Contribution Agreement

Contribution Agreement

                             CONTRIBUTION AGREEMENT

          THIS CONTRIBUTION  AGREEMENT is made and entered as the 6th day of 
August, 1997, by and between (i) EDWARD A. ST. JOHN,  PHILIP E.  RATCLIFFE,  
RONALD E. HARMAN, JAMES A.  CLAUSON,  ROBERT C.  BECKER,  GENE E.  MCCLAIN,  
CHARLES R.  PHILLIPS, LAWRENCE F.  MAYKRANTZ,  EDWARD B.  OKONSKI and RODGER R.
REISWIG,  who are, or shall be as of the Closing, all of the partners  
(collectively,  the "Partners") of Enterprise  Associates,  a Maryland general 
partnership (the  "Partnership") (the Partners sometimes hereinafter referred to
collectively as "Contributors"), 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,  the Partners own, or will own as of the Closing,  all of the
partnership interests (the "Partnership Interests") of the Partnership, and

         WHEREAS,  the  Partnership is the record and  beneficial  owner of that
certain parcel of real property containing  approximately  14.4594 acres of land
as more particularly  described on Exhibit A hereto (collectively,  the "Land"),
together with the shopping center known as  Mitchellville  Plaza Shopping Center
located in  Mitchellville,  Prince  George's  County,  Maryland,  and containing
approximately  154,698 square feet of leasable area and all other  buildings and
improvements situated thereon (collectively,  the "Building"),  and all personal
property and fixtures  located  therein  (other than that owned by tenants) (the
"Personalty"),   and  all  appurtenances,   rights,  easements,   rights-of-way,
tenements and  hereditaments  incident thereto (the "Additional  Property") (the
Land, Building,  Personalty and Additional Property are hereinafter collectively
referred to as the "Property"); and

         WHEREAS,  Contributors  and FWRLP  desire to enter into this  Agreement
relating  to  the  contribution  by  certain  Contributors  to  FWRLP  of  their
Partnership  Interests in exchange  for certain  interests in FWRLP and by other
Contributors of their Partnership Interests in exchange for cash.

         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 of Interests.  Subject to the terms and conditions set
forth in this Agreement,  at the Closing (as defined below)  Contributors  shall
contribute to FWRLP all of the  Partnership  Interests owned by them in exchange
for that number of common  limited  partnership  units of FWRLP (the "Units") or
cash, determined as set forth in Section 2 below. Contributors who receive Units
under  Section  2(a)  shall  be  sometimes  referred  to  as  "Exchangers",  and
Contributors who receive cash under Section 2(b) shall be sometimes  referred to
as "Sellers".

                                                        -1-





         2.       Consideration for Interests.

                  (a)  (i)  In   consideration   of  the   Contribution  of  the
Partnership Interests of the Exchangers, FWRLP shall issue Units in an aggregate
amount  calculated  as  follows:  86.31%  times the Net Asset  Value (as defined
below) of the Property,  divided by the Unit Price (as defined below) rounded to
the nearest one (1). The Units issued to the  Exchangers  at the Closing will be
issued to the Exchangers in accordance with the percentages  next to the name of
each Exchanger on Exhibit Q hereto.  The "Unit Price" will be  Twenty-Three  and
50/100 Dollars ($23.50) per Unit.

                  The  "Net   Asset   Value"   of  the   Property   will   equal
$19,000,000.00 ("Gross Consideration") less the outstanding and unpaid principal
balance of the Aegon Loan (as defined below) at the Closing. The Net Asset Value
shall be further adjusted by the amounts of positive or negative adjustments and
prorations  described in Section 12 below (which shall all be  determined  as of
the date of the Closing).

                           (ii)     In consideration of the Contribution of the 
Partnership Interests of the Sellers, FWRLP shall pay cash in an aggregate 
amount calculated as follows:  13.69% times the Net Asset Value of the Property.
The cash paid to the  Sellers  at Closing  will be paid to the  Sellers  in  
accordance  with the percentages next to the name of each Seller on Exhibit Q 
hereto.

                  (b) At Closing, the Partnership Interests shall be contributed
to FWRLP with the  Property  then being  subject to the  indebtedness,  lien and
operation  of the Aegon Loan,  including  without  limitation  the  Mortgage (as
defined below).

                  (c) (i) The Property is presently  encumbered  by an Indemnity
Deed of Trust and  Security  Agreement  ("Mortgage")  from the  Partnership,  as
guarantor,  for the benefit of PFL Life Insurance Company (an affiliate of Aegon
(USA) Realty  Advisers,  Inc.), as secured party (the "Lender"),  which Mortgage
secures an original principal  indebtness of $14.5 Million with interest thereon
payable  over  the term  thereof  (which  ends on  January  1,  2005) at a fixed
interest  rate of 9.25% per annum,  as  evidenced  by a Note from the St.  John,
Ratcliffe and Harman (as nominal borrowers) to Lender ("Note"). The Mortgage and
Note, and any amendments thereto,  and all documents and instruments executed in
connection therewith are collectively referred to as the "Aegon Loan." The Aegon
Loan requires equal monthly installments of principal and interest in the amount
of the $141,970.00 per month. The outstanding  principal balance under the Aegon
Loan as of February  28,  1997 is  approximately  $14,136,000.00.  Copies of the
Mortgage and Note, and any amendments thereto, are attached hereto as Exhibits N
and O, respectively.

     (ii) FWRLP's obligations under this Agreement shall be expressly contingent
on the  condition  that FWRLP  receive by Closing a letter (the  "Letter")  from
Lender (i) consenting to the Contribution of the Partnership Interests to

                                                        -2-





FWRLP  and the  assumption  of the  Aegon  Loan by FWRLP  (or its  designee)  as
borrower,  (ii)  confirming  that the Aegon 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 Aegon Loan.  At Closing,  the  Contributors  shall execute an estoppel
certificate in favor of FWRLP  certifying that, to the best knowledge of each of
the Contributors,  there is no default, or event of default which with notice or
lapse of time, or both,  would  constitute a default  under the Aegon Loan.  The
Contributors shall reasonably cooperate with FWRLP in its efforts to obtain such
Letter from Lender before the end of the Feasibility  Period (as defined below).
FWRLP  shall be  responsible  for all costs and fees  charged  by the  Lender in
connection  with such consents  (including  but not limited to assumption  fees,
Lender's  counsel  fees and title  insurance  premiums).  If such  Letter is not
received by FWRLP by Closing Date,  FWRLP shall have the right to terminate this
Agreement,  in which event the Deposit (defined  below),  together with interest
thereon,  shall be  returned to FWRLP.  If by the  Closing  Date Lender does not
consent  or if  Lender's  Letter  is other  than as set  forth  above and is not
acceptable  to FWRLP,  FWRLP  shall have the  right,  at its sole  election,  to
terminate  this  Agreement by giving  written  notice  thereof to  Contributors,
whereupon  the Deposit,  together with  interest  thereon,  shall be returned to
Contributors and neither party shall have any further liability to the other.

                           (iii) Contributors'  obligations under this Agreement
shall be
expressly contingent on the condition that the Lender, on or before the Closing,
shall have released  Contributors from all obligations and liabilities under the
Aegon  Loan  pursuant  to a release  document(s)  reasonably  acceptable  to the
Contributors  (the "Release").  FWRLP and  Contributors  shall cooperate in good
faith (at no cost to FWRLP or  Contributors)  to obtain  such  Release  from the
Lender.  If such Release is not obtained by the Closing Date,  Contributors  may
elect to either (i) terminate this Agreement, in which case the Deposit shall be
returned to FWRLP and neither  party  shall have any  further  liability  to the
other,  or (ii) extend the Closing Date for up to 30 days and if such Release is
not obtained by the end of such 30-day period,  then  Contributors  may elect to
proceed to Closing or terminate this Agreement.

                  (d) Exchangers  acknowledge  and agree that the Units will not
be redeemable for cash or exchangeable for common stock of the REIT for a period
of thirteen (13) months after their issuance, all as more fully discussed in the
Confidential  Information  Statement (as hereinafter  defined),  as supplemented
through the date hereof.

                  (e) Notwithstanding any provision hereof to the contrary,  the
Contribution  of the  Partnership  Interests  to FWRLP by the  Contributors  who
receive  Units as set forth  herein shall  constitute  a "Capital  Contribution"
within the meaning of the FWRLP  Partnership  Agreement and is intended,  to the
fullest  extent  possible,  to be  governed  by Section  721(a) of the  Internal
Revenue Code of 1986, as amended (the "Code"), and all parties to this Agreement
will report the transaction evidenced hereby

                                                        -3-





consistently  with this Section 2(e).  Since the Contribution of the Partnership
Interests  to FWRLP  will  terminate  the  Partnership  for  federal  income tax
purposes, FWRLP agrees that the Contributors shall have the right and obligation
to file final tax returns for the Partnership as of the Closing Date.

         3.       Deposit.

                  (a) Within two (2) business days after the date of delivery to
FWRLP of an original of this Agreement  executed by  Contributors  together with
completed  Exhibits hereto (the date of such delivery by Contributors  being the
"Acceptance Date"), FWRLP shall deliver to the Title Company, as escrow agent, a
deposit  (together with interest earned  thereon,  the "Deposit") of Two Hundred
Fifty  Thousand  Dollars  ($250,000.00  ) by  check  payable  to the  Commercial
Settlements,  Inc.,  1413 K  Street,  N.W.,  Washington,  DC 20005  (the  "Title
Company").

                  (b)      [Intentionally Omitted].

