8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 27, 2021

Medalist Diversified REIT, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Maryland	001-38719	47-5201540
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

1051 E. Cary Street Suite 601

James Center Three

Richmond, VA, 23219

(Address of principal executive offices)

(804) 344-4435

(Registrant’s telephone number, including area code)

None

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging Growth Company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of each Exchange on  Which Registered	Trading Symbol(s)
Common Stock, $0.01 par value	Nasdaq Capital Market	MDRR
8.0% Series A Cumulative Redeemable Preferred Stock, $0.01 par value	Nasdaq Capital Market	MDRRP

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

In connection with the acquisition of the Greenbrier Business Center property disclosed below, a wholly owned subsidiary of the operating partnership of Medalist Diversified REIT, Inc. (the “Company”), assumed the mortgage loan secured by the Greensboro Business Center property (the “Loan”) pursuant to that certain Assignment, Assumption and Release Agreement, dated as of August 27, 2021 (the “Assumption Agreement”). The Loan has a principal balance of $4,495,000 which matures on July 1, 2026 and bears interest at a rate of 4.0% per annum. The Loan is evidenced by a promissory note made by the Company for the benefit of The Old Point National Bank of Phoebus (the “Note”).

The Loan Agreement, dated as of June 7, 2021, assumed by the Company setting forth the terms of the Loan contains provisions, representations, warranties, covenants and indemnities that are customary and standard for secured debt on a commercial property. The foregoing descriptions of the Assumption Agreement, Note and Loan Agreement are qualified in their entirety by reference to the Assumption Agreement, Note and Loan Agreement, copies of which is filed as Exhibit 10.1, 10.2 and 10.3 to this Current Report on Form 8-K and is incorporated by reference in this Item 1.01.

ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.

Greenbrier Business Center Acquisition

On August 27, 2021, the Company, through its operating partnership, closed on its acquisition of the Greenbrier Business Center property, a mixed-use industrial/office property totaling approximately 89,290 square feet of gross leasable area located in Chesapeake, Virginia, for a purchase price of $7,250,000, exclusive of closing costs. The Greenbrier Business Center property was previously owned by Medalist Fund II-B, LLC, a Virginia limited liability company, which is also managed by the Company’s external manager.

Hampton Inn Sale

On August 31, 2021, a wholly owned subsidiary of the Company and PMI Greensboro, LLC closed on the sale of the Greensboro Airport Hampton Inn property, a hotel located in Greensboro, North Carolina, for a sales price of $12,900,000. The Greensboro Airport Hampton Inn was sold to an unaffiliated purchaser.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

Exhibit No.	Description
10.1	Assignment, Assumption and Assumption Agreement, dated as of August 27, 2021.
10.2	Promissory Note, made as of June 7, 2021
10.3	Loan Agreement, dated as of June 7, 2021
104	Cover Page Interactive Data File (embedded within the Inline XBRL Document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MEDALIST DIVERSIFIED REIT, INC.
Dated: September 2, 2021	By:	/s/ Thomas E. Messier
		Thomas E. Messier
		Chief Executive Officer, Chairman of the Board, Treasurer and Secretary

EX-10.1

Exhibit 10.1

ASSIGNMENT, ASSUMPTION AND RELEASE AGREEMENT

THIS ASSIGNMENT, ASSUMPTION AND RELEASE AGREEMENT (this “Agreement”) is made as of this 31st day of August, 2021, by and among MEDALIST FUND II-B, LLC, a Delaware limited liability company, whose address is 1051 E. Cary Street, Suite 601, Richmond, Virginia 23219 (the "Seller"), THOMAS E. MESSIER, whose address is 207 Massle Road, Richmond, Virginia 23221, WILLIAM R. ELLIOTT, whose address is 9 Albemarle Avenue, Richmond, Virginia 23226, and Medalist Fund II, LLC, whose address is 1051 E. Cary Street, Suite 601, 23226 (collectively, the “Guarantors”), MDR GREENBRIER, LLC, a Delaware limited liability company, whose address is 1051 E. Cary Street, Suite 601, 23226 (“MDR” and/or the “Buyer”), and THE OLD POINT NATIONAL BANK OF PHOEBUS, whose address is 1 West Mellen Street, Hampton, Virginia 23663 (the “Lender”).

