Document:

Exhibit 10.3

 

*000000070527950820780*

 

BUSINESS LOAN AGREEMENT

 

	Principal	Loan Date	Maturity	Loan No	Call / Coll	Account	Officer	Initials

 

	$4,495,000.00	06-07-2021	07-01-2026	527950820780	151 / 55		 225	 

 

References in the boxes above are for Lender's
use only and do not limit the applicability of this document to any particular loan or item.

 

Any item above containing "***"
has been omitted due to text length limitations.

 

	Borrower:	
    Medalist Fund II-B, LLC, a Delaware
    limited liability company

    1051 E Cary Street, Suite 601

    Richmond, VA 23219
	Lender:	
    THE OLD POINT NATIONAL BANK OF PHOEBUS

    Peninsula Lending

    1 West Mellen Street

    Hampton, VA 23663

 

THIS BUSINESS LOAN AGREEMENT dated
June 7, 2021, is made and executed between Medalist Fund II-B, LLC, a Delaware limited liability company ("Borrower") and THE
OLD POINT NATIONAL BANK OF PHOEBUS ("Lender") on the following terms and conditions. Borrower has received prior commercial
loans from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, including those which may
be described on any exhibit or schedule attached to this Agreement. Borrower understands and agrees that: (A) in granting, renewing, or
extending any Loan, Lender is relying upon Borrower's representations, warranties, and agreements as set forth in this Agreement; (B)
the granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender's sole judgment and discretion; and
(C) all such Loans shall be and remain subject to the terms and conditions of this Agreement. This Agreement shall apply to any and all
present and future loans, loan advances, extension of credit, financial accommodations and other agreements and undertakings of every
nature and kind that may be entered into by and between Borrower and Lender now and in the future.

 

TERM. This Agreement shall
be effective as of June 7, 2021, and shall continue in full force and effect until such time as all of Borrower's Loans in favor of Lender
have been paid in full, including principal, interest, costs, expenses, attorneys' fees, and other fees and charges, or until July 1,
2026.

 

CONDITIONS PRECEDENT TO EACH ADVANCE.
Lender's obligation to make the initial Advance and each subsequent Advance under this Agreement shall be subject to the fulfillment to
Lender's satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.

 

Loan Documents. Borrower shall
provide to Lender the following documents for the Loan: (1) the Note; (2) Security Agreements granting to Lender security interests in
the Collateral; (3) financing statements and all other documents perfecting Lender's Security Interests; (4) evidence of insurance as
required below; (5) guaranties; (6) together with all such Related Documents as Lender may require for the Loan; all in form and substance
satisfactory to Lender and Lender's counsel.

 

Borrower's Authorization. Borrower
shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the execution and delivery
of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions, authorizations,
documents and instruments as Lender or its counsel, may require.

 

Payment of Fees and Expenses.
Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable as specified in this Agreement
or any Related Document.

 

Representations and Warranties.
The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered
to Lender under this Agreement are true and correct.

 

No Event of Default. There
shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or under any Related
Document.

 

REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of loan proceeds, as
of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists:

 

Organization. Borrower is a
limited liability company which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue
of the laws of the State of Delaware. Borrower is duly authorized to transact business in all other states in which Borrower is doing
business, having obtained all necessary filings, governmental licenses and approvals for each state in which Borrower is doing business.
Specifically, Borrower is, and at all times shall be, duly qualified as a foreign limited liability company in all states in which the
failure to so qualify would have a material adverse effect on its business or financial condition. Borrower has the full power and authority
to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. Borrower maintains
an office at 1051 E Cary Street, Suite 601, Richmond, VA 23219. Unless Borrower has designated otherwise in writing, the principal office
is the office at which Borrower keeps its books and records including its records concerning the Collateral. Borrower will notify Lender
prior to any change in the location of Borrower's state of organization or any change in Borrower's name. Borrower shall do all things
necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations,
rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to Borrower and
Borrower's business activities.

 

Assumed Business Names. Borrower
has filed or recorded all documents or filings required by law relating to all assumed business names used by Borrower. Excluding the
name of Borrower, the following is a complete list of all assumed business names under which Borrower does business: None.

 

Authorization. Borrower's execution,
delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower,
do not require the consent or approval of any other person, regulatory authority, or governmental body, and do not conflict with, result
in a violation of, or constitute a default under (1) any provision of (a) Borrower's articles of organization or membership agreements,
or (b) any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable
to Borrower or to Borrower's properties. Borrower has the power and authority to enter into the Note and the Related Documents and to
grant collateral as security for the Loan. Borrower has the further power and authority to own and to hold all of Borrower's assets and
properties, and to carry on Borrower's business as presently conducted.

 

    1 

     

    

 

Financial Information. Each
of Borrower's financial statements supplied to Lender truly and completely disclosed Borrower's financial condition as of the date of
the statement, and there has been no material adverse change in Borrower's financial condition subsequent to the date of the most recent
financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial statements.

 

Legal Effect. This Agreement
constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered will constitute legal, valid,
and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms.

 

Properties. Except as contemplated
by this Agreement or as previously disclosed in Borrower's financial statements or in writing to Lender and as accepted by Lender, and
except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to all of Borrower's properties
free and clear of all Security Interests, and has not executed any security documents or financing statements relating to such properties.
All of Borrower's properties are titled in Borrower's legal name, and Borrower has not used or filed a financing statement under any other
name for at least the last five (5) years.

 

Hazardous Substances. Except
as disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that: (1) During the period of Borrower's ownership
of the Collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any
Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has no knowledge of, or reason to believe
that there has been (a) any breach or violation of any Environmental Laws; (b) any use, generation, manufacture, storage, treatment, disposal,
release or threatened release of any Hazardous Substance on, under, about or from the Collateral by any prior owners or occupants of any
of the Collateral; or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters. (3) Neither
Borrower nor any tenant, contractor, agent or other authorized user of any of the Collateral shall use, generate, manufacture, store,
treat, dispose of or release any Hazardous Substance on, under, about or from any of the Collateral; and any such activity shall be conducted
in compliance with all applicable federal, state, and local laws, regulations, and ordinances, including without limitation all Environmental
Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to make such inspections and tests as Lender may deem appropriate
to determine compliance of the Collateral with this section of the Agreement. Any inspections or tests made by Lender shall be at Borrower's
expense and for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Borrower
or to any other person. The representations and warranties contained herein are based on Borrower's due diligence in investigating the
Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1) releases and waives any future claims against Lender for
indemnity or contribution in the event Borrower becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify,
defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly
or indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use, generation, manufacture,
storage, disposal, release or threatened release of a hazardous waste or substance on the Collateral. The provisions of this section of
the Agreement, including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the termination, expiration
or satisfaction of this Agreement and shall not be affected by Lender's acquisition of any interest in any of the Collateral, whether
by foreclosure or otherwise.

 

Litigation and Claims. No litigation,
claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is pending or threatened,
and no other event has occurred which may materially adversely affect Borrower's financial condition or properties, other than litigation,
claims, or other events, if any, that have been disclosed to and acknowledged by Lender in writing.

 

Taxes. To the best of Borrower's
knowledge, all of Borrower's tax returns and reports that are or were required to be filed, have been filed, and all taxes, assessments
and other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in the
ordinary course of business and for which adequate reserves have been provided.

 

Lien Priority. Unless otherwise
previously disclosed to Lender in writing, Borrower has not entered into or granted any Security Agreements, or permitted the filing or
attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of Borrower's Loan
and Note, that would be prior or that may in any way be superior to Lender's Security Interests and rights in and to such Collateral.

 

Binding Effect. This Agreement,
the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof, as well as upon their successors,
representatives and assigns, and are legally enforceable in accordance with their respective terms.

 

Commercial Purposes. Borrower
intends to use the Loan proceeds solely for business or commercially related purposes.

 

Employee Benefit Plans. Each
employee benefit plan as to which Borrower may have any liability complies in all material respects with all applicable requirements of
law and regulations, and (1) no Reportable Event nor Prohibited Transaction (as defined in ERISA) has occurred with respect to any such
plan, (2) Borrower has not withdrawn from any such plan or initiated steps to do so, (3) no steps have been taken to terminate any such
plan or to appoint a trustee to administer such a plan, and (4) there are no unfunded liabilities other than those previously disclosed
to Lender in writing.

 

Investment Company Act. Borrower
is not an "investment company" or a company "controlled" by an "investment company", within the meaning
of the Investment Company Act of 1940, as amended.

 

Public Utility Holding Company
Act. Borrower is not a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate"
of a "holding company" or of a "subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

 

Regulations T and U. Borrower
is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulations T and U of the Board of Governors of the Federal Reserve System).

 

Information. All information
previously furnished or which is now being furnished by Borrower to Lender for the purposes of or in connection with this Agreement or
any transaction contemplated by this Agreement is, and all information furnished by or on behalf of Borrower to Lender in the future will
be, true and accurate in every material respect on the date as of which such information is dated or certified; and no such information
is or will be incomplete by omitting to state any material fact the omission of which would cause the information to be misleading.

 

Claims and Defenses. There
are no defenses or counterclaims, offsets or other adverse claims, demands or actions of any kind, personal or otherwise, that Borrower,
any Grantor, or any Guarantor could assert with respect to the Note, Loan, this Agreement, or the Related Documents.

