Document:

Exhibit

Exhibit 10.2
EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is entered into by and between Tribune Publishing Company, LLC (the “Company”), a Delaware limited liability company, and Timothy E. Ryan (“Employee”), an individual.  In consideration of the mutual promises and covenants contained herein, and for good and valuable consideration, the receipt and sufficiency of which are acknowledged by both parties, the Company agrees to employ Employee and Employee agrees to accept employment with the Company upon the terms and conditions set forth herein.

1.    EMPLOYMENT TERM.  

The term of Employee’s employment hereunder shall commence on September 8, 2015 (the “Effective Date”) and, unless terminated pursuant to Section 8 below, shall continue through October 6, 2018 (the “Employment Term”).

2.    FREEDOM TO ENTER INTO THIS AGREEMENT.

Employee represents and covenants that: (a) the execution, delivery and performance of this Agreement by him does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Employee is a party or by which Employee is bound; and (b) Employee is not a party to or bound by any employment agreement, noncompetition agreement, non-solicitation agreement, confidentiality agreement or other agreement or obligation with any other person or entity that would in any way restrict or otherwise affect his performance of this Agreement.

3.    TITLE AND EMPLOYMENT DUTIES.  

During the Employment Term and subject to the terms of this Agreement:

(a) Employee’s title will be CEO, California News Group. Employee will have such duties and responsibilities as are customarily exercised by someone serving in such a capacity as well as such other duties commensurate with his title and position as the Company may assign him from time to time.

(b) Employee agrees to devote his full business time, attention, and energies to the business of the Company and further agrees that he will perform his duties in a diligent, lawful and trustworthy manner, that he will act in accordance with his title and responsibilities and otherwise conduct himself in accordance with the written business and employee policies and practices of the Company as applicable.

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(c) Employee will be based in and will work out of the Company’s office in Los Angeles.  Company shall not relocate Employee to a different office outside the metropolitan area of Los Angeles, without Employee’s prior written consent.

4.    COMPENSATION.  

During the Employment Term and subject to the terms of this Agreement:

(a) For the services rendered by Employee under this Agreement, the Company will pay Employee a gross base salary of Six Hundred Twenty-Five Thousand Dollars and Zero Cents ($625,000) per annum (the “Base Salary”). Employee’s Base Salary shall be payable, less all authorized or required deductions, in accordance with the Company’s then-effective payroll practices. The Company will periodically review Employee’s salary and may provide for salary increases during the Employment Term, such increases to be given, if given, in the discretion of the Company.  

(b) Subject to Section 8 below, Employee shall have the opportunity to earn a discretionary annual management incentive bonus (“Annual Bonus”), with a target bonus opportunity of one hundred percent (100%) of his Base Salary (the “Target Bonus”), under a bonus plan to be established in good faith by the Company, based upon the achievement of both reasonably attainable annual Company and individual performance objectives as established by the Company. The Annual Bonus payable for any calendar year shall be paid, if paid, less all required or authorized deductions, at the time and in the manner such bonuses are paid to other similarly situated executives receiving annual bonus payments, in the calendar year following the year for which the bonus was earned, but in no event later than June 30 of the year following the year for which the bonus was earned.  Notwithstanding the foregoing, Employee’s Annual Bonus for partial years in 2015 and 2018, if applicable, shall be determined as follows:  For calendar year 2015, Employee’s Annual Bonus will be determined as follows: (i)  a pro rata amount of the Annual Bonus Employee would have received under the Annual Bonus in effect for Employee for calendar year 2015 in his capacity as Publisher and Chief Executive Officer, The Baltimore Sun and The Morning Call (which provides a target bonus opportunity of 60% of his base salary in effect for such position) if his employment in that capacity had continued through the end of calendar year 2015 and the other conditions for payment had been made based on actual performance, based on the number of days worked in such capacity in 2015, plus (ii) a bonus amount equal to the Target Bonus, i.e., 100% of Employee’s Base Salary under this Agreement, pro-rated based on the number of days worked in Employee’s position as CEO, California News Group under this Agreement in calendar year 2015.  For calendar year 2018, if after the end of the Employment Term and prior to the end of calendar year 2018, Employee’s employment terminates other than due to a termination by the Company for Cause (as defined below), Employee’s Annual Bonus for the partial year shall be a pro rata amount of the bonus earned under the bonus plan based on actual performance thereunder (based on Target Bonus and the  number of days worked in such capacity in 2018), and such pro-rated bonus shall be paid, if paid, less all required or authorized deductions, at the time and in the manner such bonuses are paid to 

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other similarly situated executives receiving annual bonus payments, in the calendar year following the year for which the bonus was earned, but in no event later than June 30 of the year following the year for which the bonus was earned.

(c) For the calendar years 2016, 2017 and 2018, Employee shall be granted a combination of restricted stock units (“RSUs”) and nonqualified stock options (“Options”) in Tribune Publishing Company’s common stock, valued in accordance with Black-Scholes or similar option-pricing model, with each of such annual awards having an aggregate fair value equal to five hundred and fifty thousand dollars ($550,000) based on the fair market value (the “FMV”) of the Tribune Publishing Company’s common stock on the date of grant.  The equity award each year shall be divided among the two types of awards as follows:  RSUs – 50% and Options – 50%.  The annual awards will be granted at the same time annual awards are granted to other similarly-situated executive officers of Tribune Publishing Company. The RSUs and Options shall be subject to such other terms as set forth in the applicable grant agreement and in the underlying equity plan as adopted by Tribune Publishing Company.  Except as specifically provided otherwise in the grant agreement, if at all, and except as provided in Section 8 below, all unvested Options and RSUs shall terminate immediately upon termination of Employee’s employment for any reason and all vested Options shall terminate immediately upon termination of Employee’s employment by the Company with Cause, as defined below.  Notwithstanding the foregoing, the annual grant of RSUs and Options is contingent upon approval by the stockholders of Tribune Publishing Company at its 2016 annual meeting of stockholders (expected to be held in May 2016) of a sufficient increase in the number of shares of common stock reserved under Tribune Publishing Company’s equity plan.  If the additional shares are so approved, the vesting commencement date for the grant of RSUs and Options shall be March 1, 2016.  

(d)    In addition, Employee shall be entitled to the payments and reimbursements provided for in Addendum 1 to this Agreement. 

5.    BENEFITS.    

(a) While employed by the Company, Employee shall be entitled to participate in the benefit plans and programs (including without limitation such medical, dental, vision, life, disability, retirement and other health and welfare plans), as the Company may have or establish from time to time for its employees in which Employee would be entitled to participate pursuant to their then-existing terms, in accordance with the terms and requirements of such plans. The foregoing, however, is not intended and shall not be construed to require the Company to establish any such plans or to prevent the modification or termination of such plans once established, and no such action or failure thereof shall affect this Agreement. It is further understood and agreed that all benefits Employee may be entitled to while employed by the Company shall be based upon his Base Salary and not upon any bonus, incentive or equity compensation due, payable, or paid to Employee, except where, if at all, the benefit plan provides otherwise.

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(b) Employee will be eligible to receive four weeks (20 days) of paid vacation per calendar year, pro-rated for partial years, to be scheduled and approved in advance and taken in accordance with the Company’s vacation policies and practices applicable to the state in which Employee’s position is located.

6.    BUSINESS EXPENSES.  

During the Employment Term, the Company shall reimburse Employee for reasonable travel and other expenses incurred in the performance of his duties hereunder as are customarily reimbursed to employees in accordance with the then-applicable expense reimbursement policies of the Company. 

7.    RESTRICTIVE AGREEMENTS.

(a) During his employment with the Company (whether or not such employment continues beyond the Employment Term), Employee agrees that his employment is on an exclusive basis and that he: i) will not engage in any activity which is in conflict with his duties and obligations hereunder, whether or not such activity is pursued for gain, profit, or other pecuniary advantage; and ii) will not engage in any other activities which could harm the business or reputation of the Company or any of its affiliates.

(b) Employee agrees that during his employment with the Company (whether or not such employment continues beyond the Employment Term) and for twelve (12) months after the date on which his employment with the Company ends for any or no reason (whether terminated by him or by the Company), except as required in the performance of his duties for the Company, he will not: i) employ, either directly or indirectly, any person previously employed by the Company or any of its affiliates unless at such time such person is not then and has not been employed by the Company or any of its subsidiaries, business units, or other affiliates for at least six (6) months, or in any way solicit, entice, persuade or induce, either directly or indirectly, any person to terminate or refrain from renewing or extending their employment with the Company or any of its subsidiaries, business units, or other affiliates; or ii) intentionally interfere with the relationship of the Company with any person or entity who or which is a customer, client, supplier, developer, subcontractor, licensee or licensor or other business relation of the Company, or assist any other person or entity in doing so. 

(c) As a consequence of his employment by the Company, Employee will be privy to the highest level of confidential and proprietary business information of the Company and its affiliates, not generally known by the public or within the industry and which, thereby, gives the Company and its affiliates a competitive advantage and which has been the subject of reasonable efforts by the Company and its affiliates to maintain such confidentiality. Except as required by law or as expressly authorized by the Company in furtherance of his employment duties, Employee shall not at any time, during his employment with the Company (whether or not such employment continues beyond 

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the Employment Term) or thereafter, directly or indirectly use, disclose, or take any action which may result in the use or disclosure of, any Confidential Information.  “Confidential Information” as used in this Agreement, includes all non-public confidential competitive, pricing, marketing, proprietary and other information or materials relating or belonging to the Company or any of its affiliates (whether or not reduced to writing), including without limitation all confidential or proprietary information furnished or disclosed to or otherwise obtained by Employee in the course of his employment, and further includes without limitation: computer programs; patented or unpatented inventions, discoveries and improvements; marketing, organizational, operating and business plans; strategies; research and development; policies and manuals; sales forecasts; personnel information (including without limitation the identity of Company employees, their responsibilities, competence and abilities, and compensation); medical information about employees; pricing and nonpublic financial information; current and prospective customer lists and information on customers or their employees; information concerning planned or pending acquisitions, investments or divestitures; and information concerning purchases of major equipment or property.  Confidential Information does not include information that lawfully is or becomes generally and publicly known outside of the Company and its affiliates other than through Employee’s breach of this Agreement or breach by any person of some other obligation. Nothing herein prohibits Employee from disclosing Confidential Information as legally required pursuant to a validly issued subpoena or order of a court or administrative agency of competent jurisdiction, provided that Employee shall first promptly notify the Company if he receives a subpoena, court order or other order requiring any such disclosure, to allow the Company to seek protection therefrom in advance of any such legally compelled disclosure.

(d) Employee hereby acknowledges and agrees that the Company owns the sole and exclusive right, title and interest in and to any and all Works (as defined below), including without limitation all copyrights, trademarks, service marks, trade names, slogans, inventions (whether patentable or not), patents, trade secrets and other intellectual property and/or proprietary rights therein, including without limitation all rights to sue for infringement thereof (collectively, “IP Rights”). The Company’s right, title and interest in and to the Works includes, without limitation, the sole and exclusive right to secure and own copyrights and maintain renewals throughout the world, the right to modify and create derivative works of or from the Works without any payment of any kind to Employee, and the right to exclusively register or record any IP Rights in the Works in the Company’s name. Employee agrees that all Works shall be "works made for hire" for the Company as that term is defined in the copyright laws of the United States or other applicable laws. To the extent that any of the Works is determined not to constitute a work made for hire, or if any rights in any of the Works do not accrue to the Company as a work made for hire, Employee agrees that his signature on this Agreement constitutes an assignment (without any further consideration) to the Company of any and all of Employee’s respective IP Rights and other rights, title and interest in and to any and all Works. “Works” means any inventions, invention disclosures, developments, improvements, trade secrets, brands, logos, drawings, trademarks, service marks, trade names, documents, memoranda, data, software programs, object code, source code, ideas, original works of authorship, or other information that Employee conceives, creates, develops, discovers, makes or acquires, in 

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whole or in part, either solely or jointly with another or others, during or pursuant to the course of his employment by the Company or its affiliates, and that relate directly or indirectly to the Company or any of its affiliates or their respective businesses, or to the Company’s or any of its affiliates’ actual or demonstrably anticipated research or development, and that are made through the use of any of the Company’s or any of its affiliates’ equipment, facilities, supplies, trade secrets or time, or that result from any work performed for the Company or any of its affiliates, or that is based on any information of, or provided to him by, the Company or any of its affiliates. Employee hereby is and has been notified by the Company, and understands that the foregoing provisions of this Section 7(d) do not apply to an invention for which no equipment, supplies, facilities or trade secret information of the Company or any of its affiliates was used and which was developed entirely on his own time, unless:  (a) the invention relates at the time of conception or reduction to practice (i) to the business of the Company or any of its affiliates or (ii) to the Company’s or any of its affiliates’ actual or demonstrably anticipated research and development, or (b) the invention results from any work performed by Employee for the Company or any of its affiliates.

(e) It is mutually agreed and stipulated between Employee and the Company that the covenants set forth in Sections 7(a) through 7(d) of this Agreement are necessary to protect the legitimate business interests of the Company and its affiliates and are reasonable, including without limitation in time and scope. 
    
(f) The amount of actual or potential damages resulting from Employee’s breach of any provision of Section 7(a) through 7(d) of this Agreement will be inherently difficult to determine with precision and, further, any breach could not be reasonably or adequately compensated in money damages. Accordingly, any breach by Employee of any provision of Section 7(a) through 7(d) of this Agreement will result in immediate and irreparable injury and harm to the Company and its affiliates for which the Company and its affiliates will have no adequate remedy at law.  The Company and/or its affiliates, thus, will be entitled to temporary, preliminary and permanent injunctive relief to prevent any such actual or threatened breach, without posting a bond or other security. The Company’s and/or its affiliates’ resort to such equitable relief will not waive any other rights that any of them may have to damages or other relief, and the Company and/or its affiliates shall be entitled to reasonable attorney’s fees and costs incurred in pursuing such an action should any of them prevail.

8.    TERMINATION/POST-TERMINATION PAYMENTS.  

(a) This Agreement, except for Section 7(d) above and this Section 8(a), will automatically terminate if Employee dies. In such case; (i) the benefits available to his estate, heirs and beneficiaries shall be determined in accordance with the applicable benefit plans and programs then in effect; and (ii) within sixty (60) days of the date of death, the Company shall pay Employee any unpaid Base Salary and any other amounts due under this Agreement through the date of death.  Except as set forth above, the Company shall not have any further obligations under this Agreement. This Agreement, 

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except for Section 7(d) above and this Section 8(a), will not survive Employee’s death, and will not inure to the benefit of his heirs, assigns and/or designated beneficiaries.

