Document:

ARMADA WATER ASSETS, INC.

 

 

 

Securities Purchase Agreement

 

 

 

Common Stock

 

 

____________

 

CONFIDENTIAL

 

Placement Agent

 

 

AEGIS CAPITAL CORP.

810 Seventh Avenue

18th floor

New York, New York 10019

Tel (212) 813-1010

Fax (212) 813-1047

 

    	 

    	 

    

 

NOTICE
TO OFFEREES

 

THE SECURITIES OFFERED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER THE APPLICABLE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION. THIS SECURITIES PURCHASE AGREEMENT AND THE OTHER OFFERING DOCUMENTS DO NOT CONSTITUTE AN OFFER
TO SELL OR SOLICITATION OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

 

THE SECURITIES ARE BEING SOLD FOR INVESTMENT
PURPOSES ONLY, WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE TRANSFERRED, RESOLD OR OFFERED FOR RESALE IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND EFFECTIVE REGISTRATION OR QUALIFICATION UNDER THE APPLICABLE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, OR THE AVAILABILITY OF AN EXEMPTION THEREFROM.

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION
NOR THE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS SECURITIES PURCHASE AGREEMENT OR ANY OF THE OTHER OFFERING DOCUMENTS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

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CONFIDENTIAL

 

SECURITIES
PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (this
“Agreement”), dated as of ___________, by and between Armada Water Assets, Inc., a Nevada corporation (the “Company”),
and the purchaser or purchasers identified on the signature page hereof (“Purchaser”).

 

RECITALS:

 

WHEREAS, Purchaser desires to purchase and
the Company desires to sell Shares of the Company’s common stock on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the
premises hereof and the agreements set forth herein below, the parties hereto hereby agree as follows:

 

1.          The
Offering.

 

(a)          Private
Offering. Under and subject to the terms of this Agreement, the Company is conducting a private offering in the United States
of up to ___________ shares of its common stock, $.0001 par value per share, subject to increase, in the mutual discretion of the
Company and the “Placement Agent” (as defined below), by an additional _______ shares to satisfy any over-subscriptions
(the “Shares”). The Shares will be sold on a “reasonable efforts” basis at a purchase price of $1.00 per
Share (the “Purchase Price”) pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 of Regulation D thereunder. The Shares are being offered solely to a limited number of “accredited
investors” as that term is defined in Rule 501(a) of the Securities Act during an offering period commencing _________, and
terminating on or before ________, and at the mutual discretion of the Company and Placement Agent, subject to extension to no
later than ____________.

 

(b)          Placement
Fees. The Company has retained Aegis Capital Corp., a registered broker-dealer firm, to act as placement or selling agent with
respect to this Offering (alternatively, “Aegis” or the “Placement Agent”). Aegis will be entitled to receive:
(i) a placement fee in an amount equal to up to ten percent (10%) of the Purchase Price of the Shares sold in the Offering; (ii)
a non-accountable expense allowance in an amount of two percent (2%) of the Purchase Price of the Shares sold in the Offering;
and (iii) warrants to purchase common stock of the Company equal to ten percent (10%) of the Shares sold in the Offering at an
exercise price of $1.50 per Share. Under its placement arrangements with the Company, Aegis has been engaged as the exclusive agent
to sell the Shares, through itself or through its selected dealers. Also under its placement arrangements with Aegis, the Company
has also agreed to indemnify Aegis, its affiliates and other related persons against certain liabilities, including liabilities
under the federal securities laws.

 

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(c)          Use
of Proceeds. Assuming all of the Shares in the Offering are sold, the net proceeds to the Company are estimated to be approximately
$________ (after deducting placement fees and offering expenses payable by the Company). The Company intends to use the net proceeds
of the Offering (after payment of offering expenses) for general working capital and to contribute towards ongoing Company initiatives,
including the payment of short-term installment obligations due in connection with the Company’s recent acquisition of Summit
Holdings, Inc. (see Annex A, “Current Developments”), as well as for future acquisitions and business expansion.

 

2.          Sale
and Purchase of Shares.

 

(a)          Sale
and Purchase of the Shares. Subject to the terms and conditions hereof, the Company agrees to sell, and Purchaser agrees to
purchase, the number of Shares specified on the signature page of this Agreement at a purchase price of $1.00 per Share. The aggregate
Purchase Price for the Shares shall be as set forth on the signature page hereto and shall be payable upon execution hereof by
check or wire transfer of immediately available funds. The Shares are being sold on a best efforts basis and there is no minimum
sale amount of Shares prior to release of funds to the Company.

 

(b)          Subscription
Procedure. In order to purchase Shares, Purchaser shall deliver to the Company, (i) one completed and duly executed copy of
this Agreement; and (ii) immediately available funds in an amount equal to the Purchase Price. Execution and delivery of this Agreement
shall constitute an irrevocable subscription for that number of Shares set forth on the signature page hereto. Payment for the
Shares may be made by wire transfer to:

 

Signature Bank as Escrow agent for Armada Water Assets,
Inc.

Signature Bank, 261 Madison Avenue, NY, NY 10016

ABA No. 026013576 for credit to Signature Bank,

as Escrow Agent for Armada Water Assets, Inc.

Account No. 1501984929

 

or by check made payable to Signature Bank, as Escrow Agent
for Armada Water Assets, Inc. This Agreement may be rejected by the Company and the Placement Agent, in whole or in part, in its
sole discretion, in which event the Purchase Price will be returned (by mail) to Purchaser within five (5) business days thereafter.

 

(c)          Closing.
Upon the Company’s acceptance of a Purchaser’s subscription and upon the receipt of the Purchase Price, the Company
shall conduct one or more closings at such time and in such manner as the Company and the Placement Agent shall determine in their
discretion (the “Closing”). At the Closing, the Company shall countersign this Agreement and confirm the issuance of
the Shares specified on the signature page of this Agreement and deliver share certificates for the benefit of the Purchaser to
the Placement Agent promptly following closing of the Offering, against payment of the Purchase Price specified on the signature
page of this Agreement by wire transfer or check payable to the Company. Upon the Closing, the subscription evidenced hereby, if
not previously rejected by the Company, will, in reliance upon Purchaser’s representations and warranties contained herein,
be accepted, in whole or in part, by the Company. If Purchaser’s subscription is accepted only in part, this Agreement will
be marked to indicate such fact, and the Company will return to Purchaser the portion of the funds tendered by Purchaser representing
the unaccepted portion of Purchaser’s subscription, without interest or deduction of any kind.

 

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3.          Representations
and Warranties of Purchaser. Purchaser represents and warrants to the Company as follows:

 

(a)          Organization
and Qualification.

 

(i)          If
Purchaser is an entity, Purchaser is duly organized, validly existing and in good standing under the laws of its jurisdiction of
organization, with the corporate or other entity power and authority to own and operate its business as presently conducted, except
where the failure to be or have any of the foregoing would not have a material adverse effect on Purchaser, and Purchaser is duly
qualified as a foreign corporation or other entity to do business and is in good standing in each jurisdiction where the character
of its properties owned or held under lease or the nature of their activities makes such qualification necessary, except for such
failures to be so qualified or in good standing as would not have a material adverse effect on it.

 

(ii)         If
Purchaser is an entity, the address of its principal place of business is as set forth on the signature page hereto, and if Purchaser
is an individual, the address of its principal residence is as set forth on the signature page hereto.

 

(b)          Authority;
Validity and Effect of Agreement.

 

(i)          If
Purchaser is an entity, Purchaser has the requisite corporate or other entity power and authority to execute and deliver this Agreement
and perform its obligations under this Agreement. The execution and delivery of this Agreement by Purchaser, the performance by
Purchaser of its obligations hereunder and all other necessary corporate or other entity action on the part of Purchaser have been
duly authorized by its Board of Directors or similar governing body, and no other corporate or other entity proceedings on the
part of Purchaser is necessary for Purchaser to execute and deliver this Agreement and perform its obligations hereunder.

 

(ii)         This
Agreement has been duly and validly authorized, executed and delivered by Purchaser and, assuming it has been duly and validly
executed and delivered by the Company, constitutes a legal, valid and binding obligation of Purchaser, in accordance with its terms.

