ex41.htm


     

    Exhibit
4.1

     

    LOAN
AGREEMENT

    


    


    THIS AGREEMENT is entered into as of
the 1st day of
October, 2008, by and between HEARTLAND, INC., a Maryland
corporation (“Borrower”) and CHOICE FINANCIAL GROUP, a
North Dakota state bank (“Lender”).

    


    WHEREAS, Borrower wishes to borrow from
Lender and Lender wishes to lend to Borrower certain funds pursuant to this
Agreement.

    


    In consideration of one dollar and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged by the parties, and in consideration of the mutual covenants
and obligations contained in this Agreement, Lender and Borrower agree as
follows:

    


    1. Loan.  Lender
will make a loan to Borrower in the original principal sum of $3,250,000.00
pursuant to the terms and conditions of this Agreement (the “Loan”).

    


    2. Note.  The
Loan shall be evidenced by and payable with interest thereon in accordance with
the terms and conditions of a Promissory Note in the principal amount of
$3,250,000.00 (the “Note”), dated the
same date as this Agreement, made and executed by Borrower and payable to the
order of Lender.  Subject to the terms and conditions of this
Agreement, Lender shall make the Loan to Borrower in one advance.  The
Loan shall bear interest at the annual rate specified in the Note from the date
of the advance.

    


    3. Real Property
Mortgages.  The payment of the Note shall be secured, among
other things, by (i) a second mortgage lien evidenced by a Third Party Mortgage,
Security Agreement and Fixture Financing Statement on the fee interest in
certain real property located in Springboro, Ohio (the “Ohio Property”) owned
by Mound Technologies, Inc., a Nevada corporation (the “Ohio Mortgage”), (ii)
a first mortgage lien evidenced by a Third Party Mortgage, Security Agreement
and Fixture Financing Statement on the fee interest in certain real property
located in ______________, Kentucky (the “Kentucky Property”)
owned by Lee’s Food Mart’s, LLC, a Tennessee limited liability company (the
“Kentucky
Mortgage”), and (iii) a first mortgage lien evidenced by a Third Party
Deed of Trust, Security Agreement and Fixture Financing Statement on the fee
interest in certain real property located in ______________, Virginia (the
“Virginia
Property”) owned by Lee Oil Company, Inc., a Virginia corporation (the
“Virginia Deed of
Trust”) (the Ohio Property, the Kentucky Property and the Virginia
Property are collectively referred to as the “Property” and the
Ohio Mortgage, the Kentucky Mortgage and the Virginia Deed of Trust are
collectively referred to as the “Mortgage”).

    


    4. Guaranty.  Lee
Oil Company, Inc., a Virginia corporation, Lee’s Food Mart’s, LLC, a Tennessee
limited liability company and Mound Technologies, Inc., a Nevada corporation
(collectively, “Guarantor”) shall guaranty the payment and performance of the
Note and the Mortgage in accordance with a guaranty executed and delivered by
them to Lender and dated the same date as this Agreement (the
“Guaranty”).

    


    5. Documents.  As
a condition precedent to Lender’s obligation to make the Loan, Borrower shall
execute and/or deliver the following documents to Lender in form and substance
satisfactory to Lender (collectively, the “Loan Documents”):

    


    
      	
              (a)  

            	
              The
      Note.

            


    

     

    
      	
              (b)  

            	
              The
      Ohio Mortgage

            


    

     

    
      	
              (c)  

            	
              Assignment
      of Leases, Rents and Purchase Agreements relating to the Ohio
      Property.

            


    

     

    
      	
              (d)  

            	
              The
      Kentucky Mortgage

            


    

     

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

     

    
      	
              (e)  

            	
              Assignment
      of Leases, Rents and Purchase Agreements relating to the Kentucky
      Property.

            


    

     

    
      	
              (f)  

            	
              The
      Virginia Deed of Trust.

            


    

     

    
      	
              (g)  

            	
              Assignment
      of Leases, Rents and Purchase Agreements relating to the Virginia
      Property.

            


    

     

    
      	
              (h)  

            	
              Environmental
      Indemnification Agreement.

            


    

     

    
      	
              (i)  

            	
              The
      Guaranty.

            


    

     

    
      	
              (j)  

            	
              Third
      Party Security Agreement by Lee Oil Company,
  Inc.

            


    

     

    
      	
              (k)  

            	
              Pledge
      Agreement by Borrower of stock in Lee Oil Company,
  Inc.

            


    

     

    
      	
              (l)  

            	
              Pledge
      Agreement by Borrower of membership interests in Lee’s Food Mart’s,
      LLC.

            


    

     

    
      	
              (m)  

            	
              Pledge
      Agreement by Borrower of stock in Mound Technologies,
  Inc.

            


    

     

    
      	
              (n)  

            	
              Third
      Party Security Agreement by Lee’s Food Mart’s,
  LLC.

            


    

     

    
      	
              (o)  

            	
              U.S.A.
      Patriot Act Notification and Compliance
  Certificate.

            


    

     

    
      	
              (p)  

            	
              UCC-1
      Financing Statements.

            


    

     

    
      	
              (q)  

            	
              Assignment
      of Life Insurance Policy by Terry Lee with a face value of at least
      $2,500,000.

            


    

     

    
      	
              (r)  

            	
              Subordination
      Agreement(s).

            


    

     

    
      	
              (s)  

            	
              Put
      Agreement.

            


    

     

    
      	
              (t)  

            	
              Opinion
      from the attorney for Borrower and Guarantor in form and substance
      acceptable to Lender.