RECITALS

A. WHEREAS, pursuant to the provisions of that certain Commitment Letter dated June 4, 2021, issued by the Lender and accepted by Seller, as amended (the “Commitment”), and that certain Business Loan Agreement dated June 7, 2021 between Lender and Seller (the “Loan Agreement”), Lender made a loan in the original amount of FOUR MILLION, FOUR HUNDRED NINTY FIVE THOUSAND AND NO/100 DOLLARS ($4,495,000.00) to Seller (the “Loan”); and

B.       WHEREAS, Seller's obligation to repay the Loan is evidenced by that certain promissory note dated June 7, 2021 in the original principal amount of FOUR MILLION, FOUR HUNDRED NINTY FIVE THOUSAND AND NO/100 DOLLARS ($4,495,000.00) made by Seller and payable to the order of Lender (the “Note”); and

C.       WHEREAS, the Note is secured by that certain Deed of Trust, dated June 7, 2021, from Seller, as Grantor, to Donald S. Buckless, a Virginia resident, whose business address is 101 East Queen Street, Hampton, Virginia 23669, and Thomas A. Burcher, a Virginia resident, whose business address is 1 East Queens Way, Hampton, Virginia 23669, as Trustees, either of whom may act (the “Lender’s Trustees”), for the benefit of Lender, recorded in the Clerk’s Office of the Circuit Court of Chesapeake, Virginia (the “Clerk’s Office”), in Deed Book 10386, at page 1207 (the "Deed of Trust") on that certain land and the improvements thereon located at 1244 Executive Blvd., Chesapeake, Virginia 23320 (the "Property"), as more particularly described in Exhibit A to the Deed of Trust; and

D.       WHEREAS, repayment of the Note is further secured by an Assignment of Rents, dated June 7, 2021, from the Seller as Grantor, to the Lender, for the benefit of the Lender, recorded in the Clerk’s Office in Deed Book 10386, at page 1225 (the “Assignment of Leases”); and

E.       WHEREAS, repayment of the Note is further secured by a Security Agreement dated June 7, 2021 from the Seller, as Debtor, to the Lender, for the benefit of the Lender and appropriately filed UCC-1 Financing Statements, filed for record in the Delaware Department of State U.C.C. Filing Section, as U.C.C. Initial Filing No. 2021 4522299 on June 10, 2021, in the Chesapeake Circuit Court Clerk’s Office at Deed Book 02021, at page 0635 as Instrument Number 00635, and with the Virginia State Corporation Commission (the “SCC”) as UCC-1 Statement Number 20210617063524 (collectively, the “Security Agreement”); and

F.       WHEREAS, the Guarantors guaranteed payment of the Note in those certain Commercial Guarantees, dated June 7, 2021 (the “Guarantees”); and

G.       WHEREAS, the Seller and Lender executed that certain Business Loan Agreement, dated June 7, 2021 (the “Loan Agreement”); and

H.       WHEREAS, the Seller, the Guarantors and the Lender executed that certain Omnibus Addendum to the Loan Documents, dated June 7, 2021 (the “Addendum”); and

I.       WHEREAS, the Seller and Lender executed that certain Hazardous Substances Certificate and Indemnity Agreement, dated June 7, 2021 (the “Hazardous Substances Indemnity”); and

J.       WHEREAS, the Seller and Lender have executed other documents in connection with the loan which, together with the documents listed above, are herein referred to, individually and collectively, as the “Loan Documents”; and

M.       WHEREAS, Seller has sold and conveyed, or is about to sell and convey, the Property to Buyer, and Buyer has requested that Lender permit Buyer to assume the Loan and all the obligations and liabilities of Seller under the Commitment, the Loan Agreement, the Note, the Deed of Trust, the Assignment of Leases, the Guarantees, the Security Agreement, the Loan Agreement, the Addendum, the Hazardous Substances Indemnity and the other Loan Documents; and

N.       WHEREAS, Lender and Lender’s Trustees have agreed to such sale and the conveyance from Seller to Buyer and to such assumption by Buyer subject to the provisions of this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises, the promises and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller, Buyer, Lender, Guarantors and Lender’s Trustees agree as follows:

1.                  Status of Note and Escrow Account. As of the date of this Agreement, the outstanding principal balance of the Note is $ , the interest rate on the Note is 4.90%, and accrued and unpaid late charges due from the Seller total $0.00. Interest is paid through . Buyer, Seller and Guarantors agree that such amounts are due and payable without defense, setoff or counterclaim. As of the date of , the sum of $__________ is being held in the Escrow Account.

