CONTRIBUTION AGREEMENT


         THIS CONTRIBUTION  AGREEMENT is made and entered on March 19, 1997, and
effective as of March 1, 1997,  by and between  ASHBURN  FARMS  VILLAGE  CENTER,
L.L.C.,  a Virginia  limited  liability  company (the  "Contributor")  and 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 Contributor is the record and beneficial  owner of all of
that certain real property  containing  approximately  10.2 acres and located in
Loudoun County,  Virginia, as more particularly  described on Exhibit A attached
hereto (the  "Land"),  together  with a shopping  center known as Ashburn  Farms
Village Center and containing  approximately 88,965 square feet of rentable area
and all other buildings and  improvements  situated thereon  (collectively,  the
"Building")  and  all  personal  property  and  fixtures  located  therein  (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,  Contributor  and FWRLP  desire to enter  into this  Agreement
relating  to the  contribution  by  Contributor  to FWRLP  and/or  an  affiliate
thereof, of the Property in exchange for certain interests in FWRLP.

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

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

         2.       Consideration.

                  (a) (i)  Effective  upon the  Contribution  of the Property to
FWRLP (i.e., at Closing),  the Contributor (or its Members) shall be admitted to
FWRLP as  additional  limited  partners in  accordance  with Section 12.2 of the
First Amended and Restated Agreement of Limited Partnership of FWRLP dated as of
June 27, 1994 (the  "FWRLP  Partnership  Agreement").  In  consideration  of the
Contribution  of the  Property,  FWRLP shall (i) issue  93,571  Common Units (as
defined in the FWRLP Partnership Agreement) to the Contributor,  (ii) subject to
Section  2(b),  below,  take  the  Property  subject  to (A)  the  Contributor's
obligations  with respect to the outstanding  principal  balance of the existing
$6,400,000 construction loan made by The First National Bank

                                                        -1-

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of Maryland ("FNBM") to the Contributor (the "FNBM Loan") (which balance,  as of
February 1, 1997, was equal to $5,189,260.00) (the "Principal Balance"), and (B)
the obligation of the Contributor to repay those certain  advances in the amount
of  $983,334.00  and  $491,667.00   made  by  Stuart  Malone  and  Joe  Thomson,
respectively,  to the  Contributor,  plus all  interest  accrued  thereon to the
Closing  (collectively,   the  "Malone/Thomson  Advance").  If  the  outstanding
principal  balance  of the FNBM  Loan and the  Malone/Thomson  Advance,  and any
accrued and unpaid  interest  thereon,  at Closing is less than or greater  than
$7,700,000,  then the total Units to be issued to Contributor shall be increased
or decreased,  respectively, by an amount equal to the difference divided by the
Unit Price.

                           (ii)     The Common Units to be issued to the
Contributor shall be issued at the following times and the following amounts:

                                    (A)     70,711 of the Common Units shall be
issued to the Contributor at the Closing.

                                    (B)     22,860 of the Common Units shall be
issued to the Contributor  upon the earlier to occur of the  following
(the "Second  Issuance Date"):  (i)  closing  of the  sale by  FWRLP  of that
certain  parcel  of land containing  approximately 0.7 acres, as more
particularly  described in Exhibit A-1 attached  hereto (the "Pad Site"),  or
(ii) FWRLP enters into a lease of the Pad Site and the tenant  thereunder
actually  commences  paying rent under said lease, or (iii) the date which is
three (3) years after the Closing Date.

                           (iii)    Contributor shall have the right to
distribute the Units received  by it  under  this  Agreement  to  its  members
(the  "Members"),  as identified  on  Exhibit  M  attached  hereto.   Unless
otherwise   directed  by Contributor,  the Units issuable  under this  Agreement
to  Contributor  will be issued  directly to the Members of Contributor in the
proportions  set forth on Exhibit M and the Members shall be admitted to FWRLP
as limited  partners at the Closing.

                  (b) (i) At or immediately after Closing, FWRLP shall repay the
Malone/Thomson  Advance to Malone and Thomson.  In  addition,  nothing set forth
above shall be  construed  to prohibit  FWRLP from  closing,  immediately  after
Closing under this Agreement is fully effective,  on a permanent loan which will
have the effect of refinancing the FNBM Loan.

                           (ii)     The Property is presently encumbered by a
Deed of Trust and Security  Agreement  ("Mortgage") from the Contributor,  as
debtor,  for the benefit of FNBM,  as secured party (the  "Lender"),  which
Mortgage  secures an original  principal  indebtedness of $6,400,000.00 with
interest thereon payable over the term thereof  (which  initial term ends on
January 1, 1998,  subject to three  one  (1)  year  extension  options),  as
evidenced  by a Note  from  the Contributor  to Lender  ("Note").  The Mortgage
and Note and all  documents  and instruments executed in connection

                                                        -2-

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therewith are collectively  referred to as the "FNBM Loan Documents."  Copies of
the Mortgage and Note are attached hereto as Exhibits Q and R, respectively.

                           (iii)        If FWRLP elects to take the Property
subject to the FNBM Loan, then at Closing,  the Contributor shall execute an
estoppel certificate in favor of FWRLP certifying that, to the best knowledge
of the Contributor,  there is no default,  or event of default which with notice
or lapse of time, or both, would constitute a default under the FNBM Loan.

                  (c) The  Contributor and FWRLP will settle any pro rations and
closing adjustments as provided in this Agreement as follows: (i) if Contributor
owes the same,  on a net basis,  to FWRLP,  through a  reduction  in Units in an
amount equal to the net adjustment  divided by $21.00 per Common Unit (the "Unit
Price"),  rounded to the nearest one (1), to be delivered  at the  Closing,  and
(ii) if FWRLP owes the same,  on a net basis,  to  Contributor,  through  (A) an
increase  in the agreed  initial  Gross  Asset Value (as such term is defined in
FWRLP's  Partnership  Agreement)  of the  Property in an amount equal to the net
adjustment and (B) the issuance of additional Common Units in an amount equal to
the net adjustment divided by the Unit Price, rounded to the nearest one (1), to
be delivered at the Closing.  Contributor acknowledges and agrees 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 the Closing  Date (with  respect to the
Units issued pursuant to Section  2(a)(ii)(A)) and for a period of thirteen (13)
months after the Second Issuance Date (with respect to the Units issued pursuant
to  Section  2(a)(ii)(B)),  all as  more  fully  discussed  in the  Confidential
Information Statement (as hereinafter defined), as supplemented through the date
hereof.

                  (d) Upon  written  notice  to  FWRLP  prior  to  Closing,  the
Contributor  may elect to receive  Series B  Preferred  Units (as defined in the
FWRLP  Partnership  Agreement)  in  place  of  some or all of the  Common  Units
otherwise  issuable to the Contributor  hereunder,  based on an exchange rate of
0.78  Preferred  Units for each Common Unit  otherwise  issuable  hereunder (the
Common Units and the Preferred Units are hereinafter collectively referred to as
the "Units").

                  (e) In the  event  that (i)  FWRLP  sells the Pad Site or (ii)
enters into a lease of the Pad Site with a net  effective  base rent  payable to
FWRLP  (i.e.,  net of any  leasing  commissions  in excess of $30,000 and tenant
improvements  and/or allowances,  etc.) of at least $50,000 per annum [or if the
lease of the Pad Site requires FWRLP to construct a building  thereon at FWRLP's
expense,  then the net effective  annual base rent must be at least $50,000 plus
12.5% times the  aggregate  cost of  constructing  the  building on the Pad Site
(hard and soft costs)],  then Contributor shall have the right to participate in
the development of the possible second pad site, as more particularly  described
in Exhibit A-2 attached hereto (the "Second Pad Site"),  on a 50/50 basis (i.e.,
all costs of developing  the Second Pad Site and all net cash flow  generated by
the Second Pad Site will be shared equally). Contributor must exercise its right
to  participate in the Second Pad Site by giving written notice thereof to FWRLP
within  ten (10)  days  after  delivery  of  written  notice  from  FWRLP to the
Contributor that FWRLP

                                                        -3-

<PAGE>



intends to develop  the Second Pad Site and the terms  thereof.  If  Contributor
does not elect to  participate  or fails to so elect  within the time period set
forth above,  than all of the rights to participate  granted to Contributor (and
its Members) herein shall terminate and be null and void and of no further force
or effect. If Contributor timely elects to participate in the development of the
Second Pad Site as set forth above, then FWRLP and Contributor will form a joint
venture (or other entity mutually agreeable to the parties) which will lease the
Second Pad Site from FWRLP for a period of ninety-nine (99) years at a rental of
One Dollar  ($1.00) per year. The terms of the joint venture  agreement  between
FWRLP and the Contributor  will provide that FWRLP shall be the managing partner
and all  decisions  with respect to the  development,  leasing,  management  and
operation of the Second Pad Site shall be made by FWRLP, in its sole discretion.
In  addition,  the  decision of whether or not and when to lease and develop the
Second  Pad Site will be made in FWRLP's  sole  discretion.  Contributor  hereby
assigns its rights to participate  in the  development of the Second Pad Site to
its Members.  Notwithstanding the foregoing,  if prior to the development of the
Second  Pad Site  FWRLP  sells or  otherwise  disposes  of the  Property  (which
includes the Second Pad Site) to a third party in a bona fide transaction,  then
any  and  all  rights  granted  to  Contributor  (and  its  Members)  herein  to
participate in the  development of the Second Pad Site shall  terminate upon the
closing of such sale or other disposition,  and shall be null and void and of no
further force or effect.

                  (e)      Intentionally Omitted.

                  (f) Attached  hereto as Exhibit S is a  description  of unpaid
fees,  expenses or other liabilities  incurred by Contributor in connection with
the  acquisition,  development  or leasing  of the  Property  (the  "Development
Expenses").  Provided that Contributor  gives FWRLP at least five (5) days prior
notice of such Development  Expenses and that such  Development  Expenses can be
quantified,  FWRLP shall pay such  Development  Expenses at the Closing (or when
due and payable,  if later) and the amount of Common Units otherwise issuable to
Contributor  at Closing  shall be reduced by dividing  the  aggregate  amount of
Development  Expenses by $21.00 (or, if Preferred  Units are also being  issued,
then  there  shall be a pro rata  reduction  of the  Preferred  Units  using the
exchange  rate  set  forth in  Section  2(d)  hereof).  If  mutually  agreeable,
Contributor and FWRLP may treat the  responsibility  for all or a portion of the
Post- Closing Work  described in Section 21 below as a Development  Expense,  in
which  case  FWRLP  shall  assume   responsibility   for  the  expense  of  such
Post-Closing  Work and the Units  otherwise  issuable to  Contributor at Closing
shall be further reduced as provided in the preceding sentence.

                  (g) Any amounts paid by the  Contributor  to FWRLP pursuant to
Sections 14, 18, or 21 or otherwise,  shall be treated as a capital contribution
by the  Contributor to FWRLP,  and the agreed initial Gross Asset Value (as such
term is defined in FWRLP's Partnership Agreement) of the Property contributed to
FWRLP by the Contributor shall be reduced by the same amount.



