Document:

CONTRACT OF SALE

          THIS  AGREEMENT, dated as of August 17,  2006,  is  made
between  AEI  Real  Estate  Fund  XVIII  Limited  Partnership,   a
Minnesota limited partnership ("AEI XVIII"), AEI Income  &  Growth
Fund  XXII  Limited  Partnership, a Minnesota limited  partnership
("AEI  XXII"), AEI Income & Growth Fund 24 LLC, a Delaware limited
liability  company ("AEI 24"), Robert F. Hajicek  and  Lillian  E.
Hajicek, as individuals ("RHLH"), Jeffrey D. Harmon and Sylvia  M.
Harmon,  as  individuals ("JHSH"), Charles E. Miller  III,  as  an
individual  ("CEM"),  Christopher  B.  Miller,  as  an  individual
("CBM"),  and  Elizabeth  V.H. Miller,  as  an  individual  ("EM";
together  with  AEI XVIII, AEI XXII, AEI 24, RHLH, JHSH,  CEM  and
CBM, hereinafter collectively referred to as "Seller"), as tenants
in  common  and Compson Holding Corporation, a Florida corporation
("Purchaser").

                            WITNESSETH:

          WHEREAS,  Seller  desires  to  sell  to  Purchaser,  and
Purchaser  desires  to  purchase from Seller,  all  those  certain
properties  described in Section 1.01 on the terms and  conditions
hereinafter set forth.

          NOW  THEREFORE, in consideration of the premises and  of
the  mutual  covenants and agreements hereinafter set  forth,  and
subject  to the terms and conditions hereof, Seller and  Purchaser
hereby covenant and agree as follows:

                             ARTICLE 1

               THE PROPERTY; PURCHASE PRICE; ESCROW

          SECTION 1.01. THE PROPERTY. Seller hereby agrees to sell
and transfer, and Purchaser hereby agrees to purchase and acquire,
upon the terms and conditions hereof, the following:

          (a)  that certain plot, piece and parcel of land known as Garden
Ridge,  located  in the State of Texas, County of Montgomery,  and
described on Schedule 1.01(a) annexed hereto (the "Land");

          (b)  the interest of Seller in the buildings and improvements
located in or on the Land (collectively, the "Improvements");

          (c)  [Intentionally omitted];

          (d)  all of Seller's interest in all easements, licenses, rights
and appurtenances relating to the Land or the Improvements;

          (e)  all of Seller's interest, if any, in and to any land lying in
the bed of any street, road or avenue opened or proposed, in front
of or adjoining the Land, to the center line thereof;
          (f)  all of Seller's right, title and interest, as lessor, in and
to  that  certain  lease with Garden Ridge  LP,  a  Texas  limited
partnership ("Garden Ridge") specified on Schedule 1.01(f) annexed
hereto together with all amendments and modifications thereto (the
"Lease"), and all rents, issues and profits thereof and therefrom,
and  all  security deposits, guarantees, if any,  unearned  common
area  maintenance assessments and other deposits made  in  respect
thereof;

          (g)  all of Seller's interest, if any, in the building and/or
equipment  warranties  which  remain  in  effect  at  Closing  (as
hereinafter defined), if any, exclusively relating to any  of  the
Improvements and Personal Property (the "Warranties"); and

          (h)  all of Seller's interest, if any, in the certificates,
licenses,  permits, authorizations and approvals  actually  issued
for  or  with respect to the Property by governmental  and  quasi-
governmental authorities having jurisdiction ("Licenses"), to  the
extent transferable.

     The  Land,  the Improvements, the Lease, the Warranties,  the
Licenses and all other rights, improvements and property specified
above  in  this  Section  1.01 relating thereto,  is  referred  to
hereinafter, collectively, as the "Property".

          SECTION 1.02. PURCHASE PRICE. The purchase price for the
Property  (the  "Purchase Price") is Nine  Million  Three  Hundred
Fifty Thousand Dollars ($9,350,000), payable as follows:

          (a)  Upon execution and delivery of this Agreement,
Seventy-Five Thousand  Dollars ($75,000) (the "Initial Downpayment")
shall  be delivered  by  Purchaser  to  Fidelity  National  Title
Insurance Company, as escrow agent ("Escrow Agent"), in Phoenix, AZ;
Attention:  Anne Bostick, by wire transfer of same day  funds  per
wire instructions to be provided prior to closing.

          (b)  On or prior to the end of the Approval Period (as
hereinafter defined), Seventy-Five Thousand Dollars ($75,000) (the
"Additional Downpayment"  and,  together  with the  Initial
Downpayment,  the "Downpayment") shall be delivered by Purchaser to
Escrow Agent, by wire  transfer  of  same day funds to Escrow  Agent's
account  as specified in subsection (a) above. The Downpayment shall
be  held by  Escrow Agent in an interest bearing account in accordance
with the  terms  of  this Agreement until the Closing  (as  hereinafter
defined)  or  termination  of  this Agreement,  and  all  interest
accrued on the Downpayment shall be paid to the party who receives
the  Downpayment.  An  amount of $1,000 of  the  Downpayment  that
Purchaser  has  paid to Seller is for an independent consideration
for  Purchaser's  right  to  terminate by  tendering  such  amount
directly  to  Seller  or Seller's agent. If  Purchaser  terminates
under Section 4.01(d) herein, the Downpayment will be refunded  to
Purchaser  and  Seller will retain the independent  consideration.
The  independent  consideration will be credited to  the  Purchase
Price upon the Closing.

          (c) Purchaser shall pay at the Closing the balance of the
Purchase Price (after crediting the amount of the Downpayment)  in
cash,  subject  to  adjustments as provided herein.  The  Purchase
Price shall be paid by Purchaser to Seller through escrow, by wire
transfer of immediately available funds to the aforementioned account
of Escrow Agent or as Seller shall otherwise direct.

          SECTION 1.03. ESCROW. The Downpayment shall be held by
Escrow Agent and disposed of only in accordance with the
following:

          (a)  Escrow Agent will deliver the Downpayment to Seller
or to Purchaser, as the case may be, under the following
conditions:

               (1)  to Seller at the Closing upon the consummation
thereof as part of the Purchase Price; or

               (ii) to Seller upon receipt of written demand therefor,
stating that Purchaser  has  defaulted in the performance  of  this
Agreement; provided, however, that Escrow Agent shall not honor such
demand earlier  than  the tenth day after Escrow Agent shall have given
notice to Purchaser enclosing a copy of such demand, nor thereafter
if Escrow Agent shall have received written notice of objection from
Purchaser prior to such tenth day; or

               (iii) to Purchaser upon receipt of written demand therefor,
which demand shall be received by Escrow Agent on or prior to  the
end  of the Approval Period, stating that Purchaser is terminating
this Agreement in accordance with Section 4.01(d) herein; or

               (iv) to Purchaser upon receipt of written demand therefor (x)
stating  that  Seller  has defaulted in the  performance  of  this
Agreement, or (y) stating that Purchaser is otherwise entitled  to
the  Downpayment  under  the  terms of this  Agreement;  provided,
however, that Escrow Agent shall not honor such demand earlier than
the tenth day after Escrow Agent shall have given notice to Seller
enclosing  a  copy of such demand, nor thereafter if Escrow  Agent
shall have received written notice of objection from Seller prior to
such tenth day.

          (b)  In  the  event Escrow Agent shall have  received  a
notice  of objection provided for in subsections (a)(ii)  or  (iv)
above  within  the  time therein prescribed,  Escrow  Agent  shall
continue to hold the Downpayment until (A) Escrow Agent shall have
received  written notice signed by Seller and Purchaser  directing
the  disbursement  of  the Downpayment, or (B)  Escrow  Agent,  at
Escrow Agent's option, in order to terminate Escrow Agent's duties
as  Escrow Agent, shall have deposited the Downpayment in a  court
of  competent jurisdiction in an action of interpleader, the costs
thereof  to be borne by whichever of Seller and Purchaser  is  the
non-prevailing  party, or (C) Escrow Agent shall  receive  from  a
court of competent jurisdiction a certified copy of a judgment  or
order, which is final and non-appealable, directing disposition of
the Downpayment.

          (c)  Escrow Agent may act upon any instrument  or  other
writing believed by Escrow Agent, in good faith, to be genuine and
to  be signed and presented by the proper person, and shall not be
liable  in  connection with the performance of any duties  imposed
upon  Escrow Agent by the provisions of this Agreement except  for
Escrow  Agent's own wilful misconduct or negligence. Escrow  Agent
shall  have no duties or responsibilities except those  set  forth
herein.  In the event that Escrow Agent shall be uncertain  as  to
Escrow  Agent's  duties  or  rights hereunder,  or  shall  receive
instructions  from  Purchaser or Seller which, in  Escrow  Agent's
opinion, are in conflict with any of the provisions hereof, Escrow
Agent shall be entitled to hold

and/or apply the Downpayment pursuant to Section 1.03(b) above and
may decline to take any other action.

          (d)  Seller and Purchaser, jointly and severally, agree
to indemnify and hold harmless Escrow Agent from and against any and
all costs, claims, damages or expenses, including reasonable
attorneys' fees, that may be incurred by Escrow Agent acting under
this Agreement or to which Escrow Agent may be put in connection
with Escrow Agent acting under this Agreement, except for costs,
claims or damages arising out of Escrow Agent's negligence,
willful misconduct or bad faith.

          (e)  Seller and Purchaser recognize and acknowledge that Escrow
Agent is serving without compensation and solely as an accommodation
to the parties hereto. Seller and Purchaser recognize and
acknowledge that Escrow Agent undertakes to perform only the duties
that are expressly set forth herein and that Escrow Agent shall not
be bound by any other agreement between Seller and Purchaser,
whether or not Escrow Agent has knowledge thereof.

                              ARTICLE 2

                             THE CLOSING

          SECTION 2.01. THE CLOSING. The closing of the
transactions contemplated hereby (the "Closing") shall take place
at 10:00 A.M. (Eastern Standard time) on or about the date that is
thirty (30) days following the end of the Approval Period, through
an "escrow closing" at the office of the Escrow Agent, or at such
other time or such other place as Seller and Purchaser shall
mutually agree. The time and date of the Closing are herein
referred to as the "Closing Date." Notwithstanding the foregoing
or anything to the contrary contained in this Agreement, Purchaser
shall have the right, exercised by written notice to Seller given
at least five (5) days before the scheduled Closing Date, to
extend the Closing for an additional period not to exceed fifteen
(15) business days, provided that Purchaser shall wire to Escrow
Agent an additional deposit of Twenty-Five Thousand Dollars
($25,000) (which amount shall be considered additional Downpayment
hereunder) concurrently with Purchaser's delivery of the extension
notice as aforesaid.

                              ARTICLE 3

                                TITLE

          SECTION  3.01. TITLE TO THE PROPERTY. SELLER  agrees  to
convey  good, valid and insurable fee simple title to the Property
and  Purchaser agrees to purchase the same, subject  only  to  the
Permitted Title Exceptions (as hereinafter defined):

          (a)  [Intentionally omitted].

          (b)  Seller shall promptly order a title commitment (the "Title
Commitment")  from Fidelity National Title Insurance Company  (the
"Title Company") and shall deliver same to Purchaser within fifteen
(15) days after the Effective Date. Purchaser shall (i) within ten
(10)

days  following receipt of the Title Commitment and a survey  (the
"Survey")  covering the Property (but in no event later  than  the
expiration of the Approval Period), and (ii) within three (3) days
of receipt of any update to the Title Commitment or the Survey and
only  with respect to an exception, matter or item first appearing
on  such  update  (but not later than the Closing  Date),  deliver
written  notice  (a  "Title Notice") to Seller setting  forth  any
liens or encumbrances affecting, or other defects in or objections
to, title to the Property, or any matters set forth on the Survey,
that  are  not  satisfactory to Purchaser  in  its  sole  judgment
("Purchaser's Objections"). Any exceptions appearing on the  Title
Commitment, and any matters noted on the Survey, and not  objected
to  by  Purchaser in accordance with this Subsection 3.01(b) shall
be deemed "Permitted Title Exceptions".

          (c)  If Purchaser notifies Seller of Purchaser's Objections
pursuant to  a  Title  Notice delivered in accordance with Section
3.01(b) above, Seller shall have no obligation to remove any of Purchaser's
Objections (other than Liens (as hereinafter defined)). Seller shall
respond  in writing to any Title Notice timely given by  Purchaser
within  five (5) business days of Seller's receipt of  such  Title
Notice, disclosing whether or not Seller will attempt to cure  any
Purchaser's Objections, provided that Seller's decision to attempt
to cure shall not be deemed to obligate Seller to accomplish same.
Seller's failure to remove Purchaser's Objections (other than Liens)
shall not be a default on Seller's part, but shall be an inability
to perform within the meaning of Section 12.01(b). If Seller has not
removed  Purchaser's  Objections as of the Closing  Date  (despite
Seller's  reasonable efforts to do so, which shall not include  an
obligation  on  the  part  of Seller to  institute  litigation  or
otherwise incur more than diminimis costs, except for the removal of
Liens and other monetary liens up to the Cure Limit (as such terms
are defined below)), Seller shall so notify Purchaser in writing. If
such written notice is given by Seller, Purchaser shall either elect
(i) to terminate this Agreement by giving written notice to Seller,
in  which event the provisions of Section 12.01(b) shall apply, or
(ii) to perform all of Purchaser's obligations hereunder and accept
title to the Property subject to such uncured Purchaser's Objections
without any abatement of the Purchase Price or liability on the part
of Seller. Purchaser shall make its election between clauses (i) and
(ii)  of  the immediately preceding sentence by written notice  to
Seller given not later than 5:00 P.M. Eastern Standard time on the
third (3rd) business day after the giving of the written notice by
Seller that it has not cured any Purchaser's Objection, but in  no
event later than the Closing Date. If Purchaser shall fail to give
such written notice as aforesaid, it shall be deemed to have elected
clause (i) above.

