Contribution Agreement

Contribution Agreement

by First Washington Rlty Tr Inc
September 17th, 1997

                             CONTRIBUTION AGREEMENT


         THIS CONTRIBUTION AGREEMENT is made and entered as the 22nd day of
May, 1997, by and between (i) DOMINICK DIMATTEO, JR. IRREVOCABLE FAMILY
TRUST F/B/O MARY ELLEN DIMATTEO, JAMES S. DIMATTEO, TRUSTEE,
DOMINICK DIMATTEO, JR. IRREVOCABLE FAMILY TRUST F/B/O DONNA
DIMATTEO OWEN, JAMES S. DIMATTEO, TRUSTEE, DOMINICK DIMATTEO, JR.
IRREVOCABLE FAMILY TRUST F/B/O JAMES S. DIMATTEO, JAMES S. DIMATTEO,
TRUSTEE, DOMINICK DIMATTEO, JR. IRREVOCABLE FAMILY TRUST F/B/O
MARGARET DIMATTEO BEDFORD, JAMES S. DIMATTEO, TRUSTEE,  and
DOMINICK DIMATTEO, JR. IRREVOCABLE FAMILY TRUST F/B/O KATHERINE
DIMATTEO CRANE, JAMES S. DIMATTEO, TRUSTEE, jointly and severally
(collectively, the "Contributor") and (ii) FIRST WASHINGTON REALTY LIMITED
PARTNERSHIP, a Maryland limited partnership (hereinafter referred to as 
"FWRLP").

                               W I T N E S S E T H:

         WHEREAS,  Contributor is the beneficial owner, pursuant to a land trust
agreement with LaSalle  National Trust  (#110462-0)  dated November 1, 1985 (the
"Land  Trust"),  of all of  those  certain  parcels  of  real  property  as more
particularly described on Exhibit A hereto (collectively,  the "Land"), together
with the shopping  center known as River's Edge Plaza Shopping Center located in
Chicago,  Cook County,  Illinois,  and all other buildings and  improvements not
owned by  tenants  situated  thereon  (collectively,  the  "Building"),  and all
personal  property  and  fixtures  not owned by  tenants  located  therein  (the
"Personal Property"), and all appurtenances,  rights, easements,  rights-of-way,
tenements and  hereditaments  incident thereto (the "Additional  Property") (the
Land,  Building,  Personal  Property and  Additional  Property  are  hereinafter
collectively referred to as the "Property"); and

         WHEREAS,  Contributor  and FWRLP  desire to enter  into this  Agreement
relating to the contribution by Contributor to FWRLP of the Property in exchange
for cash and certain interests in FWRLP.

         NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants  and  agreements  herein  contained  and for other  good and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

         1.       Contribution.  Subject to the terms and conditions set forth 
in this Agreement, Contributor and FWRLP agree to the contribution by 
Contributor to FWRLP (the "Contribution") of all of the Property.


         2.       Consideration.

                                                        -1-





                  (a) In  consideration  of the  Contribution of the Property to
FWRLP, FWRLP shall assume, pay and issue the following (the "Consideration"):

                           (i)      $2,418,655.00, or such lesser amount which 
represents the outstanding   principal   balance  with  respect  to  the  
Nationwide  Loan  (as hereinafter defined) as of Closing (the "Actual Loan 
Amount"), by FWRLP assuming the Nationwide Loan as described below;

                           (ii)     pay a sum equal $52,823.00, by cash or wire 
transfer of immediately available funds (the "Cash Portion"); and

                           (iii) issue  common  partnership  units of FWRLP (the
"Units") in
an aggregate amount  calculated as follows:  $2,498,596.00  minus the sum of the
Actual Loan Amount and the Cash Portion,  such sum to be adjusted for closing or
other  adjustments  herein  provided,  such total  divided by $23.50  (the "Unit
Price") rounded to the nearest one (1) Unit.

                  (b) At Closing,  the Property  shall be  contributed  to FWRLP
with the Property then being subject to the indebtedness,  lien and operation of
the First Mortgage (as defined  below).  Contributor  and FWRLP shall provide to
the Lender any and all information reasonably requested by the Lender.

                  (c) (i) The Property is presently encumbered by a Mortgage and
Security  Agreement  dated June 16,  1989 (the "First  Mortgage")  from the Land
Trust, as debtor,  for the benefit of Employers Life Insurance Company of Wausau
and  Nationwide  Life &  Annuity  Insurance  Co.  (formerly  known as  Financial
Horizons Life Insurance Co.), as mortgagee (collectively,  the "Lender"),  which
First Mortgage secures an original principal  indebtedness of $2,600,000.00,  in
the aggregate,  with interest  thereon payable over the term thereof (which ends
on July 10, 1999) at a fixed interest rate of 10.50% per annum,  as evidenced by
two Promissory Notes from the Land Trust to Lender  (collectively,  "Note"). The
First Mortgage and Note and all documents and instruments executed in connection
therewith are collectively  referred to as the "Nationwide Loan." The Nationwide
Loan is non-recourse (except for environmental and other standard carve outs) to
Contributor and requires equal monthly installments of principal and interest in
the amount of the $24,083.00 per month. The outstanding  principal balance under
the  Nationwide  Loan as of December 31, 1996 was  approximately  $2,418,655.00.
True and correct  copies of the First  Mortgage and Note are attached  hereto as
Exhibits J and K, respectively,  and a schedule of all of the Loan Documents are
shown on Exhibit L.

     (ii) FWRLP's obligations under this Agreement shall be expressly contingent
on the condition that Contributor obtains for and delivers to FWRLP by Closing a
letter (the "Letter") from Lender (i) consenting to the Contribution

                                                        -2-





of the  Property  subject  to the  Nationwide  Loan on the same  terms  and such
modifications  to the  Nationwide  Loan as FWRLP  shall  determine,  in its sole
discretion,   are   necessary  (to  the  extent  that  FWRLP   determines   that
modifications  are  necessary,  FWRLP  shall so  notify  Contributor  as soon as
possible,  but in any event prior to the end of the  Feasibility  Period),  (ii)
confirming  that the Nationwide  Loan is as described  above,  (iii)  certifying
that,  to the best  knowledge of the Lender,  there is no default or event which
with notice or lapse of time,  or both,  would  constitute  a default  under the
Nationwide Loan.  FWRLP and Contributor  shall cooperate in obtaining the Letter
from Lender.  Contributor  shall be responsible  and pay for any loan assumption
fees charged by the Lender in connection  with the  assumption of the Nationwide
Loan by FWRLP,  subject to the terms of Section 2(c)(iii) below, and FWRLP shall
be  responsible  for the Lender's title  charges,  fees of Lender's  counsel and
other  assumption  costs.  At  Closing,  Contributor  shall  execute an estoppel
certificate  in  favor of  FWRLP  certifying  that,  to the  best  knowledge  of
Contributor, there is no default, or event of default which with notice or lapse
of time,  or both,  would  constitute  a  default  under  the  Nationwide  Loan.
Contributor shall use commercially  reasonable  efforts to deliver to FWRLP such
Letter from Lender before the end of the Feasibility  Period (as defined below).
If Lender denies the assumption of the  Nationwide  Loan by FWRLP or if Lender's
Letter is other than as set forth above and is not acceptable to FWRLP or if the
Letter is not received by FWRLP by Closing,  FWRLP shall have the right,  at its
sole  election,  to terminate this Agreement by giving written notice thereof to
Contributor,  whereupon the Deposit,  together with interest  thereon,  shall be
returned to  Contributor  and neither party shall have any further  liability to
the other.

            (iii)  Contemporaneously  with the  execution of this Agreement,
FWRLP  is  entering  into  a  separate   Contribution   Agreement   (the  "Other
Contribution Agreement" or, collectively,  the "Other Contribution  Agreements")
with  each  of  the  beneficial   owners  (each  of  which  is  affiliated  with
Contributor) (the "Other Contributors") of each of the following properties: (i)
Mallard Creek Shopping Center, Round Lake Beach, Lake County, Illinois, (ii) The
Oaks Shopping Center, Des Plaines, Cook County, Illinois, (iii) Stonebrook Plaza
and  Outparcel,  Merrionette  Park,  Cook County,  Illinois,  (iv) Pheasant Hill
Shopping Center,  Bolingbrook,  Will County,  Illinois,  and (v) McHenry Commons
Shopping Center, McHenry,  McHenry County,  Illinois  (collectively,  the "Other
Properties",  and each of (i) through (v)  referred to as an "Other  Property").
Notwithstanding  the  foregoing,  (A)  if the  aggregate  loan  assumption  fees
(excluding lender's title charges, fees of lender's counsel and other assumption
costs)  charged by the mortgage  lenders in  connection  with the  assumption by
FWRLP of the  existing  first  mortgage  loans  on the  Property  and the  Other
Properties exceeds  $218,049.00 (the "Threshold Fees"), then the Cash Portion of
the  Consideration set forth in Section 2(a)(ii) of this Agreement and the Other
Contribution  Agreements  shall be  increased  by an  aggregate  amount equal to
one-half (1/2) of such excess amount,  or (B) if such aggregate loan  assumption
fees  are  less  than  the  Threshold   Fees,  then  the  Cash  Portion  of  the
Consideration  set forth in Section  2(a)(ii)  of this  Agreement  and the Other
Contribution  Agreements  shall be reduced by an aggregate  amount equal to such
shortfall;  provided,  however,  that if the  Property  and/or  any of the Other
Properties  are not  contributed  to  FWRLP  (the  "Noncontributed  Properties")
pursuant to this Agreement

                                                        -3-





or the Other Contribution Agreements,  then the $218,049.00 Threshold Fees shall
be reduced by a percentage  equal to the  percentage  that the then  outstanding
principal  balance of the  mortgage  loan(s) for the  Noncontributed  Properties
bears to the aggregate then outstanding principal balances of the mortgage loans
of the Property and the Other Properties.