                  (c) The Initial Deposit and all accrued  interest  thereon are
hereinafter  referred to  collectively  as the "Deposit." The Title Company will
immediately  provide  Contributors  with  written  evidence  of  receipt of such
Deposit.  The Title  Company  shall  place the  Deposit  in an  interest-bearing
account  within two (2)  business  days after the date of receipt  thereof,  and
interest on the Deposit shall accrue to the benefit of the party entitled to the
Deposit  pursuant  to this  Agreement.  The  Deposit  shall be held by the Title
Company pursuant to the terms and conditions of this Agreement.

                  (d) In the event that,  at any time prior to  Closing,  either
the Contributors or FWRLP provides Title Company with a certification (a copy of
which  shall  be  delivered  contemporaneously  to the  other  party)  that  the
Contributors or FWRLP,  as the case may be, is entitled to the Deposit  pursuant
to the terms of this Agreement,  Title Company shall deliver the Deposit to such
party within seven (7) business  days after  receipt of said notice,  unless the
other party  disputes such  certification  by written notice to Title Company (a
copy of which shall be delivered contemporaneously to the other party) delivered
within  five  (5)  business  days of  Title  Company's  receipt  of the  initial
certification.  In such event,  Title  Company  shall hold the  Deposit  pending
resolution of such dispute. Any payment of the Deposit to the Contributors shall
be made by certified check or wire transfer.

                  (e) The  parties  acknowledge  that  Title  Company  is acting
solely as a stakeholder at their request and for their  convenience,  that Title
Company shall not be deemed to be the agent of either of the parties,  and Title
Company  shall not be liable to either of the parties for any act or omission on
its part unless  taken or suffered in bad faith,  in willful  disregard  to this
Agreement or involving  gross  negligence.  The  Contributors  (in proportion to
their  respective  interests as shown on Exhibit Q) and FWRLP shall  jointly and
severally indemnify and hold Title Company harmless from and

                                                        -4-





against all costs, claims and expenses,  including  reasonable  attorneys' fees,
incurred in connection with the performance of Title Company's duties hereunder,
except with respect to actions or omissions  taken or suffered by Title  Company
in bad  faith,  in  willful  disregard  of this  Agreement  or  involving  gross
negligence on the part of Title Company.

         4.  Closing.  Except  as  otherwise  provided  in this  Agreement,  the
Contribution   contemplated   herein  shall  be  consummated  at  the  "Closing"
(sometimes hereinafter referred to as the "Closing"),  which shall take place on
the date (the "Closing Date")  specified by FWRLP on not less than ten (10) days
notice to  Contributors,  provided that the Closing Date shall not be later than
sixty (60) days after the Acceptance Date; provided, however, that if the Lender
has not  completed  all  documentation  consenting  to the  contribution  of the
Partnership  Interests by such date, then the Closing Date shall be extended for
such  reasonable  time period as is required to complete  same, not to exceed 30
days.  The Closing  shall take place at the offices of First  Washington  Realty
Limited  Partnership,  4350 East-West  Highway,  Suite 400,  Bethesda,  Maryland
20814, or at such other place as may mutually  agreed upon by  Contributors  and
FWRLP.

         5.  Representations and Warranties of Contributors.  In order to induce
FWRLP  to  enter  into  this  Agreement  and to  issue  the  Units  or  cash  in
consideration  for  the  Partnership  Interests,   as  the  case  may  be,  each
Contributor for such  Contributor  only and for no other  Contributor  makes the
following  representations  and warranties,  each of which is material and shall
survive Closing without  limitation,  notwithstanding  any  investigation at any
time made by or on behalf of FWRLP:

                  (a)  Authority.  Such  Contributor  has the rights,  power and
authority  to enter  into  this  Agreement  and to  contribute  its  Partnership
Interest in accordance with the terms and conditions of this  Agreement.  Except
for the consents required under the Aegon Loan, no consents of any persons other
than those  executing  this  Agreement  as a  Contributor  are required for such
execution  or  to  cause  such   Contributor  to  consummate  the   transactions
contemplated  by  this  Agreement.  This  Agreement  is the  valid  and  binding
obligation  of  such  Contributor,   enforceable  against  such  Contributor  in
accordance with its terms.

                  (b) No Defaults. To the Contributor's  knowledge,  neither the
execution  of  this  Agreement  nor  the   consummation   of  the   transactions
contemplated  hereby will: (i) subject to any approval  required under the Aegon
Loan,  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
such  Contributor  is a party or by which  such  Contributor  is bound,  or (ii)
subject to any approval required under the Aegon Loan,  violate any restriction,
requirement,  covenant or condition to which such  Contributor  is subject or by
which such Contributor is bound.


                                                        -5-





                  (c) Ownership of Interests. Such Contributor owns (or will own
as of the Closing) the Partnership  Interest owned by such  Contributor,  as set
forth in Exhibit Q hereto, free and clear of all liens,  charges,  encumbrances,
restrictive  agreements  and  assessments  other  than  the  provisions  of  the
Partnership Agreement.  Upon the contribution of such Contributor's  Partnership
Interest to FWRLP or its  designee(s),  FWRLP will receive  good title  thereto,
free  from  all  liens,  charges,   encumbrances,   restrictive  agreements  and
assessments  whatsoever other than the provisions of the Partnership  Agreement,
and there will be no outstanding  options or calls of any nature relating to the
Partnership Interest of such Contributor, except as set forth in the Partnership
Agreement.  Such  Contributor  hereby waives,  with respect to the  contribution
contemplated by this Agreement,  any "right of refusal" or other  restriction on
transfer set forth in the Partnership Agreement.

                  (d)      Securities Law Matters.

                           (i)      Each Exchanger who shall receive the Units 
is now or, at the time of Closing, will be, an "accredited investor" as such 
term is defined under Rule  501  promulgated  under  the  Securities  Act of  
1933,  as  amended  (the "Securities Act");

                           (ii)     Exchangers' primary residence or principal 
place of business is in the State  of Maryland or Florida, as the case may be;

                           (iii) Each  Exchanger is acquiring the Units for such
Contributor's account for investment purposes only and not with a present view 
to distribution;

     (iv) Taking into account the  information  and resources such Exchanger can
practically bring to bear on the acquisition of the Units in FWRLP  contemplated
hereby,  each  Exchanger 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  such
Exchanger  deems  relevant in making an  informed  decision to acquire the Units
(including the Confidential Information Statement attached hereto which contains
the First Amended and Restated  Agree- ment of Limited  Partnership of FWRLP and
any  Amendments  thereto  (the  "Partner-  ship  Agreement"),  except  that  the
Partnership  Agreement has been further  amended solely to reflect  exchanges of
Units for shares of the REIT's  common stock (the "Common  Stock") by holders of
such Units in accordance with the terms of the Partnership Agreement);

                           (v)      Each Exchanger 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

                                                        -6-





Securities Act and the rules and regulations promulgated thereunder and with the
terms and conditions of the Partnership Agreement;

                           (vi)     Each Exchanger acknowledges that the Units 
to be issued must be held  unless  and  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; and

     (vii) Prior to the issuance of the Units,  each  Exchanger 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.

                  (e) No  Contributor  is a person  other  than a United  States
person within the meaning of the Internal  Revenue Code of 1986, as amended (the
"Code").  The  transaction  contemplated  herein  is  not  subject  to  the  tax
withholding provisions of Section 3406 of the Code, or Subchapter A of Chapter 3
of the Code or of any other provision of law.

         6.  Representations  and  Warranties of the  Contributors.  In order to
induce  FWRLP to enter  into  this  Agreement  and to issue the Units or cash in
consideration  for  the  Partnership  Interests,   as  the  case  may  be,  each
Contributor,  for such  Contributor  only and for no other  Contributor,  hereby
makes the following  representations  and warranties as of the date hereof, each
of which is material and shall (except as otherwise set forth in Section  6(s)),
survive Closing for a period of one (1) year (unless expressly  provided that it
will survive Closing without such limitation), notwithstanding any investigation
at any time made by or on behalf of FWRLP:

                  (a) Authority.  The Partnership is a general  partnership duly
organized under the laws of the State of Maryland.  The copy of the Partnership'
s  Partnership   Agreement  and  all  Amendments  thereto   (collectively,   the
"Partnership  Agreement")  attached hereto as Exhibit P , is a true, correct and
complete  copy   thereof.   Notwithstanding   anything  to  the  contrary,   the
representations  and  warranties  contained in this  Section 6(a) shall  survive
Closing without being subject to the one year limitation.

                  (b)  Title.  To  the  best  of  Contributor's  knowledge,  the
Partnership is the sole owner of fee simple title to the Property.

                  (c)  Compliance  with  Existing  Laws.  To the  best  of  such
Contributor's  knowledge  and except as set forth on Exhibit D attached  hereto,
(i) the  Partnership is not in violation of, and has  materially  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) the  Partnership  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 the Partnership, and

                                                        -7-





the requisite  certificates of the fire marshalls or board of fire  underwriters
have  been  issued  for the  Property,  if  applicable.  The  Property  is zoned
CRC-Retail Sales. To the best of the Contributor's  knowledge,  the Building and
all related  facilities are now in conformance with all applicable  zoning laws,
and no variance,  exception or other  modification of such laws was necessary in
order to authorize the use or occupancy of any portion thereof,  or if necessary
it was obtained.

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

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

                           (ii)     no tenant has an option to purchase the 
                  Property or any portion thereof;

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

                           (iv)     to the best of the Contributor's knowledge, 
                  the Partnership 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 the Partnership and any tenant
                  has  been  completed  by the  Partnership,  and all  work  and
                  materials  have  been  fully  paid  for or will be paid for by
                  Closing, except as indicated on Exhibit B;

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


                                                        -8-





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

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

                  (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").  True and correct copies of all of the Service  Contracts
have been  delivered to FWRLP to the extent  available.  Except in the case of a
default by the vendor under a specific  Service  Contract,  no Service  Contract
will be terminated,  amended, modified or supplemented prior to the Closing Date
without FWRLP's prior written approval, which approval shall not be unreasonably
withheld, conditioned or delayed.

