Document:

EXHIBIT 10.1

 

NOTE PURCHASE
AGREEMENT

 

THIS NOTE PURCHASE AGREEMENT
(the “Agreement”), dated as of August 21, 2013, is entered into by and between, Cardinal Energy Group, Inc., a Nevada
corporation, (the “Company”), having its address at 6037 Frantz Road, Suite 103, Dublin, Ohio 43017 (the “Company”)
and Equity Trust fbo Amy Alley, 401K, having its address at_________________  (collectively, the “Purchaser”).

 

RECITALS:

 

A. The Company
and the Purchaser 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 “Securities Act”);

 

B. Purchaser
desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement
a senior, secured, convertible note of the Company, in the form attached hereto as Exhibit “A”, in the
aggregate principal amount of $98,485 (the “Note”), which Note is convertible into shares of common stock of the
Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth herein and
in the Note.

 

NOW THEREFORE,
in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1. DEFINITIONS.

 

(a) Certain
Definitions. As used herein, each of the following terms has the meaning set forth below, unless the context otherwise
requires:

 

(i) “Affiliate”
means, with respect to a specific Person referred to in the relevant provision, another Person who or which controls or is
controlled by or is under common control with such specified Person.

 

(ii) “Closing”
means the event in which the Purchaser purchases from the Company the Securities, which shall take place within five (5)
business days of the date hereof, unless otherwise agreed to by the parties hereto.

 

(iii) “Closing
Date” means the date on which the Closing is held.

 

(iv) “Person”
means any living person or any entity, such as, but not necessarily limited to, a corporation, partnership or
trust.

 

(v) “Transaction
Documents” means, collectively, this Agreement, the Note and any other agreements, documents and instruments
contemplated hereby or thereby.

 

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2. PURCHASE
AND SALE OF NOTE.

 

(a) Purchase
of Note. Subject to the satisfaction (or waiver) of the terms and conditions of this Agreement, the Purchaser agrees to
purchase at the Closing and the Company agrees to sell and issue to the Purchaser at the Closing, the Note in exchange for
$98,485(the “Purchase Price”). As set forth in the Note, the principal amount of the Note shall be repaid in
cash, but at the option of the Purchaser, such amount may be repaid through the conversion of the Note into shares of the
Company’s restricted common stock at the market price as set forth in the Note (the “Shares”). In addition
to the foregoing, the Company shall issue to the Purchaser, at the Closing Date, as paid-up interest, 131,313 shares of its
restricted Common Stock (the “Interest Shares”).

 

(b) Closing
Date. The Closing (the “Closing”) of the purchase and sale of the Note shall take place within five (5) business
days of the date hereof, subject to notification of satisfaction of the conditions to the Closing set forth herein (or such
later date as is mutually agreed to by the Company and the Purchaser (the “Closing Date”). The Closing shall
occur on the Closing Date at such location as may be agreed to by the parties.

 

(c) Form
of Payment. Subject to the satisfaction of the terms and conditions of this Agreement, on the Closing Date, (i) the Purchaser
shall deliver, or cause to be delivered, to the Company (via wire transfer of immediately available funds pursuant to the
Company’s written wiring instructions attached hereto) the Purchase Price, and (ii) the Company shall deliver to the
Purchaser: (x) the Note duly executed on behalf of the Company and in the name of the Purchaser, or its designee, and (y) the
Interest Shares.

 

3. PURCHASER
REPRESENTATIONS AND WARRANTIES.

 

The Purchaser represents
and warrants as follows:

 

(a) Investment
Purpose. The Purchaser is acquiring the Note and the Shares issuable upon conversion of the Note (the Note and the Shares may
be referred to collectively as “Securities”) for its own account for investment only and not with a view towards,
or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted
under the Securities Act; provided, however, that by making the representations herein, such Purchaser reserves the right to
dispose of the Securities at any time in accordance with or pursuant to an effective registration statement covering such
Securities or an available exemption under the Securities Act. Such Purchaser does not presently have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the Securities.