          (d)  Notwithstanding the foregoing provisions of this Section
3.01 to the contrary, Seller, at Seller's sole cost and expense, shall be
required to remove or to cause to be removed of record at or prior
to  the Closing the following (collectively, the "Liens"): (i) the
lien of any mortgage which encumbers the Property as of the date of
the  Closing; (ii) any liens which Seller places or allows  to  be
placed on the Property other than liens placed on the Property  by
Garden  Ridge unless liens to which Seller did consent,  including
mechanics  liens  and  judgments; and (iii)  any  other  liens  or
encumbrances against the Property which can be cured by the payment
of money in liquidated amounts not exceeding the sum of $100,000.00
(the  "Cure  Limit").  If Seller elects not  to  remove  liens  or
encumbrances which exceed the Cure Limit, as specified  in  clause
(iii) of the preceding sentence, Purchaser may nevertheless accept
such title as Seller can convey, in which event Purchaser shall be
entitled to a reduction in the Purchase Price
in an amount equal to the Cure Limit.

                              ARTICLE 4

                       INSPECTIONS; APPROVALS

     SECTION 4.01. (a) Commencing upon the full execution of  this
Agreement  by all parties hereto and continuing until the  Closing
or  earlier termination of this Agreement, Seller agrees to  allow
Purchaser  or  Purchaser's  agents or  representatives  reasonable
access  to  the Property for purposes of any visual,  physical  or
environmental inspection of the Property and review of the  Lease,
Service   Contracts  (as  such  terms  are  hereinafter  defined),
operating   data,  expenses  and  other  matters.  Any   and   all
inspections shall be at Purchaser's expense.

          (b)  Purchaser  agrees that, in making any  physical  or
environmental   inspections  of  the   Property,   Purchaser   and
Purchaser's  agents (i) will not unreasonably interfere  with  the
activities  of  Seller  or  any  persons  occupying  or  providing
services at the Property, (ii) will not reveal to any third  party
not  approved by Seller the results of its inspections (other than
to  Purchaser's legal counsel, lenders and advisors, if any),  and
(iii)  will  restore promptly any physical damage  caused  by  the
inspections. Purchaser shall give Seller at least twenty-four (24)
hours  prior  notice of its intention to conduct any  inspections.
Purchaser  agrees to indemnify, defend, and hold  Seller  and  its
shareholders,  directors, employees, tenants and agents  free  and
harmless from any and all loss, injury, damage, claim, lien,  cost
or  expense, including attorneys' fees and disbursements,  arising
out  of  a  breach  of the foregoing agreements  by  Purchaser  in
connection with the inspection of the Property.

     (c)  Seller shall deliver the following items relating to the
Property to Purchaser within two (2) business days after full
execution of this Agreement:

          (i)  The Final Assumption Order (as defined in the Second
Amendment to the Lease, dated as of August 11, 2004).

          (ii) Annual operating statements and capital expenditures for
calendar year 2004 and for calendar year 2005 and 2006 to the extent
obtainable by Seller.

          (iii) Tenant sales history (minimum of previous three years)
for Garden Ridge if Garden Ridge is required to report sales in Seller's
possession;

          (iv) Copies of current real estate tax assessment notices and bills
and all Service Contracts;

          (v)  A list of leasing commissions and tenant improvements to be
discharged;

          (vi) Copies of the most recent survey and title report and the
existing owner's title insurance policy;

          (vii)     Copies of all available environmental and physical
condition reports and notices (including all Phase I, Phase II, ADA
and soil reports for the Property, as available), in each case, to
the extent in Seller's possession;

          (viii)    A copy of all "as built" plans, specifications, permits
and entitlements for the Property in Seller's possession;

          (ix) A description of all pending or existing litigation involving
the Property, if any; and

          (x)  Common area maintenance and real estate tax recovery
reconciliation for the most recent year for Garden Ridge.

          Seller will permit Purchaser and its representatives to
meet with representatives and agents of Seller to discuss any and
all aspects of the Property.

          (d) On or prior to 5:00 p.m. (Eastern Standard time)  on
the  date  that is thirty (30) days following the mutual execution
of  this  Agreement by Seller and Purchaser (the period commencing
on  the  date of this Agreement and ending on such date  shall  be
hereinafter referred to as the "Approval Period"), Purchaser shall
determine,  in  its  sole  and absolute  discretion,  whether  the
Property  is  a  suitable investment for its purposes.  If,  as  a
result  of  its various investigations, Purchaser determines  that
the  Property  is  not  a suitable investment  for  its  purposes,
Purchaser  shall  have the right, exercisable in Purchaser's  sole
and  absolute  discretion, by giving Seller  written  notice  (the
"Termination  Notice")  on or prior to the  end  of  the  Approval
Period  to  terminate its obligation to purchase the Property.  If
the  Termination  Notice is timely given, Purchaser  shall  direct
Escrow Agent to return the Downpayment to Purchaser and, upon such
return,  this  Agreement  shall be deemed  terminated  and  of  no
further  force  and effect and neither Seller nor Purchaser  shall
have  any  further liability or obligation to the other hereunder,
except  for  such  liabilities or obligations as are  specifically
stated  to  survive the termination of this Agreement. Purchaser's
failure  to deliver the Termination Notice on or prior to the  end
of  the  Approval  Period  shall be  deemed  to  be  a  waiver  of
Purchaser's  right to terminate this Agreement  pursuant  to  this
Subsection (d). Notwithstanding the foregoing, Purchaser's failure
to  deliver to Escrow Agent the Additional Deposit prior  to  5:00
p.m.  (Eastern  Standard time) on the last  day  of  the  Approval
Period, shall be deemed to be the timely delivery by Purchaser  of
the  Termination  Notice,  in  which  case  this  Agreement  shall
terminate as aforesaid.

                              ARTICLE 5

                   REPRESENTATIONS AND WARRANTIES

     SECTION 5.01. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller
hereby  represents  and  warrants to  Purchaser,  subject  to  the
limitations  set  forth in this Article 5, that  as  of  the  date
hereof:

          (a) (i)  AEI XVIII is a limited partnership that has
     been duly formed and is validly existing and in good standing
     under the laws of the State of Minnesota;

               (ii)AEI XXII is a limited partnership that has
     been duly fonned and is validly existing and in good standing
     under the laws of the State of Minnesota; and

                (iii)  AEI  24 is a limited liability company  that
           has been duly formed and is validly existing and in good
           standing under the laws of the State of Delaware.

           (b)  This Agreement and the consummation of the transactions
      contemplated hereby have been duly authorized by all necessary
      action on the part of each tenant in common comprising Seller and,
      upon the assumption that this Agreement constitutes a legal, valid
      and binding obligation of Purchaser, this Agreement constitutes a
      legal,  valid and binding obligation of each tenant in common
      comprising Seller.

           (c)  The execution and delivery of this Agreement and the
      consummation of the transactions contemplated hereby by Seller do
      not  (i) violate or conflict with the certificates of limited
      partnership, certificate of formation, partnership agreements or
      operating agreement of any tenant in common comprising Seller that
      is an entity, (ii) violate or conflict with any judgment, decree or
      order of any court applicable to or affecting Seller, (iii) breach
      the provisions of, or constitute a default under, any contract,
      agreement, instrument or obligation to which Seller is a party or by
      which Seller is bound and which relates to the Property which will
      remain uncured as of Closing, or (iv) violate or conflict with any
      law applicable to Seller.

           (d)  None of the tenants in common comprising Seller is a
      "foreign person" within the meaning of section 1445 of the Internal
      Revenue Code of 1986, as amended (the "Code").

           (e)  No petition in bankruptcy (voluntary or otherwise),
      assignment for the benefit of creditors, or petition seeking
      reorganization or arrangement or other action under Federal or State
      bankruptcy laws is  pending against or contemplated by any tenant in
      common  comprising Seller.

           (f)  There are no occupancy rights (written or oral), leases or
tenancies  presently affecting the Property or any portion  thereof
other  than  pursuant to the Lease. Notwithstanding the  foregoing,
Seller  makes  no representation as to any subleases,  licenses  or
other  occupancy  rights presently affecting the  Property  or  any
portion  thereof entered into by Garden Ridge and a third party  in
respect of which Seller has not granted its consent, however, Seller
has no knowledge of any such subleases, licenses or other occupancy
rights.  Seller represents and wan-ants to Purchaser the  following
with respect to the Lease:

               (i)  A true, correct and complete copy of the Lease is
      attached hereto as Exhibit A; the Lease is in full force and effect
      and has not been modified, supplemented, or amended in any way,
      except as attached on Exhibit A annexed hereto; and the Lease
      represents the  entire agreement between Seller, as landlord
      thereunder, and Garden  Ridge;

               (ii) The amount of fixed monthly rent is $61,100;

               (iii)     To the best of Seller's knowledge, all work to be
      performed for Garden Ridge under the Lease, if any, has been
      performed as required and has been

accepted by Garden Ridge; and there are no outstanding
payments, free rent, or other payments, credits,
allowances or abatements due Garden Ridge;

          (iv) Neither Seller, as landlord, nor, to Seller's knowledge,
Garden Ridge, is in default, and, to Seller's knowledge, Garden
Ridge has no offset, defense, deduction or claim against Seller,
as landlord; and

          (v)  Garden Ridge has no right or option to purchase all or any
part of the Property or to occupy any additional space at the
Property.

     (g)  There are no service, maintenance and supply contracts
affecting  the  Property in effect on the  date  hereof  (the
"Service Contracts") except those Service Contracts entered into
between Garden Ridge and its third party vendors. Seller is not
a party to nor bound by such Service Contracts.

     (h)  Annexed hereto as Schedule 5.01(h) is a complete list of
all  brokerage,  leasing or listing agreements (collectively,
"Brokerage Agreements") affecting the Property or  any  space
covered by the Lease in effect on the date hereof. Seller has
delivered  or  made available to Purchaser true and  complete
copies of each of the Brokerage Agreements.

     (i)  Seller has not granted to any person or entity (other than
Purchaser) a right of first refusal option or other right  to
acquire the Property or any interest therein, and, to Seller's
knowledge, no such rights exist except as may be set forth in
the documents of record reflected in the Title Commitment.

     (j)  Seller has not received any written notice of special
assessment against the Land for public improvements constructed
prior to the date of this Agreement that will remain unpaid at
Closing.

     (k)  There are no rental delinquencies existing under the Lease
as of the close of the month immediately preceding the date of
this Agreement.

     (l)  Seller  has  not received written notice  from  any
Governmental Authority (defined below), of: (i)  any  pending
or threatened condemnation proceedings affecting the Property
or  any  part  thereof; or (ii) except as  may  disclosed  by
Purchaser's  Title  Commitment  and  the  related   municipal
searches  received  in  connection  therewith,  any  material
violations of any laws, rules or regulations relating to  the
use  or  operation  of  the Property. To Seller's  knowledge,
there  is  not  now  pending nor is  there  any  proposed  or
threatened proceeding for the rezoning of the Property or any
portion thereof.

     (m)  Except  as set forth on Schedule 5.01(m)  attached
hereto  and for commissions due or that may become  due  with
respect to renewal or expansion options that may be exercised
following  the  date  hereof, no  commission,  fee  or  other
compensation is payable with respect to the Lease  and  there
is  no  currently existing obligation, regardless of  whether
such  obligation is contingent on the passage of time or  the
occurrence of any event or both, to pay, either currently  or
in  the  future,  any  leasing  commissions,  fees  or  other
compensation in respect of renewals and extensions of the

     Lease  or the expansion of the premises covered by the Lease.
     There  does  not currently exist any exclusive or  continuing
     leasing  or  brokerage agreements as  to  any  of  the  space
     covered  by  the  Lease that will become  the  obligation  of
     Purchaser following Closing.

          (n)  Except as described in Schedule 5.01(n) attached hereto, no
     proceeding, suit or litigation against Seller relating to the Property
     or any part thereof is pending or, to Seller's knowledge, threatened
     in any court or other tribunal or before any govermnental authority.

          (o)  Since August 15, 2003, the date of the existing Phase I
     environmental report for the Property prepared by HBC Terracon, a copy
     of which has been delivered by Seller to Purchaser, Seller has not
     ordered, and is not in possession, of any subsequent environmental
     reports regarding the Property.

