THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.

CARDINAL ENERGY GROUP, INC.

STOCK PURCHASE WARRANT

To Purchase _________ Shares of Common Stock

( __________ thousand shares)

 THIS CERTIFIES that, for value received, __________________________________________________ (the “Holder”), is entitled, upon the terms and subject to the conditions hereinafter set forth, at any time on or after the date hereof, to subscribe for and purchase, from CARDINAL ENERGY GROUP, INC. a Nevada corporation (the “Company”), of the fully paid non-assessable shares of the Company’s common stock, $0.01 par value per share (“Common Stock”) at an initial purchase price of $1.00 per share or a lesser price as described herein, provided that such right will terminate, if not terminated earlier in accordance with the provisions hereof, at 5:00 p.m. (Pacific Time) on December 31, 2019 (the “Expiration Date”).

The purchase price and the number of shares for which this warrant (the “Warrant”) is exercisable are subject to adjustment, as provided herein.

This Warrant was issued in connection with the Company’s private offering (the “Offering”) of units of the Company’s securities (the “Units”), each Unit consisting of $50,000 par value 12% Senior Secured Convertible Promissory Notes maturing December 31, 2015 and warrants to purchase 20,000 shares of the Company’s Common Stock until Expiration Date (a “Warrant Share”), pursuant to a Private Placement Memorandum dated February ____, 2014 (the “Memorandum”) and is subject to the terms of a Subscription Agreement (the “Subscription Agreement”) incorporated therein to which the initial Holder is a party. Capitalized terms used and not otherwise defined herein will have the respective meanings ascribed to such terms in the Memorandum.

As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

(a) The term “Company” shall include CARDINAL ENERGY GROUP, INC. f/k/a _____________and any corporation that shall succeed or assume the obligations of CARDINAL ENERGY GROUP, Inc. hereunder.

(b) The term “Warrant Shares” includes (i) the Company’s Common Stock and (ii) any other securities into which or for which any of the Common Stock may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

(c) The term “Other Securities” refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities.

(d) The term “Exercise Price” shall be $1.00 per share or a lesser price per share as described in the Note, subject to adjustment pursuant to the terms hereof.

Unless sooner terminated in accordance herewith, from and after the date hereof through and including the Expiration Date, the Holder shall be entitled to receive, upon exercise of this Warrant in whole or in part, the number of shares of Common Stock of the Company set forth on the first page of this Warrant, subject to adjustment pursuant hereto, by delivery of an original or fax copy of the exercise notice attached hereto as Exhibit A (the “Notice of Exercise”) along with payment to the Company of the Exercise Price.

(a) The purchase rights represented by this Warrant are exercisable by the registered Holder hereof, in whole at any time or in part from time to time by delivery of the Notice of Exercise duly completed and executed at the office of the Company in California (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder hereof at the address of such Holder appearing on the books of the Company), and upon payment of the Exercise Price of the shares thereby purchased (cash, bank wire transfer, or by certified or official bank check payable to the order of the Company in an amount equal to the Exercise Price of the shares thereby purchased); whereupon the Holder of this Warrant shall be entitled to receive a certificate for the number of Warrant Shares so purchased; provided that the Company will place on each certificate a legend substantially the same as that appearing on this Warrant, in addition to any legend required by any applicable state or federal law. If this Warrant is exercised in part, the Company will issue to the Holder hereof a new Warrant upon the same terms as this Warrant but for the balance of Warrant Shares for which this Warrant remains exercisable. The Company agrees that upon exercise of this Warrant the Holder shall be deemed to be the record owner of the shares issued upon exercise as of the close of business on the date on which this Warrant shall have been exercised as aforesaid. This Warrant will be surrendered at the time of exercise or if lost, stolen, misplaced or destroyed, the Holder will comply with Section 7 below (b) Certificates for shares purchased hereunder shall be delivered to the Holder hereof within a reasonable time after the date on which this Warrant shall have been exercised as aforesaid.

(c) The Company covenants that all Warrant Shares which may be issued upon the exercise of rights represented by this Warrant will, upon exercise of the rights represented by this Warrant, be fully paid and non-assessable and free from all preemptive rights, taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue which shall be paid by the Company in accordance with Section 4 below).

The Company shall not be required to issue fractional Warrant Shares upon the exercise of this Warrant or to deliver Warrant Certificates that evidence fractional Warrant Shares. In the event that a fraction of a Warrant Share would, except for the provisions of this Section 3, be issuable upon the exercise of this Warrant, the Company shall pay to the Holder exercising the Warrant an amount in cash equal to such fraction multiplied by the Per Share Market Value of the Warrant Share.

For purposes of this Warrant, the Per Share Market Value shall be determined as follows: As used herein, “Per Share Market Value” means on any particular date (a) the closing bid price per share of Common Stock on such date on the national securities exchange on which the shares of Common Stock are then listed or quoted, or if there is no such price on such date, then the average of the closing bid and asked prices on the national securities exchange on the date nearest preceding such date, (b) if the shares of Common Stock are not then listed or quoted on a national securities exchange, the average of the closing bid and asked prices for a share of Common Stock in the over-the-counter market, as reported by the National Quotation Bureau, Inc., or an equivalent generally accepted reporting service, at the close of business on such date, or (c) if the shares of Common Stock are not then publicly traded, the fair market value of a share of Common Stock as determined by an appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding.

Issuance of certificates for Warrant Shares upon the exercise of this Warrant shall be made without charge to the Holder hereof for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder of this Warrant, or in such name or names as may be directed by the Holder of this Warrant; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder of this Warrant, this Warrant, when exercised, shall be accompanied by the Assignment Form attached hereto as Exhibit B (the “Assignment Form”) duly executed by the Holder hereof; and provided further, that upon any transfer involved in the issuance or delivery of any certificates for Warrant Shares, the Company may require, as a condition thereto, that the transferee execute an appropriate investment representation as may be reasonably required by the Company.

This Warrant does not entitle the Holder hereof to any voting rights or other rights as a Shareholder of the Company prior to the exercise hereof.