            


    

     

    
      	
              (u)  

            	
              A
      written action by all of the directors of Borrower, in form and substance
      acceptable to Lender authorizing the execution and delivery of the Loan
      Documents and all documents to be executed by
  Borrower.

            


    

     

    
      	
              (v)  

            	
              Certificate
      from an officer of Borrower, acceptable to Lender, which attaches the
      organizational documents of Borrower and written action of the directors
      of Borrower.

            


    

     

    
      	
              (w)  

            	
              Certificate
      of Good Standing of Borrower issued by the Secretary of State for the
      States of Maryland, Ohio, Virginia and
Kentucky.

            


    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

     

    
      	
              (x)  

            	
              A
      written action by all of the sole shareholder of Lee Oil Company, Inc., in
      form and substance acceptable to Lender authorizing the execution and
      delivery of the Guaranty and all documents to be executed by Lee Oil
      Company, Inc.

            


    

     

    
      	
              (y)  

            	
              Certificate
      from an officer of Lee Oil Company, Inc., acceptable to Lender, which
      attaches the organizational documents of Lee Oil Company, Inc. and written
      action of the sole shareholder of Lee Oil Company,
  Inc.

            


    

     

    
      	
              (z)  

            	
              Certificate
      of Good Standing of Lee Oil Company, Inc. issued by the Secretary of State
      for the State of Virginia.

            


    

     

    
      	
              (aa)  

            	
              A
      written action by all of the sole member of Lee’s Food Mart’s, LLC, in
      form and substance acceptable to Lender authorizing the execution and
      delivery of the Guaranty and all documents to be executed by Lee’s Food
      Mart’s, LLC.

            


    

     

    
      	
              (bb)  

            	
              Certificate
      from an manager of Lee’s Food Mart’s, LLC, acceptable to Lender, which
      attaches the organizational documents of Lee’s Food Mart’s, LLC and
      written action of the sole member of Lee’s Food Mart’s,
    LLC.

            


    

     

    
      	
              (cc)  

            	
              Certificate
      of Good Standing of Lee’s Food Mart’s, LLC issued by the Secretary of
      State for the State of Tennessee.

            


    

     

    
      	
              (dd)  

            	
              A
      written action by all of the sole shareholder of Mound Technologies, Inc.
      in form and substance acceptable to Lender authorizing the execution and
      delivery of the Guaranty and all documents to be executed by Mound
      Technologies, Inc.

            


    

     

    
      	
              (ee)  

            	
              Certificate
      from an officer of Mound Technologies, Inc., acceptable to Lender, which
      attaches the organizational documents of Mound Technologies, Inc. and
      written action of the sole shareholder of Mound Technologies,
      Inc.

            


    

     

    
      	
              (ff)  

            	
              Certificate
      of Good Standing of Mound Technologies, Inc. issued by the Secretary of
      State for the State of Nevada.

            


    

     

    
      	
              (gg)  

            	
              A
      recent Environmental Assessment Report for the Property acceptable to
      Lender in its sole discretion.

            


    

     

    
      	
              (hh)  

            	
              Evidence
      satisfactory to Lender that any improvements on the Property and the use
      thereof are permitted by and comply with all applicable zoning, use or
      other restrictions and requirements in prior conveyances and all federal,
      state and local laws and regulations, including, without limitation,
      environmental matters.

            


    

     

    
      	
              (ii)  

            	
              Proof
      of insurance coverage as required under the Mortgage.  If
      Borrower fails to obtain such insurance or fails to pay the premiums for
      such insurance when due, then Lender may pay said premiums, renew such
      insurance policies or obtain a new insurance policy and charge the
      premiums therefore as an advance of the
Loan.

            


    

     

    
      	
              (jj)  

            	
              Copies
      of any encumbrances concerning the
Property.

            


    

     

    
      	
              (kk)  

            	
              Searches
      for real estate taxes and levied and pending special assessments against
      the Property by a title insurance company acceptable to
      Lender.

            


    

     

    
      	
              (ll)  

            	
              Searches
      for uniform commercial code filings, state and federal tax liens,
      bankruptcies and judgments against Borrower, Lee Oil Company, Inc., Lee’s
      Food Mart’s, LLC and Mound Technologies, Inc. and any other persons having
      title to or an interest in any part of the
  Property.

            


    

     

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    
      	
              (mm)  

            	
              Title
      insurance policy naming Lender as an insured in the amount of 100% of the
      Loan insuring the Mortgage to be a first and valid lien against the
      Virginia Property and the Kentucky Property and a second and valid lien
      against the Ohio Property, issued at Borrower’s expense, by a title
      insurance company acceptable to Lender, containing such endorsements as
      required by Lender in its sole discretion and subject only to encumbrances
      permitted by Lender.

            


    

     

    
      	
              (nn)  

            	
              MAI
      Appraisal of the Property, certified to Lender, in form and amount
      acceptable to Lender in its sole
discretion.

            


    

     

    
      	
              (oo)  

            	
              Flood
      plain insurance or a letter acceptable to Lender in its sole discretion
      that the Property is not located in an unacceptable flood
      zone.

            


    

     

    
      	
              (pp)  

            	
              Compilation
      financial statements and tax returns of Borrower and Guarantor for the
      immediately preceding three fiscal years (or such lesser time period as
      approved by Lender in its sole
discretion).

            


    

     

    
      	
              (qq)  

            	
              Any
      other documents or instruments Lender requests in its sole
      discretion.

