Document:

EXHIBIT 10.2

 

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

 

MANAGEMENT SERVICES AGREEMENT

 

THIS MANAGEMENT
SERVICES AGREEMENT (“Agreement”), dated to be effective as of July 21, 2015, is entered into between Black Ridge
Oil & Gas Inc., a Nevada corporation (“Black Ridge”), and Merced Black Ridge, LLC, a Delaware limited liability
company (the “Owner”).

 

RECITALS

 

A.          The Owner
engages in the acquisition, ownership and disposition of minority, non-operator interests in parcels of land intended for oil or
gas well drilling or containing oil or gas well drilling operations in the Williston Basin (the “Projects”);
and

 

B.          The Owner
desires to engage Black Ridge to act as the manager to provide sourcing, evaluation, and day-to-day management services of the
Projects on the Owner’s behalf.

 

In consideration
of the premises and the mutual agreements hereinafter set forth, the Owner and Black Ridge agree as provided herein:

 

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 have the following meanings:

 

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

 

“Bad Act”
is defined in Section 7.2.1.

 

“Black
Ridge” is defined in the Preamble.

 

“Confidential
Information” is defined in Section 9.1.1.

 

“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.

 

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“Direct Expenses” means all third-party costs
incurred by Black Ridge that are directly attributable to providing the Management Services pursuant to this Agreement.

 

“Disclosing
Party” is defined in Section 9.1.1.

 

“LOE”
means lease operating expenses charged by operators of Projects to Owner.

 

“Management
Services” is defined in Section 2.1.

 

“Operating
Account” means a separate bank account established with a financial institution in the name of, and owned by, the Owner,
for which the Owner will provide the requisite funds pursuant to a budget agreed upon by the Owner and Black Ridge.

 

“Owner”
is defined in the Preamble.

 

“Owner
Operating Agreement” is defined in Section 7.3.1.

 

“Project”
is defined in the Recitals.

 

“Receiving
Party” is defined in Section 9.1.1.

 

“Revenue
Account” is defined in Section 2.1.4.

 

ARTICLE II

MANAGEMENT SERVICES

 

		2.1	Services to be Provided. The Owner hereby retains Black Ridge to perform the following
services (the “Management Services”):

		2.1.1.	Locate, investigate and analyze potential Project acquisition opportunities for the Owner, and,
on approval of the Owner, negotiate the acquisition of Projects from well operators or other third parties.

		2.1.2.	Coordinate the closing and funding of Project acquisitions and, following the making of such acquisitions,
oversee the management and operation of the Projects, and keep the Owner informed of the progress thereof.

		2.1.3.	Upon receipt of any notice regarding an Authorization for Expenditure (“AFE”)
for a Project, review the AFE and all supporting documentation, provide Owner with a timely recommendation as to whether Owner
should participate in such AFE and coordinate Owner’s response to such AFE. Coordinate payments from Owner’s Operating
Account for AFE, Direct Expenses and LOE.

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		2.1.4.	Upon receipt of any payments with respect to the Projects, promptly deposit such payments into
a bank account (the “Revenue Account”) established with a financial institution in the name of, and owned by,
the Owner.

		2.1.5.	Maintain books of account with respect to all Projects, and provide such reports and financial
information with respect to such Projects as are reasonably requested by the Owner.

		2.1.6.	Perform such other functions related to the matters set forth above as may be authorized by the
Owner from time to time, consistent with the provisions of the Owner Operating Agreement.

		2.1.7.	Coordinate procurement of well control coverage insurance and such other insurance as from time
to time approved by the Owner for the Projects.

		2.2	Standard of Care. In performing its duties and obligations under this Agreement,
Black Ridge will act in a commercially reasonable manner and comply in all material respects with all applicable federal, state,
and local laws and regulations, and will exercise that degree of skill and care consistent with the degree of skill and care customarily
exercised in the industry with respect to assets similar to the Projects, and that is consistent with prudent industry standards.

		2.3	Licensing. In performing its duties and obligations hereunder, Black Ridge will maintain
all state and federal licenses, permits and regulatory approvals necessary and appropriate for it to perform its responsibilities
hereunder, and will not impair the rights of the Owner in the Projects.

		2.4	Reporting.

		2.4.1.	On or before the fifteenth (15th) day of each month, Black Ridge will provide the Owner
the following detailed monthly reports for the preceding month:

	 	 	(i)	Cash reconciliation, including reconciliation of the Operating Account and Revenue Account and substantiation of Servicing
Fees payable pursuant to Section 3.1;
	 	 	 	 
	 	 	(ii)	Direct Expenses, AFE and LOE report setting forth, on a line-item basis for each Project, the Direct Expenses, AFE and LOE
incurred during the prior month.

 

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		2.4.2.	Black Ridge shall allocate Direct Expenses incurred related to multiple Projects on a reasonable
allocation basis and report such method of allocation to the Owner.

		2.4.3.	Black Ridge will maintain on Dropbox (or a similar virtual data site), and make available to the
Owner at all times through the life of each Project, all documentation and information received or created by Black Ridge with
respect to each Project including AFE history and communications. Upon termination of this Agreement, Black Ridge will transfer
to Owner all information maintained on Dropbox (or a similar virtual data site) related to the Projects.

		2.4.4.	Black Ridge will provide (i) within forty-five (45) days after the end of each interim quarterly
accounting period of Black Ridge, unaudited financial statements of Black Ridge for such period; and (ii) within ninety (90) days
after the end of each fiscal year of Black Ridge, audited financial statements of Black Ridge for such fiscal year. To the extent
Black Ridge makes such financial statements publicly available on EDGAR, the timely filing of such statements will be deemed to
satisfy the requirements of this paragraph.

		2.4.5.	Black Ridge will provide additional reporting and information as reasonably requested by the Owner.

		2.4.6.	Black Ridge will promptly respond to all inquiries from the Owner.

		2.5	Regulatory and Tax Matters.

		2.5.1.	Black Ridge will cause the Owner to execute and file punctually all forms and reports regarding
the ownership and operation of the Projects that are required by law or regulation.

		2.5.2.	Black Ridge will provide year-end tax statements as may be required by state and federal laws,
including Forms 1098 and 1099. Any third party expenses related to such tax statements will be paid by the Owner.

		2.5.3.	Black Ridge will coordinate filings and cause the Owner to pay real or personal property taxes
to the extent necessary to protect the Projects.

		2.6	* * *

 

_______________

* * * 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.

 

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ARTICLE III

MANAGEMENT FEES AND EXPENSES

 

		3.1	Management Fees. Subject to Section 7.4, as compensation for the full performance
of its obligations hereunder, Black Ridge will be paid the fees in the amounts and at the times set forth on Schedule 3.1
hereto (the “Servicing Fees”), as such schedule may be amended from time to time by written agreement of the
parties.

		3.2	Expenses.

		3.2.1.	Black Ridge may request that the Owner pay all Direct Expenses from the Operating Account to the
extent reflected in a budget agreed upon by the Owner and Black Ridge for each Project or as otherwise set forth in this Agreement.
Black Ridge may request that the Owner pay all AFE and LOE for each Project from the Operating Account once the Owner has agreed
to participate in an AFE for a Project. Black Ridge will (i) collect invoices from operators and third parties, (ii) review such
invoices for accuracy and completeness, (iii) request that the Owner process and pay such invoices according to generally accepted
accounting principles and such other controls agreed upon by Black Ridge and the Owner, and (iv) report such Direct Expenses, AFE
and LOE to the Owner through monthly reports.

