Document:

EXHIBIT 10.1

 

AMENDED AND RESTATED SECURED REVOLVING
CREDIT AGREEMENT

 

THIS AMENDED AND RESTATED SECURED REVOLVING
CREDIT AGREEMENT (this “Agreement”), is made as of September 5, 2012, by and between BLACK RIDGE OIL & GAS, INC.,
a Delaware corporation (the ”Borrower”), and DOUGHERTY FUNDING LLC, a Delaware limited liability company (the ”Lender”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower and the Lender previously
established a $10,000,000 secured revolving line of credit pursuant to the Secured Revolving Credit Agreement dated as of April 4, 2012;
and

 

WHEREAS, the Borrower has requested that
the Lender increase the secured revolving line of credit to an amount of up to $20,000,000; and

 

WHEREAS, the Lender is willing to agree
to the foregoing in accordance with the terms and subject to the conditions set forth herein.

 

NOW THEREFORE, in consideration of the
foregoing recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:

 

1.                DEFINITIONS.  As
used herein, the following terms shall have the following meanings for the purpose of this Agreement and the documents
related hereto unless the context in which such term is used clearly requires otherwise:

 

A.               
Adjusted Cash EBTDA: with respect to the Borrower for a fiscal quarter, net income before (i) income taxes,
(ii) depreciation, depletion and amortization, (iii) accretion of abandonment liability, (iv) noncash expenses relating to share
based payments recognized under ASC Topic 718, and (v) so long as no Revolving Credit Expiration Date has occurred during or prior
to the fiscal quarter for which the calculation is being made, Excluded Revenues, as determined on a cash basis in the manner described
on Exhibit G. For the fiscal quarter that includes the Revolving Credit Expiration Date, all Excluded Revenues received
prior to the Revolving Credit Expiration Date but not yet used in accordance with Section 14(CC)) prior to the Revolving Credit
Expiration Date shall be included in the amount of Adjusted Cash EBTDA for the fiscal quarter that is determined in accordance
with this definition.

 

B.                
Advance: a disbursement by the Lender of a portion of the Revolving Line hereunder.

 

C.                
Affiliate: any subsidiary of the Borrower or any entity that controls, is controlled by, or is under common control
with the Borrower.

 

D.               
Anti-Terrorism Laws: any applicable law relating to terrorism or money laundering, including Executive Order No.
13224, the USA PATRIOT Act, the applicable laws comprising or implementing the Bank Secrecy Act, and the applicable laws administered
by the United States Treasury Department’s Office of Foreign Asset Control (as any of the foregoing applicable laws may from
time to time be amended, renewed, extended, or replaced).

 

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E.                
Authorization for Expenditure: any document received by the Borrower with respect to a Borrower Property that, consistent
with industry practice, is a notice of a proposed well to be drilled with respect to which the Borrower would have a working interest
because of the Borrower Property, including, without limitation, any invitation to participate in drilling received by the Borrower
pursuant to Section 38-08 of the North Dakota Century Code and Section 43-02-03 of the North Dakota Administrative Code (or
any successor provision to either).

 

F.                 
Balance Sheet Available Cash: at any particular time, the aggregate amount of the following assets of the Borrower:
(i) unrestricted cash, (ii) obligations issued or guaranteed by the United States of America or any agency thereof, (iii) commercial
paper with maturities of not more than 180 days and a published rating of not less than A-1 or P-1 (or the equivalent rating),
(iv) certificates of time deposit and bankers’ acceptances having maturities of not more than 180 days and repurchase agreements
backed by United States government securities of a commercial bank if (I) such bank has a combined capital and surplus of at least
$500,000,000, or (II) its debt obligations, or those of a holding company of which it is a subsidiary, are rated not less than
A (or the equivalent rating) by a nationally recognized investment rating agency, (v) U.S. money market funds that invest solely
in obligations issued or guaranteed by the United States of America or an agency thereof.

 

G.               
Balance Sheet Available Cash Shortfall: as of any date, the failure of the Balance Sheet Available Cash to satisfy
the requirements set forth in Section 14(J) hereof.

 

H.               
Borrower Mortgage: individually and collectively, (i) the nine (9) Mortgages, Assignments, Security Agreements, Fixture
Filings, and Financing Statements dated as of April 4, 2012 given by the Borrower for the benefit of the Lender pursuant
to which the Borrower granted to the Lender a first mortgage lien on the Borrower Property to secure repayment of the Note, each
as amended by the First Amendment to Mortgages, Assignments, Security Agreements, Fixture Filings, and Financing Statements dated
as of September 5, 2012 given by the Borrower for the benefit of the Lender and (ii) any Mortgage, Assignment, Security Agreement,
Fixture Filing, and Financing Statement in the form attached as Exhibit A that the Borrower subsequently gives for the benefit
of the Lender as to subsequently acquired Borrower Property.

 

I.                  
Borrower Property: the property located in North Dakota, more particularly described in each of the nine (9) Borrower
Mortgage that is being executed in connection with the execution of this Agreement and any property, whether in North Dakota
or elsewhere, that the Borrower subsequently acquires for purposes of oil or gas production. All of the Borrower Property also
is identified on Schedule I attached hereto and made a part hereof, and it will be updated from time to time if, and as,
the Borrower disposes of Borrower Property or acquires additional Borrower Property.

 

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J.                  
Borrower Security Agreement: individually and collectively, (i) the Security Agreement dated as of April 4, 2012,
by and between the Borrower and the Lender, pursuant to which the Borrower assigned to the Lender all of its right, title and interest
under agreements now or hereafter entered into with respect to the Collateral to secure repayment of the Note, as amended by the
First Amendment the Security Agreement dated as of September 5, 2012, by and between the Borrower and the Lender and (ii)
any Security Agreement in the form attached as Exhibit B into which the Borrower and the Lender subsequently enter
as to subsequently acquired Collateral.

 

K.               
Borrowing Base: at any time, the lesser of (i) the Maximum Line; and (ii) the sum of (I) the Borrower’s pro-rata
share of development and production costs for wells that relate to Borrower Property for which there is a valid and enforceable
Authorization for Expenditure and that are incurred by the Borrower from and after the date of the Original Agreement, (II) the
cumulative amount that the Borrower paid from its own funds or from funds that it borrowed from Prenante5, LLC pursuant to the
Revolving Credit and Security Agreement dated May 2, 2011 between them to pay the Borrower’s pro-rata share of
development and production costs for wells that relate to Borrower Property for which there now continues to be a valid and enforceable
Authorization for Expenditure and that were not in production as of the Borrower’s last reserve report dated June 30, 2011,
and (III) the cumulative amount of expenditures paid or incurred with respect to such other purposes as are approved by the Lender
in writing. The Borrowing Base does not include operating costs with respect to a well even if any such operating cost is identified
on a Joint Interest Billing Statement.

 

L.                
Borrowing Base Certificate: the spreadsheet (or other format that is acceptable to the Lender) prepared by the Borrower
that summarizes the costs or expenditures that are included in the Borrowing Base.

 

M.              
Business Day: any day other than a Saturday or Sunday or a legal holiday on which the Lender is not open for business.

 

N.               
Certificate of Chief Financial Officer: a certificate in the form attached as Exhibit C hereto, to be
signed by the Chief Financial Officer of the Borrower.

 

O.               
Collateral: shall mean and include:

 

(a)               
all Receivables;

 

(b)              
all Equipment;

 

(c)               
all General Intangibles;

 

(d)              
all Inventory;

 

(e)               
all Investment Property;

 

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(f)               
all of the Borrower’s right, title and interest in and to, whether now owned or hereafter acquired and wherever located,
(i) its respective goods and other property including, but not limited to, all merchandise returned or rejected by Customers, relating
to or securing any of the Receivables; (ii) all of the Borrower’s rights as a consignor, a consignee, an unpaid vendor, mechanic,
artisan, or other lienor, including stoppage in transit, setoff, detinue, replevin, reclamation and repurchase; (iii) all additional
amounts due to the Borrower from any Customer relating to the Receivables; (iv) other property, including warranty claims, relating
to any goods securing the Note and the Advances; (v) all of the Borrower’s contract rights, rights of payment that have
been earned under a contract right, instruments (including promissory notes), documents, chattel paper (including electronic chattel
paper), warehouse receipts, deposit accounts, letters of credit and money, including all right, title and interest in and to the
WPT License Agreement; (vi) all commercial tort claims (whether now existing or hereafter arising) and all other litigation claims
(whether now existing or hereafter arising), including all of the Borrower’s right, title and interest in and to (I) the
litigation against Deloitte & Touche and (II) the litigation relating to the WPT License Agreement and the WPT Royalties; (vii)
if and when obtained by the Borrower, all real and personal property of third parties in which the Borrower has been granted a
lien or security interest as security for the payment or enforcement of Receivables; (viii) all letter of credit rights (whether
or not the respective letter of credit is evidenced by a writing); (ix) all supporting obligations; and (x) any other goods, personal
property or real property now owned or hereafter acquired in which the Borrower expressly has granted a security interest or may
in the future grant a security interest to the Lender under the Borrower Security Agreement, or in any amendment or supplement
thereto, or under any other agreement between the Lender and the Borrower;

 

(g)              
all of the Borrower’s ledger sheets, ledger cards, files, correspondence, records, books of account, business papers,
computers, computer software (owned by the Borrower or in which it has an interest), computer programs, tapes, disks and documents
relating to (a), (b), (c), (d), (e), or (f) of this definition; and

 

(h)              
all proceeds and products of (a), (b), (c), (d), (e), (f), and (g) in whatever form, including, but not limited to: cash,
deposit accounts (whether or not comprised solely of proceeds), certificates of deposit, insurance proceeds (including hazard,
flood and credit insurance), negotiable instruments and other instruments for the payment of money, chattel paper, security agreements,
documents, eminent domain proceeds, condemnation proceeds and tort claim proceeds.

 

P.              
 Contingent Liabilities: (a) any guarantees and endorsements for the obligation of any person or entity
entered into or incurred by the Borrower directly or indirectly, (b) other contingent liabilities for borrowed money to
any other person, party or entity entered into or incurred by the Borrower directly or indirectly, and (c) other contracts
entered into by the Borrower that, in economic effect, are substantially equivalent to a guaranty of any obligation of any
other person, party or entity, that exist on an applicable date, other than endorsements of negotiable instruments for
deposit or collection in the ordinary course of business.

 

Q.               Customer:
the account debtor with respect to any Receivable and/or the prospective purchaser of goods, services or both with respect to
any contract or contract right, and/or any party who enters into or proposes to enter into any contract or other arrangement
with the Borrower, pursuant to which the Borrower is to deliver any personal property or perform any services.

 

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R.               Defensible
Title: with respect to each Borrower Property, title that (a) entitles the Borrower to receive (free and clear of all royalties,
overriding royalties and net profits interests or other burdens on or measured by the production of Hydrocarbons, without regard
to whether such interest appears of record) not less than the anticipated “Net Revenue Interest” or “Net Royalty
Interest” percentage that the Borrower previously has provided to the Lender with respect to such Borrower Property (subject
to deviations that are acceptable to the Lender) with respect to such Borrower Property in all Hydrocarbons produced, saved and
marketed from the Borrower Property for the productive life of the Borrower Property, free and clear of all liens except the Permitted
Interests and (b) obligates the Borrower to bear costs and expenses relating to the maintenance, development and operation
of such Borrower Property in an amount not greater than the anticipated “Working Interest” percentage that the Borrower
previously has provided to the Lender with respect to such Borrower Property (subject to deviations that are acceptable to the
Lender) for the productive life of such Borrower Property.

 

S.                Environmental Law: all federal, state, and local environmental, land use, zoning, health, chemical use, safety, and
sanitation laws, statutes, ordinances, and codes relating to the protection of the environment and/or governing the use, storage,
treatment, generation, transportation, processing, handling, production, or disposal of Hazardous Substances, now or hereafter
in force, and all rules, regulations, decisions, orders, and directives of federal, state, and local governmental agencies and
authorities with respect thereto, now or hereafter in force.

 

T.              
Equipment: all of the Borrower’s equipment whether now owned or hereafter acquired and wherever located including
all equipment, machinery, apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts, accessories and all replacements
and substitutions therefor or accessions thereto.

 

U.           
   ERISA:  Employee Retirement Income Security Act of 1974.

 

V.              
Equity Offering: An issuance of additional equity in the Borrower after the date of this Agreement pursuant to which
the Borrower receives, in one or a series of transactions, net, additional equity capital in an amount of at least Ten Million
and no/100 Dollars ($10,000,000.00).

 

W.            
Event of Default:  any one or more of the events listed in Section 15(A) hereof.

 

X.             
Excluded Revenues: (a) amounts received from sales or other dispositions of Borrower Property in accordance with
Section 14(L) of this Agreement, (b) WPT Royalties, (c) proceeds resulting from the WPT Licensing Agreement, and (d) proceeds resulting
from litigation against Deloitte & Touche, all of which shall be excluded from Adjusted Cash EBTDA, but only so long as no
Revolving Credit Expiration Date has occurred.

 

Y.              
GAAP: generally accepted accounting principles in effect in the United States as of the time the principles are applied.

 

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Z.                
General Intangibles: all of the Borrower’s general intangibles, whether now owned or hereafter acquired, including
all payment intangibles, all choses in action, causes of action, corporate or other business records, inventions, designs, patents,
patent applications, equipment formulations, manufacturing procedures, quality control procedures, trademarks, trademark applications,
service marks, trade secrets, goodwill, copyrights, design rights, software, computer information, source codes, codes, records
and updates, registrations, licenses, franchises, customer lists, tax refunds, tax refund claims, computer programs, all claims
under guaranties, security interests or other security held by or granted to the Borrower to secure payment of any of the Receivables
by a Customer (other than to the extent covered by Receivables) all rights of indemnification and all other intangible property
of every kind and nature (other than Receivables).

 

AA.             Hazardous
Substance: without limitation, any flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous materials, waste materials relating to hazardous
waste disposal, or any other material that is subject to regulation under Environmental Law.

 

BB.              Held By Production: compliance with the relevant lease term that permits the Borrower to extend the terms of the
original lease for the life of a producing well, even if that term goes beyond the stipulated term of the original lease.

 

CC.              Hydrocarbons: oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons,
gaseous hydrocarbons and all products refined or separated therefrom.

 

DD.              Indebtedness:  collectively, (i) all liabilities for borrowed money, (ii) all liabilities secured
by any mortgage, pledge, security interest or lien existing on property owned subject to such mortgage, pledge, security interest
or lien whether or not the indebtedness secured thereby shall have been assumed, (iii) all liabilities in respect of letters of
credit or instruments serving a similar function issued or accepted for the Borrower’s account (regardless of whether representing
liabilities for borrowed money), and (iv) the implied debt component of any off-balance sheet financing arrangement.

 

EE.              Inventory:
all of the Borrower’s now owned or hereafter acquired goods, merchandise and other personal property, wherever located,
to be furnished under any consignment arrangement, contract of service or held for sale or lease, all raw materials, work in process,
finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed in the Borrower’s
business or used in selling or furnishing such goods, merchandise and other personal property, and all documents of title or other
documents representing them. Inventory shall include specifically, but not be limited to, petroleum, natural gas, and other minerals,
chemicals and substances extracted from under the ground by way of any extraction procedures or processes.

 

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FF.             Investment Property: all of the Borrower’s now owned or hereafter acquired securities (whether certificated
or uncertificated), securities entitlements, securities accounts, commodities contracts and commodities accounts.

 

GG.            Joint Interest Billing Statement: any statement received by the Borrower from an operator/driller of a well relating
to a valid and enforceable Authorization for Expenditure with respect to a Borrower Property that requests the Borrower’s
payment of the portion of the expenditures set forth in the statement that is equal to the Borrower’s “Working Interest”
percentage with respect to the well.

 

HH.           Loan Documents:  this Agreement, the Note, the Borrower Mortgage, and the Borrower Security Agreement,
as the same may be amended from time to time, and any and all other documents now or hereafter executed and delivered to the Lender
pursuant hereto.

 

II.              Material Adverse Effect: a material adverse effect on the business, properties, operations, assets, liabilities,
or condition (financial or otherwise) of the Borrower.

 

JJ.              Maturity Date:  August 1, 2015.

 

KK.            Maximum Line: Sixteen Million Five Hundred Thousand and no/100 Dollars ($16,500,000.00), which subsequently may be
increased pursuant to Section 2 as provided therein but not to exceed Twenty Million and no/100 Dollars ($20,000,000.00).

 

LL.             Note: that certain Amended and Restated Secured Revolving Note of even date herewith, executed by the Borrower in
the original principal amount of Twenty Million and no/100 Dollars ($20,000,000.00) and payable to the order of the Lender.

 

MM.          Organizational Documents: collectively, the following documents, each of which shall be in form and substance acceptable
to the Lender:

 

(1)              
a copy of the Articles of Incorporation for the Borrower and all amendments (if any), duly certified by the Secretary of
State of the State of Delaware;

 

(2)              
a copy of the Bylaws for the Borrower and all amendments (if any), duly certified by an officer of the Borrower;

 

(3)              
a current Certificate of Good Standing for the Borrower, duly issued by the Secretary of State of the State of Delaware;

 

(4)              
a copy of the Articles of Foreign Registration for the Borrower and all amendments (if any), duly certified by the Secretary
of State of the State of Minnesota;

 

(5)              
a current Certificate of Good Standing for the Borrower, duly issued by the Secretary of State of the State of Minnesota;

 

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(6)              
a copy of the Articles of Foreign Registration for the Borrower and all amendments (if any), duly certified by the Secretary
of State of the State of North Dakota;

 

(7)              
a current Certificate of Good Standing for the Borrower, duly issued by the Secretary of State of the State of North Dakota;

 

(8)              
a copy of the resolutions of the board of directors of the Borrower authorizing the execution, delivery and performance
of the Loan Documents to which the Borrower is a party, duly certified by an officer of the Borrower; and

 

(9)              
an opinion of counsel for the Borrower, dated as of the date hereof and acceptable in form and substance to the Lender.

 

NN.         Original Agreement: the Secured Revolving Credit Agreement dated as of April 4, 2012 between the Borrower
and the Lender.

 

OO.         Permitted
Interests:  with respect to Borrower Property or Collateral, as applicable, (a) the liens and encumbrances as set
forth in the Borrower Mortgage or otherwise consented to in writing by the Lender, (b) liens for taxes, assessments or other governmental
charges or levies which are not delinquent or which are being contested in good faith by appropriate action and for which adequate
reserves have been maintained in accordance with GAAP; (c) liens in connection with workers’ compensation, unemployment
insurance or other social security, old age pension or public liability obligations which are not delinquent or which are being
contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (d)
statutory landlord’s liens, operators’, vendors’, carriers’, warehousemen’s, repairmen’s,
mechanics’, suppliers’, workers’, materialmen’s, construction or other like liens arising by operation
of law in the ordinary course of business or incident to the exploration, development, operation and maintenance of Borrower Properties
each of which is in respect of obligations that are not delinquent or which are being contested in good faith by appropriate action
and for which adequate reserves have been maintained in accordance with GAAP; (e) contractual Liens that arise in the ordinary
course of business under operating agreements, joint venture agreements, oil and gas partnership agreements, oil and gas leases,
farm-out agreements, division orders, contracts for the sale, transportation or exchange of oil and natural gas, unitization and
pooling declarations and agreements, area of mutual interest agreements, royalty agreements, overriding royalty agreements, marketing
agreements, processing agreements, net profits agreements, development agreements, gas balancing or deferred production agreements,
injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or other geophysical permits
or agreements and other agreements which are usual and customary in the oil and gas business and are for claims which are not
delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP, provided that any such lien referred to in this clause does not materially impair the use of the Borrower
Property or the Collateral covered by such lien for the purposes for which such Borrower Property or Collateral is held by the
Borrower or materially impair the value of such Borrower Property or Collateral subject thereto; (f) liens arising solely by virtue
of any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights and remedies and
burdening only deposit accounts or other funds maintained with a creditor depository institution, provided that no such deposit
account is a dedicated cash collateral account; (g) easements, restrictions, servitudes, permits, conditions, covenants, exceptions
or reservations in any Borrower Property for the purpose of roads, pipelines, transmission lines, transportation lines, distribution
lines for the removal of gas, oil, coal or other minerals or timber, and other like purposes, or for the joint or common use of
real estate, rights of way, facilities and equipment, and liens related to surface leases and surface operations, that do not
secure any monetary obligations and which in the aggregate do not materially impair the use of such Borrower Property for the
purposes of which such Borrower Property is held by the Borrower or materially impair the value of such Borrower Property subject
thereto; (h) liens on cash or securities pledged to secure performance of tenders, surety and appeal bonds, government contracts,
performance and return of money bonds, bids, trade contracts, leases, statutory obligations, regulatory obligations and other
obligations of a like nature incurred in the ordinary course of business, (i) judgment and attachment liens not giving rise to
an Event of Default, provided that any appropriate legal proceedings which may have been duly initiated for the review of such
judgment shall not have been finally terminated or the period within which such proceeding may be initiated shall not have expired
and no action to enforce such Lien has been commenced, and (j) Permitted Seller Acreage Purchase Financing; provided, however,
that any lien described in clauses (b) through (f), (h), and (i) shall remain a Permitted Interest only for so long as (x)
no action to enforce such lien has been commenced and (y) other than the lien of any such Permitted Interest that is senior by
operation of law without regard to any action taken or alleged taken by the Borrower or the Lender regarding such seniority, no
subordination of the first priority lien granted in favor of the Lender to the lien of such Permitted Interest has occurred (as
no intention to subordinate the first priority lien granted in favor of the Lender is to be hereby implied or expressed by the
permitted existence of such Permitted Interests).

 

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PP.            
Permitted Seller Acreage Purchase Financing: any lien placed upon acreage that is hereafter acquired by the Borrower
in favor of the transferor of such acreage (but not any other third party) to secure any deferred portion of the purchase price
for such acreage; provided, however, (i) that such acreage does not have any producing wells, or the existence of
producing wells on such acreage is acceptable to the Lender, (ii) that (A) any such lien is strictly limited to the acreage
acquired by the Borrower from such transferor in the subject transaction and the Lender-acceptable producing wells, if any, on
such acreage at the time of such acreage acquisition and (B) the Lender has a second lien on such acreage and any Lender-acceptable
producing wells in existence at the time of the acreage acquisition and a first lien on any subsequent producing wells on such
acreage, and (iii) that, in connection with the acquisition of such acreage, the Borrower acquires legal title (rather than only
equitable title as a vendee or similar characterization) to, and beneficial ownership, of such acreage, and the transferor does
not continue to hold legal title to such acreage (i.e., no contract for deed or similar form of seller financing is permitted).

 

QQ.         
Person: any natural person, firm, partnership, corporation, limited liability company, governmental authority or
agency and any other public or private legal entity.

 

RR.          
Quarterly Compliance Certificate: a compliance certificate, in the form attached as Exhibit D hereto, to be
executed and delivered by a Senior Officer of Borrower to the Lender within ten (10) days following the end of each quarter, certifying,
based on an examination sufficient to permit such officer to make an informed statement, that no Balance Sheet Available Cash Shortfall
occurred during, or exists as of the end of, such quarter, and such certificate shall have appended thereto calculations that evidence
and support that no Balance Sheet Available Cash Shortfall exists as of the end of such quarter.

 

SS.            
Revolving Credit Expiration Date:  the earliest of (i) the Maturity Date, (ii) the date on which
an Event of Default occurs hereunder, (iii) the Borrower’s failure to complete successfully the Equity Offering on or before
August 31, 2014, or (iv) the date on which the Revolving Line is terminated pursuant to either Section 15(B) or Section 18(M).

 

TT.            
Revolving Line: the secured revolving line of credit established pursuant to Section 2 hereof.

 

UU.         
Receivables: all of the Borrower’s accounts, contract rights, instruments (including those evidencing Indebtedness
owed to the Borrower by its Affiliates), documents, chattel paper (including electronic chattel paper), general intangibles relating
to accounts, drafts and acceptances, credit card receivables and all other forms of obligations owing to the Borrower arising out
of or in connection with the sale or lease of Inventory or the rendition of services, all supporting obligations, guarantees and
other security therefor, whether secured or unsecured, now existing or hereafter created, and whether or not specifically sold
or assigned to the Lender hereunder, including, without limitation, the WPT Royalties and the Working Interest Payments.

 

VV.         
SEC: the United States Securities and Exchange Commission and any successor thereto.

 

WW.      
Senior Officer: the Chief Executive Officer or the Chief Financial Officer of the Borrower.

 

XX.         
Working Interest Payments: any distributions, dividends and/or payments received by the Borrower or any subsidiary
of the Borrower as a result of any working interest the Borrower or any subsidiary of the Borrower may have with respect to any
working interest in any oil and gas well, which also may be known as “Net Revenue Interest,” “Net Royalty Interest,”
“NRI,” or similar terms.

 

YY.         
WPT License Agreement: that certain License Agreement between the Borrower and a subsidiary of PartyGaming, PLC.

 

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ZZ.           
WPT Royalties: any and all royalties, licenses and/or payments received by the Borrower in respect of the WPT License
Agreement.

 

2.                REVOLVING
LINE OF CREDIT.  Upon the terms and subject to the conditions hereinafter set forth, the Lender shall make Advances
to the Borrower pursuant to this Section 2 from time to time until but excluding the Revolving Credit Expiration Date, at
such time and in such amount as to each Advance as the Borrower shall request, up to but not exceeding in aggregate principal
amount at any one time outstanding the Borrowing Base. The Revolving Line shall be used exclusively (i) to fund, or to reimburse
the Borrower for, the Borrower’s pro-rata share of development and production costs for oil wells that relate to Borrower
Property for which there is a valid and enforceable Authorization for Expenditure and that are incurred by the Borrower from and
after the date of the Original Agreement, (ii) to reimburse the Borrower for amounts that the Borrower paid from its own funds
or from funds that it borrowed from Prenante5, LLC pursuant to the Revolving Credit and Security Agreement dated May 2, 2011
between them to pay the Borrower’s pro-rata share of development and production costs for oil wells that relate to Borrower
Property for which there now continues to be a valid and enforceable Authorization for Expenditure and that were not in production
as of the Borrower’s last reserve report dated June 30, 2011, and (iii) such other purposes as are approved by the Lender
in writing. The Revolving Line may not be used by the Borrower to acquire Borrower Property. Subject to and upon the terms and
conditions hereinafter set forth, the Borrower may borrow, repay and re-borrow within the limit of the Borrowing Base under this
Section 2 from the date hereof to but excluding the Revolving Credit Expiration Date.

 

The Borrower may
not request more than one (1) Advance per month, except that, in addition to the initial Advance, which the Borrower requested
in April 2012, the Borrower was able to request an additional, subsequent Advance in April 2012. Each request for an Advance shall
be in a minimum amount of $500,000 and shall be accompanied by a request for Advance in the form of the attached Exhibit E.
The Borrower will provide the request for Advance at least ten (10) Business Days prior to the requested date of the Advance.

 

The aggregate
balance of Advances outstanding at any time shall not exceed the Borrowing Base.

 

Any sums expended by the Lender due to
the Borrower’s failure to perform or to comply with its obligations under this Agreement or any other Loan Document shall
be an additional Advance and shall be due and payable on demand.

