Document:

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                                                                    EXHIBIT 10.6

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY APPLICABLE STATE
SECURITIES LAW AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN
OPINION OF COUNSEL THAT SUCH REGISTRATION STATEMENT IS NOT REQUIRED UNDER THE
SECURITIES ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER OR UNDER THE
APPLICABLE STATE SECURITIES LAWS.

                    CONVERTIBLE SUBORDINATED PROMISSORY NOTE

$50,000                                                            April 1, 2003
                                                                 Cleveland, Ohio

      FOR VALUE RECEIVED, the undersigned, AMERICAN STONE INDUSTRIES, INC., a
Delaware corporation ("Maker"), promises to pay to the order of TERRAZZO MOSAIC
& TILE CO., LTD. ("Payee"), the principal sum of Fifty Thousand and 00/100
Dollars ($50,000.00), together with interest thereon at a rate of five percent
(5%) per annum computed on a three hundred sixty-five (365) day year, in
accordance with the terms and subject to the conditions set forth below.

      1. Payment. The principal balance of this Note and any accrued but unpaid
interest thereon shall be due and payable on March 31, 2004. Maker shall pay
accrued interest under this Note on a quarterly basis on April 1, July 1,
October 1 and January 1 of each year during the period commencing on July 1,
2003 and continuing until the entire principal balance of this Note is paid in
full. Payments of both principal and interest under this Note shall be made by
Maker to Payee in lawful money of the United States of America to Payee's
address as set forth in Section 2 below.

      2. Address of Payee. Payments of principal of and interest on this Note
shall be made to Payee: 900 Keele Street, Toronto, Canada M6N 3E7, or at such
other address as Payee may designate in writing to Maker from time to time.

      3. Prepayment. Maker reserves the right to prepay at any time, without
premium or penalty, all or any portion of the indebtedness evidenced hereby.

      4. Conversion Feature. During the period commencing on April 1, 2003 the
date hereof and continuing until the entire principal balance of this Note is
paid in full (the "Conversion Period"), Payee shall have the right and option to
convert (the "Conversion Feature") the entire then outstanding principal balance
of this Note into Maker's common stock with a par value of $.001 per share
("Common Stock"). Upon Payee's exercise of the Conversion Feature, the
conversion price shall be Three and 50/100 Dollars ($3.50) per share, which
amount shall be subject to adjustment as provided in Section 6 below (as such
amount may be adjusted from time to time, as so adjusted, the "Conversion
Price"). The number of shares issuable upon Payee's exercise of the Conversion
Feature shall be determined by dividing the then outstanding principal balance
of this Note by the Conversion Price, which number shall be subject to
adjustment as provided in Section 6 below. To exercise the Conversion Feature,
Payee must (a) complete, execute and deliver to Maker a conversion notice in the
form of EXHIBIT A attached hereto (the "Conversion Notice") prior to the
expiration of the Conversion Period and (b) surrender the original of this Note
to Maker at such time. Upon conversion, the entire outstanding principal balance
of this Note shall be deemed paid in full by Maker. After delivery of the
Conversion Notice, Payee's exercise of the Conversion Feature shall be
irrevocable except with the written

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consent of Maker. The exercise of the Conversion Feature shall be effective as
of thirty (30) days after Maker's receipt of the Conversion Notice or as of such
earlier date, not sooner than Maker's receipt of the Conversion Notice, as
determined by Maker in its sole discretion.

      5. Conditions to Exercise of Conversion Feature. The exercise of the
Conversion Feature and the issuance of Common Stock in connection therewith
shall, in all cases, be subject to each of the following conditions: (a) the
satisfaction of withholding tax or other withholding liabilities, (b) the
listing, registration or qualification of any to-be-issued shares upon any
securities exchange, the Nasdaq or other trading or quotation system or under
any federal or state law, (c) the consent or approval of any regulatory body,
and/or (d) any requirement by Maker that Payee take any reasonable action to
meet all applicable requirements imposed by federal and state securities laws
including providing undertakings as to the investment intent of Payee, accepting
transfer restrictions on the Common Stock and providing opinions of counsel, in
form and substance acceptable to Maker, as to the availability of exemptions
from such requirements. Maker shall, in its sole discretion, determine whether
one or more of the foregoing conditions is necessary or desirable to be
satisfied in connection with the exercise of the Conversion Feature and prior to
the delivery of Common Stock pursuant to the exercise of the Conversion Feature.
The exercise of the Conversion Feature shall not be effective unless and until
such condition(s) have been satisfied or Maker has, in its sole discretion,
waived such conditions in writing.

      6. Adjustments. The Conversion Price and the number of shares of Common
Stock issuable upon exercise of the Conversion Feature shall be subject to
adjustment from time to time as provided below.

            (a) Stock Dividends, Splits and Reclassifications.

                  (1) In General. The following events are hereinafter referred
            to as "Adjustment Events": (i) Maker pays a dividend with respect to
            its capital stock in shares of Common Stock; (ii) Maker subdivides
            its outstanding shares of Common Stock; (iii) Maker combines its
            outstanding shares of Common Stock into a smaller number of shares
            of any class of Common Stock; (iv) Maker issues any shares of its
            capital stock in a reclassification of Common Stock (including any
            such reclassification in connection with a merger, consolidation or
            other business combination in which Maker is the surviving entity),
            or; (v) any other corporate action which results in the issuance of
            an interest which is or could become a share of Maker. If an
            Adjustment Event occurs, the number of shares of Common Stock
            issuable upon exercise of the Conversion Feature immediately prior
            to the record date for such Adjustment Event shall be adjusted so
            that Payee shall thereafter be entitled to receive the number of
            shares of Common Stock that Payee would have owned, or would have
            been entitled to receive, after the happening of such Adjustment
            Event if the Conversion Feature had been exercised immediately prior
            to the happening of such Adjustment Event or any record date with
            respect thereto. An adjustment made pursuant to this Section 6(a)(1)
            shall become effective immediately after the effective date of such
            Adjustment Event retroactive to the record date, if any, for such
            Adjustment Event.

                  (2) Adjustment of the Conversion Price. Whenever the number of
            shares of Common Stock issuable upon exercise of the Conversion
            Feature is adjusted pursuant to Section 6(a)(1) above, the
            Conversion Price for each share of Common Stock payable upon
            conversion shall be adjusted by multiplying the Conversion Price
            immediately prior to such adjustment by a fraction, the numerator of
            which shall be the number of shares of Common Stock issuable upon
            conversion immediately prior to such adjustment, and the denominator
            of which shall be the number of shares of the Common Stock so
            issuable immediately thereafter.

<PAGE>

            (b) When No Adjustment Required. No adjustment need be made for any
      of the following:

                  (1) transactions referred to in Section 6(a)(1) above, if
            Payee is to participate in the transaction on a basis and with
            notice that the board of directors of Maker determines to be fair
            and appropriate in light of the basis and notice on which holders of
            Common Stock participate in the transaction;

                  (2) rights to purchase Common Stock pursuant to a plan of
            Maker for reinvestment of dividends or interest;

                  (3) a change in the par value or a change to no par value of
            the Common Stock;

                  (4) unless such adjustment would require an increase or
            decrease of at least one percent (1%) in the number of shares of
            Common Stock issuable upon exercise of the Conversion Feature (all
            such calculations shall be made to the nearest full share); or

                  (5) if the amount of such adjustment would be less than $0.05
            per share of Common Stock.

            (c) Consolidation or Merger. In the case of any consolidation or
      merger of Maker with or into another entity (other than a consolidation or
      merger in which Maker is the continuing entity and which does not result
      in any reclassification or change of outstanding shares of Common Stock),
      Maker shall execute and deliver to Payee an agreement supplemental hereto,
      providing that Payee shall have the right thereafter, during the
      Conversion Period, to convert this Note into the kind and amount of shares
      of stock, other securities, cash and other property receivable upon such
      consolidation or merger. Such supplemental agreement shall provide for
      adjustments which shall be as nearly equivalent as may be practicable to
      the adjustments provided in this Section 6. The rights of Payee under such
      supplemental agreement shall replace entirely all rights of Payee under
      this Section 6.