     (iv) Contributor's  obligations under this Agreement shall be contingent on
the condition that the Lender, on or before the Closing, shall have released the
Contributor  and its Partners from the  indemnity  obligations  and  liabilities
under  the  Nationwide  Loan  pursuant  to  a  release  document(s)   reasonably
acceptable to the Contributor.

                  (d)      Intentionally Omitted.

         3.       Deposit.

                  (a) Within three (3) business  days after the date of delivery
to FWRLP of an original of this Agreement executed by Contributor  together with
completed  Exhibits  hereto  (the  date of such  delivery  to  FWRLP  being  the
"Acceptance  Date"),  FWRLP shall  deliver to Chicago Title  Insurance  Company,
Chicago,  Illinois (the "Title Company"), as escrow agent, a deposit ("Deposit")
of  Seventy-Five  Thousand  Dollars  ($75,000.00 ) by check payable to the Title
Company. If FWRLP shall fail to deliver the Deposit when required to do so, this
Agreement shall become null and void and the parties hereto shall be relieved of
all further liability and obligation to each other.

                  (b) The Title  Company will  immediately  provide  Contributor
with written evidence of receipt of such Deposit.  The Title Company shall place
the Deposit in an interest-bearing  account within three (3) days after the date
of receipt  thereof,  and interest on the Deposit shall accrue to the benefit of
the party entitled to the Deposit and shall constitute a part of the Deposit for
all purposes hereof.  The Deposit shall be held by the Title Company pursuant to
the terms and conditions of a separate  deposit escrow  agreement  acceptable to
Contributor and FWRLP.

         4.  Closing.  Except  as  otherwise  provided  in this  Agreement,  the
Contribution  contemplated  herein shall be consummated at the "Closing",  which
shall take place on the date (the "Closing Date") specified by FWRLP on not less
than ten (10) days notice to  Contributor,  provided that the Closing Date shall
not be later than thirty (30) days after the end of the  Feasibility  Period (as
defined and described in Section 13(b) hereof;  provided,  however,  that if the
Lender has not completed all  documentation  for FWRLP to assume the  Nationwide
Loan by such date,  then the Closing Date shall be extended for such  reasonable
time period as is required to close the assumption of the Nationwide  Loan). The
Closing shall take place at the offices of the Title  Company,  or at such other
place as may mutually  agreed upon by  Contributor  and FWRLP.  The  transaction
contemplated by this Agreement shall be closed by means of a Deed and Money "New
York Style" Escrow (the "Closing Escrow") to be

                                                        -4-





opened with the Title Company, on or before the Closing Date, in accordance with
the  general  provisions  of the usual form of Deed and Money  "New York  Style"
Escrow  Agreement (the "Escrow  Agreement")  then provided and used by the Title
Company with such special provisions  inserted in the Escrow Agreement as may be
required  to conform to this  Agreement;  provided,  however,  in the event of a
conflict  between the terms of this Agreement and the Closing Escrow,  the terms
of this Agreement shall control.

         5.  Representations  and Warranties of Contributor.  In order to induce
FWRLP to enter into this  Agreement  and to issue the Common  Units (among other
things)  in  consideration  for  the  Property,  Contributor  hereby  makes  the
following  representations and warranties,  each of which is material and shall,
together with all  covenants,  agreements and  indemnities  set forth in or made
pursuant to this  Agreement,  survive  Closing to the extent provided in Section
18(m),  notwithstanding  any  investigation  at any time made by or on behalf of
FWRLP:

                  (a)  Authority  of   Contributor.   Each   Contributor   is  a
irrevocable  trust duly  organized  and in good  standing  under the laws of the
State of Illinois.  Contributor  has all  necessary  power and authority and has
taken all necessary action to execute, deliver and perform this Agreement and to
bind the Land Trust to deliver the Deed and other documents required  hereunder.
No  consents  of any  persons  other  than those  executing  this  Agreement  as
Contributor  are  required  for  such  execution  or to  enable  Contributor  to
consummate the transactions contemplated hereby. This Agreement is the valid and
binding obligation of Contributor, enforceable against it in accordance with its
terms,   except   that  such   enforcement   may  be  subject   to   bankruptcy,
conservatorship, receivership, reorganization, insolvency, moratorium or similar
laws or procedures  relating to or affecting  creditors' rights generally and to
general principles of equity.

                  (b) Title.  Contributor  is the sole  beneficiary  of the Land
Trust which is the sole owner of fee simple title to the  Property.  To the best
of Contributor's knowledge, such title to the Property is marketable and good of
record and free and clear of all  liens,  encumbrances,  covenants,  conditions,
restrictions  and  other  matters  affecting  title,  except  for the  Permitted
Exceptions (as defined in Section 8(a)(iii)).

                  (c)   Compliance   with   Existing   Laws.   To  the  best  of
Contributor's  knowledge,  (i)  Contributor  is not in  violation  of,  and  has
complied with any and all applicable  building,  zoning,  environmental or other
ordinances,  statutes or regulations of any governmental  agency,  in respect to
the ownership, use, maintenance,  condition and operation of the Property or any
part thereof, and (ii) Contributor possesses all licenses, certificates, permits
and  authorizations  necessary  for the use and operation of the Property in the
manner in which it is currently  being operated by  Contributor.  To the best of
Contributor's  knowledge,  no  variance,  exception  or  other  modification  of
applicable  zoning laws was necessary in order to authorize the use or occupancy
of the Property or any portion thereof.


                                                        -5-





                  (d) Leases.  True,  correct and complete  copies of all of the
leases of the Property and any amendments thereto  (collectively,  the "Leases")
are available at Contributor's corporate office for review and copying by FWRLP.
Attached hereto as Exhibit B is a description of all of the Leases and a current
rent  schedule  ("Rent  Schedule")  covering the Leases.  There are no leases or
tenancies of any space in the  Property  other than those set forth in Exhibit B
or any subleases or subtenancies  which have been consented to by Contributor or
of which Contributor has actual knowledge unless otherwise noted therein. Except
as otherwise set forth in Exhibit B or elsewhere in this Agreement:

                           (i) to  the  best  of  Contributor's  knowledge,  the
                  Leases are in full force and  effect and  constitute  a legal,
                  valid and binding obligation of the respective tenants and are
                  assignable by Contributor to FWRLP;

                           (ii)     no tenant has an option to purchase the 
                  Property;

                           (iii) no  renewal  or  expansion  options  have  been
                  granted to the tenants, except as provided in the Leases;

                           (iv)     to the best of Contributor's knowledge, 
                  Contributor is not in default under any of the Leases;

                            (v) the  rents set  forth on the Rent  Schedule  are
                  being collected on a current basis and there are no arrearages
                  in  excess of one  month,  except as  indicated  in  Exhibit B
                  hereto,  nor has any tenant paid any rent,  additional rent or
                  other  charge of any nature  for a period of more than  thirty
                  (30) days in advance;

                           (vi) all work for tenant  alterations  and other work
                  or materials  contracted for by Contributor and any tenant has
                  been  completed,  and all work and  materials  have been fully
                  paid for or will be paid for by Closing and all  contributions
                  to tenants for tenant improvements,  if any, have been paid in
                  full or will be paid for by Closing;

                           (vii)  Contributor has not sent written notice to any
                  tenant claiming that such tenant is in default,  which default
                  remains uncured,  and to the best of Contributor's  knowledge,
                  no tenant is in default  under its Lease,  except as indicated
                  in Exhibit B hereto;

                           (ix)     no action or proceeding instituted against 
                  Contributor by any tenant is presently pending in any court; 
                  and

                            (x) there are no security  deposits other than those
                  set forth in Exhibit B.


                                                        -6-





                  (e)  Service  Contracts.  Attached  hereto  as  Exhibit C is a
complete  and  correct  list of all  contracts  or  agreements  relating  to the
management,  leasing,  operation,  maintenance  or repair of the  Property  (the
"Service Contracts").  All of the Service Contracts set forth on Exhibit C shall
be assumed by FWRLP as of the Closing Date,  unless FWRLP  notifies  Contributor
before the end of the Feasibility  Period to terminate any or all of the Service
Contracts (to the extent they are capable of being terminated without penalty or
premium).  No  Service  Contract  will  be  terminated,   amended,  modified  or
supplemented  prior to the Closing Date without FWRLP's prior written  approval,
except in the ordinary course of business.

                  (f) Tax  Bills.  Attached  hereto  as  Exhibit  D are true and
correct copies of real estate tax bills issued by any applicable Federal,  state
or local governmental  authority to Contributor with respect to the Property for
the most recent past and current tax years, and any new assessment received with
respect to a current or future tax year.

                  (g) Insurance.  Attached  hereto as Exhibit E is a schedule of
all hazard,  liability and other insurance policies presently affording coverage
with respect to the Property.  The Property is insured for its replacement value
against  loss or  damage  sustained  as a result of fire or other  casualty  and
Contributor has rent loss insurance in place for the Property. Contributor shall
maintain in full force and effect all such policies until the Closing Date.

                  (h) Condition of Property. Possession of the Property shall be
delivered to FWRLP at Closing in its "as is, where is"  condition as of the date
of FWRLP's  execution  of this  Agreement.  Contributor  has no knowledge of any
material  defect in the  condition  of the  Property,  the  structural  elements
thereof or the mechanical systems therein.

                  (i) Tenant Estoppel.  Contributor represents and warrants that
it shall use reasonable good faith efforts to obtain and deliver to FWRLP within
thirty (30) days after the Acceptance Date, a tenant estoppel letter in the form
attached hereto as Exhibit F (or such other form as required by FWRLP's mortgage
lender) from each of the tenants of the Property  confirming the information set
forth in Exhibit B attached hereto.

                  (j) Condemnation Proceedings. No notices have been received by
Contributor of any condemnation or eminent domain proceedings or, to the best of
Contributor's  knowledge,  threatened  against the Property or any part thereof,
and Contributor  has made no commitments to and has received no notice,  oral or
written,  of the desire of any public  authority  or other entity to take or use
the  Property  or any part  thereof  whether  temporarily  or  permanently,  for
easements, rights-of-way, or other public or quasi-public purposes.