                  (f) Tax Bills. The Partnership has delivered to FWRLP true and
correct  copies of tax bills issued by any  applicable  federal,  state or local
governmental  authority to the Partnership  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.  The  Property is insured for its  replacement
cost against loss or damage  sustained as a result of fire or other casualty and
the  Partnership  has rent loss  insurance in place for the  Property.  Attached
hereto  as  Exhibit E is a list of all  hazard,  liability  and other  insurance
policies  presently  affording  coverage  with  respect  to  the  Property.  The
Partnership  shall maintain in full force and effect all such policies until the
Closing  Date,  and shall  cause the  Partnership's  insurer to name FWRLP as an
additional  insured as a contract  party on its rent loss policy with respect to
the Property.

                  (h)  Possession 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,   and  Contributors  make  no
representations or warranties concerning the physical condition of the Property.

                  (i) Tenant Estoppels.  The Contributors  represent and warrant
that  they  shall  use  reasonable  good  faith  efforts  (without  cost  to the
Contributors or the  Partnership) to cause to be obtained and delivered to FWRLP
a tenant  estoppel  letter from each tenant in  substantially  the form attached
hereto as Exhibit F (or in such form or containing  such  information  as may be
required by the lease of such  tenant)  from each of the tenants of the Property
confirming the information set forth in the Rent Schedule  attached as Exhibit B
hereto, but shall have no liability if an estoppel letter(s) is not obtained.

                  (j)      Condemnation Proceedings.  No condemnation or eminent
domain proceedings are pending or, to the best of the Contributor's knowledge, 
threatened

                                                        -9-





against the Property or any part thereof,  and neither the  Partnership  nor the
Contributor  has made any  commitments  to or received any written notice 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.

                  (k)  Litigation.  Except as set forth on Exhibit G hereto,  no
litigation  is  pending  or,  to  the  best  of  such  Contributor's  knowledge,
threatened against the Partnership,  including  administrative actions or orders
against the Partnership relating to governmental regulations, affecting the use,
operation  or  ownership  of the  Property or any part  thereof as  contemplated
herein, other than those being defended by the Partnerships' liability insurers.

                  (l) No Defaults. To the knowledge of Contributor,  neither the
execution  of  this  Agreement  nor  the   consummation   of  the   transactions
contemplated  hereby will: (i) subject to any approval  required under the Aegon
Loan,  conflict  with,  or result  in a breach  of,  the  terms,  conditions  or
provisions  of, or  constitute  a  default  under,  any  material  agreement  or
instrument to which the  Partnership  is a party or by which the  Partnership or
the Property is bound,  (ii) subject to the  approval  required  under the Aegon
Loan, violate any restriction,  requirement,  covenant or condition to which the
Partnership is subject or by which the  Partnership or the Property is bound, or
(iii)  result in the  cancellation  of any contract or lease  pertaining  to the
Property.

                  (m)      [Intentionally Omitted].

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

                  (o)  Hazardous  Waste.  Except  as  may be  set  forth  in any
environmental  assessments  obtained by the Partnership and shown to FWRLP, such
Contributor  has no actual  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 1986, 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.  To the
best of the 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 such  Contributor's  knowledge,  the Building is
totally free of friable asbestos requiring remediation.


                                                       -10-





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

                  (q) Licenses and Permits.  Such  Contributors have received no
notice,  nor have any  knowledge,  that the  Partnership is lacking any required
permit or license issued by applicable  governmental  authorities for operation,
maintenance or ownership of the Property ("Licenses").

                  (r)  Operating  Statements.  Attached  hereto as Exhibit H are
true and correct operating statements of the Property for 1994, 1995 and 1996.

                  (s) Utilities.  To the best of such  Contributor's  knowledge,
adequate,  usable public sewers, public water facilities,  gas and/or electrical
facilities  necessary to the  operation of the Property are installed in and are
duly connected to the Property . Notwithstanding  anything to the contrary,  the
representations  and warranties set forth in this Section 6(s) shall not survive
Closing.

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

                  (u)  Leasing   Commissions.   To  the  best  of  Contributor's
knowledge,  at Closing  there  shall be no  outstanding  or  contingent  leasing
commissions  or fees  payable  with  respect  to the  Property,  other  than the
commissions  described  on  Exhibit  M  hereto.  There is no,  and  shall be no,
contingent  leasing  commissions  payable by the Partnership with respect to the
Food Lion lease.

                  (v)  Partnership  Liabilities.  Except for (i) the obligations
and  liabilities  of the  Partnership  which  FWRLP is  taking  the  Partnership
Interests subject to under Section 2 (c) above, (ii) any accrued liabilities and
obligations of the Partnership  which are being adjusted at Closing  pursuant to
Section 12 of this Agreement,  (iii)  contingent  leasing  commissions for which
FWRLP agrees to be liable pursuant to Section  9(a)(vi) of this  Agreement,  and
(iv) matters  disclosed or referred to in the Exhibits  attached hereto,  to the
best of Contributors'  knowledge,  the Partnership does not have any liabilities
or obligations,  either accrued, absolute or contingent or otherwise, which will
not be paid or  discharged  on or before the  Closing  Date.  In  addition,  the
Partnership  has not received notice of any, and to the best of the knowledge of
such  Contributor,  there is, as of the date of execution of this Agreement,  no
basis for any, claim against (or liability of) the Partnership  arising from the
business done,  transactions entered into or other events occurring prior to the
Closing  Date  other  than the  obligations  and  liabilities  described  in the
preceding sentence.

                  (w)      Partnership for Tax Purposes.  The Partnership is, 
and at all times has been, properly treated as a partnership for Federal Income 
Tax purposes, and not

                                                       -11-





as an "association" or "publicly traded  partnership"  taxable as a corporation.
The foregoing  representation shall survive Closing without being subject to the
one year limitation.

                  (x)  Taxes.   The   Partnership  has  timely  filed  with  the
appropriate   taxing  authorities  all  returns  (including  without  limitation
information returns and other material information) in respect of Federal, State
and local taxes  (collectively  "Taxes")  required to be filed by it through the
date hereof and will timely file any such returns  required to be filed by it on
or prior to the Closing Date. The returns and other  information filed (or to be
filed) are  complete and  accurate in all  material  respects.  All Taxes of the
Partnership  in respect of periods  beginning  before the Closing Date have been
timely  paid,  or will  be  timely  paid  prior  to the  Closing  Date,  and the
Partnership  has no  material  liability  for Taxes in excess of the  amounts so
paid.  All Taxes that the  Partnership  has been required to collect or withhold
have been duly collected or withheld and, to the extent  required when due, have
been or will  be  (prior  to  Closing  Date)  duly  paid  to the  proper  taxing
authority. No audits of any of the Partnership's federal, state or local returns
for Taxes by the relevant  taxing  authorities  have  occurred,  and no material
deficiencies  for  Taxes of the  Partnership  have  been  claimed,  proposed  or
assessed by any taxing or other governmental  authority against the Partnership.
There  are no  pending  or,  to the  best  of  knowledge  of  such  Contributor,
threatened  audits,  investigations  or claims for or relating  to any  material
additional  liability to the  Partnership in respect of Taxes,  and there are no
matters under discussion with any governmental authorities with respect to Taxes
that in reasonable  judgement of such  Contributor or his counsel,  is likely to
result in a material  additional  liability  for  Taxes.  There are no liens for
taxes  (other  than for  current  taxes not yet due and  payable)  on any of the
assets of the Partnership. The foregoing representations and covenants contained
in this Section 6(x) shall survive Closing without being subject to the one year
limitation.

         Any liability of  Contributors  under this Section 6 shall be allocated
to them in proportion to their  interests as shown on Exhibit Q hereto,  and not
jointly.

         7. Obligations of Contributors Pending Closing. From and after the date
of this Agreement  through the Closing  Date,Contributors  covenant and agree as
follows:

                  (a)  Maintenance and Operation of Premises.  The  Contributors
will cause the Property to be  maintained  in its present  order and  condition,
normal wear and tear, and damage by fire or other  casualty  (subject to Section
12) 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 repairs so
that the  Property  will,  except for normal wear and tear and damage by fire or
other casualty  (subject to Section 12), be in  substantially  the same physical
condition on the Closing Date as on the date hereof.

                  (b)  Licenses.  The  Partnership  shall  use its  commercially
reasonable efforts to preserve in force all Licenses and to cause those expiring
to be renewed.

                                                       -12-





                  (c) Changes in Representations.  The Contributors shall notify
FWRLP  promptly,  and FWRLP shall notify the  Contributors  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.  From the Acceptance Date to the
expiration of the Feasibility Period provided for in Section 14, the Partnership
shall have the right to enter into new  leases for space at the  Property  ("New
Lease(s)")  or to amend,  modify,  renew,  supplement or extend any Lease in any
respect or approve any  assignment of leases or  subletting of leased space,  or
terminate  any  Lease  (with  respect  to  any  provision  amending,  modifying,
renewing, supplementing or extending, etc. above, "Amended Lease(s)"), and as to
any Amended or new Leases  entered into by the  Partnership  during this period,
the  Contributors  or their agent shall give FWRLP notice  (including  therewith
copies of the  Amended  and New  Leases  and all  relevant  data  related to the
particular  Amended or New Lease) of such Amended and/or New Leases within three
(3)  business  days after the entry into any  Amended or New Lease,  but, in any
event,  not later than seven (7) days prior to the expiration of the Feasibility
Period.  After the expiration of the Feasibility  Period,  the Partnership shall
not,  without  FWRLP's  prior  written  consent  (which  consent  shall  not  be
unreasonably withheld),  amend, modify, renew or extend any Lease in any respect
unless  required by law, or enter into new leases or approve any  assignment  of
leases or subletting of leased space,  or terminate any Lease. If FWRLP does not
respond  within five (5) business  days of written  request for consent from the
Partnership,  FWRLP shall be deemed to have  consented to such  request.  If any
space is vacant on the Closing Date,  FWRLP shall accept the Property subject to
any vacancy as of the Closing Date,  provided that the vacancy was not permitted
or created by the Partnership in violation of any restrictions contained in this
Section 7(d).  Neither the Contributors nor the Partnership shall be responsible
for vacancy  caused by a breach by tenant under its lease.  After the end of the
Feasibility Period and prior to Closing,  the Partnership shall not apply all or
any part of the  security  deposit of any tenant  unless such tenant has vacated
the Property.