 

(c)          No
Conflict; Required Filings and Consents. Neither the execution and delivery of this Agreement by Purchaser nor the performance
by Purchaser of its obligations hereunder will: (i) if Purchaser is an entity, conflict with Purchaser’s Articles of Incorporation
or Bylaws, or other similar organizational documents; (ii) violate any statute, law, ordinance, rule or regulation, applicable
to Purchaser or any of the properties or assets of Purchaser; or (iii) violate, breach, be in conflict with or constitute a default
(or an event which, with notice or lapse of time or both, would constitute a default) under, or permit the termination of any provision
of, or result in the termination of, the acceleration of the maturity of, or the acceleration of the performance of any obligation
of Purchaser under, or result in the creation or imposition of any lien upon any properties, assets or business of Purchaser under,
any material contract or any order, judgment or decree to which Purchaser is a party or by which it or any of its assets or properties
is bound or encumbered except, in the case of clauses (ii) and (iii), for such violations, breaches, conflicts, defaults or other
occurrences which, individually or in the aggregate, would not have a material adverse effect on its obligation to perform its
covenants under this Agreement.

 

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(d)          Accredited
Investor. Purchaser is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the
Securities Act. Specifically, the Purchaser qualifies as an accredited investor as the result of qualifications under the standards
as set forth on the Supplement to Signature Page appended hereto.

 

(e)          No
Government Review. Purchaser 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 Shares or passed upon or endorsed the merits of the Shares, or this Agreement or any of the other documents relating to
the proposed Offering, including the “Prior Offering Memorandum” (as hereafter defined) (collectively, the “Offering
Documents”), or confirmed the accuracy of, determined the adequacy of, or reviewed this Agreement or the other Offering Documents.

 

(f)          Investment
Intent. The Shares are being acquired for the Purchaser’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 Purchaser has no present intention of selling,
granting any participation in or otherwise distributing the same. By executing this Agreement, Purchaser further represents that
Purchaser 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 any of the Shares.

 

(g)          Restrictions
on Transfer. Purchaser understands that the Shares are “restricted securities” as such term is defined in Rule
144 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. 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, Purchase 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.

 

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(h)          High
Risk Investment; Investment Experience. Purchaser has such knowledge, sophistication and experience in financial, tax and business
matters in general, and investments in securities in particular, that it is capable of evaluating the merits and risks of this
investment in the Shares, and Purchaser has made such investigations in connection herewith as it deemed necessary or desirable
so as to make an informed investment decision without relying upon the Company for legal or tax advice related to this investment.
Purchaser hereby confirms its understanding that the Company is a start- up early-stage entity, which has only recently commenced
its consolidated operations. Purchaser further represents and warrants that it is familiar with the risks inherent in making investments
in start-up or venture entities and that the Purchaser’s investment goals and strategy include making speculative investments
in start-up ventures.

 

(i)          Access
to Information. In making its decision to acquire the Shares, Purchaser confirms that it has carefully reviewed the Company’s
Offering Documents, including specifically: (i) the Company’s Confidential Private Placement Memorandum dated April 18, 2013,
with respect to the offering of shares of Common Stock by the Company through the Placement Agent (the “Prior Offering Memorandum”);
and (ii) Annex A attached hereto, “Current Developments”, which contains a brief summary of certain of the more material
current developments affecting the Company since the date of the Prior Offering Memorandum, and that Purchaser has not relied upon
any information other than information provided to Purchaser by the Company or its representatives and contained herein and in
the other Offering Documents. Purchaser acknowledges and understands that the Company is in the early stage of its development;
having only recently acquired the businesses that provide sand and water delivery and transport within the oil field services industry;
as well as oil field services that provide well integrity testing, polyline piping, and drill pad infrastructure to oil and gas
companies; and that it has reviewed the description of the business of the Company in the Offering Documents as it has deemed necessary
in order to make an informed investment decision with respect to an investment in the Shares; that it has had the opportunity to
ask representatives of the Company certain questions and request certain additional information regarding the terms and conditions
of such investment and the finances, operations, business and prospects of the Company and has had any and all such questions and
requests answered to its satisfaction; and that it understands the risks and other considerations relating to such investment.

 

(j)          Reliance
on Representations. Purchaser understands that the Shares are being offered and sold to it 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 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 Shares. Purchaser represents and warrants to the Company that any information that Purchaser has heretofore furnished
or furnishes herewith to the Company is complete and accurate, and further represents and warrants that it 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 Shares. Within five (5) days after receipt of a request from the Company, Purchaser 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.

 

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(k)          No
General Solicitation. Purchaser is unaware of, and in deciding to participate in the Offering is in no way relying upon, and
did not become aware of the Offering 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 Offering.

 

(l)          Placement
and Finder’s Fees. Other than the Placement Agent, no agent, broker, investment banker, finder, financial advisor or
other person acting on behalf of Purchaser or under its 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 Offering, 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 Purchaser. Purchaser is aware that the Company has retained Aegis as a placement or selling agent and that Aegis
will be entitled to a placement fee and other consideration as described in Section 1(b) above in connection with the sale of the
Shares.

 

(m)          High
Risk Investment; Material Offering Risks. While management is optimistic about the opportunities available to the Company in
the oil field services industry, an investment in the Shares involves a high degree of risk as the Company remains in the early
stage of its development, having only recently commenced the operations of its various business units. Thus, the Company and its
subsidiaries have only a very brief history of operations, and it is uncertain how these business units will operate on a combined
basis and whether these various business units can be operated at a profit. Accordingly, the Shares are a suitable investment only
for those investors who can afford a total loss of their investment and who recognize the material risk associated with investing
in an early-stage enterprise. Purchasing Shares in the Offering will subject Purchaser to certain material risks, including, but
not limited to, each of the risk factors identified within the Prior Offering Memorandum, the content of which Purchaser acknowledges
he read and fully understood, as well as the risk factors identified below:

 

(i)          Early
Stage Operations. The operations of the Company remain in the very early stages as the Company’s various business units
have only recently been acquired, and current consolidated financial information is in the process of being developed; thus, there
is little financial or other information by which the Purchaser can independently evaluate the potentials results of operations
and combined capital needs of the Company.

 

(ii)         No
Guarantee. The Purchaser understands that there is no guarantee of any financial return on this investment and that this investment
is not liquid.

 

(iii)        Reasonable
Efforts Offering; No Minimum Offering. The Offering is being undertaken on a “reasonable efforts” basis, with no
minimum level of subscriptions required for a closing. Accordingly, if an investor satisfies the Company’s suitability standards,
his or its subscription will be accepted by the Company and the investor will not know at the time of investment whether the Offering
will be fully subscribed or the amount of net proceeds generated by this Offering.

 

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(iv)        Use
of Proceeds. The Company intends to use the net proceeds from the Offering for the working capital of the Company and to help
support its various corporate initiatives, including towards the payment of short-term installment obligations due in connection
with the Company’s recent acquisition of Summit Holdings, Inc. (see Annex A, “Current Developments”), as well
as for future acquisitions. Thus, Purchaser is making its investment in the Shares based in part upon very limited information
regarding the specific uses to which the net proceeds will be applied.

 

a)        Financing
Risks Associated With Recent Acquisition. The Company has recently acquired Summit Holdings, Inc. for a purchase price of $5.5
million, of which $1.0 million was paid at closing and the balance of up to $4.5 million is due to be paid in installments in a
combination of short-term obligations and/or preferred stock (see Annex A, “Current Developments”). The Company does
not presently have sufficient uncommitted cash and liquid assets to pay the entire balance of the purchase price, however, believes
that through the use of cash generated from future operations, cash generated from this, as well as future financing transactions,
or from future borrowings, it will have sufficient liquidity to satisfy the installment obligations as they become due.

 

(v)         Tax
Consequences. An investment in the Shares may involve certain material legal, accounting and federal and state tax consequences.
Purchaser should consult with its legal counsel, accountant and/or business adviser as to the legal, accounting, tax and related
matters accompanying such an investment.

 

(vi)        Arbitrary
Offering Price. The offering price of the Shares offered hereby has been determined solely by the Company and does not necessarily
bear any relationship to the value of the Company’s assets, current or potential earnings of the Company, or any other recognized
criteria used for measuring value, and therefore, there can be no assurance that the offering price of the Shares is representative
of the actual value of the underlying Shares.

