Document:

ex10-1.htm

EXHIBIT 10.1

 

RTG VENTURES, INC. AND SUBSIDIARY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 

CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

STYLAR LTD.

	
Report of Independent Registered Public Accounting Firm

	
F-1

	  	  
	
Consolidated Balance Sheets

	
F-2

	  	  
	
Consolidated Statements of Operations

	
F-3

	  	  
	
Consolidated Statement of Stockholders' Deficit

	
F-4

	  	  
	
Consolidated Statements of Cash Flows

	
F-5

	  	  
	
Notes to Consolidated Audited Financial Statements

	
F-6

BITEMARK MC LTD.

	
Report of Independent Registered Public Accounting Firm

	
F-9

	  	  
	
Consolidated Balance Sheets

	
F-10

	  	  
	
Consolidated Statements of Operations

	
F-11

	  	  
	
Consolidated Statement of Stockholders' Deficit

	
F-12

	  	  
	
Consolidated Statements of Cash Flows

	
F-13

	  	  
	
Notes to Consolidated Audited Financial Statements

	
F-14

 

  

  

  

 

REPORT OF THE INDEPENDENT AUDITORS TO THE SHAREHOLDERS OF

STYLAR LTD

We have audited the financial statements of Stylar Ltd for the period ended 31 May 2010. The financial reporting framework that has been applied in their preparation is applicable law and the Financial Reporting Standard for Smaller Entities (effective April 2008) (United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities).

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of director and auditors

As explained more fully in the Statement of Director's Responsibilities set out on page two, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the director; and the overall presentation of the financial statements.

Opinion on financial statements

In our opinion the financial statements:

 

	
-

	
give a true and fair view of the state of the company's affairs as at 31 May 2010 and of its profit for the period then ended;

	
-

	
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities; and

	
-

	
have been prepared in accordance with the requirements of the Companies Act 2006.

 

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements.

 

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

 

	
-

	
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

	
-

	
the financial statements are not in agreement with the accounting records and returns; or

	
-

	
certain disclosures of director's remuneration specified by law are not made; or

	
-

	
we have not received all the information and explanations we require for our audit; or

	
-

	
the director was not entitled to prepare the financial statements and the Report of the Director in accordance with the small companies regime.

 

/s/ Nicholas Kaye

Nicholas Kaye (Senior Statutory Auditor)

for and on behalf of AEL Partners LLP

Chartered Accountants &

Registered Auditor

201 Haverstock Hill

London

NW3 4QG

16 August 2010

 

  

F-1

  

 

	
STYLAR LTD

	
BALANCE SHEET

 

	  	  	
May 31,

	  
	  	  	
2010

	  
	  	  	
(Audited)

	  
	
ASSETS

	  	 	  
	  	  	 	  
	
CURRENT ASSETS

	  	 	  
	
Cash

	  	
£

	
15,064

	  
	
Accounts Receivable

	  	  	
50,611

	  
	  	  	  	  	  
	
TOTAL ASSETS

	  	
£

	
65,675

	  
	  	  	  	  	  
	
LIABILITIES AND STOCKHOLDER'S EQUITY

	  	  	  	  
	  	  	  	  	  
	
CURRENT LIABILITIES

	  	  	  	  
	
  Accounts payable and accrued expenses

	  	
£

	
32,634

	  
	  	  	  	  	  
	
TOTAL CURRENT LIABILITIES

	  	  	
32,634

	  
	  	  	  	  	  
	
STOCKHOLDER'S EQUITY

	  	  	  	  
	
  Called up share capital

	  	  	
100

	  
	
  Profit and loss account

	  	  	
32,941

	  
	  	  	  	  	  
	
TOTAL STOCKHOLDER'S EQUITY

	  	  	
33,041

	  
	  	  	  	  	  
	
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY

	  	
£

	
65,675

	  

 

The notes form part of these financial statements

 

  

F-2

  

 

	
STYLAR LTD

	
STATEMENT OF OPERATIONS

 

	  	  	
For the period from September 4, 2009 (Inception) to

	  
	  	  	 	  
	  	  	
May 31, 2010

	  
	  	  	
(Audited)

	  
	  	  	 	  
	
REVENUES

	  	
£

	
114,712

	  
	
Cost of goods sold

	  	  	
39,032

	  
	
Gross profit

	  	  	
75,680

	  
	  	  	  	  	  
	  	  	  	  	  
	
OPERATING EXPENSES

	  	  	  	  
	
   General and administrative

	  	  	
30,818

	  
	
Total operating expenses

	  	  	
30,818

	  
	  	  	  	  	  
	
Income before income taxes

	  	  	
44,862

	  
	  	  	  	  	  
	
Income taxes

	  	  	
9,421

	  
	  	  	  	  	  
	
NET INCOME

	  	
£

	
35,441

	  

 

The notes form part of these financial statements

 

  

F-3

  

 

	
STYLAR LTD

	 
	
STATEMENT OF STOCKHOLDER'S DEFICIT

	
(Unaudited)

 

	  	  	 	  	  	 	  	  	
Additional

	  	  	 	  	  	
Total

	  
	  	  	
Common Stock

	  	  	
Paid in

	  	  	
Accumulated

	  	  	
Stockholder's

	  
	  	  	
Shares

	  	  	
Amount

	  	  	
Capital

	  	  	
Deficit

	  	  	
Deficit

	  
	
Balance, September 4, 2009 (Inception)

	  	  	
1

	  	  	
£

	
100

	  	  	
£

	
-

	  	  	
£

	
-

	  	  	
£

	
(2,400

	
) 

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Net loss

	  	  	
-

	  	  	  	
-

	  	  	  	
-

	  	  	  	
35,441

	  	  	  	
35,441

	  
	
Issuance of dividend

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	
(2,500

	
) 

	  	  	  	  
	
Balance, May 31, 2010

	  	  	
1

	  	  	
£

	
100

	  	  	
£

	
-

	  	  	
£

	
35,441

	  	  	
£

	
33,041

	  

 

The notes form part of these financial statements

 

  

F-4

  

 

	
STYLAR LTD

	
STATEMENT OF CASH FLOWS

 

	  	  	
For the period from September 4, 2009 (Inception) to

	  
	  	  	
May 31, 2010

	  
	  	  	
(Unaudited)

	  
	
CASH FLOWS FROM OPERATING ACTIVITIES:

	  	 	  
	
  Net income

	  	
£

	
35,441

	  
	
  Adjustments to reconcile net loss to

	  	  	  	  
	
     net cash used in operating activities:

	  	  	  	  
	
(Increase) decrease in assets and liabilities:

	  	  	  	  
	
Accounts Receivable

	  	  	
(50,611

	
)

	
Accounts Payable

	  	  	
32,634

	  
	
NET CASH PROVIDED BY OPERATING ACTIVITIES

	  	  	
17,464

	  
	  	  	  	  	  
	
CASH FLOWS FROM FINANCING ACTIVITIES:

	  	  	  	  
	
Proceeds from issuance of shares of common stock

	  	  	
100

	  
	
Dividend

	  	  	
(2,500

	
)

	
NET CASH USED IN INVESTING ACTIVITIES

	  	  	
(2,400

	
)

	  	  	  	  	  
	
INCREASE IN CASH

	  	  	
15,064

	  
	  	  	  	  	  
	
CASH - BEGINNING OF PERIOD

	  	  	
-

	  
	  	  	  	  	  
	
CASH - END OF PERIOD

	  	
£

	
15,064

	  

 

The notes form part of these financial statements

 

  

F-5

  

 

The financial statements have been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies and with the Financial Reporting Standard for Smaller Entities (effective April 2008).

 

The financial statements were approved by the director on 16 August 2010 and were signed by:

/s/ R. James

R James - Director

 

  

F-6

  

 

 STYLAR LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD 4 SEPTEMBER 2009 TO 31 MAY 2010

1.         ACCOUNTING POLICIES

Accounting convention

The financial statements have been prepared under the historical cost convention and in accordance with the Financial Reporting Standard for Smaller Entities (effective April 2008). Such reporting being similar to US GAAP with respect to Styar, Ltd.

Turnover

Turnover represents net invoiced sales of goods, excluding value added tax.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

2.         OPERATING PROFIT

The operating profit is stated after charging:

	  	 	£	 
	  	 	 	 	 
	
Directors' remuneration and other benefits etc

	 	 	10,000	 

3.         TAXATION

 

Analysis of the tax charge

The tax charge on the profit on ordinary activities for the period was as follows:

 

	  	 	£	 
	
Current tax:

	 	 	 	 
	
UK corporation tax

	 	 	9,421	 
	  	 	 	 	 
	
Tax on profit on ordinary activities

	 	 	9,421	 

4.         DIVIDENDS

 

	  	 	£	 
	
Ordinary shares of £1 each

	 	 	 	 
	
Final

	 	 	2,500	 

5.         DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

 

	  	 	£	 
	
Trade debtors

	 	 	49,769	 
	
Other debtors

	 	 	842	 
	  	 	 	 	 
	
Tax on profit on ordinary activities

	 	 	50,611	 

6.         CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

 

	  	 	£	 
	
Tax creditors

	 	 	911	 
	
Taxation and social security

	 	 	31,701	 
	
Other creditors

	 	 	22	 
	  	 	 	 	 
	  	 	 	32,634	 

 

  

F-7

  

STYLAR LTD

NOTES TO THE FINANCIAL STATEMENTS - continued

FOR THE PERIOD 4 SEPTEMBER 2009 TO 31 MAY 2010

 

7.         CALLED UP SHARE CAPITAL

 

	
Allotted, issued and fully paid:

	 
	
Numnber:

	
Class: 

	
Nominal

	 	 	 
	  	  	
value:

	 	£	 
	
100

	
Ordinary

	£1	 	 	100	 

 

8.         RESERVES

 

	  	  	
Profit and loss account

	  
	  	  	
£

	  	  
	
Profit for the period

	  	  	
35,441

	  
	
Dividends

	  	  	
(2,500

	
)

	  	  	  	  	  
	
At 31 May 2010

	  	  	
32,941

	  

 

  

F-8

  

REPORT OF THE INDEPENDENT AUDITORS TO THE SHAREHOLDERS OF

BITEMARK MC LTD

We have audited the financial statements of Bitemark MC Ltd for the period ended 31 July 2009. The financial reporting framework that has been applied in their preparation is applicable law and the Financial Reporting Standard for Smaller Entities (effective April 2008) (United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities).

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of director and auditors

As explained more fully in the Statement of Director's Responsibilities set out on page two, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the director; and the overall presentation of the financial statements.

Opinion on financial statements

In our opinion the financial statements:

 

	
-

	
give a true and fair view of the state of the company's affairs as at 31 July 2009 and of its profit for the period then ended;

	
-

	
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities; and

	
-

	
have been prepared in accordance with the requirements of the Companies Act 2006.

Emphasis of matter – going concern

In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the disclosures made in Note 1 to the financial statements concerning the company’s ability to continue as a going concern. The company has incurred losses post year end, but for reasons outlined in note 1 to the financial statements, the directors believe that it is appropriate to prepare the financial statements on a going concern basis. The financial statements do not include any adjustments that would result if the company was unable to continue as a going concern.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements.

 

  

F-9

  

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

 

	
-

	
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

	
-

	
the financial statements are not in agreement with the accounting records and returns; or

	
-

	
certain disclosures of directors’ remuneration specified by law are not made; or

	
-

	
we have not received all the information and explanations we require for our audit; or

	
-

	
the directors were not entitled to prepare the financial statements and the Report of the Director in accordance with the small companies regime.

 

/s/ Nicholas Kaye

Nicholas Kaye (Senior Statutory Auditor)

for and on behalf of AEL Partners LLP

Chartered Accountants &

Registered Auditor

201 Haverstock Hill

London

NW3 4QG

16 August 2010

 

  

F-10

  

 

	
BITEMARK MC LTD

	 
	
BALANCE SHEETS

 

	  	  	
May 31, 2010

	  	  	
July 31, 2009

	  	  	
July 31, 2008

	  
	  	  	
(Unaudited)

	  	  	
(Audited)

	  	  	
(Audited)

	  
	
Assets

	  	 	  	  	 	  	  	 	  
	
 Current Assets

	  	 	  	  	 	  	  	 	  
	
   Cash and cash equivalents

	  	
£

	
22,003

	  	  	
£

	
7,422

	  	  	
£

	
36,625

	  
	
   Debtors

	  	  	
81,269

	  	  	  	
119,673

	  	  	  	
257,858

	  
	
   Stocks

	  	  	
170,700

	  	  	  	
232,483

	  	  	  	
304,397

	  
	
   Prepayments and accrued income

	  	  	
25,079

	  	  	  	
22,872

	  	  	  	
25,827

	  
	  	  	  	
299,051

	  	  	  	
382,450

	  	  	  	
624,707

	  
	
 Other Assets

	  	  	  	  	  	  	  	  	  	  	  	  
	
   Tangible assets

	  	  	
9,529

	  	  	  	
10,811

	  	  	  	
31,284

	  
	
            TOTAL ASSETS

	  	
£

	
308,580

	  	  	
£

	
393,261

	  	  	
£

	
655,991

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  
	
LIABILITIES AND STOCKHOLDERS' EQUITY

	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  	  
	
 Current Liabilities

	  	  	  	  	  	  	  	  	  	  	  	  
	
   Accounts payable

	  	
£

	
184,624

	  	  	
£

	
188,616

	  	  	
£

	
388,927

	  
	
         TOTAL CURRENT LIABILITIES

	  	  	
184,624

	  	  	  	
188,616

	  	  	  	
388,927

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Stockholders' equity

	  	  	  	  	  	  	  	  	  	  	  	  
	
 Called up share capital

	  	  	
200

	  	  	  	
200

	  	  	  	
200

	  
	
 Share premium

	  	  	
250,000

	  	  	  	
250,000

	  	  	  	
250,000

	  
	
 Profit and loss account

	  	  	
(126,244

	
)

	  	  	
(45,555

	
)

	  	  	
16,864

	  
	
      TOTAL STOCKHOLDERS' EQUITY

	  	  	
123,956

	  	  	  	
204,645

	  	  	  	
267,064

	  
	
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

	  	
£

	
308,580

	  	  	
£

	
393,261

	  	  	
£

	
655,991

	  

 

The notes form part of these financial statements

 

  

F-11

  

 

	
BITEMARK MC LTD

	
STATEMENTS OF OPERATIONS

 

	  	  	
Ten Month Period Ended May 31, 2010

	  	  	
Year Ended July 31, 2009

	  	  	
Year Ended July 31, 2008

	  
	  	  	
(Unaudited)

	  	  	
(Audited)

	  	  	
(Audited)

	  
	  	  	 	  	  	 	  	  	 	  
	
REVENUES

	  	
£

	
924,477

	  	  	
£

	
1,187,309

	  	  	
£

	
1,623,239

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Cost of sales

	  	  	
568,421

	  	  	  	
621,511

	  	  	  	
920,805

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Gross profit

	  	  	
356,056

	  	  	  	
565,798

	  	  	  	
702,434

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  
	
OPERATING EXPENSES

	  	  	  	  	  	  	  	  	  	  	  	  
	
   General and administrative

	  	  	
421,223

	  	  	  	
594,911

	  	  	  	
761,936

	  
	  	  	  	
421,223

	  	  	  	
594,911

	  	  	  	
761,936

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  
	
OTHER EXPENSES

	  	  	  	  	  	  	  	  	  	  	  	  
	
Interest payable and similar charges

	  	  	
15,522

	  	  	  	
33,306

	  	  	  	
16,979

	  
	  	  	  	
