Document:

Exhibit 10.2

 

SECURITIES PURCHASE AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of August 30, 2013, by and between CARDINAL ENERGY
GROUP, INC., a Nevada corporation, with headquarters located at 6037 Franz Road - Suite 103, Dublin, OH 43017 (the “Company”),
and ASHER ENTERPRISES, INC., a Delaware corporation, with its address at 1 Linden Place, Suite 207, Great Neck, NY 11021
(the “Buyer”).

 

WHEREAS:

 

A. The
Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “1933 Act”);

 

B. Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions
set forth in this Agreement an 8% convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal
amount of $83,500.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect
thereto in accordance with the terms thereof, the “Note”), convertible into shares of common stock, $0.00001 par value
per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth
in such Note.

 

C. The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such
principal amount of Note as is set forth immediately below its name on the signature pages hereto; and

 

NOW THEREFORE, the
Company and the Buyer severally (and not jointly) hereby agree as follows:

 

1. Purchase
and Sale of Note.

 

a. Purchase
of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase
from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages
hereto.

 

b. Form
of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be issued and
sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds
to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal
amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and
(ii) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase
Price.

 

c. Closing
Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below,
the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 12:00
noon, Eastern Standard Time on or about September 4, 2013, or such other mutually agreed upon time. The closing of the transactions
contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to
by the parties.

 

2. Buyer’s
Representations and Warranties. The Buyer represents and warrants to the Company that:

 

a. Investment
Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion
of or otherwise pursuant to the Note (including, without limitation, such additional shares of Common Stock, if any, as are
issuable (i) on account of interest on the Note, (ii) as a result of the events described in Sections 1.3 and
1.4(g) of the Note or (iii) in payment of the Standard Liquidated Damages Amount (as defined in Section 2(f) below)
pursuant to this Agreement, such shares of Common Stock being collectively referred to herein as the “Conversion
Shares” and, collectively with the Note, the “Securities”) for its own account and not with a present view
towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the
1933 Act; provided, however, that by making the representations herein, the Buyer does not agree to hold any of
the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an exemption under the 1933 Act.

 

b. Accredited Investor Status. The Buyer is an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).

 

    	 

    	 

    

 

c. Reliance on Exemptions. The Buyer understands that the Securities are being offered
and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability
of such exemptions and the eligibility of the Buyer to acquire the Securities.

 

d. Information. The Buyer and its advisors, if any, have been, and for so long as the
Note remain outstanding will continue to be, furnished with all materials relating to the business, finances and operations of
the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors.
The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, afforded the
opportunity to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material
nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly
following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or
any of its advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations
and warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a significant
degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company’s representations
and warranties made herein.

 

e. Governmental Review. The Buyer understands that no United States federal or state agency
or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.

 

f. Transfer
or Re-sale. The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being
registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless
(a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall
have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope
customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may
be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company,
(c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the
1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities
only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to
Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule)
(“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of
counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion
shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in
accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under
circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as
that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register
such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption
thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities
may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

 

g. Legends. The Buyer understands that the Note and, until such time as the Conversion
Shares have been registered under the 1933 Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the
number of securities as of a particular date that can then be immediately sold, the Conversion Shares may bear a restrictive legend
in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):

 

“NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.”

 

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The legend set forth above
shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped,
if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective
registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction
as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company
with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect
that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted
by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by
a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any.
In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities
pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of
Default pursuant to Section 3.2 of the Note.

 

h. Authorization; Enforcement. This Agreement has been duly and validly authorized. This
Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement
of the Buyer enforceable in accordance with its terms.

 

i. Residency. The Buyer is a resident of the jurisdiction set forth immediately below
the Buyer’s name on the signature pages hereto. 

 

3. Representations
and Warranties of the Company. The Company represents and warrants to the Buyer that:

 

a. Organization and Qualification. The Company and each of its Subsidiaries (as defined
below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which
it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry
on its business as and where now owned, leased, used, operated and conducted. Schedule 3(a) sets forth a list of all of the Subsidiaries
of the Company and the jurisdiction in which each is incorporated. The Company and each of its Subsidiaries is duly qualified as
a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership or use of property or
the nature of the business conducted by it makes such qualification necessary except where the failure to be so qualified or in
good standing would not have a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect
on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole,
or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith. “Subsidiaries”
means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly,
any equity or other ownership interest.

 

b. Authorization; Enforcement. (i) The Company has all requisite corporate power and authority
to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue
the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by
the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance
of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof)
have been duly authorized by the Company’s Board of Directors and no further consent or authorization of the Company, its
Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by
its authorized representative, and such authorized representative is the true and official representative with authority to sign
this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement
constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid
and binding obligation of the Company enforceable against the Company in accordance with its terms.

 

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c. Capitalization. As of the date hereof, the authorized capital stock of the Company
consists of: (i) 100,000,000 shares of Common Stock, $0.00001 par value per share, of which 34,828,362 shares are issued and outstanding;
and (ii) 100,000 shares of Preferred Stock, $0.00001 par value per share, of which no shares are issued and outstanding; no shares
are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities
(other than the Note and a prior convertible promissory note in favor of the Buyer dated April 4, 2013 in the amount of $42,500.00
for which 800,000 shares of Common Stock are presently reserved) exercisable for, or convertible into or exchangeable for shares
of Common Stock and 950,000 shares are reserved for issuance upon conversion of the Note. All of such outstanding shares of capital
stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock
of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or
encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, (i) there
are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings,
claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable
for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no
agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or
their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security
issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the
Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Certificate
of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), the Company’s By-laws, as
in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common
Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with
a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing
Date.

 

d. Issuance of Shares. The Conversion Shares are duly authorized and reserved for issuance
and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable,
and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive
rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

 

e. Acknowledgment of Dilution. The Company understands and acknowledges the potentially
dilutive effect to the Common Stock upon the issuance of the Conversion Shares upon conversion of the Note. The Company further
acknowledges that its obligation to issue Conversion Shares upon conversion of the Note in accordance with this Agreement, the
Note is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of
other shareholders of the Company.

 

f. No Conflicts. The execution, delivery and performance of this Agreement, the Note by
the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation,
the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any
provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument
to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations
to which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property
or asset of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). Neither
the Company nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational documents
and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time
or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries
has taken any action or failed to take any action that would give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which
any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not,
individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are
not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance
or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under the 1933
Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court, governmental agency, regulatory agency, self regulatory organization or stock
market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement, the Note
in accordance with the terms hereof or thereof or to issue and sell the Note in accordance with the terms hereof and to issue the
Conversion Shares upon conversion of the Note. All consents, authorizations, orders, filings and registrations which the Company
is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company
is not in violation of the listing requirements of the Over-the-Counter Bulletin Board (the “OTCBB”) and does not reasonably
anticipate that the Common Stock will be delisted by the OTCBB in the foreseeable future. The Company and its Subsidiaries are
unaware of any facts or circumstances which might give rise to any of the foregoing. 

