modifications thereof made at any time and
from time to time hereafter, (ii) the Note and any extensions, renewals
or replacements thereof, amendments thereto and restatements or
modifications thereof made at any time or from time to time hereafter,
(iii) the Mirror Note, (iv) the Property Owner Guaranty, (v) the Deed of
Trust, and/or (vi) the other Financing Documents, including, without
limitation, future advances, principal, interest, indemnities, fees,
late charges, enforcement costs and other costs and expenses, whether
direct, contingent, joint, several, joint and several, matured or
unmatured.

1.57. "Option Agreement" has the meaning set forth in Section
2.6.3.

1.58. "Pending Litigation" has the meaning set forth in
Section 2.3.1.

1.59. "Person" or "person" means and includes an
individual, a company, a corporation, a partnership, a joint venture, a
trust, an unincorporated association, a Governmental Authority or any other
entity.

1.60. "Plans and Specifications" has the meanings set forth
in Section 2.4.1 hereof.

1.61. "Plan of Remediation" has the meaning set forth in
Section 2.3.2.

1.62. "Principal Amount" has the meaning set forth in Section
2.1 hereof.

1.63. "Principal Payment Date" has the meaning set forth in
Section 2.5.1 hereof.

1.64. "Project" has the meaning set forth in Section 2.1
hereof.

1.65. "Property" means collectiVely, the Fairway Village
Property and all other land and property of the Property Owner set forth on
Exhibit 1.65, and which serves as collateral securing the Property Owner
Guaranty pursuant to the Deed of Trust.

1.66. "Property Owner" means St. ▇▇▇▇▇▇▇ Community, LLC, a
Delaware limited liability company.

1.67. "Property Owner Guaranty" has the meaning set forth in
Section 2.6.1 hereof.

1.68. "Release Payment" has the meaning set forth in Section
7.4.1 hereof.

1.69. "Release Payment Proceeds Account" has the meaning set
forth in Section 7.4.5 hereof.

1.70. "Remediation Costs" has the meaning set' forth in
Section 2.3.2 hereof.

1.71. "Remediation Reserve Account" has the meaning set forth
in Section 2.3.2 hereof.

1.72. "Requisitions" has the meaning set forth in
Section 2.4.3.

1.73. "Scheduled Maturity Date" has the meaning set forth in
Section 2.5.1 hereof.

1.74. "Structuring Fee", has the meaning set forth in Section
2.1 hereof.

1.75. "Subcontracts" means any and all contracts of
subcontractors or suppliers of labor or material entered into by the
Borrower or Property Owner in connection with the development of the
Fairway Village I Project in amounts equal to or greater than $50,000.00.

1.76. "Subsequent Advance" has the meaning set forth in
Section 2.5.6.

1.77 "Title Company" has the meaning set forth in Section 3.1.8
hereof.

1.78. "Title Insurance Policy" has the meaning set forth in
Section 3.1.6 hereof.

1.79. "Trustee(s)" shall mean the trustees named under the
Deed of Trust.

1.80. "▇▇▇▇▇▇ Guaranty" has the meaning set forth in Section
2.6.1.3 hereof.

All accounting terms which are not expressly defined herein,
shall have the meanings given them in accordance with GAAP. Unless
otherwise defined herein, all terms used herein which are defined by the
Maryland Uniform Commercial Code shall have the same meanings as assigned
to them by the Maryland Uniform Commercial Code unless and to the extent
varied by this Agreement. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement~as a whole and not to any particular provision of this Agreement,
and section, subsection, schedule and exhibit references are references to
sections or subsections of, or schedules or exhibits to, as the case may
be, this Agreement unless otherwise specified. As used herein, the
singular number shall include the plural, the plural shall include the
singular and the use of the masculine, feminine or neuter gender shall
include all genders, as the context may require

SECTION 2. The Loan.

2.1. The Loan Facility. Subject to and upon the terms,
conditions and provisions of this Agreement and relying upon the
representations and warranties set forth herein, the Lender agrees to make
a loan to the Borrower in the aggregate principal amount of up to Twenty
Million Dollars ($20,000,000), as determined by Lender in its sole
discretion, (the "Loan"), and the Borrower agrees to borrow the proceeds
of the Loan as and when such proceeds are to be advanced, and to use the
proceeds of the Loan for the purposes set forth herein. The proceeds of
the Loan will be advanced or disbursed from time to time by the Lender to
or for the account of the Borrower subject to and in accordance with the
provisions of this Agreement (each such advance or disbursement is herein
called a "Loan Advance" and collectively the "Loan Advances") and the
Borrower shall use (i) $11,000,000 of the Loan proceeds advanced to payoff
and satisfy certain existing indebtedness of Borrower to NationsBank, to
reimburse certain affiliates of Borrower for amounts paid on behalf of
Borrower, to recover certain remediation expenses and to pay certain
outstanding accounts payable and closing costs, pursuant to the terms and
conditions of Section 2.2 hereof, and to satisfy certain alleged
liabilities of the Borrower and certain affiliates to the United States
Government resulting from the Pending Litigation pursuant to Section 2.3
hereof (ii) $5,000,000 of the Loan proceeds advanced to be used to satisfy

or to establish certain reserves necessary for the satisfaction of certain
potential liabilities of the Borrower arising or resulting from the Pending
Litigation, also pursuant to the terms and conditions of Section 2.3
hereof; and (iii) the remainder of the Loan proceeds advanced to provide
financing to the Property Owner's for certain infrastructure development
relating to or in connection with the Borrower's and/or Property Owner

development of residential and commercial building lots (the
"Improvements") for that certain real property located in ▇▇▇▇▇▇▇ County,
Maryland known as Fairway Village (the "Fairway Village Property"),
pursuant to the terms and conditions of Section 2.4 hereof. The
development of the Improvements together with the Fairway Village Property,
including the development of four hundred (400) residential building
lots, shall herein be collectively referred to as the
"Project". The term "Principal Amount" as used in this Agreement means, as
of any date, the unpaid principal amount of the Loan advanced pursuant to

the provisions of this Agreement and outstanding on such date. In
consideration of Lender's agreement to make the Loan to Borrower, on the
Closing Date and prior to the initial Loan Advance, Borrower shall pay
to Lender a loan structuring fee equal to Two Hundred (200) Basis Points
of the Loan amount (the "Structuring Fee") which amount may be paid out of
the initial Loan Advance.

2.2. Payoff of NationsBank, Reimbursement and Accounts
Payable

2.2.1. Payoff of NationsBank. On the Closing Date, Lender
shall make a Loan Advance to Borrower in an amount equal to approximately
$6,800,000 (the "NationsBank Payoff Loan Advance") to be used by Borrower
or reloaned to Property Owner to satisfy on its behalf and on behalf of
Property Owner that certain indebtedness of the Borrower and Property Owner
to NationsBank, known as the Westbury Loan, the Industrial Land Loan and
the St. ▇▇▇▇▇▇▇ Loan (collectively, the "NationsBank Indebtedness").
Contemporaneously with the funding of the NationsBank Payoff Loan Advance,
Borrower and/or Property Owner shall provide Lender with documentation
acceptable to Lender in Lender's sole discretion, evidencing (i) the full
and complete satisfaction of the NationsBank Indebtedness, (ii) the full
release and discharge of any lien held by NationsBank against any of the
Collateral, which secures the NationsBank Indebtedness, and (iii) the
full release and discharge of any security interest granted by Borrower,
Property Owner arid/or Guarantor to NationsBank or any of NationsBank's
predecessors in interest with respect to the collateral.

2.2.2. Reimbursement to IGP. On the Closing Date, Lender
shall make a Loan Advance to Borrower in an amount up to approximately
$1,700,000 (the "IGP Loan Advance") to be used by Borrower to reimburse IGP
for amounts paid by IGP for the benefit of Borrower to NationsBank.

2.2.3. Payment of Accounts Payable. On the Closing Date,
Lender shall make a Loan Advance to Borrower in an amount up to $2,500,000
(the "Accounts Payable Loan Advance") to be used by Borrower to pay any and
all costs and expenses of Borrower incurred in connection with the Loan
(the "Loan Costs"), and to pay those certain accounts payable identified on
Exhibit 2.2.3.

2.3. Establishment of Remediation Reserves and Payment of
Pine.

2.3.1. Pending Litigation. In September, 1995, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, IGC and St. ▇▇▇▇▇▇▇ Associates, L.P., a Delaware limited
partnership ("SCA"), were indicted by the United States District Court for
the District of Maryland for four (4) felony and four (4) misdemeanor
violations of the Clean Water Act, 33 U.S.C. Section 1311(a) (the "Criminal
Action"). On February 29, 1996, a jury convicted each of the
aforementioned defendants of the four felony charges. IGC was fined Two
Million Dollars ($2,000,000) and SCA was fined One Million Dollars
($1,000,000.00) (each fine is herein collectively, the "Fine"), and each
IGC and SCA was placed on probation for five (5) years, and ordered to
implement a wetlands restoration mitigation plan proposed by the
United States Government. Each of the defendants has appealed the
convictions and the accompanying punishments to the United States Court of
Appeals for the Fourth Circuit. Such appeals are now pending as Appeal
Nos. 96-4498, 96-4503 and 96-4537, respectively. In addition to the
Criminal Action, the United States Government has initiated civil
proceedings before the United States District Court for the District of
Maryland against ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, IGC and SCA, seeking injunctive relief
and civil penalties arising out of the alleged discharge of dredge or fill
material into approximately seventy acres of (70) wetlands in violation of
the Clean Water Act (the "Civil Action") . The Civil Action has been
stayed pending resolution of the Criminal Action. The Criminal Action
together with the Civil Action is herein collectively, the "Pending
Litigation")

2.3.2. Remediation Reserves. As part of the penalty for
IGC and SCA's felony violation of the Clean Water Act, the United States
District Court for the District of Maryland has ordered IGC and SCA to
restore and mitigate certain of the damaged wetlands. In response to such
order, the Borrower has proposed a plan of restoration and mitigation (the
"Plan of Remediation"), at a cost to the Borrower in an approximate amount
up to Two Million Dollars ($2,000,000.00) (the "Remediation Costs"). The
Borrower and Lender hereby acknowledge and agree that Lender shall reserve
from disbursement of the Loan an amount equal to the Remediation costs (the
"Remediation Reserve Amount"), which reserve shall be made available to
Borrower if and when Borrower is required to implement the Plan of
Remediation. if and when Borrower shall require Lender to make Loan
Advances from the Remediation Reserve (the "Remediation Loan Advances") ,
such Remediation Loan Advances shall be made pursuant to terms and
conditions identical to the terms and conditions set forth in Section 2.4
herein, as if the Remediation Loan Advances were being made by Lender to
Borrower for infrastructure development.

2.3.3. Payment of Fine. On the closing date, Lender
shall make Loan Advance to Borrower in the amount of the Fine to be used by
Borrower to satisfy the Fines.

2.4. Infrastructure Development.

2.4.1. Development of Fairway Village I Project. The
Borrower and/or Property Owner has or will furnish to the Lender (a) plans
and specifications, as modified from time to time (the "Plans and
Specifications I') satisfactory to the Lender for the development of each
part of the Fairway Village I Project to be developed with a portion of the
proceeds of the Loan, Prepared by the Architect pursuant to an agreement by
and between the Architect and the Property Owner and/or Borrower, in
Substantially the form previously submitted and approved by the Lender (the
"Architect's Agreement"), (b) the contracts by and between the

General Contractor and the Property Owner and/or Borrower, in Substantially
the form previously submitted and approved by the Lender (the "Construction
Contracts"), providing for the development of the Fairway Village I
Project in accordance with the Plans and Specifications during the period
of time (the "Development Period") commencing as of the date hereof, and
ending before the first day of the thirty-sixth (36th) complete calendar
month from the date hereof (the "Development Completion Date"), and (c)
a capital budget for the period of time during the Development Period,
approved by the Lender, for the development of each part of the Fairway
Village I Project during the Development Period showing, among other
things, a cost breakdown for each category described in the capital budget
and a description in such categories of the utilization of the Loan
proceeds necessary for the completion of the Fairway Village I Project (the
development budget, together with any changes, modifications, amendments,
and supplements, each as expressly approved by the Lender in writing, in
the Lender's sole and reasonable discretion, is herein the
"Development Budget"), and a copy of which is attached hereto as Exhibit
2.4.1.