 

    2 

     

    

 

AFFIRMATIVE COVENANTS. Borrower
covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will:

 

Repayment. Repay the Loan in
accordance with its terms and the terms of this Agreement.

 

Notices of Claims and Litigation.
Promptly inform Lender in writing of (1) all material adverse changes in Borrower's financial condition, and (2) all existing and all
threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which
could materially affect the financial condition of Borrower or the financial condition of any Guarantor.

 

Financial Records. Maintain
its books and records in accordance with GAAP, applied on a consistent basis, and permit Lender to examine and audit Borrower's books
and records at all reasonable times.

 

Financial Statements. Furnish
Lender with the following:

 

Annual Statements. As soon
as available after the end of each fiscal year, Borrower's balance sheet and income statement for the year ended, prepared by Borrower
in form satisfactory to Lender.

 

Tax Returns. As soon as available,
but in no event later than one-hundred-twenty (120) days after the applicable filing date for the tax reporting period ended, Borrower's
Federal and other governmental tax returns, prepared by a certified public accountant satisfactory to Lender.

 

Additional Requirements.

 

Signed and Dated Business Tax Returns
(including all schedules) of Borrower and Medalist Fund Manager or business entity yet to be determined

 

Signed and Dated Personal Tax Returns
(including all schedules) of William Elliott and Thomas Messier

 

Signed and Dated Personal Financial
Statement of William Elliott and Thomas Messier

 

Signed and dated real estate portfolio
summaries reflecting all properties owned by Medalist Fund II LLC and Medalist Fund REIT

 

Signed and dated Current Rent Roll
for property located at 1244 Executive Blvd., Chesapeake, VA 23320

 

Addendums and changes to Lease Agreements
/ Copies of New Lease Agreements

 

Borrower and Guarantor must also
provide additional financial information when requested by OPNB.

 

All financial reports required to
be provided under this Agreement shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Borrower as
being true and correct.

 

Additional Information. Furnish
such additional information and statements, as Lender may request from time to time.

 

Financial Covenants and Ratios.
Comply with the following covenants and ratios:

 

Minimum Occupancy Requirements.
Borrower shall comply with the following property occupancy requirements:

 

Property Occupancy: The Property
shall maintain occupancy of at least 80% to be measured annually using a Certified Rent Roll from the Property Management Company, Dodson
Property Management. Occupancy percentage shall be determined by taking the total occupied square footage and dividing it y the total
leasable square forage of the Property.

 

Minimum Income and Cash flow Requirements.
Borrower shall comply with the following cash flow ratio requirements:

 

Debt Service Coverage Ratio (DSCR)
Ratio. Maintain a ratio of Debt Service Coverage Ratio (DSCR) in excess of 1.350 to 1.000. This coverage ratio will be evaluated
as of year-end.

 

Except as provided above, all computations
made to determine compliance with the requirements contained in this paragraph shall be made in accordance with generally accepted accounting
principles, applied on a consistent basis, and certified by Borrower as being true and correct.

 

    3 

     

    

 

Insurance. Maintain fire and
other risk insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower's properties
and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower, upon request of Lender, will
deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that
coverages will not be cancelled or diminished without at least thirty (30) days prior written notice to Lender. Each insurance policy
also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default
of Borrower or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest
for the Loans, Borrower will provide Lender with such lender's loss payable or other endorsements as Lender may require.

 

Insurance Reports. Furnish
to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably request,
including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the
properties insured; (5) the then current property values on the basis of which insurance has been obtained, and the manner of determining
those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however not more often than annually), Borrower
will have an independent appraiser satisfactory to Lender determine, as applicable, the actual cash value or replacement cost of any Collateral.
The cost of such appraisal shall be paid by Borrower.

 

Guaranties. Prior to disbursement
of any Loan proceeds, furnish executed guaranties of the Loans in favor of Lender, executed by the guarantors named below, on Lender's
forms, and in the amounts and under the conditions set forth in those guaranties.

 

	 	Names of Guarantors	Amounts
	 	 	 
	 	Medalist Fund II, LLC, a Delaware limited liability company	Unlimited
	 	 	 
	 	William R.  Elliott	$250,000.00
	 	 	 
	 	Thomas E.  Messier	$250,000.00

 

Other Agreements. Comply
with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify
Lender immediately in writing of any default in connection with any other such agreements.

 

Loan Proceeds. Use all Loan
proceeds solely for Borrower's business operations, unless specifically consented to the contrary by Lender in writing.

 

    4 

     

    

 

Taxes, Charges and Liens.
Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental
charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on
which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower's properties,
income, or profits. Provided however, Borrower will not be required to pay and discharge any such assessment, tax, charge, levy, lien
or claim so long as (1) the legality of the same shall be contested in good faith by appropriate proceedings, and (2) Borrower shall have
established on Borrower's books adequate reserves with respect to such contested assessment, tax, charge, levy, lien, or claim in accordance
with GAAP.

 

Performance. Perform and
comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents, and in all
other instruments and agreements between Borrower and Lender, and in all other loan agreements now or in the future existing between Borrower
and any other party. Borrower shall notify Lender immediately in writing of any default in connection with any agreement.

 

Operations. Maintain executive
and management personnel with substantially the same qualifications and experience as the present executive and management personnel;
provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and
prudent manner.

 

Environmental Studies. Promptly
conduct and complete, at Borrower's expense, all such investigations, studies, samplings and testings as may be requested by Lender or
any governmental authority relative to any substance, or any waste or by-product of any substance defined as toxic or a hazardous substance
under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any property or any facility owned,
leased or used by Borrower.

 

Compliance with Governmental
Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable
to the conduct of Borrower's properties, businesses and operations, and to the use or occupancy of the Collateral, including without limitation,
the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance
during any proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so long
as, in Lender's sole opinion, Lender's interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security
or a surety bond, satisfactory to Lender, to protect Lender's interest.

 

Inspection. Permit employees
or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower's other properties and
to examine or audit Borrower's books, accounts, and records and to make copies and memoranda of Borrower's books, accounts, and records.
If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records and computer software
programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify such party
to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records it may request,
all at Borrower's expense.

 

Change of Location. Immediately
notify Lender in writing of any additions to or changes in the location of Borrower's businesses.

 

Title to Assets and Property.
Maintain good and marketable title to all of Borrower's assets and properties.

 

Notice of Default, Litigation
and ERISA Matters. Forthwith upon learning of the occurrence of any of the following, Borrower shall provide Lender with written notice
thereof, describing the same and the steps being taken by Borrower with respect thereto: (1) the occurrence of any Event of Default, or
(2) the institution of, or any adverse determination in, any litigation, arbitration proceeding or governmental proceeding, or (3) the
occurrence of a Reportable Event under, or the institution of steps by Borrower to withdraw from, or the institution of any steps to terminate,
any employee benefit plan as to which Borrower may have any liability.

 

    5 

     

    

 

Other Information. From
time to time Borrower will provide Lender with such other information as Lender may reasonably request.

 

Employee Benefit Plans.
So long as this Agreement remains in effect, Borrower will maintain each employee benefit plan as to which Borrower may have any liability,
in compliance with all applicable requirements of law and regulations.

 

Compliance Certificates.
Unless waived in writing by Lender, provide Lender at least annually, with a certificate executed by Borrower's chief financial officer,
or other officer or person acceptable to Lender, certifying that the representations and warranties set forth in this Agreement are true
and correct as of the date of the certificate and further certifying that, as of the date of the certificate, no Event of Default exists
under this Agreement.

 

Environmental Compliance and
Reports. Borrower shall comply in all respects with any and all Environmental Laws; not cause or permit to exist, as a result of an
intentional or unintentional action or omission on Borrower's part or on the part of any third party, on property owned and/or occupied
by Borrower, any environmental activity where damage may result to the environment, unless such environmental activity is pursuant to
and in compliance with the conditions of a permit issued by the appropriate federal, state or local governmental authorities; shall furnish
to Lender promptly and in any event within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive,
letter or other communication from any governmental agency or instrumentality concerning any intentional or unintentional action or omission
on Borrower's part in connection with any environmental activity whether or not there is damage to the environment and/or other natural
resources.

 

Additional Assurances. Make,
execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, assignments, financing statements,
instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to
perfect all Security Interests.

 

LENDER'S EXPENDITURES. If any action
or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Borrower fails to comply with any provision
of this Agreement or any Related Documents, including but not limited to Borrower's failure to discharge or pay when due any amounts Borrower
is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower's behalf may (but shall not be obligated
to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests,
encumbrances and other claims, at any time levied or placed on any Collateral and paying all costs for insuring, maintaining and preserving
any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the
Note from the date incurred or paid by Lender to the date of repayment by Borrower. All such expenses will become a part of the Indebtedness
and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of
the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity.

 

NEGATIVE COVENANTS. Borrower covenants
and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender:

 

    6 

     

    

 

Indebtedness and Liens.
(1) Except for trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this Agreement, create,
incur or assume indebtedness for borrowed money, including capital leases, (2) sell, transfer, mortgage, assign, pledge, lease, grant
a security interest in, or encumber any of Borrower's assets (except as allowed as Permitted Liens), or (3) sell with recourse any of
Borrower's accounts, except to Lender.