 

(vii)       Possible
Adverse Effects Associated With The Issuance Of “Blank Check” Preferred Stock. The Company’s Certificate
of Incorporation authorizes the Company’s Board of Directors to issue “blank check” preferred stock, from time
to time, in one or more series, solely on the authorization of its Board of Directors. The Board of Directors will thus be authorized,
without further approval of the stockholders, to fix the dividend rights and terms, conversion rights, voting rights, redemption
rights and terms, liquidation preferences, and any other rights, preferences, privileges and restrictions applicable to each new
series of preferred stock. The issuance of such stock could, among other results, adversely affect the voting power of the holders
of Common Stock and, under certain circumstances, make it more difficult for a third party to gain control of the Company, discourage
bids for the Common Stock at a premium, or otherwise adversely affect the market price of the Common Stock. As a holder of Common
Stock, your interest may therefore be adversely affected following conversion by the issuance of any blank check preferred stock.

 

(viii)      Risk
of Acquisitions.

 

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(1)         Our
business strategy includes growth through the acquisitions of other businesses and may include a sale to another entity in a similar
business to combine our strategies and business prospects. We may not be able to continue to identify attractive acquisition opportunities
or successfully acquire those opportunities identified. In order to complete acquisitions, we would expect to require additional
debt and/or equity financing, which could increase our interest expense, leverage and shares outstanding. In addition, we may not
be successful in integrating current or future acquisitions into our existing operations, which may result in unforeseen operational
difficulties or diminished financial performance or require a disproportionate amount of our management’s attention.

 

(2)         Even
if we are successful in integrating our current or future acquisitions into our existing operations, we may not derive the benefits,
such as operational or administrative synergies, that we expected from such acquisitions, which may result in the commitment of
our capital resources without the expected returns on such capital. Also, competition for acquisition opportunities may escalate,
increasing our cost of making further acquisitions or causing us to refrain from making additional acquisitions.

 

(3)         Additional
risks related to our acquisition strategy include, but are not limited to: (A) the potential disruption of our existing businesses;
(B) entering new markets or industries in which we have limited prior experience; (C) difficulties integrating and retaining key
management, sales, research and development, production and other personnel; (D) difficulties integrating or expanding information
technology systems and other business processes to accommodate the acquired businesses; (E) risks associated with integrating financial
reporting and internal control systems; and (F) whether any necessary additional debt or equity financing will be available on
terms acceptable to us, or at all, and the impact of such financing on our operating performance and earnings per share.

 

(ix)         Integration
Risk. We may not be able to successfully integrate or realize the anticipated benefits of our recent or contemplated acquisitions
and may not be able to maintain or achieve profitability of the acquired businesses or overall. The integration and consolidation
of these businesses will require substantial management, financial and logistical and other resources. While we believe that we
have sufficient resources to integrate these businesses successfully, such integration involves a number of significant risks,
including diversion of management’s attention and resources. Moreover, there can be no assurance as to the extent to which
the anticipated benefits of the acquisition will be realized, if at all, or that significant time and cost beyond that anticipated
will not be required in connection with the integration and continuing operation of the consolidated businesses.

 

(x)          Risk
of Rapid Growth. We are vulnerable to the potential difficulties associated with rapid growth. We believe that our future success
depends on our ability to manage rapid growth that we expect to experience organically and through acquisitions, and the demands
and additional responsibilities that our growth will place on our management. The following factors could present difficulties
to us: lack of sufficient executive-level personnel, increased administrative burden, long lead times associated with acquiring
additional equipment; and availability of suitable acquisition candidates.

 

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(n)          Legends.
The certificates and agreements evidencing the Shares shall have endorsed thereon the following legend (and appropriate notations
thereof will be made in the Company’s stock transfer books), and stop transfer instructions reflecting these restrictions
on transfer will be placed with the transfer agent of the Shares:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.
THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT
AND REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN AVAILABLE EXEMPTION THEREFROM. NO TRANSFER
OF THE SECURITIES REPRESENTED HEREBY MAY BE MADE IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION UNLESS THERE SHALL HAVE BEEN
DELIVERED TO THE ISSUER A WRITTEN OPINION OF UNITED STATES COUNSEL OF RECOGNIZED STANDING, IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER, TO THE EFFECT THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND REGISTRATION
OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

 

4.          Representations
and Warranties of the Company. The Company represents and warrants to Purchaser as follows:

 

(a)          Organization
and Qualification. The Company is duly organized, validly existing and in good standing under the laws of its jurisdiction
of organization, with the corporate power and authority to own and operate its business as presently conducted, except where the
failure to be or have any of the foregoing would not have a material adverse effect on the Company. The Company is duly qualified
as a foreign corporation or other entity to do business and is in good standing in each jurisdiction where the character of its
properties owned or held under lease or the nature of their activities makes such qualification necessary, except for such failures
to be so qualified or in good standing as would not have a material adverse effect on the Company.

 

(b)          Authority;
Validity and Effect of Agreement.

 

(i)          The
Company has the requisite corporate power and authority to execute and deliver this Agreement, perform its obligations under this
Agreement, and conduct the Offering. The execution and delivery of this Agreement by the Company, the performance by the Company
of its obligations hereunder, the Offering and all other necessary corporate action on the part of the Company have been duly authorized
by its Board of Directors, and no other corporate proceedings on the part of the Company is necessary to authorize this Agreement
or the Offering. This Agreement has been duly and validly executed and delivered by the Company and, assuming that it has been
duly authorized, executed and delivered by Purchaser, constitutes a legal, valid and binding obligation of the Company, in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding
in equity or at law) and an implied covenant of good faith and fair dealing.

 

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(ii)         The
Shares have been duly authorized and, when issued and paid for in accordance with this Agreement, will be validly issued, fully
paid and non-assessable shares of Common Stock with no personal liability resulting solely from the ownership of such shares and
will be free and clear of all liens, charges, restrictions, claims and encumbrances imposed by or through the Company.

 

(c)          No
Conflict; Required Filings. Neither the execution and delivery of this Agreement by the Company nor the performance by the
Company of its obligations hereunder will: (i) conflict with the Company’s Articles of Incorporation or Bylaws; (ii) violate
any statute, law, ordinance, rule or regulation, applicable to the Company or any of the properties or assets of the Company; or
(iii) violate, breach, be in conflict with or constitute a default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or permit the termination of any provision of, or result in the termination of, the acceleration of
the maturity of, or the acceleration of the performance of any obligation of the Company, or result in the creation or imposition
of any lien upon any properties, assets or business of the Company under, any material contract or any order, judgment or decree
to which the Company is a party or by which it or any of its assets or properties is bound or encumbered except, in the case of
clauses (ii) and (iii), for such violations, breaches, conflicts, defaults or other occurrences which, individually or in the aggregate,
would not have a material adverse effect on its obligation to perform its covenants under this Agreement;

 

(d)          Capitalization.
The Company is authorized to issue 150,000,000 shares of capital stock, 100,000,000 shares of which are designated Common Stock,
$0.0001 par value per share, of which, as of ________, ____________ shares of Common Stock were issued and outstanding and 50,000,000
shares of Preferred Stock of which, 3,200,000 shares of Series A Preferred Stock were issued and outstanding, and 8,000,000 shares
of Series B Preferred Stock were issued and outstanding. Additional preferred shares may be issued in connection with the recent
acquisition of Summit Holdings, Inc. See Annex A, “Current Developments”. The Company also has outstanding short-term
options to purchase _______ shares of common stock, as well as long-term options to purchase ________ shares of common stock, each
of which was granted to Company CEO, Maarten Propper, and each of which was described within the Prior Offering Memorandum. In
addition, in connection with the Prior Offering Memorandum, the Company issued to the Placement Agent warrants to purchase ________
shares of common stock. Except as may be described in the Offering Documents, no securities of the Company are entitled to preemptive
or similar rights, and no entity or person has any right of first refusal, preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by this Agreement unless any such rights have been waived. Additional shares
may be issued by our board of directors without further stockholder approval. The Company previously completed in full, through
the Placement Agent, an offering of its Common Stock upon the terms as described in the Prior Offering Memorandum.