This Warrant is exchangeable, upon the surrender hereof by the registered Holder at the above-mentioned office or agency of the Company, for a new Warrant or Warrants aggregating the total Warrant Shares of the surrendered Warrant of like tenor and dated as of such exchange. The Company shall maintain at the above-mentioned office or agency a registry showing the name and address of the registered Holder of this Warrant. This Warrant may be surrendered for exchange, transfer or exercise, in accordance with its terms, at such office or agency of the Company, and the Company shall be entitled to rely in all respects, prior to written notice to the contrary, upon such registry.

Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and in case of loss, theft or destruction, of indemnity reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor (but with no additional rights or obligations) and dated as of such cancellation, in lieu of this Warrant.

If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday or a Sunday or shall be a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a Saturday, Sunday or legal holiday.

No adjustment on account of cash dividends or interest on the Company’s Common Stock or Other Securities that may become purchasable hereunder will be made to the Exercise Price under this Warrant.

If the Company is a party to a consolidation, merger or transfer of assets that reclassifies or changes its outstanding Common Stock, the successor corporation (or corporation controlling the successor corporation or the Company, as the case may be) shall by operation of law assume the Company’s obligations under this Warrant. Upon consummation of such transaction the Warrants shall automatically become exercisable for the kind and amount of securities, cash or other assets that the holder of a Warrant would have owned immediately after the consolidation, merger or transfer if the holder had exercised the Warrant immediately before the effective date of such transaction. As a condition to the consummation of such transaction, the Company shall arrange for the person or entity obligated to issue securities or deliver cash or other assets upon exercise of the Warrant to, concurrently with the consummation of such transaction, assume the Company’s obligations hereunder by executing an instrument so providing and further providing for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this Section.

The number of shares and class of capital stock purchasable under this Warrant are subject to adjustment from time to time as set forth in this Section.

(a) Adjustment for change in capital stock. If the Company:

(i) pays a dividend or makes a distribution on its Common Stock, in each case, in shares of its Common Stock;

(ii) subdivides its outstanding shares of Common Stock into a greater number of shares;

(iii) combines its outstanding shares of Common Stock into a smaller number of shares;

(iv) makes a distribution on its Common Stock in shares of its capital stock other than Common Stock; or

(v) issues by reclassification of its shares of Common Stock any shares of its capital stock;

then the number and classes of shares purchasable upon exercise of each Warrant in effect immediately prior to such action shall be adjusted so that the holder of any Warrant thereafter exercised may receive the number and classes of shares of capital stock of the Company which such holder would have owned immediately following such action if such holder had exercised the Warrant immediately prior to such action.

For a dividend or distribution the adjustment shall become effective immediately after the record date for the dividend or distribution. For a subdivision, combination or reclassification, the adjustment shall become effective immediately after the effective date of the subdivision, combination or reclassification.

If after an adjustment the Holder, upon exercise of a Warrant, may receive shares of two or more classes of capital stock of the Company, the Board of Directors of the Company shall in good faith determine the allocation of the adjusted Exercise Price between or among the classes of capital stock. After such allocation, that portion of the Exercise Price applicable to each share of each such class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock in this Warrant. Notwithstanding the allocation of the Exercise Price between or among shares of capital stock as provided by this Section, a Warrant may only be exercised in full by payment of the entire Exercise Price currently in effect.

(b) The Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Section and in the taking of all such action as may be necessary or appropriate in order to protect the exercise rights of the Holders of this Warrant against impairment.

(c.) Each Warrant shall be non-redeemable and shall expire December 31, 2019 and entitles its holder to purchase one restricted share of the Company’s Common Stock at an initial exercise price of $1.00 per share, subject to adjustment for stock splits, dividends and combinations described in the Memorandum and Warrant.

Beginning six-months after the issuance of the Warrants and until the Warrants expire, the Warrant Exercise Price (“EP”), subject to being no less than the Floor Price, shall at each month-end be adjusted to the lesser of:

Where SP equals the VWAP of the Company’s stock during the most recent six-month period as reported by Bloomberg or its successors.

Where Floor Price is defined as:

Subject to being no less than the Floor Price, if at the end of 2014 and any subsequent or partial calendar year’s VWAP of the Company’s Common Stock as reported by Bloomberg is less than $1.00 per share, the exercise price shall become 80% of the prior month’s exercise price or EP before making the monthly six-month adjustment described above.

In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the exercise of the Warrant, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the Holder of the Warrant and any Warrant agent of the Company (appointed pursuant to Section 16 hereof).

The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Warrant. If the Company has not reserve sufficient shares to accommodate all of its obligations include these Warrants to be converted into authorized common shares and a Warrant holder notifies the Company of this deficiency, then the number of common shares into which this Warrant may be exercised shall increase by 1% per day until the transfer agent has verified in writing that such shares shall have been duly authorized by the Company’s Board of Directors and shareholders if required.

Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered Holder hereof (a “Transferor”) with respect to any or all of the shares underlying this Warrant. On the surrender for exchange of this Warrant, with the Transferor’s duly executed Assignment Form and together with evidence reasonably satisfactory to the Company demonstrating compliance with applicable securities laws, which shall include, without limitation, a legal opinion from the Transferor’s counsel that such transfer is exempt from the registration requirements of applicable securities laws, the Company at its expense (but with payment by the Transferor of any applicable transfer taxes) will issue and deliver to or on the order of the Transferor thereof a new Warrant of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Assignment Form (each a “Transferee”), calling in the aggregate on the face or faces thereof for the number of Warrant Shares called for on the face or faces of the Warrant so surrendered by the Transferor; and provided further, that upon any such transfer, the Company may require, as a condition thereto, that the Transferee execute an appropriate investment representation as may be reasonably required by the Company.

The Company has agreed to register the Warrant Shares in any subsequent registration statement filed by the Company with the SEC, so that Holders shall be entitled to sell the same simultaneously with and upon the terms and conditions as the securities sold for the Company’s account are being sold pursuant to any such registration statement, subject to such lock-up provisions as may be proposed by the underwriter of said registration statement (the “Piggyback Registration Right”). There is no guarantee as to a time frame for the filing of such a registration statement.

The Company may, by written notice to each Holder of a Warrant, appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Warrant, exchanging this Warrant, and replacing this Warrant, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.