 

Continuity of Operations.
(1) Engage in any business activities substantially different than those in which Borrower is presently engaged, (2) cease operations,
liquidate, merge or restructure as a legal entity (whether by division or otherwise), consolidate with or acquire any other entity, change
its name, convert to another type of entity or redomesticate, dissolve or transfer or sell Collateral out of the ordinary course of business,
or (3) make any distribution with respect to any capital account, whether by reduction of capital or otherwise.

 

Loans, Acquisitions and Guaranties.
(1) Loan, invest in or advance money or assets to any other person, enterprise or entity, (2) purchase, create or acquire any interest
in any other enterprise or entity, or (3) incur any obligation as surety or guarantor other than in the ordinary course of business.

 

Agreements. Enter into any
agreement containing any provisions which would be violated or breached by the performance of Borrower's obligations under this Agreement
or in connection herewith.

 

CESSATION OF ADVANCES. If Lender has
made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation
to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (B) Borrower or any Guarantor dies,
becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there
occurs a material adverse change in Borrower's financial condition, in the financial condition of any Guarantor, or in the value of any
Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor's guaranty
of the Loan or any other loan with Lender; or (E) Lender in good faith deems itself insecure, even though no Event of Default shall have
occurred.

 

RIGHT OF SETOFF. To the extent permitted
by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other
account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However,
this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes
Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts,
and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided
in this paragraph.

 

DEFAULT. Each of the following shall
constitute an Event of Default under this Agreement:

 

Payment Default. Borrower
fails to make any payment when due under the Loan.

 

Other Defaults. Borrower
fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related
Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender
and Borrower.

 

Environmental Default. Failure
of any party to comply with or perform when due any term, obligation, covenant or condition contained in any environmental agreement executed
in connection with any Loan.

 

Default in Favor of Third Parties.
Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement,
in favor of any other creditor or person that may materially affect any of Borrower's or any Grantor's property or Borrower's or any Grantor's
ability to repay the Loans or perform their respective obligations under this Agreement or any of the Related Documents.

 

False Statements. Any warranty,
representation or statement made or furnished to Lender by Borrower or on Borrower's behalf, or made by Guarantor, under this Agreement
or the Related Documents in connection with the obtaining of the Loan evidenced by the Note or any security document directly or indirectly
securing repayment of the Note is false or misleading in any material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.

 

Death or Insolvency. The
dissolution or termination of Borrower's existence as a going business or the death of any member, or a trustee or receiver is appointed
for Borrower or for all or a substantial portion of the assets of Borrower, or Borrower makes a general assignment for the benefit of
Borrower's creditors, or Borrower files for bankruptcy, or an involuntary bankruptcy petition is filed against Borrower and such involuntary
petition remains undismissed for sixty (60) days.

 

Defective Collateralization.
This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to
create a valid and perfected security interest or lien) at any time and for any reason.

 

Creditor or Forfeiture Proceedings.
Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by
any creditor of Borrower or by any governmental agency against any collateral securing the Loan. This includes a garnishment of any of
Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith
dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and
if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for
the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond
for the dispute.

 

Execution; Attachment. Any
execution or attachment is levied against the Collateral, and such execution or attachment is not set aside, discharged or stayed within
thirty (30) days after the same is levied.

 

Change in Zoning or Public Restriction.
Any change in any zoning ordinance or regulation or any other public restriction is enacted, adopted or implemented, that limits or defines
the uses which may be made of the Collateral such that the present or intended use of the Collateral, as specified in the Related Documents,
would be in violation of such zoning ordinance or regulation or public restriction, as changed.

 

Default Under Other Lien Documents.
A default occurs under any other mortgage, deed of trust or security agreement covering all or any portion of the Collateral.

 

Judgment. Unless adequately
covered by insurance in the opinion of Lender, the entry of a final judgment for the payment of money involving more than ten thousand
dollars ($10,000.00) against Borrower and the failure by Borrower to discharge the same, or cause it to be discharged, or bonded off to
Lender's satisfaction, within thirty (30) days from the date of the order, decree or process under which or pursuant to which such judgment
was entered.

 

    7 

     

    

 

Events Affecting Guarantor.
Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent,
or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.

 

Adverse Change. A material
adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Loan is impaired.

 

Insecurity. Lender in good
faith believes itself insecure.

 

EFFECT OF AN EVENT OF DEFAULT. If
any Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents, all commitments and obligations
of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate (including any obligation to
make further Loan Advances or disbursements), and, at Lender's option, all sums owing in connection with the Loans, including all principal,
interest, and all other fees, costs and charges, if any, will become immediately due and payable, all without notice of any kind to Borrower,
except that in the case of an Event of Default of the type described in the "Insolvency" subsection above, such acceleration
shall be automatic and not optional. In addition, Lender shall have all the rights and remedies provided in the Related Documents or available
at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender's rights and remedies shall be cumulative
and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy,
and an election to make expenditures or to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender's
right to declare a default and to exercise its rights and remedies.

 

ADDITIONAL DOCUMENTS. Borrower shall
provide Lender with the following additional documents:

 

Articles of Organization and
Company Resolutions. Borrower has provided or will provide Lender with a certified copy of Borrower's Articles of Organization, together
with a certified copy of resolutions properly adopted by the members of the company, under which the members authorized one or more designated
members or employees to execute this Agreement, the Note and any and all Security Agreements directly or indirectly securing repayment
of the same, and to consummate the borrowings and other transactions as contemplated under this Agreement, and to consent to the remedies
following any default by Borrower as provided in this Agreement and in any Security Agreements.

 

Opinion of Counsel. When
required by Lender, Borrower has provided or will provide Lender with an opinion of Borrower's counsel certifying to and that: (1) Borrower's
Note, any Security Agreements and this Agreement constitute valid and binding obligations on Borrower's part that are enforceable in accordance
with their respective terms; (2) Borrower is validly existing and in good standing; (3) Borrower has authority to enter into this Agreement
and to consummate the transactions contemplated under this Agreement; and (4) such other matters as may have been requested by Lender
or by Lender's counsel.

 

MISCELLANEOUS PROVISIONS. The following
miscellaneous provisions are a part of this Agreement:

 

Amendments. This Agreement,
together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in
this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.

 

Attorneys' Fees; Expenses.
Borrower agrees that if Lender hires an attorney to help enforce this Agreement, Borrower will pay, subject to any limits under applicable
law, Lender's attorneys' fees and all of Lender's other collection expenses, whether or not there is a lawsuit and including without limitation
additional legal expenses for bankruptcy proceedings.

 

Borrower Information. Borrower
consents to the release of information on or about Borrower by Lender in accordance with any court order, law or regulation and in response
to credit inquiries concerning Borrower.

 

Caption Headings. Caption
headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement.

 

Consent to Loan Participation.
Borrower agrees and consents to Lender's sale or transfer, whether now or later, of one or more participation interests in the Loan to
one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more
purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter relating to
the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally waives
any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation interests. Borrower
also agrees that the purchasers of any such participation interests will be considered as the absolute owners of such interests in the
Loan and will have all the rights granted under the participation agreement or agreements governing the sale of such participation interests.
Borrower further waives all rights of offset or counterclaim that it may have now or later against Lender or against any purchaser of
such a participation interest and unconditionally agrees that either Lender or such purchaser may enforce Borrower's obligation under
the Loan irrespective of the failure or insolvency of any holder of any interest in the Loan. Borrower further agrees that the purchaser
of any such participation interests may enforce its interests irrespective of any personal claims or defenses that Borrower may have against
Lender.

 

Governing Law. This Agreement
will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of
Virginia without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the Commonwealth of Virginia.

 

Choice of Venue. If there
is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the applicable courts for the City of Hampton, Commonwealth
of Virginia.

 

Non-Liability of Lender.
The relationship between Borrower and Lender created by this Agreement is strictly a debtor and creditor relationship and not fiduciary
in nature, nor is the relationship to be construed as creating any partnership or joint venture between Lender and Borrower. Borrower
is exercising Borrower's own judgment with respect to Borrower's business. All information supplied to Lender is for Lender's protection
only and no other party is entitled to rely on such information. There is no duty for Lender to review, inspect, supervise or inform Borrower
of any matter with respect to Borrower's business. Lender and Borrower intend that Lender may reasonably rely on all information supplied
by Borrower to Lender, together with all representations and warranties given by Borrower to Lender, without investigation or confirmation
by Lender and that any investigation or failure to investigate will not diminish Lender's right to so rely.

 

Notice of Lender's Breach.
Borrower must notify Lender in writing of any breach of this Agreement or the Related Documents by Lender and any other claim, cause of
action or offset against Lender within thirty (30) days after the occurrence of such breach or after the accrual of such claim, cause
of action or offset. Borrower waives any claim, cause of action or offset for which notice is not given in accordance with this paragraph.
Lender is entitled to rely on any failure to give such notice.