      7. Subordination.

            (a) Senior Indebtedness. Maker covenants and agrees, and Payee, for
      itself and for each subsequent holder of this Note, by its acceptance
      hereof likewise covenants and agrees, that the indebtedness represented by
      this Note and the payment of the principal of and interest on this Note is
      hereby expressly subordinated and junior in right of payment to the prior
      payment in full of the principal of (and premium, if any) and interest on
      any of the following (collectively, the "Senior Indebtedness"):

                  (1) all indebtedness of Maker (including indebtedness of
            others guaranteed by Maker) other than under this Note, whether
            outstanding on the date of this Note or thereafter created, incurred
            or assumed, which is (A) for money borrowed or (B) evidenced by a
            note or similar instrument given in connection with the acquisition
            of any businesses, properties or assets of any kind;

                  (2) obligations of Maker as lessee under leases required to be
            capitalized on the balance sheet of the lessee under generally
            accepted accounting principles and leases of property or assets made
            as part of any sale and lease-back transaction to which Maker is a
            party;

                  (3) all borrowings under any lines of credit, revolving credit
            agreements or promissory notes from a bank or other financial
            institution (including any letters of credit,

<PAGE>

            performance bonds and other credit facilities under such borrowing
            arrangements), and any amendments, modifications, renewals or
            extensions of any of the foregoing;

                  (4) any amounts payable in respect of any interest rate
            exchange agreement, currency exchange agreement or similar
            agreement; and

                  (5) amendments, renewals, extensions, modifications and
            refundings of any such indebtedness or obligation, unless in any
            case the instrument creating or evidencing any such indebtedness or
            obligation or pursuant to which the same is outstanding provides
            that such indebtedness or obligation is not superior in right of
            payment to this Note.

            (b) Permitted Payments. Notwithstanding any provision in this Note
      to the contrary, Payee, and each subsequent holder of this Note, by its
      acceptance hereof, acknowledges and agrees that it is entitled to receive
      payments of principal of or interest on this Note only to the extent that
      such payments (1) are made in accordance with the original tenor of this
      Note at the times, in the amounts and otherwise in strict conformity with
      the provisions of Section 1 and Section 7(a) above and (2) are not
      otherwise prohibited under the remaining provisions of this Section 7.

            (c) Insolvency/Bankruptcy. In the event of any insolvency or
      bankruptcy proceedings, and any receivership, liquidation, reorganization
      or other similar proceedings in connection therewith, relative to Maker or
      to the property of Maker, and in the event of any proceedings for
      voluntary liquidation, dissolution or other winding-up of Maker, whether
      or not involving insolvency or bankruptcy, the holders of the Senior
      Indebtedness shall first be entitled to receive payment in full of all of
      the Senior Indebtedness before any holder of this Note is entitled to
      receive any payment on account of the principal of or interest on the
      indebtedness evidenced by this Note.

            (d) Maturity of Senior Indebtedness. Upon the maturity of any Senior
      Indebtedness by lapse of time, acceleration or otherwise, all such
      maturing Senior Indebtedness shall first be paid in full before any
      payment is made on account of the principal of or interest on this Note.

            (e) Loan Covenants. Payments, whether on account of interest or
      principal, may be prohibited, or otherwise restricted or conditioned by
      any holder of the Senior Indebtedness, upon delivery of notice to Payee or
      other holder hereof, at any time if (1) Maker, at such time, is in default
      under such Senior Indebtedness or (2) the effect of making such payment
      would be to cause Maker to be in default under the provisions of any loan
      agreement with any holder of the Senior Indebtedness.

            (f) Subordination Agreement. To the extent that any holder of the
      Senior Indebtedness requests that Payee or any other holder of this Note
      execute a separate agreement respecting the terms and conditions of
      subordination relative to the indebtedness evidenced hereby (any such
      agreement being hereinafter referred to as a "Subordination Agreement"),
      Payee or such other holder shall, so long as the same is not materially
      inconsistent with the terms of subordination herein set forth or the
      intent hereof, execute such Subordination Agreement and, to the extent so
      executed by Payee or other holder hereof, the terms and conditions of such
      Subordination Agreement shall govern in the event of any conflict with the
      terms hereof.

            (g) Payments in Contravention. In the event that any direct or
      indirect payment or distribution shall be received by the holder of this
      Note in contravention of the provisions of this Section 7 or a
      Subordination Agreement, if any, then, and in any such event, such payment
      or distribution shall be held in trust for the benefit of, and shall be
      paid over and delivered to, the holders of the Senior Indebtedness (as
      their respective interests may appear) for application to the payment of
      all Senior Indebtedness.

<PAGE>

            (h) Continuing Terms of Subordination/Future Lenders. The
      indebtedness evidenced hereby shall continue to be subordinated to any and
      all future indebtedness, including renewals, extensions and refundings
      thereof, of Maker to any person or entity which is or may become a holder
      of any Senior Indebtedness unless the instrument creating or evidencing
      the same and pursuant to which the same is outstanding provides that such
      indebtedness or such renewal, extension or refunding thereof is not
      superior in right to payment of this Note.

      8. Acceleration. The entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon, shall become due and
payable forthwith without presentation, protest, demand or notice of any kind,
all of the foregoing being expressly waived, upon the occurrence of any one or
more of the following events of default:

            (a) the failure by Maker to make any payment required hereunder
      within thirty (30) days after the due date thereof;

            (b) the failure or neglect of Maker to perform, keep or observe any
      other term, provision, condition, covenant, warranty or representation
      that is required to be performed, kept or observed by Maker under this
      Note, if Maker fails to cure such failure or neglect within thirty (30)
      days after Maker's receipt of written notice thereof delivered by Payee.

            (c) the commencement by or against Maker of any proceeding for
      reorganization, liquidation, dissolution or receivership, or the filing of
      any voluntary or involuntary petition in bankruptcy by or against Maker or
      the commencement of any proceeding under any other present or future
      federal or state insolvency or other law for the relief from, or
      adjustment of, any indebtedness, to the extent that any of the foregoing
      are not dismissed within ninety (90) days after the filing thereof;

            (d) the dissolution or termination of existence of Maker; or

            (e) the sale of all, or substantially all, of the assets of Maker.

      9. Default. A Default under this Note shall include failure of the Maker
to pay when due the interest or principal under this Note, and continuation of
such failure for thirty (30) days after delivery of written notice to the Maker.
In the event of Default hereunder, the Payee hereof may declare, at the Payee's
option, the entire amount of the interest on and principal of the Note remaining
unpaid to be at once due and payable plus interest on all late payments (in
Default) at two percent (2%) per annum.

      10. Representations, Warranties and Covenants of Payee. Payee, for itself
and for each subsequent holder of this Note, by its acceptance hereof
represents, warrants and covenants to Maker, that:

            (a) Payee is acquiring this Note for his own account, for
      investment, and not for distribution or resale, and will make no transfer
      of this Note except in compliance with applicable federal and state
      securities laws;

            (b) Payee can bear the economic risk of investment in this Note,
      including a total loss of Payee's investment;

            (c) Payee is experienced in business and financial matters and is
      capable of (1) evaluating the merits and risks of an investment in this
      Note, (2) making an informed investment decision regarding this Note, and
      (3) protecting Payee's interests in connection therewith; and

<PAGE>

            (d) Payee is an Accredited Investor, as such term is defined in Rule
      501 of Regulation D promulgated by the Securities and Exchange Commission
      pursuant to the Securities Act of 1933, as amended.

      11. Governing Law. This Note shall be construed under and governed by the
laws of the State of Ohio, without giving effect to principles of conflicts of
laws contained therein.

      12. Notices. Any notice to Maker required or permitted hereunder shall be
deemed to have been effectively delivered (a) upon transmission if sent via
facsimile, with a copy sent via overnight courier, provided that such overnight
delivery is received, (b) when received if in writing and served by personal
delivery to Maker, or (c) three business days after deposit in the United States
mail if sent by registered or certified mail with return receipt requested,
postage prepaid, to Maker. Such notices and other communications shall be sent
to Maker at the address or facsimile number below or at such other address or
facsimile number as Maker may designate in writing to Payee from time to time:

             American Stone Industries, Inc.
             Attn:  Russell Ciphers, Sr., President and Chief Executive Officer
             8705 Quarry Road
             Amherst, Ohio 44001
             Facsimile:  (440) 986-4531

      13. Successors. This Note shall be binding upon the successors and assigns
of Maker and shall inure to the benefit of the heirs, successors and assigns of
Payee; provided, however, that Payee may not sell, transfer, hypothecate or
assign his interest hereunder, in whole or in part, directly or indirectly, by
operation of law or otherwise without the prior written consent of Maker, which
consent may be withheld in Maker's sole and absolute discretion, and any
attempted sale, transfer, hypothecation or assignment in the absence of such
consent shall be void and of no effect.

      14. Partial Invalidity. If any term or provision of this Note or the
application thereof to any person, firm or corporation or any circumstance,
shall be invalid or unenforceable, the remainder of this Note, or the
application of such term or provision to any person, firm or corporation or any
circumstance, other than those as to which it is held invalid, shall both be
unaffected thereby and each term or provision of this Note shall be valid and be
enforced to the fullest extent permitted by law.