15,522

	  	  	  	
33,306

	  	  	  	
16,979

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Income before income taxes

	  	  	
- 

	  	  	  	
(62,419

	
)

	  	  	
(76,481

	
)

	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Income taxes

	  	  	
-

	  	  	  	
-

	  	  	  	
(8,323

	
)

	  	  	  	  	  	  	  	  	  	  	  	  	  
	
NET LOSS

	  	
£

	
(80,689

	
) 

	  	
£

	
(62,419

	
) 

	  	
£

	
(68,158

	
) 

	  	  	  	  	  	  	  	  	  	  	  	  	  

 

The notes form part of these financial statements

 

  

F-12

  

 

	
BITEMARK MC LTD

	 
	
STATEMENTS OF STOCKHOLDERS' EQUITY

	
(Unaudited)

 

	  	  	 	  	  	 	  	  	
Additional

	  	  	 	  	  	
Total

	  
	  	  	
Common Stock

	  	  	
Paid in

	  	  	
Accumulated

	  	  	
Stockholders'

	  
	  	  	
Shares

	  	  	
Amount

	  	  	
Capital

	  	  	
Deficit

	  	  	
Equity

	  
	  	  	 	  	  	 	  	  	 	  	  	 	  	  	 	  
	
Balance, July 31, 2008

	  	  	
2,000

	  	  	
£

	
200

	  	  	
£

	
250,000

	  	  	
£

	
16,864

	  	  	
£

	
267,064

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Net loss

	  	  	
-

	  	  	  	
-

	  	  	  	
-

	  	  	  	
(62,419

	
)

	  	  	
(62,419

	
)

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Balance, July 31, 2009

	  	  	
2,000

	  	  	  	
200

	  	  	  	
250,000

	  	  	  	
(45,555

	
)

	  	  	
204,645

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Net loss

	  	  	
-

	  	  	  	
-

	  	  	  	
-

	  	  	  	
(80,689

	
)

	  	  	
(80,689

	
)

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Balance, May 31, 2010

	  	  	
2,000

	  	  	
£

	
200

	  	  	
£

	
250,000

	  	  	
£

	
(126,244

	
) 

	  	
£

	
123,956

	  

 

The notes form part of these financial statements

 

  

F-13

  

 

	
BITEMARK MC LTD

	
STATEMENTS OF CASH FLOWS

 

	  	  	
Ten Month

	  	  	 	  
	  	  	
Period ended

	  	  	
Year ended

	  
	  	  	
May 31, 2010

	  	  	
July 31, 2009

	  
	  	  	
(Unaudited)

	  	  	
(Unaudited)

	  
	
CASH FLOWS FROM OPERATING ACTIVITIES:

	  	 	  	  	 	  
	
  Net loss

	  	
£

	
(80,689

	
) 

	  	
£

	
(62,419

	
) 

	
  Adjustments to reconcile net loss to

	  	  	  	  	  	  	  	  
	
     net cash provided by (used in) operating activities:

	  	  	  	  	  	  	  	  
	
Depreciation

	  	  	
1,282

	  	  	  	
8,799

	  
	
Loss on disposal of assets

	  	  	
-

	  	  	  	
16,695

	  
	
(Increase) decrease in assets and liabilities:

	  	  	  	  	  	  	  	  
	
Accounts Receivable

	  	  	
38,404

	  	  	  	
138,185

	  
	
Other Current Asset

	  	  	
(2,207

	
)

	  	  	
2,955

	  
	
Accounts Payable

	  	  	
(3,992

	
)

	  	  	
(200,311

	
)

	
Stocks

	  	  	
61,783

	  	  	  	
71,914

	  
	
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

	  	  	
14,581

	  	  	  	
(24,182

	
)

	  	  	  	  	  	  	  	  	  
	
CASH FLOWS FROM INVESTING ACTIVITIES:

	  	  	  	  	  	  	  	  
	
Fixed Assets

	  	  	
-

	  	  	  	
(5,021

	
)

	
NET CASH USED IN INVESTING ACTIVITIES

	  	  	
-

	  	  	  	
(5,021

	
)

	  	  	  	  	  	  	  	  	  
	
INCREASE(DECREASE) IN CASH

	  	  	
14,581

	  	  	  	
(29,203

	
)

	  	  	  	  	  	  	  	  	  
	
CASH - BEGINNING OF PERIOD

	  	  	
7,422

	  	  	  	
36,625

	  
	  	  	  	  	  	  	  	  	  
	
CASH - END OF PERIOD

	  	
£

	
22,003

	  	  	
£

	
7,422

	  

 

The notes form part of these financial statements

 

  

F-14

  

 

The financial statements have been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies and with the Financial Reporting Standard for Smaller Entities (effective April 2008).

The financial statements were approved by the director on 16 August 2010 and were signed by:

 

 

/s/ D Hawes

D Hawes - Director

 

  

F-15

  

 

BITEMARK MC LTD

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JULY 2009

1.       ACCOUNTING POLICIES

Accounting convention

The financial statements have been prepared under the historical cost convention and in accordance with the Financial Reporting Standard for Smaller Entities (effective April 2008). Such reporting being similar to US GAAP with respect to Bitemark MC, Ltd.

Turnover

Turnover represents net invoiced sales of goods, excluding value added tax.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

	
Plant and machinery etc

	
- 33% on cost,

	  	
  25% on cost and

	  	
  20% on cost

 

Stocks

Stocks are valued at the lower of cost and net realizable value, after making due allowance for obsolete and slow moving items.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Going concern

The company meets its day to day working capital requirements by utilizing an invoice discount financing facility.

For the ten month period ended 31 May 2010, the company has made further losses. In order to counteract the effect of these losses the directors have implemented a number of measures to significantly reduce costs and increase profitability and is arranging further funding.

The directors have reviewed the situation and on the basis of discussions with potential investors, expect that adequate facilities will be made available and accordingly the directors consider it appropriate to prepare the financial statements on a going concern basis.

2.       OPERATING LOSS

The operating loss is stated after charging/(crediting):

	  	
2009

	  	  	
2008

	  
	  	
£

	  	  	
£

	  
	
Depreciation - owned assets

	
8,799

	  	  	
5,559

	  
	
Foreign exchange differences

	
(4,178

	
)

	  	
(8,101

	
)

	  	  	  	  	  	  
	
Directors' remuneration and other benefits etc

	
110,000

	  	  	
110,000

	  

  

F-16

  

 

BITEMARK MC LTD

NOTES TO THE FINANCIAL STATEMENTS - continued

FOR THE YEAR ENDED 31 JULY 2009

 

3.       TAXATION

 

Analysis of the tax credit

The tax credit on the loss on ordinary activities for the year was as follows:

	  	
2009

	  	  	
2008

	  
	  	
£

	  	£
	
Current tax:

	  	  	  	  	  
	
UK corporation tax provision (benefit)

	
-

	  	  	
(8,323

	
)

	
Tax on loss on ordinary activities

	
-

	  	  	
(8,323

	
)

4.       TANGIBLE FIXED ASSETS

 

	  	 	
Plant and

	 
	  	 	
machinery

	 
	  	 	
etc

	 
	
 

	 	

£

	 
	
COST

	 	 	 
	
At 1 August 2008

	 	 	43,161	 
	
Additions

	 	 	5,021	 
	
Disposals

	 	 	(18,380 	)
	  	 	 	 	 
	
At 31 July 2009

	 	 	29,802	 
	  	 	 	 	 
	
DEPRECIATION

	 	 	 	 
	
At 1 August 2008

	 	 	11,877	 
	
Charge for year

	 	 	8,799	 
	
Eliminated on disposal

	 	 	(1,685 	)
	  	 	 	 	 
	
At 31 July 2009

	 	 	18,991	 
	  	 	 	 	 
	
NET BOOK VALUE

	 	 	 	 
	
At 31 July 2009

	 	 	10,811	 
	  	 	 	 	 
	
At 31 July 2008

	 	 	31,284	 

5.       DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

 

	
  

	
2009

	  	  	
2008

	  
	  	
£

	  	  	

£

	  
	
Trade debtors

	
99,099

	  	  	
248,579

	  
	
Other debtors

	
20,574

	  	  	
9,279

	  
	  	  	  	  	  	  
	  	
119,673

	  	  	
257,858

	  

6.       CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

 

	  	
2009

	  	  	
2008

	  
	  	
£

	  	£
	
Trade creditors

	
92,534

	  	  	
239,821

	  
	
Taxation and social security

	
25,577

	  	  	
23,261

	  
	
Other creditors

	
70,505

	  	  	
125,845

	  
	  	  	  	  	  	  
	  	
188,616

	  	  	
388,927

	  

 

  

F-17

  

BITEMARK MC LTD

NOTES TO THE FINANCIAL STATEMENTS - continued

FOR THE YEAR ENDED 31 JULY 2009

 

7.       CALLED UP SHARE CAPITAL

	
Allotted, issued and fully paid:

	  	  	  	  
	
Number:

	
Class:

	
Nominal

	
2009

	  	2008	  
	  	  	
value:

	
£

	  	£	  
	
200

	
Ordinary

	
£0.10

	
200

	  	  	
200

	  

8.       RESERVES

	  	 	
Profit

	 	 	 	 	 	 	 
	  	 	
and loss

	 	 	
Share

	 	 	 	 
	  	 	
account

	 	 	
premium

	 	 	
Totals

	 
	  	 	

£

	 	 	
£

	 	 	

£

	 
	  	 	 	 	 	 	 	 	 	 
	
At 1 August 2008

	 	 	16,864	 	 	 	250,000	 	 	 	266,864	 
	
Deficit for the year

	 	 	(62,419 	)	 	 	 	 	 	 	(62,419 	)
	  	 	 	 	 	 	 	 	 	 	 	 	 
	
At 31 July 2009

	 	 	(45,555 	)	 	 	250,000	 	 	 	204,445	 

 

  

F-18

  

 

RTG VENTURES, INC.

PRO FORMA UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

CONTENTS

	
Introduction to Unaudited Pro Forma Combined Financial

	  	
F-20

	  	  	  
	
Pro Forma Consolidated Balance Sheet As of May 31, 2010

	  	
F-21

	  	  	  
	
Pro Forma Consolidated Statements of Operations for the Nine Months Ended May 31, 2010

	  	
F-22

	  	  	  
	
Pro Forma Consolidated Statements of Operations for the Year Ended August 31, 2009

	  	
F-23

	  	  	  
	
Notes to Pro Forma Consolidated Financial Statements

	  	
F-24

 

  

F-19

  

 

RTG VENTURES, INC.

Introduction to Unaudited Pro Forma Combined Financial Statements

 

 

The unaudited pro forma combined financial statements are presented to illustrate the estimated effects of RTG Ventures, Inc. (“RTGV”) having entered into a Share Exchange Agreement (the “Exchange Agreement”), on March 31, 2010, with Cloud Channel Limited,  which was subsequently re-named as RTG Ventures (Europe) Limited in July 2010 (“RTG Ventures Europe”), a private company registered in England and Wales with company number 07147702, limited by shares, whereby RTGV acquired 100% of the shares of RTG Ventures Europe, 10,000 (Ten Thousand) ordinary shares at £ .0001 per share par value. RTG shall issue and transfer  500,000 from an aggregate amount of  1,273,059 preferred shares which convert into of its common stock, .001 par value per share (the “RTG Common Stock”). The conversion rate is calculated in each individual contract and agreed by RTG.  It is acknowledged and approved by both Boards that the majority of these shares are to be consideration for acquisitions and asset purchases to be completed by Cloud Channel. All shares held in escrow will be voted by management.

On March 31, 2010, the same date as the above Exchange Agreement, RTG Ventures Europe entered into share purchase agreements with Stylar Limited, a private limited company, registered in England and Wales, company number 07009951, whereby RTGV acquired 100% of its shares and with Bitemark MC Limited a private limited company, registered in England and Wales, company number 4258735, whereby RTGV acquired 100% of its shares.

Pursuant to the Exchange Agreement, RTGV acquired 100% of the outstanding capital stock of RTG Ventures Europe from its stockholders for consideration consisting of Convertible Preferred Shares of RTGV according to the valuation methodologies outlined in the share purchase agreements of Bitemark MC Limited and Stylar Limited. Although the acquisitions of Bitemark MC Limited and Stylar Limited are probable, RTGV as the sole shareholder of RTG Ventures Europe, has the option to withdraw from the transaction at any time prior to the issuance of the preferred shares. RTG Ventures Europe has been valued 12 months forward using forecasts submitted by them and agreed by RTGV. Based on the results after 12 months, shareholders will be able to convert the preferred shares into common stock using the average share price of the 30 days preceding the conversion. At conversion the valuations will be adjusted up to a maximum of 25% in either direction using performance against forecast. All preferred stock will be held by RTGV's transfer agent for the 12 month period.

The unaudited pro forma consolidated financial information for the year ended August 31, 2009 for RTGV and for the year ended July 31, 2009 for Bitemark MC Limited have been derived from the audited financial statements of the companies. The financial information for the year ended July 31, 2009 for Bitemark MC Limited was converted from British Pounds (“BP”) to US Dollars (“USD”) at the July 31, 2009 year ended average rate of $1.58523. The exchange rate used is based on the rates provided by oanda.com. The unaudited pro forma consolidated financial information as of and for the nine  months ended May 31, 2010 have been derived from the unaudited financial statements of RTG Ventures, Inc., Bitemark MC Limited and Stylar Limited. The financial information for the nine months ended May 31, 2010 for Bitemark MC Limited and Stylar Limited were converted from British Pounds (“BP”) to US Dollars (“USD”) at the May 31, 2010  year ended average rate of $1.59514. The exchange rate used is based on the rates provided by oanda.com. The financial information as of the nine months ended May 31, 2010 for Bitemark MC Limited and Stylar Limited was converted from British Pounds (“BP”) to US Dollars (“USD”) at the May 31, 2010 spot rate of $1.44394. The exchange rate used is based on the rates provided by oanda.com.

The unaudited pro forma combined financial information should be read in conjunction with the unaudited and audited financial statements of the companies included elsewhere in this Form 8-K. The pro forma adjustments are based on the best information available and assumptions that management believes are reasonable given the information available. The unaudited pro forma financial information is for illustrative and informational purposes only and is not intended to represent or be indicative of what the Company’s financial position would have been had the transactions contemplated by the Share Exchange Agreement and related transactions occurred on June 30, 2010, August 31, 2009 or July 31, 2009.

  

F-20

  

 

	
RTG VENTURES, INC.

	
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS

	
AS OF MAY 31, 2010

 

	  	 	
BiteMark MC LTD

	 	 	
Stylar Ltd.

	 	 	
RTG Ventures, Inc.