 

If subsequent to the date of this Agreement,
the Lender enters into one or more agreements pursuant to which the Lender has written agreements for participations in this Loan
in an aggregate amount that exceeds Sixteen Million Five Hundred Thousand and no/100 Dollars ($16,500,000.00), upon the Lender’s
giving written notice to the Borrower pursuant to this Section 2, which the Lender promptly will give after entering into any such
agreement, the Maximum Line will increase to such aggregate amount, which will be set forth in the written notice, and such written
notice will be deemed to be, and will be treated by the parties as, an amendment to this Agreement. The aggregate amount to which
the Maximum Line may increase will not exceed Twenty Million and no/100 Dollars ($20,000,000.00). The Lender will use good faith
efforts to attempt to increase such aggregate amount, up to the maximum amount that is provided in the preceding sentence, but
it has no obligation to increase such aggregate amount, and it is not guaranteeing, in any manner, any such increase.

 

    	10

    	 

    
 

3.             
NOTE.  The obligation of the Borrower to repay any and all Advances made pursuant to Section 2 hereof shall be evidenced by the Note.

 

4.             
MANNER OF
BORROWING. Each time the Borrower desires to obtain an Advance pursuant to Section 2 hereof, the Borrower shall request
the Advance in writing. Each such request must specify the date of the requested Advance and the amount thereof. Prior to the
Lender’s making an Advance, the conditions set forth in Section 12 hereof or otherwise in this Agreement shall be satisfied.
The Lender will make an Advance directly to the Borrower, and as to any amount of an Advance that is not a reimbursement to the
Borrower, the Borrower will pay promptly after the Borrower’s receipt of the Advance the amount or the amounts to the person
or persons that are to be paid with any such amount.

 

5.             
UNUSED FACILITY FEE. The Borrower shall pay to the Lender on each May 1, August 1, November 1, and February 1, commencing
November 1, 2012, a fee equal to the product of (i) one-quarter of one percent (0.25%) and (ii) the average amount of the unused
and unadvanced amount of the Maximum Line for the calendar quarter preceding the payment date (with the average equaling the sum
of such unused and unadvanced amount with respect to each day during such calendar quarter divided by the number of days in such
calendar quarter). The Borrower paid the fee that was due on August 1, 2012 pursuant to this Section 5.

 

6.              INTEREST.  Through
but excluding September 1, 2012, interest on the unpaid principal balance of the Note shall accrue at the following per annum
rates (as determined at the commencement of each monthly interest accrual period): (i) unless, and except to the extent that,
clause (ii) applies, nine percent (9.0%); and (ii) if the Equity Offering has not been completed successfully and if
the then-outstanding unpaid principal balance of the Note exceeds Five Million and no/100 Dollars ($5,000,000.00), nine and one-half
percent (9.5%) on such balance in excess of Five Million and no/100 Dollars ($5,000,000.00).

 

Beginning on September 1, 2012 and thereafter,
interest on the unpaid principal balance of the Note shall accrue at the per annum rates of nine and one-quarter percent (9.25%).

 

Interest on the unpaid principal balance
of the Note shall be computed on the basis of a 360-day year, but shall be charged for the actual number of days interest is unpaid
(actual ÷ 360).

 

If the Note has not been repaid on or before
the Revolving Credit Expiration Date, or if an Event of Default occurs, then the unpaid principal balance shall thereafter accrue
interest at an annual rate of two percent (2.0%) per annum in excess of the rate or rates otherwise payable hereunder, as such
rate changes from time to time (the “Default Rate”), until the unpaid principal balance is paid in full or such Event
of Default is cured.

 

If, for any reason whatsoever, the interest
and other consideration payable to the Lender under the Loan Documents exceeds the limit prescribed by any applicable usury statute
or any other applicable law, then such interest and other consideration shall be reduced to the limit provided in such statute
or law, so that in no event shall such interest and other consideration be in excess of such limit. If any payments of interest
or other consideration have been made to the Lender in excess of such limits, such excess amount shall be applied to the principal
balance or, if the Note has been fully paid, refunded to the Borrower.

 

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7.             PAYMENTS.  The principal balance and accrued interest on the Note shall be payable as follows:

 

A.             
All
then-accrued interest is payable on a monthly basis beginning on May 1, 2012, and on the same day of each month thereafter,
plus a final interest payment with the final payment of principal;

 

B.             
If
at any time the sum of all outstanding Advances exceeds the Borrowing Base, the Borrower will make within ten (10) days after such
excess arises (unless, before then, the Borrower receives cash from a third party relating to such excess, in which event the Borrower
will pay such excess immediately upon receiving such cash), a payment of principal on the Note in an amount at least equal to such
excess, together with accrued interest on the amount of such principal paid to the date of such payment; and

 

C.             
Any payment received from the Borrower pursuant to Section 14(BB) shall be applied to reduce the then-outstanding amount of principal
on the Note, and the amount of accrued interest on the amount of such repaid principal shall be paid on the next interest payment
date pursuant to Section 7(A) hereof.

 

Except as provided in Section 7(B) or Section
7(C), all payments shall be applied first to accrued interest, then to late payment charges, and then to the payment of the principal
balance; provided, however, if an Event of Default exists, the Lender may elect to apply any payments in any order
as it deems appropriate. Payments of principal of, and interest on, the Note and all late payment charges, fees, expenses and other
obligations of the Borrower under the Loan Documents that are payable to the Lender shall be made to the Lender without setoff
or counterclaim in immediately available funds not later than 1:00 p.m. (Minneapolis time) on the due date thereof at the Lender’s
main office in Minneapolis, Minnesota. Funds received after such time shall be deemed to have been received on the next Business
Day. Whenever any payment to be made under the Loan Documents shall be stated to be due on a day that is not a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of time, in the case of a payment of principal, shall
be included in the computation of any interest on such principal payment.

 

If any required payment of principal pursuant
to Section 7(B) or Section 7(C) hereof or of interest hereunder is not made within five (5) days after the due date thereof, the
Borrower shall pay to the Lender a late payment charge equal to five percent (5.0%) of the amount of the overdue payment, for the
purpose of reimbursing the Lender for a portion of the expense incident to handling the overdue payment. If the required payment
of principal, accrued interest, and other amounts, if any, payable under this Agreement at the Maturity Date or upon an acceleration
of the Loan is not made within thirty (30) days after the due date thereof, the Borrower shall pay to the Lender a late payment
charge equal to three percent (3.0%) of the amount of the overdue payment, for the purpose of reimbursing the Lender for a portion
of the expense incident to handling the overdue payment. This late payment charge shall not be prorated on a daily basis as payments
are received by the Lender. This provision shall not be deemed to excuse a late payment or to be a waiver of any other rights that
the Lender may have, including the right to declare the entire unpaid principal balance and accrued interest immediately due and
payable. The Borrower agrees that the “late payment charge” is a provision for liquidated damages and represents a
fair and reasonable estimate of the damages that the Lender will incur by reason of the late payment, considering all circumstances
known to the Borrower and the Lender on the date hereof. The Borrower further agrees that proof of actual damages will be difficult
or impossible.

 

    	12

    	 

    
 

The Lender will have the right to pay accrued
interest or principal on the Note and any and all other amounts due and payable under the Loan Documents by debiting any account
of the Borrower at the Lender or by making an Advance against the Revolving Line, without further authorization of the Borrower.

 

The Borrower shall pay principal, interest,
and all other amounts payable under this Agreement, or under any other Loan Document, without any deduction whatsoever, including,
but not limited to, any deduction for any setoff or counterclaim.

 

8.              REPAYMENT AND RE-BORROWING OF ADVANCES. During the term of this Agreement, Borrower from time-to-time may repay all
or any portion of the outstanding balance of the Advances and may re-borrow all or a portion of the amount of a repaid Advance
in accordance with the provisions of this Agreement. A repayment pursuant to this Section 8 shall be paid on an interest payment
date, as set forth in Section 7. The Borrower’s payment in full of all then-outstanding Advances will be a payment pursuant
to this Section 8 and not pursuant to Section 9 unless the Borrower has given to the Lender prior written notice of its
intent to prepay pursuant to Section 9.

 

9.              PREPAYMENT.  The
Note and all then-outstanding Advances, accrued interest, and all other amounts, if any, payable under this Agreement may be prepaid
in whole at any time without penalty or premium provided that the Borrower has given to the Lender written notice of the intent
to prepay pursuant to this Section 9 at least thirty (30) days prior to the date of the prepayment. If the Borrower prepays pursuant
to this Section 9, the Lender will not be obligated under this Agreement to make any additional Advances to the Borrower, the
Lender will mark the Note as satisfied in full and will return the marked Note to the Borrower, the Lender will execute terminations
in recordable form with respect to the Borrower Mortgage and the UCC filings relating to the Collateral and will provide them
to the Borrower who may file them, and this Agreement will terminate (except as to provisions hereof that expressly survive the
termination of this Agreement).

 

10.           [INTENTIONALLY OMITTED]

 

11.           CONDITIONS
PRECEDENT.  As a condition precedent to the extension by the Lender of the Revolving Line hereunder, the following
conditions must be satisfied.

 

A.               
The following agreements, documents and other items shall have been executed and/or delivered to the Lender by the party
indicated, each of which documents, agreements and other items shall be in form and substance acceptable to the Lender:

 

(1)              
This Agreement, duly executed and delivered by the Borrower.

 

(2)              
The Note, duly executed and delivered by the Borrower.

 

    	13

    	 

    
 

(3)              
The Borrower Security Agreement, duly executed and delivered by the Borrower.

 

(4)              
The Borrower Mortgage, duly executed and delivered by the Borrower.

 

(5)              
The Organizational Documents, together with an incumbency certificate dated the closing date and executed by an officer
of the Borrower with respect to the Organizational Documents other than the opinion.

 

(6)              
Such other papers and documents as may be required by this Agreement or as the Lender otherwise reasonably may require.

 

B.                
Closing Costs. The Borrower shall have paid all closing costs, including without limitation attorney fees and other
costs incurred by the Lender with respect to the establishment of the Revolving Line and the execution of this Agreement.

 

C.                
Preclosing Requirements. The Borrower shall have delivered to Lender the following, each in form and substance acceptable
to Lender, to the extent that such items have not been previously delivered to the Lender:

 

(1)              
Financial Statements. The Borrower’s most recent Form 10-K and the most recent Form 10-Q, each as filed with
the SEC.

 

(2)              
Insurance. Evidence of insurance maintained by the Borrower that is acceptable to the Lender and that names the Lender
and any participant as an additional insured and/or loss payee, as applicable, and evidence of the Borrower’s requesting
in the elections to participate that the Borrower previously has delivered to drillers/operators in response to Authorizations
for Expenditure that a driller/operator include the Borrower in all insurance policies maintained by the driller/operator that
provide coverage with respect to the well to be drilled.

 

(3)              
Organizational Documents. A copy of the Organizational Documents.

 

(4)              
Authorizations for Expenditure. Copies of all Authorizations for Expenditure that currently apply with respect to
Borrower Property. All such Authorizations for Expenditure will be in full force and effect. The Borrower also will provide a copy
of any Authorization for Expenditure that the Borrower has received but as to which the Borrower has not made an election to participate
and for which the period to elect to participate has not expired. The Borrower also will provide a list of the Authorizations for
Expenditure that the Borrower previously had received as to which the Borrower did not elect to participate, if any.

 

(5)              
Projected Operating Budget. A copy of the projected operating budget that the Borrower provided to Prenante5, LLC
with respect to the Borrower’s fiscal year 2012.

 

(6)              
Other. Such other documents as the Lender otherwise reasonably may require.

 

    	14

    	 

    
 

D.               
Searches. The Lender shall have received the results of UCC, lien, judgment, and other searches that it requested,
and the searches are acceptable to the Lender.

 

E.                
Borrower Property; Collateral. The Borrower shall have delivered to Lender, each in form and substance acceptable
to Lender, a schedule as to all of the Borrower Property of the Borrower, copies of all documents by which the Borrower acquired
its interests in the Borrower Property, copies of all landman reports or title opinions that Borrower received with respect to
the Borrower Property, and a description of all other reports, documents, opinions, or other materials received by the Borrower
with respect to the Borrower Property and a copy of any such other reports, documents, opinions, or other materials that the Lender
requests. The Borrower represents that it has not obtained title insurance with respect to any Borrower Property. The Lender, in
its sole discretion, will have determined that the Borrower’s rights with respect to the Borrower Property and the Collateral
are acceptable. The Lender reserves the right to require, at the Borrower’s expense, title insurance with respect to the
Borrower’s rights in the Borrower Property if title insurance later becomes commercially available and is requested by lenders
as to loan transactions that are comparable to this transaction between the Borrower and the Lender.

 

F.                 
Filings, Registrations, and Recordings. Other than the releases and terminations to which Section 12(H) refers, each
document (including any Uniform Commercial Code financing statement) required by this Agreement, any other Loan Document, or under
law, or reasonably requested by the Lender, to be filed, registered, or recorded to create or to continue, in favor of the Lender,
a first perfected security interest in or lien upon the Borrower Property or the Collateral (including the filing of a UCC-1 financing
statement in the State of North Dakota, any other state in which Borrower Property is located, and the State of Delaware), subject
to Permitted Interests, have been executed in recordable form, and the originals of such documents have been delivered to counsel
for the Lender for filing and recording together with all amounts required for the payment of any necessary fee, tax or expense
to file and to record.

 

12.           CONDITIONS
TO AN ADVANCE. The Lender will not be required to make any Advance unless and until the following conditions, and any other
requirements required by this Agreement or any other Loan Document, have been satisfied by the Borrower, each in a manner acceptable
to the Lender, and each request by the Borrower shall be a representation and warranty by the Borrower that, as of the date that
the Lender makes the Advance, the following conditions, and any other requirements required by this Agreement or any other Loan
Document, have been satisfied by the Borrower:

 

A.               
Warranties and Representations True. All warranties and representations made in the Loan Documents shall remain true
and correct in every material respect as if made on the date of the disbursement of an Advance.

 

B.                
Documents to be Furnished for Each Advance. At least ten (10) Business Days prior to each requested disbursement,
the Borrower shall have furnished to the Lender the documents and information required for a disbursement pursuant to this Agreement,
and the documents and information are acceptable to the Lender, including the following documents and information:

 

    	15

    	 

    
 

(1)              
A copy of each executed Authorization for Expenditure, which will be in full force and effect, with respect to which amounts
requested pursuant to the disbursement will be applied. If the Borrower previously has provided to the Lender any such Authorization
for Expenditure, rather than providing another copy, the Borrower may identify to the Lender the Authorization for Expenditure.

 

(2)              
A copy of (i) a Borrowing Base Certificate that (a) establishes that the sum of (I) the then-outstanding amount of
all Advances and (II) the amount that is being requested with respect to the Advance that is being requested does not exceed the
Borrowing Base and (b) summarizes each Joint Interest Billing Statement with respect to which amounts requested pursuant to the
disbursement will be applied and the Borrower’s confirmation that the Borrower’s “Working Interest” percentage
that is being applied with respect to each such Joint Interest Billing Statement is consistent with the Authorization for Expenditure
to which such Joint Interest Billing Statement relates, (ii) each Joint Interest Billing Statement with respect to which amounts
requested pursuant to the disbursement will be applied, and (iii) any back-up, expenditure information to the Joint Interest Billing
Statement that the Lender requests.

 

(3)              
A description, or copies, of all other documents that were provided to the Borrower with respect to the Joint Interest Billing
Statement (other than the back-up, expenditure information) or the well to which it relates since the last requested disbursement
with respect to such well and, if a description if provided, a copy of any such document that the Lender requests.

 

(4)              
As to (i) any expenditure for which the Borrower is requesting reimbursement and (ii) any expenditure as to which the Borrower
requested in the immediately preceding disbursement an advance with which to pay the expenditure, proof of the payee’s receipt
of the payment in the form of (a) a copy (copies) of the Borrower’s check register(s) on, or as to, which the Borrower has
identified the check(s) pursuant to which any such payment was made and (b) a copy (copies) of the Borrower’s bank statement(s)
on, or as to, which the Borrower has identified the clearance of such check(s) (or, if a check is outstanding, the Borrower’s
confirmation in the request for the Advance that the check was sent to the payee and that the applicable account contains, and
will continue to contain, adequate funds to cover the outstanding check and all other outstanding checks drawn on the account,
and which is acceptable to the Lender; if this parenthetical clause applies, the Borrower will be obligated with respect to the
outstanding check to comply with this Section 12(B)(4) for subsequent requests until the outstanding check has cleared; unless
the Lender consents, any expenditure with respect to a check that has been outstanding more than ninety (90) days no longer will
be included in the Borrowing Base).

 

C.                No Event of Default. Neither an Event of Default, nor any event that with the passing of time, the giving of notice,
or both could become an Event of Default, shall have occurred and be continuing under any Loan Document.

 

    	16

    	 

    
 

D.               
Held by Production. If a Borrower Property with respect to which the Borrower is requesting an amount pursuant to
the disbursement is not then Held by Production, the Borrower will identify the Borrower Property and the amount of the proposed
disbursement to be applied with respect to it, and the Borrower will describe the expected timeframe for establishing when the
Borrower Property will be Held by Production, all of which will be acceptable to the Lender in the Lender’s discretion.

 

E.                
Borrower Property. The Lender reserves the right to require, at the Borrower’s expense, title insurance with
respect to the Borrower’s rights in the Borrower Property if title insurance later becomes commercially available and is
requested by lenders as to loan transactions that are comparable to this transaction between the Borrower and the Lender.

 

F.                 
Filings, Registrations, and Recordings. Other than the Advance, if any, made in connection with the Lender’s
extension of the Revolving Line, any document of the type that is described in Section 11(G) shall have been properly filed, registered
or recorded in each jurisdiction in which the filing, registration or recordation thereof is so required or requested, and the
Lender shall have received an acknowledgment copy, or other evidence satisfactory to it, of each such filing, registration or recordation
and satisfactory evidence of the payment of any necessary fee, tax or expense relating thereto.

 

G.               
Advance Request. An executed Advance request from the Borrower to the Lender in the form attached to this Agreement
as Exhibit E.

 

H.               
Release of Existing Prenante Liens. As a condition to the initial Advance, releases or terminations in recordable
form as to all of the secured liens that Prenante5, LLC holds with respect to the funds that it loaned to the Borrower pursuant
to the Revolving Credit and Security Agreement dated May 2, 2011 between them have been executed, and the originals of
such releases and terminations have been delivered to counsel for the Lender (or to another Person that is acceptable to the Lender)
for filing and recording together with all amounts required for the payment of any necessary fee, tax or expense to file and to
record. The Borrower and the Lender believe that all releases and terminations to which this Section 12(H) applies have been executed
and recorded and all amounts required for payment to file and to record have been paid.

 

13.           REPRESENTATIONS.  To
induce the Lender to make Advances hereunder, the Borrower hereby warrants, represents and certifies to the Lender as follows:

 

A.               
Existence and Power.  The Borrower is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, and is in good standing in Minnesota, North Dakota, and every other jurisdiction wherein
the nature of its business or the character of its properties makes such qualification necessary and where failure to be so qualified
and in good standing would, in the aggregate, have a Material Adverse Effect, and has all requisite power and authority to carry
on its business as now conducted and as presently proposed to be conducted.

 

    	17

    	 

    
 

B.                
Authority.  The Borrower has full power and authority to execute and to deliver the Loan Documents, and
to incur and perform its obligations hereunder and thereunder; the execution, delivery, and performance by the Borrower of the
Loan Documents, and any and all other documents and transactions contemplated hereby or thereby, have been duly authorized by all
necessary actions that remain in full force and effect, will not violate any law, ordinance, or regulation by which the Borrower
may be bound or affected or the Organizational Documents, or result in the breach of, constitute a default under, or create or
give rise to any lien under, any indenture or other agreement or instrument to which the Borrower is a party or by which the Borrower
or its property may be bound or affected; and the Loan Documents have been executed and delivered to the Lender by the officers
of the Borrower who have been authorized by the Board of Directors of the Borrower.

 

C.                
Enforceability.  Each Loan Document constitutes the legal, valid, and binding obligations of the Borrower,
enforceable in accordance with such Loan Document’s terms (subject, as to enforceability, to limitations resulting from bankruptcy,
insolvency, and other similar laws affecting creditors’ rights generally and principles of equity).

 

D.               
Financial Condition.  The financial statements of the Borrower heretofore furnished to the Lender are complete
and correct in all material respects and fairly present the financial condition of the Borrower at and as of the dates of such
statements and the results of the Borrower’s operations for the period ended on said dates, and have been prepared in accordance
with GAAP, consistently applied. Since the most recent set of financial statements delivered by the Borrower to the Lender, there
have been no material adverse changes in the financial condition of the Borrower. The Borrower has not incurred any Indebtedness
other than (i) the Indebtedness pursuant to this Agreement, (ii) Permitted Seller Acreage Purchase Financing, and (iii) as
to all other Indebtedness, in an aggregate, outstanding amount that does not exceed $50,000.

 

E.                
Litigation.  There is no action, suit, or proceeding pending or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any basis therefor, that, if adversely determined, would have a Material Adverse Effect or
that would question the validity of the Loan Documents or any instrument, document or other agreement related hereto or required
hereby, or impair the ability of the Borrower to perform its obligations under the foregoing agreements.

 

F.                 
Licenses.  The Borrower possesses adequate licenses, permits, franchises, patents, copyrights, trademarks
and trade names, or rights thereto, to conduct its businesses substantially as now conducted and as presently proposed to be conducted.

 

G.               
Default.  The Borrower is not in default of (i) any agreement, instrument, decree, or order to which it
is a party and that relate to the leasing, use, development of the Borrower Property, the production with respect thereto, or the
right to receive payments with respect thereto or (ii) a provision under any other agreement, instrument, decree or order to which
it is a party or by which it or its property is bound or affected and all of which defaults under clauses (i) and (ii), if any,
would have a Material Adverse Effect.

 

H.               
Consents, and Similar Approvals or Authorizations.  No consent, approval, order, or authorization of, or
registration, declaration, or filing with, or notice to, any governmental authority or any third party is required in connection
with the execution and delivery of the Loan Documents, or any of the agreements or instruments herein mentioned to which the Borrower
is a party, or in connection with the carrying out or performance of any of the transactions required or contemplated hereby or
thereby or, if required, such consent, approval, order or authorization has been obtained or such registration, declaration or
filing has been accomplished or such notice has been given prior to the date hereof.

 

    	18

    	 

    
 

I.                  
Taxes.  The Borrower has filed timely all local, state, federal, and other tax returns required to be filed
by it on or before the date of this Agreement and has either paid timely all taxes to be due, including interest and penalties,
that are not being contested in good faith and by appropriate proceedings, or provided adequate reserves for payment thereof, and
the Borrower does not have any information or knowledge of any objections to or claims for additional taxes in respect of any local,
state, and federal or other tax.

 

J.                  
Title.  The Borrower has Defensible Title to the Borrower Property and good and marketable title to the
Collateral, free and clear of all mortgages, security interests, liens and encumbrances, except Permitted Interests. The mortgage
liens granted to the Lender by the Borrower pursuant to the Borrower Mortgage, and the security interests granted to the Lender
pursuant to the Borrower Security Agreement, constitute valid and, upon filing and recording, perfected first liens in and to the
Borrower Property and the Collateral, subject to Permitted Interests.

 

K.               
Pension Plans. The Borrower has not established, maintained, or made any contributions to, any employee benefit plan
that is subject to Part 3 of Subtitle B of Title 1 of ERISA or, if such a plan has been so established, maintained, or
contributed to, such plan did not have an “accumulated funding deficiency” (as that term is defined in Section 302
of ERISA) in excess of $250,000 as of the date hereof, and, without limiting the generality of the foregoing, the Borrower has
not incurred any material liability to the Pension Benefit Guaranty Corporation with respect to any such plan.

 

L.                
Use of Advances.  The 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 Regulation U of the
Board of Governors of the Federal Reserve System), and no part of the proceeds of any Advance hereunder will be used to purchase
or carry any such margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock.

 

M.              
Solvency.

 

(1)              
The fair saleable value of the assets of the Borrower will, immediately following the closing of the transaction contemplated
hereby exceed the amount that will be required to be paid or in respect of the existing debts and other liabilities (including
contingent liabilities) of the Borrower as they mature.

 

(2)              
The Borrower does not and will not have, immediately following the closing of the transaction contemplated hereby, unreasonably
small capital to carry out its business as conducted or as proposed to be conducted.

 

    	19

    	 

    
 

(3)              
The Borrower does not intend to, and does not believe that it will, incur debts beyond its ability to pay such debts as
they mature.

 

(4)              
The list of Contingent Liabilities that is attached as Exhibit F is a true, correct, and complete list of all of
Borrower’s Contingent Liabilities.

 

N.               
Submissions to Lender.  All financial and other information provided to the Lender by or on behalf of the
Borrower in connection with the Borrower’s request for the Revolving Line contemplated hereby is true and correct in all
material respects.

 

O.               
Compliance with Covenants.  The Borrower is in compliance with its obligations that are set forth in Section
14 and Section 16 hereof.

 

Each of the foregoing warranties and representations,
and any additional warranty or representation contained in this Agreement or in any other Loan Document, shall be deemed to be
repeated and reaffirmed on and as of the date that the Lender makes an Advance to the Borrower pursuant to Section 2 hereof.

 

14.           COVENANTS.  On
and after the date hereof and until the payment in full of the Note and all Advances, and the performance of all other obligations
of the Borrower hereunder or under any other Loan Document, and so long as the Revolving Line remains in full force and effect,
the Borrower agrees that, unless the Lender shall otherwise consent or agree in writing:

 

A.               
Financial Statements.  The Borrower shall establish and maintain accurate and complete, in all material
respects, books, accounts and records as to the Borrower in accordance with GAAP consistently applied. The Borrower will permit
representatives of the Lender to have free access to and to inspect and copy all books, records and contracts of the Borrower during
normal business hours. Any such inspection by the Lender and its representatives shall be for the sole benefit and protection of
the Lender, and the Lender shall not have any obligation to disclose the results thereof to the Borrower or to any third party.
In addition, the Borrower shall deliver to the Lender each of the following documents, which shall be in form and detail acceptable
to the Lender:

 

(1)              
within forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower,
its balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such
fiscal quarter and the then-elapsed portion of the fiscal year; provided that, so long as such quarterly report contains
all information and certifications required under this Section 14(A)(1) and is publicly available free of charge, the Borrower’s
filing on the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system of the Borrower’s quarterly report
with Form 10-Q, together with the delivery of the certificate required by Section 14(A)(3), shall be deemed to be the Borrower’s
furnishing of all items required to be delivered to the Lender pursuant to this Section 14(A)(1);

 

(2)              
within ninety (90) days after the end of each fiscal year of the Borrower, its audited balance sheet and related statements
of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by independent public accountants; provided that, so long
as such annual report contains all information and certifications required under this Section 14(A)(2) and is publicly available
free of charge, the Borrower’s filing on the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system
of the Borrower’s annual report with Form 10-K, together with the delivery of the certificate required by Section 14(A)(3),
shall be deemed to be the Borrower’s furnishing of all items required to be delivered to the Lender pursuant to this Section
14(A)(2);

 

    	20

    	 

    
 

(3)              
concurrently with any delivery of financial statements under clause (1) or (2) above, a Certificate of Chief Financial Officer
of the Borrower substantially in the form of Exhibit C;

 

(4)              
as soon as available and in any event within (i) forty-five (45) days after the end of each of the first three fiscal quarters
of each fiscal year of the Borrower and (ii) ninety (90) days after the end of each fiscal year of the Borrower, a spreadsheet
(or other format that is acceptable to the Lender) (the Borrower’s format as of the date of the Original Agreement is an
Excel spreadsheet summary that is titled “Oil Sale Reconciliation”) that shows the operating results of each of the
wells in production during such quarter in which the Borrower has a working interest;

 

(5)              
within ten (10) days after the end of each calendar quarter during the term hereof, a Quarterly Compliance Certificate executed
by a Senior Officer; and

 

(6)              
from time to time, with reasonable promptness, such further information regarding the business, operations, affairs and
financial and other condition of the Borrower as the Lender reasonably may request.