 

    	11

    	 	 	 

    

 

 

(e)          Consents.
The Company is not required to obtain any consent, waiver, authorization, approval or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other governmental authority or other person or entity
in connection with the execution, delivery and performance by the Company of this Agreement or the issuance, sale or delivery of
the Shares other than (i) any filings required by state securities laws, (ii) the filing of a Notice of a Sale of Securities on
Form D with the Securities and Exchange Commission under Regulation D of the Securities and Exchange Act, (iii) those that have
been made or obtained prior to or contemporaneously with the initial Closing, and (iv) filings pursuant to the Securities and Exchange
Act.

 

(f)          Litigation.
There is no pending or, to the best knowledge of the Company, threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Company, or any of its affiliates that would affect the
execution by the Company or the performance by the Company of its obligations under this Agreement, and all other agreements entered
into by the Company relating hereto. There is no pending or, to the best knowledge of the Company, threatened action, suit, proceeding
or investigation before any court, governmental agency or body, or arbitrator having jurisdiction over the Company, or any of its
affiliates which litigation if adversely determined could result in a material adverse effect.

 

5.          Indemnification.

 

(a)          Purchaser
agrees to indemnify, defend and hold harmless the Company and its respective affiliates and agents from and against any and all
demands, claims, actions or causes of action, judgments, assessments, losses, liabilities, damages or penalties and reasonable
attorneys’ fees and related disbursements incurred by the Company which arise out of or result from a breach of any representations
or warranties made by Purchaser herein, and Purchaser agrees that in the event of any breach of any representations or warranties
made by Purchaser herein, the Company may, at its option, forthwith rescind the sale of the Shares to Purchaser.

 

(b)          The
Company agrees to defend, indemnify and hold harmless the Purchasers and shall reimburse Purchasers for, from and against each
claim, loss, liability, cost and expense (including without limitation, interest, penalties, costs of preparation and investigation,
and the reasonable fees, disbursements and expenses of attorneys, accountants and other professional advisors) (collectively, “Losses”)
directly or indirectly relating to, resulting from or arising out of any untrue representation, misrepresentation, breach of warranty
or non-fulfillment of any covenant, agreement or other obligation by or of the Company contained herein or in any certificate,
document, or instrument delivered to Purchasers pursuant hereto.

 

    	12

    	 	 	 

    

(c)          The
party to be indemnified hereunder (the “Indemnified Party”) shall promptly notify the party providing indemnification
hereunder (the “Indemnifying Party”) of any claim, demand, action or proceeding for which indemnification may be sought
under Sections 5(a) and 5(b) of this Agreement, and, if such claim, demand, action or proceeding is a third party claim, demand,
action or proceeding (collectively, an “Action”), the Indemnifying Party will have the right at its expense to assume
the defense thereof using counsel reasonably acceptable to the Indemnified Party; provided, however any failure or delay to so
notify the Indemnifying Party will not relieve it from its obligation to indemnify any Indemnified Party, unless and only to the
extent that such failure or delay results in the forfeiture by the Indemnifying Party of substantial rights and defenses or the
Indemnifying Party is otherwise materially prejudiced by such failure or delay. Any Indemnified Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be
at the expense of such Indemnified Party except to the extent that (i) the employment thereof has been specifically authorized
by the Indemnifying Party in writing, (ii) the Indemnifying Party has failed after a reasonable period of time to assume such defense
and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material
issue between the position of the Indemnifying Party and the position of such Indemnified Party, in which case the Indemnifying
Party shall be responsible for the reasonable fees and expenses of no more than one such separate counsel for the Indemnified Party.
In connection with any such third party Action, Purchasers and the Company shall cooperate with each other and provide each other
with access to relevant books and records in their possession. No Indemnifying Party shall, without the prior written consent of
the Indemnified Party, which shall not be unreasonably withheld, effect any settlement, compromise or consent to the entry of judgment
in any pending or threatened Action in respect of which any Indemnified Party is or could have been a party and indemnity was or
could have been sought hereunder by such Indemnified Party, unless such settlement, compromise or consent includes an unconditional
release of such Indemnified Party from all liability on claims that are the subject matter of such Action. Further, no Indemnified
Party seeking indemnification hereunder will, without the prior written consent of the Indemnifying Party, which shall not be unreasonably
withheld, settle, compromise, consent to the entry of any judgment in or otherwise seek to terminate any Action. The Indemnifying
Party shall not be liable for settlement of any Action effected without its written consent.

 

6.          Registration
Rights. Purchasers of the Shares will be entitled to the registration rights (and subject to the restrictions upon resale)
provided in the Prior Offering Memorandum, a copy of which is attached as Annex B to this Agreement, the terms of which are agreed
to and acknowledged by the Purchasers by their execution of this Agreement.

 

7.          Confidentiality.
Purchaser acknowledges and agreements that:

 

(a)          This
Agreement and the other Offering Documents have been furnished to Purchaser by the Company for the sole purpose of enabling Purchaser
to consider and evaluate an investment in the Company, and will be kept confidential by Purchaser and not used for any other purpose.

 

(b)          The
information contained herein shall not, without the prior written consent of the Company, be disclosed by Purchaser to any person
or entity, other than Purchaser’s personal financial and legal advisors for the sole purpose of evaluating an investment
in the Company, and will not, directly or indirectly, disclose or permit Purchaser’s personal financial and legal advisors
to disclose, any of such information without the prior written consent of the Company.

 

    	13

    	 	 	 

    

 

 

(c)          Purchaser
shall make its representatives aware of the terms of this section and to be responsible for any breach of this Agreement by such
representatives.

 

(d)          Purchaser
shall not, without the prior written consent of the Company, directly or indirectly, make any statements, public announcements
or release to trade publications or the press with respect to the subject matter of this Agreement and the other Offering Documents.

 

(e)          If
Purchaser decides to not pursue further investigation of the Company or to not participate in the Offering, Purchaser will promptly
return this Agreement, the other Offering Documents and any accompanying documentation to the Company.

 

8.          Entire
Agreement. This Agreement contains the entire agreement between the parties and supercedes all prior agreements and understandings,
both written and oral, between the parties with respect to the subject matter hereto, and no party shall be liable or bound to
any other party in any manner by any warranties, representations, guarantees or covenants except as specifically set forth in this
Agreement. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.

 

9.          Amendment
and Modification. This Agreement may not be amended, modified or supplemented except by an instrument or instruments in writing
signed by the party against whom enforcement of any such amendment, modification or supplement is sought.

 

10.         Extensions
and Waivers. At any time prior to the Closing, the parties hereto entitled to the benefits of a term or provision may (a) extend
the time for the performance of any of the obligations or other acts of the parties hereto, (b) waive any inaccuracies in the representations
and warranties contained herein or in any document, certificate or writing delivered pursuant hereto, or (c) waive compliance with
any obligation, covenant, agreement or condition contained herein. Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an instrument or instruments in writing signed by the party against whom enforcement
of any such extension or waiver is sought. No failure or delay on the part of any party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty, covenant
or agreement.

 

11.         Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns, provided, however, that no party hereto may assign its rights or delegate its obligations under this Agreement without
the express prior written consent of the other party hereto. Except as provided in Section 5, nothing in this Agreement is intended
to confer upon any person not a party hereto (and their successors and assigns) any rights, remedies, obligations or liabilities
under or by reason of this Agreement.

 

    	14

    	 	 	 

    

 

 

12.         Survival
of Representations, Warranties and Covenants. The representations and warranties contained herein shall survive the Closing
and shall thereupon terminate eighteen (18) months from the Closing, except that the representations contained in Sections 3(a),
3(b), 4(a), and 4(b) shall survive indefinitely. All covenants and agreements contained herein which by their terms contemplate
actions following the Closing shall survive the Closing and remain in full force and effect in accordance with their terms. All
other covenants and agreements contained herein shall not survive the Closing and shall thereupon terminate.

 

13.         Headings;
Definitions. The Section headings contained in this Agreement are inserted for convenience of reference only and will not affect
the meaning or interpretation of this Agreement. All references to Sections contained herein mean Sections of this Agreement unless
otherwise stated. All capitalized terms defined herein are equally applicable to both the singular and plural forms of such terms.