	 	 	
Pro Forma Adjustments

	 	 	
Pro Forma

Combined

Total

	 
	
Assets

	 	 	(	*)	 	 	(	*)	 	 	 	 	 	 	 	 	 
	
 Current Assets

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
   Cash and cash equivalents

	 	$	31,771	 	 	$	21,752	 	 	$	-	 	 	$	 	-	 	 	$	53,523	 
	
   Debtors

	 	 	117,348	 	 	 	73,079	 	 	 	-	 	 	 	 	-	 	 	 	190,427	 
	
   Stocks

	 	 	246,481	 	 	 	-	 	 	 	-	 	 	 	 	-	 	 	 	246,481	 
	
   Prepayments and accrued income

	 	 	36,212	 	 	 	-	 	 	 	-	 	 	 	 	-	 	 	 	36,212	 
	  	 	 	431,812	 	 	 	94,831	 	 	 	-	 	 	 	 	-	 	 	 	526,643	 
	
 Non-Current

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
   Intangible asset

	 	 	-	 	 	 	-	 	 	 	-	 	 	 	
(a)

	1,660,306	 	 	 	1,660,306	 
	
   Tangible assets

	 	 	13,759	 	 	 	-	 	 	 	-	 	 	 	 	-	 	 	 	13,759	 
	
            Total Assets

	 	$	445,571	 	 	$	94,831	 	 	$	-	 	 	$	 	1,660,306	 	 	$	2,200,708	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Liabilities

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
 Current Liabilities

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
   Accounts payable

	 	$	266,586	 	 	$	47,122	 	 	$	1,144,199	 	 	$	 	-	 	 	$	1,457,907	 
	
   Notes Payable

	 	 	-	 	 	 	-	 	 	 	300,000	 	 	 	 	-	 	 	 	300,000	 
	
Total Liabilities

	 	 	266,586	 	 	 	47,122	 	 	 	1,444,199	 	 	 	 	-	 	 	 	1,757,907	 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Shareholders’ equity (deficit)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
 Preferred stock,  US$0.001 par value, shares

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
  authorized,2,000,000: issued and outstanding – 0   (actual); 500,000 (pro forma)

	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(a)	500	 	 	 	500	 
	
 Called up share capital

	 	 	289	 	 	 	144	 	 	 	-	 	 	 	
(a)

	(433 	) 	 	 	-	 
	
 Common stock,  US$0.001 par value, shares

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
  authorized, 200,000,000: issued and outstanding 134,718,885

	 	 	-	 	 	 	-	 	 	 	134,719	 	 	 	 	-	 	 	 	134,719	 
	
 Share premium

	 	 	360,985	 	 	 	-	 	 	 	-	 	 	 	
(a)

	(360,985 	) 	 	 	-	 
	
 Profit and loss account

	 	 	(182,289 	) 	 	 	47,565	 	 	 	-	 	 	 	
(a)

	134,724	 	 	 	-	 
	
 Additional paid-in capital

	 	 	-	 	 	 	-	 	 	 	5,497,050	 	 	 	
(a)

	1,886,500	 	 	 	7,383,550	 
	
 Retained earnings

	 	 	-	 	 	 	-	 	 	 	(7,075,968 	) 	 	 	 	 	 	 	 	(7,075,968 	) 
	
      TOTAL SHAREHOLDERS' EQUITY (DEFICIT)

	 	 	178,985	 	 	 	47,709	 	 	 	(1,444,199 	) 	 	 	 	1,660,306	 	 	 	442,801	 
	
      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

	 	$	445,571	 	 	$	94,831	 	 	$	-	 	 	$	 	1,660,306	 	 	$	2,200,708	 

 

* The financials of Cloud Channel, Ltd. (“RTG Ventures Europe”) are not included as RTG Ventures Europe is essentially a non-operating shell, with no operations and no assets or liabilities.

 

The accompanying notes are integral parts of the unaudited pro forma consolidated financial statements.

 

  

F-21

  

 

	
RTG VENTURES, INC.

	
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

	
FOR THE NINE MONTHS ENDED MAY 31, 2010

 

	  	  	
BiteMark MC LTD

	  	  	
 Stylar Ltd.

	  	  	
RTG Ventures, Inc.

	  	  	
Pro Forma Adjustments

	  	  	
Pro Forma Combined Total

	  
	  	  	  	
(*)

	  	  	  	
(*)

	  	  	  	  	  	  	  	  	  	  	  	  
	
REVENUES

	  	
$

	
1,379,461

	  	  	
$

	
182,982

	  	  	
$

	
-

	  	
 $

	
 -

	  	  	
$

	
1,657,652

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Cost of sales

	  	  	
852,302

	  	  	  	
62,262

	  	  	  	
-

	  	  	
 -

	  	  	  	
968,973

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Gross profit

	  	  	
527,159

	  	  	  	
120,720

	  	  	  	
-

	  	  	
 -

	  	  	  	
688,679

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
OPERATING EXPENSES

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
General and administrative

	  	  	
614,539

	  	  	  	
49,159

	  	  	  	
223,505

	
 (b)

	  	
 249,046

	  	  	  	
1,136,249

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
OTHER EXPENSES

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Interest payable and similar charges

	  	  	
22,675

	  	  	  	
-

	  	  	  	
-

	  	  	
 -

	  	  	  	
22,675

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Income (loss) before income taxes

	  	  	
(110,055

	
)

	  	  	
71,561 

	  	  	  	
(223,505

	
) 

	  	
 -

	  	  	  	
(511,045 

	
) 

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Income taxes

	  	  	
-

	  	  	  	
15,028

	  	  	  	
-

	  	  	
 -

	  	  	  	
15,028

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
NET INCOME (LOSS)

	  	
$

	
(110,055

	
) 

	  	
$

	
56,533

	  	  	
$

	
(223,505

	
) 

	
$ 

	
 -

	  	  	
$

	
(526,073

	
) 

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
NET LOSS PER SHARE:

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Basic and Diluted

	  	  	
n/a

	  	  	  	
n/a

	  	  	
$

	
(0.00

	
)

	  	
-

	  	  	
$

	
(0.00)

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
WEIGHTED AVERAGE NUMBER OF SHARES:

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Basic and Diluted

	  	  	
n/a

	  	  	  	
n/a

	  	  	  	
124,212,858

	
 (c)

	  	
145,153,846

	  	  	  	
269,366,704

	  

* The financials of Cloud Channel, Ltd. (“RTG Ventures Europe”) are not included as RTG Ventures Europe is essentially a non-operating shell, with no operations and no assets or liabilities.

The accompanying notes are integral parts of the unaudited pro forma consolidated financial statements.

 

  

F-22

  

 

	
RTG VENTURES, INC.

	
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

	
FOR THE YEAR ENDED AUGUST 31, 2010

 

	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	
Bitemark MC LTD

	  	  	
RTG Ventures, Inc.

	  	  	  	  	  	  	
Pro Forma

	  
	  	  	
July 31, 2009

	  	  	
August 31, 2009

	  	  	Pro Forma Adjustments	  	  	
Combined Total

	  
	  	  	  	
(*) (**)

	  	  	  	  	  	  	  	  	  	  	  	  	  
	
REVENUES

	  	
$

	
1,882,158

	  	  	
$ 

	
-

	  	  	
$

	
 -

	  	  	  	
1,882,158

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Cost of sales

	  	  	
985,238

	  	  	  	
-

	  	  	 	
 -

	  	  	  	
985,238

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Gross profit

	  	  	
896,920

	  	  	  	
-

	  	  	  	
 -

	  	  	  	
896,920

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
OPERATING EXPENSES

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
   General and administrative

	  	  	
943,071

	  	  	  	
495,410

	  	  	
(b)

	
 332,061

	  	  	  	
1,770,542

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
OTHER EXPENSES

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Interest payable and similar charges

	  	  	
52,798

	  	  	  	
19,500

	  	  	  	
 -

	  	  	  	
72,298

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
NET LOSS

	  	
$

	
(1,915

	
) 

	  	
$

	
(514,910

	
) 

	  	
$

	
 332,061

	  	  	
$

	
(945,919

	
) 

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
NET LOSS PER SHARE:

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Basic and Diluted

	  	  	
n/a

	  	  	
$

	
(0.00)

	  	  	 	
-

	  	  	  	
(0.00)

	  
	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
WEIGHTED AVERAGE NUMBER OF SHARES:

	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  	  
	
Basic and Diluted

	  	  	
n/a

	  	  	  	
124,212,858

	  	  	
(c)

	
145,153,846

	  	  	  	
269,366,704

	  

 

* The financials of Cloud Channel, Ltd. (“RTG Ventures Europe”) are not included as RTG Ventures Europe is essentially a non-operating shell, with no operations and no assets or liabilities.

** For pro forma purposes, the year ended July 31, 2009 for Bitemark MC, Ltd., was deemed a similar period to the year ended August 31, 2009 for RTG Ventures, Inc.

 

The accompanying notes are integral parts of the unaudited pro forma consolidated financial statements.

  

F-23

  

 

FOOTNOTES TO PRO FORMA FINANCIAL STATEMENTS

	
 

	  	  	  	  	
 

	  
	
Description of Pro Forma Adjustments

	  	  	  	  	  	  
	
 

	  	
 

	  	  	
 

	  
	
a  - To reflect the acquisition of Bitemark MC Ltd. (“Bitemark”) and Skylar Ltd. (“Skylar”) through the issuance of 500,000 preferred shares. Pursuant to the Exchange Agreement, RTG Ventures, Inc. (“RTGV”) acquired 100% of the outstanding capital stock of RTG Ventures Europe from its stockholders for consideration consisting of Convertible Preferred Shares of RTGV valued according to the valuation methodologies outlined in the subsequent Share Purchase Agreements of Bitemark and Stylar by RTG Ventures Europe. Bitemark, Stylar and RTG Ventures Europe, will collectively be known as  RTG Ventures Europe and Subsidiaries. RTG Ventures Europe has been valued 12 months forward using forecasts submitted by them and agreed by RTGV. The minimum valuation for Bitemark is 769,400BP (British Pounds) reduced by 25% or 192,350BP for a valuation of 577,050BP. For Skylar the minimum valuation is 644,334BP. The total minimum is 1,221,384BP. At a currency conversion rate of 1.545 (as of September 3, 2010) that translates into $1,887,000 – US dollars.

 

	  	
Dr

	  	  	
Cr

	  
	
Assets in excess of cost

	  	  	
1,660,306

	  	  	  	  	  
	
APIC/Share premium of Skylar Ltd and Bitemark MC Ltd

	  	  	
360,985

	  	  	  	  	  
	
Called up share capital - Skylar Ltd and Bitemark MC Ltd

	  	  	
433

	  	  	  	  	  
	
Profit and Loss – Skylar Ltd. and Bitemark MC Ltd

	  	  	  	  	  	  	
134,724

	  
	
Preferred shares – Par Value

	  	  	  	  	  	  	
  500

	  
	
Additional paid in capital – RTG Ventures, Inc.

	  	
 

	  	  	  	
1,886,500

	  
	  	  	  	  	  	  	  	  	  
	
b - The resultant Intangible Asset from the acquisition of  Bitemark and Stylar has been deemed a  Non Contractual Customer Relationships that is being amortized over the estimated life of the asset of five years. This preliminary valuation and classification are subject to change pending an appraisal of the acquisitions of Bitemark and Stylar. The accompanying unaudited consolidated statements of operations for the nine months ended May 31, 2010 and the year ended August 31, 2009, reflect the amortization of this intangible asset as if the acquisition had occurred at the inception of each period, and the expense of the intangible asset had been in effect for the entire period.

 

c – To reflect the issuance of 500,000 preferred shares valued at $1,887,000. To reflect the preferred shares as if they were converted into common shares, as of September 3, 2010 at a market price of $0.013 per share, the result would be the issuance of 145,143,846 shares of common stock. Such common stock is presented in the accompanying unaudited consolidated statements of operations for the nine months ended May 31, 2010 and the year ended year ended August 31, 2009, as if issued and outstanding for the entire periods with respect to earnings per share.

	  	  	  	  	  	  	  	  

 

F-24exhibit1001.htm

    
      
         

      

      
         

      

      
         

      

    

    
      	 
      	
              Alico
      Term & RELOC 2010

            
	 
      	
              Real
      Estate Term Loan: 10053500

              Real
      Estate Line of Credit: 10053600

               

            

    

     

    CREDIT
AGREEMENT

     

    This
agreement is dated as of September  8, 2010.  It is between
ALICO, INC., a Florida corporation ("Alico, Inc.");
ALICO-AGRI, LTD., a Florida limited partnership ("Alico-Agri"); ALICO
PLANT WORLD, L.L.C., a Florida limited liability company ("Plant World"); BOWEN
BROTHERS FRUIT, LLC, a Florida limited liability company ("Bowen"); and ALICO
LAND DEVELOPMENT, INC., a Florida corporation ("ALDI") (Alico Inc.;
Alico-Agri; Plant World; Bowen; and ALDI are individually and collectively,
“Borrower”) and
RABO AGRIFINANCE, INC., a Delaware corporation (“Lender”).

     

    
      	
              Borrower
      requests that Lender make a term loan and provide a line of credit to
      Borrower.  Lender will make a term loan and provide a line of
      credit, subject to the terms of this
agreement.

            

    

     

    ARTICLE
1                         
- THE REAL ESTATE TERM LOAN

     

    1.01 Loan
Amount.   Lender
shall lend Borrower the principal sum of $40,000,000.00 (the "Term
Loan").

     

    1.02 Interest.  The
unpaid principal balance of the Term Loan will bear interest at a rate equal to
the one month LIBOR plus 2.500% per annum, Adjusted on the first day of each
Term Loan Month (the "Term Loan LIBOR Indexed
Rate").  Lender shall advise Borrower of the initial interest
rate not more than two (2) days prior to Closing. The term "Term Loan Month"
means the one month period beginning on the first day of the calendar month
immediately following the Closing Date, and each successive one month
period.

     

    1.03 Interest
Margin Adjustment.

     

    (a) On
October 1, 2015 (the "Term Loan Margin Adjustment
Date"), Lender may Adjust the Interest Rate Margin applicable to the Term
Loan to any percent per annum (not to exceed five percent (5%)) determined by
Lender.

     

    (b) Lender
shall notify Borrower of the new Interest Rate Margin applicable to the Term
Loan not less than 30 days prior to the effective date of the
Adjustment.  The Adjusted Interest Rate Margin will become effective
upon the applicable date of Adjustment; except that Borrower may, at its option,
irrevocably elect to Prepay the entire unpaid principal balance of the Term
Loan, all accrued interest and all other charges due under the Term Loan, by
giving notice to Lender no later than the effective date of the Adjustment (a
"Notice of Election to
Prepay").  If there is a Notice of Election to Prepay, Borrower
shall pay the entire unpaid principal balance of the Term Loan, all accrued
interest and all other charges due under this agreement with respect to the Term
Loan, without prepayment fee or penalty, within 90 days after the effective date
of the Adjustment.  If Lender does not receive a Notice of Election to
Prepay Borrower will be deemed to have acknowledged and accepted the
Adjustment.  A Notice of Election to Prepay will not affect the
effective date of the Adjustment of the Interest Rate Margin.

     

    1.04 Required Payments; Maturity
Date.

     

    (a) Borrower
shall pay accrued interest on the Term Loan on October 1, 2010 and on the first
day of each January, April, July and October after the Closing Date to the Term
Loan Maturity Date.

     

    (b) On
October 1, 2011 (the “Term Loan Initial Principal
Payment Date"), and on the first day of each January, April, July and
October thereafter to the Real Estate Term Loan Maturity Date, Borrower shall
pay Term Loan principal in the amount of $500,000.00 in addition to accrued
interest.

     

    (c) Reserved.

     

    (d) The
unpaid principal balance of, all unpaid accrued interest on, and other charges
under this agreement with respect to the Term Loan, shall be paid on October 1,
2020 (the "Term Loan
Maturity Date").

     

    1.05 Prepayments.  Subject to Section 1.03(b),
Section 3.06
and the following sentence, Prepayments of the Term Loan may be made at any time
without prepayment fee or premium; except that each Prepayment must be not less
than $100,000.00. Borrower shall give Lender not less than fifteen (15) days
notice of Borrower’s intention to make any Prepayment of $2,000,000.00 or more,
specifying the date and the amount of such Prepayment.

     

    1.06 The Term
Loan Note.  The Term Loan
will be evidenced by this agreement and a promissory note in a form provided by
Lender (the "Term Loan
Note").

