Document:

FIRST AMENDMENT TO TERM LOAN AND SECURITY Agreement

FIRST AMENDMENT TO CREDIT AGREEMENT

This FIRST AMENDMENT TO CREDIT AGREEMENT (this "Agreement"), dated as of December 16, 2005, is made by and among AMERICAN CAPITAL STRATEGIES, LTD., a Delaware corporation ("Borrower"), the Lenders (as defined below) signatory hereto, and WACHOVIA BANK, NATIONAL ASSOCIATION, individually and in its capacity as administrative agent ("Agent").

RECITALS
A.  Borrower, the lenders party thereto (collectively, "Lenders") and Agent are parties to that certain Credit Agreement dated as of June 17, 2005 (as amended or modified from time to time the "Credit Agreement").

B.  Borrower has requested that the cap on Commitment Increases be increased by $200,000,000 and certain other amendments to the Credit Agreement, and that Agent and Lender's grant certain limited waivers with respect to the Credit Agreement as set forth herein.

C.  Agent and Lenders are willing to enter into this Agreement to amend the Credit Agreement and grant certain limited waivers with respect to the Credit Agreement upon the terms and conditions set forth below.

NOW THEREFORE, in consideration of the matters set forth in the recitals and the covenants and provisions herein set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

Section 1.  Definitions.  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement.

Section 2.  Limited Waiver.  Subject to the terms and conditions set forth herein and in reliance on the representations and warranties of the Borrower herein contained, the Agent and the Lenders hereby waive the Event of Default existing as of the date hereof (such waiver applying only for the period referenced and not to any future requirement under such referenced section) under Section 7.1(c) of the Credit Agreement resulting solely from Borrower, prior to the date hereof, breaching Section 5.12 of the Credit Agreement by granting Liens to secure Debt in respect of total return swaps permitted under Section 5.29(b) of the Credit Agreement.  Except as set forth in this Section 2, the Agent and Lenders hereby reserve all rights and remedies granted to the Agent and Lenders under the Credit Agreement or applicable law or otherwise and nothing contained herein shall be construed to limit, impair or otherwise affect the right of the Agent and Lenders to declare an Event of Default with respect to any other existing or any future non-compliance with any covenant, term or provision of the Credit Agreement or any other document now or hereafter executed and delivered in connection therewith.

Section 3.  Amendment.  Sections 1.1, 2.2, 5.12 and 5.29 of the Credit Agreement are modified and amended as follows:
(a)  Section 1.1 of the Credit Agreement is hereby modified and amended by deleting clause (xi) in the definition of "Debt" in its entirety and substituting the following in lieu thereof:
"(xi) all obligations, direct or indirect (absolute or contingent) of such Person to repurchase property or assets sold or otherwise transferred by such Persons (excluding any customary obligations to repurchase property or assets sold or otherwise transferred in connection with a securitization transaction or total return swap),"

(b)  Section 2.2(a) of the Credit Agreement is hereby modified and amended by deleting clause (ii) of Section 2.2(a) in its entirety and substituting the following in lieu thereof:
"(ii) immediately after giving effect to such Commitment Increase, the total Commitments of all the Lenders hereunder shall not exceed $500,000,000;"

(c)  Section 5.12 of the Credit Agreement is hereby modified and amended by deleting Section 5.12 in its entirety and substituting the following in lieu thereof:
Neither the Borrower nor any Subsidiary of the Borrower will create, assume or suffer to exist any Lien on any asset now owned or hereafter acquired by it, except:  (a) Liens granted by a SPE Subsidiary in Securitization Transaction assets; (b) Liens granted by the Borrower to secure Debt permitted under Section 5.29(c); (c) Liens granted by the Borrower to secure Debt permitted under Section 5.29(d); and (d) Liens granted by the Borrower to secure Debt in respect of total return swaps permitted under Section 5.29(b).

(d)  Section 5.29 of the Credit Agreement is hereby modified and amended by deleting Section 5.29 in its entirety and substituting the following in lieu thereof:
The Borrower shall not directly or indirectly issue, assume, create, incur or suffer to exist any Debt or the equivalent (including obligations under Capital Leases), except for:  (a) the Debt owed to the Lenders and Swingline Lender under this Agreement and the Credit Documents; (b) the Debt existing and outstanding on the Closing Date described on Schedule 5.29 as such Debt may be amended, restated or refinanced from time to time, provided that such amendment, restatement or refinancing shall not cause the principal amount of such Debt to exceed the amount set forth on Schedule 5.29; (c) Debt in respect of which recourse for payment is contractually limited to specific assets of the Borrower or its Subsidiaries encumbered by a Lien securing such Debt; (d) Debt (other than Debt described in clause (c) of this Section 5.29) secured by a Lien upon assets of the Borrower if the aggregate outstanding principal amount of such Debt does not, at any time prior to March 31, 2006, exceed $125,000,000 and $75,000,000 at any time thereafter; (e) Subordinated Debt; and (f) unsecured Debt of the Borrower not permitted under clause (e) of this Section 5.29 with respect to which no scheduled principal payment shall be prior to the date six months after the Commitment Termination Date; provided that after giving effect to the issuance, assumption, creation, incurrence or existence of the Debt permitted by clauses (a), (b), (c), (d), (e), and (f) of this Section 5.29, no Default shall have occurred and be continuing.