2.4.2. Loan Proceeds for Fairway Village I. Upon receipt,
the Borrower will hold Fairway Village I Loan Advances made to it hereunder
with respect to the development of the Fairway Village I Project for the
benefit of the Property Owner and the Property Owner will use any amounts
advanced by Borrower hereunder with respect to the development of the
Project, for the purpose of paying the costs of development of the Fairway
Village I Project substantially in accordance with the Plans and
Specifications and the Development Budget. Without the prior written
consent of the Lender, the Borrower and Property Owner shall not expend any
part of the proceeds of the Loan allocated for the Fairway Village I
Project for any purpose except in connection with the uses and purposes
provided for in this Agreement. The Lender is hereby irrevocably authorized
by the Borrower to make Fairway Village I Loan Advances to the Borrower
pursuant to requests or requisitions signed by any one of the persons who
are authorized to do so under the provisions of the authorizations of the
general partner of the Borrower furnished to the Lender under the
provisions of Section 3.1.1 hereof. The Lender assumes no responsibility
or liability for any errors, mistakes or discrepancies in the oral,
written, telephonic or other transmissions of any instructions, orders,
requests or confirmations between the Lender and the Borrower for or in
connection with the Loan or any Fairway Village I Loan Advances, except for
errors, mistakes or discrepancies resulting solely from the Lender's
actions or otherwise resulting from Lender's gross negligence or wilful
misconduct.

2.4.3. Fairway Village I Loan Advances.

(a) The Loan Advances for the Fairway Village I
Project shall be advanced by Lender and used directly by Borrower or
readvanced by Borrower for use by the Property Owner in accordance with the
terms of this Section 2.4.3 (such Loan Advances are herein the "Fairway
Village I Loan Advances") . Requests by Borrower for Fairway Village I
Loan Advances shall be made on approved AlA Forms 702 and 703 or such other
form as agreed to by Lender, and submitted to, and approved by, Lender, and
signed by the authorized representative and certified by the General
Contractor, showing the percentage of completion and setting forth in trade
breakdown form in such detail as may be required by Lender the amounts
expended and/or costs incurred for work done and materials incorporated
into the Fairway Village I Project (the "Requisitions"). The Borrower

shall submit with each Requisition a statement that the work completed to
the date of such Requisition complies in all material,respects and is of
quality consistent with the Plans and Specifications. After each
Requisition is submitted, Lender shall have the right to inspect the
Fairway VilLage I Project and verify the cost of the completed
construction, the percentage of completion, compliance with Plans and
Specifications, quality of work, and the materials or equipment installed.
Any and all inspections made by the Lender or any agents or employees of
the Lender are for the Lender's information and shall not be deemed to have
been made for or on account of the Borrower. The Borrower hereby releases
the Lender from any liability and responsibility whatsoever relating to the
development of the Fairway Village I Project, the Plans and
Specifications, and labor or materials supplied in connection therewith.
If soft costs are a part of any Requisition, the Borrower shall furnish

to the Lender such additional information as the Lender may reasonably
require to assure that amounts requisitioned for soft costs are to be used
for reimbursement for such costs previously paid by the Property Owner
and/or the Borrower or to pay such costs incurred by the Property Owner
and/or the Borrower which are due and payable. The Lender will have a
period of five (5) Business Days to fund each Requisition approved by
the Lender, but in no event shall Lender be obligated to make Fairway
Village I Loan Advances more frequently than once per calendar month.

(b) If and to the extent the Borrower and/or Property
Owner retains any portion of any advance to the General Contractor, the
Fairway Village I Loan Advances for development costs shall be subject to
the identical funding and retainage requirements (the "Retainage") .
The Retainage shall only be released to Borrower upon satisfaction of all
conditions precedent to the Lender' s obligation to make the final Fairway
Village I Loan Advance, as provided under Section 3.2 hereof.

(c) Notwithstanding the other provisions of this
Agreement, if an Event of Default under this Agreement has occurred and is
continuing, the Lender, may, at its sole option, and without liability to
the Borrower and/or Property Owner, make any Fairway Village I Loan
Advance directly to the General Contractor or to any persons furnishing
labor, services, or materials used or to be used on or in the development
of the Fairway Village I Project (including authorized extras) or to any
combination of them, and may pay any loan fees, interest, taxes,
appraisals, inspection fees, recording charges, legal fees and any other
outstanding amounts, relating to the Project and the full cost of their
completion. Any such Fairway Village I Loan Advance or payment shall be
deemed to have been made to the Borrower or for its account. No further
direction or authorization from the Borrower and/or Property Owner shall be
necessary to warrant such direct Fairway Village I Loan Advances and all
such Fairway Village I Loan Advances shall satisfy pro tanto the
obligations of the Lender hereunder and shall be guaranteed by the Owner's
Guaranty, which Owner's Guaranty shall be secured by the Deed of Trust, and
secured by the other Financing Documents, as fully as if made to the
Borrower, regardless of the disposition thereof by the party or parties to
whom such Fairway Village I Loan Advance is made. The Lender shall in no
event be responsible or liable to any person other than the Borrower for
the disbursement of or the failure to disburse the Fairway Village I Loan
Advances, and no third party, including, without limitation, the
General Contractor, any subcontractor or any supplier of labor, services
or materials, shall have any right or claim against the Lender under this
Agreement or the administration thereof.

(d) The Lender may advance, in its discretion, a
portion of the Loan proceeds allocated for the Fairway Village I Project,
to the Borrower, who will then reloan the proceeds to the Property Owner,
to pay for costs of materials actually incurred by the Property Owner for
materials stored on site at the Fairway Village I Project and which are
required in connection with the development of the Fairway Village I
Project, provided that (i) such materials are in accordance with the Plans
and Specifications, (ii) such materials are securely stored on site and
properly inventoried, (iii) the bills of sale and contracts under which
such materials are being provided shall be in form and substance
satisfactory to the Lender, and (iv) such materials are insured against
casualty, loss and theft in a manner satisfactory to the Lender

2.4.4. Development and Completion of the Fairway Village
I Project. In the event no Fairway Village I Loan Advance is made within
ninety days (90) days of the date hereof, then any obligation of the Lender
to make Fairway Village I Loan Advances shall terminate, unless extended
by the Lender in its sole discretion. The Borrower and Property Owner
agree to complete the Fairway Village I Project in accordance with the
Plans and Specifications, subject to any requirements of
Governmental Authorities on or before the Development Completion Date, time
being of the essence, subject to events occasioned by strikes, lock-outs,
war or civil disturbance, natural disaster, acts of God or illegal acts of
third parties beyond the control of Borrower and/or Property Owner ("Force
Majeure") . The Lender shall have no obligation to make Fairway Village I
Loan Advances after the expiration of the Development Period.

2.4.5. Additional Funds. If at any time the unpaid costs
to be incurred as determined from the Development Budget exceed the
undisbursed Loan proceeds allocated for the Fairway Village I Project, as
determined by the Lender in i~s sole but reasonable discretion, the
Borrower and/or Property Owner shall provide from sources other than the
Loan, funds necessary to pay the additional costs to complete the
construction of the Fairway Village I Project in accordance with the Plans
and Specifications.

2.4.6. Assignments. Without the prior written consent
of the Lender, the Borrower and/or Property Owner shall not transfer,
assign, pledge or hypothecate any right or interest in any payment or
Fairway Village I Loan Advance made or to be made pursuant to this
Agreement, any of the other benefits of this Agreement, or any of benefits
under the other Financing Documents. Any assignment made or attempted by
the Borrower and/or Property Owner without the prior written consent of the
Lender shall be void and of no effect. No consent by the Lender to an
assignment by the Borrower and/or Property Owner shall release the Borrower
and/or Property Owner as the party primarily obligated and liable under the
provisions of this Agreement unless the Borrower and/or Property Owner
shall be released specifically by the Lender in writing. No consent by the
Lender to an assignment shall be deemed to be a waiver of the requirement
of prior written consent by the Lender with respect to each and every
further assignment and as a condition precedent to the effectiveness of
such assignment.

2.4.7 Assignment of Construction Contracts Plans and
Specifications. Contemporaneously with the closing of the Loan, Property
Owner shall assign to the Lender, as security for the Obligations, all of
Property Owner's right, title and interest in and to (a) the Construction
Contracts and Subcontracts, (b) the Plans and Specifications, and (c) any

other contract entered into by Borrower or Property Owner in connection
with the development of the Fairway Village I Project.

2.4.8. No Warranty by the Lender. The Lender makes no
warranty, either express or implied, of the actual or designed capacity of
the Fairway Village I Project or the suitability of the Fairway Village I
Project for the purposes intended by the Property Owner or that the
proceeds of the Loan allocated to the Fairway Village I Project will
ultimately be sufficient to pay in full all costs of the development of the
Fairway Village I Project in accordance with the Plans and Specifications
or otherwise.

2.4.9. Establishment of Development Escrow Account.

2.4.9.1 Development Escrow Account. Contemporaneously
herewith, the Borrower shall establish with Lender a Development Escrow
Account (the "Development Escrow Account") . The Borrower shall deposit
in the Development Escrow Account, the aggregate sum of One Million Dollars
($1,000,000.00) in equal semi-annual payments beginning on or before
February 1, 1998, and August 1, 1998, in the amounts of Five Hundred
Thousand Dollars ($500,000.00). Funds deposited in the Development Escrow
Account shall earn interest at the rate in effect from time to time for a
Bank One business high balance savings account. The Lender shall retain
all payments made into the Development Escrow Account free of any trust
except to the extent, if any, that the laws of the State of Ohio shall
require otherwise. The Borrower hereby creates and grants to the Lender, a
security interest in and to any and all funds held in the Development
Escrow Account.

2.4.9.2 Use of Funds. The amounts held in the
Development Escrow Account shall be used by the Borrower, together with the
Fairway Village I Loan Advances, to pay the cost of development of the
Fairway Village I Project. The Lender shall, upon written request from
Borrower and upon satisfaction of the requirements set forth in this
Section 2.4.9, release to Borrower amounts from the Development Escrow
Account necessary to reimburse Borrower for costs of development of the
Fairway Village I Project reflected in the Development Budget or otherwise
approved by Lender. Tn no event shall Lender be obligated to release
escrow funds if an Event of Default exists hereunder or under any of the
Financing Documents and Lender shall be permitted, and Borrower hereby
consents, to offset any remaining escrow funds in the Development Escrow
Account against the Indebtedness of Borrower to Lender.

2.4.9.3 Disbursements. At any time following the
first calendar anniversary of the date hereof, Borrower may request
disbursements from the Development Escrow Account. The Borrower shall make
requests for disbursements from the Development Escrow Account and
Borrower shall disburse funds from the Development Escrow Account,
pursuant to terms and conditions identical to the terms and conditions set
forth in Section 2.4.3 hereof, as if such requests for disbursements were
Requisitions.

2.4.9.4 Costs; Release of Funds. All reasonable

costs and expenses incurred by Lender (excluding interest payable on
the deposited funds) in connection with collecting, holding, administering
and disbursing funds from the Development Escrow Account shall be paid by
Borrower immediately upon requests therefor. Upon payment in full of the

entire outstanding Principal Amount and any other sums secured by the
Financing Documents, the Lender shall release to the Borrower the remaining
amounts in the Development Escrow Account, if any.

2.5. Repayment of the Loan.

2.5.1. Principal Payment of the Loan. The Borrower shall
pay the principal amount of the Loan to the Lender over a period of seven
(7) years in consecutive semi-annual installments of principal, the first
such installment being due on the first Business Day of the seventh (7th)
complete calendar month following the date hereof and subsequent
installments being due on the first Business Day of every sixth (6th) month
thereafter (each such date, a "Principal Payment Date") . The first two (2)
installments of principal shall be in amounts equal to One Million
Dollars ($1,000,000) each. Beginning with the third installment and
continuing for each installment thereafter, each installment of principal
shall be in an amount equal to One Million Five Hundred Thousand Dollars
($1,500,000). Unless sooner paid, and subject to acceleration, the unpaid
Principal Amount of the Loan, together with all accrued and unpaid interest
thereon, shall be due and payable in full by the Borrower to the Lender on
July 31, 2004, without notice by or demand of the Lender (the "Scheduled
Maturity Date")

2.5.2. Loan Interest. Except for all times during a
Default Period and subject to the other applicable provisions of this
Agreement, Borrower shall pay to Lender interest on the unpaid Principal
Amount of the Loan from the date hereof until the maturity of the Loan
(whether by acceleration or otherwise) at the Base Rate. Borrower shall
also pay to Lender Additional Interest on the unpaid Principal Amount of
the Loan at the Additional Interest ▇▇▇▇, as more fully set forth in the
Note.

2.5.3. Loan Default Rate. At all times during a Default
Period, the Borrower shall pay to the Lender: (i) Base Interest on any
unpaid Principal Amount (before and after judgment) at a per annum rate of
interest equal to the Default ▇▇▇▇ in effect from time to time, (ii)
Additional Interest, as such Additional Interest becomes due and payable
under the Note, at the Additional Interest Rate, and (iii) interest on any
accrued but unpaid Base Interest or Additional Interest at a per annum rate
of interest equal to the Default Rate in effect from time to time.

2.5.4. Loan Interest Payments. Except at all times during
a Default Period, Base Interest accrued on the unpaid Principal Amount of
the Loan shall be paid by the Borrower to the Lender on the first Business
Day of each Interest Period, and Additional Interest shall be paid on or
before each calendar anniversary of the date of the Note. At all times
during any Default Period, the Borrower shall on demand from time to time
by the Lender pay to the Lender all accrued Interest on the unpaid
Principal Amount of the Loan.