     

     

    ARTICLE
2                         
- THE REAL ESTATE LINE OF CREDIT

     

    2.01 The Line
of Credit.  Lender shall
extend credit (the “Line of Credit”) from
time to time during the period from the Closing Date to the Line of Credit
Maturity Date (that period, including extensions, if any, the “Line of Credit Availability
Period”) by making loans to Borrower (each such loan a "Line of Credit Loan")
on a revolving basis.

     

    2.02 Maximum
Amount  The aggregate unpaid principal balance of the Line of
Credit Loans must not exceed $60,000,000.00 (the "Line of Credit Committed
Amount").

     

    2.03 Loans
under the Line of Credit.  Loans under the
Line of Credit are subject to Article
5.  Line of Credit Loans must be used only for financing
general corporate expenditures, including operating expenses, purchases of
capital assets, payment of dividends and general working
capital.  Each Line of Credit Loan must be a minimum of
$100,000.00.  Up to 52 Line of Credit Loans per year may be obtained
without a disbursement fee.  Additional Line of Credit Loans will be
subject to a disbursement fee of $100.00 per Loan.

     

    2.04 Revolving
Nature.  The Line of Credit is a revolving line of credit; and
during the Line of Credit Availability Period, subject to the terms and
conditions of this agreement, Borrower may repay principal amounts and reborrow
them.

     

    2.05 Commitment
Fee.  During the Line
of Credit Availability Period, Borrower shall pay an annual commitment fee equal
to 0.150% of the difference between the annual average unpaid balance and the
Line of Credit Committed Amount.  The commitment fee shall be paid on
February 1 of each year.  The commitment fee with respect to any
partial year will be prorated according to the ratio of the number of days in
that partial year period to the number of days in the entire year.

     

    2.06 Interest.  The
unpaid principal balance of Loans under the Line of Credit will bear interest at
a rate equal to the one month LIBOR plus 2.500% per annum, Adjusted on the first
day of each Line of Credit Month (the "Line of Credit LIBOR Indexed
Rate").  Lender shall advise Borrower of the initial interest
rate not more than two (2) days prior to Closing. The term "Line of Credit Month"
means the one month period beginning on the first day of the calendar month
immediately following the Closing Date, and each successive one month
period.

     

    2.07 Interest
Margin Adjustment.

     

    (a) Commencing
on February 1, 2011 and on each February 1 thereafter (each a "Line of Credit Margin
Adjustment Date"), Lender shall Adjust the Interest Rate Margin
applicable to the Line of Credit to an Interest Rate Margin determined pursuant
to the Pricing Grid attached hereto as Exhibit A (that, and
any replacement pricing grid, the “Pricing Grid”) based on Borrower’s Debt
Service Coverage Ratio for the immediately preceding fiscal year. Category 2
pricing shall apply for interest accruing from Closing through the first
Adjustment Date.

     

    (b) On
October 1, 2015, Lender may Adjust the Interest Rate Margins set forth in the
Pricing Grid  applicable to the Line of Credit Loan to any percent per
annum determined by Lender.  Lender shall notify Borrower of the new
Interest Rate Margins (and Pricing Grid) not less than 30 days prior to the
applicable date of Adjustment.  The Pricing Grid shall become
effective upon the applicable date of Adjustment at the Debt Service Coverage
Ratio category  then in effect; except that Borrower may, at its
option, prior to the applicable date of Adjustment, notify Lender that Borrower
will Prepay the entire unpaid principal balance of the Line of Credit Loan, all
accrued interest and other charges due under the Line of Credit Loan, and
terminate its ability to draw under the Line of Credit.  Upon giving
such notice, Borrower shall pay the entire unpaid principal balance of the Line
of Credit Loan, without prepayment fee or penalty, within 90 days after the
applicable date of Adjustment.  If Lender does not receive such
notice, Borrower will be deemed to have acknowledged and accepted the new
Pricing Grid.  A notice of election to prepay will not affect the
effective date of the Adjustment of the Interest Rate Margins.

     

    2.08 Required Payments; Maturity
Date.

     

    (a) Borrower
shall pay accrued interest on the Line of Credit on October 1, 2010 and on the
first day of each January, April, July and October after the Closing Date to the
Line of Credit Maturity Date.

     

    (b) The
unpaid principal balance of, all unpaid accrued interest on, and other charges
under this agreement with respect to the Line of Credit, shall be paid on
October 1, 2020 (the "Line of Credit Maturity
Date").

     

    2.09 Prepayments.  Subject to Sections 2.07(b)
and  3.06, Prepayments of the Line of Credit may be made at any
time without prepayment fee or penalty; except that each Prepayment must be not
less than $100,000.00.

     

    2.10 The Line
of Credit Note.  Loans under the
Line of Credit will be evidenced by this agreement and a promissory note in a
form provided by Lender (the "Line of Credit
Note").

     

     

    ARTICLE
3                      
- COVENANTS REGARDING THE LOANS

     

    3.01 Loan
Requests.  Each Line of
Credit Loan will be made upon the request of Borrower (a "Loan
Request").  Each Loan Request (a) must comply with the
requirements of Article 9; (b) at
Lender's option, must be received by Lender before 12:00 noon (St. Louis,
Missouri time) on a Business Day which is not less than one Business day prior
to the date of the Loan; and (c) must specify the amount of the Line of Credit
Loan.  No Line of Credit Loan will be made if the interest rate for
that Loan would exceed the Maximum Rate.  Each Loan Request will be
irrevocable.  Lender may postpone making any Line of Credit Loan to
the extent Lender is delayed by fire, earthquake or another circumstance outside
Lender’s reasonable control.

     

    3.02 Computation
of Interest.  All computations
of accrued interest under the Loan Documents other than interest at the Maximum
Rate, and all fees under the Loan Documents, will be made on the basis of a year
of 360 days for the actual number of days (including the first day but excluding
the last day) elapsed; and all computations of interest accrued at the Maximum
Rate will be based upon a year of the actual number of days in the respective
year.  Subject to Section 3.04, there is no
limit on the amount that a rate of interest subject to Adjustment by Lender may
increase at any one time, or in the aggregate.  Lender's determination
of a rate of interest will be conclusive, absent manifest error.

     

    3.03 Default
Rate.  Upon the
occurrence of an Event of Default, the principal balance of the Loans and, to
the extent permitted by Applicable Law, all other Loan Obligations shall, from
the date of the Event of Default until the date Lender notifies Borrower that it
is waived or cured or all Loan Obligations are paid in full, bear interest at
the Default Rate.  Subject to the provisions of Section 3.04, the "Default Rate" means
with respect to (i) the unpaid principal balance of  the Term Loan,
the rate per annum which would otherwise be in effect plus 5.000% per annum;
(ii) the unpaid principal balance of all Loans under the Line of Credit, the
rate per annum which would otherwise be in effect using the Category 3 rate set
forth in the Pricing Grid, plus 5.000% per annum; and (iii) all other Loan
Obligations, a rate equal to the highest Default Rate applicable to the unpaid
principal balance of any Loan.  Interest payable at the Default Rate
shall be paid from time to time on demand, or if not sooner demanded, on the
first day of each month.  The provisions of this section may result in
compounding of interest.  The provisions of this section will not
constitute a waiver of any Event of Default.

     

    3.04 Maximum
Rate.  Notwithstanding
any provision of this agreement to the contrary, (a) no interest will be due on
any amount due under this agreement if, under Applicable Law, Lender is not
permitted to charge interest on that amount, and (b) in all other cases interest
due under this agreement will be calculated at a rate not to exceed the Maximum
Rate.  If Borrower is requested by Lender to pay interest on any
amount due under this agreement at a rate greater than the Maximum Rate, the
amount of interest due on that amount will be deemed the Maximum Rate and all
payments in excess of the Maximum Rate will be deemed to have been Prepayments
without prepayment fee or penalty, and not interest.  All amounts
other than interest which are paid or agreed to be paid to Lender for the use,
forbearance, or detention of Borrower's indebtedness to Lender under this
agreement shall, to the extent permitted by Applicable Law, be amortized and
spread over the full stated term of the indebtedness, so that the rate of
interest on account of that indebtedness does not exceed the Maximum Rate for so
long as the indebtedness is outstanding.

     

    3.05 Method
and Application of Payments. All payments of principal,
interest, and other amounts to be made under the Loan Documents shall be made to
Lender in U.S. dollars and in immediately available funds, without set-off,
deduction, or counterclaim, not later than 2:00 pm (St. Louis, Missouri time) on
the dates on which those payments will become due (any of those payments made
after the time on the due date will be deemed to have been made on the next
succeeding Business Day).  All payments received by Lender (including,
to the extent permitted by Applicable Law, all proceeds received from the sale
or other liquidation of the Collateral) will be applied to the Obligations in
any order determined by Lender.  The early or late date of making a
regularly scheduled payment will be disregarded for purposes of allocating the
payment between principal and interest.  For this purpose, the payment
will be treated as though made on the date due provided any late payments shall
include interest at the applicable Default Rate.  In any legal action
or proceeding, the entries made by Lender in an account or accounts maintained
by Lender or Rabobank International or any of their Affiliates in accordance
with its usual practice and evidencing the Obligations, will be prima facie evidence of the
existence and amounts of those Obligations.

     

    3.06 Prepayments
Generally.  Lender may refuse
to accept any Prepayment not expressly permitted in this
agreement.  If a Prepayment is conditioned upon prior notice to
Lender, at the option of Lender, (a) that notice will be irrevocable; (b) a
Prepayment will be due in the amount and on the date specified in that notice;
and (c) that notice will not affect Borrower's obligation to make all other
payments required under the Loan Documents on the date when due. Prepayments of
the Term Loan must be accompanied by unpaid accrued interest.  Lender
may, at its option, condition any Prepayment of a Line of Credit Loan upon
payment of all amounts then due under this agreement.  Each Prepayment
of a portion of the Term Loan or a Line of Credit Loan will be applied to the
most remote payment of the principal due under this agreement without affecting
the amount or due date of any subsequent payment due under the Term Loan or the
Line of Credit Loan.  If Lender receives any Prepayment which it is
permitted to refuse, Lender may accept the Prepayment; except that Lender may,
as a condition of acceptance, require the payment of interest which would accrue
on the amount prepaid through the date when Lender would be obligated to accept
the Prepayment, or the date the principal amount prepaid would be due under this
agreement, whichever is earlier.

     

    Notwithstanding
that the Obligations are secured by the Collateral in its entirety and provided
that there has been no Event of Default and no material decrease in the value of
the Collateral, Lender will release that portion of the Collateral comprised of
the Citrus Groves upon receipt of immediately available funds  in full
repayment of all amounts due under the Term Loan, and will release the portion
of the Collateral comprised of the Collins Slough/Hill Grade Tract properties
upon receipt of immediately available funds  in full repayment of all
amounts due and the termination of the Line of Credit.

     

    3.07 Reserved.

     

    3.08 Mandatory
Repayments.  If at any time the unpaid principal balance of a
Line of Credit Loan exceeds the maximum amount thereof under the terms of this
agreement, then, upon demand by Lender, Borrower shall repay that portion of the
principal balance thereof in excess of that maximum amount, along with all
unpaid accrued interest on that portion.

     

    3.09 Inability
to Determine Rates.  If, in connection
with any Loan bearing interest at a rate to be determined in whole or in part on
the basis of the applicable LIBOR (a “LIBOR Based Rate”),
Lender determines that (a) United States dollar deposits are not being offered
to banks in the London interbank market for the applicable amount of such Loan,
or (b) adequate and reasonable means do not exist for determining the applicable
LIBOR Based Rate, Lender will promptly so notify the
Borrower.  Thereafter, the obligation of Lender to make or maintain
any Loan bearing interest at the applicable LIBOR Based Rate shall be suspended
until Lender revokes such notice, and all Loans which would otherwise bear
interest at the applicable LIBOR Based Rate shall accrue interest at that rate,
per annum, equal to the Prime Rate.

     

    3.10 Hedging
Agreements and Hedging Obligations.  In the event Borrower or
any of them has any interest rate swap Hedging Obligations related to the Loans,
a Prepayment hereunder may trigger a close-out of corresponding parties as to
Hedging Agreements at Lender’s option, in the event that Borrower does not have
outstanding amounts under the Loans bearing interest at a LIBOR rate in amount
equal to or in excess of the notional amount of the interest rate swap from time
to time.

     

     

    ARTICLE
4                         -
COLLATERAL

     

    4.01 Collateral
Documents.  The payment and
performance of the Obligations shall be secured by all liens upon and security
interests in any rights, title and interests in property, created under the
terms and conditions of any instrument or agreement between any Borrower and
Lender or Rabobank International or any of their Affiliates, whether now
existing or hereafter arising, stating that it secures the payment or
performance of the Loan Obligations or the indebtedness, liabilities and
obligations of Borrower to Lender, generally (those rights, title and interests,
individually and collectively, the "Collateral;" and
those instruments and agreements, the "Collateral
Documents"). The Collateral Documents include, without limitation, that
certain Florida Mortgage, Security Agreement and Financing Statement of even
date herewith from Borrower to Lender in its capacities as Mortgagee and
Collateral Agent. The Collateral and Collateral Documents secure the Term Loan,
the Line of Credit and the Hedging Obligations.

     