 

14.         Severability.
If any provision of this Agreement or the application thereof to any person or circumstance is held to be invalid or unenforceable
to any extent, the remainder of this Agreement shall remain in full force and effect and shall be reformed to render the Agreement
valid and enforceable while reflecting to the greatest extent permissible the intent of the parties.

 

15.         Notices.
All notices hereunder shall be sufficiently given for all purposes hereunder if in writing and delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, telecopy, telefax or other electronic transmission service to
the appropriate address or number as set forth below:

 

If to the Company:

 

Armada Water Assets, Inc.

419 Canyon Avenue, Suite 310

Fort Collins, CO 80521

Attention: Maarten Propper, CEO

 

If to Purchaser:

 

To that address indicated on the signature page hereof.

 

16.         Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts
to be wholly-performed within said State, and without regard to the conflicts of laws principles thereof.

 

17.         Arbitration.
The parties agree to submit all controversies to arbitration in accordance with the provisions set forth below and understand that:

 

(a)          Arbitration
is final and binding on the parties.

 

(b)          The
parties are waiving their right to seek remedies in court, including the right to a jury trial.

 

    	15

    	 	 	 

    

 

 

(c)          Pre-arbitration
discovery is generally more limited and different from court proceedings.

 

(d)          The
arbitrator’s award is not required to include factual findings or legal reasoning and any party’s right to appeal or
to seek modification of rulings by arbitrators is strictly limited.

 

(e)          The
panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry.

 

(f)          All
controversies which may arise between the parties concerning this Agreement shall be determined by arbitration pursuant to the
rules then pertaining to the American Arbitration Association in New York City, New York. The arbitration shall be governed by
the Federal Arbitration Act, 9 U.S.C. Sec. 1-16, and the judgment upon the award rendered by the arbitrators may be entered by
any court having jurisdiction thereof. Any notice of such arbitration or for the confirmation of any award in any arbitration shall
be sufficient if given in accordance with the provisions of this Agreement. The parties agree that the determination of the arbitrators
shall be binding and conclusive upon them.

 

18.         No
Separate Counsel for Investors. Fox Rothschild LLP has acted as counsel for the Company and not as counsel for the Purchaser.
Unless separately retained by the Purchaser (at its expense), no counsel has acted for the Purchaser.

 

19.         Counterparts.
This Agreement may be executed and delivered by facsimile in two or more counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same agreement.

 

    	16

    	 	 	 

    

 

 

IN WITNESS WHEREOF, intending to be legally bound, the parties
hereto have caused this Agreement to be executed as of the date set forth below.

 

	 	 	Individual Purchasers:
	Date:	 	 	PURCHASER:
	 	 	Individual Purchasers:
	 	 	 
	 	 	Name:
	 	 	 
	 	 	Entity Purchasers:
	 	 	 
	 	 	Name of Company
	 	 	 
	 	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 	 	 

	 	 	All Purchasers Complete
	 	 	 
	 	 	Address:	 

 

	 	 	Email Address:	 
	 	 	Social Security/Tax I.D. Number:

 

	 	 	Number of Shares Purchased:	 

 

	 	 	Purchase Price
	 	 	@$1.00 per Share:  	$

 

	Subscription Accepted:	 	ARMADA WATER ASSETS, INC.
	 	 	 
	Date:	 	 	By:	 
	 	 	Maarten Propper, CEO
	 	 	 	 	 

 

 

    	17

    	 	 	 

    

 

SUPPLEMENT
TO SIGNATURE PAGE

PURCHASER QUALIFICATION AS ACCREDITED INVESTOR

PLEASE CHECK ONE AS APPROPRIATE

 

_____ (1)         a
bank, insurance company, registered investment company, business development company, or small business investment company;

 

_____ (2)         Any
private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

 

_____ (3)         Any
organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust,
or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

 

_____ (4)         Any
director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive
officer, or general partner of a general partner of that issuer;

 

_____ (5)         Any
natural person whose individual net worth, or joint net worth with that person's spouse, exceeds $1,000,000.

 

(i)                   Except
as provided in paragraph (a)(5)(ii) of this section, for purposes of calculating net worth under this paragraph (a)(5):

 

(A)         The
person's primary residence shall not be included as an asset;

 

(B)         Indebtedness
that is secured by the person's primary residence, up to the estimated fair market value of the primary residence at the time of
the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the
time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of
the primary residence, the amount of such excess shall be included as a liability); and

 

(C)         Indebtedness
that is secured by the person's primary residence in excess of the estimated fair market value of the primary residence at the
time of the sale of securities shall be included as a liability;

 

_____ (6)         Any
natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that
person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level
in the current year;

 

_____ (7)         Any
trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person as described in § 230.506(b)(2)(ii); and

 

_____ (8)         Any
entity in which all of the equity owners are accredited investors.

 

    	18REGISTRATION
RIGHTS AGREEMENT

 

This Registration Rights Agreement (this
“Agreement”), dated as of ___________, 2013 (the “Effective Date”), is entered into by and
between Armada Water Assets, Inc., a Nevada corporation (the “Company”), and Aegis capital Corp., a ______ corporation
(“Aegis”), as placement agent and attorney-in-fact for the purchasers (each, a “Purchaser”
and, collectively, the “Purchasers”) of Common Stock (as defined below) pursuant to Subscription Agreements
(each, a “Subscription Agreement” and, collectively, the “Subscription Agreements”) by and
between the Company and each Purchaser.

 

WHEREAS, the Purchasers have acquired shares
of Common Stock in a private placement by the Company (the “Offering”) with the understanding that they would
receive registration rights in respect of such shares;

 

WHEREAS, the Company has issued a Common
Stock Purchase Warrant (the “Agent’s Warrant”) to Aegis in consideration for Aegis’s services as
placement agent in connection with the Offering with the understanding that Aegis would receive registration rights in respect
of the shares of Common Stock issuable upon exercise of the Agent’s Warrant; and

 

WHEREAS, the Company, the Purchasers and
Aegis desire to set forth the registration rights to be granted by the Company to the Purchasers and Aegis pursuant to this Agreement.

 

NOW, THEREFORE, in consideration of the
mutual promises, representations, warranties, covenant and conditions set forth herein and in the Subscription Agreements, the
parties mutually agree as follows:

 

1.                 
Certain Definitions. As used in this Agreement, the following terms shall have the following respective meanings:

 

“Blackout Period” means,
with respect to a registration, a period, in each case commencing on the day immediately after the Company notifies the Purchasers
and Aegis that they are required to suspend offers and sales of Registrable Securities pursuant to Section 4(f) hereof, during
which the Company, in the good faith judgment of a majority of the members of its Board of Directors, after the advice of counsel,
determines (because of (i) the existence of, or in anticipation of, any material acquisition, financing activity or other fundamental
transaction involving the Company, (ii) the unavailability, for reasons beyond the Company’s control, of any required financial
statements or other required disclosure or (iii) any other event or condition of similar significance to the Company) that the
registration and distribution of the Registrable Securities to be covered by a registration statement, if any, would be seriously
detrimental to the Company and its stockholders; provided that such period shall end on the earlier of (1) the date upon which
the circumstance giving rise to the commencement of the period would no longer cause the registration and distribution of the Registrable
Securities to be seriously detrimental to the Company and its stockholders (e.g., the material acquisition, financing or other
fundamental transaction is consummated or the unavailable financial statements or other required disclosure is publicly disclosed)
and (2) such time as the Company (A) notifies the selling Holders that the Company will no longer delay such filing of the registration
statement, (B) recommences steps to make such registration statement effective or (C) allows sales pursuant to such registration
statement to resume; provided, further that (a) the Company shall limit its use of Blackout Periods, in the aggregate, to 60 Trading
Days in any rolling 12-month period and (b) no Blackout Period may commence sooner than 30 days after the end of a prior Blackout
Period.

 

    	1

    	 

    

 

“Business Day” means
any day of the year, other than a Saturday, Sunday or other day on which the Commission is required or authorized to be closed.

 

“Closing Date” means
[_________________], 2013, or such other time as is mutually agreed between the Company and the Purchasers for the closing of the
Offering.