All notices shall be in writing signed by the party giving such notice, and delivered personally or sent by overnight courier or messenger or sent by registered or certified mail (air mail if overseas), return receipt requested, or by telex, facsimile transmission, telegram or similar means of communication. Notices shall be deemed to have been received on the date of personal, telex, facsimile transmission, telegram or similar means of communication, or if sent by overnight courier or messenger, shall be deemed to have been received on the next delivery day after deposit with the courier or messenger, or if sent by certified or registered mail, return receipt requested, shall be deemed to have been received on the third business day after the date of mailing. Notices shall be sent to the addresses set forth below each party’s signature on the Subscription Agreement.

In case,

(a) The Company takes a record of the holders of its Common Stock for the purpose of entitling them to subscribe for or purchase any shares of stock of any class or to receive a dividend, distribution or any other rights; or

(b) There is any capital reorganization of the Company, reclassification of the capital stock of the Company (other than a subdivision or combination of its outstanding shares of Common Stock), or consolidation or merger of the Company with or into another corporation which does not constitute a sale of the Company; or

(c) There is a voluntary or involuntary dissolution, liquidation or winding up of the Company;

then, and in any such case, the Company shall cause to be mailed to the Holder, at least 20 business days prior to the date hereinafter specified, a notice stating the date on which (i) a record is to be taken for the purpose of such dividend, distribution or rights, or (ii) such reclassification, reorganization, consolidation, merger, dissolution, liquidation or winding up is to take place and the date, if any is to be fixed, as of which holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, reorganization, consolidation, merger, dissolution, liquidation or winding up.

(a) The Company may from time to time supplement or amend this Warrant without the approval of any Holders in order to cure any ambiguity or to be correct or supplement any provision contained herein which may be defective or inconsistent with any other provision, or to make any other provisions in regard to matters or questions herein arising hereunder which the Company may deem necessary or desirable and which shall not materially adversely affect the interest of the Holder. All other supplements or amendments to this Warrant must be signed by the party against whom such supplement or amendment is to be enforced.

(b) Notwithstanding Section 19(a), the Company may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

Holder represents and warrants to the Company that Holder is acquiring the Warrants for investment and with no present intention of distributing or reselling any of the Warrants.

The Warrants and the Warrant Shares issuable upon exercise thereof shall bear the following legend by which Holder shall be bound:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.”

Certificates for Warrants or Warrant Shares without such legend shall be issued if such Warrants or Warrant Shares are sold pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”), or if the Company has received an opinion from counsel reasonably satisfactory to counsel for the Company, that such legend is no longer required under the Act.

(a) This Warrant shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. The parties submit to the jurisdiction of the Courts of the County of Los Angeles, State of California or a Federal Court empanelled in the State of California for the resolution of all legal disputes arising under the terms of this Warrant, including, but not limited to, enforcement of any arbitration award. The Company and the Holder agree to submit to the jurisdiction of such courts and waive trial by jury.

(b) If any action or proceeding is brought by the Company on the one hand or by the Holder on the other hand to enforce or continue any provision of this Warrant, the prevailing party’s costs and expenses, including its reasonable attorney’s fees, in connection with such action or proceeding shall be paid by the other party.

(c) In the event that any provision of this Warrant 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 that may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Warrant.

(d) The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof

Signature page follows

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto duly authorized as of the date first written above.

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS

CARDINAL ENERGY GROUP, INC.

SENIOR SECURED CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, the undersigned, CARDINAL ENERGY GROUP, INC. (CEGX.OB), a company organized under the laws of the State of Nevada (the “Company”), promises to pay to the order of _____________________________________________________________________________ or its registered assigns (the “Holder”), the principal sum of _________________________________ dollars ( $ ___________ ), with interest from the date hereof at the rate of 10% per annum on the unpaid balance hereof until paid.

This Note was issued in connection with the Company’s private offering (the “Offering”) of units of the Company’s securities (the “Units”), each Unit consisting of $50,000 par value 12% Senior Secured Convertible Promissory Notes maturing December 31, 2015 and warrants to purchase 20,000 shares of the Company’s Common Stock until Expiration Date (a “Warrant Share”), pursuant to a Private Placement Memorandum dated November 29, 2012 (the “Memorandum”) and is subject to the terms of a Subscription Agreement (the “Subscription Agreement”) incorporated therein to which the initial Holder is a party. Capitalized terms used and not otherwise defined herein will have the respective meanings ascribed to such terms in the Memorandum.

If not earlier converted pursuant to Section 3(a) hereof, the principal of this Note shall be payable on December 31, 2015 (“Maturity Date”). The Note will rank senior to all debt of the Company. The Note shall be secured by:

(a) by a senior secured interest in the assets of the Company’s working interest in the Conway- Dawson Lease, Powers-Sanders Lease, and Stroebel-Broyles Lease,

(b) by a pledge of a number of shares of restricted Stock (the “Stock Coverage”) whose value based on the bid price of the Stock is twice (or 200%) the amount in outstanding and unpaid principal and interest of the Notes. Stock certificates for the Stock Coverage shall be issued by the Company and held by the Company’s transfer agent or its successor. The amount of Stock in the Stock Coverage shall be increased on the fifth calendar day of each month so that, based on the previous month-end bid price of the Stock, the value of the Stock in the account is at least 200% of the aggregate amount of principal and accrued interest as of the previous month-end. The Stock Coverage shall only be returned to the Company by its transfer agent upon the full repayment of unpaid principal and interest to the all of the Note Holders, and

(c) by cash which has been deposited into and held in the Company’s brokrage account (“Company Brokerage Account”) held at Syndicated Capital as the result of required quarterly deposits (the “Sinking Fund Payment”) equal to 15% of the Company’s reported revenue and must be made within 45 days after the end of each calendar quarter. Payments required to be made after the calendar quarters beginning April 1, 2014 through December 31, 2014 shall be deferred until February 15, 2015.

The Notes will bear interest at a rate of 12.0% per year. Interest will be paid to the person in whose name a note is registered at the close of business on July 31 ^st and January 31 ^st as the case may be (whether or not the day is a business day), immediately preceding the relevant interest payment date. Interest on the Notes will be computed on a 360-day year comprised of twelve 30-day months and will accrue from the date of the original issuance of the Notes. If any interest payment date falls on a date that is not a business day, such payment of interest (or principal in the case of the Maturity Date or any earlier repurchase date for the Notes) will be made on the next succeeding business day, and no interest or other amount will be paid as a result of any such delay.