2.5.5. The Note and the Mirror Note. The
obligation of the Borrower to pay the Loan with interest shall be evidenced
by a promissory note (which promissory note, as the same may from time to
time be extended, replaced, amended, restated, or otherwise modified, is
herein called the "Note") dated the date hereof in the Principal Amount of
the Loan and executed and delivered by the Borrower to the Lender
simultaneously herewith. The obligation of the Property Owner to repay any
amounts loaned by the Borrower with interest shall be evidenced by a

promissory note (which promissory note, as the same may from time to time
be extended, replaced, amended, restated, or otherwise modified, is herein
called the "Mirror Note") dated the date hereof and executed and delivered
by the Property Owner to the Borrower simultaneously herewith and assigned
to Lender, which Mirror Note shall contain substantially the same terms and
conditions as the Note.

2.5.6. Undisbursed Loan Proceeds. Upon (i) a final
resolution of the Pending Litigation and (ii) upon completion of the
Fairway Village I Project in accordance with the provisions of this
Agreement to the satisfaction of the Lender, and provided no Event of
Default exists and is continuing, if the full Principal Amount of the Loan
has not been advanced pursuant hereto, the Borrower shall have the right
to request a subsequent advance of any such amount (a "Subsequent Advance")
. If and to the extent, Lender determines, in its sole discretion, not to
disburse any Subsequent Advance, or if Borrower does not request any
Subsequent Advance, then the Borrower and the Lender will amend the Note
and this Agreement by an agreement in form and content satisfactory to the
Lender so that the Principal Amount of the Note is reduced to an amount
equal to the amount of the Principal Amount advanced pursuant hereto.

2.5.7. Loan Payments. Whenever any payment to be made by
the Borrower under the provisions of this Agreement, the Note, the Property
Owner Guaranty, or any of the other Financing Documents is due on a day
which is not a Business Day. the due date thereof shall be extended to the
next succeeding Business Day.

2.5.8. Interest Calculation. All interest and fees
payable under this Agreement or the Note shall be computed on the basis of
actual number of days elapsed over a year of 360 days.

2.5.9. Late Charges. So long as the Obligations have not
matured or been accelerated, (i) if the Borrower fails to make any payment
of Interest when due pursuant to the provisions of this Agreement or the
Note within five (5) days of the date due and payable, the Borrower shall
pay to Lender a late charge equal to five percent (5%) of such overdue
amount (the "Late Charge"); and (ii) if the Borrower fails to make any
payment of the Principal Amount when due pursuant to the provisions of this
Agreement or the Note within five (5) days following the receipt of
notice of nonpayment from Lender to Borrower, the Borrower shall pay to
Lender an additional late charge (the "Additional Late Charge") equal to
Two Hundred Fifty Thousand Dollars ($250,000.00) or in the alternative,
Lender may exercise its right under the Option Agreement to purchase an
additional Two Hundred Fifty Thousand (250,000) Class A Units or shares of
stock of either Borrower or any successor company. Neither of such five
(5) day periods shall be construed in any way to extend the due date of any
such payment. Late charges are imposed for the purpose of defraying the
Lender's expenses incident to the handling of the delinquent payments, and
are in addition to, and not in lieu of, the exercise by the Lender of any
rights and remedies hereunder or under applicable laws and any fees and
expenses of any agents or attorneys which the Lender may employ upon an
Event of Default.

2.5.10. Prepayment of Loan. Except for mandatory release
payments due upon the sale of any of the Property as set forth in Section 7
hereof or repayment from the proceeds of any securities offering with
respect to which Lender received an opportunity to participate pursuant to

Section 5.23 hereof (whether or not Lender actually provides Borrower
investment banking services), the Borrower shall be prohibited from
prepaying the Loan in full or in part at any time during the first full
calendar year following the date hereof. At any time following the first
calendar anniversary of this Agreement, the Borrower shall have the right
to prepay the unpaid Principal Amount in whole at any time without premium
or penalty, provided that the Borrower gives the Lender fifteen (15) days
prior written notice. The Lender shall apply any prepayment first to any
accrued and unpaid interest and then to the payment of unpaid Principal
Amounts in their inverse order of maturity.

2.6. Guaranties, Collateral. etc.

2.6.1. Guaranties.

2.6.1.1. Property Owner Guaranty. The payment of the
obligations and the performance of this Agreement, the Note, and the other

Financing Documents by the Borrower shall be guaranteed by Property Owner
pursuant to that certain Property Owner Guaranty Agreement, dated as of
the date hereof, from Property Owner to Lender (which Property Owner
Guaranty Agreement, as the same may from time to time be amended, extended,
restated, supplemented or otherwise modified, is herein called the
"Property Owner Guaranty".

2.6.1.2. Key Principal Guaranty. Further, any
misapplication of the Loan Proceeds, any act of fraud, any
intentional breach of any representation or warranty of the Borrower
contained herein or in any of the other Financing Documents or any
unintentional breach of any representation or warranty of the Borrower
contained herein or in any of the other Financing Documents that results in
any liability of Borrower in an aggregate amount in excess of $250,000.00,
the Borrower's failure to comply with the representations and
warranties regarding Hazardous Materials and Environmental Laws, and any
acts of waste committed by the Borrower which constitute the tort of waste
under Maryland common law, shall be guaranteed by certain of the
Guarantors pursuant to that certain Key Principals Guaranty
Agreement, dated as of the date hereof from such Guarantors to Lender
(which Key Principals Guaranty as the same may from time to time be
amended, restated, supplemented or otherwise modified, is herein called the
"Key Principals Guaranty")

2.6.1.3. ▇▇▇▇▇▇ Guaranty. To the extent that the
Pending Litigation results in civil or criminal fines and/or penalties in
excess of the Fine, or if the Remediation Costs exceed the Remediation
Reserve Amount, such additional obligations of the Borrower shall be
personally guaranteed by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ pursuant to that certain ▇▇▇▇▇▇
Guaranty Agreement, dated as of the date hereof from ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ to
Lender (which ▇▇▇▇▇▇ Guaranty, as the same may from time to time be
amended, restated, supplemented or otherwise modified, as herein called
the "▇▇▇▇▇▇ Guaranty".)

2.6.2. Collateral. The payment of the Obligations and
the performance of this Agreement, the Note, and the other Financing
Documents are secured or supported by the provisions of, and the property
described in, (a) a certain Indemnity Deed of Trust, Security Agreement
and Assignment of Leases and Rents (which Indemnity Deed of Trust,
Security Agreement and Assignment of Leases, as the same may from time to

time be amended, extended, restated, supplemented or otherwise modified, is
herein called the "Deed of Trust") dated the date hereof from the Property
Owner to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Trustees for the benefit
of the Lender and, among other things, securing the Property Owner's
obligations hereunder and under the Property Owner Guaranty with the
rights, property and interests described therein (the
"Deed of Trust Property"), (b) a certain Assignment of Contracts (which
Assignment of Contracts, as the same may from time to time be amended,
restated, supplemented or otherwise modified, is herein called the
"Contract Assignment") dated the date hereof from the Borrower and/or
Property Owner to the Lender and, among other things, securing the
Property Owner's obligations under the Owner's Guaranty with the rights,
property and interests described therein (the "Contracts"), (c) certain
Assignment Agreements (which Assignment Agreements, as the same may from
time to time be amended, restated, supplemented or otherwise modified, is
herein called the "Assignment Agreements") whereby the Borrower has
assigned to Lender certain of Borrower's economic and beneficial interests
in and from, those certain partnerships identified on Exhibit 2.6.2
hereto (the "Partnership Interests") and (d) a certain Deposit Pledge
Agreement (which Deposit Pledge Agreement, as the same may from time
to time be amended, restated, supplemented, or otherwise modified, is
herein the "Deposit Pledge Agreement") dated the date hereof from the
Borrower to Lender, pledging to Lender certain rights of Borrower in the
Release Payment Proceeds Account up to the Remediation Reserve Amount. The
Deed of Trust Property, the Contracts, the Partnership Interests, the
Release Payment Proceeds Account, and any other collateral assigned
hereunder are herein sometimes called collectively the "Collateral".

2.6.3. Option Agreement. As additional
consideration to Lender for making the Loan, Borrower and Lender shall
enter into that certain Option Agreement, dated as of the date hereof,
(which Option Agreement, as the same may from time to time be amended,
restated, supplemented, or otherwise modified, as herein called the "Option
Agreement"), whereby Lender~shall have the following options:

(a) Lender shall have an immediate opt ion to purchase
up to one hundred fifty thousand (150,000) Class A Units of IGC at a price
equal to $3.0016 (the "Strike price");

(b) For each consecutive twelve (12) month period
after the date hereof that any Principal Amount remains outstanding, Lender
shall have an opt ion to purchase from IGC, or any successor entity, an
additional seventy-five thousand (75,000) Class A Units, or after the
Restructuring, seventy-five thousand (75,000) shares of Common Shares of
ACPT or shares of stock at the lesser of (i) the Strike Price or (ii) the
average price of such Borrower s, or any successor company's, Class A Units
or shares of stock during the twenty (20) trading days immediately
preceding the date which the option was granted, as reported on the
American Stock Exchange or any successor exchange on which the Class A
Units or shares of stock are listed. Lender shall be permitted, in its
sole discretion, to exercise the options granted under the Option Agreement
at any time following the granting thereof and such options shall be
subject to customary anti-dilution provisions. Said options shall expire at
the later of (i) five years from the date upon which the options were
granted, or (ii) the date which is four (4) years from the date upon which
the Loan is paid in full.

SECTION 3. Conditions Precedent.

3.1. Conditions Precedent to the Initial Loan Advance. The
Lender shall have no commitment or obligation whatsoever to make the
initial Loan Advance unless and until the following conditions precedent
have been satisfied in a manner acceptable to the Lender prior to the
initial Loan Advance (unless such conditions are waived by the Lender)

3.1.1. Organizational Documents.

3.1.1.1. IGC. Lender shall have received (a) a copy,
certified to Lender as of the date hereof by the General Partner of IGC, of
the Certificate of Limited Partnership, dated as of February 6, 1987, as
amended, and filed with the Delaware Secretary of State (the "IGC
Certificate of Partnership"), (b) a copy, certified to Lender as true and
correct as of the date hereof by the General Partner of IGC, of the
Agreement of Limited Partnership, dated as of February 6, 1987, as amended
(the "IGC and Partnership Agreement"), (c) a Certificate of Good Standing
for IGC issued by the Delaware Secretary of the State, (d) consent of the
General Partner of IGC authorizing execution and delivery of this Agreement
and the other Financing Documents to which IGC is a party and designating
by name the individuals who are authorized to sign this Agreement and such
other Financing Documents for and on behalf of IGC and to make the
borrowings hereunder.

3.1.1.2. ACPT. Lender shall have received (a) a copy,
certified to Lender as of the date hereof by the Trustees of ACPT, of the
Declaration of Trust, dated as of March 13, 1997, and filed with the
Maryland State Department of Assessments and Taxation ("SDAT") (the "ACPT
Declaration of Trust"), (b) a copy, certified to Lender as true and
correct as of the date hereof by the Trustee of ACPT, of the Bylaws of ACPT
(the "ACPT Bylaws"), (c) a Certificate of Good Standing for ACPT issued by
SDAT, and (d) resolutions of the Trustees of ACPT authorizing execution and
delivery of this Agreement and the other Financing Documents to which ACPT
is a party and designating by name the individuals who are authorized to
sign this Agreement and such other Financing Documents for and on behalf of
ACPT and to make the borrowings hereunder.

3.1.1.3. Property Owner. Lender shall have received
(a) a copy, certified to Lender as of the date hereof by the Managing
Member of Property Owner, of the Certificate of Formation of Property
Owner, dated as of July 22, 1997, and filed with the Delaware Secretary of
State, (b) a copy, certified to Lender as true and correct as of the date
hereof by the Managing Member of the Property Owner, of the Operating
Agreement of the Property Owner, dated as of July 22, 1997, and (c) a
Certificate of Good Standing for the Property Owner issued by the Delaware
Secretary of State, and (d) resolutions of the Members of the Property
Owner authorizing the execution and delivery of this Agreement and the
other Financing Documents to which the Property Owner is a party and
designating by name the individuals who are authorized to sign this
Agreement and such other Financing Documents for and on behalf of the
Property Owner and to make the borrowings hereunder.

3.1.2. Financial Statements. Lender shall have received
the most recent quarterly financial statement of the Borrower and any other
financial information requested by Lender from Borrower concerning the
business operations and/or affairs of Borrower and relating to the
Collateral, and Borrower has certified to Lender that there has been no

material adverse change between the date of the aforementioned financial
statements and such other information, and the date of the initial Loan
Advance.

3.1.3. UCC, Judgment and Lien Searches. Lender shall
have received and accepted UCC searches conducted in the State of Maryland,
together with judgment and lien searches against the Borrower and Property
Owner in the State of Maryland and in the United States District Court for
the District of Maryland, and such searches shall not disclose any
encumbrances, judgments or liens which have not been previously disclosed
and accepted by Lender.