Section 4.  Representations and Warranties.  To induce Agent and Lenders to execute this Agreement, Borrower hereby represents and warrants to Agent and Lenders as follows:
(a)  the execution, delivery and performance of this Agreement have been duly authorized by all requisite action of Borrower and this Agreement constitutes the legal, valid and binding obligation of Borrower enforceable against Borrower in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors' rights generally and to general principles of equity; 

(b)  the execution, delivery and performance of this Agreement does not and will not contravene, conflict with, violate or constitute a default under (i) the articles of incorporation or bylaws of Borrower, or (ii) any applicable law, rule or regulation, or any judgment, decree or order, or any agreement, indenture or instrument to which Borrower is a party or is bound or which is binding upon or applicable to all or a portion of its property, in any material respect;

(c)  after giving effect to this Agreement and the consummation of the transactions hereby each of the representations and warranties in the Credit Agreement are true and correct in all material respects with the same effect as though made on and as of the date hereof (except, in each case, to the extent stated to relate to an earlier date, in which case such representation or warranty shall have been true and correct on and as of such earlier date) and no Event of Default or Default exists under the Credit Agreement after giving effect to this Agreement and the consummation of the transactions contemplated hereby;

Section 5.  Conditions of Effectiveness.  The effectiveness of this Agreement shall be subject to the satisfaction of all of the following conditions in a manner, form and substance satisfactory to the Agent:
(a)  All of the representations and warranties of Borrower set forth in this Agreement and in the Credit Agreement, after giving effect to this Agreement, shall be true and correct in all respects, except to the extent such representations and warranties expressly related to an earlier date, in which case such representations and warranties shall have been true and correct in all respects as of such earlier date.

(b)  The execution and delivery of this Agreement by each of the parties hereto.

(c)  With respect to the amendments set forth in Section 3(b) of this Agreement receipt by Agent of an officer's or secretary's certification of resolutions adopted by the Board of Directors of the Borrower authorizing an increase in the cap on Commitment Increases to $500,000,000.

Section 6.  No Further Amendments or Waivers.  Except for the waivers specifically granted in Section 2 of this Agreement and the amendments set forth in Section 3 of this Agreement, the Credit Agreement and each of the other Credit Documents shall remain in full force and effect in accordance with their respective terms.  Borrower hereby ratifies, confirms and reaffirms its liabilities, its payment and performance obligations (contingent or otherwise) and its agreements under the Credit Agreement and the other Credit Documents, as amended by this Agreement.  Borrower hereby acknowledges and agrees that except as specifically set forth herein, neither this Agreement nor any actions pursuant to this Agreement nor any negotiations or discussions among Borrower, any of its agents, officers or principals and Agent or Lenders, shall be deemed or construed to cure any existing defaults under the Credit Documents, constitute a reinstatement, novation or release of the Loan or the Credit Documents, or constitute a modification, amendment or waiver of the Loan or Credit Documents.

Section 7.  No Defenses, Counterclaims or Rights of Offset.Borrower for itself and its successors and assigns, and by its execution hereof (i) hereby acknowledges, admits and agrees that, as of the date of execution and delivery of this Agreement, there are no defenses, counterclaims or offsets relating to its obligations under or in respect of the Credit Documents or to the enforcement or exercise by Lenders of any of their rights, powers or remedies under or in respect of the Credit Documents, or alternatively (ii) hereby irrevocably waives, relinquishes and releases any and all such objections, claims, defenses, counterclaims or offsets, that may exist as of the date hereof, including, without limitation, any and all such objections, claims, defenses, counterclaims or offsets that are unknown, unsuspected, unanticipated or undisclosed as of such date.

Section 8.  Release.In consideration of the Lenders' agreements herein contained, Borrower hereby irrevocably releases and forever discharges the Agent, the Lenders and their affiliates, subsidiaries, successors, assigns, participants, directors, officers, employees, agents, consultants and attorneys (each, a "Released Person") of and from all damages, losses, claims, demands, liabilities, obligations, actions and causes of action whatsoever arising on or prior to the date hereof which such Borrower, or any of its Affiliates may now have or claim to have against the Agent, the Lenders or any other Released Person on account of or in any way touching, concerning, arising out of or founded upon the Credit Agreement, after giving effect to this Agreement and the transactions contemplated or otherwise evidenced thereby, whether presently known or unknown and of every nature and extent whatsoever.

Section 9.  Reimbursement of Expenses.  Borrower hereby agrees to reimburse Agent on demand for all reasonable fees and reasonable out-of-pocket costs and expenses (including without limitation, reasonable fees and expenses of its counsel) incurred by Agent in connection with the negotiation, documentation and consummation of this Agreement and the transactions contemplated hereby.

Section 10.  Miscellaneous.
(a)  Effect of Agreement.  The execution, delivery and effectiveness of this Agreement shall not operate as a waiver of any right, power or remedy of Agent or any Lender under the Credit Agreement or any Credit Document, nor constitute a waiver of any provision of the Credit Agreement or any Credit Document, except as specifically set forth herein.

(b)  Counterparts.  This Agreement may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.  Delivery of the executed counterpart of this Agreement by telecopy or electronic mail shall be as effective as delivery of a manually executed counterpart to this Agreement.

(c)  Severability.  The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Agreement or any instrument or agreement required hereunder.

(d)  Captions.  Section captions used in this Agreement are for convenience only, and shall not affect the construction of this Agreement.

(e)  Entire Agreement.  This Agreement, embodies the entire agreement and understanding among the parties hereto and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof.

Section 11.  Governing Law.  THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES.