    4.02            Due on
Sale or Encumbrance Provisions.  Each Collateral
Document which is a mortgage, deed of trust or deed to secure debt includes
substantially the following provision:  Mortgagor shall not, without
Collateral Agent's or Mortgagee's prior written consent in each instance,
directly or indirectly sell, grant, convey, transfer, assign, or otherwise
dispose of the Real Estate or any portion thereof or any legal or beneficial
interest therein, whether by operation of law or otherwise, or permit or suffer
any such sale, grant, conveyance, transfer, assignment or other disposition of
same.  Furthermore, if Mortgagor is a corporation, partnership,
limited liability company or other entity, Mortgagor shall not, without
Collateral Agent's or Mortgagee's prior written consent, directly or indirectly
permit, allow or suffer any person or entity having, directly or indirectly,
through one or more intermediate persons or otherwise, any stock, partnership,
legal, beneficial, or other ownership interest in Mortgagor, to convey,
transfer, assign, pledge, hypothecate, mortgage, encumber, or otherwise dispose
of such interest, if as a result of such transaction or transactions, either (i)
any person or entity having a Controlling Interest (as hereinafter defined) in
Mortgagor immediately prior thereto would cease to have a Controlling Interest
in Mortgagor immediately thereafter, or (ii) any person or entity not having a
Controlling Interest in Mortgagor immediately prior thereto would have a
Controlling Interest in Mortgagor immediately
thereafter.  "Controlling Interest" means the legal or beneficial
ownership, use, enjoyment, or benefit, directly or indirectly, through one or
more intermediate persons, of the power to direct the removal and replacement of
management, including the chief executive officer, of Mortgagor, directly or
indirectly, whether through the direct or indirect ownership, of voting
securities, by contract or otherwise.  Except as provided below in
this paragraph, any sale, grant, conveyance, transfer, assignment or other
disposition described in this paragraph, without Collateral Agent's or
Mortgagee's prior written consent, shall, at Collateral Agent's or Mortgagee's
sole option, constitute a default under this Mortgage and the other Loan
Documents, entitling Collateral Agent or Mortgagee immediately to exercise all
rights and remedies under this Mortgage and the other Loan Documents without
notice to Mortgagor or any other parties.  Notwithstanding anything in
this Agreement to the contrary:  (i) any direct or indirect
conveyance, transfer, assignment or other disposition (the “Event”) of any
stock, partnership, limited liability company, legal, beneficial or other
interest in Mortgagor shall not be a default hereunder or under the other Loan
Documents as long as either (A) the chief executive officer of Mortgagor
immediately prior to such Event is not actually removed or replaced (other than
as a result of the death or disability of the chief executive officer which
shall not be deemed a removal or replacement) within two (2) years of such
Event, or (B) those
persons or entities having a direct or indirect Controlling Interest in
Mortgagor as of the date of this Agreement, continue to have, in the aggregate
with their Affiliates and Related Parties, a direct or indirect Controlling
Interest in Mortgagor, (ii) the transfer of the Real Estate to an Affiliate of
Mortgagor (a “Transferee-Affiliate”) by merger of Mortgagor into such Affiliate
shall not be a default hereunder or under the other Loan Documents so long as
those persons or entities having a direct or indirect Controlling Interest in
Mortgagor as of the date of this Agreement, continue to have, in the aggregate
with their Affiliates and Related Parties, a direct or indirect Controlling
Interest in said Transferee-Affiliate, (iii) the transfer of the Real Estate to
a wholly-owned Affiliate of Mortgagor (a “Wholly-Owned Affiliate”) shall not be
a default hereunder or under the other Loan Documents so long as said
Wholly-Owned Affiliate remains wholly-owned by Mortgagor or an Affiliate of
Mortgagor and executes and delivers to Lender a guaranty of all of the
Obligations and all other instruments and agreements required by Lender pursuant
to Paragraph 7.12 below, and (iv) any pledge, hypothecation or encumbrance of a
direct or indirect interest in Mortgagor without the actual transfer of voting
rights with respect thereto shall not be deemed to constitute a conveyance,
transfer, assignment, pledge, hypothecation, mortgage, encumbrance or other
disposition of such interest for purposes of this Paragraph 4.02 (provided,
however, either (A) a pledge, hypothecation or encumbrance of a direct or
indirect interest in Mortgagor together with the actual transfer of voting
rights with respect thereto or (B) a transfer of the voting rights pursuant to
the exercise or enforcement of such permitted pledge, hypothecation or
encumbrance, shall be deemed to constitute a conveyance, transfer, assignment,
pledge, hypothecation, mortgage, encumbrance or other disposition of such
interest for purposes of this Paragraph 4.02).  If an Event described
in (i) (A) above occurs followed by the removal or replacement of the chief
executive officer within two (2) years of such Event, Mortgagor shall notify
Mortgagee and Collateral Agent in writing (“Change Notice”) and if Mortgagee and
Collateral Agent desire, as a result thereof, to assert a default hereunder or
under any of the other Loan Documents, Mortgagee and Collateral Agent shall send
written notice of default to Mortgagor within thirty (30) days following receipt
of the Change Notice, failing which they shall be deemed to have waived the
right to assert such default as a result of the Event.   “Related
Parties” means, in the case of an individual, members of such individual’s
“Immediate Family”, family trusts for the benefit of such individual and/or his
or her Immediate Family, and entities in which such individual and/or Related
Parties have a Controlling Interest.  “Immediate Family” shall mean
the ancestors, siblings, spouse, and lineal descendants of an individual and the
spouses of such siblings and lineal descendants. Notwithstanding any transfer
otherwise permitted hereunder, all Obligations, including but not limited
to  all financial covenants, shall remain in full force and
effect.

     

    

     

     

    ARTICLE
5                      -
CONDITIONS

     

    5.01 Conditions
of the Initial Loan.  Lender's
obligation to make the initial Loan is subject to the following conditions
precedent:

     

    (a) Borrower
has executed and delivered the Loan Documents to Lender;

     

    (b) Lender
has received evidence satisfactory to Lender, of the formation and existence of
all parties to the Transaction Documents other than Lender which are anything
other than an individual, if any, and authorization of the individuals executing
the Transaction Documents on behalf of those parties;

     

    (c) Lender
has received all appraisals and inspection reports required by Lender, in a form
and content satisfactory to Lender;

     

    (d) Lender
has received evidence satisfactory to Lender, that Borrower is in compliance
with all applicable Environmental Laws  (that evidence, the "Environmental
Information");

     

    (e) Lender
has received evidence satisfactory to Lender, that all regulatory approvals,
permits and licenses required under Applicable Law for Borrower's business
operations have been issued and are in full force and effect;

     

    (f) Lender
has received evidence satisfactory to Lender, that the Liens granted to Lender
under the Collateral Documents are valid, enforceable, properly perfected, and
prior to the rights and interests of all other Persons, except those rights and
interests acceptable to Lender;

     

    (g) Lender
has received evidence satisfactory to Lender, that all policies of insurance
required under the Loan Documents;

     

    (h) all
representations and warranties of all parties other than Lender in the
Transaction Documents are true and correct;

     

    (i) Lender
has received a written opinion from Borrower's legal counsel acceptable to
Lender, covering all issues required by Lender;

     

    (j) Lender’s
receipt of any required closing fee;

     

    (k) reimbursement
of Lender's out of pocket expenses, including Legal Fees, incurred in connection
with the underwriting of the Loans or the Closing (collectively, the “Closing Expenses”);
and

     

    (l) Lender's
receipt of all other documents, information and other preconditions required by
Lender.

     

    5.02 Additional
Loans.  Lender's
obligation to make each additional Loan is subject to the condition precedent
that on the Drawdown Date:

     

    (a) Lender
shall receive a Loan Request (defined in Section 3.01);

     

    (b) the
following statements are correct (and Borrower will be deemed to represent to
Lender that those representations are correct) as of the Drawdown
Date:  (i) the representations and warranties in the Loan Documents
are correct as though made on that date; (ii) no Event of Default or event
which, with the passage of time or the giving of notice would constitute an
Event of Default, has occurred and remains uncured or would result from the
additional Loan; (iii) there has been no change in the financial condition of
Borrower since the effective date of this agreement, that would have a Material
Adverse Effect on Borrower; and (iv) the unpaid principal amount of all
outstanding Loans under the line of credit facility under which those Loans are
made, together with the amount of that additional Loan does not exceed the
maximum amount thereof under the terms of this agreement; and

     

    (c) Lender
shall have received all other approvals, opinions, or documents reasonably
requested by Lender.

     

     

    ARTICLE
6                      –
BORROWER REPRESENTATIONS

     

    6.01 Representations.  Borrower
represents to Lender that:

     

    (a) if
Borrower is anything other than an individual, it has complied with all
applicable laws concerning its organization, existence and the transaction of
its business, and is in existence and good standing in its state of organization
and each state in which it conducts its business;

     

    (b) the
execution, delivery and performance by Borrower of each Transaction Document to
which it is a Party, is within the powers and authority of Borrower and has been
duly authorized;

     

    (c) to
Borrower's knowledge, the Transaction Documents do not conflict with any
Applicable Law;

     

    (d) each
Transaction Document to which Borrower is a Party is a legal, valid and binding
agreement of Borrower, enforceable against Borrower in accordance with its
terms, and any instrument or agreement required thereunder, when executed and
delivered to Lender, will be similarly legal, valid, binding and
enforceable;

     

    (e) all
financial statements and other reports, documents, instruments, information and
forms of evidence concerning Borrower, the Collateral, or  any other
fact or circumstance (the "Financial
Information"), delivered to Lender in connection with this agreement, are
accurate, correct and sufficiently complete in all material respects to provide
Lender true and accurate knowledge of their subject matter, including, without
limitation, all material contingent liabilities as defined by GAAP;

     

    (f) there has
been no Material Adverse Effect as to Borrower since the effective date of the
Financial Information provided to Lender;

     

    (g) Borrower
is not the subject of any Judgment; and there is no lawsuit, tax claim or other
dispute pending or to Borrower's knowledge credibly threatened against Borrower
that, if determined adverse to Borrower, is reasonably likely to have a Material
Adverse Effect;

     

    (h) the
Transaction Documents do not conflict with, nor is Borrower in default under any
agreement or arrangement in effect providing for or relating to extensions of
credit in respect of which Borrower is in any manner directly or contingently
obligated;

     

    (i) to
Borrower’s knowledge, Borrower has filed all tax returns (federal, state, and
local) required to be filed by Borrower and has paid all taxes, assessments, and
governmental charges and levies thereon, including interest and
penalties;

     

    (j) Borrower
is in compliance with all Applicable Laws (including all Environmental Laws),
and there is no claim, action, proceeding or investigation pending or to
Borrower's knowledge credibly threatened against Borrower with respect to a
violation of Applicable Law by Borrower;

     

    (k) Borrower
is not a "foreign person" within the meaning of Section 1445 of the Internal
Revenue Code of 1986;

     

    (l) no
director, officer or stockholder of Borrower or any subsidiary of Borrower is an
officer or director of Lender or Metropolitan Life Insurance Company or any of
their Affiliates or is a relative of an officer or director of Lender or
Metropolitan Life Insurance Company or any of their Affiliates within the
following categories: a son, daughter or descendant of either; a stepson,
stepdaughter, stepfather, stepmother; father, mother or ancestor of either, or a
spouse. It is expressly understood that for the purpose of determining any of
the foregoing relationship, a legally adopted child of a person is consider a
child of such person by blood;

     

    (m) no lease
of the Collateral (whether hunting, recreational or agricultural) has a
remaining term in excess of thirty six (36) months; and

     

    (n) there is
no Event of Default or event which, with notice or lapse of time would be an
Event of Default.

     

    6.02 Information
Accurate and Complete.
Except for projections, proformas, estimates and the like (which are, by
nature, at least in part subject to conjecture and supposition), Borrower's
submission of any report, record or other information pertaining to the
condition or operations, financial or otherwise, of Borrower, from time to time,
whether or not required under this agreement, will be deemed accompanied by a
representation by Borrower that the report, record or information is complete
and accurate in all material respects as to the condition or operations of
Borrower (and, if applicable, Borrower's Subsidiaries, Affiliates, partners,
shareholders, members, or other principals), including, without limitation, all
material contingent liabilities.

     

     

    ARTICLE
7                      
– BORROWER COVENANTS

     

    Until
such time as all Obligations have been paid in full and Lender has no obligation
to make additional Loans:

     

    7.01 Tangible
Net Worth.  Borrower shall at
all times maintain not less than $80,000,000.00 in Consolidated Tangible Net
Worth.

     

    7.02 Current
Ratio.  Borrower shall at
all times maintain a Consolidated Current Ratio of not less than
2.00:1.00.

     

    7.03 Debt
Service Coverage Ratio.  Borrower shall
maintain a Consolidated Debt Service Coverage Ratio of not less than 1.15:1.00,
determined as of the end of each fiscal year, provided however, a violation of
this covenant shall not be deemed an Event of Default unless it is breached in
two consecutive fiscal years.

     

    7.04 Debt to
Total Assets Ratio.  Borrower shall at
all times maintain a Consolidated Debt to Total Assets Ratio of not greater than
0.60:1.00.

     

    7.05 Dividends.  Borrower shall
declare no dividends in any fiscal year in which the Consolidated Debt Service
Coverage Ratio is or would be breached as a result of the declaration of such
dividend (or dividends).

     

    7.06 Sale/Transfer/Lease
of Assets.  At no time shall
aggregate assets transferred or contributed  to Borrower’s Affiliate
Agri-Insurance Company, Ltd., a Bermuda limited liability company, exceed
$200,000.

     

    Borrower shall not lease the Real
Estate or any part of it for terms of more than 36 calendar months without
Lender’s express prior written consent; such approved leases shall be consistent
with Borrower’s past practice and standard agricultural practice in the area in
which the Real Estate is located.

     

    7.07 Books and
Records.  Borrower shall
maintain and cause each of its Subsidiaries to maintain proper books of record
and account including full, true, and correct entries of all dealings and
transactions relating to its and their business and activities on a cash or an
accrual basis, at the option of Borrower, in all material respects in conformity
with generally accepted accounting principles ("GAAP").

     

    7.08 Reporting
Requirements.  Borrower shall
furnish to Lender:

     

    (a) as soon
as available, but no later than 45 days after the end of each fiscal quarter, a
copy of Self Prepared Consolidated financial statements of Borrower for that
period;

     

    (b) as soon
as available, but no later than 120 days after the end of each fiscal year, a
copy of CPA Audited Consolidated financial statements of Borrower for that
period;

     

    (c) no less
frequently than 60 days prior to the end of each fiscal year, financial
projections for Borrower's operations for the upcoming fiscal year, specifying
the assumptions on which they are based;

     

    (d) within
ten (10) business days following sending or receipt thereof by Borrower, copies
of any management letters and correspondence relating to management letters, or
any accountant’s reports or opinions accompanying any of the financial
statements required under this Agreement;

     

    (e) promptly
upon receipt, copies of all notices, orders, or other communications regarding
(i) any enforcement action by any Governmental Authority relating to health,
safety, the environment, or any Hazardous Substances with regard to Borrower's
property, activities, or operations, or (ii) any claim against Borrower
regarding Hazardous Substances;

     

    (f) notice of
the occurrence of any of the following, promptly, but in any event no later than
five (5) days after such occurrence: (i) any lawsuit, tax claim or other dispute
is filed against Borrower in an amount or type or character which would be
required to be reported by Borrower on its next required Securities Exchange
Commission  filing, or the subsequent determination that such lawsuit,
tax claim or other dispute would require such reporting; (ii) any substantial
dispute between Borrower and any Governmental Authority which, if not resolved
favorably to the Borrower, could reasonably be expected to have a Material
Adverse Effect on Borrower; (iii) the failure by Borrower to comply with the
terms and provisions of this agreement; (iv) any Material Adverse Effect as to
Borrower; or (vi) any change in Borrower's name, legal structure, place of
business, or chief executive office;

     

    (g) if any
financial statement required under this agreement has been compiled, reviewed or
audited, a copy of that compiled, reviewed or audited financial statement, along
with a copy of any accompanying accountant's report or opinion;

     

    (h) promptly
upon Lender's request, copies of all other books, records, statements, lists of
property and accounts, budgets, forecasts, reports, records or other information
pertaining to the condition or operations of Borrower reasonably requested by
Lender; and

     

    (i) concurrently
with the Financial Information delivered pursuant to this Section a compliance
certificate executed by the President or Chief Financial Officer of the Borrower
(1) setting forth, as of the end of the preceding reporting period, the extent
to which the Borrower complied with the requirements of Sections 7.01 through
7.06, inclusive, including in each case a brief description, together with all
necessary computations, of the manner in which such compliance was determined,
(2) stating that a review of the activities of the Borrower during the preceding
reporting period has been made under his or her supervision to determine whether
the Borrower fulfilled all of its obligations under the Loan Documents, and (3)
stating that, to the best of his or her knowledge, the Borrower is not in
default in the fulfillment of any of the terms, covenants, provisions or
conditions hereof and thereof and no Event of Default (or event which, with
notice or lapse of time or both would become an Event of Default and is not
expected to be remedied within any applicable appropriate cure period), exists
or existed or, if any such default or Event of Default or event exists or
existed, specifying such default, Event of Default or event and the nature and
status thereof;

    

     

    7.09 Change in
Accounting.  Borrower shall
not make any material change or modification of Borrower’s manner and method of
accounting except as required by the applicable accounting
standard.

     

    7.10 Maintenance
of Assets.  Borrower shall
maintain and preserve all rights, privileges, and franchises Borrower now has;
and make any repairs, renewals, or replacements to keep Borrower's properties in
good working condition.