(b) The Company may terminate Employee’s employment at any time during the Employment Term for “Cause.” “Cause” shall be determined by the Company reasonably and in good faith, but shall mean the occurrence of any one or more of the following (it being acknowledged and agreed that a Disability1 of the Employee shall not be deemed to be Cause): 

(i) a material failure by Employee to perform his duties of employment diligently and competently after having been notified in writing of such specific performance deficiencies and having not less than thirty (30) days to correct the deficiencies;
(ii) failure or refusal to implement or follow reasonable, material and lawful directives of the Company, if such breach is not cured (if curable) within 20 days after written notice thereof to the Employee by the Company;
(iii) a material breach of any material provisions of this Agreement, or a material violation of the then existing policies, procedures or rules of the Company, as applicable, if such breach is not cured (if curable) within 20 days after written notice thereof to the Employee by the Company; 
(iv) the commission of an act of fraud, embezzlement, theft, material misappropriation (whether or not related to employment with the Company) or the commission of or nolo contendere or guilty plea to any felony; or
(v) intentional misconduct materially injurious to the Company, its affiliates or subsidiaries, either monetarily or otherwise. 

(c)(1) The Company may terminate Employee’s employment, at any time, other than for Cause as defined above. (2) Employee may terminate his employment at any time during the Employment Term with or without “Good Reason.” “Good Reason” means one or more of the following events: (a) a reduction in the Base Salary, a reduction in the Target Bonus, or a reduction in the relocation benefits described in the Addendum 1 hereto, in each case without Employee’s prior written consent; (b) a failure by the Company to pay in accordance with the terms of this Agreement without Employee’s prior written consent; (c) a material diminution or adverse change in Employee’s duties, authority, responsibilities, reporting line or positions without Employee’s prior written consent; or (d) a Change in Control2; provided, however, that prior to resigning for Good Reason, 
___________________________
1  “Disability” means Employee would be entitled to long-term disability benefits under the Company’s long term disability plan as in effect from time to time, without regard to any waiting or elimination period under such plan and assuming for the purpose of such determination that Employee is actually participating in such plan at such time.  If the Company does not maintain a long-term disability plan, “Disability” means Employee’s inability to perform his duties and responsibilities hereunder due to physical or mental illness or incapacity that is expected to last for a consecutive period of 90 days or for a collective period of 120 days in any 365 day period as determined by the Company in its good faith judgment.
2 “Change in Control” means either a “TPC Change in Control” or a “CNG Change in Control”, each as defined in Exhibit A.

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Employee shall give written notice to the Company of the facts and circumstances claimed to provide a basis for such resignation not more than thirty (30) days following his knowledge of such facts and circumstances or with respect to a Change in Control, not more than five (5) days following the occurrence of a Change in Control), and, if curable (with the understanding that the occurrence of a Change in Control is not curable), the Company shall have thirty (30) days after receipt of such notice to cure such facts and circumstances (and if so cured, then Employee shall not be permitted to resign with Good Reason in respect thereof). Any resignation with Good Reason shall be communicated to the Company by written notice, which shall include Employee’s date of termination of employment (which, except as set forth in the preceding sentence or in the event of a Change in Control, shall be a date at least ten (10) days after delivery of such notice and the expiration of such cure period and not later than 60 days thereafter and which, in the case of a Change in Control, shall be within ten (10) days following the effective date of the Change in Control). 

(d)(1) If the Company terminates Employee’s employment other than for Cause as defined above or if Employee resigns for Good Reason (other than Change of Control) during (and not after) the Employment Term, the Company will provide him within ten (10) days after the date on which Employee’s employment terminates with a Waiver and General Release (the “Waiver”) of any and all legally-waivable claims against the Company and its past, present, and future parents, divisions, subsidiaries, partnerships, other affiliates, and other related entities (whether or not they are wholly owned); and the past, present, and future owners, trustees, fiduciaries, administrators, shareholders, directors, officers, partners, agents, representatives, members, associates, employees, and attorneys of each entity listed above (a copy of the Waiver is attached as Exhibit B), and provided that on or within twenty one (21) days after the date on which Employee receives the Waiver or such longer period as may be applicable under the ADEA, Employee: i) signs, dates and returns the Waiver to the Company; and ii) does not revoke the Waiver in accordance with its terms, the Company will, as consideration (“Consideration”), (A) pay Employee not later than sixty (60) days of the date of Employee’s termination of employment: (i) a lump sum amount equal to twelve (12) months of his Base Salary, less all required or authorized deductions, (ii) any unpaid Annual Bonus with respect to the calendar year immediately preceding the calendar year of termination of employment; (iii) a pro-rata amount of the Target Bonus based on the number of days worked in such calendar year, and (B) Employee shall be entitled to accelerated vesting of all outstanding unvested equity awards granted under Section 4(c) prior to the date of termination that would have vested in the ordinary course over the one (1) year period following such termination. Notwithstanding the preceding, to the extent that any amount payable under this Section 8(d)(1) constitutes nonqualified deferred compensation within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”): i) Section 9 shall, if applicable, apply to such portion of the payment which is nonqualified deferred compensation, and ii) if the sixty-(60) day period following Employee’s termination of employment spans two calendar years, the portion of such payment which is nonqualified deferred compensation shall be paid in the second calendar year.    

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(d)(2) If Employee resigns for Good Reason due to a Change of Control or is terminated without Cause by the Company on or after a Change of Control, in either case, during (and not after) the Employment Term, the Company will provide him within ten (10) days after the date on which Employee’s employment terminates with the Waiver of any and all legally-waivable claims against the Company and its past, present, and future parents, divisions, subsidiaries, partnerships, other affiliates, and other related entities (whether or not they are wholly owned); and the past, present, and future owners, trustees, fiduciaries, administrators, shareholders, directors, officers, partners, agents, representatives, members, associates, employees, and attorneys of each entity listed above (a copy of the Waiver is attached as Exhibit B), and provided that on or within twenty one (21) days after the date on which Employee receives the Waiver or such longer period as may be applicable under the ADEA, Employee: i) signs, dates and returns the Waiver to the Company; and ii) does not revoke the Waiver in accordance with its terms, the Company will, as Consideration, (A) pay Employee not later than sixty (60) days of the date of Employee’s termination of employment: (i) a lump sum amount equal to (a) in the case of a TPC Change of Control,  twelve (12) months of his Base Salary plus one (1) year of Target Bonus, or (b) in the case of a CNG Change of Control, twenty-four (24) months of his Base Salary plus two (2) years of Target Bonus, in either case, less all required or authorized deductions; and (ii) any unpaid Annual Bonus with respect to the calendar year immediately preceding the calendar year of termination of employment; and (B) Employee shall be entitled to accelerated vesting of all outstanding unvested equity awards granted under Section 4(c) prior to the date of termination that would have vested in the ordinary course over the one (1) year period following such termination. Notwithstanding the preceding, to the extent that any amount payable under this Section 8(d)(2) constitutes nonqualified deferred compensation within the meaning of Section 409A of the Code: i) Section 9 shall, if applicable, apply to such portion of the payment which is nonqualified deferred compensation, and ii) if the sixty-(60) day period following Employee’s termination of employment spans two calendar years, the portion of such payment which is nonqualified deferred compensation shall be paid in the second calendar year.    

(e)  The parties expressly agree that the Company’s payment of Consideration pursuant to Section 8(d) above precludes Employee from eligibility for or entitlement to any and all other payments, including but not limited to compensation, benefits or perquisites, subject to any earned but unpaid wages and accrued but unpaid vacation as of the date of termination as well as benefits that may be vested under the terms of applicable benefit plans in which he participates.  Notwithstanding any other provision of this Agreement, Employee shall not participate in or be eligible under (and Employee hereby waives participation in) any other severance or severance-related plan or program of the Company or any of its affiliates in effect at any time (whether his employment terminates or is terminated with or without Cause during the Employment Term).
9.    COMPLIANCE WITH IRS CODE SECTION 409A. 

It is intended that any amounts and benefits payable under this Agreement will be exempt from or comply with Section 409A of the Code, and treasury regulations relating thereto, so as not to subject 

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Employee to the payment of any interest and tax penalty which may be imposed under Section 409A of the Code, and this Agreement shall be interpreted and construed accordingly, provided, however, that the Company and its affiliates shall not be responsible for any such interest and tax penalties. All references in this Agreement to Employee’s termination of employment shall mean a separation from service within the meaning of Section 409A of the Code. The timing of the payments or benefits provided herein may be modified to so comply with Section 409A of the Code. Any reimbursement payable to Employee pursuant to this Agreement shall be conditioned on the submission by Employee of all expense reports reasonably required by the Company under any applicable expense reimbursement policy, and shall be paid to Employee in accordance with Company practices following receipt of such expense reports (or invoices), but in no event later than the last day of the calendar year following the calendar year in which Employee incurred the reimbursable expense. Notwithstanding any other provision in this Agreement, if on the date of Employee’s separation from service (as defined in Section 409A of the Code) (i) the Company or any of its affiliates is a publicly traded corporation and (ii) Employee is a “specified employee,” as defined in Section 409A of the Code, then to the extent any amount payable under this Agreement upon Employee’s separation from service constitutes the payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, that under the terms of this Agreement would be payable prior to the six (6) month anniversary of Employee’s separation from service, such payment shall be delayed until the earlier to occur of (x) the first day of the month following the six (6) month anniversary of Employee’s separation from service or (y) the date of Employee’s death.

10.    NOTICES.
  
Any notice, request, or other communication required or permitted to be given hereunder shall be made to the following addresses or to any other address designated by either of the parties hereto by notice similarly given: (a) if to the Company, to Tribune Publishing Company, LLC, c/o Chief Executive Officer, 435 N. Michigan Avenue, Chicago, IL 60611; and (b) if to Employee, to his last known home address in the Company’s records. All such notices, requests, or other communications shall be sufficient if made in writing either (i) by personal delivery to the party entitled thereto, (ii) by certified mail, return receipt requested, or (iii) by express courier service with proof of delivery, and shall be effective upon personal delivery, upon the fourth (4th) day after mailing by certified mail, or upon the second (2nd) day after sending by express courier service.

11.    COMPANY PROPERTY

Except as required in furtherance of Employee’s employment, Employee will not remove from the Company’s premises any property of the Company or its affiliates, including without limitation any documents or things containing any Confidential Information, computer programs and drives or storage devices of any kind (portable or otherwise), files, forms, notes, records, charts, or any copies thereof (collectively, "Property"). Upon any termination at any time by either party of Employee's employment for any or no reason, Employee shall return to the Company, and shall not alter, delete 

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or destroy, any and all Property, including without limitation any and all laptops and other computer equipment, iPhones, iPads, laptops, blackberries and similar devices, cellphones, credit cards, keys and other access cards, and electronic and hardcopy files.

12.    NONDISPARAGEMENT.

Employee agrees that he will not at any time during his employment with the Company (whether or not such employment continues beyond the Employment Term) or thereafter take (directly or indirectly, individually or in concert with others) any actions or make any communications calculated or likely to have the effect of materially undermining, disparaging or otherwise reflecting negatively upon the reputation, goodwill, or standing in the community of the Company, or any of its respective subsidiaries, business units, other affiliates, officers, directors, employees and/or agents, provided that nothing herein shall prohibit Employee from giving truthful testimony or evidence to a governmental entity, or if properly subpoenaed or otherwise required to do so under applicable law.
 
13.    ASSIGNMENT.  

This is an Agreement for the performance of personal services by Employee and may not be assigned by Employee. This Agreement may be assigned or transferred to, and shall be binding upon and shall inure to the benefit of:  (a) the Company, or its subsidiaries, business units, or other affiliates and its/their respective legal successors; and (b) any person or entity that at any time (whether by merger, purchase or otherwise) acquires all or substantially all of the assets, ownership interests or business of the Company.   

14.        GOVERNING LAW; INTERPRETATION OF THE AGREEMENT.  

This Agreement shall be construed and interpreted in accordance with the laws of the State of California (without giving effect to the choice of law principles thereof). Employee and the Company acknowledge that each party had an equal opportunity to review and/or modify the provisions set forth in this Agreement. Thus, in the event of any misunderstanding, ambiguity or dispute concerning this Agreement's provisions or their interpretation, no rule of construction shall be applied that would result in having this Agreement interpreted against either party. The language of all parts in this Agreement shall be construed as a whole, according to fair meaning, and not strictly for or against any party. The headings provided in boldface are inserted for the convenience of the parties and shall not be construed to limit or modify the text of this Agreement.

		
	15.
	COMPLETE AGREEMENT.  

This Agreement (and its attachments which include an Addendum 1, describing additional terms related to certain allowances available to Employee, Exhibit A, defining the terms “TPC Change of Control” and “CNG Change of Control” and Exhibit B, attached the form of Waiver) embodies the entire agreement and understanding of the parties hereto with regard to the matters described 

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herein and supersedes any and all prior and/or contemporaneous agreements and understandings, oral or written, actual or alleged, between said parties regarding such matters, including without limitation concerning Employee’s compensation arrangements or other terms and conditions of employment (if any), and any actual or alleged prior employment agreements with or involving the Company or any of its affiliates. This Agreement cannot be amended, modified, supplemented or altered except by written amendment signed by Employee and the Chief Executive Officer of the Company. 

16.    SEVERABILITY/REFORMATION.  
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law. If any provision of this Agreement is found by a court of competent jurisdiction to be unreasonable or otherwise unenforceable, it is the purpose and intent of the parties that any such provision be deemed modified or limited so that, as modified or limited, such provision may be enforced to the fullest extent possible.  If any provision of this Agreement is held to be prohibited by or invalid under applicable law (notwithstanding any attempted modification or limitation pursuant to the preceding sentence), such provision will 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.
17.    SURVIVAL.  

Except as provided in Section 8(a) above, the provisions of Section 2 and of Sections 7 through 17 (inclusive) of this Agreement shall survive any expiration of the Employment Term and any termination of Employee’s employment at any time (whether during or after the Employment Term) by either party with or without Cause, and shall not be limited or discharged by any alleged breach or misconduct on the part of the Company.

18.    MISCELLANEOUS.

This Agreement may be executed in two or more counterparts, or by facsimile transmission, each of which shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. The headings contained in this Agreement are for reference purposes only, and shall not affect the meaning or interpretation of this Agreement.
		
