AGREEMENT OF PURCHASE AND SALE

By this Agreement of Purchase  and Sale of Limited Partnership Interests (this “ Agreement ”) dated as of ______________ ___, 2009 (the “ Effective Date ”) AMERICAN COMMUNITY PROPERTIES TRUST ,   a Maryland real estate investment trust (“ ACPT ”), AMERICAN LAND DEVELOPMENT U.S., INC ., a ____________corporation (“ American Land ”), and IGP GROUP CORP., a __________ corporation (“ IGP Group ”) (ACPT, American Land and IGP Group are collectively referred to in this Agreement as “ Seller ”), agrees to sell and convey to PARTNERS BUSINESS EQUITIES ,   a ______________________, or its permitted assignee ( “Purchaser” ), who agrees to purchase and pay for all of Seller’s limited partnership interests in Interstate General Properties Limited Partnership S.E. , a Maryland limited partnership   (“ IGP ”), and all rights of Seller associated therewith and/or pertaining thereto.

WHEREAS, American Land and IGP Group Corp are wholly owned subsidiaries of ACPT; and

WHEREAS, IGP Group owns the Class A partnership interests in IGP and American Land owns the Class B partnership interests in IGP; and

WHEREAS, as of the date of Closing, Seller, directly or indirectly, will own and control all of the partnership interests in IGP; and Seller and Purchaser desire for Seller to assign, or cause to be assigned, to Purchaser such interests in IGP and to convey to Purchaser certain other management agreements pursuant to the terms and subject to the conditions herein; and

WHEREAS, IGP owns the general partner interests in nine (9) limited partnerships (the “ Project Partnerships ”) and limited partner interests in two of the Project Partnerships; and

WHEREAS, the Project Partnerships own twelve (12) multifamily residential properties, all of which are located in the Commonwealth of Puerto Rico (the “ Subject Properties ”); and

WHEREAS, by obtaining ownership of IGP, Purchaser will be:  (i) obtaining control of the Project Partnerships and the Subject Properties; (ii) acquiring the Related Leasehold Property (as defined below); and, (iii) obtaining all other assets of IGP except the Excluded Assets (as defined below) and Ineligible Liabilities (as defined below).

NOW THEREFORE, FOR AND IN CONSIDERATION of Ten Dollars and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree as follows:

1.   DEFINITIONS

For purposes of this Agreement, the following terms have the meanings specified or referred to in this Section 1 :

A.    “ Affiliates ” -- as to any Person, any other person owned or controlled by, or under common ownership or control with, the subject Person.

B.   “ Encumbrance ” -- any charge, claim, community property interest, condition, equitable interest, lien, option, pledge, security interest, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.

C.   “ Excluded Assets ” -- those assets set forth on Schedule 1(C) attached hereto together with the leasehold interests (the “ Excluded Leases ”) identified on Schedule 1(C-1) attached hereto. .

D.   “ Existing Indebtedness ” -- any financial obligation of any Project Partnership secured by an Encumbrance on the Subject Properties (whether one or more) owned by such Project Partnership.

E.   “ Governmental Body ” -- any:

F.   “ IGP Assets ” -- all of the assets owned or controlled by IGP including, without limitation, the Partnership Interests in the Project Partnerships, the Subject Properties, the Related Leasehold Property, and all other assets of IGP as of the date of Closing excepting only the Excluded Assets and the Ineligible Liabilities.

G.   “ Ineligible Liabilities ” --. the stated or contingent liabilities of IGP not related to the IGP Assets expressly included in the financial statements and records of IGP or otherwise expressly disclosed in writing by Seller on or prior to the Closing and specifically including accrued employee salaries, regular vacations, Christmas bonus payments required by Puerto Rico Legal Requirement, payroll taxes, 401(K) contributions, and medical insurance for all employees not retained by Seller.

H.   “ Knowledge ” -- an individual will be deemed to have “ Knowledge ” of a particular fact or other matter if such individual is actually aware of such fact or other matter.   A Person (other than an individual) will be deemed to have “ Knowledge ” of a particular fact or other matter if any individual who is currently serving as a director, officer, partner, executor, or trustee of such Person (or in any similar capacity) has, or at any time had, Knowledge of such fact or other matter.