            


    

     

    6. Borrower’s Warranties and
Representations.  Borrower warrants and represents to Lender as
follows:

    


    
      	
               
      

            	
              (a)

            	
              Borrower
      has full power and authority to enter into this Agreement, to borrow the
      full amount of the Loan and to execute and deliver the documents and
      instruments required under this
Agreement.

            


    

    


    
      	
               
      

            	
              (b)

            	
              This
      Agreement and the documents executed under this Agreement shall not
      violate any contract or agreement concerning Borrower’s operations, nor
      result in a breach of the terms or conditions of or constitute a default
      under or result in the creation or imposition of any lien, charge or
      encumbrance upon any property or assets of Borrower pursuant to any
      agreement to which Borrower is a party or by which Borrower may be bound,
      except liens in favor of Lender.

            


    

    


    
      	
              (c)  

            	
              Lee
      Oil Company, Inc. has good and marketable title to the Virginia
      Property.  Lee’s Food Mart’s, LLC has good and marketable title
      to the Kentucky Property.  Mound Technologies, Inc. has good and
      marketable title to the Ohio
Property.

            


    

    


    
      	
              (d)  

            	
              Borrower
      owns all of its assets free and clear of any lien, encumbrances or
      security interests, except liens in favor of
  Lender.

            


    

    


    
      	
              (e)  

            	
              No
      default exists under any of the encumbrances permitted by Lender beyond
      the applicable cure period.

            


    

    


    
      	
              (f)  

            	
              Borrower
      is a duly organized and validly existing Maryland corporation and is in
      good standing in its state of formation.  Borrower’s chief
      executive office is located at 1005 North 19th Street, Middlesboro,
      Kentucky 40965.

            


    

    


    
      	
              (g)  

            	
              Borrower
      has not engaged the services of any broker(s) in connection with the Loan
      and Borrower shall defend, indemnify and hold Lender (and its successors
      and assigns) harmless from any claim, demand, lawsuit, verdict or judgment
      for any commissions allegedly owed to any broker in connection with the
      Loan.  All of the indemnification obligations herein shall
      survive the payment of the Note and foreclosure of the
      Mortgage.

            


    

     

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
 

    
      	
              (h)  

            	
              All
      credit information submitted or to be submitted to Lender by or on behalf
      of Borrower and/or Guarantor is or will be true and correct in all
      material respects and Lender (and its successors and assigns) is
      authorized to make such credit investigations and obtain such credit
      reports and other financial information, whether written or oral, in
      connection with Borrower’s and/or Guarantor’s financial status as Lender
      (and its successor and assigns) deems necessary, in its sole
      discretion.

            


    

    


    
      	
              (i)  

            	
              No
      construction has been commenced upon the Property nor has any actual or
      visible improvement on the ground of the Property been made until the
      applicable Mortgage has been duly executed and recorded or, if
      construction has been commenced prior thereto, Borrower shall provide
      Lender with a title insurance policy insuring the Mortgage against any
      mechanics’ liens upon the Property and stating that no mechanic’s lien
      (either prior or subordinate to the Mortgage) has been filed upon the
      Property.

            


    

    


    
      	
              (j)  

            	
              The
      Kentucky Property is located at
  ____________________.

            


    

    


    
      	
              (k)  

            	
              The
      Virginia Property is located at
  _____________________.

            


    

    


    
      	
              (l)  

            	
              The
      Ohio Property is located at
  ______________________.

            


    

    


    
      	
              (m)  

            	
              Borrower’s
      federal tax identification number is
  ________________.

            


    

    


    
      	
              (n)  

            	
              Borrower’s
      organizational number is MD D05284310.

            


    

    


    7. Borrower’s
Covenants.  While any part of the principal or interest
evidenced by the Note remains unpaid, Borrower will:

    


    
      	
              (a)  

            	
              Not
      change its state of formation or the location of its chief executive
      office without the prior written consent of
  Lender.

            


    

     

    
      	
              (b)  

            	
              Pay
      all taxes and special assessments levied against the Property prior to the
      date on which penalties attach.

            


    

     

    
      	
              (c)  

            	
              Maintain
      proper books and records in which full, true and correct entries shall be
      made of all business affairs relating to Borrower and the Property and
      permit Lender, its agents or employees, to examine such books and records
      and to make copies thereof.  Upon Lender’s request, advise
      Lender promptly in writing of the location of such books and
      records.

            


    

     

    
      	
              (d)  

            	
              Furnish
      upon request Borrower’s and Guarantor’s current financial statements
      prepared in a manner consistent with the financial statements heretofore
      furnished to Lender and in form and substance acceptable to
      Lender.

            


    

     

    
      	
              (e)  

            	
              Enforce
      or cause to be enforced the prompt performance of any contracts relating
      to Borrower and/or Guarantor.

            


    

     

    
      	
              (f)  

            	
              Not
      change, modify, amend or restate any of the organizational documents of
      Borrower without the prior written consent of Lender, which consent will
      not be unreasonably withheld.

            


    

     

    
      	
              (g)  

            	
              Comply
      with and require all persons furnishing labor or materials for the
      construction of any improvements to the Property to comply with all
      federal, state and local laws and regulations concerning the construction
      of such improvements.

            


    

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

    
      	
              (h)  

            	
              Maintain
      or cause to be maintained all insurance required under the
      Mortgage.

            


    

     

    
      	
              (i)  

            	
              Pay
      promptly all persons who furnish labor or materials at Borrower’s request
      in connection with the construction of improvements to the
      Property.