          (p)  Seller does not own any of the fixtures, systems, machinery,
     equipment and items of tangible and intangible personal property
     attached to or used in connection with the Land or the Improvements.

     SECTION 5.02. PURCHASER'S REPRESENTATIONS AND WARRANTIES.
Purchaser hereby represents and warrants to Seller that:

          (a)  Purchaser is a limited liability company that has been duly
     formed and is validly existing and in good standing under the laws of
     the State of Florida.

          (b)  This Agreement and the consummation of the transactions
     contemplated hereby have been duly authorized by all necessary action
     on the part of Purchaser and, upon the assumption that this Agreement
     constitutes a legal, valid and binding obligation of Seller, this
     Agreement constitutes a legal, valid and binding obligation of
     Purchaser, enforceable against Purchaser in accordance with its terms.

          (c)  The execution and delivery of this Agreement and the
     consummation of the transactions contemplated hereby do not and will
     not (i) violate or conflict with the operating agreement or certificate
     of formation of Purchaser, (ii) violate or conflict with any judgment,
     decree or order of any court applicable to or affecting Purchaser,
     (iii) breach the provisions of, or constitute a default under, any
     contract, agreement, instrument or obligation to which Purchaser is a
     party or by which Purchaser is bound, which remains uncured as of
     Closing, or (iv) violate or conflict with any law or governmental
     regulation or permit applicable to Purchaser.

          (d)  No petition in bankruptcy (voluntary or otherwise), assignment
     for the benefit of creditors, or petition seeking reorganization or
     arrangement or other action under Federal or State bankruptcy laws is
     pending against or contemplated by Purchaser.

     SECTION 5.03.  [Intentionally omitted]

     SECTION 5.04. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. (a)
The  only  representations, warranties and  agreements  of  Seller
hereunder  that  will  survive the  Closing  are  those  that  are
specifically  stated  herein to survive. The  representations  and
warranties of Seller

 contained in Section 5.01 will survive the Closing, provided that
 any claim based upon any alleged breach thereof must be asserted
 in writing within twelve (12) months after the Closing.

           (b)  The only representations, warranties and agreements
 of  Purchaser  hereunder that will survive the Closing  are  those
 that   are   specifically   stated   herein   to   survive.    The
 representations and warranties of Purchaser contained  in  Section
 5.02  will survive the Closing, provided that any claim based upon
 any  alleged  breach thereof must be asserted  in  writing  within
 twelve (12) months after the Closing.

           SECTION  5.05.  NO OTHER REPRESENTATIONS OR  WARRANTIES.
 (a)   Purchaser  acknowledges  that  a  material  term   of   this
 transaction for Seller is for Purchaser to purchase and accept the
 Property  on  the  Closing Date "as is" in its present  condition,
 based  on  its  own  due diligence review and  inspection  of  the
 physical and environmental condition of the Property (and  subject
 to  Seller's  representations  and warranties  contained  in  this
 Agreement  and  in  the  documents to be delivered  by  Seller  at
 Closing   (the   "Closing  Documents"))  and  all  other   matters
 pertaining  to  the  Property. Accordingly, Purchaser  represents,
 warrants  and agrees that, except as expressly set forth  in  this
 Agreement or in the Closing Documents, neither Seller nor  any  of
 the  employees, agents or attorneys of Seller have made any verbal
 or  written  representations, warranties, promises  or  guaranties
 whatsoever  to  Purchaser, whether express  or  implied,  and,  in
 particular, that no such representations, warranties, promises  or
 guaranties  have  been  made  with  respect  to  the  physical  or
 environmental condition or operation of the Property,  the  actual
 or  projected revenue and expenses of the Property, the compliance
 by the Property with applicable zoning, building, environmental or
 other  laws,  regulations  and rules,  the  quantity,  quality  or
 condition  of  the  articles  of personal  property  and  fixtures
 included  in  the  transactions contemplated hereby,  the  use  or
 occupancy of the Property or any part thereof or any other  matter
 or  thing affecting or related to the Property or the transactions
 contemplated  hereby, except as, and solely to the extent,  herein
 or in the Closing Documents specifically set forth.

      (b)   Subject  to  Seller's  representations  and  warranties
 contained  in Section 5.01 hereof and elsewhere in this  Agreement
 or  in  the  Closing  Documents, Purchaser agrees  to  accept  the
 Property  "as is" in its present condition, subject to  reasonable
 use,  wear, tear and natural deterioration of the Property between
 the  date  hereof and the Closing Date, and Seller  shall  not  be
 liable for any latent or patent defects in the Property.

                               ARTICLE 6

                          COVENANTS OF SELLER

      SECTION  6.01.  COVENANTS OF SELLER. (a) From and  after  the
 date   of  this  Agreement  until  the  Closing  Date  or  earlier
 termination of this Agreement, Seller shall (i) keep, maintain and
 operate the Property in a businesslike manner and substantially in
 accordance  with  Seller's  past practices  with  respect  to  the
 Property,  and to the extent required of Seller under  the  Lease,
 make  any and all repairs and replacements reasonably required  to
 deliver  the  Property  to Purchaser at  Closing  in  its  present
 condition,  normal wear and tear and damage by casualty  excepted;
 (ii)  not further mortgage or voluntarily encumber all or any part
 of  the Property; (iii) promptly furnish Purchaser with copies  of
 all notices received by Seller relating to the Property

or the Lease; (iv) not receive or collect any rents from Garden
Ridge for a period of more than one month in advance; and (v) not
further pledge, encumber or assign the Lease.

     (b)  Within  ten  (10) days after the date of this  Agreement,
Seller  shall deliver to Purchaser an estoppel certificate  in  the
form  attached  hereto  as  Schedule  8.02(b)  completed  with  all
applicable  factual  information for Garden Ridge  for  Purchaser's
review  and approval prior to sending it to Garden Ridge.  Promptly
following  the  end of the Approval Period, Seller  shall  send  to
Garden  Ridge  such approved estoppel certificate for execution  by
Garden  Ridge.  Seller  shall, upon receipt,  promptly  deliver  to
Purchaser  a  copy of all correspondence or other matters  received
by  Seller  in connection with such estoppel certificate and  shall
use  its  good  faith  efforts  to assist  Purchaser  in  obtaining
delivery of all such certificates.

     (d)  From and after the date that is three (3) days prior to the end
of  the  Approval Period and continuing to the Closing Date, Seller
shall not institute any proceeding or application for a reduction in
the  real  estate tax assessment of the Property for any  tax  year
without the prior written consent of Purchaser, which consent shall
not be unreasonably withheld, conditioned or delayed.

     (e)  Seller acknowledges that Purchaser will be seeking financing in
connection with its acquisition of the Property, and Seller agrees to
cooperate with Purchaser in its efforts to obtain a subordination, non-
disturbance and attornment agreement ("SNDA") from Garden Ridge, in
the form and to the extent requested by Purchaser's lender. Purchaser
shall  prepare  and deliver to Seller such SNDA and  Seller  shall,
promptly following receipt thereof, deliver it to Garden Ridge.

     SECTION   6.02.  CERTAIN  MATTERS.  Notwithstanding   anything
contained  in  this  Agreement to the contrary,  Seller  shall  not
enter  into  any new leases for all or any portion of the  Property
nor  modify,  amend,  supplement, extend, renew  or  terminate  the
Lease  or  consent  to  the surrender or assignment  of  the  Lease
(unless  such  action  is  required by the  terms  of  the  Lease),
without  obtaining Purchaser's prior written consent, which consent
may  be  withheld  by  Purchaser  in Purchaser's  sole  discretion,
provided  that Seller may enter into new service contracts  without
Purchaser's   consent  so  long  as  such  service  contracts   are
terminable  without penalty upon not more than  thirty  (30)  days'
written notice.

                               ARTICLE 7

                        [INTENTIONALLY OMITTED]

                               ARTICLE 8

                   CLOSING CONDITIONS AND DELIVERIES

     SECTION   8.01.   CONDITIONS  TO  SELLER'S  OBLIGATIONS.   The
obligation of Seller to transfer the Property to Purchaser  and  to
otherwise consummate the transactions contemplated hereby shall  be
subject  to the satisfaction of the following conditions  precedent
on and as of the Closing Date:

           (a)  all representations and warranties of Purchaser contained in
      this Agreement shall have been true when made and shall be true in
      all material respects at and as of the Closing Date as if such
      representations and warranties were made at and as of the Closing
      Date, and Purchaser shall have performed and complied in all material
      respects with all covenants, agreements and conditions required by
      this Agreement to be performed or complied with by Purchaser prior to
      or at the Closing. At Closing, Seller shall execute and deliver to
      Purchaser  a Seller's Closing Certificate ("Seller's  Closing
      Certificate") in the form of Schedule 8.01(a) attached hereto,
      certifying to Purchaser that all such representations and warranties
      are true and correct in all material respects on and as of, the
      Closing Date, with only such exceptions therein as are necessary to
      reflect facts or circumstances arising between the date of this
      Agreement  and  the  Closing Date that would  make  any  such
      representation or warranty untrue or incorrect in all material
      respects on and as of the Closing Date.

           (b)  Seller shall have received (directly or by delivery into
      escrow with the Title Company) all of Purchaser's Closing Documents
      (as set forth in Section 8.04 below).

           (c)  Seller shall have received payment of the Purchase Price in
      accordance with Section 1.02 and such other amounts as are due Seller
      hereunder.

      SECTION   8.02.   CONDITIONS   TO  PURCHASER'S   OBLIGATIONS.
 Purchaser's obligation to pay the Purchase Price, to purchase  the
 Property  and  otherwise consummate the transactions  contemplated
 hereby  shall  be  subject to the satisfaction  of  the  following
 conditions precedent on and as of the Closing Date:

           (a)  subject to Section 5.04 hereof, all representations and
      warranties of Seller contained in this Agreement shall have been true
      in all material respects when made and shall be true in all material
      respects at and as of the Closing Date as if such representations and
      warranties were made at and as of the Closing Date, and Seller shall
      have performed and complied in all material respects with all
      covenants, agreements and conditions required by this Agreement to be
      performed or complied with by Seller prior to or at the Closing Date.
      At  Closing, Purchaser shall execute and deliver to Seller  a
      Purchaser's Closing Certificate ("Purchaser's Closing Certificate")
      in the form of Schedule 8.02(a) attached hereto, certifying to Seller
      that all such representations and warranties are true and correct in
      all material respects on and as of the Closing Date, with only such
      exceptions therein as are necessary to reflect facts or circumstances
      arising between the date of this Agreement and the Closing Date that
      would make any such representation or warranty untrue or incorrect in
      all material respects on and as of the Closing Date.

           (b)  Purchaser shall have received an estoppel certificate,
      dated not more than thirty (30) days prior to the Closing Date,
      substantially in the form of Schedule 8.02(b) hereto or in the form
      required under the Lease, if different from the form attached as
      Schedule 8.02(b), executed  by  Garden Ridge, showing (x) no material
      economic discrepancies from the terms of the Lease as set forth in
      the Lease delivered to Purchaser, (y) no delinquencies regarding the
      monetary obligations and material non-monetary

      obligations of Garden Ridge under the Lease, in each case
      beyond applicable notice and cure periods, and (z) no uncured
      material defaults of the landlord under the Lease.

           (c)  Seller shall have received and provided to Purchaser the SNDA
      from Garden Ridge with respect to the Lease in a form acceptable to
      Purchaser's lender.

           (d)  Purchaser shall have received all of Seller's Closing
      Documents (as set forth in Section 8.03 below).

           (e)  The Title Company shall have agreed to insure at standard
      rates  fee simple title to the Property in an amount at least equal
      to the  Purchase Price and subject only to the Permitted Title
      Exceptions.

      SECTION  8.03.  SELLER'S CLOSING DOCUMENTS. At  the  Closing,
 Seller  shall  deliver to Purchaser the following  documents  duly
 executed and, where appropriate, acknowledged by Seller,  and  the
 following other items (the documents and other items described  in
 this  Section  8.03 being collectively referred to herein  as  the
 "Seller's Closing Documents"):

           (a)  a special warranty deed ("Deed") for the Land, in the form
      annexed hereto as Schedule 8.03(a), together with customary title
      affidavits;

           (b)  intentionally omitted;

           (c)  an Assignment and Assumption of Lease in substantially the form
      annexed hereto as Schedule 8.03(c), whereby Seller will assign and
      Purchaser shall assume all of Seller's right, title and interest,
      including all the obligations of Seller, in, to and under the Lease;

           (d)  to the extent the same are in Seller's possession, a complete
      set of keys for the Property;

           (e)  Seller's Closing Certificate;

           (f)  original, executed counterparts of the leases for the Property
      or, if unavailable, photocopies thereof certified by Seller as true
      and complete photocopies thereof;

           (g)  an affidavit of Seller pursuant to Section 1445(b)(2) of the
      Code, stating that Seller is not a foreign person within the meaning
      of such Section;

           (h)  written notice from Seller to Garden Ridge stating that the
      Property has been sold to Purchaser and that Garden Ridge's security
      deposits (if any) in Seller's possession have been transferred to
      Purchaser, and directing Garden Ridge to make future rental payments
      to Purchaser at the address designated by Purchaser;

           (i)  a closing statement setting forth adjustments provided for
      hereunder;

           (j) all books, records, correspondence files and
     similar materials as are in Seller's possession, unless
     previously delivered by Seller to Purchaser;

          (k) all equipment operating manuals and all equipment
     warranties and equipment guarantees, if any, in Seller's
     possession;

          (1)  all certificates of occupancy, permits, warranties,
     entitlements and plans and specifications, if any, related to
     the Property to the extent that same are in the possession of
     Seller or its property manager;

          (in)  all  security  deposits (if any  of  the  security
     deposits  are in the form of letters of credit, Seller  shall
     deliver  the  original letters of credit to Purchaser,  along
     with completed assignment documentation necessary to transfer
     the  letters of credit to Purchaser at no cost to Purchaser);
     and

           (n)  such other instruments and documents, in form  and
     substance reasonably satisfactory to Seller, Purchaser or the
     Title  Company, as may be reasonably necessary to effect  the
     Closing.