	Timothy E. Ryan
	TRIBUNE PUBLISHING COMPANY, LLC

		
	_/s/ Timothy E. Ryan_________
	By:_/s/ Jack Griffin___________ 
           Jack Griffin, CEO

        
		
	Date: __Sept. 7________, 2015      
	Date: __Sept. 7__________, 2015

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EXHIBIT A

“TPC Change in Control” means the occurrence of any of the following events with the “Applicable Company” defined as “Tribune Publishing Company, LLC” or “Tribune Publishing Company”, and “CNG Change in Control” means the occurrence of any of the following events with the “Applicable Company” defined as “Los Angeles Times Communications LLC” (it being understood that a TPC Change in Control shall not be deemed to also trigger a CNG Change in Control):
(a)    Consummation of a merger, consolidation, or other reorganization of the Applicable Company with or into (“Business Combination”), sale of securities representing a majority of the voting equity securities of the Applicable Company in a tender offer, equity placement, or other transaction, or the sale of all or substantially all of the Applicable Company’s business and/or assets as an entirety to (“Sale”), one or more entities that are not subsidiaries or affiliates of  the Applicable Company, unless immediately following such Business Combination or Sale, (i) 50% or more of the total voting power of (x) the entity resulting from such Business Combination or the entity that has acquired all or substantially all of the business or assets of the Applicable Company in a Sale (in either case, the “Surviving Company”), or (y) if a Sale, the ultimate parent entity that directly or indirectly has Beneficial Ownership of sufficient voting securities eligible to elect a majority of the board of directors (or the analogous governing body) of the Surviving Company (the “Parent Company”), is represented by the outstanding  common voting securities of  the Applicable Company, as applicable,  that were outstanding immediately prior to such Business Combination or Sale (or, if applicable, is represented by shares into which the outstanding common voting securities of  the Applicable Company were converted or exchanged pursuant to such Business Combination or Sale), (ii) no Person is or becomes the Beneficial Owner, directly or indirectly, of more than 50% of the total voting power of the outstanding voting securities eligible to elect members of the board of directors (or the analogous governing body) of the Surviving Company (if a Business Combination) or the Parent Company (if a Sale), and (iii) at least a majority of the members of the board of directors (or the analogous governing body) of the Surviving Company (if a Business Combination) or the Parent Company (if a Sale) following the consummation of the Business Combination or Sale were members of the board of directors (or the analogous governing body) at the time of  such board’s approval of the execution of the definitive agreement providing for such Business Combination or Sale or recommendation or approval of such tender offer, equity placement, or other transaction (terms capitalized but not otherwise defined in this subsection (a) of this Exhibit have the meaning set forth in Tribune Publishing Company’s 2014 Omnibus Incentive Plan); or
(b)    Individuals who on September 8, 2015 constituted the board of directors (or equivalent for a limited liability company, if applicable) of the Applicable Company (the “Board”) cease to constitute at least a majority thereof, unless the election, or the nomination for election by the stockholders (or member(s), if applicable) of the Applicable Company, of each new director was approved by a vote of at least two-thirds (2/3) of the directors then still in office who were directors on September 8, 2015 (including for these purposes, new members whose election or nomination 

-13-

was so approved), but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board.

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EXHIBIT B

Form of Waiver

(To Be Attached)

-15-

WAIVER AND GENERAL RELEASE AGREEMENT 
This Waiver and General Release Agreement (“Waiver and Release”) is made by and between INSERT NAME (“you” or “Executive”) and Los Angeles Times Communications LLC (“Company” or “LATC”), a subsidiary of Tribune Publishing Company, (together “Parties”) to set forth the Parties’ agreement concerning the terms and conditions that govern the termination of Executive’s employment relationship with the Company.  The Parties mutually agree as set forth herein.
1.Separation Date.  The Company hereby exercises its right under that certain Employment Agreement by and between Executive dated INSERT DATE (the “Employment Agreement”), to terminate the employment of Executive without cause.  The employment relationship between the Company and Executive is terminated, effective INSERT DATE (“Separation Date”).  From and after the Separation Date, there shall be no employment relationship between Executive and either the Company itself or any subsidiary, parent, division, entity, agent, shareholder, or affiliate of the Company.  Executive agrees to execute all additional documents and take such further steps as may be required to effectuate his termination from any and all positions, titles, duties, authorities, and responsibilities with, arising out of, or relating to the Executive’s employment.  
2.Final Pay, Expenses, and Discontinuation of Benefits.  Executive’s wages, salary, and compensation, and his participation in the benefit plans and programs in which active Company employees participate shall be discontinued as follows:
a.    Salary and Expenses.  The Company will pay Executive at his normal salary rate in accordance with the Company’s standard payroll practices through the Separation Date.  Executive will be reimbursed for any unreimbursed expenses incurred prior to the Separation Date per Company policy.  Reimbursement requests must be submitted no later than 30 days after the Separation Date.
b.    Vacation Pay.  All vacation pay that Executive has earned and accrued and which remains unused as of the Separation Date will be paid to Executive on the Separation Date.  
c.    Benefit Plans and Programs.  As of the Separation Date, Executive will cease to receive, accrue, or be eligible for coverage or benefits under benefit plans and programs provided to employees of the Company, with the sole exception of the specific benefits promised in this Waiver and Release.  Any vested benefits to which Executive may be entitled under the pension, 401(k), or other retirement plans of the Company shall be provided to Executive in accordance with the terms of those plans, including the terms that govern the time and form of payment of benefits.  Upon termination of the Executive’s medical benefits, regardless of signing this Waiver and Release, Executive will be eligible to convert his medical benefits in accordance with COBRA provisions.  COBRA notification will be mailed directly to Executive.  
3.Separation Benefits.  In exchange for Executive’s promises set forth in this Waiver and Release, and contingent upon Executive’s valid execution of this Waiver and Release without revocation, the Company will provide Executive with the Separation Benefits described in this Section 3 in accordance with the Employment Agreement.  

1

a.    Liquidated Damages.  The Company will pay Executive as liquidated damages pursuant to the Employment Agreement, the sum of INSERT AMOUNT ($000,000.00), the equivalent of INSERT AMOUNT , less applicable deductions and withholdings that are required or were previously authorized or agreed (“Liquidated Damages”).  Liquidated Damages will be paid to Executive within ten (10) days after the date on which the Company receives a signed and dated copy of this Waiver and Release from Executive, and provided that this Waiver and Release is validly executed within the time period allowed in Section 7 below.  The Liquidated Damages payment shall not be eligible for 401(k) plan deductions or counted for purposes of calculating any pension or retirement benefit.
b.    Prior Equity Awards.  As provided in the Employment Agreement, the vesting of all outstanding unvested restricted stock units (“RSUs”) and nonqualified stock options (“Options”) granted prior to the Separation Date that would have vested in the ordinary course over the one-year period following the Separation Date, is accelerated. 
c.    Understanding.  Executive acknowledges that, pursuant to and in accordance with, the Employment Agreement, he is not entitled to any additional payment or benefit that is not expressly promised or described in this Waiver and Release, and he expressly hereby waives any claim or entitlement to any other severance benefit to which he otherwise may be entitled under any other plan or program of the Company.
d.    Internal Revenue Code 409A.  To the extent applicable, it is intended that the compensation arrangements under this Waiver and Release be in full compliance with Section 409A of the Internal Revenue Code (“Section 409A”).  This Waiver and Release shall be construed in a manner to give effect to such intention.  In no event whatsoever (including, but not limited to, as a result of this section or otherwise) shall the Company be liable for any tax, interest or penalties that may be imposed on Executive under Section 409A.  The Company shall have no obligation to indemnify or otherwise hold Executive harmless from any or all such taxes, interest or penalties, or liability for any damages related thereto.  Executive acknowledges that he has been advised to obtain independent legal, tax or other counsel in connection with Section 409A.
4.Release of Claims.  
a.    In exchange for the Separation Benefits described in Section 3, and subject only to the exclusions of Section 4(c) below, Executive hereby RELEASES the Company, its parents, shareholders, subsidiaries, affiliates, predecessors, successors, assigns, related companies or entities, its and their employee benefit plans and administrators, and any and all of its and their respective current and former officers, directors, partners, insurers, agents, representatives, attorneys, accountants, actuaries, trustees, fiduciaries, shareholders, and employees (“Released Parties”) from any and all claims, demands, or causes of action which Executive or Executive’s heirs, executors, administrators, agents, attorneys, representatives, or assigns (all collectively included in the term “Executive” for purposes of this release), has, had or may have against any of the Released Parties, based on any events or circumstances arising or occurring on or before the date of Executive’s execution of this Waiver and Release, including, but not limited to, any claims relating to Executive’s employment or termination of employment.  Executive also waives and releases any rights of continued employment, reinstatement, or 

2

reemployment with any of the Released Parties and hereby agrees not to seek employment with any of the Released Parties after the date of this Waiver and Release.
b.    Subject only to the exclusions in Section 4(c) below, Executive expressly agrees, understands, and acknowledges that this is a general release that, to the fullest extent permitted by law, waives, surrenders, and extinguishes any and all claims that Executive has or may have against any of the Released Parties, including, any claims arising from or relating in any way to his employment relationship or the termination of his employment relationship with the Company, including claims which could arise under Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act of 1990, as amended, the Workers Adjustment and Retraining Notification Act, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the California Constitution, the California Fair Employment and Housing Act, the California Family Rights Act, the California Labor Code, the California Unruh Act, any public policy, contract, tort, or common law, or any allegation for costs, fees, or other expenses including attorneys’ fees, and any and all other federal, state and local laws or obligations regulating the employment relationship between the parties, or by reason of any matter, cause or thing whatsoever, whether known or unknown (“Claims”), except for claims for enforcement of his rights under this Waiver and Release, claims that may arise after the date Executive signs this Waiver and Release, and claims that cannot be waived as a matter of law.
In addition, nothing herein shall prevent Executive from filing a charge or complaint with the Equal Employment Opportunity Commission (“EEOC”) or similar federal or state agency or Executive’s ability to participate in any investigation or proceeding conducted by such agency; provided, however, that pursuant to Section 3, Executive is waiving any right to recover monetary damages or any other form of personal relief in connection with any such charge, complaint, investigation or proceeding.  To the extent Executive receives any personal or monetary relief in connection with any such charge, complaint, investigation or proceeding, the Company will be entitled to an offset for the payments made pursuant to Section 2 of this Waiver and Release.
c.    Claims Not Released.  The claims released under Section 4 of this Waiver and Release do not include any claim or cause of action based on any of the following:  (a) the right to vested benefits under any pension or retirement plan; (b) the right to continued benefits as required by COBRA; (c) any right to receive workers’ compensation benefits or unemployment insurance as required by applicable law; (d) the right to challenge the validity or enforceability of this Waiver and Release under the Older Workers Benefit Protection Act (“OWBPA”); (e) any claim to enforce the terms of this Waiver and Release; or (f) any claim which cannot be waived as a matter of law.  Additionally, Executive does not waive or release any entitlement that he may have to indemnification or reimbursement as an officer of the Company or its affiliates.  For the avoidance of doubt, nothing herein constitutes a waiver or release of any claim that may arise in the future.  
d.    Waiver of Unknown Claims.  Executive understands and agrees that the Claims released above include not only claims presently known to Executive, but also include all unknown or unanticipated claims, complaints, rights, suits and actions of every kind and character that would otherwise come within the scope of the released Claims.  Executive understands that Executive may hereafter discover facts different from what Executive now believes to be true, which if known, could have materially affected this Waiver and Release, but 

3

Executive nevertheless waives any claims or rights based on different or additional facts.  Executive knowingly and voluntarily waives any and all rights or benefits that Executive may now have, or in the future may have, under the terms of Section 1542 of the Civil Code of the State of California, which provides as follows:
“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”
e.    Permitted Conduct. Nothing in the Waiver and Release shall prohibit or restrict Executive, the Company or their respective attorneys from:  (i) making any disclosure of relevant and necessary information or documents in any action, investigation, or proceeding relating to the Waiver and Release, including all exhibits, or as required by law or legal process; or (ii) participating, cooperating, or testifying in any action, investigation, or proceeding with, or providing information to, the EEOC or similar state or local agency, the Company’s Legal Department, and the Securities and Exchange Commission, and/or pursuant to the Dodd-Frank or Sarbanes-Oxley Act; provided that, to the extent permitted by law, upon receipt of any subpoena, court order or other legal process compelling disclosure of any such information or documents, Executive will give prompt written notice to the Company so as to permit the Company to protect its interests to the fullest extent possible.  Notwithstanding any of the foregoing, Executive shall not disclose attorney-client privileged communications.  Separation Benefits provided to Executive under Section 3 shall be the sole financial benefit that Executive is entitled to get for any of the claims that Executive is releasing under Section 4.  Therefore, even though Executive can initiate, assist in, or provide testimony or information in an investigation or in proceedings described in this Section 4(e), doing so will not entitle Executive to additional compensation from any of the Released Parties.  In fact, if Executive is awarded any monetary relief in connection with any lawsuit, legal proceeding, charge or complaint, that relief will be reduced by any amounts paid or payable by the Company to Executive under this Waiver and Release.  
5.Pay and Leave Confirmation.  Executive is not aware of any occasion on which the Company or any of the Released Parties failed to pay Executive for hours worked for or on behalf of the Company at the appropriate rate of pay.  Executive agrees that he has received all entitlements due from the Company relating to Executive’s employment with the Company, including but not limited to, all wages earned, sick pay, vacation pay, and any paid and unpaid personal leave for which Executive was eligible and entitled, and that no other entitlements are due to Executive other than as set forth in this Waiver and Release.  Executive is not aware of any occasion on which he was denied any leave that he was entitled to take under the Family and Medical Leave Act or otherwise.
6.Confidentiality, Intellectual Property, and other Obligations.  Pursuant to the covenants and promises made and agreed in the Employment Agreement, Executive affirms that he is bound by the Restrictive Agreements therein, and further affirms and agrees that except as permitted in Section 4(c) above, as follows
a.    Non-Solicitation. Executive agrees that for twelve (12) months after the Separation Date, he will not: (i) employ, either directly or indirectly, any person previously 

4

employed by Tribune Publishing Company or any of its subsidiaries, business units, or other affiliates (collectively "affiliates"), including but not limited to LATC, (“Tribune”), unless at such time such person is not then and has not been employed by Tribune or any of its affiliates for at least six (6) months, or in any way solicit, entice, persuade or induce, either directly or indirectly, any person to terminate or refrain from renewing or extending their employment with Tribune or any of its affiliates; or (ii) intentionally interfere with the relationship of Tribune or any of its affiliates with any person or entity who or which is a customer, client, supplier, developer, subcontractor, licensee or licensor or other business relation of Tribune, or assist any other person or entity in doing so; provided that the preceding clause (i) shall not prohibit Executive from (x) conducting a general solicitation made by means of a general purpose advertisement not specifically targeted at employees or other persons or entities described in clause (i) or (y) soliciting any employee or other person or entity described in clause (i) who is referred to Executive by search firms, employment agencies or other similar entities, provided that such firms, agencies or entities have not been instructed by Executive to solicit any such employee or person or entity or category thereof.
b.    Confidential Information. Executive shall not at any time, directly or indirectly use, disclose, or take any action which may result in the use or disclosure of, any Company Confidential Information. "Confidential  Information" includes all non-public confidential competitive, pricing, marketing, proprietary and other information or materials relating or belonging to Tribune or any of its affiliates (whether or not reduced to writing), including without limitation all confidential or proprietary information furnished or disclosed to or otherwise obtained by Executive in the course of his employment, and further includes without limitation: computer programs; patented or unpatented inventions, discoveries and improvements; marketing, organizational, operating and business plans; strategies; research and development; policies and manuals; sales forecasts; personnel information (including without limitation the identity of Tribune employees, their responsibilities, competence and abilities, and compensation); medical information about employees; pricing and nonpublic financial information; current and prospective customer lists and information on customers or their employees; information concerning planned or pending acquisitions, investments or divestitures; and information concerning purchases of major equipment or property.  Confidential Information does not include information that lawfully is or becomes generally and publicly known outside of Tribune and its affiliates other than through Executive’s breach of this Waiver and Release or the Employment Agreement or breach by any person of some other obligation.  Nothing herein prohibits Executive from disclosing Confidential Information as legally required pursuant to a validly issued subpoena or order of a court or administrative agency of competent jurisdiction, provided that Executive shall first promptly notify the Company if he receives a subpoena, court order or other order requiring any such disclosure, to allow the Company to seek protection therefrom in advance of any such legally compelled disclosure.
c.    Intellectual Property.  All writing or other works subject to copyright and, whether patentable or not, every invention, discovery, improvement, device, design, apparatus, practice, process, method or product (each of which is hereinafter called an “invention”), created, written, made, developed, perfected, devised, conceived or first reduced to practice by the Executive, either solely or in collaboration with others during his employment by the Company and its affiliates, whether or not during regular working hours, relating in any way to the business, products, developments or activities of the Company and its affiliates, are the sole and exclusive property of the Company and its affiliates.  To the extent that the Company and its 