		3.2.2.	Any authorized fees and Direct Expenses advanced by Black Ridge and not paid from the applicable
Operating Account will be billed monthly by Black Ridge to the Owner. Black Ridge will provide the Owner with invoices and other
information reasonably satisfactory to the Owner to substantiate the amount of Direct Expenses that Black Ridge has incurred.

		3.2.3.	All Direct Expenses, AFE and LOE will be paid without mark-up.

		3.2.4.	All costs and obligations that Black Ridge incurs that are related to its overhead or the compensation
of its employees will be the sole responsibility of Black Ridge.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

		4.1	Representations and Warranties of the Owner and Black Ridge. The Owner and Black
Ridge each make the following representations and warranties to each other as of the date of this Agreement and each is entitled
to rely on such representations and warranties. The representations and warranties set forth in this Article IV are continuous
and will survive the termination or expiration of this Agreement, unless otherwise agreed to in writing by the parties.

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		4.1.1.	It is now and will continue at all times to be duly organized, validly existing, and in good standing
under the laws of the jurisdiction of its organization and has the power to own its assets and to transact the business in which
it is currently engaged. It is duly qualified to do business as a foreign entity and is in good standing in each jurisdiction in
which it is required by law and the character of the business transacted by it or properties owned or leased by it requires such
qualification and in which the failure to be so qualified would have a material adverse effect on its business, properties, assets
or condition (financial or otherwise).

		4.1.2.	It has the power and authority to make, execute, deliver, and perform its responsibilities and
obligations under this Agreement and all of the transactions contemplated under this Agreement.

		4.1.3.	It is not required to obtain the prior consent of any agency in connection with the execution,
delivery, or performance of this Agreement.

		4.1.4.	The execution, delivery and performance of this Agreement will not violate any provision of any
existing law or regulation or any order or decree of any court that would have a material adverse effect on its business, properties,
assets or condition (financial or otherwise) or the certificate of incorporation or bylaws (or similar documents such as partnership
or operating agreement, if applicable) of the entity, or constitute a material breach of any deed to secure debt, mortgage, indenture,
contract or other agreement to which it is a party or by which it may be bound.

		4.1.5.	The execution and delivery of this Agreement by it, and the performance by it of its obligations
hereunder, have been duly authorized by all necessary company actions. This Agreement has been duly executed and delivered by it
and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors’ rights generally and to general principles of equity (whether
considered in a proceeding in equity or at law).

		4.1.6.	There is no litigation or administrative proceeding of or before any court, tribunal, or governmental
body that is currently pending, or, to its knowledge, threatened against it or any of its properties or with respect to this Agreement,
which, if adversely determined, would reasonably be expected to adversely affect the transactions contemplated by this Agreement.

		4.2	Representations and Warranties of Black Ridge. Black Ridge makes the following representations
and warranties to the Owner as of the date of this Agreement and the Owner is entitled to rely on such representations and warranties.
The representations and warranties set forth in this Article IV are continuous and will survive the termination or expiration
of this Agreement, unless otherwise agreed to in writing by the parties.

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		4.2.1.	It is duly registered and licensed and will continue to be registered and licensed as required
by the law of each state in which the Projects are located, or in which its actions or status may otherwise require. In addition,
it is in possession of all licenses, approvals, or authorizations from, or registration or declaration with, any governmental authority,
bureau or agency necessary to perform its responsibilities and obligations under this Agreement. This representation and warranty
is subject to the terms contained in Section 2.2 of this Agreement.

		4.2.2.	It is not subject to any obligation to any third party that will prevent it from submitting any
opportunity to the Owner to acquire one or more Projects pursuant to the terms of Section 2.6.

ARTICLE V

INSPECTION AND AUDIT

 

The Owner reserves
the right, at any time during normal business hours and upon not less than three days’ prior notice where practicable, at
the Owner’s expense, to inspect and audit any and all books, ledgers, files and records maintained by Black Ridge in connection
with the performance of its obligations under this Agreement. Black Ridge will make available for review and inspection by the
Owner copies of all books, ledgers, files and records that pertain to a particular Project or that will enable the Owner to determine
the status of each Project promptly upon request by the Owner. Such documents will be maintained by Black Ridge in accordance with
generally accepted accounting principles, consistently applied. To the extent practicable, Black Ridge will make the books of
account and other records available to the Owner electronically.

 

ARTICLE VI

INSURANCE

 

Upon request of
the Owner, Black Ridge will submit to Owner quotes for the premiums of (i) an errors and omissions policy of insurance and/or (ii)
employee fidelity insurance coverage, from such insurers and in such amounts as approved by the Owner in its sole discretion. At
the election of Owner in its sole discretion, Black Ridge shall obtain (i) an errors and omissions policy of insurance and/or (ii)
employee fidelity insurance coverage consistent with such premium quotes and the costs for such insurance shall be considered a
Direct Expense. If such insurance is obtained upon the request of the Owner, Black Ridge will cause to be delivered to the Owner
a certificate of insurance for such bond and insurance policies naming the Owner as an additional insured party to the extent of
the Projects managed by Black Ridge and a statement from the surety and the insurer that such bond and insurance policies shall
in no event be terminated or materially modified without thirty (30) days’ prior written notice to the Owner.

 

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ARTICLE VII

TERMINATION; REMOVAL

 

		7.1	Termination for Convenience. Either party to this Agreement may terminate this Agreement
by providing the other party with 90 days’ advance written notice.

		7.2	Termination for Cause.

		7.2.1.	Either party may terminate this Agreement immediately due to any of the following actions by or
events regarding the other party: (i) filing a voluntary petition in bankruptcy; (ii) being adjudicated bankrupt or insolvent;
(iii) filing a petition or answer seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future statute or law relating to bankruptcy, insolvency or other relief for debtors, whether
federal or state (hereinafter, a “reorganization”); (iv) entry by a court of competent jurisdiction of an order,
judgment or decree approving a petition seeking a reorganization, to which the other party consents or acquiesces (as hereinafter
defined) or such order, judgment or decree remains unvacated or unstayed for an aggregate period of 60 days from the date of entry
thereof; (v) seeking, consenting to or acquiescing in the appointment of a trustee, receiver, conservator or liquidator of
or for all or any substantial part of its assets; or (vi) entry by a court of competent jurisdiction of an order, judgment
or decree finding that the other party or its Affiliates (or an admission that such party or Affiliate) engaged in gross negligence,
willful misconduct, fraud, bad faith or any criminal activity in connection with the subject matter of this Agreement (each of
the matters listed in this clause (vi), a “Bad Act”). As used herein, “acquiesces” or “acquiescing”
includes the failure to file a petition or motion to vacate or discharge any order, judgment or decree providing for the appointment
of a trustee, receiver, conservator or liquidator within the time specified by law.