                                                        -4-

<PAGE>



         3.       Deposit.

                  (a) Within three (3) business  days after the date of delivery
to FWRLP of an original of this Agreement executed by Contributor  together with
completed  Exhibits  hereto (the date of such delivery by Contributor  being the
"Acceptance Date"), FWRLP shall deliver to the Title Company, as escrow agent, a
deposit (the "Deposit") of Fifty Thousand Dollars  ($50,000.00) by check payable
to the Fidelity  National Title Insurance  Company of  Pennsylvania  (the "Title
Company").

                  (b) The Title  Company will  immediately  provide  Contributor
with written evidence of receipt of such Deposit.  The Title Company shall place
the Deposit in an interest-bearing  account within three (3) days after the date
of receipt  thereof,  and interest on the Deposit shall accrue to the benefit of
the party entitled to the Deposit pursuant to this Agreement.  The Deposit shall
be held by the  Title  Company  pursuant  to the terms  and  conditions  of this
Agreement.

                  (c)  In  the  event  that,  at  any  time  prior  to  Closing,
Contributor  or FWRLP  provides  Title Company with a  certification  (a copy of
which  shall  be  delivered  contemporaneously  to the  other  party)  that  the
Contributor 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.

                  (d) 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. Contributor and FWRLP shall jointly and
severally  indemnify and hold Title Company harmless from and 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",  which
shall take place on the date (the "Closing Date") specified by FWRLP on not less
than ten (10) days notice to  Contributor,  provided that the Closing Date shall
not be later than thirty (30) days after the end of the Feasibility  Period. The
Closing  shall take place at the offices of Tenenbaum & Saas,  P.C.,  or at such
other place as may mutually  agreed upon by Contributor  and FWRLP.  The parties
intend that the transfer of the Property

                                                        -5-

<PAGE>



be effective for all purposes as of 12:01 a.m. on March 1, 1997, irrespective of
the actual Closing Date,  and all provisions of this Agreement  which purport to
adjust items as of the Closing Date shall be interpreted so as to give effect to
such intention. The date upon which the Closing actually occurs (irrespective of
the intended  effective date of the  contribution of the Property) shall also be
referred to herein as of the "Date of Funding".

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

                  (a) Authority of Contributor. Contributor has the right, power
and authority to enter into this  Agreement  and to  contribute  the Property in
accordance  with the terms and conditions  hereof.  Other than FNBM's consent if
the FNBM Loan is not repaid in full, no consents of any persons other than those
executing this Agreement are required for such execution or to cause Contributor
to consummate the transactions  contemplated hereby. This Agreement is the valid
and binding obligation of Contributor, enforceable against it in accordance with
its terms.

                  (b)      [Intentionally Omitted]

                  (c)  Compliance  with  Existing  Laws.   Contributor  has  not
received any written notice,  and the Contributor is not aware of, any violation
of, any 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 which
remain(s) outstanding as of the date hereof, except as set forth in Exhibit G.

                  (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. 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 constitute a legal, valid and binding obligation of the
                  respective tenants;

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


                                                        -6-

<PAGE>



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

                           (iv)     to the Contributor's knowledge, the
                  Contributor is not in default under 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) other than tenant  alterations and allowances as
                  described in Exhibit L (which shall be the  responsibility  of
                  Contributor unless otherwise agreed under Section 2(f) above),
                  all work for tenant  alterations and allowances and other work
                  or materials  contracted  for by the  Contributor  and, to the
                  Contributor's  knowledge, any tenant has been completed and/or
                  paid for by the Contributor (or such tenant), and all work and
                  materials  have  been  fully  paid  for or will be paid for by
                  Closing;

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

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

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

                  (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.  No Service  Contract which FWRLP agrees to assume
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.  Attached  hereto  as  Exhibit  D are true and
correct  copies of tax bills issued by any  applicable  federal,  state or local
governmental  authority to the Contributor  with respect to the Property for the
most recent past and current tax years,  and any new  assessment  received  with
respect to a current or future tax year.

                  (g)      Insurance.  The Property is insured for its
replacement value against loss or damage sustained as a result of fire or
other casualty.  Contributor shall

                                                        -7-

<PAGE>



maintain  in full force and effect all  hazard,  liability,  rent loss and other
insurance policies until the Closing Date. Copies of all such policies have been
delivered to FWRLP.

                  (h) Condition of Property.  At Closing,  the Property shall be
in its "as is, where is" condition as of the Acceptance  Date.  Contributor  has
not knowingly withheld any information  regarding the condition of the Property,
or its compliance with any laws,  rules or regulations that would be material to
FWRLP's decision to enter into this transaction.

                  (i) Tenant Estoppels. Contributor represents and warrants that
it will use  commercially  reasonable  efforts  to obtain  and  deliver to FWRLP
within thirty (30) days after the Acceptance  Date, a tenant  estoppel letter in
the form attached hereto as Exhibit F (or such other form as required by FWRLP's
mortgage  lender) from each of the tenants of the  Property,  except that in the
case of Super Fresh the form of  estoppel  letter will be governed by the tenant
Lease.  Contributor  hereby agrees that FWRLP shall have full  participation  in
connection with the procurement of said tenant estoppel letter(s).

                  (j)  Condemnation  Proceedings.  No  condemnation  or  eminent
domain  proceedings  are  pending  or, to the best of  Contributor`s  knowledge,
threatened against the Property or any part thereof, and Contributor has made no
commitments to and has received no notice, oral or written, of the desire of any
public authority or other entity to take or use the Property or any part thereof
whether  temporarily  or  permanently,  for easements,  rights-of-way,  or other
public  or  quasi-public  purposes,  other  than as set  forth in the  Permitted
Exceptions and in other public records concerning the initial development of the
Property (e.g., the approved site plan).

                  (k)  Litigation.  No  litigation is pending or, to the best of
Contributor`s knowledge,  threatened, including administrative actions or orders
relating to governmental regulations,  affecting the use, operation or ownership
of the Property or any part thereof or  Contributor`s  right to  contribute  the
Interests as contemplated herein.

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

                  (m)      Hazardous Waste.  Other than as set forth in the
Phase I environmental report prepared by Engineering Consulting Services, Ltd.
dated

                                                        -8-

<PAGE>



February 15, 1995,  Contributor  has no  knowledge of any  discharge,  spillage,
uncontrolled  loss,  seepage or  filtration  (a  "Spill") of oil,  petroleum  or
chemical liquids or solids, liquid or gaseous products or any hazardous waste or
hazardous substance (as those terms are used in the Comprehensive  Environmental
Response,  Compensation  and  Liability  Act of 1980,  as amended,  the Resource
Conservation  and Recovery Act of 1976, as amended,  or in any other  applicable
federal,  state or local  laws,  ordinances,  rules or  regulations  relating to
protection  of public  health,  safety or the  environment,  as such laws may be
amended from time to time) at, upon,  under or within the Land or any contiguous
real estate. To the best of Contributor`s  knowledge,  there is no proceeding or
action pending or threatened by any person or governmental  agency regarding the
environmental  condition of the Property.  To the Contributor`s  knowledge,  the
Building is totally free of asbestos.

                  (n)      [Intentionally Omitted]

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

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

                  (q) Leasing  Commissions.  There are, and at Closing shall be,
no outstanding or contingent leasing commissions or fees payable with respect to
the Property  (exclusive of any partial commissions payable for Leases where the
tenant is not yet in occupancy as set forth in Exhibit O hereto,  which shall be
the  responsibility  of Contributor,  unless otherwise agreed under Section 2(f)
above).  The covenants  contained in this  subparagraph  shall  survive  Closing
without limitation.

                  (r)      Securities Law Matters.

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

                           (ii)     The Members have their primary residences or
                  principal place of business in the Commonwealth of
                  Pennsylvania and the Commonwealth of Virginia;

                           (iii) The  recipients  of the Units are acquiring the
                  Units  for  their  own  respective   accounts  for  investment
                  purposes only and not with a present view to distribution;

                                                        -9-

<PAGE>



                           (iv) Taking into account the  personnel and resources
                  Contributor can  practically  bring to bear on the acquisition
                  of the Units in the FWRLP contemplated  hereby, the recipients
                  of the Units are knowledgeable,  sophisticated and experienced
                  in making,  and are 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 have requested,
                  received,  reviewed and  considered  all  information it deems
                  relevant in making an  informed  decision to acquire the Units
                  (including the  Confidential  Information  Statement  attached
                  hereto as Exhibit I which  Contains First Amended and Restated
                  Agreement of Limited  Partnership  of FWRLP and any Amendments
                  thereto (the "Partnership Agreement"));

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

                           (vi) The recipients of the Units acknowledge 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;

                           (vii)  Prior  to  the  issuance  of  the  Units,  the
                  recipients of the Units 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,  including  without
                  limitation executing an amendment to the Partnership Agreement
                  of FWRLP whereby the recipients of the Units agree to be bound
                  by  all  of  the  terms  and  conditions  of  the  Partnership
                  Agreement;

                           (viii) As required by the Pennsylvania Securities Act
                  of 1972, recipients of Units who are residents of, or who have
                  their  principal  place of business  in, the  Commonwealth  of
                  Pennsylvania,  shall not  resell his or its Units for a period
                  of twelve  (12)  months  from and after the  issuance  thereof
                  unless pursuant to an exemption from the  requirements of such
                  act or an order from the Pennsylvania Securities Commission;

                           (ix) The  recipients  of the  Units  acknowledge  and
                  agree   that,   notwithstanding   Section  8.6  of  the  FWRLP
                  Partnership Agreement,  the Units to be issued hereunder shall
                  not be  redeemable  for cash or  exchangeable  for  Common and
                  Preferred Stock, as applicable, of First

                                                       -10-

<PAGE>



                  Washington  Realty  Trust,  Inc.  ("REIT")  for  a  period  of
                  thirteen  (13) months  from and after the  Closing  Date (with
                  respect to the Units issued  pursuant to Section  2(a)(ii)(A))
                  and for a period of  thirteen  (13)  months  after the  Second
                  Issuance  Date (with  respect to the Units issued  pursuant to
                  Section 2(a)(ii)(B)); and

                            (x)     The foregoing representations and covenants
in this subsection (r) shall survive Closing without limitation.

         FWRLP hereby  agrees  that,  at Closing,  Contributor  may transfer the
Units to its Members in accordance  with the  percentages set forth in Exhibit M
to this  Agreement,  or may  request  FWRLP to issue the Units  directly to such
Members,  provided that the Members  receiving such Units shall  acknowledge and
agree to be bound (on a several basis with respect to matters pertaining to such
Members) by all of the  provisions of this Section 5(r) and any other  provision
of this  Agreement  relating  to the  Units  (in  lieu of  Contributor),  and by
accepting such Units hereby agree to be so bound.