     SECTION  8.04. PURCHASER'S CLOSING DOCUMENTS. At the Closing,
Purchaser  shall  deliver to Seller the following  documents  duly
executed  and,  where applicable, acknowledged by  Purchaser  (the
documents  described  in  this  Section  8.04  being  collectively
referred to herein as the "Purchaser's Closing Documents"):

          (a)  counterparts of the documents described in Sections 8.03(c);

          (b)  Purchaser's Closing Certificate; and

          (c)  such other instruments and documents, in form and substance
     reasonably satisfactory to Seller and Purchaser, as may be reasonably
     necessary to effect the Closing.

     SECTION  8.05. CONDITIONS GENERALLY. The foregoing conditions
are  for the benefit only of the party for whom they are specified
to  be  conditions  precedent and such  party  may,  in  its  sole
discretion,  waive any or all of such conditions and  close  title
under  this  Agreement without any increase in,  abatement  of  or
credit against the Purchase Price.

                              ARTICLE 9

                 APPORTIONMENTS AND CLOSING MATTERS

     SECTION 9.01. APPORTIONMENTS AND PAYMENTS. (a) The following
items shall be apportioned at the Closing as of midnight on the
day immediately preceding the Closing Date:

          (i)  Rents and all other charges (including common area maintenance
and other cost reimbursement payments) payable under the Lease.

          (ii) All charges and payments for utility services which are not
charged directly to Garden Ridge; provided that if there is no meter
or if the current bill for any of such

 utilities  has  not  been issued prior to the  Closing  Date,  the
 charges therefor shall be adjusted at the Closing on the basis  of
 the  charges for the prior period for which bills were issued  and
 shall  be  further adjusted when the bills for the current  period
 are issued.

           (iii) All other operating income and expense from the
 Property customarily prorated between a purchaser and seller in
 the areas in which the Property is located.

 If  any  of  the  foregoing cannot be apportioned at  the  Closing
 because  of  the  unavailability of the amounts which  are  to  be
 apportioned, such items shall be estimated using the  most  recent
 data  available  and  adjusted as soon as  practicable  after  the
 Closing Date.

      (b)  If any refund of real property taxes or assessments, water rates
 and charges or sewer taxes and rents shall be made after the Closing,
 the same shall be held in trust by Seller or Purchaser, as the case
 may be, and shall first be applied to the unreimbursed costs incurred
 in  obtaining the same, and the balance, if any, shall be paid  to
 Seller (for the period prior to the Closing Date) and to Purchaser
 (for the period commencing with the Closing Date).

      (c)  [Intentionally omitted]

      (d)  The amount of all net apportionments hereinabove provided for in
 this  Section  9.01 which is to be made at the  Closing  shall  be
 credited by the Title Company and/or Escrow Agent to the appropriate
 party.

      (e)  If any proceeding for certiorari or other proceeding  to
 determine the assessed value of the Property or the real  property
 taxes payable with respect to the Property for any fiscal period of a
 taxing authority which includes or precedes the Closing Date shall
 have been commenced prior to the date hereof and be continuing ,as of
 the Closing Date, Seller shall be entitled to control the prosecution
 of  such proceeding or proceedings to completion and to settle  or
 compromise any claim therein, with the consent of Purchaser, which
 consent  shall not be unreasonably withheld or delayed.  Purchaser
 agrees to cooperate with Seller and to execute any and all documents
 reasonably requested by Seller in furtherance of the foregoing.

      (f)  (i) Within sixty (60) days following the Closing Date, Seller
 shall  deliver  to  Purchaser  a  statement  detailing  the   cost
 reimbursement payments and rents, if any, payable by Garden  Ridge
 under  the  Lease  that  are expressed as a  fixed  percentage  or
 percentages  of  the receipts of sales of the tenant  ("Percentage
 Rents"), in each case, which were billed to and collected from Garden
 Ridge under the Lease through the period ending on the Closing Date.
 Within a reasonable time after Purchaser has made its calculations of
 the  final  cost reimbursement payments and Percentage  Rents,  in
 respect  of  the  fiscal periods which include the  Closing  Date,
 Purchaser shall prepare and submit to Seller a fmal calculation (the
 "Final  Report") of the amounts and other items to be  apportioned
 pursuant to this Agreement as of the Closing Date. Seller shall raise
 any  objections it has to the Final Report within thirty (30) days
 after  the submission thereof by written notice to Purchaser given
 within said thirty (30) day period and stating in reasonable detail
 Seller's  objections,  and Purchaser shall allow  Seller  and  its
 authorized representatives reasonable access during business hours to
 its books and records pertinent to the Properties to permit Seller to
 review the Final Report and to ascertain its accuracy.

           (ii)  If Seller shall raise any objections to the  Final
 Report as provided above, the parties shall meet (by telephone  or
 otherwise)  within  ten  (10) days after  submission  of  Seller's
 notice  thereof  and  attempt to resolve such objections.  If  any
 objections are not resolved within said ten (10) day period,  such
 objections  may  thereafter be submitted  by  the  parties  to  an
 independent real estate or accounting firm mutually acceptable  to
 the  parties (or if the parties cannot agree on such a firm within
 five  (5)  days thereafter, to the real estate consulting practice
 of  any  "big  four"  accounting  firm  selected  by  Seller)  for
 determination,  and such firm shall be instructed  to  render  its
 determination as soon as is reasonably practicable,  but,  in  any
 event,  within  fifteen (15) days of submission of  the  pertinent
 information.  The  determination of such firm shall  be  fmal  and
 conclusive  on the parties and judgment may be entered thereon  in
 any  court  of  competent jurisdiction. The rules of the  American
 Arbitration  Association  applicable  to  commercial  arbitrations
 shall apply to ANY such arbitration.

           (iii)  The  Final  Report shall  be  deemed  amended  by
 agreement  of  the  parties or determination of  such  firm,  and,
 within ten (10) days after such agreement or determination (or, if
 Seller raises no objections to the Final Report, the expiration of
 the  thirty (30) day objection period), Purchaser shall  bill  the
 tenants  therefore.  Thereafter,  Seller  promptly  shall  pay  to
 Purchaser, or Purchaser promptly shall pay to Seller, as the  case
 may  be,  the amount determined to be due from such party  to  the
 other  in  accordance with this Section 9.01 based upon the  Final
 Report, as the same may have been amended.

           (iv) If a determination is required, the parties shall
 bear the fees and expenses of the firm handling such determination
 equally.

      SECTION 9.02. Closing Matters. The following items shall be
 provided for at the Closing:

      (a) No insurance policies of Seller are to be transferred  to
 Purchaser, and no apportionment of the premiums therefor shall  be
 made.  Purchaser  acknowledges that it shall  be  responsible  for
 securing its own insurance for the Property.

     (b)  Seller will pay the following costs of closing this
     transaction:

          (i)  One-half (1/2) of any escrow fees and all of the documentary
     stamps and recording fees;

          (ii) The fees and disbursements of Seller's counsel and any other
     expense incurred by Seller in closing this transaction which is not
     payable by Purchaser hereunder;

          (iii)     One-half (1/2) the cost of a standard form title insurance
     policy (without extended coverage or special endorsements) in the
     amount of the Purchase Price; and

          (v)  Any realty transfer taxes.

       (c) Purchaser will pay the following costs of closing
           this transaction:

          (i)  One-half (1/2) the cost of a standard form title insurance
     policy (without extended coverage or special endorsements) in the
     amount of the Purchase Price and the cost of title insurance in
     excess of the standard form policy required to be delivered by Seller
     as aforesaid,

          (ii) The cost of an update of the Survey, if any, which shall be
     required by Purchaser's lender;

          (iii)     The fees and disbursements of its counsel, inspecting
     architect and engineer and any other consultants and advisors, if
     any;

          (iv) One-half (1/2) of any escrow fees;

          (v)  Any sales or use taxes relating to the transfer of personal
     property to Purchaser; and

          (vi) Any other expense(s) incurred by Purchaser or its
     representative(s) in inspecting or evaluating the Property or closing
     this transaction.

     (d)  Seller shall credit Purchaser with all security deposits
held by Seller in respect of the Lease and any prepaid rents or
other prepaid items.

     SECTION 9.03. Survival. The obligations of the parties under
this Article 9 shall survive the Closing.

                             ARTICLE 10

               CONDEMNATION AND DESTRUCTION; INSURANCE

     SECTION  10.01. Condemnation. If, prior to the Closing  Date,
Seller shall receive notice of a proposed taking of any portion of
the  Property  in  an  eminent domain or condemnation  proceeding,
Seller  shall  notify  Purchaser  of  such  fact  promptly   after
obtaining knowledge thereof and Purchaser shall have the right  to
terminate this Agreement by giving notice to Seller not later than
ten  (10)  days after the giving of Seller's notice. If  Purchaser
elects to terminate this Agreement as aforesaid, the provisions of
Section  12.01(b)  shall apply. If Purchaser shall  not  elect  to
terminate this Agreement as aforesaid, there shall be no abatement
of  the  Purchase  Price  and  Seller shall  assign  to  Purchaser
(without  recourse) at the Closing the rights  of  Seller  to  the
awards, if any, for the taking, and Purchaser shall be entitled to
receive  and  keep all awards for the taking of such  Property  or
such portion thereof

     SECTION 10.02. Destruction. If, prior to the Closing Date,  a
material  part (as defined in this Section 10.02) of the  Property
is  destroyed  or damaged by fire or other casualty, Seller  shall
promptly  notify Purchaser of such fact and Purchaser  shall  have
the  right to terminate this Agreement by giving notice to  Seller
not  later than ten (10) days after the giving of Seller's notice.
For  the purposes hereof, a "material part" of the Property  shall
mean  (i)  a part of the Property the cost of restoring which,  as
estimated  by  Seller,  exceeds  Five  Hundred  Thousand   Dollars
($500,000), or (ii) fifteen percent (15%) or more of the  leasable
area  of  the  Property is damaged by fire or other  casualty.  If
Purchaser elects to terminate this Agreement as aforesaid,

the provisions of Section 12.01(b) shall apply. If Purchaser shall
not elect to terminate this Agreement as aforesaid, or if there is
damage  to or destruction of an "immaterial  part" (i.e., anything
other  than  a  material part) of the Property by  fire  or  other
casualty,  there shall be no abatement of the Purchase  Price  and
Seller  shall  pay to Purchaser the amount of any  deductible  and
assign  to Purchaser (without recourse) at the Closing the  rights
of  Seller  to  the  proceeds, if any,  under  Seller's  insurance
policies  covering  the Property with respect to  such  damage  or
destruction, and Purchaser shall be entitled to receive  and  keep
any monies received from such insurance policies.

     SECTION  10.03.  Insurance. From the date  hereof  until  the
Closing  Date, Seller shall continue to carry, and shall  keep  in
full  force  and  effect, casualty and all other insurance  in  an
amount  not  less  than, with a deductible not greater  than,  and
affording  substantially  the  same  coverage  as,  the  insurance
policies covering the Property as of the date hereof.

                             ARTICLE 11

                               BROKER

     SECTION  11.01. Broker. (a) Purchaser represents and warrants
to  Seller  that  it  has not hired, retained or  dealt  with  any
broker, finder, consultant or intermediary in connection with  the
negotiation,  execution  or delivery  of  this  Agreement  or  the
transactions  contemplated hereby other  than  Westminster  Realty
Company  ("Broker"). Purchaser shall be responsible for  all  fees
and/or  commissions  payable to Broker  in  connection  with  this
transaction.  Purchaser  will indemnify Seller  against  liability
arising  out  of  any  breach of the aforesaid representation  and
warranty.

     (b)  Seller represents and warrants to Purchaser that it has not
hired,  retained or dealt with any broker, finder,  consultant  or
intermediary  in  connection with the  negotiation,  execution  or
delivery of this Agreement or the transactions contemplated hereby
other than Broker. Seller will indemnify Purchaser against liability
arising  out  of  any  breach of the aforesaid representation  and
warranty.

