(PAGE)             CONTROL TRANSFER AGREEMENT


          This Control Transfer Agreement (this "Agreement"),
dated as of December 31, 1996, is entered into by and among
Interstate Business Corporation, a Delaware corporation ("IBC"),
Interstate General Company L.P., a Delaware limited partnership
(IGC"), Interstate General Properties Limited Partnership S.E., a
Maryland limited partnership ("IGP"), Housing Development
Associates S.E., a Puerto Rico partnership ("HDA"), Equus
Management Company, a Delaware corporation ("EMC"), and Equus
Gaming Company L.P., a Virginia limited partnership ("Equus").

                      W I T N E S S E T H:

          WHEREAS, EMC, Equus and HDA are all commonly
controlled, directly or indirectly by IGC;

          WHEREAS, IGC wishes to divest itself of control of EMC,
Equus and HDA by transferring such control to IBC;

          WHEREAS, in anticipation of the control transfer to be
effected by this Agreement, in April 1996 IGP transferred to EMC
certain employees that perform consulting services for El
Comandante Operating Company, Inc. ("ECOC") and IGP assigned to
EMC its rights under that certain Consulting Agreement dated as
of December 15, 1993 by and between IGP and ECOC, and in August
1996 IGP transferred certain employees that perform services for
Equus and HDA to the payroll of EMC and IGP assigned to EMC that
certain Amended and Restated Management Agreement dated as of
December 15, 1993 by and between IGP and HDA (all such employees
are referred to herein as the "Transferred Employees");

          WHEREAS, in transferring control, IGC, Equus and EMC
wish to preserve the employee benefits presently enjoyed by EMC
employees and wish to provide for continued funding of certain
EMC and Equus expenses;

          WHEREAS, the Board of Directors of each of IBC, EMC and
the managing general partner of IGC has determined that the
transactions contemplated by this agreement are fair to each of
IBC, IGC and Equus and are at least as favorable to each such
company as would be available for substantially comparable
transactions between unrelated parties;

          NOW THEREFORE, in consideration of the foregoing
premises and the mutual covenants contained in this Agreement and
for other good and valuable consideration, the receipt and
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sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

     1.   Transfer of Stock.  For and in consideration of the
undertakings set forth in Section 3 hereof, IGC hereby sells,
assigns, transfers and conveys to IBC, and IBC hereby purchases,
acquires and accepts from IGC, all of IGC's right title and
interest in and to 100 shares of the Common Stock of EMC (the
"EMC Stock").  IGC and EMC represent and warrant to IBC that the
EMC Stock constitutes all of the issued and outstanding shares of
capital stock of EMC.  IBC hereby acknowledges receipt of
Certificate No._____ representing the EMC Stock, duly endorsed by
IGC.  IBC shall surrender such stock certificate to EMC and EMC
shall issue to IBC a stock certificate evidencing IBC's ownership
of the EMC Stock and bearing the following legend:

     Certain dividend and transfer rights with respect to the
     shares represented by this certificate have been irrevocably
     assigned to Interstate General Company L.P., or its
     successors or assigns, in accordance with that certain
     Control Transfer Agreement dated as of December 31, 1996.
     The Shares represented by this certificate have not been
     registered under the Securities Act of 1933.  Such Shares
     have been acquired for investment and may not be pledged,
     offered, sold or transferred except in compliance with the
     registration requirements of the Securities Act of 1933 or
     an exemption therefrom, or upon delivery to Equus Management
     Company ("EMC"), if requested, of an opinion of counsel, in
     form and substance reasonably satisfactory to EMC, that
     registration under such Act is not required.

     2.   Transfer of IGC GP Interest.  For and in consideration
of the undertakings set forth in Section 3 hereof, IGC shall, if
and when it receives Nasdaq Approval (as hereinafter defined),
sell, assign, transfer and convey to IBC, and IBC shall purchase,
acquire and accept from IGC, all of IGC's right, title and
interest in an to IGC's general partnership interest (the "IGC GP
Interest").  Upon the transfer to IBC of the IGC GP Interest, IGC
shall withdraw as a general partner of Equus.

     3.   IBC Undertakings.  For and in full consideration of the
transfer of the EMC Stock and the IGC GP Interest to IBC by IGC,
IBC hereby agrees to:

          (a)  forever indemnify and hold harmless IGC, and its
successors and assigns from and against any and all liability and
expense (including, without limitation, any liability for debts
(PAGE)
or obligations incurred by Equus) which IGC may incur as a result
of its serving as a general partner of Equus;

          (b)  use its best efforts to obtain the approval of
Nasdaq Stock Market to the continued listing of Equus' Class A
Limited Partnership Units ("Equus Units") on the Nasdaq Stock
Market in the event of and following the withdrawal of IGC as a
general partner of Equus ("Nasdaq Approval");

          (c)  irrevocably assign to IGC all rights to any
distributions received by EMC from Equus in respect of its .99%
general partnership interest in Equus to the extent that such
distributions exceed the expenses and liabilities of EMC incurred
in the ordinary course of business in its capacity as managing
general partner of Equus; and

          (d)  not transfer or otherwise dispose of any EMC stock
other than (i) to an affiliate or IBC who agrees to remain bound
by the terms of this Agreement, or (ii) to any party in an arm's
length transaction for fair value which such value is hereby
irrevocably assigned to IGC.