		7.2.2.	In addition, the Owner may terminate this Agreement (i) immediately upon written notice to Black
Ridge if Black Ridge liquidates, dissolves, terminates or suspends its business operations or otherwise fails to operate its business
within the ordinary course, or sells all or substantially all of its assets; (ii) immediately upon written notice to Black Ridge
if any representation, warranty or statement of Black Ridge made in this Agreement, or in any written certificate or report delivered
by Black Ridge to the Owner in the course of providing the Management Services, (A) proves to be incorrect in any material respect
as of the date made and (B) with respect to a representation, warranty or statement in a written certificate or report delivered
by Black Ridge, the Owner reasonably relies to its material detriment upon such representation, warranty or statement; or (iii)
within 30 days of written notice to Black Ridge of Black Ridge’s failure to perform any of its Management Services or fulfill
any covenant hereunder in the manner or within the time required under this Agreement, which failure remains uncured after such
30-day period.

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		7.3	Effect of Termination.

		7.3.1.	Payment of Servicing Fees. Black Ridge will be entitled to * * *. With respect to the “Management
Participation Interest” (as such term is defined in the Limited Liability Company Agreement of the Owner (the “Owner
Operating Agreement”)) of Black Ridge, the effect of any termination of this Agreement on such Management Participation
Interest will be as set forth in the Owner Operating Agreement.

		7.3.2.	Termination for any reason will not release either party from any liability or obligation that
has already accrued as of the effective date of such termination, or that expressly survives termination of this Agreement, and
will not constitute a waiver or release of, or otherwise be deemed to prejudice or adversely affect, any rights, remedies or claims
that a party may have under this Agreement or that may arise out of or in connection with such termination.

		7.4	Appointment of Replacement Manager. Upon the occurrence of any event described in
Section 7.2.2, the Owner may elect, in its sole discretion and without prejudice to Owner’s right to terminate this
Agreement as a result of such event or otherwise, to continue this Agreement and appoint one or more replacement managers to manage
the Projects and provide the Management Services hereunder. Selection of any such replacement manager, and the terms and conditions
or such replacement manager’s appointment, will be in Owner’s sole discretion and, provided that the replacement manager
is a third party and not an Affiliate of the Owner, the Owner will be entitled to offset any fees paid to the replacement manager
against any Servicing Fees payable to Black Ridge hereunder.

		7.5	Transition. Upon termination of this Agreement or appointment of a
             replacement manager, the Owner and Black Ridge will cooperate fully in connection with the transfer of servicing
             responsibilities.

		7.6	Survival. The provisions of Article I (Definitions), Article IV (Representations
and Warranties), Article V (Inspection and Audit), Article VII (Termination and Removal), Article VIII (Indemnification) and Sections
2.4.2 (Virtual Access to Records), 9.1 (Confidentiality), 9.2 (Dispute Resolution; Venue), 9.3 (Governing Law), 9.5 (Entire Agreement;
Severability), 9.10 (No Waiver) and 9.11 (Notices) will survive any termination of this Agreement.

 

ARTICLE VIII

INDEMNIFICATION

 

		8.1	Indemnification by Black Ridge. Black Ridge will indemnify and defend the Owner,
its directors, officers, employees, managers, equity holders, and agents and hold them harmless from and against any liability,
damage, penalty, fee, cost, expense or obligation (including reasonable attorneys’ fees and disbursements) arising from any
breach of this Agreement by Black Ridge or from any other action or omission by Black Ridge in the performance of its duties hereunder,
if such action or omission constitutes gross negligence, recklessness or misconduct on the part of Black Ridge.

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		8.2	Indemnification by the Owner. The Owner will indemnify and defend Black Ridge, its
directors, officers, employees and agents and hold them harmless from and against any liability, damage, penalty, fee, cost, expense
or obligation (including reasonable attorneys’ fees and disbursements) arising from any breach of this Agreement by the Owner
or from any other action or omission by the Owner in the performance of its duties hereunder, if such action or omission constitutes
gross negligence, recklessness or misconduct on the part of the Owner.

		8.3	Limitation of Liability. Notwithstanding anything in this Agreement to the contrary,
neither party will have any liability to the other party for any special, consequential or punitive damages.

		8.4	Third Party Claims. Black Ridge will immediately notify the Owner if a claim is made
by a third party with respect to (i) this Agreement, (ii) any matter arising from the Management Services, or (iii) any Project
that is the subject of this Agreement. Black Ridge will propose counsel to defend any such claim and the Owner will have the right
to approve such counsel or direct Black Ridge to retain counsel of the Owner’s choosing. The Owner will pay all expenses
in connection with the defense of such claim, including counsel fees, and promptly pay, discharge and satisfy any judgment or decree
which may be entered in respect of such claim, except when the claim results from Black Ridge’s negligence, misconduct or
recklessness.

ARTICLE IX

MISCELLANEOUS

		9.1	Confidentiality.

		9.1.1.	Black Ridge covenants and agrees that it will not at any time during the term of this Agreement,
or for a period of two (2) years thereafter, directly or indirectly use, sell or otherwise disclose Confidential Information (as
defined below) of the other party except in connection with the Management Services and the Projects. For purposes of this Agreement,
“Confidential Information” means all nonpublic or proprietary information disclosed by the Company to Black
Ridge or its Affiliates, other than information that Black Ridge can demonstrate (i) is presently a matter of public knowledge,
(ii) is or becomes available on a non-confidential basis from a source that is not known to be prohibited from disclosing such
information or (iii) was legally in the possession of the parties bound by this provision without obligation of confidentiality
prior to disclosure by the Owner or its Managing Member. The Confidential Information will be maintained in confidence by Black
Ridge using the same degree of care with which Black Ridge employs with respect to its own confidential information, but in no
event maintained with less than a reasonable standard of care. In the event that Black Ridge is requested or required by legal
or regulatory authority to disclose any Confidential Information, Black Ridge will promptly notify the Owner of such request or
requirement prior to disclosure so that the Owner may seek an appropriate protective order 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 the Owner, Black Ridge or
any of its Affiliates is nonetheless, under the advice of counsel, legally required to disclose Confidential Information, Black
Ridge may, without liability hereunder, disclose only that portion of the Confidential Information that Black Ridge’s counsel
advises is legally required to be disclosed.

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		9.1.2.	Black Ridge agrees that upon termination of this Agreement, it will immediately return to the Owner
all documents and materials constituting or containing Confidential Information of the Owner, and Black Ridge will not take or
retain any records reflecting Confidential Information of the Owner, or copies thereof, whether or not originated by Black Ridge.
Notwithstanding the foregoing, Black Ridge may retain copies of the Owner’s Confidential Information in accordance with policies
and procedures of Black Ridge 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 Black
Ridge will continue to be bound by the terms of this Agreement with respect to such Confidential Information.

		9.1.3.	Black Ridge agrees that it would be difficult or impossible to measure the damage to the Owner
from any breach by it of the covenants set forth in this Section 9.1, and that damages to the Owner for any such injury
would therefore be an inadequate remedy for any such breach. Accordingly, Black Ridge agrees that if it breaches any term of this
Section 9.1, the Owner will be entitled, in addition to and without limitation upon all other remedies it may have, to obtain
injunctive or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the
Owner.

		9.1.4.	Black Ridge, on behalf of itself and its respective Affiliates, hereby waives the right to seek
any equitable relief in connection with a breach by the Owner of its obligations hereunder or otherwise in connection with the
Management Services, including, without limitation, any rights of rescission and the right to seek injunctive relief, it being
acknowledged by Black Ridge that the right to seek actual damages shall constitute its sole and exclusive remedy for such breach,
and is fully adequate to compensate Black Ridge for same.

