Exhibit 10.32


 


Richard Schaeffer


Option No.: 2014-003


 


ARMADA WATER ASSETS, INC.


 


AMENDED AND RESTATED


STOCK OPTION AGREEMENT


UNDER THE


ARMADA WATER ASSETS, INC.


2014 STOCK INCENTIVE PLAN (the “Plan”)


 


This Amended and Restated
Stock Option Agreement is made as of the date set forth on Schedule A hereto (the “Grant Date”) by and between Armada
Water Assets, Inc. (the “Company”), and the option holder named on Schedule A hereto (the “Holder”).


 


WHEREAS, Holder is
a valuable member of the Board of Directors of the Company;


 


WHEREAS, the Company
considers it desirable and in its best interest that Holder be given an inducement to acquire a proprietary interest in the Company
and an incentive to advance the interests of the Company by granting the Holder an option to purchase shares of common stock of
the Company (the “Common Stock”); and


 


WHEREAS, to cover the
granting of such Options, the Company has adopted the 2014 Stock Incentive Plan (the “Plan”).


 


NOW, THEREFORE, the
parties hereto, intending to be legally bound, hereby agree that as of the Grant Date, the Company hereby grants Holder an option
(the “Option”) to purchase from it, upon the terms and conditions set forth in this Agreement and the Plan, that number
of shares of the authorized and unissued Common Stock of the Company as is set forth on Schedule A hereto.


 


1.          Terms
of Stock Option. The Option to purchase Common Stock granted hereby is subject to the terms, conditions, and covenants
set forth in the Plan as well as the following:


 


		(a)	The Holder has been provided with, reviewed and fully
understood, the terms, conditions and covenants, of the Plan;



 


		(b)	This Option is granted under, and subject in its entirety
to, the terms of the Plan;



 


		(c)	The Holder acknowledges that it has had access to and
has reviewed all documents and records relating to the Company, that he has deemed necessary in order to make an informed investment
decision with respect to the Option; that he has had the opportunity to ask representatives of the Company certain questions and
request certain additional information regarding the terms and conditions of the Option and the finances, operations, business
and prospects of the Company and has had any and all such questions and requests answered to his satisfaction; and that he understands
the risks and other considerations relating to such investment;



 


		(d)	This Option shall constitute a Non-Qualified Stock Option,
which is not intended to qualify as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended
(the “Code”);



 


		(e)	The Holder is a sophisticated investor who acknowledges
that it is his responsibility to consult with his own tax advisors regarding the tax effects of this Option and the requirements
necessary to obtain favorable income tax treatment under Section 422 of the Code, including, but not limited to, holding period
requirements;



 



    	 



    	 



    

 


		(f)	The Holder understands that neither the United States
Securities and Exchange Commission (“SEC”) nor any securities commission or other governmental authority of any state,
country or other jurisdiction has approved the issuance of the Option or passed upon or endorsed the merits of the Option, the
shares underlying this Option, this Agreement, or any of the other documents relating to the Option, or confirmed the accuracy
of, determined the adequacy of, or reviewed this Agreement or any other documents relating to the Option.



 


		(g)	The Option is being acquired for the Holder’s own
account for investment purposes only, not as a nominee or agent and not with a view to the resale or distribution of any part
thereof, and the Holder has no present intention of selling, granting any participation in or otherwise distributing the same.
By executing this Agreement, the Holder further represents that the Holder does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participation to such person or third person with respect to the Option
(or any of the shares underlying the Option).



 


		(h)	The Holder understands that the Option is being offered
and granted to him in reliance on specific exemptions from the registration requirements of the federal and state securities laws
and that the Company is relying in part upon the truth and accuracy of, and such Holder’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of such Holder set forth herein in order to determine the availability
of such exemptions and the eligibility of such Holder to acquire the Option. The Holder represents and warrants to the Company
that any information that the Holder has heretofore furnished or furnishes herewith to the Company is complete and accurate, and
further represents and warrants that he will notify and supply corrective information to the Company immediately upon the occurrence
of any change therein occurring prior to the Company’s issuance of the Option. Within five (5) days after receipt of a request
from the Company, the Holder will provide such information and deliver such documents as may reasonably be necessary to comply
with any and all laws and regulations to which the Company is subject;



 