 

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g. SEC Documents; Financial Statements. The Company has timely filed all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated
by reference therein, being hereinafter referred to herein as the “SEC Documents”). Upon written request the Company
will deliver to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated documents. As
of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules
and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except
for such statements as have been amended or updated in subsequent filings prior the date hereof). As of their respective dates,
the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have
been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods
involved and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries
as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in the financial statements of the
Company included in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred
in the ordinary course of business subsequent to June 30, 2013, and (ii) obligations under contracts and commitments incurred in
the ordinary course of business and not required under generally accepted accounting principles to be reflected in such financial
statements, which, individually or in the aggregate, are not material to the financial condition or operating results of the Company.
The Company is subject to the reporting requirements of the 1934 Act.

 

h. Absence of Certain Changes. Since June 30, 2013, there has been no material adverse
change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition, results
of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

 

i. Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation
before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the
Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or
directors in their capacity as such, that could have a Material Adverse Effect. Schedule 3(i) contains a complete list and summary
description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of
its Subsidiaries, without regard to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware
of any facts or circumstances which might give rise to any of the foregoing.

 

j. Patents, Copyrights, etc. The Company and each of its Subsidiaries owns or possesses
the requisite licenses or rights to use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks,
trademark applications, service marks, service names, trade names and copyrights (“Intellectual Property”) necessary
to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); there is no
claim or action by any person pertaining to, or proceeding pending, or to the Company’s knowledge threatened, which challenges
the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business
as now operated (and, as presently contemplated to be operated in the future); to the best of the Company’s knowledge, the
Company’s or its Subsidiaries’ current and intended products, services and processes do not infringe on any Intellectual
Property or other rights held by any person; and the Company is unaware of any facts or circumstances which might give rise to
any of the foregoing. The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of their Intellectual Property.

 

k. No Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries
is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the
judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect. Neither the Company
nor any of its Subsidiaries is a party to any contract or agreement which in the judgment of the Company’s officers has or
is expected to have a Material Adverse Effect.

 

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l. Tax Status. The Company and each of its Subsidiaries has made or filed all federal,
state and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject
(unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate
for the payment of all unpaid and unreported taxes) and has paid all taxes and other governmental assessments and charges that
are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in
good faith and has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to
the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be
due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim. The Company
has not executed a waiver with respect to the statute of limitations relating to the assessment or collection of any foreign, federal,
state or local tax. None of the Company’s tax returns is presently being audited by any taxing authority.

 

m. Certain Transactions. Except for arm’s length transactions pursuant to which
the Company or any of its Subsidiaries makes payments in the ordinary course of business upon terms no less favorable than the
Company or any of its Subsidiaries could obtain from third parties and other than the grant of stock options disclosed on Schedule
3(c), none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company or
any of its Subsidiaries (other than for services as employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or
otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer,
director, trustee or partner.

 

n. Disclosure. All information relating to or concerning the Company or any of its Subsidiaries
set forth in this Agreement and provided to the Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions
contemplated hereby is true and correct in all material respects and the Company has not omitted to state any material fact necessary
in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading.
No event or circumstance has occurred or exists with respect to the Company or any of its Subsidiaries or its or their business,
properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure
or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s
reports filed under the 1934 Act are being incorporated into an effective registration statement filed by the Company under the
1933 Act).

 

o. Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges
and agrees that the Buyer is acting solely in the capacity of arm’s length purchasers with respect to this Agreement and
the transactions contemplated hereby. The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement
made by the Buyer or any of its respective representatives or agents in connection with this Agreement and the transactions contemplated
hereby is not advice or a recommendation and is merely incidental to the Buyer’ purchase of the Securities. The Company further
represents to the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent
evaluation of the Company and its representatives.

 

p. No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy
any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer.
The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company’s securities (past,
current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.

 

q. No Brokers. The Company has taken no action which would give rise to any claim by any
person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions contemplated
hereby. 

 

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r. Permits; Compliance. The Company and each of its Subsidiaries is in possession of all
franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and
orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted (collectively,
the “Company Permits”), and there is no action pending or, to the knowledge of the Company, threatened regarding suspension
or cancellation of any of the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default
or violation of, any of the Company Permits, except for any such conflicts, defaults or violations which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect. Since June 30, 2013, neither the Company nor any
of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations of applicable laws,
except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have
a Material Adverse Effect.

 

s. Environmental Matters.

 

(i) There are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries
or any predecessor of the Company, no past or present violations of Environmental Laws (as defined below), releases of any material
into the environment, actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give
rise to any common law environmental liability or any liability under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 or similar federal, state, local or foreign laws and neither the Company nor any of its Subsidiaries has
received any notice with respect to any of the foregoing, nor is any action pending or, to the Company’s knowledge, threatened
in connection with any of the foregoing. The term “Environmental Laws” means all federal, state, local or foreign laws
relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous
Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated
or approved thereunder.

 

(ii) Other than those that are or were stored, used or disposed of in compliance with applicable
law, no Hazardous Materials are contained on or about any real property currently owned, leased or used by the Company or any of
its Subsidiaries, and no Hazardous Materials were released on or about any real property previously owned, leased or used by the
Company or any of its Subsidiaries during the period the property was owned, leased or used by the Company or any of its Subsidiaries,
except in the normal course of the Company’s or any of its Subsidiaries’ business.

 

(iii) There are no underground storage tanks on or under any real property owned, leased or used
by the Company or any of its Subsidiaries that are not in compliance with applicable law.

 

t. Title to Property. The Company and its Subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the
business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as
are described in Schedule 3(t) or such as would not have a Material Adverse Effect. Any real property and facilities held under
lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions
as would not have a Material Adverse Effect.

 

u. Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent
and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary
has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material
Adverse Effect. Upon written request the Company will provide to the Buyer true and correct copies of all policies relating to
directors’ and officers’ liability coverage, errors and omissions coverage, and commercial general liability coverage.

 

v. Internal Accounting Controls. The Company and each of its Subsidiaries maintain a system
of internal accounting controls sufficient, in the judgment of the Company’s board of directors, to provide reasonable assurance
that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles
and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.

 

    	7

    	 

    

 

w. Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor any
director, officer, agent, employee or other person acting on behalf of the Company or any Subsidiary has, in the course of his
actions for, or on behalf of, the Company, used any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act
of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.

 

x. Solvency. The Company (after giving effect to the transactions contemplated by this
Agreement) is solvent (i.e., its assets have a fair market value in excess of the amount required to pay its probable liabilities
on its existing debts as they become absolute and matured) and currently the Company has no information that would lead it to reasonably
conclude that the Company would not, after giving effect to the transaction contemplated by this Agreement, have the ability to,
nor does it intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection
therewith as such debts mature. The Company did not receive a qualified opinion from its auditors with respect to its most recent
fiscal year end and, after giving effect to the transactions contemplated by this Agreement, does not anticipate or know of any
basis upon which its auditors might issue a qualified opinion in respect of its current fiscal year.