      15. Captions. The captions and section numbers appearing in this Note are
inserted only as a matter of convenience; they do not define, limit, construe or
describe the scope or intent of the provisions of this Note.

      16. Consent. Maker and Payee hereby irrevocably and unconditionally
consent to submit to the exclusive jurisdiction of the courts of the State of
Ohio and of the United States of America located in the City of Cleveland, Ohio,
for any actions, suits or proceedings arising out of or relating to this Note
and the transactions contemplated hereby (and Maker and Payee agree not to
commence any action, suit or proceeding relating thereto except in such courts),
and further agree that service of any process, summons, notice or document by
U.S. certified or registered mail, return receipt requested, to the addresses
set forth in Section 12 or Section 2 above shall be effective service of process
for any action, suit or proceeding brought against Maker or Payee in any such
court. Maker and Payee hereby irrevocably and unconditionally waive any
objection to the laying of venue of any action, suit or proceeding arising out
of this Note, or the transactions contemplated hereby, in the courts of the
State of Ohio or of the United States of America located in the City of
Cleveland, Ohio, and hereby further irrevocably and unconditionally waive and
agree not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.

<PAGE>

      17. Joint Preparation. This Note shall be deemed to have been prepared
jointly by Maker and Payee, and any uncertainty or ambiguity existing herein
shall not be interpreted against either party, but shall be interpreted
according to the rules for the interpretation of arm's length agreements.

      18. Third Parties. Nothing herein, express or implied, is intended to be
or shall be construed to confer upon or give any person other than the parties
hereto and their successors or assigns, any rights or remedies under or by
reason of this Note.

      19. Waiver of Jury Trial. MAKER AND PAYEE HEREBY VOLUNTARILY, IRREVOCABLY
AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN MAKER AND
PAYEE ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN MAKER AND PAYEE IN CONNECTION WITH THIS NOTE OR
ANY OTHER AGREEMENT OR DOCUMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR THE TRANSACTIONS RELATED HERETO OR THERETO.

      IN WITNESS WHEREOF, Maker has executed this Note as of the day and year
first written above.

                                  AMERICAN STONE INDUSTRIES, INC.

                                  By:  /s/ Russell Ciphers
                                     -----------------------------------------
                                  Name:   Russell Ciphers, Sr.
                                  Title:  President and Chief Executive Officer

<PAGE>

                                    EXHIBIT A

                            FORM OF CONVERSION NOTICE

                    NOTICE OF EXERCISE OF CONVERSION FEATURE
                                      UNDER
               $ 50,0000 CONVERTIBLE SUBORDINATED PROMISSORY NOTE

To:   American Stone Industries, Inc. ("Maker")

From: Terrazzo Mosaic & Title Co. ("Payee")

Date: April 1, 2003

      Pursuant to the terms and conditions of that certain $50,000 Convertible
Subordinated Promissory Note dated April 1, 2003, as issued by Maker and made
payable to the order of Payee (the "Note"), the undersigned hereby exercises the
right to convert the entire outstanding principal balance due and payable under
the Note into Maker's common stock in accordance with the terms of the Note (the
"Common Stock").

      The undersigned hereby represents, warrants, and covenants to Maker that:

      (a) The undersigned is acquiring the Common Stock for his own account, for
investment, and not for distribution or resale, and the undersigned will make no
transfer of the Common Stock except in compliance with applicable federal and
state securities laws.

      (b) The undersigned can bear the economic risk of the investment in the
Common Stock resulting from this exercise of the Conversion Feature (as such
term is defined in the Note), including a total loss of the undersigned's
investment.

      (c) The undersigned is experienced in business and financial matters and
is capable of (i) evaluating the merits and risks of an investment in the Common
Stock; (ii) making an informed investment decision regarding exercise of the
Conversion Feature; and (iii) protecting the undersigned's interests in
connection therewith.

      (d) The undersigned is an Accredited Investor, as such term is defined in
Rule 501 of Regulation D promulgated by the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended.

      The undersigned acknowledges that issuance of the Common Stock pursuant to
the Note is subject to further conditions set forth in the Note.

Date: April 1, 2003                          /s/ Glen Gaspirini
                                             ---------------------------------
                                             Payee

<PAGE>

LIQUIDITY AND SOURCES OF CAPITAL

The Company's primary source of liquidity is the Company's line of credit under
an agreement between the Company and Dollar Bank (the "Credit Agreement"). The
Credit Agreement provides for maximum borrowings of $500,000, with interest
payable monthly at a rate equivalent to the prime lending rate. Borrowings under
the Credit Agreement are secured by substantially all real estate, inventory and
equipment of the Company. The outstanding balance at June 30, 2003 and December
31, 2002 was $500,000.

As disclosed on July 1, 2003, Dollar Bank has requested immediate payment of the
balance due on the Credit Agreement. As of August 15, 2003, the Bank has not
sought to enforce its request, and the Company remains in discussions with a
Cleveland-area bank on a new term loan and revolving credit facility.

The Company's cash flow from operations has improved from the first quarter of
2003 due to the seasonal factors and careful working capital management.
However, the Company has experienced significant operating losses over the
previous two years and as a result, cash flow and liquidity remain a concern.
Management has cut administrative overhead, employment levels and other expenses
with a goal of reducing expenses by nearly $1 million in 2003. Management has
also instituted strict controls on credit and sales policies and procedures.
There can be no assurances that these measures will enable the Company to become
profitable or achieve positive cash flow in the foreseeable future. Management
is currently evaluating alternatives including identifying and obtaining
long-term funding sources, including debt placement, stock issuance and other
alternatives. If Management is unable to obtain additional capital, there is
doubt about the Company's ability to continue as a going concern. (CONFIRM THIS
LANGUAGE)

Management believes that the Company is not in default with respect to any note,
loan, lease or other indebtedness or financing agreement. (UPDATE AND INSERT)

FORWARD-LOOKING STATEMENTS The Company is making this statement in order to
satisfy the "safe harbor" provisions contained in the Private Securities
Litigation Reform Act of 1995. This Quarterly Report on Form 10-QSB includes
forward-looking statements relating to the business of the Company.
Forward-looking statements contained herein or in other statements made by the
Company are made based on Management's expectations and beliefs concerning
future events affecting the Company and are subject to risks and uncertainties
that could cause actual results of the Company to differ materially from the
expectations expressed in or implied by forward-looking statements. The Company
believes that the following factors, among others, could affect its future
performance and cause actual results of the Company to differ materially from
those expressed in or implied by forward-looking statements made by or on behalf
of the Company: (a) general economic, business and market conditions; (b)
competition; (c) the success of advertising and promotional efforts; (d) trends
within the building construction industry; (e) the existence or absence of
adverse publicity; (f) changes in relationships with the Company's major
customers or in the financial condition of those customers; and (g) the adequacy
of the Company's financial resources and the availability and terms of any
additional capital. There can be no assurances that efforts to reduce costs and
raise additional capital will enable the Company to become profitable or achieve
positive cash flow in the foreseeable future.<PAGE>
                                                                 EXHIBIT 10.4

                               MARKETING AGREEMENT

         THIS AGREEMENT, is made and entered into effective as of June 1, 1998
by and between CARGILL, INCORPORATED, a Delaware corporation with principal
offices and place of business at 15407 McGinty Road West, Wayzata, Minnesota
55391 ("Cargill"), and THE ANDERSONS, INC., an Ohio corporation with principal
offices and place of business at 480 W. Dussel Drive, P.O. Box 119, Maumee, Ohio
43537 ("TAI").

         WHEREAS, Cargill has leased its two grain handling facilities located
in Toledo and Maumee, Ohio (the "Leased Facilities") to TAI by lease agreement
dated June 1, 1998 (the "Lease Agreement");

         WHEREAS, TAI intends to use TAI's existing two grain handling
facilities at Toledo and Maumee, Ohio (the "TAI Facilities") and the Leased
Facilities (collectively, the "Facilities") for the primary purpose of
originating grain in the Toledo and Maumee, Ohio area (the "Toledo Grain"); and

         WHEREAS, TAI intends to sell the Toledo Grain to Cargill, and Cargill
intends to purchase from TAI and merchandise the Toledo Grain;

         NOW, THEREFORE, in consideration of the foregoing and the mutual terms
and conditions hereinafter set forth, Cargill and TAI mutually agree as follows:

                                    ARTICLE I
                              TERM AND TERMINATION

         1.1 TERM. The initial term of this Agreement shall commence on June 1,
1998 (the "Effective Date") and shall continue through May 31, 2003 (the
"Initial Term"), subject to the termination provisions below. This Agreement
shall automatically renew for consecutive five (5) year periods unless either
party provides notice to the other party at least six (6) months prior to the
expiration of the then current term of such party's intent to terminate or
modify this Agreement. If a party provides such notice of its intent to modify
the Agreement for purposes of renewal, the parties shall negotiate in good faith
a renewal of this Agreement. In the event that the parties are unable to
negotiate a mutually agreeable renewal prior to the expiration of the Initial
Term or the then current term, this Agreement shall terminate without further
notice at the expiration of such term.