            


    

     

    
      	
              (j)  

            	
              Subject
      to the right to contest liens as provided in the Mortgage, not create or
      permit to be created any mortgage, encumbrance or other lien upon the
      Property other than the encumbrances permitted by Lender, special
      assessments and any other mortgage lien in favor of
  Lender.

            


    

     

    
      	
              (k)  

            	
              Not
      sell, assign, exchange, lease or otherwise transfer the Property or any
      part thereof without the prior written consent of Lender, in Lender’s sole
      discretion.

            


    

     

    
      	
              (l)  

            	
              Not
      convey, sell, assign, or otherwise transfer all or any ownership interest
      in Guarantor without the prior written consent of Lender, in Lender’s sole
      discretion.

            


    

     

    
      	
              (m)  

            	
              Permit
      no default to exist under any of the encumbrances permitted by Lender
      beyond the applicable cure period.

            


    

     

    
      	
              (n)  

            	
              Not
      create or permit to be created any security interest, lien or encumbrance
      against any assets of Borrower or any Guarantor, without the prior written
      consent of Lender, in Lender’s sole
discretion.

            


    

     

    
      	
              (o)  

            	
              Not
      distribute, pledge, sell, assign, exchange, lease, convey or otherwise
      transfer any assets of Borrower or any Guarantor without the prior written
      consent of Lender, in Lender’s sole discretion, other than in the ordinary
      course of Borrower’s and Guarantor’s
business.

            


    

     

    
      	
              (p)  

            	
              Not
      make any single capital expenditure in excess of $250,000 or a series of
      related capital expenditures which aggregate in excess of $250,000 without
      the prior written consent of Lender, in Lender’s sole
      discretion.

            


    

     

    
      	
              (q)  

            	
              Provide
      to Lender copies of all letters of intent, sale agreements and/or other
      documentation in connection with the sale of any assets of Borrower and/or
      any Guarantor other than in the ordinary course of Borrower’s and
      Guarantor’s business.

            


    

     

    
      	
              (r)  

            	
              Provide
      to Lender by April 30 of each calendar year the audited financial
      statements of Borrower and each Guarantor for said year, including a
      balance sheet, statement of income and expense and a statement of changes
      in capital for said year prepared in accordance with generally accepted
      accounting principles by certified public accountants acceptable to Lender
      and certified as true and correct by an officer of Borrower and each
      Guarantor.

            


    

     

    
      	
              (s)  

            	
              Provide
      to Lender by April 15 of each calendar year copies of the federal and
      state income tax returns (including all schedules) filed for Borrower and
      each Guarantor for the previous calendar
year.

            


    

     

    
      	
              (t)  

            	
              Provide
      to Lender within fifteen (15) days following the end of each calendar
      quarter, internally-prepared consolidated financial statements of Borrower
      and each Guarantor for the immediately prior calendar quarter and
      year-to-date.

            


    

     

    
      	
              (u)  

            	
              Not
      declare or make any payments, distributions or dividends to any of owners
      of Borrower or any Guarantor without the prior written consent of Lender,
      in Lender’s sole discretion. Not issue or redeem any class of stock
      or membership units of Borrower or any Guarantor without the prior written
      consent of Lender, in Lender’s sole
discretion.

            


    

     

    
      	
              (v)  

            	
              Establish
      and maintain a depository account with Lender with a balance at all times
      of at least $1,000,000.

            


    

     

    
      	
              (w)  

            	
              Maintain
      a minimum collective Debt Service Coverage Ratio of 1.20 to 1, determined
      as of December 31 of each calendar year.  Debt Service Coverage
      Ratio shall mean the sum of net income, depreciation, amortization,
      interest expense and loss on the sale of assets, less the gain on the sale
      of assets, divided by scheduled principal and interest payments due under
      the Note during the calendar year.

            


    

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     

     

    
      	
              (x)  

            	
              Not
      accept any management, consulting or other fees from any Guarantor if the
      Debt Service Coverage Ratio is out of
  compliance.

            


    

     

    
      	
              (y)  

            	
              Not,
      and will not allow or cause any Guarantor to, become a party to any
      merger, consolidation or any other business
  combination.

            


    

     

    
      	
              (z)  

            	
              Not,
      and will not allow or cause any Guarantor to, incur any indebtedness
      without the prior written consent of Lender, in Lender’s sole discretion,
      other than trade debt incurred in the ordinary course of business of
      Borrower and Guarantor.

            


    

     

    
      	
              (aa)  

            	
              Cause
      Lee Oil Company, Inc. to maintain a Net Worth of at least $3,385,000 and
      cause Lee’s Food Mart’s, LLC to maintain a Net Worth of at least
      $1,003,000.  Net Worth shall mean total assets valued at fair
      market value less total
liabilities.

            


    

     

    
      	
              (bb)  

            	
              Achieve
      and maintain Owner’s Equity in Lee Oil Company, Inc. of at least 35% and
      Owner’s Equity in Lee’s Food Mart’s, LLC of at least
      57%.  Owner’s Equity shall mean Net Worth divided by total
      assets, determined as of December 31 of each year.  The
      classification and valuation of assets and liabilities shall be determined
      by Lender in its sole discretion but in accordance with generally accepted
      accounting principles.

            


    

     

    
      	
              (cc)  

            	
              Achieve
      and maintain Working Capital in Lee Oil Company, Inc. of at least
      $2,117,000 and Working Capital in Lee’s Food Mart’s, LLC of at least
      $865,000.  Working Capital shall mean current assets less
      current liabilities as shown on the December 31, 2008 balance sheet of Lee
      Oil Company, Inc. and Lee’s Food Mart’s, LLC and each year end balance
      sheet thereafter.  The classification and valuation of assets
      and liabilities shall be determined by Lender in its sole discretion but
      in accordance with generally accepted accounting principles.  If
      necessary in order to achieve and maintain the above Working Capital
      requirements, Borrower shall sell its non-current or non-core business
      assets or refinance non-current assets with non-current
    debt.