                                                        -7-





                  (k)  Litigation.  No  litigation is pending or, to the best of
Contributor's knowledge, currently threatened,  including administrative actions
or orders relating to governmental regulations,  affecting the use, operation or
ownership  of the  Property  or any  part  thereof  or  Contributor's  right  to
contribute the Property as contemplated herein, except as set forth on Exhibit G
hereof.

                  (l) No Defaults.  Neither the execution of this  Agreement nor
the  consummation  of the  transactions  contemplated  hereby will: (i) conflict
with,  or result in a breach of,  the terms,  conditions  or  provisions  of, or
constitute a default under, any agreement or instrument to which  Contributor is
a party or by which the  Contributor  or the  Property is bound,  subject to the
consent of the Lender,  (ii) violate any restriction,  requirement,  covenant or
condition to which the  Contributor  is subject or by which  Contributor  or the
Property  is  bound,  (iii)  constitute  a  violation  of any  applicable  code,
resolution,  law, statute,  regulation,  ordinance,  rule,  judgment,  decree or
order, or (iv) result in the cancellation of any contract or lease pertaining to
the Property.

                  (m) Entrances. To the best of Contributor's knowledge,  access
to any portion of the Land is not obtained from adjoining  public roads by means
of easements,  rights-of-way  or licenses  across lands or premises not included
within the Property.

                  (n)  Separate  Tax  Lot  and  Subdivision.   To  the  best  of
Contributor's  knowledge,  each  parcel  of Land is the  subject  of a  separate
subdivision, and each parcel of Land is assessed for tax purposes as one or more
separate and distinct parcels.

                  (o)  Hazardous  Waste.  Contributor  has no  knowledge  of any
discharge,  spillage,  uncontrolled  loss,  seepage or filtration (a "Spill") of
oil, petroleum or chemical liquids or solids,  liquid or gaseous products or any
hazardous  waste  or  hazardous  substance  (as  those  terms  are  used  in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended,  the Resource  Conservation and Recovery Act of 1976, as amended, or in
any  other  applicable  federal,  state  or  local  laws,  ordinances,  rules or
regulations relating to protection of public health,  safety or the environment,
as such laws may be  amended  from time to time) at,  upon,  under or within the
Land or any contiguous  real estate.  Contributor has not caused or permitted to
occur,  and shall not permit to exist any condition  which may cause a Spill at,
upon,  under or within the Land or any  contiguous  real estate.  To the best of
Contributor's knowledge,  there is no proceeding or action pending or threatened
by any person or governmental  agency regarding the  environmental  condition of
the Property.  To the Contributor's  knowledge,  the Building is totally free of
asbestos.

                  (p)  Operating  Statements.  Attached  hereto as Exhibit H are
true and correct  operating  statements  of the  Property for fiscal years 1994,
1995 and 1996. To Contributor's  knowledge,  there has been no adverse change in
the Property or the operation  thereof which would  materially  adversely affect
the economic condition of the

                                                        -8-





Property.  Also attached as Exhibit H is a copy of the 1997 operating budget for
the Property.

                  (q)  Utilities.  To  the  best  of  Contributor's   knowledge,
adequate,  usable public  sewers,  public water  facilities,  gas and electrical
facilities  necessary to the  operation of the Property are installed in and are
duly  connected to the  Property  and can be used without any charge  except the
normal deposits, if any, and usual metered utility charges and sewer charges.

                  (r) Personal Property. Attached hereto as Exhibit I is a true,
correct and complete inventory of all personal property  ("Personal  Property"),
if any,  owned  by  Contributor  and  used in the  management,  maintenance  and
operation of the  Property  (other than trade  fixtures or personal  property of
tenants).

                  (s) Certificates of Occupancy.  Contributor will not amend any
certificates  of occupancy for the Property and will maintain them in full force
and effect to the extent Contributor is responsible for them.

                  (t)  Licenses  and  Permits.  To  the  best  of  Contributor's
knowledge,  all  licenses  and permits  have been issued to  Contributor  by all
applicable  governmental  authorities  which are  necessary  for the  ownership,
management  and  operation of the Property  (the  "Licenses").  Contributor  has
received  no notice,  nor has any  knowledge,  that it is lacking  any  required
permit or license.

                  (u) Leasing  Commissions.  There are, and at Closing shall be,
no outstanding or contingent leasing commissions or fees payable with respect to
the Property, other than those shown on Exhibit N attached hereto.

                  (v)      Securities Law Matters.

                            (i) Each Contributor is an "accredited  investor" as
                  such term is  defined  under  Rule 501  promulgated  under the
                  Securities Act of 1933, as amended (the "Securities Act");

                           (ii)     Intentionally Omitted;

                           (iii) Each  Contributor has its primary  residence in
                  the State of Illinois;

                           (iv)  Contributor  will  hold the  Units  for its own
                  account for  investment  purposes  only and not with a view to
                  distribution  and does  intend to  distribute  or  resell  the
                  Units;

                            (v) Taking into account the  personnel and resources
                  Contributor can  practically  bring to bear on the acquisition
                  of the Units in FWRLP

                                                        -9-





                  contemplated    hereby,    Contributor    is    knowledgeable,
                  sophisticated  and experienced in making,  and is qualified to
                  make,  decisions  with respect to  investments  in  securities
                  presenting  an  investment  decision like that involved in the
                  acquisition of the Units,  including investments in securities
                  issued by FWRLP,  and has  requested,  received,  reviewed and
                  considered  all  information  it deems  relevant  in making an
                  informed   decision  to  acquire  the  Units   (including  the
                  Confidential  Information  Statement,  as supplemented through
                  the date hereof,  attached  hereto as Exhibit M which contains
                  the  First   Amended  and   Restated   Agreement   of  Limited
                  Partnership   of  FWRLP  and  any   Amendments   thereto  (the
                  "Partnership Agreement");

                           (vi)  Contributor  will not,  directly or indirectly,
                  voluntarily offer, sell, pledge, transfer or otherwise dispose
                  of (or  solicit  any  offers  to buy,  purchase  or  otherwise
                  acquire  or take a  pledge  of)  any of the  Units  except  in
                  compliance   with  the   Securities  Act  and  the  rules  and
                  regulations  promulgated  thereunder  and with the  terms  and
                  conditions of the Partnership Agreement;

                           (vii)  Contributor  acknowledges that the Units to be
                  issued  must be held  until they are  subsequently  registered
                  under the Securities Act and under applicable state securities
                  or blue sky laws,  unless  exemptions from such  registrations
                  are available at the time of resale;

                           (viii)   Prior  to  the   issuance   of  the   Units,
                  Contributor   will  execute  all  such  other   documents  and
                  instruments  as may be reasonably  necessary to allow FWRLP to
                  comply with Federal and state securities law requirements with
                  respect to the  issuance  of the Units and to comply  with the
                  terms of the Partnership Agreement; and

                           (ix)   Contributor   acknowledges  and  agrees  that,
                  notwithstanding Section 8.6 of the Partnership Agreement,  the
                  Units to be issued  hereunder shall not be redeemable for cash
                  or  exchangeable  for Common Stock in the REIT for a period of
                  thirteen (13) months from the date of issuance to Contributor.

         6. Obligations of Contributor Pending Closing.  From and after the date
of this Agreement through the Closing Date,  Contributor covenants and agrees as
follows:

                  (a)  Maintenance  and Operation of the  Property.  Contributor
will cause the Property to be  maintained  in its present  order and  condition,
normal wear and tear  excepted,  and will cause the  continuation  of the normal
operation  thereof,  including  the  purchase  and  replacement  of fixtures and
equipment,  and  the  continuation  of  the  normal  practice  with  respect  to
maintenance and repair in the ordinary course of

                                                       -10-





business  so that the  Property  will,  except for normal  wear and tear,  be in
substantially the same condition on the Closing Date as on the Acceptance Date.

                  (b)  Licenses.  Contributor  shall  use its  best  efforts  to
preserve in force all Licenses and to cause those expiring to be renewed.

                  (c) Changes in Representations. Contributor shall notify FWRLP
promptly,  and FWRLP shall notify Contributor  promptly, if either becomes aware
of any  occurrence  prior  to the  Closing  Date  which  would  make  any of its
representations,  warranties  or  covenants  contained  herein  not  true in any
material respect.

                  (d) Obligations as to Leases.  Contributor  shall not, without
FWRLP's prior written consent which consent shall not be  unreasonably  withheld
or  delayed,  amend,  modify,  renew or extend any Lease in any  respect  unless
required by law or the terms of any existing  lease (and then only in accordance
with the  terms  of such  lease),  or  enter  into new  leases  or  approve  any
assignment  of leases or  subletting  of leased  space,  or terminate any Lease.
Prior to Closing,  Contributor  shall not apply all or any part of the  security
deposit of any tenant unless such tenant has vacated the Property.  With respect
to those  leases  listed on  Schedule  A of  Exhibit B hereto and any new leases
entered  into  after  the  Acceptance  Date as to which  FWRLP has  granted  its
consent,  FWRLP  shall be  responsible  for any leasing  commissions  and tenant
improvement allowance which are the responsibility of landlord thereunder if the
Contribution contemplated hereunder closes.

                  (e) Obligations as to Nationwide  Loan. The Contributor  shall
not, without FWRLP's prior written  consent,  (i) prepay the Nationwide Loan, or
(ii) modify or amend any of the documents  evidencing or securing the Nationwide
Loan  or  otherwise  entered  into  in  connection  with  the  Nationwide  Loan.
Contributor  shall make all  payments  required to be made under the  Nationwide
Loan when due, shall perform all obligations under the Nationwide Loan and shall
keep the Nationwide Loan free from default.