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

                  (f) Obligations as to Food Lion Lease. The Contributors  shall
reimburse to Food Lion the  renovation/retrofit  costs in such amount and within
such time period  required  under its Lease in order to preclude  Food Lion from
reducing its rent payable  under its Lease and shall use due  diligence and good
faith efforts to complete such reimbursement  prior to the Closing Date. If Food
Lion has not satisfied all  conditions to the  obligation of the  Partnership to
reimburse  Food  Lion for the cost of the  renovation/retrofit  set forth in its
Lease by the Closing Date, then the Contributors,

                                                       -13-





jointly and severally shall be responsible for and shall reimburse Food Lion for
such  renovation/retrofit  costs within the time period required under the Lease
as soon as the  conditions  for  reimbursement  have  been  satisfied,  it being
understood  and  agreed  that in no event  shall Food Lion be able to reduce the
rent  payable  under  their  Lease  as a  result  of  non-reimbursement  of  the
renovation\retrofit  costs.   Notwithstanding  anything  to  the  contrary,  the
foregoing  covenant and  agreement  contained in this Section 7(f) shall survive
Closing without being subject to any limitation.

         8.  Representations  and  Warranties  of  FWRLP.  In  order  to  induce
Contributors  to enter into this  Agreement  and to contribute  the  Partnership
Interests to FWRLP,  FWRLP, and, as to Sections 8(a), 8(b), 8(e), 8(f) and 8(g),
First   Washington   Realty  Trust,  Inc  ("REIT")  hereby  make  the  following
representations  and warranties as of the date hereto, each of which is material
and shall survive Closing, notwithstanding any investigation at any time made by
or on behalf of Contributors:

                  (a)  Authority  of FWRLP  and the  REIT.  FWRLP  is a  limited
partnership  duly  organized and existing and in good standing under the laws of
the State of Maryland.  Subject to the approval of the Board of Directors of the
REIT,  as set forth in Section  9(a)(ix),  FWRLP and the REIT have all necessary
power  and  authority  to  execute,  deliver  and  perform  this  Agreement  and
consummate all of the  transactions  contemplated by this  Agreement,  including
without  limitation the Registration  Rights Agreement referred to in Section 18
and  attached  hereto as Exhibit  K.  Subject  to the  approval  of the Board of
Directors of the REIT as set forth in Section  9(a)(ix),  this  Agreement is the
valid and binding obligation of FWRLP and the REIT,  enforceable against each of
them in accordance with its terms.

                  (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,  any  agreement or instrument to which FWRLP or the
REIT  is a  party,  (ii)  violate  any  restriction,  requirement,  covenant  or
condition  to which the FWRLP or the REIT is  subject,  and (iii)  constitute  a
violation  of  any  applicable  code,  resolution,  law,  statute,   regulation,
ordinance, rule, judgment, decree or order.

                  (c) Disclosure  Documents.  Attached  hereto as Exhibit L 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  L, 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.

                  (d) Disclosure.  The Confidential  Information  Statement,  as
supplemented  through the date hereof, and including the Appendices  thereto, on
the date hereof, does not contain an untrue statement of a material fact or omit
to state a

                                                       -14-





material fact required to be stated  therein or necessary to make the statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.

                  (e) Financial  Information.  The financial statements of FWRLP
and  the  REIT  (including  the  notes  thereto)  included  in the  Confidential
Information  Statement,  as supplemented through the date hereof, present fairly
the financial position of the respective entity or entities presented therein at
the  respective  dates  indicated  and the results of their  operations  for the
respective  periods  specified,  and  except  as  otherwise  stated  in any such
registration  statement or periodic report, such financial  statements have been
prepared in conformity with generally accepted accounting  principles applied on
a consistent basis.

                  (f)  Issuance  of  Units.  The  FWRLP  Partnership   Agreement
provides,  or prior to Closing will provide,  for the issuance of the Units. The
Units to be issued in connection with the transactions  herein contemplated have
been, or prior to their issuance will have been, duly authorized for issuance by
FWRLP to Exchangers,  and on the date of their issuance will be validly  issued,
fully paid and  non-assessable.  The Units  conform to the  description  thereof
contained in the Confidential Information Statement, as supplemented through the
date hereof, and such description  conforms to the rights set forth in the FWRLP
Partnership  Agreement.   All  issued  and  outstanding  Units  were  issued  in
compliance with or in transactions  exempt from the  registration  provisions of
applicable federal and state securities laws. Any and all shares of Common Stock
of the REIT  exchangeable  for Units issued in connection with the  transactions
herein  contemplated  will be duly  authorized,  validly issued,  fully paid and
non-assessable.  All issued and  outstanding  shares of Common Stock of the REIT
were issued in compliance with or in transactions  exempt from the  registration
provisions of applicable federal and state securities laws.

                  (g) Litigation.  There is no action or proceeding  pending or,
to the knowledge of FWRLP,  threatened against FWRLP, the REIT or any subsidiary
before any court or  administrative  agency  which would  result in any material
adverse  change in the  business or financial  condition of FWRLP,  the REIT and
their subsidiaries, taken as a whole.

                  (h) Sale of the Property. (i) In no event shall FWRLP sell the
Property,  or permit  the  Property  to be sold,  for a period of five (5) years
following the Closing,  unless pursuant to a tax-free exchange such that no gain
would be  incurred  by  Exchangers  as a result of such sale.  In the event of a
breach by FWRLP of the  covenant  not to sell or permit the sale of the Property
as set forth above in this Section  8(h),  FWRLP agrees that it shall pay to the
Exchangers liquidated damages in the aggregate amount of $3,465,000.00, it being
recognized that the actual amount of damages  sustained by the Exchangers is not
susceptible  of a precise  amount,  and the amount of  liquidated  damages shall
compensate  the  Exchangers  for the damages  resulting  from a breach by FWRLP;
provided, however, that if the number of Units held by Exchangers at the time of
settlement  of any such sale of the  Property  is less than the  number of Units
issued to such Exchangers at Closing, then the foregoing amount

                                                       -15-





of  liquidated  damages  shall  be  reduced  to an  aggregate  amount  equal  to
$3,465,000.00  multiplied by a fraction, the numerator of which is the aggregate
number of Units then held by Exchangers  and the  denominator  of which shall be
the aggregate number of Units issued to such Exchangers at Closing.

                           (ii)     After the end of such five-year period, if 
FWRLP or any affiliate of FWRLP  desires to sell or  otherwise  dispose of the  
Property,  it shall (A) provide a copy of the marketing  materials to Exchangers
and (B) use its best efforts to accomplish  such sale or disposition  pursuant 
to a tax-free exchange under Section 1031 (or any successor  section) of the 
Internal  Revenue Code ("Code") such that no gain would be incurred by the  
Exchangers as a result of such sale. Such best efforts obligation shall not 
apply if tax-free exchanges are no  longer  available  under the Code or if such
sale  would not  trigger a taxable event to the Contributors.

                           (iii) If FWRLP,  despite  using its best  efforts  to
accomplish a tax-free exchange of the Property,  is unable to accomplish the 
sale of the Property after the five-year period pursuant to a tax-free exchange,
or if such tax-free exchanges  are  then no  longer  available  under  the Code,
and  FWRLP or any affiliate of FWRLP still  desires to sell or dispose of the  
Property  after the five-year  period,  then FWRLP or such affiliate will 
provide Exchangers with a right of first  refusal  to "trade  back" the Property
for the same price as contained in a bona fide offer from a third-party 
purchaser.  FWRLP shall send a notice  to  Exchangers  containing  a copy of the
contract of sale or a fully detailed letter of intent with the bona fide 
purchaser. Exchangers shall have 30 days from the receipt of such  notice in 
which to exercise  their right of first refusal to receive the Property in 
exchange for Units or cash. Any or all of the Exchangers may exercise the right 
of first refusal, provided the entire Property is acquired by the  Exchangers  
exercising  such right.  If Exchangers  exercise their right of first  refusal,
Exchangers  may use cash  and/or  Units (such Unit price based upon the then 
current  closing  price per share of common stock into which the Units are 
exchangeable). If the Exchangers exercise the right of first refusal,  the 
closing shall occur at the same time as otherwise contained in the bona fide 
offer (the above 30 day period shall constitute the study period).  If the 
Exchangers do not exercise  their right of first  refusal,  then FWRLP shall
have the right to sell the Property to such third party pursuant to the terms of
the bona fide offer.  If FWRLP or its affiliate sells the Property after the end
of the  five-year  period and shall not have used its best efforts to accomplish
such sale  pursuant  to a  tax-free  exchange  or shall  have  failed to provide
Exchangers with the right of first refusal,  Exchangers  shall have all remedies
available at law or in equity and FWRLP shall be liable for all reasonable legal
fees, costs and expenses incurred by Exchangers in exercising such remedies.

     (iv) For the  purposes  of (ii) and (iii)  above,  FWRLP shall be deemed to
have used its "best efforts" if, during its normal  acquisition  process for the
period  from its  decision to sell the  Property  (as  evidenced  by delivery to
Exchangers of the marketing  materials) until execution of a letter of intent or
contract with a third party purchaser,  FWRLP shall have sought in good faith to
identify an exchange property

                                                       -16-





which would  qualify as a tax-free  exchange  under  Section 1031 (or  successor
section)  at  that  time  and  which  otherwise  satisfies  FWRLP's  acquisition
criteria.