 

B.                
Taxes and Claims.  The Borrower shall pay and discharge all taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits, or upon any of its assets or properties, prior to the date on which penalties
attach thereto, and all lawful claims that, if unpaid, might become a lien or charge upon the property or assets of the Borrower;
provided, however, that the Borrower shall not be required to pay any such tax, assessment, charge, levy or claim
the payment of which is being contested in good faith and by proper proceedings and for which it shall have set aside on its books
adequate reserves therefor.

 

C.                
Insurance.  The Borrower shall maintain or cause to be maintained insurance coverage with responsible insurance
companies that is acceptable to the Lender and that names the Lender and any participant as an additional insured and/or loss payee,
as applicable. The Borrower also shall request in each election to participate that the Borrower delivers to a driller/operator
in response to an Authorization for Expenditure that the driller/operator includes both the Borrower and the Lender and any participant
in all insurance policies maintained by the driller/operator that provide coverage with respect to the well to be drilled.

 

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D.               
Maintenance of Existence; Conduct of Business.  The Borrower shall preserve or cause to be preserved all
of its rights, privileges and franchises necessary or desirable in the normal conduct of its business, including, without limitation,
the timely satisfaction of all conditions to avoid the expiration of a Borrower Property lease unless it would not be prudent to
do so and the Borrower promptly gives written notice to the Lender that the Borrower is not doing so. The Borrower shall conduct
its business in an orderly, efficient and regular manner. The Borrower shall not liquidate, dissolve, suspend business operations,
sell all or substantially all of its assets, acquire all or substantially all of the assets of any other person or entity (other
than acquisitions of additional Borrower Property in accordance with Section 14(M) hereof), or, except in the ordinary course of
the Borrower’s business, enter into any partnership or joint venture. If, after the date of the Original Agreement, the Borrower
registers in a jurisdiction as a foreign entity qualified to do business in the jurisdiction, the Borrower will provide promptly
to the Lender a copy of the filed registration application and the registration certificate.

 

E.                
Maintenance of Properties. The Borrower shall preserve or cause to be preserved all of its rights and privileges
with respect to the Borrower Property, including an Authorization for Expenditure, except where it would not be prudent to do so
and the Borrower promptly gives written notice to the Lender that the Borrower is not doing so, and with respect to the Collateral. 
The Borrower shall keep or cause to be kept all of its other assets and properties that are necessary to its business in good working
order and condition, ordinary wear and tear excepted.

 

F.                 
Compliance with Applicable Laws.  The Borrower shall comply or shall cause compliance with the requirements
of all applicable local, state, and federal laws, and of all rules, regulations, and orders of any governmental or other authority
or agency, a breach of which would have a Material Adverse Effect, except where contested in good faith and by proper proceedings.

 

G.               
Litigation.  The Borrower shall promptly give to the Lender notice in writing of all litigation and of
all proceedings by or before any court or governmental or regulatory agency affecting the Borrower, except litigation or proceedings
that, if adversely determined, would not materially affect the financial condition or business of the Borrower.

 

H.               
Liens.  The Borrower shall not create, assume, incur, or suffer to exist any assignment, mortgage, pledge,
security interest, lien, charge or other encumbrance whatsoever upon the Borrower Property or the Collateral securing any Indebtedness
or obligation, except the Permitted Interests.

 

I.                  
Events of Default. The Borrower shall furnish to the Lender as soon as possible and in any event within seven (7)
days after the Borrower has obtained knowledge of the occurrence of an Event of Default, or an event that with the giving of notice
or lapse of time or both would constitute an Event of Default, a statement signed by the Borrower setting forth the details of
the Event of Default or of the event and the action that the Borrower has taken, is taking, or proposes to take to correct the
same.

 

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J.                  
Balance Sheet Available Cash.  The Borrower, at all times, shall cause its Balance Sheet Available Cash
(i) to be an amount that is not less than the greater of (x) $300,000 and (y) twelve (12) months’ then-regularly scheduled
payments of interest on the outstanding amount of Advances. Borrower shall promptly (but in no event more than three (3) Business
Days following the occurrence of a Balance Sheet Available Cash Shortfall) notify the Lender that there is a Balance Sheet Available
Cash Shortfall; provided that the Borrower shall have twenty (20) days from the date on which the Balance Sheet Available Cash
Shortfall arose to remedy the Balance Sheet Available Cash Shortfall.

 

K.               
Access.  The Borrower shall grant to the Lender’s agents access at any reasonable time to inspect
the Borrower Property to which the Borrower has, or reasonably may obtain, access, the Collateral, and the Borrower’s other
property and business.

 

L.                
Transfer of Borrower Property.  The Borrower shall not sell, dispose of, mortgage, assign or transfer all
or any part of its right, title or interest in or to the Borrower Property other than (a) the sale of Hydrocarbons and seismic
data in the ordinary course of business; (b) farm-outs of undeveloped acreage and assignments in connection with such farm-outs;
(c) sales or other dispositions of Borrower Properties or any interest therein; provided that the consideration received
in respect of such sale, farm-out, or other disposition shall be (i) cash, (ii) new Borrower Property, or (iii) any combination
of (i) and (ii). Collateral may be sold or disposed of (x) where it represents the sale or transfer of tangible personal property
that is no longer necessary for the business of the Borrower or is replaced by property of at least comparable value and use and
(y) other dispositions and sales of Collateral, without the Lender’s consent, having a fair market value not to exceed $50,000
in the aggregate during the term of this Agreement.

 

M.              
Acquisition of Additional Borrower Property. If the Borrower acquires an additional Borrower Property, except as
provided in the following sentence, on or before ten (10) days after the end of a calendar quarter in which any such acquisition
occurred, the Borrower will cause the execution and the filing of a Borrower Mortgage, or an amendment to an existing Borrower
Mortgage, that grants to the Lender a mortgage lien with respect to such additional Borrower Property and that constitutes a valid
and perfected first lien in and to such additional Borrower Property, subject to Permitted Interests. If at any point in time during
a calendar quarter, the Borrower has acquired cumulatively additional Borrower Property in excess of one thousand (1,000) acres
(whether as leasehold interests, or possibly fee ownership or other property rights, with respect to such amount of acreage), the
Borrower will comply with the preceding sentence within ten (10) days after the acquisition that causes this sentence to apply
and also will comply with the preceding sentence after the end of the calendar quarter as to any remaining additional Borrower
Property acquired during the calendar quarter (and this sentence may apply more than once during a calendar quarter, but, if it
applies, the acreage count will restart for the calendar quarter after its application). The Borrower will provide to the Lender
an acknowledgment copy, or other evidence satisfactory to the Lender, of each such filing, registration or recordation and satisfactory
evidence of the payment of any necessary fee, tax or expense relating thereto. If a Borrower Property is added, the parties also
shall revise Schedule I to reflect the addition, and the Borrower will provide to the Lender the anticipated “Net
Revenue Interest” or “Net Royalty Interest” percentage and the anticipated “Working Interest” percentage
for each additional Borrower Property. The Borrower will not acquire any additional Borrower Property pursuant to which it would
become an active operator of any oil and gas properties without the written consent of the Lender.

 

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N.               
Consolidation and Merger.  The Borrower shall not consolidate with or merge into any person or entity,
or permit any other person or entity to merge into it.

 

O.               
Dividends/Distributions. The Borrower shall not declare or pay any dividends or other distributions to shareholders
during any fiscal year of the Borrower, other than (i) typical liquidated damages to purchasers of securities in connection
with registration rights agreements, not to exceed one percent (1.0%) of the purchase price that any such purchaser paid to
acquire any such security on a monthly basis and not to exceed a total of nine (9) months, where the Borrower has made a reasonable
effort to comply with such agreements and (ii) cash in lieu of fractional shares that the Borrower pays to shareholders in connection
with a reserve stock split that is effected consistently with the Borrower’s disclosure of a potential reverse stock split
in its 8-K filing that was filed with the SEC on March 26, 2012.

 

P.                 
Notice of Litigation. Promptly upon receiving notice thereof, the Borrower will give written notice to Lender of
(a) any action or proceeding instituted by or against it in any federal or state court or other regulatory body; or (b) any such
proceedings that are threatened against it that, if adversely determined, could have a Material Adverse Effect.

 

Q.               
Maintenance of Existence; Change in Name or Organizational State. The Borrower shall maintain and preserve its respective
existence and all rights and franchises material to its respective business. The Borrower shall not change its name or the state
in which it is organized without thirty (30) days’ prior written notice to the Lender.

 

R.                
Anti-Terrorism Laws. The Borrower shall not (i) conduct any business or engage in any transaction or dealing with
any transaction relating to, any property blocked pursuant to Executive Order No. 13224; or (ii) engage in or conspire to engage
in any transaction that evades or avoids, or attempts to violate, any of the prohibitions set forth in Executive Order No. 13224,
the USA PATRIOT Act, or any other Anti-Terrorism Law. The Borrower shall deliver to the Lender any certification or other evidence
requested by the Lender, confirming the Borrower’s compliance with this section.

 

S.                 
Costs and Expenses. The Borrower will pay all costs and expenses required to satisfy the conditions of this Agreement,
including but not limited to all recording expenses, the Lender’s reasonable attorney’s fees, environmental reports,
and insurance premiums.

 

T.                 
Restriction on Indebtedness. The Borrower shall not incur any Indebtedness other than (i) the Indebtedness pursuant
to this Agreement, (ii) Permitted Seller Acreage Purchase Financing, and (iii) as to all other Indebtedness, in an aggregate amount
that does not exceed $50,000 at any one time outstanding.

 

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U.               
Authorization for Expenditure. Within five (5) days after the Borrower receives an Authorization for Expenditure,
the Borrower will provide to the Lender a copy of the Authorization for Expenditure and all documents and materials relating to
it. The Borrower will elect timely to participate with respect to an Authorization for Expenditure, except where (x) it would not
be prudent to do so and the Borrower promptly gives written notice to the Lender that the Borrower is not doing so or (y) unless,
at least five (5) days prior to the deadline to make the election, the Borrower has requested in writing to the Lender the Lender’s
consent to the Borrower’s electing not to participate and the Lender has so consented. The Borrower will comply with all
of the Borrower’s requirements with respect to an Authorization for Expenditure so as to maintain all of the Borrower’s
rights under the Authorization for Expenditure in full force and effect unless the Borrower is contesting a requirement in good
faith by appropriate action and for which adequate reserves are being maintained in accordance with GAAP and promptly gave the
Lender written notice to the Lender that the Borrower would be contesting.

 

V.               
Joint Interest Billing Statement. The Borrower will pay timely the amount that the Borrower is required to pay pursuant
to each Joint Interest Billing Statement that it receives unless the Borrower is contesting all or a portion of the amount in good
faith by appropriate action and for which adequate reserves are being maintained in accordance with GAAP and promptly gave the
Lender written notice to the Lender that the Borrower would be contesting.

 

W.              
Inspections. The Lender shall not be required to conduct any inspection of the Borrower Property or the wells being
drilled or in production pursuant to Authorizations for Expenditure that relate to the Borrower Property. It is expressly understood
and agreed that the Lender assumes no liability or responsibility for the satisfactory completion of the drilling of any such wells,
for the adequacy of funds advanced or disbursed pursuant hereto, for inspections during drilling or production, or for any acts
on the part of the Borrower or other Persons to be performed in the drilling or the production of any such wells.

 

X.               
Material Adverse Occurrence. The Borrower promptly will notify the Lender in writing as to any development in the
business or affairs of the Borrower that reasonably could be expected to have a Material Adverse Effect.

 

Y.               
SEC Filings. The Borrower will notify the Lender in writing of any filing that the Lender makes with the SEC within
three (3) Business Days after the Lender has made the filing.

 

Z.                
Projected G&A Budget. The Borrower will furnish the Lender for its review and approval, prior to the beginning
of the Borrower’s fiscal year, commencing with fiscal year 2013, a proposed, quarter-by-quarter, projected budget outlining
anticipated general and administrative expenses for the fiscal year, such projections to be accompanied by a certificate signed
by a Senior Officer of Borrower to the effect that such projections have been prepared on the basis of sound financial planning
practice consistent with past budgets and financial statements and that such officer has no reason to question the reasonableness
of any material assumptions on which such projections were prepared. The Lender will review the proposed budget and will provide
within ten (10) days after receiving it either the Lender’s approval or its proposed changes or comments. If the
Lender provides proposed changes or comments to the proposed budget, the parties will cooperate to address them and to reach an
approved projected budget. If the Lender fails to respond within ten (10) days after receiving the proposed budget, the Lender
will be deemed to have approved it. The Borrower may not exceed the amount of the budgeted general and administrative expenditures
set forth in an approved, projected budget with respect to any quarter by more than twenty-five percent (25%) without the Lender’s
prior written consent, which will not be unreasonably withheld, conditioned, or delayed, provided that no default or Event of Default
shall arise upon the Borrower’s failure to comply with the provisions of this Section 14(Z) unless and until the Lender first
has delivered to the Borrower written notice of such failure to comply and has afforded the Borrower sixty (60) days to cure such
failure, which cure may be accomplished by the Borrower’s demonstrating to the Lender that the excess amount of general and
administrative cost expenditures have been, or will be timely, funded from sources other than Excluded Revenues.

 

    	25

    	 

    
 

AA.         
Notice of Damage or Loss. If a Borrower Property or Collateral is damaged by fire or other casualty, or if there
is a loss with respect to Collateral, the Borrower will give promptly to the Lender written notice that describes the Borrower
Property or the Collateral and the nature of the damage or the loss. For purposes of this section, Borrower Property will include
a well to which an Authorization for Expenditure applies with respect to a Borrower Property.

 

BB.          
Cash Sweep. Within five (5) days following the earlier of (I) the Borrower’s timely filing of or (II) the due
date for the filing of (i) its Form 10-Q for each of the first three calendar quarters of a fiscal year of the Borrower, commencing
with the third quarter of the Borrower’s fiscal year 2012 and of (ii) its Form 10-K for a fiscal year for purposes of
the fourth quarter of a fiscal year of the Borrower, beginning with the Borrower’s fiscal year 2012 (and if either (x) the
Borrower obtains an extension to the original due date for filing any such form or (y) the Borrower does not timely file any such
form, within five (5) days following the due date of such form without any extension), the Borrower will pay to the Lender ninety
percent (90%) of the amount, if any, of Adjusted Cash EBTDA. In connection with, or prior to, the Borrower’s making the payment
that is required to pursuant to this Section 14(BB), the Borrower will provide to the Lender a Certificate of Chief Financial
Officer of the Borrower Regarding Adjusted Cash EBTDA, substantially in the form of Exhibit G, that sets forth the calculation
of the amount that is then-being paid by the Borrower pursuant to this Section 14(BB) (or, if there is no excess amount to
be paid with respect to such period, the calculation that shows that there is no excess amount).

 

CC.          
Use of Excluded Revenues. Subject to (i) no prior occurrence of a Revolving Credit Expiration Date and (ii) any other
applicable provision of this Agreement, the Borrower may use the amount of any Excluded Revenues for only the following purposes:
(i) to purchase additional Borrower Property; (ii) to pay all or a portion of an Authorization for Expenditure; and (iii) to pay
general and administrative costs of the Borrower, subject to the limitations on payment of such general and administrative costs
that are set forth in Section 14(Z).

 

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15.           EVENTS
OF DEFAULT; REMEDIES.

 

A.               
Any one or more of the following events shall constitute an Event of Default hereunder and under the documents related hereto:

 

(1)              
the Borrower shall default in the payment of principal or interest payable to the Lender hereunder, under the Note or under
any of the other Loan Documents, as and when due;

 

(2)              
the Borrower shall default in the payment of any fees or other amounts payable to the Lender hereunder, under the Note or
under any of the other Loan Documents, and such failure shall continue for five (5) days after written notice to the Borrower of
such failure; or

 

(3)              
other than an Event of Default that is described in another provision of this Section 15(A), the Borrower shall fail
to observe or perform any covenant, condition or agreement to be observed or performed by it under any of the Loan Documents for
the applicable period of time that is set forth in such Loan Document with respect to such covenant, condition, or agreement (or,
if no applicable period is set forth, for a period of thirty (30) days after written notice, specifying such default and requesting
that it be remedied, given to the Borrower by the Lender, unless the Lender shall agree in writing to an extension of such time
prior to its expiration, or for such longer period as may be reasonably necessary to remedy such default (other than defaults that
can be cured by a money payment) provided that the Borrower is proceeding with reasonable diligence to remedy the same); or

 

(4)              
the Borrower shall file a petition in bankruptcy or for reorganization or for an arrangement pursuant to any present or
future state or federal bankruptcy act or under any similar federal or state law, or shall be adjudicated a bankrupt or insolvent,
or shall make a general assignment for the benefit of its creditors, or files any petition or answer seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar relief under the present or any future federal bankruptcy
act or any other present or future applicable federal, state or other statute or law, or shall be unable to pay its debts generally
as they become due; or if an order for relief under any present or future federal bankruptcy act or similar state or federal law
shall be entered against the Borrower; or if a petition or answer requesting or proposing the entry of such order for relief or
the adjudication of the Borrower as a debtor or a bankrupt or its reorganization under any present or future state or federal bankruptcy
act or any similar federal or state law shall be filed in any court and such petition or answer shall not be discharged or denied
within thirty (30) days after the filing thereof; or if a receiver, trustee or liquidator of the Borrower or of all or substantially
all of the assets of the Borrower, of the Borrower Property or any part thereof, or of the Collateral or any part thereof, shall
be appointed in any proceeding brought against the Borrower and shall not be discharged within thirty (30) days of such appointment;
or if the Borrower shall consent to or acquiesce in such appointment; or if any property of the Borrower (including without limitation
the estate or interest of the Borrower in the Borrower Property or any part thereof or in the Collateral or any part thereof) shall
be levied upon or attached in any proceeding; or

 

    	27

    	 

    
 

(5)              
a judgment or judgments for the payment of money shall be rendered or filed against the Borrower in excess of $50,000 individually
and $100,000 at any one time outstanding, and the Borrower, within thirty (30) days thereafter and in any event prior to the execution
thereof by the judgment creditor, shall not discharge the same, procure a stay of execution thereof, or appeal therefrom and cause
the execution thereof to be stayed during such appeal; or

 

(6)              
any representation or warranty made by the Borrower herein or in any document related hereto shall prove to be untrue or
misleading in any material respect, or any statement, certificate, or report furnished hereunder or under any of the foregoing
documents by or on behalf of the Borrower shall prove to be untrue or misleading in any material respect on the date when the facts
set forth and recited therein are stated or certified; or

 

(7)              
the Borrower shall liquidate, dissolve, terminate or suspend its business operations or otherwise fail to operate its business
in the ordinary course, or sell all or substantially all of its assets, without the prior written consent of the Lender; or

 

(8)              
the Borrower shall fail to pay, withhold, collect or remit any tax or tax deficiency when assessed or due (other than any
tax or tax deficiency that is being contested in good faith and by proper proceedings and for which the Borrower shall have set
aside on its books adequate reserves therefor) or notice of any state or federal tax liens shall be filed or issued; or

 

(9)              
any property of the Borrower shall be garnished, levied upon, or attached in any proceeding and such garnishment or attachment
shall remain undischarged for a period of thirty (30) days during which execution has not been effectively stayed; or

 

(10)          
an event of default occurs under the terms of any other Indebtedness of Borrower to the Lender whether any such Indebtedness
is now existing or hereafter arises and whether direct or indirect, due or to become due, absolute or contingent, primary or secondary
or joint or joint and several; or

 

(11)          
the failure to preserve or cause to be preserved all of the Borrower’s rights and privileges with respect to the Borrower
Property, including an Authorization for Expenditure, or the Collateral and the failure would have a Material Adverse Effect; or

 

    	28

    	 

    
 

(12)          
any Loan Document, at any time, shall cease to be in full force and effect or shall be judicially declared null and void,
or the validity or enforceability thereof shall be contested by the Borrower, or the Lender shall cease to have a valid and perfected
security interest having the priority contemplated thereunder in the collateral described therein, other than by action or inaction
of the Lender, and any of the foregoing shall remain unremedied for ten (10) days or more after receipt or notice thereof to the
Borrower from the Lender; or

 

(13)          
the occurrence of a Balance Sheet Available Cash Shortfall and the Borrower’s failure to remedy it within twenty (20)
days from the date on which the Balance Sheet Available Cash Shortfall arose; or

 

(14)          
any lien created under this Agreement or any other Loan Document ceases to be, or is not, a valid and perfected lien having
a first priority interest, subject to Permitted Interests, or

 

(15)          
in the Lender’s reasonable opinion, any other item that would have a Material Adverse Effect, but only after the Lender
has given to the Borrower written notice, specifying the item and requesting that it be remedied, and the Borrower fails to remedy
the item within twenty (20) days after the written notice.

 

B.                Upon the occurrence at any time of any Event of Default, or at any time thereafter, the Lender may (i) terminate the
Revolving Line, and/or (ii) declare the unpaid principal balance of, plus accrued interest on, plus all other amounts due
and owing under, the Note to be immediately due and payable, upon contemporaneous notice to the Borrower, in which case the Note
and all amounts due hereunder or any other Loan Document shall be immediately due and payable.

 

C.                The Lender also may suspend or refuse to make advances under this Agreement and the Note if any Event of Default shall occur
or if any event or condition shall occur or exist that, with the giving of notice, the passage of time, or both, would constitute
an Event of Default.

 

D.               Upon
the occurrence of an Event of Default, or at any time thereafter, the Lender may exercise any or all of its rights and remedies
under the Loan Documents and the documents related hereto or thereto, and under applicable law.

 

16.           ENVIRONMENTAL.
The Borrower is primarily a passive nonoperator working interest owner in, or with respect to, the Borrower Property with no managerial
control over operations on the Borrower Property. The Borrower shall not become an active operator of any oil and gas properties
without the written consent of the Lender. In light of the foregoing, the Borrower makes the following limited covenants in this
Section 16:

 

A.               The Borrower has duly complied, and the Borrower Property and all of the Borrower’s other assets and property comply,
in all material respects with all Environmental Law except where the failure to comply would not have a Material Adverse Effect.
There are no outstanding citations, notices, or orders of noncompliance under any Environmental Law that were issued to the Borrower
with respect to, or, to the Borrower’s knowledge, that otherwise relate to, the Borrower Property or the Borrower’s
other assets or property.

 

    	29

    	 

    
 

B.                
To the Borrower’s knowledge, all required federal, state, and local licenses, certificates, or permits under any applicable
Environmental Law have been issued with respect to the Borrower Property.

 

C.                
To the Borrower’s knowledge, other than any of the following that do not constitute a violation of applicable Environmental
Law or would not have a Material Adverse Effect, (i) there are no visible signs of releases, spills, discharges, leaks, or disposal
of Hazardous Substances at, upon, under, or within any Borrower Property; (ii) no Borrower Property ever has been used as
a treatment, storage, or disposal facility of Hazardous Substances; and (iii) no Hazardous Substances are present on any Borrower
Property.

 

D.               
The Borrower shall not knowingly cause its business or operations on the Borrower Property to be conducted in violation
of applicable Environmental Law.

 

E.                
If the Borrower obtains, gives, or receives notice of any violation or alleged violation, request for information, or notification
that it is potentially responsible for investigation or cleanup of environmental conditions at a Borrower Property, demand letter
or complaint, order, citation, or other notice with regard to any Hazardous Discharge or violation or alleged violation of any
Environmental Law affecting a Borrower Property or the Borrower’s interest therein (any of the foregoing is referred to herein
as an “Environmental Complaint”) from any Person with authority to enforce an Environmental Law, including any state
or local governmental agency that is responsible in whole or in part for environmental matters in the state in which a Borrower
Property is located or the United States Environmental Protection Agency (any such Person or entity hereinafter the “Authority”),
then the Borrower, within five (5) Business Days, shall give written notice of the same to the Lender detailing the facts and circumstances
of which the Borrower is aware giving rise to the Environmental Complaint. Such information is to be provided to allow the Lender
to protect its security interest in, and lien on, the Borrower Property and the Collateral and is not intended to create, nor shall
it create, any obligation upon the Lender with respect thereto.

 

F.                 
The Borrower promptly shall forward to the Lender copies of any request for information, notification of potential liability,
demand letter relating to potential responsibility, or other notice given to, or received from, an Authority (as defined in Section
16(E) hereof) with respect to the investigation or cleanup of Hazardous Substances at any other site owned, operated or used by
the Borrower to dispose of Hazardous Substances and shall continue to forward copies of correspondence between the Borrower and
the Authority regarding such claims to the Lender until the claim is settled. Such information is to be provided solely to allow
the Lender to protect the Lender’s security interest in, and lien on, the Borrower Property and the Collateral and is not
intended to create, nor shall it create, any obligation upon the Lender with respect thereto.

 

    	30

    	 

    
 

G.               
The Borrower shall defend and indemnify the Lender and its parent, directors, governors, officers, managers, employees,
agents and participants against, and shall hold the Lender and its parent, directors, governors, officers, managers, employees,
agents and participants harmless from, all loss, liability, damage and expense, claims, costs, fines, and penalties, including
reasonable attorney’s fees, suffered or incurred by the Lender, its parent, or any of the Lender’s directors, governors,
officers, managers, employees, agents, or participants under or on account of any Environmental Law, including the assertion of
any lien thereunder, with respect to the presence of any Hazardous Substances affecting any Borrower Property, whether or not the
same originates or emerges from such Borrower Property, including any loss of value of the Borrower Property as a result of the
foregoing, except to the extent such loss, liability, damage and expense is attributable to the gross negligence or willful misconduct
of the Lender, its parent, or any of the Lender’s directors, governors, officers, managers, employees, agents, or participants.
The Borrower’s obligations under this Section 16(G) shall apply whether or not any Authority (as defined in Section 16(E)
hereof) has taken or threatened any action in connection with the presence of any Hazardous Substances. Any amount payable under
this Section 16(G) shall be due and payable to the Lender upon demand therefor and receipt by the Borrower of a statement
from the Lender setting forth in reasonable detail the amount claimed and the basis therefor. The Borrower’s obligations
under this Section 16(G) shall not be affected by the absence or unavailability of insurance covering the same or by the failure
or refusal of any insurance carrier to perform any obligation on its part under any such policy of insurance. If any claim, action,
or proceeding is made or brought against the Lender, its parent, or any of the Lender’s directors, governors, officers, managers,
employees, agents, or participants that is subject to the indemnity set forth in this Section 16(G), the Borrower shall defend
against the same, in its own name or, if necessary, in the name of the Lender, its parent, or any of the Lender’s directors,
governors, officers, managers, employees, agents, or participants by attorneys retained by the Borrower and approved by the Lender.
Notwithstanding the foregoing, the Lender, in its discretion, if it disapproves of the attorneys provided by the Borrower, may
engage the Lender’s own attorneys to defend, or to assist therein, and the Borrower shall pay, or, on demand, shall reimburse
the Lender for the payment of, all reasonable fees and disbursements of the Lender’s own attorneys. All obligations set forth
in this Section 16(G) shall survive the Borrower’s payment of the Note and other obligations under the Loan Documents,
the foreclosure of the Borrower Mortgage, the acceptance by the Lender (or an assignee designated by the Lender) of a deed-in-lieu
of foreclosure, and the termination of this Agreement.