 

(b) Accredited
Investor Status. The Purchaser is: (i) an “Accredited Investor” as that term is defined in Rule 501(a)(3) of
Regulation D, (ii) experienced in making investments of the kind described in this Agreement and the related documents, (iii)
able, by reason of the business and financial experience of its officers (if an entity) and professional advisors (who are
not affiliated with or compensated in any way by the Company or any of its affiliates or selling agents), to protect its own
interests in connection with the transactions described in this Agreement, and the related documents, and (iv) able to afford
the entire loss of its investment in the Securities.

 

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

 

(d) Information.
The Purchaser and its advisors (and his or, its counsel), if any, have been furnished with all materials relating to the
business, finances and operations of the Company and information he deemed material to making an informed investment decision
regarding his purchase of the Securities, which have been requested by such Purchaser. The Purchaser and its advisors, if
any, have been afforded the opportunity to ask questions of the Company and its management. Neither such inquiries nor any
other due diligence investigations conducted by such Purchaser or its advisors, if any, or its representatives shall modify,
amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in
herein. The Purchaser understands that its investment in the Securities involves a high degree of risk. The Purchaser has
sought such accounting, legal and tax advice, as it has considered necessary to make an informed investment decision with
respect to its acquisition of the Securities.

 

(e) No
Governmental Review. The Purchaser understands that no United States federal or state agency or any other government or
governmental agency has passed on or made any recommendation or endorsement of the Securities, or the fairness or suitability
of the investment in the Securities, nor have such authorities passed upon or endorsed the merits of the offering of the
Securities.

 

(f) Transfer
or Resale. The Purchaser understands that: (i) the Securities have not been and are not being registered under the
Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, (B) such Purchaser shall have delivered to the Company an opinion of counsel, in a
generally acceptable form, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration requirements, or (C) such Purchaser provides the Company with
reasonable assurances (in the form of seller and broker representation letters) that such Securities can be sold, assigned
or transferred pursuant to Rule 144 or Rule 144A promulgated under the Securities Act, as amended (or a successor rule
thereto) (collectively, “Rule 144”), in each case following the applicable holding period set forth therein; (ii)
any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and
further, if Rule 144 is not applicable, any resale of the 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 Securities Act) may require
compliance with some other exemption under the Securities 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 the Securities under the Securities Act or any
state securities laws or to comply with the terms and conditions of any exemption thereunder.

 

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(g) Legends.
The Purchaser agrees to the imprinting on the certificates or documents representing the Securities a restrictive legend in
substantially the following form:

 

THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.

 

Certificates evidencing
the restricted shares of the Company’s Common Stock(the “Restricted Stock”) shall not contain any legend (including
the legend set forth above): (i) while a registration statement covering the resale of such security is effective under the Securities
Act, (ii) following any sale of such Restricted Stock pursuant to Rule 144, (iii) if such Restricted Stock are eligible for sale
under Rule 144, or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the SEC). The Purchaser agrees that the removal of restrictive legend
from certificates representing Securities is predicated upon the Company’s reliance that the Purchaser will sell any Securities
pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom, and that if Securities are sold pursuant to a registration statement, they will be sold in compliance
with the plan of distribution set forth therein.

 

(h) Authorization,
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of such Purchaser and is a
valid and binding agreement of such Purchaser enforceable in accordance with its terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and
remedies.

 

(i) No
Legal Advice from the Company. The Purchaser acknowledges, that it had the opportunity to review this Agreement and the
transactions contemplated by this Agreement with his or its own legal counsel and investment and tax advisors. The Purchaser
is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its
representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated
by this Agreement or the securities laws of any jurisdiction.

 

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4. COMPANY
REPRESENTATIONS AND WARRANTIES.

