Lee Oil Company is a multi-state petroleum marketer and distributor which had approximately 36 million gallons of petroleum product sales during the year ended December 2007. It is reported that Lee has in excess of 35 long-term petroleum supply contracts with retail and wholesale customers. Lee Food Marts operates 23 convenience stores in the states of Virginia, Tennessee and Kentucky.
Consideration for the Lee companies included a payment to the former owners of the Lee companies, including Terry Lee, CEO and a director of Heartland, of an aggregate of $3.25 million in cash, promissory notes in the amount of $3.25 million and 2.5 million shares of common stock in Heartland.
In order to fund the cash purchase price of the acquisition, Heartland entered into a loan agreement with Choice Financial Group of Grand Forks, North Dakota. The note with Choice Financial Group has an interest rate of 7.75%, amortizes on a monthly basis and is required to be paid in full by September 30, 2011.