I.   “ Legal Requirement ” -- any Governmental Body order, constitution, law, ordinance, principle of common law, regulation, statute, or treaty.

J.   “ Management Agreements ” -- the management agreements between each of the Project Partnerships as owner and IGP as manager together with the management contracts between IGP and certain non-for-profit entities, all as described on Schedule 1(J) attached hereto.

K.   “ Material Adverse Effect as used in this Agreement, means any change in or effect on the business, operations or financial condition of the Seller or any of its subsidiaries that is materially adverse to the Seller and its subsidiaries or affiliates taken as whole except for (i) any change or effect resulting from general economic, financial or market conditions or (ii) any change or effect resulting from conditions or circumstances generally effecting the community development, development and ownership of rental apartment properties, property management, and development of commercial rental properties.

L.   “ Organizational Documents ” -- (a) the articles or certificate of incorporation and the bylaws of a corporation; (b) the partnership agreement and any statement of partnership of a general partnership; (c) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (d) the operating agreement and certificate of formation of a limited liability company; (e) any charter or similar document adopted or filed in connection with the creation, formation, or organization of a Person; and (f) any amendment to any of the foregoing.

M.   “ Partnership Interests ” -- all of the Class A and Class B partnership interests in IGP, and all other rights of Seller associated therewith and/or pertaining thereto identified on Schedule 1(L) attached hereto.

N.   “ Person ” -- any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or Governmental Body.

O.   “ Related Leasehold Property ” --  Leasehold improvements and all furniture, fixtures and equipment owned by IGP and currently located in its central offices and/or in any of the Project Partnerships’ properties except for Excluded Assets.

P.    “ Project Partnership ” -- any of the limited partnerships identified on Schedule 1(O) attached hereto (collectively referred to in this Agreement as the “ Project Partnerships ”).

Q.    “ Subject Properties ” -- the properties owned by the Project Partnerships as of the date of this Agreement described on Schedule 1(P) attached hereto (individually referred to in this Agreement as a “ Subject Property ”).

2.   PARTNERSHIP INTERESTS, MANAGEMENT AGREEMENTS AND EXCLUDED ASSETS AND LIABILITIES, USE OF “INTERSTATE”

A.   Seller agrees to sell, transfer and assign to Purchaser, and Purchaser agrees to purchase and have assigned to it, the Partnership Interests together with all of the interest of Seller in all IGP Assets (the Partnership Interests and the IGP Assets are collectively referred to as the “ Assigned Interests ”).

B.   Prior to the Closing, the Excluded Assets and Ineligible Liabilities will be distributed by IGP to its partners, American Land and IGP Group, and shall not be a part of the transactions that are the subject of this Agreement.

C.   Purchaser shall be allowed to continue using the word “ Interstate ” as part of its corporate or organizational charter, but shall refrain from using such word, alone or together with other modifying words, terms, designs, or symbols in advertising or press releases or in connection with the sale of promotion of its services or business, or in any other manner not expressly authorized in writing by Seller, except as otherwise required to comply with any Legal Requirement.  Seller will retain the IGP Group name and shall be allowed to continue to trade under that name.

3.   PURCHASE PRICE

A.   The purchase price (“ Purchase Price ”) for the Assigned Interests shall be Fourteen Million Three Hundred Thousand Dollars ($14,300,000).  Payment of the Purchase Price shall be the responsibility of Purchaser; however, Seller acknowledges that Purchaser intends to have $300,000 of such Purchase Price paid to Seller by Partners Services Inc.(“ PSI ”), a related entity of Purchaser.

4.   DEPOSIT

Purchaser, immediately upon execution by Seller of this Agreement, shall deposit into an escrow account Fifty Thousand Dollars ($50,000) (the “ Deposit ”) for the acquisition of the Assigned Interests, which will become nonrefundable (except if the Closing does not occur due to any breach of this Agreement by Seller) by the end of the Due Diligence Period as defined in Section 5 hereof.  The Deposit shall be maintained in an interest-bearing account with an FDIC-insured commercial bank in Puerto Rico.  Interest shall accrue to the benefit of Purchaser and the full amount of the Deposit, plus interest thereon, shall be applied to the payment of the Purchase Price at Closing.  If Purchaser wrongfully fails to close in accordance with the terms of this Agreement, the Deposit (less interest thereon, which shall be returned to Purchaser) shall be delivered by the bank to Seller as full and liquidated damages.  If Seller wrongfully fails to close in accordance with the terms of this Agreement, the entire Deposit, including interest thereon, shall be returned by the bank to Purchaser and Seller shall reimburse to Purchaser, upon demand, all legal and professional services expenses incurred in connection with this purchase transaction.