5

affiliates or the Executive was, is or will be involved in agreements or arrangements with the United States Government or agencies or instrumentalities thereof, Executive agrees that he was, is and will be bound by all obligations, restrictions, and limitations imposed by contract, law or regulation, applicable to any invention conceived or developed, or to any writing or other work acquired, written or produced by the Executive during the period of his employment with the Company and its affiliates, and shall take all action which may be required to discharge such obligations and to comply with such restrictions and limitations. 
d.    Confidentiality of Terms.  Except as permitted in Section 4(c) and 6(b) above, Executive has kept and agrees to keep the terms of this Waiver and Release confidential; agrees not to disclose such terms to anyone except his spouse, attorneys, accountants, or tax advisors; and agrees to take all steps necessary to assure confidentiality by those recipients.  If Executive discloses the terms of this Waiver and Release to his spouse, attorneys, accountants, or tax advisors, Executive (i) will advise them that they must not disclose the terms of this Waiver and Release to anyone else and (ii) will be responsible for any such disclosure by them to the same extent as if Executive made the disclosure himself.  
e.    Cooperation in Litigation/Investigations.  If requested, Executive will provide full cooperation to the Company in connection with the investigation and/or litigation of matters about which Executive had personal knowledge during his employment with the Company.  Such cooperation will include consulting with Company counsel and preparing for and attending depositions or hearings.
f.    Non-Disparagement.  Except as permitted in Section 4(e) and 6(b) above, Executive shall not make to any third party any false or defamatory statement about the Company or any of the Released Parties, nor shall he make any statement of belief or purported fact about the Company or any of the Released Parties if such statement is disparaging or intended to harm the reputation or standing of any of the same.  In addition to other legal or equitable relief to which the Company may be entitled, Executive shall be liable to the Company for liquidated damages in the amount of $67,500.00 for each instance of a statement violating this Section 6(f).
g.    Company Property.  No later than the Separation Date, Executive will return to the Company all property belonging to the Company.
7.Knowing and Voluntary Waiver of Rights.  Executive understands and acknowledges that he is waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and the Older Workers Benefit Protection Act (“OWBPA”), and that this waiver and release is knowing and voluntary.  Executive understands and agrees that this waiver and release does not apply to any rights or claims that may arise under the ADEA and OWBPA, after the Effective Date of this Waiver and Release.  Executive understands and acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Executive was already entitled.  Executive further understands and acknowledges that he has been advised by this writing that: (a) he should consult with an attorney prior to executing this Waiver and Release; (b) he has twenty-one (21) days within which to consider this Waiver and Release; (d) he has seven (7) days following his execution of this Waiver and Release to revoke this Waiver and Release; (e) this Waiver and Release shall not be effective until after the revocation period has expired; and (f) nothing in this 

6

Waiver and Release prevents or precludes Executive from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA or OWBPA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law.  In the event Executive signs this Waiver and Release and returns it to the Company in less than the 21-day period identified above, Executive hereby acknowledges that he has freely and voluntarily chosen to waive the time period allotted for considering this Waiver and Release.  For any revocation to be effective, Executive understands and agrees that he must notify the Company of the revocation in an express, signed writing delivered to the attention Cindy Ballard, SVP Human Resources at 202 West First Street, Los Angeles, CA 90012, within seven (7) days following Executive’s execution of this Waiver and Release.
8.General Provisions
a.    Complete Agreement.  This Waiver and Release constitutes the entire understanding of the Company and the Executive with respect to the subject matter hereof and, together with the Employment Agreement, award agreements accepted by Executive as a condition of each grant of RSUs or Stock Options, and provisions of the intellectual property, trade secret, confidentiality, or proprietary information agreements signed by Executive, shall supersede all prior understandings, written or oral, except as expressly incorporated herein.  Neither of the Parties is executing this Waiver and Release in reliance upon any statement or representation not expressly set forth or incorporated herein.
b.    Amendment; Waiver.  The terms of this Waiver and Release may be changed, modified or discharged only by a written instrument signed by both of the Parties.  A failure of the Company or the Executive to insist upon strict compliance with any provision of this Waiver and Release shall not be deemed a waiver of such provision or any other provision hereof.  
c.    Non-Admission.  This Waiver and Release does not constitute and shall not be construed as an admission by the Company or any of the Released Parties that any of them has violated any law, interfered with any rights, breached any obligation or otherwise engaged in any improper or illegal conduct, and the Company expressly denies that it has engaged in any such conduct.
d.    Unenforceability.  The invalidity or unenforceability of any particular provision of this Waiver and Release shall not affect the other provisions hereof, and this Waiver and Release shall be construed in all respects as if such invalid or unenforceable provisions were omitted.
e.    Counterparts.  This Waiver and Release may be signed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument.
f.    Construction of Agreement.  Each party has negotiated the terms and provisions of this Waiver and Release and has had the opportunity to contribute to its revision.  The terms of this Waiver and Release shall be construed fairly and evenly as to both Parties hereto and not in favor or against either party based on the characterization of one or the other as the drafting party.

7

g.    Choice of Law.  This Waiver and Release shall be construed, enforced and interpreted in accordance with and governed by the laws of the State of California without regard to its choice-of-law principles, provided, however, that any issue concerning Executive’s right to indemnification as an officer of the Company or its affiliates shall be governed by the law of the state of incorporation in accordance with the governing corporate articles, and without regard to that state’s choice of law principles.
h.    Successors and Assigns.  This Waiver and Release is binding upon, and shall inure to the benefit of, the parties and their respective heirs, successors and assigns.
PLEASE READ CAREFULLY.  THIS WAIVER AND RELEASE CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
NOW INTENDING TO BE LEGALLY BOUND THEREBY, the parties have executed this Waiver and Release on the date(s) set forth below.  
	
		
	ACCEPTED AND AGREED BY:
	ACCEPTED AND AGREED BY:

	INSERT EXECUTIVE
	LOS ANGELES TIMES COMMUNICATIONS LLC

	Signature:       
 
 
Date:         
	Signature:       
Name 
 
Date:         

8

ADDENDUM 1

1.    RELOCATION ADVANCE.  The Company will pay Employee a lump sum payment of Seventy-Five Thousand Dollars and No Cents ($75,000.00) to be paid no later than September 30, 2015, for the purpose of relocating Employee’s residence from Baltimore, Maryland to Los Angeles County, California.  Employee will not earn this amount unless Employee remains a full-time employee with the Company through at least the second-year anniversary of Employee’s start date in California.  In the event Employee resigns (other than for Good Reason) or the Company terminates Employee’s employment for Cause prior to the first-year anniversary of Employee’s start date in California, Employee will immediately repay the entire relocation advance (i.e., $75,000.00) to the Company.  In the event Employee resigns (other than for Good Reason) or the Company terminates Employee’s employment for Cause after the first-year anniversary but prior to the second-year anniversary of Employee’s start date in California, Employee will immediately repay one-half of the  relocation advance (i.e., $37,500.00) to the Company.  Notwithstanding the foregoing, in the event of termination of Employee’s employment without Cause, or Employee’s death, the foregoing amount shall be considered earned in full and no portion thereof shall be repaid to the Company.

2.    SETTLING COSTS.  

(a)    The Company will pay for Employee’s rental of a standard-sized rental car from a nationally recognized rental car company and also a preferred vendor of Tribune Publishing (e.g., Hertz, Avis, National, and Enterprise) for up to the first four months of Employee’s employment with the Company under the Agreement. Employee will submit the expense through the standard expense reimbursement process.  

(b)    The Company will pay for Employee’s standard 2 bedroom temporary housing located in Los Angeles County, California up to the first four months of Employee’s employment with the Company under the Agreement. The temporary housing vendor will be at the discretion of the Company and a preferred vendor of Tribune Publishing and will be direct billed to the Company.
 

(c)    The Company will provide Employee with an allowance for permanent housing, as follows: (1) a lump sum payment of One Hundred Seventy-Five Thousand Dollars and No Cents ($175,000.00) to be paid by September 30, 2015; and (2) a lump sum payment of Eighty-Seven Thousand Dollars and No Cents ($87,000.00) to be paid on September 30, 2016.  Any amounts for Employee’s housing in excess of the allowance will be Employee’s sole responsibility.  Upon the Company’s termination of Employee’s employment during (and not after) the Employment Term for any reason other than Cause, or Employee’s resignation for Good Reason, the Company will pay any early termination fees, costs and/or penalties, relieving 

- 16 -

Employee of all obligations under the current lease agreement, which is not to exceed the term of the contract period.

3.    RETURN RELOCATION ALLOWANCE.  Upon the Company’s termination of Employee’s employment during (and not after) the Employment Term for any reason other than Cause or Employee’s resignation with Good Reason during (and not after) the Employment Term, the Company will pay Employee a lump sum payment of Seventy-Five Thousand Dollars and No Cents ($75,000.00), for the purpose of relocating Employee’s residence from Los Angeles County, California to Baltimore, Maryland.  

- 17 -EXHIBIT 10.1

 

[CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION]

 

LIMITED LIABILITY COMPANY
AGREEMENT 

 

OF

 

MERCED BLACK RIDGE, LLC

 

This LIMITED
LIABILITY COMPANY AGREEMENT OF MERCED BLACK RIDGE, LLC, a Delaware limited liability company (the “Company”)
(this “Agreement”) is made effective as of July 21, 2015, by and among Merced Oil & Gas, LLC, a Delaware
limited liability company (“Merced”) and Black Ridge Oil & Gas Inc., a Nevada corporation (“Black
Ridge”) (Merced and Black Ridge are collectively referred to herein as the “Parties” and individually
as a “Party”). All capitalized terms used without definition will have the meanings given to them in Article
I.

 

RECITALS

 

Company was formed
as a limited liability company under the laws of the State of Delaware on June 17, 2015. The Parties now wish to enter into this
written agreement, in accordance with the provisions of the Delaware Limited Liability Company Act and any successor statute, as
amended from time to time (the “Act”), governing the affairs of the Company and the conduct of its business.

 

NOW, THEREFORE,
the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

DEFINITIONS 

 

1.1          General Interpretive
Principles. Except as otherwise expressly provided in this Agreement or unless the context otherwise requires, (i) the terms
defined in this Article will have the meanings assigned to them in this Article and will include the plural as well as the singular,
(ii) the use of any gender in this Agreement will be deemed to include the other gender and (iii) the word “including”
means “including, but not limited to.”

 

1.2          Defined Terms.
As used in this Agreement, the following terms will have the following respective meanings:

 

“Act”
means the Delaware Limited Liability Company Act, as codified in Title 6 of the Delaware Code, §§ 18-101 et seq., as
the same may be amended from time to time.

 

“AFE”
means an Authorization for Expenditure.

 

“Affiliate”
means any Person directly or indirectly Controlling, Controlled by, or under Common Control of such other Person.

 

    	1

    	 

    

 

“Agreement”
means this Limited Liability Company Agreement, as originally executed or as the same may be amended from time to time.

 

“Black
Ridge” is defined in the introductory paragraph of this Agreement.

 

“Book
Value” means, with respect to any asset of the Company, the adjusted basis of such asset for federal income tax purposes;
provided, however, that (i) if any asset is contributed to the Company, the initial Book Value of such asset will equal its fair
market value on the date of contribution (as determined by the Managing Member and set forth on Exhibit A hereto), and (ii)
if the Capital Accounts of the Members are adjusted pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(g) to reflect the
fair market value of any asset of the Company, the Book Value of such asset will be adjusted to equal its respective fair market
value as of the time of such adjustment (as determined by the Managing Member), in accordance with such Treasury Regulation.

 

“Business
Day” means any day other than a Saturday, Sunday or day on which commercial banks in New York City are authorized or
required by law to close.

 

“Capital
Account” is defined in Section 10.1 as adjusted under Treasury Regulation Section 1.704-1(b).

 

“Capital
Contribution” means the aggregate contributions made by a Member to the Company in cash or property whenever made. The
Capital Contributions of the Members are reflected in the books and records of the Company and the Company will maintain such books
and records as are necessary and appropriate to reflect the Capital Contributions of its Members.

 

“Certificate”
means the Certificate of Formation for the Company, filed with the Secretary of State of the State of Delaware on June 17, 2015,
as the same may be amended from time to time.

 

“Code”
means the Internal Revenue Code of 1986, as the same may be amended from time to time.

 

“Company”
is defined in the introductory paragraph of this Agreement.

 

“Control”
including the correlative terms “Controlling”, “Controlled by” and “Under Common Control with”
means possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through
ownership of securities or any partnership or other ownership interest, by contract or otherwise) of a Person. Without limiting
the effect of the preceding sentence, control will be deemed to exist (but will not be limited to) when a Person possesses, directly
or indirectly, through one or more intermediaries (i) in the case of a corporation, 50 percent or more of the outstanding voting
securities thereof; (ii) in the case of a limited liability company, partnership, limited partnership or venture, the right to
50 percent or more of the distributions therefrom (including liquidating distributions); or (iii) in the case of any other Person,
50 percent or more of the economic or beneficial interest therein.

 

“Covered
Person” is defined in Section 5.7.

 

    	2

    	 

    

 

“Depreciation”
means, for each Fiscal Year or other period, an amount equal to the depreciation, amortization, or other cost recovery deduction
allowable with respect to Company property for such Fiscal Year or other period for federal income tax purposes as determined by
the Managing Member; provided, however, that if the Book Value of Company property differs from its adjusted basis for federal
income tax purposes at the beginning of such Fiscal Year or other period, Depreciation shall be determined by the Managing Member
in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g).