 

y. No Investment Company. The Company is not, and upon the issuance and sale of the Securities
as contemplated by this Agreement will not be an “investment company” required to be registered under the Investment
Company Act of 1940 (an “Investment Company”). The Company is not controlled by an Investment Company.

 

z. Breach of Representations and Warranties by the Company. If the Company breaches any
of the representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer
pursuant to this Agreement, it will be considered an Event of default under Section 3.4 of the Note.

 

4. COVENANTS.

 

a. Best Efforts. The parties shall use their best efforts to satisfy timely each of the
conditions described in Section 6 and 7 of this Agreement. 

 

b. Form D; Blue Sky Laws. The Company agrees to file a Form D with respect to the Securities
as required under Regulation D and to provide a copy thereof to the Buyer promptly after such filing. The Company shall, on or
before the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities for
sale to the Buyer at the applicable closing pursuant to this Agreement under applicable securities or “blue sky” laws
of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such
action so taken to the Buyer on or prior to the Closing Date.

 

c. Use of Proceeds. The Company shall use the proceeds for general working capital purposes.

 

d. Right of First Refusal. Unless it shall have first delivered to the Buyer, at least
seventy two (72) hours prior to the closing of such Future Offering (as defined herein), written notice describing the proposed
Future Offering, including the terms and conditions thereof and proposed definitive documentation to be entered into in connection
therewith, and providing the Buyer an option during the seventy two (72) hour period following delivery of such notice to purchase
the securities being offered in the Future Offering on the same terms as contemplated by such Future Offering (the limitations
referred to in this sentence and the preceding sentence are collectively referred to as the “Right of First Refusal”)
(and subject to the exceptions described below), the Company will not conduct any equity financing (including debt with an equity
component) (“Future Offerings”) during the period beginning on the Closing Date and ending twelve (12) months following
the Closing Date. In the event the terms and conditions of a proposed Future Offering are amended in any respect after delivery
of the notice to the Buyer concerning the proposed Future Offering, the Company shall deliver a new notice to the Buyer describing
the amended terms and conditions of the proposed Future Offering and the Buyer thereafter shall have an option during the seventy
two (72) hour period following delivery of such new notice to purchase its pro rata share of the securities being offered on the
same terms as contemplated by such proposed Future Offering, as amended. The foregoing sentence shall apply to successive amendments
to the terms and conditions of any proposed Future Offering. The Right of First Refusal shall not apply to any transaction involving
(i) issuances of securities in a firm commitment underwritten public offering (excluding a continuous offering pursuant to Rule
415 under the 1933 Act) or (ii) issuances of securities as consideration for a merger, consolidation or purchase of assets, or
in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity capital), or
in connection with the disposition or acquisition of a business, product or license by the Company. The Right of First Refusal
also shall not apply to the issuance of securities upon exercise or conversion of the Company’s options, warrants or other
convertible securities outstanding as of the date hereof or to the grant of additional options or warrants, or the issuance of
additional securities, under any Company stock option or restricted stock plan approved by the shareholders of the Company.

 

    	8

    	 

    

 

e. Expenses. At the Closing, the Company shall reimburse Buyer for expenses incurred by
them in connection with the negotiation, preparation, execution, delivery and performance of this Agreement and the other agreements
to be executed in connection herewith (“Documents”), including, without limitation, reasonable attorneys’ and
consultants’ fees and expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments or
modifications of the Documents or any consents or waivers of provisions in the Documents, fees for the preparation of opinions
of counsel, escrow fees, and costs of restructuring the transactions contemplated by the Documents. When possible, the Company
must pay these fees directly, otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and
expenses immediately upon written notice by the Buyer or the submission of an invoice by the Buyer. The Company’s obligation
with respect to this transaction is to reimburse Buyer’ expenses shall be $3,500.

 

f. Financial
Information. Upon written request the Company agrees to send or make available the following reports to the Buyer until
the Buyer transfers, assigns, or sells all of the Securities: (i) within ten (10) days after the filing with the SEC, a
copy of its Annual Report on Form 10-K its Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K;
(ii) within one (1) day after release, copies of all press releases issued by the Company or any of its Subsidiaries;
and (iii) contemporaneously with the making available or giving to the shareholders of the Company, copies of any
notices or other information the Company makes available or gives to such shareholders.

 

g. [INTENTIONALLY DELETED]

 

h. Listing.
The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the
Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing
of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the Buyer
owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCBB or any equivalent replacement exchange,
the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York Stock
Exchange (“NYSE”), or the American Stock Exchange (“AMEX”) and will comply in all respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”)
and such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any notices it receives from the
OTCBB and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibility
of the Common Stock for listing on such exchanges and quotation systems.

 

i. Corporate
Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not
sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale of all or
substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s
obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded
corporation whose Common Stock is listed for trading on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

 

j. No
Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of
the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval
provision applicable to the Company or its securities.

 

k. Breach
of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies
available to the Buyer pursuant to this Agreement, it will be considered an event of default under Section 3.4 of the Note.

 

    	9

    	 

    

 

l. Failure
to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting
requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.

 

m. Trading
Activities. Neither the Buyer nor its affiliates has an open short position in the common stock of the Company and the Buyer
agree that it shall not, and that it will cause its affiliates not to, engage in any short sales of or hedging transactions with
respect to the common stock of the Company. 

 

5. Transfer Agent Instructions. The Company shall issue irrevocable instructions to its
transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts
as specified from time to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the
“Irrevocable Transfer Agent Instructions”). In the event that the Borrower proposes to replace its transfer agent,
the Borrower shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions
in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably
reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower. Prior
to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to
Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold, all
such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement. The Company warrants that: (i)
no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, and stop transfer instructions
to give effect to Section 2(f) hereof (in the case of the Conversion Shares, prior to registration of the Conversion Shares under
the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number
of Securities as of a particular date that can then be immediately sold), will be given by the Company to its transfer agent and
that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided
in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its
transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Conversion Shares to be
issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and
(iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent
from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for
any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note
and this Agreement. Nothing in this Section shall affect in any way the Buyer’s obligations and agreement set forth in Section
2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If the Buyer
provides the Company, at the cost of the Buyer, with (i) an opinion of counsel in form, substance and scope customary for opinions
in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under
the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be
sold pursuant to Rule 144, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly instruct
its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified
by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer,
by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy
at law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies,
to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without
any bond or other security being required.

 

6. Conditions to the Company’s Obligation to Sell. The obligation of the Company
hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date
of each of the following conditions thereto, provided that these conditions are for the Company’s sole benefit and may be
waived by the Company at any time in its sole discretion:

 

a. The Buyer shall have executed this Agreement and delivered the same to the Company.

 

b. The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.

 

c. The representations and warranties of the Buyer shall be true and correct in all material
respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties
that speak as of a specific date), and the Buyer shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or
prior to the Closing Date. 

 

d. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.