		9.1.5.	Under this Agreement, the Owner may become privy to information that is considered material inside
information about Black Ridge within the meaning and intent of applicable securities laws and the rules and regulations promulgated
thereunder. The Owner shall not use any of such information, and shall direct each of its Affiliates to whom such information is
disclosed not to use any of such information, directly or indirectly, as a basis for any decision to buy, sell or otherwise deal
in any securities in a manner prohibited by U.S. law.

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		9.1.6.	Neither the Owner nor Black Ridge shall issue or publish any press release or other public communication
about the formation, existence or operations of the Owner without the approval of the Owner 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 Owner Operating Agreement, without the consent of Owner; provided, that Black Ridge will use commercially reasonable efforts
to provide the Owner with an opportunity to review any Owner-related disclosures contained in such filings prior to filing. The
foregoing provisions shall not be deemed to prohibit Black Ridge or the Owner from disclosing summary information related to the
amount of capital invested in the Owner, the performance of the Owner or general information about the performance of the Owner
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” or the “Management Participation Interest” (as such terms are defined
in the Owner Operating Agreement) or the compensation payable under this 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.

		9.2	Dispute Resolution. Any claim or dispute arising out of or in connection with this
Agreement will be resolved solely though the following procedures:

		9.2.1.	The parties will attempt in good faith to resolve any dispute arising out of or relating to this
Agreement promptly through negotiation. Either party may give the other party written notice of any dispute not resolved in the
normal course of business. Within five (5) business days after receipt of such notice, the parties are required to meet personally
at a mutually acceptable time and place to attempt to resolve the dispute. Each party’s right pursuant to Section 9.1.3
to obtain equitable relief shall not be subject to this Section 9.2.1.

		9.2.2.	Absent resolution pursuant to Section 9.2.1, the parties hereby submit all controversies,
claims and matters of difference arising under this Agreement to any court of competent jurisdiction in Minneapolis, Minnesota.

		9.2.3.	To the fullest extent permitted by law, each party unconditionally waives any objection to the
laying of venue of any such action brought in any such court, and any claim that any such action has been brought in an inconvenient
forum.

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		9.2.4.	Each party irrevocably agrees to waive trial by jury in any action, proceeding, claim or counterclaim
brought by or on behalf of either party related to or arising out of this Agreement or the performance of Management Services hereunder.

		9.3	Governing Law. The validity, construction and enforceability of this Agreement will
be governed and constructed in accordance with the laws of the State of Minnesota, without regard to its principles of conflicts
of law.

		9.4	Force Majeure. Notwithstanding anything in this Agreement to the contrary, Black
Ridge will not be liable to the Owner, and the Owner will not be liable to Black Ridge, for any delay or failure to perform any
of its obligations hereunder due to an act of God, war (whether declared or undeclared), riot, civil commotion, fire, casualty,
strike, boycott, labor dispute, act of any federal, state or local authority, or for any other similar reason beyond its reasonable
control.

		9.5	Entire Agreement; Severability. The terms and conditions contained in this Agreement
constitute the entire agreement between the parties hereto with regard to the subject matter hereof and supersede all previous
agreements and understandings, whether oral or written, between the parties with respect thereto. No amendment to this Agreement
is binding upon any party unless set forth in a written document which expressly refers to this Agreement and which is signed and
delivered by both parties hereto. If any provision of this Agreement is held invalid, illegal 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 either party. 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.

		9.6	Independent Contractor. The parties are independent contractors. Nothing contained
in this Agreement or done pursuant to this Agreement will cause either party to be deemed the agent, partner, or joint venturer
of the other party for any purpose.

		9.7	Counterparts; Electronic Delivery. This Agreement may be executed in any number of
counterparts, each counterpart constituting an original instrument, and all such separate counterparts will constitute only one
and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile, electronic mail
or other electronic transmission is effective as delivery of an original executed counterpart of this Agreement.

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		9.8	Assignment. This Agreement will inure to the benefit of and be binding upon the successors
and assigns of the parties hereto. Black Ridge may not assign, transfer or delegate its rights or obligations hereunder (including
in each case by operation of law), in whole or in part, without the Owner’s prior written consent. The Owner may not assign,
transfer or delegate its rights and obligations hereunder (including in each case by operation of law), in whole or in part, without
Black Ridge’s prior written consent, provided that the Owner may assign its rights and obligations hereunder to any of its
Affiliates with prior written notice to Black Ridge. Any purported assignment, transfer or delegation in violation of the foregoing
will be null and void. Further, any assignment will not relieve the assigning party of its obligations of confidentiality hereunder.

		9.9	Amendments. This Agreement may be amended from time to time by the further agreement
of the parties hereto in a writing signed by both parties.

		9.10	No Waiver. The failure by a party to exercise or any delay in exercising any right
under this Agreement or by law does not constitute a waiver of the right or remedy or a waiver of other rights or remedies. Further,
a party’s waiver of any right under this Agreement shall not constitute an ongoing waiver of such right.

		9.11	Notices. All notices, demands or other communications required or permitted to be
given 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 below, unless another address is specified in writing by any such party and notice thereof is delivered
to the other party 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 electronic mail with confirmation of receipt received, or (iv) when delivered by overnight courier with executed receipt,
addressed as follows:

	 	Owner	
        Merced Black Ridge, LLC

        c/o Merced Capital, L.P.

        Attn: General Counsel

        601 Carlson Parkway, Suite 200

        Minnetonka, MN 55331

        Telephone: (952) 476-7200

        Email: tom.rock@mercedcapital.com

         

	 	Black Ridge	
        Black Ridge Oil & Gas Inc.

        Attn: Chief Executive Officer

        10275 Wayzata Boulevard, Suite 100

        Minnetonka, MN 55305

        Telephone: (952) 426-1821

        Email: ken.decubellis@blackridgeoil.com

 

[Remainder of page intentionally left blank.]

 

    	14

    	 

    

 

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

 

BLACK RIDGE:

 

BLACK RIDGE OIL & GAS INC.

 

 

By: /s/ Ken DeCubellis

Name:  Ken DeCubellis

Title: Chief Executive Officer

 

 

OWNER:

 

MERCED BLACK RIDGE, LLC

 

By: /s/ Thomas G. Rock

Name:  Thomas G. Rock

Title: Authorized Signatory

 

 

 

 

 

    	15

    	 

    

 

SCHEDULE 3.1

SERVICING FEES

 

Black Ridge will be paid the following
fees pursuant to the terms of the Agreement:

 

		1.	*
* *.

		2.	* * *.

		3.	* * *.

For purposes of clarity, nothing in
this Agreement shall obligate the Owner to acquire any number of Projects or to make a minimum investment in Project acquisitions.

 

 

___________________

* * * 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.

 

 

 

    	16Exhibit

Ex. 10.44

BUSINESS LOAN AGREEMENT
	
								
	Principal
$5,400,000.00
	Loan Date
10-07-2015
	Maturity
04-30-2016
	Loan No
60365
	Call / Coll
	Account
	Officer
153
	Initials

	References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. 
Any item above containing "***" has been omitted due to text length limitations.