Section 12.  JURY TRIAL WAIVER.  BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS AGREEMENT, OR THE OTHER CREDIT DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE.  AGENT AND LENDERS ARE HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

	 	

BORROWER:

	 	 
	 	

AMERICAN CAPITAL STRATEGIES, LTD., a Delaware corporation

	 	 
	 	

By:    /s/ Cydonii Fairfax

Name:    Cydonii Fairfax

Title:    Vice President

	 	 

	 	

AGENT:

	 	 
	 	

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and as a Lender

	 	 
	 	

By:    /s/ Paul A. Burkhart

Name:    Paul A. Burkhart

Title:    Vice President

 

 

	 	

LENDER:

	 	 
	 	

BRANCH BANKING AND TRUST COMPANY,

as a Lender

	 	 
	 	

By:    /s/ James E. Davis

Name:    James E. Davis

Title:    Senior Vice President

 

 

	 	

LENDER:

	 	 
	 	

JP MORGAN CHASE BANK, N.A.,

as a Lender

	 	 
	 	

By:    /s/ Christine Herrick

Name:    Christine Herrick

Title:    Vice President

 

 

	 	

LENDER:

	 	 
	 	

CITICORP NORTH AMERICA, INC.,

as a Lender

	 	 
	 	

By:    /s/ Thomas Fontana

Name:    Thomas Fontana

Title:    Managing Director

 

 

	 	

LENDER:

	 	 
	 	

BANK OF AMERICA, N.A.,

as a Lender

	 	 
	 	

By:    /s/ Mary Pat Riggins

Name:    Mary Pat Riggins

Title:    Senior Vice President

 

 

	 	

LENDER:

	 	 
	 	

BANK OF MONTREAL,

as a Lender

	 	 
	 	

By:    /s/ Amy K. Dumser

Name:    Amy K. Dumser

Title:    Director

 

 

	 	

LENDER:

	 	 
	 	

HIBERNIA NATIONAL BANK,

as a Lender

	 	 
	 	

By:    /s/ Julie Nosser

Name:    Julie Nosser

Title:    Assistant Vice President

 

 

	 	

LENDER:

	 	 
	 	

FIFTH THIRD BANK,

as a Lender

	 	 
	 	

By:    /s/ Jennifer Schwartz

Name:    Jennifer Schwartz

Title:    Assistant Vice President

 

 

	 	

LENDER:

	 	 
	 	

BAYERISCHE HYPO-UND VEREINSBANK AG,

as a Lender

	 	 
	 	

By:    /s/ Michael F. Davis

Name:    Michael F. Davis

Title:    Director

	 	

By:    /s/ M. A. Imperiale

Name:    M. A. Imperiale

Title:    DirectorASSIGNMENT AND ASSUMPTION
                              OF
                      PURCHASE AGREEMENT

      THIS  ASSIGNMENT made and entered into this 24th day  of
October,  2005,  by and between AEI FUND MANAGEMENT,  INC.,  a
Minnesota  corporation, ("Assignor") and AEI INCOME  &  GROWTH
FUND   25   LLC,   a   Delaware  limited   liability   company
("Assignee");

     WITNESSETH, that:

      WHEREAS,  on  the 21st day of September, 2005,  Assignor
entered  into an Purchase Agreement  (hereinafter referred  to
as  the "Agreement") for that certain property located at 1016
North  Route 59, Aurora., Illinois, which is more particularly
described within the Agreement, (the "Property) with LaFayette
Village,  L.L.C.,  a  Virginia limited liability  company,  as
Seller; and

      WHEREAS, Assignor desires to assign to Assignee  all  of
Assignor's  rights, title and interest in, to  and  under  the
Agreement  regarding  the  Property and  Assignee  desires  to
accept  the  assignment thereof and assume  Assignor's  right,
title  and  interest in, to and under the Agreement  regarding
the Property as hereinafter provided;

     NOW, THEREFORE, for One Dollar ($1.00) and other good and
valuable   consideration,   receipt   of   which   is   hereby
acknowledged,  it  is  hereby agreed between  the  parties  as
follows:

     1.   Assignor assigns all of its rights, title and interest
          in, to and under the Agreement regarding the Property to
          Assignee, to have and to hold the same unto the Assignee, its
          successors and assigns;

     2.   Assignee hereby assumes all rights, promises, covenants,
          conditions and obligations under the Agreement regarding the
          Property to be performed by the Assignor thereunder, and
          agrees to be bound for all of the obligations of Assignor
          under the Agreement;

All  other terms and conditions of the Agreement shall  remain
unchanged and continue in full force and effect.

ASSIGNOR:

AEI FUND MANAGEMENT, INC.,
a Minnesota corporation

By:   /s/ Robert P Johnson
Name:     Robert P Johnson
Title:    President

ASSIGNEE:

AEI INCOME & GROWTH FUND 25 LLC,
a Delaware limited liability company

By:  AEI Fund Management XXI, Inc.,
     a Minnesota corporation, its Managing Member

By:   /s/ Robert P Johnson
Name:     Robert P Johnson
Title:    President

                 AGREEMENT OF PURCHASE AND SALE

     THIS AGREEMENT ("Agreement"), dated as of the 21 day of
September, 2005, by and between LAFAYETTE VILLAGE, L.L.C., a
Virginia limited liability company ("Seller") and AEI FUND
MANAGEMENT, INC., a Minnesota corporation ("Purchaser"), recites
and provides:

                            RECITALS

      Seller  is  the  owner of a parcel of real  property,  with
improvements  thereon  known generally as 1016  North  Route  59,
Aurora,  Illinois, currently leased for use as a Jared's  Jewelry
Store, such property being more particularly described on Exhibit
"A" attached hereto (collectively, the "Property").