 

“Effective
Date” means July 20, 2015.

 

“Fiscal
Year” means the Company’s fiscal year, which will be the calendar year.

 

“Loss”
is defined under the definition of “Profit” in this Article.

 

“Management
Participation Interest” means the interest in partnership profits issued to Black Ridge contemporaneously with the initial
Capital Contributions of Merced in connection with the performance of services for the Company pursuant to Rev. Proc. 93-27, 1993-2
CB 343 and Rev. Proc. 2001-43, 2001-2 CB 191, representing the right to receive a percentage of the profits of the Company pursuant
to Section 7.1(c) of this Agreement.

 

“Management
Services Agreement” means that certain Management Services Agreement dated the date hereof between Black Ridge and the
Company.

 

“Managing
Member” means Merced with such responsibilities as described in Article V and elsewhere in this Agreement.

 

“Members”
means, collectively, Merced and Black Ridge and any other Person admitted as a member in accordance with the terms of this Agreement.

 

“Membership
Interest” means each Member’s entire interest in the capital and profits of the Company and, if applicable, the
right to vote on or participate in, and the right to receive information concerning, the business and affairs of the Company, including
such Member’s Percentage Interest, Management Participation Interest and Voting Interest, if any, as reflected on Exhibit
A hereto and as provided in this Agreement. Initially, the Membership Interests will not be represented by certificates. If
the Managing Member determines that it is in the interest of the Company to issue certificates representing Membership Interests,
certificates will be issued. A Transfer by a Member of less than 100% of its Membership Interest pursuant to this Agreement will
constitute a division of such Member’s Membership Interest and a Transfer of a portion of the Member’s Membership Interest
in proportion to the Membership Interest transferred.

 

“Merced”
is defined in the introductory paragraph of this Agreement.

 

“Net
Cash Flow” means Operating Cash Flow (i) less (x) capital investments, interest on financings, principal on financings,
management fees, and any other similar uses of cash in the operation of the Company, and (y) such reserves as are determined by
the Managing Member to be reasonably necessary for the conduct of the Company’s business (including broker commissions,
expenses related to the ownership and protection of properties owned by the Company and servicing fees paid to Black Ridge pursuant
to the Management Services Agreement); and (ii) plus proceeds of sales of capital assets, interest earned on cash, proceeds of
financings, and any other similar sources of cash.

 

    	3

    	 

    

 

“Non-Voting
Member” means any Person admitted as a Member of the Company and not allocated any Voting Interest, as reflected on Exhibit
A hereto.

 

“Officer”
is defined in Section 5.4. 

 

“Operating
Cash Flow” means, for any period, the sum of all operating revenues of the Company (including fees earned by the Company
and its subsidiaries and revenue from hedging activities), reduced by all operating and hedging expenses of the Company and its
subsidiaries, in each case determined on an accrual basis. The calculation of Operating Cash Flow will not include depreciation
or amortization, interest paid or accrued, debt principal payments or fundings, capital investments or management fees.

 

“Percentage
Interest” means, with respect to a Member, the “Percentage Interest” of such Member as reflected on Exhibit
A attached hereto. The Percentage Interests will be recalculated by the Managing Member and promptly communicated to all Members
upon (i) the admission of additional Members, (ii) the reallocation of Percentage Interests among existing Members, (iii) the forfeiture
of Percentage Interests allocated to Black Ridge pursuant to Section 6.2 or (iv) the Transfer, repurchase or cancellation
of any outstanding Percentage Interests. The Percentage Interests will be recalculated as of the effective date of such admission,
issuance, reallocation, Transfer, repurchase or cancellation and the Company will reflect any such change on its books and records.

 

“Person”
means a natural person, partnership (whether general or limited), limited liability company, trust, estate, association, corporation,
custodian, nominee or any other individual or entity in its own or any representative capacity.

 

“Pool”
means a set of one or more investments in Projects, identified by the Managing Member in its reasonable discretion, where such
assets have an aggregate value of acquisition costs and approved AFEs for drilling of approximately $50 million.

 

“Preferred
Return” means an amount equal to *** 1

 

“Profit”
or “Loss” means, for any Fiscal Year or other period, an amount equal to the Company’s taxable income,
gain or loss for such Fiscal Year or other period, determined in accordance with Section 703(a) of the Code (for this purpose,
all items of income, gain, loss or deduction required to be separately stated pursuant to Section 703(a)(1) of the Code shall be
included in taxable income or loss), with the following adjustments:

 

 

_____________

1
*** Confidential Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to this omitted information.

 

    	4

    	 

    

 

(a) Any income of
the Company that is exempt from federal income tax or otherwise described in Section 705(a)(1)(B) of the Code and not otherwise
taken into account shall be added to such taxable income or loss;

 

(b) Any expenditure
of the Company described in Section 705(a)(2)(B) of the Code and nondeductible syndication costs described in Section 709 of the
Code and not otherwise taken into account shall be subtracted from such taxable income or loss;

 

(c) If the Book
Value of any asset differs from its adjusted basis for federal income tax purposes at the beginning of such Fiscal Year or other
period, in lieu of depreciation, amortization and other cost recovery deduction, there shall be taken into account Depreciation
for such Fiscal Year or other period, and in lieu of a gain or loss resulting from disposition of Company property and taken into
account in computing taxable income or loss, there shall be taken into account gain or loss computed by reference to the Book Value
of such Company property rather than its adjusted basis for federal income tax purposes; and

 

(d) Items of income,
gain, loss or deduction that are specifically allocated pursuant to Section 8.3 shall not be taken into account in calculating
Profits and Losses.

 

“Project”
means a minority, non-operator interest in a parcel of land intended for oil or gas well drilling or containing oil or gas well
drilling operations in the Williston Basin.

 

“Regulatory
Allocations” is defined in Section 8.3(f).

 

“Securities
Act” is defined in Section 12.2.

 

“Transfer”
means transfer, sale, assignment, pledge, hypothecation, exchange, gifting, or bequeathment.

 

“Treasury
Regulations” means regulations issued by the Department of the Treasury under the Code. Any reference to a specific section
or sections of the Treasury Regulations will be deemed to include a reference to any corresponding provision of future regulations
under the Code.

 

“Unreturned
Capital Contributions” means as to a Member, at any time, the aggregate Capital Contributions made with respect to such
Member, reduced (but not below zero) by the aggregate amounts distributed pursuant to Section 7.1(b) with respect to such
Member (whenever made and regardless of the source or character thereof). In the event any Member transfers its Membership Interest
in accordance with the terms of this Agreement, such Member’s transferee will succeed to the Unreturned Capital Contribution
Balance that relates to such Membership Interest.

 

“Unsatisfied
Preferred Return” means, with respect to a Member, at any time, the amount (if any) that the Preferred Return on such
Member’s Capital Contribution exceeds the aggregate amount of all distributions made to such Member (whenever made and regardless
of the source or character thereof) pursuant to Section 7.1(a).

 

    	5

    	 

    

 

“Voting
Interest” means, with respect to a Member, the “Voting Interest” of such Member as reflected on Exhibit
A attached hereto. The Voting Interests will be recalculated by the Managing Member and promptly communicated to all Members
upon (i) the admission of additional Voting Members, (ii) the reallocation of Voting Interests among existing Voting Members, or
(iii) the Transfer, repurchase or cancellation of any outstanding Voting Interests. The Voting Interests will be recalculated as
of the effective date of such admission, issuance, reallocation, Transfer, repurchase or cancellation and the Company will reflect
any such change on its books and records.

 

“Voting
Member” means any Member that holds a Voting Interest.

 

ARTICLE II

ORGANIZATIONAL MATTERS 

 

2.1          Formation.
The Company was organized as a Delaware limited liability company pursuant to the Act. Thomas G. Rock, as an authorized
person within the meaning of the Act, executed, delivered and filed the Certificate with the Secretary of State of the State of
Delaware. Upon the execution of this Agreement, Mr. Rock’s powers as an authorized person ceased.

 

2.2          Rights
and Obligations of the Members. The rights and obligations of the Members will be determined pursuant to the Act and this Agreement.
To the extent that the rights or obligations of the Members are different by reason of any provision of this Agreement than they
would be in the absence of such provision, this Agreement will, to the extent permitted by the Act, control. Each Member will be
entitled to rely on the provisions of this Agreement, and no Member will be liable to the Company or to any other Member for any
action or refusal to act taken in good faith reliance on this Agreement.

 

2.3          Name.
The name of the Company will be “MERCED BLACK RIDGE, LLC” and such name will be used at all times in connection
with the conduct of the Company’s business. Each Member acknowledges and agrees that the Company will have the exclusive
right to use the name set forth in this Section or any other names under which the Company operates, subject to customary use and
reference by Members in connection with providing services to the Company and reporting on their interest in the Company. In the
event the Management Services Agreement is terminated, the Company shall amend its name to remove the reference to “Black
Ridge” within ninety (90) days of such termination.

 

2.4          Term.
Unless otherwise agreed to in writing amending this Agreement, the Company’s existence will be perpetual.

 

2.5          Registered
Agent and Office. The Company’s registered agent for service of process and registered office in the State of Delaware
will be The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.
The Company will continuously maintain a registered office and a registered agent in the State of Delaware, as required by the
Act. The Delaware registered office and registered agent may be changed from time to time by the Managing Member, in accordance
with the Act.

 

2.6          Principal
Place of Business. The Company’s principal place of business will be located at 601 Carlson Parkway, Suite 200, Minnetonka,
MN 55305. The Managing Member may change the location of the Company’s principal place of business. The Managing Member will
cause to be made any filing and cause to be taken any other action required by applicable law in connection with any such change
and will give notice to all Members of the new location of the Company’s principal place of business promptly after any such
change becomes effective. The Company also may have such other offices as the Managing Member from time to time may determine.

 

    	6

    	 

    

 

2.7          Maintenance.
The Managing Member will cause to be filed promptly all certificates, amendments, or other instruments as required by law to maintain
the Company in good standing as a limited liability company in the State of Delaware and any other jurisdiction in which the Company
conducts business, including as required to comply with any fictitious name statutes.

 

2.8          Business
and Purpose. The purpose of the Company will be to engage in any lawful activity for which a limited liability company may
be organized under the Act, including the acquisition, ownership and disposition of one or more Projects.

 

2.9          Powers.
The Company will have all powers of a limited liability company under the Act and the power to do all things necessary or convenient
to operate its business and accomplish its purpose as described in Section 2.8.

 

2.10          Existence,
Properties, Etc. The Managing Member will maintain, preserve, and keep in full force and effect (i) all rights, franchises,
licenses and permits necessary to the proper conduct of the Company’s business and (ii) ownership, leasing or operation of
the Company’s properties which, if not so maintained, could reasonably be expected to have a material adverse effect on the
Company. The Managing Member also will take all action that may be reasonably required to obtain, preserve, renew and extend all
material licenses, permits, authorizations, trade names, trademarks, service names, service marks, copyrights and patents which
are necessary for the continuance of the operation of any such properties and the business by the Company.

 

2.11          Effective
Date. This Agreement became effective on the Effective Date.

 

2.12          Title
to Company Property. All property owned by the Company will be owned by the Company as an entity and, insofar as permitted
by applicable law, no Member will have any ownership interest in any Company property in its individual name or right, and each
Member’s interest in the Company will be personal property for all purposes.

 

2.13          No Partnership.
The Company will not be a partnership or joint venture under any state or federal law, and no Member will be a partner or joint
venturer of any other Member for any purpose, other than the Code and other applicable tax laws, and this Agreement will not be
construed otherwise.

 

2.14          Financial
Statements. All of the Company’s financial records will be maintained pursuant to generally accepted accounting principles
(except for the absence of footnotes and subject to changes resulting from normal year-end
audit adjustments for recurring accruals of the types included in the financial statements of the Company in prior fiscal years),
and its other records will be maintained to the extent necessary to record the activities and business operations of the Company.
The Company will provide complete financial reports, including a balance sheet, income statement and statement of cash flows to
all Members within 120 days after the end of each fiscal year. The expense of preparing such financial reports will be borne by
the Company.

 

    	7

    	 

    

 

ARTICLE III

MEMBERS 

 

3.1          Members.
The Members of the Company will be as set forth on Exhibit A hereto, as amended from time to time in accordance with this
Agreement. Except as required under the Act or as expressly set forth in this Agreement, no Member, in its capacity as a Member,
(i) will take part in the control, management, direction or operation of the affairs of the Company or have power or authority
to bind the Company or (ii) will be personally liable for any debt, obligation or liability of the Company, whether such debt,
obligation or liability arises in contract, tort or otherwise.

 

3.2          Additional
Members. Additional Members will not be admitted to the Company without the approval of the Managing Member. The Membership
Interests allocated to any additional Member will be determined by the Managing Member. The Managing Member will amend the books
and records of the Company to reflect any revised Membership Interests. An additional Member that intends to become a party to
this Agreement pursuant to this Section will not have any rights under this Agreement or with respect to the Company, and will
not be admitted as a Member of the Company, unless and until such additional Member executes a counterpart of this Agreement and
satisfactorily completes, executes and delivers such additional documentation and certifications as the Managing Member may require.

 

3.3          Managing
Member. Except as expressly otherwise provided in this Agreement, actions of the Company may be taken only at the direction
and consent of the Managing Member in accordance with Section 5.2, without the requirement of any vote or consent of any
other Member.

 

3.4          Meetings.
Meetings of the Members for any purpose consistent with this Agreement may be called by the Managing Member. Non-Voting Members
have the right to receive notice of and attend any meetings of Members, but may not otherwise participate in such meetings, except
as the Managing Member may otherwise direct from time to time or as otherwise expressly provided in this Agreement. Written notice
of each meeting of the Members will be delivered, pursuant to Section 13.1 or as otherwise required by the Act, by or at
the direction of the Person calling such meeting, to each such Member. Each notice delivered pursuant to this Section will state
the place, day and hour of the meeting and the purpose for which such meeting is being called. A quorum necessary for the transaction
of any business is present if the Managing Member is present and more than fifty percent (50%) of the Voting Interest of all Voting
Members is present. Any action that can be taken at a meeting can be taken by a written action, provided that such written action
is signed by the Managing Member and such other Members as are necessary to represent more than fifty percent (50%) of the Voting
Interest of all Voting Members. A copy of such written action will promptly be transmitted to the Members not signing such written
action. Meetings of the Members may be made by video or audio conferencing or similar communications equipment provided that a
quorum exists and if all Members participating in the meeting can hear each other.