2.                  Consent to Transfer. The Lender and its Trustees each consent to the transfer and sale of the Property to Buyer subject to the terms of this Agreement, but do not otherwise consent to any other or further assignment or transfer of the Property. Only with the express consent of the Lender shall the Buyer finance the purchase of the Property and place a lien or liens thereon to secure such financing, which if approved, any lien will be at all times junior to the lien of the Deed of Trust. The consent of the Lender to the transfer of the Property to Buyer shall not otherwise constitute a waiver of any provisions of the Loan Documents.

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3.                  Assumption. Buyer unconditionally assumes the Loan and assumes and agrees to perform, be bound by, be liable for, and be subject to all the obligations and liabilities of Seller under the Loan Documents. Buyer further unconditionally assumes and agrees to pay any and all indebtedness now due or which may become due under the Note or the other Loan Documents. Each reference in any Loan Document to Seller also shall be deemed to be a reference to Buyer, and Buyer shall hereafter be deemed the Grantor under the Deed of Trust.

In the event of a default by Buyer under the Loan Documents or this Agreement, Lender shall be entitled to exercise all remedies available to it or them under the terms of this Agreement and the Loan Documents, as well as all other remedies available to Lender at law or in equity.

4.                  Affirmation. Except as modified in this Agreement, all terms of the Loan Documents shall remain unchanged and are ratified and affirmed by all parties to this Agreement. Buyer and Seller acknowledge and agree that the execution, delivery and performance of this Agreement shall not constitute a novation of any Loan Document and that the Loan Documents all continue in full force and effect.

5.                  Limited Release of Seller. In reliance upon the representations, warranties and covenants set forth herein by Seller, Buyer, Guarantors, Lender hereby releases Seller from any liability for repayment of the principal and interest due under the terms of the Loan Documents, and any and all other borrower obligations under the Loan Documents, to the extent such obligations arise from matters first occurring from and after the date of this Agreement.

6.                  Assumption Fees and Other Fees and Costs. In consideration of the consent of Lender to the provisions of this Agreement, and to compensate Lender for the time spent in obtaining approval of the assumption of the Loan by Buyer, Lender or its representatives or counsel shall receive reimbursement for all of its out-of-pocket costs and expenses in connection with the negotiation and preparation of this Agreement and the documents related to such assumption, including its attorneys’ fees and out-of-pocket costs and expenses. Payment of these amounts must be made upon the closing of the transfer of the Property from Seller to Buyer. The consent of Lender and to the transfer of the Property is expressly conditional upon the payment of such amounts. Such amounts shall be paid by Buyer in accordance with the provisions of the sales contract between Buyer and Seller.

7.                  Property Subject to Lien. The Property shall remain subject to the lien created by the Deed of Trust, and nothing contained in this Agreement shall affect or be construed to affect such lien or the priority of such lien over other liens, charges or encumbrances affecting the Property. Seller agrees that Lender may grant any extension, forbearance or other indulgence with respect to the Loan Documents, or may release any security therefor or any person liable therefor without notice to or consent of Seller.

8.                  Assignment of Leases and Rents. In the event that the Buyer executes any lease agreement with respect to the Property, Buyer will provide Lender with a copy of any executed lease or leases covering all or any portion of the Property and will execute a Collateral Assignment of Leases and Rents for the said leases referenced above.

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9.                  Buyer's Evaluation. Buyer represents and warrants that it has made an independent inspection and evaluation of the Property and the business being conducted at the Property and that its decision to purchase the Property and assume the Loan is based upon that independent evaluation and not upon any representations or inducements by Lender.

10.              Warranties as to Existing Compliance of Property with Environmental Regulations. Seller and Buyer each represents and warrants that, to the best of their knowledge, after due inquiry and investigation, the Property is now, and at all times since the date of the Loan has been, in full compliance with all federal, state and local environmental laws, rules, regulations and ordinances, and that, to the best of their knowledge, as of the date of this Agreement there are no hazardous materials, substances, wastes or other environmentally regulated substances (including, without limitation, any materials containing asbestos) located on, in or under the Property or used in connection therewith, except such as are in compliance with all applicable laws, rules, regulations and ordinances.

