URBAN AG. CORP - FORM 10-K - XML - IDEA: XBRL DOCUMENT - November 23, 2012

CCS established a $2,000,000 line of credit with a commercial bank in 2007. At December 31, 2011 and 2010, the outstanding balances on this line of credit were $1,996,330 and $1,949,315, respectively. Advances bear interest at the bank’s prime rate, are secured by substantially all CCS’ assets and guaranteed by the members and related limited liability companies. The balance may not exceed its borrowing base of eighty percent (80%) of the face amount of eligible accounts receivable, as defined in the agreement. At December 31, 2010 CCS had failed its financial covenants and was out of formula with the bank and has not received a waiver from the bank in regards to the violation. In June 2011 the bank sold the outstanding obligation to Summitbridge Capital Corp. (“Summitbridge”), who assumed terms related to the Line of Credit. In November 2011 Summitbridge notified CCS of its continued violation of the loan covenants and of Summitbridge’s intent to foreclose the line of credit. See Note 17 of the Notes to the Consolidated Financial Statements for disposition on the Line of Credit outstanding with Summitbridge.

On January 9, 2012, the Company executed a Loan Purchase and Sale Agreement with Summitbridge Credit Investments LLC (“Summitbridge”) in order for Summitbridge to acquire certain outstanding loan obligations (the “Obligations”) owed by the recently acquired CCS Environmental Worldwide Inc. in the amount of $2,018,339, which includes the face amount of the underlying loans plus accrued interest and fees (the “Summitbridge Settlement”). Pursuant to the The Summitbridge Settlement, the Company and Summitbridge agreed to the following: (i) that Summitbridge sell, assign, convey and transfer to the Company, without recourse, representation or warranty all of Summitbridge’s interest in the Obligations; and (ii) the Company to pay Summitbridge the amount of $1,335,000 in consideration thereof. The Company recognized a gain of $602,475 in connection with the Summitbridge Settlement in 2012. A copy of the Summitbridge Settlement is included as Exhibit 10.15 to this Annual Report on Form 10-K.