      Seller wishes to sell and Purchaser wishes to purchase  the
Property on the terms and conditions set forth herein.

                            AGREEMENT

      NOW,  THEREFORE, in consideration of their mutual  promises
hereinafter  set forth and other good and valuable consideration,
the   receipt  and  sufficiency  of  which  are  hereby  mutually
acknowledged, the parties hereto covenant and agree as follows:

      1.    Recitals.  The recitals above are incorporated herein
by this reference as matters of contract, and not mere recital.

      2.    Contract.  This Agreement shall constitute a  binding
contract for the purchase and sale of the Property, on the  terms
and conditions set forth herein.

     3.   Property.  The Property includes all of Seller's right,
title and interest in and to all buildings and other improvements
on   or  within  the  Property  and  all  appurtenances  thereto,
including  easements and covenants and Seller's right, title  and
interest  in and to the lease of the Property (together with  all
rents,  charges  and other matters arising or otherwise  accruing
thereunder) (the "Lease").

      4.    Deposit.   Upon  execution  hereof,  Purchaser  shall
deposit the sum of $50,000 as a "Deposit", which will be held  by
First American Title Insurance Company Minneapolis, Minnesota, as
the  "Escrow  Agent"  in  escrow pending "Settlement".   If  this
Agreement  is  timely terminated pursuant to any right  contained
herein,  the Deposit shall be returned to Purchaser.  The Deposit
shall be applied to the Purchase Price at Settlement or shall  be
paid to Purchaser or Seller in accordance with the provisions  of
Section 6 and/or 16 below.

      5.    Purchase  Price.  The purchase price  (the  "Purchase
Price")  for  the  Property  shall be  Two  Million  Two  Hundred
Thousand  Dollars ($2,200,000.00).  The Purchase Price  shall  be
payable all in cash at settlement by wire transfer.

     6.   Feasibility.

           (a)   During  the  fifteen (15)  business  day  period
following  the latest of the dates on which Purchaser and  Seller
have  both  executed  this Agreement (the "Feasibility  Period"),
Purchaser, its agents, employees and contractors shall  have  the
right  to  enter  the  Property for  the  purpose  of  inspecting
improvements,   making  surveys,  updating  the   due   diligence
materials  previously  delivered to Purchaser  pursuant  to  6(b)
below,  and  performing other tests, studies and examinations  as
Purchaser,  in  its sole discretion, desires and to  confirm  the
availability of financing, on terms and conditions acceptable  to
Purchaser.    If  Purchaser  is  not  satisfied,  in   its   sole
discretion,  with the results of all updated tests including  any
materially  adverse  facts or conditions not  shown  in  the  Due
Diligence Materials (defined below) which may be revealed  by  an
updated   Phase   I   Environmental  report,  survey   or   title
examination, Purchaser shall have the right, upon written  notice
to Seller given prior to expiration of the Feasibility Period, to
terminate  this  Agreement, in which event the Deposit  shall  be
returned to Purchaser.

           (b)   Purchaser acknowledges that Seller has delivered
to  Purchaser  the  materials  listed  on  Exhibit  B  (the  "Due
Diligence  Materials"), and that all matters  disclosed  by  such
deliveries are acceptable to Purchaser and shall not be the basis
for  any  objection hereunder. The  matters of title  and  survey
reflected  in  the materials already delivered to  Purchaser  are
"Permitted  Exceptions" deemed acceptable to  Purchaser.   Seller
shall  promptly  deliver to Purchaser such  other  due  diligence
materials  in  Seller's possession as Purchaser may  specifically
identify  in  writing, excluding any materials of  a  proprietary
nature,  not  relating  to the condition or  performance  of  the
Property  or the tenant.  All due diligence updates shall  be  at
Purchaser's sole expense.

           (c)   If  notice of termination is not given prior  to
expiration of the Feasibility Period, all such matters  shall  be
deemed acceptable and all such conditions satisfied and/or waived
and the termination right under 6(a) shall be extinguished.

           (d)   Purchaser  agrees to repair  any  damage  caused
directly  by exercise of the right of access granted to Purchaser
in  this paragraph, and to indemnify and hold the Seller harmless
from  any and all losses actually incurred as a direct result  of
the  exercise of such right of access, other than as a result  of
the  Seller's  negligence  or willful  misconduct.   Seller  will
cooperate and assist Purchaser's access to the buildings.

      7.   Conditions Precedent to Obligation of Purchaser.  This
Agreement  and  all  of  Purchaser's  obligations  hereunder  are
further subject to satisfaction of the following conditions on or
before Settlement:

           (a)   Seller's  Representations and  Deliveries.   All
representations  and warranties of Seller made  herein  shall  be
true  and  correct in all material respects as  of  the  date  of
Settlement  and Seller shall have taken all action and  delivered
all documents and materials required by this Agreement.

           (b)  No Litigation.  As of Settlement, there shall  be
no  litigation, proceeding or investigations pending, or  to  the
knowledge of Purchaser or Seller threatened, which might  prevent
or  adversely affect the use of the Property, or which  questions
the  validity  of  any  action taken or to  be  taken  by  Seller
hereunder.