                  (s)  Bonding  Requirements.  The only  payment or  performance
bonds required of the  Contributor by Loudoun  County or other  jurisdiction  in
connection with the development of the Property which remain outstanding are (i)
a  $2,472.02  one year  maintenance  cash bond to Loudoun  County  for  off-site
sanitary  sewer,  (ii) a  $2,700.10  one year  maintenance  cash bond to Loudoun
County for on-site and  off-site  water and sewer,  (iii) a $12,500 bond to VDOT
for stormwater management, and (iv) a $43,667 bond to Loudoun County for erosion
control (items (i) and (ii) are referred to collectively as the "Cash Bonds" and
items (iii) and (iv) are referred to collectively as the "Non-cash  Bonds").  If
and when any bond is  released,  any cash related  thereto  which is received by
FWRLP shall be retained by FWRLP.  If less than the face amount of any cash bond
is  returned  to FWRLP  when the bond is  released  or if any bond is drawn upon
prior  to its  release,  then the  amount  of the  shortfall  or draw  down,  as
applicable  shall be  reimbursed  to FWRLP by the  Contributor  and its  Members
pursuant  to  Section  18(e)  herein.  If either of the bonds set forth as items
(iii) and (iv) above are not released within six (6) months after Closing,  then
FWRLP  shall have the right to hold back any  distributions  payable by FWRLP to
Contributor  or its Members in an amount equal to  twenty-five  percent (25%) of
the face value of such bond(s) not released until such bond(s) are released.  If
any of the  bonds  are  drawn  upon by the  applicable  authority  holding  such
bond(s), then FWRLP will promptly notify Contributor and its Members, and if the
bonds drawn upon are not  reinstated  in full (and the  Members may  participate
with FWRLP in seeking  such  reinstatement)  within  thirty (30) days after such
notice to Contributor (and its Members),  then Contributor and its Members shall
reimburse  to  FWRLP  such  amount  drawn  pursuant  to  Section  18(e)  herein.
Contributor  and its Members  hereby agree to  cooperate  with FWRLP to properly
transfer  ownership  rights to such bonds to FWRLP,  at the lowest cost and fees
possible.  With  respect to the  Non-cash  bonds,  but subject to the  foregoing
reimbursement  obligations  from  Contributor  and its Members,  FWRLP agrees to
either (i) replace  the  contractor  as obligor to  Commerce  Bank to secure any
obligation of the contract or viz-a-viz the

                                                       -11-

<PAGE>



letters  of  credit   supporting   such  Non-cash  Bonds  or  (ii)  replace  the
contractor's  letters of credit with those of FWLRP. This covenant shall survive
Closing without limitation.

         (ii)  Notwithstanding  Section  5(i)  or any  other  provision  of this
Agreement to the contrary (other than the second sentence of Section 14(a)):

                  (a) With regard to the title to the Property, FWRLP is relying
solely upon the Policy of Title Insurance  currently issued to FWRLP (the "Title
Policy"),  plus any additional  title insurance to be obtained by FWRLP pursuant
to this  Agreement,  and any  endorsements to the Title Policy to be obtained by
FWRLP, and Contributor makes no  representations  or warranties  whatsoever with
regard to matters of title affecting the Property.

                  (b) In the  event  FWRLP  does  not  elect to  terminate  this
Agreement  within the  Feasibility  Period  pursuant to the terms of Section 13,
below,  then the  representations  and  warranties  made by  Contributor in this
Agreement  (as well as the  specific  facts  and/or  conditions  which  were the
subject of such  representations  and/or warranties) shall be deemed modified to
account appropriately for every fact or other matter which came to the attention
of FWRLP, or FWRLP's employees, agents, or representatives, during the course of
the  Feasibility  Period  (other  than such fact or matter  which was due to the
willful  misconduct  or bad faith of  Contributor),  which  fact or  matter  was
inconsistent with the Contributor`s representation(s) or warranty(ies) set forth
herein,  it being the intent and  agreement  of the parties that FWRLP shall not
have the right or ability to claim that the inaccuracy of any representation set
forth  herein  (provided  that  such  inaccuracy  was  not  due to  the  willful
misconduct  or  bad  faith  of  Contributor  or  its  employees   agents  and/or
representatives)  which was actually  known to FWRLP (or its  employees,  agents
and/or  representatives)  as of the end of the  Feasibility  Period  constitutes
either  a  default  by  Contributor  or a  failure  of a  condition  to  Closing
hereunder.

                  (c) In the event FWRLP elects to consummate  the Closing under
this Agreement despite the failure of any of the conditions set forth in Section
8, below which was  actually  known to FWRLP (or its  employees,  agents  and/or
representatives), including without limitation the failure of any representation
or warranty of the  Contributor  herein  contained to be true and correct as the
time of Closing,  then  unless  Contributor  expressly  agrees in writing to the
contrary at the time of Closing, FWRLP shall be deemed to have waived any claims
against  Contributor arising out of such failure (provided that such failure was
not due to the willful  misconduct  or bad faith of  Contributor),  and, in such
event,  Contributor  shall have no post-Closing  liability to FWRLP with respect
thereto.

                  (d) FWRLP shall not be  entitled  to assert any claim  against
Contributor  with respect to the  inaccuracy of any  representation  or warranty
made by Contributor  (provided  that such  inaccuracy was not due to the willful
misconduct  or bad faith of  Contributor),  to the extent  such  inaccuracy  was
actually known to FWRLP, or FWRLP's employees, agents and/or representatives, as
of or prior to the time of Closing and

                                                       -12-

<PAGE>



FWRLP elects to consummate the Closing under this Agreement, it being the intent
and  agreement  of the parties that FWRLP shall not have the right or ability to
consummate the Closing and thereafter assert a claim for breach of a warranty or
representation  by  Contributor  which  was  actually  known  to  FWRLP  or  its
representatives as of or prior to Closing.

                  (e) In the event a matter represented by Contributor hereunder
was true as of the date of  execution of this  Agreement,  but  subsequently  is
rendered inaccurate due to the occurrence of events or due to a cause other than
Contributor `s  intentional  misconduct or bad faith,  or intentional  breach of
this  Agreement,  then  such  inaccuracy  shall  not  constitute  a  default  by
Contributor  under this  Agreement,  even  though the same  might  constitute  a
failure of a condition to the Closing  (subject to  subsections  5(ii)(b) - (d),
above).

                  (f) The  representations  and  warranties  of the  Contributor
contained in this  Agreement,  or in any  certificate,  document,  instrument or
agreement delivered pursuant to this Agreement, shall survive until one (1) year
after Closing,  unless a  representation  or warranty  survives  Closing without
limitation as expressly stated elsewhere in this Agreement.

                  (g) FWRLP shall not have the right to assert any claim against
the  Contributors  for inaccuracies set forth in Exhibit B and Exhibit C hereto,
to the extent such  inaccuracies  derive  from  errors made by First  Washington
Management,  Inc.  ("FWM") in the  preparation  of such  Exhibits (as opposed to
erroneous  information  or  documentation  furnished by  Contributor to FWM). In
addition, FWRLP shall be imputed any actual knowledge which FWM has with respect
to the matters set forth in this Section 5 of the Agreement.

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

                  (a)  Maintenance and Operation of Premises.  Contributor  will
cause the Property to be maintained in its present order and  condition,  normal
wear and tear excepted,  and will cause the continuation of the normal operation
thereof, 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 fire,
casualty  and/or  condemnation  (which are governed by other  provisions of this
Agreement), be in substantially the same condition on the Closing Date as on the
Acceptance Date.

                  (b)  Licenses.   Contributor  shall  use  all  reasonable  and
diligent  efforts to preserve in force all licenses  and permits  (collectively,
"Licenses")  necessary  for the proper  operation  of the  Property and to cause
those expiring to be renewed.

                  (c)      Changes in Representations. Contributor shall notify
FWRLP promptly, and FWRLP shall notify Contributor promptly, if either becomes
aware of any

                                                       -13-

<PAGE>



occurrence   prior  to  the   Closing   Date   which   would  make  any  of  its
representations,  warranties  or  covenants  contained  herein  not  true in any
material respect.

                  (d) Obligations as to Leases.  Contributor shall not after the
end of the Feasibility Period, without FWRLP's prior written consent which shall
not be unreasonably  withheld,  conditioned or delayed,  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.  Contributor hereby further agrees that if any space is vacant on the
Closing Date, FWRLP shall accept the Property subject to such vacancy,  provided
that the vacancy was not permitted or created by Contributor in violation of any
restrictions  contained in this Agreement.  Prior to Closing,  Contributor shall
not apply all or any part of the security  deposit of any tenant  unless after a
default in accordance with the terms of such tenant's Lease.

         7.  Representations  and  Warranties  of  FWRLP.  In  order  to  induce
Contributor  to enter into this  Agreement  and to  contribute  the Interests to
FWRLP, FWRLP hereby makes the following representations and warranties,  each of
which is material and shall survive Closing,  notwithstanding  any investigation
at any time made by or on behalf of Contributor:

                  (a) Authority of FWRLP.  FWRLP is a limited  partnership  duly
organized  and  existing  and in good  standing  under  the laws of the State of
Maryland.  FWRLP has all necessary  power and authority to execute,  deliver and
perform this Agreement and consummate all of the  transactions  contemplated  by
this  Agreement.  This  Agreement is the valid and binding  obligation of FWRLP,
enforceable against it 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 I 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 provided in Exhibit I.

                  (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 material fact required to be stated  therein or necessary to make the
statements therein,

                                                       -14-

<PAGE>



in light of the circumstances under which they were made, not misleading.  FWRLP
acknowledges  that the Contributor is relying upon the confidential  information
statement in acquiring the Common Units and Preferred Units.

                  (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. Since the date of the aforementioned  financial  statements,
there has been no material  and adverse  change in the  financial  condition  of
either FWRLP or the REIT.

                  (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 the Closing Date will have been,  duly authorized for issuance
by FWRLP to Contributor,  and on the Closing Date 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. All shares of stock of the REIT
exchangeable  for  Units  issued  in  connection  with the  transactions  herein
contemplated  will at Closing and at all times thereafter until the time of such
exchange be duly  authorized  and  available for such exchange and upon issuance
will be validly issued,  fully paid and non-assessable,  and, after the issuance
of such stock  pursuant  to the terms of an  effective  registration  statement,
shall be  unrestricted.  All issued and outstanding  shares of 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 legal or  governmental  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  or  which  would
materially  and adversely  affect the  consummation  of any of the  transactions
contemplated within this Agreement.

                  (h) Disposition of Property.  Except in connection with a sale
of all or  substantially  all of FWRLP's assets or a merger or  consolidation of
FWRLP,  in no event shall FWRLP  voluntarily  sell or  otherwise  dispose of the
Property  (other than the Pad Site and the Second Pad Site) for a period of five
(5) years following the Closing Date.