            


    

     

    
      	
              (dd)  

            	
              Use
      the Loan proceeds only to pay costs associated directly with the Loan and
      for such other business purposes as are approved by Lender or as otherwise
      permitted hereunder.

            


    

     

    8. Indemnification.  Borrower
hereby agrees to defend, indemnify and hold Lender, and its successors and
assigns, harmless from and against any and all claims, liabilities, losses,
damages, costs and expenses of whatever kind or nature, including, without
limitation,  attorneys’ fees, arising out of, incidental to or in
connection with any liens, mortgages, deeds of trust or other encumbrances
concerning the Property.  Borrower’s obligations under this paragraph
shall survive the payment of the Note and the foreclosure of the
Mortgage.

    


    Further, Borrower shall defend and
indemnify Lender, its shareholders, directors, officers, employees, agents,
attorneys, insurers, contractors, licensees, invitees, successors and assigns
(collectively “Indemnified Parties”) from and against, shall hold the
Indemnified Parties harmless from, and shall reimburse the Indemnified Parties
for any and all costs, directly or indirectly incurred by the Indemnified
Parties, including attorneys’ and consultants’ fees resulting from any violation
of any Accessibility Regulation.  This Indemnity shall be deemed
continuing for the benefit of the Indemnified Parties, including any purchaser
at a foreclosure or other sale under the Mortgage, any transferee of the title
from Lender, and any subsequent owner of the Property, and shall survive the
satisfaction or release of the Mortgage, any foreclosure of or other sale under
the Mortgage and/or any acquisition of title to the Property or any part thereof
by Lender, or anyone claiming by, through or under Lender, by deed in lieu of
foreclosure or otherwise, and also shall survive the repayment or any other
satisfaction of the Loan.  Any amounts covered by the foregoing
indemnification shall bear interest from the date incurred at the highest rate
payable pursuant to the Note including any default rate, as therein defined, and
shall be payable on demand.  Borrower agrees that its obligations
under this Agreement are separate from, independent of, and in addition to its
obligations, under the Loan Documents.

    


    As used in this Agreement, the
following terms shall have the following meanings:

    


    
      	
               
      

            	
              (a)

            	
              “Accessibility
      Regulation” means a Law relating to accessibility of facilities or
      properties for disabled, handicapped and/or physically challenged persons,
      including, without limitation, the Americans With Disabilities Act of
      1991, as amended.

            


    

    


    
      	
               
      

            	
              (b)

            	
              “Law”
      means any federal, state or local law, statute, code, ordinance, rule,
      regulation or requirement.

            


    

    


    9. Fees and
Expenses.  Whether or not any funds are advanced under the
Note, Borrower agrees to pay to Lender $50,000.00 as an origination fee for
making the Loan.  Lender has earned such origination fee upon Lender’s
and Borrower’s execution of this Agreement and the same is nonrefundable
notwithstanding the reduction or termination of the liability of
Lender.

     

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
 

    Borrower also agrees to reimburse
Lender upon demand for all out-of-pocket expenses actually incurred by Lender in
connection with this Agreement or with any transactions contemplated by this
Agreement, including, without limitation, all attorneys’ fees.  In the
event that Borrower fails to pay such fees, expenses or other recoverable
amounts, Lender may, at its option, advance the same under the Note and the
payment thereof shall be secured by the Mortgage.

    


    10. Defaults.  Each
of the following occurrences is an event of default (“Event of Default”) under
this Agreement:

    


    
      	
              (a)  

            	
              Borrower
      fails to perform any of the terms, conditions or covenants to be kept or
      performed by it under this Agreement, the Note or any of the other Loan
      Documents of a monetary nature continuing for a period of ten (10) days
      after written notice thereof to Borrower or of a non-monetary nature
      continuing for a period of fifteen (15) days or for such longer period of
      time as is required to cure the default, if the same cannot be reasonably
      cured within said fifteen (15) day period and Borrower is using all
      reasonable effort to cure, but in no event more than forty-five (45)
      days.

            


    

     

    
      	
              (b)  

            	
              Guarantor
      fails to perform any of the terms or conditions to be kept or performed by
      such Guarantor under the Guaranty.

            


    

     

    
      	
              (c)  

            	
              Any
      representation or warranty made by Borrower herein is untrue or misleading
      in any material respect or any statement, certificate or report furnished
      hereunder by or on behalf of Borrower is untrue or misleading in any
      material respect on the date as of which the facts set forth therein are
      stated or certified.

            


    

     

    
      	
              (d)  

            	
              Borrower
      or any Guarantor becomes insolvent or unable to pay its or their debts as
      they mature or Borrower or any Guarantor makes an assignment for the
      benefit of creditors or any proceedings are initiated by or against
      Borrower or any Guarantor, alleging that Borrower or any Guarantor is
      insolvent or unable to pay its or their debts as they mature or a petition
      is filed by or against Borrower or any Guarantor under any of the
      provisions of the United States Bankruptcy Code not resolved to the
      satisfaction of Lender in its sole discretion within thirty (30)
      days.