         1.2       TERMINATION.

                  (a) If the Lease Agreement is terminated for any reason, the
Initial Term of this Agreement or renewal term, if any, shall automatically
terminate without notice. The Lease Agreement, which is incorporated herein by
this reference, is attached hereto as Exhibit A.

                  (b) Either party may terminate this Agreement prior to the
expiration of the Initial Term or renewal term, if any, following any material
breach of this Agreement by the other party if the breaching party fails to
remedy such breach within thirty (30) days after receiving from the
non-breaching party written notice of the breach specifying the basis on which
such breach is claimed.

<PAGE>

                  (c) This Agreement shall terminate upon written notice by
either party to the other in the event that the notified party shall file a
voluntary petition in bankruptcy, or shall be adjudicated as a bankrupt pursuant
to an involuntary petition, or shall suffer appointment of a temporary or
permanent receiver, custodian, or trustee for its business or for all or
substantially all of its assets, or shall make an assignment for the benefit of
creditors.

                  (d) In the event that one or more third parties purchases
TAI's stock in an amount sufficient to significantly affect or change control of
TAI, or one or more third parties takes any action that does significantly
affect the control of TAI, Cargill may in its sole discretion either continue or
terminate this Agreement. For purposes of this Agreement, "control" shall mean
(a) the direct or indirect ownership of more than fifty percent (50%) of the
total voting securities of every class or other voting evidences of ownership
interest of TAI, or (b) the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of TAI. If Cargill
elects to terminate this Agreement under this provision, Cargill must provide
written notice to TAI of its election to terminate not more than fifteen (15)
days after public announcement or after TAI has provided written notice to
Cargill of any public filing with the Securities Exchange Commission. TAI shall
have no right to terminate this Agreement under this Section 1.2 (d) herein.

                  (e) Termination of this Agreement shall not affect any
obligation of either party accrued prior to the effective date of such
termination.

         1.3 CONTINUING OBLIGATIONS. Upon the expiration or termination of this
Agreement, for a period of two (2) years from the date of such expiration or
termination, Cargill shall have both a right of first refusal and a right of
last refusal to purchase from TAI at a mutually agreed market price, 50% of the
grain put through the TAI Facilities for the first year of the two year period,
and 25% of the grain put through the TAI Facilities for the second year of the
two year period; provided, however, that this provision shall not apply to grain
sold to those customers with whom TAI maintains direct trading relationships
during the term of this Agreement. If the parties cannot mutually agree to the
market price, the market price shall be determined by an independent third
party, mutually agreeable to both parties.

                                   ARTICLE II
                       GRAIN ORIGINATION AND MERCHANDISING

         2.1 OBLIGATION OF BOTH PARTIES. Both parties have the obligation to
maximize net income of the Facilities. As a means to this, Cargill will maintain
control of the grain merchandising function, while TAI will maintain control of
the grain origination and facility operation functions. Communications between
the parties regarding such obligation of both parties shall be conducted in
accordance with the Guidelines as defined in Section 8.1 herein.

         2.2 ORIGINATION. TAI shall use its best efforts throughout the duration
of the Initial Term and all subsequent renewal terms, if any, to maximize
origination of the Toledo Grain. TAI shall use the Facilities for the primary
purpose of originating the Toledo Grain. Any other intended use by TAI of the
Facilities to generate income shall be promptly communicated to Cargill and
shall be subject to Cargill's approval, which shall not be unreasonably
withheld. For purposes of this Section 2.2, it shall not be unreasonable for
Cargill to withhold approval if TAI's intended use may cause a default in the
IRB Lease as defined in the Lease Agreement. TAI shall have sole discretion to
establish the price at which TAI purchases the Toledo Grain in connection with
TAI's origination activities.

<PAGE>

         2.3 SALE/PURCHASE OF THE TOLEDO GRAIN. Subject to the terms and
conditions set forth in this Agreement, TAI agrees to sell to Cargill and
Cargill agrees to purchase from TAI the Toledo Grain for the duration of the
Initial Term and all subsequent renewal terms, if any. Cargill shall have sole
discretion to determine when Cargill shall purchase and at what price Cargill
shall purchase the Toledo Grain from TAI. These decisions shall be made with
full consideration of origination, logistic and grain quality factors as
represented in good faith by TAI. During the term of this Agreement, TAI will
not sell the Toledo Grain to any person or entity other than Cargill pursuant to
the terms of this Agreement. Cargill and TAI shall execute Cargill's standard
purchase contract ("Purchase Contract") to effectuate each respective sale of
the Toledo Grain. The terms and conditions on the front and back sides of the
Purchase Contract shall govern the transaction to the extent that such terms and
conditions do not conflict with the terms of this Agreement in which case this
Agreement shall govern. A copy of the Purchase Contract is attached hereto as
Exhibit B.

         2.4 TOLEDO GRAIN EXCEPTIONS. TAI will remain fully active in the NS
rail markets as such markets relate to facilities other than the Facilities
which are the subject of this Agreement, and no NS rail sales will be offered by
TAI for the Toledo Grain. Should an opportunity arise wherein TAI desires to
purchase certain amounts of Toledo Grain, TAI may contact Cargill's
merchandising contact for this Agreement with a bid. Further, TAI may direct
trading relationships with certain customers as mutually agreed by the parties.

         2.5 GRAIN MERCHANDISING. Cargill shall use its best efforts throughout
the duration of the Initial Term and all subsequent renewal terms, if any, to
promote the sale of and to merchandise the Toledo Grain. Except as otherwise
provided herein, Cargill shall have sole authority to merchandise the Toledo
Grain into both export and domestic markets, and accordingly TAI shall not
communicate with any of Cargill's customers regarding the sale of the Toledo
Grain except as provided herein, or as mutually agreed by the parties.

                                   ARTICLE III
                                 OPEN CONTRACTS

         3.1 Cargill agrees to assign, deliver, and transfer to TAI on the
Effective Date, and TAI agrees to accept from Cargill, on the Effective Date,
all right, title, and interest of Cargill in and to all executory contracts for
the purchase of grain (the "Open Contracts") by Cargill from various sellers,
which Open Contracts are in existence on the Effective Date. TAI shall purchase
the Open Contracts at the TAI truck bid on the Effective Date. If the parties
cannot mutually agree to the TAI truck bid, the price shall be determined by an
independent third party, mutually agreeable to both parties. Cargill shall
indemnify and hold harmless TAI against all claims, damages, liabilities, costs,
suits, obligations or penalties (including attorneys' fees) arising from
Cargill's breach of or negligent administration or handling of any open
hedge-to-arrive grain contracts which are assigned from Cargill to TAI ("HTA
Contracts"), or arising from any questions of legality of such HTA Contracts to
the extent that such questions of legality do not arise from TAI's breach of or
negligent administration or handling of the HTA Contracts. TAI shall indemnify
and hold harmless Cargill against all claims, damages, liabilities, costs,
suits, obligations, or penalties (including attorneys' fees) arising from TAI's
breach of or negligent administration or handling of the HTA Contracts.

<PAGE>

                                   ARTICLE IV
                        DISPOSITION OF THIRD PARTY GRAIN

         4.1 ASSIGNMENT. On the Effective Date, Cargill anticipates having in
storage at the Leased Facilities certain quantities of grain belonging to third
parties (the "Cargill Third Party Grain"). The Cargill Third Party Grain is
stored in the Leased Facilities under warehouse receipts, storage receipts or
scale tickets ("Cargill Receipt Obligations"). On the Effective Date, Cargill
shall assign to TAI the Cargill Receipt Obligations and warrants that sufficient
quantity and quality of grain will remain in the Leased Facilities over and
above the Cargill Inventory (as defined in Section 5.1 herein) on the Effective
Date to satisfy the Cargill Receipt Obligations.

         4.2 PRORATION. Cargill and TAI agree that storage charges due under the
Cargill Receipt Obligations shall be apportioned between them, Cargill to
receive all storage charges accrued up to the Effective Date, TAI to receive all
charges accruing thereafter, which charges shall be included on the P&L as
defined in Section 6.3 herein. Any prepaid storage or other charges shall be
prorated between Cargill and TAI as of the Effective Date. If TAI should receive
payment for storage charges to which Cargill is entitled, TAI shall promptly
forward such amounts to Cargill. Should it be necessary for either party to
execute an assignment to the other to collect such charges, it shall do so.