                                                       -15-

<PAGE>



         8.       Conditions Precedent to Closing.

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

                            (i) Representations  and Warranties.  Subject to the
                  qualifications   set   forth   in   Section   5(ii),    above,
                  Contributor`s  representations and warranties  hereunder shall
                  be true  and  correct  in 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.

                           (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,  providing  affirmative coverage
                  satisfactory  to FWRLP  insuring  against  any  mechanic's  or
                  materialmen's  lien  arising  from goods,  labor or  materials
                  provided  to the  Property  prior  to the  Closing  Date.  The
                  "Permitted Exceptions" are:

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

                           (B)     such matters as would be shown by a current
                           and accurate survey of the Property as of the
                           Acceptance Date;

                           (C)      all existing zoning, building, land use and
                           other restrictions upon the Property existing as of
                           the Acceptance Date;

                           (D)       the Leases;

                           (E)      such other matters which are listed on
                           Exhibit J hereto, and

                           (F) such  other  matters  as FWRLP  shall  approve in
                           writing.

                           (iv)  Existing  Mortgages.   Contributor  shall  have
                  delivered  to  the  Title   Company  such  releases  or  other
                  instruments  necessary  to release of record and  beneficially
                  any and all  existing  mortgages,  deeds of  trust,  financing
                  statements or other security documents  affecting the Property
                  (collectively,  the "Existing Mortgages"), other than the FNBM
                  Loan which may be satisfied  at Closing  pursuant to Section 2
                  herein.

                            (v)    Leasing     Brokerage/Property     Management
                  Agreements.  Contributor  shall  have  terminated  any and all
                  leasing   brokerage   agreements   and   property   management
                  agreements  with respect to the  Property  effective as of the
                  Closing. All responsibility for dealings with any such brokers
                  and  agents,  including  the  payment of any claims (if deemed
                  warranted by Contributor), shall be the sole responsibility of
                  Contributor,  except  if and to the  extent  such  claims  are
                  expressly  assumed by FWRLP in writing or  pursuant to Section
                  2(f) herein.  Contributor  agrees 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 in connection with
                  any additional and/or contingent  leasing  commissions or fees
                  or management  fees. The provisions of this  subparagraph  (v)
                  shall survive Closing without limitation.

                           (vi)  Performance by Contributor.  Contributor  shall
                  have  complied  with  and  not  be in  breach  of  any  of its
                  covenants or obligations  under this  Agreement,  which breach
                  remains  continuing  for a period  of thirty  (30) days  after
                  FWRLP provides Contributor with written notice specifying such
                  breach  (provided  that the Closing  Date shall be extended by
                  the lesser of (i) such 30-day period or (ii) the actual number
                  of days  which it takes for the  Contributor  to cure any such
                  breach,  if any such breach is in existence as of the date the
                  parties otherwise intend to consummate the Closing).

                           (vii) Tenant  Estoppels.  FWRLP shall have received a
                  tenant  estoppel letter in the form attached hereto as Exhibit
                  F (except that in the case of Super Fresh the form of estoppel
                  letter will be  governed by the  Tenant's  Lease)  from,  at a
                  minimum,  tenants  satisfying  the  requirements  described on
                  Exhibit F-1 (or from such tenants and in such form as required
                  by FWRLP's  mortgage  lender),  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 any  subordination  and  attornment  agreements
                  required by the mortgage lender of FWRLP.

If FWRLP elects to consummate  Closing  notwithstanding  a failure of any of the
foregoing conditions,  then the provisions of Section 5(ii)(c),  above, shall be
applicable.

                  (b) Failure of  Condition.  In the event of the failure by the
Closing Date of any condition precedent set forth 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, except as otherwise provided in
Section  16  hereof,  neither  party  shall  have  any  further  obligations  or
liabilities to the other; or (b) proceed to

                                                       -16-

<PAGE>



Closing,  in which  event  FWRLP  will be  deemed  to have  waived  any claim it
otherwise might have against Contributor by virtue of such failure of condition,
unless such failure of condition was due to the willful  misconduct or bad faith
of  Contributor;  or (c) extend the Closing Date for such reasonable time period
as may be  determined  by FWRLP  (but in no event for more than three (3) months
from the Closing Date then in effect) in order to permit the satisfaction of any
condition precedent not so fulfilled.

                  (c) It shall be a  condition  precedent  of the  Contributor`s
obligation to make a full  settlement  hereunder  that each and every one of the
following   conditions   shall  exist  on  the  Closing  Date,  or  shall  occur
simultaneously with the deliveries to be made by Contributor pursuant to Section
9, below:

                            (i)   Representations   and   Warranties.    FWRLP's
                  representations  and  warranties  hereunder  shall be true and
                  correct   in   all   material    respects   as   though   such
                  representations  and warranties had been made on and as of the
                  Closing (except that FWRLP may amend its Partnership Agreement
                  prior to Closing  provided  it does not  materially  adversely
                  affect Contributor).

                           (ii) Release of  Guarantors.  Unless the FNBM Loan is
                  repaid in full as of the Closing Date, FWRLP shall have caused
                  FNBM to execute and deliver to Brian McElwee,  Jay Donegan and
                  Richard  Ireland  (collectively,   the  "Loan  Guarantors")  a
                  complete and unconditional  release of the Contributor and all
                  existing  Guaranties  of the  FNBM  Loan  to  which  the  Loan
                  Guarantors  are  bound,   including  without   limitation  the
                  "Guaranty of Payment" and the "Guaranty of  Completion"  dated
                  December 28, 1995 which was executed and delivered by the Loan
                  Guarantors in favor of FNBM.

                           (iii)     [Intentionally Omitted]

                           (iv)       [Intentionally Omitted]

                            (v)  Issuance  of Units.  FWRLP shall have issued to
                  the  Contributor  (or its  Members)  the Common  Units  and/or
                  Preferred  Units  required  to be issued  pursuant  to Section
                  2(a)(i) and, if  applicable,  Section 2(d) of this  Agreement,
                  and the  Contributor (or its Members) shall have been admitted
                  to FWRLP as a limited partner  pursuant to Section 12.2 of the
                  FWRLP Partnership Agreement.

                           (vi)     [Intentionally Omitted]

                           (vii)    Tax Opinion of Saul, Ewing, Remick & Saul.
                  The Contributor shall have received an opinion from Saul,
                  Ewing, Remick & Saul, regarding the tax treatment of the
                  transaction evidenced by this

                                                       -17-

<PAGE>



                  Agreement,  which is in form and substance satisfactory to the
                  Contributor in its sole discretion.

                           (viii)   Performance  by  FWRLP.   FWRLP  shall  have
                  complied  with,  and not be in breach of, any of its covenants
                  or  obligations  under this  Agreement,  which breach  remains
                  continuing for a period of thirty (30) days after  Contributor
                  provides  FWRLP with  written  notice  specifying  such breach
                  (provided  that the  Closing  Date  shall be  extended  by the
                  lesser of (i) such 30-day  period or (ii) the actual number of
                  days which it takes for FWRLP to cure any such breach,  if any
                  such  breach  is in  existence  as of  the  date  the  parties
                  otherwise intend to consummate the Closing).

                  (d) Each of the parties  hereto shall use all  reasonable  and
diligent efforts to cause the satisfaction of each condition to closing which is
within the control of such party.

         9.       Contributor`s Deliveries. Contributor shall execute,
acknowledge and deliver to FWRLP at the Closing the following documents, each
dated on the Closing Date:

                  (a)      a special warranty deed, in form and substance
satisfactory to FWRLP, and Title Company, conveying good and marketable fee
simple title to the Property;

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

                  (c)      [Intentionally Omitted]

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

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

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

                  (g) copies of books,  records,  operating  reports,  files and
other materials related to the ownership,  use and operation of the Property, to
the  extent  that any  exist and are in the  possession  of  Contributor,  which
obligation shall survive Closing;

                  (h)      such documents as are reasonably required by FNBM to
permit FWRLP to assume the FNBM Loan;

                                                       -18-

<PAGE>



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

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

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

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

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

                  (n) an amendment to the  Partnership  Agreement of FWRLP, in a
form acceptable to FWRLP,  admitting the  Contributor (or the Members  receiving
Units,  if applicable) as a limited  partner(s) of FWRLP and issuing such Common
Units and/or Preferred Units as set forth on Exhibit M hereto;

                  (o)      an assignment of the hedge cap on the one month
LIBOR, with a notional amount of $6,200,000.00 and a strike of nine percent
(9%); and

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

         10. FWRLP's Performance. At Closing, simultaneously with the deliveries
of  Contributor  pursuant  to the  provisions  of Section 9 above,  FWRLP  shall
satisfy  each  of the  conditions  stated  in  Section  8(c),  above,  including
subsections  8(c)(ii) and (vi), above, and issue to Contributor (or its Members)
certificates  evidencing the Units in the manner  specified in Section 2 and any
cash required under Section 2, whereupon the Deposit,  and any interest  accrued
thereon, shall be returned to FWRLP by the Title Company.

         11.      Settlement Charges; Prorations and Adjustments.

                  (a) At or before Closing,  FWRLP shall (i) pay all charges for
the title examination,  the title insurance premium,  notary fees and other such
charges incident to Closing,  (ii) pay all transfer and recording fees and taxes
and  documentary  stamps  associated  with the financing of this  transaction by
FWRLP, (iii) pay all of FWRLP's

                                                       -19-

<PAGE>



legal fees related to the  preparation of this Agreement and the  preparation of
all  documents  required  to settle  the  transaction  contemplated  hereby,  or
otherwise  incurred by FWRLP in connection  herewith,  (iv) pay all  Development
Expenses  assumed by FWRLP under Section 2(f) above,  to the extent then due and
payable,  and (v) pay all transfer and recording fees and taxes and  documentary
stamps  associated  with the transfer of the Property other than those described
in clause  (ii) above (the  amount  described  in clause  11(a)(v),  above being
referred to in this Agreement as the "Closing Costs").

                  (b)      Return on Malone/Thomson Advance.  FWRLP shall pay
interest at a rate of 9% per annum to Malone/Thomson on the Malone/Thomson
Advance due Malone/Thomson from March 1, 1997 to the Date of Funding.

                  (c) At the Closing,  the following  adjustments and prorations
shall be computed as of March 1, 1997 (it being  agreed that March 1, 1997 shall
be the effective date of the Closing  irrespective of the actual date upon which
Closing occurs).

                            (i)     Taxes.  Real estate and personal property
                  taxes shall be apportioned as of March 1, 1997.

                           (ii) Assessments.  All special  assessments and other
                  similar  charges  which have  become or may become a lien upon
                  the Property or any part thereof as of March 1, 1997,  whether
                  or not the same are then  past due or are  payable  thereafter
                  (in  installments or otherwise),  or which have been confirmed
                  by a  public  authority  as  of  Closing,  shall  be  paid  by
                  Contributor  in full at Closing  (or  apportioned  in favor of
                  FWRLP pursuant to this Section 11(c).

