LOAN AGREEMENT

(a)  

The Note.

(b)  

The Ohio Mortgage

(c)  

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

(d)  

The Kentucky Mortgage

(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.

(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.

(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.

(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.

(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.

(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.

(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 publ