 

    8 

     

    

 

Indemnification of Lender.
Borrower agrees to indemnify, to defend and to save and hold Lender harmless from any and all claims, suits, obligations, damages, losses,
costs and expenses (including, without limitation, Lender's attorneys' fees), demands, liabilities, penalties, fines and forfeitures of
any nature whatsoever that may be asserted against or incurred by Lender, its officers, directors, employees, and agents arising out of,
relating to, or in any manner occasioned by this Agreement and the exercise of the rights and remedies granted Lender under this, as well
as by: (1) the ownership, use, operation, construction, renovation, demolition, preservation, management, repair, condition, or maintenance
of any part of the Collateral; (2) the exercise of any of Borrower's rights collaterally assigned and pledged to Lender hereunder; (3)
any failure of Borrower to perform any of its obligations hereunder; and/or (4) any failure of Borrower to comply with the environmental
and ERISA obligations, representations and warranties set forth herein. The foregoing indemnity provisions shall survive the cancellation
of this Agreement as to all matters arising or accruing prior to such cancellation and the foregoing indemnity shall survive in the event
that Lender elects to exercise any of the remedies as provided under this Agreement following default hereunder. Borrower's indemnity
obligations under this section shall not in any way be affected by the presence or absence of covering insurance, or by the amount of
such insurance or by the failure or refusal of any insurance carrier to perform any obligation on its part under any insurance policy
or policies affecting the Collateral and/or Borrower's business activities. Should any claim, action or proceeding be made or brought
against Lender by reason of any event as to which Borrower's indemnification obligations apply, then, upon Lender's demand, Borrower,
at its sole cost and expense, shall defend such claim, action or proceeding in Borrower's name, if necessary, by the attorneys for Borrower's
insurance carrier (if such claim, action or proceeding is covered by insurance), or otherwise by such attorneys as Lender shall approve.
Lender may also engage its own attorneys at its reasonable discretion to defend Borrower and to assist in its defense and Borrower agrees
to pay the fees and disbursements of such attorneys.

 

Counterparts. This Agreement
may be executed in multiple counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts, taken
together, shall constitute one and the same Agreement.

 

No Waiver by Lender. Lender
shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay
or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender
of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with
that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower,
or between Lender and any Grantor, shall constitute a waiver of any of Lender's rights or of any of Borrower's or any Grantor's obligations
as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender
in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent
may be granted or withheld in the sole discretion of Lender.

 

Notices. Any notice required
to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, if hand delivered, when actually
received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed,
when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown
near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice
to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Borrower agrees
to keep Lender informed at all times of Borrower's current address. Unless otherwise provided or required by law, if there is more than
one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers.

 

Severability. If a court
of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance, that
finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending
provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified,
it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability
of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.

 

Sole Discretion of Lender.
Whenever Lender's consent or approval is required under this Agreement, the decision as to whether or not to consent or approve shall
be in the sole and exclusive discretion of Lender and Lender's decision shall be final and conclusive.

 

Subsidiaries and Affiliates
of Borrower. To the extent the context of any provisions of this Agreement makes it appropriate, including without limitation any
representation, warranty or covenant, the word "Borrower" as used in this Agreement shall include all of Borrower's subsidiaries
and affiliates. Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make
any Loan or other financial accommodation to any of Borrower's subsidiaries or affiliates.

 

Successors and Assigns.
All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall bind Borrower's successors
and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to assign
Borrower's rights under this Agreement or any interest therein, without the prior written consent of Lender.

 

Survival of Representations
and Warranties. Borrower understands and agrees that in making the Loan, Lender is relying on all representations, warranties, and
covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement
or the Related Documents. Borrower further agrees that regardless of any investigation made by Lender, all such representations, warranties
and covenants will survive the making of the Loan and delivery to Lender of the Related Documents, shall be continuing in nature, and
shall remain in full force and effect until such time as Borrower's Indebtedness shall be paid in full, or until this Agreement shall
be terminated in the manner provided above, whichever is the last to occur.

 

Time is of the Essence.
Time is of the essence in the performance of this Agreement.

 

Waive Jury. All parties to this
Agreement hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by any party against any other party.

 

DEFINITIONS. The following capitalized
words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all references
to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement
shall have the meanings attributed to such terms in the Uniform Commercial Code. Accounting words and terms not otherwise defined in this
Agreement shall have the meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date
of this Agreement:

 

    9 

     

    

 

Advance. The word "Advance"
means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf on a line of credit or multiple advance basis
under the terms and conditions of this Agreement.

 

Agreement. The word "Agreement"
means this Business Loan Agreement, as this Business Loan Agreement may be amended or modified from time to time, together with all exhibits
and schedules attached to this Business Loan Agreement from time to time.

 

Borrower. The word "Borrower"
means Medalist Fund II-B, LLC, a Delaware limited liability company and includes all co-signers and co-makers signing the Note and all
their successors and assigns.

 

Collateral. The word "Collateral"
means all property and assets granted as collateral security for a Loan, whether real or personal property, whether granted directly or
indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, collateral mortgage,
deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment
trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security device,
or any other security or lien interest whatsoever, whether created by law, contract, or otherwise.

 

Environmental Laws. The
words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection
of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986,
Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto.

 

ERISA. The word "ERISA"
means the Employee Retirement Income Security Act of 1974, as amended from time to time, and including all regulations and published interpretations
of the act.

 

Event of Default. The words
 "Event of Default" mean individually, collectively, and interchangeably any of the events of default set forth in this Agreement
in the default section of this Agreement.

 

GAAP. The word "GAAP"
means generally accepted accounting principles.

 

Grantor. The word "Grantor"
means each and all of the persons or entities granting a Security Interest in any Collateral for the Loan, and their personal representatives,
successors and assigns.

 

Guarantor. The word "Guarantor"
means any guarantor, surety, or accommodation party of any or all of the Loan, and, in each case, Borrower's successors, assigns, heirs,
personal representatives, executors and administrators of any guarantor, surety, or accommodation party.

 

Guaranty. The word "Guaranty"
means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note.

 

Hazardous Substances. The
words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious
characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored,
disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very
broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under
the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products
or any fraction thereof and asbestos.

 

Indebtedness. The word "Indebtedness"
means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness
and costs and expenses for which Borrower is responsible under this Agreement or under any of the Related Documents.

 

Lender. The word "Lender"
means THE OLD POINT NATIONAL BANK OF PHOEBUS, its successors and assigns.

 

Loan. The word "Loan"
means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced,
including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached
to this Agreement from time to time, and further including any and all subsequent amendments, additions, substitutions, renewals and refinancings
of any of Borrower's Loans.

 

Note. The word "Note"
means the Note dated June 7, 2021 and executed by Medalist Fund II-B, LLC, a Delaware limited liability company in the principal amount
of $4,495,000.00, together with all modifications of and renewals, replacements, and substitutions for the note or credit agreement.

 

Permitted Liens. The words
 "Permitted Liens" mean (1) liens and security interests securing Indebtedness owed by Borrower to Lender; (2) liens for taxes,
assessments, or similar charges either not yet due or being contested in good faith; (3) liens of materialmen, mechanics, warehousemen,
or carriers, or other like liens arising in the ordinary course of business and securing obligations which are not yet delinquent; (4)
purchase money liens or purchase money security interests upon or in any property acquired or held by Borrower in the ordinary course
of business to secure indebtedness outstanding on the date of this Agreement or permitted to be incurred under the paragraph of this Agreement
titled "Indebtedness and Liens"; (5) liens and security interests which, as of the date of this Agreement, have been disclosed
to and approved by the Lender in writing; and (6) those liens and security interests which in the aggregate constitute an immaterial and
insignificant monetary amount with respect to the net value of Borrower's assets.

 

Related Documents. The words
 "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security
agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether
now or hereafter existing, executed in connection with the Loan.

 

Security Agreement. The
words "Security Agreement" mean and include without limitation any agreements, promises, covenants, arrangements, understandings
or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest.

 

Security Interest. The words
 "Security Interest" mean, individually, collectively, and interchangeably, without limitation, any and all types of collateral
security, present and future, whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment,
pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust
receipt, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest
whatsoever whether created by law, contract, or otherwise.

 

    10 

     

    

 

BORROWER ACKNOWLEDGES HAVING READ ALL
THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED JUNE 7, 2021.

 

THIS AGREEMENT IS GIVEN UNDER SEAL AND
IT IS INTENDED THAT THIS AGREEMENT IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW.

 

BORROWER:

 

Medalist Fund II-B, LLC, a

Delaware limited liability company

 

		By:	Medalist Fund II, LLC, a

Delaware limited liability company

		Its:	Sole Member

 

		By:	Medalist Fund Manager, Inc., a

Virginia corporation

		Its:	Manager

 

	By: 	/s/ William Elliott	 
	Name: 	William Elliott	 
	Title: 	Co-President	 

  

LENDER:

 

THE OLD POINT NATIONAL BANK OF PHOEBUS

 

	By:	/s/ Natasha Merz	 (Seal) 
	 	Authorized Officer	 

 

    11
Signature page to Business Loan AgreementDocument

Exhibit 10.1

GMS INC. 2020 EQUITY INCENTIVE PLAN
NONSTATUTORY STOCK OPTION - NOTICE OF GRANT
        
GMS Inc. (the “Company”), a Delaware corporation, hereby grants to the Optionee set forth below (the “Optionee”) an option (the “Option”) to purchase the number of Shares of common stock of the Company (“Shares”) set forth below at the Option Price set forth below, pursuant to the terms and conditions of this Notice of Grant (the “Notice”), the Nonstatutory Stock Option Award Agreement attached hereto as Exhibit A (the “Award Agreement”), and the GMS Inc. 2020 Equity Incentive Plan (the “Plan”).