                           (iii) Rent.  Rent shall be apportioned as of March 1,
                  1997, and Rent for the month of Closing and  thereafter  which
                  was collected by the  Contributor  prior to the actual Closing
                  Date shall be apportioned in favor of FWRLP.  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  and  diligent  efforts to
                  collect  (at no cost to FWRLP),  or shall  assign the right to
                  collect arrearages in rents due from tenants as of the Closing
                  Date to the  Contributor.  If  rents  or any  portion  thereof
                  received by  Contributor  or FWRLP after the Closing  Date are
                  payable to the other party by reason of this  allocation,  the
                  appropriate sum, less a proportionate  share of any reasonable
                  attorneys' fee, costs and expenses of collection thereof,  (if
                  any)  shall  be  promptly  paid  to  the  other  party,  which
                  obligation shall survive the Closing.


                                                       -20-

<PAGE>



                                    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 March 1, 1997, then FWRLP shall promptly pay to Contributor
                  its proportionate share thereof, less a proportionate share of
                  any  reasonable   attorneys'   fees,  costs  and  expenses  of
                  collection thereof, (if any) if and when the tenant paying the
                  same has made all payments of rents and Additional  Rents then
                  due to FWRLP pursuant to the tenant's Lease,  which obligation
                  shall survive the Closing.

                           Notwithstanding the foregoing:

                            (A)  Prepaid  rent shall be pro rated as of March 1,
1997.

                            (B)  Contributor  shall  receive a credit at Closing
                  for accounts receivable from Tenants through February 28, 1997
                  in the total  amount of  $32,323.76.  If any of such  accounts
                  receivable   are  not  collected   from  such  tenants,   then
                  Contributor  (and its Members) shall  reimburse FWRLP for such
                  uncollected amounts pursuant to Section 18(e) herein.

                            (C)  Except  as  set  forth  in  clause  (B)  above,
                  Contributors  shall not  receive  any  credit at  Closing  for
                  uncollected  rents  for the for  months  prior to the month of
                  March 1, 1997.

                            (D)     [Intentionally Omitted]

                            (E)     [Intentionally Omitted]

                            (F) With respect to any  pass-throughs  of operating
                  expenses, real estate taxes or insurance premiums due from any
                  tenant  (except for those  tenants in clause (B) above) at the
                  Property under its lease, but not payable by such tenant until
                  an  accounting  is rendered to such tenant after year end, and
                  any such  amounts  are  payable on account of a period of time
                  prior to March 1, 1997  (other  than those from any tenant who
                  is more  than 60 days  delinquent  in  payment  of rent at the
                  Closing or from any tenant listed in clause (B) above),  FWRLP
                  shall pay over to  Contributor  Contributor`s  pro rata  share
                  thereof  (less a pro rata share of any cost of  collection  or
                  bad debts) within  fifteen (15) days of receipt by FWRLP,  but
                  only if and to the extent received by FWRLP.

                           (iv) Debt  Service on FNBM Loan.  If the FNBM Loan is
                  not repaid at Closing,  the amount of interest  payable  under
                  the FNBM Loan from and  after  March 1, 1997  shall be paid by
                  FWRLP  or  shall  otherwise  be  apportioned  in  favor of the
                  Contributor at Closing.

                                                       -21-

<PAGE>




                           (v)      Cash Bonds.  FWRLP will credit to
                  Contributor the amount of $5,172.12 at Closing, as replacement
                  for the Cash Bonds.

                           (vi)  Miscellaneous.   All  other  charges  and  fees
                  customarily  prorated  and adjusted in sales  transactions  of
                  operating properties,  including utilities, insurance premiums
                  and  charges for  Service  Contracts,  shall be prorated as of
                  March 1, 1997. 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.  Any
                  adjustment  which  requires a payment by  Contributor to FWRLP
                  shall be paid in accordance  with Section  18(e).  Contributor
                  agrees  that  an  appropriate   amount  in  respect  of  water
                  consumption charges may be held in escrow by the Title Company
                  in connection with its issuance of a title insurance policy to
                  FWRLP as of  March 1,  1997.  Contributor  shall  use its best
                  efforts to have all utility meters read on March 1, 1997 so as
                  to accurately determine its share of current utility bills.

         12. Risk of Loss. The risk of loss or damage to the Property by fire or
other  casualty  shall be borne by  Contributor  until  Closing,  provided  that
Closing  under  this  Agreement  in  fact  occurs.   If  prior  to  Closing  (i)
condemnation  proceedings are commenced  against all or any material  portion of
the  Property,  or (ii) if the Property is damaged by fire or other  casualty to
the extent that the cost of repairing such damage shall be Two Hundred  Thousand
Dollars  ($200,000.00)  or more,  or  (iii) if the  Property  is  damaged  by an
uninsured risk; or (iv) if the Property  becomes subject to litigation which may
deprive FWRLP of any material benefit to which it would become entitled pursuant
to this  Agreement,  then FWRLP shall have the right,  upon notice in writing to
the  Contributor  delivered  within thirty (30) days after actual notice of such
condemnation or fire or other casualty or litigation, and in all events prior to
the Closing Date 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 fails to send such notice  within
such 30-day  period  (time being of the  essence)  FWRLP shall be deemed to have
elected not to terminate  this  Agreement.  If FWRLP does not elect to terminate
this  Agreement  or in the event of fire or other  casualty not giving rise to a
right to  terminate  this  Agreement  by FWRLP,  FWRLP  shall be  entitled to an
assignment  of all of  Contributor`s  share  of the  proceeds  of fire or  other
casualty  insurance  and rent  insurance  proceeds  payable  with respect to the
period  after  Closing  or of the  condemnation  award,  as the case may be, and
Contributor  shall  have no  obligation  to  repair  or  restore  the  Property;
provided,  however,  that the Unit portion of the Consideration shall be reduced
by an  amount  equal  to  the  sum  of  (a)  the  "deductible"  applied  by  the
Contributor's  insurance policy, or (b) if the Contributor is self-insured,  the
cost of repairing such damage. If FWRLP does not elect to terminate

                                                       -22-

<PAGE>



this  Agreement as aforesaid,  FWRLP shall have the right to  participate in the
negotiation and settlement of any casualty or condemnation-related claim.

         13.      Inspection of Property.

                  (a) FWRLP's Right of  Inspection.  FWRLP shall have the right,
at its own risk,  cost and  expense,  at any time or times prior to Closing,  to
enter, or cause its agents or  representatives  to enter,  upon the Property for
the  purpose of making  surveys,  or any tests,  investigations  and/or  studies
relating to the Property which FWRLP deems appropriate,  in its sole discretion,
during reasonable hours and upon reasonable  notice to Contributor.  FWRLP shall
further  have  complete  access  to  all  documentation,  agreements  and  other
information in the possession of Contributor  related to the ownership,  use and
operation of the Property, to the extent it is readily available to Contributor,
and shall  have the right to make  copies of same.  FWRLP  agrees to repair  any
damage to the Property  that may be caused by its  inspections  and to indemnify
and defend Contributor and hold Contributor harmless against any injury, loss or
damage suffered upon the Property as a result of such inspections.

                  (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.  In the
event that any of such tests, investigations and/or studies indicate, in FWRLP's
sole discretion, that FWRLP's plans for the Property would not be feasible, then
FWRLP shall have the right,  at its sole election on or before the date which is
thirty (30) days after the  Acceptance  Date (such period herein  referred to as
the "Feasibility  Period"), to terminate this Agreement by giving written notice
thereof to  Contributor,  in which event this  Agreement  shall  terminate,  the
Deposit  shall be  returned  to FWRLP and  neither  party shall have any further
liabilities or obligations to each other.

                  FWRLP agrees to use all  reasonable  and  diligent  efforts to
minimize disruption to business operations within the Property during the course
of any entries thereupon.  In addition, in making any entries onto the Property,
or otherwise conducting its due diligence activities pursuant to this Agreement:
(i) FWRLP  agrees  to notify  Contributor  prior to  making  any entry  onto the
Property  which is not  within  the scope of the  ordinary  property  management
functions of its affiliate property management company;  (ii) FWRLP shall obtain
and maintain commercial general liability insurance, covering FWRLP with respect
to any third party claims for injury or damage to property,  and injury or death
to persons,  occurring during the course of any entry by FWRLP or its employees,
agents,  contractors and/or representatives upon the Property; (iii) all entries
by FWRLP shall be  conducted,  to the extent  possible,  at times  calculated to
minimize  disruption to shopping center operations;  (iv) all such entries shall
be made at FWRLP 's sole risk and expense;  (v) any  intrusive  testing by FWRLP
(such as soil  borings,  and the like)  shall be  subject  to the  Contributor's
reasonable  consent;  (vi) in the event FWRLP elects to terminate this Agreement
prior to the expiration of the

                                                       -23-

<PAGE>



Feasibility Period, or does not consummate Closing  thereafter,  FWRLP agrees to
return to the Contributor,  upon the termination of this Agreement,  all written
reports,  studies, title materials,  surveys,  environmental reports, as well as
all copies of documents  theretofore  delivered to FWRLP in connection  with its
due diligence  activities,  with no charge to the  Contributor;  and (vii) FWRLP
agrees that the election by FWRLP not to terminate  this  Agreement  pursuant to
this  Section  13,  whether  deemed  or  otherwise,  shall  constitute  FWRLP 's
acceptance,  as  exceptions  to  title,  of  all  matters  of  record  as of the
Acceptance Date.

                  (c)  Audit.  Contributor  hereby  agrees  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 Contributor
will  cooperate  and cause its  employees  and other agents to cooperate in such
auditing  process.  FWRLP shall  provide  Contributor  with prior notice of such
audit.

                  (d)  FWRLP  acknowledges  that  all  records  and  information
received by it pursuant to this Agreement  relating to the Property  constitutes
proprietary and sensitive  business  information of the  Contributor,  and FWRLP
accordingly  agrees  to  keep  all  such  information  confidential,  and not to
disclose any such  information to any third parties except (A) to its affiliates
and their employees,  attorneys,  financial  advisors,  lenders  accountants and
auditors and other  consultants,  (B) pursuant to  compulsion  by due process of
law, (C) in connection  with the resolution of any dispute between FWRLP and the
Contributor, or (D) if such information was obtained, or is otherwise available,
in the public domain or from other sources.

