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     EXHIBIT 10.35   FIRST MODIFICATION TO DEED OF TRUST AND
                       SECURITY AGREEMENT "B"












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                                           THIS DOCUMENT IS BEING RE-RECORDED TO
                                                   REFLECT SIGNATURE OF GRANTOR.

         FIRST MODIFICATION TO DEED OF TRUST AND SECURITY AGREEMENT "B"

         THIS FIRST MODIFCIATION TO DEED OF TRUST AND SECURITY AGREEMENT "B",
(this "Modification"), is made as of the 24th day of November, 1998, by and
between ARLINGTON SQUARE LIMITED PARTNERSHIP, a Virginia limited partnership
("Grantor") having its principal office at c/o The Washington Corporation, 4650
East West Highway, Suite 251, Bethesda, Maryland 20814 and ALLIED CAPITAL
CORPORATION, a Maryland corporation ("Beneficiary") having its principal office
at 1919 Pennsylvania Avenue, N. W., Third Floor, Washington, D.C. 20006.


                                    RECITALS:

         Whereas, pursuant to the terms of a certain Loan Agreement dated
November 20, 1997, by and between Grantor and Beneficiary, Grantor previously
obtained a loan ( the "Loan") from Beneficiary in the aggregate principal amount
of Twenty-four Million Three Hundred Thousand and No/100 Dollars
($24,300,000.00); and

Whereas, the Loan was evidenced by (I) a certain Promissory Note dated November
20, 1997 (together with any and all extensions, renewals, modifications and
substitutions thereof or therefor, "Note A") made by Grantor and payable to the
order of Beneficiary in the original principal amount of Twenty-three Million
Three Hundred Thousand and No/100 Dollars ($23,300,000.000, which note was
secured by, among other things, the lien of a certain Deed of Trust and Security
Agreement "A" ("Deed of Trust A") made by Grantor for the benefit of Beneficiary
and recorded on November 21, 1997 in Book 2860 at Page 1501 in the Office of the
Clerk of the Circuit Court of Arlington County, Virginia encumbering the real
property located more particularly described therein and located at 4401 Fairfax
Drive, Ballston, Virginia (the "Real Property"); and (ii) a certain Promissory
Note dated November 20, 1997, as modified by Allonge dated April 23, 1998
(together with any and all extensions, renewals, modification and substitutions
thereof or therefor, "Note B") made by Grantor and payable to the order of
Beneficiary in the original principal amount of One Million and No/100 Dollars
($1,000,000.00), which note evidences Grantor's obligation to repay to
Beneficiary the principal amount thereof and certain other monetary obligations
owing to Beneficiary (including, without limitation, Beneficiary's participation
interest pursuant to subparagraph 2(g) of Note B) more particularly set forth
therein (collectively, the "Other Monetary Obligations") and is secured by,
among other things, the lien of a certain Deed of Trust and Security Agreement
"B" ("Deed of Trust B") made by Grantor for the benefit of Beenficiary and
recorded on November 21, 1997 in Book 2860 at Page 1530 in the Office of the
Clerk of the Circuit Court of Arlington County, Virginia, encumbering the Real
Property as more particularly described therein and on Schedule A attached
hereto; and

WHEREAS, Grantor has repaid all sums due and owing pursuant to Note A and Deed
of Trust A has accordingly been released; and


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WHEREAS, while Grantor has repaid the principal and interest due and payable
pursuant to Note B, the Other Monetary Obligations remain outstanding; and

WHEREAS, Grantor and Beneficiary desire to enter into this Modification to
reflect the pay down of Note B, as described above, and to reflect that Deed of
Trust B continues to secure Grantor's obligation to repay the Other Monetary
Obligations as and when due pursuant to Note B.

                                WITNESSETH THAT:

         NOW THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and the sufficiency of which is hereby acknowledge,
the parties hereto, intending to be legally bound hereby, agree as follows:

              1. The foregoing recitals are hereby incorporated herein by this
reference and made a part hereof, with the same force and effect as if fully set
forth herein.

              2. Deed of Trust B is hereby modified to reflect that given, the
pay-down of Note B as referenced above, the defined term "Debt", as used in Deed
of Trust B, shall be limited to Grantor's obligation to pay to Beneficiary the
Other Monetary Obligations pursuant to Note B.


              3. Except as expressly modified hereby, the terms and provisions
of Deed of Trust B shall be and remain unchanged and in full force and effect,
and as so modified the same are hereby approved, ratified and confirmed.

              4. This Modification shall be governed by the laws of the
Commonwealth of Virginia and shall be binding upon and inure to the benefit of
the parties hereto and their respective, heirs, executors, administrators,
personal representatives, successors, and assigns.


                   5. This Modification may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall be deemed one and the same instrument.


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IN WITNESS WHEREOF, the undersigned have executed this Modification on the day
and year first above written.


                                   GRANTOR:


                                   ARLINGTON SQUARE LIMITED
                                   PARTNERSHIP, a Virginia limited partnership

                                   By:  Arlington Square, Inc., a Virginia
                                   Corporation, its general partner


                                   By: /s/ William N. Demas
                                      -------------------------------------
                                      Name:   William N. Demas
                                      Title:  President


                                      BENEFICIARY:

                                      ALLIED CAPITAL CORPORATION,  a
                                      Maryland Corporation


                                      By: /s/ Michael J. Grisius
                                         -------------------------------------
                                         Name:   Michael J. Grisius
                                         Title:  Principal



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STATE OF MARYLAND    )
                     ) ss.:
COUNTY OF Montgomery )


         On this 24th day of November, 1998, before me personally came
William N. Demas to me known, who, being by me duly sworn, did depose and say
that s/he is the President of Arlington Square, Inc., general partner of
Arlington Square Limited Partnership, the limited partnership described in and
which executed the within instrument as Grantor; and that s/he signed his name
thereto in such capacity on behalf of said entity as general partner of and on
behalf of said limited partnership.


                               /s/  Carolyn C. Boccacella
                               ----------------------------------------
                                     Notary Public



My Commission Exprires:

Carolyn C. Boccacella
Notary Public State of Maryland
My Commission Expires November 1, 1999
















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DISTRICT OF COLUMBIA) ss.:


         On this 24th day of November, 1998, before me personally came
Michael J. Griusius to me known, who, being by me duly sworn, did depose
and say that s/he is the Principal of Allied Capital Corporation, the
corporation described in and which executed the within instrument as
Beneficiary; and that s/he signed his name thereto in such capacity on
behalf of said entity.


                               /s/ Amelia Mitchem
                               ----------------------------------------
                                         Notary Public


         My Commission Expires:  10/31/02















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                                  Schedule "A"
                                LEGAL DESCRIPTION


All that certain land situate in Arlington County, Virginia, and more
particularly described as follows:

Parcel A, ARLINGTON SQUARE, as duly dedicated, platted and recorded in Deed Book
2210, page 994, among the land records of Arlington County, Virginia.


















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