                           (v)      All taxable events in this Section 8(h) 
shall be calculated without regard to  Contributors'  carry-forward  losses.  
Each  Exchanger's  tax consequences shall be calculated separately, without 
regard to the tax situation of the other Exchangers.

         9.       Conditions Precedent to Closing.

                  (a) Conditions Precedent to FWRLP's Obligation.  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.  Contributors'
                  representations  and  warranties  hereunder  shall be true and
                  correct in all material  respects the 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 on the date of FWRLP's
                  execution of this Agreement.

                           (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) 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, without exception for 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 J
                           attached  hereto.  Notwithstanding  anything  to  the
                           contrary   contained  in  this   paragraph  (B),  the
                           Contributors,  at or prior to Closing, shall cause to
                           be satisfied  and  released of record all  mortgages,
                           deeds of trust,  financing  statements,  judgments or
                           liens , other than the Aegon Mortgage,  assignment of
                           rents and leases and financing statements  associated
                           with the Aegon Loan.


                                                       -17-





                           (iv)  Existing  Mortgages.  Contributors  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  Aegon  Loan  (collectively,   the  "Existing
                  Mortgages").

                            (v)     [Intentionally Omitted].

                           (vi)    Leasing     Brokerage/Property     Management
                  Agreements. The Contributors 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  the   Contributors),   shall   be   the   sole
                  responsibility  of the  Contributors.  The Contributors  agree
                  that they  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  or by the  Partnership  in  connection  with  any
                  outstanding and/or contingent  leasing  commissions or fees or
                  management fees.  However,  the Partnership and FWRLP shall be
                  liable  for such  contingent  leasing  commissions  due  after
                  Closing  and  payable  to  third  parties   unaffiliated  with
                  Contributors  (i.e.,  not  owned or  controlled  by any of the
                  Contributors)  and either (A) shown on Exhibit M hereto or (B)
                  payable upon renewal of existing leases after Closing provided
                  that   Exchangers'   had  no  knowledge   regarding  any  such
                  contingent leasing  commissions at the Closing Date; and FWRLP
                  shall  indemnify  Contributors  with regard to such contingent
                  leasing  commissions  for which FWRLP has  assumed  liability.
                  Notwithstanding  anything to the  contrary,  the indemnity set
                  forth  in  this  subsection  9(a)(vi)  shall  survive  Closing
                  without limitation.

                           (vii) Performance by Contributor.  Contributors shall
                  have  complied  with  and  not be in  breach  of any of  their
                  covenants or obligations  under this Agreement in any material
                  respect.

                           (viii)  Tenant  Estoppels.  FWRLP shall have received
                  (a)  a  tenant  estoppel  letter  in  substantially  the  form
                  attached  hereto as Exhibit F (or in such form as  required by
                  the lease to which a specific  tenant is subject)  from,  at a
                  minimum,  tenants  satisfying  the  requirements  described on
                  Exhibit F-1,  confirming the information set forth in the Rent
                  Schedule  attached  as Exhibit B hereto for such  tenants  and
                  containing no material changes from the Rent Schedule, and (b)
                  any  subordination and attornment  agreements  required by the
                  mortgage  lender  of FWRLP  from at  least  those  tenants  on
                  Exhibit F-1.


                                                       -18-





                           (ix) FWRT Board  Approval.  The Board of Directors of
                  FWRT shall have approved this  Agreement and the  transactions
                  contemplated  hereby by the end of the Feasibility  Period. 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  Contributors  written notice thereof
                  within one (1) day after the end of the Feasibility  Period in
                  which  event the  Deposit and any  interest  thereon  shall be
                  returned  to FWRLP and  neither  party  shall have any further
                  obligations nor liabilities to the other.

                  (b) Failure of  Condition.  In the event of the failure by the
Closing Date of any condition  precedent  set forth in Section 9(a) above,  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,  neither
party shall have any further  obligations or  liabilities  to the other;  or (b)
proceed  to  Closing  which  shall  be  deemed a  waiver  of any such  condition
precedent; or (c) extend the Closing Date for such reasonable time period as may
be determined by FWRLP and Contributor  (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.

                  (c)  Conditions  Precedent to  Contributors'  Obligations.  It
shall  be a  condition  precedent  of  Contributors'  obligation  to make a full
settlement hereunder that (i) FWRLP's and REIT's  representations and warranties
hereunder  shall be true and correct in all material  respects as of the Closing
Date and FWRLP will deliver a certification  thereof to Contributors at Closing,
and (ii) the  substantive  terms of the  FWRLP  Partnership  Agreement,  and the
amendments  thereto (which shall exclude,  among other things,  issuance  and/or
exchange of any units thereunder),  as attached to the Confidential  Information
Statement set forth in Exhibit L hereto, have not been modified prior to Closing
in a manner  materially  adverse to the interests of the  Exchangers as incoming
additional limited partners of FWRLP, and (iii) the release described in Section
2(c)(iii) shall have been issued..

         10. Contributors'  Deliveries.  At the Closing the following documents,
each dated on the Closing Date, shall be delivered to FWRLP:

                  (a) a Contribution and Assumption Agreement ("Assignment") and
an Amendment to the  Partnership  Agreement  of the  Partnership  ("Amendment"),
reasonably  satisfactory  to  FWRLP  and the  Contributors,  setting  forth  the
assignment by each of the  Contributors  of their  Partnership  Interest and its
withdrawal  from the  Partnership  and the  substitution  of  FWRLP  and /or its
designee(s) as partners of the  Partnership,  which  Amendment shall be executed
and acknowledged by all the Contributors; at FWRLP's option, such Assignment and
Amendment  may contain such other  amendments  of the  Partnership  Agreement as
shall be determined by FWRLP,  provided that the Contributors shall execute such
Assignment  and  Amendment  solely  for  the  purpose  of  (a)  assigning  their
respective   Partnership  Interests  to  FWRLP  or  its  designee(s),   and  (b)
withdrawing from the Partnership. If, in conjunction with Closing,

                                                       -19-





the Partnership is converted into an LLP (at FWRLP's  request),  FWRLP shall pay
all costs associated therewith.

                  (b) a release from each Contributor  releasing the Partnership
and  FWRLP  (and  its  designee(s))  as  partners  of the  Partnership  from any
obligations  and  liabilities  with  respect to the  original  formation  of the
Partnership,  and any other matter  arising  from  business  done,  transactions
entered into or events occurring prior to the Closing Date  (including,  without
limitation,  liability  arising  from any  breach  by any of the  Contributors);
provided,  however,  such release shall not relate to the indemnity by FWRLP and
the  Partnership for the contingent  leasing  commissions for which they will be
liable as set forth in Section 9(a)(vi) of this Agreement.

                  (c) An  opinion  of  counsel  for  Contributors,  in from  and
substance reasonably acceptable to counsel for FWRLP, to the effect that:

                           (i) The  Partnership  is a duly organized and validly
                  existing as a general  partnership under the laws of the State
                  of Maryland:

     (ii) The execution and delivery of this Agreement and all other  agreements
delivered in  connection  herewith or at the Closing,  the  consummation  of the
transactions  herein  contemplated,  and  compliance  with  the  terms  of  this
Agreement and all other  agreements  delivered in connection  herewith or at the
Closing  will not  conflict  with,  or result in a breach  of, any of the terms,
conditions or provisions of, or constitute a default under, any note, indenture,
mortgage,  deed of trust, contract or other agreement or instrument to which the
Partnership  is a party  or by which  the  Partnership  is  bound  (and of which
counsel has knowledge)  (other than the Aegon Loan), or any law or order,  rule,
regulation,   writ,  injunction  or  decree  of  any  government,   governmental
instrumentality or court, domestic or foreign;

                           (iii)  Contributors  have  complete and  unrestricted
                  power to contribute, transfer, assign and deliver to FWRLP and
                  its  designee(s)  all  of  the  Partnership  Interests  to  be
                  contributed  and  assigned  hereunder  which are owned and/or
                  controlled  by  them,  and the  Assignment  and the  Amendment
                  delivered  pursuant  to this  Section  10 are in form  legally
                  sufficient to vest in FWRLP and its designee(s)  good title to
                  the Partnership Interests described therein; and

                           (iv) To the best of counsel's knowledge,  there is no
                  litigation or investigation  pending or threatened against the
                  Partnership, or the Property, or any part thereof, which might
                  result  in any  material,  adverse  change  pertaining  to the
                  Property or the  Partnership,  or the operations  thereof,  or
                  which  questions the validity of any action taken in, under or
                  in connection with any of the provisions of this Agreement.


                                                       -20-





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

                  (e)  originally  executed  Leases and  Service  Contracts  and
copies of books, records,  operating reports,  files and other materials related
to the  ownership,  use and  operation of the  Property,  to the extent that any
exist and are in the  possession of the  Contributors,  which  obligation  shall
survive Closing;

                   (f)     [Intentionally Omitted].

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

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

                   (i)     from each Contributor, 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;

                   (j) such other items and instruments from the Contributors as
shall be required by the Title  Company in  connection  with the issuance of its
title  insurance  policy  to FWRLP  pursuant  to  Section  9(a)(iii)  (including
customary  Contributors' or owner's  affidavit),  except that Contributors shall
not be obligated to undertake any financial obligation,  indemnities, escrows or
guarantee in favor of the Title Company;

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

                   (l)     any other documents required by this Agreement to be 
delivered by Contributors; and

                  (m) An amendment to the  Partnership  Agreement of FWRLP, in a
form reasonably  acceptable to FWRLP and Contributors,  admitting the Exchangers
as limited  partners of FWRLP and issuing  such Units as computed in  accordance
with Exhibit Q hereto .