		(i)	Purchaser understands that the Company shares issuable
upon exercise of the Options are “restricted securities” as such term is defined under the Securities Act and have
not been registered under the Securities Act or registered or qualified under any state securities law, and may not be, directly
or indirectly, sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under
the Securities Act and registration or qualification under applicable state securities laws or the availability of an exemption
therefrom; and under current law, the resale of such shares will be restricted under Rule 144, which in most cases could delay
sales of the shares for varying periods of up to one year, or perhaps indefinitely, following exercise. In any case where such
an exemption is relied upon by Purchaser from the registration requirements of the Securities Act and the registration or qualification
requirements of such state securities laws, Purchaser shall furnish the Company with an opinion of counsel stating that the proposed
sale or other disposition of such securities may be effected without registration under the Securities Act and will not result
in any violation of any applicable state securities laws relating to the registration or qualification of securities for sale,
such counsel and opinion to be satisfactory to the Company. Purchaser acknowledges that it is able to bear the economic risks
of an investment in the Shares for an indefinite period of time, and that its overall commitment to investments that are not readily
marketable is not disproportionate to its net worth.



 


		(j)	The Holder is unaware of, and is in no way relying upon,
and did not become aware of the Option through or as a result of, any form of general solicitation or general advertising including,
without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar
media, or broadcast over television or radio or the internet, in connection with the Option;



 


		(k)	No agent, broker, investment banker, finder, financial
advisor or other person acting on behalf of the Holder or under his authority is or will be entitled to any broker’s or
finder’s fee or any other commission or similar fee, directly or indirectly, in connection with the Option, and no person
is entitled to any fee or commission or like payment in respect thereof based in any way on agreements, arrangements or understanding
made by or on behalf of the Holder;



 



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		(l)	This Option shall vest in accordance with the vesting
schedule set forth on Schedule A hereto, subject to whatever other limitations are set forth within the Plan or contained in this
Agreement;



 


		(m)	No portion of this Option may be exercised later than
the term of the Option set forth on Schedule A hereto;



 


		(n)	This Option shall be subject to the restrictions on transferability
set forth within the Plan; and



 


		(o)	The Holder agrees that, in connection with the Company’s
initial public offering, that unless waived in writing by the managing underwriter of such offering, not to sell or transfer any
Options or shares of Common Stock issuable upon exercise of the Options, for a period of up to 180 days, plus up to an additional
20 days to the extent necessary to comply with applicable regulatory requirements following such public offering.



 


		2.	Exercise of Options.



 


		(a)	The Holder shall be permitted to exercise this Option
by either (i) payment of cash; or (ii) by such cashless methods of exercise as are permissible under Sections V(a) and VI(b) of
the Plan, as such cashless methods are approved for the purposes of this Option.



 


		3.	Miscellaneous.



 


		(a)	This Agreement is binding upon the parties hereto and
their respective heirs, personal representatives, successors and assigns.



 


		(b)	This Agreement will be governed and interpreted in accordance
with the laws of the State of Nevada, and may be executed in more than one counterpart, each of which shall constitute an original
document.



 


		(c)	No alterations, amendments, changes or additions to this
agreement will be binding upon either the Company or Holder unless reduced to writing and signed by both parties.



 


		(d)	Capitalized terms used within this Agreement unless otherwise
defined, shall have the meaning ascribed thereto in the Plan.



 


		(e)	Nothing contained herein shall be construed as a guarantee
of continued employment of Holder for any specific duration of time.



 


		(f)	This Agreement may be executed in any number of counterparts
(including by facsimile or electronic transmission), each of which shall be deemed an original, but all of which when taken together
shall constitute one instrument.



 


		(g)	This Amended and Restated Option Agreement is intended
to replace and supercede an original Stock Option Agreement provided to Holder on or about March 26, 2014 (the “Original
Grant Date”) in order to restate certain items contained therein, however, shall continue to remain in effect as of the
Original Grant Date.



 




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IN WITNESS WHEREOF,
the parties have executed this Agreement as of the Grant Date.


 


	 	ARMADA WATER ASSETS, INC.
	 	 	 