Date of Grant:    [●] 
Name of Optionee:    [●]
Number of Shares 
Subject to Option:    [●] Shares
Option Price 
(Price Per Share):    $[●]1 per Share
Expiration Date:    10 year anniversary of the Date of Grant.
Vesting:    The Option shall vest pursuant to the terms and conditions set forth in Section 3 of the Award Agreement.
Vesting Start Date:    [●]

The Option shall be subject to the execution and return of this Notice by the Optionee to the Company within 30 days of the date hereof (including by utilizing an electronic signature and/or web-based approval and notice process or any other process as may be authorized by the Company). This Option is a non-qualified stock option and is not intended by the parties hereto to be, and shall not be treated as, an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended. Capitalized terms used but not defined herein shall have the meaning attributed to such terms in the Award Agreement or, if not defined therein, in the Plan, unless the context requires otherwise. By executing this Notice, the Optionee acknowledges that his or her agreement to the covenants set forth in Section 7 of the Award Agreement is a material inducement to the Company in granting this Award to the Optionee. 

This Notice may be executed by facsimile or electronic means (including, without limitation, PDF) and in one or more counterparts, each of which shall be considered an original instrument, but all of which together shall constitute one and the same agreement, and shall become binding when one or more counterparts have been signed by each of the parties hereto and delivered to the other party hereto.

[Signature Page Follows]

1 Option Price to equal fair market value per Share on Date of Grant.

IN WITNESS WHEREOF, the parties hereto have executed this Notice of Grant as of the Date of Grant set forth above. 

GMS INC.

By:    
Name:
Title:

OPTIONEE

By:        
Name:

[Signature Page to Notice of Grant for the GMS Inc. 2020 Equity Incentive Plan Nonqualified Stock Option]

Exhibit A

GMS INC.
2020 EQUITY INCENTIVE PLAN
NON-STATUTORY STOCK OPTION
AWARD AGREEMENT

THIS NONSTATUTORY STOCK OPTION AWARD AGREEMENT (the “Award Agreement”) is entered into by and among GMS Inc. (the “Company”) and the individual set forth on the signature page to that certain Notice of Grant (the “Notice”) to which this Award Agreement is attached.  The terms and conditions of the Option granted hereby, to the extent not controlled by the terms and conditions contained in the Plan, shall be as set forth in the Notice and this Award Agreement.  Capitalized terms used but not defined herein shall have the meaning attributed to such terms in the Notice or, if not defined therein, in the Plan, unless the context requires otherwise.

1.No Right to Continued Employee Status or Consultant Service 

Nothing contained in this Award Agreement shall confer upon the Optionee the right to the continuation of his or her Employee status, or, in the case of a Consultant or Director, to the continuation of his or her service arrangement, or in either case to interfere with the right of the Company or any of its Subsidiaries or other affiliates to Terminate the Optionee.

2.Term of Option 

As a general matter, the Option will expire on the Expiration Date set forth in the Notice and be deemed to have been forfeited by the Optionee. As provided below, the Optionee’s right to exercise the Option may expire prior to the Expiration Date if the Optionee Terminates, including in the event of the Optionee’s Retirement, Disability or death. This Award Agreement shall remain in effect until the Option has fully vested and been exercised or any unexercised portion thereof has been forfeited by the Optionee as provided in this Award Agreement. No portion of this Option shall be exercisable after the Expiration Date, or such earlier date as may be applicable, except as provided herein. 

3.Vesting of Option2 

[Option 1: Subject to the remainder of this Section 3, the Option will vest as to thirty-three and one third percent (33.33%) on each anniversary of the Vesting Start Date, such that the Option shall become fully (100%) vested as of the third anniversary of the Vesting Start Date, subject to the Optionee not having Terminated as of the applicable vesting date.]

2 2020 Plan requires vesting period of at least one year.

[Option 2: Subject to the remainder of this Section 3, the Option shall become fully (100%) vested upon first anniversary of the Vesting Start Date, subject to the Optionee not having Terminated prior to such anniversary.]

If the Optionee incurs a Termination by reason of his or her death or Disability, then the Option shall become fully-vested and exercisable as of the date of such Termination. Except as otherwise provided herein, if the Optionee Terminates for any reason, the portion of the Option that has not vested as of such date shall terminate upon such Termination and be deemed to have been forfeited by the Optionee without consideration. 

4.Exercise 

Prior to the Expiration Date and at any time prior to the Optionee’s Termination, the Optionee may exercise all or a portion of the Option, to the extent vested, by giving notice in the form, to the person, and using the administrative method and the exercise procedures established by the Committee from time to time (including any procedures utilizing an electronic signature and/or web-based approval and notice process), specifying the number of Shares to be acquired. The Optionee’s right to exercise the vested portion of the Option following the date that of the Optionee’s Termination will depend on the reason for such Termination, as described in Sections 5, 6 and 7 below. 

The Optionee must pay to the Company at the time of exercise the amount of the Option Price for the number of Shares covered by the notice to exercise (“Aggregate Option Price”). The Aggregate Option Price for any Shares purchased pursuant to the exercise of an Option shall be paid in any or any combination of the following forms: (v) cash or its equivalent (e.g., a check);  (w) by making arrangements through a registered broker-dealer pursuant to cashless exercise procedures established by the Committee from time to time; (x) if permitted by the Committee in its sole discretion, the transfer, either actually or by attestation, to the Company of Shares held by the Optionee , such transfer to be upon such terms and conditions as determined by the Committee; (y) in the form of other property as determined by the Committee in its sole discretion; or (z) through Share withholding as a result of which the number of Shares issued upon exercise of an Option would be reduced by a number of Shares having a Fair Market Value equal to the Aggregate Option Price. Any Shares transferred to the Company as payment of the Aggregate Option Price shall be valued at their Fair Market Value on the last business day preceding the date of exercise of such Option. If requested by the Committee, the Optionee shall deliver this Award Agreement to the Company, which shall endorse thereon a notation of such exercise and return such Award Agreement to the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an Option and the number of Shares that may be purchased upon exercise shall be rounded down to the nearest number of whole Shares. 

5.Termination of Service 

If the Optionee incurs a Termination for any reason, whether voluntarily or involuntarily, without Cause, other than as a result of the Optionee’s death, Disability or Retirement, then the portion of this Option that has previously vested but has not been exercised shall remain exercisable until, 

and shall terminate upon, the first to occur of (a) the end of the day that is ninety (90) days following the date of the Optionee’s Termination or (b) the Expiration Date. If the Optionee incurs a Termination for Cause, then this Option and all rights attached hereto shall be forfeited and terminate immediately upon the effective date of such Termination for Cause. 

6.Death or Disability of the Optionee 

Upon the Optionee’s Termination by reason of death or Disability, the vested portion of the Option shall remain exercisable until, and shall terminate upon, the first to occur of (a) the end of the day that is one hundred and eighty (180) days after the date of the Optionee’s Termination for death or Disability, as applicable, or (b) the Expiration Date of the Option.  Until such termination of the Option, the vested portion of the Option may, to the extent that this Option has not previously been exercised by the Optionee, be exercised by the Optionee in the case of his or her Disability, or, in the case of death, by the Optionee’s personal representative or the person entitled to the Optionee’s rights under this Award Agreement. 

7.Retirement of the Optionee

(a)    If the Optionee Terminates as a result of the Optionee’s Retirement and the Optionee agrees to be bound by the restrictive covenants set forth in Exhibit B attached hereto (the “Restrictive Covenants”), then (i) the Optionee shall continue to vest in the portion of the Option that was not vested and exercisable as of the date of the Optionee’s Retirement for the [Option 1: three-year] [Option 2: one-year] period following Optionee’s Retirement as if the Optionee’s employment had not terminated, unless the Optionee violates any of the Restrictive Covenants; and (ii) the Option shall terminate upon the Expiration Date, unless the Optionee violates any of the Restrictive Covenants.  If, in the sole discretion of the Company, the Optionee violates one of the Restrictive Covenants, then the Option, whether or not vested, shall be immediately forfeited and cancelled as of the date of such violation.

For purposes of this Award Agreement, “Retirement” shall mean the Optionee’s termination of employment following attainment of age 63 or following attainment of age 60 plus 5 years of service, whichever is the first to occur.

For the avoidance of doubt, the Restrictive Covenants are separate and apart from, and shall be in addition to, any restrictive covenants the Optionee may be subject to pursuant to another agreement or arrangement with the Company.

(b)    If the Optionee Terminates as a result of the Optionee’s Retirement and the Optionee does not agree to be bound by the Restrictive Covenants, then the portion of this Option that has previously vested but has not been exercised shall remain exercisable until, and shall terminate upon, the first to occur of (i) the end of the day that is ninety (90) days following the date of the Optionee’s Retirement or (ii) the Expiration Date.

8.Change in Control

(a)    If (i) a Change in Control occurs while Optionee is employed by, or otherwise providing services to, the Company or one of its Subsidiaries, and (ii) the Option is not assumed by the surviving entity or otherwise equitably converted or substituted in connection with the Change in Control in a manner approved by the Committee, then, as of the effective date of the Change in Control, the Option shall become immediately vested and exercisable.  