       4.3 TAI THIRD PARTY GRAIN. On the Effective Date, TAI anticipates having
in storage at the TAI Facilities certain quantities of grain belonging to third
parties (the "TAI Third Party Grain"). The TAI Third Party Grain is stored in
the TAI Facilities under warehouse receipts, storage receipts or scale tickets
("TAI Receipt Obligations"). All storage charges due under the TAI Receipt
Obligations accrued on or after the Effective Date shall be included in the P&L.
Any prepaid storage or other charges shall be prorated accordingly as of the
Effective Date.

                                    ARTICLE V
                                    INVENTORY

         5.1 LEASED FACILITIES. On the Effective Date, Cargill will have in
storage at the Leased Facilities inventories of grain (the "Cargill Inventory").
TAI will purchase the Cargill Inventory at the FOB Toledo value LESS * on the
Effective Date (the "Inventory Price"). Prior to or on the Effective Date,
representatives of Cargill and TAI shall determine by weigh-up/measurement the
quantity and quality of the Cargill Inventory (and thereby the Cargill Third
Party Grain). Quality of grain will be at market scale of discount. The cost of
said weigh-up/measurement and grading shall be borne equally by Cargill and TAI.
Should the representatives of Cargill and TAI be unable to agree on the quantity
or quality of the Cargill Inventory or any portion thereof or the Third Party
Grain, the matter shall be resolved in accordance with Article XIV of this
Agreement. If the parties cannot mutually agree to the FOB Toledo value less *
such value shall be determined by an independent third party, mutually agreeable
to both parties.

         5.2 TAI FACILITIES. On the Effective Date, TAI will have in storage at
the TAI Facilities inventories of grain (the "TAI Inventory"). The parties shall
mutually agree to a FOB Toledo value less * of the TAI Inventory as of the
Effective Date, which amount shall be included on the P&L as defined in Section
6.3 herein. Prior to or on the Effective Date, representatives of Cargill and
TAI shall determine by weigh-up/measurement the quantity and quality of the TAI
Inventory. Quality of

*CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SEC

<PAGE>

grain will be at market scale of discount. The cost of said weigh-up/measurement
and grading shall be borne equally by Cargill and TAI, of which TAI's respective
cost shall not be included on the P&L. Should the representatives of Cargill and
TAI be unable to agree on the quantity or quality of the TAI Inventory or any
portion thereof, the matter shall be resolved in accordance with Article XIV of
this Agreement. If the parties cannot mutually agree to the FOB Toledo value
less * , such value shall be determined by an independent third party, mutually
agreeable to both parties.

                                   ARTICLE VI
                                FINANCIAL MATTERS

         6.1 EARNINGS THRESHOLD. The parties hereby establish a five-year
cumulative earnings before long-term interest and income tax ("EBIT") threshold
* (the "Threshold"). In the event that the actual five-year cumulative EBIT of
the Facilities is greater than the Threshold, the amount over the Threshold
shall be distributed equally between the parties. If the actual five-year
cumulative EBIT is below the Threshold, Cargill shall pay TAI the difference
between the Threshold and the actual five-year cumulative EBIT, less all
absorbed losses as described herein. TAI shall absorb fifty percent (50%) of
each individual year's loss where the EBIT for the individual year is less than
zero. In no event shall the sum of TAI's absorbed losses exceed the total actual
five-year cumulative EBIT shortfall from the Threshold. If this Agreement is
terminated before the expiration of the Initial Term, or before the expiration
of the then current term, the Threshold shall be adjusted on a prorated basis.
By way of example, if this Agreement is terminated 3 years 3 months into the
Initial Term, the Threshold would be adjusted from * to * .

         6.2 SETTLEMENT. In order to reconcile the distributions to which each
party is entitled pursuant to Section 6.1 herein, the parties shall conduct
interim tentative settlements on an annual basis as of May 31. Such settlements
shall be based on interim annual thresholds of * , and * for years one through
five of this Agreement, respectively. Annual settlement payments shall be
treated as a purchase price adjustment to all grain sold and purchased pursuant
to Section 2.3 of this Agreement.

         By way of example, settlement would occur in the following manner:

         Example One

         Year One: P&L states a profit of * . The interim threshold for year one
is * . The parties split equally the excess over the interim threshold, which
excess is * in this example; therefore, TAI pays Cargill * . Accordingly, at end
of year one, TAI's account is * , and Cargill's account is * .

*CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SEC

<PAGE>

         Year Two: P&L states a loss of * . The interim threshold for year two
is * . Because of the * loss, TAI's account is at * , and consequently requires
an additional * to match the interim threshold. However, because TAI and Cargill
absorb the * loss on an equal basis, Cargill pays TAI * . Accordingly, at end of
year two, TAI's account is * , and Cargill's account is negative * .

         Year Three: P&L states a profit of * . The interim threshold for year
three is * . TAI's account is now at * , while Cargill's account is at negative
* . In order to reconcile the accounts to the interim threshold, TAI pays
Cargill * . Accordingly, at end of year three, TAI's account is * , and
Cargill's account is * .

         Year Four: P&L states a loss of * . The interim threshold is * .
Because of the * loss, TAI's account is now at * , and consequently requires an
additional * to match the interim threshold. However, because TAI and Cargill
absorb the cumulative losses on an equal basis, Cargill pays TAI * less * in
cumulative losses). Accordingly, at end of year four, TAI's account is * , and
Cargill's account is negative * .

         Year Five: P&L states a profit of * . The final threshold is * . TAI's
account is now at * , while Cargill's account is at negative * . In order to
reconcile the accounts to the final threshold, TAI pays Cargill * . Accordingly,
at end of year five, TAI's account is * , and Cargill's account is negative * .

         Example Two

(All dollar figures are in millions)

<TABLE>
<CAPTION>
                                                          PAYMENT            CARGILL            TAI
                    ACTUAL             INTERMIN           TO/(FROM)          CUMULATIVE         CUMULATIVE
       YEAR         EARNINGS           THRESHOLD          CARGILL            ACCOUNT            ACCOUNT
       ----         --------           ---------          -------            -------            -------
<S>    <C>          <C>                <C>                <C>                <C>                <C>
1                           *                  *                  *                  *                  *
2                           *                  *                  *                  *                  *
3                           *                  *                  *                  *                  *
4                           *                  *                  *                  *                  *
5                           *                  *                  *                  *                  *
</TABLE>

         6.3 PROFIT AND LOSS STATEMENT. TAI shall include the Leased Facilities
in TAI's profit and loss statement currently dedicated by TAI to the TAI
Facilities (the "P&L").

         The P&L SHALL INCLUDE the following items:

                  (a)      Rent paid by TAI pursuant to the Lease Agreement for
                           the Leased Facilities;

                  (b)      TAI's purchases of the Toledo Grain;

*CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SEC

<PAGE>

                  (c)      Sales of the Toledo Grain by TAI to Cargill;

                  (d)      Certain allocated administrative and general
                           operating costs mutually agreeable to the parties,
                           including identified and quantified costs that relate
                           specifically to the parties' origination, operation,
                           and merchandising functions under this Agreement;

                  (e)      Storage and other charges for Cargill Third Party
                           Grain and TAI Third Party Grain pursuant to Article
                           IV herein accrued on or after the Effective Date;

                  (f)      The market value of the TAI Inventory as of the
                           Effective Date;

                  (g)      Such other items as may be mutually agreed by the
                           parties.

         The P&L SHALL NOT INCLUDE the following items:

                  (a)      Claims, damages, liabilities, costs, expenses, suits,
                           obligations or penalties (including attorneys' fees
                           and costs of defense) of any and every nature
                           whatsoever arising out of or in any manner connected
                           with any grossly negligent act or omission by TAI or
                           Cargill, including without limitation TAI's grossly
                           negligent operation of the Facilities;

                  (b)      Claims, damages, liabilities, costs, expenses, suits,
                           obligations or penalties (including attorneys' fees
                           and costs of defense) of any and every nature
                           whatsoever arising out of or in any manner connected
                           with TAI's or Cargill's failure or alleged failure to
                           comply with all applicable laws, rules, regulations,
                           orders and decrees of the United States and the State
                           of Ohio;

                  (c)      Claims, damages, liabilities, costs, expenses, suits,
                           obligations or penalties (including attorneys' fees
                           and costs of defense) of any and every nature
                           whatsoever arising out of or in any manner connected
                           with TAI's or Cargill's failure or alleged failure to
                           comply materially with its contractual obligations;

                  (d)      Claims, damages, liabilities, costs, expenses, suits,
                           obligations or penalties (including attorneys' fees
                           and costs of defense) of any and every nature
                           whatsoever arising out of or in any manner connected
                           with any environmental condition at the Facilities to
                           the extent that such environmental condition arises
                           from, relates to or results from (i) the use,
                           operation or ownership of the Facilities and the
                           conduct of business therein, thereon, thereabout or
                           with regard thereto at all times prior to the
                           Effective Date, (ii) any deviation by TAI from
                           standard business practices, or (iii) any violation
                           of the law.