         7.  Representations,  Warranties  and  Covenants of FWRLP.  In order to
induce  Contributor  to enter into this Agreement and to contribute the Property
to FWRLP,  FWRLP  hereby makes the  following  representations,  warranties  and
covenants,  each of which is material  and shall  together  with all  covenants,
agreements and indemnities set forth or made pursuant to this Agreement  survive
Closing to the extent provided in Section 18(m):

                  (a) Authority of FWRLP.  FWRLP is a limited  partnership  duly
organized  and  existing  and in good  standing  under  the laws of the State of
Maryland  and will be  qualified  to do  business  in the State of  Illinois  by
Closing.  Subject to Section  8(a)  (viii),  FWRLP has all  necessary  power and
authority to execute,  deliver and perform this  Agreement and consummate all of
the transactions contemplated by this Agreement. Subject to Section 8(a) (viii),
this Agreement is the valid and binding

                                                       -11-





obligation of FWRLP, enforceable against it in accordance with its terms, except
that  such   enforcement   may  be  subject  to   bankruptcy,   conservatorship,
receivership,   reorganization,   insolvency,  moratorium  or  similar  laws  or
procedures  relating to or affecting  creditors' rights generally and to general
principles of equity.

                  (b) No Defaults.  Neither the execution of this  Agreement nor
the  consummation  of the  transactions  contemplated  hereby will: (i) conflict
with,  or result in a breach of,  the terms,  conditions  or  provisions  of, or
constitute  a default  under,  the  Partnership  Agreement  or any  agreement or
instrument to which FWRLP is a party, (ii) violate any restriction, requirement,
covenant or  condition  to which the FWRLP is subject,  and (iii)  constitute  a
violation  of  any  applicable  code,  resolution,  law,  statute,   regulation,
ordinance, rule, judgment, decree or order.

                  (c) Vacant  Space.  FWRLP  hereby  further  agrees that if any
rentable space in the Property is vacant on the Closing Date, FWRLP shall accept
the  Property  subject  to such  vacancy,  provided  that  the  vacancy  was not
permitted or created by Contributor in violation of any  restrictions  contained
in this Agreement.

                  (d) Additional  Matters  Regarding  Authority.  The execution,
delivery and  performance by FWRLP of this  Agreement and each other  agreement,
document or instrument  contemplated  hereby to which FWRLP is a party and which
is  required to be  delivered  to  Contributor  at Closing  (together  with this
Agreement,  the "FWRLP  Documents"),  the fulfillment of and the compliance with
the  respective  terms and provisions  hereof and thereof by FWRLP,  and the due
consummation of the  transactions  contemplated  hereby or thereby by FWRLP have
been,  or by Closing  will be, duly and validly  authorized  and approved by all
requisite partnership actions of FWRLP.

                  (e) Disclosure  Documents.  Attached  hereto as Exhibit M is a
true and correct copy of the Confidential Information Statement, as supplemented
through the date hereof.  The FWRLP Partnership  Agreement,  as contained in the
Confidential Information Statement, as supplemented through the date hereof, has
not been  amended or  modified  except as set forth in  Exhibit  M, and,  to the
knowledge of FWRLP,  is in full force and effect as of the date hereof,  and, to
the knowledge of FWRLP, no default or condition which,  with the passage of time
or the giving of notice could become a default,  exists on the part of any party
thereunder.

         8.       Conditions Precedent to Closing.

                  (a) It shall be a condition precedent of FWRLP's obligation to
make a full  settlement  hereunder  that  each and  every  one of the  following
conditions shall exist on the Closing Date:

                            (i)  Representations and Warranties.  Contributor's
                  representations and warranties hereunder shall be true and 
                  correct in the

                                                       -12-





                  same   manner  and  with  the  same   effect  as  though  such
                  representations  and warranties had been made on and as of the
                  Closing.

                           (ii) Zoning. No proceedings shall have occurred or be
                  pending  to  change,   redesignate   or  redefine  the  zoning
                  classification   of  the   Property  to  a  more   restrictive
                  classification than presently exists.

                           (iii)  Title.   Title  to  the   Property   shall  be
                  marketable, good of record, and insurable by the Title Company
                  at standard  rates or less,  pursuant to a full  coverage ALTA
                  Form-B (Rev.  1970 and 1984, or if not available,  then a 1992
                  form)  owner's  title  insurance  policy (or an  unconditional
                  commitment therefor) without any exceptions ("Printed form" or
                  otherwise)  other  than  the  Permitted  Exceptions,   and  in
                  addition, providing affirmative coverage satisfactory to FWRLP
                  insuring against any mechanic's or materialmen's  lien arising
                  from goods,  labor or materials provided to the Property prior
                  to the Closing Date. The "Permitted Exceptions" are:

                            (A)     the lien of current real estate taxes and 
                           special assessments not yet due and payable; and

                            (B) such other matters which are listed on Exhibit P
                           attached  hereto.  Notwithstanding  anything  to  the
                           contrary    contained   in   this    paragraph   (B),
                           Contributor,  at or prior to Closing,  shall cause to
                           be  satisfied  and  released of record all  mortgages
                           (other  than the  First  Mortgage),  deeds of  trust,
                           financing  statements,  judgements,  liens  and other
                           matters  that  may  be  satisfied  by  payment  of  a
                           liquidated  sum,  provided that any mechanic's  liens
                           may be  bonded  over  by  Contributor  as long as the
                           Title Company  issues an  endorsement  insuring FWRLP
                           against any loss arising therefrom.

                           (iv)    Leasing     Brokerage/Property     Management
                  Agreements.  Contributor  shall  have  terminated  any and all
                  leasing   brokerage   agreements   and   property   management
                  agreements  with respect to the  Property  effective as of the
                  Closing. All responsibility for dealings with any such brokers
                  and  agents,  including  the  payment of any claims (if deemed
                  warranted by Contributor), shall be the sole responsibility of
                  Contributor (other than those leasing commissions set forth on
                  Exhibit N hereto,  which FWRLP  shall pay if the  Contribution
                  contemplated  hereunder  closes).  Contributor  agrees that it
                  will  indemnify  and  hold  FWRLP,  its  successors,  assigns,
                  partners,  agents and  employees,  harmless  against  any such
                  claims   and/or   losses  which  might  be  incurred  by  such
                  indemnitees  in  connection   with  any   outstanding   and/or
                  contingent leasing commissions or fees or management fees. The
                  provisions of this  subparagraph  (iv) shall  survive  Closing
                  without limitation.

                                                       -13-





                            (v)  Performance by Contributor.  Contributor  shall
                  have  complied  in all  material  respects  with and not be in
                  material  breach of any of its covenants or obligations  under
                  this Agreement.

                           (vi) Tenant Estoppels.  FWRLP shall have received (A)
                  a tenant  estoppel  letter  in the  form  attached  hereto  as
                  Exhibit F from,  at a minimum,  those  tenants at the Property
                  satisfying the requirements  described on Exhibit F-1 attached
                  hereto (or in such form as required by the Lender), confirming
                  the  information  set forth in the  Leases  and Rent  Schedule
                  attached  hereto as Exhibit B for such tenants and  containing
                  no material changes  therefrom,  and (B) any subordination and
                  attornment agreements required by the Lender.

                           (vii)  Existing  Mortgages.  Contributor  shall  have
                  delivered  to  the  Title   Company  such  releases  or  other
                  instruments  necessary  to release of record and  beneficially
                  any and all  existing  mortgages,  deeds of  trust,  financing
                  statements or other security documents affecting the Property,
                  other than the First  Mortgage  (collectively,  the  "Existing
                  Mortgages").

                           (viii) FWRT Board Approval. The Board of Directors of
                  FWRT shall have approved this  Agreement and the  transactions
                  contemplated hereby. In the event that the aforesaid condition
                  is not satisfied by the end of the Feasibility  Period,  FWRLP
                  may elect to terminate  this  Agreement by giving  Contributor
                  written notice thereof on or before the end of the Feasibility
                  Period in which  event the Deposit  and any  interest  thereon
                  shall be returned to  Purchaser  and neither  party shall have
                  any further obligations or liabilities to the other.

                  (b) Failure of  Condition.  In the event of the failure by the
Closing Date of any  condition  precedent  set forth  above,  FWRLP shall notify
Contributor  in writing,  and if  Contributor  does not correct such failure (if
valid) within five (5) business days after such notice,  then FWRLP, at its sole
election,  may (a) terminate this Agreement,  in which event the Deposit and any
interest thereon shall be returned to FWRLP and, except as otherwise provided in
Section  16  hereof,  neither  party  shall  have  any  further  obligations  or
liabilities  to the other;  or (b) proceed to Closing  and, if a default,  avail
itself of any legal or equitable remedy FWRLP may have, except as to any default
of Contributor waived in writing by FWRLP or deemed to be waived pursuant to the
provisions  of this  Agreement on or before the Closing  Date; or (c) extend the
Closing Date for such  reasonable time period as may be determined by FWRLP (but
in no event for more than three (3) months from the Closing Date then in effect)
in order to permit the satisfaction of any condition precedent not so fulfilled.

     9. Contributor's  Deliveries.  Contributor shall execute, acknow- ledge and
deliver  to FWRLP at the  Closing  the  following  documents,  each dated on the
Closing Date:

                                                       -14-





                  (a) a trustee's  deed, in form and substance  satisfactory  to
FWRLP and Title  Company,  conveying good and marketable fee simple title to the
Property, free and clear of all liens, encumbrances,  easements and restrictions
of every nature and description, except for the Permitted Exceptions;

                  (b) a bill of sale which  shall  convey to FWRLP good title to
all the Personal Property, free and clear of all liens and encumbrances;

                  (c) an  affidavit  setting  forth  that  all of  Contributor's
representations  and warranties are true and correct in all material respects on
the Closing Date;

                  (d) an assignment of the Leases,  together with all originally
executed Leases, and the security deposits shall be paid to FWRLP;

                  (e)  an  assignment  of  Licenses,   warranties   and  Service
Contracts,  if  any,  which  are to be  assumed  by  FWRLP,  together  with  the
originally executed Service Contracts which are to be assumed;

                  (f) a schedule updating the Rent Schedule for the Property and
setting forth all arrearages in rents and all prepayments of rents;

                  (g) copies of books,  records,  operating  reports,  files and
other  materials  related to the  ownership,  use and  operation of the Property
(other than  Contributor's  partnership tax returns,  Contributor's  partnership
documents and other confidential  ownership  documents which are not required to
properly  operate  the  Property),  to the extent  that any exist and are in the
possession of Contributor, which obligation shall survive Closing;

                  (h) Tenant estoppel letters as required in Section 8(a)(vi).