 

“Commission” means the
Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

 

“Common Stock” means
the common stock, par value $0.0001 per share, of the Company and any and all shares of capital stock or other Equity Securities
of: (i) the Company which are added to or exchanged or substituted for the Common Stock by reason of the declaration of any stock
dividend or stock split, the issuance of any distribution or the reclassification, readjustment, recapitalization or other such
modification of the capital structure of the Company; and (ii) any other entity, now or hereafter organized under the laws of any
state or other governmental authority, with which the Company or any subsidiary or parent thereof is merged, which results from
any consolidation or reorganization to which the Company is a party or to which substantially all of the shares or assets of the
Company are sold, if, immediately after such merger, consolidation, reorganization or sale, the Company or the stockholders of
the Company directly or indirectly own Equity Securities having, in the aggregate, more than 50.0% of the total voting power of
such other entity.

 

“Equity Securities” means
(i) any Common Stock, (ii) any security convertible, with or without consideration, into any shares of Common Stock (including,
without limitation, any option to purchase such convertible security), (iii) any security exchangeable, with or without consideration,
for any shares of Common Stock (including, without limitation, any option to purchase such exchangeable security), or (iv) any
security carrying any warrant or right to subscribe for or purchase any shares of Common Stock.

 

“Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.

 

“Family Member” means
(a) with respect to any individual, such individual’s spouse, any descendants (whether natural or adopted) of such individual,
any trust all of the beneficial interests of which are owned by such individual or by any such individual together with any organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, the estate of any such individual, and any corporation,
association, partnership or limited liability company all of the equity interests of which are owned by such individual or any
of the above-described trusts or organizations and (b) with respect to any trust, the owners of all of the beneficial interests
in such trust.

 

“Form S-1” means such
form under the Securities Act as in effect on the date hereof or any similar registration form under the Securities Act subsequently
adopted by the Commission.

 

    	2

    	 

    

 

“Form S-3” means such
form under the Securities Act as in effect on the date hereof or any similar registration form under the Securities Act subsequently
adopted by the Commission.

 

“Holder” means (i) each
Purchaser, (ii) any of such Purchaser’s respective successors and Permitted Assignees who acquire rights in accordance with
this Agreement with respect to the Registrable Securities directly or indirectly from a Purchaser, (iii) Aegis or (iv) any of Aegis’s
successors and Permitted Assignees who acquire rights in accordance with this Agreement directly or indirectly from Aegis.

 

“Initial Registration Statement”
is defined in Section 3(a).

 

“Inspector” means any
attorney, accountant or other agent retained by a Purchaser for the purposes provided in Section 4(j).

 

“Majority Holders” means,
at any time, the Holders of a majority of the Registrable Securities.

 

“Offering Price” means
the Offering Price of the Common Stock sold in the Offering.

 

“Permitted Assignee”
means (a) with respect to a partnership, its partners or former partners in accordance with their partnership interests, (b) with
respect to a corporation, its stockholders in accordance with their interests in the corporation, (c) with respect to a limited
liability company, its members or former members in accordance with their interests in the limited liability company, (d) with
respect to an individual, any Family Member of such individual, (e) an entity that is controlled by, controls or is under common
control with a transferor or (f) a party to this Agreement.

 

The terms “register,”
“registered” and “registration” refer to a registration effected by preparing and filing
a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration
statement.

 

“Registrable Securities”
means shares of Common Stock issued to each Purchaser pursuant to the Subscription Agreements or issued or issuable to Aegis pursuant
to the Agent’s Warrant, but the definition of “Registrable Securities” excludes (i) any securities that
have been publicly sold or may be immediately, freely sold without registration under the Securities Act either pursuant to Rule
144 under the Securities Act or otherwise, (ii) any securities sold by a person in a transaction pursuant to a registration statement
filed under the Securities Act or (iii) any securities that are at the time subject to an effective registration statement under
the Securities Act.

 

“Registration Statement”
means any registration statement required to be filed by the Company pursuant to Section 3(a) hereof.

 

“Securities Act” means
the Securities Act of 1933, as amended, or any similar Federal statute promulgated in replacement thereof, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the time.

 

    	3

    	 

    

 

“SEC Effective Date”
means the date the Initial Registration Statement is declared effective by the Commission.

 

“Trading Day” means a
day on which (a) the national securities exchange, (b) the Nasdaq Stock Market or (c) any other securities market (including, without
limitation, the OTC Bulletin Board), in any such case which at the time constitutes the principal securities market or quotation
system for the Common Stock, is open for general trading or quotation of securities.

 

2.                 
Term. This Agreement shall continue in full force and effect for a period of two years from the Effective
Date, unless terminated sooner hereunder.

 

3.                 
Registration.

 

(a)               
Initial Registration. As promptly as reasonably practicable after the date hereof, the Company shall file
with the Commission an initial registration statement (the “Initial Registration Statement”) on Form S-1, or any other
appropriate form for which the Company then qualifies in the opinion of counsel for the Company) to cover: (i) an initial public
offering of newly issued shares to be publicly offered by the Company; (ii) the public resale by the Holders of all of the Registrable
Securities; and (iii) the public resale on behalf of any other shareholders of the Company; provided, however, that the Company
shall not be obligated to effect any such registration, qualification, or compliance pursuant to this Section 3(a), or to keep
such registration effective pursuant to Section 4, during any Blackout Period. Notwithstanding the foregoing, if, in the opinion
of the underwriter for an initial public offering it is not advisable to include Registrable Securities in the Initial Registration
Statement, the Company may omit Registrable Securities from the Initial Registration Statement; provided, however, that the Company
shall thereafter (following the expiration of any market stand-off agreement) file a Registration Statement to include the Registrable
Securities (a “Reoffer Registration Statement”). The Initial Registration Statement or the Reoffer Registration
Statement, as applicable, shall permit the registration for resale by the Holders of the Registrable Securities in accordance with
the plan of distribution attached as Exhibit A hereto [NTD: to be provided]; provided such methods are reasonably acceptable to
the underwriter of the Company’s initial public offering. The Company shall use its commercially reasonable best efforts
to cause the Initial Registration Statement to be declared effective by the Commission under the Securities Act as promptly as
is practicable, and to keep the Initial Registration Statement and any Registration Statement covering Registrable Securities that
is filed in replacement of or in addition to the Initial Registration Statement after the SEC Effective Date (a “Subsequent
Registration Statement”) continuously effective under the Securities Act for the term of this Agreement (i.e., a period
of two years from the Effective Date), subject to the imposition of any Blackout Periods. If the Initial Registration Statement
or any Subsequent Registration Statement ceases to be effective at any time during the term of this Agreement for any reason other
than the imposition of a Blackout Period, then the Company shall use its reasonable best efforts to obtain the prompt withdrawal
of any order suspending the effectiveness of such Initial Registration Statement or Subsequent Registration Statement and, in any
event within 30 days of such cessation of effectiveness, amend the Initial Registration Statement or Subsequent Registration Statement
in a manner reasonably expected to result in the withdrawal of the order suspending the effectiveness thereof or file an additional
Subsequent Registration Statement covering all of the securities that as of the date of such filing are Registrable Securities.
If an additional Subsequent Registration Statement is filed pursuant to the preceding sentence, the Company shall use its reasonable
best efforts to cause such Registration Statement to be declared effective by the Commission under the Securities Act as promptly
as possible after such filing and to keep such Registration Statement continuously effective during the term of this Agreement.
The Company shall supplement and amend the Initial Registration Statement and any Subsequent Registration to the extent required
by the Securities Act or any guidance promulgated by the Commission.

 

    	4

    	 

    

 

(b)              
Notwithstanding anything to the contrary contained herein, the Company’s obligation in Paragraph 3(a) above
shall extend only to the inclusion of the resale of the Registrable Securities in the Initial Registration Statement. The Company
shall have no obligation to assure the terms and conditions of distribution, to obtain a commitment from an underwriter relative
to the sale of the Registrable Securities or to otherwise assume any responsibility for the manner, price or terms of the distribution
thereof. Furthermore, the Company shall not be restricted in any manner from including within the Initial Registration Statement
or the distribution, the public resale of any other shares of the Company, or issuance or resale of any of its or any other securities,
as the Company intends, and the Holders acknowledge, that the Initial Registration Statement will be used by the Company to cover
an initial public offering of its own newly issued shares.