Borrower:    CA-Daley, LLC    Lender:    Banc of California, National Association
7001 N. Scottsdale Road, Suite 2050    Business Banking - Los Angeles Office
Scottsdale, AZ 85253    601 S. Figueroa Street, Suite 1400
Los Angeles, CA 90017
THIS BUSINESS LOAN AGREEMENT dated October 7, 2015, is made and executed between CA-Daley, LLC ("Borrower") and Banc of California, National Association ("Lender") en the following terms and conditions. Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, including those which may be described on any exhibit or schedule attached to this Agreement. Borrower understands and agrees that: (A) in granting, renewing, or extending any Loan, Lender is relying upon Borrowers representations, warranties, and agreements as set forth in this Agreement; (B) the granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender's sole judgment and discretion; and (C) all such Loans shall be and remain subject to the terms and conditions of this Agreement.
TERM. This Agreement shall be effective as of October 7, 2015, and shall continue in full force and effect until such time as all of Borrower's Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys' fees, and other fees and charges, or until such time as the parties may agree in writing to terminate this Agreement.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial Advance and each subsequent Advance under this Agreement shall be subject to the fulfillment to Lender's satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.
Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the Note; (2) Security Agreements granting to Lender security interests in the Collateral; (3) financing statements and all other documents perfecting Lender's Security Interests; (4) evidence of insurance as required below; (5) guaranties; (6) together with all such Related Documents as Lender may require for the Loan; all in form and substance satisfactory to Lender and Lender's counsel.
Borrower's Authorization. Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the execution and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions, authorizations, documents and instruments as Lender or its counsel, may require.
Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable as specified in this Agreement or any Related Document.
Representations and Warranties. The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered to Lender under this Agreement are true and correct.
No Event of Default. There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or under any Related Document.
Other Conditions to Advance. Borrower shall provide to Lender upon the pay-off of Calmwater Capital 3, LLC the following documents for the Loan: (1) Assignment of Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing on property located at south side of Serramonte Boulevard between Callan Boulevard and Gellert Avenue (entitled land), Daly City, APN: 091-247-080. (2) Original Promissory Note secured by Real Property dated January 31, 2014 between Serramonte Terraces LLC, a California limited liability company ("Maker") and CA-Daley, LLC, an Arizona limited liability company ("Payee") in the original principal amount of $7,200,000.00 and original Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, executed by Serramonte Terraces LLC, a California limited liability company, dated as of January 31, 2014 and recorded January 31, 2014 as Instrument Number 2014-008432 in the Official Records of San Mateo County, California.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each
disbursement of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists:
Organization. Borrower is a limited liability company which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Arizona. Borrower is duly authorized to transact business in all other states in which Borrower is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which Borrower is doing business. Specifically, Borrower is, and at all times shall be, duly qualified as a foreign limited liability company in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. Borrower has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. Borrower maintains an office at 7001 N. Scottsdale Road, Suite 2050, Scottsdale, AZ 85253. Unless Borrower has designated otherwise in writing, the principal office is the office at which Borrower keeps its books and records including its records concerning the Collateral. Borrower will notify Lender prior to any change in the location of Borrower's state of organization or any change in Borrower's name. Borrower shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to Borrower and Borrower's business activities.
Assumed Business Names. Borrower has filed or recorded all documents or filings required by law relating to all assumed business names used by Borrower. Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower does business: None.

Authorization. Borrower's execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower's articles of organization or membership agreements, or (b) any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower's properties.
Financial Information. Each of Borrower's financial statements supplied to Lender truly and completely disclosed Borrower's financial condition as of the date of the statement, and there has been no material adverse change in Borrower's financial condition subsequent to the date of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial statements.
BUSINESS LOAN AGREEMENT
Loan No: 60365
delivered will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms.
Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower's financial statements or in writing to Lender and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to all of Borrower's properties free and clear of all Security Interests, and has not executed any security documents or financing statements relating to such properties. All of Borrower's properties are titled in Borrower's legal name, and Borrower has not used or filed a financing statement under any other name for at least the last five (5) years.
Hazardous Substances. Except as disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that: (1) During the period of Borrower's ownership of the Collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has no knowledge of, or reason to believe that there has been (a) any breach or violation of any Environmental Laws; (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Collateral by any prior owners or occupants of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of the Collateral shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from any of the Collateral; and any such activity shall be conducted in compliance with all applicable federal, state, and focal laws, regulations, and ordinances, including without limitation all Environmental Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to make such inspections and tests as Lender may deem appropriate to determine compliance of the Collateral with this section of the Agreement. Any inspections or tests made by Lender shall be at Borrower's expense and for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Borrower or to any other person. The representations and warranties contained herein are based on Borrower's due diligence in investigating the Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Borrower becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release of a hazardous waste or substance on the Collateral. The provisions of this section of the Agreement, including the obligation to indemnify and defend, shall survive the payment of the indebtedness and the termination, expiration or satisfaction of this Agreement and shall not be affected by Lender's acquisition of any interest in any of the Collateral, whether by foreclosure or otherwise.
Litigation and Claims. No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is pending or threatened, and no other event has occurred which may materially adversely affect Borrower's financial condition or properties, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender in writing.
Taxes. To the best of Borrower's knowledge, all of Borrower's tax returns and reports that are or were required to be filed, have been filed, and all taxes, assessments and other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in the ordinary course of business and for which adequate reserves have been provided.
Lien Priority. Unless otherwise previously disclosed to Lender in writing, Borrower has not entered into or granted any Security Agreements, or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of Borrower's Loan and Note, that would be prior or that may in any way be superior to Lender's Security Interests and rights in and to such Collateral.
Binding Effect. This Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof, as .well as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will:
Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse changes in Borrower's financial condition, and (2) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor.
Financial Records. Maintain its books and records in accordance with GAAP, applied on a consistent basis, and permit Lender to examine and audit Borrower's books and records at all reasonable times.
Financial Statements. Furnish Lender with the following: Additional Requirements.
Interim Financial Statements. Quarterly, as soon as available, but in no event later than forty five (45) days after the end of each fiscal quarter, Borrower's balance sheet and profit and loss statement for the quarter then ended, prepared by Borrower on an accrual basis.
Guarantor Annual Financial Statements. Annually, as soon as available, but in no event later than ninety (90) days after the end of each fiscal year, Guarantor's financial statement consisting of balance sheet, income statement, statement of cash flows and net worth reconciliation for the year then ended, audited by a certified public accountant satisfactory to Lender.
All financial reports required to be provided under this Agreement shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Borrower as being true and correct.
Additional Information. Furnish such additional information and statements, as Lender may request from time to time. Additional Requirements.
Debt Service Coverage Ratio: Borrower shall maintain a minimum Debt Service Coverage Ratio of 1.10 to 1.0 (measured quarterly on a trailing 12 month basis). Debt service coverage ratio is defined as the sum of net profit after tax, non-cash items including depreciation and amortization and interest expense divided by the sum of; current portion of long term debt, current portion of capital leases and interest.
Guarantor Debt Service Coverage Ratio: Guarantor shall maintain a minimum Debt Service Coverage Ratio of 1.25 to 1.0 (measured quarterly on a trailing 12 month basis). Debt service coverage ratio is defined as the sum of net profit after tax, non-cash items including depreciation and amortization and interest expense divided by the sum of; current portion of long term debt, current portion of capital [eases and interest.
Liquidity: Guarantor shall maintain minimum liquidity of $4,000,000.00, measured quarterly. Liquidity is defined as unencumbered cash, cash equivalents and marketable securities that can be converted to cash within thirty days.