 

17.           NOTICES.  All
notices, consents, requests, demands and other communications hereunder shall be given to or made upon the respective parties
hereto at their respective addresses specified below or, as to any party, at such other address as may be designated by it in
a written notice to the other party. All notices, requests, consents and demands hereunder shall be effective when addressed in
accordance with the preceding sentence and personally delivered or duly deposited in the United States mails, certified or registered,
postage prepaid, or sent by electronic transmission with confirmed receipt from the addressee by reply electronic transmission.

 

    	31

    	 

    
 

IF TO
THE LENDER:

 

Dougherty Funding LLC

90 South Seventh Street

Suite 4300

Minneapolis, Minnesota 55402-4108

Attn: James A. Berman

Telephone No.: (612) 376-4031

Fax No.: (612) 673-0584

E-mail: jberman@doughertymarkets.com

 

IF TO
THE BORROWER:

 

Black Ridge Oil & Gas, Inc.

10275 Wayzata Boulevard

Suite 310

Minneapolis, Minnesota 55305

Attn: James Moe

Telephone No.: (952) 426-0333

Fax No.: (952) 406-8518

E-mail: jmoe@blackridgeoil.com

 

18.           MISCELLANEOUS.

 

A.               
Waivers.  No failure on the part of the Lender to exercise, and no delay in exercising, any right or remedy
hereunder or under applicable law or any document or agreement related hereto shall impair any such right or shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof
or the exercise of any other right or remedy. The remedies herein provided are cumulative and not exclusive of any remedies provided
by law. No making of an Advance hereunder shall constitute a waiver of any of the conditions to the Lender’s obligation to
make further Advances nor, if the Borrower is unable to satisfy any such condition, shall any such Advance have the effect of precluding
the Lender from thereafter declaring such inability to be an Event of Default as hereinabove provided.

 

B.                
Expenses.  The Borrower shall reimburse the Lender for any and all costs and expenses, including without
limitation reasonable attorneys’ fees, paid or incurred by the Lender in connection with (i) the preparation of the
Loan Documents; (ii) the negotiation of any amendments, modifications, or extensions to or of any of the Loan Documents requested
by the Borrower and the preparation of any and all documents necessary or desirable to effect such amendments, modifications, or
extensions; (iii) any and all other out-of-pocket expenses of the Lender in connection with any of the transactions contemplated
hereby; and (iv) the enforcement by the Lender during the term hereof or thereafter of any of the rights or remedies of the
Lender under any of the foregoing documents, instruments, or agreements or under applicable law, whether or not suit is filed with
respect thereto.

 

    	32

    	 

    
 

C.                
Amendments; Modifications.  The Loan Documents may not be amended or modified, nor may any of their terms
(including without limitation, terms affecting the maturity of or rate of interest on the Note) be modified or waived, except by
written instruments signed by the Lender and the other party or parties to such document.

 

D.               
Successors.  This Agreement shall be binding upon and inure to the benefit of the Borrower and the Lender
and their respective successors and assigns; provided, however, that the Borrower may not transfer or assign (voluntarily,
by operation of law, or otherwise) its rights to borrow hereunder without the prior written consent of the Lender. The Lender’s
consent to a transfer or assignment shall not release the Borrower from its obligations under the Loan Agreement.

 

E.                
Offsets.  Nothing in this Agreement shall be deemed a waiver or prohibition of the Lender’s right
of banker’s lien, offset, or counterclaim, which right the Borrower hereby grants to the Lender.

 

F.                 
Counterparts.  This Agreement may be executed in any number of counterparts, all of which taken together
shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart.

 

G.               
Accounting.  Unless otherwise expressly provided herein, or unless the Lender otherwise consents in writing,
all accounting terms used herein which are not expressly defined in this Agreement shall have the meanings respectively given to
them in accordance with GAAP and all financial statements and reports furnished to the Lender hereunder shall be prepared, and
all computations and determinations pursuant hereto shall be made, in accordance with GAAP and practices, applied on a basis not
materially inconsistent with that applied in preparing the respective financial statements referred to in Sections 13(D) and
14(A) hereof.

 

H.               
Governing Law; Construction. The Loan Documents shall be governed by and construed in accordance with the internal
law, and not the law of conflicts, of the State of Minnesota, provided that a Borrower Mortgage for any Borrower Property shall
be governed by the laws of the state in which such Borrower Property is located. Whenever possible, each provision of this Agreement
and/or any of the other Loan Documents and any other statement, instrument or transaction contemplated hereby or thereby or relating
hereto or thereto shall be interpreted in such manner as to be effective and valid under such applicable law, but, if any provision
of this Agreement and/or any of the other Loan Documents or any other statement, instrument, or transaction contemplated hereby
or thereby or relating hereto or thereto should be held to be prohibited or invalid under such applicable law, such provision shall
be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement and/or any of the other Loan Documents or any other statement, instrument or transaction
contemplated hereby or thereby or relating hereto or thereto. In the event of any conflict within, between, or among the provisions
of this Agreement and/or any of the other Loan Documents or any other statement, instrument, or transactions contemplated hereby
or thereby or relating hereto or thereto, those provisions giving the Lender the greater right shall govern.

 

    	33

    	 

    
 

I.                  
Jurisdiction; Waiver of Jury Trial.  The Borrower and the Lender hereby submit themselves to the jurisdiction
of the State of Minnesota and the federal courts of the United States located in such state in respect of all actions arising out
of or in connection with the interpretation or enforcement of this Agreement and the documents related hereto; the Borrower and
the Lender each irrevocably waives, to the fullest extent permitted by law, any and all right to trial by jury in any legal proceeding
commenced and conducted in a court arising out of or relating to the Loan Documents or the transactions contemplated hereby or
thereby.

 

J.                  
Headings.  The descriptive headings for the several sections of this Agreement are inserted for convenience
only and shall not define or limit any of the terms or provisions hereof.

 

K.               
Indemnification.  The Borrower shall indemnify the Lender and its parent, directors, governors, officers,
managers, employees, agents, and participants for any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever that may be imposed on, incurred by or asserted against
the Lender, its parent, or any of the Lender’s directors, governors, officers, managers, employees, agents, or participants
in any action by a third party with respect to the Loan Documents, the transactions contemplated thereby, the Borrower Property,
and the Collateral; provided, however, that the Borrower shall not be liable for any of the foregoing to the extent
that they arise from the gross negligence or willful misconduct of the Lender, its parent, or any of the Lender’s directors,
governors, officers, managers, employees, agents, or participants. Any amount payable under this Section 18(K) shall be due and
payable to the Lender upon demand therefor and receipt by the Borrower of a statement from the Lender setting forth in reasonable
detail the amount claimed and the basis therefor. The Borrower’s obligations under this Section 18(K) shall not be affected
by the absence or unavailability of insurance covering the same or by the failure or refusal of any insurance carrier to perform
any obligation on its part under any such policy of insurance. If any claim, action, or proceeding is made or brought against the
Lender, its parent, or any of the Lender’s directors, governors, officers, managers, employees, agents, or participants that
is subject to the indemnity set forth in this Section 18(K), the Borrower shall defend against the same, in its own name or, if
necessary, in the name of the Lender, its parent, or any of the Lender’s directors, governors, officers, managers, employees,
agents, or participants by attorneys retained by the Borrower and approved by the Lender. Notwithstanding the foregoing, the Lender,
in its discretion, if it disapproves of the attorneys provided by the Borrower, may engage the Lender’s own attorneys to
defend, or to assist therein, and the Borrower shall pay, or, on demand, shall reimburse the Lender for the payment of, all reasonable
fees and disbursements of the Lender’s own attorneys. All obligations set forth in this Section 18(K) shall survive
the Borrower’s payment of the Note and other obligations under the Loan Documents, the foreclosure of the Borrower Mortgage,
the acceptance by the Lender (or an assignee designated by the Lender) of a deed-in-lieu of foreclosure, and the termination of
this Agreement.

 

L.                
Highest Lawful Rate.  Anything herein to the contrary notwithstanding, the obligations of the Borrower
under the Note shall be subject to the limitation that payments of interest shall not be required to the extent that contracting
for or receipt thereof would be contrary to provisions of any law applicable to the Lender limiting the highest rate of interest
which may be lawfully contracted for, charged, or received by the Lender.

 

    	34

    	 

    
 

M.              
Termination of Revolving Line.  If all of the releases and terminations to which Section 12(H) refers are
not delivered to counsel for the Lender (or to another Person that is acceptable to the Lender) for filing and recording together
with all amounts required for the payment of any necessary fee, tax or expense to file and to record within thirty (30) days
after the date of the Original Agreement, the Lender may terminate this Agreement and the Revolving Line by providing notice to
the Borrower, at which time, the Borrower will be obligated to pay within five (5) days of the date of the notice all amounts,
if any, due and owing to the Lender, this Revolving Line shall terminate, the Borrower shall have no further right to borrow hereunder,
and the Lender will not be obligated under this Agreement to make any Advances to the Borrower, and, upon the payment of all amounts,
if any, due and owing to the Lender, this Agreement will terminate (except as to provisions hereof that expressly survive the termination
of this Agreement). The Borrower and the Lender believe that all releases and terminations to which Section 12(H) applies have
been executed and recorded and all amounts required for payment to file and to record have been paid.

 

N.               
Cumulative Rights and Remedies. The rights and remedies of Lender specified in this Agreement shall be in addition
to, and not exclusive of, any other rights and remedies which Lender would otherwise have at law, in equity or by statute, and
all such rights and remedies, together with Lender’s rights and remedies under the other Loan Documents, are cumulative and
may be exercised individually, concurrently, successively and in any order.

 

O.               
Time of the Essence. Time is of the essence of this Agreement.

 

P.                 
No Agency. Lender is not the agent or representative of Borrower, and Borrower is not the agent or representative
of Lender, and nothing in this Agreement will be construed to make Lender liable to anyone for goods delivered or services performed
upon the Premises or for debts or claims accruing against Borrower.

 

Q.               
No Partnership or Joint Venture. Neither anything contained herein nor the acts of the parties hereto will be construed
to create a partnership or joint venture between the Borrower and the Lender.

 

R.                
No Third-Party Beneficiaries. All conditions to the obligations of Lender to make Advances hereunder are imposed
solely and exclusively for the benefit of Lender and its assigns and no other Person will have standing to require satisfaction
of such conditions or be entitled to assume that Lender will not make disbursements in the absence of strict compliance with any
or all thereof and no other Person, under any circumstances, will be deemed to be beneficiary of such conditions, any or all of
which may be waived in whole or in part by Lender at any time if Lender in its sole discretion deems it advisable to do so.

 

    	35

    	 

    
 

S.                 
Partial Invalidity. In the event any one or more of the provisions contained in this Agreement shall be for any reason
be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision
had never been set forth herein.

 

T.                 
Confidential Information. The Lender agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates' parent, directors, governors, officers, managers, employees,
and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential),
(b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) in connection with the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (e) to (i) any assignee
of or participant in, or any prospective assignee of or participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to any Borrower and
its obligations (it being understood in each case that the Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information confidential), (f) with the consent of the Borrower, or (g)
to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 18(T) or (ii)
becomes available to Lender on a nonconfidential basis from a source other than the Borrower. For the purposes of this Section 18(T),
"Information" means all information received from the Borrower relating to the Borrower or its business, other than any
such information that is available to the Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that,
in the case of information received from the Borrower after the date hereof, such information is clearly identified at the time
of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section 18(T)
shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain
the confidentiality of such Information as such Person would accord to such Person’s own confidential information.

 

U.               
Release of Liens. The Lender shall promptly release all of its liens on sales or transfers of a Borrower Property
or Collateral permitted by this Agreement or any other Loan Document, but the proceeds received by the Lender in a sale or transfer
of a Borrower Property or Collateral shall be subject to such liens.

 

V.               
Entire Agreement. This Agreement, the other Loan Documents and the other documents mentioned herein set forth the
entire agreement of the parties with respect to the Loan and supersede all prior written or oral understandings and agreements
with respect thereto.

 

[THE REMAINDER OF THIS PAGE HAS BEEN
LEFT BLANK INTENTIONALLY. 

SIGNATURE PAGE FOLLOWS.]

 

    	36

    	 

    

 

 

IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed and delivered as of the day and year first above written.

 

 

	 	DOUGHERTY FUNDING LLC
	 	 
	 	By: 	/s/ James A. Berman
	 	 	James
A. Berman

Senior Vice President

 

 

 

 

 

 

 

    	37

    	 

    
 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first
above written.

 

	 	BLACK RIDGE OIL & GAS, INC.
	 	 
	 	By: 	/s/ Kenneth DeCubellis
	 	 	Kenneth DeCubellis

Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

    	38

    	 

    
  

EXHIBIT A

 

FORM OF BORROWER MORTGAGE

 

MORTGAGE,

ASSIGNMENT, SECURITY AGREEMENT, FIXTURE
FILING

AND FINANCING STATEMENT

FROM

 

BLACK RIDGE OIL & GAS, INC.,

a Delaware corporation

(Organizational No. 4810064)

 

 

TO

DOUGHERTY FUNDING LLC

Dated ______, 201__

 

A CARBON, PHOTOGRAPHIC, FACSIMILE, OR OTHER
REPRODUCTION OF THIS INSTRUMENT IS SUFFICIENT AS A FINANCING STATEMENT.

 

THIS INSTRUMENT CONTAINS AFTER-ACQUIRED
PROPERTY PROVISIONS, SECURES PAYMENT OF FUTURE ADVANCES, AND COVERS PROCEEDS OF COLLATERAL.

 

THIS INSTRUMENT COVERS, AMONG OTHER THINGS,
(A) GOODS WHICH ARE OR ARE TO BECOME FIXTURES RELATED TO THE REAL PROPERTY DESCRIBED HEREIN, AND (B) AS-EXTRACTED COLLATERAL RELATED
TO THE REAL PROPERTY DESCRIBED HEREIN (INCLUDING OIL, GAS AND OTHER MINERALS AND ACCOUNTS ARISING OUT OF THE SALE AT THE WELLHEAD
OR MINEHEAD THEREOF). THIS INSTRUMENT IS TO BE FILED FOR RECORD, AMONG OTHER PLACES, IN THE REAL ESTATE, MORTGAGE, OR COMPARABLE
RECORDS OF THE COUNTIES REFERENCED IN EXHIBIT A HERETO AND SUCH FILING SHALL SERVE, AMONG OTHER PURPOSES, AS A FIXTURE FILING
AND AS A FINANCING STATEMENT COVERING AS-EXTRACTED COLLATERAL. THE MORTGAGOR HAS AN INTEREST OF RECORD IN THE REAL ESTATE CONCERNED,
WHICH INTEREST IS DESCRIBED IN SECTION 1.1 OF THIS INSTRUMENT.

 

	
        WHEN RECORDED OR FILED RETURN TO:

         

        Dougherty Funding LLC

        90 South Seventh Street, Suite 4300

        Minneapolis, Minnesota 55402

         
	
        THIS DOCUMENT PREPARED BY:

         

        Winthrop & Weinstine, P.A. (PWM)

        225 South Sixth Street, Suite 3500

        Minneapolis, Minnesota 55402 

 

 

    	1

    	 

    
 

MORTGAGE,

ASSIGNMENT, SECURITY AGREEMENT, FIXTURE FILING

AND FINANCING STATEMENT

(this “Mortgage”)

 

ARTICLE I.

Granting Clauses; Secured Indebtedness

 

Section
1.1. Grant and Mortgage. Black Ridge Oil & Gas, Inc., a Delaware corporation (herein called “Mortgagor”),
for and in consideration of the sum of Twenty Million and 00/100 Dollars ($20,000,000.00) to Mortgagor in hand paid and for other
good and valuable consideration received, and in order to secure the payment of the secured indebtedness herein referred to and
the performance of the obligations, covenants, agreements, warranties and undertakings of Mortgagor herein described, does hereby
GRANT, BARGAIN, SELL, ASSIGN, MORTGAGE, WARRANT, TRANSFER AND CONVEY to Dougherty Funding LLC (“Mortgagee”),
the following described properties, rights, and interests (the “Mortgaged Properties”), SAVE and EXCEPT
the Excluded Properties (as herein defined) located on any Mortgaged Properties:

 

The oil,
gas or other mineral leases, properties, mineral servitudes and mineral rights that are described in Exhibit A attached
hereto and made a part hereof;

 

Without limitation
of the foregoing, all other right, title and interest of Mortgagor of whatever kind or character (whether now owned or hereafter
acquired by agreement or operation of law or otherwise) in and to (i) the leases or other agreements described in Exhibit A
hereto, together with all renewals, extensions, substitutions, ratifications, supplements and replacements thereto, (ii) any other
leases or agreements which cover or pertain to the lands described or referred to in Exhibit A, even if such leases or other
agreements are not described or are incorrectly or insufficiently described on Exhibit A, together with all renewals, extensions,
substitutions, ratifications, supplements and replacements thereto, and (iii) the lands described or referred to in Exhibit A
(or described or referred to in any of the instruments described or referred to in Exhibit A), in each case without
regard to any limitations as to specific lands or depths that may be set forth in Exhibit A hereto or in any of the leases
or other agreements described in Exhibit A hereto;

 

All of Mortgagor’s
rights, titles and interests (whether now owned or hereafter acquired by agreement or operation of law or otherwise) in, to or
under all presently existing and hereafter created oil, gas or mineral unitization, pooling or communitization agreements, declarations
or orders, and in and to the properties, rights and interests covered and the units created thereby (including units formed under
orders, rules, regulations or other official acts of any federal, state or other authority having jurisdiction), which cover, affect
or otherwise relate to the properties, rights and interests described in clauses A or B above;

 

    	2

    	 

    
 

All of Mortgagor’s
rights, titles and interests (whether now owned or hereafter acquired by agreement or operation of law or otherwise) in, to or
under all presently existing and hereafter created operating agreements, equipment leases, production sales contracts, purchase,
exchange and processing contracts and agreements, transportation agreements, utility agreement, gathering agreements, gas balancing
agreements, farm-out or farm-in agreements, salt water disposal agreements, area of mutual interest agreements, licenses, permits,
and other contracts, agreements or regulatory approvals which cover, affect, or otherwise relate to the properties, rights and
interests described in clauses A, B or C above or to the operation of such properties, rights and interests or to the production,
exchange, treating, handling, storage, processing, transporting sale, purchase, or marketing of oil, gas, other hydrocarbons, or
other minerals produced from (or allocated to) such properties, rights and interests (including those contracts listed in Exhibit
A hereto), as same may be amended or supplemented from time to time;

 

All of Mortgagor’s
rights, titles and interests (whether now owned or hereafter acquired by agreement or operation of law or otherwise) in, to and
under all improvements, facilities, infrastructure, equipment, fixtures, and other real, immovable, personal or immovable property
(including all platforms, wells, pumping units, wellhead equipment, tanks, pipelines, flow lines, gathering lines, compressors,
dehydration units, separators, meters, buildings, injection facilities, salt water disposal facilities, and power, telephone and
telegraph lines), and all fee interests, easements, servitudes, rights-of-way, surface leases, licenses, permits and other surface
rights, which are now or hereafter used, or held for use, in connection with the properties, rights and interests described in
clauses A, B, C or D above, or in connection with the operation of such properties, rights and interests, or in connection with
the treating, handling, storing, processing, transporting or marketing of oil, gas, other hydrocarbons, or other minerals produced
from (or allocated to) such properties, rights and interests; and

 

All of Mortgagor’s
rights, estates, powers and privileges appurtenant to any of the foregoing.

 

Notwithstanding any provision in this Mortgage
to the contrary, in no event is (a) any Building (as defined in the applicable Flood Insurance Regulation) or Manufactured (Mobile)
Home (as defined in the applicable Flood Insurance Regulation), which is located within an area having special flood hazards and
in which flood insurance is available under the National Flood Insurance Act of 1968, or (b) any interest held by Mortgagor in
and to the surface of the lands underlying said Building or Manufactured (Mobile) Home, insofar and only insofar as such lands
lie directly below said Building or Manufactured (Mobile) Home (such Buildings, Manufactured (Mobile) Homes and lands are collectively
referred to herein as, the “Excluded Properties”), included in the definition of “Mortgaged Properties”,
and no Excluded Properties are encumbered by this Mortgage. As used herein, “Flood Insurance Regulations” shall mean
(i) the National Flood Insurance Act of 1968 as now in effect, (ii) the Flood Disaster Protection Act of 1973 as now in effect,
(iii) the National Flood Insurance Reform Act of 1994 (amending 42 USC 4001, et seq.), as now in effect, and (iv) the Flood
Insurance Reform Act of 2004 as now in effect.

 

    	3

    	 

    
 

Any fractions or percentages
specified on attached Exhibit A in referring to the Mortgagor’s interests are solely for purposes of the warranties
made by the Mortgagor pursuant to ARTICLE II hereof and shall in no manner limit the quantum of interest affected by this Section
1.1 with respect to any Mortgaged Property.

 

TO HAVE AND TO HOLD
the Mortgaged Properties unto Mortgagee, and its successors and assigns, upon the terms, provisions and conditions herein set forth.
Mortgagor will warrant and defend title to the Property (as herein defined) against the claims and demands of all Persons claiming
or to claim the same or any part thereof, free and clear of all liens, security interests, and encumbrances except for “Permitted
Interests” (as defined in the Credit Agreement referred to below, and herein so called).

 

Section
1.2. Scope of Mortgage. This Mortgage is a mortgage, a security agreement, a financing statement and an assignment.
This Mortgage covers real property, and personal property (including goods that are or are to become fixtures and as-extracted
collateral), and all proceeds thereof.

 

Section
1.3. Grant of Security Interest. To further secure the payment of the secured indebtedness herein referred to and
the performance of the obligations, covenants, agreements, warranties, and undertakings of Mortgagor herein described, Mortgagor
hereby grants to Mortgagee (as herein defined) a security interest in the entire interest of Mortgagor (whether now owned or hereafter
acquired by operation of law or otherwise) in and to:

 

(a)               
the Mortgaged Properties, to the extent the Mortgaged Properties consist of fixtures and personal property;

 

(b)              
all oil, gas, other hydrocarbons, and other minerals at any time produced from or allocated to the Mortgaged Properties
and all products processed or obtained therefrom (herein collectively called the “Production”),
together with all accounts arising out of the sale of Production and all other proceeds of Production (regardless of whether or
not the Production, such accounts and such proceeds constitute “as-extracted collateral” under the UCC), and all liens
and security interests securing payment of the proceeds of Production, including those liens and security interests provided for
under (i) statutes enacted in the jurisdictions in which the Mortgaged Properties are located, or (ii) statutes made applicable
to the Mortgaged Properties under federal law (or some combination of federal and state law);

 

(c)               
without limitation of or by any other provisions of this Section 1.3, all payments received in lieu of Production (regardless
of whether such payments accrued, or the events which gave rise to such payments occurred on, before or after the date hereof),
including “take or pay” payments and similar payments, payments received in settlement of or pursuant to a judgment
rendered with respect to take or pay or similar obligations or other obligations under a production sales contract, payments received
in buyout or buydown or other settlement of a production sales contract, and payments received under a gas balancing or similar
agreement as a result of (or received otherwise in settlement of or pursuant to judgment rendered with respect to) rights held
by Mortgagor as a result of Mortgagor (or its predecessors in title) taking or having taken less gas from lands covered by a Mortgaged
Property (or lands pooled or unitized therewith) than their ownership of such Mortgaged Property would entitle them to receive
(the payments described in this subsection (b) being herein called “Payments in Lieu of
Production”);

 

    	4

    	 

    
 

(d)              
all equipment, inventory, improvements, fixtures, accessions, goods, and other personal property or movable property of
whatever nature now or hereafter located on or used or held for use in connection with the Mortgaged Properties (or in connection
with the operation thereof or the treating, handling, storing, processing, transporting, or marketing of Production), and all licenses
and permits of whatever nature now or hereafter used or held for use in connection with the Mortgaged Properties (or in connection
with the operation thereof or the treating, handling, storing, processing, transporting, or marketing of Production), and all renewals
or replacements of the foregoing or substitutions for the foregoing;

 

(e)               
all accounts, contracts, contract rights, choses in action (i.e., rights to enforce contracts or to bring claims thereunder)
and general intangibles of any kind (regardless of whether the same arose, or the events which gave rise to the same occurred,
on or before or after the date hereof) in any way related to the Mortgaged Properties, the operation thereof (whether Mortgagor
is operator or non-operator or otherwise), or the treating, handling, separation, stabilization, storing, processing, transporting,
gathering, sale or marketing of Production (including any of the same relating to payment of proceeds of Production or to payment
of amounts which could constitute Payments in Lieu of Production);

(f)               
without limitation of or by the foregoing, all rights and interests of Mortgagor under any Hedging Contract now or hereafter
existing;

 

(g)              
all geological, geophysical, engineering, accounting, title, legal, and other technical or business data concerning the
Mortgaged Properties, the Production or any other item of Property (as herein defined), which data is now or hereafter in the possession
of Mortgagor or in which Mortgagor can otherwise grant a security interest, and all books, files, records, magnetic media, software,
and other forms of recording or obtaining access to such data;

 

(h)              
without limitation of or by any of the foregoing, all rights, titles and interests now owned or hereafter acquired by Mortgagor
in any and all goods, inventory, equipment, as-extracted collateral, documents, money, instruments, intellectual property, certificated
securities, uncertificated securities, investment property, letters of credit, rights to proceeds of written letters of credit
and other letter-of-credit rights, commercial tort claims, deposit accounts, payment intangibles, general intangibles, contract
rights, chattel paper (including electronic chattel paper and tangible chattel paper), rights to payment evidenced by chattel paper,
software, supporting obligations and accounts, wherever located, and all rights and privileges with respect thereto (all of the
properties, rights and interests described in subsections (a), (b), (c), (d), (e), (f) and (g) above, subsection (i) below, and
this subsection (h) being herein sometimes collectively called the “Collateral”);
and

 

(i)                
all proceeds of the Collateral (the Mortgaged Properties, the Collateral, and the proceeds of the Mortgaged Properties and
of the Collateral being herein sometimes collectively called the “Property”).