     

    7.11 Existence
and Good Standing.  If Borrower is
anything other than an individual, Borrower shall preserve and maintain its
existence and good standing in the jurisdiction of its formation, and qualify
and remain qualified to conduct its business in each jurisdiction in which such
qualification is required;

     

    7.12 Change in
Business or Organizational Structure.  Without Lender’s prior
written consent, Borrower shall not engage in any material line of business
substantially different from those lines of business conducted by Borrower and
its Subsidiaries on the date hereof or any business substantially related or
incidental thereto.  Borrower shall not form or otherwise acquire any
wholly-owned Subsidiary unless that wholly-owned Subsidiary executes and
delivers to Lender a guaranty of all of the Obligations and all other
instruments and agreements required by Lender; nor shall Borrower (a) merge,
dissolve, liquidate, consolidate with or into another Person, or dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to or in favor of
any Person or (b) change its name or jurisdiction of organization. Borrower
shall not  pledge, hypothecate, mortgage or encumber any of its
interests in any Subsidiary or Affiliate or its rights to receive any dividends
or distributions from such entity. Lender, in its sole discretion, may require
an assignment of such proceeds.

     

    7.13 Compliance
with Laws.  Borrower shall
comply in all respects with all applicable laws and pay before delinquency, all
taxes, assessments, and governmental charges imposed upon Borrower or its
property.

     

    7.14 Inspections. Borrower shall, at any
reasonable time and from time to time, permit Lender or any of its agents or
representatives to examine and make copies of and abstracts from the records and
books of, and visit the properties of, Borrower and to discuss the affairs,
finances, and accounts of Borrower with (if Borrower is other than an
individual) officers, directors, partners, or managers or Borrower, as
applicable; Borrower's independent accountants; and any other person dealing
with Borrower.

     

    7.15 Insurance.

     

    (a) Borrower
shall maintain, or cause to be maintained, in addition to (but without
duplication of) any insurance requirements set forth in the Collateral
Documents, all risk property damage insurance policies covering tangible
property comprising the Collateral for the full insurable value on a replacement
cost basis; and such additional insurance as required by Lender or any Swap
Counterparty from time to time.

     

    (b) If any
Real Estate is located in an area now or hereafter designated by the Director of
the Federal Emergency Management Agency as a special flood hazard area, Borrower
agrees to obtain and maintain Federal Flood Insurance, if available, within 45
days after notice is given by Lender that the Real Estate is located in a
special flood hazard area, as required by Lender, and to maintain such insurance
for the term of the Loans.

     

    (c) All
policies of insurance required under the Transaction Documents must be issued by
companies approved by Lender and the Swap Counterparties, and must be acceptable
to Lender and the Swap Counterparties as to amounts, forms, risk coverages,
deductibles, expiration dates, and loss payable and cancellation
provisions.  In addition, each required policy must contain such
endorsements as Lender or the Swap Counterparties may require and must provide
that all proceeds be payable to Lender and the Swap Counterparties to the extent
of their respective interests.

     

    (d) If and
whenever Lender or a Swap Counterparty reasonably believes that any required
insurance is not in effect, Lender or that Swap Counterparty may (but will not
be obligated to) procure that insurance at Borrower's
expense.  Borrower shall reimburse Lender and the Swap Counterparties,
on demand, for all premiums on that insurance paid by Lender or  the
Swap Counterparties, respectively.

     

    7.16 Arms'
Length Dealing.  Borrower shall
not enter into any transaction of any kind with any family member, Subsidiary or
Affiliate, whether or not in the ordinary course of business, other than on fair
and reasonable terms substantially as favorable to Borrower as would be
obtainable by any Borrower at the time in a comparable arm’s length transaction
with a Person other than a family member, Subsidiary or Affiliate.

     

    7.17 Use of
the Loans.  Borrower shall
not use the Loans (a) for personal, family or household purposes, or (b) to
purchase or carry "margin stock" (as that term is defined in Regulation U of the
Board of Governors of the Federal Reserve System) or to invest in other Persons
for the purpose of carrying any such "margin stock" or to reduce or retire any
indebtedness incurred for that purpose.

     

    7.18 ERISA
Plans.  Borrower shall
promptly pay and cause all Subsidiaries to pay contributions adequate to meet
not less than the minimum funding standards under ERISA with respect to each and
every Plan; file each annual report required to be filed pursuant to ERISA in
connection with each Plan for each year; and notify Lender within ten days
following the occurrence of any Reportable Event that might constitute grounds
for termination of any capital Plan by the Pension Benefit Guaranty Corporation
or for the appointment by the appropriate United States District Court of a
trustee to administer any Plan.  "ERISA" means the
Employee Retirement Income Security Act of 1974, as amended from time to
time.  Capitalized terms in this section shall have the meanings
defined within ERISA.

     

    7.19 Legal
Fees; Costs.  Borrower shall
pay the following:  (a) costs, expenses and Legal Fees paid or
incurred in connection with the collection or enforcement of the Transaction
Documents, whether or not suit is filed; (b) costs and Legal Fees paid or
incurred in connection with any Insolvency Proceeding involving a claim under
the Transaction Documents; (c) costs, expenses and Legal Fees incurred to
protect the liens and security interests under the Collateral Documents; and (d)
costs of suit and such sum as the court may adjudge as Legal Fees in any action
to enforce payment of the Notes or any part thereof.

     

    7.20 Lender
Expenses.  Within ten
Business Days after demand from Lender to Borrower, Borrower shall pay (or
reimburse Lender for payment of) Closing Expenses not previously received by
Lender.

     

    7.21 Encumbrances
On and Transfers of the Collateral. Except for encumbrances permitted by
Lender in writing, Borrower will not create, incur, assume or suffer to exist
any Lien on any of the Collateral or any interest therein except the Liens of
the Collateral Documents other than liens for taxes not yet due and
payable.

     

    7.22 Other
Acts.  Upon request by
Lender, Borrower shall cooperate with Lender for the purposes of, and perform
all acts which may be necessary or advisable to perfect any Lien granted under
this agreement or the Collateral Documents, or to carry out the intent of the
Transaction Documents.

     

     

    ARTICLE
8                         
- EVENTS OF DEFAULT AND REMEDIES

     

    8.01 Events of
Default. 
The following each will be an event of default under this agreement (an "Event of
Default"):

     

    (a) any
payment required under the Loan Documents is not made on the date when
due;

     

    (b) the
Financial Information or any representation in the Loan Documents is materially
incorrect or misleading;

     

    (c) Borrower
does not (i) pay (or cause payment of) all taxes assessed on the Collateral
prior to the date when delinquent; (ii) maintain (or cause to be maintained) all
policies of insurance required under the Transaction Documents and pay (or cause
payment of) all premiums for that insurance on or prior to the date when due;
and (iii) maintain the Collateral (or cause the Collateral to be maintained) in
good condition and repair, all in accordance with the terms and conditions of
the Transaction Documents;

     

    (d) the death
of (i) any Borrower who is an individual, (ii) if Borrower is a partnership, any
general partner of that partnership who is an individual, or (iii) if Borrower
is the trustee under a trust acting in that capacity, any individual trustor
under the trust;

     

    (e) the
filing of any federal tax lien against Borrower, any member or general partner
of Borrower, or against the Collateral and same is not discharged of record
within 60 days after the date filed;

     

    (f) an
Insolvency Proceeding is initiated by Borrower; or any Insolvency Proceeding
initiated against Borrower by another Person is not discharged within 60 days
after filing;

     

    (g) Borrower
or any Subsidiary are or become subject to a Judgment or
Judgments:  (i) for the payment of money in an aggregate amount (as to
all such Judgments or orders) exceeding $5,000,000.00, which are not covered by
independent third-party insurance as to which the insurer does not dispute
coverage, or (ii) that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in (i) or (ii)
above, (A) enforcement proceedings are commenced by any creditor upon any such
Judgment, or (B) there is a period of thirty consecutive days during which a
stay of enforcement of any such Judgment, by reason of a pending appeal or
otherwise, is not in effect;

     

    (h) the
violation of any Financial Covenant (except for Section 7.03 which must be
violated for two consecutive fiscal years to constitute an Event of
Default);

     

    (i) any
"Event of Default" or “event of default” as that term is defined or used in the
Loan Documents other than this agreement which is not cured within any
applicable cure or grace period;

     

    (j) breach of
the due on sale or due on encumbrance provisions contained in Section 4.02 or
Section 7.21 of this Agreement or the due on sale or due on encumbrance
provisions of any of the Collateral Documents referred to in Section 4.02 or
Section 7.21 of this Agreement;

     

    (k) any
default in the payment or performance of a term or condition of any credit
agreement, note, security agreement, mortgage, deed of trust, deed to secure
debt, or other agreement or instrument evidencing or securing any other
indebtedness, liabilities or obligations of Borrower to Lender or Rabobank
International, Rabobank, N.A., or any other Affiliate of Lender, or any Swap
Counterparty;

     

    (l) any act
or omission of Borrower constituting or causing any default
termination event or other similar event under any Hedging Agreement relating to
the indebtedness evidenced or secured by any Loan Document  which is
not cured within any applicable cure or grace period;

     

    (m) any
Material Adverse Effect as to Borrower;

     

    (n) for more
than ten days after notice from Lender, Borrower is in default under any term,
covenant or condition of this agreement not previously described in this Section 8.01, which can
be cured by the payment of a sum of money; and

     

    (o) for 30
days after notice from Lender, Borrower is in default under any term, covenant
or condition of this agreement not previously described in this Section 8.01; provided
that if (i) it is reasonably certain that the default cannot be cured by
Borrower within that 30 day period and (ii) Borrower has commenced curing that
default within that 30 day period and thereafter diligently and expeditiously
proceeds to cure that default, then that 30 day period will be extended for so
long as reasonably required by Borrower in the exercise of due diligence to cure
that default, up to a maximum of 90 days after the notice to Borrower of the
Event of Default.

     

    8.02 Remedies.  Upon the
occurrence of an Event of Default, Lender may: (a) without notice to Borrower,
decline Loan Requests; (b) declare all Loan Obligations due and payable, without
presentment, notice of intent to accelerate or notice of acceleration, demand,
protest or further notice of any kind, all of which are expressly waived by
Borrower; and (c) exercise all other rights and remedies afforded to Lender
under the Loan Documents or Applicable Law or in equity; except that upon an
actual or deemed entry of an order for relief with respect to Borrower or any of
its Subsidiaries in any Insolvency Proceeding, (i) any obligation of Lender to
make additional Loans shall automatically be terminated and (ii) all Loan
Obligations shall automatically become due and payable, without presentment,
demand, protest or any notice of any kind, all of which are expressly waived by
Borrower.

     

     

    ARTICLE
9                      
- NOTICES

     

    All
requests, notices, approvals, consents, and other communications between the
Parties (collectively, "Notices") under the
terms and conditions of the Loan Documents must be in writing and mailed or
delivered to the address specified in that Loan Document, or to the address
designated by any Party in a notice to the other Parties; and in the case of any
other Person, to the address designated by that Person in a notice to Borrower
and Lender.  All Notices will be deemed to be given or made upon the
earlier to occur of (a) actual receipt by the intended recipient or (b) (i) if
delivered by hand or by courier, upon delivery; or (ii) if delivered by mail,
four Business Days after deposit in the mails, properly addressed, postage
prepaid; except that notices and other communications to Lender shall not be
effective until actually received by Lender.  Borrower requests that
Lender accept, and Lender may, at its option, accept and is entitled to rely and
act upon any Notices purportedly given by or on behalf of Borrower, even if not
made in a manner specified herein (including Notices made verbally, by
telephone, telefacsimile, email, or other electronic means of communication),
were incomplete or were not preceded or followed by any other form of Notice
specified herein, or the terms thereof, as understood by the recipient, varied
from any confirmation thereof.  All telephonic Notices to and other
telephonic communications with Lender may be recorded by Lender, and each Party
consents to such recording.

     

     

    ARTICLE
10                      
– GENERAL DEFINITIONS, ACCOUNTING MATTERS AND DRAFTING CONVENTIONS

     

    10.01 Defined
Terms.  Capitalized terms
defined in this section are used in this agreement as so defined. Except as
otherwise defined in this agreement, or unless the context otherwise requires,
each term that is used in this agreement which is defined in
Article 9 of the UCC shall have the meaning ascribed to that term in
Article 9 of the UCC.

     

    "Adjust" means to
increase or decrease; "Adjusted" means
increased or decreased; and "Adjustment" means an
increase or decrease.

     

    "Adjustment Date"
means each date on which the rate of interest on a LIBOR Indexed Rate Loan (or
Interest Rate Margin used to determine that rate of interest), is or may be
Adjusted by Lender pursuant to this agreement.

     

    “Affiliate” of a
Person other than an individual means another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.

     

    "Applicable Law" means
all existing and future laws, orders, ordinances, rules and regulations of or by
a Governmental Authority; except that in determining the Maximum Rate,
Applicable Law shall mean those laws, orders, ordinances, rules and regulations
in effect as of the date hereof or if there is a change in Applicable Law which
(a) permits Lender to charge interest on amounts which Lender would not
otherwise be permitted to charge interest, or (b) increases the permissible rate
of interest, then the new Applicable Law as of its effective date.

     

    "Borrower" shall have
the meaning specified in the preamble of this agreement.

     

    "Business Day" means
any day other than a Saturday, Sunday, or other day on which commercial banks
are authorized or required to close under the Applicable Laws of the State of
Missouri, or are in fact closed in the State of Missouri.

     

    “CAFDS" (Cash
Available For Debt Service) means at any date, for the preceding twelve months,
net income, minus gains on real estate sales, minus dividends paid, plus
interest expense, plus income taxes, plus depreciation and amortization, plus
cash proceeds from sale of real estate, plus collections of mortgages and notes
receivable, plus property impairments.

     

    "Capital Expenditures"
means expenditures for fixed or capital assets.

     

    “Citrus Groves" shall
have the meaning specified in the Collateral Documents.

     

    “Collins Slough/Hill Grade
Tract” shall have the meaning specified in the Collateral
Documents.

     

    "Closing" means (a)
the acknowledgement by Lender that all conditions precedent to the initial Loan
are satisfied or waived in accordance with this agreement, or (b) the initial
Loan is made, whichever is earlier.

     

    "Closing Date" means
the date of the Closing.

     

    "Collateral Agency
Agreement" means the collateral agency agreement between the Mortgagees
named in that certain Florida Mortgage, Security Agreement and Financing
Statement of even date herewith from Borrower to Lender in its capacities as
Mortgagee and Collateral Agent and governing their rights and obligations as
between themselves. Such agreement does not result in any changes to Borrower’s
obligations under the Loan Documents.

     

    "Compensation" means,
as applicable, salaries and other compensation paid to shareholders, members,
partners, directors, managers, and officers.

     

    "Consolidated" means,
in connection with any definition, financial report or financial covenant, the
combination of the applicable Persons, together with their
Subsidiaries.

     

    "Control" of a Person
other than an individual means the power to direct the management and policies
of that Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

     

    "CPA" means an
independent certified public accountant acceptable to Lender.

     

    "CPA Audited" audited
by a CPA, including an auditor's opinion.

     

    "Current Ratio" means
the ratio of current assets to current liabilities.

     

    "Debt Service Coverage
Ratio" means the ratio of CAFDS to the current portion of Funded Debt
plus interest expense.

     

    "Debt to Total Assets
Ratio" means the ratio of total liabilities to total assets.

     

    "Distributions" means,
as applicable, living expenses for individuals, or dividends, distributions or
other payments (whether in cash, securities or other property) with respect to
any capital stock, membership interest, general or limited partnership interest,
beneficial interest in a trust or other equity interest.

     

    "Drawdown Date" means
in the case of any Loan, the date on which that Loan is made.

     

    "EBITDA" means at any
date (a) net income, excluding any extraordinary and non-operating income
(unless deemed by Lender to be recurring in nature), of a Person for the
preceding twelve months plus (b) any interest expense, income taxes,
depreciation, amortization, and other non-cash charges for that twelve months to
the extent they were deducted from gross income to calculate net
income.