If the Note is not paid in full by the Maturity Date, the interest rate payable on the Note shall be adjusted for interest accruable after the Maturity Date from 10% per annum to the lesser of 30% per annum or the maximum statutory rate pursuant to California law and other applicable jurisdiction based on the opinion of legal counsel selected by the Placement Agent.

An event of “Principal Payment Default” shall occur if either (1) after the Maturity Date, the principal and interest of the Note continues to have not been paid in full to the Note Holder or (2) whenever the Company has been delinquent at least 30 days in its required filings of all Forms 10-Q and 10-K with the U.S. Securities and Exchange Commission.

An “Event of Other Payment Default” shall exist after fifteen or more days after the date that any of the following has occurred:

a. Interest payment not paid when due,

b. Sinking Fund Payment not paid when due,

c. Stock Coverage deposit not made when due,

d. The “Net Revenue Interest” Payment not paid when due,

e. Non-payment of any other required deposit or payment described herein, or

f. non-performance of Company representations in Section 9.

On any day that an Event of Principal Payment Default or an Event of Other Payment Default continues and has not been remedied, a Note Holder may demand in writing that a part or all of Holder’s Notes be converted into the Company’s common stock at an adjusted conversion price equal to 50% of the Stock’s Volume Weighted Average Price reported as Bloomberg (“VWAP”) during the 15 days prior to documented date that the written conversion request was sent to the Company.

If there is an ongoing Event of Principal Payment Default and if requested in writing by the Note Holder; the Company will promptly grant the request of the Note Holder to convert some or all the Notes unpaid interest and then unpaid principal into the shares of the Company’s Stock Coverage common stock. For each one dollar of principal and/or accrued interest to be redeemed or paid, the value of the Stock transferred will be two dollars based on the most recent Bloomberg average closing bid price of the stock on the five days before the date of the written withdrawal request.

If there is an ongoing Event of Principal Payment Default or an Event of Other Payment Default and if requested in writing by the Note Holder; the Company will promptly grant the request of the Note Holder to transfer cash from the Company Brokerage Account to an account of the Note Holder as payment for some or all the unpaid interest and then unpaid principal of Note Holder’s Notes.

If the Note is not paid in full by the Maturity Date, the interest rate payable on the Note shall be adjusted for interest accruable after the Maturity Date from 12% per annum to the lesser of: (1) 30% per annum or (2) the maximum statutory rate pursuant to California law and other applicable jurisdiction.

(a) Conversion . The Note-holder may convert the principal and unpaid interest into the Company’s common stock at any time (“Conversion Event”). The Note’s initial Conversion Price is $1.00 per share at which price each $50,000 par value can be converted into 50,000 common shares at this price.

(b) Mechanics of Conversion . The Company shall not be obligated to issue certificates evidencing the common stock issuable upon a Conversion Event unless this Note is either delivered to the Company, duly endorsed, at the office of the Company, or the Holder notifies the Company that this Note has been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with this Note. As soon as practicable after delivery of the Note, or delivery of an agreement and indemnification in the case of a lost Note, the Company shall issue and deliver to the Holder a certificate or certificates for the number of shares of common stock to which the Holder shall be entitled (the “Conversion Shares”), and a check payable to the Holder in the amount equal to the cash amounts payable as a result of a conversion into fractional shares of such common stock. Any Conversion Event shall be deemed to have occurred immediately prior to the close of business on the date of the Conversion Event, and the Holder entitled to receive the common stock issuable upon such conversion shall be treated for all purposes as the record holder of such common stock on such date.

(c) Conversion Price Adjustment . The conversion price of the Note (“Conversion Price” or “CP”) is subject to customary adjustment for stock splits, stock and cash dividends and combinations and as described in the Memorandum and Note and specific adjustments in an event of default.

An event of Principal Payment Default shall occur if after the Maturity Date, the principal of the Note has been not paid in full.

An event of Other Payment Default shall occur if, after the date that any interest or sinking fund payment is due, the respective payment has been not paid in full.

Whenever an Event of Other Payment Default continues and has not been remedied within 15 days, a Note Holder may deliver to the Company a request in writing that a part or all of Holder’s Notes be converted into the Company’s common stock at an adjusted conversion price equal to the common stock’s Volume Average Price as reported by Bloomberg (“VWAP”) during the 15 days prior to date that the written conversion request was received by the Company.

Whenever an Event of Principal Payment Default continues and has not remedied within 15 days, a Note Holder may deliver to the Company a request in writing that a part or all of Holder’s Notes be converted into the Company’s common stock at an adjusted conversion price equal to 50% of the common stock’s VWAP during the 15 days prior to date that the written conversion request was received by the Company.

If, after a Conversion Event, the Notes have been held for: (i) by a non-affiliate of the Company for more than six months, the Company at its expense shall do whatever is required to issue common shares without restriction and allowing for the public resale of these shares in accordance with Rule 144(d)(1)(i), and (ii) by an affiliate of the Company for more than six months, the Company at its expense shall do whatever is required to issue common shares without restriction and allowing for the public resale of these shares in accordance with Rule 144(d)(1)(i).

The shares of common stock underlying the Note will have anti-dilution protection for stock splits, stock dividends, and/or similar transactions.

(d) Fractional Shares . No fractional shares of common stock shall be issued upon conversion of this Note. In lieu of any fractional shares to which the Holder would otherwise be entitled, the Company shall pay cash equal to such fraction multiplied by the Conversion Price.

5. Redemption of the Note before the Maturity Date: Sixty (60) days after written notice is promptly delivered to the Note Holder (the “Redemption Notice”), the Company may, at its option, redeem via wire transfer all or a portion of the Notes at a call price in cash equal to:

a. 110% of the principal amount of the Notes to be called plus accrued and unpaid interest up to the payment date, if the previous 6 month Average Daily Trading Value as reported by Bloomberg on the date of the Redemption Notice is less than or equal to $200,000,

b. 105% of the principal amount of the Notes to be called plus accrued and unpaid interest up to the payment date, if the previous 6 month Average Daily Trading Value as reported by Bloomberg on the date of the Redemption Notice is greater than $200,000 and,

c. 103% of the principal amount of the Notes to be called plus accrued and unpaid interest up to the payment date, if the previous 6 month Average Daily Trading Value as reported by Bloomberg on the date of the Redemption Notice is greater than $250,000.