         14.      Indemnifications.

                  (a) Indemnification by Contributor.  Subject to Section 5(ii),
the Contributor  hereby  indemnifies 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 claims,  expenses,  costs,  damages,  losses and liabilities  (including
reasonable  attorneys'  fees)  which  may at any  time be  asserted  against  or
suffered by any indemnitee, the Property, or any part thereof, whether before or
after  Closing,  as a result of, on account of or arising from (a) any breach of
any  covenant,  representation,  warranty  or  agreement  on  the  part  of  the
Contributor made herein or in any instrument or document  delivered  pursuant to
this Agreement, and/or (b) any claim relating to or arising out of any contract,
agreement  or other  obligation  to which the  Company  was a party or any claim
relating to any encumbrance or other occurrence prior to Closing,  (exclusive of
the documents evidencing the FNBM Loan) provided (and solely to the extent) such
claim is derived from an occurrence or breach which took place prior to Closing,
and  solely to the extent  such  claim is not within the scope of any  insurance
and/or  indemnity  agreement  in favor of FWRLP (and FWRLP will look to any such
insurance and /or indemnity  agreement(s) in connection with any such insured or
indemnified  claims to the  extent  actually  covered by such  insurance  and/or
indemnity  agreement).  Notwithstanding any other provision of this Agreement to
the contrary, the liability of the Contributor, or its Members, to

                                                       -24-

<PAGE>



FWRLP and its  successors  and  assigns  with  respect to or arising out of this
Agreement,  any indemnities set forth herein,  any documents  delivered pursuant
hereto, and/or any of the transactions  contemplated herein, shall be limited to
the right,  title and interest of Contributor or the Members in the Units issued
to the Contributor (or its Members) pursuant to Section 2 of this Agreement, and
such liability  shall be satisfied  solely out of the sale or redemption of such
Units by FWRLP in levy upon or set off against the right,  title and interest of
the  Contributor  (or its Members)  therein,  and in any  distributions  payable
pursuant thereto,  except and solely to the extent the Units so issued have been
exchanged  by the  Contributor  (or its  Members)  for  REIT  Shares  or sold or
otherwise  transferred by the Contributor (or its Members),  in which event such
liability may be satisfied out of any assets of the  Contributor or the Members,
subject to a maximum  limitation  of liability  equal to the market value of the
Units (i.e.,  the number of Units multiplied by the closing price on the NYSE of
the  respective  Common  Stock or  Preferred  Stock  into  which  the  Units are
exchangeable)  issued to such  Contributor  (or its Members) as of Closing.  Any
indemnification of FWRLP by the Contributor or its Members shall survive Closing
for a period of three (3) years  (other than  indemnification  for breach of the
securities  representations  set forth in Section  5(i)(r)  hereof  which  shall
survive Closing without limitation and other than  indemnification for breach of
other representations or warranties pursuant to clause (a) of the first sentence
of this Section 14(a) which are subject to a limited  survival period under this
Agreement   (Section  5  (ii)  (f)),   in  which  case  the   survival  of  such
indemnification  shall  be  limited  to the  survival  period,  if any,  of such
representation or warranty).

                  (b)  Indemnification  by FWRLP and the  Company.  FWRLP hereby
indemnifies  and agrees to defend and hold harmless  Contributor and its Members
and their successors and assigns from and against any and all claims,  expenses,
costs,  damages,  losses and liabilities  (including reasonable attorneys' fees)
which may at any time be  asserted  against or suffered  by  Contributor  or its
Members as a result  of, on  account  of or  arising  from (a) any breach of any
covenant, representation, warranty or agreement on the part of FWRLP made herein
or in any instrument or document  delivered  pursuant to this Agreement,  and/or
(b) any  obligation,  claims,  suit,  liability,  contract,  agreement,  debt or
encumbrance or other  occurrence  created,  arising or accruing on and after the
Closing and relating to the Property or its operations.

         15. Brokerage  Commission.  Contributor and FWRLP represent and warrant
to each other that no brokerage fee or real estate commission is or shall be due
or owing in connection with this  transaction,  and Contributor 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.

         16.      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  the  Title  Company  shall  deliver  the  Deposit  to
Contributor as full and complete  liquidated  damages,  and as the exclusive and
sole right and remedy of Contributor, whereupon

                                                       -25-

<PAGE>



this  Agreement  shall  terminate  and  neither  party  shall  have any  further
obligations or liabilities  to any other party.  The foregoing  notwithstanding,
(i) if FWRLP disputes any  certification by the Contributor to the Title Company
that the  Contributor  is  entitled  to delivery of the Deposit due a default by
FWRLP hereunder and if Contributor is the prevailing  party in any such dispute,
then in addition to  recovery of the Deposit due to such  default by FWRLP,  the
Contributor  shall  also be  entitled  to  recover  from  FWRLP  all  reasonable
attorneys fees and court costs incurred by the Contributor to enforce its rights
and  remedies  under  this  Agreement;  and  (ii)  any  indemnification  of  the
Contributor by FWRLP  pursuant to this  Agreement  (such as, but not limited to,
FWRLP's   indemnity  under  Section  13(a)  hereof),   shall  survive  any  such
termination of this Agreement and shall not be affected  thereby.  The foregoing
exclusive   remedy  applies   solely  to  FWRLP's   failure  to  consummate  the
Contribution  contemplated  herein,  and  shall  not apply to limit any right or
remedy  available to the  Contributor  in the event of FWRLP's  violation of its
post-closing  obligations  hereunder,  including  but  not  limited  to  FWRLP's
post-closing obligations under Section 14(b) and Section 18 hereof.

                  (b) Contributor`s  Default.  Except for any breaches waived in
writing  by  FWRLP,  if  Contributor  has  breached  any  of  its  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  Contributor  under this Agreement
shall be inaccurate  or incorrect,  then FWRLP shall be entitled as its sole and
exclusive remedy to (i) (A) waive such breach, default or failure and proceed to
Closing,  (B) terminate this Agreement and obtain the return of the Deposit,  or
(C) pursue an action for  specific  performance,  or (ii) extend the Closing for
such  reasonable  time or times (not to exceed 3 months) as may be  necessary in
order to enable  Contributor to remedy such breach,  default or failure,  and if
not so  remedied  by the end of such  extension  period  (if FWRLP  elects  such
extension),  FWRLP  shall  have the choice of  remedies  set forth in clause (i)
above.  In the  event  that  FWRLP  elects to  pursue  an  action  for  specific
performance and FWRLP prevails in such action, in addition to any relief awarded
to FWRLP, Contributor shall be obligated to pay all reasonable legal fees, costs
and expenses incurred by FWRLP. The foregoing exclusive remedy applies solely to
Contributor`s  failure to consummate the Contribution  contemplated  herein, and
shall not apply to limit any right or remedy  available to FWRLP in the event of
Contributor`s violation of its post-closing obligations hereunder, including but
not limited to Contributor`s  post-closing  obligations  under Section 14(a) and
Section 18 hereof.

         17.      Registration Rights.

                   Contributor, the Members and the REIT hereby agree to execute
at Closing the Registration Rights Agreement attached hereto as Exhibit N.



                                                       -26-

<PAGE>



         18.      Guaranty.

                  (a)      Rent Guaranty.

                            (i)  Term  of  Guaranty.  The  period  from  Closing
                  through  February  28,  2000 is defined as the "Rent  Guaranty
                  Period."  Subject  to  the  limitation  specified  in  Section
                  18(a)(iv)   below,   Contributor   and  its   Members   hereby
                  (severally, as described in Section 18(c), below) guarantee to
                  FWRLP (the "Rent  Guaranty")  during the Rent Guaranty  Period
                  the  payment  of the  amount  of  any  monthly  deficiency  or
                  difference (the "Rent  Deficiency")  between (A) the aggregate
                  Rent (as  defined  below) due and  payable  for each month (or
                  portion  thereof) with respect to the Tenant Space (defined as
                  those spaces described in Exhibit K hereto) less $34,000 as an
                  overall annual vacancy factor, and (B) the aggregate amount of
                  such Rent  actually  received  by FWRLP  with  respect to such
                  Tenant Space.

                           (ii)     Computation of Rent.  "Rent", as used
                  herein, shall be computed on a triple-net basis and as to
                  the Tenant Space described in Exhibit K shall consist of the
                  sum of:

                                    (A) a  monthly  base  rent  for  the  Tenant
                           Space,  derived from the annual base rents  specified
                           in Exhibit K; plus,

                                    (B) a pro rata share for the  Tenant  Spaces
                           which  are  vacant  as of  Closing  of all  estimated
                           taxes, insurance and common area maintenance expenses
                           of  the  Property,   including  but  not  limited  to
                           management  fees  calculated at a rate of 5% of gross
                           rents,  and other  incidental  costs of managing  the
                           Property.   Such  operating  expenses  are  currently
                           estimated  to  be  approximately   Three  and  00/100
                           Dollars  ($3.00) per square foot of rentable area per
                           year; plus,

                                    (C) a pro rata share for the  Tenant  Spaces
                           which  were  leased as of  Closing  of all  estimated
                           taxes, insurance and common area maintenance expenses
                           of  the  Property,   including  but  not  limited  to
                           management  fees  and  other   incidental   costs  of
                           managing  the  Property,  but only to the extent such
                           amounts are recoverable under the terms of the leases
                           executed with respect to such spaces as of Closing.

                           (iii)    Records Regarding Rent Guaranty.  FWRLP
                  shall provide Contributor with quarterly accounting of rent
                  collection on the Tenant Space.


                                                       -27-

<PAGE>



                           (iv)  Limitation  of  Liability.   Anything  in  this
                  Section  18(a) to the contrary  notwithstanding,  (A) the Rent
                  Guaranty  obligation  for the first year of the Rent  Guaranty
                  Period shall be limited to a maximum aggregate amount equal to
                  the product of $1.95 times the total number of Common Units to
                  be issued to Contributor (or its Members)  hereunder (prior to
                  any  election  to receive  Preferred  Units in place of Common
                  Units),  (B) the Rent Guaranty  obligation for the second year
                  of the Rent  Guaranty  Period  shall be  limited  to a maximum
                  aggregate  amount  equal to 75% of the  product of $1.95 times
                  the total number of Common  Units to be issued to  Contributor
                  (or its Members)  hereunder  (prior to any election to receive
                  Preferred  Units in place of Common  Units),  and (C) the Rent
                  Guaranty  obligation  for the third year of the Rent  Guaranty
                  Period shall be limited to a maximum aggregate amount equal to
                  50% of the product of $1.95  times the total  number of Common
                  Units to be issued to Contributor  (or its Members)  hereunder
                  (prior to any election to receive  Preferred Units in place of
                  Common Units).

                            (v) Leasing and Collection Efforts.  FWRLP shall use
                  reasonable  and diligent  efforts to lease the Tenant Space on
                  terms and conditions  acceptable to FWRLP, and to collect Rent
                  from all tenants within the Tenant Space on a timely basis. In
                  the event that  Contributor  or any of its Members  procures a
                  bona fide,  creditworthy  tenant for any  Tenant  Space  whose
                  proposed use of the Tenant Space is compatible  with the other
                  tenants  at  the  Property  in  FWRLP's  sole  but  reasonable
                  judgement  and such tenant has entered into a bona fide letter
                  of intent for such Tenant  Space with a base rent (on a triple
                  net basis)  equal to or  greater  than the base rent set forth
                  for such Tenant Space in Exhibit K hereto,  but FWRLP  rejects
                  such  tenant,  then the Rent  Guaranty  with  respect  to such
                  Tenant  Space  shall   terminate  until  such  time  that  any
                  subsequent  tenant of such  Tenant  Space  ceases  paying rent
                  therefor during the Rent Guaranty Period;  provided,  however,
                  that if the  proposed  base  rent  payable  by such  bona fide
                  tenant is not more than five  percent  (5%) less than the base
                  rent set forth for such Tenant Space in Exhibit K hereto, then
                  the Rent  Guaranty with respect to such Tenant Space shall not
                  terminate, but rather Contributor shall be deemed to receive a
                  credit  against  the Rent  Guaranty  with  respect to the rent
                  otherwise  due and payable for such Tenant  Space as set forth
                  in Exhibit K until a  subsequent  tenant of such Tenant  Space
                  ceases to pay rent therefor.