11.              Future Compliance of Property with Environmental Regulations. Buyer agrees that during the term of the Note and any extensions thereof, that Buyer and any tenant of the Property shall comply fully with all applicable local, state and federal laws, rules, regulations and ordinances related to land use, zoning or protection of the environment, or to the generation, use, storage, removal, transportation, handling or disposal of toxic materials or substances, as such substances may be identified or defined by such laws, rules, regulations and/or ordinances from time to time. Buyer agrees that it shall not cause or permit to exist, as a result of any intentional or unintentional act or omission on its part or on the part of any other tenant or occupant of the Property, a releasing, spilling, leaking, pumping, emitting, pouring, emptying or dumping of a toxic material, hazardous substance or hazardous waste into air or waters, wildlife or other resources. Buyer agrees to notify Lender promptly of any event or occurrence, whether occurring on the Property or on adjacent or nearby property, which poses a risk of contamination by any hazardous substance, toxic material, hazardous waste or similar substance or materials (as defined in or regulated by any applicable federal, state or local law, rule, regulation or ordinance) to the Property or such adjacent or nearby property or of air or water on, under or near the Property or such adjacent or nearby property.

12.              Indemnification. Seller and Buyer each acknowledges that Lender is relying upon their representations, warranties and covenants as set forth above in consenting to the assumption of the Loan by Buyer. Seller and Buyer agree, jointly and severally, to indemnify, defend and hold Lender harmless against any loss that Lender suffers, including but not limited to penalties, fines, claims, costs (including clean-up costs) and other expenses incurred by Lender (including the expenses of environmental consultants) as a result of any inaccuracy or any breach of the representations, warranties or covenants set forth above; provided, however, that Seller shall not have any liability for the violation by Buyer of any representations, warranties or covenants provided in Section 10 of this Agreement, nor for any losses arising out of or caused by the gross negligence or willful misconduct of Lender or its employees or agents. The indemnity obligations of this Section shall not be limited by the term of the Note or any extensions thereof, but shall continue, survive and remain in full force and effect notwithstanding payment in full and satisfaction of the Note and the Deed of Trust or the foreclosure or acceptance of a deed in lieu of foreclosure with respect to the Property.

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13.              Guarantors’ Consent. Guarantors hereby consent to Buyer's assumption of the Loan and payment of any and all indebtedness now due or which may become due under the Note or the other Loan Documents, and Buyer's agreement to perform, be bound by, be liable for, and be subject to all the obligations and liabilities of Seller under the Loan Documents.

Guarantors further acknowledge and agree that the execution, delivery and performance of this Agreement shall not constitute a novation of the Guarantees and that the Guarantees continue in full force and effect, subject to the release contained in Section 5. Guarantors also agree that Lender may grant any extension, forbearance or other indulgence with respect to the Loan or the Loan Documents, or may release any security therefor or any person liable therefor without notice to or consent of Guarantors.

14.              Buyer Unaffected by Default of Seller or Guarantors. Lender hereby agrees that no act or omission of Seller or Guarantors that does or would constitute a default or an event of default by Seller or Guarantors under the Loan Documents will be considered a default or an event of default by Buyer under the Loan Documents.

15.              Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without reference to conflict of laws principles.

16.              No Waiver. No waiver of a right, interest or remedy of Lender under this Agreement or any Loan Document shall be enforceable unless it is in writing and signed by Lender. Except as specifically provided in writing signed by the party seeking enforcement thereof, the failure to enforce or the waiver of any term, breach or default of this Agreement or any Loan Document shall not constitute the waiver of such term, breach or default at any subsequent time or under any other circumstances and shall not give rise to any restriction on or condition to the prompt, full and strict enforcement of this Agreement or such Loan Document thereafter.

17.              Notices. Any notice required or permitted to be given under this Agreement shall be sufficient if (a) in writing and (b) either (1) personally delivered or (2) sent by certified or registered mail, return receipt requested and postage prepaid, or (3) sent by overnight U.S. Express mail or overnight letter (commercial courier), to the party's address as specified below:

Buyer:	MDR Greenbrier, LLC
Guarantor:	Thomas Messier
	207 Massie Road, Richmond, VA 23221
Guarantor:	William Elliott
	9 Albemarle Avenue, Richmond, VA 23226
Guarantor:	Medalist Fund, II, LLC
Lender:	The Old Point National Bank of Phoebus
	Peninsula Landing, 1 West Mellen Street, Hampton, VA 23663

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Any notice required or permitted to be given under this Agreement shall be deemed effective upon receipt. Notice of any change in address shall be given as set forth in this Section. Any notice required or permitted to be given under any Loan Document shall be given first in accordance with the notice provision(s) of such Loan Document; second, if there is no notice provision in such Loan Document, then in accordance with the notice provision(s) of the Loan Agreement; or otherwise in accordance with this Section.