3.1.4. Architect and Plans and Specifications. The Lender
shall have (a) approved of the Architect, (b) received and approved of the
Plans and Specifications completed to date, for the Fairway Village I
Project prepared by the Architect, and signed by the Architect and the
Property Owner, and (c) received the Architect's written permission to
use the Plans and Specifications without cost to the Lender.

3.1.5. General Contractor. The Lender shall have (a)
approved of the current General Contractor to be engaged by the Property
Owner to construct the Fairway Village I Project, (b) received and
approved of the current Construction Contract between the Property Owner
and General Contractor for the development of the Fairway Village I Project
in accordance with the Plans and Specifications, (c) received and approved
the form of all current Subcontracts (which are then in place) (d) received
an assignment of the current Construction Contract by the Property Owner
and General Contractor in form and content satisfactory to the Lender, and
(e) received an assignment to the Lender from the General Contractor of
all current Subcontracts.

3.1.6. Title Insurance. The Lender shall have received
in form and content satisfactory to it, a commitment for a 1992 ALTA
standard loan form mortgage title insurance policy, with respect to the
Property, in the amount of not less than $20,000,000, issued by
Commonwealth Land Title Insurance Company (the "Title Company") , insuring
that (a) the Property Owner holds title in fee simple to the Property (the
"Title Insurance Policy"), (b) the Lien of the Deed of Trust is a valid
Lien thereon subject only to such exceptions as have been approved in
writing by the Lender, (c) the Property is free and clear of all other
Liens, claims and encumbrances, other than those approved by the Lender in
its reasonable discretion, and, (d) containing such endorsements as may be
satisfactory to the Lender including, by way of example and not limitation,
an affirmative endorsement insuring the validity and priority of Lender's
lien against the Property granted under the Deed of Trust, with respect to
the Pending Litigation.

3.1.7. Property and Casualty Insurance. The Lender shall
have received from the Property Owner evidence of property and casualty
insurance from a well rated and responsible insurance company insuring the
Property and any improvements thereto, and any equipment thereon belonging
to the Property Owner, in amounts satisfactory to the Lender against loss
or damage resulting from fire and other risks insured against by extended
coverage, together with a standard non-contributing and non-reporting
mortgagee's endorsement in favor of the Lender in form satisfactory to the
Lender, and as more fully set forth in the Deed of Trust.

3.1.8. Flood Insurance. The Lender shall have received
a flood insurance policy in an amount satisfactory to the Lender or the
maximum limit of coverage available, whichever is less, if the Property is
located in a special flood hazard area, or, if the Property is not located
in a special flood hazard area, a signed statement to that effect from the
surveyor identified in Section 3.1.12.

3.1.9. Survey. Lender shall have received surveys of the
Property, in form and content satisfactory to Lender in Lender's sole
discretion.

3.1.10. Environmental Audit. The Lender shall have
received a "Phase I" environmental audit or assessment of the Property from
an environmental engineer acceptable to the 'Lender and in form and content
satisfactory in all respects to the Lender.

3.1.11. Appraisal. The Lender shall have received an
appraisal of the Property from an appraiser engaged by Lender at Borrower's
and/or Property Owner's expense, in form and substance acceptable to
Lender.

3.1.12. Development Budget, etc. The Lender shall have
received (a) the Development Budget for the development of the Fairway
Village I Project in form, content and detail satisfactory to the Lender,
and (b) a list of all current subcontractors and material suppliers.

3.1.13. Commencement of Work. The Lender shall have
received from the Property Owner written evidence in form and substance
reasonably satisfactory to the Lender, to the effect that no construction
work of any kind (other than grading) has commenced upon the Fairway
Village Property and no materials have been placed or stored upon the
Fairway Village Property prior to the recordation of the Deed of Trust
among the Land Records unless the Lender shall have received (a) lien
waivers from General Contractor and the subcontractors who performed such
work, and (b) evidence that such materials are fully and adequately
insured.

3.1.14. Leases. The Lender shall have received from the
Property Owner a list of any and all leases, license agreements,
concessionaire agreements, service agreements, tenancies and other use
and occupancy agreements which cover any and all of the Property Owner's
right, title and interest in any Property.

3.1.15. Opinion of Counsel to the Borrower, Property
Owner and the Guarantors. The Lender shall have received an Opinion of
Counsel to the Borrower and the Property Owner in form and content
satisfactory to the Lender.

3.1.16. Taxes. Lender shall receive from Property Owner
or Title Company, certified copies of any and all real estate tax bills
with respect to the Property from all taxing authorities for the most
recent twelve (12) month period.

3.1.17. Other Items. Lender shall have, received such
other documents, certificates and instruments as Lender as may reasonably
require.

28
3.2. Conditions to the Making of all Fairway Village I Loan
Advances, and Remediation Loan Advances. The Borrower and/or the Property
Owner shall satisfy the following conditions as a condition precedent to
all Fairway Village I Loan Advances, and Remediation Loan Advances.

3.2.1. Requisition. With respect to any Fairway Village
I Loan Advances or Remediation Loan Advances, Borrower and/or the Property
Owner shall have delivered to the Lender a Requisition meeting the
requirements of Section 2.4.3 of this Agreement and acceptable to Lender.

3.2.2. Time for Completion of Development. With respect
to any Fairway Village I Loan Advance there shall be sufficient time in the
reasonable opinion of the Lender to complete the Fairway Village I Project
not later than the Development Completion Date.

3.2.3. Waivers of Liens. If requested by the Lender, at
its sole but reasonable option, the Borrower and/or the Property Owner
shall have furnished waivers of liens and receipts of payment from the
General Contractor, any subcontractor or any supplier of labor or materials
designated by the Lender for all work performed to the date of the
immediately preceding Fairway Village I Loan Advance or Remediation Loan
Advance, as the case may be, at the time each requisition is submitted, and
waivers of liens as to each supplier for materials included in the last
previous requisition within 30 days from the date of funding of the last
previous requisition, or prior to the next requisition, whichever shall
first occur.

3.2.4. Title Continuation. If requested by the Lender,
at its sole but reasonable option, the Title Company shall issue a title
continuation or endorsement showing that the Property is clear of Liens
(other than the lien of the Deed of Trust and any other Liens therein
expressly permitted) to the date of such Fairway Village I Loan Advance
and that no financing statements affecting the Fairway Village Property, or
any part thereof, other than in favor of the Lender, have been filed.

3.2.5. Conformity with Plans and Specifications or
Remediation Plan. All development work which has been completed shall be
in conformity with the Plans and Specifications, or with the Remediation
Plan, in all material respects, and shall be acceptable to Lender and/or
Lender's inspection engineer, as the case may be.

3.2.6. Site Plan, Public Works Agreements. The Lender
shall have received and approved a site plan for the Fairway Village I
Project approved by all appropriate Governmental Authorities and shall
have received and approved any and all public works agreements for any
of the Property approved by all Governmental Authorities.

3.2.7. Permits, etc. The Lender shall have received
from Borrower written evidence, in form and substance satisfactory to the
Lender, from either the Architect, the Property Owner's engineer, or all
Governmental Authorities having or claiming jurisdiction to the effect
that to the extent applicable and on an as completed and as necessary
basis, all development, building, construction and other permits required
in connection with the development of the Fairway Village I Project have
been validly issued or will be issued, that all fees and bonds required in
connection therewith have been, or will be, paid in full or posted, as the
circumstances may require, and that the Fairway Village I Project meets
zoning requirements, subdivision requirements, environmental
requirements, and all sewer and storm drain requirements.

3.2.8. Utilities. The Lender shall have received from
the Property Owner written evidence, in form and substance reasonably
satisfactory to the Lender, from either the Architect, the Property Owner's
engineer, or all municipalities and utility companies having or claiming
jurisdiction to the effect that all utility services required by the Plans
and Specifications or otherwise necessary for the construction of the
Fairway Village I Project and the operation thereof for their intended
purpose after completion are available for connection and use at the
boundaries of the Fairway Village Project Property including, without
limitation, telephone service, water supply, storm and sanitary sewer
facilities, natural gas and electric facilities.

3.3. Conditions to Making All Loan Advances. The
Borrower and/or Property Owner shall satisfy the following
conditions as a condition precedent to all Loan Advances.

3.3.1. Representations and Warranties. Any
representation or warranty made in or in connection with this Agreement and
the other Financing Documents is true, correct and complete in all material
respects on and as of the date of any Loan Advance or any Loan as if made
on such date.

3.3.2. Legality. It shall not be unlawful (a) for the
Lender to perform any of its material agreements or obligations under this
Agreement or any of the other Financing Documents to which it is a party,
(b) for the Borrower and/or the Property Owner to perform any of its
material agreements or obligations under this Agreement or any of the other
Financing Documents to which the Borrower and/or the Property Owner is a
party, or (c) for any other party to any of the Financing Documents to
perform any of such party's agreements or obligations under such Financing
Documents.

3.3.3. Order, etc. No order, judgment or decree of any
arbitrator, court or other Governmental Authority shall or shall purport
to enjoin or restrain the Lender from making a Fairway Village I Loan
Advance.

3.3.4. No Litigation. Except for the Pending
Litigation, there shall not be pending, or to the knowledge of the Borrower
and/or the Property Owner, threatened in writing, any action, suit,
proceeding, governmental investigation or arbitration against or affecting
the Borrower and/or the Property Owner, which would in the reasonable
opinion of the Lender be likely to have a material adverse affect (i) on
the ability of the Borrower and/or the Property Owner, to perform its
obligations in all material respects under any of the Financing Documents
to which it is a party, (ii) on the validity or enforceability of any of
the Financing Documents in all material respects or (iii) on the material
rights, remedies or benefits available to the Lender under the provisions
of the Financing Documents.

3.3.5. Compliance. The Borrower and/or the Property Owner
shall then be in compliance in all material respects with all terms,
covenants, conditions and provisions of this Agreement and the other
Financing Documents which are binding upon it.

3.3.6. Default. No Event of Default shall have occurred
and be continuing.

SECTION 4. Representations and Warranties. Each of the
Borrower and the Property Owner represents and warrants to the Lender that
the following statements are true, correct and complete as of the date
hereof and as of each date any Loan Advance is to be made hereunder:

4.1. Authority, etc.

4.1.1. IGC. IGC is a limited partnership duly organized
and in good standing under the laws of the State of Delaware and is
qualified to do business in all states where IGC conducts business. IGC
has the full power and authority to execute, deliver and perform this
Agreement and the other Financing Documents to which IGC is a party.
Neither such execution, delivery and performance, nor compliance by IGC
with the provisions of this Agreement and of the other Financing Documents
to which IGC is a party will conflict with or result in a breach or
violation of IGC's Partnership Agreement, or any judgment, order,
regulation, ruling or law to which IGC is subject or any contract or
agreement to which IGC is a party or to which any of IGC's assets and
properties is subject, or constitute a default thereunder. The execution,
delivery and performance of this Agreement and all other Financing
Documents to which IGC is a party have been duly authorized and approved by
all necessary action by IGC and constitute the legal, valid and binding

obligations of IGC enforceable in accordance with their terms except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.

4.1.2. ACPT. ACPT is a Maryland real estate investment
trust duly organized and in good standing under the laws of the State of
Maryland and is qualified to do business in all states where ACPT conducts
business. ACPT has the full power and authority to execute, deliver and
perform this Agreement and the other Financing Documents to which it is a
party. Neither such execution, delivery and performance, nor compliance by
ACPT with the provisions of this Agreement or of the other Financing
Documents to which ACPT is a party will conflict with or result in a breach
or violation of the ACPT Declaration of Trust, ACPT Bylaws, or any
judgment, order, regulation, ruling or law to which ACPT is subject or any
contract or agreement to which ACPT is a party or to which any of ACPT's
assets and properties is subject, or constitute a default thereunder. The
execution and performance of this Agreement and all other Financing
Documents to which ACPT is a party have been duly authorized and approved
by all necessary action by ACPT and constitute the legal, valid and
binding obligations of ACPT enforceable in accordance with their terms
except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally.

4.1.3. Property Owner. Property Owner is a limited
liability company duly organized and in good standing under the laws of the
State of Delaware and is qualified to do business in all states where the
Property Owner conducts business. The Property Owner has the full power
and authority to execute, deliver and perform this Agreement and the other
Financing Documents to which it is a party. Neither such execution,
delivery and performance, nor compliance by Property Owner with the
provisions of this Agreement and of the other Financing Documents to which
the Property Owner is a party will conflict with or result in a breach or
violation of the Property Owner's Articles of Organization, Operating
Agreement or any judgment, order, regulation, ruling or law to which
Property Owner is subject or any contract or agreement to which Property

Owner is a party or to which any of Property Owner's assets and properties
is subject, or constitute a default thereunder. The execution, delivery
and performance of this Agreement and all other Financing Documents to
which the Property Owner is a party have been duly authorized and approved
by all necessary action by the Property Owner and constitute the legal,
valid and binding obligations of the Property Owner enforceable in
accordance with their terms except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.