                           (vi) In the event that FWRLP leases the Pad Site, the
                  Rent  Guaranty set forth in this  Section 18, shall  include a
                  guarantee  of net rent (i.e.,  net of leasing  commissions  in
                  excess of  $30,000,  tenant  improvements  and/or  allowances,
                  etc.) for the Pad Site of $50,000 per annum (or  $4,166.67 per
                  month)  commencing on the issuance of the Units to Contributor
                  pursuant to Section  2(a)(ii)(B) herein and ending on February
                  28, 2000. In the event that Contributor or any of its Members

                                                       -28-

<PAGE>



                  procures  a bona  fide,  creditworthy  tenant for the Pad Site
                  whose  proposed  use of the Pad  Site is  compatible  with the
                  other  tenants at the Property in FWRLP's sole but  reasonable
                  judgment  and such  proposed  tenant  enters  into a bona fide
                  letter of intent to lease  such Pad Site and  either  (i) such
                  Tenant enters into a Ground Lease on terms acceptable to FWRLP
                  which  produces a net  effective  annual base rent of at least
                  $50,000 per annum,  or (ii) such Tenant enters into a Lease of
                  the Pad Site which  requires  FWRLP to construct  the building
                  thereon at FWRLP's  expense and the net effective  annual base
                  rent is at least  the sum of  $50,000  plus  12.5%  times  the
                  aggregate  cost of  constructing  the building on the Pad Site
                  (hard and soft costs), but FWRLP rejects such tenant, then the
                  Rent  Guaranty  with  respect  to  the  Pad  Site  only  shall
                  terminate.  In  addition,  upon any bona  fide sale of the Pad
                  Site by FWRLP to a third party,  then the Rent  Guaranty  with
                  respect to the Pad Site only shall  terminate upon the closing
                  of such sale.

                  (b)      Fit-Up/Leasing Guaranty.

                            (i) Reimbursement. Contributor and its Members shall
                  (severally,  as described in Section 18(c),  below)  reimburse
                  FWRLP (A) up to $5.00 per  square  foot [on a rolling  average
                  basis,  (e.g., if a lease for 2,000 square feet provides for a
                  $3.00 per  square  foot  tenant  improvement  allowance,  then
                  another  lease for 2,000  square  feet may  provide  for up to
                  $7.00 per square foot tenant improvement allowance, etc.)] for
                  any  costs,  expenses  or  allowances  incurred  by  FWRLP  in
                  connection  with  tenant  improvements  or  tenant  allowances
                  funded by FWRLP  pursuant  to any leases for the Tenant  Space
                  executed  during the Rent  Guaranty  Period,  and (B)  leasing
                  commissions and fees in an amount of up to 3% of the aggregate
                  value of the base rent (up to FWRLP's  pro forma base rent for
                  such Tenant  Space)  payable under new leases (up to a maximum
                  term of 5 years)  payable by FWRLP  pursuant to any leases for
                  the Tenant Space executed during the Rent Guaranty Period.

                           (ii) Certain  Statements from Operating  Partnership.
                  When  FWRLP  is  due  to  pay  any  such  costs,  expenses  or
                  allowances or leasing commissions or fees described in Section
                  18(b)(i) above,  FWRLP shall present the  Contributors and its
                  Members with a statement setting forth the costs,  expenses or
                  allowances  incurred by FWRLP in  connection  with such tenant
                  improvements  or  tenant  allowances  funded  by FWRLP  and/or
                  leasing commissions.

                           (iii)  Final  Payments.   If  any  Tenant  Space  was
                  occupied  as of  Closing,  or at any point  during  the Rental
                  Guaranty  Period and such space is vacant at the expiration of
                  the Rent Guaranty  Period,  then  Contributor  and its Members
                  shall pay to FWRLP, pursuant to Section 18(e), an amount equal
                  to: (i) $5.00 per square foot for such vacant

                                                       -29-

<PAGE>



                  Tenant Space,  plus (ii) 3% of the aggregate value of a 5-year
                  lease on such vacant  Tenant Space  assuming an annual  rental
                  rate for each such  space set forth  under Year 3 on Exhibit K
                  hereto.

                           (iv)  Quarterly   Accounting.   FWRLP  shall  provide
                  Contributor with a quarterly accounting of all amounts payable
                  to FWRLP pursuant to this Agreement with respect to the Tenant
                  Space (space by space),  and such amounts  shall be reimbursed
                  to FWRLP pursuant to Section 18(e) herein.

                  (c)      Collection of Guarantied Amounts.

                           (i)      [Intentionally Omitted]

                           (ii) Units. In connection with the obligations of the
                  Contributor (and its Members)  pursuant to Sections 18 (a) and
                  (b)  above,  Contributor  and its  Members  hereby  absolutely
                  assign  to  FWRLP  the   distributions/dividends   payable  to
                  Contributor   and  its  Members  by  FWRLP  with   respect  to
                  Contributor`s   and   its   Members'   Units.   Recourse   for
                  Contributor`s  and its  Members'  liability  pursuant  to this
                  Agreement may be taken  against such  distributions/dividends,
                  provided,  however,  if the Units are reduced  pursuant to the
                  exercise  of  the  exchange  rights   contemplated  hereby  or
                  otherwise,  then  Contributor and its Members shall deliver to
                  FWRLP  cash or an  irrevocable  and  unconditional  letter  of
                  credit (in form and from a  financial  institution  reasonably
                  acceptable to FWRLP) in an amount of (i) $5.86 per Common Unit
                  reduced  and  $7.32  per  Preferred  Unit  reduced,   if  such
                  reduction  occurs  during the first year after  Closing,  (ii)
                  $3.90 per Common  Unit  reduced and $4.88 per  Preferred  Unit
                  reduced, if such reduction occurs during the second year after
                  Closing, and (iii) $1.95 per Common Unit reduced and $2.44 per
                  Preferred Unit reduced,  if such  reduction  occurs during the
                  third  year  after  Closing,  to be held in escrow by FWRLP to
                  secure  the Rent  Guaranty  and Fit-  Up/Leasing  Guaranty  of
                  Contributor and its Members  hereunder.  FWRLP shall place any
                  escrow in an  interest-bearing  account at a federally-insured
                  institution  reasonably acceptable to Contributor within three
                  (3) days after  receipt  thereof,  and interest  thereon shall
                  become part of the escrow for all purposes herein. Contributor
                  and its Members authorize FWRLP and its agents to pay directly
                  to FWRLP  from  such  distributions/dividends  or  escrow  all
                  amounts  payable  by  Contributor  and its  Members  to  FWRLP
                  pursuant to this  Section 18 or as  otherwise  provided for in
                  this Agreement.  If the amount in any cash escrow  established
                  under Section  18(b)(i) with respect to fit-up and commissions
                  for  Tenant  Space  which was  vacant as of the  Closing  Date
                  exceeds the maximum unfunded  liability of the Contributor and
                  its Members with  respect to such vacant  space under  Section
                  18(b)(i),  FWRLP  shall  distribute  the excess  amount to the
                  Contributor  (the calculation for which shall be made when the
                  last such vacant space is leased or at the  expiration  of the
                  Guaranty Period). If current distributions from FWRLP

                                                       -30-

<PAGE>



                  exceed the amounts then payable by Contributor and its Members
                  to FWRLP,  then the excess will be paid to Contributor and its
                  Members. If current distributions from FWRLP are less than the
                  amounts then payable by Contributor  and its Members to FWRLP,
                  then  such  current  distributions  shall  be  paid  in  their
                  entirety to FWRLP and payment of the  remainder of the amounts
                  payable  by  Contributor  and its  Members  to FWRLP  shall be
                  deferred  until the subsequent  distribution(s).  All guaranty
                  payments  due  from  the  Contributor  and its  Members  under
                  Sections 18(a) and 18(b),  above, shall be collected solely by
                  impounding  or  setting  off  against  distributions/dividends
                  payable  with  respect  to  the  Units  to be  issued  to  the
                  Contributor (or its Members) under this Agreement (or from the
                  cash escrow  established under this Section 18(c) with respect
                  to such  Contributor or its Members who exercised the exchange
                  rights contemplated hereby and by the Partnership Agreement of
                  FWRLP),  and such collection shall be effected solely on a pro
                  rata  basis   against  the   Contributor's   or  its  Member's
                  distributions  or  escrow  (so that the  foregoing  guaranties
                  will, in effect,  be "several"  (and not joint)  guaranties by
                  each Member of the  Contributor  for his,  her or its pro rata
                  share of the total guaranty  obligation of the Contributor and
                  its Members' under this Section 18). The  Contributor and each
                  of its  Members  authorizes  FWRLP to  exercise  such pro rata
                  right  of  collection   against  such  Contributor's  and  its
                  Members'  distributions/dividends  and/or cash  escrows  under
                  circumstances  where FWRLP is entitled to payment of sums from
                  the  Contributor  under the  Guaranties  set forth in Sections
                  18(a) and 18(b),  above or as  otherwise  provided for in this
                  Agreement.  To the  extent  that a tenant  of a  Tenant  Space
                  forfeits  a  security  deposit,  the same  shall be applied by
                  FWRLP  to rent in  arrears  before  impounding  or  collecting
                  against the Contributor's (or its Members) Unit  distributions
                  or escrow on account of such rent in arrears.  If an amount is
                  paid to FWRLP  because a tenant(s)  occupying  a Tenant  Space
                  does  not  pay its  Rent  when  due,  and  FWRLP  subsequently
                  collects  such  unpaid  Rent from the  tenant,  then such Rent
                  collected  from such tenant shall be paid to  Contributor on a
                  quarterly  basis to the extent of such amount  previously paid
                  to FWRLP.  Contributor  and its Members shall not be precluded
                  from  making  a  claim  against  FWRLP  with  respect  to  any
                  incorrect  amount paid to FWRLP  pursuant  to this  Agreement.
                  Notwithstanding the foregoing,  if the Units are issued to the
                  Members,  then  the  obligations  under  this  Section  18  of
                  "Contributors and (or) its Members" shall mean the Members.