5.   DUE DILIGENCE

A.   The due diligence period (“ Due Diligence Period ”) shall be for a period of sixty days (60) commencing on the date of the execution of this Agreement by both parties.  If the results of this due diligence investigation are unsatisfactory to Purchaser, in its sole determination, then Purchaser will have the option to terminate this Agreement on or before the expiration of the Due Diligence Period and the Deposit shall be returned to Purchaser.

B.   During the Due Diligence Period, Purchaser, its attorneys and other representatives, shall have the right to inspect any and all relevant documents and information related to the Partnership Interests, IGP and the IGP Assets, including but not limited to: (i) all of IGP’s financial statements, contracts, books, records and other documents, including but not limited to all such documents maintained by or for IGP with respect to any of the Project Partnerships’ properties and other properties managed under the Management Agreements and the operation thereof; (ii) all of the HUD reports on the management and operation of such properties; and (iii) all other documents in the possession of Seller relating to IGP and/or the Project Partnerships, the Subject Properties and the Management Agreements properties (excluding, however, any internal organizational or financial documents of Seller not related to the assets, liabilities or contracts of IGP, the Project Partnerships and/or Management Agreements) at such place or places as such books, records and documents are maintained.

C.   Purchaser, at its cost, shall also have the right to make physical inspections of all the properties managed by IGP pursuant to Management Agreements.

D.   By written notice delivered to Seller at least five (5) business days prior to the expiration of the Due Diligence Period, Purchaser shall have the one-time right to extend the Due Diligence Period for an additional period of fifteen (15) days, should it have not been able to complete the due diligence process.

6.   OTHER TRANSACTION TERMS AND CONDITIONS

A.   During the Due Diligence Period, Seller and Purchaser shall enter into mutually satisfactory arrangements for the payment of the amounts owed by Valle del Sol Associates Limited Partnership ($928,045) and Turabo Limited Dividend Partnership ($46,000) to Seller, which are payable only by proceeds from (i) mortgage refinancing, (ii) partial condemnation, (iii) sale of easements or similar interest, or (iv) proceeds from the sale of any Subject Property.

B.   Except for the distributions to be made to Seller and the limited partners of the Project Partnerships regarding the 2008 operations (it being understood that such distributions shall be reviewed by Purchaser during the Due Diligence Period), no additional distribution of dividends or partnership profits or earned revenues shall be made by the Project Partnerships to American Land, IGP Group and/or ACPTr.  It is understood by both parties that the Monserrate Associates, LP Subject Property is to be refinanced on or before April 30, 2009, when its loan amount matures.  Both parties agree that all refinancing proceeds to be collected by IGP as General Partner and Limited Partner, shall be distributable to Purchaser only and that Seller shall not be entitled to any of such proceeds.

C.   Seller will be responsible for all Ineligible Liabilities, the complete description of which shall be agreed upon in writing by the parties during the Due Diligence Period.

D.   Seller shall receive all uncollected management fees due pursuant to the Management Agreements until the Closing Date.  Seller also shall receive the accrued incentive fee earned pursuant to the Management Agreements until the Closing Date.  Such payment or payments will be made, according to the partnership agreements of the Project Partnerships and the Management Agreement for the Subject Properties, at the time the Project Partnerships make the cash distributions to the partners on March 31, 2010.

E.   Purchaser shall receive the refinancing fee related to Monserrate Associates, LP from the refinancing proceeds of the realty.

F.   Purchaser shall cause PSI to assume the existing lease of IGP with Escorial Office Building I until the expiration of the current term of such lease.  The form of such lease assumption shall be agreed upon during the Due Diligence Period.