 

7. Conditions to The Buyer’s Obligation to Purchase. The obligation of the Buyer
hereunder to purchase the Note at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following
conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in
its sole discretion:

 

a. The Company shall have executed this Agreement and delivered the same to the Buyer.

 

b. The Company shall have delivered to the Buyer the duly executed Note (in such denominations
as the Buyer shall request) in accordance with Section 1(b) above.

 

c. The
Irrevocable Transfer Agent Instructions, in form and substance satisfactory to a majority-in-interest of the Buyer, shall have
been delivered to and acknowledged in writing by the Company’s Transfer Agent.

 

    	10

    	 

    

 

d. The representations and warranties of the Company shall be true and correct in all material
respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties
that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or
prior to the Closing Date. The Buyer shall have received a certificate or certificates, executed by the chief executive officer
of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested
by the Buyer including, but not limited to certificates with respect to the Company’s Certificate of Incorporation, By-laws
and Board of Directors’ resolutions relating to the transactions contemplated hereby.

 

e. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.

 

f. No event shall have occurred which could reasonably be expected to have a Material Adverse
Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the
Company to be timely in its 1934 Act reporting obligations.

 

g. The Conversion Shares shall have been authorized for quotation on the OTCBB and trading in
the Common Stock on the OTCBB shall not have been suspended by the SEC or the OTCBB.

 

h. The Buyer shall have received an officer’s certificate described in Section 3(c) above,
dated as of the Closing Date.

 

8. Governing Law; Miscellaneous.

 

a. Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against
the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in
the federal courts located in the state and county of Nassau. The parties to this Agreement hereby irrevocably waive any objection
to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or
venue or based upon forum non conveniens. The Company and Buyer waive trial by jury. The prevailing party shall be entitled
to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Agreement
or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law,
then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process
and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction
Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.

 

    	11

    	 

    

 

b. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts
have been signed by each party and delivered to the other party. 

 

c. Headings. The headings of this Agreement are for convenience of reference only and
shall not form part of, or affect the interpretation of, this Agreement.

 

d. Severability. In the event that any provision of this Agreement is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid
or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

 

e. Entire Agreement; Amendments. This Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically
set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed
by the majority in interest of the Buyer.

 

f. Notices. All notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier
service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to
such other address as such party shall have specified most recently by written notice. Any notice or other communication required
or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation
generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other
than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following
the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be: 

 

If to the Company,
to:

CARDINAL ENERGY
GROUP, INC.

6037 Franz
Road - Suite 103

Dublin, OH
43017

Attn: TIMOTHY CRAWFORD, Chief Executive
Officer

facsimile: [enter fax number]

 

With a copy
by fax only to (which copy shall not constitute notice):

[enter name
of law firm]

Attn: [attorney
name]

[enter address
line 1]

[enter city,
state, zip]

facsimile:
[enter fax number]

 

    	12

    	 

    

 

If to the Buyer:

ASHER ENTERPRISES, INC.

1 Linden Pl.,
Suite 207

Great Neck, NY.
11021

Attn: Curt Kramer, President

facsimile:
516-498-9894

 

With a copy
by fax only to (which copy shall not constitute notice):

Naidich Wurman Birnbaum
& Maday LLP

80 Cuttermill Road,
Suite 410

Great Neck, NY 11021

Attn: Bernard S. Feldman,
Esq.

facsimile:
516-466-3555

 

Each party shall provide
notice to the other party of any change in address.

 

g. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, subject to Section 2(f),
the Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from the Buyer or to
any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.

 

h. Third Party Beneficiaries. This Agreement is intended for the benefit of the parties
hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

 

i. Survival. The representations and warranties of the Company and the agreements and
covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted
by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees
and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations,
warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement
of expenses as they are incurred.

 

j. Publicity. The Company, and the Buyer shall have the right to review a reasonable period
of time before issuance of any press releases, SEC, OTCBB or FINRA filings, or any other public statements with respect to the
transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval
of the Buyer, to make any press release or SEC, OTCBB (or other applicable trading market) or FINRA filings with respect to such
transactions as is required by applicable law and regulations (although the Buyer shall be consulted by the Company in connection
with any such press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment
thereon).

 

k. Further Assurances. Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

 

l. No Strict Construction. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any
party.

 

m. Remedies. The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly,
the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees,
in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled,
in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions
hereof, without the necessity of showing economic loss and without any bond or other security being required.

 

    	13

    	 

    

 

IN WITNESS WHEREOF, the
undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

 

CARDINAL ENERGY GROUP, INC.

 

	By: 	/s/
    Timothy Crawford	 
	 	TIMOTHY CRAWFORD	 
	 	Chief Executive Officer	 

 

ASHER ENTERPRISES, INC.

 

	By:	/s/
    Curt Kramer	 
	Name:	Curt Kramer 	 
	Title:	President	 
	1 Linden Pl., Suite 207	 
	Great Neck, NY. 11021	 

 

AGGREGATE SUBSCRIPTION AMOUNT:

 

	Aggregate Principal Amount of Note:	$83,500.00
	 	 
	Aggregate Purchase Price:	$83,500.00

 

    	14dex1016

Exhibit 10.16

NON-RESIDENTIAL PREMISES LEASE AGREEMENT

Kaunas                                        10 July 2013 

BUAB Apskaitos etika, company number 1117 75915, legal address 50 V. Putvinskio Str., Kaunas, represented by the administrator UAB Įmonių bankroto administravimo ir teisinių paslaugų biuro (Company Bankruptcy Administration and Legal Services Bureau), number of legal person 235238440, by authorized person Kęstutis Stankus (basis for authorization is the 26 March 2012 Resolution of Kaunas Regional Court and the 30 April 2012 Power of Attorney No. 04-81/1), hereinafter referred to as the ‘Lessor’ on one side 
and
UAB Ubiquiti Networks Europe, number of legal person 300633724, address of the registered office 221 Savanorių Ave., Kaunas, represented by Rasa Juodišienė, the director, hereinafter referred to as the ‘Lessee’ on the other side,
    
The Lessor and the Lessee hereinafter may be referred to as the ‘Parties’ and each individually as the ‘Party’, entered into this Lease Agreement (hereinafter – the ‘Agreement’) and have agreed:

		
	I.
	SUBJECT MATTER OF THE AGREEMENT

		
	1.1.
	 According to the terms and conditions as well as procedure set forth herein the Lessor shall lease to the Lessee (i.e. provide for temporal possession and use for a lease fee), and the latter shall lease from the Lessor the immovable property owned by the Lessor, i.e. premises of administrative purpose the total area of which is 477 sq.m., located on the third floor of the building, the unique number of which is 4400-0605-4380,  owned by the Lessor and located at 50 V.Putvinskio Str. (hereinafter – the ‘Property’) and shall undertake to pay to the Lessor the lease and other fees pursuant to the terms and procedure set forth herein. During entire term of Agreement validity the Lessee shall be entitled to use the yard and garage in this yard of the Building wherein the Premises to be leased are located and that is included into the lease price. The Parties agree that based on this paragraph, the Lessee is entitled to park the road motor vehicles of employees and clients (light motor vehicles, motorcycles and bikes). 