           (c)  Lease.  Purchaser shall have received an Estoppel
Certificate  from  the  tenant under  the  Lease,  such  Estoppel
Certificate to be in the form specified by the Lease,  confirming
that  the  Lease is in full force and effect, that there  are  no
modifications  or  amendments,  other  than  those  provided   to
Purchaser,  the  amount  of rent and any security  deposit,  that
amounts due under the Lease are current and not prepaid and  that
Seller  is  not  in  default  under the  Lease.   Purchaser  must
determine during the Feasibility Period if this form of  Estoppel
is satisfactory to Purchaser.

            (d)    Declaration  for  Meridian  Business   Campus.
Purchaser  shall have received a satisfactory resolution  of  the
three  (3)  title  issues reported from review of  Due  Diligence
Materials as follows:

                (i)   Estoppel confirmation as to what entity  is
authorized to bill and collect assessments for Meridian  Business
Campus  Phase  II and confirmation that no amounts are  past  due
under the Declaration for Meridian Business Campus Phase II;

                (ii)  Confirmation  in the tenant  estoppel  that
tenant  pays  amounts  assessed against the  Property  under  the
Declaration; and

                (iii)      Confirmation by the authorized billing
party  under the Declaration as to what specific common areas  it
makes   assessments   for   (e.g.,  clarification   as   to   the
responsibilities  of  tenant  and the  billing  party  under  the
Declaration to maintain the "Access Drive" and "Shared  Roadway",
respectively  as  such  terms are used in the  Lease  and/or  the
Declaration).

      In  the  event  any  of  the foregoing  conditions  is  not
satisfied on the date of Settlement, then Purchaser, at its  sole
option,  shall either:  (i) waive such condition in  writing  and
proceed   to  consummate  Settlement;  or  (ii)  terminate   this
Agreement  by  written  notice to Seller, whereupon  the  Deposit
shall  be  promptly repaid to Purchaser, subject  to  Purchaser's
right to exercise its remedies hereunder in the event of a Seller
default.  Failure to select one of the foregoing on the  date  of
Settlement shall constitute Purchaser's election not to terminate
this   Agreement  and  shall  constitute  waiver  of   all   such
conditions.

     8.   Settlement.

           (a)   Time and Place.  Unless this Agreement has  been
terminated  as  provided above, Seller and Purchaser  shall  make
settlement on the sale and purchase of the Property in accordance
with  the  terms hereof ("Settlement") on the date which  is  ten
(10) business days after the expiration of the Feasibility Period
(the  "Settlement Date"), time being of the essence.   Settlement
shall  take  place  at  the offices of the Escrow  Agent,  or  as
mutually agreed by the parties.

            (b)   Purchaser's  Deliveries.   At  Settlement,  the
Purchaser  shall  pay  the purchase price  to  Seller  and  shall
execute  and  deliver  an  instrument providing  for  Purchaser's
assumption of the Lease and Purchaser's indemnity of Seller  with
respect  to all matters occurring under the Lease or with respect
to the Property from and after the date of Settlement.

           (c)   Seller's Deliveries.  Seller shall  deliver  the
following  to  Purchaser:  (i) the Deed (as defined in  paragraph
10);  (ii)  an  affidavit as to mechanics' liens and  parties  in
possession  in  customary form as reasonably  required  to  cause
owner's title policy to be issued without exception for Mechanics
Liens  or parties in possession (other than the Lease);  (iii)  a
Certificate of Non-Foreign Status as required by Section 1445  of
the  Internal  Revenue  Code of 1986 and any  other  certificates
required  by  any  governmental  authority  or  agency;  (iv)  an
assignment  of all of Seller's right, title and interest  in  the
Lease;  (v)  an  assignment of all of Seller's right,  title  and
interest in and to any warranties applicable to the Property,  to
the  extent any are in effect and assignable; and (vi) a  written
notice  from  Seller to the tenant stating that the Property  has
been  sold  to Purchaser and directing tenant to regard Purchaser
as  its Landlord and make rental payments payable to Purchaser at
the address specified by Purchaser and set forth in such notice.

           (d)   Costs.   The  Seller  shall  pay  the  costs  of
preparing  the  Deed,  the title insurance  company's  reasonable
escrow  settlement charges and any state transfer  taxes,  stamps
and  similar recording charges on the Deed.  The Purchaser  shall
pay  for  the  examination of title to the  Property,  local  and
county transfer taxes or documentary stamps, premiums charged  by
the  title insurance company, and the cost of any updated survey,
environmental report and other feasibility studies.   Each  party
shall  pay its own legal, accounting and other expenses  incurred
in connection with this Agreement or Settlement hereunder.  It is
the  intent of the parties that Seller shall be entitled  to  all
income for the period of time up to but not including the date of
Settlement,  and Purchaser shall be entitled to  all  income  and
shall  be  responsible for all expenses for the  period  of  time
from,   after  and  including  the  date  of  Settlement.    Such
adjustments shall be shown on the Settlement Statement (with such
supporting  documentation  as the parties  hereto  may  require).
Without  limiting the generality of the foregoing, the  items  of
income  and  expense allocated at Settlement shall include  rent,
maintenance charges, any other additional rent, real and personal
property  taxes,  amounts  due under contracts  assigned  to  and
assumed  by  Purchaser, if any, and utility charges,  except  for
costs  which  the  tenants under the Lease are  responsible  for,
which  shall not be prorated.  In addition, any security  deposit
under  the Lease shall be assigned and delivered to Purchaser  at
Settlement.  For purposes of this Section, Settlement  shall  not
be deemed to have occurred unless and until Seller's proceeds are
received  by  Seller  prior to 2:00 p.m.  E.S.T.  on  such  date.
Settlement  and  any  prorations shall  be  computed  as  of  the
following  day in the event Seller's proceeds cannot be delivered
by 2:00 p.m. EST on the date specified for Settlement.