During the 60-day period after delivery of the Redemption Notice, the Note Holder may elect to convert the Note.

If at any time after the delivery of the Redemption Notice, the Company amends any part of the Redemption Notice then the earliest date on which the Note may be redeemed is 60 days after the date that the Note Holders were notified in writing about the amendment.

6. Transfer Restrictions . The Holder shall not transfer the Note (except to its own affiliate, subsidiary, or shareholders) until (a) it has first given written notice to the Company, describing briefly the manner of any such proposed transfer; and (b) (i) the Company has at its expense received from counsel satisfactory to the Company an opinion that such transfer can be made without compliance with the registration requirements of the Securities Act of 1933, as amended (the “1933 Act”), and applicable state securities laws, or (ii) a registration statement filed by the Company under the 1933 Act and applicable state securities laws is declared effective by the Securities and Exchange Commission and state securities commissions having jurisdiction.

7. Currency; Payments . All references herein to “dollars” or “$” are to U.S. dollars, and all payments of principal of, and interest on, this Note shall be made in lawful money of the United States of America in immediately available funds. If the date on which any such payment is required to be made pursuant to the provisions of this Note occurs on a Saturday or Sunday or legal holiday observed in the State of California, such payments shall be due and payable on the immediately succeeding date which is not a Saturday or Sunday or legal holiday so observed.

8. Representations and Warranties of Holder . Holder hereby represents and warrants that:

(a) Securities Not Registered . Holder is acquiring the Note for its own account, not as an agent or nominee, and not with a view to, or for sale in connection with, any distribution thereof in violation of applicable securities laws. By executing this Note, Holder further represents with respect to the Note that Holder does not have any present contract, undertaking, understanding or arrangement with any person to sell, transfer or grant participations to such persons or any third person.

(b) Access to Information . The Company has made available to Holder the opportunity to ask questions of and to receive answers from the Company’s officers, directors and other authorized representatives concerning the Company and its business and prospects, and Holder has been permitted to have access to all information which it has requested in order to evaluate the merits and risks of the purchase of the Note.

(c) Investment Experience . Holder is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the purchase of the Note.

(d) Regulation D . Holder is an “accredited investor” as defined in Rule 501 under the 1933 Act. In the normal course of business, Holder invests in or purchases securities similar to the Note and has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of purchasing the Note.

(e) Unregistered . Holder has been advised that (i) neither the Note nor the common stock issuable upon conversion of the Note has been registered under the 1933 Act or other applicable securities laws, (ii) the common stock issuable upon conversion of the Note may need to be held indefinitely, and Holder must continue to bear the economic risk of the investment in the common stock issuable upon conversion of the Note is subsequently registered under the 1933 Act or an exemption from such registration is available, (iii) when and if the common stock issuable upon conversion of the Note may be disposed of without registration in reliance on Rule 144 promulgated under the 1933 Act, such disposition can be made only in limited amounts in accordance with the terms and conditions of such Rule, and the Company at its expense may require an opinion of counsel to the Company and in form substance and scope reasonably acceptable to the Company to the effect that the common stock may be sold or transferred under an exemption from such registration, and (iv) if the Rule 144 exemption is not available, public sale without registration will require compliance with an exemption under the 1933 Act.

(g) Pre-Existing Relationship . Holder has either (1) a pre-existing personal or business relationship with the Company or any of its officers, directors or controlling persons, or (2) has sufficient business or financial experience or (3) have reviewed the Offering with financial advisors, other than Syndicated Capital, who have sufficient business or financial experience and are unaffiliated with and are not compensated by the Company; in such degree that, directly or indirectly, the Holder could be reasonably assumed to have the capacity to protect his/its own interest in connection with the acquisition of the Note and the common stock into which it converts.

(h) No Advertisement . Holder acknowledges that the offer and sale of the Note or the common stock into which it converts was not accomplished by the publication of any advertisement.

(i) No Review . Holder understands that no arbitration board or panel, court or federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, has passed upon or made any recommendation or endorsement of the common stock into which it converts.

(j) Holder understands that the common stock into which the Note may convert shall bear a restrictive legend in substantially the following form:

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED UNDER AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

9. Survival of Representation and Warranties . All representations and warranties made by Holder shall survive the earlier of the Due Date and shall remain effective and enforceable until the earlier to occur of the Due Date or the date on which claims based thereon shall have been barred by the applicable statutes of limitation.

10. Waiver . The Company expressly waives presentment, protest, demand, notice of dishonor, notice of nonpayment, notice of maturity, notice of protest, presentment for the purpose of accelerating maturity, and diligence in collection.

11. Attorneys’ Fees and Costs . In the event of any legal proceedings in connection with this Note, all expenses in connection with such legal proceedings of the prevailing party, the non-prevailing party upon demand shall reimburse including reasonable legal fees and applicable costs and expenses. This provision shall not merge with any enforcement order or judgment on this Note and shall be applicable to any proceeding to enforce or appeal any judgment relating to the Note.

12. Severability . If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof.

13. Successors and Assigns . This Note shall inure to the benefit of the Holder and its successors and permitted assigns and shall be binding upon the undersigned and its successors and permitted assigns. As used herein, the term “Holder” shall mean and include the successors and permitted assigns of the Holder.

14. Governing Law . The parties acknowledge and agree that this Note and the rights and obligations of all parties hereunder shall be governed by and construed under the laws of the State of California, without regard to conflict of laws principles.

15. Modification . This Note may not be modified or amended orally, but only by an agreement in writing signed by the party against whom such agreement is sought to be enforced.

16. Entire Agreement . This Note constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes any and all prior written or oral agreements and understandings with respect to the matters covered hereby.

CONFIDENTIAL

CARDINAL ENERGY GROUP, INC.