		
	1.2.
	The Lessee confirms that he inspected the Property and it is completely satisfied with condition of the Property and other terms.

		
	1.3.
	The Lessee shall undertake to use the Property to carry out the economic activity, hereinafter referred to as the ‘Lease Purpose’. Hereby the lease purpose of use of the premises is established, i.e. to carry out administrative activity of the company of the Lessee. The company of the Lessee shall provide the creation of information technology and consulting services. The Lessee may change the Lease Purpose set forth herein only with prior written consent of the Lessor.

		
	1.4.
	During entire Agreement validity period the Lessee shall undertake to maintain the Premises at the same level as the Premises are on the day of Premises delivery and acceptance by the Lessee.

		
	1.5.
	The Lessor shall undertake to assure that on a day Premises delivery to the Lessee, the Premises to be leased should be empty, ordered and clean and also free of any third parties or their property.

		
	1.6.
	This Agreement shall entitle the Lessee to register the address of registered office of the Lessor at the address of the Premises.

2. EQUIPMENT AND ADJUSTMENT OF PREMISES FOR ACTIVITIES OF THE LESSEE AND TERMS OF PROPERTY DELIVERY. REPAIR AND MAINTENANCE OF PREMISES

2.1. The Premises shall be leased as of existing condition and the Lessor shall not perform any additional repairs with an exception of arrangements and modifications of premises which must be made by the Lessor until 1 September 2013, namely:

2.1.1 Install the measuring apparatus;
2.1.2 Install shower cabin.
2.2. The Lessor shall undertake to deliver the Premises to the Lessee and the latter shall undertake to accept the Premises from the Lessor on a day of signing of this Agreement. The delivery of the Premises must be executed by signing the Premises Delivery and Acceptance Certificate by the Parties which having it signed and approved by stamps of the Parties shall become integral part of this Agreement and in which an actual condition of the Premises and reading of measuring apparatus located in the Premises are to be stated.
2.3. Having the Premises delivered to the Lessee, the latter shall be entitled to use the Premises without any restrictions in accordance with the terms and purposes set forth herein, including, but not limited to free access to the Premises during the day and night time (24-hours) 7 days a week, with an exception of temporal restrictions of access to the Premises because of emergencies, disturbances in the Premises and Building or engineering systems installed therein, prohibitions or other actions established by the sate and/or municipal authorities which are beyond the will of the Lessor.
2.4. During the time of transfer of the Premises to the Lessee, the Lessor must deliver to the Lessee the regulations applicable in the common use premises of the Building (if any) and also other documents (their copies), if any, which are necessary in order for the Lessee to use the Premises for the purposes set forth herein.
2.5.  The Lessee shall be entitled to perform the improvements and/or rearrangements of the Premises with prior consent of the Lessor. If the Lessee performs the improvement and/or rearrangements of the Premises, after expiry of this Agreement or its termination prior to the term, the Lessee shall be entitled to take the devices, systems and other equipment as well as performed improvements and/or rearrangements which have been performed at its expense, if they can be detached without damaging the Premises and if the Parties fail to agree that the Lessor shall reimburse the value of such improvements and/or rearrangements to the Lessee.
2.6. The Property must be returned to the Lessor at least within 30 (thirty) calendar days as of the end of this Agreement. Within this period the Lessee shall pay the lease fee and other fees (payments) set forth herein. The Lessee shall return cleaned, ordered Property and with all the keys, including those manufactured by the Lessee in the state which is not worse than the one which was present on a day of the Property delivery to the Lessee, taking into account regular wear and tear. Having the Agreement ended or terminated prior to its term the Lessee shall deliver the Property to the Lessor by signing the bilateral Property Delivery and Acceptance Certificate. In case of failure to deliver the Property to the Lessor within the term specified herein, the Lessor shall pay to the Lessee the default interest in the sum of LTL 500,00 (five hundred Litas) for each day of delay to vacate and deliver the Property.
2.7. During this Agreement validity period the Lessor shall undertake to arrange and perform the overhaul repair works of the Premises, provided such repairs are necessary and immediate. The Lessor shall undertake to notify the Lessee in advance about the overhaul repair works intended to be carry out by the Lessor and also the repair works, which impede the activity of the Lessee, of engineering networks or systems of the Building wherein the leased Premises are located. Having the Lessor notified the Lessee of Premises’ overhaul repair works intended to be carry out, the Lessee must facilitate the proper performance of such works, including without limitation, refrain from temporarily using the Premises (or part of them) upon request of the Lessor (for the term specified by the Lessor). The Lessee shall not pay the Lease fee for the days during which it could not properly use the leased Premises.
2.8.   The Lessor shall undertake not to prevent the Lessee from using the Premises during the Lease term. If the Lessor wants to inspect the terms of operational use of the Premises not during the business hours or wants to show the Premises to a potential lessee not during the business hours, it shall be entitled to enter the Premises only with presence of the Lessee’s representative. In the event of emergency which may damage the Building and cause harm to the people who are working therein, the Lessor shall be entitled to enter the Premises at any time, however, must notify the Lessee of such entry and in the event there is no possibility to notify the Lessee prior to the entry, it must notify the Lessee immediately after the entry. Without breaching the rights of the Lessee the Lessor shall be entitled to verify whether the Lessee uses the Premises properly.

2.9. If the meeting of creditors of the Lessor takes the decision to assign the Premises to third parties, the Lessor shall undertake to notify the Lessee of such circumstances at least within 5 (five) calendar days as of a day of taking the decision of the meeting of creditors and provide information on potential acquirer of the Premises by furnishing its details in order the Lessee could start negotiations with new owner of the Premises regarding the execution of new Premises’ lease agreement.
2.10. The Lessor must deliver to the Lessee the properly (according to applicable legislation) installed engineering communications (electricity, water-supply, sewage and heating supply) of the Premises.
2.11. The Lessor must assure the proper operational use of engineering communications of the Building wherein the Premises are located within the limits of responsibility of the Lessor up to inlets into the Premises.
2.12. The Lessor shall undertake to assure the hire (appointment) of administrator of the Building who would maintain the Building and leased Premises and administer all the fees, organize security of the Building and the Premises, collection of garbage, cleaning and lighting works of common areas of the building, yard and streets, lightning of Building’s façade, maintenance of equipment in the Building and Premises, including without limitation maintenance and repair of sanitary equipment, electrical, heating and other networks as well as equipment.
2.13. The Parties agree that the costs of operational use specified in Paragraph 2.12 hereof shall be calculated in proportion of the area of the leased Premises to general area of the Building taking into account actual costs  incurred by the Lessor, furnishing by the Lessor to the Lessee the copies of documents justifying such costs.