 

    	8

    	 

    

 

ARTICLE IV

TRANSFERS; OPTION TO BID

 

4.1          Transfer
Restrictions.

 

(a)          Except for
Merced, which may Transfer all or any portion of its Membership Interest to any party without restriction (subject to the provisions
of Section 4.1(b)), no Member may Transfer all or any part of its Membership Interest without receiving express, prior written
consent from the Managing Member, which consent may be withheld in the Managing Member’s sole and absolute discretion, provided
that Black Ridge may Transfer all or a part of its Membership Interest to an Affiliate. Any consent granted by the Managing Member
will only apply to such Transfer as specifically described in such written consent (including the name(s) of the buyer, assignee
or transferee, and the terms and conditions of such Transfer), and will terminate automatically in the event such Transfer is not
consummated by the deadline specified in such written consent. All Persons to whom Membership Interests are transferred pursuant
to this Section will also be subject to the transfer restrictions contained in this Section.

 

(b)          In the event
Merced Transfers its entire Membership Interest (other than to an Affiliate of Merced) or Merced Transfers part of its Membership
Interest (other than to an Affiliate of Merced) and will no longer serve as the Managing Member as a result of such Transfer, Black
Ridge shall have the right to include in the sale its entire Membership Interest in the Company. The amount to be received by Black
Ridge in connection with a sale under this Section 4.1(b) shall be equal to the amount Black Ridge would have received with
respect to the transferred Membership Interest if the sale proceeds had been paid to the Company, and the Company had then liquidated
on the date of the sale and distributed the proceeds of such liquidation to the holders of the transferred Membership Interests
in accordance with the provisions of Article 11 relating to distributions to be made in connection with the winding up of
the Company.

 

4.2          Direct
and Indirect Transfers. For purposes of this Agreement, restrictions upon the Transfer of a Membership Interest will extend
to any direct or indirect Transfer and any involuntary transfer of such Membership Interest (such as a transfer pursuant to a foreclosure
sale or a transfer resulting by operation of law).

 

4.3          Substitution
of a Member.

 

(a)           Other than an assignee,
legatee, or transferee of Merced (as provided in Section 4.1 above), no assignee, legatee, or transferee (by conveyance,
operation of law or otherwise) of the whole or any portion of a Membership Interest will have the right to become a substituted
Member without the written approval of the Managing Member, which approval may be withheld in the Managing Member’s sole
discretion. The granting or denial of a request for approval will be within the absolute discretion of the Managing Member; provided,
however, that the Managing Member will not unreasonably withhold or delay consent regarding any Transfer of a Membership Interest
by a Member to an Affiliate of such Member. Any purported Transfer in violation of this Article IV will be null and void and the
purported transferee will become neither a Member nor a holder of any interest in the Company whatsoever. A substituted Member
that is admitted as a Member in accordance with Section 4.6 will succeed to all the Membership Interest of its assignor.

 

    	9

    	 

    

 

(b)          If a Member will
be dissolved, merged or consolidated, its successor-in- interest will have the same rights and obligations that such Member would
have had if it had not been dissolved, merged or consolidated, except that the successor will not become a substituted Member without
the prior approval of the Managing Member pursuant to (a) above.

 

(c)          As conditions to its
substitution as a Member pursuant to this Section, a Person will (i) execute and deliver such instruments, in form and substance
satisfactory to the Managing Member, as the Managing Member deem necessary in its sole discretion and (ii) pay all reasonable expenses
of the Company in connection with its admission as a substituted Member.

 

4.4          Conditions
to Transfer. No Transfer of any Membership Interest in the Company otherwise permitted under this Agreement will be effective
for any purpose whatsoever until the transferee will have assumed the transferor’s obligations to the extent of the Membership
Interest transferred and will have agreed to be bound by all the terms and conditions hereof, by written instrument, duly acknowledged,
in form and substance reasonably satisfactory to the Managing Member in its sole discretion.

 

4.5          Adjustment
of Membership Interests. Upon a Transfer, redemption or other change in any Membership Interest, including a Member substitution,
pursuant to this Article, the Managing Member will amend Exhibit A hereto to reflect such Transfer, redemption or other
change.

 

4.6          New Member
as a Party to this Agreement. A Person that (a) has been approved as an additional or substitute Member pursuant to Section
3.2 or Section 4.3, as applicable, and (b) intends to become a party to this Agreement pursuant to this Article, will
not have any rights under this Agreement or with respect to the Company, and will not be admitted as a Member of the Company, unless
and until such Person executes a counterpart of this Agreement. An assignee, legatee or transferee that is not admitted as a Member
will be entitled only to the allocations and distributions to which its assignor would otherwise be entitled.

 

4.7          Black
Ridge Option to Bid. In the event that the Managing Member determines to sell one or more Projects or its Membership Interest
related thereto by means of an auction or similar sales process (the “Auction”), the Managing Member will send
written notice (the “Auction Notice”) of such intent to Black Ridge. Black Ridge will have the option to deliver
to the Managing Member, in accordance with the applicable Auction terms, a bid to purchase the Project(s) or Membership Interest
being offered for sale and setting forth the gross purchase price and other significant terms on which Black Ridge is willing to
purchase the Company’s assets. The Managing Member will determine whether to accept the Offer or reject it in the course
of the Auction and will have the sole discretion whether to accept the Offer or any other bid, or to decide not to consummate such
sale. The option set forth in this section will not apply to, and the Managing Member will not be obligated to deliver an Auction
Notice with respect to, any endeavor by the Managing Member to sell all or a portion of the Projects or its Membership Interest
through a private sale process; e.g., pursuant to bilateral discussions with a third party.

 

    	10

    	 

    

 

ARTICLE V

MANAGEMENT

 

5.1          Management.

 

(a)          The management
and control of the business and affairs of the Company will be exclusively vested in the Managing Member, without the requirement
of any vote or consent of any other Member.

 

(b)          The Company
will indemnify the Managing Member and its Affiliates, officers, directors, equity holders, partners, employees and agents to the
fullest extent permitted by Delaware law, against any liability or cost arising out of its service to the Company. The Company
will advance funds to cover expenses, including attorneys’ fees, incurred by the Managing Member in connection with the defense
of any civil, criminal, administrative or investigative action, suit or proceeding arising out of such member’s service to
the fullest extent permitted by Delaware law.

 

(c)          The Company
will indemnify the Members and their Affiliates, officers, directors, equity holders, partners, employees and agents to the fullest
extent permitted by Delaware law, against any liability or cost arising out of their Membership Interests in the Company. The Company
will advance funds to cover expenses, including attorneys’ fees, incurred by a Member in connection with the defense of any
civil, criminal, administrative or investigative action, suit or proceeding arising out of such Member’s Membership Interest
to the fullest extent permitted by Delaware law. For the avoidance of doubt, the indemnification and advance of funds provided
under this Section 5.1(c) will not cover or apply to Black Ridge with respect to its performance of, or any liability under,
the Management Services Agreement, including any manner of tax liability arising thereunder.

 

5.2          Action
by Managing Member. Any action, decision or determination by the Managing Member will constitute an action, decision or determination
of the Company. Except as expressly otherwise provided in this Agreement, actions of the Company may be taken only at the direction
and consent of the Managing Member in accordance with this Section 5.2, without the requirement of any vote or consent of
any other Member.

 

5.3          Independent
Activities; Transactions with Affiliates.

 

(a)          The Managing
Member will devote such time to the affairs of the Company as it, in its sole discretion, deem necessary to manage and operate
the Company.

 

(b)          To the extent
permitted by applicable law, and except as specifically provided in this Section 5.3, neither this Agreement nor any activity
undertaken pursuant to this Agreement will prevent a Member or any of its respective Affiliates from engaging in whatever activities
they choose, whether the same are competitive with the Company or otherwise and any such activities may be undertaken without having
or incurring any obligation to offer any interest in such activities to the Company or any other Member, or requiring the Company
or any other Member (or such Member’s Affiliates) to participate in any such activities.

 

    	11

    	 

    

 

(c)          To the extent
permitted by applicable law and subject to the provisions of this Agreement, the Managing Member is authorized to cause the Company
to purchase property from, sell property to, or otherwise deal with any other Member, acting on its own behalf, or any Affiliate
of any Member; provided that any such purchase, sale or other transaction is either (i) made on terms and conditions which are
no less favorable to the Company than if the sale, purchase or other transaction had been made with an independent third party
or (ii) consented to by a majority of the disinterested Members.

 

(d)          The Managing
Member is authorized to have the Company enter into the Management Services Agreement with Black Ridge.

 

5.4          Officers.
The Company is not required to have officers, but may have such officers or other authorized persons as deemed necessary or appropriate
by the Managing Member in its sole discretion (each, an “Officer”). All Officers shall be selected by the Managing
Member and shall serve at the pleasure of the Managing Member. Any individual may hold any number of offices. Each Officer shall
have the powers and duties of management usually vested in such Officer’s office by a corporation existing under Delaware
law, and shall have such other powers and duties as may be prescribed by the Managing Member.

 

5.5          Reliance
by Third Parties. No third party dealing with the Company will be required to ascertain whether the Managing Member or any
Officer is or are acting in accordance with the provisions of this Agreement. All third parties may rely on a document executed
by the Managing Member (or an Officer duly authorized by the Managing Member to execute such document) as binding the Company.
If any Member acts without authority, such Person will be liable to the Members for any damages arising out of such unauthorized
actions.

 

5.6          Insurance.
The Managing Member will cause the Company to maintain, at the cost of the Company and for the protection of the Company and all
of its Members, officers’ insurance and such other insurance as the Managing Member deems necessary for the operations being
conducted.

 

5.7          Fiduciary
Duties. This Agreement is not intended to, and does not, create or impose any duty (including any fiduciary duty) on the Managing
Member, any other Member, or agent of the Company, or an Officer, director, equity holder, partner, employee, agent or Affiliate
of such Person (each, a “Covered Person”). Further, notwithstanding any other provision of this Agreement or
any duty otherwise existing at law or in equity, the parties hereto agree that no Member or Managing Member shall, to the fullest
extent permitted by law, have duties (including fiduciary duties) to any other Member or to the Company, and in doing so, recognize,
acknowledge and agree that their duties and obligations to one another and to the Company are only as expressly set forth in this
Agreement; provided, however, that each Member shall have the duty to act in accordance with the implied contractual covenant of
good faith and fair dealing. To the extent that, at law or in equity, any Covered Person has duties (including fiduciary duties)
and liabilities relating thereto to the Company or to any other Covered Person, a Covered Person acting under this Agreement will
not be liable to the Company, to any Member or to any other Covered Person for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise
existing at law or in equity, are agreed by the Members to replace such other duties and liabilities of such Covered Person.

 

    	12

    	 

    

 

ARTICLE VI

CAPITAL CONTRIBUTIONS; INTERESTS;
ADDITIONAL PROJECTS

 

6.1          Initial
Capital Contributions; Interests. Merced has made an initial Capital Contribution to the Company in the amount set forth on
Exhibit A, which is an amount deemed sufficient by the Managing Member for the initial capital needs of the Company (including
costs and expenses association with forming the Company). Each Member is deemed to have the Percentage Interest and Voting Interest,
if any, set forth on Exhibit A hereto.

 

6.2           Forfeiture
of Management Participation Interest. If the Management Services Agreement is terminated by the Company for * * * or by Black
Ridge pursuant to Section 7.1 of such agreement (Termination for Convenience), then the Management Participation Interest
will be immediately forfeited and declared null and void and of no further effect, and neither the Company nor the Managing Member
will have any further liability with respect to the Management Participation Interest. For the avoidance of doubt, if the Management
Services Agreement is terminated by the Company pursuant to * * *, by the Company pursuant to * * *, or by Black Ridge pursuant
to Section 7.2 of such agreement (Termination for Cause), Black Ridge will retain its Management Participation Interest
and maintain its status as a Member hereunder until such time as this Agreement is terminated and the Company is dissolved pursuant
to the terms and conditions of this Agreement. Nothing set forth in this Section 6.2 will affect Black Ridge’s rights
to compensation under the Management Services Agreement.

 

6.3          Additional
Capital Contributions.

 

(a)          Merced will
from time to time and in its sole discretion make additional Capital Contributions to the Company for Project acquisitions, to
fund approved AFEs for Projects and as needed for the operations of the Company, in each case based on Merced’s evaluation
of each Project, AFE and potential Project, and of additional criteria (including satisfactory progress of existing Project(s)
and a continuing favorable market outlook). Unless otherwise agreed by all Members or as set forth in Section 6.3(b) below,
all additional Capital Contributions will be made 100% by Merced. For purposes of clarity, nothing in this Agreement shall obligate
Merced to acquire any number of Projects or to make a minimum investment in Project acquisitions.

 

(b)          Subject to
Section 6.3(d), if, from time to time in the reasonable judgment of the Managing Member, the Company requires additional
capital for any purpose and Merced does not wish to make such additional Capital Contribution, the Managing Member is authorized
to cause the Company to issue additional Membership Interests of any class, on terms and conditions and with repayment priorities
as determined by the Managing Member in its sole discretion.

 

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(c)          Subject to
Section 6.3(d), if, from time to time, the Managing Member determines that it is in the best interest of the Company to
issue additional Membership Interests to one or more Persons performing services for the Company, the Managing Member will have
the right to cause the Company to issue such Membership Interests of any class. The Percentage Interest, Voting Interest and the
cost of each will be determined by the Managing Member in its sole discretion. The Managing Member may elect, in connection with
the issuance of a Membership Interest in connection with the performance of services, to revalue the Company’s property pursuant
to Treasury Regulation Section 1.704-1(b)(2)(iv)(f)(5) and adjust the Capital Accounts of Members pursuant to such regulation.
The Company and each Member acknowledge that the Internal Revenue Service (“Service”) has issued Rev. Proc.
93-27, 1993-2 CB 343 and Rev. Proc. 2001-43, 2001-2 CB 191, which set forth criteria which the Service is bound to apply to the
issuance by a partnership of vested or unvested profits interests in connection with the performance of services. The Service subsequently
issued proposed regulations in 2005 which when made final would, among other things, revoke these revenue procedures and subject
the issuance of any partnership interest, whether a capital or a profits interest, to the provisions of Section 83 of the Code;
there is no assurance that these regulations will be finalized, and, if finalized, whether they will contain provisions identical
to those in the proposed regulations. The proposed regulations if finalized in their present form would affect the tax consequences
to both the service partner and the Company of an issuance of a profits or capital interest in connection with the performance
of services including adjustments which may be required to be made to the Capital Accounts of the Members. Accordingly, in addition
to any other power and authority vested in the Managing Member, and notwithstanding any other provision of this Agreement, the
Managing Member may:

 

(i)          cause such
adjustments to the Capital Accounts of Members as the Managing Member determines to be necessary or appropriate to reflect the
economic rights and obligations that the Managing Member agrees to embody in Membership Interests that are issued in connection
with the performance of services;

 

(ii)         make any
special allocation of taxable income or items thereof that is consistent with the provisions of current or future law relating
to issuance of partnership interests in connection with the performance of services;

 

(iii)        cause the
Company to elect, maintain and comply with the safe harbor provisions described in proposed Treasury Regulation Section 1.83-3(1),
when finalized, and to take any action on behalf of each Member as may be necessary or appropriate to legally bind the Company
and all Members, including transferees, to elect, maintain and comply with the requirements of such safe harbor, and each Member
will execute such documentation as may be reasonably requested by the Company to assurance such election, compliance and maintenance;
and

 

(iv)        amend this
Agreement without Member approval to the extent the Managing Member considers necessary or appropriate to implement the foregoing
provisions of this Section 6.3(c).