BUSINESS LOAN AGREEMENT
Loan No: 60365    
Minimum Book Net Worth: Guarantor shall maintain a minimum Book Net Worth of $50,000,000.00, measured quarterly. Book Net Worth is defined as total assets less total liabilities including Notes Payable to Shareholders, Employees and Affiliates not subordinated to Lender.
Annual Budget. Annually, as soon as available, but in no event later than 12/15 of each year, Guarantor's annual budget, prepared by Guarantor.
Compliance Certificate. Unless waived in writing by Lender, provide Lender within forty-five (45) days after the end of each fiscal quarter, with a certificate executed by Guarantor's chief financial officer, or other officer or person acceptable to Lender, certifying that the representations and warranties set forth in this Agreement are true and correct as of the date of the certificate and further certifying that, as of the date of the certificate, no Event of Default exists under this Agreement.
Lender Subordination. Lender shall not subordinate its first deed of trust position on the subject property located at south side of Serramonte Boulevard between Callan Boulevard and Gellert Avenue, Daly City, CA 94015.
Insurance. Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower's properties and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least thirty (30) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Borrower or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest for the Loans, Borrower will provide Lender with such lender's loss payable or other endorsements as Lender may require.
Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties insured; (5) the then current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however not more often than annually), Borrower will have an independent appraiser satisfactory to Lender determine, as applicable, the actual cash value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower.
Guaranties. Prior to disbursement of any Loan proceeds, furnish executed guaranties of the Loans in favor of Lender, executed by the guarantor named below, on Lender's forms, and in the amount and under the conditions set forth in those guaranties.
Name of Guarantor    Amount
MN Financial Corporation    Unlimited
Other Agreements. Comply with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify Lender immediately in writing of any default in connection with any other such agreements.
Loan Proceeds. Use all Loan proceeds solely for Borrower's business operations, unless specifically consented to the contrary by Lender in writing.
Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower's properties, income, or profits. Provided however, Borrower will not be required to pay and discharge any such assessment, tax, charge, levy, lien or claim so long as (1) the legality of the same shall be contested in good faith by appropriate proceedings, and (2) Borrower shall have established on Borrower's books adequate reserves with respect to such contested assessment, tax, charge, levy, lien, or claim in accordance with GAAP.
Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents, and in all other instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in connection with any agreement.
Operations. Maintain executive and management personnel with substantially the same qualifications and experience as the present executive and management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and prudent manner.
Environmental Studies. Promptly conduct and complete, at Borrower's expense, all such investigations, studies, samplings and testings as may be requested by Lender or any governmental authority relative to any substance, or any waste or by-product of any substance defined as toxic or a hazardous substance under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any property or any facility owned, leased or used by Borrower.
Compliance with Governmental Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the conduct of Borrower's properties, businesses and operations, and to the use or occupancy of the Collateral, including without limitation, the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest.
Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower's other properties and to examine or audit Borrower's books, accounts, and records and to make copies and memoranda of Borrower's books, accounts, and records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records it may request, all at Borrower's expense.

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

BUSINESS LOAN AGREEMENT
Loan No: 60365    
assignments, financing statements, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all Security Interests.
Lender Subordination. Banc of California shall not subordinate its first deed of trust position on the subject property located at south side of Serramonte Boulevard between Callan Boulevard and Gellert Avenue, Daly City, CA 94015.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Borrower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower's failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on any Collateral and paying all costs for insuring, maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender:
Indebtedness and Liens. (1) Except for trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this Agreement, create, incur or assume indebtedness for borrowed money, including capital leases, (2) sell, transfer, mortgage, assign, pledge, lease, grant a security interest in, or encumber any of Borrower's assets (except as allowed as Permitted Liens), or (3) sell with recourse any of Borrower's accounts, except to Lender.
Continuity of Operations. (1) Engage in any business activities substantially different than those in which Borrower is presently engaged, (2) cease operations, liquidate, merge, transfer, acquire or consolidate with any other entity, change its name, dissolve or transfer or sell Collateral out of the ordinary course of business, or (3) make any distribution with respect to any capital account, whether by reduction of capital or otherwise.
Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or assets to any other person, enterprise or entity, (2) purchase, create or acquire any interest in any other enterprise or entity, or (3) incur any obligation as surety or guarantor other than in the ordinary course of business.
Agreements. Enter into any agreement containing any provisions which would be violated or breached by the performance of Borrower's obligations under this Agreement or in connection herewith.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the terms of this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower's financial condition, in the financial condition of any Guarantor, or in the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any other loan with Lender; or (E) Lender in good faith deems itself insecure, even though no Event of Default shall have occurred.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts.
DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower fails to make any payment when due under the Loan.
Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.
Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's or any Grantor's property or Borrower's or any Grantor's ability to repay the Loans or perform their respective obligations under this Agreement or any of the Related Documents.
False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member withdraws from Borrower, or any other termination of Borrower's existence as a going business or the death of any member, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.
Defective Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any
Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.

BUSINESS LOAN AGREEMENT
Loan No: 60365
Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Loan is impaired.
Insecurity. Lender in good faith believes itself insecure.
Right to Cure. If any default, other than a default on Indebtedness, is curable and if Borrower or Grantor, as the case may be, has not been given a notice of a similar default within the preceding twelve (12) months, it may be cured if Borrower or Grantor, as the case may be, after Lender sends written notice to Borrower or Grantor, as the case may be, demanding cure of such default: (1) cure the default within thirty (30) days; or (2) if the cure requires more than thirty (30) days, immediately initiate steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continue and complete all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.
Cross-Default. The Borrower hereby agrees that a default pursuant to the terms of the Promissory Note securing any of the obligations of Borrower and Guarantor IMH Financial Corporation, to include any obligations owed outside of Lender shall be a default under the other Promissory Note(s) evidencing the other Loans and that Lender may exercise each and every remedy, including without limitation, foreclosure of any or all of the Property, and/or each and every remedy under each of the Promissory Notes in the event of such default.
EFFECT OF AN EVENT OF DEFAULT. if any Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents, all commitments and obligations of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate (including any obligation to make further Loan Advances or disbursements), and, at Lender's option, all indebtedness immediately will become due and payable, all without notice of any kind to Borrower, except that in the case of an Event of Default of the type described in the "Insolvency" subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights and remedies provided in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender's rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender's right to declare a default and to exercise its rights and remedies.
JUDICIAL REFERENCE. Borrower and Lender hereby agree that any dispute, claim or controversy ("Controversy") between Lender and Borrower or related to the Loan, whether sounding in contract, tort or otherwise, that becomes the subject of a judicial action shall be heard by a referee pursuant to Section 638 of the California Code of Civil Procedure ("CCP"), as it may be amended from time to time. The parties shall select a single neutral referee, who shall be a retired state or federal judge. In the event that the parties cannot agree upon a referee, the referee shall be appointed by the court. The parties agree that the referee may (i) hear and determine all of the issues, whether of fact or law, and Op ascertain any fact necessary to enable the court to determine an action or proceeding in any Controversy or matter related to a Controversy. This agreement shall constitute a "reference agreement" under Section 638 and maybe filed with court by either party or serve as the basis for a motion to have the Controversy heard by a referee under Section 638. Judgment upon the decision of the referee may be entered as provided in the CCP. No party shall be deemed to have waived its right to request judicial reference for the determination of any remaining questions of law or fact because the party has commenced or participated in, or failed to request judicial reference up to any point in a judicial or other proceeding.
COUNTERPART. This agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same agreement.
FACSIMILE OR ELECTRONIC MAIL DOCUMENTS INDEMNIFICATION. In accepting delivery of this document by method of fax transmission or electronic mail, and by affixing your signature upon all or any portion of this document, you hereby consent and agree to the following: The undersigned hereby waives any right, claim, or the defense that the incompleteness of any documentation received by fax transmission or electronic mail (the "Faxed or Email Document"), in comparison to the originally transmitted document from which the fax or email was generated or issued (the "Original Document"), resulted in damages by way of such incomplete document; or would have caused the undersigned not to sign this document had the undersigned been aware of additional verbiage, terms or conditions that are contained in the Original Document from which the fax or email was issued (the "Purported Missing Terms"). By affixing your signature upon all or any portion of the Faxed or Emailed Document, the undersigned further agrees to be bound by the Purported Missing Terms as if they had appeared in the Faxed or Emailed Document. Should the undersigned have any reason to believe that Purported Missing Terms exist between the Original Document and the Faxed or Emailed Document, the undersigned shall immediately notify Lender of any such Purported Missing Terms.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:

Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment.
Attorneys' Fees; Expenses. Borrower agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Borrower also shall pay all court costs and such additional fees as may be directed by the court.
Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement.
Consent to Loan Participation. Borrower agrees and consents to Lender's safe or transfer, whether now or later, of one or more participation interests in the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally waives any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation interests. Borrower also agrees that the purchasers of any such participation interests will be considered as the absolute owners of such interests in the Loan and will have all the rights granted under the participation agreement or agreements governing the sale of such participation interests. Borrower further waives all rights of offset or counterclaim that it may have now or later against Lender or against any purchaser of such a participation interest and unconditionally agrees that either Lender or such purchaser may enforce Borrower's obligation under the Loan irrespective of the failure or insolvency of any holder of any interest in the Loan. Borrower further agrees that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or defenses that Borrower may have against Lender.
Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of California without regard to its conflicts of law provisions. This Agreement has been accepted by Lender In the State
BUSINESS LOAN AGREEMENT
Loan No: 60365    
of California.
Choice of Venue. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Los Angeles County, State of California.
No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower, or between Lender and any Grantor, shall constitute a waiver of any of Lender's rights or of any of Borrower's or any Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.
Notices. Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower's current address. Unless otherwise provided or required by law, if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers.
Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.
Subsidiaries and Affiliates of Borrower. To the extent the context of any provisions of this Agreement makes it appropriate, including without limitation any representation, warranty or covenant, the word "Borrower" as used in this Agreement shall include all of Borrower's subsidiaries and affiliates. Notwithstanding the foregoing however, under no circumstances shall this Agreement he construed to require Lender to make any Loan or other financial accommodation to any of Borrower's subsidiaries or affiliates.
Successors and Assigns. All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall bind Borrower's successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to assign Borrower's rights under this Agreement or any interest therein, without the prior written consent of Lender.
Survival of Representations and Warranties. Borrower understands and agrees that in extending Loan Advances, Lender is relying on all representations, warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement or the Related Documents. Borrower further agrees that regardless of any investigation made by Lender, all such representations, warranties and covenants will survive the extension of Loan Advances and delivery to Lender of the Related Documents, shall be continuing in nature, shall be deemed made and redated by Borrower at the time each Loan Advance is made, and shall remain in full force and effect until such time as Borrower's Indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur.
Time is of the Essence. Time is of the essence in the performance of this Agreement.
Waive Jury. To the extent permitted by applicable law, all parties to this Agreement hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by any party against any other party.
DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code. Accounting words and terms not otherwise defined in this Agreement shall have the meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date of this Agreement:

Advance. The word "Advance" means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf on a line of credit or multiple advance basis under the terms and conditions of this Agreement.
Agreement. The word "Agreement" means this Business Loan Agreement, as this Business Loan Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Business Loan Agreement from time to time.
Borrower. The word "Borrower" means CA-Daley, LLC and includes all co-signers and co-makers signing the Note and all their successors and assigns.
Collateral. The word "Collateral" means all property and assets granted as collateral security for a Loan, whether real or personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise.
Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq,, the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the California Health and Safety Code, Section 25100, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto.
Event of Default. The words "Event of Default" mean any of the events of default set forth in this Agreement in the default section of this Agreement.
GAAP. The word "GAAP" means generally accepted accounting principles.
Grantor. The word "Grantor" means each and all of the persons or entities granting a Security Interest in any Collateral for the Loan, including without limitation all Borrowers granting such a Security Interest.

BUSINESS LOAN AGREEMENT
Loan No: 60365    
Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Loan.
Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note.
Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos.
Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any of the Related Documents.
Lender. The word "Lender" means Banc of California, National Association, its successors and assigns.
Loan. The word "Loan" means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced, including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached to this Agreement from time to time.
Note. The word "Note" means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of and substitutions for promissory notes or credit agreements.
Permitted Liens. The words "Permitted Liens" mean (1) liens and security interests securing Indebtedness owed by Borrower to Lender; (2) liens for taxes, assessments, or similar charges either not yet due or being contested in good faith; (3) liens of materialmen, mechanics, warehousemen, or carriers, or other like liens arising in the ordinary course of business and securing obligations which are not yet delinquent; (4) purchase money liens or purchase money security interests upon or in any property acquired or held by Borrower in the ordinary course of business to secure indebtedness outstanding on the date of this Agreement or permitted to be incurred under the paragraph of this Agreement titled "indebtedness and Liens"; (5) liens and security interests which, as of the date of this Agreement, have been disclosed to and approved by the Lender in writing; and (6) those liens and security interests which in the aggregate constitute an immaterial and insignificant monetary amount with respect to the net value of Borrower's assets.
Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Loan.
Security Agreement. The words "Security Agreement" mean and include without limitation any agreements, promises, covenants, arrangements, understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest,
Security Interest. The words "Security Interest" mean, without limitation, any and all types of collateral security, present and future, whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract, or otherwise.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED OCTOBER 7, 2015.

BORROWER:
CA-DALEY, LLC
IMH FINANCIAL CORPORATION, Member/Chief Manager of CA-Daley, LLC
By:
Lawrence D. Bain, CEO/President of IMH Financial Corporation
LENDER:
BANC OF CALIFORNIA, NATIONAL ASSOCIATION
By:    
George Sacco, Senior Vice President

PROMISSORY NOTE
	
								
	Principal
$5,400,000.00
	Loan Date
10-07-2015
	Maturity
04-30-2016
	Loan No
60365
	Call I Coll
	Account
	Officer
153
	Initials

	References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. 
Any item above containing """"" has been omit ed due to text length limitations.