(b)    If (i) a Change in Control occurs while Optionee is employed by, or otherwise providing services to, the Company or one of its Subsidiaries, (ii) the Option is assumed by the surviving entity or otherwise equitably converted or substituted in connection with the Change in Control in a manner approved by the Committee, and (iii) within two (2) years after the effective date of the Change in Control, the Optionee’s employment or service is terminated by the Company or one of its Subsidiaries without Cause or, if applicable, the Optionee resigns for Good Reason (as defined herein), then as of Optionee’s Termination, the Option shall be immediately vested and exercisable.  For purposes of this Award Agreement, “Good Reason” shall have the meaning, if any, assigned such term in the employment, severance or similar agreement, if any, between the Optionee and the Company or one of its Subsidiaries, provided, however that if there is no such employment, severance or similar agreement in which “Good Reason” is defined, then “Good Reason” as used herein shall not be operative and shall not apply to the Option.

9.Prohibited Activities 

(a)No Sale or Transfer. Unless otherwise required by law, this Option shall not be (i) sold, transferred or otherwise disposed of, (ii) pledged or otherwise hypothecated or (iii) subject to attachment, execution or levy of any kind, other than by will or by the laws of descent or distribution; provided, however, that any transferred Option will be subject to all of the same terms and conditions as provided in the Plan and this Award Agreement and the Optionee’s estate or beneficiary appointed in accordance with the Plan will remain liable for any withholding tax that may be imposed by any federal, state or local tax authority.

(b)Right to Terminate Option and Recovery. The Optionee understands and agrees that the Company has granted this Option to the Optionee to reward the Optionee for the Optionee’s future efforts and loyalty to the Company and its affiliates by giving the Optionee the opportunity to participate in the potential future appreciation of the Company.  Accordingly, if (a) the Optionee materially violates the Optionee’s obligations relating to the non-disclosure or non-use of confidential or proprietary information under any Restrictive Agreement to which the Optionee is a party, or (b) the Optionee materially breaches or violates the Optionee’s obligations relating to non-disparagement under any Restrictive Agreement to which the Optionee is a party, or (c) the Optionee engages in any activity prohibited by this Section 7 of this Award Agreement, or (d) the Optionee materially breaches or violates any non-solicitation obligations under any Restrictive Agreement to which the Optionee is a party, or (e) the Optionee breaches or violates any non-competition obligations under any Restrictive Agreement to which the Optionee is a party, or (f) the Optionee is convicted of a felony against the Company or any of its affiliates, 

then, in addition to any other rights and remedies available to the Company, the Company shall be entitled, at its option, exercisable by written notice, to terminate the Option (including the vested portion of the Option), or any unexercised portion thereof, which shall be of no further force and effect.  “Restrictive Agreement” shall mean any agreement between the Company or any Subsidiary and the Optionee (including any prior option agreement) that contains non-competition, non-solicitation, non-hire, non-disparagement, or confidentiality restrictions applicable to the Optionee. 
 
(c)Other Remedies. The Optionee specifically acknowledges and agrees that its remedies under this Section 7 shall not prevent the Company or any Subsidiary from seeking injunctive or other equitable relief in connection with the Optionee’s breach of any Restrictive Agreement.  In the event that the provisions of this Section 7 should ever be deemed to exceed the limitation provided by applicable law, then the Optionee and the Company agree that such provisions shall be reformed to set forth the maximum limitations permitted. 

10.No Rights as Stockholder 

The Optionee shall have no rights as a stockholder with respect to the Shares covered by any exercise of this Option until the effective date of issuance of the Shares and the entry of the Optionee’s name as a shareholder of record on the books of the Company following exercise of this Option. 
 
11.Taxation Upon Exercise of Option; Tax Withholding; Parachute Tax Provisions

The Optionee understands that, upon exercise of this Option, the Optionee will recognize income, for Federal, state and local income tax purposes, as applicable, in an amount equal to the amount by which the Fair Market Value of the Shares, determined as of the date of exercise, exceeds the Option Price. The acceptance of the Shares by the Optionee shall constitute an agreement by the Optionee to report such income in accordance with then applicable law and to cooperate with Company and its subsidiaries in establishing the amount of such income and corresponding deduction to the Company and/or its subsidiaries for its income tax purposes. 

The Optionee is responsible for all tax obligations that arise as a result of the exercise of this Option. The Company may withhold from any amount payable to the Optionee an amount sufficient to cover any Federal, state or local withholding taxes which may become required with respect to such exercise or take any other action it deems necessary to satisfy any income or other tax withholding requirements as a result of the exercise this Option. The Company shall have the right to require the payment of any such taxes and require that the Optionee, or the Optionee’s beneficiary, to furnish information deemed necessary by the Company to meet any tax reporting obligation as a condition to exercise or before the issuance of any Shares pursuant to this Option. The Optionee may pay his or her withholding tax obligation in connection with the exercise of the Option, by making (w) a cash payment to the Company, or (x) arrangements through a registered broker-dealer pursuant to cashless exercise procedures established by the Committee from time to time.  In addition, the Committee, in its sole discretion, may allow the Optionee, to pay his or her withholding tax obligation in connection with the exercise of the 

Option, by (y) having withheld a portion of the Shares then issuable to him or her upon exercise of the Option or (z) surrendering Shares, in each case having an aggregate Fair Market Value equal to the amount required to be withheld in accordance with applicable tax requirements, all in accordance with such procedures as the Committee approves.    

    In connection with the grant of this Option, the parties wish to memorialize their agreement regarding the treatment of any potential golden parachute payments as set forth in Exhibit A attached hereto.

12.Securities Laws; Tolling of Exercise Period Expiration 

(a)Upon the acquisition of any Shares pursuant to the exercise of the Option, the Optionee will make such written representations, warranties, and agreements as the Committee may reasonably request in order to comply with securities laws or with this Award Agreement. Optionee hereby agrees not to offer, sell or otherwise attempt to dispose of any Shares issued to the Optionee upon exercise of the Option in any way which would: (x) require the Company to file any registration statement with the Securities and Exchange Commission (or any similar filing under state law or the laws of any other county) or to amend or supplement any such filing or (y) violate or cause the Company to violate the Securities Act, Exchange Act, as amended, the rules and regulations promulgated thereunder, or any other Federal, state or local law, or the laws of any other country. The Company reserves the right to place restrictions on any Shares the Optionee may receive as a result of the exercise of the Option. 

(b)Notwithstanding any provision contained in this Award Agreement or the Plan to the contrary, 

(i)if, following the Optionee’s Termination, all or a portion of the exercise period applicable to the Option occurs during a time when the Optionee cannot exercise the Option without violating (w) an applicable Federal, state or local law, (x) the rules related to a blackout period declared by the Company, (y) any agreed to lock-up arrangement, or (z) other similar circumstance, in each case, the exercise period applicable to the Option will be tolled for the number of days that such prohibitions or restrictions apply, such that the exercise period will be extended by the same number of days as were subject to the prohibitions or restrictions; provided, however, that the exercise period may not be extended due to such tolling past the Expiration Date of the Option as set forth above; and 

(ii)if the Expiration Date is set to occur during a time that the Optionee cannot exercise the Option without violating an applicable Federal, state or local law (and the Option has not previously been exercised or otherwise terminated), the exercise period will be tolled until such time as the violation would no longer apply; provided, however, that the exercise period applicable to the Option in this event will be fifteen (15) days from the date such potential violation is longer applicable. 

13.Modification, Extension and Renewal of Options 

This Award Agreement may not be modified, amended, terminated and no provision hereof may be waived in whole or in part except by a written agreement signed by the Company and the Optionee and no modification shall, without the consent of the Optionee, alter to the Optionee’s material detriment or materially impair any rights of the Optionee under this Award Agreement except to the extent permitted under the Plan. 

14.Notices 

Unless otherwise provided herein, any notices or other communication given or made pursuant to the Notice, this Award Agreement or the Plan shall be in writing and shall be deemed to have been duly given (i) as of the date delivered, if personally delivered (including receipted courier service) or overnight delivery service, with confirmation of receipt; (ii) on the date the delivering party receives confirmation, if delivered by facsimile to the number indicated or by email to the address indicated or through an electronic administrative system designated by the Company; (iii) one (1) business day after being sent by reputable commercial overnight delivery service courier, with confirmation of receipt; or (iv) three (3) business days after being mailed by registered or certified mail, return receipt requested, postage prepaid and addressed to the intended recipient as set forth below: 
 
(a)If to the Company at the address below: 

    GMS Inc. 
100 Crescent Centre Parkway, Suite 800
Tucker, Georgia 30084
Phone:  (800) 392-4619
Attention:  General Counsel
    
(b)If to the Optionee, at the most recent address, facsimile number or email contained in the Company’s records. 

15.Award Agreement Subject to Plan and Applicable Law 

This Option is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of the Plan is attached hereto. Any provision of this Option inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. The Plan shall control in the event there shall be any conflict between the Plan, the Notice, and this Award Agreement, and it shall control as to any matters not contained in this Award Agreement. The Committee shall have authority to make constructions of this Award Agreement, and to correct any defect or supply any omission or reconcile any inconsistency in this Award Agreement, and to prescribe rules and regulations relating to the administration of this Award and other Awards granted under the Plan. 