         11.  FWRLP's  Performance.  At the  Closing,  simultaneously  with  the
deliveries of Contributors pursuant to the provisions of Section 10 above, FWRLP
shall  issue to  Contributors  the Units  and cash in the  manner  specified  in
Section 2 and FWRLP and REIT shall execute and deliver those  documents and take
such other actions required to be taken by FWRLP and REIT at Closing as required
under this Agreement,

                                                       -21-





whereupon the Deposit,  and any interest accrued  thereon,  shall be returned to
FWRLP by the Title Company.

         12. Settlement Charges; Prorations and Adjustments. FWRLP shall pay for
the title examination,  the title insurance premium,  notary fees and other such
charges  incident to Closing.  Any real estate  transfer and recording  fees and
taxes and documentary stamps in connection with this transaction,  if any, shall
be borne by FWRLP; provided, however, that the Gross Consideration under Section
2(a) hereof  shall be reduced by an amount  equal to one-half  (1/2) of the real
estate transfer and recording fees and taxes payable by FWRLP in connection with
the contribution of the Partnership  Interests.  Although Contributors and FWRLP
believe  that  no  real  estate  transfer  or  recording  taxes  will  be due in
connection  with  the  transactions   contemplated  hereby,  if  it  is  finally
determined  that such taxes are due and  payable in  connection  herewith,  then
Contributors shall (in proportion to their relative  percentages under Exhibit Q
hereto)  either (at FWRLP's  election) (i) reimburse to FWRLP  one-half (1/2) of
such sum paid by FWRLP, or (ii)  return/relinquish  to FWRLP the number of Units
(based on the Unit Price) and cash, as the case may be, equal to one-half  (1/2)
of the taxes paid by FWRLP  divided by the Unit  Price.  FWRLP and  Contributors
shall each pay its own legal fees related to the  preparation  of this Agreement
and all documents  required to settle the transaction  contemplated  hereby.  In
addition  to the  foregoing,  at the  Closing,  the  following  adjustments  and
prorations  shall be  computed  as of the Closing  Date,  as if the  transaction
contemplated  by this Agreement was a sale of the Property by the Partnership to
FWRLP:

                  (a) Taxes.  Real estate and personal  property  taxes shall be
apportioned  (based on the fiscal  periods for which such taxes are assessed) as
of the Closing Date.

                  (b) Assessments.  All special  assessments which have become a
lien upon the  Property on or before the Closing Date and are due and payable in
full on or prior to the Closing Date,  shall be brought current and paid in full
by the  Partnership or the  Contributors  on or prior to the Closing.  All other
special assessments or similar charges for the 1997 year shall be adjusted as of
the Closing Date.

                  (c) Rent. Rent for the month of , and any month after, Closing
collected by the  Partnership  prior to Closing shall be  apportioned  as 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.  FWRLP shall
either  use  reasonable  efforts  to  collect  (at  no  cost  to  FWRLP),  or if
Contributors  so elect  shall  assign  to  Contributors  the  right to  collect,
arrearages  in rents due from  tenants as of the Closing  Date.  If rents or any
portion  thereof  received by  Contributors  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 paid to outside
counsel and costs and expenses of

                                                       -22-





collection  thereof paid to third  parties,  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
Contributors their  proportionate  share thereof,  less a proportionate share of
any reasonable attorneys' fees paid to outside counsel and costs and expenses of
collection  thereof  paid to  third  parties,  and  deliver  to  Contributors  a
statement therefor, 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.   Upon  written   request  of
Contributors,  FWRLP shall provide  Contributors  with the then current periodic
report of the status of collection of such Additional Rents from such tenants.

                  (d)  Distributions.  The  quarterly  distributions  payable to
Contributors on the Common Units for the first record date after any issuance to
Contributors shall be pro rated based upon the number of days within the quarter
occurring after such issuance to Contributors .

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

                   (f)  Miscellaneous.  All other  charges and fees  customarily
prorated and adjusted in similar  transactions,  including utilities,  insurance
premiums  and  charges for Service  Contracts  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.  To the  extent  that  water
consumption or other utility charges may constitute a lien against the Property,
Contributors agree that an appropriate amount in respect of water consumption or
other  utility  charges may be held in escrow by the Title Company in connection
with its  issuance  of a title  insurance  policy to FWRLP not to exceed two (2)
times the most  recent  invoice.  The  Contributors  shall use their  reasonable
efforts to have all utility  meters read on the Closing Date so as to accurately
determine its share of current utility bills.

                  (g) Immediately prior to the Closing,  Contributors shall have
the right to cause the  Partnership  to  withdraw  from the  Partnership's  bank
account(s) and distribute to the Contributors an amount equal to all cash within
such bank  account(s)  as of 11:59 p.m.  on the day  immediately  preceding  the
Closing Date. The Partnership  shall  distribute and assign to Contributors  the
right to all accounts receivable of the

                                                       -23-





Partnership as of Closing,  including but not limited to the accounts receivable
listed on Exhibit R hereto.

         13. Risk of Loss. The risk of loss or damage to the Property by fire or
other casualty until the Closing shall be borne by the Contributors. If prior to
Closing (i) condemnation proceedings are commenced against all or any 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 Two Hundred  Thousand
Dollars ($200,000.00) or more based on the good faith estimate of an independent
contractor  selected by the  Contributors  and reasonably  approved by FWRLP, or
(iii) if the Property is materially 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  Contributors  delivered
within ten (10) 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  timely  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 the  proceeds  of fire  or  other  casualty  insurance
proceeds  and the rent  insurance  proceeds  payable  with respect to the period
after  Closing  or of the  condemnation  award,  as the case may be (i.e.,  such
proceeds  shall  remain  in the  Partnership  for the  benefit  of  FWRLP),  and
Contributors  shall  have no  obligation  to repair  or  restore  the  Property;
provided,  however,  that the Gross  Consideration shall be reduced by an amount
equal to the sum of (a) the "deductible" applied by the Partnership's  insurance
policy,  or (c) if the Partnership 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 if FWRLP does not elect
to terminate this Agreement.

         14.      Inspection of Property.

                  (a)  FWRLP's  Right of  Inspection.  Subject  to the rights of
tenants under the Leases,  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  the
Contributors.  FWRLP shall  further have complete  access to all  documentation,
agreements  and  other  information  in the  possession  of the  Partnership  or
Exchangers related to the ownership,  use and operation of the Property,  to the
extent it is readily available to Partnership or Exchangers,  and shall have the
right to make  copies  of same.  FWRLP  shall  not have  the  right  during  the
Feasibility  Period  to  contact  tenants  without  the  prior  consent  of  the
Contributors.  FWRLP  agrees to repair  any damage to the  Property  that may be
caused by its  inspections  and to indemnify  and defend  Contributors  and hold
Contributors harmless against any injury, loss or damage

                                                       -24-





suffered  upon the  Property as a result of such  inspections,  which  indemnity
shall survive Closing.

                  (b) Feasibility Period. Any other provisions of this Agreement
to the  contrary  notwithstanding,  FWRLP  may  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,  subject
to the rights of tenants  under the Leases.  FWRLP agrees to use all  reasonable
efforts to minimize disruption to business operations within the Property during
the  course  of  any  entries  thereon.  In the  event  that  any of the  tests,
investigations,  market  studies and other  studies  indicate,  in FWRLP's  sole
discretion,  that FWRLP's  plans for the Property  would not be feasible for any
reason,  then FWRLP shall have the right,  at its sole election on or before the
date which is the later of (i) thirty  (30) days  after the  Acceptance  Date or
(ii)  September  9, 1997 (such  period  herein  referred to as the  "Feasibility
Period"),  to terminate  this  Agreement by giving written notice thereof to the
Contributors 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. If FWRLP does not terminate this Agreement before the
end of the Feasibility Period as aforesaid, this contingency shall automatically
lapse.

                  (c) Audit.  The  Contributors  hereby agree to allow books and
records  related to the Property to be audited (at FWRLP's  sole  expense) by an
independent,  certified  public  accounting  firm  selected  by  FWRLP,  and the
Contributors  will  cooperate  and  cause  its  employees  and  other  agents to
cooperate in such auditing  process.  FWRLP shall provide the Contributors  with
prior notice of such audit.

                  (d) Contributors  shall confirm the non-taxable  nature of the
proposed  transaction during the Feasibility  Period. If Contributors,  in their
sole and absolute  discretion,  are not satisfied with the non-taxable nature of
the proposed  transaction,  the Contributors  shall have the right, on or before
the end of the Feasibility Period, to terminate this Agreement by giving written
notice  thereof to FWRLP 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 the other.

         15.      Indemnifications.

                  (a)  Indemnification  by  Contributors  under  Section 5. Each
Contributor  for such  Contributor  only, and for no other  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 be asserted  against or suffered by any  indemnitee,
the  Partnership or the Property,  or any part thereof,  whether before or after
the Closing  Date,  as a result of, on account of or arising  from any breach of
any  representation,  warranty,  covenant  or  agreement  on the  part  of  such
Contributor set

                                                       -25-





forth in  Section 5 herein or in any  instrument  or  document  related  thereto
delivered by such Contributor  pursuant to this Agreement.  The  indemnification
set forth in this Section 15(a) shall survive Closing without limitation.