 

Except as otherwise
set forth herein, the Company represents and warrants as follows:

 

(a) Organization
and Qualification. The Company and its subsidiaries are corporations duly organized and validly existing in good standing
under the laws of the jurisdiction in which they are incorporated, and have the requisite corporate power to own their
properties and to carry on their business as now being conducted. Each of the Company and its subsidiaries is duly qualified
as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business
conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good
standing would not have or reasonably be expected to result in a Material Adverse Effect and no proceeding has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and
authority or qualification.

 

(b) Authorization,
Enforcement, Compliance with Other Instruments. (i) The Company has the requisite corporate power and authority to enter into
and perform its obligations under the Transaction Documents and to issue the Securities in accordance with the terms hereof
and thereof, (ii) the execution and delivery of the Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby, including, without limitation, the issuance of the Securities, have been duly
authorized by the Company’s Board of Directors and no further consent or authorization is required by the Company, its
Board of Directors or its stockholders, (iii) the Transaction Documents have been duly executed and delivered by the Company,
(iv) the Transaction Documents constitute the valid and binding obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors’ rights and remedies.

 

(c) Issuance
of Securities. The issuance of the Securities is duly authorized and free from all taxes, liens and charges with respect
to the issue thereof. The Restricted Stock, when issued, will be validly issued, fully paid and nonassessable, free from
all taxes, liens and charges with respect to the issue thereof. The Company has reserved from its duly authorized capital
stock the appropriate number of shares of Common Stock as set forth in this Agreement.

 

(d) SEC
Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by it with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for
the year preceding the date hereof (all of the foregoing filed prior to the date hereof or amended after the date hereof and
all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein,
being hereinafter referred to as the “SEC Documents”) on timely basis or has received a valid extension of such
time of filing and has filed any such SEC Document prior to the expiration of any such extension. The Company has delivered
to the Purchaser or its representatives, or made available through the SEC’s website at http://www.sec.gov., true and
complete copies of the SEC Documents. As of their respective dates, the SEC Documents complied in all material respects with
the requirements of the Exchange 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 the light of the circumstances under which they were made, not misleading. 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 generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the
case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and
fairly present in all material respects the financial position of the Company as of the dates thereof and the results of
its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end
audit adjustments).

 

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(e) No
General Solicitation. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities
Act) in connection with the offer or sale of the Securities.

 

(f) (j)
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 of any security or solicited any offers to buy any security, under
circumstances that would require registration of the Securities under the Securities Act or cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of the Securities Act.

 

(g) Private
Placement. Assuming the accuracy of the Purchaser’s representations and warranties set forth herein, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchaser as contemplated
hereby. 

 

(h) Reporting
Status. With a view to making available to the Purchaser the benefits of Rule 144 or any similar rule or regulation of the
SEC that may at any time permit the Purchaser to sell securities of the Company to the public without registration, and as a
material inducement to the Purchaser’s purchase of the Securities, the Company represents and warrants to the
following: (i) the Company is, and has been for a period of at least 90 days immediately preceding the date hereof, subject
to the reporting requirements of section 13 or 15(d) of the Exchange Act (ii) the Company has filed all required reports
under section 13 or 15(d) of the Exchange, as applicable, during the 12 months preceding the date hereof (or for such shorter
period that the Company was required to file such reports), and (iii) the Company is not an issuer defined as a “Shell
Company.” For the purposes hereof, the term “Shell Company” shall mean an issuer that meets the description
defined in paragraph (i)(1)(i) of Rule 144.

 

5. DISCLOSURE.
The Company has made available to the Purchaser and its counsel all the information reasonably available to the Company that the
Purchaser or its counsel have requested for deciding whether to acquire the Securities. No representation or warranty of the Company
contained in this Agreement (as qualified by the SEC Documents or any of the other Transaction Documents, and no certificate furnished
or to be furnished to the Purchaser at the Closing, or any due diligence evaluation materials furnished by the Company or on behalf
of the Company, including without limitation, due diligence questionnaires, or any other documents, presentations, correspondence,
or information contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the circumstances under which they were made.