            


    

     

    
      	
              (e)  

            	
              Borrower,
      any affiliated or related person or entity of Borrower, any Guarantor or
      any affiliated or related person or entity of any Guarantor fails to
      perform any of the terms or conditions to be kept or performed by it or
      any of them under any promissory note, contract or agreement with Lender
      or any third party, now existing or hereafter entered into, after
      expiration of the applicable cure period contained therein, if
      any.

            


    

     

    
      	
              (f)  

            	
              Borrower
      fails to comply with (i) any of its obligations relating to the Property,
      and/or (ii) any applicable federal, state or local permits, laws, rules,
      ordinances or regulations.

            


    

     

    
      	
              (g)  

            	
              All
      or any portion of the Property or all or any interest in Guarantor is
      sold, pledged, assigned, exchanged, leased, transferred, encumbered,
      mortgaged, hypothecated, or otherwise disposed of, without Lender’s prior
      written consent, in Lender’s sole
discretion.

            


    

     

    
      	
              (h)  

            	
              Commencement
      of any action or proceeding involving, affecting or bringing into question
      any interest in the Property or lien of the Mortgage upon the Property
      which is not resolved to the reasonable satisfaction of Lender within
      thirty (30) days.

            


    

     

    
      	
              (i)  

            	
              Commencement
      of an action to acquire any part of the Property by eminent domain unless
      the same is dismissed within thirty (30) days
  thereof.

            


    

     

    
      	
              (j)  

            	
              Filing
      of any mechanics’ lien against the Property which is not paid in full and
      satisfied or released of record within thirty (30) days after the date of
      said filing.

            


    

     

    
      	
              (k)  

            	
              Any
      of the improvements on the Property are materially damaged or destroyed by
      fire or other casualty and the loss or damage, in Lender’s reasonable
      judgment, is not covered adequately by insurance actually collected or to
      be collected or by cash deposited with Lender by Borrower to affect such
      repairs.

            


    

     

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

     

    
      	
              (l)  

            	
              Execution
      or attachment shall have been levied against the Property or any part
      thereof and shall continue without stay and in effect for a period of more
      than thirty (30) consecutive days.

            


    

     

    
      	
              (m)  

            	
              Borrower’s
      failure to maintain its valid existence in the state of its formation as
      indicated in this Agreement.

            


    

     

    
      	
              (n)  

            	
              Any
      default exists under any of the encumbrances permitted by
      Lender.

            


    

     

    
      	
              (o)  

            	
              Any
      material adverse change occurs in the financial condition or operating
      condition of Borrower and/or any
Guarantor.

            


    

     

    
      	
              (p)  

            	
              Borrower
      shall fail to execute and/or deliver to Lender in acceptable form in
      Lender’s sole discretion, each and all of the Loan
    Documents.

            


    

     

    
      	
              (q)  

            	
              Lender
      deems itself insecure for any reason as determined by Lender in its sole
      discretion.

            


    

     

    11. Remedies.  Upon
the occurrence of an Event of Default, Lender may, at its option, exercise any
or all of the following rights and remedies;

    


    
      	
               
      

            	
              (a)

            	
              Declare
      immediately due and payable the entire unpaid balance of this Agreement,
      the Note, the Mortgage, or any other agreement between Borrower and/or its
      affiliates, and Lender and/or Guarantor and/or its affiliates, and Lender,
      together with accrued interest thereon, and the same shall thereupon be
      immediately due and payable without demand or notice of any kind, all of
      which are expressly waived by
Borrower.

            


    

    


    
      	
               
      

            	
              (b)

            	
              Foreclose
      any or all of the Mortgages and exercise any other rights and remedies
      thereunder.

            


    

    


    
      	
               
      

            	
              (c)

            	
              Enter
      upon the Property to complete or cause to be completed any improvements to
      the Property at the cost and expense of Borrower.  Borrower
      irrevocably empowers and appoints Lender its attorney-in-fact, to do all
      the foregoing in its own name or in Borrower’s name.  If Lender
      elects to complete such improvements, it may do so according to such
      changes, alterations or modifications to the applicable plans and
      development agreements as Lender may deem appropriate, and Lender may
      enforce or cancel all contracts, which in Lender’s sole judgment may be
      advisable.  Borrower agrees to cooperate with Lender and to
      surrender upon demand such documents or records in its possession
      concerning any improvements.  Borrower shall be liable to Lender
      for all sums expended by Lender in completing any improvements, together
      with any costs or expenses incident thereto, all of which shall bear
      interest at the rate provided in the Note, shall be payable by Borrower
      upon demand and the payment thereof shall be considered an advance under
      the Note and secured by the Mortgage.  If a proceeding is
      commenced against Borrower for the recovery of the sums expended by Lender
      in connection with the completion of any improvements, a statement of such
      expenditures, verified by the affidavit of an officer of Lender, shall be
      prima facie evidence of the sums expended and of the necessity for such
      expenditures and the burden of proving the contrary shall be upon
      Borrower.  Lender shall have the right to apply any funds which
      it agrees to advance hereunder to pay the cost of completing any
      improvements.  Lender does not represent that the funds to be
      advanced under this Agreement are sufficient to complete any
      improvements.

            


    

    


    
      	
               
      

            	
              (d)

            	
              Perform
      in its discretion, but without obligation to do so, any covenants or
      agreements of Borrower contained herein, in the Note, in the Mortgage, or
      in any other document executed in connection with the Loan.  The
      reasonable amounts so expended by Lender, together with interest thereon
      from the date of advancement at the rate provided in the Note, shall be
      payable by Borrower upon demand and the payment thereof shall be
      considered an advance under the Note and secured by the
      Mortgage.