 

    	5

    	 

    
 

provided, however, that if the grant of
a security interest or Lien under Section 1.1 or this Section 1.3 with respect to any contract, easement, right of way, surface
lease, personal property lease or other agreement is prohibited thereunder and the violation of such prohibition would cause Mortgagor
to lose its interest in or rights with respect to such contract, easement, right of way, surface lease, personal property lease
or other agreement, Mortgagor shall be deemed not to have granted such security interest or Lien therein or thereon to the extent
that such prohibition is enforceable and applicable.

 

Except as otherwise expressly provided
in this Mortgage, all terms in this Mortgage relating to the Collateral and the grant of the foregoing security interest which
are defined in the UCC, as defined below, shall have the meanings assigned to them in Article 9 (or, absent definition in Article
9, in any other Article) of the UCC, as those meanings may be amended, revised or replaced from time to time. Notwithstanding the
foregoing, the parties intend that the terms used herein which are defined in the UCC have, at all times, the broadest and most
inclusive meanings possible. Accordingly, if the UCC shall in the future be amended or held by a court to define any term used
herein more broadly or inclusively than the UCC in effect on the date of this Mortgage, then such term, as used herein, shall be
given such broadened meaning. If the UCC shall in the future be amended or held by a court to define any term used herein more
narrowly, or less inclusively, than the UCC in effect on the date of this Mortgage, such amendment or holding shall be disregarded
in defining terms used in this Mortgage.

 

Section
1.4. Loan Documents, Hedging Obligations, and Other Obligations. This Mortgage is made to secure and enforce the
payment and performance of the following obligations, indebtedness, Revolving Line, and liabilities:

 

(a)               
All indebtedness and other obligations of Mortgagor now or hereafter incurred or arising pursuant to the provisions of that
certain Amended and Restated Secured Revolving Credit Agreement dated as of September 5, 2012 between Mortgagor and Mortgagee,
and all supplements thereto and amendments or modifications thereof, and all agreements given in substitution therefor or in restatement,
renewal or extension thereof, in whole or in part (such Secured Revolving Credit Agreement as the same may from time to time be
supplemented, amended or modified, and all other agreements given in substitution therefor or in restatement, renewal or extension
thereof, in whole or in part, being herein called the “Credit Agreement”);

 

(b)              
The “Revolving Line” (as defined in the Credit Agreement and used with the same meaning herein) in the
aggregate principal amount of up to $20,000,000.00, that may be made from time to time by Mortgagee to Mortgagor pursuant to the
Credit Agreement, and the promissory note evidencing such Revolving Line, bearing interest as now or hereafter provided in the
Credit Agreement and having a final maturity date on or before March 31, 2014 unless otherwise extended pursuant to the Credit
Agreement or by amendment thereto;

 

(c)               
Payment and performance of all Hedging Obligations;

 

(d)              
All other indebtedness and other obligations now or hereafter incurred or arising pursuant to the provisions of the Credit
Agreement, this Mortgage or any other instrument now or hereafter evidencing, governing, guaranteeing or securing the “secured
indebtedness” (as herein defined) or any part thereof or otherwise executed in connection with any advance or loan evidenced
or governed by the Credit Agreement (the Credit Agreement, any and all promissory notes issued thereunder, this Mortgage and such
other instruments being herein sometimes collectively called the “Loan Documents”);

 

    	6

    	 

    
 

(e)               
All interest on any of the foregoing, whether presently or hereafter agreed to, and all costs and expenses of Mortgagee
in enforcing its rights and remedies hereunder; and

 

(f)               
All other loans and future advances made by Mortgagee to Mortgagor and all other debts, obligations and liabilities of Mortgagor
of every kind and character now or hereafter existing in favor of Mortgagee, whether direct or indirect, primary or secondary,
joint or several, fixed or contingent, and whether originally payable to Mortgagee or to a third party and subsequently acquired
by Mortgagee, it being contemplated that Mortgagor may hereafter become indebted to Mortgagee for such further debts, obligations
and liabilities.

 

Without limiting the generality of the
foregoing, this Mortgage secures the payment of all amounts that constitute part of the secured indebtedness and would be owed
by Mortgagor to Mortgagee under the Loan Documents but for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving Mortgagor.

  

In addition to the obligations otherwise
described in this Mortgage, this Mortgage secures the following (collectively, the “Future Advances”): (i) all future
advances from Mortgagee to Mortgagor made under or pursuant to the Credit Agreement or the other Loan Documents; and (ii) all amounts
disbursed by Mortgagee under any other provision of this Mortgage. The Future Advances are part of the secured indebtedness. The
Future Advances are secured by this Mortgage whether or not Mortgagee is obligated to make the Future Advances. The Future Advances
are secured as if made on the date of this Mortgage. It is expressly agreed that the lien and security interest of this Mortgage
shall continue despite the fact that the indebtedness evidenced by the Loan Documents may, from time to time, be fully paid, and
despite that the aggregate amount of the advances evidenced by the Loan Documents may exceed the initial aggregate principal balance
secured by this Mortgage and despite that certain advances may be non-obligatory, until the obligations of Mortgagee to make further
advances under the Loan Documents is terminated and all of the secured indebtedness is fully and finally paid or performed and
no further secured indebtedness may thereafter arise.

 

Section
1.5. Certain Defined Terms.

 

(a)               
The indebtedness referred to in Section 1.4, and all renewals, extensions and modifications thereof, and all substitutions
therefor, in whole or in part, are herein sometimes collectively referred to as the “secured indebtedness” or
the “indebtedness secured hereby”.

 

(b)              
“Applicable Rate” means the rate in effect at any time in question with respect to Revolving Line pursuant
to the Credit Agreement.

 

(c)               
 “Credit Party” means Mortgagor.

 

    	7

    	 

    
 

(d)              
“Hedging Contract” means any written or unwritten agreement now existing or hereafter entered into that
provides for (i) any rate swap transaction, swap option, basis swap, forward rate transaction, commodity swap or collar, commodity
floor, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap
transaction, currency option, credit protection transaction, credit swap, credit default swap, credit default option, total return
swap, credit spread transaction, repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities
lending transaction, weather index transaction or forward purchase or sale of a security, commodity or other financial instrument
or interest (including any option with respect to any of these transactions), (ii) any type of transaction that is similar to any
transaction referred to in clause (i) above that is currently, or in the future becomes, recurrently entered into in the financial
markets (including terms and conditions incorporated by reference in such agreement) and that is a forward, swap, future, option
or other derivative on one or more rates, currencies, commodities, equity securities or other equity instruments, debt securities
or other debt instruments, economic indices or measures of economic risk or value, or other benchmarks against which payments or
deliveries are to be made, or (iii) any combination of the foregoing transactions

 

(e)               
“Hedging Obligation” means any obligation of any Credit Party arising from time to time under any Hedging
Contract heretofore, presently or hereafter entered into with a Secured Counterparty; provided that if any Person that was a Secured
Counterparty ceases to be a Secured Counterparty, the Hedging Obligations shall only include such obligations to the extent arising
from transactions entered into during or prior to the time such Person was a Secured Counterparty and shall not include any obligations
arising from any transaction entered into after such Person ceases to be a Secured Counterparty.

 

(f)               
“Indemnified Persons” means Mortgagee and its parent, directors, governors, officers, managers, employees,
participants, agents, and successors and assigns.

 

(g)              
“Permitted Transfers” means (a) the sale of Hydrocarbons (as defined in the Credit Agreement) and seismic
data in the ordinary course of business; (b) farm-outs of undeveloped acreage and assignments in connection with such farm-outs;
(d) sales or other dispositions of Borrower Properties (as defined in the Credit Agreement) or any interest therein; provided that
the following are satisfied: (i) at least seventy-five percent (75%) of the consideration received in respect of such sale, farm-out,
or other disposition shall be cash, or (ii) new Borrower Property (as defined in the Credit Agreement) or any combination of (i)
and (ii); and (e) the sale, disposal or other disposition of Collateral (as defined in the Credit Agreement) (x) where it represents
the sale or transfer of tangible personal property that is no longer necessary for the business of the Mortgagor or is replaced
by property of at least comparable value and use and (y) other dispositions and sales of Collateral, without Mortgagee’s
consent, having a fair market value not to exceed $50,000 in the aggregate during the term of this Mortgage

 

(h)              
“Person” means an individual, corporation, general partnership, limited partnership, limited liability
company, association, joint stock company, trust or trustee thereof, estate or executor thereof, governmental agency or authority,
or any other legally recognizable entity.

 

    	8

    	 

    
 

(i)                
“Secured Counterparty” means Mortgagee and any affiliate of Mortgagee.

 

(j)                
“UCC” means the Uniform Commercial Code as enacted from time to time as part of the laws applicable to
this Mortgage pursuant to Section 5.19.

 

ARTICLE II.

Representations, Warranties and Covenants

 

Section
2.1. Mortgagor represents, warrants, and covenants as follows:

 

(i)                
Title and Liens. Mortgagor has, and Mortgagor covenants to maintain, good and Defensible Title (as defined in the
Credit Agreement) to the fee interests in real property and the oil and gas leasehold interests comprising the Property, in each
case free and clear of all liens, security interests, and encumbrances except for Permitted Interests. The ownership by Mortgagor
of the Mortgaged Properties does and will, with respect to each well or unit identified on Schedule I attached to the Credit
Agreement and made a part hereof by this reference, entitle Mortgagor to receive (subject to the terms and provisions of this Mortgage)
a decimal or percentage share of the oil, gas and other hydrocarbons produced from, or allocated to, such well or unit equal to
not less than the decimal or percentage share that Mortgagor previously has provided to Mortgagee for such well or unit (subject
to deviations that are acceptable to Mortgagee), and cause Mortgagor to be obligated to bear a decimal or percentage share of the
cost of operation of such well or unit equal to not more than the decimal or percentage share that Mortgagor previously has provided
to Mortgagee for such well or unit (subject to deviations that are acceptable to Mortgagee). The above-described shares of production
which Mortgagor is entitled to receive and shares of expenses which Mortgagor is obligated to bear are not and will not be subject
to change (other than changes which arise pursuant to non-consent provisions of operating agreements described in Exhibit A
in connection with operations hereafter proposed), except, and only to the extent that, such changes are acceptable to Mortgagee.
There is not and will not be any unexpired financing statement covering any part of the Property on file in any public office naming
any party other than Mortgagee as secured party and other than Permitted Interests.

 

(a)               
No Sale or Disposal Without Consent. Except for Permitted Transfers or as otherwise may be expressly permitted herein
or under the Credit Agreement, Mortgagor will not sell, exchange, lease, transfer, release or otherwise dispose of any part of,
or interest in, the Property.

 

(b)              
Defense of Mortgage. If the validity or priority of this Mortgage or of any rights, titles, liens or security interests
created or evidenced hereby with respect to the Property or any part thereof or the title of Mortgagor to the Property shall be
endangered or questioned or shall be attacked directly or indirectly or if any legal proceedings are instituted against Mortgagor
with respect thereto, Mortgagor will give prompt written notice thereof to Mortgagee and at Mortgagor’s own cost and expense
will diligently endeavor to cure any defect that may be developed or claimed, and will take all necessary and proper steps for
the defense of such legal proceedings, including the employment of counsel, the prosecution or defense of litigation and the release
or discharge of all adverse claims, and Mortgagee (whether or not named as a party to legal proceedings with respect thereto) is
hereby authorized and empowered to take such additional steps as in its judgment and discretion may be necessary or proper for
the defense of any such legal proceedings or the protection of the validity or priority of this Mortgage and the rights, titles,
liens and security interests created or evidenced hereby, including the employment of independent counsel, the prosecution or defense
of litigation, the compromise or discharge of any adverse claims made with respect to the Property, the purchase of any tax title
and the removal of prior liens or security interests, and all expenditures so made of every kind and character shall be a demand
obligation (which obligation Mortgagor hereby expressly promises to pay) owing by Mortgagor to Mortgagee and shall bear interest
from the date expended until paid as described in Section 2.3 hereof, and the party incurring such expenses shall be subrogated
to all rights of the Person receiving such payment.

 

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(c)               
Insurance. Mortgagor will carry insurance as required under the Credit Agreement. In the event of foreclosure of
this Mortgage, or other transfer of title to the Property in extinguishment in whole or in part of the secured indebtedness, all
right, title and interest of Mortgagor in and to such policies then in force concerning the Property and all proceeds payable thereunder
shall, to the maximum extent permitted under applicable law, thereupon vest in the purchaser at such foreclosure or other transferee
in the event of such other transfer of title.

  

(d)              
Further Assurances. Mortgagor will, on request of Mortgagee, (i) promptly correct any defect, error or omission
which may be discovered in the contents of this Mortgage, or in any other Loan Document, or in the execution or acknowledgment
of this Mortgage or any other Loan Document, (ii) execute, acknowledge, deliver and record or file such further instruments
(including further deeds of trust, mortgages, security agreements, financing statements, continuation statements, and assignments
of production, accounts, funds, contract rights, general intangibles, and proceeds) and do such further acts, as may be necessary,
desirable or proper to carry out more effectively the purposes of this Mortgage and the other Loan Documents, and (iii) execute,
acknowledge, deliver, and file or record any financing statement, notice, document or instrument reasonably requested by Mortgagee
to protect the liens or the security interests hereunder against the rights or interests of third persons. Mortgagor shall pay
all reasonable costs connected with any of the foregoing.

 

(e)               
Not a Foreign Person. Mortgagor is not a “foreign person” within the meaning of Sections 1445 and 7701
of the Internal Revenue Code of 1986, as amended, (i.e. Mortgagor is not a non-resident alien, foreign corporation, foreign partnership,
foreign trust or foreign estate as those terms are defined in the Code and any regulations promulgated thereunder).

 

(f)               
Payment and Performance. Mortgagor will make due and punctual payment of all secured indebtedness as the same become
due and payable, whether at a date for payment of a fixed installment, or contingent or other payment, or as a result of acceleration
or otherwise. Mortgagor will timely and properly perform all of its covenants and agreements under this Mortgage or the Loan Documents
and will not permit a default to occur hereunder or thereunder.

 

Section
2.2. [Intentionally Deleted] 

 

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Section
2.3. Performance on Mortgagor’s Behalf. Mortgagor agrees that if Mortgagor fails to perform any act or to take
any action which Mortgagor is required to perform or take hereunder or under any of the Loan Documents, or to pay any money which
Mortgagor is required to pay under any of the Loan Documents, Mortgagee, in Mortgagor’s name or Mortgagee’s own name,
may perform or cause to be performed such act or take such action or pay such money, and any expenses so incurred by Mortgagee
and any money so paid by Mortgagee shall be a demand obligation owing by Mortgagor to Mortgagee (which obligation Mortgagor hereby
expressly promises to pay) and Mortgagee, upon making such payment, shall be subrogated to all of the rights of the Person receiving
such payment. Mortgagee will use its best efforts to give notice to Mortgagor of an action taken by Mortgagee pursuant to the preceding
sentence, but Mortgagee will not be liable for its failure to give notice, and any failure by Mortgagee to give notice will not
affect Mortgagee’s rights under this Mortgage. Each amount due and owing by Mortgagor to Mortgagee pursuant to this Section
2.3 or any other section of this Mortgage that refers to the Applicable Rate shall bear interest each day, from the date of such
expenditure or payment until paid, at the Applicable Rate; and all such amounts, together with such interest thereon, shall be
a part of the secured indebtedness and shall be secured by this Mortgage.

 

Section
2.4. Recording. Mortgagor will cause this Mortgage and all amendments and supplements thereto and substitutions therefor
and all financing statements and continuation statements relating thereto to be recorded, filed, re-recorded and refiled in such
manner and in such places as Mortgagee shall reasonably request and will pay all such recording, filing, re-recording and refiling
taxes, fees and other charges.

 

Section
2.5. Reporting Compliance. Mortgagor agrees to comply with any and all reporting requirements applicable to the transactions
relating to the secured indebtedness that are set forth in any law, statute, ordinance, rule, regulation, order or determination
of any governmental authority, and further agrees upon request of Mortgagee to furnish Mortgagee with evidence of such compliance.

 

Section
2.6. Release of Mortgage. Upon the payment and satisfaction in full of the secured indebtedness, the termination
or expiration of the commitment of Mortgagee to extend credit to any Credit Party under the Credit Agreement, and the termination
of the Credit Agreement and all transactions under Hedging Contracts in accordance with the terms thereof, this Mortgage will terminate,
and Mortgagee will, at Mortgagor’s request and expense, execute and deliver to Mortgagor such documents as Mortgagor shall
reasonably request to evidence such termination and the release of the liens and security interests created hereby.

 

(b)              
Partial Release of Mortgage Upon Permitted Transfer of Property. Notwithstanding anything to the contrary in this
Mortgage, Mortgagor shall have the right to make, and Mortgagee hereby consents to, any Permitted Transfer. Upon any Permitted
Transfer, the Property that is the subject of the Permitted Transfer shall be deemed released from the lien of this Mortgage, but
the proceeds received by Mortgagor in exchange for the Property that Mortgagor transfers in the Permitted Transfer shall be subject
to the lien of this Mortgage. Upon request, Mortgagee shall execute and deliver to Mortgagor such documents as Mortgagor shall
reasonably request to evidence such release.

 

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Section
2.7. Survival of Indemnities; Reinstatement. Notwithstanding any release of this Mortgage (and whether or not expressly
reserved in any instrument of release), the indemnifications and other rights that this Mortgage or the Credit Agreement contemplate
will continue in effect following the release hereof shall continue in effect unaffected by such release. If any payment of any
secured indebtedness is held to constitute a preference or a voidable transfer under applicable state or federal laws, or if for
any other reason Mortgagee is required to refund such payment to the payor thereof or to pay the amount thereof to any third party,
this Mortgage shall be reinstated to the extent of such payment or payments.

 

ARTICLE III.

Assignment of Production, Accounts, and Proceeds

 

Section
3.1. Assignment of Production and Production Proceeds. Mortgagor does hereby absolutely and unconditionally assign,
transfer and set over to Mortgagee (a) all Production and all other as-extracted collateral that relates or accrues to Mortgagor’s
interests in the Mortgaged Properties and (b) all proceeds of the foregoing (including all as-extracted collateral constituting
proceeds) and all Payments in Lieu of Production (which proceeds and Payments in Lieu of Production are herein collectively called
“Production Proceeds”), together with the immediate and continuing right
to collect and receive such Production Proceeds. Mortgagor directs and instructs any and all purchasers of any Production to pay
to Mortgagee all of the Production Proceeds accruing to Mortgagor’s interest until such time as such purchasers have been
furnished with evidence that all secured indebtedness has been paid and that this Mortgage has been released. Mortgagor agrees
that no purchaser of Production shall have any responsibility for the application of any funds paid to Mortgagee.

 

Section
3.2. Effectuating Payment of Production Proceeds to Mortgagee. Mortgagor agrees to execute and deliver any and all
transfer orders, division orders and other instruments that may be requested by Mortgagee or that may be required by any purchaser
of any Production for the purpose of effectuating payment of the Production Proceeds to Mortgagee. If under any existing sales
agreements, other than division orders or transfer orders, any Production Proceeds are required to be paid by the purchaser to
Mortgagor so that under such existing agreements payment cannot be made of such Production Proceeds to Mortgagee, Mortgagor’s
interest in all Production Proceeds under such sales agreements and in all other Production Proceeds which for any reason may be
paid to Mortgagor shall, when received by Mortgagor, constitute trust funds in Mortgagor’s hands and shall be immediately
paid over to Mortgagee. Without limitation upon any of the foregoing, Mortgagor hereby constitutes and appoints Mortgagee as Mortgagor’s
special attorney-in-fact (with full power of substitution, either generally or for such periods or purposes as Mortgagee may from
time to time prescribe) in the name, place and stead of Mortgagor to do any and every act and exercise any and every power that
Mortgagor might or could do or exercise personally with respect to all Production and Production Proceeds (the same having been
assigned by Mortgagor to Mortgagee pursuant to Section 3.1 hereof), expressly including the right, power and authority to:

 

(a)               
execute and deliver in the name of Mortgagor any and all transfer orders, division orders, letters in lieu of transfer orders,
indemnifications, certificates and other instruments of every nature that may be requested or required by any purchaser of Production
from any of the Mortgaged Properties for the purposes of effectuating payment of the Production Proceeds to Mortgagee or that Mortgagee
may otherwise deem necessary or appropriate to effect the intent and purposes of the assignment contained in Section 3.1; and

 

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(b)              
if under any sales agreements other than division orders or transfer orders, any Production Proceeds are required to be
paid by the purchaser to Mortgagor so that under such existing agreements payment cannot be made of such Production Proceeds to
Mortgagee, to make, execute and enter into such sales agreements or other agreements as are necessary to direct Production Proceeds
to be payable to Mortgagee;

 

giving and granting unto said attorney-in-fact
full power and authority to do and perform any and every act and thing whatsoever necessary and requisite to be done as fully and
to all intents and purposes, as Mortgagor might or could do if personally present; and Mortgagor shall be bound thereby as fully
and effectively as if Mortgagor had personally executed, acknowledged and delivered any of the foregoing certificates or documents.
The power of attorney herein conferred is granted for valuable consideration and hence is coupled with an interest and is irrevocable
so long as the secured indebtedness, or any part thereof, shall remain unpaid. All Persons dealing with Mortgagee or any substitute
shall be fully protected in treating the powers and authorities conferred by this paragraph as continuing in full force and effect
until advised by Mortgagee that all the secured indebtedness is fully and finally paid. Mortgagee may, but shall not be obligated
to, take such action as it deems appropriate in an effort to collect the Production Proceeds and any reasonable expenses (including
reasonable attorney’s fees) so incurred by Mortgagee shall be a demand obligation of Mortgagor and shall be secured hereby
and bear interest each day, from the date of such expenditure or payment until paid, at the Applicable Rate.

 

(c)               
License to Sell Production. Notwithstanding anything to the contrary in this Article III, so long as no Event of
Default has occurred and is continuing, Mortgagee hereby grants to Mortgagor a license to sell all Production and all other as-extracted
collateral that relates or accrues to Mortgagor’s interests in the Mortgaged Properties, including but not limited to all
Hydrocarbons, and seismic data, in the ordinary course of business, provided that such license shall automatically terminate upon
and for so long as an Event of Default is continuing.

 

Section
3.3. Change of Purchaser. To the extent an Event of Default has occurred and is continuing, should any Person now
or hereafter purchasing or taking Production fail to make payment promptly to Mortgagee of the Production Proceeds, Mortgagee shall,
subject to then existing contractual prohibitions, have the right to make, or to require Mortgagor to make, a change of purchaser,
and the right to designate or approve the new purchaser, and Mortgagee shall have no liability or responsibility in connection
therewith so long as ordinary care is used in making such designation.

 

Section
3.4. Application of Production Proceeds. All Production Proceeds received by Mortgagee shall be applied or held by
Mortgagee in accordance with the provisions of the Credit Agreement.

 

Section
3.5. Release From Liability; Indemnification. Mortgagee and its successors and assigns are hereby released and absolved
from all liability for failure to enforce collection of the Production Proceeds and from all other responsibility in connection
therewith, except the responsibility of each to account to Mortgagor for funds actually received by each. Mortgagor has provided
pursuant to the Credit Agreement certain indemnifications for the benefit of the Indemnified Persons that apply also for purposes
of this Mortgage.

 

    	13

    	 

    

 

Section
3.6. Mortgagor’s Absolute Obligation to Pay Revolving Line. Nothing herein contained shall detract from or
limit the obligations of Mortgagor to pay the secured indebtedness in accordance with the terms thereof, regardless of whether
the Production and Production Proceeds herein assigned are sufficient to pay the same, and the rights under this Article III shall
be cumulative of all other rights under the Loan Documents.

 

ARTICLE IV.

Remedies Upon Default

 

Section
4.1. Event of Default. The term “Event of Default” as used in this Mortgage means an “Event
of Default” as defined in the Credit Agreement.

 

Section
4.2. Acceleration of Secured Indebtedness. The maturity of the secured indebtedness may be accelerated as provided
in the Credit Agreement and in accordance with [North Dakota] law.

 

Section
4.3. Preforeclosure Remedies. Upon the occurrence and during the continuance of an Event of Default, Mortgagee is
authorized, prior or subsequent to the institution of any foreclosure proceedings, to enter upon the Property, or any part thereof,
and to take possession of the Property and all books and records relating thereto, and to exercise without interference from Mortgagor
any and all rights which Mortgagor has with respect to the management, possession, operation, protection or preservation of the
Property. If necessary to obtain the possession provided for above, Mortgagee may invoke any and all remedies to dispossess Mortgagor.
Mortgagor agrees to peacefully surrender possession of the Property if requested by Mortgagee. All costs, expenses and liabilities
of every character incurred by Mortgagee in managing, operating, maintaining, protecting or preserving the Property shall constitute
a demand obligation (which obligation Mortgagor hereby expressly promises to pay) owing by Mortgagor to Mortgagee and shall bear
interest from date of expenditure until paid at the Applicable Rate, all of which shall constitute a portion of the secured indebtedness
and shall be secured by this Mortgage and by any other instrument securing the secured indebtedness. In connection with any action
taken by Mortgagee pursuant to this Section 4.3, Mortgagee
shall not be liable for any loss sustained by Mortgagor or any affiliate of Mortgagor resulting from any act or omission by Mortgagee
(including Mortgagee’s own negligence or strict liability) in managing the Property, except to the extent such loss is caused
by the gross negligence or willful misconduct of Mortgagee, nor shall Mortgagee be obligated to perform or discharge
any obligation, duty or liability of Mortgagor arising under any agreement forming a part of the Property or arising under any
Permitted Interest or otherwise arising. Mortgagor hereby assents to, ratifies and confirms any and all actions of Mortgagee with
respect to the Property taken under this Section 4.3, other than gross negligence or willful misconduct of Mortgagee.

 

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Section
4.4. Foreclosure.

  

(a)               
Upon the occurrence and during the continuance of an Event of Default, this Mortgage may be foreclosed as to the Mortgaged
Properties, or any part thereof, in any manner permitted by applicable law.