 

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6. CLOSING. At
Closing:

 

(a) The
Company shall deliver to the Purchaser the Interest Shares and the duly executed Note.

 

(b) The
Purchaser shall deliver, or cause to be delivered, to the Company the Purchase Price (as adjusted downward for the costs and
expenses set forth in section (c) below) by wire transfer of immediately available U.S. funds pursuant to the wire
instructions provided by the Company.

 

7. CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL. The Company’s obligation to sell the Securities to the Purchaser
pursuant to this Agreement on the Closing Date is conditioned upon:

 

(a) Delivery
by the Purchaser to the Company of the Purchase Price for the Securities by wire transfer of immediately available U.S.
funds pursuant to the wire instructions provided by the Company;

 

(b) Delivery
of the executed Transaction Documents, as appropriate; and

 

(c) The
representations and warranties of the Purchaser 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 Purchaser 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 Purchaser at or prior to the
Closing Date.

 

8. CONDITIONS
TO THE PURCHASER’S OBLIGATION TO PURCHASE. The Purchaser’s obligation to purchase the Debenture and the Restricted
Stock pursuant to this Agreement on the Closing Date is conditioned upon:

 

(a) Delivery
by the Company to the Purchaser of the Note and the Interest Shares to be purchased in accordance with this
Agreement;

 

(b) Delivery
of the executed Transaction Documents, as appropriate; and

 

(c) 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 that 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.

 

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9. GOVERNING
LAW; MISCELLANEOUS. 

 

(a) Governing
Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Nevada for contracts to
be wholly performed in such state and without giving effect to the principles thereof regarding the conflict of laws. To the
extent determined by such court, the Company shall reimburse the Purchaser for any reasonable legal fees and disbursements
incurred by the Purchaser in enforcement of or protection of any of its rights under any of the Transaction
Documents.

 

(b) Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered 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 and shall not form part of, or affect the interpretation of,
this Agreement.

 

(d) Severability.
If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability
shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.

 

(e) Entire
Agreement, Amendments. This Agreement supersedes all other prior oral or written agreements between the Purchaser, the
Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and 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 any Purchaser 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 party to be charged with enforcement.

 

(f) Notices.
Any notices, consents, waivers, or other communications required or permitted to be given under the terms of this Agreement
must be in writing and will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon
confirmation of receipt, when sent by facsimile; (iii) three (3) days after being sent by U.S. certified mail, return receipt
requested, or (iv) one (1) day after deposit with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

 

	COMPANY: 	 	
        Cardinal Energy Group, Inc.

        6037 Frantz Road, Suite 103

        Dublin, Ohio 43017

        Fax No. ________________

        

	 	 	 
	PURCHASER:	 	
        Equity Trust fbo Amy Alley, 401K

        _______________________

        _______________________

        Fax No. ________________

        

 

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(g) Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns. Neither the Company nor any Purchaser shall assign this Agreement or any rights or obligations hereunder without the
prior written consent of the other party hereto.

 

(h) (h)
No 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.
All agreements, representations and warranties contained in this Agreement or made in writing by or on behalf of any party in
connection with the transactions contemplated by this Agreement shall survive the execution and delivery of this Agreement
and the Closing.

 

(j) Publicity.
The Company and the Purchaser shall have the right to approve, before issuance any press release or any other
public statement with respect to the transactions contemplated hereby made by any party; provided, however, that the Company
shall be entitled, without the prior approval of the Purchaser, to issue any press release or other public disclosure with
respect to such transactions required under applicable securities or other laws or regulations (the Company shall use its
best efforts to consult the Purchaser in connection with any such press release or other public disclosure prior to its
release and Purchaser shall be provided with a copy thereof upon release thereof).