           (e)   Possession.  Subject only to the rights  of  the
tenant  under  the  Lease, possession of the  Property  shall  be
delivered   to   Purchaser  immediately  upon   consummation   of
Settlement.

           (f)   Closing Documents.  All closing documents to  be
executed and delivered by the parties pursuant hereto shall be in
form, execution and substance as required herein.

     9.   Title and Survey Objections.  The Purchaser shall have until
expiration  of  the  Feasibility Period to report  to  Seller  in
writing any survey or title defects or other objections regarding
the  Property  that  are  disclosed by Purchaser's  examinations,
other  than  the Permitted Exceptions (as to which Purchaser  has
waived  any  objection), which, in Purchaser's  sole  discretion,
materially  adversely  affect use of the  Property  as  currently
operated  or make the title to the Property uninsurable or  which
impose  restrictions on future use of the Property which are  not
acceptable  to Purchaser.  Seller shall have the right,  but  not
the duty to cure any such title objections reported by Purchaser.
If  the  Seller is unable or unwilling to cure objections to  the
Purchaser's    satisfaction    prior    to    Settlement    then,
notwithstanding  anything herein to the contrary,  the  Purchaser
shall,  at  its  option, either (i) terminate this Agreement,  in
which  event  the Deposit shall be refunded; or (ii)  waive  such
defects  and  proceed  to Settlement, with no  reduction  in  the
Purchase  Price; provided, however, that all mortgages, deeds  of
trusts  and  other monetary liens may be paid at Settlement,  and
the  parties  hereby authorize application of the Purchase  Price
proceeds to effect the same.  If any additional matters of record
are   created  after  the  date  of  the  examination  of   title
contemplated  hereby,  and prior to Settlement,  Purchaser  shall
have  the right to further delay Settlement a reasonable time  to
permit Seller to complete curative action.  Any matters of  title
or  survey  not  timely  objected to by Purchaser  or  which  are
reported but not cured by Settlement shall be deemed waived.

      10.   The Deed.  At the time specified in paragraph 8 above
for  Settlement the Seller shall deliver to Purchaser  a  Special
Warranty  Deed  (the "Deed") conveying fee simple  title  to  the
Property, described according to the applicable legal description
attached hereto as Exhibit A, subject to all liens, encumbrances,
conditions,  restrictions  and other matters  of  record,  unless
otherwise agreed in writing.

      11.   Risk  of  Loss.  The risk of loss or  damage  to  the
Property  by  fire or other casualty prior to Settlement  thereon
shall  be  on the Seller.  If such loss or damage is substantial,
materially and adversely affects the Purchaser's intended use and
enjoyment of the Property as of Settlement or gives rise  to  the
right  of the tenant to terminate the Lease as a result  of  such
casualty,  the  Purchaser shall have the option to (i)  terminate
this Agreement and have the Deposit refunded, in which event  the
parties  hereto shall have no further obligations or  liabilities
to  one another hereunder; or (ii) proceed to Settlement with  an
assignment  of  any  right of Seller in and to  the  proceeds  of
insurance.

     12.  Condemnation.  If all or any portion of the Property is
subject  to actual or threatened taking pursuant to the power  of
eminent  domain  prior  to Settlement,  the  Purchaser  shall  be
entitled to elect either to (a) terminate this Agreement and have
the  Deposit  refunded in which event the parties shall  have  no
further  obligations hereunder, or (b) proceed to Settlement,  in
which event, at Purchaser's Option all proceeds, awards and other
payments  arising from any such taking or sale shall be  assigned
and paid to the Purchaser.

     13.  Covenants.

           (a)   Seller's Covenants.  Seller covenants and agrees
with Purchaser that, prior to Settlement:

                (i)   Seller, as Landlord, shall not violate  the
provisions of the Lease and shall use reasonable efforts to cause
tenant  to  fully  comply with the terms and  provisions  of  the
Lease.

                (ii)  Seller  shall continue to maintain  all  of
Seller's existing insurance policies relating to the Property, or
any  part  thereof, if any, in full force and  effect  until  the
Settlement  has occurred, and shall cause tenant to maintain  all
of  tenant's policies relating to the Property as required  under
the Lease.

                (iii)      Seller shall provide Purchaser with  a
copy  of any written notice hereafter received by Seller relating
to  any violations or alleged violations of any federal, state or
municipal  laws, ordinances, rules and regulations affecting  the
Property,  or  any pending or threatened actions, proceedings  or
claims affecting the Property.

                (iv) From and after the date hereof, Seller shall
not  (A)  make  or  authorize to be made any alterations  to  the
Property,  (B) enter into any agreements, leases or  undertakings
with  respect to the Property or any part thereof, (C) submit  or
file any applications with governmental authorities to change the
zoning  or  the  Property,  or  (D)  record  or  consent  to  the
recordation of any liens, mortgages, or encumbrances of any  kind
affecting  the  Property,  except  as  would  be  discharged   at
Settlement, without the prior written consent of Purchaser.

      14.   Representations and Warranties of  the  Seller.   The
Seller represents and warrants as of the date hereof that to  the
best of its actual knowledge without investigation:

           (a)   Repairs.  No governmental agency has served  any
written  notice on the Seller regarding any repairs,  alterations
or corrections of any existing condition on the Property.

           (b)   Condemnation.  There is no pending or threatened
proceedings  for  condemnation or the exercise of  the  right  of
eminent domain as to any part of the Property or for the limiting
or denying of any right of access thereto.