18.              Modifications. No modification, waiver, extension, discharge or other change of this Agreement or of any Loan Documents shall be binding unless executed in writing by the party against whom enforcement of any such modification, waiver, extension, discharge or change is sought.

19.              Binding Agreement. This Agreement applies to, inures to the benefit of, and binds all parties hereto, and their respective personal representatives, heirs, successors and assigns.

20.              Assignment. Neither Buyer, Seller nor Guarantors may assign, transfer, pledge or hypothecate in any way his, her or its rights, interests or benefits under this Agreement and may not delegate the performance of his, her or its obligations under this Agreement without the prior written consent of Lender.

21.              Severability. In the event that a court of competent jurisdiction finds any provision(s) of this Agreement invalid, illegal or unenforceable as applied to any circumstance, the remaining provisions of this Agreement, and the same provision(s) as applied to other circumstances, shall be unimpaired and remain in full force and effect.

22.              Entire Agreement. This Agreement (including any exhibits or other documents incorporated herein) contains the entire understanding of the parties concerning the subject matter hereof and there are no other understandings or agreements between the parties with respect thereto other than this Agreement. This Agreement supersedes all prior or contemporaneous understandings, agreements, representations, promises or statements, whether written or oral, between the parties on the subject matter hereof, and all such prior or contemporaneous understandings, agreements, representations, promises or statements, whether written or oral, are of no effect except as may be provided in this Agreement.

23.              Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same agreement.

24.              Authority. Each party hereby represents and warrants that its entry into and its performance of its obligations under this Agreement are fully authorized and that all requisite corporate actions therefor have been taken by it, and the person signing this Agreement below on such party's behalf represents and warrants that he or she is fully authorized to do so.

Signatures and notarial acknowledgments follow

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IN WITNESS WHEREOF, the parties have executed this Agreement.

BUYER:

MDR GREENBRIER, llc, a

Delaware limited liability company

By: Medalist Diversified Holdings, L.P., a

Delaware limited partnership

Its: Sole Member

By: Medalist Diversified REIT, Inc., a

Maryland corporation

Its: General Partner

By:	/s/ William R. Elliott
	William R. Elliott
	Co-President

COMMONWEALTH OF VIRGINIA

CITY/COUNTY OF ______________________, TO-WIT:

The foregoing was duly acknowledged before me, the undersigned Notary Public, this _____________ day of , 2021, by William R. Elliott, the duly authorized Co-President of Medalist Diversified REIT, Inc., a Maryland corporation, which is the duly authorized General Partner of Medalist Diversified Holdings, L.P., a Delaware limited partnership, the duly authorized Sole Member of MDR Greenbrier, LLC, a Delaware limited liability company, on behalf of the said company. He is personally known to me or has produced as identification.

My commission expires on _______________________.

__________________________________ (SEAL)

Notary Public

Notarial Registration Number:______________________

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SELLER:

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/ Thomas E. Messier
Name:	Thomas E. Messier
Title:	Co-President

COMMONWEALTH OF VIRGINIA

CITY/COUNTY OF ______________________, TO-WIT:

The foregoing instrument was sworn to and acknowledged before me this _____________ day of August, 2021, by , the duly authorized of Medalist Fund-II B, LLC, a Delaware limited liability company, the duly authorized Manager of Medalist Fund Manager, Inc., a Virginia corporation, on behalf of the said company. He is personally known to me or has produced _______________________________ as identification.

_______________________________ (SEAL)

Notary Public

My commission expires:

Notary Registration No.:

[Affix Notarial Stamp]

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GUARANTOR:

/s/ Thomas Messier_________________________________ (SEAL)

Thomas Messier

COMMONWEALTH OF VIRGINIA

CITY/COUNTY OF ______________________, TO-WIT:

The foregoing was duly acknowledged before me, the undersigned Notary Public, this _____________ day of ________________, 2021, by Thomas Messier. He is personally known to me or has produced ________________ as identification.