 

(b)              
Upon the occurrence and during the continuance of an Event of Default, Mortgagee may exercise its rights of enforcement
with respect to the Collateral under the UCC or under any other statute in force in any state to the extent the same is applicable
law and:

 

(i)                
Mortgagee may enter upon the Mortgaged Properties or otherwise upon Mortgagor’s premises to take possession of, assemble
and collect the Collateral or to render it unusable;

 

(ii)              
Mortgagor shall upon Mortgagee’s request assemble the Collateral and make it available at one or more places reasonably
designated by Mortgagee to allow Mortgagee to take possession or dispose of the Collateral;

 

(iii)            
written notice mailed to Mortgagor as provided herein at least ten (10) days prior to the date of public sale of the Collateral
or prior to the date after which private sale of the Collateral will be made shall constitute reasonable notice;

 

(iv)            
in the event of a foreclosure of the liens or security interests created or evidenced hereby, the Collateral, or any part
thereof, and the Mortgaged Properties, or any part thereof, may, at the option of Mortgagee, be sold, as a whole or in parts, together
or separately (for example, when a portion of the Mortgaged Properties is sold, the Collateral related thereto may be sold in connection
therewith);

 

(v)              
the expenses of sale provided for in clause FIRST of Section 4.6 shall include the reasonable expenses of retaking the Collateral,
or any part thereof, holding the same and preparing the same for sale or other disposition;

 

(vi)            
should, under this subsection, the Collateral be disposed of other than by sale, any proceeds of such disposition shall
be treated under Section 4.6 as if the same were sales proceeds; and

 

(vii)          
Mortgagee shall have full power and authority to act as Mortgagor’s attorney-in-fact, and Mortgagor hereby grants
to Mortgagee appropriate powers of attorney to act for and on behalf of Mortgagor, in all dealings with the Department of Interior
and all other agencies, departments and subdivisions of the United States of America and of all states in all transactions relating
to the Property or any part thereof. Mortgagor hereby authorizes and directs all such agencies, departments and subdivisions to
rely upon any writing from Mortgagee asserting that a default has occurred and is continuing, without inquiry into whether or not
such default actually occurred and is continuing, and Mortgagor agrees that the exercising by Mortgagee of such powers of attorney
may be relied upon in all respects and, as between Mortgagor and such agency, department or subdivision, shall be binding upon
Mortgagor.

 

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(c)               
To the extent permitted by applicable law, the sale hereunder of less than the whole of the Property shall not exhaust the
powers of sale herein granted or the right to judicial foreclosure, and one or more successive sale or sales may be made until
the whole of the Property shall be sold, and, if the proceeds of such sale of less than the whole of the Property shall be less
than the aggregate of the indebtedness secured hereby, this Mortgage and the liens and security interests hereof shall remain in
full force and effect as to the unsold portion of the Property just as though no sale had been made; provided, however, that Mortgagor
shall never have any right to require the sale of less than the whole of the Property. In the event any sale hereunder is not completed
or is defective in the opinion of Mortgagee, such sale shall not exhaust the powers of sale hereunder or the right to judicial
foreclosure, and Mortgagee shall have the right to cause a subsequent sale or sales to be made. Any sale may be adjourned by announcement
at the time and place appointed for such sale without further notice except as may be required by law. Any and all statements of
fact or other recitals made in any deed or deeds, or other instruments of transfer, given in connection with a sale as to nonpayment
of the secured indebtedness or as to the occurrence of any Event of Default, or as to all of the secured indebtedness having been
declared to be due and payable, or as to the request to sell, or as to notice of time, place and terms of sale and the properties
to be sold having been duly given, or as to any other act or thing having been duly done by any Person, shall be taken as prima
facie evidence of the truth of the facts so stated and recited. Notwithstanding any reference herein to the Credit Agreement or
any other Loan Document, all Persons dealing with the Mortgaged Properties shall be entitled to rely on any document, or certificate,
of Mortgagee as to the occurrence of any event or the satisfaction of any condition, such as the existence of an Event of Default,
and shall not be charged with or forced to review any provision of this Mortgage or any other document to determine the accuracy
thereof. With respect to any sale held in foreclosure of the liens or security interests covered hereby, it shall not be necessary
for Mortgagee, any public officer acting under execution or order of the court or any other party to have physically present or
constructively in his/her or its possession, either at the time of or prior to such sale, the Property or any part thereof.

 

Section
4.5. Receiver. In addition to all other remedies herein provided for, Mortgagor agrees that, upon the occurrence
and during the continuance of an Event of Default, Mortgagee shall as a matter of right be entitled to the appointment of a receiver
or receivers for all or any part of the Property, whether or not such receivership is incident to a proposed sale (or sales) of
such property or otherwise, and without regard to the value of the Property or the solvency of any Person or Persons liable for
the payment of the indebtedness secured hereby, and Mortgagor hereby consents to the appointment of such receiver or receivers,
waives any and all defenses to such appointment, agrees not to oppose any application therefor by Mortgagee, and agrees that such
appointment shall in no manner impair, prejudice or otherwise affect the rights of Mortgagee under Article III hereof. Mortgagor
expressly waives notice of a hearing for appointment of a receiver and the necessity for bond or an accounting by the receiver.
Nothing herein is to be construed to deprive Mortgagee of any other right, remedy or privilege it may now or hereafter have under
the law to have a receiver appointed. Any money advanced by Mortgagee in connection with any such receivership shall be a demand
obligation (which obligation Mortgagor hereby expressly promises to pay) owing by Mortgagor to Mortgagee and shall be secured hereby
and bear interest, from the date of making such advancement by Mortgagee until paid, at the Applicable Rate.

 

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Section
4.6. Proceeds of Foreclosure. The proceeds of any sale held in foreclosure or other enforcement of the liens or security
interests created or evidenced hereby shall be applied as follows:

 

FIRST,
such proceeds shall be applied to the payment of all costs and expenses incident to such foreclosure sale or other enforcement,
including all court costs and charges of every character in the event foreclosed by suit or any judicial proceeding under the provisions
of Section 4.4.(a), but excluding attorneys’ fees;

 

SECOND,
such proceeds shall be applied to the payment of the secured indebtedness in accordance with the Credit Agreement (or shall be
held as cash collateral in accordance therewith); and

 

THIRD,
the remainder, if any, of such proceeds shall be paid to Mortgagor, or to Mortgagor’s heirs, devisees, representatives, successors
or assigns, or to such other Persons as may be entitled thereto by law.

 

Section
4.7. Mortgagee as Purchaser. Mortgagee shall have the right to become the purchaser at any sale held in foreclosure
of the liens or security interests created or evidenced hereby, and Mortgagee purchasing at any such sale shall have the right
to credit upon the amount of the bid made therefor, to the extent necessary to satisfy such bid, the secured indebtedness owing
to Mortgagee, or if Mortgagee holds less than all of such indebtedness, the pro rata part thereof owing to Mortgagee, accounting
to all other Mortgagees not joining in such bid in cash for the portion of such bid or bids apportionable to non-bidding Mortgagee.

 

Section
4.8. Foreclosure as to Matured Debt. Upon the occurrence and during the continuance of an Event of Default, Mortgagee
shall have the right to proceed with foreclosure of the liens or security interests created or evidenced hereby without declaring
the entire secured indebtedness due, and in such event, any such foreclosure sale may be made subject to the unmatured part of
the secured indebtedness and shall not in any manner affect the unmatured part of the secured indebtedness, but as to such unmatured
part, this Mortgage shall remain in full force and effect just as though no sale had been made. The proceeds of such sale shall
be applied as provided in Section 4.6 except that the amount paid under clause SECOND thereof shall be only the matured portion
of the secured indebtedness and any proceeds of such sale in excess of those provided for in clauses FIRST and SECOND (modified
as provided above) shall be applied or held as provided in Section 3.5. Several sales may be made hereunder without exhausting
the right of sale for any unmatured part of the secured indebtedness.

 

Section
4.9. Remedies Cumulative. All remedies herein provided for are cumulative of each other and of all other remedies
existing at law or in equity and are cumulative of any and all other remedies provided for in any other Loan Document, and, in
addition to the remedies herein provided, there shall continue to be available all such other remedies as may now or hereafter
exist at law or in equity for the collection of the secured indebtedness and the enforcement of the covenants herein and the foreclosure
of the liens or security interests created or evidenced hereby, and the resort to any remedy provided for hereunder or under any
such other Loan Document or provided for by law shall not prevent the concurrent or subsequent employment of any other appropriate
remedy or remedies.

 

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Section
4.10. Discretion as to Security. Mortgagee may resort to any security given by this Mortgage or to any other
security now existing or hereafter given to secure the payment of the secured indebtedness, in whole or in part, and in such
portions and in such order as may seem best to Mortgagee in its discretion, and any such action (or any delay in taking or
decision not to take such action) shall not in any way be considered as a waiver of any of the rights, benefits, liens or
security interests created or evidenced by this Mortgage.

 

Section
4.11. Mortgagor’s Waiver of Certain Rights. To the full extent Mortgagor may do so, Mortgagor agrees that Mortgagor
will not at any time insist upon, plead, claim or take the benefit or advantage of any law now or hereafter in force providing
for any appraisement, valuation, stay, extension or redemption, and Mortgagor, for Mortgagor, Mortgagor’s heirs, devisees,
representatives, successors and assigns, and for any and all Persons ever claiming any interest in the Property, to the extent
permitted by applicable law, hereby waives and releases all rights of appraisement, valuation, stay of execution, redemption, notice
of intention to mature or declare due the whole of the secured indebtedness, notice of election to mature or declare due the whole
of the secured indebtedness and all rights to a marshaling of assets of Mortgagor, including the Property, or to a sale in inverse
order of alienation in the event of foreclosure of the liens or security interests hereby created. Mortgagor shall not have or
assert any right under any statute or rule of law pertaining to the marshaling of assets, sale in inverse order of alienation,
the exemption of homestead, the administration of estates of decedents, or other matters whatever to defeat, reduce or affect the
right under the terms of this Mortgage to a sale of the Property for the collection of the secured indebtedness without any prior
or different resort for collection, or the right under the terms of this Mortgage to the payment of the secured indebtedness out
of the proceeds of sale of the Property in preference to every other claimant whatever. If any law referred to in this section
and now in force, of which Mortgagor or Mortgagor’s heirs, devisees, representatives, successors or assigns or any other
Persons claiming any interest in the Property might take advantage despite this section, shall hereafter be repealed or cease to
be in force, such law shall not thereafter be deemed to preclude the application of this section.

 

Section
4.12. Mortgagor as Tenant Post-Foreclosure. In the event there is a foreclosure sale hereunder and at the time of
such sale Mortgagor or Mortgagor’s representatives, successors or assigns or any other Persons claiming any interest in the
Property by, through or under Mortgagor are occupying or using the Property, or any part thereof, each and all shall immediately
become the tenant of the purchaser at such sale, which tenancy shall be a tenancy from day to day, terminable at the will of either
landlord or tenant, at a reasonable rental per day based upon the value of the property occupied, such rental to be due daily to
the purchaser. To the extent permitted by applicable law, the purchaser at such sale shall, notwithstanding any language herein
apparently to the contrary, have the sole option to demand immediate possession following the sale or to permit the occupants to
remain as tenants at will. In the event the tenant fails to surrender possession of said property upon demand, the purchaser shall
be entitled to institute and maintain a summary action for possession of the property (such as an action for forcible entry and
detainer) in any court having jurisdiction.

 

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ARTICLE V.

 

Miscellaneous

 

Section
5.1. Effective as a Financing Statement. The Property includes, and this Mortgage covers, goods which are or are
to become fixtures on the real property described herein and as-extracted collateral related to the real property described herein.
 This Mortgage shall be effective as a financing statement (i) filed as a fixture filing with respect to all fixtures included
within the Property, (ii) covering as-extracted collateral with respect to all as-extracted collateral included within the Property,
and (iii) covering all other Property. This Mortgage is to be filed for record in the real property records or other appropriate
records of each county where any part of the Mortgaged Properties is situated and may also be filed in the offices of the Bureau
of Land Management or any federal, state or local agency (or any successor agencies). The mailing address of Mortgagor is the address
of Mortgagor set forth at the end of this Mortgage and the address of Mortgagee from which information concerning the security
interests hereunder may be obtained is the address of Mortgagee set forth at the end of this Mortgage. This Mortgage (and any carbon,
photographic, facsimile or other reproduction of this Mortgage) shall be sufficient as a financing statement for all purposes.

 

Section
5.2. Authority to File Financing Statements. Mortgagor hereby authorizes Mortgagee to file, in any filing or recording
offices, one or more financing statements (including a copy of this Mortgage) and any renewal or continuation statements thereof,
describing the Collateral as Mortgagee deems appropriate (including any such financing statement, renewal or continuation statement
that describes the Collateral as “all assets” or “all personal property” of Mortgagor).

 

Section
5.3. Notice to Account Debtors. In addition to, but without limitation of, the rights granted in Article III hereof,
Mortgagee may at any time notify the account debtors or obligors of any accounts, chattel paper, negotiable instruments or other
evidences of indebtedness included in the Collateral to pay Mortgagee directly.

 

Section
5.4. Waivers. As provided in the Credit Agreement, Mortgagee may at any time and from time to time in writing waive
compliance by Mortgagor with any covenant herein made by Mortgagor to the extent and in the manner specified in such writing, or
consent to Mortgagor’s doing any act which hereunder Mortgagor is prohibited from doing, or to Mortgagor’s failing
to do any act which hereunder Mortgagor is required to do, to the extent and in the manner specified in such writing, or release
any part of the Property or any interest therein or any Production Proceeds from the lien and security interest of this Mortgage.
Any party liable, either directly or indirectly, for the secured indebtedness or for any covenant herein or in any other Loan Document
may be released from all or any part of such obligations without impairing or releasing the liability of any other party. No such
act shall in any way impair any rights or powers hereunder except to the extent specifically agreed to in such writing.

 

Section
5.5. No Impairment of Security. No lien, security interest or other security right hereunder shall be impaired by
any indulgence, moratorium or release, or any renewal, extension or modification, with respect to any secured indebtedness, or
any surrender, compromise, release, renewal, extension, exchange or substitution which may be granted in respect of the Property
(including Production Proceeds), or any part thereof or any interest therein, or any release or indulgence granted to any endorser,
guarantor or surety of any secured indebtedness.

 

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Section
5.6. Acts Not Constituting Waiver. Any Event of Default may be waived without waiving any other prior or subsequent
Event of Default. Any Event of Default may be remedied by Mortgagee without such remedy constituting a waiver of the Event of Default
remedied. No failure to exercise, and no delay in exercising, any right, power or remedy upon any Event of Default shall be construed
as a waiver of such Event of Default or as a waiver of the right to exercise any such right, power or remedy at a later date. No
single or partial exercise of any right, power or remedy hereunder shall exhaust the same or shall preclude any other or further
exercise thereof, and every such right, power or remedy hereunder may be exercised at any time and from time to time. No modification
or waiver of any provision hereof nor consent to any departure by Mortgagor therefrom shall in any event be effective unless the
same shall be in writing and signed by Mortgagee and then such waiver or consent shall be effective only in the specific instances,
for the purpose for which given and to the extent therein specified. No notice to or demand on Mortgagor in any case shall of itself
entitle Mortgagor to any other or further notice or demand in similar or other circumstances. Acceptance of any payment in an amount
less than the amount then due on any secured indebtedness shall be deemed an acceptance on account only and shall not in any way
excuse the existence of an Event of Default.

 

Section
5.7. Mortgagor’s Successors. In the event the ownership of the Property or any part thereof becomes vested
in a Person other than Mortgagor, then, without notice to Mortgagor, Mortgagee may deal with such successor or successors in interest,
with respect to this Mortgage and to the indebtedness secured hereby, in the same manner as with Mortgagor, without in any way
vitiating or discharging Mortgagor’s liability hereunder or for the payment of the indebtedness or performance of the obligations
secured hereby. No transfer of the Property, no forbearance, and no extension of the time for the payment of the indebtedness secured
hereby shall operate to release, discharge, modify, change or affect, in whole or in part, the liability of Mortgagor (or any other
Person) for the payment of the secured indebtedness or the performance of the obligations secured hereby.

 

Section
5.8. Subrogation to Existing Liens. To the extent that the proceeds of the Revolving Line have been used to pay existing
indebtedness secured by any outstanding liens, security interests, charges or prior encumbrances against the Property, such proceeds
have been advanced at Mortgagor’s request and Mortgagee shall be subrogated to any and all rights, security interests and
liens owned by any owner or holder of such outstanding liens, security interests, charges or encumbrances, irrespective of whether
said liens, security interests, charges or encumbrances are released, and it is expressly understood that, in consideration of
the payment of such indebtedness, Mortgagor hereby waives and releases all demands and causes of action for offsets and payments
to, upon or in connection with such existing indebtedness.

 

Section
5.9. Application of Payments to Certain Indebtedness. If any part of the secured indebtedness cannot be lawfully
secured by this Mortgage or if any part of the Property cannot be lawfully subject to the liens and security interests hereunder
to the full extent of such indebtedness, then all payments made shall be applied on such indebtedness first in discharge of that
portion thereof which is not secured by this Mortgage.

 

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Section
5.10. Compliance With Usury Laws. It is the intent of Mortgagor, Mortgagee and all other parties to the Loan Documents
to contract in strict compliance with applicable usury law from time to time in effect. In furtherance thereof, it is stipulated
and agreed that, as more fully provided in the Credit Agreement, none of the terms and provisions contained herein shall ever be
construed to create a contract to pay, for the use, forbearance or detention of money, interest in excess of the maximum amount
of interest permitted to be collected, charged, taken, reserved, or received by applicable law from time to time in effect.

 

Section
5.11. Notices. All notices, requests, consents, demands and other communications required or permitted hereunder
shall be in writing and shall be deemed sufficiently given or furnished if delivered in compliance with the Credit Agreement. Notwithstanding
the foregoing, or anything else in the Loan Documents which may appear to the contrary, any notice given in connection with a foreclosure
of the liens or security interests created hereunder, or otherwise in connection with the exercise by Mortgagee of its respective
rights hereunder or under any other Loan Document, which is given in a manner permitted by applicable law shall constitute proper
notice, and, without limitation of the foregoing, notice given in a form required or permitted by statute shall (as to the portion
of the Property to which such statute is applicable) constitute proper notice.

 

Section
5.12. Invalidity of Certain Provisions. A determination that any provision of this Mortgage is unenforceable or invalid
shall not affect the enforceability or validity of any other provision and the determination that the application of any provision
of this Mortgage to any Person or circumstance is illegal or unenforceable shall not affect the enforceability or validity of such
provision as it may apply to other Persons or circumstances.

 

Section
5.13. Interpretation, etc. All references in this Mortgage to Exhibits, Schedules, articles, sections, subsections,
definitions and other subdivisions refer to the Exhibits, Schedules, articles, sections, subsections, definitions and other subdivisions
of this Mortgage unless expressly provided otherwise. References to any document, instrument, or agreement (a) shall include all
exhibits, schedules, and other attachments thereto, and (b) shall include all amendments, supplements or restatements thereof.
Titles appearing at the beginning of any subdivisions hereof are for convenience only and do not constitute any part of such subdivisions
and shall be disregarded in construing the language contained in such subdivisions. The words “this Mortgage”,
“this instrument”, “herein”, “hereof”, “hereby”, “hereunder”
and words of similar import refer to this Mortgage as a whole and not to any particular subdivision unless expressly so limited.
The phrases “this section” and “this subsection” and similar phrases refer only to the sections
or subsections hereof in which such phrases occur. The word “or” is not exclusive, and the word “including”
(in its various forms) means “including without limitation”. References to a Person’s “discretion”
refer to such Person’s sole and absolute discretion. Pronouns in masculine, feminine and neuter genders shall be construed
to include any other gender, and words in the singular form shall be construed to include the plural and vice versa, unless the
context otherwise requires. Unless otherwise specified, references herein to any particular Person also refer to its successors
and permitted assigns. This Mortgage has been reviewed and negotiated by sophisticated parties with access to legal counsel and
no rule of construction shall apply hereto or thereto which would require or allow this Mortgage to be construed against any party
because of its role in drafting this Mortgage.

 

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Section
5.14. Certain Consents. Except where otherwise expressly provided herein, in any instance hereunder where the approval,
consent or the exercise of judgment of Mortgagee is required, the granting or denial of such approval or consent and the exercise
of such judgment shall be within the discretion of such party, and such party shall not, for any reason or to any extent, be required
to grant such approval or consent or exercise such judgment in any particular manner, regardless of the reasonableness of either
the request or the judgment of such party.

 

Section
5.15. Authority of Mortgagee. Mortgagee may provide for and regulate the exercise of rights and remedies hereunder,
but, unless and until modified to the contrary in writing signed by all such Persons and recorded in the same counties or parishes
as this Mortgage is recorded, (i) all Persons other than Mortgagor and its affiliates shall be entitled to rely on the releases,
waivers, consents, approvals, notifications and other acts of Mortgagee (including the appointment of substitute or successor trustee,
or trustees, hereunder and the bidding in of all or any part of the secured indebtedness held by Mortgagee, whether the same be
conducted under the provisions hereof or otherwise), without inquiry into any such agreements or the existence of required consent
or approval of any Persons constituting Mortgagee and without the joinder of any party other than Mortgagee in such releases, waivers,
consents, approvals, notifications or other acts and (ii) all notices, requests, consents, demands and other communications
required or permitted to be given hereunder may be given to Mortgagee.

 

Section
5.16. Counterparts. This Mortgage may be executed in several counterparts, all of which are identical, except that,
to facilitate recordation, certain counterparts hereof may include only that portion of Exhibit A that contains descriptions
of the properties located in (or otherwise subject to the recording or filing requirements or protections of the recording or filing
acts or regulations of) the recording jurisdiction in which the particular counterpart is to be recorded, and other portions of
Exhibit A shall be included in such counterparts by reference only. All of the counterparts hereof shall constitute one
and the same instrument. Executed counterparts of this Mortgage containing the entire Exhibit A have been retained by Mortgagor
and Mortgagee.

 

Section
5.17. Successors and Assigns. The terms, provisions, covenants, representations, indemnifications and conditions
hereof shall be binding upon Mortgagor, and the successors and assigns of Mortgagor, and shall inure to the benefit of Mortgagee
and its respective successors and assigns, and shall constitute covenants running with the Mortgaged Properties. All references
in this Mortgage to Mortgagor or Mortgagee shall be deemed to include all such successors and assigns.

 

Section
5.18. Place of Payment. All secured indebtedness which may be owing hereunder at any time by Mortgagor shall be payable
at the place designated in the Credit Agreement or other governing instrument or, if no such designation is made, at the address
of Mortgagee indicated at the end of this Mortgage or at such other place as Mortgagee may designate in writing.

 

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Section
5.19. Choice of Law. This Mortgage shall be
construed and enforced in accordance with and governed by the laws of the State of [North Dakota] and the laws of the United States
of America, except to the extent the laws of a State in which a portion of the Property is located (or which is otherwise applicable
to a portion of the Property) necessarily, or in the discretion of Mortgagee appropriately, govern with respect to procedural and
substantive matters relating to the creation, record notice, attachment, perfection or enforcement of the liens and security interests
and other rights and remedies of Mortgagee granted or provided herein.

 

Section
5.20. Final Agreement of the Parties. The written
Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous
or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties.

 

[The remainder of
this page is intentionally left blank.]

 

 

 

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IN WITNESS WHEREOF,
this instrument is executed by Mortgagor on the date set forth in the acknowledgment below, to be effective for all purposes as
of the date first written above.

 

 

	 	BLACK RIDGE OIL & GAS, INC.
	 	 
	 	By: 	
	 	 	
[Name]
[Title]

 

 

 

 

	The address of Mortgagee is:	The address of Mortgagor is:
	 	 
	90 South Seventh Street	10275 Wayzata Boulevard
	Suite 4300	Suite 310
	Minneapolis, MN 55402	Minnetonka, MN 55305
	 	 
	Attention:  James A. Berman	Attention:  James A. Moe

 

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ACKNOWLEDGEMENT

 

 

	STATE OF ___________	§
	 	§
	COUNTY OF ___________	§

 

The foregoing instrument was acknowledged before me this ______,
201_ by __________, the __________ of Black Ridge Oil & Gas, Inc., a Delaware corporation, on behalf of the corporation.

 

 

	 	Notary Public, State of __________
	 	 
	 	 
	 	Printed Name

 

 

My Commission Expires: _______________

[Notarial Seal]

 

    	25

    	 

    
 

EXHIBIT A

 

DESCRIPTION OF MORTGAGED PROPERTIES

 

 

 

 

 

 

 

 

 

 

 

 

 

    	26

    	 	

    
  

EXHIBIT B

 

 

FORM OF BORROWER SECURITY AGREEMENT

 

SECURITY AGREEMENT

 

 

THIS SECURITY AGREEMENT, is made as of
__________, 201_, by BLACK RIDGE OIL & GAS, INC., a Delaware corporation (the “Debtor”), in favor of DOUGHERTY
FUNDING LLC, a Delaware limited liability company (the “Secured Party”).