            


    

    


    
      	
               
      

            	
              (e)

            	
              Perform
      in its discretion, but without obligation to do so, the obligations under
      any of the Permitted Encumbrances, or any covenants or agreements of
      Borrower contained in any executory contract and any mortgage, deed of
      trust, or other encumbrance concerning the Property, whether the same are
      prior or subordinate to the lien of the Mortgage.  Lender may
      also pay or obtain the release of any executory contract and any lien,
      mortgage, deed of trust or other encumbrance concerning the Property,
      whether the same are prior or subordinate to the lien of the Mortgage and
      whether or not the same are delinquent.  The amounts so expended
      by Lender (including attorneys’ fees), together with interest thereon from
      the date of advancement at the rate provided in the Note, shall be payable
      by Borrower upon demand and the payment thereof shall be considered an
      advance under the Note and secured by the Mortgage and Lender shall be
      subrogated to the rights of the holder thereof as fully as if the same had
      been assigned to Lender.

            


    

    


    
      	
               
      

            	
              (f)

            	
              Commence
      an action to enforce specifically Borrower’s performance of its
      obligations under the Loan
Documents.

            


    

    


    
      	
               
      

            	
              (g)

            	
              To
      charge or setoff (i) all sums owed to Lender under the Note, the Mortgage
      and any of the other Loan Documents, or (ii) any claims of Borrower
      against Lender, against any and all of Borrower’s deposits, credits and
      accounts (including, without limitation, all certificates of deposit, debt
      instruments, securities and any other deposit, credit or account) with
      Lender (or any third party) and/or at Lender’s option, to administratively
      freeze all such deposits, credits and accounts to facilitate such charge
      or setoff.  Such right shall exist whether or not Lender shall
      have made any demand hereunder or under any other Loan Document, whether
      or not said sums, or any part thereof, or deposits, credits or accounts
      held for the account of Borrower is or are matured or unmatured, and
      regardless of the existence or adequacy of any collateral, guaranty or any
      other security, right or remedy available to Lender.  Nothing in
      this Agreement shall be deemed a waiver or prohibition of or restriction
      on Lender to all rights of banker’s lien, setoff and counterclaim
      available pursuant to law.

            


    

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
 

    
      	
               
      

            	
              (h)

            	
              Exercise
      any and all other rights and remedies available at law or in
      equity.

            


    

    


    The rights and remedies provided Lender
herein or otherwise afforded at law or in equity are distinct and cumulative and
any forbearance by Lender in exercising any right or remedy shall not be a
waiver of or preclude the exercise of any other right or remedy.

    


    Upon the occurrence of an Event of
Default, Borrower agrees to pay all expenses and costs of collection incurred by
Lender under this Agreement, including, without limitation, attorneys’ fees,
whether or not in connection with a judicial proceeding and whether or not in
connection with an original or appellate proceeding.

    


    12. Revival of
Liability.  If any payments or proceeds received by Lender
under the Note, or under any other Loan Document, are subsequently invalidated,
declared to be fraudulent or preferential, set aside, or required to be repaid
to a trustee, to Borrower, directly or as a debtor-in-possession, to a receiver,
or any other person, whether directly or indirectly, under any bankruptcy law,
state or federal law, common law, or equitable cause, then Borrower’s obligation
to make all such payments shall be revived and shall continue in full force and
effect as if such payment or proceeds had never been received by
Lender.

    


    13. No Marshalling of
Assets.  Borrower agrees that notwithstanding the existence of
any security interests, collateral or liens on any personal or real property
held by Lender, Lender shall have the right to determine the order in which all
or any portion of its collateral or other security for payment of the all
amounts owed under the Note and/or the Loan Documents shall be subjected to the
remedies provided in this Agreement, the Note, the Mortgage and any other Loan
Documents or applicable law.  Lender shall have the right to determine
the order in which any or all portions of the obligations of Borrower are
satisfied from the proceeds realized upon the exercise of such
remedies.  Borrower waives any and all right to require a marshalling
of assets by Lender.

    


    14. Notices.  Any
notice provided for in this Agreement shall be in writing and shall be given by
certified mail, return receipt requested, postage prepaid, addressed
to:

    
 

    
      	 	 Borrower
      at:   	Heartland,
      Inc.	 
	 	 	1005 North 19th
      Street	 
	 	 	Middlesboro,
      Kentucky 40965	 
	 	 	 	 
	 	Lender
      at:  	Choice Financial
      Group	 
	 	 	1697 South 42nd
      Street	 
	 	 	Grand Forks, North
      Dakota 58201	 


    

     

                                    

    or to
such other address furnished by notice to the other party as provided
herein.  Any notice provided for in this Agreement shall be deemed to
have been given when postmarked, postage prepaid and properly given as provided
herein.

    


    15. Waivers.

    


    
      	
               
      

            	
              (a)

            	
              BORROWER
      ACKNOWLEDGES THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT
      THAT IT MAY BE WAIVED AND THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY
      A JURY MAY EXCEED THE TIME AND EXPENSE REQUIRED FOR TRIAL WITHOUT A
      JURY.  BORROWER, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY
      TO CONSULT) WITH COUNSEL OF BORROWER’S CHOICE, KNOWINGLY AND VOLUNTARILY,
      AND FOR THE MUTUAL BENEFIT OF LENDER AND BORROWER, WAIVES ANY RIGHT TO
      TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
      ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT, ANY RELATED
      AGREEMENTS OR OBLIGATIONS THEREUNDER.  BORROWER HAS READ ALL OF
      THIS AGREEMENT AND UNDERSTANDS ALL OF THE PROVISIONS OF THIS
      AGREEMENT.  BORROWER ALSO AGREES THAT COMPLIANCE BY LENDER WITH
      THE EXPRESS PROVISIONS OF THIS AGREEMENT SHALL CONSTITUTE GOOD FAITH AND
      SHALL BE CONSIDERED REASONABLE FOR ALL
PURPOSES.