                  (i) an original  letter  executed by Contributor  advising the
tenants  of the  Property  of the  contribution  of the  Property  to FWRLP  and
directing that rents and other payments  thereafter be sent to FWRLP or as FWRLP
may direct;

                  (j)      possession of the Property in the condition required 
by this Agreement, and the keys therefore;

     (k) the  Certification  of  Non-foreign  Status as provided in Treas.  Reg.
1.1445-2(b)(2)(iii)(B)  or in any other form as may be required by the  Internal
Revenue Code or the regulations issued thereunder;

                  (l) such other items and  instruments  as shall be required by
the Title Company in connection with the issuance of its title insurance  policy
to FWRLP  pursuant to Section  8(a)(iii) or as shall be reasonably  requested by
counsel to FWRLP and consistent with the terms of this Agreement;

                                                       -15-





                  (m)  any and all  documents  necessary  to  release  the  cash
constituting  the Deposit  from  escrow with the Title  Company and to have said
Deposit returned to FWRLP;

                  (n) an amendment to the  Partnership  Agreement of FWRLP, in a
form reasonably  acceptable to FWRLP and Contributor,  admitting the Contributor
as a limited  partner(s) of FWRLP and issuing the Units to Contributor  computed
in accordance with Section 2 herein; and

                  (o) any  other  documents  required  by this  Agreement  to be
delivered by Contributor.

         10. FWRLP's Performance. At Closing, simultaneously with the deliveries
of Contributor  pursuant to the  provisions of Section 9 above,  FWRLP shall pay
the cash and issue the Units to Contributor  in the manner  specified in Section
2, whereupon the Deposit, and any interest accrued thereon, shall be returned to
FWRLP by the Title Company.  FWRLP shall also execute and deliver to Contributor
an assumption of Leases,  Licenses,  warranties and Service  Contracts,  if any,
which are to be assumed by FWRLP hereunder.

         11.      Settlement Charges; Prorations and Adjustments.

                  (a) Contributor shall pay for the title examination, the title
insurance  premiums,  ALTA basic As-Built  survey of the Property,  any Illinois
State and County and municipal  transfer  taxes and recording fees in connection
with this  transaction.  FWRLP  shall pay any other  costs  incurred by FWRLP in
connection  with studying the Property and closing this  transaction.  FWRLP and
Contributor shall each pay its own legal fees related to the preparation of this
Agreement  and all  documents  required to settle the  transaction  contemplated
hereby and shall share  equally  the cost of any Title  Company  escrow  closing
charges, including any New York-style closing fees.

                  (b)  In  addition  to  the  foregoing,  at  the  Closing,  the
following  adjustments and prorations  shall be computed as of the Closing Date,
as follows:

                           (i) Taxes.  Real estate and personal  property  taxes
                  shall be apportioned as of the Closing Date.

                           Contributor  represents  that the  tenants  listed on
                  Exhibit Q hereto  reimburse  the landlord for its share of the
                  real estate taxes payable for the Property upon receipt of the
                  real estate tax bill and that real estate taxes are payable to
                  the applicable jurisdiction in arrears.  Therefore, at Closing
                  Contributor  shall  receive a credit  for the  estimated  real
                  estate taxes unpaid (but not yet due) from such tenants  which
                  is allocable  for any period  prior to Closing.  If such other
                  tenants do not pay to FWRLP when due the  entire  real  estate
                  taxes allocable to a period prior to Closing and

                                                       -16-





                  which was  credited  to  Contributor  at  Closing as set forth
                  above,  then  Contributor  shall  reimburse FWRLP for any such
                  shortfall within fifteen (15) days of demand therefor, and, if
                  not so timely reimbursed, FWRLP shall have the right to offset
                  any  distributions/dividends  due to Contributor on account of
                  the Units  issuable  to them  until  such  shortfall  is fully
                  reimbursed to FWRLP.

                           (ii) Assessments.  All special  assessments and other
                  similar  charges which have become a lien upon the Property or
                  any part  thereof at the Closing  Date and are due and payable
                  through the  Closing  Date,  if any,  shall be paid in full by
                  Contributor at the Closing.  All other special  assessments or
                  similar charges shall be adjusted as of the Closing Date.

                           (iii)  Rent.  Rent for the  month  of,  and any month
                  after, Closing collected by Contributor prior to Closing shall
                  be adjusted as of the date of the Closing  Date. If any tenant
                  is in arrears  in the  payment  of rent on the  Closing  Date,
                  rents  received  from such tenant  after the Closing  shall be
                  applied in the following order of priority:  (a) first, to the
                  payment of current  rent then due; (b) second,  to  delinquent
                  rent for any period after the Closing Date; and (c) third,  to
                  delinquent  rent for any period prior to the Closing  Date. At
                  Contributor's  election (i) FWRLP will  institute  suit at the
                  request of  Contributor  to collect  arrearages  due as of the
                  Closing  Date   provided  all  costs   (including   reasonable
                  attorneys'   fees)  in   connection   therewith  are  paid  by
                  Contributor,  or (ii) FWRLP shall  assign to  Contributor  all
                  rights with respect to such  arrearages  and  Contributor  may
                  pursue  collection  thereof.  If rents or any portion  thereof
                  received by  Contributor  or FWRLP after the Closing  Date are
                  payable to the other party by reason of this  allocation,  the
                  appropriate sum, less a proportionate  share of any reasonable
                  attorneys'  fee,  costs and  expenses of  collection  thereof,
                  shall be promptly  paid to the other party,  which  obligation
                  shall survive the Closing.

                           If any tenants are required to pay percentage  rents,
                  escalation charges for real estate taxes,  operating expenses,
                  cost-of-living  adjustments  or  other  charges  of a  similar
                  nature  ("Additional  Rents")  and any  Additional  Rents  are
                  collected by FWRLP after the Closing which are attributable in
                  whole  or in part to any  period  prior to the  Closing,  then
                  FWRLP shall  promptly  pay to  Contributor  its  proportionate
                  share thereof,  less a  proportionate  share of any reasonable
                  attorneys' fees, costs and expenses of collection  thereof (if
                  any),  if and when  the  tenant  paying  the same has made all
                  payments  of  rents  and  Additional  Rent  then  due to FWRLP
                  pursuant to the tenant's Lease, which obligation shall survive
                  the Closing.


                                                       -17-





                           (iv) Debt Service on the Nationwide  Loan. The amount
                  of  interest  payable  under  the  Nationwide  Loan  shall  be
                  apportioned as of the Closing Date.

                           (v)   Miscellaneous.   All  other  charges  and  fees
                  customarily  prorated  and  adjusted in similar  transactions,
                  including  utilities,   insurance  premiums  and  charges  for
                  Service  Contracts  and  other  liabilities  incurred  in  the
                  ordinary  course of business to be assumed by FWRLP,  shall be
                  prorated as of the Closing  Date.  In the event that  accurate
                  prorations  and other  adjustments  cannot be made at  Closing
                  because  current bills are not  obtainable or the amount to be
                  adjusted is not yet  ascertainable  (as, for  example,  in the
                  case of utility  bills) the parties  shall prorate on the best
                  available information,  subject to further adjustment promptly
                  upon  receipt  of the final bill or upon  completion  of final
                  computations.  Contributor  shall use its best efforts to have
                  all  utility  meters  read  on  the  Closing  Date  so  as  to
                  accurately determine its share of current utility bills.

At  Contributor's  election,  Contributor  shall  have the  right to pay any net
closing  adjustments  due to FWRLP in cash, and in such case the Units otherwise
issuable  to  Contributor  pursuant  to  Section  2(a)(iii)  herein  will not be
adjusted for such closing adjustments.

                  (c)  Distributions.  The  quarterly  distributions  payable to
Contributor  on the Units for the first record date after  Closing  shall be pro
rated based upon the number of days within the quarter occurring after Closing.

         12. Risk of Loss. The risk of loss or damage to the Property by fire or
other  casualty  until  delivery  of the  deed of  conveyance  shall be borne by
Contributor.  If prior to Closing (i)  condemnation  proceedings  are  commenced
against all or any material portion of the Property,  or (ii) if the Property is
damaged by fire or other  casualty to the extent that the cost of repairing such
damage shall be Five Hundred  Thousand  Dollars  ($500,000.00) or more or if Ace
Hardware or Trak Auto or a tenant(s)  of the  Property  (occupying  in excess of
4,000 square feet in the aggregate) shall exercise a termination right available
under its lease  because of such damage,  or (iii) if the Property is damaged by
an uninsured risk; or (iv) if the Property  becomes subject to litigation  which
may deprive  FWRLP of any  material  benefit to which it would  become  entitled
pursuant  to this  Agreement,  then FWRLP  shall have the right,  upon notice in
writing to the Contributor delivered within thirty (30) days after actual notice
of such condemnation or fire or other casualty or litigation,  to terminate this
Agreement,  and thereupon the parties shall be released and discharged  from any
further obligations to each other and the Deposit shall be refunded to FWRLP. If
FWRLP  does not elect to  terminate  this  Agreement  or in the event of fire or
other  casualty not giving rise to a right to terminate this Agreement by FWRLP,
FWRLP shall be entitled to an  assignment of all of  Contributor's  share of the
proceeds of fire or other casualty insurance and rent insurance proceeds payable
with respect to the period after Closing or of the

                                                       -18-





condemnation award, as the case may be, and Contributor shall have no obligation
to repair or restore the  Property;  provided,  however,  that the Unit  portion
(based on the Unit  Price) of the  Consideration  shall be  reduced by an amount
equal to the sum of (a) the "deductible" applied by the Contributor's  insurance
policy,  or (b) if the Contributor is  self-insured,  the cost of repairing such
damage.  FWRLP  shall  have the  right to  participate  in the  negotiation  and
settlement of any casualty or  condemnation-related  claim, provided FWRLP shall
have previously  elected not to terminate this Agreement or has no such right of
termination.