This Option shall be governed by the laws of the State of Delaware, without regard to the conflicts of law principles thereof, and subject to the exclusive jurisdiction of the courts therein. The Optionee hereby consents to personal jurisdiction in any action brought in any court, federal or state, within the State of Delaware having subject matter jurisdiction in the matter. 

16.Headings and Capitalized Terms 

Unless otherwise provided herein, capitalized terms used herein that are defined in the Plan and not defined herein shall have the meanings set forth in the Plan. Headings are for convenience only and are not deemed to be part of this Award Agreement. Unless otherwise indicated, any reference to a Section herein is a reference to a Section of this Award Agreement.
 
17.Severability and Reformation 

If any provision of this Award Agreement shall be determined by a court of law of competent jurisdiction to be unenforceable for any reason, such unenforceability shall not affect the enforceability of any of the remaining provisions hereof; and this Award Agreement, to the fullest extent lawful, shall be reformed and construed as if such unenforceable provision, or part thereof, had never been contained herein, and such provision or part thereof shall be reformed or construed so that it would be enforceable to the maximum extent legally possible. 

18.Binding Effect 

This Award Agreement shall be binding upon the parties hereto, together with their personal executors, administrator, successors, personal representatives, heirs and permitted assigns. 

19.Entire Agreement 

This Award Agreement, together with the Plan, supersedes all prior written and oral agreements and understandings among the parties as to its subject matter and constitutes the entire agreement of the parties with respect to the subject matter hereof.  If there is any conflict between the Notice, this Award Agreement and the Plan, then the applicable terms of the Plan shall govern. 
 
20.Waiver 

Waiver by any party of any breach of this Award Agreement or failure to exercise any right hereunder shall not be deemed to be a waiver of any other breach or right whether or not of the same or a similar nature. The failure of any party to take action by reason of such breach or to exercise any such right shall not deprive the party of the right to take action at any time while or after such breach or condition giving rise to such rights continues. 

Exhibit A

PARACHUTE TAX PROVISIONS

This Exhibit A sets forth the terms and provisions applicable to the Optionee pursuant to the provisions of Section 9 of the Award Agreement.  This Exhibit A shall be subject in all respects to the terms and conditions of the Award Agreement.  

(a)    To the extent that the Optionee, would otherwise be eligible to receive a payment or benefit pursuant to the terms of this Award Agreement, any employment or other agreement with the Company or any Subsidiary or otherwise in connection with, or arising out of, the Optionee’s employment with the Company or a change in ownership or effective control of the Company or of a substantial portion of its assets (any such payment or benefit, a “Parachute Payment”), that a nationally recognized United States public accounting firm selected by the Company (the “Accountants”) determines, but for this sentence would be subject to excise tax imposed by Section 4999 of the Code (the “Excise Tax”), subject to clause (c) below, then the Company shall pay to the Optionee whichever of the following two alternative forms of payment would result in the Optionee’s receipt, on an after-tax basis, of the greater amount of the Parachute Payment notwithstanding that all or some portion of the Parachute Payment may be subject to the Excise Tax: (1) payment in full of the entire amount of the Parachute Payment (a “Full Payment”), or (2) payment of only a part of the Parachute Payment so that the Optionee receives the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”).

(b)    If a reduction in the Parachute Payment is necessary pursuant to clause (a), then the reduction shall occur in the following order:  (1) cancellation of acceleration of vesting on any equity awards for which the exercise price exceeds the then fair market value of the underlying equity; (2) reduction of cash payments (with such reduction being applied to the payments in the reverse order in which they would otherwise be made, that is, later payments shall be reduced before earlier payments); and (3) cancellation of acceleration of vesting of equity awards not covered under (1) above; provided, however, that in the event that acceleration of vesting of equity awards is to be cancelled, acceleration of vesting of full value awards shall be cancelled before acceleration of options and stock appreciation rights and within each class such acceleration of vesting shall be cancelled in the reverse order of the date of grant of such equity awards, that is, later equity awards shall be canceled before earlier equity awards; and provided, further, that to the extent permitted by Code Section 409A and Sections 280G and 4999 of the Code, if a different reduction procedure would be permitted without violating Code Section 409A or losing the benefit of the reduction under Sections 280G and 4999 of the Code, the Optionee may designate a different order of reduction.

(c)    For purposes of determining whether any of the Parachute Payments (collectively the “Total Payments”) will be subject to the Excise Tax and the amount of such Excise Tax, (i) the Total Payments shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “parachute payments” in excess of the “base amount” (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, 

unless and except to the extent that, in the opinion of the Accountants, such Total Payments (in whole or in part):  (1) do not constitute “parachute payments,” including giving effect to the recalculation of stock options in accordance with Treasury Regulation Section 1.280G-1, Q&A 33, (2) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the “base amount” or (3) are otherwise not subject to the Excise Tax, and (ii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Accountants in accordance with the principles of Section 280G of the Code.

(d)    All determinations hereunder shall be made by the Accountants, which determinations shall be final and binding upon the Company and the Optionee.

(e)    The federal tax returns filed by the Optionee (and any filing made by a consolidated tax group which includes the Company) shall be prepared and filed on a basis consistent with the determination of the Accountants with respect to the Excise Tax payable by the Optionee.  The Optionee shall make proper payment of the amount of any Excise Tax, and at the request of the Company, provide to the Company true and correct copies (with any amendments) of his or her federal income tax return as filed with the Internal Revenue Service, and such other documents reasonably requested by the Company, evidencing such payment (provided that the Optionee may delete information unrelated to the Parachute Payment or Excise Tax and provided, further that the Company at all times shall treat such returns as confidential and use such return only for purpose contemplated by this paragraph).  

(f)    In the event of any controversy with the Internal Revenue Service (or other taxing authority) with regard to the Excise Tax, the Optionee shall permit the Company to control issues related to the Excise Tax (at its expense), provided that such issues do not potentially materially adversely affect the Optionee but the Optionee shall control any other issues.  In the event that the issues are interrelated, the Optionee and the Company shall in good faith cooperate so as not to jeopardize resolution of either issue.  In the event of any conference with any taxing authority as to the Excise Tax or associated income taxes, the Optionee shall permit the representative of the Company to accompany the Optionee, and the Optionee and his representative shall cooperate with the Company and its representative.

(g)    The Company shall be responsible for all charges of the Accountants.

(h)    The Company and the Optionee shall promptly deliver to each other copies of any written communications, and summaries of any verbal communications, with any taxing authority regarding the Excise Tax covered by this Exhibit A.

(i)    Nothing in this Exhibit A is intended to violate the Sarbanes-Oxley Act of 2002 and to the extent that any advance or repayment obligation hereunder would do so, such obligation shall be modified so as to make the advance a nonrefundable payment to the Optionee and the repayment obligation null and void.

(j)    Notwithstanding the foregoing, any payment or reimbursement made pursuant to this Exhibit A shall be paid to the Optionee promptly and in no event later than the end of the calendar year next following the calendar year in which the related tax is paid by the Optionee or where no taxes are required to be remitted, the end of the Optionee’s calendar year following the Optionee’s calendar year in which the audit is completed or there is a final and nonappealable settlement or other resolution of the litigation.

(k)    The provisions of this Exhibit A shall survive the termination of the Optionee’s employment with the Company for any reason and the termination of the Award Agreement.

Exhibit B

RESTRICTIVE COVENANTS

This Exhibit B contains the Restrictive Covenants applicable to the Optionee if the Optionee agrees to be bound by the Restrictive Covenants as a condition to receipt of the benefits set forth in Section 7(a) of the Award Agreement.  

1.    Unauthorized Disclosure.  The Optionee agrees and understands that in the Optionee’s position with the Company, the Optionee has and shall be exposed to and has and shall receive information relating to the confidential affairs of the Company and its direct and indirect subsidiaries and affiliates (the “Company Group”), including, without limitation, technical information, intellectual property, business and marketing plans, strategies, customer information, software, other information concerning the products, promotions, development, financing, expansion plans, business policies and practices of the Company Group and other forms of information considered by the Company Group to be confidential or in the nature of trade secrets (including, without limitation, ideas, research and development, know-how, formulas, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals) (collectively, the “Confidential Information”).  Confidential Information shall not include information that is generally known to the public or within the relevant trade or industry other than due to the Optionee’s violation of this Section 1 of Exhibit B or disclosure by a third party who is known by the Optionee to owe the Company an obligation of confidentiality with respect to such information.  The Optionee agrees that at all times during the Optionee’s employment with the Company and thereafter, the Optionee shall not disclose such Confidential Information, either directly or indirectly, to any individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof (each a “Person”) without the prior written consent of the Company and shall not use or attempt to use any such information in any manner other than in connection with the Optionee’s employment with the Company, unless required by law to disclose such information, in which case the Optionee shall provide the Company with written notice of such requirement as far in advance of such anticipated disclosure as possible.  This confidentiality covenant has no temporal, geographical or territorial restriction.  The Optionee understands and acknowledges that nothing in this section limits the Optionee’s ability to report possible violations of federal, state, or local law or regulation to any governmental agency or entity; to communicate with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agencies in connection with any charge or complaint, whether filed by the Optionee, on the Optionee’s behalf, or by any other individual; or to make other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation, and the Optionee shall not need the prior authorization of the Company to make any such reports or disclosures and shall not be required to notify the Company that the Optionee has made such reports or disclosures.  In addition, and anything herein to the contrary notwithstanding, the Optionee is hereby given notice that the Optionee shall not be criminally or civilly liable under any federal or state trade secret law for disclosing a trade secret (as defined by 18 U.S.C. § 1839) in confidence to a federal, state, or 