7.   APPROVALS AND CONSENTS

A.   During the four (4) month period following the Effective Date (the “Required Approval Delivery Period”), Seller shall cooperate with Purchaser in providing all necessary notices and take all appropriate actions to obtain the required consents or approvals from (i) HUD, including the “2530” clearances, (ii) existing lenders on the Subject Properties, (iii) applicable Governmental Bodies, and (iv) limited partners in the Project Partnerships (collectively, the “ Required Approvals ”).  Purchaser and Seller agree that should the lenders charge a transfer fee, a fee of 1% of the then outstanding principal balance of each loan shall be acceptable and Seller and Purchaser shall share equally in the cost of such transfer fees.  However, in the event a lender requires a transfer fee in excess of 1%, Seller and Purchaser shall attempt to reach an agreement as to the allocation of the amount in excess of 1% and if no agreement is reached within a ten (10) day period, Purchaser may terminate this Agreement, and Purchaser shall have full refund of the Deposit.  By written notice delivered to Seller at least five (5) business days prior to the expiration of the Required Approval Delivery Period, Purchaser may extend the Required Approval Delivery Period for a period not to exceed an additional thirty (30) days if such required approvals have been requested from the appropriate parties but not yet obtained.  All Required Approvals are set forth on Schedule 7(A) attached hereto.

8.   REPRESENTATIONS AND WARRANTIES REGARDING AUTHORITY

A.   ACPT’s Authority .  ACPT hereby represents and warrants to Purchaser as of the date of this Agreement and as of the Closing Date that this Agreement has been duly authorized, executed and delivered by ACPT and all consents required under ACPT’s Organizational Documents have been obtained.  All documents that are to be executed by ACPT and delivered to Purchaser on the Closing Date have been, or on the Closing Date will be, duly executed, authorized and delivered by ACPT.  This Agreement and all such documents are, and on the Closing Date will be, legal, valid and binding obligations of ACPT, enforceable in accordance with their terms and do not, and, at the time of the Closing Date will not, violate any provisions of any agreement or judicial or administrative order to which ACPT is a party or to which ACPT is subject.

B.   American Land’s Authority .  American Land hereby represents and warrants to Purchaser as of the date of this Agreement and as of the Closing Date that this Agreement has been duly authorized, executed and delivered by American Land and all consents required under American Land’s Organizational Documents have been obtained.  All documents that are to be executed by American Land and delivered to Purchaser on the Closing Date have been, or on the Closing Date will be, duly executed, authorized and delivered by American Land.  This Agreement and all such documents are, and on the Closing Date will be, legal, valid and binding obligations of American Land, enforceable in accordance with their terms and do not, and, at the time of the Closing Date will not, violate any provisions of any agreement or judicial or administrative order to which American Land is a party or to which American Land is subject.

C.   IGP Group’s Authority .  IGP Group hereby represents and warrants to Purchaser as of the date of this Agreement and as of the Closing Date that this Agreement has been duly authorized, executed and delivered by IGP Group and all consents required under IGP Group’s Organizational Documents have been obtained.  All documents that are to be executed by IGP Group and delivered to Purchaser on the Closing Date have been, or on the Closing Date will be, duly executed, authorized and delivered by IGP Group.  This Agreement and all such documents are, and on the Closing Date will be, legal, valid and binding obligations of IGP Group, enforceable in accordance with their terms and do not, and, at the time of the Closing Date will not, violate any provisions of any agreement or judicial or administrative order to which IGP Group is a party or to which IGP Group is subject.

D.   Purchaser’s Authority .  Purchaser hereby represents and warrants to Seller as of the date of this Agreement and as of the Closing Date that this Agreement has been duly authorized, executed and delivered by Purchaser and all consents required under Purchaser’s Organizational Documents or by law have been obtained.  All documents that are to be executed by Purchaser and delivered to Seller on the Closing Date have been, or on the Closing Date will be, duly executed, authorized and delivered by Purchaser.  This Agreement and all such documents are, and on the Closing Date will be, legal, valid and binding obligations of Purchaser, enforceable in accordance with their terms and do not, and, at the time of the Closing Date will not, violate any provisions of any agreement or judicial or administrative order to which Purchaser is a party or to which Purchaser is subject.

9.   REPRESENTATIONS AND WARRANTIES.

A.   Organization and Ownership of Project Partnerships.

B.   Consents and Approvals for Project Partnerships .