	 	By: 	/s/ Maarten Propper
	 	 	Authorized Executive Officer
	 	 	 
	 	HOLDER
	 	 	 
	 	/s/ Richard Schaeffer
	 	Signature
	 	 	 
	 	Richard Schaeffer
	 	Print Name




 




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Schedule A


 


		1.	Holder: Richard Schaeffer



 


		2.	Grant Date: March 25, 2014



 


		3.	Term of Option: March 31, 2019



 


		4.	Number of Shares of Common Stock covered by the Option:
270,000



 


		5.	Exercise Price: The price per share at which the Company’s
common stock is offered and sold in an initial public offering.



 


		6.	The Option shall vest in accordance with the following
schedule:



 


		(i)	90,000 Shares shall each vest on March 31, 2015 (the
“2015 Options”) provided Holder has continuously provided service to the Company in his capacity as a Board member
(“Service”) from the Grant Date through March 31, 2015, with the recognition that the right to vest in the 2015 Options
shall be terminated once Holder’s Service on the Company’s Board of Directors is discontinued for any reason prior
to March 31, 2015;



 


		(ii)	90,000 Shares shall each vest on March 31, 2016 (the
“2016 Options”) provided Holder has continuously provided “Service” (as defined under the Plan) by serving
on the Company’s Board of Directors from the Grant Date through March 31, 2016, with the recognition that the right to vest
in the 2016 Options shall be terminated once Holder’s Service on the Company’s Board of Directors is discontinued
for any reason prior to March 31, 2016;



 


		(iii)	90,000 Shares shall vest once the following two objectives
have been achieved by the Company (the “Performance-Based Options”): (a) the recruitment of one independent director
or senior executive officer by the Company following the Grant Date; and (ii) the successful completion by the Company of one
or more equity financing transactions raising more than $10 million in cumulative net proceeds (after offering costs) following
the Grant Date;



 


		(iv)	upon whatever earlier dates as are permitted by the Company
in its sole discretion; or



 


		(v)	as otherwise provided for, and in accordance with, the
terms and provisions of the Plan.



 


		7.	Subject to the provisions of Sections 8 and 9 below,
once a termination of Service occurs (whether by Holder’s resignation, retirement, removal or failure to get nominated or
elected), all Options to which Holder is then entitled to exercise may only be exercised, if at all, in accordance with, and subject
to, the terms and provisions of the Plan.



 


		8.	Notwithstanding the provisions above or any provision
to the contrary in the Plan; should the Holder’s Service to the Company terminate prior to March 31, 2016 as a result of:
(i) his Death or Disability; (ii) following and in connection with the occurrence of a Change of Control; or (iii) any termination
of Holder’s position with the Company without “Cause” (as defined under the Plan); then in either of these events:
(X) Holder will be entitled to accelerate his vesting of all time-based Options as of such date of termination of Service, and
will be deemed as of such date to have concluded his Service to the Company through the end of the next date of vesting that is
scheduled to occur, but for the occurrence of any of such events; and (Y) Holder (or by the Holder’s personal representatives
or persons entitled thereto under Holder’s will or by the applicable laws of descent or distribution) will have a period
of three (3) months following any such termination of Service to exercise the Options then vested.



 


		9.	Notwithstanding the provisions above or any provision
to the contrary in the Plan, provided Holder has continuously provided Service as a Member of the Company’s Board of Directors
through March 31, 2016, all time-based Options covered by this Agreement may be exercised thereafter by the Holder (or by the
Holder’s personal representatives or persons entitled thereto under Holder’s will or by the applicable laws of descent
or distribution) at any time during the remainder of the Term.



 



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		10.	Notwithstanding the provisions above or any provision
to the contrary in the Plan, provided Holder has vested in the Performance-Based Options and continuously provided Service as
a Member of the Company’s Board of Directors through March 31, 2016, the Performance-Based Options covered by this Agreement
may be exercised thereafter by the Holder (or by the Holder’s personal representatives or persons entitled thereto under
Holder’s will or by the applicable laws of descent or distribution) at any time during the remainder of the Term.



 


	 	ARMADA WATER ASSETS, INC.
	 	 	 
	 	By: 	/s/ Maarten Propper
	 	 	Authorized Executive Officer
	 	 	 
	 	HOLDER
	 	 	 
	 	/s/ Richard Schaeffer
	 	Signature
	 	 	 
	 	Richard Schaeffer
	 	Print Name


 



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