SUBSCRIPTION AGREEMENT

Each Unit consists of:

$50,000 par value

12% Senior Secured Callable Convertible Promissory Notes Maturing July 31, 2015

&

Warrants expiring December 31, 2019 to Purchase 20,000 Common Shares

THE SECURITIES OFFERED PURSUANT TO THE CONFIDENTIAL PRIVATE OFFERING MEMORANDUM DELIVERED HEREWITH (THE “MEMORANDUM”) ARE BEING OFFERED ONLY TO “ACCREDITED INVESTORS,” AS SUCH TERM IS DEFINED IN RULE 501 UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). SEE “PLAN OF DISTRIBUTION - INVESTOR SUITABILITY REQUIREMENTS” IN THE MEMORANDUM.

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE, INVOLVE A HIGH DEGREE OF RISK AND SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE”RISK FACTORS” IN THE MEMORANDUM.

If you would like to subscribe to Units of CARDINAL ENERGY GROUP, INC. please complete and return the attached documents to your broker-dealer representative or by fax, mail or e-mail to the following:

Syndicated Capital, Inc.

Attn: Faith Lee

1299 Ocean Avenue, Second Floor

Santa Monica, CA 90401

Email: flee@syndicatedcapital.com

Telephone: (310) 255-4482

Facsimile: (310) 255-4582

Before you invest, please consult with your broker, investment adviser, attorney, accountant or other advisers regarding an investment in the Company and its suitability for you. Your purchase of the Unit does not pay for or reimburse you for the fees and/or expenses you incur for these professional services.

Remember to complete all applicable sections of the subscription agreement along with a copy of your valid passport or government issued ID as requested.

If not completed in full, the subscription agreement may be returned and rejected.

FUNDS REMITTANCE INSTRUCTIONS

In order to subscribe for the Securities, on or before the Termination Date of this Offering, each prospective investor will prior to the closing be required to deliver a check payable to, or a wire transfer in favor of, the Company’ escrow agent City National Bank in Los Angeles, CA for the full amount of the subscription. In addition, the prospective investor must complete, execute and deliver, by such date, the Subscription Agreement attached hereto as Exhibit C. The subscription documentation includes: (i) a Subscription Agreement containing certain representations by such investor relating to such investor’s subscription; (ii) a completed Questionnaire regarding FINRA Affiliations ; and (iii) for United States citizens or residents of the United States, Internal Revenue Service Form W-9, which is attached hereto as Exhibit D.

The minimum investment that can be made by any subscriber is $50,000 per Interest. All funds should be mailed or wired to the following:

City National Bank

555 S. Flower Street

12th Floor

Los Angeles, CA 90071

Attn: Sue Behning

ABA 122016066

A/C ESC – TBA

Cardinal Energy Group, Inc.

If wires are sent from outside the US, the SWIFT CODE is CINAUS6L . Only USD will be accepted.

An investor or such investor’s representative should contact Syndicated Capital, as Placement Agent, at (310) 255-4482 to receive more information relative to wire instructions or to make other necessary arrangements to pay for the subscription.

All subscription proceeds will be deposited and held by the Company for the benefit of subscribers pending the receipt and acceptance of subscriptions for the Minimum Offering. Subscription Agreements are not binding on the Company until accepted by the Company, which reserves the right to reject any subscription, in whole or in part, in its sole and absolute discretion. If the Company rejects all or a portion of any subscription, the Company will promptly mail to the subscriber a check for the amount submitted with such subscriber’s subscription, without interest.

Investors who are not United States citizens or resident aliens may be required to execute additional and/or different subscription documentation.

The Securities Purchase Agreement will be irrevocable by the prospective investor, unless the subscription is rejected or this Offering is withdrawn, the subscriber will become an investor in this Offering. We or the Placement Agent may reject subscriptions for failure to conform to the requirements of this Offering, incomplete or illegible documentation, over subscription of this Offering or any such other reason, whatsoever, as we and the Placement Agents, in their sole discretion, may determine.

CERTIFICATION INSTRUCTIONS

Identify and check your correct Investor category and provide the information requested below for that category:

CERTIFICATION OF ACCREDITED INVESTOR FORM

DEFINITION OF “ACCREDITED INVESTOR”

The term “accredited investor” means one of the following:

CERTIFICATION OF ACCREDITED INVESTOR FORM

I understand that investment in the Units is an illiquid investment . In particular, I recognize that:

(i) I must bear the economic risk of investment in the Units for an indefinite period of time, since the Units have not been registered under the Securities Act of 1933 (the “Securities Act”) and therefore cannot be sold unless either they are subsequently registered under the Securities Act or an exemption from such registration is available and a favorable opinion of counsel for the Company to that effect is obtained (if requested by the Company); and

(ii) no established market will exist and it is possible that no public market for the Units, or any part thereof or any security underlying any part thereof, will develop. I consent to the affixing by the Company of such legends on certificates representing the Units (or any part thereof) as any applicable federal or state securities law or any securities law of any other applicable jurisdiction may require from time to time.

I represent and warrant to the Company that:

I understand that the purchase price per Unit does not reimburse for any costs incurred by me for legal, tax, accounting or financial advice, including fees paid to my purchaser representative, if any.

The undersigned, if a corporation, partnership, trust or other form of business entity,

The persons executing the Subscription Agreement, as well as all other Agreements related to this Offering, represent that they are duly authorized to execute all such Agreements on behalf of the entity. (If the undersigned is one of the aforementioned entities, it agrees to supply any additional written information that may be required.)

I have carefully considered and have discussed (or accepts the responsibility to discuss) with my own legal, tax, accounting and financial advisors, to the extent that I have deemed necessary, the suitability of this investment and the transactions contemplated by this Agreement for my particular federal, state, provincial, local and foreign tax and financial situation and have independently determined that this investment and the transactions contemplated by this Agreement are a suitable investment for me. I understand that I (and not the Company) shall be responsible my own tax liability that may arise as a result of the investment in the transactions contemplated by this Agreement.

I confirm that I have had the opportunity to ask questions of, and receive answers from, the Company or any authorized Person acting on its behalf concerning the Company and its business, and to obtain any additional information, to the extent possessed by the Company (or to the extent it could have been acquired by the Company without unreasonable effort or expense) necessary to verify the accuracy of the information received by Investor. In connection therewith, Investor acknowledges that I have had the opportunity to discuss the Company’s business, management and financial affairs with the Company’s management or any authorized Person acting on its behalf. I have received and reviewed all the information concerning the Company and the Shares, both written and oral, that Investor desires. In determining whether to make this investment, Investor has relied solely on Investor’s own knowledge and understanding of the Company and its business based upon my own due diligence investigations. I further confirm that the most recent annual report on Form 10-K, any subsequent quarterly reports on Form 10-Q and Current Reports on Form 8-K have been made available to me for my review.