My commission expires on _______________________.

__________________________________ (SEAL)

Notary Public

Notarial Registration Number:_________________

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GUARANTOR:

William Elliott________________________________ (SEAL)

William Elliott

COMMONWEALTH OF VIRGINIA

CITY/COUNTY OF ______________________, TO-WIT:

The foregoing was duly acknowledged before me, the undersigned Notary Public, this ____ day of _____________, 2021, by William Elliott. He is personally known to me or has produced ____________________ as identification.

My commission expires on _______________________.

__________________________________ (SEAL)

Notary Public

Notarial Registration Number:_________________

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GUARANTOR:

MEDALIST FUND II, LLC, a

Delaware limited liability company

By: Medalist Fund Manager, Inc., a

Virginia corporation

Its: Sole Member

By:	/s/ Thomas E. Messier	(SEAL)
	Thomas E. Mesier
	Manager

COMMONWEALTH OF VIRGINIA

CITY/COUNTY OF _____________________, TO WIT:

The foregoing instrument was sworn to and acknowledged before me this ____ day of August, 2021, by Thomas E. Messier, the duly authorized Manager of Medalist Fund Manager, Inc., a Virginia corporation, which is the duly authorized Sole Member of Medalist Fund II, LLC, a Delaware limited liability company, on behalf of the said company. He is personally known to me or has produced ___________________ as identification.

My commission expires on _______________________.

__________________________________ (SEAL)

Notary Public

Notarial Registration Number:______________________

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LENDER:

THE OLD POINT NATIONAL BANK OF PHOEBUS

By:	/s/ Natasha Merz	(SEAL)
Name:	Natasha Merz
Title:	SVP, Market Executive

COMMONWEALTH OF VIRGINIA

AT LARGE, to-wit:

The foregoing instrument was acknowledged before me in _______________, Virginia, this _____ day of August, 2021, by ____________ , as ____________, of The Old Point National Bank of Phoebus (the “Lender”), on behalf of the Lender. He/she is personally known to me or has produced ____________ as identification.

Notary Public

My commission expires:

Notary Registration No.:

[Affix Notarial Stamp]

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EX-10.2

Exhibit 10.2

*000000955527950820780*

PROMISSORY NOTE

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

Principal Amount:  $4,495,000.00 Date of Note:  June 7, 2021

PROMISE TO PAY. Medalist Fund II-B, LLC, a Delaware limited liability company ("Borrower") promises to pay to THE OLD POINT NATIONAL BANK OF PHOEBUS ("Lender"), or order, in lawful money of the United States of America, the principal amount of Four Million Four Hundred Ninety-five Thousand & 00/100 Dollars ($4,495,000.00), together with interest on the unpaid principal balance from June 7, 2021, until paid in full.

PAYMENT. Borrower will pay this loan in accordance with the following payment schedule, which calculates interest on the unpaid principal balances as described in the "INTEREST CALCULATION METHOD" paragraph using the interest rates described in this paragraph: 12 monthly consecutive interest payments, beginning August 1, 2021, with interest calculated on the unpaid principal balances using an interest rate of 4.000%; 47 monthly consecutive principal and interest payments of $23,873.37 each, beginning August 1, 2022, with interest calculated on the unpaid principal balances using an interest rate of 4.000%; and one principal and interest payment of $4,067,885.93 on July 1, 2026, with interest calculated on the unpaid principal balances using an interest rate of 4.000%. This estimated final payment is based on the assumption that all payments will be made exactly as scheduled; the actual final payment will be for all principal and accrued interest not yet paid, together with any other unpaid amounts under this Note. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; then to any escrow or reserve account payments as required under any mortgage, deed of trust, or other security instrument or security agreement securing this Note; then to any late charges; and then to any unpaid collection costs. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. All payments must be made in U.S. dollars and must be received by Lender consistent with any written payment instructions provided by Lender. If a payment is made consistent with Lender's payment instructions but received after 5:00 P.M. Eastern Time, Lender will credit Borrower's payment on the next business day.

INTEREST CALCULATION METHOD. Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. All interest payable under this Note is computed using this method.