     4.   Assignment of Master Support Agreement.  IGC, hereby
assigns to IBC all rights and IBC hereby assumes all obligations
under that certain Master Services and Support Agreement between
IGC and Equus dated as of December 9, 1994.  (the "Support
Agreement").  Equus hereby consents to such assignment.

     5.   Unit Transfer to Fund Employee Benefits.  IGC, Equus
and EMC hereby amend that certain Distribution Agreement dated as
of August, 1994 to reduce by 50,000 the number of Equus Units
that Equus is obligated to deliver to IGC from time to time to
fund employee benefit obligations of IGC (the "Relinquished
Units").  IGC hereby transfers and conveys to Equus 75,000 Class
A Limited Partnership Units of IGC (the "Reserved IGC Units").
Equus shall offer the Transferred Employees unit incentive awards
("Replacement Awards") that will provide benefits substantially
equivalent to incentive compensation awards issued to such
Transferred Employees by IGC and until Equus' obligations with
such Replacement Awards have been satisfied, Equus shall use the
Relinquished Units and the Reserved IGC Units solely to satisfy
obligations under such Replacement Awards.  IGC is issuing the
Reserved Units to Equus without registration under the Securities
Act of 1933.  The Unit certificate evidencing the Reserved Units
shall bear the following legend:


(PAGE)
     Transfer of the Units represented by this certificate are
     subject to certain restrictions in accordance with that
     certain Control Transfer Agreement dated as of December 31,
     1996.  The Units represented by this certificate have not
     been registered under the Securities Act of 1933.  Such
     Units have been acquired for investment and may not be
     pledged, offered, sold or transferred except in compliance
     with the registration requirements of the Securities Act of
     1933 or an exemption therefrom, or upon delivery to
     Interstate General Company, L.P. ("IGC"), if requested, of
     an opinion of counsel, in form and substance reasonably
     satisfactory to IGC, that registration under such Act is not
     required.

     6.   Assignment of HDA Management Agreement.  IGP hereby
assigns to EMC all rights, and EMC hereby assumes from IGP all
obligations under that certain Amended and Restated Management
Agreement dated December 15, 1993 by and between IGP and HDA (the
"HDA Management Agreement").  IGP shall provide EMC office space
and office equipment and supplies (including telecommunications
equipment and services) suitable to permit EMC to perform the
obligations assumed under the HDA Management Agreement.  EMC
shall reimburse IGP for its direct costs incurred in providing
such administrative support.

     7.   Further Actions.  The parties hereto shall promptly
execute and deliver all such documents, instruments and
agreements and take such other actions as may be necessary or
desirable to carry into effect the transactions contemplated
hereby.

     8.   Amendments; Waivers.  Any provisions of this Agreement
may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by all of the parties hereto.
No failure or delay by any party hereto in exercising any right,
power or privilege hereunder shall operate as a waiver thereof
nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.

     9.   Severability.  Should any provision of this Agreement
for any reason be declared invalid or unenforceable, such
decision shall not affect the validity or enforceability of any
of the other provisions of this Agreement, which remaining
provisions shall remain in full force and effect, and the
application of such invalid or unenforceable provision to persons
or circumstances other than those as to which it is held invalid
(PAGE)
or unenforceable shall be valid and be enforced to the fullest
extent permitted by law.

     10.  Headings.  The descriptive headings of the several
Sections of this Agreement are inserted for convenience only, do
not constitute a part of this Agreement and shall not affect in
any way the meaning or interpretation of this Agreement.

     11.  Applicable Law.  The validity and interpretation of
this Agreement and the performance by the parties of their
respective obligations hereunder shall be governed by the laws of
the State of Delaware without regard to its choice of law
provisions.

     12.  Counterparts.  This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, and
it shall not be necessary in making proof of this Agreement to
produce or account for more than one counterpart signed by the
party to be charged thereby.

     13.  Entire Agreement.  This Agreement contains the entire
agreement of the parties hereto with respect to the subject
matters hereof, and supersedes all previous agreements and
understandings among the parties with respect to such matters.

     14.  Successors and Assigns.  This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors, assigns and transferees.



















(PAGE)
          IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.

INTERSTATE GENERAL PROPERTIES     INTERSTATE BUSINESS CORPORATION
LIMITED PARTNERSHIP S.E.

By: Interstate General Company L.P.,   /s/ James Michael Wilson
    its General Partner                -------------------------
                                       Name: James Michael Wilson
                                       Title: President

By: Interstate General Management
    Corporation, its Managing    INTERSTATE GENERAL COMPANY L.P.
    General Partner
                                 By:Interstate General Management
                                    Corporation, its Managing
By: /s/ James Michael Wilson        General Partner
   --------------------------
Name: James Michael Wilson
Title: Vice Chairman
                                   By: /s/ James Michael Wilson
                                       --------------------------
EQUUS GAMING COMPANY L.P.          Name: James Michael Wilson
                                   Title: Vice Chairman
By: Equus Management Company, its
    Managing General Partner       EQUUS MANAGEMENT COMPANY


By: /s/ Donald G. Blakeman         By: /s/ Donald G. Blakeman
   --------------------------       ----------------------------
Name: Donald G. Blakeman           Name: Donald G. Blakeman
Title: President                   Title: President

HOUSING DEVELOPMENT
 ASSOCIATES, S.E.

By: Equus Gaming Company L.P., its
    Managing General Partner

By: Equus Management Company, its
    Managing General Partner


By: /s/ Donald G. Blakeman
   ------------------------------
Name: Donald G. Blakeman
Title: President