     (c)  The provisions of this Section 11.01 shall survive the Closing
and any termination of this Agreement.

                            ARTICLE 12

                            REMEDIES

     SECTION 12.01. Remedies. (a) If Purchaser fails to perform as
required  by this Agreement, in the time and manner set  forth  in
this Agreement, Seller, as Seller's sole and exclusive remedy, may
terminate this Agreement and receive payment in the amount of  the
Downpayment  as  liquidated  damages. Such  termination  shall  be
effective  five (5) days after Seller has given written notice  of
its  intent to cancel to Purchaser and Escrow Agent if Purchaser's
default  is  not cured within such five (5) day cure period.  Upon
such  termination, Seller shall be entitled to, and  Escrow  Agent
shall  deliver  to  Seller, the Downpayment, as consideration  for
acceptance  of  this Agreement, for taking the  Property  off  the
market,  and  as  the parties' best estimate of  Seller's  damages
resulting from Purchaser's default, but not as a penalty.

 Such  funds paid to Seller upon such termination shall be retained
 by  Seller as Seller's sole and exclusive remedy against Purchaser
 in  all  respects, except for any indemnification  obligations  of
 Purchaser contained in this Agreement.

      (b)  If,  on  the Closing Date, Seller shall  be  unable  (as
 opposed to unwilling) to perform its obligations or to satisfy any
 condition  applicable to Seller hereunder in accordance  with  the
 provisions of this Agreement or title to the Property shall not be
 in  accordance with this Agreement, then Purchaser shall elect  as
 its  sole and exclusive remedy, either (i) to direct Escrow  Agent
 to   return  the  Downpayment  and,  upon  such  return   of   the
 Downpayment, this Agreement shall be deemed terminated and  Seller
 shall  not  have any further liability or obligation to  Purchaser
 hereunder  nor  shall  Purchaser have  any  further  liability  or
 obligation  to  Seller hereunder, except for such  liabilities  or
 obligations  as are specifically stated to survive the termination
 of  this Agreement, or (ii) to waive such condition and proceed to
 Closing.  If  Seller is unwilling to perform  (as  opposed  to  an
 inability  to perform) as required by this Agreement in  the  time
 and  manner  set  forth in this Agreement , then  Purchaser  shall
 elect  as  its  sole and exclusive remedy, either of the  remedies
 described  in  clauses (i) and (ii) above or to  enforce  specific
 performance  of Seller's obligations hereunder. It is agreed  that
 Purchaser may not commence an action against Seller for damages.

                             ARTICLE 13

                               NOTICES

      SECTION  13.01. Notices. All notices and other communications
 hereunder  shall be in writing and shall be deemed  to  have  been
 duly  given  if  (i) personally delivered with proof  of  delivery
 thereof  or  sent  by facsimile (confirmed thereafter  by  regular
 United  States  mail) (any notice or communications  so  delivered
 being deemed to have been received at the time delivered), or (ii)
 sent  by  United  States  registered or  certified  mail,  postage
 prepaid (any notice or communication so sent being deemed to  have
 been  received three (3) business days after mailing in the United
 States),  or  (iii)  by a nationally recognized overnight  courier
 service (any notice or communications so sent being deemed to have
 been  received at the time delivered); in each case  addressed  to
 the respective parties as follows:

           if to Seller:

                AEI Real Estate Fund XVIII Limited Partnership
                AEI Income & Growth Fund XXII Limited Partnership
                AEI Income & Growth Fund 24 LLC
                Attention: Robert Johnson
                30 East Seventh Street, #1300
                St.Paul, MN 55101

                Robert & Lillian
                Hajicek C/O Paul Hajicek
                25699 Krueger
                Avenue Chisago
                City, MN 55013

               Elizabeth Miller
               2 Elmwood Way
               Burlington, NJ 08016

               Charles E. Miller III
               P.O. Box 308
               117 South Main Street
               Grace, ID 83241

               Christopher B. Miller
               1325 Carter Crest Road
               Edmonton, Alberta, Canada T6R-2L6

               Jeffrey & Sylvia Harmon
               41694 Higgins Way
               Fremont, CA 94539

          if to Purchaser:

               Compson Holding Corporation
               980 North Federal Highway,
               Suite #314 Boca Raton,
               Florida 33432
               Attention: Mr. Michael
               Comparato Facsimile:
               (561) 391-8494

          with a copy to:

               Kronish Lieb Weiner &
               Hellman, LLP 1114 Avenue
               of the Americas
               New York, New York 10036
               Attention: Alan S. Cohen, Esq.
               Facsimile: (212) 479-6275

or  to  such  other  address or party as  either  party  may  have
furnished  to the other in writing in accordance herewith,  except
that  notices  of  change of address or addresses  shall  only  be
effective upon receipt.

                             ARTICLE 14

                      MISCELLANEOUS PROVISIONS

     SECTION  14.01.  BINDING  EFFECT.  This  Agreement  does  not
constitute  an offer to sell and shall not bind Seller unless  and
until Seller elects to be bound hereby by executing and delivering
to  Purchaser  an  executed counterpart hereof  (original  or  via
facsimile).

     SECTION 14.02. INDEMNIFICATION GENERALLY. (a) Wherever it is
provided in this Agreement or in any agreement or document
delivered pursuant hereto that a party shall

indemnify  another  party hereunder against liability  or  damages,
such  phrase  and  words  of similar import  shall  mean  that  the
indemnifying party hereby agrees to and does indemnify, defend  and
hold  harmless  the indemnified party and such party's  direct  and
indirect  shareholders,  partners,  members,  trustees  and   their
respective past, present and future officers, directors,  employees
and  agents  from and against any and all claims, damages,  losses,
liabilities  and  expenses (including, without  being  limited  to,
reasonable attorneys' fees and disbursements) to which they or  any
of  them may become subject or which may be incurred by or asserted
against  any or all of them attributable to, arising out of  or  in
connection  with  the  matters  provided  for  in  such  provision.
Neither  party  shall  be  required  to  indemnify  the  other  for
liabilities  caused  by the gross negligence or willful  misconduct
of the party seeking indemnification.

     (b)  If any action, suit or proceeding is commenced, or if any
claim,  demand  or  assessment is asserted in respect  of  which  a
party  is  indemnified hereunder or under any agreement or document
delivered pursuant hereto, the indemnified party shall give  notice
thereof to the indemnifying party and the indemnifying party  shall
be  entitled  to  control  the defense,  compromise  or  settlement
thereof,  at  its  own  cost and expense, with  counsel  reasonably
satisfactory  to  the indemnified party, and the indemnified  party
shall  cooperate fully and make available to the indemnifying party
such  information  under its control or in its possession  relating
thereto  and may, at its own cost and expense, participate in  such
defense.

     SECTION  14.03. Partial Invalidity. If any term  or  provision
of  this  Agreement or the application thereof to  any  persons  or
circumstances  shall, to any extent, be invalid  or  unenforceable,
the remainder of this Agreement or the application of such term  or
provision to persons or circumstances other than those as to  which
it  is held invalid or unenforceable shall not be affected thereby,
and  each  term and provision of this Agreement shall be valid  and
enforceable to the fullest extent permitted by law.

     SECTION  14.04.  Entire  Agreement. This  Agreement,  together
with  the exhibits hereto, constitutes the entire agreement of  the
parties  regarding  the subject matter of this  Agreement  and  all
prior     or     contemporaneous    agreements,     understandings,
representations and statements, oral or written, are hereby  merged
herein.

     SECTION  14.05.  Further  Assurances.  The  parties  agree  to
mutually  execute and deliver to each other, at the  Closing,  such
other  and  further  documents as may  be  reasonably  required  by
counsel  for  the  parties to carry into effect  the  purposes  and
intents  of this Agreement, provided such documents are customarily
delivered  in  real estate transactions in jurisdictions  in  which
the   Property   is  located,  and  do  not  impose  any   material
obligations  upon any party hereunder except as set forth  in  this
Agreement.

     SECTION  14.06. Enforcement. In the event either party  hereto
fails to perform any of its obligations under this Agreement or  in
the   event   a   dispute   arises  concerning   the   meaning   or
interpretation of any provision of this Agreement,  the  party  not
prevailing  in  such  dispute shall  pay  any  and  all  costs  and
expenses  reasonably incurred by the other party  in  enforcing  or
establishing   its  rights  hereunder,  including,  without   being
limited to, court costs and reasonable attorneys' fees.

      SECTION 14.07. AMENDMENT. This Agreement may not be modified,
 amended, altered or supplemented except by written agreement
 executed and delivered by Purchaser and Seller.

      SECTION  14.08. GOVERNING LAW. This Agreement and the  rights
 of  the  parties hereunder, shall be governed by and construed  in
 accordance  with  the laws of the State of Florida  applicable  to
 agreements made and to be performed wholly within said State.

      SECTION 14.09. EXHIBITS AND SCHEDULES. All Exhibits and
 Schedules referred to in this Agreement are incorporated herein
 and made a part hereof as fully as if set forth herein.

      SECTION  14.10 NO WAIVER. THE failure of any party hereto  to
 enforce at any time any of the provisions of this Agreement  shall
 in  no way be construed as a waiver of any of such provisions,  or
 the  right of any party thereafter to enforce each and every  such
 provision. No waiver of any breach of this Agreement shall be held
 to be a waiver of any other or subsequent breach.

      SECTION   14.11.  HEADINGS;  ARTICLE,  SECTION  AND   EXHIBIT
 REFERENCES. The Article and Section headings used herein  are  for
 reference  purposes only and do not control or affect the  meaning
 or  interpretation of any term or provision hereof. All references
 in  this  Agreement to Articles, Sections, Exhibits and  Schedules
 are  to  the  Articles and Sections hereof and  the  Exhibits  and
 Schedules annexed hereto.

      SECTION   14.12.   NO  OTHER  PARTIES.  The  representations,
 warranties  and  agreements of the parties  contained  herein  are
 intended  solely  for  the benefit of the  parties  to  whom  such
 representations, warranties or agreements are made,  shall  confer
 no  rights  hereunder, whether legal or equitable,  in  any  other
 party, and no other party shall be entitled to rely thereon.

      SECTION  14.13. COUNTERPARTS. This Agreement may be  executed
 and  delivered  in any number of counterparts, each  of  which  so
 executed and delivered shall be deemed to be an original  and  all
 of which shall constitute one and the same instrument. Counterpart
 copies executed by facsimile shall constitute originals.

           SECTION  14.14.  SECTION 1031 EXCHANGE.  Notwithstanding
 anything herein to the contrary, each party shall have the  right,
 prior  to  Closing, implement a "like-kind exchange" in accordance
 with Section 1031 of the Code. Each party will cooperate with  the
 other, and take such actions as are reasonably requested to assist
 the  other  party  in  transacting  such  Section  1031  exchange;
 provided,  however that neither party shall be required  to  incur
 any  additional cost or expense, and the completion of the Section
 1031  exchange  will  not  delay  or  postpone  the  Closing,   in
 connection therewith. The effectuation of a Section 1031  exchange
 prior to Closing shall not be a condition or contingency to either
 party's obligations hereunder.

                         [No Further Text]

                     [Signature Page to Follow]

    IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.

                         SELLER:

                         AEI REAL ESTATE FUND XVIII LIMITED
                         PARTNERSHIP, a Minnesota limited
                         partnership; AEI INCOME & GROWTH
                         FUND XXII LIMITED PARTNERSHIP, a
                         Minnesota limited partnership;
                         AEI INCOME & GROWTH FUND 24 LLC, a
                         Delaware limited liability company

                         By: /s/ Robert P Johnson
                           Robert P Johnson - President

     IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.

                         SELLER:

                         Jeffrey & Sylvia Harmon

                         By: /s/ Jeffrey Harmon
                                 Jeffrey Harmon

                         By: /s/ Sylvia Harmon

                                 Sylvia Harmon

     IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.

                         SELLER:

                         Robert & Lillian Hajicek

                         By: /s/ Robert Hajicek by Paul Hajicek P.O.A. 8/3/06
                                Robert Hajicek

                         By: /s/ Lillian Hajicek by Paul Hajicek P.O.A. 8/3/06
                                Lillian Hajicek

     IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.

                         SELLER:

                         By: /s/ Charles Miller
                                Charles Miller

     IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.

                         SELLER:

                            By: /s/ Christopher B Miller
                                 Christopher Miller

     IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.

                         SELLER:

                         By:/s/ ELizabeth Miller
                               Elizabeth Miller

     IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.

                         PURCHASER:

                         COMPSON  HOLDING CORPORATION

                         By: /s/ Michael Comparato
                         Name: Michale Comparato
                         Title: President

     IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the date first set forth above.