            


    

     

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
 

    
      	
               
      

            	
              (b)

            	
              BORROWER
      KNOWINGLY AND VOLUNTARILY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO SEEK
      PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM LENDER AND ANY
      OF ITS AFFILIATES, SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS
      AND ANY OF THEIR SUCCESSORS AND ASSIGNS WITH RESPECT TO ANY AND ALL ISSUES
      PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY
      LENDER AGAINST BORROWER OR BY BORROWER AGAINST LENDER ARISING IN ANY WAY
      IN CONNECTION WITH THE LOAN OR UNDER ANY AGREEMENT, INSTRUMENT, DOCUMENT,
      EXECUTED IN CONNECTION WITH THE LOAN OR ARISING FROM ANY RELATIONSHIP
      EXISTING IN CONNECTION THEREWITH OR ANY STATEMENTS OR ACTIONS OF BORROWER
      OR LENDER.

            


    

    


    
      	
               
      

            	
              (c)

            	
              BORROWER
      WAIVES EVERY PRESENT AND FUTURE DEFENSE (OTHER THAN THE DEFENSE OF PAYMENT
      IN FULL), CAUSE OF ACTION, COUNTERCLAIM OR SETOFF WHICH BORROWER MAY NOW
      HAVE OR HEREAFTER MAY CLAIM TO HAVE AGAINST ANY ACTION BY LENDER IN
      CONNECTION WITH THE LOAN.

            


    

    


    
      	
               
      

            	
              (d)

            	
              BORROWER
      ACKNOWLEDGES THAT THE FOREGOING WAIVERS HAVE BEEN READ AND FULLY
      UNDERSTOOD BY BORROWER AND ARE A MATERIAL INDUCEMENT FOR LENDER TO EXTEND
      THE LOAN.

            


    

    


    16. Miscellaneous
Provisions.  Time is expressly declared to be of the essence in
the performance of this Agreement.  This Agreement shall be governed
in all respects by the laws of the State of North Dakota.  This
Agreement shall inure to and bind the parties hereto, their respective
successors and assigns.  This Agreement is made for the sole benefit
of Lender and Borrower, their successors and assigns, and no other person shall
be deemed a direct or intended beneficiary of the Loan or have any rights or
remedies under this Agreement nor shall Lender, whether or not it elects to
employ any or all of the rights or remedies available to it upon the occurrence
of an Event of Default, have any obligation or liability of any kind to any
third party by reason of this Agreement or any of Lender’s actions or omissions
pursuant thereto.  Lender shall have no liability for payment of any
expenses incurred in connection with the exercise of any right or remedy
available to Lender or for the performance or non-performance of any other
obligation of Borrower.  The rights of Borrower under this Agreement
cannot be assigned or otherwise transferred in whole or in part without Lender’s
prior written consent.  The entire agreement of the parties hereto has
been set forth herein and in the Loan Documents and there are no agreements,
representations or warranties between the parties except as set forth herein and
in the Loan Documents.  Borrower agrees that Lender, its agents,
employees, successors and assigns shall not be liable for any representations,
warranties or agreements not contained in this Agreement and that if any such
representations, agreements or warranties have been made, they are wholly
unauthorized and not binding upon Lender.  Borrower expressly waives
any claim for damages or for rescission because of any representations,
agreements or warranties made by Lender, its agents or employees, other than as
contained in this Agreement.  All prior agreements or contracts,
written or oral, concerning the subject matter of this Agreement are hereby
canceled and superseded.  The provisions of this Agreement shall be
severable and the invalidity or unenforceability of any one or more of the
provisions of this Agreement shall not affect the validity and enforceability of
the other provisions.  No change, addition or modification of this
Agreement shall be valid or binding unless it is in writing and signed by the
party to be charged.  No waiver of any provision of this Agreement
shall be valid unless it is in writing and signed by the party against whom the
waiver is sought to be enforced.  No valid waiver of any provision of
this Agreement shall be deemed a waiver of any other provision of this
Agreement.  This Agreement may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but a
single instrument.

     

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
 

               IN
WITNESS WHEREOF, the parties made and entered into this Loan Agreement as of the
day and year first above written.

     

    
      
        	BORROWER:	 	 	LENDER:	 
	HEARTLAND,
      INC. 	 	 	CHOICE
      FINANCIAL GROUP	 
	 	 	 	 	 
	 	 	 	 	 
	
                /s/Tom
      Miller

              	 	 	
                /s/
      

              	 
	
                Its 

              	 	 	
                Its   

              	 
	
                 

              	 	 	
                 

              	 


      

    

    


     

    
    

     

    
      	STATE OF	 	)	 
	 	 	) ss	 
	COUNTY OF	 	)	 


    

     

     

    The
foregoing instrument was acknowledged before me this ___ day of ____________,
2008, by __________________, the ________________ of Heartland, Inc., a Maryland
corporation, on behalf of the corporation.

     

     

     

    
      
        	
                 

              	
                 

              	 	 
	 	 	      
                Notary
      Public

              	 
	 	 	 	 
	 	 	 	 


      



     

    12