3. LEASE TERM

3.1. The Premises shall be leased for the period of 3 (three) years, but for the period which is not longer than until the day of Property sale, delivery or return in accordance with the procedure established by the Law on Bankruptcy of the Entities of the Republic of Lithuania. The calculation of the Premises lease term shall commence as of the day of signing the Premises Delivery and Acceptance Certificate.
3.2.   Having this Agreement ended, the Lessee who orderly fulfilled the undertaken obligations hereunder shall have the priority with respect to other persons to renew this Agreement in accordance with the procedure set forth in Paragraph 3.3 hereof.
3.3. If having this Agreement ended the Lessor intends to further lease the Premises, the Lessor must notify the Lessee in writing of that in advance, but no later than 3 (three) months prior to the end of the lease term by specifying the Premises lease term and the fee as well as other substantial terms and conditions of lease. In this case the Lessee must furnish a written reply to the Lessor no later than within 1 (one) month as form receipt of notice of the Lessor and state whether or not the Lessee agrees to renew this Agreement under the terms and conditions specified in the notice of the Lessor. If the Lessee agrees to enter into the Premises lease agreement under the terms and conditions specified in the notice of the Lessor, the Parties shall agree to take all the actions under their control in order the new Premises leases agreement to be signed as soon as possible.

4. PAYMENTS AND SETTLEMENTS

4.1. The calculation of the lease fee and other payments hereunder shall commence as of 1 September 2013.
4.2. The Lessee shall undertake to pay to the Lessor for the Property specified in Paragraph 1.1 hereof each month the Lease Fee in the sum of LTL 31,50 for 1 sq.m. plus VAT which amounts in total LTL 15 000,00 (fifteen thousand Litas, 00 ct) per month. In case the law and/or regulations of legislation establishes other amount of VAT and/or other fees and/or other equivalent payments related to the subject matter of this Agreement, the Lessee shall have to pay newly established VAT and/or other fees and payments. The lease fee specified herein is established based on the provision that official Litas and Euro exchange rate amounts to LTL 3,4528 for EUR 1 on a day of signing of this Agreement. If mandatory Litas and Euro exchange rate established by the Bank of Lithuania for the commercial banks on a day of payment differs from the one as of the day of signing of this Agreement, on a day of payment the said lease fee shall be paid of such amount that having it 

converted to Euros on that day the amount in Euros would be the same as the lease fee converted in Euros according to the exchange rate of the day of signing of this Agreement. The Parties agree that the Lessee shall pay to the Lessor LTL 30 000,00 (thirty thousand Litas) plus VAT of the lease fee advance payment within 14 days as of the day of signing of this Agreement. The paid advance payment shall be considered as the lease fee for the last months of the lease.
4.3.  The Parties agree that if the consumer price index established and published by the Department of Statistics of the Republic of Lithuania, hereinafter CPI, increases by more than 3 (three) percentage points from the day of execution of this Agreement or the last recalculation of such index, the lease fee shall be recalculated in proportion to CPI change percentage. Recalculated fee amount shall be applicable as from the beginning of the calendar year following the year on which such recalculation was performed.
4.4. The lease fee shall be paid for the past month until the 10th day of the following month against an invoice furnished by the Lessor.
4.5. The Parties agree that the Lessee shall not enter into the direct services agreements with the companies providing utility services (heating, electricity, water, gas, etc.) and undertake to pay directly to the Lessor all the fees for actually used heating, electricity, water, gas in the Premises and also for communication services and other utility services that have been actually provided in the Premises. The fees for the utility services provided in the Premises, electricity and heating must be calculated in accordance with the readings of measuring apparatus (utility meters) installed in the Premises and if the individual measuring appratus (utility meters) are not installed in the Premises, such fees shall be calculated according to the documents (invoices) on actually provided utility services in the Premises issued by the organizations providing respective utility services. The Lessee shall undertake to make the payment for the services specified in this Paragraph for the current month at least within 5 (fifth) day of the current month against the VAT invoice furnished by the Lessor according to the resources used during the last month. If the amount paid by the Lessee in accordance with the procedure established herein is smaller than the monetary expression of amount specified in the invoices delivered by the service providers for heating, electricity, water, communication services as well as utility services provided actually in the Premises which have been used by the Lessee during the current month, the Lessee must pay the accrued price difference within 3 (three) business days as of the additional VAT invoice delivered by the Lessor. If the paid amount is higher than the monetary expression for heating, electricity, water, communication services as well as utility services provided actually in the Premises the accrued price difference shall be deemed to be as the partial payment for provided utility services for upcoming months.
4.6. If the Lessee fails to make the lease fee in the timely manner or other payments to the Lessor hereunder, from the amounts paid by the Lessee first of all the Lessor shall set off the late payment penalties and/or penalties, and then indebtedness of the lease fee of the Lessee and other payments hereunder.

5. RIGHTS AND OBLIGATIONS OF THE PARTIES

5.1. Without violating the rights of the Lessee, having notified the Lessee in advance, the Lessor shall be entitled to verify whether or not the Lessee properly uses the Property. Besides, the Lessor shall be entitled to show the Property to a future lessee or acquirer.
5.2. The Lessor shall be entitled each month and if needed more often to verify the readings of measuring apparatus located in the Premises which measure the usage of energy resources, water and other utility services.
5.3. The Lessor shall not be liable for interruptions in provision of energetic resources, water, communications, utility services and other services due to fault of third parties and/or providers of these resources/services. The Lessor also shall not be liable and shall not reimburse the loss incurred by the Lessee due to emergencies which have occurred due to fault of third parties and/or providers of these resources/services.
5.4. The Lessee must use the Property orderly and appropriately for the purposes set forth herein, keep the Property in good condition taking into account regular wear and tear.

5.5. After the end of the lease term or termination of this Agreement prior to its term the value of improvements, rearrangements and installations (improvements) of the Premises and/or Property shall not be reimbursed to the Lessee.
5.6 The Lessee shall undertake to perform the permanent repair works of the Premises and/or Property at its own expenses with prior written coordination with the Lessor. The Parties agree that the definition of ‘permanent repair works’ to extend it is specified herein shall meet the definition of ‘permanent repair works’ established in the Law on Construction of the Republic of Lithuania. Repair works must be carried out in compliance with all the requirements of legislation governing this activity taking into account the specifics of the Premises and Property.
5.7. The Lessee must observe the regulations of fire-safety, sanitary, environmental, occupational safety, electrical safety, operational use of heating, water-supply and sewage, telephone networks and installations and also internal procedure regulations of the Building interior and other regulations related to operational use of the Premises which are established in legislation of the Republic of Lithuania.
5.8. The Lessee must immediately notify the Lessor about fire, accident, emergencies and other events that have occurred in the Premises and which could cause or have caused damage to the Premises/Property and undertake measures for protection of the Premises and the property located therein as well as for liquidation of consequences of emergency and accident (event), if that happened due to fault of the Lessee.
5.9.  The Lessee must immediately notify verbally (and then as soon as possible in writing) the Lessor about the accidents or emergencies that have occurred in the Premises, Building or their engineering systems, malfunctions of the said systems and their consequences and also about deterioration of conditions of the Premises and/or equipments or devices of the Lessor installed therein which could cause or cause damage to the leased Premises. Having received the notice of the Lessee specified herein, the Lessor shall undertake without any unreasonable delay and at its expense to liquidate the said accidents or emergencies, malfunctions of engineering systems and also the consequences of such accidents, emergencies or malfunctions if that occurred due to fault of the Lessor.
5.10. The Lessee must pay properly and in the timely manner the lease fee and other payments hereunder.
5.11. The Lessee shall not be entitled to sub-lease the Property to third parties.
5.12. The Lessee shall not be entitled to rearrange the leased Premises without written consent of the Lessor.
5.13. The Lessee must obtain at its expenses all the licenses, permits and other documents necessary for the use of the Premises according to their purpose and the Lessor shall undertake to refrain from preventing this and provide to the Lessee all the authorizations to this end.
5.14. If damage is caused to the Property due to fault of the Lessee, its clients, visitors, interested parties and/or other third persons to whom the Lessee granted the right or possibility to enter the Premises or use them otherwise, the Lessee shall immediately perform the Property repair works having coordinated this with the Lessor. If the Lessee fails to perform the required repair works in the timely manner and such repair works are performed by the Lessor at its expense, the Lessee shall reimburse to the Lessor all the repair related expenses incurred by the Lessor and justified by the documents.