           (c)  Authorization and Execution.  This Agreement  has
been  duly authorized by all necessary action on the part of  the
Seller  and  has been duly executed and delivered by the  Seller.
Seller  shall  deliver  to Purchaser, prior  to  Settlement,  all
organizational  documents, resolutions,  certificates  and  other
materials  reasonably  required  by  Purchaser  to  confirm   the
foregoing.

           (d)  Hazardous Materials.  No hazardous materials,  as
hereinafter defined, are located on or about the Property nor has
Seller used the Property for the storage, manufacture or disposal
of  hazardous  materials.  For the purposes  of  this  Agreement,
"hazardous  materials"  shall  mean  any  "hazardous  substance",
"hazardous  waste" and "hazardous material", as  defined  in  the
Comprehensive  Environmental Response Compensation and  Liability
Act  of  1984,  42 U.S.C. Section 9601 et. seq., as amended,  the
Resource  Conservation and Recovery Act of 1976, as amended,  and
the  Hazardous and Solid Waste Amendment of 1984, as amended, the
regulations adopted pursuant thereto and any other federal, state
and   local   law,  statute  or  ordinance  or   any   court   or
administrative   decree  or  any  private  agreement   with   any
governmental   authority  pertaining  to   hazardous   or   toxic
materials,  substances,  pollutants,  contaminants  or  waste  to
Seller's knowledge.

           (e)  Leases.  There are no leases, tenancies, licenses
or  other  rights  of  occupancy or use for any  portion  of  the
Property other than the Lease, the Permitted Exceptions and title
matters  of  record.  Neither tenant nor Seller is in default  in
performing its obligations under the Lease.

           (f)   Seller  has  not  entered  into  any  agreements
affecting  the  Property other than the Lease and  other  matters
that  would be revealed by inquiry and proper search of the  land
records   and/or  zoning  and  planning  records  in  the   local
jurisdiction.

      Except  for the foregoing representations, Seller makes  no
representations  or warranties with respect to the  Property  and
Purchaser acknowledges and agrees that the Property is being sold
"AS  IS,  WHERE  IS"  and that Purchaser is relying  on  its  own
inspections,  consultants  and  inquiries  with  respect  to  the
Property,  the  Lease  and all related  matters.   The  "best  of
Seller's  knowledge" as used herein shall be deemed to  mean  the
actual  knowledge, without investigation, of Marvin Bolinger  and
Dennis Weiss.

      15.  Representations and Warranties of the Purchaser.   The
Purchaser represents and warrants as of the date hereof and shall
be deemed to represent and warrant as of Settlement that:

           (a)   Organization   Purchaser is a  corporation  duly
organized  and in good standing under the laws of Minnesota,  and
has  qualified  (or  will be qualified) to  do  business  in  all
jurisdictions  in  which  such  qualification  is  necessary   to
consummate the transactions described herein.

           (b)   Authorization  and  Execution.   The  execution,
delivery and performance of this Agreement by Purchaser has  been
duly  authorized by all necessary action, if any, as  applicable,
and  has been duly executed and delivered by the Purchaser.  This
Agreement is enforceable against Purchaser in accordance with its
terms  and  does  not  conflict  with  any  indenture,  operating
agreement,  bylaw, or any other agreement to which  Purchaser  is
bound.   The  individual  signing  on  behalf  of  Purchaser   is
authorized  to act for and on behalf of and to bind Purchaser  in
connection with this Agreement.

           (c)   Agreements.   There is  no  agreement  to  which
Purchaser is a party or, to Purchaser's knowledge, is binding  on
Purchaser, which adversely affects Purchaser's ability to perform
its obligations under this Agreement.

      16.   Default.   In  the event of a default  by  Purchaser,
Seller's  sole  and  exclusive  remedy,  in  lieu  of  all  other
remedies,  shall be to retain the Deposit as liquidated  damages,
and  Seller hereby specifically waives the right to seek specific
performance  of this Agreement by Purchaser.  If Seller  defaults
hereunder, Purchaser may terminate this Agreement, in which event
the  Deposit shall be promptly refunded to Purchaser or Purchaser
may  seek  specific  performance of this Agreement  as  its  sole
remedy at law or in equity.

      17.   Agents and Brokers.  Each party hereunder  represents
and  warrants that it did not consult or deal with any broker  or
agent, real estate or otherwise, with regard to this Agreement or
the transactions contemplated hereby. Each party hereto agrees to
indemnify  and hold harmless the other party from all  liability,
expense,  loss,  cost or damage, including reasonable  attorneys'
fees,  that may arise by reason of any claim, demand or  suit  of
any agent or broker arising out of facts constituting a breach of
the foregoing representations and warranties.