 

4.                 
Registration Procedures. In the case of each registration, qualification or compliance effected by the Company
pursuant to Section 3 hereof, the Company will keep each Holder including securities therein reasonably advised in writing as to
the initiation of each registration, qualification and compliance and as to the completion thereof. With respect to any registration
statement filed pursuant to Section 3 hereof, the Company will use its commercially reasonable best efforts to:

 

(a)               
prepare and file with the Commission with respect to such Registrable Securities, a registration statement on Form
S-1, Form S-3, or any other appropriate form for which the Company then qualifies in the opinion of counsel for the Company (provided,
however, that if the Company files a registration on Form S-1, and subsequently becomes eligible to use Form S-3, it may file a
post-effective amendment to such Form S-1 on Form S-3 prior to the end of such period and use its best efforts to cause such registration
statement as amended to become and remain effective during the Effectiveness Period (as hereinafter defined)), which form shall
be available for the sale of the Registrable Securities in accordance with the intended methods of distribution thereof, and the
Company shall use its commercially reasonable efforts to cause such registration statement to become and remain effective at least
for a period ending with the first to occur of (i) the sale of all Registrable Securities covered by the registration statement,
(ii) as to any Holder, the availability under Rule 144 for such Holder to immediately, freely resell without restriction all Registrable
Securities owned by such Holder covered by the registration statement, (iii) one year after a registration statement filed pursuant
to Section 3(a) is declared effective by the Commission ( the “Effectiveness Period”), provided, however, that if at
the end of the one-year period in clause (iii) any Holder is not able to immediately, freely resell all Registrable Securities
that it owns, the Effectiveness Period shall continue until terminated pursuant to clauses (i) or (ii) above but in no event shall
the Effectiveness Period continue for more than the earlier of (X) the Term; or (Y) two years after the Effective Date);

 

    	5

    	 

    

 

(b)              
if a registration statement is subject to review by the Commission, promptly respond to all comments and diligently
pursue resolution of any comments to the satisfaction of the Commission;

 

(c)               
prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration statement effective during the Effectiveness Period
and to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration
statement;

 

(d)              
furnish, without charge, to each Holder of Registrable Securities covered by such registration statement (i) a reasonable
number of copies of such registration statement (including any exhibits thereto other than exhibits incorporated by reference therein),
each amendment and supplement thereto as such Holder may request, (ii) such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and any other prospectus filed pursuant to Rule 424 under the Securities
Act) as such Holders may reasonably request, in conformity with the requirements of the Securities Act and (iii) such other documents
as such Holder may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Holder,
but only during the Effectiveness Period;

 

(e)               
use its commercially reasonable best efforts to register or qualify such Registrable Securities under such other
applicable securities or Blue Sky laws of such jurisdictions as any Holder of Registrable Securities covered by such registration
statement reasonably requests or as may be necessary for the marketability of the Registrable Securities (such request to be made
by the time such registration statement prior to filing with the Commission) and to do any and all other acts and things which
may be reasonably necessary or advisable to enable such Holder to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such Holder, provided that the Company shall not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this Section 4(e), (ii) subject itself to taxation in
any such jurisdiction or (iii) consent to general service of process (other than service of process in respect of the transactions
contemplated by such registration statement) in any such jurisdiction;

 

(f)               
notify each Holder of such Registrable Securities as promptly as practicable after becoming aware that a prospectus
included in such registration statement contains an untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein (in the light of the circumstances under which they were made)
not misleading and the Company shall promptly prepare and furnish to such Holder a supplement or amendment to such prospectus (or
prepare and file appropriate reports under the Exchange Act) so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not contain an untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein (in the light of the circumstances under which they were made)
not misleading, unless suspension of the use of such prospectus otherwise is authorized herein or in the event of a Blackout Period,
in which case no supplement or amendment need be furnished (or Exchange Act filing made) until the termination of such suspension
or Blackout Period;

 

    	6

    	 

    

 

(g)              
comply, and continue to comply during the period that such registration statement is effective under the Securities
Act, in all material respects with the Securities Act and the Exchange Act and with all applicable rules and regulations of the
Commission with respect to the disposition of all securities covered by such registration statement, and make available to its
security holders, as soon as reasonably practicable, an earnings statement covering the period of at least 12 months, but not more
than 18 months, beginning with the first full calendar month after the SEC Effective Date, which earnings statement shall satisfy
the provisions of Section 11(a) of the Securities Act;

 

(h)              
notify each Holder of Registrable Securities being offered or sold pursuant to such registration statement as promptly
as practicable after becoming aware of the issuance by the Commission of any stop order or other suspension of effectiveness of
the Registration Statement at the earliest possible time;

 

(i)                
permit the Holders of Registrable Securities being included in such registration statement and their legal counsel,
at such Holders’ sole cost and expense (except as otherwise specifically provided in Section 6 hereof), to review and have
a reasonable opportunity to comment on the registration statement and all amendments and supplements thereto at least five Business
Days prior to their filing with the Commission;

 

(j)                
make available for inspection by any Holder and any Inspector retained by such Holder, at such Holder’s sole
expense, all records as shall be reasonably necessary to enable such Holder to exercise its due diligence responsibility, and cause
the Company’s officers, directors, and employees to supply all information which such Holder or any Inspector may reasonably
request for purposes of such due diligence, provided, however, that such Holder shall hold in confidence and shall not make any
disclosure of any records which the Company determines in good faith to be confidential, and of which determination such Holder
is so notified at the time such Holder receives such information, unless (i) the disclosure of such records is necessary to avoid
or correct a misstatement or omission in such registration statement and a reasonable time prior to such disclosure the Holder
shall have informed the Company of the need to so correct such misstatement or omission and the Company shall have failed to correct
such misstatement of omission, (ii) the release of such records is ordered pursuant to a subpoena or other order from a court or
governmental body of competent jurisdiction or (iii) such records have been made generally available to the public other than by
disclosure in violation of this or any other agreement. The Company shall not be required to disclose any confidential information
in such records to any Inspector until and unless such Inspector shall have entered into a confidentiality agreement with the Company
with respect thereto, substantially in the form of this Section 4(j), which agreement shall permit such Inspector to disclose records
to the Holder who has retained such Inspector;

 

(k)              
use its best efforts to cause all of the Registrable Securities covered by such registration statement to be listed
or quoted on the principal securities market or quotation system on which securities of the same class or series issued by the
Company are then listed or quoted (including, without limitation, the OTC Bulletin Board);

 

(l)                
provide a transfer agent and registrar, which may be a single entity, for the Registrable Securities at all times;
and

 

    	7

    	 

    

 

(m)            
cooperate with the Holders of Registrable Securities being offered pursuant to such registration statement to facilitate
the timely preparation and delivery of certificates (not bearing any restrictive legends) representing Registrable Securities to
be offered pursuant to such registration statement and enable such certificates to be in such denominations or amounts as the Holders
may reasonably request and registered in such names as the Holders may request.

 

5.                 
Suspension of Offers and Sales. Each Holder of Registrable Securities agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section 4(f) hereof or of the commencement of any Blackout
Period, such Holder shall discontinue dispositions of Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by
Section 4(f) hereof or notice of the end of the Blackout Period, and, if so directed by the Company, such Holder shall deliver
to the Company (at the Company’s expense) all copies (including, without limitation, any and all drafts), other than permanent
file copies, then in such Holder’s possession of the current prospectus covering such Registrable Securities. In the event
that the Company shall give any such notice, the period mentioned in Section 4(a)(iii) hereof shall be extended by the greater
of: (x) ten Business Days or (y) the number of days during the period from and including the date of the giving of such notice
pursuant to Section 4(f) hereof to and including the date when each Holder of Registrable Securities covered by such registration
statement shall have received the copies of the supplemented or amended prospectus contemplated by Section 4(f) hereof.