 

To secure the payment and performance of
(i) all debts, liabilities and obligations of the Debtor pursuant to that certain Amended and Restated Secured Revolving Credit
Agreement dated as of September 5, 2012 by and between the Debtor and the Secured Party (the “Credit Agreement”) and
(ii) each and every other debt, liability, and obligation of every type and description that the Debtor, now or at any time
hereafter, may owe to the Secured Party (whether such debt, liability, or obligation now exists or is hereafter created or incurred,
whether it arises under or is evidenced by this Agreement, the Credit Agreement, any other document executed in connection with
the Credit Agreement, or any other present or future instrument or agreement, or by operation of law, and whether it is or may
be direct or indirect, due or to become due, absolute or contingent, primary or secondary, liquidated or unliquidated, or sole,
joint, several, or joint and several) (all such debts, liabilities, and obligations of the Debtor to the Secured Party collectively
referred to as the “Secured Obligations”), the Debtor hereby agrees as follows:

 

1.            SECURITY INTEREST AND COLLATERAL.
To secure the payment and performance of the Secured Obligations, the Debtor hereby grants to the Secured Party a security interest
(herein called the “Security Interest”) in and to the following property (hereinafter collectively referred to as
the “Collateral”):

 

		(a)	all of the Borrower’s accounts, contract rights, instruments (including those evidencing
indebtedness owed to the Borrower by its affiliates), documents, chattel paper (including electronic chattel paper), general intangibles
relating to accounts, drafts and acceptances, credit card receivables and all other forms of obligations owing to the Borrower
arising out of or in connection with the sale or lease of Inventory or the rendition of services, all supporting obligations, guarantees
and other security therefor, whether secured or unsecured, now existing or hereafter created, and whether or not specifically sold
or assigned to the Lender hereunder, including, without limitation, any and all royalties, licenses and/or payments received by
the Borrower in respect of that certain License Agreement between the Borrower and a subsidiary of PartyGaming, PLC (the “WPT
License Agreement”) and any distributions, dividends and/or payments received by the Borrower or any subsidiary of the Borrower
as a result of any working interest the Borrower or any subsidiary of the Borrower may have with respect to any working interest
in any oil and gas well (collectively, “Receivables”);

 

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		(b)	all of the Borrower’s equipment whether now owned or hereafter acquired and wherever located
including all equipment, machinery, apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts, accessories and
all replacements and substitutions therefor or accessions thereto (collectively, “Equipment”);
	 	 	 

		(c)	all of the Borrower’s general intangibles, whether now owned or hereafter acquired, including
all payment intangibles, all choses in action, causes of action, corporate or other business records, inventions, designs, patents,
patent applications, equipment formulations, manufacturing procedures, quality control procedures, trademarks, trademark applications,
service marks, trade secrets, goodwill, copyrights, design rights, software, computer information, source codes, codes, records
and updates, registrations, licenses, franchises, customer lists, tax refunds, tax refund claims, computer programs, all claims
under guaranties, security interests or other security held by or granted to the Borrower to secure payment of any of the Receivables
by a person that is either an account debtor with respect to any Receivable and/or the prospective purchaser of goods, services
or both with respect to any contract or contract right, and/or any party who enters into or proposes to enter into any contract
or other arrangement with the Borrower, pursuant to which the Borrower is to deliver any personal property or perform any services
(a “Customer”) (other than to the extent covered by Receivables), all rights of indemnification and all other intangible
property of every kind and nature (other than Receivables) (collectively, “General Intangibles”);
	 	 	 

		(d)	all of the Borrower’s now owned or hereafter acquired goods, merchandise and other personal
property, wherever located, to be furnished under any consignment arrangement, contract of service or held for sale or lease, all
raw materials, work in process, finished goods and materials and supplies of any kind, nature or description which are or might
be used or consumed in the Borrower’s business or used in selling or furnishing such goods, merchandise and other personal
property, and all documents of title or other documents representing them. Inventory shall include specifically, but not be limited
to, petroleum, natural gas, and other minerals, chemicals and substances extracted from under the ground by way of any extraction
procedures or processes (collectively, “Inventory”);
	 	 	 

		(e)	all of the Borrower’s now owned or hereafter acquired securities (whether certificated or
uncertificated), securities entitlements, securities accounts, commodities contracts and commodities accounts (collectively, “Investment
Property”);

 

    	2

    	 

    
 

		(f)	all of the Borrower’s right, title and interest in and to, whether now owned or hereafter
acquired and wherever located, (i) its respective goods and other property including, but not limited to, all merchandise returned
or rejected by Customers, relating to or securing any of the Receivables; (ii) all of the Borrower’s rights as a consignor,
a consignee, an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in transit, setoff, detinue, replevin, reclamation
and repurchase; (iii) all additional amounts due to the Borrower from any Customer relating to the Receivables; (iv) other property,
including warranty claims, relating to any goods securing the Note and the Advances; (v) all of the Borrower’s contract
rights, rights of payment that have been earned under a contract right, instruments (including promissory notes), documents, chattel
paper (including electronic chattel paper), warehouse receipts, deposit accounts, letters of credit and money, including all right,
title and interest in and to the WPT License Agreement; (vi) all commercial tort claims (whether now existing or hereafter
arising) and all other litigation claims (whether now existing or hereafter arising), including all of the Borrower’s right,
title and interest in and to (I) the litigation against Deloitte & Touche and (II) the litigation relating to the WPT
License Agreement and the royalties relating thereto; (vii) if and when obtained by the Borrower, all real and personal property
of third parties in which the Borrower has been granted a lien or security interest as security for the payment or enforcement
of Receivables; (viii) all letter of credit rights (whether or not the respective letter of credit is evidenced by a writing);
(ix) all supporting obligations; and (x) any other goods, personal property or real property now owned or hereafter acquired in
which the Borrower expressly has granted a security interest or may in the future grant a security interest to the Lender under
this Agreement, or in any amendment or supplement thereto, or under any other agreement between the Lender and the Borrower;
	 	 	 

		(g)	all oil, gas, other hydrocarbons, and other minerals at any time produced from or allocated to
the “Borrower Property” (as defined in the Credit Agreement) and all products processed or obtained therefrom (herein
collectively called the “Production”), together with all accounts arising out of the sale of Production and all other
proceeds of Production (regardless of whether or not the Production, such accounts and such proceeds constitute “as-extracted
collateral” under the UCC), and all liens and security interests securing payment of the proceeds of Production, including
those liens and security interests provided for under (i) statutes enacted in the jurisdictions in which the Borrower Property
are located, or (ii) statutes made applicable to the Borrower Property under federal law (or some combination of federal and state
law);
	 	 	 

		(h)	without limitation of or by any other provisions of this Section 1.3, all payments received in
lieu of Production (regardless of whether such payments accrued, or the events which gave rise to such payments occurred on, before
or after the date hereof), including “take or pay” payments and similar payments, payments received in settlement of
or pursuant to a judgment rendered with respect to take or pay or similar obligations or other obligations under a production sales
contract, payments received in buyout or buydown or other settlement of a production sales contract, and payments received under
a gas balancing or similar agreement as a result of (or received otherwise in settlement of or pursuant to judgment rendered with
respect to) rights held by the Borrower as a result of the Borrower (or its predecessors in title) taking or having taken less
gas from lands covered by a Borrower Property (or lands pooled or unitized therewith) than their ownership of such Borrower Property
would entitle them to receive (the payments described in this subsection (h) being herein called “Payments in Lieu of Production”);

 

    	3

    	 

    
 

		(i)	without limitation of or by the foregoing, all rights and interests of the Borrower under any hedging
contract now or hereafter executed;
	 	 	 

		(j)	all geological, geophysical, engineering, accounting, title, legal, and other technical or business
data concerning the Borrower Property, the Production or any other item of Property (as herein defined), which data is now or hereafter
in the possession of the Borrower or in which the Borrower can otherwise grant a security interest, and all books, files, records,
magnetic media, software, and other forms of recording or obtaining access to such data;
	 	 	 

		(k)	all of the Borrower’s ledger sheets, ledger cards, files, correspondence, records, books
of account, business papers, computers, computer software (owned by the Borrower or in which it has an interest), computer programs,
tapes, disks and documents relating to subsections (a), (b), (c), (d), (e), (f), (g), (h), (i), and (j) above; and
	 	 	 

		(l)	all substitutions and replacements for and proceeds and products of subsections (a), (b), (c),
(d), (e), (f), (g), (h), (i), (j), and (k) in whatever form, including, but not limited to: cash, deposit accounts (whether or
not comprised solely of proceeds), certificates of deposit, insurance proceeds (including hazard, flood and credit insurance),
negotiable instruments and other instruments for the payment of money, chattel paper, security agreements, documents, eminent domain
proceeds, condemnation proceeds and tort claim proceeds and, in the case of all tangible Collateral, together with (i) all accessories,
attachments, parts, equipment, accessions, and repairs now or hereafter attached or affixed to or used in connection with any such
goods, and (ii) all warehouse receipts, bills of lading, and other documents of title now or hereafter covering such goods.

 

2.            REPRESENTATIONS,
WARRANTIES AND AGREEMENTS. The Debtor hereby represents and warrants to, and covenants and agrees with, the Secured Party
as follows:

 

(a)            Except
as set forth on Exhibit A, the Debtor does not own any interest in any copyrights, patents, or trademarks that are registered
under either federal or state law.

 

(b)            Except
as set forth on Exhibit A, the Debtor does not own any interest in any certificated vehicle or piece of equipment.

 

(c)            The
Collateral will be used primarily for business purposes. The Debtor’s chief executive office is located at 10275 Wayzata
Boulevard, Suite 310, Minneapolis, Minnesota 55305, and it keeps and will keep all of its books and records with respect to all
of its accounts at such address.

 

    	4

    	 

    
 

(d)            If
any part or all of the Collateral will become so related to particular real estate (other than the “Borrower Property”
as defined in the Credit Agreement) as to become a fixture, the Debtor will promptly advise the Secured Party as to the real estate
concerned and the record owner thereof and will execute and deliver any and all instruments necessary to perfect the Security Interest
therein and to assure that such Security Interest will be prior to the interest therein of the owner of the real estate.

 

(e)            During
the preceding one (1) year, [other than_____,] the Debtor has not changed its name or operated or conducted business under any
trade name or “d/b/a” that is different from its corporate name [, except that _____]. The Debtor shall notify the
Secured Party promptly of any change in the Debtor’s corporate name or if the Debtor operates or conducts business under
any trade name or “d/b/a” that is different from such name or the trade names or “d/b/a’s” that are
identified in the preceding sentence. The Debtor will not change the state under which it is organized or merge or consolidate
with or into any other entity.

 

(f)            The
Debtor has (or will have at the time the Debtor acquires rights in Collateral hereafter acquired or arising) and will maintain
good and marketable title to each item of Collateral free and clear of all security interests, liens and encumbrances, except the
Security Interest and such other security interests, liens and encumbrances as are listed on Exhibit B hereto (the
Security Interest and the security interests, liens and encumbrances listed on Exhibit B are hereinafter collectively referred
to as the “Permitted Interests”), and will defend the Collateral against all claims or demands of all persons other
than the Secured Party and those holding Permitted Interests. Except as permitted pursuant to Section 14(L) of the Credit
Agreement, the Debtor will not sell or otherwise dispose of the Collateral or any interest therein.

 

(g)            The
Debtor will not permit any Collateral to be located in any state (and, if county filing is required, in any county) in which a
financing statement covering such Collateral is required to be filed for perfection of the Security Interest but has not in fact
been filed.

 

(h)            All
rights to payment and all instruments, documents, chattel paper and other agreements constituting or evidencing Collateral are
(or will be when arising or issued) the valid, genuine, and legally enforceable obligation, subject to no defense, set-off, or
counterclaim (other than those arising in the ordinary course of business) of each account debtor or other obligor named therein
or in the Debtor’s records pertaining thereto as being obligated to pay such obligation. The Debtor will not agree to any
modification, amendment, or cancellation of any such obligation in excess of $25,000 without the Secured Party’s prior written
consent and will not subordinate any such right to payment to claims of other creditors of such account debtor or other obligor.

 

    	5

    	 

    
 

(i)            The
Debtor will (i) keep all Collateral free and clear of all security interests, liens, and encumbrances except the Permitted Interests;
(ii) if the Secured Party at any time reasonably requests, promptly deliver to the Secured Party any instrument, document, or chattel
paper constituting Collateral, duly endorsed or assigned by the Debtor to the Secured Party; (iii) from time to time execute such
financing statements as the Secured Party reasonably may deem to be required to be filed to perfect the Security Interest and,
if any Collateral is covered by a certificate of title, execute such documents as may be required to have the Security Interest
properly noted on a certificate of title; (iv) pay when due or reimburse the Secured Party on demand for all costs of collection
of any of the Secured Obligations and, subject to any limitations set forth in the Credit Agreement, all other out-of-pocket expenses
(including in each case all reasonable attorneys’ fees) incurred by Secured Party in connection with the creation, perfection,
satisfaction, or enforcement of the Security Interest or the execution or creation, continuance, or enforcement of this Agreement
or any or all of the Secured Obligations including expenses incurred in any litigation or bankruptcy or insolvency proceedings;
(v) execute, deliver, or endorse any and all instruments, documents, assignments, security agreements, and other agreements and
writings which the Secured Party may at any time reasonably request to secure, protect, perfect, or enforce the Security Interest
and the Secured Party’s rights under this Agreement, including, without limitation, an assignment of claim with respect to
any account that is a government receivable; (vi) permit the Secured Party at any time and from time to time to send requests to
account debtors or other obligors for verification of amounts owed to the Debtor; and (vii) otherwise comply with all covenants,
terms, and provisions set forth in the Credit Agreement that apply to the Collateral. If the Debtor at any time fails to perform
or observe any agreement contained in this Section 2(i) (without regard to Section 2(i)(vii), a failure with respect to which the
Credit Agreement covers), and if such failure shall continue for a period of thirty (30) calendar days after the Secured Party
gives the Debtor written notice thereof (or, in the case of the agreements contained in clause (iii) of this Section 2(i), immediately
upon the occurrence of such failure, without notice or lapse of time) the Secured Party may (but need not) perform or observe such
agreement on behalf, and in the name, place, and stead, of the Debtor (or, at the Secured Party’s option, in the Secured
Party’s own name) and may (but need not) take any and all other actions that the Secured Party reasonably may deem to be
necessary to cure or correct such failure (including, without limitation, the payment of taxes, the satisfaction of security interests,
liens, or encumbrances (other than Permitted Interests), the performance of obligations under contracts or agreements with account
debtors or other obligors, the procurement and maintenance of insurance, the execution of financing statements, the endorsement
of instruments, and the procurement of repairs, transportation, or insurance); and, except to the extent that the effect of such
payment would be to render any loan or forbearance of money usurious or otherwise illegal under any applicable law, the Debtor
shall thereupon pay the Secured Party on demand the amount of all moneys expended and all costs and expenses (including reasonable
attorneys’ fees) incurred by the Secured Party in connection with or as a result of the Secured Party’s performing
or observing such agreements or taking such actions, together with interest thereon from the date expended or incurred by the Secured
Party at the rate provided for in the Credit Agreement with respect to the Note. To facilitate the performance or observance by
the Secured Party of such agreements of the Debtor, the Debtor hereby irrevocably appoints (which appointment is coupled with an
interest) the Secured Party, or its delegate, as the attorney-in-fact of the Debtor with the right (but not the duty) from time
to time to create, prepare, complete, execute, deliver, endorse, or file, in the name and on behalf of the Debtor, any and all
instruments, documents, financing statements, applications for insurance and other agreements and writings required to be obtained,
executed, delivered or endorsed by the Debtor under this Section 2.

 

    	6

    	 

    
 

3.            ASSIGNMENT OF INSURANCE. The
Debtor hereby assigns to the Secured Party, as additional security for the payment of the Secured Obligations, any and all moneys
(including but not limited to proceeds of insurance and refunds of unearned premiums) due or to become due under, and all other
rights of the Debtor under or with respect to, any and all policies of insurance covering the Collateral, and the Debtor hereby
directs the issuer of any such policy to pay any such moneys to the Secured Party. Upon the occurrence and during the continuance
of an Event of Default under the Credit Agreement, the Secured Party may (but need not) in its own name or in the Debtor’s
name, execute and deliver proofs of claim, receive all such monies (subject to the Debtor’s rights), endorse checks and other
instruments representing payment of such monies, and adjust, litigate, compromise or release any claim against the issuer of any
such policy.

 

4.            COLLECTION OF ACCOUNTS. The Secured
Party may, or at the Secured Party’s request, the Debtor shall, upon the occurrence and during the continuance of an Event
of Default under the Credit Agreement, notify any account debtor or any obligor on an instrument or contract to make payment directly
to a post office box specified by and under the sole control of the Secured Party, whether or not the Secured Party was theretofore
making collections with respect thereto, and the Secured Party shall be entitled to take control of any proceeds thereof. If so
requested by the Secured Party, the Debtor shall insert appropriate language on each invoice directing its customers to make payment
to such post office box. The Debtor hereby authorizes and directs the Secured Party to deposit into a special collateral account
to be established and maintained with the Secured Party all checks, drafts, cash payments, or other payments received in the lock
box. All deposits in said collateral account shall constitute proceeds of Collateral and shall not constitute payment of any of
the Secured Obligations. At its option, the Secured Party, at any time, may apply finally collected funds on deposit in said collateral
account to the payment of the Secured Obligations in such order of application as the Secured Party may determine, or permit the
Debtor to withdraw all or any part of the balance on deposit in said collateral account. If a collateral account is so established
the Debtor agrees that it will deliver promptly to the Secured Party for deposit into said collateral account, all payments on
accounts and chattel paper received by it. All such payments shall be delivered to the Secured Party in the form received (except
for the Debtor’s endorsement where necessary). Until so deposited, all payments on accounts and chattel paper received by
the Debtor shall be held in trust by the Debtor for and as the property of the Secured Party and shall not be commingled with
any funds or property of the Debtor.

 

    	7

    	 

    
 

5.            REMEDIES. Upon the occurrence
of an Event of Default under the Credit Agreement, and at any time thereafter, the Secured Party may exercise any one or more
of the following rights or remedies if any or all of the Secured Obligations are not paid when due: (i) exercise and enforce any
or all rights and remedies available after default to a secured party under the Uniform Commercial Code, including but not limited
to the right to take possession of any Collateral, proceeding without judicial process or by judicial process (without a prior
hearing or notice thereof, which the Debtor hereby expressly waives), and the right to sell, lease or otherwise dispose of or
use any or all of the Collateral; (ii) the Secured Party may require the Debtor to assemble the Collateral and make it available
to the Secured Party at a place to be designated by the Secured Party that is reasonably convenient to both parties; (iii) exercise
the Debtor’s rights under any lease agreements regardless of whether or not the Debtor is in default under such leases;
and (iv) exercise or enforce any or all other rights or remedies available to the Secured Party by law or agreement against
the Collateral, against the Debtor or against any other person or property. The Secured Party hereby is granted a nonexclusive,
worldwide, and royalty-free license to use or otherwise to exploit all trademarks, franchises, copyrights, and patents of the
Debtor that the Secured Party deems necessary or appropriate to the disposition of any Collateral. If notice to the Debtor of
any intended disposition of Collateral or any other intended action is required by law in a particular instance, such notice shall
be deemed commercially reasonable if given (in the manner specified in Section 6 hereof) at least ten (10) calendar days prior
to the date of intended disposition or other action.

 

6.            MISCELLANEOUS. This Agreement
does not contemplate a sale of accounts or chattel paper, and, as provided by law, the Debtor is entitled to any surplus and shall
remain liable for any deficiency. This Agreement can be waived, modified, amended, terminated, or discharged, and the Security
Interest can be released, only explicitly in a writing signed by the Secured Party. A waiver signed by the Secured Party shall
be effective only in the specific instance and for the purpose given. Mere delay or failure to act shall not preclude the exercise
or enforcement of any of the Secured Party’s rights or remedies. All rights and remedies of the Secured Party shall be cumulative
and may be exercised singularly or concurrently, at the Secured Party’s option, and the exercise or enforcement of any one
such right or remedy shall neither be a condition to nor bar the exercise or enforcement of any other. All notices to be given
to the Debtor shall be deemed sufficiently given if given in accordance with the Credit Agreement, to the Debtor at its address
set forth herein. The Secured Party’s duty of care with respect to Collateral in its possession (as imposed by law) shall
be deemed fulfilled if the Secured Party exercises reasonable care in physically safe keeping such Collateral or, in the case
of Collateral in the custody or possession of a bailee or other third person, exercises reasonable care in the selection of the
bailee or other third person, and the Secured Party need not otherwise preserve, protect, insure, or care for any Collateral.
The Secured Party shall not be obligated to preserve any rights that the Debtor may have against any other party, to realize on
the Collateral at all or in any particular manner or order, or to apply any cash proceeds of the Collateral in any particular
order of application. This Agreement shall be binding upon and inure to the benefit of the Debtor, the Secured Party, and their
respective successors and assigns and shall take effect when signed by the Debtor and delivered to the Secured Party, and the
Debtor waives notice of the Secured Party’s acceptance hereof. The Secured Party may execute this Agreement if appropriate
for the purpose of filing, but the failure of the Secured Party to execute this Agreement shall not affect or impair the validity
or effectiveness of this Agreement. Except to the extent otherwise required by law, this Agreement shall be governed by the laws
of the State of Minnesota, and, unless the context otherwise requires, all terms used herein that are defined in the Uniform Commercial
Code, as in effect in said state shall have the meanings therein stated and all capitalized terms used herein that are defined
in the Credit Agreement shall have the meanings therein stated. If any provision or application of this Agreement is held unlawful
or unenforceable in any respect, such illegality or unenforceability shall not affect other provisions or applications that can
be given effect, and this Agreement shall be construed as if the unlawful or unenforceable provision or application had never
been contained herein or prescribed hereby. All representations and warranties contained in this Agreement shall survive the execution,
delivery, and performance of this Agreement and the creation and payment of the Secured Obligations.

 

 

[THE REMAINDER OF THIS PAGE HAS BEEN
LEFT BLANK INTENTIONALLY. 

SIGNATURE PAGE
FOLLOWS.]

 

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IN WITNESS WHEREOF,
the Debtor has executed and delivered to the Secured Party this Security Agreement as of the day and year first above written.

 

 

	 	BLACK RIDGE OIL & GAS, INC.
	 	 
	 	By: 	
	 	 	[Name]
[Title]

 

 

 

 

 

 

 

 

[SIGNATURE PAGE TO SECURITY AGREEMENT]

 

 

    	9

    	 

    
 

EXHIBIT
A

 

 

(Certificated Vehicles and Equipment)

 

None

 

(Copyrights, patents and trademarks)

 

None

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	1

    	 	

    
  

EXHIBIT B

 

 

(Permitted Security Interests)

 

“Permitted Interests” (as defined
in, and to the extent provided in, the Credit Agreement)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	1

    	 	

    
 

EXHIBIT C

 

FORM OF 

CERTIFICATE OF CHIEF FINANCIAL OFFICER

 

 

The undersigned hereby
certifies, in his capacity as the Chief Financial Officer of Black Ridge Oil & Gas, Inc. (the “Borrower), on behalf of
the Borrower, as follows:

 

(i)                
The financial statement(s) attached hereto, or filed with the United States Securities and Exchange Commission (or any successor
thereto) on _________, 201_, are complete and correct in all material respects and fairly present the financial condition of the
Borrower, as of the date of said financial statement(s) and the results of its business operations for the period covered thereby,
and have been prepared in accordance with generally accepted accounting principles, consistently applied.

 

(ii)              
The representations and warranties of the Borrower set forth and contained in the Amended and Restated Secured Revolving
Credit Agreement dated as of September 5, 2012, by and between the Lender and the Borrower, as the same may be amended
from time to time (the “Credit Agreement”) and in the documents related thereto are true and correct in all material
respects as of the date hereof.

 

(iii)            
No Event of Default (as that term is defined in the Credit Agreement), and no event that with the giving of notice, the
passage of time. or both could constitute an Event of Default, has occurred or is continuing as of the date hereof.

 

IN WITNESS WHEREOF,
the undersigned has signed and delivered this Certificate to the Lender pursuant to Section 14(A)(3) of the Credit Agreement
as of the _____ day of ________________, 201_, for the period ending as of the ____ day of _________________, 201_.

 

 

	 	Name:
James A. Moe

Title: Chief Financial Officer

	 	 
	 		
	 	 	

 

 

    	1

    	 	

    

 

EXHIBIT D

 

 

FORM OF 

QUARTERLY COMPLIANCE CERTIFICATE

 

The undersigned hereby
certifies, in his capacity as the [Chief Executive Officer / Chief Financial Officer] of Black Ridge Oil & Gas, Inc. (the “Borrower),
on behalf of the Borrower, as follows:

 

		1.	I am the [Chief Executive Officer / Chief Financial Officer] of the Borrower.
	 	 	 

		2.	Reference is made to that certain Amended and Restated Secured Revolving Credit Agreement dated
as of September 5, 2012, by and between Dougherty Funding LLC and the Borrower, as the same may be amended from time to time (the
“Credit Agreement”). Capitalized terms used and not otherwise defined herein shall have the meanings
given to such terms in the Credit Agreement.
	 	 	 

		3.	I have reviewed the Credit Agreement and have made, or have caused to be made under my supervision,
such examination or investigation as is necessary to enable me to express an informed opinion as to the matters referred to herein.
	 	 	 

		4.	Attached is the Borrowing Base Certificate as of the quarter ended ______________, 201_. The
Borrowing Base equals or exceeds the outstanding amount of Advances as of the quarter ended ___________, 201_.
	 	 	 

		5.	The Borrower did not have a Balance Sheet Available Cash Shortfall during the quarter ended __________,
201_.
	 	 	 

		6.	The Balance Sheet Available Cash of the Borrower as of the quarter ended ___________, 201_
was $___________.
	 	 	 

		7.	Twelve (12) months’ of regularly scheduled payments of interest on the outstanding amount
of Advances as of the quarter ended ___________, 201_ equals $___________.
	 	 	 

		8.	Accordingly, as of the quarter ended ____________, 201_, the Borrower had Balance Sheet Available
Cash that satisfied the requirements of Section 14(J) of the Credit Agreement.
	 	 	 

		9.	The calculation attached to this Certificate supports the certifications that are set forth in
Paragraph 5 through 7 of this Certificate.

 

    	1

    	 	

    
 

IN WITNESS WHEREOF,
the undersigned has signed and delivered this Certificate to the Lender pursuant to Section 14(A)(5) of the Credit Agreement
as of the _____ day of ________________, 201_, for the period ending as of the ____ day of _________________, 201_.

 

 

	 	

	 	
	 	Name:	
	 	Title:  	

 

 

 

    	2

    	 	

    
 

EXHIBIT
E

 

 

FORM OF

ADVANCE REQUEST

 

The undersigned Black
Ridge Oil & Gas, Inc., a Delaware corporation (the “Borrower”), requests an advance from Dougherty Funding LLC,
a Delaware limited liability company (the “Lender”), pursuant to the terms and conditions set forth in the Amended
and Restated Secured Revolving Credit Agreement dated as of September 5, 2012, by and between the Lender and the Borrower, as the
same may be amended from time to time (the “Credit Agreement”) and, in support of this request, certifies the following:

 

(i)                
The amount of the requested Advance is $____________.

 

(ii)              
Of the amount that is set forth in Paragraph 1, the amount of $________ is a request for reimbursement for expenditures
that the Borrower previously has incurred and has paid to the applicable payee or payees. Attached to this request is proof of
each applicable payee’s receipt of the Borrower’s payment to the payee.

 

(iii)            
The date by which the Borrower requests that the Advance be disbursed is _________, 201_.

 

(iv)            
Attached to this request is a copy of each executed Authorization for Expenditure that the Borrower previously has not provided
to the Lender, which is in full force and effect, with respect to which amounts requested pursuant to this request will be applied.
The following is each Authorization for Expenditure that the Borrower previously has provided to the Lender, which remains in full
force and effect, with respect to which amounts requested pursuant to this request will be applied: [List any such Authorizations
for Expenditure]

 

(v)              
Attached to this request is a copy of Borrowing Base Certificate that includes each Joint Interest Billing Statement with
respect to which amounts requested pursuant to this request will be applied. The Borrowing Base equals or exceeds the outstanding
amount of Advances. The Borrower’s “Working Interest” percentage that is being applied with respect to each such
Joint Interest Billing Statement is consistent with the Authorization for Expenditure to which such Joint Interest Billing Statement
relates.

 

(vi)            
[Attached to this request is a description of all other documents that were provided to the Borrower with respect to each
Joint Interest Billing Statement (other than the back-up, expenditure information) or the well to which it relates since the last
requested Advance with respect to such well.] OR [Attached to this request are copies of all other documents that were provided
to the Borrower with respect to each Joint Interest Billing Statement (other than the back-up, expenditure information) or the
well to which it relates since the last requested Advance with respect to such well.]

 

    	1

    	 	

    
 

(vii)          
The representations and warranties of the Borrower set forth and contained in the Credit Agreement and in the documents
related thereto are true and correct in all material respects as of the date hereof.

 

(viii)        
No Event of Default (as that term is defined in the Credit Agreement), and no event that with the giving of notice, the
passage of time. or both could constitute an Event of Default, has occurred or is continuing as of the date hereof.

 

(ix)            
All Borrower Property with respect to which the Borrower is requesting an amount pursuant to this request is Held by Production
[, except as follows].

 

[The
following Borrower Property with respect to which the Borrower is requesting an amount pursuant to this request is not Held by
Production: [List such Borrower Property]. The amount of the requested Advance to be applied with respect to such Borrower Property
is $_______. The expected timeframe for establishing when the Borrower Property will be Held by Production is __________, which
will be established by __________. The lease that applies with respect to such Borrower Property will terminate on _______, 201_
if it is not Held by Production by such date.] [Repeat as to each applicable Borrower Property.]

 

(x)              
The Borrower does not have a Balance Sheet Available Cash Shortfall as of the date of this request, and will not have a
Balance Sheet Available Cash Shortfall taking into account the amount of Advance requested pursuant to this request, as evidenced
by the calculation attached to this request.

 

(xi)            
[If applicable: Check #______, which was a payment that was made with funds from a prior Advance, is outstanding. The Borrower
confirms that the check was sent to the payee and that Account #_________, which is the account on which the check was drawn, contains,
and will continue to contain, adequate funds to cover the outstanding check and all other outstanding checks drawn on the account.]