     

    "Environmental Law"
means all Applicable Laws relating to or imposing liability or standards of
conduct concerning protection of health or the environment.

     

    "Financial Covenant"
means any covenant contained in the Loan Documents regarding the financial
status of a Person other than Lender.

     

    "Funded
Debt"  means all outstanding long term liabilities for money
borrowed for non-consumer purposes, other long term interest-bearing
non-consumer liabilities, and capital leases.

     

    "Governmental
Authority" means any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body,
court, administrative tribunal, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.

     

    "Hazardous Substance"
means any substance, material or waste that is or becomes designated or
regulated as "toxic," "hazardous," "caustic," "pollutant," or "contaminant" or a
similar designation or regulation under any Environmental Law, and shall also
include, without limitation, asbestos, PCBs, petroleum, petroleum products, and
natural gas.

     

    "Hedging Agreement"
means any interest rate swap, interest rate caps, interest rate collars or other
similar agreement between Borrower and a Swap Counterparty, for the purpose of
fixing or limiting interest expense, or any foreign exchange, currency hedging,
commodity hedging, security hedging or other agreement between Borrower and a
Swap Counterparty, for the purpose of limiting the market risk of holding
currency, a security or a commodity in either the cash or futures
markets.

     

    "Hedging Obligations"
means all indebtedness, liabilities and obligations of Borrower under any
Hedging Agreement, whether now existing or hereafter arising, whether direct,
indirect, related, unrelated, fixed, contingent, liquidated, unliquidated,
joint, several, or joint and several.

     

    "Insolvency
Proceeding" means the insolvency of a Person, the appointment of a
receiver of any part of Person's property, an assignment by a Person for the
benefit of creditors, or the commencement of any proceeding under the Federal
Bankruptcy Code or any other bankruptcy or insolvency law, by or against a
Person.

     

    "Interest Payment
Date" means a date on which regularly scheduled payments of interest are
due.

     

    "Interest Period"
means with respect to a Real Estate Term Loan LIBOR Indexed Rate Loan or Real
Estate Line of Credit LIBOR Indexed Rate Loan, each period commencing on the
date that the  Real Estate Term Loan LIBOR Indexed Rate Loan
or  initial Real Estate Line of Credit LIBOR Indexed Rate Loan,
respectively, is made or the applicable rate is recalculated, until the next
Adjustment Date or, if earlier, the respective Maturity Date.

     

    "Interest Rate Margin"
means the percentage margin used to calculate any rate of interest which is
determined by adding together a published rate and a percentage margin set by
Lender.

     

    "Judgment" means a
judgment, order, writ, injunction, decree, or rule of any court, arbitrator, or
Governmental Authority.

     

    "Legal Fees" means any
and all counsel, attorney, paralegal and law clerk fees and disbursements,
including, but not limited to fees and disbursements at the pre-trial, trial,
appellate, discretionary review, or any other level, incurred or paid by Lender
in protecting and enforcing its rights and interests under the Loan Documents or
the Collateral Documents.

     

    "Lender" shall have
the meaning specified in the preamble of this agreement and any successors and
assigns of any of its rights and obligations under this agreement.

     

    "LIBOR" means, for any
Interest Period, the rate of interest published in the "Money Rates" section of
The Wall Street Journal
(or if The Wall Street
Journal is not available or does not publish that rate, any other
authoritative source of that rate, selected by Lender from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits
in an amount equal to the Loan in the London interbank market at approximately
11:00 a.m., London time) on the London Banking Day immediately preceding the
commencement of the Interest Period, as the rate for dollar deposits with a
maturity comparable to the applicable contract period; provided, that LIBOR may
be Adjusted from time to time in Lender's discretion for reserve requirements,
deposit insurance assessment rates and other regulatory costs.

     

    "LIBOR Indexed Rate"
means with respect to the Term Loan, the Term Loan LIBOR Indexed Rate and with
respect to the Line of Credit, the Line of Credit LIBOR Indexed
Rate.

     

    "LIBOR Indexed Rate
Loan" means a Loan which bears interest at a LIBOR Indexed
Rate.

     

    “Lien” means any
mortgage, pledge, assignment, deposit arrangement, privilege, encumbrance, lien
(statutory or other), charge, or preference, priority or other security interest
or preferential arrangement in the nature of a security interest of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any easement, right of way or other encumbrance on title to real
property, and any financing lease having substantially the same economic effect
as any of the foregoing).

     

    "Loan" means the Term
Loan or a Line of Credit Loan.

     

    "Loan Documents" means
this agreement, the Notes, the Collateral Documents, and all other agreements
and instruments required by Lender for purposes of evidencing or securing the
Loans.

     

    "Loan Obligations"
means all indebtedness, liabilities and obligations of Borrower to Lender
arising pursuant to any of the Loan Documents, whether now existing or hereafter
arising, whether direct, indirect, related, unrelated, fixed, contingent,
liquidated, unliquidated, joint, several, or joint and several.

     

    "London Banking Day"
means a day on which banks are open for dealings in dollar deposits in the
London interbank market.

     

    "Losses" means any and
all claims, suits, liabilities (including, without limitation, strict
liabilities), actions, proceedings, obligations, debts, damages, losses, costs,
expenses, fines, penalties, charges, fees, Judgments, awards, amounts paid in
settlement of whatever kind or nature (including Legal Fees).

     

    "Material Adverse
Effect" means any set of circumstances or events which (a) has or could
reasonably be expected to have any material adverse effect as to the validity or
enforceability of any Transaction Document or any material term or condition
therein against the applicable Person; (b) is or could reasonably be expected to
be material and adverse to the financial condition, business assets, operations,
or property of the applicable Person individually or in the aggregate having an
impact on the Borrower in excess of $5,000,000 as determined by Lender; or (c)
materially impairs or could reasonably be expected to materially impair the
ability of the applicable Person to perform the Obligations.

     

    "Maturity Date" means,
with respect to the Term Loan and Line of Credit, the Term Loan Maturity Date or
the Line of Credit Maturity Date, respectively, or any other earlier date when,
under the terms of this agreement, the entire unpaid principal amount of the
Term Loan and Line of Credit, respectively, is due.

     

    "Maximum Rate" means
that rate per annum which, under Applicable Law, may be charged without
subjecting Lender to civil or criminal liability, or limiting Lender's rights
under the Loan Documents as a result of being in excess of the maximum interest
rate which Borrower is permitted to contract or agree to pay; except that the
Maximum Rate on any amount upon which Lender is not permitted to charge interest
will be zero percent.

     

    "Note" means the Term
Loan Note and/or the Line of Credit Note, as the context may require, and any
other evidence of indebtedness delivered in connection with this
agreement.

     

    "Obligations" means
the Loan Obligations and the Hedging Obligations.

     

    "Party" refers only to
a named party to this agreement or another Loan Document, as the context
requires.

     

    "Person" means an
individual, a corporation, limited liability company, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
or other business entity, or a government or any agency or political subdivision
thereof.

     

    "Prepay" means to make
a Prepayment.

     

    "Prepayment" means a
payment of all or a portion of the unpaid principal balance of a Loan prior to
the date when due, whether voluntary, by reason of acceleration, or
otherwise.

     

    "Prime Rate" means for
any day the highest rate published from time to time in the “Money Rates”
section of The Wall Street
Journal as the Prime Rate for that day (or, if The Wall Street Journal is
not available, any other authoritative source of that rate selected by
Lender).

     

    "Rabobank
International" means Cooperatieve Centrale Raiffeisen-Boerenleenbank
B.A., a foreign banking organization organized as a cooperative bank under the
laws of The Netherlands.

     

    "Real Estate" means
that portion of the Collateral which is real property, as opposed to personal
property.

     

    "Self Prepared" means
for the financial statement of any Person, prepared by that Person, and not
compiled, reviewed or audited by a certified public accountant.

     

    “Subsidiary” of a
Person which is anything other than an individual means a business entity of
which a majority of the shares of securities or other interests having ordinary
voting power for the election of directors or other governing body are at the
time beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly by that Person.  Unless otherwise specified,
all references to a “Subsidiary” or to “Subsidiaries” shall refer to any
Subsidiary or Subsidiaries, if any.

     

    "Swap Counterparty"
means any party to a Hedging Agreement which is Rabobank International or an
Affiliate of Rabobank International.

     

    "Tangible Net Worth"
means total assets, less the sum of (without limitation and without duplication
of deductions) (a) total liabilities, (b) any reserves established by a Person
for anticipated losses or expenses, (c) the amount, if any, of all intangible
items including any leasehold rights, the amount of any investment in any
Affiliate or other entity including a Subsidiary, good will (including any
amounts, however designated on the balance sheet, representing the cost of
acquisition of business and investments in excess of underlying tangible
assets), trademarks, trademark rights, trade name rights, copyrights, patents,
patent rights, licenses, unamortized debt discount, marketing expenses, and
customer and/or mailing lists, (d) all amounts due from employees, stockholders,
and Subsidiaries; and (e) any other asset deemed intangible by
Lender.

     

    "Transaction
Documents" means the Loan Documents and all Hedging
Agreements.

     

    "UCC" means the
Uniform Commercial Code in the Governing Law State.

     

    10.02 Accounting
Matters.  All accounting
terms not specifically defined herein will be construed in accordance with
GAAP.  All financial covenants applicable to an individual will be
calculated based on that individual's business, excluding personal assets and
liabilities.  Borrower will not change (a) the accounting standards
used to prepare Borrower's financial statements or (b) the manner in which
either the last day of its fiscal year or the last days of the first three
fiscal quarters of its fiscal years is calculated.  If at any time any
change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document Lender may amend that ratio or
requirement to preserve the original intent thereof in light of that
change.

     

    10.03 Drafting
Conventions.  Unless expressly
stated therein or the context otherwise requires, the Loan Documents will be
interpreted in accordance with the following (the "Drafting
Conventions"):  (a) the words "include," "includes," and
"including" are to be read as if they were followed by the phrase "without
limitation"; (b) unless otherwise expressly stated, terms and provisions
applicable to two or more Persons shall apply on an individual, as well as
collective basis; (c) headings and captions are provided for convenience only
and do not affect the meaning of the text which follows; (d) references to a
parcel or tract of real estate means, without limitation, the land described,
and any and all improvements located thereupon and all easements or other rights
or interests benefiting that land; (e) references to an agreement or instrument
means that agreement or instrument, together with all extensions, renewals,
modifications, substitutions and amendments thereof, subject to any restrictions
thereon in that agreement or instrument or in the Loan Documents; (F) ANY REPORT
OR DOCUMENT TO BE RECEIVED BY LENDER SHALL BE REASONABLY SATISFACTORY IN FORM
AND CONTENT TO LENDER; (G) WHEREVER (I) LENDER EXERCISES ANY RIGHT GIVEN TO IT
TO APPROVE OR DISAPPROVE, (II) ANY ARRANGEMENT OR TERM IS TO BE SATISFACTORY TO
LENDER, OR (III) ANY OTHER DECISION OR DETERMINATION IS TO BE MADE BY LENDER,
THEN EXCEPT AS MAY BE OTHERWISE EXPRESSLY AND SPECIFICALLY PROVIDED THEREIN, THE
DECISION TO APPROVE OR DISAPPROVE, ALL DECISIONS THAT ARRANGEMENTS OR TERMS ARE
SATISFACTORY OR NOT SATISFACTORY, AND ALL OTHER DECISIONS AND DETERMINATIONS
MADE BY LENDER, SHALL BE IN THE SOLE BUT REASONABLE DISCRETION OF LENDER,
WITHOUT REGARD FOR THE ADEQUACY OF ANY SECURITY FOR THE OBLIGATIONS; (h)
whenever by the terms of the Loan Documents, Borrower is prohibited from taking
an action or permitting the occurrence of some circumstance, Borrower shall not,
directly or indirectly take that action or permit that circumstance, or directly
or indirectly permit any Subsidiary to take that action or permit that
circumstance; (i) evidence of the occurrence or non-occurrence of any event, or
the existence or non-existence of any circumstance to be delivered to Lender
must be in a form reasonably satisfactory to Lender; (j) unless specified
otherwise, references to a statute or regulation means that statute or
regulation as amended or supplemented from time to time and any corresponding
provisions of successor statutes or regulations; (k) unless otherwise specified,
all references to a time of day are references to the time in St. Louis,
Missouri; (l) references to "month" or "year" are references to a calendar month
or calendar year, respectively; (m) if any date specified in this agreement as a
date for taking action falls on a day that is not a Business Day, then that
action may be taken on the next Business Day; (n) a pronoun used in referring
generally to any member of a class of Persons, or Persons and things, applies to
each member of that class, whether of the masculine, feminine, or neuter gender;
(o) references to "articles," "sections," "subsections," "paragraphs;"
"exhibits," and "schedules" reference articles, sections, subsections,
paragraphs, exhibits, and schedules, respectively, of this agreement unless
otherwise specifically provided; (p) the words "hereof," "herein," "hereunder,"
and "hereby" refer to this agreement as a whole and not to any particular
provision of this agreement; (q) the definitions in this agreement apply equally
to both singular and plural forms of the terms defined; and (r) for purposes of
computing periods of time from a specified date to a later specified date, the
word "from " means "from and after" and the words "to" and "until" each mean "to
and including".

     

     

    ARTICLE
11                      
- MISCELLANEOUS

     

    11.01 Entire
Agreement.  This agreement
and the other Loan Documents, collectively: (i) represent the sum of the
understandings and agreements between Lender and Borrower concerning this
credit; (ii) replace any prior oral or written agreements between Lender and
Borrower concerning this credit; and (iii) are intended by Lender and Borrower
as the final, complete and exclusive statement of the terms agreed to by
them.  In the event of any conflict between this agreement and any
other agreements required by this agreement, this agreement will
prevail.

     

    11.02 Joint and
Several Obligations.  If Borrower
consists of more than one Person, each Borrower (a) expressly acknowledges that
it has benefited and will benefit, directly and indirectly, from each Loan and
acknowledges and undertakes, together with the other Borrowers, joint and
several liability for the punctual payment when due, whether at stated maturity,
by acceleration or otherwise, of all Loan Obligations; (b) acknowledges that
this agreement is the independent and several obligation of each Borrower and
may be enforced against each Borrower separately, whether or not enforcement of
any right or remedy hereunder has been sought against any other Borrower; and
(c) agrees that its liability hereunder and under any other Loan Document is
absolute, unconditional, continuing and irrevocable.  BORROWER
EXPRESSLY WAIVES ANY REQUIREMENT THAT LENDER EXHAUST ANY RIGHT, POWER OR REMEDY
AND PROCEED AGAINST THE OTHER BORROWERS UNDER THIS AGREEMENT, OR ANY OTHER LOAN
DOCUMENTS, OR AGAINST ANY OTHER PERSON UNDER ANY GUARANTY OF, OR SECURITY FOR,
ANY OF THE OBLIGATIONS.

     

    11.03 Authority
to Bind Borrower.  If Borrower is
comprised of multiple Persons, any Person comprising Borrower is authorized to
bind all parties comprising Borrower.  Without limitation of the
foregoing, Lender may require any Loan Request or other request, authorization,
or other action by or on behalf of Borrower be by one or more individuals
designated in writing by the parties comprising Borrower (a "Designated
Person").  Lender may, at any time and without notice, waive
any prior requirement that requests, authorizations, or other actions be taken
only by a Designated Person.

     

    11.04 Binding
Effect; Successors and Assigns.  The Loan
Documents will inure to the benefit of and be binding upon the parties and their
respective successors and assigns.