local government official, either directly or indirectly, or to an attorney, in either event solely for the purpose of reporting or investigating a suspected violation of law; or disclosing a trade secret (as defined by 18 U.S.C. § 1839) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
2.    Return of Property.  Upon termination of the Optionee’s employment with the Company, the Optionee shall promptly supply to the Company all property, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical data and any other tangible product or document which has been produced by, received by or otherwise submitted to the Optionee during or prior to the Optionee’s employment with the Company, and any copies thereof in the Optionee’s (or reasonably capable of being reduced to the Optionee’s) possession; provided that nothing in this Award Agreement or elsewhere shall prevent the Optionee from retaining and utilizing: documents relating to the Optionee’s personal benefits, entitlements and obligations; documents relating to the Optionee’s personal tax obligations; the Optionee’s desk calendar, rolodex, and the like; and such other records and documents as may reasonably be approved by the Company. To the extent that the Optionee has electronic files or information in the Optionee’s possession or control that belong to the Company or contain Confidential Information (specifically including but not limited to electronic files or information stored on personal computers, mobile devices, electronic media, or in cloud storage), on or prior to Optionee’s Termination, or at any other time the Company requests, the Optionee shall (i) provide the Company with an electronic copy of all of such files or information (in an electronic format that readily accessible by the Company); (ii) after doing so, delete all such files and information, including all copies and derivatives thereof, from all non-Company-owned computers, mobile devices, electronic media, cloud storage, and other media, devices, and equipment, such that such files and information are permanently deleted and irretrievable; and (iii) provide a written certification to the Company that the required deletions have been completed and specifying the files and information deleted and the media source from which they were deleted.  
3.    Non-Competition. By and in consideration of the Company’s grant of the Option, and in further consideration of the Optionee’s exposure to the Confidential Information of the Company Group, the Optionee agrees that the Optionee shall not, during Optionee’s employment with the Company and for twelve (12) months following the Optionee’s Termination (the “Restriction Period”), directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of, or be connected in any manner with, including, without limitation, holding any position as a stockholder, director, officer, consultant, independent contractor, employee, partner, or investor in, any Restricted Enterprise (as defined below); provided, that in no event shall ownership of one percent or less of the outstanding securities of any class of any issuer whose securities are registered under the Securities Exchange Act of 1934, as amended, standing alone, be prohibited by this Section 3 of Exhibit B, so long as the Optionee does not have, or exercise, any rights to manage or operate the business of such issuer other than rights as a stockholder thereof.  For purposes of this paragraph, “Restricted Enterprise” shall mean any Person that is actively engaged in any geographic area in which any member of the Company Group operates or markets in any business which is in material competition with the business of any member of the Company Group.  During the 

Restriction Period, upon request of the Company, the Optionee shall notify the Company of the Optionee’s then-current employment status.  
4.    Non-Solicitation of Employees.  During the Restriction Period, the Optionee shall not directly or indirectly contact, induce or solicit (or assist any Person to contact, induce or solicit) for employment any person who is, or within twelve (12) months prior to the date of such solicitation was, an employee of any member of the Company Group other than an employee (a) whose employment was involuntarily terminated by a member of the Company Group after the Optionee’s Termination and (b) who has not been an employee of the Company Group for six months or longer.  The foregoing restriction shall not apply to the placement of general advertisements or other notices of employment opportunities that are not targeted, directly or indirectly, to any current or former employee of the Company otherwise covered by the scope of such restriction so long as the Optionee is not personally involved in the recruitment or hiring of any such employee subsequent to such general advertisement or other notice.
5.    Interference with Business Relationships.  During the Restriction Period (other than in connection with carrying out the Optionee’s responsibilities for the Company Group), the Optionee shall not directly or indirectly induce or solicit (or assist any Person to induce or solicit) any customer or client of any member of the Company Group to terminate its relationship or otherwise cease doing business in whole or in part with any member of the Company Group, or directly or indirectly interfere with (or assist any Person to interfere with) any material relationship between any member of the Company Group and any of their customers or clients so as to cause harm to any member of the Company Group.
6.    Extension of Restriction Period.  The Restriction Period shall be tolled for any period during which the Optionee is in breach of any of Sections 3, 4 or 5 of this Exhibit B.
7.    Proprietary Rights.  The Optionee shall disclose promptly to the Company any and all inventions, discoveries, and improvements (whether or not patentable or registrable under copyright or similar statutes), and all patentable or copyrightable works, initiated, conceived, discovered, reduced to practice, or made by the Optionee, either alone or in conjunction with others, during the Optionee’s employment with the Company and related to the business or activities of the Company Group (the “Developments”).  Except to the extent any rights in any Developments constitute a work made for hire under the U.S. Copyright Act, 17 U.S.C. § 101 et seq. that are owned ab initio by a member of the Company Group, the Optionee assigns and agrees to assign all of the Optionee’s right, title and interest in all Developments (including all intellectual property rights therein) to the Company or its nominee without further compensation, including all rights or benefits therefor, including without limitation the right to sue and recover for past and future infringement.  The Optionee acknowledges that any rights in any Developments constituting a work made for hire under the U.S. Copyright Act, 17 U.S.C § 101 et seq. are owned upon creation by the Company as the Optionee’s employer.  Whenever requested to do so by the Company, the Optionee shall execute any and all applications, assignments or other instruments which the Company shall deem necessary to apply for and obtain trademarks, patents or copyrights of the United States or any foreign country or otherwise protect the interests of the Company Group.  These obligations shall continue beyond the end of 

the Optionee’s employment with the Company with respect to inventions, discoveries, improvements or copyrightable works initiated, conceived or made by the Optionee while employed by the Company, and shall be binding upon the Optionee’s employers, assigns, executors, administrators and other legal representatives.  If the Company is unable for any reason, after reasonable effort, to obtain the Optionee’s signature on any document needed in connection with the actions described in this Section 7 of Exhibit B, the Optionee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as the Optionee’s agent and attorney in fact to act for and on the Optionee’s behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of this Section 7 of Exhibit B with the same legal force and effect as if executed by the Optionee.
8.    Remedies.  The Optionee agrees that any breach of the terms of the Restrictive Covenants contained in this Exhibit B would result in irreparable injury and damage to the Company Group for which the Company would have no adequate remedy at law; the Optionee therefore also agrees that in the event of said breach or any threat of breach, the Company shall be entitled to an immediate injunction and restraining order to prevent such breach and/or threatened breach and/or continued breach by the Optionee and/or any and all Persons acting for and/or with the Optionee, without having to prove damages, in addition to any other remedies to which the Company may be entitled at law or in equity.  The terms of this paragraph shall not prevent the Company from pursuing any other available remedies for any breach or threatened breach hereof, including, without limitation, the recovery of damages from the Optionee.  The Optionee and the Company further agree that the provisions of the covenants contained in this Exhibit B are reasonable and necessary to protect the businesses of the Company Group because of the Optionee’s access to Confidential Information and the Optionee’s material participation in the operation of such businesses.  In the event that the Optionee willfully and materially breaches any of the covenants set forth in this Exhibit B, then in addition to any injunctive relief, the Optionee shall forfeit the Option in its entirety, whether vested or unvested.
9.    Applicable Law; Forum Selection; Consent to Jurisdiction.  The Company and the Optionee agree that, notwithstanding anything in this Award Agreement to the contrary, this Exhibit B shall be governed by and construed and interpreted in accordance with the laws of the State of Georgia without giving effect to its conflicts of law principles.  The Optionee agrees that the exclusive forum for any action to enforce this Exhibit B, as well as any action relating to or arising out of this Exhibit B, shall be the federal and state courts of the State of Georgia.  With respect to any such court action, the Optionee hereby irrevocably submits to the personal jurisdiction of such courts.  The Company and the Optionee hereto further agree that the courts listed above are convenient forums for any dispute that may arise herefrom and that neither party shall raise as a defense that such courts are not convenient forums.  
10.    Non-Disparagement. From and after the date of grant and following the Optionee’s Termination, the Optionee agrees not to make any statement, whether direct or indirect, whether true or false, that is intended to become public, or that should reasonably be expected to become public, and that criticizes, ridicules, disparages or is otherwise derogatory of the Company, any of its subsidiaries, affiliates, employees, officers, directors or stockholders.  This Section 10 of 

Exhibit B shall not in any way limit any of the protected rights contained in the last two sentences of Section 1 of Exhibit B of this Award Agreement, or the Optionee’s ability to provide truthful testimony pursuant to a subpoena, court order or as otherwise required by law.
11.    Survival. The obligations of the Optionee under this Exhibit B shall survive the termination of this Award Agreement and the Optionee’s Termination for the periods expressly designated in this Exhibit B or, if no such period is designated, for the maximum period permissible under applicable law.

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