4.2. Litigation. Except for the Pending Litigation, there
is no litigation or proceeding pending or, to the knowledge of any
representative of the Borrower signing this Agreement on behalf of the
Borrower and/or the Property Owner threatened in writing against or
affecting the Borrower and/or the Property Owner which might materially
adversely affect the business, financial condition or operations of the
Borrower and/or the Property Owner or the ability of the Borrower to
perform and comply with this Agreement or the other Financing Documents to
which the Borrower and/or the Property Owner is a party.

4.3. Taxes. Each of the Borrower and/or the Property Owner
has filed all federal, state and local income, excise, property and other
tax returns which are required to be filed and has paid all taxes as shown
on such returns or assessments received by the Borrower and/or the Property
Owner (including, without limitation, all F.I.C.A. payments and
withholding taxes, if appropriate) , except for such taxes, if any, as
are being contested in good faith and as to which adequate reserves have
been provided. No tax liens have been filed and no claims are being
asserted with respect to such taxes or assessments.

4.4. Title to Property and Collateral. Borrower and/or
Property Owner, where applicable, has good and marketable title to all of
its assets and property, including, without limitation, the Property and
the Collateral, and the Collateral is not subject to any Liens, security
interests or other encumbrances except for (a) those of the Lender, (b)
those expressly permitted by the provisions of this Agreement or any
of the other Financing Documents, or (c) those set forth in the Title
Insurance Policy furnished to the Lender pursuant to Section 3.1.6 hereof
or otherwise disclosed to Lender in writing, and reviewed by Lender as a
part of Lender's due diligence.

4.5. Compliance with Laws, etc.

4.5.1. Environmental Laws. Except for the
allegations in the Pending Litigation and based upon reasonable inquiry and
inspection of the Property, neither the Borrower nor the Property Owner is
in violation of any applicable federal, state or local law, statute, rule,
regulation or ordinance and has not received any notice of, nor is the
subject of, any investigation or complaint alleging that the Borrower, the
Property Owner or any property of the Borrower or Property Owner which is
collateral and security for the Obligations under the Financing Documents
(or any part thereof) or any other property owned, leased, operating or
used by the Borrower is in material violation of any such law, statute,
rule, regulation or ordinance, including, without limitation, those
which relate to Hazardous Materials (as hereinafter defined) and/or
the protection of the environment or human health, including any
wetland laws or regulations, (collectively "Environmental Laws")

4.5.2. Hazardous Materials. Except as otherwise
previously disclosed to Lender, to the best of Borrower 5 and the Property
Owner's knowledge, no hazardous wastes, hazardous substances, toxic
chemicals and substances, oil and petroleum products and their by-
products, radon, asbestos, pollutants or contaminants ("Hazardous
Materials") have been used, located, installed, spilled, treated,
released or stored on, under or from the Property in material violation of
the Environmental Laws.

4.6. Material Agreements. Neither the Borrower nor the
Property Owner is in default or breach in the performance, observance
or fulfillment or any of the terms, conditions or provisions of any
material instrument, agreement or document to which the Borrower or
Property Owner is a party (including, without limitation, any instrument
or agreement evidencing or made in connection with any indebtedness or
liabilities) which default or breach might have a material adverse effect
on the business, properties, operations or financial condition of the
Borrower or the Property Owner.

4.7. Approvals and Consents. No approval, consent or
authorization of, or registration, declaration or filing with, any
Governmental Authority is required in connection with the valid execution,
delivery and performance of the Construction Contracts, this Agreement, the
Note or the other Financing Documents or the carrying out by the Borrower
and/or the Property Owner of the transactions contemplated hereby or
thereby.

4.8. Permits, etc. With respect to the current
development of the Fairway Village I Project to date, all required
development, building, construction and other permits, all necessary
or required licenses and approvals, and evidence of compliance with all
zoning, environmental and other laws, ordinances, rules, regulations,
and restrictions, affecting such development of the Fairway Village I
Project, have been obtained or will be obtained, and all fees and bonds
required in connection therewith have been or will be paid or posted as the
case may be within a reasonable period of time after the Completion Date.

4.9. Construction Contracts. The current Construction
Contracts are in full force and effect and have not been amended, modified
or altered without the Lender's written consent, and the Property Owner is
not in default thereunder, and, none of the parties to the current
Construction Contracts in default thereunder, and there are no events,
occurrences or conditions which with the passage of time or the giving of
notice or both, would constitute a default thereunder.

4.10. Plans and Specifications. The Plans and Specifications
for the development of the Fairway Village I Project as contemplated by
this Agreement and the use of the Property for the purpose contemplated by
the Property Owner does and shall, in all material respects, comply with,
and are lawful, permitted and conforming uses under, all applicable
building, fire, safety, subdivision, zoning, sewer, environmental,
securities, health, insurance and other laws, ordinances, rules,
regulations and plan approval conditions of any Governmental Authority.
The Plans and Specifications have been approved, to the extent required by
applicable law or any effective restrictive covenant, by all Governmental
Authorities and the beneficiaries of any such covenant.

4.11. Compliance in Zoning. (a) The anticipated use of the
Property, including the Fairway Village Property after construction
of the Fairway Village I Project, complies with all applicable zoning
ordinances, regulations and restrictive covenants affecting the Property;

(b) all use requirements of any Governmental Authority having
jurisdiction have or will have been satisfied; and (c) no material
violation of any law or regulation exists with respect thereto. Evidence
of zoning shall be in form and substance satisfactory to the Lender, and
shall consist of either a letter to the Lender from the appropriate zoning
office, or an endorsement to the Lender's title insurance policy, or a
certificate from the Architect or Engineer.

4.12. Utilities. All utility services necessary for the
development of the Fairway Village I Project are or will be available at
the boundaries of the Fairway Village I Property, including, without
limitation, telephone service, water supply, storm and sanitary sewer
facilities, natural gas and electric facilities.

4.13. Access; Roads. All roads and other access
necessary for the development of the Fairway Village I Project and full
utilization thereof for its intended purpose have either been completed or
the necessary rights of way therefor have either been acquired by the
appropriate Governmental Authorities or have been dedicated to public use
and all necessary steps have been taken by Borrower, Property Owner or such
Governmental Authorities to assure the complete development and
installation thereof by a date sufficient to ensure the timely completion
of the development of the Fairway Village I Project and in no event later
than the Development Completion Date.

4.14. Violations. Neither the Borrower nor the Property Owner
has knowledge of any violation, nor is there any written notice or other
written record of any violation, of any zoning, subdivision, environmental,
building or other statute, ordinance, regulation, restrictive covenant or
other restriction applicable to the Property, except for violations which
the Borrower and/or the Property Owner have disclosed to the Lender in
writing and are proceeding in good faith to remove or correct.

4.15. Liens. There exist no encumbrances, charges or other
Liens against the Property or any property relating thereto other than the
Deed of Trust and the other Financing Documents and the Lien created
thereby or pursuant thereto, including statutory and other Liens of
mechanics, workmen, contractors, subcontractors, suppliers, taxing
authorities and others, except (i) as disclosed in the Title Insurance
Policy delivered to the Lender on the date hereof and except for real
estate taxes on the Property which are not yet due and payable, or (ii)
otherwise permitted by Lender.

4.16. Accuracy of Information. No information, exhibit,
report, statement or document furnished by the Borrower, the Property
Owner or any other person to the Lender in connection with the Loan, this
Agreement or the other Financing Documents (Dr the negotiation thereof when
taken together as a whole contains any material misstatement of fact or
omitted to state a material fact necessary to make the statements contained
herein or therein not misleading.

4.17. Solvency of Property Owner. Property Owner is not
insolvent and Property Owner's execution, delivery and performance of this

Agreement and all other Financing Documents to which the Property Owner is
a party will not render the Property Owner insolvent. For purposes of the
representations and warranties set forth in this Section 4.17, the term
"insolvent" means either (i) the present fair market value of Property
Owner's assets is less than the amount necessary to pay Property
Owner's probable liability on its existing debts as they become absolute
and mature, or (ii) the sum of Property Owner's debts is greater than the
present fair market value of Property Owner's assets.

SECTION 5. Affirmative Covenants. Each of the Borrower and
the Property Owner covenants and agrees with the Lender that so long as any
of the Obligations (or commitments therefor) shall be outstanding, the
Borrower and/or Property Owner shall:

5. 1. Payment of Obligations. Punctually pay the principal
of and interest on the Loan and the other Obligations, at the times and
places, in the manner and in accordance with the terms of this Agreement,
the Note, and the other Financing Documents.

5.2. Financial Statements and Other Reports. Maintain at
all times a system of accounting established and administered in accordance
with sound business practices, and deliver, or cause to be delivered, to
the Lender (a) as soon as available, but in no event more than forty-five
(45) days after the end of each calendar quarter of each fiscal year of the
Borrower and Property Owner, quarterly financial statements, in form and
content reasonably satisfactory to Lender, (b) as soon as available, but in
no event more than ninety (90) days after the close of each fiscal year of
the Borrower and Property Owner, audited financial 'statements certified
by an independent accounting firm acceptable to Lender, (c) at such
reasonable intervals as the Lender may reasonably require, such
assignments, schedules, statements, reports, certifications, records
and other documents with respect to the Collateral in such form and detail
reasonably satisfactory to the Lender, (d) within 30 days after the date
of filing, all federal tax returns of the Borrower and Property Owner,
together with all schedules and attachments, certified as true, correct and
complete by the Borrower or Property Owner, and (e) promptly upon request
of the Lender such other information, reports or documents respecting the
business, properties, operation or financial condition of the Borrower
and/or the Property Owner as the Lender may at any time and from time to
time reasonably request.

5.3. Gross Revenues from Sale of Property. During the first
twelve (12) , twenty-four (24) , thirty-six (36) and forty-eight (45) month
periods following the date hereof, have annual gross sales of all or a
portion of the Property in amounts, respectively, but not less Four Million

Dollars ($4,000,000.00), Eight Million Dollars ($8,000,000.00); Twelve
Million Dollars ($12,000,000.00) and Fourteen Million Dollars
($14,000,000.00).

5.4 Conduct of Business and Maintenance of Existence
Continue to engage in business of the same general type as now being
conducted by it, and do and cause to be done all things necessary to
maintain and keep in full force and effect its existence in good standing
in each jurisdiction in which it conducts business.

5.5. Compliance with Laws, etc. (a) Comply with all laws,
statutes, ordinances, orders, rules or regulations applicable to it or to

its property and assets in all material respects, including, without
limitation, the Collateral (or any part thereof) or to any other property
owned, leased, operated or used by it, including, without limitation, all
material provisions concerning Hazardous Materials and Environmental Laws
as set forth in the Deed of Trust.

5.6. Payment of Liabilities and Taxes. Pay, when due
subject to applicable grace periods, all of its indebtedness and
liabilities (including, without limitation, the Obligations (when and if
due)), and pay and discharge promptly all taxes, assessments and
governmental charges and levies (including, without limitation, F.I.C.A.
payments and withholding taxes) upon it or upon its income, profits or
property (including, without limitation, the Collateral), except to the
extent the amount or validity of any of the foregoing is contested in good
faith by appropriate proceedings so long as adequate reserves have been set
aside therefor.

5.7. Contractual Obligations. Comply with any agreement or
undertaking to which it is a party, and maintain in full force and effect
all contracts and leases to which it is or becomes a party unless the
failure to do so would not have a material adverse effect on its
business, operation, properties or financial condition.

5.8. Maintenance of Property. Do all things necessary to
maintain, preserve, protect and keep the Property in good repair, working
order and condition (ordinary wear and tear excepted), and make all
necessary and proper repairs, renewals and replacements so that its
business may be properly conducted at all times, unless the failure to do
so would not have a material adverse effect on its business, operation or
financial condition. The Borrower and/or the Property Owner shall
promptly notify the Lender of any event causing material deterioration,
loss or depreciation in value of any substantial portion of the Collateral
and the amount of such loss or depreciation.

5.9. Insurance. Maintain with financially sound, well rated
and reputable insurance companies insurance as provided herein and as
provided in the Deed of Trust in such amounts and covering such risks as is
consistent with sound business practice, and in any event as is ordinarily
and customarily carried by companies similarly situated and in the same or
similar businesses as the Borrower or the Property Owner. The Borrower
and/or the Property Owner will pay, when due, all premiums on such
insurance and will furnish to the Lender, upon request, evidence of payment
of such premiums and other information as to the insurance carried by the
Borrower and/or the Property Owner. Such insurance shall conform and
comply with the insurance provisions in the Deed of Trust.