6. LIABILITY OF THE PARTIES

6.1. Each Party must reimburse to the other Party all the loss that has been incurred by such other Party because of failure to perform or properly perform the obligations undertaken hereunder.
6.2. If the terms of payment set forth herein of the lease fee and/or other payments are breached and upon written request of the Lessor, the Lessee shall undertake to pay the default interest in the sum of 0,02 percent of unpaid amount for each day of delay.
6.3. The Lessee shall be liable for the damage caused to the Property by its faulty acts or due to its negligence.
6.4. Each of the Parties shall be excused from liability for failure to perform or properly perform the obligations set forth herein, if it is capable of proving that such failure occurred due to circumstances beyond control (Force Majeure) which are set forth in RL legislation (such as fire, flood, strike, transport disturbances, natural disasters and other circumstances of similar nature) which have 

occurred after signing of this Agreement and also if it is capable of proving that it could not by any measures prevent the occurrence of said circumstances or could not avoid them and also it could not anticipate the occurrence of such circumstances when signing this Agreement. The Party which faced the Force Majeure circumstances must in writing notify the other Party of that and deliver the documents justifying the existence of such circumstances.

7. AGREEMENT VALIDITY, AMENDMENT AND TERMINATION

7.1. This Agreement shall become effective as of the moment of its signs and shall be valid until full performance of obligations hereunder.
7.2. All amendments, supplements and annexes to this Agreement shall be valid if drawn up in writing and signed by both Parties.
7.3. The Lessor shall be entitled to unilaterally, without invoking judicial procedure, to terminate this Agreement prior to expiry of the lease term with at least 1 (one) month notice to the Lessee, if:    
7.3.1. The Lessee uses the leased Property against the purpose set forth herein;
7.3.2. The Lessee delays the payment of the Lease Fee and other fees hereunder for more than 30 days and fails to rectify this breach within the term specified in writing by the Lessor;
7.3.3. The Lessee deliberately or negligently deteriorates the condition of the Property;
7.3.4. The Lessee does not carry out the repair works in cases when it is obliged to do so and fails to rectify this breach within the term specified in writing by the Lessor.
7.4. The Lessee shall be entitled to unilaterally, without invoking judicial procedure, to terminate this Agreement prior to expiry of the lease term with at least 1 (one) month notice to the Lessor, if:    
7.4.1. The Property becomes unsuitable for use because of the circumstances for which the Lessee is not responsible;
7.4.2. The Lessor prevents the Lessee from using the Property according to its purpose and terms of this Agreement.
7.5. The Lessee shall be entitled to unilaterally terminate this Agreement prior to its term without a reasonable cause by notifying the Lessor about the intended termination 1 (one) month prior to the intended day of Agreement termination.
7.6. This Agreement is subject to termination by written agreement of both Parties.
7.7. Having this Agreement terminated, the obligations and duties which have not been performed as well as established procedure of settlement, payment of penalties and loss, resolution of disputes arising out of this Agreement shall remain effective.
7.8.  By signing this Agreement the Lessor understands and agrees that this Lease Agreement may not be terminated by unilateral statement of the Lessor unless the circumstances specified in Paragraph 7.3 are present.

8. OTHER PROVISIONS

8.1. Each Party hereby represents and warrants to another Party that:
8.1.1. it is a company of private limited liability duly established and legitimately operating under the laws of the Republic of Lithuania;
8.1.2. it has all the rights and authorizations to execute this Agreement and perform properly the obligations undertaken hereunder; it received all the permits, approvals and authorizations of the competent institutions, its corporate bodies and/or other persons which based on applicable legislation and internal documentation of the Parties are necessary for execution and implementation of this Agreement;
8.1.3. neither execution of this Agreement, nor performance of obligations established herein violate and breach (i) any Articles of Association of the Party or provisions of other internal documents and also any decisions, orders or instructions issued by the corporate bodies of the Party; (ii) any decision, resolution, order, instruction or other document issued by court or other sate or municipal which is mandatory or applicable to the Party; (iii) any agreement, other transaction or promise to which it is a party; and also (iv) any provisions of laws or applicable legislation that is mandatory to the Party.