PROVISIONS REGARDING
DISPOSITION OF DOWNPAYMENT AND
TERMS OF ESCROW AGREED BY:

FIDELITY NATIONAL TITLE INSURANCE COMPANY, ESCROW AGENT

By: /s/ Anne Bostick
Name: Anne Bostick
Title: SR EO

AEI Fund Management, Inc.
1300 Wells Fargo Place
30 East Seventh Street
Sr. Paul, Minnesota 55101
651.227.7333
651.227.7705 (fax)
800.328.3519
www.aeifunds.com

September 13, 2006

Compson Holding
Corporation 980 N.
Federal Highway
Boca Raton, Florida
33432 Attention:
Michael Comparato

          Re: Garden Ridge - Montgomery County, Texas (the "Property")

Dear Mr. Comparato:

          Reference is made to that certain Contract of Sale,
dated August 17, 2006 (the "Contract"), between AEI Real Estate
Fund XVIII Limited Partnership, a Minnesota Limited Partnership
("AEI XVIII"), AEI Income & Growth Fund XXII Limited Partnership,
a Minnesota limited partnership ("AEI XXII"), AEI Income & Growth
Fund 24 LLC, a Delaware limited liability company ("AEI 24"),
Robert F. Hajicek and Lillian E. Hajicek, as individuals ("RHLH"),
Jeffrey D. Harmon and Sylvia M. Harmon, as individuals ("JHSH"),
Charles E. Miller III, as an individual ("CEM"), Christopher B.
Miller, as an individual ("BM"), and Elizabeth V.H. Miller, as an
individual ("EM"), collectively, as seller, and Compson Holding
Corporation, as purchaser for the captioned property. All terms
not otherwise defined herein shall have the meanings ascribed to
them in the Contract.

          AEI XVIII, AEI XXII, and AEI 24 (the "AEI Entities")
hereby represent that the AEI Entities together are entitled to
receive seventy-nine percent (79%) of the net proceeds resulting
from the sale of the Property at the Closing. The AEI Entities
agree that in connection with the Closing, these AEI Entities will
together (and not individually) credit to Purchaser a total amount
equal to $325,000.00 (the "Credit"), which Credit will be
subtracted, in proportion to their respective ownership percentage
interests, from the sales proceeds otherwise due the AEI Entities
at Closing.

          The undersigned AEI Entities acknowledge that their
delivery of the Credit to Purchaser at Closing is a material
condition to Purchaser's agreement to continue the transaction
contemplated in the Contract, without which Purchaser would
exercise its right to terminate pursuant to Section 4.01(d) of the
Contract.

          Net Lease Property Financing. Ownership, Management
                            Since 1970

  Please sign below to acknowledge your agreement herewith.

                                         Very truly yours,

AEI Real Estate Fund XVIII Limited
Partnership, a Minnesota limited
partnership

By: AEI Fund Management XVIII, Inc.,
    a Minnesota corporation, its
    General Partner

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

AEI Income & Growth Fund XXII Limited
Partnership, a Minnesota limited
partnership

By: AEI Fund Management XXII, Inc.,
     a Minnesota corporation, its
     General Partner

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

AEI Income & Growth Fund 24 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
       Its: President

AGREED TO:

COMPSON HOLDING CORPORATION

By:  /s/ Michael Comparato
         Michael Comparato
         President<PAGE>

                                                                    Exhibit 10.1

                                CREDIT AGREEMENT

     THIS CREDIT AGREEMENT (this "Agreement") is entered into as of August 4,
2006, by and between STERLING FINANCIAL CORPORATION, a Washington corporation
("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank").

                                    RECITALS

     Borrower has requested that Bank extend or continue credit to Borrower as
described below, and Bank has agreed to provide such credit to Borrower on the
terms and conditions contained herein.

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Bank and Borrower hereby agree as follows:

                                   ARTICLE I
                                  CREDIT TERMS

     SECTION 1.1. LINE OF CREDIT.

     (a) Line of Credit - 364 Days. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make advances to Borrower from time to time up
to and including August 3, 2007, not to exceed at any time the aggregate
principal amount of Forty Million Dollars ($40,000,000.00) ("Line of Credit"),
the proceeds of which shall be used for Borrower's working capital purposes and
general corporate purposes. Borrower's obligation to repay advances under the
Line of Credit shall be evidenced by a promissory note dated as of August 4,
2006 ("Line of Credit Note"), all terms of which are incorporated herein by this
reference.

     (b) Borrowing and Repayment. Borrower may from time to time during the term
of the Line of Credit borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit Note; provided however,
that the total outstanding borrowings under the Line of Credit shall not at any
time exceed the maximum principal amount available thereunder, as set forth
above.

     SECTION 1.2. INTEREST/FEES

     (a) Interest. The outstanding principal balance of the Line of Credit shall
bear interest at the rate of interest set forth in the Line of Credit Note.

     (b) Computation and Payment. Interest shall be computed on the basis of a
360-day year, actual days elapsed. Interest shall be payable at the times and
place set forth in each promissory note or other instrument or document required
hereby.

     (c) Commitment Fee. Borrower shall pay to Bank a non-refundable commitment
fee for the Line of Credit equal to Twenty Thousand Dollars ($20,000.00), which
fee shall be due and payable in full on the date of this Agreement.

     (d) Unused Commitment Fee. Borrower shall pay to Bank a fee equal to
one-fifth percent (0.20%) per annum (computed on the basis of a 360-day year,
actual days elapsed) on

                                       -1-

<PAGE>

the average daily unused amount of the Line of Credit, which fee shall be
calculated on a calendar quarter basis by Bank and shall be due and payable by
Borrower in arrears on the last day of each March, June, September and December.

                                   ARTICLE II
                         REPRESENTATIONS AND WARRANTIES

     Borrower makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this Agreement and
shall continue in full force and effect until the full and final payment, and
satisfaction and discharge, of all obligations of Borrower to Bank subject to
this Agreement.

     SECTION 2.1 LEGAL STATUS. Borrower is a corporation, duly organized and
existing and in good standing under the laws of Washington and is qualified or
licensed to do business (and is in good standing as a foreign corporation, if
applicable) in all jurisdictions in which such qualification or licensing is
required or in which the failure to so qualify or to be so licensed could have a
material adverse effect on Borrower.

     SECTION 2.2. AUTHORIZATION AND VALIDITY. This Agreement and each promissory
note, contract, instrument and other document required hereby or at any time
hereafter delivered to Bank in connection herewith (collectively, the "Loan
Documents") have been duly authorized, and upon their execution and delivery in
accordance with the provisions hereof will constitute legal, valid and binding
agreements and obligations of Borrower or the party which executes the same,
enforceable in accordance with their respective terms.

     SECTION 2.3. NO VIOLATION. The execution, delivery and performance by
Borrower of each of the Loan Documents do not violate any provision of any law
or regulation, or contravene and provision of the Articles of Incorporation or
By-Laws of Borrower, or result in any breach of or default under any contract,
obligations, indenture or other instrument to which Borrower is a party or by
which Borrower may be bound.

     SECTION 2.4. LITIGATION. There are no pending, or to the best of Borrower's
knowledge, threatened actions, claims, investigations, suites or proceedings by
or before any governmental authority, arbitrator, court or administrative agency
which could have a material adverse effect on the financial condition or
operation of Borrower other than those disclosed by Borrower to Bank in writing
prior to the date hereof.

     SECTION 2.5. CORRECTNESS OF FINANCIAL STATEMENT. The annual financial
statement of Borrower dated December 31, 2005, and all interim financial
statements delivered to Bank since said date, true copies of which have been
delivered by Borrower to Bank prior to the date hereof, (a) are complete and
correct and present fairly the financial condition of Borrower, (b) disclose all
liabilities of Borrower that are required to be reflected or reserved against
under generally accepted accounting principles, whether liquidated or
unliquidated, fixed or contingent, and (c) have been prepared in accordance with
generally accepted accounting principles consistently applied. Since the dates
of such financial statements there has been no material adverse change in the
financial condition of Borrower, nor has Borrower mortgaged, pledged, granted a
security interest in or otherwise encumbered any of its assets or properties
except in favor of Bank or as otherwise permitted by Bank in writing.

                                       -2-

<PAGE>

     SECTION 2.6 INCOME TAX RETURNS. Borrower has no knowledge of any pending
assessments or adjustments of its income tax payable with respect to any year.

     SECTION 2.7. NO SUBORDINATION. There is no agreement, indenture, contract
or instrument to which Borrower is a party or by which Borrower may be bound
that requires the subordination in right of payment of any of Borrower's
obligations subject to this Agreement to any other obligation of Borrower.

     SECTION 2.8. PERMITS, FRANCHISES. Borrower possesses, and will hereafter
possess, all permits, consents, approvals, franchises and licenses required and
rights to all trademarks, trade names, patents, and fictitious names, if any,
necessary to enable it to conduct the business in which it is now engaged in
compliance with applicable law.

     SECTION 2.9. ERISA. Borrower is in compliance in all material respects with
all applicable provisions of the Employee Retirement Income Security Act of
1974, as amended or recodified from time to time ("ERISA"); Borrower has not
violated any provision of any defined employee pension benefit plan (as defined
in ERISA) maintained or contributed to by Borrower (each, a "Plan"); no
Reportable Event as defined in ERISA as occurred and is continuing with respect
to any Plan initiated by Borrower; Borrower has met its minimum funding
requirements under ERISA with respect to each Plan; and each Plan will be able
to fulfill its benefit obligations as they come due in accordance with the Plan
documents and under generally accepted accounting principles.

     SECTION 2.10. OTHER OBLIGATIONS. Borrower is not in default on any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation.

     SECTION 2.11. BANK SUBSIDIARIES. As of the date of this Agreement Borrower
owns 100% of the issued and outstanding common voting stock in Sterling Savings
Bank. Each bank, if any, named in this Section, and each bank at any time
hereafter established or acquired by Borrower, is referred to as a "Bank
Subsidiary."

                                   ARTICLE III
                                   CONDITIONS

     SECTION 3.1 CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of
Bank to extend any credit contemplated by this Agreement is subject to the
fulfillment to Bank's satisfaction of all of the following conditions:

     (a) Approval of Bank Counsel. All legal matters incidental to the extension
of credit by Bank shall be reasonably satisfactory to Bank's counsel.

     (b) Documentation. Bank shall have received, in form and substance
satisfactory to Bank, each of the following, duly executed:

     (i)  This Agreement and each promissory note or other instrument or
          document required hereby.

     (ii) Certificate of Incumbency.

     (iii) Corporate Borrowing Resolution.

     (iv) Such other documents as Bank may require under any other Section of
          this Agreement.

                                       -3-

<PAGE>

     (c) Financial Condition. There shall have been no material adverse change,
as determined by Bank, in the financial condition or business of Borrower, nor
any material decline, as determined by Bank, in the market value of any
collateral required hereunder or a substantial or material portion of the assets
of Borrower.

     SECTION 3.2 CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of Bank
to make each extension of credit requested by Borrower hereunder shall be
subject to the fulfillment to Bank's satisfaction of each of the following
conditions:

     (a) Compliance. The representations and warranties contained herein and in
each of the other Loan Documents shall be true on and as of the date of the
signing of this Agreement and on the date of each extension of credit by Bank
pursuant hereto, with the same effect as though such representations and
warranties had been made on and as of each such date, and on each such date, no
Event of Default as defined herein, and no condition, event or act which with
the giving of notice or the passage of time or both would constitute such an
Event of Default, shall have occurred and be continuing or shall exist.

     (b) Documentation. Bank shall have received all additional documents which
may be required in connection with such extension of credit.

                                   ARTICLE IV
                              AFFIRMATIVE COVENANTS

     Borrower covenants that so long as Bank remains committed to extend credit
to Borrower pursuant thereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents
remain outstanding, and until payment in full of all obligations of Borrower
subject hereto, Borrower shall, unless Bank otherwise consents in writing:

     SECTION 4.1. PUNCTUAL PAYMENTS. Punctually pay all principal, interest,
fees or other liabilities due under any of the Loan Documents at the times and
place and in the manner specified therein.

     SECTION 4.2. ACCOUNTING RECORDS. Maintain adequate books and records in
accordance with generally accepted accounting principals consistently applied,
and permit any representative of Bank, at any reasonable time, to inspect, audit
and examine such books and records, to make copies of the same, and to inspect
the properties of Borrower; provided, however, Bank understands that Borrower is
a publicly owned company whose shares are traded on a national exchange and
that, as a consequence, Bank agrees that it, its employees attorneys, and
agents, shall keep all non-public financial information of Borrower strictly
confidential and that neither it, or any of its employees, attorneys or agents,
shall trade, sell or otherwise exchange any shares of Borrower's stock while
they are in possession of any of Borrower's nonpublic financial information.

     SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the following, in
form and detail satisfactory to Bank:

     (a) not later than 90 days after and as of the end of each fiscal year, an
unqualified audit of the financial statement of Borrower prepared by the
independent accounting firm of BDO Seidman, or such other independent certified
public accountant reasonably acceptable to

                                       -4-

<PAGE>

Bank, to include balance sheet, income statement, statement of Borrower's cash
flow, which Bank confirms is acceptable to it, management report, auditor's
report, all supporting schedules, footnotes and a copy of 10K report filed with
the Securities Exchange Commission;

     (b) not later than 45 days after and as of the end of each fiscal quarter,
company prepared financial statement of Borrower, to include a balance sheet,
income statement, statement of cash flow, and a copy of 10Q report filed with
the Securities Exchange Commission;

     (c) contemporaneously with each annual and quarterly financial statement of
Borrower required hereby, a compliance certificate of the president or chief
financial officer of Borrower that said financial statements are accurate, that
there exists no Event of Default nor any condition, act or event which with the
giving of notice or the passage of time or both would constitute an Event of
Default, and demonstrating compliance with the financial covenants contained in
this Agreement;

     (d) as soon as available, and in any event no later than 15 days after
filing with the Federal Reserve Bank, each quarterly, semi-annual, and annual
financial statement of the Borrower (including but not limited to any FRY-9SP,
FRY-9LP, FRY-6 and FRY-9C, as applicable) required to be filed by Borrower with
the Federal Reserve Bank in the applicable Federal Reserve District;

     (e) as soon as available (but without duplication of any other requirements
set forth in this Section 4.3.) a copy of all reports which are required by law
to be furnished to any regulatory authority having jurisdiction over Borrower or
any Bank Subsidiary (including without limitation Call Reports, but excluding
any report which applicable law or regulation prohibits Borrower or a Bank
Subsidiary from furnishing to Bank);

     (f) from time to time such other information as Bank may reasonably
request.

     SECTION 4.4. COMPLIANCE. Preserve and maintain all license, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; and comply with the provisions of all documents
pursuant to which Borrower is organized and/or which govern Borrower's continued
existence and with the requirements of all laws, rules, regulations and orders
of any governmental authority applicable to Borrower and/or its business.

     SECTION 4.5. INSURANCE. Maintain and keep in force, for each business in
which Borrower is engaged, insurance as described in Schedule 4.5 attached
hereto, with all such insurance carried with companies and in amounts
satisfactory to Bank, and deliver to Bank from time to time at Bank's request
schedules setting forth all insurance then in effect.

     SECTION 4.6. FACILITIES. Keep all properties useful or necessary to
Borrower's business in good repair and condition, and from time to time make
necessary repairs, renewals and replacements there to so that such properties
shall be fully and efficiently preserved and maintained.

     SECTION 4.7. TAXES AND OTHER LIABILITIES. Pay and discharge when due any
and all indebtedness, obligations, assessments and taxes, both real or personal,
including without limitation federal and state income taxes and state and local
property taxes and assessments, except such (a) as Borrower may in good faith
contest or as to which a bona fide

                                       -5-

<PAGE>

dispute may arise, and (b) for which Borrower has made provision, to Bank's
satisfaction, for eventual payment thereof in the event Borrower is obligated to
make such payment.

     SECTION 4.8. LITIGATION. Promptly give notice in writing to Bank of any
litigation pending or threatened against Borrower with a claim in excess of
$10,000,000.00.

     SECTION 4.9. BORROWER'S FINANCIAL CONDITION. Maintain Borrower's
consolidated financial condition as follows using generally accepted account
principles consistently applied and used consistently with prior practices
(except to the extent modified by the definitions herein), with compliance
determined commencing with Borrower's financial statements for period ending
September 30, 2006:

     (a) ROA not less than 0.65% on a rolling four quarter basis, determined as
of each fiscal quarter end, with "ROA" defined as the percentage arrived at by
dividing net income by Total Assets, as reported in the most recent Call Report.

     (b) Allowance for loan and lease losses not less than 100% of the total
amount of Non-Performing Assets, determined as of each fiscal quarter end, with
"Non-Performing Assets" defined as the sum of: (i) all loans classified as past
due 90 days or more and still accruing interest; (ii) all loans classified as
'non-accrual' and no longer accruing interest; (iii) all loans classified as
'restructured loans and leases'; and (iv) all other 'non-performing assets',
including those classified as 'other real estate owned' and 'repossessed
property', as reported in the then most recent Call Report.

     (c) Non-Performing Assets not greater than 10% of Primary Equity Capital,
determined as of each fiscal quarter end, with "Non-Performing Assets" as
defined above, and with "Primary Equity Capital" defined as the aggregate of
allowance for loan and lease losses, as reported in the then most recent Call
Report, plus Equity Capital (defined as the aggregate of perpetual preferred
stock (and related surplus), common stock, surplus (excluding all surplus
related to perpetual preferred stock), undivided profits and capital reserves,
plus the net unrealized holding gains (or less the net realized holding losses)
on available-for-sale securities, less goodwill and other disallowed intangible
assets).

     SECTION 4.10. BORROWER'S AND BANK SUBSIDIARY FINANCIAL CONDITION. Cause
Borrower and each Bank Subsidiary to maintain its categorization as Well
Capitalized as defined by regulatory agencies having jurisdiction, which,
pursuant to Section 38 of the Federal Deposit Insurance Act (created by Section
131 of the Federal Deposit Insurance Corporation Improvement Act (FDICIA) of
1991) (entitled "Prompt Corrective Action") (herein, "Section 38"), which
considers an institution "Well Capitalized" if, among other things, its Total
Risk-Based Capital Ratio equals or exceeds 10%, its Tier 1 Risk-Based Capital
equals or exceeds 6% and its Leverage equals or exceeds 5%. As used herein,
"Total Risk-Based Capital Ratio," "Tier 1 Risk-Based Capital" and "Leverage"
shall be defined and calculated in conformity with Section 38.

     SECTION 4.11. NOTICE TO BANK. Promptly (but in no event more than five (5)
business days after Borrower knows or in the exercise of reasonable care and
diligence should have known of the occurrence of each such event or matter) give
written notice to Bank in reasonable detail of: (a) the occurrence of any Event
of Default, or any condition, event or act which with the giving or the passage
of time or both would constitute an Event of Default; (b) any change in the name
or legal structure of borrower; (c) the occurrence and nature of any Reportable
Event or Prohibited Transaction, each as defined in ERISA, or any funding

                                       -6-
<PAGE>

deficiency with respect to any Plan; (d) any termination or cancellation of any
insurance policy which Borrower is required to maintain, or any uninsured or
partially uninsured loss through liability or property damage, or through fire,
theft or any other cause affecting Borrower's property in excess of an aggregate
of $10,000,000.00; (e) any change in Executive Management of Borrower or any
Bank Subsidiary; with "Executive Management" defined as the Chief Financial
Office or Chief Executive Officer; or (f) any negotiations to sell any capital
stock of Borrower and/or any Bank Subsidiary, together with copies of any
proposed buy/sell agreements; provided however, that this clause shall not be
deemed approval by Bank of any such negotiation and shall not apply to
information which under applicable law or regulation is prohibited from
disclosure to Bank.

                                    ARTICLE V
                               NEGATIVE COVENANTS

     Borrower further covenants that so long as Bank remains committed to extend
credit to Borrower pursuant thereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower will not without Bank's prior written
consent, which consent shall not be unreasonably withheld, conditioned or
delayed:

     SECTION 5.1. USE OF FUNDS. Use any of the proceeds of any credit extended
hereunder except for the purposes stated in Article 1 hereof.

     SECTION 5.2. CAPITAL EXPENDITURES. Make any additional investment in fixed
assets in any fiscal year in excess of an aggregate of $50,000,000.00.

     SECTION 5.3. LEASE EXPENDITURES. Incur operating lease expense in any
fiscal year in excess of an aggregate of $10,000,000.00.

     SECTION 5.4. OTHER INDEBTEDNESS. Create, incur, assume or permit to exist
any indebtedness or liabilities resulting from borrowings loans or advances,
whether secured or unsecured, matured or unmatured, liquidated or unliquidated,
joint or several, except (a) the liabilities of Borrower to Bank, (b) trade debt
and other similar obligations incurred in the ordinary course of business in
favor of Borrower's suppliers, vendors and other Third Parties; and (c) any
other liabilities of Borrower existing as of, and disclosed to Bank prior to,
the date hereof; provided that Borrower's existing $20,000,000.00 secured line
of credit shall be repaid in full and terminated no later than 30 days from the
date of this Agreement.

     SECTION 5.5 MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or
consolidate with any other entity; make any substantial change in the nature of
Borrower's business as conducted as of the date hereof; acquire all or
substantially all of the assets of any other entity; nor sell, lease, transfer
or otherwise dispose of all or a substantial or material portion of Borrower's
assets or consolidations except (a) acquisitions in the same line of business as
Borrower and its subsidiaries currently engage, so long as the cost of any such
acquisition does not exceed 10% of Borrower's total consolidated assets
(determined prior to such acquisition), and (b) acquisitions in a different line
of business than Borrower and its subsidiaries currently engage in, so long as
the cost of any such acquisition does not exceed 5% of Borrower's total
consolidated assets (determined prior to such acquisition).

                                       -7-

<PAGE>

     SECTION 5.6. DIVIDENDS, DISTRIBUTIONS. Declare or pay any dividend or
distribution either in cash, stock or any other property on Borrower's stock now
or hereafter outstanding, nor redeem, retire, repurchase or otherwise acquire
any shares of any class of Borrower's stock now or thereafter outstanding;
provided however, that so long as no Event of Default has occurred and is
continuing, Borrower may pay cash dividends or distributions to its shareholders
in any fiscal year not to exceed 10% of Borrower's net income for the prior
fiscal year.

     SECTION 5.7. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist a
security interest in, or lien upon, all or any portion of Borrower's assets now
owned or hereafter acquired, except (i) any of the foregoing in favor of Bank or
which is existing as of, and disclosed to Bank in writing prior to, the date
hereof; and (ii) Permitted Liens. As used herein "Permitted Liens" shall mean
(a) Liens securing purchase money indebtedness and capital lease obligations
(and refinancings thereof; (b) Liens for ad valorem, income or property taxes or
assessments and similar charges that either are not delinquent or are being
properly contested; (c) statutory Liens of carriers, warehousemen, mechanics
suppliers, materialmen, repairmen and other Liens imposed by law incurred in the
ordinary course of business for sums not yet delinquent or being properly
contested; (d) Liens incurred or pledges or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment insurance and
other social security legislation, leases, appeal bonds and other obligations of
like nature incurred by Borrower or any of its Subsidiaries in the ordinary
course of business, and deposits made in the ordinary course of business
securing liability to insurance carriers under insurance or self-insurance
arrangements; (e) Liens, deposits or pledges to secure the performance of bids,
tenders, contracts, leases, or other similar obligations arising in the ordinary
course of business; (f) judgment and attachment Liens not giving rise to an
Event of Default and notices of lis pendens and associated rights related to
litigation being properly contested; (g) Liens, deposits or pledges in the
ordinary course of business to secure public or statutory obligations, surety,
stay, appeal, indemnity, performance or other similar bonds or obligations and
liens, deposits or pledges in the ordinary course of business in lieu of such
bonds or obligations, or to secure such bonds or obligations, or to secure
letters of credit in lieu of or supporting the payment of such bonds or
obligations; (h) Liens in favor of collecting or payor banks having a right of
setoff, revocation, refund or chargeback with respect to money or instruments of
Borrower or any Subsidiary on deposit with or in possession of such bank; (i)
any interest or title of a lessor, licensor or sublicensor in the property
subject to any lease, license or sublicense; (j) Liens arising from
precautionary UCC financing statements regarding operating leases or
consignments; and (k) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any lien referred
to in the foregoing clauses, provided that such extension, renewal or
replacement Lien shall be limited to all or a part of the property which secured
the Lien so extended, renewed or replaced.

                                   ARTICLE VI
                                EVENTS OF DEFAULT

     SECTION 6.1. The occurrence of any of the following shall constitute an
"Event of Default" under this Agreement:

     (a) Borrower shall fail to pay within five (5) business days of when due
any principal, interest, fees or other amounts payable under any of the Loan
Documents.

                                       -8-

<PAGE>

     (b) Any financial statement or certificate furnished to Bank in connection
with, or any representation or warranty made by Borrower under this Agreement or
any other Loan Document fails to fairly present the financial condition of
Borrower.

     (c) Any default in the performance of or compliance with the covenants
contained in Sections 4.9, 4.10, 5.4, 5.5, 5.6 or 5.7 hereof, or any substantial
default in the performance of or compliance with any other material obligation,
agreement or other provision contained herein or in any other Loan Document
(other than those referred to in subsections (a) and (b) above), and with
respect to any such default which by its nature can be cured, such default is
not cured within thirty (30) days from its occurrence, or such longer period of
time as may be reasonably necessary so long as cure of such default is being
diligently pursued by Borrower during such extended cure period.

     (d) Any default under any other agreement between Borrower or any Bank
Subsidiary and Bank, or any defined event of default, under the terms of any
contract or instrument (other than any of the Loan Documents) pursuant to which
Borrower, any Bank Subsidiary, has incurred any debt or other liability to any
person or entity in excess of $100,000.00, but only if such other person or
entity has declared an event of default thereunder and such action is not being
contested in good faith by Borrower or Bank Subsidiary, as applicable.