All of the information which I have furnished to the Company and which is set forth in the Subscription Agreement is correct and complete as of the date of the Subscription Agreement. If any material change in this information should occur prior to my subscription being accepted, I will immediately furnish the revised or corrected information.

I further agree to be bound by all of the terms and conditions of this Offering described in the Memorandum, the Securities Purchase Agreement and the other documents and agreements related thereto.

I am the only person with a direct or indirect interest in the Units subscribed for by this Subscription Agreement.

I agree to indemnify and hold harmless the Company and its officers, directors and affiliates from and against all damages, losses, costs and expenses (including reasonable attorneys’ fees) that they may incur by reason of the failure of the undersigned to fulfill any of the terms or conditions of this Subscription Agreement or by reason of any breach of the representations and warranties made by the undersigned herein or in any Agreement provided by the undersigned to the Company.

This subscription is not transferable or assignable by me without the written consent of the Company.

I acknowledge that I have such knowledge and experience in financial and business matters that Investor is capable of evaluating the merits and risks of an investment in the Shares and of making an informed investment decision with respect thereto. Investor acknowledges that an investment in the Shares is speculative and involves a high degree of risk and that I can bear the economic risk of the acceptance of the Shares, including a total loss of its investment. I am experienced in evaluating and investing in early stage or start-up or reorganizing companies such as the Company.

If more than one person is executing this Agreement, the obligations of each shall be joint and several and the representations and warranties contained in this Subscription Agreement shall be deemed to be made by, and be binding upon, each of these persons and his or her heirs, executors, administrators, successors and assigns.

This subscription, upon acceptance by the Company, shall be binding upon my heirs, executors, administrators, successors and assigns. This Subscription Agreement shall be construed in accordance with and governed in all respects by the laws of the State of California.

CERTIFICATION OF ACCREDITED INVESTOR FORM

INDIVIDUAL and JOINT ACCOUNTS

I/We certify that I am/we are an accredited investor(s) by initialing in the applicable box:

__________      __________   I had an individual income of more than $200,000 in the two most recent calendar years. I expect to have an individual income in excess of $200,000 in the current calendar year; or my spouse and I had joint income in excess of $300,000 in the two most recent calendar years, and we expect to have a joint income in excess of $300,000 in the current year.

My/our income(s) in 2010 was/were $ ________________USD and in 2011 was/were $____________USD.

__________     __________   I/We have a total net worth in excess of $1,000,000, excluding my primary residence.

DEFINITION OF INCOME

For purposes of this Subscription Agreement, “individual income” means “adjusted gross income” as reported for Federal income tax purposes, exclusive of any income attributable to a spouse or to property owned by a spouse:

(1) the amount of any interest income received which is tax-exempt under Section 103 of the Internal Revenue Code of 1986, as amended, (the Code)

(2) the amount of the losses claimed as a limited partner in a limited partnership (as reported on Schedule E of IRS Form 1040)

(3) any deduction claimed for depletion under Section 611, et seq. of the Code and

(4) any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Sections 1202 of the Internal Revenue Code as it was in effect prior to enactment of the Tax Reform Act of 1986.

For purposes of this Subscription Agreement, “joint income” means “adjusted gross income” as reported for Federal income tax purposes, including any income attributable to a spouse or to property owned by a spouse, and increased by the following amounts:

(1) the amount of any interest income received which is tax-exempt under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”)

(2) the amount the losses claimed as a limited partner in a limited partnership (as reported on Schedule E of IRS Form 1040)

(3) any deduction claimed for depletion under Section 611 et. seq. of the Code and

(4) any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Section 1202 of the Internal Revenue code as it was in effect prior to enactment of the Tax Reform Act of 1986.

CERTIFICATION OF ACCREDITED INVESTOR FORM

CORPORATE ACCOUNT

Please certify that the corporate account is an accredited investor by initialing where applicable:

CERTIFICATION OF ACCREDITED INVESTOR FORM

TRUST ACCOUNT

Please certify that the trust account is an accredited investor by initialing where applicable:

CERTIFICATION FOR NON-US PERSON REPRESENTATIONS

(Page 1 of 2)

At the time of (a) the offer by the Company and (b) the acceptance of the offer by such person or entity, of the Units, such person or entity was outside the United States. The term “Units”, for the purposes of the Subscription Agreement, is deemed to include any security forming a part of the Units, or any security underlying the Units.

Such person or entity is acquiring the Units for its own account, for investment and not for distribution or resale to others and is not purchasing the Units for the account or benefit of any U.S. person, or with a view towards distribution to any U.S. person, in violation of the registration requirements of the Securities Act.

Such person or entity will make all subsequent offers and sales of the Units either (1) outside of the United States in compliance with Regulation S; (2) pursuant to a registration under the Securities Act; or (3) pursuant to an available exemption from registration under the Securities Act. Specifically, such person or entity will not resell the Units to any U.S. person or within the United States prior to the expiration of a period commencing on the closing date of this Offering and ending on the date that is one year thereafter (the “Distribution Compliance Period”), except pursuant to registration under the Securities Act or an exemption from registration under the Securities Act.

Such person or entity has no present plan or intention to sell the Units in the United States or to a U.S. person at any predetermined time, has made no predetermined arrangements to sell the Units and is not acting as a Distributor of such securities (as Distributor is defined under the Securities Act).

Neither such person or entity, its affiliates nor any person or entity acting on behalf of such person or entity, has entered into, has the intention of entering into, or will enter into any put option, short position or other similar instrument or position in the U.S. with respect to the Units at any time after the closing date of this Offering through the Distribution Compliance Period except in compliance with the Securities Act.

Such person or entity consents to the placement of a legend on any certificate or other document evidencing the Units substantially in the form set forth in the Memorandum.

Such person or entity is not acquiring the Units in a transaction (or an element of a series of transactions) that is part of any plan or scheme to evade the registration provisions of the Securities Act.