                  (e)      Claims, damages, liabilities, costs, expenses, suits,
                           obligations or penalties (including attorneys' fees
                           and costs of defense) of any and every nature
                           whatsoever arising out of or in any manner connected
                           with TAI's or Cargill's deviations from grain
                           industry standards;

                  (f)      Such other items as may be mutually agreed by the
                           parties.

<PAGE>

         6.4      CAPITAL IMPROVEMENTS.

                  (a) Each party is entering into this business venture
agreement with a solid trust in the respective condition of the other's
facilities, as well as the past operating standards that each party employed in
the operation of each party's respective facilities. The Lease Agreement
represents a strong vote of confidence by Cargill in TAI's ability to operate
the Cargill facilities in conformance with high standards for safety,
maintenance and recapitalization.

                  In defining the guidelines for capital spending and
depreciation recovery, neither party should benefit at the expense of the other
party. While each party retains absolute accountability for its asset
investment, Cargill is entrusting TAI with oversight responsibility as the
Lessee, to manage the Cargill assets with the same degree of vigilance as
extended to their own assets, and in accordance with the Lease Agreement.

                  TAI will annually assemble a Capital Spending Plan for each of
the Facilities. The Capital Spending Plan ("Plan") shall be submitted to Cargill
for review in advance of the June-July fiscal year. Review and approval by each
party is required. This will establish the basic framework for capital spending
against which each party can measure and decide on appropriate deviations from
the Plan.

                  (b)      MINOR CAPITAL SPENDING:

                  "Minor Capital Spending" is defined as any project with a
total project cost of less than * but greater than * and considered an
acceptable and appropriate expenditure to be capitalized under the Internal
Revenue Tax Code.

                  "Profit Maintaining Minor Capital Spending" is defined as any
capital expenditures necessary to maintain the continued operating standards and
serviceability of the Facilities.

                  "Profit Adding Minor Capital Spending" is defined as any
capital expenditures that add minor amounts of revenue and profit to the P&L.

                  Minor Capital Spending may also include expenditures for
safety and/or environmental facility upgrades in order to comply with state and
federal regulations and/or best operating standards and practices.

                  (c)      MAJOR CAPITAL SPENDING:

                  "Major Capital Spending" is defined as any project with a
total cost equal to or greater than * .

*CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SEC

<PAGE>

                  "Profit Maintaining Major Capital Spending" is defined as any
capital expenditure equal to or in excess of * that serves to return the
facility to its original operating level of serviceability and does not increase
revenues and operating net income by a marked degree. Profit Maintaining Major
Capital Spending may also include expenditures on Safety and Environmental
projects required by State or Federal law or best operating practices.

                  "Profit Adding Major Capital Spending" is defined as any
capital expenditure equal to or in excess of * that will increase operating
revenues, net income and EBIT by a marked degree.

                  (d)      RULES AND GUIDELINES:

                           (i)      TAI shall be required to pay for all Capital
                                    Spending related to or affecting the
                                    Facilities.

                           (ii)     Depreciation is for the account of the
                                    business venture.

                           (iii)    TAI has authority to approve all Minor
                                    Capital Spending in the Plan less than * per
                                    project, so long as such expenditures are
                                    consistent with the Plan.

                           (iv)     Proposed expenditures of * per project or
                                    more related to or affecting the Cargill
                                    Facilities will be submitted to Cargill for
                                    prior approval, including all expenditures
                                    within the Plan.

                           (v)      TAI's capital spending approval procedures
                                    will govern TAI's decision-making process
                                    for Minor Capital Spending.

                           (vi)     Substitutions within the framework of the
                                    Plan will be allowed for expenditures less
                                    than * . Substituted expenditures of amounts
                                    greater than * will require the approval of
                                    the owner of the affected Facility.

                           (vii)    All Major Capital Spending in excess of *
                                    per project will require prior approval by
                                    both parties regardless of the affected
                                    Facility.

                           (viii)   All capital spending in excess of or outside
                                    of the Plan will require prior approval by
                                    both parties.

                           (ix)     Upon termination of the Lease Agreement,
                                    Cargill shall purchase from TAI, and TAI
                                    shall sell to Cargill, all alterations,
                                    additions and improvements to the Cargill
                                    Facilities at the then current book value of
                                    such alterations, additions and
                                    improvements, consistent with Section 7(b)
                                    of the Lease Agreement.

*CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SEC

<PAGE>

         6.5 RIGHT TO AUDIT DOCUMENTS. Both parties shall have the right at any
time and upon reasonable notice to the other party to audit the other party's
financial records relating to and generated pursuant to this Agreement. Such
review shall be subject, however, to the Guidelines (as defined in Section 8.1
herein) provided to the parties by joint legal counsel.

         6.6 EFFECT OF DEFICIENCY ON THRESHOLD. In the event that TAI's
capability to maximize origination pursuant to this Agreement is materially
restricted, limited or in any way deficient in any respect as a result of a
force majeure, any grossly negligent act or omission by TAI, or by any
significant event that substantially interferes with all or part of the normal
business activities of the Facilities, which event could not reasonably be
foreseen by the parties (including by way of example, but not limited to, an
explosion, a shutdown of the Great Lakes market, or a facility-related weather
disaster), the Threshold shall be renegotiated to reflect such deficiency. The
parties shall assign a percentage to the loss in capability, and the Threshold
shall be reduced accordingly by such percentage for the duration of the
deficiency. If the parties are unable to agree on a percentage loss in
capability, the matter will be resolved pursuant to Article XIV herein.

                                   ARTICLE VII
                        RELATIONSHIP BETWEEN THE PARTIES

         7.1 TAI shall conduct its business under this Agreement in the purchase
and sale to Cargill of the Toledo Grain as a principal for its own account and
at its own expense and risk, subject to the terms and conditions of this
Agreement. Cargill shall conduct its business under this Agreement in the
purchase from TAI and the merchandising of the Toledo Grain as a principal for
its own account and at its own expense and risk, subject to the terms and
conditions of this Agreement

         7.2 TAI shall have no power to make, and shall not make, any
representations on behalf of Cargill. TAI warrants that it will not act or
attempt to act as agent for or representative of Cargill, and will not create or
attempt to create any obligation binding upon Cargill, or assert or compromise
or attempt to assert or compromise any right of Cargill. Cargill shall have no
power to make, and shall not make, any representations on behalf of TAI. Cargill
warrants that it will not act or attempt to act as agent for or representative
of TAI, and will not create or attempt to create any obligation binding upon
TAI, or assert or compromise or attempt to assert or compromise any right of
TAI.

                                  ARTICLE VIII
                                  COMMUNICATION

         8.1 GENERAL. Prior to the Effective Date, joint legal counsel for the
parties shall furnish the parties with specific guidelines relating to future
communications between the parties and each party's right to audit the other
party's financial records pursuant to Section 6.5 herein (the "Guidelines"). The
parties shall strictly follow the Guidelines in all future communications
between the parties and in conducting all audits pursuant to Section 6.5 herein.

         8.2 ADVISORY PANEL. An advisory panel consisting of approximately three
(3) representatives, unless the parties otherwise mutually agree, from each
party (the "Panel") shall be established as soon as reasonably practicable after
commencement of the Initial Term. The Panel shall meet on a quarterly basis,
unless otherwise agreed, to address issues relating to the origination and
merchandising of the Toledo Grain; provided, however, that the parties shall
strictly follow the Guidelines in all communications between representatives of
the Panel.

<PAGE>

                                   ARTICLE IX
                            CONFIDENTIAL INFORMATION

         9.1 Cargill and TAI hereby agree that they each will keep the terms and
conditions of this Agreement confidential and proprietary, will only disclose
the contents of this Agreement with those of their employees and others who are
on a need-to-know basis, and will ensure that reasonable procedures are
implemented to maintain the confidential nature of this Agreement with care
equal to that given to confidential information of its own respective business,
but in no event less than a reasonable degree of care. Cargill and TAI assume
liability for any breach of this Article by it or any of its employees, agents
or representatives. The obligations set forth in this Article shall survive any
termination of this Agreement.