 

(d)          So long as
no default has occurred and is continuing under the Management Services Agreement, and notwithstanding anything to the contrary
in this Agreement, Black Ridge’s prior written consent will be required in order to issue additional Membership Interests
or reallocate the Membership Interests of the Members pursuant to an issuance of Membership Interests to one or more Persons performing
services for the Company, if such issuance or reallocation has the effect of diluting the economic interests of Black Ridge. Additional
Capital Contributions by a Member, and the right to distributions of Unreturned Capital Contributions, and Unsatisfied Preferred
Returns pertaining thereto, will not be treated as diluting the economic interests of the other Members.

 

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(e)          Upon the acceptance
of additional Capital Contributions and issuance of additional Membership Interests or reallocation of Membership Interests pursuant
to this Section, the Managing Member will update the books and records of the Company to reflect such additional Capital Contributions
and issuance, which books and records will be definitive evidence of the amount of each Member’s Capital Contributions and
ownership of Membership Interests of the Company, absent manifest error.

 

6.4          Return
of Capital Contributions. Capital Contributions will be expended in furtherance of the business of the Company. All costs and
expenses of the Company will be paid from its funds. No interest will be paid on Capital Contributions. The Company will not have
any personal liability for the repayment of any Capital Contribution to a Member.

 

6.5          Acquisition
of Additional Projects; Black Ridge Option to Co-Invest. Prior to the Company’s acquisition of a new Project, Black Ridge
will have the option to participate as a co-investor with the Company in such Project (each, a “Co-Invest Project”),
up to a maximum co-investment of twenty-five percent (25%) of the total Co-Invest Project capital. If Black Ridge elects to participate
in a Co-Invest Project, Black Ridge will deliver to the Managing Member no more than five (5) business days after notice to the
Company of a new Project or at the time of the Company’s approval of the Project acquisition, if such approval is made earlier,
a written notice of Black Ridge’s intent to co-invest and its co-investment commitment amount (the “Co-Invest Percentage”).
Each Co-Invest Project will be owned severally (and not jointly) by Black Ridge and the Company, with Black Ridge holding a portion
equal to the Co-Invest Percentage and the Company owning the remaining portion.

 

ARTICLE VII

DISTRIBUTIONS

 

7.1          Distributions.
On a quarterly basis, and more often as the Managing Member may determine in its sole discretion, the Company: (i) will distribute
to the Members Net Cash Flow of the Company; and (ii) may distribute other assets of the Company as determined by the Managing
Member in its sole discretion, such distribution not to be unreasonably withheld (the amount of any such distribution of Net Cash
Flow or other assets of the Company, the “Distributable Amount”). The Company will not distribute Net Cash Flow
unless the Managing Member determines in its reasonable discretion that (x) such Net Cash Flow or portion thereof proposed to be
distributed is held by the Company in the form of cash and (y) such cash is not needed by the Company for the payment of expenses.
Unless otherwise unanimously agreed by the Members, Net Cash Flow and Operating Cash Flow of the Company will be calculated and
distributed separately for each Pool, and will be distributed to the Members in the following order of priorities:

 

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(a)          First, 100
percent of such Distributable Amount will be distributed to the Members, in proportion to and to the extent of their respective
then outstanding Unsatisfied Preferred Returns;

 

(b)          Next, 100 percent
of any remaining Distributable Amount will be distributed to the Members in proportion to and to the extent of their respective
then outstanding Unreturned Capital Contributions; and

 

(c)          Thereafter,
the balance of any remaining Distributable Amount will be distributed * * * % to the Members in proportion to their
Percentage Interests and * * * % to Black Ridge in respect of its Management Participation Interest.

 

The Members intend
that nonliquidating distributions to the Members under Section 7.1 be separately calculated with respect to each Pool. For
the avoidance of doubt, the Members intend that distributions under Section 7.1(a) and 7.1(b) be calculated by allocating
to each Pool its proper share of the Unsatisfied Preferred Returns and Unreturned Capital Contributions of a Member, and that distributions
may accordingly be made to the Members pursuant to Section 7.1(c) with respect to a given Pool even though there remain
Unsatisfied Preferred Returns and Unreturned Capital Contributions with respect to other Pools.

 

The Management Participation
Interest has been structured to satisfy the requirements of Rev. Proc. 93-27 to be treated as a profits interest thereunder, and
for avoidance of doubt, the Members intend the provisions of Section 7.1(a), (b) and (c) to satisfy the requirement
of such revenue procedure that, if the Company were liquidated immediately following the issuance of the Management Participation
Agreement, its debts repaid and the net remaining proceeds distributed to Merced pursuant to Section 7.1(a) and (b),
there would be no remaining proceeds available for distribution to Black Ridge under Section 7.1(c).

 

7.2          Amounts
Withheld. Any amounts withheld from a distribution by the Company to a Member pursuant to any federal, state, local or foreign
tax law shall be treated as if the same had been distributed to that Member pursuant to Section 7.1. Any other amount required
to be paid by the Company to a taxing authority with respect to a Member pursuant to any federal, state, local or foreign tax law
in connection with any payment to or tax liability (estimated or otherwise) of the Member shall be treated as a loan from the Company
to that Member. If such loan is not repaid within thirty (30) days from the date the Managing Member notifies that Member of the
withholding, the loan shall bear interest at an annual rate equal to the lesser of (a) ten percent (10%) per annum or (b) the highest
nonusurious rate permitted by applicable law under such circumstances from the date of the applicable notice to the date of repayment.
In addition to all other remedies the Company may have, the Company may withhold distributions that would otherwise be payable
to that Member and apply those distributions instead to the repayment of the loan and accrued interest.

 

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ARTICLE VIII

ALLOCATIONS OF PROFIT AND LOSS

 

8.1          Determination
of Profit and Loss. Profit or Loss will be determined by the Managing Member in accordance with this Agreement on an annual
basis and for such other periods as may be required by this Agreement or otherwise.

 

8.2          Allocations
of Profit and Loss. Except as otherwise provided in this Agreement, and after giving effect to Section 8.3, Profit or
Loss for any Fiscal Year will be allocated among the Members such that the Capital Account of each Member, immediately after giving
effect to such allocations, will equal (proportionately), as nearly as possible, (A) the amount of the distributions that would
be made to such Member during such Fiscal Year if (i) the Company were dissolved and terminated, (ii) its affairs were wound up
and each asset were sold for its Book Value (except that any asset which was the subject of a disposition in such Fiscal Year will
be treated as if it were sold for cash equal to the sum of the amount received by the Company in any such disposition and the fair
market value of any other property received by the Company in such disposition), (iii) all liabilities of the Company were satisfied;
and (iv) the net assets of the Company were distributed to the Members in accordance with Section 7.1, minus (B) such Member’s
share of partnership minimum gain and partner nonrecourse debt minimum gain determined pursuant to Treasury Regulation Sections
1.704-2(g)(1) and 1.704-2(i)(5), computed immediately prior to the hypothetical sale of assets. The Managing Member will make such
other assumptions as it deems necessary or appropriate in its good faith and reasonable judgment in order to effectuate the intended
beneficial entitlements of the Members.

 

8.3          Regulatory
Allocations and Curative Provision.

 

(a)          The “partnership
minimum gain” and “partner nonrecourse debt minimum gain” provisions of Treasury Regulation Section 1.704-2 are
incorporated herein by reference and will apply notwithstanding the allocation of Profit and Loss provided for under Section
8.2 to the extent provided in that regulation.

 

(b)          The “qualified
income offset” provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) are incorporated herein by reference and will
apply notwithstanding the allocation of Profit and Loss otherwise provided for under Section 8.2 to the extent provided
in that regulation.

 

(c)          Company deductions
that are characterized as “nonrecourse deductions” under Treasury Regulation Sections 1.704-2(b)(1) and 1.704-2(c)
for any taxable year, or portion thereof, will be allocated to the Members in proportion to their respective Percentage Interests.

 

(d)          Company deductions
that are characterized as “partner nonrecourse deductions” under Treasury Regulation Sections 1.704-2(i)(1) and 1.704-2(i)(2)
for any taxable year, or portion thereof, will be allocated to the Members as provided in Treasury Regulation Section 1.704-2(i)(1).

 

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(e)          Notwithstanding
the provisions of Section 8.2, if during any Fiscal Year the allocation of any loss or deduction, net of any income or gain,
to a Member would cause or increase a negative balance in a Member’s Capital Account as of the end of that Fiscal Year, only
the amount of such loss or deduction that reduces the balance to zero will be allocated to the Member and the remaining amount
will be allocated to the other Members. For the purpose of the preceding sentence, a Capital Account will be reduced by the adjustments,
allocations and distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6), and increased by
the amount, if any, that the Member is obligated to restore to the Member’s Capital Account within the meaning of Treasury
Regulation Section 1.704-1 (b )(2)(ii)(c) as of that time or is deemed obligated to restore under Treasury Regulation Section 1.704-2(g)(1)
or Section 1.704-2(i)(5).

 

(f)          All allocations
pursuant to the foregoing provisions of this Section (the “Regulatory Allocations”) will be taken into account
in computing allocations of other items under Section 8.2, including, if necessary, allocations in subsequent Fiscal Years,
so that the net amounts reflected in the Members’ Capital Accounts and the character for income tax purposes of the taxable
income recognized (e.g., as capital or ordinary) will, to the extent possible, be the same as if no Regulatory Allocations
had been given effect. In exercising its discretion under this Section 8.3(f), the Company shall take into account future
Regulatory Allocations under Section 8.3(a) that, although not yet made, are likely to offset other Regulatory Allocations
previously made under Sections 8.3(c) and (d).

 

ARTICLE IX

ALLOCATION OF TAXABLE INCOME AND
LOSS

 

9.1          General.
Except as provided in Section 9.2, each item of income, gain, loss and deduction of the Company for federal income tax purposes
will be allocated among the Members in the same manner as such item is allocated under Article VIII.

 

9.2          Allocation
of Section 704(c) Items. The Members recognize that with respect to property contributed to the Company by a Member and with
respect to property revalued in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), there may be a difference between
the fair market value of such property at the time of contribution or revaluation and the adjusted tax basis of such property at
that time, which will result under Treasury Regulation Section 1.704(b) in a difference between the Book Value of such property
and its adjusted tax basis. All items of tax depreciation, cost recovery, amortization, amount realized and gain or loss with respect
to such assets will be allocated among the Members to take into account such book-tax disparities in accordance with the provisions
of Section 704(c) of the Code and the Treasury Regulations thereunder using a reasonable method selected by the Managing Member.

 

9.3          Recapture
Items. In the event that the Company has taxable income that is characterized as ordinary income under the recapture provisions
of the Code, then Sections 1.1245-1(e) and 1.1250-1(f) of the Treasury Regulations shall apply, and in the event that the Company
has taxable income that is characterized as “unrecaptured Section 1250 gain” under Section 1(h)(6) of the Code, then
the principles of such Treasury Regulations shall apply.

 

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ARTICLE X

ACCOUNTING, REPORTING AND TAX MATTERS

 

10.1          Capital
Accounts. The Managing Member will establish and maintain a separate capital account (“Capital Account”)
for each Member in accordance with the Treasury Regulations under Section 704(b) of the Code and such other accounts as may be
necessary or desirable to comply with the requirements of applicable laws and regulations. No Member will be required to make up
a negative balance in its Capital Account or to pay to any Member the amount of any such negative balance.

 

10.2          Transfers
During Year. In order to avoid an interim closing of the Company’s books, the share of Profits or Losses under Article
VIII of a Member who transfers part or all of its interest in the Company during the Company’s accounting year may be determined
by taking such Member’s pro rata share of the amount of such Profits or Losses for the year. The proration will be based
on the portion of the Company’s accounting year that has elapsed prior to the transfer or may be determined under any other
reasonable method; provided, however, that any gain or loss from the sale of Company assets will be allocated to the owner of the
Membership Interest at the time of such sale. The balance of the Profits or Losses attributable to the Membership Interest transferred
will be allocated to the transferee of such Membership Interest.

 

10.3           Tax
Filings. The Managing Member will cause the income tax returns for the Company to be prepared and filed in a timely manner
with the appropriate authorities. Prior to March 15 of each year, the Members will be provided with a copy of the Company federal
income tax return (Form 1065), as filed or to be filed for the preceding year.

 

10.4          Election
to be Taxed as Partnership. The Company will be treated as a partnership for federal income tax purposes. Neither the Managing
Member nor any Member will take any action that would cause the Company to be treated as a corporation for federal income tax purposes.

 

10.5          Section
754 Election. Upon the request of any Member, the Managing Member may, at its discretion, cause the Company to make the election
provided for under Section 754 of the Code.

 

10.6          Tax
Matters Partner. Merced will represent the Company as “tax matters partner” (as defined in Section 6231 of the
Code) in connection with all examinations of the Company’s affairs by tax authorities, including resulting judicial and administrative
proceedings, and will expend the Company’s funds for professional services and costs associated therewith.

 

ARTICLE XI

DISSOLUTION AND WINDING UP

 

11.1          Dissolution.
The Company will be dissolved, its assets disposed of, and its affairs wound up upon the occurrence of any of the following events:

 

(a)          a written election
by the Managing Member to dissolve the Company;

 

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(b)          the merger
of the Company (where the Company is not the surviving entity) or sale of all or substantially all of the assets of the Company;
or

 

(c)          entry of a
decree of judicial dissolution pursuant to Section 18-802 of the Act.

 

11.2          Winding
Up. If the Company is dissolved pursuant to Section 11.1, the Company will continue solely for the purpose of winding
up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors. The Managing Member, or,
if the Managing Member is unable to act, another Person selected by the Managing Member, will be responsible for overseeing the
winding up and liquidation of the Company, will take full account of the liabilities and assets of the Company and will cause the
Company’s assets to be sold (as promptly as is consistent with obtaining the fair market value thereof) prior to distributing
any such assets, and will cause the proceeds therefrom, to the extent sufficient therefor, to be applied and distributed as provided
in Section 11.3. The Managing Member (or such other Person selected in accordance with this Section) will give written notice
of the commencement of winding up to each Member and to all known creditors and claimants whose addresses appear on the records
of the Company.

 

11.3          Payment
of Liabilities and Distribution of Assets upon Dissolution.

 

(a)          After determining
that all reasonably foreseeable debts and liabilities of the Company, including debts and liabilities to any of the Members as
creditors of the Company, have been paid or adequately provided for, the remaining assets will be distributed to the Members in
accordance with Section 7.1. Such distribution will be made by the later of (i) the end of the Company’s taxable year
in which the Company is liquidated or (ii) 90 days after the date of such liquidation.