         13.      Inspection of Property.

                  (a) FWRLP's Right of  Inspection.  FWRLP shall have the right,
at its own risk,  cost and  expense,  at any time or times prior to Closing,  to
enter, or cause its agents or  representatives  to enter,  upon the Property for
the  purpose of making  surveys,  or any tests,  investigations  and/or  studies
relating to the Property or FWRLP's  intended  acquisition  thereof  which FWRLP
deems  appropriate,  in its sole  discretion,  during  reasonable hours and upon
reasonable  notice to Contributor.  FWRLP's entry shall be subject to the rights
of all tenants of the Property,  and FWRLP shall use  reasonable  efforts not to
interfere with the business being conducted by the tenants.  FWRLP shall further
have complete access to all  documentation,  agreements and other information in
the possession of Contributor related to the ownership (other than Contributor's
partnership  tax  returns,   Contributor's   partnership   documents  and  other
confidential  ownership documents which are not required to properly operate the
Property),  use and  operation  of the  Property,  to the  extent it is  readily
available to  Contributor,  and shall have the right,  at FWRLP's  cost, to make
copies of same.

                  (b) Feasibility Period. Any other provisions of this Agreement
to the contrary  notwithstanding,  FWRLP may,  prior to the  expiration of sixty
(60) days after the  Acceptance  Date (such 60-day period herein  referred to as
the "Feasibility Period"),  cause at FWRLP's sole cost and expense, such boring,
engineering,  economic, water, sanitary and storm sewer, utilities, topographic,
structural,  environmental and other tests,  investigations,  market studies and
other  studies  as FWRLP  shall  elect.  In the  event  that any of such  tests,
investigations and/or studies indicate, in FWRLP's sole discretion, that FWRLP's
plans for the Property  would not be feasible,  then FWRLP shall have the right,
at its sole election on or before the expiration of the Feasibility  Period,  to
terminate this Agreement by giving  written  notice thereof to  Contributor,  in
which event this  Agreement  shall  terminate,  the Deposit shall be returned to
FWRLP and neither party shall have any further  liabilities  or  obligations  to
each other. FWRLP shall be liable for any damage to real or personal property or
injuries to persons  caused by FWRLP's  actions in studying the Property  during
the  Feasibility  Period,  and FWRLP shall  indemnify  Contributor  for and hold
Contributor harmless against any such damage or injuries.

                  (c) Audit.  Contributor  hereby  agrees to allow its books and
records  related to the Property to be audited (at FWRLP's sole  expense) at the
Contributor's

                                                       -19-





office by an independent,  certified  public  accounting firm selected by FWRLP,
and  Contributor  will  cooperate  and cause its  employees  and other agents to
cooperate in such auditing process.  FWRLP shall provide  Contributor with prior
notice of such audit.

                  (d)  Contributor  shall not be  obligated  to  contribute  the
Property to FWRLP under this  Agreement  unless FWRLP  acquires all of the Other
Properties  pursuant to the Other Contribution  Agreements;  provided,  however,
that the  acquisition  of one or more of the  Other  Properties  shall  not be a
condition to Contributor's obligation to contribute the Property to FWRLP if the
Contribution  Agreement for such Other  Property(s)  was terminated (i) due to a
default on the part of Contributor thereunder, or (ii) by FWRLP on or before the
end of the  Feasibility  Period provided for therein as a result of any material
adverse  environmental  or material adverse  structural  condition of such Other
Property, provided that the right to exclude Other Properties pursuant to clause
(ii) as a condition  to  Contributor's  obligations  shall be limited to two (2)
Other Properties.

         14.      Indemnifications.

                  (a) Indemnification by Contributor.  Subject to the provisions
of Section 18(m),  Contributor  hereby indemnifies and agrees to defend and hold
harmless  FWRLP and its partners  and  subsidiaries  and any officer,  director,
employee, agent of any of them, and their respective successors and assigns from
and against any and all claims, expenses, costs, damages, losses and liabilities
(including reasonable attorneys' fees) which may at any time be asserted against
or suffered by FWRLP,  any  indemnitee,  or the  Property,  or any part thereof,
whether  before or after the  Closing  Date,  as a result  of, on  account of or
arising  from  (i) any  breach  of any  covenant,  representation,  warranty  or
agreement  on the part of  Contributor  or its  Partners  made  herein or in any
instrument or document  delivered  pursuant to this  Agreement,  and/or (ii) any
obligation, claims, suit, liability, contract, agreement, debt or encumbrance or
other occurrence  created,  arising or accruing on or prior to the Closing Date,
regardless of when asserted,  and relating to the Contributor or the Property or
its operations.  To the extent an  indemnification  obligation  under clause (i)
above arises out of a breach by any Partner of the several  representations  and
warranties set froth in Section 5(v) hereof,  only the Partner  responsible  for
such breach shall be obligated to indemnify FWRLP hereunder.

                  (b)      Intentionally Omitted.

                  (c)  Indemnification  by FWRLP.  Subject to the  provisions of
Section 18(m),  FWRLP hereby  indemnifies and agrees to defend and hold harmless
Contributor   and  its  Partners   and  their   respective   heirs,   executors,
administrators,  personal or legal representatives,  successors and assigns from
and against any and all claims, expenses, costs, damages, losses and liabilities
(including reasonable attorneys' fees) which may at any time be asserted against
or suffered by  Contributor  or its  Partners  and/or  their  heirs,  executors,
administrators, personal or legal representatives,

                                                       -20-





successors  or assigns  as a result  of, on  account of or arising  from (i) any
breach of any  covenant,  representation,  warranty or  agreement on the part of
FWRLP made herein or in any  instrument or document  delivered  pursuant to this
Agreement,  and/or  (ii) any  obligation,  claims,  suit,  liability,  contract,
agreement,  debt or encumbrance or other occurrence created, arising or accruing
after the Closing Date and relating to the Property or its operations.

         15. Brokerage  Commission.  Contributor and FWRLP represent and warrant
to each other that no brokerage fee or real estate commission is or shall be due
or owing in  connection  with  this  transaction  other  than  that  payable  to
Mid-America  Real Estate  Corporation,  which  shall be payable by  Contributor.
Contributor and FWRLP hereby  indemnify and hold the other harmless from any and
all claims of any broker or agent so claiming  based on action or alleged action
of the other.  The  provisions of this Section 15 shall  survive  Closing or any
termination of this Agreement without limitation.

         16.      Default Provisions; Remedies.

                  (a) FWRLP's Default.  Except for any failure waived in writing
by  Contributor,  if FWRLP fails to  consummate  the  Contribution  contemplated
herein when required to do so pursuant to the provisions hereof,  then the Title
Company shall  deliver the Deposit and all interest  thereon to  Contributor  as
full and complete  liquidated  damages,  and as the exclusive and sole right and
remedy of  Contributor,  at law or in equity,  whereupon  this  Agreement  shall
terminate and neither party shall have any further obligations or liabilities to
any other party, except for any indemnity obligations under Section 13(b).

                  (b) Contributor's  Default.  Except for any breaches waived in
writing by FWRLP,  if  Contributor  breaches any of its covenants or obligations
under this  Agreement  or has  failed,  refused or is unable to  consummate  the
Contribution  contemplated  herein  by  the  Closing  Date  or  if  any  of  the
representations and warranties made by Contributor under this Agreement shall be
inaccurate  or  incorrect  in any  material  respect,  then FWRLP  shall  notify
Contributor  of such breach in writing  and,  should  Contributor  not cure same
within five (5)  business  days of receipt of such  default  notice,  then FWRLP
shall be entitled to (i) waive such breach,  default or failure,  and proceed to
Closing,  (ii) extend the Closing  for such  reasonable  time or times as may be
necessary  in order to enable  Contributor  to remedy  such  breach,  default or
failure  (but in no event  more than three (3)  months),  (iii)  terminate  this
Agreement and obtain the return of the Deposit, and/or (iv) pursue such remedies
as  may  be  available  at  law  or  in  equity,  including  without  limitation
maintaining an action for damages (other than for  consequential  damages (i.e.,
lost  profits))  and/or  specific  performance   (including  without  limitation
reasonable attorneys' fees and court costs).  Notwithstanding the foregoing,  if
in the event of a failure by the Closing Date of a condition precedent set forth
in  Section  8 herein  and such  failure  was not  known to  Contributor  at the
Acceptance Date and such failure was not caused by any act or omission of

                                                       -21-





Contributor,  then  FWRLP  shall be  precluded  from  maintaining  an action for
damages pursuant to clause (iv) above with respect to such failure.

                  (c) In the event that any  litigation  shall arise between the
parties  hereto as to the subject matter  hereof,  the prevailing  party in such
litigation shall be entitled to recover from the non-prevailing party all of its
court costs and reasonable attorneys' fees.

         17.      Registration Rights.

                  (a) First  Washington  Realty Trust,  Inc. (the "REIT") hereby
agrees to use its best efforts to file a registration  statement within thirteen
(13) months after Closing to register the issuance and resale,  if required,  of
REIT Common Stock which may be issued to  Contributor in exchange for its Units,
to use its best efforts to cause such registration statement to become effective
and to  keep  such  registration  continuously  effective  (subject  to  certain
exceptions) for a period for four (4) years thereafter;  provided, however, that
the REIT shall be permitted to postpone such filing or suspend the effectiveness
of such shelf registration statement (i) for such periods as the REIT reasonably
determines  are in the best  interest of the REIT  (including  suspending  sales
under  the  shelf  registration  statement  for  such  periods  as the  managing
underwriter in an underwritten offering deems necessary), provided that any such
postponement or suspension  shall be limited to sixty (60)  consecutive  days at
any one time,  or (ii) for such  periods  which  are  necessary  to comply  with
securities law requirements which are beyond the reasonable control of FWRLP.