 

(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) Brokerage.
The Company represents that no broker, agent, finder or other party has been retained by it in connection with the
transactions contemplated hereby and that no other fee or commission has been agreed by the Company to be paid for or on
account of the transactions contemplated hereby.

 

(m) 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.

 

IN WITNESS WHEREOF,
this Agreement has been duly executed by the Purchaser and the Company as of the date first set forth above.

 

CARDINAL ENERGY GROUP, INC.:

 

	By:	 	 
	Name:	 	 
	Title:	 	

 

EQUITY TRUST
FBO AMY ALLEY, 401K:

 

	By:	 	 
	Name:	 	 
	Title:	 	 

 

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Exhibit “A”

 

FORM OF PROMISSORY NOTE

 

    	10EXHIBIT 10.2

 

THIS NOTE AND THE COMMON
SHARES ISSUABLE UPON CONVERSION OF THIS NOTE, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND ACCORDINGLY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.

 

CARDINAL ENERGY GROUP, INC.

 

CONVERTIBLE
PROMISSORY NOTE

 

	____________, 2013	$98,485.00

 

Cardinal
Energy Group, Inc., a Nevada corporation (the “Company”), hereby promises to pay to the order of
Equity Trust fbo Amy Alley, 401K, or its designee(s) (collectively, the “Holder”) the principal amount
of $98,485(the “Principal Amount”) in accordance with the provisions of this Convertible Promissory Note
(the “Note”).This Note is issued pursuant to the terms of that certain Note Purchase Agreement of even
date herewith (the “Purchase Agreement”).

 

1. Paid-up Interest. As of the date hereof,
the Company has issued to the Holder, as paid-up interest, 131,313 shares of its restricted Common Stock (the “Interest Shares”).

 

2. Payment of Principal.

 

2.1.
Scheduled Payments. The Company will pay the principal amount of $98,485 (or such principal amount then outstanding) to the
Holder on or before 120 days from the date hereof (the “Maturity Date”).

 

2.2. Prepayments.

 

(a) The
Company may at any time, prepay all or any part, of the outstanding Principal Amount of the Note. In such event, the Company
shall deliver to the Holder a written irrevocable notice indicating the amount intended to be so prepaid (the
“Prepayment Amount”) and the date on which such prepayment shall be made (the “Prepayment
Date”). Such notice shall be delivered to the Holder at least seven (7) business days’ prior to the
Prepayment Date.

 

(b) Upon receipt of the prepayment notice described
above, the Holder shall then have the option (by notifying the Company in writing within 5 business days of receipt of the prepayment
notice) to accept the prepayment in cash or elect to have the Note converted pursuant to paragraph 4, below.

 

2.3. Security. The obligations of the Company
hereunder are secured by a security interest in the assets of the Company.

 

3. Event of Default.

 

3.1. An “Event of Default”, wherever
used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected
by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative
or governmental body):

 

    	 

    	 

    

 

(a) Any default in the payment of the principal
of,or other charges in respect of this Note, as and when the same shall become due and payable (whether on a Conversion Date or
the Maturity Date or by acceleration or otherwise);

 

(b) The Company shall fail to observe or perform
any other covenant, agreement or warranty contained in, or otherwise commits any breach or default of any provision of this Note.

 

3.2. During the time that any portion of this
Note is outstanding, if any Event of Default has occurred and such Default is not cured by the Company within ten (10) days of
the occurrence of the Event of Default (the “Cure Period”), the full principal amount of this Note,shall become
at the Holder’s election, immediately due and payable in cash, provided however, the Holder may request (but shall have no
obligation to request) payment of such amounts in common stock of the Company (the “Common Stock”) pursuant
to its right of conversion as set forth below.

 

4. Conversion.

 

4.1. Optional Conversion by Holder. At any
time prior to Maturity, the Holder shall have the right (upon providing written notice to the Company), but not the obligation,
to convert all or any portion of the outstanding Principal Amount into fully paid and nonassessable shares of the Company’s
Common Stock at the conversion price set forth below.