5.10. Inspection. During regular business hours or at such
times as reasonably requested by Lender, permit the Lender, by its
representatives and agents, to inspect the Property and other Collateral,
its properties, books and financial records, examine and make copies of its
books of accounts and other financial records, and to discuss its affairs,
finances and accounts with, and to be advised as to the same by, it (or its
representatives) at such reasonable times and intervals as the Lender may
designate. In connection with the foregoing, the Lender and its represen-
tatives and agents, upon reasonable prior notice to Borrower and/or the
Property Owner, and at the expense of the Borrower and/or the Property
Owner but only upon an Event of Default, shall have the right to enter the
business premises of the Borrower and/or the Property Owner to audit,

appraise, examine and inspect such property and all records related
thereto and to make extracts therefrom and copies thereof.

5.11. Development. Except as expressly permitted by the
Lender, cause the development of the Fairway Village I Project to be
prosecuted with reasonable diligence and substantially in accordance with
the Plans and Specifications and will complete the construction of the
Fairway Village I Project in accordance with the Plans and
Specifications on or before the Development Completion Date subject to
Force Majeure, free and clear of Liens or claims for Liens for materials
supplied and for labor or services performed in connection with the
construction of the Fairway Village I Project. The Fairway Village I
Project shall be developed in accordance with all applicable (whether
present or future) laws, ordinances, rules, regulations, requirements
and orders of any Governmental Authority having or claiming
jurisdiction. The Improvements shall be constructed entirely on the
Fairway Village Property and shall not encroach upon any easement or right-
of-way, or upon the land of others. Development of the Fairway Village I
Project shall occur wholly within all applicable building restriction
lines and setbacks, however established, and shall be in strict
compliance with all applicable use or other restrictions and the
provisions of any prior agreements, declarations, covenants and all
applicable zoning and subdivision ordinances and regulations. The Property
Owner shall not make any material changes or modifications to the Plans and
Specifications or issue any material change orders for the
development of the Fairway Village I Project without the prior written
consent of the Lender.

5.12. Payment to General Contractor. Promptly pay
General Contractor, all subcontractors and all suppliers of
materials, services and labor the amounts justly due to them. In the event
any mechanics' lien or other encumbrance or Lien shall be filed or attached
against the Fairway Village Property without the prior written consent of
the Lender, in each instance the Property Owner covenants and agrees that
within twenty (20) days after the filing of such Lien, the Property Owner
will promptly discharge the same by payment, filing bond or otherwise as
permitted by law. If the Property Owner fails to do so, the Lender may, at
its option, in addition to, and not in limitation of, all other rights and
remedies of the Lender in the Event of Default by the Property Owner, and
without regard to the priority of such mechanics' lien or other encumbrance
or Lien, pay the same, and all amounts expended by the Lender for such
purpose shall constitute loans to the Borrower and shall be secured by the
Deed of Trust and the other Financing Documents, and be due and payable by
the Borrower to the Lender on demand by the Lender with interest thereon at
the Default Rate.

5.13. Development Progress Report. In the event that the
Borrower does not submit a request for payment for any month during the
Development Period, submit a report to the Lender for such month setting
forth the progress on the development of the Fairway Village I Project.

5.14. Inspections; Cooperation. Permit the Lender and its
duly authorized representatives (including, without limitation, the
Engineer) to enter upon the Property, to inspect the Property and any and
all materials to be used in connection with an development of the Property,
to examine all detailed plans and shop drawings and similar materials as
well as all records and books of account maintained by or on behalf of the
Borrower and/or the Property Owner relating thereto and to discuss the

affairs, finances and accounts pertaining to the Loan and the development
of the Fairway Village I Project with representatives of the Borrower
and/or the Property Owner. The Borrower and the Property shall at all
times cooperate and use all reasonable efforts to cause the Property
Owner's engineer, Architect, General Contractor and each and every one
of General Contractor's subcontractors and materialmen to cooperate
with the Lender and its duly authorized representatives in connection with
or in aid of the performance of the Lender's functions under this
Agreement.

5.15. Vouchers and Receipts. Furnish to the Lender, promptly
on demand, any contracts, bills of sale, statements, receipted vouchers
or agreements pursuant to which the Property Owner have any claim of
title to any materials, fixtures, equipment, appliances, furnishings
or other personal property delivered or to be delivered to the Property or
incorporated or to be incorporated into the Property. The Property Owner
shall furnish to the Lender, promptly on demand, a verified written
statement, in such form and detail as the Lender may require. showing all
amounts paid for labor and materials and all items of labor and materials
furnished or to be furnished for the Project which payment has not been
made and the amounts to be paid therefor.

5.16. Correction of Defects. Promptly following any
reasonable demand by the Lender, the Property Owner shall correct or cause
the correction of any material structural defects in the Fairway Village I
Project and any material departures or deviations from the Plans and
Specifications not approved in writing by the Lender.

5.17. Notice of Liens. Forward to Lender promptly after
receipt thereof, copies of all material notices, permits or other documents
(excepting only notices for non-delinquent taxes due) received by the
Property Owner from any Governmental Authority relating to the Property or
from any person claiming a mechanic's or materialmen's lien against the
Property.

5.18. Releases. Prior to making final payment under the
applicable Construction Contracts, require General Contractor thereon to
deliver to the Borrower, from General Contractor and all General
Contractor's subcontractors or suppliers of materials, services and
labor, a general release of mechanics' and materialmen's liens and
the Property Owner will promptly deliver to the Lender copies of all such
releases so obtained, certified by the Borrower to be true and correct.

5.19. Compliance with Contracts. Comply in all material
respects with all requirements and satisfy all conditions of all contracts,
bonds or insurance which insure or relate to all or any part of this
Agreement, the Property, or the Property Owner. The foregoing includes,
without limitation, compliance with all material terms and satisfaction
of all material conditions of the applicable Construction Contracts and the
Architect's Agreement. In the event of a failure by the Property Owner to
comply with any of such material terms or satisfy any of such material
conditions, the Lender may undertake such compliance or satisfaction on
behalf of the Property Owner and any sums expended by the Lender in
connection therewith shall be deemed Loan Advances hereunder, shall bear
interest at the Default Rate from the date expended until the Lender is
repaid in full, shall be secured by the Financing Documents and shall be
paid to the Lender by the Borrower upon demand by the Lender.

5.20. Notice. Promptly give written notice to the
Lender of the occurrence of any Default.

5.21. Payment of Release Amount. Upon the sale of any and
all of the Property or refinancing of any portion of Indebtedness
owed to Lender secured by any or all of the collateral, pay to
Tender the Release Amount and all other costs associated with the Partial
Release, as more fully set forth in Section 7 hereof.

5.22. Resolution of Pending Litigation. Upon the earlier of
September 30, 1997 or a determination by the United States Court of Appeals
for the 4th Circuit regarding the Criminal Action, provide Lender with a
management succession plan. If the decision rendered by the United States
Court of Appeals for the 4th Circuit is unfavorable to IGC, or if a
decision is not rendered on or before September 30, 1997, then IGC shall
demand the resignation of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as an officer and Chairman of the
Board of Directors of IGC, or any successor company. Notwithstanding the
foregoing, following the Restructuring, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ may continue
or resume his position as an officer and Chairman of the Board of Directors
of IGC.

5.23. Investment Banking Services. For so long as any
Principal Amount remains outstanding, Lender, or Lender's affiliated
designee, shall have the first right to perform all investment banking and
mortgage banking services on behalf of Borrower, including, but not limited
to, services pertaining to the Restructuring and any real estate
financing upon terms and conditions as proposed by Borrower. If Lender
declines to perform any such services, then Borrower shall be permitted to
obtain such services from any other entity but only upon the identical
terms and conditions previously proposed to Lender. If such,terms and
conditions are modified, altered, or changed in any manner, then Lender
again shall have a continuing first right to perform such services upon the
terms and conditions, as modified, altered or changed, before Borrower may
proceed with banking and mortgage banking services with any other entity.

5.24. Review of Operations. At least quarterly, meet or
confer with Lender to fully review Borrower's operations, budgets and
strategic plans, to provide Lender with advance notice (i) if, in any given
fiscal year, legal fees of the Borrower expected to exceed $500,000.00,
(ii) the occurrence of any event involving the Borrower, which has occurred
outside of the Borrower's ordinary course of business, including, by
way of example and not limitation, any extraordinary or material
events.

5.25. Debt to Worth Ratio. For the term of the Loan, the
Borrower shall maintain a ratio of aggregate liabilities to tangible net
worth equal to no greater than three to one (3 to 1) For purposes of this
Section 5.25, the term "tangible net worth" shall mean the Borrower's net
worth, less any goodwill and deferred costs, as calculated on a GAAP basis.

SECTION 6. Negative Covenants. Each of the Borrower and
Property Owner, to the extent applicable, covenants and agrees with the
Lender that so long as any of the Obligations (or commitments thereof or)
shall be outstanding, the Borrower and/or Property Owner shall not:

6.1. Indebtedness. Without the Lender's prior written
consent, create, incur, assume or permit to exist any Indebtedness except
(a) Indebtedness to the Lender, (b) Indebtedness incurred by the

endorsement of negotiable instruments for deposit or collection in the
ordinary course of business, (c) Indebtedness incurred in the ordinary
course of business which is unsecured, (d) as for the Borrower,
Indebtedness, in addition to that which existed as of June 30, 1997 but
exclusive of any Indebtedness to Nationsbank being refinanced pursuant to
the terms hereunder, in an aggregate amount up to Ten Million Dollars
($10,000,000.00) incurred in the ordinary course of business and which is
secured by property of the Borrower other than the Collateral, and (e)
Indebtedness incurred in the refinancing of any Indebtedness of Borrower to
Lender, and which refinancing is secured by this portion of the Collateral
released pursuant to Section 7 hereof.

6.2. Liens. Without the Lender's prior written consent
which will not be unreasonably withheld, create, incur, assume or permit to
exist any Lien of any nature whatsoever on any of its properties or assets,
both now owned and hereafter acquired, except (a) for any Lien now or
hereafter securing all or any part of the Obligations, (b) for any Lien
subsequently approved by the Lender in writing after the date hereof, and
(c) as otherwise,permitted pursuant to Section 6.1 hereof.

6.3. Loans and Investments. Without the Lender's prior
written consent, make or permit to remain outstanding any loan or advance
to, provide any guaranty for, or make or own any investment in, any Person,
other than any such loan, advance, guaranty or investment made in the
ordinary course of business based on historical business practices of the
Borrower and/or Property Owner, as the case may be.

6.4. Mergers, Acquisitions, Restructuring, etc. Subject to
Section 10 hereof, without the Lender's prior written consent, enter into
any merger, restructuring, consolidation or acquire or purchase all or
substantially all of the assets, properties or stock of any other entity.

6.5. Sale of Assets and Liquidation. Subject to Section 10
hereof, sell, lease or otherwise dispose of, in one transaction or a series
of transactions, all or any substantial part of its business, assets or
properties, outside of the ordinary course of business or take any action
to liquidate, dissolve or wind up itself or its business.

6.6. Change of Business. Enter into any significant new
line of business other than the business as conducted by it (or any related
business) on the date hereof.

6.7. Lease. Take any action with respect to any leases
inconsistent with the terms and conditions herein and in the Deed of Trust.

6.8. Prohibited Distributions. Subject to Section 10
hereof, not to distribute to any unit holders, partners, or
stockholders of the Borrower, or any partnership controlled directly
or indirectly by the Borrower, more than the minimum amounts required under
either the IGC Partnership Agreements, the ACPT Declaration of Trust or
applicable State Law or Federal Law.

SECTION 7. Partial Releases.

7.1. Sale of Lots. Lender and Borrower agree and
acknowledge that it is the intention of Borrower and Property Owner to
cause the Fairway Village Property to be subdivided into residential lots
for sale to third-party builders, and for all other Property which may be

subdivided into saleable lots and developed with supporting infrastructure,
for sale to third-party builders, (each such lot is herein a "Lot" and all
such lots are herein collectively the "Lots") . Accordingly, Lender agrees
that in order to enable the Borrower and Property Owner to convey the Lots
free of the encumbrance of the Deed of Trust, Lender shall direct the
Trustee to grant partial releases of the lien thereof on the terms and
conditions set forth in this Section 7 (such release is herein a "Partial
Release").

7.2. Contract Approval. Any Lot proposed to be released
shall be the subject of (i) a bona-fide third-party contract between
Borrower or Property Owner and a third-party builder, developer or
homeowner, or (ii) a bona fide contract between Borrower or Property
Owner and an affiliate of Borrower or Property Owner for a purchase price
equal to no less than the fair market value of such Lot as determined by an
independent appraiser.

7.3. Subdivision Approval. Each Lot proposed to be
released shall be shown on a subdivision plat approved by all applicable
Governmental Authorities, approved by Lender and recorded among the
Land Records.

7.4. Additional Conditions to Release. Lender's
agreement to cause the Trustee to release any Lot shall be subject to the
additional conditions set forth in this Section 7.4, each of which shall
have been satisfied by the Borrower or Property Owner on or before the date
of any Partial Release.

7.4.1. Release Payment. Borrower and/or Property Owner
shall have paid to Lender all of the following amounts: (i) the full
amount of the release payment for each Lot proposed to be released, as set
forth on the Schedule attached hereto as Exhibit 7.4.1 (the "Release
Payment") and (ii) all costs and expenses incurred by Lender, including
but not limited to, reasonable attorneys' fees, in processing,
reviewing and, if applicable, approving such proposed Partial Release.