                  (b)  Indemnification  by  the  Contributors.  Except  for  the
indemnifications  set forth in Section  15(a)  above,  the  Contributors  hereby
indemnify  and agree 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 third party
claims (which shall include any expenses, costs, damages, losses and liabilities
(including  reasonable attorneys' fees related thereto) which may at any time be
asserted against or suffered by, any indemnitee the Partnership 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  representation,  warranty,
covenant  or  agreement  on the part of the  Contributors  made herein or in any
document delivered by the Contributors pursuant to Section 10 of this Agreement,
and/or (ii) any obligation,  claims, suit, liability,  contract, agreement, debt
or encumbrance or other occurrence  (other than obligations under the Aegon Loan
accruing  after the Closing,  obligations  accruing after the Closing Date under
the Leases and Service  Contracts,  items  adjusted as of the Closing Date under
Section 12 above,  contingent  leasing  commissions for which FWRLP agrees to be
liable  pursuant to Section  9(a)(vi) of this  Agreement and other  obligations,
claims or agreements  expressly assumed by FWRLP in writing) provided such claim
is derived  from an  occurrence  or breach which took place prior to the Closing
Date and to the extent that such claim is not within the scope of any  insurance
agreement in favor of the Partnership.  Claims within the scope of the indemnity
set  forth  in  clause  (ii)  shall  include,  without  limitation,  any and all
liabilities  for federal and state income and other taxes due and payable by the
Partnership with respect to any period (or portion thereof) prior to the Closing
Date.  Notwithstanding  anything to the contrary contained herein, the liability
of each  Contributor  with respect to any  indemnities set forth in this Section
15(b), shall be limited (A) with respect to each of the Exchangers, to an amount
equal to the value of the Units  issued to the  Exchanger  on the  Closing  Date
(i.e.,  the number of Units  issued  multiplied  by the Unit Price) and (B) with
respect to each of the Sellers, to an amount equal to the amount of cash paid to
each Seller.  Any such liability of such Exchangers may be satisfied by FWRLP in
levy upon or set off against the right,  title and interest of such Exchanger in
its Units and in any distributions  payable pursuant  thereto,  to the extent of
any final, nonappealable judgment obtained by FWRLP and/or the Partnership.  Any
indemnification  under this Section 15(b) shall survive  Closing for a period of
three (3) years (other than  indemnification  for breach of  representations  or
warranties  pursuant to clause (i) of the first  sentence of this Section 15(b),
which are subject to a survival period described in Section 6 of this Agreement,
but shall  cease and expire  with  respect to any claim not raised by FWRLP,  by
written notice to Contributors, within such limited survival period).

                  (c)  Indemnification  by FWRLP.  FWRLP hereby  indemnifies and
agrees to defend and hold harmless  Contributors  and their  respective,  heirs,
personal  representatives,  successors  and assigns from and against any and all
claims,

                                                       -26-





expenses,   costs,  damages,   losses  and  liabilities   (including  reasonable
attorneys'  fees)  which may at any time be  asserted  against  or  suffered  by
Contributors as a result of, on account of or arising from (i) any breach of any
representation, warranty, covenant or agreement on the part of FWRLP or the REIT
made  herein  or in any  instrument  or  document  delivered  pursuant  to  this
Agreement,  (ii)  obligations  under the Aegon Loan accruing  after the Closing,
obligations  accruing  after the  Closing  Date  under the  Leases  and  Service
Contracts,  items  adjusted  as of the  Closing  Date  under  Section  12 above,
contingent  leasing  commissions for which FWRLP agrees to be liable pursuant to
Section 9(a)(vi) of this Agreement and other  obligations,  claims or agreements
expressly  assumed by FWRLP in writing,  and/or  (iii) 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, the Partnership or its operations. The foregoing obligations set forth
in this Section 15(c) shall survive Closing without time limitation.

         16. Brokerage Commission.  Contributors 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 First
Capital Realty, Inc., which shall be payable by FWRLP at the Closing pursuant to
a separate agreement. Contributors and FWRLP hereby indemnify and hold the other
harmless from any and all claims of any other broker or agent so claiming  based
on action or alleged action of the other.

         17.      Default Provisions; Remedies.

                  (a)  FWRLP's  Default.   If  FWRLP  fails  to  consummate  the
Contribution  contemplated  herein  when  required  to do  so  pursuant  to  the
provisions  hereof,  then  Contributors may elect to terminate this Agreement in
which case the Title Company shall deliver the Deposit to  Contributors  as full
and complete liquidated damages,  and as the exclusive and sole right and remedy
of  Contributors,  whereupon  this Agreement  shall  terminate and neither party
shall have any further obligations or liabilities to any other party.

                  (b)  Contributors  Default.  Except for any breaches waived in
writing by FWRLP,  if  Contributors  have  breached  any of their  covenants  or
obligations  under  this  Agreement  or have  failed,  refused  or are unable to
consummate the Contribution contemplated herein by the Closing Date or if any of
the  representations  and warranties made by  Contributors  under this Agreement
shall be  inaccurate or incorrect in any material  respect,  then FWRLP shall be
entitled,  as FWRLP's  sole and  exclusive  right and remedy,  to (i) waive such
breach,  default  or  failure  and  proceed  to  Closing  without  abatement  of
consideration  under Section 2(a),  (ii) extend the Closing for such  reasonable
time or times as may be necessary in order to enable Contributors to remedy such
breach,  default or failure (not to exceed  thirty (30) days),  (iii)  terminate
this  Agreement  and obtain the return of the  Deposit,  and/or  (iv)  pursue an
action  for  specific  performance.  In the event  that  FWRLP  elects to pursue
specific  performance and FWRLP prevails in such litigation,  in addition to any
relief awarded to FWRLP,

                                                       -27-





Contributors  shall be obligated  to pay all  reasonable  legal fees,  costs and
expenses incurred by FWRLP.

                  (c) The  provisions of Sections  17(a) and (b) above shall not
be  applicable to any breach or default by a party  occurring or first  becoming
actually known to the other party after  Closing,  and, as to any said breach or
default, the non-defaulting party may exercise any and all remedies available at
law or in equity,  subject,  however, to any applicable  limitations on survival
expressly provided for in this Agreement.

         18.  Registration  Rights.  Exchangers  and the  REIT  hereby  agree to
execute at Closing  the  Registration  Rights  Agreement  attached  hereto as on
Exhibit K.

         19.      Miscellaneous Provisions.

                  (a) Completeness and  Modification.  This Agreement  (together
with  Exhibits  A to R  attached  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  successors and
assigns.

                  (c)  Assignment.  This  Agreement  shall not be  assignable by
FWRLP  without  the  consent of  Contributors,  provided  that,  notwithstanding
anything to the contrary contained in this Agreement, FWRLP shall be entitled to
transfer  or,  at  Closing,  cause  the  Partnership  to issue a 1%  partnership
interest  in  the  Partnership  to  the  REIT  or to an  entity  controlled  by,
controlling  or under common  control  with the FWRLP,  as long as the Units are
issued to Contributors and cash paid to Sellers as required herein.
This Agreement shall not be assignable by Contributors.

     (d) Waiver;  Modification.  Failure by FWRLP or Contributors 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 Maryland.

                  (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, the Contributors shall afford FWRLP reasonable access to any and all 
information in

                                                       -28-





their  possession  concerning the  ownership,  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
the Contributors,  the Partnership or FWRLP concerning confidentiality set forth
herein.  FWRLP and the REIT agree and acknowledge that the information  provided
to them by the  Contributors  or the  Partnership  regarding the Property or the
Partnership is confidential, and that they will not disclose such information to
any other person,  other than to their  employees,  attorneys,  accountants  and
other  consultants,  or use such  information  for any  purpose  other  than the
transaction   described   herein  without  the  prior  written  consent  of  the
Contributors.  If this  Agreement is  terminated or if the  Contribution  at the
Closing is not consummated,  all information provided to FWRLP and the REIT, and
all copies thereof, shall be returned to the Contributors.

                  (h) 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.

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

                      (ii)     if to Contributors:

                               c/o Edward St. John
                               MIE Investment Company
                               5720 Executive Drive
                               Baltimore, MD  21228-1789
                               Telecopy:  (410) 788-0851

                               with a copy to:

                               Richard E. Levine, Esq.

                                                       -29-





                               Miles & Stockbridge, P.C.
                               10 Light Street
                               Baltimore, MD 21202
                               Telecopy: (410) 385-3700

                  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 Section 19(i).

                  (j)      [Intentionally Omitted].

                  (k)  Further  Assurances.  Contributors  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.

                  (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)  Time  of  the  Essence.  Time  is of the  essence  in the
performance of all obligations under this Agreement.

         20.      Tax Matters.

                  (a) FWRLP hereby agrees to send to each Exchanger who receives
Units the following information on an annual basis at least 30 days prior to the
filing of the tax return of FWRLP:

                           (i)      the  amount  of  the  debt  secured  by  the
                                    Property  and the  amount of  FWRLP's  total
                                    non-recourse  debt as of the end of the most
                                    recent fiscal year;

                           (ii)     the amount of nonrecourse debt allocated to 
                                    each Exchanger;

                           (iii)    the adjusted basis of the Property as of the
                                    end of the most recent fiscal year; and

                           (iv)     the  projected  taxable  income  or  loss of
                                    FWRLP for such fiscal year.


                                                       -30-





                  (b) Each Exchanger who receives Units, at its written election
but with no obligation to do so, may affirmatively make on an annual basis (a) a
DRO Election or (b) a Bottom  Guaranty  Election with respect to a mortgage loan
on a property  acceptable  to FWRLP in its sole  discretion.  Any such  election
shall be made by notice  delivered  to FWRLP no later than the date on which the
tax return for FWRLP is filed for the fiscal year in question.

                  (c) A DRO  Election  shall state that if the  Exchanger  has a
deficit  balance  in  its  capital  account  following  the  Liquidation  of the
Exchanger's  interest in FWRLP or the  Liquidation of FWRLP, as the case may be,
such Exchanger  shall  contribute to the capital of FWRLP, no later than the end
of the fiscal year during which the Exchanger's  interest in FWRLP is Liquidated
or during which FWRLP is Liquidated,  as the case may be (or, if later,  90 days
after the date on which the  Exchanger's  interest in FWRLP is  Liquidated or on
which  FWRLP is  Liquidated,  as the case may be) (the  "Liquidation  Date")  an
amount of money equal to a designated  portion of the deficit in the Exchanger's
capital account.  The term  "Liquidation"  shall have the meaning given to it in
Treas. Regs. Section 1.704.