                  (d)  Suspension.  In the  event  that the  Shelf  Registration
Statement to be filed with the SEC pursuant to the Registration Rights Agreement
attached  hereto  as  Exhibit  N is not  declared  effective  by the SEC  within
nineteen  (19) months after the Closing  Date (with  respect to the Units issued
pursuant to Section  2(a)(ii)(A))  and the Second Issuance Date (with respect to
the Units issued  pursuant to Section  2(a)(ii)(B)),  then the Rent Guaranty and
the  Fit-Up/Leasing  Guaranty  set forth in  Sections  18(a) and  18(b),  above,
respectively,  shall be suspended for the period  commencing on the first day of
the twentieth (20th) month after the Closing Date and terminating on the date

                                                       -31-

<PAGE>



that the Shelf Registration Statement is declared effective by the SEC. Upon the
date the SEC declares the Shelf  Registration  Statement  to be  effective,  the
Rental Guaranty and the Fit-Up Leasing  Guaranty shall be reinstated,  but FWRLP
shall not have any  retroactive  claim for recapture of amounts which  otherwise
would have been due thereunder with respect to the suspension period.

                  (e) Notwithstanding anything to the contrary contained herein,
any amounts  that are payable by  Contributor  and/or its Members to FWRLP under
this  Agreement  after Closing under Sections  5(i)(s),  11, 18(a) and (b) or 21
shall be  reimbursed  to FWRLP  solely by  impounding  or  setting  off  against
distributions/  dividends  next  payable with respect to the Units issued to the
Contributor  or its Members  under this  Agreement  (and/or from the cash escrow
established  under  Section  18(c)).  Any  amounts  which  are not  paid  from a
distribution/dividend  shall be carried  forward and shall be paid from the next
following  distributions/dividends  (and/or from the cash escrow),  and any such
amount carried  forward shall bear interest at the rate of nine percent (9%) per
annum,    which    interest    shall   be   paid   from   the   next   following
distributions/dividends  (and/or from the cash escrow).  Any payment obligations
which remain  outstanding  at the time of reduction of the Units pursuant to the
exercise by  Contributor or its Members of their  exchange  rights  contemplated
hereby or otherwise,  shall be paid to FWRLP by  Contributor  and its Members in
cash at such time.

         19.      Miscellaneous Provisions.

                  (a) Completeness and  Modification.  This Agreement  (together
with  Exhibits  A to  S  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  Contributor,  provided that this  Agreement may be
assigned without  Contributor's  consent to an entity controlled by, controlling
or under common control with FWRLP.  This  Agreement  shall not be assignable by
Contributor  provided  nothing herein shall preclude  transfer of any membership
interests in the Company prior to Closing,  as long as all transferees are bound
hereby.

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

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


                                                       -32-

<PAGE>



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

                  (g)  Continuing  Documentation  and  Access.  From  and  after
Closing,  Contributor  shall  afford  FWRLP  reasonable  access  to any  and all
information in its possession concerning the ownership, use and operation of the
Property (including the right to copy same at the expense of FWRLP) for purposes
of any tax  examination  or audit  or  other  similar  purpose,  subject  to the
agreements of FWRLP concerning confidentiality set forth herein.

                  (h) 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 or its Members:

                                    Mr. Brian G. McElwee
                        c/o Valley Forge Investment Corp.
                          120 S. Warner Road, Suite 200
                            King of Prussia, PA 19406
                            Telecopy: (610) 254-0666

                                    and

                                    Jay Donegan
                                    8500 Leesburg Pike, Suite 403
                                    Vienna, VA 22182
                                    Telecopy:   (703) 506-1721

                                                       -33-

<PAGE>




Such notice shall be deemed given on the date of receipt by the addressee or the
date receipt  would have been  effectuated  if delivery  were not refused.  Each
party may  designate a new address by written  notice to the other in accordance
with this Paragraph 19(i).

                  (j)      Further Assurances. Contributor and FWRLP agree to
execute, acknowledge and deliver any further agreements, documents or
instruments that are reasonably necessary or desirable to carry out the
transactions contemplated by this Agreement.

                  (k) 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.

         20.      Additional Provisions.

                  (a) Approvals and Consents. In the event that any provision of
this  Agreement  subjects  the  action or  inaction  of any party  hereto to the
consent or approval of the other party,  the parties  agree that such consent or
approval shall not be  unreasonably  withheld,  conditioned  or delayed  (unless
specifically provided to the contrary in the applicable provision).

                  (b)      Time of the Essence.  Time is of the essence of all
provisions of this Agreement.

                  (c)  Effect  of  Termination.  Upon  any  termination  of this
Agreement,  and irrespective of the cause thereof,  all rights of entry provided
for hereunder, and all provisions limiting the actions of the Contributor to the
consent of FWRLP shall immediately cease and terminate.

                  (d)  Severability.  All provisions of this Agreement  shall be
valid and enforceable to the fullest extent permissible by law; and in the event
any provision (or part) of this Agreement  shall be held to be void,  invalid or
unenforceable  for any  reason,  then the same shall not affect the  validity or
enforceability  of the  remaining  provisions  of this  Agreement,  which  shall
continue  in full  force and  effect as if the void,  invalid  or  unenforceable
provision (or part) were deleted herefrom.

                  (e) Attorney's Fees for Breach of Post-Closing Obligations. In
the event any legal action is brought by a party hereto due to any breach of the
post-closing obligations of the parties hereto, the non-breaching party shall be
entitled  to recover  from the  breaching  party,  in  addition  to any  damages
recoverable by virtue of such

                                                       -34-

<PAGE>



breach, the non-breaching  party's reasonable attorneys fees and court costs, if
the non- breaching party is the prevailing party in such legal action.

         21.      Post Closing Work.

                  (a) Contributor  hereby agrees that,  unless  otherwise agreed
pursuant to Section 2(f) below,  the Property work set forth on Exhibit P hereto
(the  "Post-Closing  Work") shall be completed by Contributor,  at Contributor`s
sole cost and expense,  after Closing and in a diligent and good and workmanlike
manner,  lien free, and in accordance with all Loudoun County approved plans and
specifications and other applicable laws, rules and regulations. Notwithstanding
the  foregoing,  all of the Post-  Closing Work shall be completed  with all due
diligence,  but in no event  later than six (6)  months  after  Closing,  unless
required to be  completed  sooner  under the  requirements  of any  governmental
agency or body. If the Post-Closing Work is not completed within the time period
set forth above,  then FWRLP shall have the right,  but not the  obligation,  to
complete the  Post-Closing  Work and  Contributor  shall reimburse FWRLP for all
reasonable  costs paid by FWRLP in  accordance  with Section  18(e)  herein.  In
addition,  if the cost of the monument  sign for the Property  exceeds  $25,000,
then  Contributor  (or its Members) shall  reimburse FWRLP for one-half (1/2) of
the cost of such monument sign in excess of  $25,000.00,  and such payment shall
be made to FWRLP in accordance  with Section 18(e) herein.  The  obligations set
forth in this Section 21 shall survive Closing without limitation.

                  (b) To the  extent  any of the items  listed on  Exhibit P are
covered or indemnified against under the terms of any applicable warranty and/or
contractual rights in favor of the Contributor which have been properly assigned
to FWRLP,  FWRLP agrees to enforce such warranty and/or  contractual rights upon
the request of the Contributor  (and the  Contributor  agrees to coordinate with
FWRLP's  property  manager,  at no  out-of-pocket  expense to FWRLP, the actions
necessary  to bring  about  the  enforcement  of such  warranty  rights  and the
completion of all such items).

                  (c) Except as otherwise agreed pursuant to Section 2(f) above,
all costs  expended by FWRLP  pursuant  to this  Section 21 shall be paid by the
Contributor to FWRLP pursuant to Section 18(e) herein.

                  (d)      The obligations and covenants set forth in this
Section 21 shall survive Closing without limitation.



                                                       -35-

<PAGE>



         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

                                 By:             /s/
                                    William J. Wolfe
                                    President

                                 Date of execution:  March 19, 1997

WITNESSES:                       CONTRIBUTOR:

                                 ASHBURN FARMS VILLAGE
                                 CENTER, L.L.C.

                                 By:              /s/
                                    Brian G. McElwee
                                    Managing Member

         The  undersigned  Members join herein  solely for the purpose of making
the  representations,  warranties  and  covenants  contained  in Sections  2(e),
5(i)(r), 5(i)(s), 11(c)(B), 14(a), 18 and 21 hereof.
                                                              MEMBERS:

                                                                       /s/
                                                              BRIAN G. McELWEE

                                                                      /s/
                                                              RICHARD W. IRELAND

                                                                     /s/
                                                              STUART H. MALONE

                                                                     /s/
                                                              JOHN H. DONEGAN

                                                                    /s/
                                                              JOE M. THOMSON


                                                           -36-

<PAGE>



         First Washington Realty Trust, Inc. joins herein solely for the purpos
of making the covenants contained in Sections 17 hereof.

WITNESS:                                FIRST WASHINGTON REALTY TRUST, INC.


                                        By:               /s/
                                           William J. Wolfe
                                           President

                                        Date of execution: March 19, 1997



F:\DATA\WPDOC\DUKE\JBLUM\FORMS\ASHBURN.AGT

                                                           -37-

<PAGE>



                          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.


                                             FIDELITY NATIONAL TITLE
                                             INSURANCE COMPANY OF
                                             PENNSYLVANIA


                                             By:            /s/
                                                Dennis Ryan



                                             Date:  March 19, 1997


                                                       -38-

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                                                     LIST OF EXHIBITS



EXHIBIT A.   Legal Description of Land                      Recitals

EXHIBIT A-1. Legal Description of Pad Site                  Section 2(a)(ii)(C)

EXHIBIT A-2. Description of Second Pad Site                 Section 2(e)

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

EXHIBIT C.   Service Contracts                              Section 5(i)(e)

EXHIBIT D.   Tax Bills                                      Section 5(i)(f)

EXHIBIT E.   Intentionally Omitted

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

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

EXHIBIT G.   Violations                                     Section 5(i)(c)

EXHIBIT H.   Personal Property                              Section 5(i)(p)

EXHIBIT I.   Confidential Information Statement             Section 5(i)(t)(iv)

EXHIBIT J.   Permitted Exceptions                           Section 8(a)(iii)(B)

EXHIBIT K.   Tenant Space                                   Section 18(a)

EXHIBIT L.   Schedule of Incomplete Work and
             Allowances Due Under Leases                    Section 5(i)(d)(vi)

EXHIBIT M.   Percentage of Units to Members of Contributor  Section 2(a)(iii)

EXHIBIT N.   Registration Rights Agreement                  Section 17(a)

EXHIBIT O.   Contingent Leasing Commissions                 Section 5(i)(q)

EXHIBIT P.   Post Closing Work                              Section 21

EXHIBIT Q.   FNBM Mortgage                                  Section 2(c)

EXHIBIT R.   FNBM Note                                      Section 2(c)

EXHIBIT S.   Development Expenses                           Section 2(f)


        [Contributors to Attach Foregoing at Acceptance of this Agreement]

                                                           -39-

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