7.4.2. Remaining Property. The balance of the Lots shall
remain subject to the lien, operation and effect of the Deed of Trust and,
if required by Lender, the Borrower or Property Owner shall provide such
endorsements to the Title Policy with respect to confirming such liens as
Lender shall reasonably request.

7.4.3. Notice: Frequency. Partial Release requests shall
be processed by Lender only upon prior written request of the Borrower at
least fifteen (15) Business Days in advance of the date of such Partial
Release is desired.

7.4.4. Default. Lender shall not be obligated to process
or approve any Partial Release requested by Borrower or Property Owner if
there exists an Event of Default or an event which, with the giving of
notice or lapse of time, or both, would become an Event of Default and the
terms of the underlying bonafide contract for sale applicable to such
Partial Release is for a purchase price less than fair market value.

7.4.5. Release Payment Proceeds. Borrower, Property
Owner and Lender acknowledge that the Release Payment Amounts are based
upon the assumption that the entire amount of the Loan is fully advanced in
accordance with the terms, of this Agreement and the other Financing

Documents. However, to the extent that all or any portion of the Loan is
part of the Remediation Reserve Amount, such amount would not have been
advanced as part of the Loan unless and until any request for disbursements
from the Remediation Reserve Amount, all as provided in Section 2.3 above.
Accordingly, all Release Payment Amounts shall be treated by Lender as
follows: (a) first, each Release Payment Amount shall be applied to
repayment of the outstanding Principal Amount, exclusive of the Remediation
Reserve Amount; (b) second, any portion of any Release Payment Amount in
excess of the outstanding Principal Amount (exclusive of the Remediation
Reserve Amount), shall be deposited into an interest bearing account
maintained by Lender (the "Release Payment Proceeds Account"), and all of
Borrower's and Property Owner's right, title and interest in and to such
account shall be pledged to Lender as additional collateral for the payment
and performance of the Borrower's and Property Owner's obligations
hereunder and under each of the other Financing Documents, pursuant to the
terms of the Deposit Pledge Agreement. Lender shall have the right to
apply all or any portion of the balance of the Release Payment Proceeds
Account to the outstanding Principal Amount at any time or from time to
time, in its sole and absolute discretion. Notwithstanding any provision of
this Agreement or any other Financing Document to the contrary, in no event
shall the Borrower be entitled to, nor shall Lender be obligated to, re-
advance all or any portion of any Release Payment Amount.

7.5. Dedicated Land. Notwithstanding anything contained in
this Section 7 to the contrary, upon Lender's prior written approval,
Borrower and/or Property Owner shall be permitted to dedicate and convey a
certain portion of the Property to any Governmental Authority or community
association, at no cost to the Governmental Authority or community
association. Provided that Lender has previously approved such
dedication, Lender shall waive the Release Payment requirement and grant a
Partial Release for such portion of the Property. No additional Lender
approval shall be required for conveyances to Governmental
Authorities and community associations made as reflected in the
Plans and Specifications.

7.6. Refinancing: Subject to the prepayment provisions
herein, Borrower shall be permitted to refinance any portion of the
Indebtedness to Lender and secure such refinancing with any Collateral
provided that the Borrower delivers to Lender the applicable Release
Payment that it would obtain if such collateral were sold for its appraised
value, and upon such delivery, Lender shall release the lien on such
Collateral held by Lender.

SECTION 8. Events of Default. The occurrence of any one or
more of the following events shall constitute an event of default under the
provisions of this Agreement, and the term "Event of Default" shall mean,
whenever it is used in this Agreement, any one or more of the following
events:

8.1. Payment of Obligations. The failure of the Borrower to
pay (i) interest or principal in accordance with the provisions of this
Agreement or the Note, within five (5) days of the due date thereof or (ii)
any other Obligation arising under this Agreement or any of the other
Financing Documents within five (5) days following written demand by
Lender (whether due as a scheduled payment, by acceleration or otherwise)

8.2. Perform, etc. Other Provisions of This Agreement and
other Financing Documents. The failure of the Borrower, the Property Owner

and/or any Guarantor to perform, observe or comply with any of the
provisions of this Agreement not otherwise covered by other sections of
this Section 8 or any of the other Financing Documents, and such failure is
not cured to the satisfaction of the Lender within a period of twenty (20)
Business Days after the date of written notice thereof by the Lender to the
Borrower and/or the Property Owner, (or, whenever such a failure is such
that it cannot be corrected within twenty (20) Business Days after the
Borrower and/or the Property Owner is given notice thereof, then within
sixty (60) Business Days from the date after the Borrower and/or the
Property Owner is given notice thereof if, in the sole but reasonable
discretion of the Lender, the Borrower and/or Property Owner is taking
appropriate corrective action to cure the failure and such failure will not
impair the ability of the Borrower and/or the Property Owner to perform its
obligations under this Agreement and the other Financing Documents)

8.3. Representations and Warranties. If any representation
and warranty contained herein, in any other Financing Document, or
any statement or representation made in any certificate or any other
information at any time given by or on behalf of the Borrower and/or the
Property Owner or furnished in connection with this Agreement or any of the
other Financing DoCuments shall prove to be false, incorrect or misleading
in any material respect on the date as of which made, and would have a
material and adverse effect on the business, operations, property or
financial condition of Borrower and/or the Property Owner.

8.4. Progress of Development. Except for delays caused by
events occasioned by Force Majeure, the development of the Fairway Village
I Project is not carried on in good faith and with reasonable dispatch or
is abandoned or discontinued for a period of more than sixty (60)
consecutive days and the development of the Project is not carried on in
good faith and with reasonable dispatch or is abandoned or discontinued for
a period of more than six (6) consecutive months.

8.5. Completion of Development. Absent a Force Majeure, the
development of the Project, in the exclusive but reasonable judgment of the
Lender, is not completed before August 1, 2002.

8.6. Default Under Construction Contracts. General
Contractor shall have defaulted under its Construction Contract, which
default the Lender, in its sole but reasonable discretion, shall deem
substantial, and the Property Owner, after thirty (30) days written notice
from the Lender, shall fail to exercise any resulting right or remedy to
which any of them may be entitled thereunder;

8.7. Mechanic's Lien. A lien for the performance of work or
the supply of services or materials which is perfected against any of the
Property or the Fairway Village I Project remains unsatisfied or unbounded
for a period of thirty (30) days after the date of perfection.

8.8. Liquidation, Termination, Dissolution, etc. If the
Borrower or the Property Owner shall liquidate, dissolve or terminate
its existence.

8.9. Bankruptcy. If proceedings in bankruptcy, or for
reorganization of the Borrower or the Property Owner, or for the
readjustment of any of the debts of the Borrower or the Property Owner
under the United States Bankruptcy Code (as amended) or any part thereof,
or under any other applicable laws, whether state or federal and state, for

the relief of debtors, now or hereafter existing, shall be commenced
against the Borrower or the Property Owner and, except with respect to any
such proceedings instituted by the Borrower or the Property Owner shall not
be discharged within ninety (90) days of their commencement.

8.10. Receiver, etc. A receiver or trustee shall be
appointed for the Borrower or the Property Owner or for any substantial
part of the assets of the Borrower or the Property Owner, or any
proceedings shall be instituted for the dissolution or the full or partial
liquidation of the Borrower or the Property Owner and, except with respect
to any such appointments requested or instituted by the Borrower or the
Property Owner, such receiver or trustee shall not be discharged within
thirty (30) days of his or her appointment, and, except with respect
to any such proceedings instituted by the Borrower or the Property Owner,
such proceedings shall not be discharged within ninety (90) days of their
commencement.

8.11. Payment of Any Other Indebtedness. If the Borrower or
the Property Owner should fail to pay when due any Indebtedness in an
aggregate amount in excess of One Million Dollars ($1,000,000.00), if
accelerated prior to its scheduled maturity and such failure is not cured
to the satisfaction of the creditors to which said Indebtedness is due,
within a period of forty-five (45) days after Borrower and/or the Property
Owner is given notice thereof, or judgment is entered against the Borrower,
and the enforcement of which has not been stayed.

8.12. Material Adverse Change. The occurrence of an event or
change which, the Lender determines in good faith, would materially and
adversely affect the business, properties, condition (financial or
otherwise) or operations, present or prospective, of the Borrower and which
would result in a material, adverse change in the net worth of the Borrower
and/or Property Owner.

SECTION 9. Rights and Remedies.

9.1. Rights and Remedies. If any Event of Default shall
occur and be continuing, the Lender may (i) declare the Loan and any
obligation or commitment of the Lender hereunder to make Loan Advances to
the Borrower to be terminated, whereupon the same shall forthwith
terminate, and (ii) declare the unpaid principal amount of each of the
Note, together with accrued and unpaid interest thereon, and all other
Obligations then outstanding to be immediately due and payable,
whereupon the same shall become and be forthwith due and payable by the
Borrower to the Lender, without presentment, demand, protest or notice of
any kind, all of which are expressly waived by the Borrower; provided,
that, in the case of any Event of Default referred to in Sections 8.8, 8.9,
or 8.10, above, the Loan and any obligation or commitment of the Lender
hereunder to make Loan Advances to the Borrower shall immediately and
automatically terminate and the unpaid principal amount of the Note,
together with accrued and unpaid interest thereon, and all other
Obligations then outstanding shall be automatically and immediately due and
payable by the Borrower to the Lender without further notice, presentment,
demand, protest or other action of any kind, all of which are expressly
waived by the Borrower. Upon the occurrence and during the continuation of
any Event of Default, then in each and every case, the Lender shall be
entitled to exercise in any jurisdiction in which enforcement thereof is
sought, the following rights and remedies in addition to the rights and
remedies available to the Lender under the other provisions of this

44
Agreement and the other Financing Documents, and all other rights and
remedies available to the Lender under applicable law, all such rights and
remedies being cumulative and enforceable alternatively, successively or
concurrently:

(a) Restrict Loan Advances. Make no further Loan Advances
hereunder; or restrict Loan Advances hereunder to such amounts and for such
purposes as the Lender deems appropriate under the circumstances then
prevailing.

(b) Protect Property. Take such steps as the Lender deems
appropriate to protect the Property from depredation or injury including
employment of watchmen or other protective services, all at the expense of
the Borrower.

(c) Take Control of Property. Enter upon the Property
for the purposes of causing the continuation or completion of the
development of the Fairway Village I Project, causing the obligations of
the Borrower hereunder to be fulfilled, to manage, operate, lease and
develop the Property and to perform such other acts in connection with the
foregoing as the Lender in its sole discretion may deem proper. For such
purposes, each of the Borrower and the Property Owner hereby appoints the
Lender as its lawful attorney-in-fact, with full power of delegation
and substitution, to act for such purposes in the Borrower's name,
including, but not limited to, the power to continue the
development of the Fairway Village I Project and avail itself and procure
performance of all contracts theretofore made by the Borrower, to modify
such contracts or to enter into new contracts with the same or other
contractors, architects, suppliers or agents, to make such corrections
or changes in the Plans and Specifications or Development Budget as may in
the sole judgment of the Lender be necessary or desirable for the
continuance of the work, to pay, settle or compromise any bills, claims
or liens incurred in connection with the development of the Fairway Village
I Project, to prosecute or defend any action or proceeding in connection
therewith, to execute such applications and certificates as may be required
by any Governmental Authority or any agreement by the Borrower, and to
perform any other act and to execute and deliver all documents and
instruments as may be appropriate for such purposes, and to use the funds
then remaining to be disbursed hereunder or which may have otherwise been
allocated or made available therefor to pay the cost thereof, it being
specifically agreed that this power of attorney is a power coupled with an
interest which cannot be revoked. Any advance of funds for such purposes
shall be deemed Loan Advances pursuant to this Agreement, a part of the
Obligations, and if it shall be reasonably necessary for the Lender to
advance amounts in excess of the amount remaining to be disbursed hereunder
or otherwise available to the Lender in order to accomplish such purposes,
the Borrower agrees to reimburse the Lender for the amount of such excess
together with interest thereon at the Default Rate from the date of such
advance until paid in full, and authorize the Lender to apply funds
received from the sale or rental of any portions of the Property to the
repayment of such excess before the same are applied for any other purpose.
Any action taken by the Lender hereunder may, in the Lender's sole
discretion, be thereafter terminated or changed and this Agreement or any
action taken hereunder shall in no way be construed as imposing any
obligation upon the Lender to act or continue to act on behalf of the
Borrower or the Property Owner. Notwithstanding anything herein to the
contrary, neither the Borrower nor the Property Owner shall have any
liability to the Lender for any acts of gross negligence or willful
misconduct of the Lender.