Such person or entity has sufficient knowledge and experience in finance, securities, investments and other business matters to be able to protect such person’s or entity’s interests in connection with the transactions contemplated by the Subscription Agreement and the Memorandum relating to this Offering.

Such person or entity has consulted, to the extent that it has deemed necessary, with its tax, legal, accounting and financial advisors concerning its investment in the Units.

Such person or entity understands the various risks of an investment in the Units and can afford to bear such risks for an indefinite period of time, including, without limitation, the risk of losing its entire investment in the Units.

Such person or entity has had access to the Company’s publicly filed reports with the Securities and Exchange Commission and has been furnished during the course of the transactions contemplated by this Agreement with all other public information regarding the Company that such person or entity has requested and all such public information is sufficient for such person or entity to evaluate the risks of investing in the Units.

Such person or entity has been afforded the opportunity to ask questions of and receive answers concerning the Company and the terms and conditions of the issuance of the Units.

Such person or entity is not relying on any representations and warranties concerning the Company made by the Company or any officer, employee or agent of the Company, other than those contained in this Agreement.

CERTIFICATION FOR NON-US PERSON REPRESENTATIONS

(Page 2 of 2)

Such person or entity will not sell or otherwise transfer the Units unless either (A) the transfer of such securities is registered under the Securities Act or (B) an exemption from registration of such securities is available.

Such person or entity represents that the address furnished in this Subscription Agreement is the principal residence if he or she is an individual or its principal business address if it is a corporation or other entity.

Such person or entity understands and acknowledges that the Units have not been recommended by any federal or state securities commission or regulatory authority, that the foregoing authorities have not confirmed the accuracy or determined the adequacy of any information concerning the Company that has been supplied to such person or entity and that any representation to the contrary is a criminal offense.

INVESTOR INFORMATION FORM

Annual Expenses (recurring)

Special Expenses (future, non-recurring)

Timeframe for Special Expenses

USA PATRIOT ACT INFORMATION

Are you or anyone with an interest in this account either: (1) a senior military, governmental, or political official in a non-US country, or (2) closely associated with an immediate family member of such an official?

[  ] Yes [  ] No If yes, identify the name of the official, office held, and country _______________________________________________

Are you or any member of your immediate family affiliated with or employed by a member a stock exchange or the FINRA?

[  ] Yes [  ] No If yes, employer authorization is required.

Are you a senior officer, director, or 10% or more shareholder of a public company? [  ] Yes [  ] No If yes, specify company

_____________________________________________

I/we acknowledge that purchasing an investment product that has certain fees and risks as well as features and benefits associated with it. My registered investment professional has reviewed and explained, where applicable.

I/we are subscribing to the following:

CLIENT INITIALS

ARBITRATION DISCLOSURES

THIS AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE. BY SIGNING AN ARBITRATION AGREEMENT THE PARTIES AGREE AS FOLLOWS:

● ALL PARTIES TO THIS AGREEMENT ARE GIVING UP THE RIGHT TO SUE EACH OTHER IN COURT, INCLUDING THE RIGHT TO A TRIAL BY JURY, EXCEPT AS PROVIDED BY THE RULES OF THE ARBITRATION FORUM IN WHICH A CLAIM IS FILED.

● ARBITRATION AWARDS ARE GENERALLY FINAL AND BINDING; A PARTY’S ABILITY TO HAVE A COURT REVERSE OR MODIFY AN ARBITRATION AWARD IS VERY LIMITED.

● THE ABILITY OF THE PARTIES TO OBTAIN DOCUMENTS, WITNESS STATEMENTS, AND OTHER DISCOVERY IS GENERALLY MORE LIMITED IN ARBITRATION THAN IN COURT PROCEDDINGS.

● THE ARBITRATORS DO NOT HAVE TO EXPLAIN THE REASON(S) FOR THEIR AWARD.

● THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY.

● THE RULES OF SOME ARBITRATION FORUMS MAY IMPOSE TIME LIMITS FOR BRINGING A CLAIM IN ARBITRATION. IN SOME CASES, A CLAIM THAT IS INELIGIBLE FOR ARBITRATION MAY BE BROUGHT IN COURT.

● THE RULES OF THE ARBITRATION FORUM IN WHICH THE CLAIM IS FILED, ANY AMENDMENTS THERETO, SHALL BE INCORPORATED INTO THIS AGREEMENT.

ARBITRATION AGREEMENT

ANY CONTROVERSY BETWEEN YOU AND US SHALL BE SUBMITTED TO ARBITRATION BEFORE THE NEW YORK STOCK EXCHANGE, INC., ANY OTHER NATIONAL SECURITIES EXCHANGE ON WHICH A TRANSACTION GIVING RISE TO THE CLAIM TOOK PLACE (AND ONLY BEFORE SUCH EXCHANGE), OR THE FINANCIAL INDUSTRY REGULATORY AUTHORITY. NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTIONS TO ARBITRATION, NOR SEEK TO ENFORCE ANY PREDISPUTE ARBITRATION AGREEMENT AGAINST ANY PERON WHO HAS INITIATED IN COURT A PUTATIVE CLASS ACTION; OR WHO IS A MEMBER OF A PUTATIVE CLASS WHO HAS NOT OPTED OUT OF THE CLASS WITH RESPECT TO ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION UNTIL; (I) THE CLASS CERTIFICATION IS DENIED; (II) THE CLASS IS DECERTIFIED; OR (III) THE CUSTOMER IS EXCLUDED FROM THE CLASS BY THE COURT. SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF ANY RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN.

I (WE) ACKNOWLEDGE THAT THIS AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE ABOVE.

SUBSCRIPTION AGREEMENT SIGNATURE PAGE FOLLOWS :

IN WITNESS WHEREOF , each of the undersigned has duly executed this CERTIFICATION OF ACCREDITED INVESTOR as of this date ____________________________.

Subscription accepted by the Company as to Investment Amount: $ ___________

[Signature page to Subscription Agreement]

BROKER INFORMATION AND APPROVAL

Broker Dealer ______________________________________________________________________________

Address_____________________________________________________________________________________

Rep Name ___________________________________________________

BD Approval _____________________________________________________ _________/_________/201__

Phone ( ) ________________________________________________________________

Email Address ______________________________@__________________________