                  (b) Survival.  The  obligations of the REIT under this Section
17 shall survive Closing without limitation.

         18.      Miscellaneous Provisions.

                  (a) Completeness and  Modification.  This Agreement  (together
with  Exhibits A to Q attached  hereto)  represents  the complete  understanding
between the parties hereto with respect to the transactions contemplated herein,
and it supersedes all prior  discussions,  understandings or agreements  between
the  parties.  This  Agreement  shall not be  modified  or amended  except by an
instrument in writing signed by all of the parties hereto.

                  (b) Binding  Effect.  This Agreement shall be binding upon and
inure  to the  benefit  of the  parties  hereto,  and  their  respective  heirs,
executors,  administrators,  personal and legal representatives,  successors and
assigns.

                  (c)  Assignment.  This  Agreement  shall not be  assignable by
FWRLP without the consent of  Contributor,  provided that this  Agreement may be
assigned without  Contributor's  consent to an entity controlled by, controlling
or under common control with FWRLP.  This  Agreement  shall not be assignable by
Contributor.

                                                       -22-






     (d) Waiver; Modification. Failure by FWRLP or Contributor to insist upon or
enforce any of its rights hereto shall not  constitute a waiver or  modification
thereof.

                  (e)  Governing  Law. This  Agreement  shall be governed by and
construed under the laws of the State of Illinois.

                  (f) Headings.  The headings are herein used for convenience or
reference  only and shall not be deemed to vary the content of this Agreement or
the covenants,  agreements,  representations and warranties herein set forth, or
the scope of any provision hereof.

                  (g)  Continuing  Documentation  and  Access.  From  and  after
Closing,  Contributor  shall  afford  FWRLP  reasonable  access  to any  and all
information in its possession concerning the ownership (other than Contributor's
partnership  tax  returns,   Contributor's   partnership   documents  and  other
confidential  ownership documents which are not required to properly operate the
Property),  use and operation of the Property  (including the right to copy same
at the expense of FWRLP) for purposes of any tax  examination  or audit or other
similar purpose,  subject to the agreements of FWRLP concerning  confidentiality
set forth herein.

                  (h) All Warranties  Joint and Several.  Except on set forth in
Section  5(t)  hereof,  each  and  every  warranty,  covenant,  undertaking  and
agreement of Contributor hereunder shall be deemed a joint and several warranty,
covenant,  undertaking  and  agreement  of each  person and entity  collectively
comprising the Contributor.

                  (i) Counterparts.  To facilitate execution, this Agreement may
be executed in as many  counterparts as may be required;  it shall be sufficient
that the  signature of, or on behalf of, each party,  or that the  signatures of
the persons required to bind any party, appear on one or more such counterparts.
All counterparts shall collectively constitute a single agreement.

                  (j)  Notices.  All  notices,  requests,   consents  and  other
communications  hereunder  shall be in writing and shall be delivered by hand or
mailed by first-class  registered or certified mail,  return receipt  requested,
postage  prepaid or  delivered  by  commercial  courier,  telecopy or  overnight
courier (e.g.,  Federal  Express) against  receipt,  to the addresses  indicated
below:

                      (i)      if to FWRLP:

                               First Washington Realty Limited Partnership
                               4350 East-West Highway, Suite 400
                               Bethesda, MD  20814
                               Attn:   William J. Wolfe

                                                       -23-





                               Jeffrey S. Distenfeld, Esq.
                               Telecopy: (301) 907-4911

                      (ii)     if to Contributor:

                               c/o Dodi Management, Inc.
                               450 East Devon Avenue
                               Suite 250
                               Itasca, IL  60143
                               Attn:  George L. Frye
                               Telecopy:  (630) 773-0171

                               with a copy to:

                               Arnold Weinberg, Esquire
                               Katz, Randall & Weinberg
                               333 W. Wacker Drive
                               Suite 1800
                               Chicago, IL  60606
                               Telecopy:  (312) 807-3903

                  Such  notice  shall be deemed  given on the date of receipt by
the addressee or the date receipt would have been  effectuated  if delivery were
not  refused.  Each party may  designate a new address by written  notice to the
other in accordance with this Paragraph 18(j).

                  (k)  Further  Assurances.   Contributor  and  FWRLP  agree  to
execute,   acknowledge  and  deliver  any  further   agreements,   documents  or
instruments  that  are  reasonably  necessary  or  desirable  to  carry  out the
transactions  contemplated  by this  Agreement,  provided  that such  execution,
acknowledgment  and delivery does not impose any additional  costs on such party
(other than such party's  attorneys'  fees in the review  thereof and de minimis
recording costs).

                  (l) Business Days. A "business  day" shall be Mondays  through
Fridays,  less and  expecting all legal  holidays  observed by the United States
Government  or the  Government of the State of Maryland.  Any date  specified in
this  Agreement  which  does not fall on a business  day shall be  automatically
extended until the first business day after such date.

                  (m)  Survival.   All  of  the   representations,   warranties,
covenants,  and  indemnities of this Agreement  shall survive  Closing and shall
thereafter remain in effect, without limitation, except as follows:

                           (i)      the covenants, representations and 
warranties contained in Section 5(a) through (t) and Section  7(a) through (e) 
shall  terminate  one (1) year after the Closing Date except as to claims for 
breach thereof asserted by a party within such one (1) year period; and


                                                       -24-





                           (ii)     the indemnifications for breach of 
representations or warranties  pursuant to clause (i) of the first  sentence of 
Sections  14(a) and 14(c) which are subject to a limited survival period under 
this Agreement (i.e., pursuant to Section  18(m)(i)  above),  shall  terminate  
one (1) year after the Closing  Date,  except as to claims as to which a party  
hereto  has  asserted a right of indemnification within said period.

                  (n)  Confidentiality.  FWRLP agrees and acknowledges  that the
information  provided to it by the Contributor  hereunder regarding the Property
is  confidential,  and that it will not disclose such  information  to any other
person, other than to its employees, agents, attorneys, accountants, lenders and
other  consultants or other parties that need to know such  information in order
for  FWRLP  to  evaluate  the  transaction  contemplated  herein,  or  use  such
information for any purpose other than the transaction  described herein without
the prior written consent of the  Contributor.  If this Agreement is terminated,
all information provided to FWRLP shall be returned to the Contributor.



                                                       -25-





         IN WITNESS WHEREOF,  the parties hereto have executed this Contribution
Agreement as of the day and year first written above.

                                     FWRLP:

                                     FIRST WASHINGTON REALTY
                                     LIMITED PARTNERSHIP

                                     By:  First Washington Realty Trust, Inc.,
WITNESS:                                  Its general partner

/s/                                       By:        /s/
                                                  Jeffrey S. Distenfeld
                                                  Senior Vice President

                                     Date of execution:  May 22, 1997


                                     CONTRIBUTOR:

WITNESS:                             DOMINICK DIMATTEO, JR. IRREVOCABLE
                                     FAMILY TRUST F/B/O MARY ELLEN DIMATTEO


/s/                                  By:        /s/
                                             James S. DiMatteo, Trustee

                                     DOMINICK DIMATTEO, JR. IRREVOCABLE
                                     FAMILY TRUST F/B/O DONNA DIMATTEO OWEN


/s/                                  By:        /s/
                                             James S. DiMatteo, Trustee

                                     DOMINICK DIMATTEO, JR. IRREVOCABLE
                                     FAMILY TRUST F/B/O JAMES S. DIMATTEO


/s/                                  By:        /s/
                                             James S. DiMatteo, Trustee


                    [Signatures continued on following page]


                                                           -26-





                    [Signatures continued from preceding page]

                                     DOMINICK DIMATTEO, JR. IRREVOCABLE
                                     FAMILY TRUST F/B/O MARGARET
                                     DIMATTEO BEDFORD

/s/                                  By:        /s/
                                            James S. DiMatteo, Trustee

                                     DOMINICK DIMATTEO, JR. IRREVOCABLE
                                     FAMILY TRUST F/B/O KATHERINE
                                     DIMATTEO CRANE


/s/                                  By:        /s/
                                             James S. DiMatteo, Trustee


                                     Date of execution:  May 23, 1997






                                                         -27-






     First Washington  Realty Trust, Inc. joins herein solely for the purpose of
making the  representations,  warranties  and covenants  contained in Section 17
hereof.

                                         FIRST WASHINGTON REALTY
WITNESS:                                 TRUST, INC.


/s/                                      By:        /s/
                                                 Jeffrey S. Distenfeld
                                                 Senior Vice President

                                         Date of execution: May 22, 1997



















                                                       -28-







                                                       -29-






                                LIST OF EXHIBITS



EXHIBIT A.        Legal Description of Land                             Recitals

EXHIBIT B.        Leases and Rent Schedule                          Section 5(d)

                  Schedule A - Landlord Contribution                Section 6(d)

EXHIBIT C.        Service Contracts                                 Section 5(e)

EXHIBIT D.        Tax Bills                                         Section 5(f)

EXHIBIT E.        Insurance Policies                                Section 5(g)

EXHIBIT F.        Form of Tenant Estoppel                           Section 5(i)

EXHIBIT F-1.      Tenant Estoppels                              Section 8(a)(vi)

EXHIBIT G.        Litigation                                        Section 5(k)

EXHIBIT H.        Operating Statements and Budget                   Section 5(p)

EXHIBIT I.        Personal Property                                 Section 5(r)

EXHIBIT J.        Mortgage                                       Section 2(c)(i)

EXHIBIT K.        Note                                           Section 2(c)(i)

EXHIBIT L.        Loan Documents                                 Section 2(c)(i)

EXHIBIT M.        Confidential Information Statement         Sections 5(v), 7(e)

EXHIBIT N.        Contingent Leasing Commissions                    Section 5(u)

EXHIBIT O.        [Intentionally Omitted]

EXHIBIT P.        Permitted Exceptions                        Section 8(a)(i)(B)