8.2. Besides the statements and warranties set out in Paragraph 8.1 hereof, by signing this Agreement the Lessor shall additionally represent and warrant to the Lessee, that:
8.2.1. the Lessor possesses the Premises by private ownership title;
8.2.2. the Lessor represents that during the time of execution of this Agreement the leased Premises are mortgaged to the bank AB Swedbank.
8.2.3. there are no disputes in court concerning the leased premises, premises are not seized or their use according to their direct purpose is not otherwise limited; premises are not leased and are not given to any third parties on the grounds of commodate; there are no hidden defects of which the Lessor is aware of due to which the Premises could not be used according to their purpose or their utility could be decreased to the extent that if the Lessee had known about these defects, it should not have leased the Premises or should not paid for the Premises the lease fee of such amount.
8.3. It shall be deemed that representations and warranties listed herein is delivered and is accurate on a day of signing of this Agreement and on the day of delivery and acceptance of the Premises.
8.4. If the representations and warranties as well as statements set out herein were not true, the Party to which such representation, warranty or statement has been presented (aggrieved Party) shall be entitled (in addition without limiting the rights which it can exercise under the laws of the Republic of Lithuania) to demand from the Party which presented such representation or statement, to reimburse the direct loss suffered due to the fact that the aggrieved Party trusted false representation, warranty or statement and which could not have been incurred by the Party, if the representation or warranty should have corresponded to reality.
8.5. The Party shall undertake to refrain from disclosing the terms and conditions of this Agreement to any third parties with an exception of state institutions and creditors of the Lessor which are entitled to receive such information under the laws. Notwithstanding the confidentiality obligation set forth herein, any of the Parties shall be entitled to disclose the confidential information to is employees, participants, auditors and advisors and/or consultants selected by the Parties.
8.6. Invalidity of any provision of this Agreement shall not affect the validity of other provisions of the Agreement. The Parties agree to replace the invalid provision of the Agreement with other provision which meet the most the objective and spirit of the previous one.
8.7. The Agreement together with all its amendments, supplements and/or annexes form one agreement between the Parties and the Agreement may not be anyhow divided.
8.8. Having the ownership title to the Property passed from the Lessor to a third party, this Agreement shall be valid to the new owner of the Premises with the same terms and conditions for the entire Agreement validity time.
8.9. Any dispute arising out of this Agreement or related hereto which within 30 (thirty) days as from submission of the Party’s request regarding the performance of obligations hereunder is not resolved by negotiations, must be resolved in court of the Republic of Lithuania in accordance with the procedure established by laws of the Republic of Lithuania.
8.10. The laws of the Republic of Lithuania shall govern the relations arising between the Parties which are not regulated by this Agreement.
8.11. In the event of change of the legal addresses, numbers of bank accounts and (or) other details, the Parties must immediately notify each other of that. The Party which failed to fulfill this requirement shall be deprived of the right to present the claims or counterclaims that actions of the other Party performed according to the details of which it was lately aware of fails to meet the terms of the agreement or that it had not received notices which have been send according to these details.
8.12. The Parties confirm that all the terms and conditions of this Agreement were discussed and coordinated individually, i.e. each term and condition of the Agreement was discussed and coordinated individually.
8.13. All the information, warnings or notices related to this Agreement must be drawn up in writing and must be send by electronic mail, fax, registered letter or courier mail (with confirmation about delivery) or delivered against the signature at the addresses specified in Paragraph 9 hereof.
8.14. This Agreement may be registered in Kaunas Branch of Immovable Property Register of the State Enterprise Center of Registers. The Agreement shall be registered at expenses of the Lessee.
8.15. The Agreement shall be signed in three copies in the Lithuanian language, each copy having the same legal authority, one copy is retained by each Party to the Agreement and third copy shall be 

delivered to the Kaunas Branch of Immovable Property Register of the State Enterprise Center of Registers. The Parties shall place their signatures on each page of the Agreement. 
8.16. The Parties represent that they have read this Agreement, understood their content and the consequences of its performance, failure of performance or improper performance, or untimely performance. The Parties sign this Agreement as the document which corresponds to the will of each of them and the objectives of signing this Agreement.
8.17. By signing this Agreement the representative of the Lessor confirms that the meeting of creditors of the Lessor has approved this Agreement draft as it is being signed and the Agreement draft is approved by decision of the meeting of creditors of the Lessor.

ANNEXES TO THE AGREEMENT:

Annex No. 1 – Copy of the Premises’ Plan
Annex No. 2 – Plan of the Third Floor of the Building
Annex No. 3 – Certificate of Delivery and Acceptance of the Premises
Annex No. 4 – Extract from the Register of Immovable Property of the State Enterprise Center of 
    Registers.

9. LEGAL ADDRESSES AND DETAILS OF THE PARTIES

LESSOR                    LESSEE

BUAB Apskaitos etika                UAB Ubiquiti Networks Europe
Company number  1117 75915            Company number  300633724
50 Putvinskio Str., Kaunas            Address: 221 Savanorių Ave., Kaunas
LT19 4010 0425 0307 4176            E-mail: rasa@ubnt.com
AB DNB bank                    Ph. 8-687-27482
Represented by bankruptcy administrator
UAB Įmonių bankroto administravimo ir teisinių paslaugų biuras
 E-mail k.stankus@adminbiuras.lt
Ph. 8-687-55922

/signed/                        /signed/
Kęstutis Stankus                Director Rasa Juodišienė
A person authorized by the administrator

ANNEX No.3 to the 10 July 2013 Non-Residential Premises Lease Agreement

CERTIFICATE OF DELIVERY AND ACCEPTANCE OF THE PREMISES

10 July 2013, Kaunas

BUAB Apskaitos etika, company number 1117 75915, legal address 50 V. Putvinskio Str., Kaunas, represented by the administrator UAB Įmonių bankroto administravimo ir teisinių paslaugų biuro (Company Bankruptcy Administration and Legal Services Bureau), number of legal person 235238440, by authorized person Kęstutis Stankus (basis for authorization is the 26 March 2012 Resolution of Kaunas Regional Court and the 30 April 2012 Power of Attorney No. 04-81/1), hereinafter referred to as the ‘Lessor’ on one side 
and
UAB Ubiquity Networks Europe, number of legal person 300633724, address of the registered office 221 Savanorių Ave., Kaunas, represented by Rasa Juodišienė, the director, hereinafter referred to as the ‘Lessee’ on the other side,
    
The Lessor and the Lessee hereinafter may be referred to as the ‘Parties’ and each individually as the ‘Party’, following the Non-Residential Premises Lease agreement entered into on 10 July 2013 (hereinafter referred to as the ‘Agreement’) hereby agree as follows:

		
	1.
	The Lessor hereby delivers to the Lessee for the fee to possess and use the premises of administrative purpose the total area of which is 477 sq.m., located on the third floor of the building at address 50 V.Putvinskio Str., the unique number of which is 4400-0605-4380, owned by the Lessor.

		
	2.
	The Lessee hereby undertakes the aforementioned Premises. The Lessee confirms that the conditions of the Premises to be delivered on the day of execution of this Certificate meets substantially the terms and conditions of the Agreement and also that the Premises are suitable for use according to their purpose set out in the Agreement.

		
	3.
	The Parties state that at the time of signing of this Certificate the works which have been undertaken by the Lessor under the Paragraph 2.1 of the Agreement are not performed: the measuring apparatus and shower cabin are not installed. The Lessor shall undertake to perform such works in accordance with the terms set out in the Agreement.

		
	4.
	The defects of the Premises which are present on the day of signing of this Certificate:

Keys have not been handed, gate remote control, access cards and the company ‘Apskaitos etika’ has not vacated the Premises 
(specify, if any)

The readings of utility meters on the day of signing this Certificate:
5.1. electricity: WHG:21422; WHP:1951; WHP:1692;
5.2. heating: 0000; 0000 (2 measuring apparatus);
5.3. _______________________ .

LEGAL ADDRESSES AND DETAILS OF THE PARTIES

LESSOR                    LESSEE

BUAB Apskaitos etika                UAB Ubiquiti Networks Europe
Company number 1117 75915            Company number  300633724

50 Putvinskio Str., Kaunas            Address: 221 Savanorių Ave., Kaunas
LT19 4010 0425 0307 4176            E-mail: rasa@ubnt.com
AB DNB bank                    Ph. 8-687-27482
Represented by bankruptcy administrator
UAB Įmonių bankroto administravimo ir teisinių paslaugų biuras
 E-mail k.stankus@adminbiuras.lt
Ph. 8-687-55922

/signed/                        /signed/
Kęstutis Stankus                Director Rasa Juodišienė
A person authorized by the administrator

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