	
			
	Borrower:CA-Daley, LLC
7001 N. Scottsdale Road, Suite 2050 Scottsdale, AZ 85253
	Lender:
	Banc of California, National Association Business Banking - Los Angeles Office 601 S. Figueroa Street, Suite 1400 Los Angeles, CA 90017

Principal Amount: $5,400,000.00    Date of Note: October 7, 2015
PROMISE TO PAY. CA-Daley, LLC ("Borrower") promises to pay to Banc of California, National Association ("Lender"), or order, in lawful money of the United States of America, the principal amount of Five Million Four Hundred Thousand & 001100 Dollars ($5,400,000.00) or so much as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan in full immediately upon Lender's demand. If no demand is made, Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on April 30, 2016. In addition, Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning November 30, 2015, with all subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law, payments will be applied to any accrued unpaid interest; then to principal; and then to any late charges, fees and costs. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index which is the The Prime Rate, as published in the Wall Street Journal (the "Index"). The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notifying Borrower. Lender will tell Borrower the current Index rate upon Borrower's request. The interest rate change will not occur more often than each day. Borrower understands that Lender may make loans based on other rates as well. The Index currently is 3.250% per annum. Interest on the unpaid principal balance of this Note will be calculated as described in the "INTEREST CALCULATION METHOD" paragraph using a rate of 1.250 percentage points over the Index, adjusted if necessary for any minimum and maximum rate limitations described below, resulting in an initial rate of 4.500%. NOTICE: Under no circumstances will the interest rate on this Note be less than 4.500% per annum or more than the maximum rate allowed by applicable law.
INTEREST CALCULATION METHOD. Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. All interest payable under this Note is computed using this method.
PREPAYMENT; MINIMUM INTEREST CHARGE. Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. In any event, even upon full prepayment of this Note, Borrower understands that Lender is entitled to a minimum interest charge of $100.00. Other than Borrower's obligation to pay any minimum interest charge, Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments of accrued unpaid interest. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked "paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that 

the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Banc of California, National Association; Business Banking - Los Angeles Office; 601 S. Figueroa Street, Suite 1400; Los Angeles, CA 90017.
LATE CHARGE. if a payment is 11 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment or $5.00, whichever is greater.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, at Lender's option, and if permitted by applicable law, Lender may add any unpaid accrued interest to principal and such sum will bear interest therefrom until paid at the rate provided in this Note (including any increased rate). Upon default, the interest rate on this Note shall, if permitted under applicable law, immediately increase by adding an additional 5.000 percentage point margin ("Default Rate Margin"). The Default Rate Margin shall also apply to each succeeding interest rate change that would have applied had there been no default.
DEFAULT. Each of the following shall constitute an event of default ("Event of Default") under this Note: Payment Default. Borrower fails to make any payment when due under this Note.
Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.
Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents.
False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.
Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member withdraws from Borrower, or any other termination of Borrower's existence as a going business or the death of any member, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower,
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or
PROMISSORY NOTE
Loan No: 60365    
forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note.
Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired.
Insecurity. Lender in good faith believes itself insecure.
Cure Provisions. If any default, other than a default in payment, is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after Lender sends written notice to Borrower demanding cure of such default (1) cures the default within thirty (30) days; or (2) if the cure requires more than thirty (30) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.
CROSS-DEFAULT. The Borrower hereby agrees that a default pursuant to the terms of the Promissory Note securing any of the obligations of Borrower and Guarantor IMH Financial Corporation, to include any obligations owed outside of Lender shall be a default under the other Promissory Note(s) evidencing the other Notes and that Lender may exercise each and every remedy, including without limitation, foreclosure of any or all of the Property, and/or each and every remedy under each of the Promissory Notes in the event of such default..
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount.
ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. Borrower also will pay any court costs, in addition to all other sums provided by law.
JURY WAIVER. To the extent permitted by applicable law, Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the other.
GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of California without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of California.
CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Los Angeles County, State of California.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $36.00 if Borrower makes a payment on Borrower's loan and the check or preauthorized charge with which Borrower pays is later dishonored.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts.
COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the security instrument listed herein: a note or an instrument described in a Commercial Pledge Agreement dated October 7, 2015.

LINE OF CREDIT. This Note evidences a straight line of credit. Once the total amount of principal has been advanced, Borrower is not entitled to further loan advances. Advances under this Note, as well as directions for payment from Borrower's accounts, may be requested orally or in writing by Borrower or by an authorized person. Lender may, but need not, require that all oral requests be confirmed in writing. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions of an authorized person or (B) credited to any of Borrower's accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by.endorsements on this Note or by Lender's internal records, including daily computer print-outs.
COUNTERPART. This agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same agreement.
FACSIMILE OR ELECTRONIC MAIL DOCUMENTS INDEMNIFICATION. In accepting delivery of this document by method of fax transmission or electronic mail, and by affixing your signature upon all or any portion of this document, you hereby consent and agree to the following: The undersigned hereby waives any right, claim, or the defense that the incompleteness of any documentation received by fax transmission or electronic mail (the "Faxed or Email Document"), in comparison to the originally transmitted document from which the fax or email was generated or issued (the "Original Document"), resulted in damages by way of such incomplete document; or would have caused the undersigned not to sign this document had the undersigned been aware of additional verbiage, terms or conditions that are contained in the Original Document from which the fax or email was issued (the "Purported Missing Terms"). By affixing your signature upon all or any portion of the Faxed or Emailed Document, the undersigned further agrees to be bound by the Purported Missing Terms as if they had appeared in the Faxed or Emailed Document. Should the undersigned have any reason to believe that Purported Missing Terms exist between the Original Document and the Faxed or Emailed Document, the undersigned shall immediately notify Lender of any such Purported Missing Terms.
ADDITIONAL INFORMATION. Borrower covenants and agrees with Lender that, so long as this Note remains in effect, Borrower will furnish such additional information and statements, as Lender may request from time to time.
JUDICIAL REFERENCE. Borrower and Lender hereby agree that any dispute, claim or controversy ("Controversy") between Lender and Borrower or related to the Loan, whether sounding in contract, tort or otherwise, that becomes the subject of a judicial action shall be heard by a referee pursuant to Section 638 of the California Code of Civil Procedure ("CCP"), as it may be amended from time to time. The parties shall select a single neutral referee, who shall be a retired state or federal judge. In the event that the parties cannot agree upon a referee, the referee shall be appointed by the court. The parties agree that the referee may (i) hear and determine all of the issues, whether of fact or law, and (ii) ascertain any fact necessary to enable the court to determine an action or proceeding in any Controversy or matter related to a Controversy. This agreement shall constitute a "reference agreement" under Section 638 and maybe filed with court by either party or serve as the basis for a motion to have the Controversy heard by a referee under Section 638. Judgment upon the decision of the referee may be entered as provided in the CCP. No party shall be deemed to have waived its right to request judicial reference for the determination of any remaining questions of
PROMISSORY NOTE
Loan No: 60365    
law or fact because the party has commenced or participated in, or failed to request judicial reference up to any point in a judicial or other proceeding.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns.
NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Borrower may notify Lender if Lender reports any inaccurate information about Borrower's account(s) to a consumer reporting agency. Borrower's written notice describing the specific inaccuracy(ies) should be sent to Lender at the following address: Banc of California, National Association 10100 Santa Monica Boulevard Los Angeles, CA 90067.
GENERAL PROVISIONS. This Note is payable on demand. The inclusion of specific default provisions or rights of Lender shall not preclude Lender's right to declare payment of this Note on its demand. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive any applicable statute of limitations, presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE. BORROWER:
CA-DALEY, LLC
IMH FINANCIAL CORPORATION, Member/Chief Manager of CA-Daley, LLC
By:    
Lawrence D. Bain, CEO/President of IMH Financial Corporation

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