EXHIBIT Q.        Other Tenants That Pay Real Estate Taxes
                  Upon Receipt of Tax Bill                      Section 11(b)(i)

           [Contributor to Attach Foregoing at Acceptance of this Agreement]

                                                       -30-





                                    EXHIBIT A

                            LEGAL DESCRIPTION OF LAND



                                                       -31-





                                    EXHIBIT B

                            LEASES AND RENT SCHEDULE



                                                       -32-





                                    EXHIBIT B

                                   SCHEDULE A

                              LANDLORD CONTRIBUTION

                                                       -33-





                                    EXHIBIT C

                                SERVICE CONTRACTS

                                                       -34-





                                    EXHIBIT D

                                    TAX BILLS

                                                       -35-





                                    EXHIBIT E

                               INSURANCE POLICIES

                                                       -36-





                                    EXHIBIT F
                            [Form of Tenant Estoppel]

                              ESTOPPEL CERTIFICATE


First Washington Realty Limited Partnership
4350 East-West Highway, Suite 400
Bethesda, MD  20814

                                                                 , 199
     [Lender]



         Re:      Lease dated                           , 19

Gentlemen:

         Please be advised that the  undersigned  tenant hereby  certifies as of
the date hereof as follows with respect to the Lease:

Name of Tenant:

Description of Leased Premises:

Date of Commencement of Current Term of Lease:

Date of Termination of Current Term of Lease:

Remaining Options to Renew:          [               ] [       ]-year options

Current Base Minimum Rent:  Annual Rental of $              , payable monthly in
                                             ---------------
advance.

Percentage Rent:           [   ]  yes     [   ] no - ____% over

Real Estate Tax Charges:  Pro rata [   ]  yes     [   ] no   $ currently payable
                                                             ----------------
monthly in advance.

Common Area Maintenance Charges:  Pro rata [   ]  yes     [   ] no  $
currently payable monthly in advance.

Insurance Charges:  Pro rata [   ]  yes [   ] no   $ currently payable monthly
                                                       ----------------
in advance.





                                       -i-





Tenant in possession of the premises under the Lease?:  [   ]  yes     [   ] no

Amendments:  The Lease is unmodified and in full force and effect except for
amendments and modifications listed by number and date on Exhibit A attached 
hereto.

Amount of rent paid in advance:  $

Amount of Security Deposit:  $

Compliance  with  Construction  Requirements:  Landlord  has  complied  with all
construction  requirements of Tenant,  and Tenant has accepted all of the leased
premises under the Lease.

Default: Tenant has not made any claims against Landlord and has no knowledge of
any  uncured  default  on the part of  Landlord  (If there is  knowledge  of any
uncured default, please note and attach separate sheet).

Tenant's  Right to  Purchase:  Tenant  has no option or right in the nature of a
right of first  refusal to purchase  or  otherwise  acquire any  interest in the
leased premises.

Tenant's Right to Lease Additional Space:  Tenant has no right or option to 
lease additional space at the shopping center.

Tenant's Right of Premature Termination:  Tenant has no right to premature
termination of the Lease.

Mortgagee's   Right   to  Cure:   Anything   in  the   Lease  to  the   contrary
notwithstanding,  Tenant agrees that it will not terminate the Lease or withhold
any rents due  thereunder  because  of  Landlord's  default  in the  performance
thereof until tenant has first given notice to Landlord and to the holder of any
deed of trust specifying the nature of any such default by Landlord and allowing
the said  holder,  at its option,  thirty (30) days after date of such notice to
cure  the  default,  or a  reasonable  period  of time in  addition  thereto  if
circumstances are such that the default cannot be cured within a thirty (30) day
period.

Tenant agrees to  subordinate  the Lease to any mortgage or deed of trust on the
leased  premises.  In the event of  foreclosure,  Tenant agrees to attorn to the
purchaser of the leased premises at the foreclosure sale.

                                     TENANT:
WITNESS:
                                     [Name of Tenant]

                                      By:
                                            Name:
                                            Title:


                                      -ii-





                                   EXHIBIT F-1

                                TENANT ESTOPPELS



o        Ace Hardware                                10,800 s.f.
o        Trak Auto                                    6,000 s.f.

                                    TOTAL            16,800 s.f.


o        Tenant's occupying at least 70% of
         the remaining space at the Property.

         [(30,500 s.f. - 16,800 s.f.) X 70% = 9,590 s.f.


                                      -iii-





                                    EXHIBIT G

                                   LITIGATION

                                      NONE

                                      -iv-





                                    EXHIBIT H

                         OPERATING STATEMENTS AND BUDGET

                                       -v-





                                    EXHIBIT I

                                PERSONAL PROPERTY

                                      NONE

                                      -vi-





                                    EXHIBIT J

                                    MORTGAGE

                                      -vii-





                                    EXHIBIT K

                                      NOTE




                                     -viii-





                                    EXHIBIT L

                                 LOAN DOCUMENTS

                                      -ix-





                                    EXHIBIT M

                       CONFIDENTIAL INFORMATION STATEMENT


                                       -x-





                                    EXHIBIT N

                         CONTINGENT LEASING COMMISSIONS


                                      -xi-





                                    EXHIBIT O

                              INTENTIONALLY OMITTED



                                      -xii-





                                    EXHIBIT P

                              PERMITTED EXCEPTIONS


                                     -xiii-





                                    EXHIBIT Q

                       OTHER TENANTS THAT PAY REAL ESTATE
                         TAXES UPON RECEIPT OF TAX BILL



                                      -xiv-








                                      July 11, 1997



Mr. George L. Frye
Dodi Developments L.L.C.
450 East Devon Avenue
Suite 250
Itasca, IL 60143

         Re:   Contribution Agreement dated as of May 22, 1997 between First 
               Washington Realty Limited Partnership and Dodi Developments 
               L.L.C. for River's Edge Shopping Center

Dear George:

         This   letter   is   intended   to  serve  as  an   amendment   to  the
above-referenced  Contribution  Agreement.  Notwithstanding any of the terms and
conditions in the Contribution Agreement to the contrary, it is expressly agreed
as follows:

         1.       Clause A of  subparagraph  2(c)(iii) deals with aggregate loan
                  assumption  fees  between  $218,049.00  and  $438,049.00.  The
                  following is added at the end of subparagraph 2(c)(iii):

                           "If the aggregate  loan  assumption  fees  (excluding
                           lender's title charges,  fees of lender's counsel and
                           other  assumption  costs)  charged  by  the  mortgage
                           lenders in connection with the assumption by FWRLP of
                           the existing first mortgage loans on the Property and
                           the Other Properties exceeds $438,049.00 (the "Second
                           Threshold  Fees"),  then  the  Cash  Portion  of  the
                           Consideration  set forth in Section  2(a)(ii) of this
                           Agreement and the Other Contribution Agreements shall
                           be  increased  by an  aggregate  amount equal to such
                           excess amount."

         2.       The outside  Closing Date under Section 4 of the  Contribution
                  Agreement was set at August 27, 1997,  subject to extension as
                  set forth in such  Section 4. The outside  Closing  Date under
                  Section 4 is hereby  amended to be September 9, 1997,  subject
                  to extension as set forth in such Section 4.

         3.       The last day of the Feasibility  Period under Section 13(b) of
                  the  Contribution  Agreement is hereby  amended to be July 22,
                  1997; provided,  however, that the last day of the Feasibility
                  Period  with  respect  to  review  of  the  title  commitment,
                  documents of record and updated survey only shall be the tenth
                  (10th) day after  receipt by FWRLP of the last updated  survey
                  of the Property and the Other Properties.

         4.       Paragraph   11(b)  is  hereby  revised  to  provide  that  the
                  adjustments and prorations computed as of the Closing shall be
                  computed as of 11:59 p.m. on August 31, 1997.




                                      -xv-




Mr. George L. Frye
July 11, 1997
Page 3

         5. Clause (ii) of subparagraph  13(d) of the Contribution  Agreement is
hereby deleted.

         6.       All capitalized  terms used but not otherwise  defined in this
                  letter  amendment shall have the meanings  ascribed to them in
                  the  Contribution  Agreement.  Except as amended  hereby,  the
                  Contribution  Agreement  remains  unmodified  and continues in
                  full force and effect.

         If the foregoing is acceptable to you,  please  indicate your agreement
to these terms and  conditions set forth herein by executing and returning to me
the enclosed counterpart original of this letter amendment.

                                   Sincerely,

                                   FIRST WASHINGTON REALTY
                                   LIMITED PARTNERSHIP

                                   By:      First Washington Realty Trust, Inc.,
                                            Its general partner


                                            By:   /s/
                                                 William J. Wolfe
                                                 President

AGREED AND ACCEPTED as of July 14, 1997:

DOMINICK DIMATTEO, JR. IRREVOCABLE
FAMILY TRUST F/B/O MARY ELLEN DIMATTEO


By:  /s/
    James S. DiMatteo, Trustee

DOMINICK DIMATTEO, JR. IRREVOCABLE
FAMILY TRUST F/B/O DONNA DIMATTEO OWEN


By:  /s/
    James S. DiMatteo, Trustee


                    [Signatures continued on following page]







                                                             -xvi-




Mr. George L. Frye
July 11, 1997
Page 3


                    [Signatures continued from preceding page]


DOMINICK DIMATTEO, JR. IRREVOCABLE
FAMILY TRUST F/B/O JAMES S. DIMATTEO


By:  /s/
    James S. DiMatteo, Trustee

DOMINICK DIMATTEO, JR. IRREVOCABLE
FAMILY TRUST F/B/O MARGARET
DIMATTEO BEDFORD


By:  /s/
    James S. DiMatteo, Trustee

DOMINICK DIMATTEO, JR. IRREVOCABLE
FAMILY TRUST F/B/O KATHERINE
DIMATTEO CRANE


By:  /s/
    James S. DiMatteo, Trustee




cc:      Arnold Weinberg, Esq.
         Stephen Mitnick
         Jeffrey S. Distenfeld, Esq.




                                     -xvii-