         9.2 TAI shall keep confidential any Cargill information (whether
business marketing, technical or other data) known to it to be, or designated by
Cargill as being, confidential ("Confidential Information"), and shall use such
care as TAI would use in maintaining the confidentiality of its own confidential
information. TAI shall use such information only to the extent needed and for
the purpose of performing its obligations under this Agreement. TAI's
obligations under this Section 9.02 shall survive any termination of this
Agreement, except that the obligation of confidentiality under this Section 9.02
shall not apply:

                  (a) to information known to TAI, as evidenced by TAI, at the
time of TAI's receipt thereof from Cargill; or

                  (b) to information received by TAI from a third party under
no obligation of confidentiality to Cargill.

         9.3 Cargill shall keep confidential any TAI information (whether
business marketing, technical or other data) known to it to be, or designated by
TAI as being, confidential ("Confidential Information"), and shall use such care
as Cargill would use in maintaining the confidentiality of its own confidential
information. Cargill shall use such information only to the extent needed and
for the purpose of performing its obligations under this Agreement. Cargill's
obligations under this Section 9.03 shall survive any termination of this
Agreement, except that the obligation of confidentiality under this Section 9.03
shall not apply:

                  (a) to information known to Cargill, as evidenced by Cargill,
at the time of Cargill's receipt thereof from TAI; or

                  (b) to information received by Cargill from a third party
under no obligation of confidentiality to TAI.

                                    ARTICLE X
                               EMPLOYMENT MATTERS

         10.1 Any persons who are employed by Cargill at the Leased Facilities
immediately prior to the Effective Date and who are terminated in anticipation
of this Agreement shall be considered for employment by TAI. It is mutually
understood and agreed, however, that TAI is under no obligation to hire and
provide employment for any such employees.

<PAGE>

         10.2 Cargill has terminated any employment relationship it previously
had with certain of its employees at the Leased Facilities. Cargill shall have
no further supervisory function whatsoever with respect to any of such former
employees at the Leased Facilities. TAI has sole authority to operate the Leased
Facilities for the purposes of the relationship contemplated in this Agreement.
Accordingly, TAI shall be solely responsible for the direction of its agents,
servants and employees, including all former employees of Cargill hired by TAI.
In particular and without limitation, TAI shall be solely responsible for its
employees' selection, hiring, firing, supervision, wages and benefits, hours,
performance standards, training and discipline. TAI shall also be solely
responsible for compliance with all applicable local, state and federal laws and
regulatory requirements relating to its employees.

         10.3 Notwithstanding the foregoing, if TAI hires any Cargill employees,
TAI shall recognize past service of such employees for vacation and sick pay
eligibility purposes only. TAI will also waive the one year waiting period for
participation in its RSIP (401K Plan). Further, such employees shall be subject
to the applicable vesting schedules under the pension benefit plans, based on
the employment date of such employees with TAI. Health insurance coverage will
commence on the date of hire of such employees as TAI employees, and there will
be no exclusions for pre-existing conditions. Such former employees'
participation in Cargill's employee welfare, pension, fringe benefit and profit
sharing plans shall terminate on the Effective Date.

                                   ARTICLE XI
                         REPRESENTATIONS AND WARRANTIES

       11.1 REPRESENTATIONS AND WARRANTIES OF CARGILL. Cargill represents and
warrants as follows to TAI, such representations and warranties to be true and
correct on the Effective Date, that:

                  (a) ORGANIZATION, QUALIFICATION AND GOOD STANDING. Cargill is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and is registered to do business in and is in good
standing under the laws of the State of Ohio. All corporate proceedings required
to be taken by Cargill to authorize the execution, delivery and consummation of
this Agreement have been duly and validly taken and will be in full force and
effect on the Effective Date.

                  (b) AUTHORITY; BINDING EFFECT. Cargill has full power and
authority to execute and perform this Agreement, and this Agreement constitutes
a legal, valid and binding obligation of Cargill enforceable against Cargill in
accordance with its terms, subject to applicable bankruptcy or insolvency laws.

                  (c) COMPLIANCE WITH OTHER INSTRUMENTS. Cargill is neither a
party to, nor otherwise subject to, any agreement or other instrument which
would prevent or prohibit Cargill from or require any consent to, the execution
or consummation hereof.

         11.2 SURVIVAL OF WARRANTIES AND INDEMNIFICATION. All the warranties and
representations given by Cargill in Section 11.1 herein or elsewhere in this
Agreement, all of which are relied upon by the TAI, shall survive the Effective
Date hereof. Cargill agrees to indemnify and hold TAI harmless from and against
any loss, damage, claim, liability, cost, expense or penalty (including
reasonable attorneys' fees) which TAI may incur or sustain after the Effective
Date resulting from or arising out of any breach of any of said representations
and warranties.

<PAGE>

         11.3 REPRESENTATIONS AND WARRANTIES OF TAI. TAI represents and warrants
as follows to Cargill, such representations and warranties to be true and
correct on the Effective Date, that:

                  (a) ORGANIZATION, QUALIFICATION AND GOOD STANDING. TAI is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Ohio and is registered to do business in and is in good standing
under the laws of the State of Ohio. All corporate proceedings required to be
taken by TAI to authorize the execution, delivery and consummation of this
Agreement have been duly and validly taken and will be in full force and effect
on the Effective Date.

                  (b) AUTHORITY; BINDING EFFECT. TAI has full power and
authority to execute and perform this Agreement, and this Agreement constitutes
a legal, valid and binding obligation of TAI enforceable against TAI in
accordance with its terms, subject to applicable bankruptcy or insolvency laws.

                  (c) COMPLIANCE WITH OTHER INSTRUMENTS. TAI is neither a party
to, nor otherwise subject to, any agreement or other instrument which would
prevent or prohibit TAI from or require any consent to, the execution or
consummation hereof.

                  (d) CORPORATE DOCUMENTS. TAI has provided Cargill with all
corporate documents evidencing the provisions that TAI has in place which limit
potential changes in control of TAI.

         11.4 SURVIVAL OF WARRANTIES AND INDEMNIFICATION. All the warranties and
representations given by TAI in Section 11.3 herein or elsewhere in this
Agreement, all of which are relied upon by the Cargill, shall survive the
Effective Date hereof. TAI agrees to indemnify and hold Cargill harmless from
and against any loss, damage, claim, liability, cost, expense or penalty
(including reasonable attorneys' fees) which Cargill may incur or sustain after
the Effective Date resulting from or arising out of any breach of any of said
representations and warranties.

                                   ARTICLE XII
                                 INDEMNIFICATION

         12.1 INDEMNIFICATION BY CARGILL. Cargill shall defend, exonerate,
indemnify and hold harmless TAI, its officers, directors, employees and agents
from and against all claims, damages, liabilities, costs, and expenses, suits,
obligations or penalties (including attorneys' fees and costs of defense) of any
and every nature whatsoever arising out of or in any manner connected with (a)
any breach of this Agreement by Cargill; and (b) the operation or ownership of
the Leased Facilities and the conduct of its business therein, thereon,
thereabout or with regard thereto at all times prior to the Effective Date,
including without limiting the generality of the foregoing all environmental
liabilities.

         12.2 INDEMNIFICATION BY TAI. TAI shall defend, exonerate, indemnify and
hold harmless Cargill, its officers, directors, employees and agents from and
against all claims, damages, liabilities, costs, expenses, suits, obligations or
penalties (including attorneys' fees and costs of defense) of any and every
nature whatsoever arising out of or in any manner connected with (a) any breach
of this Agreement by TAI; (b) the operation or ownership of the TAI Facilities
and the conduct of business therein, thereon, thereabout or with regard thereto
at all times prior to the Effective Date, including without limiting the
generality of the foregoing all environmental liabilities; (c) the grossly
negligent operation or ownership of the TAI Facilities and the grossly
<PAGE>

negligent conduct of business therein, thereon, thereabout or with regard
thereto at all times on and after the Effective Date, including without limiting
the generality of the foregoing all environmental liabilities; (d) the grossly
negligent use, operation or occupancy of the Leased Facilities and the grossly
negligent conduct of business therein, thereon, thereabout or with regard
thereto at all times on and after the Effective Date, including without limiting
the generality of the foregoing all environmental liabilities; and (e) any
grossly negligent act or omission or willful misconduct by TAI.