 

(b)          The payment
of a debt or liability, whether the whereabouts of the creditor is known or unknown, may be adequately provided for by either of
the following means (provided, however, that the following means will not prescribe the exclusive means of making adequate provision
for the payment of debts and liabilities):

 

Payment thereof
has been assumed or guaranteed in good faith by one or more financially responsible Persons or by the United States government
or any agency thereof, and the provision, including the financial responsibility of the Person, was determined in good faith and
with reasonable care by the Managing Member (or other Person selected by the Managing Member) to be adequate at the time of any
distribution of the assets pursuant to this Section; or

 

The amount of the
debt or liability has been provided for in accordance with Section 18-804(b) of the Act.

 

11.4          Distributions
In Kind. Any non-cash asset distributed to one or more Members will first be valued at its fair market value as of a date reasonably
close to the date of liquidation. Any unrealized appreciation or depreciation with respect to such asset will be allocated among
the Members (in accordance with the provisions of Article VIII assuming that the asset was sold for appraised value and the proceeds
where distributed in accordance to Section 7.1) and taken into consideration in determining the balance in the Members’
Capital Accounts as of the date of liquidation. Distribution of any such asset in kind to a Member will be considered a distribution
of an amount equal to the asset's fair market value for purposes of Section 7.1. The Managing Member (or such other Person
selected in accordance with Section 11.2), in its sole discretion, may distribute any percentage of any asset in kind to
a Member even if such percentage exceeds the percentage in which the Member shares in distributions as long as the sum of the cash
and fair market value of all the assets distributed to each Member equals the amount of the distribution to which such Member is
entitled pursuant to this Agreement. The fair market value of any non-cash asset will be determined by the Members and, if the
Members are unable to agree within 30 days of the date or event requiring such determination, by an independent appraisal. The
cost of such appraisal shall be borne by the Company.

 

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11.5          Certificate
of Cancellation. As soon as possible following the dissolution and the completion of winding up of the Company pursuant to
this Article, or as otherwise required under the Act, the Managing Member (or such other Person selected in accordance with Section
11.2) will execute a certificate of cancellation and will cause such certificate of cancellation to be filed with the Secretary
of State of the State of Delaware and will take such other actions as may be necessary to terminate the Company.

 

ARTICLE XII

INVESTMENT REPRESENTATIONS

 

12.1          Investment
Purpose. In acquiring a Membership Interest in the Company, each Member represents and warrants to the Company that it is acquiring
such Membership Interest for its own account for investment and not with a view to its sale or distribution. Each Member recognizes
that investments such as those contemplated by the Company are speculative and involve substantial risk and are suitable only for
investors of substantial means who have no immediate need for liquidity of the amount invested, and that such investments involve
a risk of loss of all or a substantial part of such investments. Each Member further represents and warrants that none of the Company,
Merced, Black Ridge, or any Affiliate, officer, director, equity holders, partner, employee or agent of the Company or any such
Member, has made any guaranty or representation upon which said Member has relied concerning the possibility or probability of
profit or loss as a result of its acquisition of an Membership Interest in the Company.

 

12.2          Restrictions
on Transfer. Each Member recognizes that: (i) its Membership Interest has not been registered under the Securities Act of 1933,
as amended (the “Securities Act”), in reliance upon an exemption from such registration, (ii) a Member may not
Transfer or offer to Transfer all or any part of Membership Interest in the Company in the absence of an effective registration
statement covering such interest under the Securities Act, unless such Transfer or offer of Transfer is exempt from registration
under the Securities Act (and is otherwise in compliance with any additional restrictions on transfer set forth elsewhere in this
Agreement), (iii) the Company will not have any obligation to register any Member’s interest for sale or to assist in establishing
an exemption from registration for any proposed Transfer and (iv) these restrictions on Transfer, together with the additional
restrictions on Transfer set forth in this Agreement, may severely affect the liquidity of a Member’s investment.

 

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12.3          Accredited
Investors. In acquiring a Membership Interest in the Company, each Member represents and warrants to the Company that:

 

(a)          it is an “accredited
investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act;

 

(b)          such Member
has such knowledge and experience in financial, tax and business matters so as to enable it to evaluate the merits and risks of
an investment in the Company and to make an informed investment with respect thereto;

 

(c)          such Member
is not relying on the Company with respect to the tax or other economic considerations of an investment in the Company and has
obtained, or had the opportunity to obtain, the advice of its own legal, tax and other advisors;

 

(d)          such Member,
if executing this Agreement in a representative or fiduciary capacity, has full power and authority to execute and deliver this
Agreement in such capacity and on behalf of the Person for whom such Member is executing this Agreement, and such Person has full
right and power to perform pursuant to this Agreement and make an investment in the Company;

 

(e)          such Member,
if a natural person, has reached the age of majority in the state in which such Member resides; and

 

(f)          such Member
or its adviser has had a reasonable opportunity to ask questions of and receive answers from one or more Persons on behalf of the
Company concerning the offering of the Membership Interests and all such questions have been answered to the full satisfaction
of such Member.

 

12.4          Indemnification.
Each Member agrees to indemnify and hold harmless the Company, the Managing Member, other Members, Officers, employees, agents
and Affiliates against any and all loss, liability, claim, damage and expense whatsoever (including any and all expenses reasonably
incurred in investigating, preparing or defending against any litigation commenced or threatened or any claim whatsoever) arising
out of or based upon any false representation or warranty or breach or failure by such Member to comply with any covenant or agreement
made by such Member pursuant to this Article.

 

ARTICLE XIII

MISCELLANEOUS PROVISIONS

 

13.1          Notices.
All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement will
be delivered to the appropriate parties at the respective addresses for such parties set forth on Exhibit B hereto, unless
another address is specified in writing by any such party and notice thereof is delivered to the Company and each of the other
parties in accordance with this Section. Such notices, demands and other communications will be in writing and will be deemed to
have been given (i) when personally delivered, (ii) when mailed by certified mail, return receipt requested, (iii) when sent by
telecopy or electronic mail with confirmation of receipt received, or (iv) when delivered by overnight courier with executed receipt.

 

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13.2          Captions.
The captions used in this Agreement are for convenience of reference only and do not constitute a part of this Agreement and will
not be deemed to limit, characterize or in any way affect any provision of this Agreement, and all provisions of this Agreement
will be enforced and construed as if no captions had been used in this Agreement.

 

13.3          Complete
Agreement: Exhibits. Each exhibit delivered pursuant to this Agreement will be in writing and will constitute a part of this
Agreement. This Agreement, together with such exhibits, and the Certificate constitute the complete statement of agreement with
respect to the subject matter herein and therein and will supersede any prior understandings, agreements or representations, written
or oral, which may have related to the subject matter hereof in any way.

 

13.4          Governing
Law and Jurisdiction. The laws of the State of Delaware, without regard to conflict of law doctrines, will govern all questions
concerning the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this
Agreement. In any action brought to enforce a right provided hereunder, the Parties agree to submit to the exclusive jurisdiction
of a federal or state court located in Hennepin County, Minnesota.

 

13.5          Waiver
of Jury Trial. Each Member hereby unconditionally waives any right to a jury trial with respect to and in any action, proceeding,
claim, counterclaim, demand or other matter whatsoever arising out of this Agreement.

 

13.6          Third
Party Beneficiaries. Nothing in this Agreement is intended or will be construed to entitle any Person, other than the Company,
the Members and their respective successors and assigns, to any claim, cause of action, remedy or right of any kind.

 

13.7          Severability.
If any provision of this Agreement is declared illegal, invalid or unenforceable it will be severed if the remaining provisions
of this Agreement can reasonably and fairly be given effect without affecting the legal and economic substance of the transactions
contemplated by this Agreement in a manner adverse to the Company or any Member. To the full extent, however, that the provisions
of such applicable law may be waived, they are hereby waived to the end that this Agreement will be deemed to be a valid and binding
agreement enforceable in accordance with its terms.

 

13.8          Binding
Effect. This Agreement will be binding upon and inure to the benefit of the Company, the Members and their respective successors
and assigns.

 

13.9          Amendments:
Waiver. This Agreement may not be amended and no provision hereof may be waived except by a written instrument signed by all
of the Members. Notwithstanding the foregoing, Exhibit A and Exhibit B hereto may be amended by the Managing Member
without such signatures, if such amendment is made pursuant to this Agreement.

 

13.10          Costs
and Attorneys Fees. A prevailing party will be awarded attorneys’ fees and costs in any proceeding brought after the
Effective Date of this Agreement to enforce or to interpret this Agreement. For purposes of this Agreement, the term “prevailing
party” will be the party who is determined by a trial court judge or, if the matter is appealed, an appellate court judge,
to be adjudicated to recover costs of suit, whether or not the proceeding is brought to final judgment or award. A party not entitled
to recover costs will not recover attorneys’ fees. No sum of attorneys’ fees will be included in any computation of
the amount of judgment or award for purposes of determining whether a party is entitled to recover costs or attorneys’ fees.

 

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13.11          Counterparts.
This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together
will constitute one and the same instrument.

 

13.12          Confidential
Information.

 

(a)          Each Member
covenants and agrees that it will not at any time while it is a Member, or for a period of two (2) years thereafter, directly or
indirectly use, sell or otherwise disclose Confidential Information (as defined herein) except in furtherance of the Company’s
business. “Confidential Information” means the terms and conditions of this Agreement and the Management Agreement,
financial models, market analysis, the relative or absolute rights or interests of any of the Members or other proprietary information
of or regarding the Company that has not been publicly disclosed by the Managing Member. The Confidential Information will be maintained
in confidence by Members using the same degree of care with which such Member employs with respect to its own confidential information,
but in no event maintained with less than a reasonable standard of care. This provision does not apply to information that is presently
a matter of public knowledge, which is or becomes available on a non-confidential basis from a source which is not known to be
prohibited from disclosing such information or which was legally in the possession of the parties bound by this provision without
obligation of confidentiality prior to disclosure by the Company or its direct and indirect subsidiaries. In the event that a Member
bound by this provision is requested or required by legal or regulatory authority to disclose any Confidential Information, the
affected party will promptly notify the Company of such request or requirement prior to disclosure so that the Company or other
Members may seek an appropriate protective order and/or waive compliance with the terms of this Agreement. If, in the absence of
a protective order or other remedy or the receipt of a waiver by such other party, the party requested or required to make the
disclosure or any of its Affiliates is nonetheless, under the advice of counsel, legally required to disclose Confidential Information,
the disclosing party may, without liability hereunder, disclose only that portion of the Confidential Information that such party’s
counsel advises is legally required to be disclosed.

 

(b)          Each Member
agrees that upon Transfer or redemption of all of its Membership Interests, such Member will immediately return to the Company
all Company property, including records reflecting Confidential Information, and such Member will not take or retain (1) any records
reflecting Confidential Information, or copies thereof, whether or not originated by the Company, or (2) any other Company property,
including tapes or other materials. Notwithstanding the foregoing, a Member may retain copies of the Confidential Information in
accordance with policies and procedures of such Member solely in order to comply with law, regulation or archival purposes; provided,
however, that any Confidential Information so retained will continue to be Confidential Information pursuant to the terms of this
Agreement and the retaining Member will continue to be bound by the terms of this Agreement with respect to such Confidential Information.

 

    	24

    	 

    

 

(c)          Each Member
agrees that, so long as it remains a Member and thereafter, it will not make any disparaging, uncomplimentary or negative communication,
whether oral or written, about the Company to any Person, including any communication with respect to the Company’s (or its
subsidiaries’ or affiliates’) products, services, business affairs or employees.

 

(d)          Each Member
agrees that it would be difficult or impossible to measure the damage to the Company from any breach by it of the covenants set
forth in this Section 13.12, and that damages to the Company for any such injury would therefore be an inadequate remedy
for any such breach. Accordingly, each Member agrees that if it breaches any term of this Section 13.12, the Company will
be entitled, in addition to and without limitation upon all other remedies the Company may have, to obtain injunctive or other
appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company.

 

(e)          No
Member shall issue or publish any press release or other public communication about the formation, existence or operations of
the Company without the approval of Merced and Black Ridge, which consent shall not be unreasonably withheld and shall be provided
promptly following submission of the proposed press release or other public communication. Notwithstanding the foregoing, Black
Ridge may make all required regulatory filings regarding this Agreement and the Management Services Agreement, without the consent
of Merced; provided, that Black Ridge will use commercially reasonable efforts to provide Merced with an opportunity to review
any Company-related disclosures contained in such filings prior to filing. The foregoing provisions shall not be deemed to prohibit
any Member from disclosing summary information related to the amount of capital invested by the Company, the performance of its
investment in the Company or general information about the performance of the Company or its Projects to any of its investors,
prospective investors or lenders. In no event may Black Ridge disclose the dollar or percentage values of the Preferred Return,
the Management Participation Interest or the compensation payable under the Management Services Agreement in any press release
or other public communication and, if under the advice of counsel Black Ridge is legally required to disclose such values in a
regulatory filing, Black Ridge shall use commercially reasonable efforts to seek confidential treatment thereof and shall disclose
only such values that Black Ridge’s counsel advises is legally required to be disclosed.

 

[Remainder of page intentionally
left blank.]

 

    	25

    	 

    

 

 

IN WITNESS WHEREOF,
the undersigned have signed this Agreement as of the day and year first above written.

 

MERCED OIL & GAS, LLC,

a Delaware limited liability company

 

 

By: /s/ Thomas G. Rock

       Name: Thomas G. Rock

       Its: Authorized Signatory

 

 

BLACK RIDGE OIL & GAS INC., 

a Nevada corporation

 

By: /s/ Ken DeCubellis

       Name: Ken DeCubellis

       Its: Chief Executive Officer

 

    	26

    	 

    

 

Exhibit A

 

MEMBERS, CAPITAL CONTRIBUTIONS
AND INTERESTS

 

As of the Effective Date

 

 

	Member	Capital Contribution	Percentage Interest and Voting Interest	Management Participation Interest
	 
	Merced Oil & Gas, LLC	* * * 	100%	 
	Black Ridge Oil & Gas Inc.	$-0-	0%	 * * * 

 

 

 

 

 

 

 

    	27

    	 

    

 

Exhibit B

 

NOTICES

 

Company and Merced:

 

c/o Merced Capital, L.P.

601 Carlson Parkway, Suite 200

Minnetonka, Minnesota 55305

Attn: General Counsel

Phone: (952) 476-7200

Fax: (952) 476-7201

Email: tom.rock@mercedcapital.com 

 

 

Black Ridge:

 

c/o Black Ridge Oil & Gas Inc.

10275 Wayzata Boulevard, Suite 100

Minnetonka, MN 55305

Attn: Ken DeCubellis

Phone: (952) 426-1821

Fax: ___________________

Email: ken.decubellis@blackridgeoil.com

 

 

    	28

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