     (e) The filing of a notice of judgment lien against Borrower or any Bank
Subsidiary in any amount in excess of $100,000.00, and enforcement of any such
judgment has not been superseded or otherwise stayed; or the recording of any
abstract of judgment against Borrower or any Bank Subsidiary in an amount in
excess of $100,000.00 in any county which Borrower or such Bank Subsidiary has
an interest in real property, and enforcement of any such judgment has not been
superseded or otherwise stayed; or the service of a notice of levy and/or of a
writ of attachment or execution; or other like process, against the assets of
Borrower or any Bank Subsidiary, in an amount in excess of $100,000.00, and
enforcement of any such levy or writ has not been superseded or otherwise
stayed.

     (f) Borrower or any Bank Subsidiary shall become insolvent, or shall suffer
or consent to or apply for the appointment of a receiver, trustee, custodian or
liquidator of itself or any of its property, or shall generally fail to pay its
debts as they become due, or shall make a general assignment for the benefit of
creditors; Borrower or any Bank Subsidiary shall file a voluntary petition in
bankruptcy, or seeking reorganization, in order to effect a plan or other
arrangement with creditors or any other relief under the Bankruptcy Reform Act,
Title 11 of the United State Code, as amended ore recodified from time to time
("Bankruptcy Code"), or under any state or federal law granting relief to
debtors, whether now or hereafter in effect; or any involuntary petition or
proceeding pursuant to the Bankruptcy Code or any other applicable state or
federal law relating to bankruptcy, reorganization or other relief for debtors
is filed or commenced against Borrower or any Bank Subsidiary or Third Party
Obligor, or Borrower or nay Bank Subsidiary or Third Party Obligor shall file an
answer admitting the jurisdiction of the court and the material allegations of
any involuntary petition; or Borrower or any Bank Subsidiary or Third Party
Obligor shall be adjudicated a bankruptcy, or an order for relief shall be
entered against Borrower or any Bank Subsidiary by any court of competent
jurisdiction under the Bankruptcy Code or any other applicable state or federal
law relating to bankruptcy, reorganization or other relief for debtors.

     (g) The dissolution or liquidation of Borrower or any Bank Subsidiary; or
Borrower or any Bank Subsidiary shall take action to seeking to effect such
dissolution or liquidation.

                                       -9-

<PAGE>

     (h) The issuance or proposed issuance against Borrower, or any affiliate of
Borrower (including without limitation, any Bank Subsidiary) of any or formal
administrative action, temporary or permanent, by any federal or state
regulatory agency having jurisdiction or control over Borrower or such
affiliate, such action taking the form of, but not limited to: (i) any or formal
directive citing conditions or activities deemed to be unsafe or unsound or
breaches of fiduciary duty or law or regulation which directive would impair the
prospect of payment or performance by Borrower of its obligations under the Loan
Documents; (ii) a memorandum of understanding; (iii) a cease and desist order;
(iv) the termination of insurance coverage of customer deposits by the Federal
Deposit Insurance Corporation; (v) the suspension or removal of key executives,
or the prohibition of participation in the business affairs of Borrower or such
affiliate; (vi) any capital maintenance agreement; or (vii) any other regulatory
action, agreement or understanding with respect to Borrower or such affiliate.

     SECTION 6.2. REMEDIES. Upon the occurrence and continuation of any Event of
Default: (a) all indebtedness of Borrower under each of the Loan Documents, any
term thereof to the contrary notwithstanding, shall at Bank's option and without
notice become immediately due and payable without presentment, demand, protest
or notice of dishonor, all of which are hereby expressly waived by Borrower; (b)
the obligation, if any, of Bank to extend any further credit under any of the
Loan Documents shall immediately cease and terminate; and (c) Bank shall have
all rights, powers and remedies available under each of the Loan Documents, or
accorded by law, including without limitation the right to resort to any or all
security for any credit subject hereto and to exercise any or all of the rights
of a beneficiary or secured party pursuant to applicable law. All rights, powers
and remedies of Bank may be exercised at any time by Bank and from time to time
after the occurrence of an Event of Default, are cumulative and not exclusive,
and shall be in addition to any other rights, powers or remedies provided by law
or equity.

                                   ARTICLE VII
                                  MISCELLANEOUS

     SECTION 7.1. NO WAIVER. No delay, failure or discontinuance of Bank in
exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive or
otherwise affect an other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Bank of any breach of or default under any of the Loan Documents must be
in writing and shall be effective only to the extent set forth in such writing.

     SECTION 7.2. NOTICES. All notices, request and demands which any party is
required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to each party at the following address:

     BORROWER: STERLING FINANCIAL CORPORATION
               111 North Wall Street
               Spokane, WA 99201
               Attn: Chief Financial Officer

                                      -10-

<PAGE>

     BANK:     WELLS FARGO BANK, NATIONAL ASSOCIATION
               Correspondent Banking Northwest
               999 3rd Avenue, 14th Floor
               Seattle, WA 98104

Or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt.

     SECTION 7.3. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to
Bank immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all reasonably and responsibly allocated costs of Bank's
in-house counsel), expended or incurred by Bank in connection with (a) the
negotiation and preparation of this Agreement and the other Loan Documents, and
the preparation of any amendments and waivers hereto and thereto, (b) the
enforcement of Bank's rights and/or the collection of any amounts which become
due to Bank under any of the Loan Documents, and (c) the prosecution of defense
of any action in any way related to any of the Loan Documents, including without
limitation, any action for declatory relief, whether incurred at the trial or
appellate level, in an arbitration proceeding or otherwise, and including any of
the foregoing incurred in connection with any bankruptcy proceeding (including
without limitation, any adversary proceeding, contested matter or motion brought
by Bank or any other person) relating to Borrower or any other person or entity.

     SECTION 7.4. SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the heirs, executors, administrators, legal
representative, successors and assigns of the parties; provided however, that
Borrower may not assign or transfer its interests or rights hereunder without
Bank's prior written consent. Bank reserves the right to sell, assign, transfer,
negotiate or grant participations in all or any part of, or any interest in,
Bank's rights and benefits under each of the Loan Documents, subject to
Borrower's consent, which consent shall not be unreasonably conditioned,
withheld or delayed; provided, however, no such assignment, transfer, sale or
participation shall (i) be made to any person or entity other than a Well
Capitalized financial institution, as defined in Section 38; and (ii) release
Bank of its obligations to the Note and remaining Loan Documents. In connection
therewith, Bank may disclose all documents and information which Bank now has or
may hereafter acquire relating to any credit subject hereto, Borrower, any Bank
Subsidiary or any collateral required hereunder.

     SECTION 7.5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan
Documents constitute the entire agreement between Borrower and Bank with respect
to each credit subject hereto and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
hereof. This Agreement may be amended or modified only in writing signed by each
party hereto.

     SECTION 7.6. NO THIRD PARTY BENEFICIARIES. This Agreement is made and
entered into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any other of the Loan Documents
to which it is not a party.

                                      -11-
<PAGE>

     SECTION 7.7. TIME. Time is of the essence of each and every provision of
this Agreement and each other of the Loan Documents.

     SECTION 7.8 SEVERABILITY OF PROVISIONS. If any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of this
Agreement.

     SECTION 7.9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be an
original, and all of which when taken together shall constitute one and the same
Agreement.

     SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Washington.

     SECTION 7.11. ARBITRATION.

     (a) Arbitration. The parties hereto agree, upon demand by any party, to
submit to binding arbitration all claims, disputes and controversies between or
among them (and their respective employees, officers, directors, attorneys, and
other agents), whether in tort, contract or otherwise in any way arising out of
or relating to (i) any credit subject hereto, or any of the Loan Documents, and
their negotiation, execution, collateralization, administration, repayment,
modification, extension, substitution, formation, inducement, enforcement,
default or termination; or (ii) requests for additional credit.

     (b) Governing Rules. Any arbitration proceeding will (i) proceed in a
location in Washington selected by the American Arbitration Association ("AAA");
(ii) be governed by the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in any of the
documents between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA's commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
costs in which case the arbitration shall be conducted in accordance with the
AAA's optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to herein, as applicable, the "Rules"). If
there is any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
dispute. Nothing contained herein shall be deemed to be a waiver by any party
that is a bank of the protections afforded to it under 12 U.S.C. Section 91 or
any similar applicable state law.

     (c) Arbitrator Qualifications and Powers. Any arbitration proceeding in
which the amount in controversy is $5,000,000.00 or less will be decided by a
single mutually acceptable arbitrator and who shall not render an award of
greater than $5,000,000.00. Any dispute in which the amount in controversy
exceeds $5,000,000.00 shall be decided by majority vote of a panel of three
arbitrators selected in accordance with the Rules; provided however, that all
three arbitrators must actively participate in all hearings and deliberations.
The arbitrator will be a neutral attorney licensed in the State of Washington or
a neutral retired judge of the stet or federal judiciary of Washington, in
either case with a minimum of ten years experience in the substantive law
applicable to the subject matter of the dispute to be arbitrated. The arbitrator

                                      -12-

<PAGE>

will determine whether or not an issue is arbitratable ad will give effect to
the states of limitation in determining any claim. In any arbitration proceeding
the arbitrator will decide (by documents only or with a hearing at the
arbitrator's discretion) any pre-hearing motions which are similar to motions to
dismiss for failure to state a claim or motions for summary adjudication. The
arbitrator shall resolve all disputes in accordance with the substantive law of
Washington and may grant any remedy or relief as is necessary to make effective
any award. The arbitrator shall also have the power to award reasonable fees, to
impose sanctions and to take such other action as the arbitrator seems necessary
to the same extent a judge could pursuant to the Federal Rules of Civil
Procedures, the Washington Rules of Civil Procedure or other applicable law.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction. The institution and maintenance of any action for judicial
relief or pursuit of a provisional or ancillary remedy shall not constitute a
waiver of the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests such action for
judicial relief.

     (d) Class Proceedings and Consolidations. No party hereto shall be entitled
to join or consolidate disputes by or against others in any arbitration, except
parties who have executed any Loan Document, or to include in any arbitration
any dispute as a representative or member of a class, or to act in any
arbitration in the interest of the general public or in a private attorney
general capacity.

     (e) Payment of Arbitration Costs and Fees. The arbitrator shall award all
costs and expenses of the arbitration proceeding to the prevailing party.

     (f) Miscellaneous. To the maximum extend practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a dispute, the arbitration provision most directly
related to the Loan Documents or the subject matter of the dispute shall
control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.

ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.

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

STERLING FINANCIAL CORPORATION          WELLS FARGO BANK,
                                        NATIONAL ASSOCIATION

By: /s/ Daniel G. Byrne                 By: /s/ David S. Hernandez
    ---------------------------------       ------------------------------------
Title: EVP - Finance                        David S. Hernandez
                                            SVP & Division Manager

                                      -13-
<PAGE>

                       FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered into as of
August 29, 2006, by and between STERLING FINANCIAL CORPORATION, a Washington
corporation ("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank").

                                    RECITALS

     WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and
conditions of that certain Credit Agreement between Borrower and Bank dated as
of August 4, 2006, as amended from time to time ("Credit Agreement").

     WHEREAS, Bank and Borrower have agreed to certain changes in the terms and
conditions set forth in the Credit Agreement and have agreed to amend the Credit
Agreement to reflect said changes.

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree that the Credit
Agreement shall be amended as follows:

     1. Section 1.1 (a) is hereby amended by deleting "Forty Million Dollars
($40,000,000.00)" as the maximum principal amount available under the Line of
Credit, and by substituting for said amount "Thirty Million Dollars
($30,000,000.00)," with such change to be effective upon the execution and
delivery to Bank of a promissory note dated as of August 29, 2006 (which
promissory note shall replace and be deemed the Line of Credit Note defined in
and made pursuant to the Credit Agreement) and all other contracts, instruments
and documents required by Bank to evidence such change.

     2. In consideration of the changes set forth herein, promptly upon receipt
by Bank of an executed copy of this Amendment and the Line of Credit Note
reducing the maximum principal amount of the Line of Credit to $30,000,000.00,
Bank shall refund to Borrower $5,000.00 of the $20,000.00 that the Borrower has
paid to Bank as a commitment fee.

     3. Except as specifically provided herein, all terms and conditions of the
Credit Agreement remain in full force and effect, without waiver or
modification. All terms defined in the Credit Agreement shall have the same
meaning when used in this Amendment. This Amendment and the Credit Agreement
shall be read together, as one document.

     4. Borrower hereby remakes all representations and warranties contained in
the Credit Agreement and reaffirms all covenants set forth therein. Borrower
further certifies that as of the date of this Amendment there exists no Event of
Default as defined in the Credit Agreement, nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute
any such Event of Default.

ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.

                                       -1-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.

STERLING FINANCIAL CORPORATION          WELLS FARGO BANK,
                                        NATIONAL ASSOCIATION

By: /s/ Daniel G. Byrne                 By: /s/ Brandon Kowsky
    ---------------------------------       ------------------------------------
Title: Executive Vice President,            Brandon Kowsky
       Assistant Secretary,                 Vice President
       and Chief Financial Officer

                                       -2-

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