         Notwithstanding the foregoing or anything to the contrary in the Lease
Agreement, the parties intend that the P&L shall include all customary items,
except as otherwise provided by Section 6.3 of this Agreement. TAI's failure to
follow, use, adopt, implement or recognize standard business practices,
including, without limitation, standard business practices of a grain handling
business, may be a factor in determining whether TAI is grossly negligent for
purposes of this Agreement; provided, however, that the mere fact that TAI is
found liable for negligence against a third party shall not be determinative in
and of itself as to whether TAI is grossly negligent for purposes of this
Agreement for the same conduct giving rise to TAI's negligence against such
third party.

         12.3 NOTICE. Each party agrees to promptly give the other party notice
of any claim or indemnification arising under this Section.

         12.4 SURVIVAL. The obligations of each party under the foregoing
indemnification provisions shall survive the termination of this Agreement.

                                  ARTICLE XIII
                                  FORCE MAJEURE

         13.1 The obligations of each party under this Agreement may be delayed
or suspended in the event of Act of God, war, riot, fire, explosion, accident,
flood, sabotage, inability to obtain fuel, power, raw material, labor,
containers or transportation, facilities, governmental laws, regulations, order
or action, breakage or failure of machinery or apparatus, national defense
requirements or any other event beyond the reasonable control of such party or
in the event of labor trouble, strike, lockout or injunction (whether or not
such labor event is within the reasonable control of such party), any of which
events prevents the sale, purchase or merchandising of the Toledo Grain. For
purposes of this Section 13.1, ordinary variations in weather conditions,
including without limitation prolonged periods of dryness or wetness, shall not
be considered an event of force majeure. If, because of any such event, either
party is unable to meet its obligations in part or in whole under this
Agreement, the obligations of the affected party shall be abated during the
period in which its performance is prevented by the event of force majeure upon
giving prompt notice of such event to the other party. The other party's
performance shall likewise be abated during such period, but this Agreement
shall otherwise remain unaffected.

                                   ARTICLE XIV
                               DISPUTE RESOLUTION

         14.1 In the event a dispute arises under this Agreement that cannot be
resolved by those with direct responsibility for the matter in dispute, such
dispute shall be resolved by way of the following process:

<PAGE>

                  (a) The Panel shall meet to discuss the basis for the dispute
and shall use its best efforts to reach a reasonable resolution to the dispute.

                  (b) If the Panel fails to resolve the dispute within 10 days
of its receipt of written notice of the dispute, the matter in dispute shall be
brought to the attention of senior management at Cargill and TAI. Said
management shall meet in person to negotiate a good faith resolution to the
dispute within 20 days of their receipt of written notice of the dispute.

                  (c) If such negotiations are unsuccessful, the matter may
promptly be submitted by either party to an individual or organization
recognized in the field of alternate dispute resolution as may be agreed upon by
the parties (collectively referred to as the "Mediator"). The Mediator shall,
within thirty (30) days after its receipt of a party's request for assistance,
recommend to the parties, in writing, a procedure for non-binding mediation
("Mediation") for resolving such matter. The Mediator's recommendation shall
also set forth rules for the recommended process including without limitation:
(i) a schedule for the exchange of documents and short narrative statements
summarizing each party's position on the matter; (ii) if appropriate in the
Mediator's view, an expedited discovery schedule; (iii) the format and location
of the Mediation; and (iv) the time period in which the Mediation is to be
completed. The Mediator shall conduct the Mediation.

                  (d) At the conclusion of the Mediation, the representatives
shall meet and attempt to resolve the matter. If the matter cannot be resolved
within such period as the Mediator deems reasonable (but not later than ninety
(90) days after the Mediator has issued its procedural recommendation for the
Mediation), the Mediator shall (upon request of either party) certify to the
parties that the matter is incapable of resolution through the Mediation process
and the matter shall, thereafter, promptly be submitted to and settled by
arbitration in accordance with the Commercial Arbitration Rules, then in effect,
of the American Arbitration Association ("AAA"), except to the extent modified
herein. The arbitration shall be held in Ohio. Judgment on the award rendered
may be entered in any court having jurisdiction thereof.

                  (e) Each party shall within thirty (30) days of receipt of
notice that the matter has been referred to arbitration, appoint one arbitrator
and, within thirty (30) days of the appointment of the last of such two
arbitrators, the two arbitrators shall appoint a third arbitrator. If either
party or the two arbitrators fail to timely appoint an arbitrator, the said
arbitrator shall be appointed by AAA. The arbitrators shall not be empowered to
award punitive or exemplary damages.

                  (f) Unless otherwise determined by the arbitration panel, the
parties shall bear their respective costs incurred in connection with the
procedures described in this Section, except that the parties shall share
equally the fees and expenses of any Mediation or arbitration.

                  (g) Notwithstanding any other provision of this Agreement,
each party shall still be entitled to access the courts to obtain appropriate
injunctive relief.

                  (h) During the pendency of any dispute resolution procedure
pursuant to this Section, the effectiveness of any notice of termination given
pursuant to this Agreement shall be suspended.

<PAGE>

                                   ARTICLE XV
                            MISCELLANEOUS PROVISIONS

         15.1 ASSIGNMENT. Neither Cargill nor TAI may assign this Agreement
without the prior written consent of the other party.

         15.2 WAIVER. Failure by either party at any time to require performance
by the other party or to claim a breach of any provision of this Agreement will
not be construed as a waiver of any right accruing hereunder, nor will it affect
any subsequent breach or the effectiveness of this Agreement or any part hereof,
or prejudice either party as regards any subsequent action. A waiver of any
right accruing to either party pursuant to this Agreement shall not be effective
unless given in writing.

         15.3 NOTICES. Whenever notice is required by the terms hereof, it shall
be given in writing by delivery in person, by recognized overnight delivery
service, or by certified or registered mail addressed to the other party at the
following address or such other address as a party shall designate by
appropriate notice:

                           If to Cargill:              Cargill, Incorporated
                                                       15407 McGinty Road West
                                                       Wayzata, MN  55391
                                                       Attn:  Daniel P. Dye

                           With a copy to:             Cargill, Incorporated
                                                       15407 McGinty Road West
                                                       Wayzata, MN  55391
                                                       Attn:  CGD Attorney

                           If to TAI:                  The Andersons, Inc.
                                                       480 W. Dussel Drive
                                                       P.O. Box 119
         `                                             Maumee, OH  43537
                                                       Attn:  Hal Reed

                           With a copy to:             The Andersons, Inc.
                                                       480 W. Dussel Drive
                                                       P.O. Box 119
         `                                             Maumee, OH  43537
                                                       Attn: Beverly McBride

If notice is given by mail, it shall be effective three (3) days after mailing.

         15.4 CONSTRUCTION OF TERMS OF AGREEMENT; MODIFICATION. The language in
all parts of this Agreement shall be constructed as a whole according to its
fair meaning and not strictly for or against any party hereto. Headings in this
Agreement are for convenience only and are not construed as a part of this
Agreement or in any defining, limiting or amplifying the provisions hereof. This
Agreement contains the entire agreement, and supersedes and replaces any prior
agreements (either written or oral), between the parties with respect to the
subject matter hereof and shall not be modified in any manner except by an
instrument in writing executed by the parties hereto. In the event any term,
covenant or condition herein contained is held to be invalid or void by

<PAGE>
any court of competent jurisdiction, the invalidity of any such term, covenant
or condition shall in no way affect any other term, covenant or condition herein
contained.

         15.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of each of the parties hereto; provided, however, that
this Agreement shall not be assigned, transferred or sold by either party
without the prior written consent.

         15.6 COMPLIANCE WITH LAWS. Cargill and TAI each agrees to perform its
obligations under this Agreement in material compliance with all applicable
laws, rules, regulations, orders and decrees of the United States and the State
of Ohio.

         15.7 NO THIRD PARTY BENEFICIARY. No person or entity shall be deemed to
be a third party beneficiary of this Agreement and nothing expressed or implied
in this Agreement shall be deemed to confer upon any person or entity, or any
heir, successor, assign or legal representative thereof, any rights or remedies
of any nature or kind whatsoever, including without limitation any right to
contract or any right to employment or continued employment.

         15.8 GOVERNING LAW. This Agreement is to be governed by, and construed
in accordance with, the laws of the State of Ohio, without reference to its
conflicts of law rules.

         15.9 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

         IN WITNESS WHEREOF, Cargill, Incorporated and The Andersons, Inc. have
executed this Agreement effective the day and year first above written.

CARGILL, INCORPORATED                          THE ANDERSONS, INC.

By:  /s/Daniel P. Dye                          By:  /s/Joseph L. Braker
     -----------------------------------            ----------------------------

Its: Vice President, Grain Division            Its: President, Agriculture Group
     -----------------------------------            ----------------------------

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