PREPAYMENT PENALTY. Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. Upon prepayment of this Note, Lender is entitled to the following prepayment penalty: The prepayment premium shall apply throughout maturity. If the Borrower prepays this Loan with the proceeds of a Loan from another financial institution prior to its maturity, the prepayment must be accompanied by a prepayment premium equal to 1.00% of the outstanding principal balance. OPNB will receive Last Look and first Right of Refusal for any refinance.

Except for the foregoing, Borrower may pay all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due and may result in Borrower's making fewer payments. Borrower agrees not to send Lender payments marked "paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: THE OLD POINT NATIONAL BANK OF PHOEBUS, 1 West Mellen Street Hampton, VA 23663.

LATE CHARGE. If a payment is 7 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment.

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest rate on this Note shall be increased by adding an additional 4.000 percentage point margin ("Default Rate Margin"). The Default Rate Margin shall also apply to each succeeding interest rate change that would have applied had there been no default. After maturity, or after this Note would have matured had there been no default, the Default Rate Margin will continue to apply to the final interest rate described in this Note. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.

DEFAULT. Each of the following shall constitute an event of default ("Event of Default") under this Note:

Payment Default. Borrower fails to make any payment when due under this Note.

Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note 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.

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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 property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents.

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.

False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf, or made by Guarantor, or any other guarantor, endorser, surety, or accommodation party, under this Note or the related documents in connection with the obtaining of the loan evidenced by this Note or any security document directly or indirectly securing repayment of this 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.

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.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor, or any other guarantor, endorser, surety, or accommodation party of any of the indebtedness or any Guarantor, or any other guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note.

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

Insecurity. Lender in good faith believes itself insecure.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest, together with all other applicable fees, costs and charges, if any, immediately due and payable, and then Borrower will pay that amount.

ATTORNEYS' FEES; EXPENSES. Subject to any limits under applicable law, upon default, Borrower agrees to pay Lender's attorneys' fees and all of Lender's other collection expenses, whether or not there is a lawsuit, including without limitation legal expenses for bankruptcy proceedings.

JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the other.

GOVERNING LAW. This Note 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 Note 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.

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $35.00 if Borrower makes a payment on Borrower's loan and the check or preauthorized charge with which Borrower pays is later dishonored.

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.

COLLATERAL. Borrower acknowledges this Note is secured by a Credit Line Deed of Trust and Assignment of Rents and Leases dated June 7, 2021 in the amount of $4,495,000.00, recorded in the Clerk's Office of the Circuit Court in the City of Chesapeake on the real property located at 1244 Executive Blvd., Chesapeake, VA 23320 in the name of Medalist Fund II-B, LLC; and Security Agreement dated June 7, 2021 on all Equipment, General Intangibles and Fixtures located in or attached to the real property located at 1244 Executive Blvd., Chesapeake, VA 23320 and owned by the Debtor.

FINANCIAL STATEMENTS. Borrower agrees to provide Lender with such financial statements and other related information at such frequencies and in such detail as Lender may reasonably request.

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SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns.

NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Borrower may notify Lender if Lender reports any inaccurate information about Borrower's account(s) to a consumer reporting agency. Borrower's written notice describing the specific inaccuracy(ies) should be sent to Lender at the following address: THE OLD POINT NATIONAL BANK OF PHOEBUS 1 West Mellen Street Hampton, VA 23663.

GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made.

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PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

THIS NOTE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS NOTE 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

X	/s/ Natasha Merz
	Authorized Officer

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Sigature page to Note

EX-10.3

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.

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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.

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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.

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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.

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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 Agreement

XML

Cover	Aug. 27, 2021
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 27, 2021
Entity File Number	001-38719
Entity Registrant Name	Medalist Diversified REIT, Inc.
Entity Central Index Key	0001654595
Entity Tax Identification Number	47-5201540
Entity Incorporation, State or Country Code	MD
Entity Address, Address Line One	1051 E. Cary Street Suite 601
Entity Address, Address Line Two	James Center Three
Entity Address, City or Town	Richmond
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	23219
City Area Code	804
Local Phone Number	344-4435
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	MDRR
Security Exchange Name	NASDAQ
8.0% Series A Cumulative Redeemable Preferred Stock, $0.01 par value
Document Information [Line Items]
Title of 12(b) Security	8.0% Series A Cumulative Redeemable Preferred Stock, $0.01 par value
Trading Symbol	MDRRP
Security Exchange Name	NASDAQ