     

    11.05 Assignment;
Participations.  Borrower shall
not assign its rights or obligations hereunder without Lender's
consent.  Lender may assign or sell participations in all or any
portion of its interest in the Loans or under the Loan Documents to any
Person.  Lender may disclose to any actual or potential assignee or
participant any information or documents that Borrower has delivered to Lender
in connection with the Loan Documents; and Borrower shall cooperate fully with
Lender in providing such information and documents.  If Lender assigns
or sells a participation in the Loans or the Loan Documents, the purchaser will
have the right of set-off against Borrower.

     

    11.06 Severability.  Any provision of
any Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to that jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions of that Loan
Document or affecting the validity or enforceability of that provision in any
other jurisdiction; except that if such provision relates to the payment of any
monetary sum, then Lender may, at its option, declare all Loan Obligations
immediately due and payable.

     

    11.07 Amendments
in Writing.  The Loan
Documents may not be amended, changed, modified, altered or terminated without
the prior written consent of all parties to the respective Loan
Document.

     

    11.08 Governing
Law.  Except as
expressly stated therein, the Loan Documents will be governed exclusively by the
applicable laws of the State of Florida (the "Governing Law State")
without regard or reference to its conflict of laws
principles.  Borrower understands that the laws of the Governing Law
State may differ from the laws of the State where Borrower resides or otherwise
is located or where the Collateral is located.  Borrower understands,
agrees and acknowledges that (a) this agreement and the transaction evidenced
hereby have significant and substantial contacts with the Governing Law State,
(b) it is convenient to Borrower and Lender to select the law of the Governing
Law State to govern this agreement and the transactions evidenced hereby, (c)
the transactions evidenced by this agreement bear a reasonable connection to the
laws of the Governing Law State, (d) the choice of the internal laws of the
Governing Law State was made for good and valid reasons, and (e) the choice of
the Governing Law State constitutes good and valuable consideration for Lender
to enter into this agreement and Lender has entered into this agreement in
reliance on this choice.

     

    11.09 JURISDICTION
AND VENUE.  BORROWER IRREVOCABLY AGREES THAT, AT THE OPTION OF
LENDER, ALL ACTIONS, PROCEEDINGS OR COUNTERCLAIMS ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT WILL BE LITIGATED IN THE UNITED
STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA (ORLANDO DIVISION) OR
THE FLORIDA STATE COURT LOCATED IN POLK COUNTY, FLORIDA.  BORROWER
IRREVOCABLY CONSENTS TO SERVICE, JURISDICTION, AND VENUE OF THOSE COURTS FOR ALL
SUCH ACTIONS, PROCEEDINGS AND COUNTERCLAIMS AND WAIVES ANY OTHER VENUE TO WHICH
IT MIGHT BE ENTITLED BY VIRTUE OF DOMICILE, HABITUAL RESIDENCE OR
OTHERWISE.

     

    11.10 Counterpart
Execution.  The Loan
Documents may be executed in counterparts, each of which will be an original and
all of which together are deemed one and the same instrument.

     

    11.11 Necessary
Action. Lender is
authorized to execute any other documents or take any other actions necessary to
effectuate the Loan Documents and the consummation of the transactions
contemplated therein.

     

    11.12 Credit
Report. Lender is
authorized to order a credit report and verify all other credit information,
including past and present loans and standard references from time to time to
evaluate the creditworthiness of Borrower.  Without limitation, a copy
of the consent for release of information, general authorization or similar
document on file with Lender shall authorize third Persons to provide the
information requested from time to time.

     

    11.13 No
Construction Against Drafter.  Each Party has
participated in negotiating and drafting this agreement, so if an ambiguity or a
question of intent or interpretation arises, this agreement is to be construed
as if the parties had drafted it jointly, as opposed to being construed against
a Party because it was responsible for drafting one or more provisions of this
agreement.

     

    11.14 INDEMNIFICATION.  BORROWER SHALL
DEFEND, INDEMNIFY AND HOLD LENDER AND ITS OFFICERS, DIRECTORS, EMPLOYEES,
PARTNERS, AGENTS AND ATTORNEYS (THE "INDEMNIFIED PERSONS")
HARMLESS AGAINST ANY AND ALL LOSSES OF ANY KIND OR NATURE WHATSOEVER THAT MAY BE
IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE INDEMNIFIED PERSONS: (I)
INCURRED AS A RESULT OF THE FAILURE BY BORROWER TO BORROW THE AMOUNT SPECIFIED
IN A LOAN REQUEST (INCLUDING ANY FAILURE RESULTING FROM THE FAILURE TO FULFILL
THE APPLICABLE CONDITIONS PRECEDENT), INCLUDING ANY LOSS OF ANTICIPATED PROFITS
AND LOSSES BY REASON OF THE LIQUIDATION OR REEMPLOYMENT OF FUNDS ACQUIRED BY
LENDER TO FUND THE LOAN; (II) AS A RESULT OF ITS ACTS OR OMISSIONS WHICH RESULT
FROM COMMUNICATIONS GIVEN OR PURPORTED TO BE GIVEN, BY BORROWER OR ANY
DESIGNATED PERSON, WHICH ARE INTERRUPTED, WHICH ARE MISUNDERSTOOD, OR WHICH ARE
IN FACT FROM UNAUTHORIZED PERSONS; (III) ARISING OUT OF OR RESULTING FROM THE
VIOLATION BY BORROWER OF ANY ENVIRONMENTAL LAW; (IV) RESULTING FROM THE
REASONABLE RELIANCE BY LENDER ON EACH NOTICE PURPORTEDLY GIVEN BY OR ON BEHALF
OF BORROWER; AND (V) ARISING OUT OF CLAIMS ASSERTED AGAINST THE INDEMNIFIED
PERSONS AS A RESULT OF LENDER BEING PARTY TO THIS AGREEMENT OR THE TRANSACTIONS
CONSUMMATED PURSUANT TO THIS AGREEMENT; EXCEPT THAT BORROWER SHALL HAVE NO
OBLIGATION TO AN INDEMNIFIED PERSON UNDER THIS SECTION WITH RESPECT TO LOSSES
RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THAT INDEMNIFIED
PERSON AS DETERMINED BY A COURT OF COMPETENT JURISDICTION. IF AND TO THE EXTENT
THAT ANY INDEMNITY UNDER THE LOAN DOCUMENTS IN FAVOR OF INDEMNIFIED PARTIES IS
UNENFORCEABLE FOR ANY REASON, BORROWER SHALL TO MAKE THE MAXIMUM CONTRIBUTION TO
THE PAYMENT AND SATISFACTION THEREOF WHICH IS PERMISSIBLE UNDER APPLICABLE
LAW.  ALL INDEMNITIES UNDER THE LOAN DOCUMENTS IN FAVOR OF INDEMNIFIED
PARTIES SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.

     

    

     

    11.15 COLLATERAL
AGENCY AGREEMENT.  The Loan
Documents are subject to the terms of the Collateral Agency Agreement. Such
agreement does not affect Borrower’s obligations under the Loan Documents and
allows the Hedging Obligations to be secured by the Collateral
Documents.

     

    

    11.16 ENDORSEMENT
AND ASSIGNMENT IN LIEU OF SATISFACTION.  When the
indebtedness evidenced and secured by the Loan Documents has been paid in full
and there exists no further commitment binding upon Lender to extend financing
under any of the Loan Documents, Lender shall execute, acknowledge and deliver
to Borrower a satisfaction of mortgage in recordable form confirming the full
payment of the indebtedness evidenced and secured by the Loan Documents and
shall authorize the filing by Borrower of Forms UCC-3 Financing Statement
Amendments in the Florida Secured Transaction Registry and in the Public Records
of Hendry, Polk and Collier Counties, Florida, terminating any then effective
financing statements; provided, however, that if requested by Borrower in
writing prior to the execution and delivery of such satisfaction of mortgage and
said authorization with respect to the termination of then effective financing
statements, Lender shall assign the Loan Documents and shall endorse the
promissory notes evidencing the Term Loan and the Line of Credit Loan (in each
case, without covenant, recourse, representation or warranty except as specified
below), and deliver the originals thereof through an appropriate third party
escrow holder reasonably acceptable to Lender, upon payment of an administrative
fee determined by Lender which shall in no event be in excess of $1,500.00, plus
Lender’s reasonable attorney’s fees and costs actually incurred in executing,
acknowledging, delivering and accomplishing such endorsement and assignment, to
a third party bank, insurance company or other institutional lender which
agrees, together with Borrower, in writing, to indemnify and hold Lender
harmless from any claims, causes of action or liabilities arising out of the
Term Loan, the Line of Credit Loan and/or the Loan Documents after the effective
date of such endorsement and assignment by Lender.  In connection with
the above mentioned endorsement and assignment by Lender, Lender shall deliver a
pay-off statement of the amounts owing and represent and warrant only (i) that
it owns and holds the Loan Documents so endorsed and assigned and (ii) that none
of the Loan Documents so endorsed and assigned have been otherwise sold,
assigned, pledged or encumbered by Lender and that Lender has good right and
lawful authority to assign and endorse the Loan Documents.  Nothing
herein shall require Lender to postpone the Line of Credit Maturity Date or the
Term Date Maturity Date or otherwise waive or compromise any of its rights
and/or remedies under any of the Loan Documents unless and until all
indebtedness evidenced and secured thereby is paid in full and no further
commitment on the part of the Lender exists to extend or advance additional
financing to the Borrower pursuant to the terms of the Loan
Documents.

     

    

     

    11.17 WAIVER OF
TRIAL BY JURY.  BORROWER AND LENDER HEREBY SEVERALLY,
VOLUNTARILY, KNOWINGLY AND INTELLIGENTLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY
JURY AND WAIVE THE RIGHT TO CLAIM OR RECEIVE CONSEQUENTIAL OR PUNITIVE DAMAGES
IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT, OF OR IN CONNECTION WITH,
OR IN ANY WAY RELATING TO, DIRECTLY OR INDIRECTLY, THE LOANS EVIDENCED HEREBY,
THIS CREDIT AGREEMENT, THE NOTE, THE MORTGAGE OR ANY OTHER LOAN DOCUMENT, ANY
COLLATERAL THEREFOR, AND/OR ANY RELATIONSHIP, COURSE OF CONDUCT OR DEALINGS OR
NEGOTIATIONS BETWEEN BORROWER AND LENDER, PERTAINING TO ANY OF THE FOREGOING,
REGARDLESS OF WHETHER SUCH ACTION OR PROCEEDING CONCERNS ANY CONTRACTUAL OR
TORTIOUS OR OTHER CLAIM.  EACH OF BORROWER SEVERALLY ACKNOWLEDGE THAT
THIS WAIVER OF JURY TRIAL AND CONSEQUENTIAL AND PUNITIVE DAMAGES IS A MATERIAL
INDUCEMENT TO LENDER IN EXTENDING THE CREDIT EVIDENCED HEREBY AND THE SWAP
COUNTERPARTIES ENTERING INTO THE HEDGING AGREEMENTS, THAT LENDER WOULD NOT HAVE
EXTENDED SUCH CREDIT WITHOUT THIS WAIVER, AND THAT EACH PARTY HAS BEEN
REPRESENTED BY INDEPENDENT LEGAL COUNSEL, SELECTED BY SUCH PARTY'S OWN FREE
WILL, OR HAS HAD AN OPPORTUNITY TO CONSULT WITH INDEPENDENT LEGAL COUNSEL IN
CONNECTION WITH THIS CREDIT AGREEMENT AND UNDERSTANDS THE LEGAL EFFECT OF THIS
WAIVER.

     

    11.18 BALLOON
PAYMENT.  THIS AGREEMENT PROVIDES FOR A BALLOON
PAYMENT.  BORROWER ACKNOWLEDGES THAT LENDER HAS NOT AGREED TO
REFINANCE THAT PAYMENT.

     

    11.19 USA
Patriot Act Notice.  Federal law requires all financial
institutions to obtain, verify and record information that identifies each
person who obtains a loan.  Lender will ask for the Borrower’s legal
name, address, tax ID number or social security number and other identifying
information.  Lender may also ask for additional information or
documentation or take other actions reasonably necessary to verify the identity
of Borrower, any guarantors or other related persons.

     

    11.20 ORAL AGREEMENTS OR
COMMITMENTS.   NOTICE IS HEREBY GIVEN TO MAKER THAT ORAL
AGREEMENTS OR ORAL COMMITMENTS TO LEND MONEY, EXTEND CREDIT, MODIFY LOAN TERMS
OR FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE PURSUANT TO
FLORIDA STATUTES SECTION 687.304 AS AMENDED OR RENUMBERED FROM TIME TO
TIME.

     

    APPLICABLE
DOCUMENTARY STAMP TAXES HAVE BEEN PAID AND AFFIXED TO THE MORTGAGE

    SECURING
THE OBLIGATIONS

     

    The
parties have signed this agreement effective as of the day and year first
written above.

    

     

    BORROWER

     

    Alico, Inc., a Florida
corporation

     

    By:           /S/ JD
Alexander    

    Its:           Chief
Executive Officer

     

    Alico-Agri, Ltd., a Florida limited
partnership

     

    By:           Alico,
Inc., a Florida corporation,

     

    its General Partner

     

    By:           /S/ JD
Alexander

     

    Its:          Chief
Executive Officer

     

    Alico Plant World, L.L.C., a Florida
limited liability company

     

    By:           Alico,
Inc., a Florida corporation,

     

    its Manager

     

    By:           /S/ JD
Alexander

                                                    Its:          Chief
Executive Officer

    Bowen Brothers Fruit, LLC, a Florida
limited liability company

     

    By:           Alico,
Inc., a Florida corporation,

     

    its Managing Member

     

    By:           /S/ JD
Alexander

     

    Its:           Chief
Executive Officer

     

    Alico Land Development Inc., a Florida
corporation

     

    By:           /S/ JD
Alexander

    Its:           Chief
Executive Officer

    

     
 

     

    
      	
              Address
      for notices:

            
	
              640
      South Main Street

              Labelle,
      Florida 33935

              ATTN:  Chief
      Financial Officer

               

            

    

     
 

     

    
      
        
          Alico
Term & RELOC 2010

          Credit
Agreement

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    LENDER

     

    
      	
              Address
      for notices:

            	
              RABO
      AGRIFINANCE, INC.

              By:
      /S/ Brian J. Newcomer

              Its: Executive Vice President

            
	
              12443
      Olive Boulevard, Suite 50

              St.
      Louis, MO 63141

              Attention:  Customer
      Service Representative

               

            

    

    

     

    

    
      
        
          Alico
Term & RELOC 2010

          Credit
Agreement

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    PRICING
GRID

     

    

     

    

    The
Percentage Margin will be adjusted annually, on the first of each January, based
upon the Borrower’s Debt Coverage Service Ratio for the immediately preceding
fiscal year. Category 2 pricing will apply from the Closing Date until February
1, 2011, at which time the pricing grid specified below will apply.

    

    
      	
              Debt
      Service Coverage Ratio

            	
              Percentage
      Margin

            	
              Default
      Rate

            
	
              Category 1

              ≥
      1.75x

            	
              2.25%

            	
              Category
      3 Pricing + 5.00%

            
	
              Category 2

              ≥
      1.15x

              and

              <
      1.75x

            	
              2.50%

            	
              Category
      3 Pricing + 5.00%

            
	
              Category 3

              <
      1.15x

            	
              2.75%

            	
              Category
      3 Pricing + 5.00%

            

    

    

    In
the event of default, the Default Rate shall apply regardless of the level of
the Debt Service Coverage Ratio.  The Default Rate will be 5% in
excess of Category 3 Pricing.

    

     

    
      
        
          Alico
Term & RELOC 2010

          Credit
Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}]]