 

IN WITNESS WHEREOF,
the undersigned has signed and delivered this request for an Advance as of the _____ day of ________________, 201_.

 

	 	BLACK RIDGE OIL & GAS, INC.
	 	 
	 	
	 	Name:	

	 	Title:	 

 

 

    	2

    	 	

    
 

EXHIBIT
F

 

 

CONTINGENT LIABILITIES

 

 

NONE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	1

    	 	

    
 

EXHIBIT G

 

 

FORM OF 

CERTIFICATE OF CHIEF FINANCIAL OFFICER

REGARDING

ADJUSTED CASH EBTDA 

 

 

The undersigned hereby
certifies, in his capacity as the Chief Financial Officer of Black Ridge Oil & Gas, Inc. (the “Borrower), on behalf of
the Borrower, that the following is the reconciliation of the Borrower’s adjusted earnings before interest, taxes, depreciation,
and amortization, as reported by the Borrower for the fiscal quarter most recently completed in the Borrower’s filings with
the United States Securities Exchange Commission, to the Borrower’s adjusted earnings before taxes, depreciation, and amortization,
as determined on a cash basis:

 

	 	 	Three Months Ended
[Month / Day], 201_
	
         

        Adjusted EBITDA (as reported to the SEC)
	 	                         ______
	 	 	 
	Minus:  Financing costs paid	 	                         ______
	Minus:  Cash interest expense	 	                         ______
	 	 	 
	Plus / Minus:  Decrease (increase) in assets:	 	 
	Accounts receivable	 	                         ______
	Other current assets	 	                         ______
	 	 	 
	Plus / Minus:  Increase (decrease) in liabilities:	 	 
	Accounts payable	 	                         ______
	Accrued expenses	 	                         ______
	 	 	 
	Other	 	                         ______
	 	 	 
	
        Minus: “Excluded Revenues” (as defined in the Credit
        Agreement) (provided that no Revolving

        Credit Expiration Date occurred or previously occurred)
		______
	 	 	 
	Adjusted Cash EBTDA	 	                         ______
	 	 	 
	 	 	 
	
        Cash Sweep Due to the Lender under Section 14(BB)

        of the Credit Agreement:
	 	 
	
         

        Adjusted Cash EBTDA
	 	                         _______
	 	 	90%
	
         

        Remaining sweep to be applied to principal
	 	                         _______

 

    	1

    	 	

    
 

IN WITNESS WHEREOF,
the undersigned has signed and delivered this Certificate to the Lender pursuant to Section 14(BB) of the Credit Agreement
as of the _____ day of ________________, 201_, for the period ending as of the ____ day of _________________, 201_.

 

 

 

 

	 	Name:
James A. Moe

Title: Chief Financial Officer

	 	 
	 		
	 	 	

 

 

 

 

 

 

 

 

2EXHIBIT 10.2

 

THIS SECURITY HAS NOT BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED OR
SOLD UNLESS (I) REGISTERED AND QUALIFIED PURSUANT TO THE APPLICABLE PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS, (II) THIS
SECURITY MAY BE SOLD PURSUANT TO RULE 144 OF THE ACT OR (III) UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION APPLIES.  THEREFORE,
NO SALE OR TRANSFER OF THIS SECURITY SHALL BE MADE, NO ATTEMPTED SALE OR TRANSFER SHALL BE VALID, AND THE ISSUER SHALL NOT BE REQUIRED
TO GIVE ANY EFFECT TO ANY SUCH TRANSACTION UNLESS (A) SUCH TRANSACTION HAS BEEN DULY REGISTERED UNDER THE ACT AND QUALIFIED OR
APPROVED UNDER APPROPRIATE STATE SECURITIES LAWS, (B) THE SECURITY MAY BE SOLD PURSUANT TO RULE 144 OF THE ACT OR (C) THE
ISSUER HAS FIRST RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH REGISTRATION, QUALIFICATION OR APPROVAL
IS NOT REQUIRED.

 

WARRANT

 

For the Purchase of Shares of Common Stock
of

 

BLACK RIDGE OIL & GAS, INC.

(formerly known as Ante5, Inc.)

 

Void After 5 P.M., CT, on August 31, 2015

 

	Date:

 

Warrant to Purchase
[                          ] Shares of Common Stock

 

THIS IS TO CERTIFY, that, for value
received, Dougherty Funding LLC, or successors or registered assigns (the “Holder”), is entitled, subject to the terms
and conditions hereinafter set forth, at any time and from time to time during the period commencing as of 9:00 A.M., CT, on [                          ] (the “Issue Date”) and ending as of 5:00 P.M., CT, August 31, 2015 at which time this Warrant shall become void
and all rights hereunder shall cease, to purchase [                          ] shares (the “Warrant Shares”) of Common Stock, par value $0.001
(“Common Stock” or the “Shares”), of Black Ridge Oil & Gas, Inc. (formerly known as Ante5, Inc.), a
Delaware corporation (the “Company”), from the Company at an exercise price per Share equal to $0.38 at the date of
issuance (the exercise price in effect being herein called the “Exercise Price”).  The number of Warrant
Shares purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as described
herein.  This Warrant is being issued pursuant to that certain Amended and Restated Fee Agreement dated as of September 5, 2012
between the Company and the Holder.   Capitalized terms used herein have the respective meanings ascribed thereto
in the Amended and Restated Secured Revolving Credit Agreement dated as of September 5, 2012 (“the “Credit Agreement”)
between the Company and the Holder unless otherwise defined herein.

 

SECTION 1.        Terms of this Warrant

 

1.1           Time
of Exercise.  This Warrant may be exercised at any time and from time to time during the period commencing as of
9:00 A.M., CT, on [                          ] (the “Issue Date”) and ending as of 5:00 P.M., CT, on August 31, 2015, at which time this Warrant
shall become void and all rights hereunder shall cease. This Warrant shall be subject to cancellation by the Company if it is conclusively
determined through arbitration or legal proceedings that the Holder defaulted in its obligation to make Advances to the Company
in accordance with the Credit Agreement and such default was not cured.

 

1.2           Manner
of Exercise.

 

1.2.1           The
Holder may exercise this Warrant, in whole or in part, upon surrender of this Warrant, with the duly executed exercise notice,
in the form attached hereto as Appendix A, to the Company at its corporate office in Minnetonka, Minnesota, and upon payment
to the Company of the Exercise Price for each Warrant Share to be purchased in lawful money of the United States, or by certified
or cashier's check, or wired funds or by cashless exercise as provided in Section 1.3 below.

 

    	1

    	 

    
 

1.2.2           Upon
receipt of this Warrant with the duly executed exercise notice and accompanied by payment of the aggregate Exercise Price for the
Warrant Shares for which this Warrant is then being exercised (unless this Warrant is being exercised on a cashless basis as provided
in Section 1.3 below), the Company shall cause to be issued and delivered to the Holder, certificates for the total number of whole
Warrant Shares for which this Warrant is being exercised in such denominations as are required for delivery to the Holder.  

 

1.2.3           In
case the Holder shall exercise this Warrant with respect to less than all of the Warrant Shares that may be purchased under this
Warrant, the Company shall execute a new Warrant for the balance of the Warrant Shares that may be purchased upon exercise of this
Warrant and deliver such new Warrant to the Holder.

 

1.2.4           The
Company covenants and agrees that it will pay when due and payable any and all taxes which may be payable in respect of the issue
of this Warrant, or the issue of any Shares upon the exercise of this Warrant.  The Company shall not, however, be required
to pay any tax which may be payable in respect of any transfer involved in the issuance or delivery of this Warrant or of the Warrant
Shares in a name other than that of the Holder at the time of surrender, and until the payment of such tax the Company shall not
be required to issue such Warrant Shares.

 

1.3           Cashless
Exercise.  Notwithstanding any other provision contained herein to the contrary, the Holder may elect to receive,
without the payment by the Holder of the aggregate Exercise Price in respect of the shares of Common Stock to be acquired, shares
of Common Stock of equal value to the value of this Warrant, or any specified portion hereof, by the surrender of this Warrant
(or such portion of this Warrant being so exercised) together with a Net Issue Election Notice, in the form annexed hereto as Appendix
B, duly executed, to the Company.  Thereupon, the Company shall issue to the Holder such number of fully paid, validly
issued and nonassessable shares of Common Stock as is computed using the following formula:

 

X = Y (A - B)

A

 

where

 

X =           the
number of shares of Common Stock to which the Holder is entitled upon such cashless exercise;

 

Y =           the
total number of shares of Common Stock covered by this Warrant for which the Holder has surrendered purchase rights at such time
for cashless exercise (including both shares to be issued to the Holder and shares as to which the purchase rights are to be canceled
as payment therefor);

 

A =          the
Market Price of one share of Common Stock as at the date the net issue election is made; and

 

B =           the
Exercise Price in effect under this Warrant at the time the net issue election is made.

 

1.4           Market
Price.  “Market Price” shall mean, on any given day: (A) if the class of Warrant Shares is exchange-traded,
the average of the closing sales prices per share of the class of Warrant Shares for the ten (10) consecutive trading days ending
on the day that is two (2) trading days prior to the applicable date of determination of Market Price; or (B) if the class
of Warrant Shares is not listed or admitted to trading on any securities exchange but is regularly traded in any over-the-counter
market, then the average of the bid and ask prices per share of the class of Warrant Shares for the ten (10) consecutive trading
days ending on the day that is two (2) trading days prior to the applicable date of determination of Market Price; or (C) if
the class of Warrant Shares is not traded as described in clauses (A) or (B), then the per share market price of the class
of Warrant Shares as determined in good faith by the Company’s Board of Directors.

 

    	2

    	 

    
 

1.5           Exchange
of Warrant.  Upon the request of the Holder, this Warrant may be divided into, combined with or exchanged for another
Warrant or Warrants of like tenor to purchase a like aggregate number of Shares.  If the Holder desires to divide, combine
or exchange this Warrant, the Holder shall make such request in writing delivered to the Company at its corporate office and shall
surrender this Warrant and any other Warrants to be so divided, combined or exchanged.  The Company shall execute and
deliver to the person entitled thereto a Warrant or Warrants, as the case may be, as so requested.  The Company shall
not be required to effect any division, combination or exchange which will result in the issuance of a Warrant entitling the Holder
to purchase upon exercise a fraction of a Share.

 

1.6           Holder
as Owner.  Prior to surrender of this Warrant in accordance with Section 1.7 for registration or assignment, the
Company may deem and treat the Holder as the absolute owner of this Warrant (notwithstanding any notation of ownership or other
writing hereon) for the purpose of any exercise hereof and for all other purposes, and the Company shall not be affected by any
notice to the contrary.

 

1.7           Assignment.  Any
assignment or transfer of any portion or all of this Warrant shall be made by surrender of this Warrant to the Company at its principal
office with the form of assignment attached hereto duly executed.  In such event, the Company shall, without charge,
execute and deliver a new Warrant in the name of the assignee named in such instrument of assignment and the portion of this Warrant
assigned to the assignee shall promptly be canceled.

 

1.8           Rights
of Holder.  Nothing contained in this Warrant shall be construed as conferring upon the Holder, prior to the exercise
of this Warrant, the right to vote, consent or receive notice as a shareholder in respect of any meetings of shareholders for the
election of directors or any other matter, or as having any rights whatsoever as a shareholder of the Company.

 

1.9           Lost
Certificates.  If this Warrant is lost, stolen, mutilated or destroyed, the Company shall, on such reasonable terms
as to indemnity as it may impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new
Warrant of like denomination and tenor as, and in substitution for, this Warrant, which shall thereupon become void.  Any
such new Warrant shall constitute an additional contractual obligation of the Company, whether or not the Warrant so lost, stolen,
destroyed or mutilated shall be at any time enforceable by anyone.

 

1.10           Covenants
of the Company.  The Company covenants and agrees as follows:

 

1.10.1           At
all times the Company shall reserve and keep available for the exercise of this Warrant such number of authorized shares of Common
Stock as are sufficient to permit the exercise in full of this Warrant.

 

1.10.2           The
Company covenants that all Warrant Shares when issued upon the exercise of this Warrant will be duly and validly issued, fully
paid, non-assessable and free of preemptive rights.

 

SECTION 2.        Adjustment of Exercise
Price and Number of Warrant Shares Purchasable upon Exercise

 

Subject and pursuant
to the provisions of this Section 2, the Exercise Price and the number of Warrant Shares subject to this Warrant shall be subject
to adjustment from time to time as set forth hereinafter.

 

2.1           Stock
Splits.  If the Company shall, at any time or from time to time while this Warrant is outstanding, pay a dividend
or make a distribution on its Common Stock in shares of Common Stock, subdivide its outstanding shares of Common Stock into a greater
number of shares or combine its outstanding shares of Common Stock into a smaller number of shares or issue by reclassification
of its outstanding shares of Common Stock any shares of its capital stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing corporation), then (i) the Exercise Price in effect immediately
prior to the date on which such change shall become effective shall be adjusted by multiplying such Exercise Price by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such change and the denominator
of which shall be the number of shares of Common Stock outstanding immediately after giving effect to such change and (ii) the
number of Warrant Shares purchasable upon exercise of this Warrant shall be adjusted by multiplying the number of Warrant Shares
purchasable upon exercise of this Warrant immediately prior to the date on which such change shall become effective by a fraction,
the numerator of which shall be the Exercise Price in effect immediately prior to the date on which such change shall become effective
and the denominator of which shall be the Exercise Price in effect immediately after giving effect to such change, calculated in
accordance with clause (i) above.  Such adjustments shall be made successively whenever any event listed above shall
occur.

 

    	3

    	 

    
 

2.2           Recapitalization
or Reclassification.  If any capital reorganization, reclassification of the capital stock of the Company, consolidation
or merger of the Company with another corporation in which the Company is not the survivor, or sale, transfer or other disposition
of all or substantially all of the Company’s assets to another corporation shall be effected, then, as a condition of such
reorganization, reclassification, consolidation, merger, sale, transfer or other disposition, lawful and adequate provision shall
be made whereby each Holder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions
herein specified and in lieu of the Warrant Shares immediately theretofore issuable upon exercise of the Warrant, such shares of
stock, securities or assets as would have been issuable or payable with respect to or in exchange for a number of Warrant Shares
equal to the number of Warrant Shares immediately theretofore issuable upon exercise of the Warrant, had such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition not taken place, and in any such case appropriate provision shall be
made with respect to the rights and interests of each Holder to the end that the provisions hereof (including, without limitation,
provision for adjustment of the Exercise Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation
to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof.  The Company shall not
effect any such consolidation, merger, sale, transfer or other disposition unless prior to or simultaneously with the consummation
thereof the successor corporation (if other than the Company) resulting from such consolidation or merger, or the corporation purchasing
or otherwise acquiring such assets or other appropriate corporation or entity shall assume the obligation to deliver to the Holder,
at the last address of the Holder appearing on the books of the Company, upon the proper exercise of this Warrant by the Holder,
such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to purchase,
and the other obligations under this Warrant.  The provisions of this paragraph (b) shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, sales, transfers or other dispositions.

 

2.3           Distributions.  In
case the Company shall fix a payment date for the making of a distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness
or assets (other than dividends or distributions referred to in Section 2.1), or subscription rights or warrants, the Exercise
Price to be in effect after such payment date shall be determined by multiplying the Exercise Price in effect immediately prior
to such payment date by a fraction, the numerator of which shall be the total number of shares of Common Stock outstanding multiplied
by the Market Price per share of Common Stock immediately prior to such payment date, less the fair market value (as determined
by the Board of Directors in good faith) of said assets or evidences of indebtedness so distributed, or of such subscription rights
or warrants, and the denominator of which shall be the total number of shares of Common Stock outstanding multiplied by such Market
Price per share of Common Stock immediately prior to such payment date.

 

2.4           An
adjustment to the Exercise Price shall become effective immediately after the payment date in the case of each dividend or distribution
and immediately after the effective date of each other event which requires an adjustment.

 

2.5           In
the event that, as a result of an adjustment made pursuant to this Section 2, the Holder shall become entitled to receive any shares
of capital stock of the Company other than shares of Common Stock, the number of such other shares so receivable upon exercise
of this Warrant shall be subject thereafter to adjustment from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Warrant Shares contained in this Warrant.

 

2.6           Upon
the happening of any event requiring an adjustment of the Exercise Price, the Company shall promptly give written notice thereof
to the Holder at the address appearing in the records of the Company, stating the adjusted Exercise Price and the adjusted number
of Warrant Shares resulting from such event and setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based.  Failure to give such notice to the Holder or any defect therein shall not affect the
legality or validity of the subject adjustment.

 

    	4

    	 

    
 

SECTION 3.        Restrictions on Transfer;
Legends

 

3.1           Registration
or Exemption Required.Assuming the accuracy of the representations and warranties of the Holder contained in the Credit
Agreement, this Warrant has been issued in a transaction exempt from the registration requirements of the Securities Act by virtue
of Regulation D and exempt from state registration or qualification under applicable state laws. Neither this Warrant nor the
Warrant Shares may be pledged, transferred, sold or assigned except pursuant to an effective registration statement or an exemption
to the registration requirements of the Securities Act and applicable state laws. If, at the time of the surrender of this Warrant
in connection with any transfer of this Warrant, or upon surrender of the Warrant Shares for transfer, the transfer of this Warrant,
or where applicable the Warrant Shares, shall not be registered pursuant to an effective registration statement under the Securities
Act and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such transfer
(i) that the Holder or transferee of this Warrant or the Warrant Shares, as the case may be, furnish to the Company a written
opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions)
to the effect that such transfer may be made without registration under the Securities Act and under applicable state securities
or blue sky laws, (ii) that the holder or transferee execute and deliver to the Company an investment letter in form and substance
acceptable to the Company and (iii) that the transferee be an “accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the Securities Act or a “qualified institutional buyer” as defined
in Rule 144A(a) under the Securities Act in a transaction pursuant to Rule 144A.

 

3.2           Restrictive
Legend.The Holder understands that until such time as the Warrant Shares have been registered under the Securities Act,
or otherwise may be sold pursuant to Rule 144 under the Securities Act or an exemption from registration under the Securities
Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, this Warrant
and the Warrant Shares, as applicable, shall bear a restrictive legend in substantially the form set forth on the cover page of
this Warrant (and a stop-transfer order may be placed against transfer of the certificates for such securities).

 

3.3           Removal of Restrictive
Legends.The certificates evidencing the Warrant Shares shall not contain any legend restricting the transfer thereof:
(A) while a registration statement covering the sale or resale of the Warrant Shares is effective under the Securities Act, or
(B) following any sale of such Warrant Shares pursuant to Rule 144, or (C) if such Warrant Shares are eligible for sale under
Rule 144(b)(1), or (D) if such legend is not required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission) and the Company shall have received an opinion of counsel
to the Holder in form reasonably acceptable to the Company to such effect (collectively, the “Unrestricted Conditions”).
The Company shall cause its counsel to issue a legal opinion to its Transfer Agent if required by the Transfer Agent to effect
the issuance of the Warrant Shares, as applicable, without a restrictive legend or removal of the legend hereunder. The Company
agrees that at such time as the Unrestricted Conditions are met, it will, no later than seven (7) trading days following the delivery
by the Holder to the Company or the Transfer Agent of a certificate representing Warrant Shares, issued with a restrictive legend,
deliver or cause to be delivered to such Holder a certificate (or electronic transfer) representing such Warrant Shares that is
free from all restrictive and other legends.

 

SECTION 4.       Representations
and Warranties of Holder

 

The Holder of a Warrant (including the
Agents) represents and warrants to the Company as follows:

 

4.1           Acquisition
of Warrant for Personal Account. The Holder is acquiring this Warrant and the Warrant Shares (collectively the “Securities”)
for investment for its own account and not with a present view to, or for resale in connection with, any public resale or distribution
thereof. The Holder understands that the Securities have not been registered under the Securities Act of 1933, as amended (the
“Act”), by reason of a specific exemption from the registration provisions of the Act which depends upon, among other
things, the bona fide nature of the investment intent as expressed herein. The Holder further understands that the Securities
have not been passed upon or the merits thereof endorsed or approved by any state or federal authorities.

 

    	5

    	 

    
 

4.2           Rule 144.
The Holder acknowledges that the Securities must be held indefinitely unless subsequently registered under the Act or an exemption
from such registration is available. The Holder is aware of the provisions of Rule 144 promulgated under the Act.

 

4.3           Accredited Investor.
As of the date hereof, the Holder is an “accredited investor” within the meaning of Regulation D promulgated under
the Act. The Holder is sophisticated in financial matters, and is able to evaluate the risks and benefits of an investment in
the Securities for an indefinite period of time.

 

4.4           Opportunity
To Discuss; Information. The Holder has been afforded the opportunity to ask questions of, and receive answers from, the officers
and/or directors of the Company acting on its behalf concerning the terms and conditions of this transaction and to obtain any
additional information, to the extent that the Company possesses such information or can acquire it without unreasonable effort
or expense, necessary to verify the accuracy of the information furnished; and has availed itself of the opportunity to the extent
the Holder considers appropriate in order to permit it to evaluate the merits and risks of an investment in the Company.                

 

SECTION 5.        Other Matters

 

5.1           Binding
Effect.  All the covenants and provisions of this Warrant by or for the benefit of the Company shall bind and inure
to the benefit of its successors hereunder.

 

5.2           Notices.  Notices
or demands pursuant to this Warrant to be given or made by the Holder to or on the Company shall be sufficiently given or made
if sent by certified or registered mail, return receipt requested, postage prepaid, or facsimile and addressed, until another address
is designated in writing by the Company, as follows:

 

Black Ridge Oil &
Gas, Inc.

10275 Wayzata Blvd.,
Suite 310

Minnetonka, Minnesota
55305

Telephone No.: (952)
426-1851

Attention: Jim Moe,
Chief Financial Officer

 

Notices to the Holder
provided for in this Warrant shall be deemed given or made by the Company if sent by certified or registered mail, return receipt
requested, postage prepaid, and addressed to the Holder at its last known address as it shall appear on the books of the Company.

 

5.3           Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Warrant shall be governed by, and construed in accordance
with, the internal laws of the State of New York, without reference to the choice of law provisions thereof.  The Company
and, by accepting this Warrant, the Holder, each irrevocably submits to the exclusive jurisdiction of the courts of the State of
Minnesota located in Hennepin County and the United States District Court for the District of Minnesota for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this Warrant and the transactions contemplated hereby.  Service
of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this Warrant.  The Company and, by accepting this Warrant,
the Holder, each irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying
of venue in such court.  The Company and, by accepting this Warrant, the Holder, each irrevocably waives any objection
to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE COMPANY AND,
BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS
WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

5.4           Parties
Bound and Benefited.  Nothing in this Warrant expressed and nothing that may be implied from any of the provisions
hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the Company and the
Holder any right, remedy or claim under any promise or agreement hereof, and all covenants, conditions, stipulations, promises
and agreements contained in this Warrant shall be for the sole and exclusive benefit of the Company and its successors and of the
Holder and its successors and registered assigns.

 

    	6

    	 

    
 

5.5           Confidentiality.
The Holder agrees to maintain, and to require its representatives to maintain, all confidential information obtained from the Company
on a confidential basis, which, among other things, precludes the use of such confidential information for the purposes of trading
on the Warrant Shares.

 

5.6.           Identity
of Transfer Agent.  The Transfer Agent for the Common Stock is Empire Stock Transfer, Inc.  Upon the appointment
of any subsequent transfer agent for the Common Stock or other shares of the Company’s capital stock issuable upon the exercise
of the rights of purchase represented by the Warrant, the Company will mail to the Holder a statement setting forth the name and
address of such transfer agent.

 

5.7.           Amendment;
Waiver.  Any term of this Warrant may be amended or waived upon the written consent of the Company and the Holder.

 

5.8.           Section
Headings.   The section headings in this Warrant are for the convenience of the Company and the Holder and in
no way alter, modify, amend, limit or restrict the provisions hereof.

 

  

[THE REMAINDER OF THIS PAGE HAS BEEN
LEFT BLANK INTENTIONALLY.

SIGNATURE PAGE FOLLOWS.]

 

    	7

    	 

    

 

IN WITNESS WHEREOF, each of the Company
and Holder has each caused this Warrant to be executed and delivered as of the Issue Date by an officer thereunto duly authorized.

 

	 	BLACK RIDGE OIL & GAS, INC.	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 By:	____________________________________ 	 
	 	 	Kenneth DeCubellis, Chief Executive Officer	 
	 	 	 	 
	 	 	 	 
	 	DOUGHERTY FUNDING LLC	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	By:	____________________________________ 	 
	 	 	
        James A. Berman

        Senior Vice President
	 

 

 

 

    	8

    	 

    
 

ASSIGNMENT OF WARRANT

 

 

 

 

FOR VALUE RECEIVED, _______________________
hereby sells, assigns and transfers unto _____________________________ the within Warrant and the rights represented thereby, and
does hereby irrevocably constitute and appoint _______________________________ Attorney, to transfer said Warrant on the books
of the Company, with full power of substitution.

 

 

Dated: _______________________________________

 

 

Signed: ______________________________________

 

                                                                           

 

 

Signature guaranteed:

 

 

____________________________________________

 

 

    	9

    	 

    
 

APPENDIX A

[NAME]

WARRANT EXERCISE FORM

 

To [Name]:

 

The undersigned hereby irrevocably elects to exercise the right
of purchase represented by the within Warrant (“Warrant”) for, and to purchase thereunder by the payment of the Warrant
Price and surrender of the Warrant, _______________ shares of Common Stock (“Warrant Shares”) provided for therein,
and requests that certificates for the Warrant Shares be issued as follows:

 

________________________________

Name

________________________________

Address

________________________________

________________________________

Federal Tax ID or Social Security No.

 

and delivered by               (certified
mail to the above address, or

(electronically (provide DWAC Instructions:___________________),
or

(other (specify):

 __________________________________________).

 

and, if the number of Warrant Shares shall not be all the Warrant
Shares purchasable upon exercise of the Warrant, that a new Warrant for the balance of the Warrant Shares purchasable upon exercise
of this Warrant be registered in the name of the undersigned Holder or the undersigned’s Assignee as below indicated and
delivered to the address stated below.

 

 

Dated: ___________________, ____

 

 

Signature:______________________________

______________________________

Name (please print)

______________________________

______________________________

Address

______________________________

Federal Identification or

Social Security No.

 

Assignee:

______________________________

______________________________

______________________________

 

    	10

    	 

    
 

APPENDIX B

[NAME]

NET ISSUE ELECTION NOTICE

 

 

To: [Name]

 

Date:[_________________________]

 

 

The undersigned hereby elects under Section
1.3 of this Warrant to surrender the right to purchase [____________] shares of Common Stock pursuant to this Warrant and hereby
requests the issuance of [_____________] shares of Common Stock.  The certificate(s) for the shares issuable upon such
net issue election shall be issued in the name of the undersigned or as otherwise indicated below.

 

 

_________________________________________

Signature

 

_________________________________________

Name for Registration

 

_________________________________________

Mailing Address

 

 

 

 

 

 

11

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