      18.   Notices.  Any notice, request or demand  required  or
permitted  to  be given pursuant to this Agreement  shall  be  in
writing  and  shall be deemed sufficiently given if delivered  by
hand  by messenger at the address of the intended recipient, sent
prepaid  by Federal Express (or a comparable guaranteed overnight
delivery service), or deposited in the United States first  class
mail  (registered  or  certified, postage  prepaid,  with  return
receipt requested), addressed as follows:

     For the Purchaser:  c/o George Rerat
                         Managing Director of Acquisitions
                         1300 Wells Fargo Place
                         30th Seventh Street East
                         St. Paul, MN  55101
                         Fax No.:  (651) 227-7705
                         Phone No.:  (651) 227-7333
                         Copy to: Robert Johnson, President

     with a copy to:     Michael B. Daugherty, Esquire
                         30 East Seventh Street
                         Suite 1300
                         Saint Paul, Minnesota  55101
                         Fax No.: (612) 677-3181
                         Phone No.: (612) 720-0777

     For the Seller:     Silver Capital LLC
                         Sabre Center II, Suite 600
                         6001 Broken Sound Parkway
                         Boca Raton, FL  33487
                         Attn:  Larry D. Silver
                         Fax No.:  (561) 997-1094
                         Phone No.:  (561) 981-5252

     with a  copy to:    Denny Weiss
                         Sabre Center II, Suite 600
                         6001 Broken Sound Parkway
                         Boca Raton, FL  33487
                         Fax No.:  (561) 997-1094
                         Phone No.:  (561)-981-5252

     with a copy to:     John W. Steele, Esquire
                         Hirschler Fleischer
                         Federal Reserve Bank Building
                         701 E. Byrd Street, Floor 16
                         Richmond, VA  23219
                         Fax No.:  (804) 644-0957
                         Phone No.:  (804) 771-9565

Notice  may  also  be  given by facsimile transmission,  provided
notice  is also sent subsequently by one of the methods specified
above.   Notice shall be deemed given on the date of the  receipt
if delivered by hand or mail, one day after posting with FedEx or
other comparable carrier or upon confirmed facsimile transmission
to the party named therein at the applicable fax number above.

      19.   Applicable Law.  This Agreement shall  be  construed,
performed  and enforced in accordance with the laws of the  State
of Illinois.

       20.    Entire  Agreement;  Modification.   This  Agreement
contains the entire agreement between the parties hereto relating
to  the  Property  and  supersedes all prior and  contemporaneous
negotiations,  understandings and agreements,  written  or  oral,
between  the parties hereto.  This Agreement shall not be amended
or  modified  and  no  waiver of any provision  hereof  shall  be
effective unless set forth in a written instrument executed  with
the same formality as this Agreement.

      21.  Survival.  The provisions of this Agreement shall  not
survive Settlement hereunder and shall be deemed merged into  the
deed at Settlement.

     22.  Time of the Essence.  The parties expressly acknowledge
and  agree that TIME IS OF THE ESSENCE with respect to  each  and
every provision of this Agreement; provided, however, that if the
final  date  of any period which is set out in any  provision  of
this Agreement falls on a Saturday, Sunday or legal holiday under
the  laws  of the United States, then such time period  shall  be
extended to the next day which is not a Saturday, Sunday or legal
holiday.

      23.   Severability.  In the event any one or  more  of  the
provisions  contained in this Agreement are held to  be  invalid,
illegal,  or  unenforceable  in  any  respect,  such  invalidity,
illegality,  or  unenforceability  shall  not  affect  any  other
provision  hereof, and this Agreement shall be  construed  as  if
such  invalid, illegal, or unenforceable provision had  not  been
contained herein.

     24.  Captions.  Any paragraph headings or captions contained
in  this Agreement shall be for convenience of reference only and
shall  not  affect  the  construction or  interpretation  of  any
provision of this Agreement.

      25.   Counterparts.  Upon written notice  to  Seller,  this
Agreement may be executed in any number of counterparts, each  of
which  shall be deemed to be an original, but all of  which  when
taken together shall constitute one and the same instrument.

      26.   Tax-Free  Exchange.   The parties  acknowledges  that
Purchaser  and/or  Seller may wish to close this  transaction  as
part  of  a tax-free exchange.  The parties shall cooperate  with
the  other  and take any reasonable actions necessary,  including
the execution of appropriate documents, to assist the other so to
acquire  or sell the Property as part of a 1031 deferred exchange
provided that:  (a) neither party shall not be required to  incur
any  liability or expense in connection with the others exchange;
and (b) the exchange does not delay Settlement.

      27.  Assignment.  This Agreement shall not be assignable by
Purchaser  without Seller's prior written consent, which  consent
shall   not  be  unreasonably  withheld  or  delayed.   Provided,
however,  if  Purchaser shall remain primarily liable  hereunder,
the  Purchaser may assign, with written notice to the Seller, all
or a portion of its interest herein to an affiliate of Purchaser.
No  assignment by Purchaser shall relieve him of his  obligations
and liabilities hereunder.

                   [SIGNATURE PAGE TO FOLLOW.]

     IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed in its name pursuant to due
authority as of the dates set forth below.

     PURCHASER:               AEI FUND MANAGEMENT, INC.,
                              a Minnesota corporation

                              By:  /s/ Robert P Johnson
                              Name:    Robert P Johnson
                              Title:   President
                              Date:    September 21, 2005

     SELLER:                  LAFAYETTE VILLAGE, L.L.C.,
                              a Virginia limited liability
                              company

                              By   /s/ Larry D Silver
                              Title:   Larry D. Silver,Member/CEO
                              Date:    September 26, 2005

                            EXHIBIT A

Parcel 1:

Lot 1 in Meridian Business Campus Phase 2 Unit 8, being a
subdivision in Section 16, Township 38 North, Range 9,
east of the third principal meridian, according to the
plat thereof recorded October 30, 1998 as Document No. R98-
226549, in DuPage County, Illinois.

                            EXHIBIT B

1.   Existing survey

2.   Existing title policy and copies of all exceptions

3.   Existing Phase I Environmental Report

4.   Certificate of Occupancy

5.   Lease

6.   Tenant's insurance information

7.   Real estate tax bills for current year

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