                  (d) A Bottom Guaranty Election shall state that if FWRLP shall
be in default with respect to the mortgage  loan  securing the property of FWRLP
identified  by FWRLP in  Section  20(b)  above,  then the  Exchanger  agrees  to
contribute to the capital of FWRLP a designated portion of the principal balance
of such mortgage loan (the  "Contribution  Limit");  however,  such contribution
shall only occur if the mortgage lender shall have exhausted all of its remedies
against such property securing such mortgage loan in order to collect the amount
owing the mortgage  lender,  and such  Contribution  Limit shall be reduced on a
dollar-for-dollar  basis for every dollar  received by the mortgage  lender from
exercising its remedies.  Any such contribution shall be made by the Liquidation
Date. For example,  if the amount of the mortgage loan were  $10,000,000.00  and
the  amount  of  the  Contribution   Limit  were   $1,000,000.00,   the  capital
contribution would only be required if the property were sold in foreclosure and
the proceeds of sale were less than $1,000,000.00.

                  (e) FWRLP covenants that the principal balance of the mortgage
loan secured by the Property shall not be reduced below $12,000,000  (other than
scheduled  amortization  of the mortgage loan and principal  curtailments of the
mortgage loan beyond FWRLP's reasonable control),  and that the mortgage loan to
such extent shall remain non-recourse for federal income tax purposes during the
period beginning on the Closing Date and ending five (5) years thereafter.

                  (f) FWRLP will use,  or will cause the  Partnership  to use, a
method under Section 704(c) of the Code as designated by Exchangers at least ten
(10) days prior to the end of the  Feasibility  Period,  in connection  with the
contribution  herewith.  The depreciation of the book basis and tax basis of the
Property shall be consistent with such method.

                  (g) This Paragraph 20 shall survive the Closing.

                                                       -31-





         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/
                                             Stuart D. Halpert
                                             Chairman

                                  Date of execution:  August 6, 1997

WITNESS:                          CONTRIBUTORS:


         /s/                            /s/
                                  EDWARD A. ST. JOHN


         /s/                            /s/
                                  PHILIP E. RATCLIFFE


         /s/                            /s/
                                  RONALD E. HARMAN


         /s/                            /s/
                                  JAMES A. CLAUSON


         /s/                            /s/
                                  ROBERT C. BECKER


         /s/                            /s/
                                  GENE E. MCCLAIN

                          [Signatures continued on following page]

                                                           -32-





                          [Signatures continued from preceding page]


WITNESS:


         /s/                            /s/
                                  CHARLES R. PHILLIPS


         /s/                            /s/
                                  LAWRENCE F. MAYKRANTZ


         /s/                            /s/
                                  EDWARD B. OKONSKI


         /s/                            /s/
                                  RODGER R. REISWIG


                                  Date of execution:   , 1997


First  Washington  Realty  Trust,  Inc.  joins herein  solely for the purpose of
making the representations, warranties and covenants contained in Sections 8(a),
8(b), 8(e), 8(f), 8(g), 11 and 18 hereof.

                                  FIRST WASHINGTON REALTY
WITNESS:                          TRUST, INC.


         /s/                      By:      /s/
                                       Stuart D. Halpert
                                       Chairman


                                  Date of execution:  August 6, 1997









                                                       -33-





                          ACKNOWLEDGE BY TITLE COMPANY


         The  undersigned  Title Company  executes this  Contribution  Agreement
solely to acknowledge  receipt of the Deposit pursuant to Paragraph 3 hereof and
to evidence its agreement to serve as escrow agent  pursuant to the terms of the
foregoing Agreement.

WITNESS:                                 COMMERCIAL SETTLEMENTS, INC.


         /s/                             By:      /s/
                                              Stuart S. Levin
                                              Vice President

                                         Date:  August 8, 1997


                                                       -34-





                                LIST OF EXHIBITS



EXHIBIT A.     Legal Description of Land                                Recitals

EXHIBIT B.     Leases and Rent Schedule                             Section 6(d)

EXHIBIT C.     Service Contracts                                    Section 6(e)

EXHIBIT D.     Violations                                           Section 6(c)

EXHIBIT E.     Insurance List                                       Section 6(g)

EXHIBIT F.     Form of Tenant Estoppel                              Section 6(i)

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

EXHIBIT G.     Litigation                                           Section 6(k)

EXHIBIT H.     Operating Statements and Budget                      Section 6(r)

EXHIBIT I.     Personal Property                                    Section 6(t)

EXHIBIT J.     Permitted Exceptions                         Section 9(a)(iii)(B)

EXHIBIT K.     Registration Rights Agreement                         Section 18

EXHIBIT L.     Confidential Information Statement                   Section 8(c)

EXHIBIT M.     Contingent Leasing Commissions                       Section 6(u)

EXHIBIT N.     Mortgage                                             Section 2(c)

EXHIBIT O.     Note                                                 Section 2(c)

EXHIBIT P.     Partnership Agreement                                Section 6(a)

EXHIBIT Q.     Allocation of Consideration                          Section 2(a)

EXHIBIT R.     Partial List of Accounts Receivable                 Section 12(g)


  [Contributors and FWRLP to Attach Foregoing at Acceptance of this Agreement]

                                                       -35-





                                    EXHIBIT A

                            LEGAL DESCRIPTION OF LAND

                                                       -36-





                                    EXHIBIT B

                            LEASES AND RENT SCHEDULE

                                                       -37-





                                    EXHIBIT C

                                SERVICE CONTRACTS




                                                       -38-





                                    EXHIBIT D

                                   VIOLATIONS

                                      NONE

                                                       -39-





                                    EXHIBIT E

                                 INSURANCE LIST

                                                       -40-





                                    EXHIBIT F
                             Form of Tenant Estoppel

                              ESTOPPEL CERTIFICATE

                                                                       , 199
First Washington Realty Limited Partnership
4350 East-West Highway, Suite 400
Bethesda, MD 20852

         Re:      [Name of Shopping Center]
                  Lease dated ________, 19___, with [name of Tenant]

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 Lease:

Date of Termination of Lease:

Options to Renew:

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

Real Estate Tax Charges: pro rata: ___ yes ___ no.  ( $  payable monthly in
                                                      -----------------
advance)

Percentage Rent:  ____% of Gross Receipts over $___________

Common Area Maintenance Charges:  pro rata: ___ yes ___ no.  ($________
payable monthly in advance)

Tenant in possession of the premises under the Lease?:  Yes

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

Amount of rent paid in advance:  $

Amount of Security Deposit:  $


                                       -i-





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.

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 of Premature  Termination or Option to Renew: Tenant has no right
to  premature  termination  and no right or option  to renew or extend  the term
beyond  its  present  term and no option to lease  additional  space,  except as
expressly set forth in the Lease.

In the event of  foreclosure,  Tenant  agrees to attorn to the  purchaser of the
leased premises at the foreclosure sale.

                                     TENANT:


                                       By:
                                            Name:
                                            Title:


STATE OF                            )
                                    )  ss:
COUNTY OF                           )

         Signed and sealed in my presence this      day of            , 199   .
                                                     


                                         Notary Public
                                            [SEAL]



My Commission Expires:



                                      -ii-





                                   EXHIBIT F-1

                                TENANT ESTOPPELS


         o        Food Lion                          45,100 s.f.
         o        Blockbuster                         6,133 s.f.
         o        Mitchellville Children's
                    House                             4,232 s.f.
         o        McDonald's                          2,972 s.f.
         o        Mobil Oil                           1,700 s.f.
                                                     ------------
                           TOTAL                     60,137 s.f.

         o        Tenant's occupying at least 80% of
                  the remaining space at the Property.

                  [154,698 s.f. - 60,137 s.f.) X 80% = 75,648 s.f.

                                      -iii-





                                    EXHIBIT G

                                   LITIGATION

                                      NONE

                                      -iv-





                                    EXHIBIT H

                         OPERATING STATEMENTS AND BUDGET

                                       -v-





                                    EXHIBIT I

                                PERSONAL PROPERTY

                                      NONE

                                      -vi-





                                    EXHIBIT J

                              PERMITTED EXCEPTIONS


                                      -vii-





                                    EXHIBIT K

                          REGISTRATION RIGHTS AGREEMENT



                                     -viii-





                                    EXHIBIT L

                       CONFIDENTIAL INFORMATION STATEMENT

                                      -ix-





                                    EXHIBIT M

                         CONTINGENT LEASING COMMISSIONS





















                                       -x-





                                    EXHIBIT N

                                    MORTGAGE


                                      -xi-





                                    EXHIBIT O

                                      NOTE



                                      -xii-





                                    EXHIBIT P

                              PARTNERSHIP AGREEMENT



                                     -xiii-





                                    EXHIBIT Q

                           ALLOCATION OF CONSIDERATION


                                                               Percentage of
                  Exchangers                                   Consideration

         1.       Edward A. St. John                              37.24%
         2.       Philip E. Ratcliffe                             29.07
         3.       Ronald E. Harman                                20.00

                  Sellers

         4.       James A. Clauson                                 9.69
         5.       Robert C. Becker                                 2.00
         6.       Gene E. McClain                                  0.25
         7.       Charles R. Phillips                              1.00
         8.       Lawrence F. Maykrantz                            0.24
         9.       Edward B. Okonski                                0.29
         10.      Rodger R. Reiswig                                0.22



                                      -xiv-




                                    EXHIBIT R

                       PARTIAL LIST OF ACCOUNTS RECEIVABLE


                                      -xv-