9.2. Liens, Setoff. As security for the payment of the
Obligations and the performance of the Financing Documents, each of the
Borrower and the Property Owner hereby grants to the Lender a continuing
security interest and lien on, in and upon all indebtedness owing
by it to, and all of its deposits (general or special) , credits, balances,
monies, securities and other property and all proceeds thereof, both now
and hereafter held or received by, in transit to, or due by, the Lender.
In addition to, and without limitation of, any rights of the Lender under
applicable laws, if the Borrower becomes insolvent, however evidenced, or
any Event of Default occurs, the Lender may at any time and from time to
time thereafter, without notice to the Borrower, set off, hold, segregate,
appropriate and apply at any time and from time to time thereafter all
such indebtedness, deposits, credits, balances (whether provisional or
final and whether or not collected or available), monies, securities and
other property toward the payment of all or any part of the Obligations in
such order and manner as the Lender in its sole discretion may determine
and whether or not the Obligations or any part thereof shall then be due or
demand for payment thereof made by the Lender.

9.3. Enforcement Costs. The Borrower shall pay to the
Lender on demand all Enforcement Costs paid, incurred or advanced by or on
behalf of the Lender. As used herein, the term "Enforcement Costs"
shall mean and include collectively and include all reasonable expenses,
charges, recordation or other taxes, costs and fees (including reasonable
attorneys' fees and expenses) of any nature whatsoever advanced, paid or
incurred by or on behalf of the Lender in connection with (a) the
collection or enforcement of this Agreement or any of the other
Financing Documents, (b) the creation, perfection, maintenance,
preservation, defense, protection, realization upon, disposition,
collection, sale or enforcement of all or any part of the Collateral or
any part thereof, and (c) the exercise by the Lender of any rights or
remedies available to it under the provisions of this Agreement or any of
the other Financing Documents. All Enforcement Costs, with interest as
above provided, shall be a part of the Obligations hereunder.

9.4. Application of Proceeds. Any proceeds of the
collection of the Obligations and/or the sale or other disposition of the
Collateral will be held and applied by the Lender to the payment of
Enforcement Costs, and any balance of such proceeds (if any) will be
applied by the Lender to the payment of the remaining Obligations (whether
then due or not), at such time or times and in such order and manner of
application as the Lender may from time to time in its sole discretion
determine. If the sale or other disposition of the Collateral fails
to satisfy all of the Obligations, the Borrower shall remain liable to
the Lender for any deficiency.

9.5. Remedies, etc. Cumulative. Each right, power and
remedy of the Lender as provided for in this Agreement or in the other
Financing Documents or now or hereafter existing under applicable laws or
otherwise shall be cumulative and concurrent and shall be in addition to
every other right, power or remedy provided for in this Agreement or in the
other Financing Documents, or now or hereafter existing under applicable
laws or otherwise, and the exercise or beginning of the exercise by the
Lender of any one or more of such rights, powers or remedies shall not
preclude the simultaneous or later exercise by the Lender of any or all
such other rights, powers or remedies.

9.6. No Waiver, etc. No failure or delay by the Lender to
insist upon the strict performance of any term, condition, covenant or
agreement of this Agreement or of the other Financing Documents, or to
exercise any right, power or remedy consequent upon a breach thereof, shall
constitute a waiver of any such term, condition, covenant or agreement or
of any such breach, or preclude the Lender from exercising any such right,
power or remedy at any later time or times. By accepting payment after the
due date of any amount payable under this Agreement or under any of the
other Financing Documents, the Lender shall not be deemed to waive the
right either to require prompt payment when due of all other amounts
payable under this Agreement or under any of the other Financing Documents,
or to declare an Event of Default for failure to effect such prompt payment
of any such other amount. The payment by any one or more of the Borrower
or any other person and the acceptance by the Lender of any amount due and
payable under the provisions of this Agreement or the other Financing
Documents at any time during which an Event of Default exists shall not in
any way or manner be construed as a waiver of such Event of Default by the
Lender or preclude the Lender from exercising any right of power or remedy
consequent upon such Event of Default.

SECTION 10. Restructuring of IGC. IGC has informed Lender
that it intends in the future to convey substantially all of its assets to
ACPT and to distribute the holders of Class A Units of IGC into equity
interests of ACPT. Lender shall consent to such Restructuring, upon the
Borrower's satisfaction of the following terms and conditions:

10.1. Continuation of Lien. Lender shall determine, in

its sole but reasonable discretion, that the Restructuring will have

no adverse impact upon Lender or the Collateral, and that Lender's right,
title and interest in the Collateral shall continue and that ACPT shall
acquire the assets of IGC subject to the liens established pursuant to the
Financing Documents.

10.2. Structure of REIT. The Restructuring shall be
substantially upon the terms and conditions of the Restructuring as
previously reviewed by Lender' s counsel approved by Lender prior to the
date hereof, without any material modifications, derivations, or
changes thereto.

10.3. Opinions of Counsel. Lender shall have received from
counsel to IGC and to ACPT, legal opinion,s in form and content
satisfactory to Lender, regarding the Restructuring, the effect of such
Restructuring on the Collateral, the approval of the Restructuring from all
Governmental Authorities, including, by way of example and not limitation,
the United States Department of Justice and the United States Corps of
Engineers, and such other matters as reasonably requested by Lender.

10.4. Confirmation of Security Interests. Contemporaneously
with the Restructuring, ACPT shall acknowledge, ratify and confirm its
obligations to Lender and the existence, validity and perfection of any and
all liens held by Lender against the Collateral, and ACPT shall deliver to
Lender any and all documents necessary to evidence such acknowledgment,
ratification and confirmation.

10.5. Release of IGC from Covenants. Upon completion
of the Restructuring, the parties hereby covenant and agree, that, without

further action by any party, as of such date of completion of the
Restructuring, IGC shall be released from any and all prospective
covenants, representations or warranties arising hereunder.

SECTION 11. Miscellaneous.

11.1. Course of Dealing; Amendment. No course of
dealing between the Lender, the Borrower and the Property Owner shall be
effective to amend, modify or change any provision of this Agreement or the
other Financing Documents. The Lender shall have the right at all times to
enforce the provisions of this Agreement and the other Financing Documents,
to the extent applicable, in strict accordance with the provisions
hereof and thereof, notwithstanding any conduct or custom on the part of
the Lender in refraining from so doing at any time or times. The failure
of the Lender at any time or times to enforce its rights under such
provisions, strictly in accordance with the same, shall not be construed
as having created a custom in any way or manner contrary to specific
provisions of this Agreement or the other Financing Documents or as having
in any way or manner modified or waived the same. This Agreement and the
other Financing Documents to which the Borrower is a party may not be
amended, modified, or changed in any respect except by an agreement in
writing signed by the Lender, the Borrower and any other party thereto.

11.2. Waiver of Default. The Lender may, at any time and
from time to time, execute and deliver to the Borrower and/or the Property
Owner a written instrument waiving, on such terms and conditions as the
Lender may specify in such written instrument, any of the requirements of
this Agreement or of the other Financing Documents or any Event of Default
or Default and its consequences, provided, that any such waiver shall be
for such period and subject to such conditions as shall be specified in any
such instrument. In the case of any such waiver, the Borrower, the Property
Owner and the Lender shall be restored to their former positions prior to
such Event of Default or Default and shall have the same rights as they had
hereunder. No such waiver shall extend to any subsequent or other Event
of Default or Default, or impair any right consequent thereto and
shall be effective only in the specific instance and for the specific
purpose for which given.

11.3. Notices. All notices, requests and demands to or upon
the parties to this Agreement shall be in writing and shall be deemed to
have been given or made when delivered by hand, or when deposited in the
mail, postage prepaid by registered or certified mail, return receipt
requested, or, in the case of notice by telegraph, telex or facsimile
transmission, when properly transmitted, addressed as follows or to such
other address as may be hereafter designated in writing by one party to the
other:

Property Owner: St. ▇▇▇▇▇▇▇ community, LLC
c/o Interstate General Company, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇

with a copy to: W. ▇▇▇▇▇▇ ▇▇▇▇, Esquire
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇

Borrower: Interstate General Company, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇

American Community Properties Trust
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇

Lender: Banc One Capital Partners IV, Ltd.
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esquire

with a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇

11.4. Right to Perform. Upon any Event of Default the Lender
may (but shall be under no obligation whatsoever to) without notice to or
demand upon the Borrower, remedy any such failure by advancing funds or
taking such action as it deems appropriate for the account and at the
expense of the Borrower and/or the Property Owner. The advance of any such
funds or the taking of any such action by the Lender shall not be deemed or
construed to cure such Event of Default or waive performance by the
Borrower and/or the Property Owner of any provisions of this Agreement.
The Borrower shall pay to the Lender on demand any such funds so advanced
by the Lender, any interest thereon to the extent provided for herein or in
the other Financing Documents and any reasonable costs and expenses
advanced or incurred by or on behalf of the Lender in taking any such
action, all of which shall be a part of the Obligations hereunder.

11.5. Costs and Expenses. The Borrower shall pay to the
Lender on demand all reasonable fees, recordation and other taxes, costs
and expenses of whatever kind and nature, including reasonable
attorney's fees and disbursements, which the Lender may incur or which are
payable in connection with the closing of the Loan, including, without
limitation, the preparation of this Agreement and the other Financing
Documents, the recording or filing of any and all of the Financing
Documents and obtaining surveys, appraisals, environmental audits,
engineering reports, lien searches and title insurance policies. All such
fees, costs, recordation and other taxes shall be a part of the Obligations
hereunder.

11.6. Consent to Jurisdiction. Each of the Borrower and the
Property Owner irrevocably (a) consents and submits to the jurisdiction and
venue of any state or federal court sitting in the State of Maryland over
any suit, action or proceeding arising out of or relating to this Agreement
or any of the other Financing Documents, (b) waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in any
such court and any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum, and (c)
consents to the service of process in any such suit, action or proceeding

in any such court by the mailing of copies of such process to it by
certified or registered mail at its address set forth herein for the
purpose of giving notice.

11.7. Waiver of Jury Trial. The Borrower, the Property Owner
and the Lender hereby voluntarily and intentionally waive any right they
may have to a trial by jury in any action, proceeding or litigation
directly or indirectly arising out of, under or in connection with the
Loans, this Agreement or any of the other Financing Documents.

11.8. Survival. All representations, warranties and
covenants contained among the provisions of this Agreement shall survive
the execution and delivery of this Agreement and all other Financing
Documents.

11.9. Binding Effect. This Agreement and all other Financing
Documents shall be binding upon and inure to the benefit of the Borrower,
the Property Owner and the Lender and their respective personal
representatives, successors and assigns, except that neither the Borrower
nor the Property Owner shall have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lender.

11.10. Applicable Law and Time of Essence. This Agreement
and the rights and obligations of the parties hereunder shall be construed
and interpreted in accordance with the laws of the State of Maryland, both
in interpretation and performance. Time is of the essence in connection
with all obligations of the Borrower and the Property Owner hereunder and
under any of the other Financing Documents.

11.11. Duplicate Originals and Counterparts. This Agreement
may be executed in any number of duplicate originals or counterparts, each
of such duplicate originals or counterparts shall be deemed to be an
original and all taken together shall constitute but one and the same
instrument.

11.12. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only, shall not
constitute a part of this Agreement for any other purpose and shall not
be deemed to affect the meaning or construction of any of the
provisions hereof.

11.13. Severability. Nothing in the provisions of this
Agreement and no transaction related hereto shall operate or be construed
to require the Borrower or the Property Owner to make any payment or do
anything contrary to any applicable law. No determination by any court
or governmental authority that any provision in this Agreement is invalid,
illegal or unenforceable in any instance shall effeCt the validity,
legality or enforceability of (a) any other provision thereof, or (b) such
provision in any circumstance not controlled by such determination. Each
such provision shall be valid and enforceable to the fullest extent allowed
by, and shall be construed where ever possible as being consistent with,
applicable law.

11.14. Conflicts. Without altering or impairing the
operational effect of the provisions of this Agreement, if there is any
conflict between the provisions of this Agreement and those of any other
Financing Documents, the former shall prevail.

IN WITNESS WHEREOF, each of the parties hereto have executed and
delivered this Agreement under their respective seals as of the day and
year first written above.

WITNESS: INTERSTATE GENERAL COMPANY, L P.

By: INTERSTATE GENERAL MANAGEMENT CORP.,
a Delaware corporation

/s/ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------ ---------------------------(SEAL)
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: CFO

AMERICAN COMMUNITY PROPERTIES TRUST

/s/ ▇▇▇▇▇ ▇▇▇▇▇ Yette By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------ --------------------------------(SEAL)
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Trustee

ST. ▇▇▇▇▇▇▇ COMMUNITY, LLC

/s/ ▇▇▇▇▇ ▇▇▇▇▇ Yette By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------ --------------------------------(SEAL)
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Management Committee Chair

BANC ONE CAPITAL PARTNERS IV, LTD.

By: BOCP HOLDINGS CORPORATION
Its: Manager

/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------- -------------------------------(SEAL)
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Authorized Signer

Exhibit 10(a) MASTER LOAN AGREEMENT dated as of August 1, 1997

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