 

4.2. Conversion Price. Subject to adjustment
as described below, the conversion price per share (the “Conversion Price”) shall be the Market Price of the
Company’s Common Stock. “Market Price” means the average of the closing Trading Price (as defined below) for
the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date.
“Trading Price” means, for any security as of any date, the closing bid price on the Over-the-Counter Market, or applicable
trading market (the “OTC”). “Trading Day” shall mean any day on which the Common Stock is tradable for
any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being
traded. The shares of Common Stock to be issued upon conversion are herein referred to as the “Conversion Shares”.

 

4.3.
Mechanics of Conversion. In the event that the Holder elects to convert this Note into shares of the Company’s
Common Stock, the Holder shall give notice of such election by delivering an executed and completed notice of
conversion (“Notice of Conversion”) to the Company and such Notice of Conversion shall provide a breakdown
in reasonable detail of the amount of Principal Amount being converted. On each Conversion Date (as hereinafter defined) and
in accordance with its Notice of Conversion, the Company shall make the appropriate reduction to the Principal Amount as
entered in its records and shall provide written notice thereof to the Holder within two (2) business days after the
Conversion Date. Each date on which a Notice of Conversion is delivered or telecopied to the non-Converting Party in
accordance with the provisions hereof shall be deemed a Conversion Date (the “Conversion Date”). In the
case of the exercise of the conversion rights set forth herein, the conversion privilege shall be deemed to have been
exercised and the Conversion Shares issuable upon such conversion shall be deemed to have been issued upon the date of
receipt by the non-Converting Party of the Notice of Conversion.

 

    	- 2 -

    	 

    

 

4.4. Adjustment Provisions. The Conversion
Price and the number and kind of shares or other securities to be issued upon conversion determined herein shall be subject to
adjustment from time to time upon the happening of certain events while this conversion right remains outstanding, as follows:

 

(a) Reclassification, etc. If the Company at any
time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any
class or classes, this Note, as to the unpaid Principal Amount, shall thereafter be deemed to evidence the right to purchase an
adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect
to the Common Stock immediately prior to such reclassification or other change.

 

(b) Stock Splits, Combinations and Dividends.
If the shares of Common Stock are subdivided or combined into a greater or smaller number of shares of Common Stock, or if a dividend
is paid on the Common Stock in shares of Common Stock, the Conversion Price shall be proportionately reduced in case of subdivision
of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which
the total number of shares of Common Stock outstanding immediately after such event bears to the total number of shares of Common
Stock outstanding immediately prior to such event.

 

4.6. Reservation of Shares. During the period
the conversion right exists, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares
to provide for the issuance of Common Stock upon the full conversion of this Note. The Company represents that upon issuance, such
shares will be duly and validly issued, fully paid and non-assessable. The Company agrees that its issuance of this Note shall
constitute full authority to its officers, agents, and transfer agents who are charged with the duty of executing and issuing stock
certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note.

 

5. Amendment and Waiver. Except as otherwise
expressly provided herein, the provisions of the Note may be amended and the Company may take any action herein prohibited, or
omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder.

 

6. Cancellation. After all
principal owed on this Note has been paid in full or upon full conversion of this Note, this Note shall be surrendered to the
Company for cancellation and will not be reissued.

 

7. Place of Payment. Payments of principal is
to be delivered to the Holder at the address set forth below for the Holder or to such other address or to the attention of such
other person as specified by prior written notice to the Note.

 

8. Rank. The Note shall be senior in rank to
any other debt held by officers, directors or affiliates of the Company.

 

IN WITNESS WHEREOF, the Company has executed
and delivered this Note as of the date first above written.

 

	CARDINAL ENERGY GROUP, INC.:	 
	 	 	 
	By:		 
	Name:		 
	Title:		 
	Date:		 

 

    	- 3 -

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