 

6.                 
Registration Expenses. The Company shall pay any and all expenses incurred in connection with any registration
contemplated by this Agreement, including, without limitation, all registration, filing, stock exchange and FINRA fees, all printing
expenses, all fees and expenses of complying with securities or Blue Sky laws and the fees and disbursements of its independent
accountants and of counsel for the Company and Aegis; provided that, in any underwritten registration, each party shall pay for
its own underwriting discounts and commissions and transfer taxes.

 

7.                 
Status of Purchasers. Each Purchaser who, at the time of determination, is also a Holder of Registrable Securities
shall be treated for all purposes as if such Purchaser were a party to this Agreement, and such Purchaser, together with any of
such Purchaser’s successors and Permitted Assignees who acquire rights in accordance with this Agreement with respect to
Registrable Securities directly or indirectly from such Purchaser, shall be entitled to enforce this Agreement as a third party
beneficiary. Notwithstanding the foregoing, it is the understanding of the parties to this Agreement that, whenever possible, the
actions of the Purchasers and such successors and Permitted Assignees shall be coordinated through Aegis as the attorney-in-fact
for the Purchasers. A Purchaser who is no longer a Holder of Registrable Securities shall nevertheless continue to be treated as
a party to this Agreement for purposes of Section 10 hereof and shall be entitled to enforce such provision as a third party beneficiary.

 

8.                 
Assignment of Rights. No Holder may assign its rights under this Agreement to any party without the prior
written consent of the Company; provided, however, that a Holder may assign its rights under this Agreement without such restrictions
to a Permitted Assignee as long as (i) such transfer or assignment is effected in accordance with applicable securities laws, (ii)
such transferee or assignee agrees in writing to become subject to the terms of this Agreement and (iii) the Company is given written
notice by such Holder of such transfer or assignment, stating the name and address of the transferee or assignee and identifying
the Registrable Securities with respect to which such rights are being transferred or assigned.

 

    	8

    	 

    

 

9.                 
Information by Holder. The Holder or Holders of Registrable Securities included in any registration shall
furnish to the Company such information regarding such Holder or Holders and the distribution proposed by such Holder or Holders
as the Company may request in writing.

 

10.             
Indemnification.

 

(a)               
In the event of the offer and sale of Registrable Securities held by Holders under the Securities Act, the Company
shall, and hereby does, indemnify and hold harmless, to the fullest extent permitted by law, each Holder, its directors, officers,
partners, each other person who participates as an underwriter in the offering or sale of such securities, and each other person,
if any, who controls or is under common control with such Holder or any such underwriter within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act, against any losses, claims, damages or liabilities, joint or several, and expenses
to which the Holder or any such director, officer, partner or underwriter or controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which such shares were registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, or any omission or
alleged omission therefrom of any material fact required to be stated therein or necessary to make the statements therein (in the
light of the circumstances in which they were made) not misleading, and the Company shall reimburse the Holder, and each such director,
officer, partner, underwriter and controlling person for any legal or any other expenses reasonably incurred by them in connection
with investigating, defending or settling any such loss, claim, damage, liability, action or proceeding; provided that the foregoing
shall not apply, and the Company shall not be liable, in any such case (i) to the extent that any such loss, claim, damage, liability
(or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement
in or omission or alleged omission from such registration statement, any such preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement that was made in reliance upon and in strict conformity with written information furnished
to the Company through an instrument duly executed by or on behalf of such Holder specifically stating that such information would
be used in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement, (ii) if the person asserting any such loss, claim, damage, liability (or action or proceeding in respect thereof)
who purchased the Registrable Securities that are the subject thereof did not receive a copy of an amended preliminary prospectus
or the final prospectus (or the final prospectus as amended or supplemented) at or prior to the written confirmation of the sale
of such Registrable Securities to such person because of the failure of such Holder or underwriter to so provide such amended preliminary
or final prospectus and the untrue statement or alleged untrue statement or omission or alleged omission of a material fact made
in such preliminary prospectus was corrected in the amended preliminary or final prospectus (or the final prospectus as amended
or supplemented) or (iii) to the extent that the Holders failed to comply with the terms of the plan of distribution mechanics
described in the applicable prospectus. Such indemnity shall remain in full force and effect regardless of any investigation made
by or on behalf of the Holders, or any such director, officer, partner, underwriter or controlling person, and shall survive the
transfer of such shares by the Holder.

 

    	9

    	 

    

 

(b)              
As a condition to including any Registrable Securities to be offered by a Holder in any registration statement filed
pursuant to this Agreement, each such Holder agrees to be bound by the terms of this Section 10 and to indemnify and hold harmless,
to the fullest extent permitted by law, the Company, its directors and officers, and each other person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act, legal counsel and accountants
for the Company, any underwriter, any other Holder selling securities in such registration statement and any controlling person
within the meaning of the Securities Act of any such underwriter or other Holder, against any losses, claims, damages or liabilities,
joint or several, to which the Company or any such director or officer or controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened,
in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement in, or any omission or
alleged omission from, such registration statement, any preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement that was made in reliance upon and in strict conformity with written information furnished to the Company through
an instrument duly executed by or on behalf of such Holder specifically stating that such information would be used in the preparation
of such registration statement, preliminary prospectus, final prospectus, amendment or supplement, (ii) if the person asserting
any such loss, claim, damage, liability (or action or proceeding in respect thereof) who purchased the Registrable Securities that
are the subject thereof did not receive a copy of an amended preliminary prospectus or the final prospectus (or the final prospectus
as amended or supplemented) at or prior to the written confirmation of the sale of such Registrable Securities to such person because
of the failure of such Holder or underwriter to so provide such amended preliminary or final prospectus and the untrue statement
or alleged untrue statement or omission or alleged omission of a material fact made in such preliminary prospectus was corrected
in the amended preliminary or final prospectus (or the final prospectus as amended or supplemented) or (iii) to the extent that
the Holders failed to comply with the terms of the plan of distribution mechanics described in the applicable prospectus; provided,
however, that the total indemnification obligation of any Holder pursuant to this Section 10(b) shall in no event exceed the gross
proceeds received by such Holder from the sale of securities pursuant to the underlying registration statement, preliminary prospectus,
final prospectus, amendment or supplement. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Holders, or any such director, officer, partner, underwriter or controlling person and shall survive
the transfer of such shares by the Holder, and such Holder shall reimburse the Company, and each such director, officer, legal
counsel and accountants, underwriter, other Holder and controlling person, for any legal or other expenses reasonably incurred
by them in connection with investigating, defending, or settling and such loss, claim, damage, liability, action or proceeding.

 

    	10

    	 

    

 

(c)               
Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving
a claim referred to in Section 10(a) or Section 10(b) hereof (including any governmental action), such indemnified party shall,
if a claim in respect thereof is to be made against an indemnifying party, give written notice to the indemnifying party of the
commencement of such action; provided that the failure of any indemnified party to give notice as provided herein shall not relieve
the indemnifying party of its obligations under Section 10(a) or Section 10(b) hereof, except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. Neither an indemnified nor an indemnifying party shall be liable for
any settlement of any action or proceeding effected without its consent, which consent shall not be unreasonably withheld. No indemnifying
party shall, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a complete
release from all liability in respect of such claim or litigation. Notwithstanding anything to the contrary set forth herein, and
without limiting any of the rights set forth above, in any event any party shall have the right to retain, at its own expense,
counsel with respect to the defense of a claim.

 

(d)              
In the case of the expense reimbursement obligations set forth in Section 10(a) and Section 10(b) hereof or in an
action pursuant to Section 10(c) hereof any required expense reimbursement shall be made by periodic payments in the amount of
such current expenses during the course of the investigation or defense, as and when bills are received or expenses, losses, damages,
or liabilities are incurred.

 

(e)               
If the indemnification provided for in this Section 10 is held by a court of competent jurisdiction to be unavailable
to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying
party, in lieu of indemnifying such indemnified party hereunder, shall (i) contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage or expense as is appropriate to reflect not only the relative benefits
received by the indemnified party, on the one hand, and the indemnifying party, on the other hand, but also the relative fault
of such parties (determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission of a material fact relates to information supplied by the indemnifying party or the indemnified
party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission), together with any other relevant equitable considerations. No indemnified party guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any indemnifying party who was
not guilty of such fraudulent misrepresentation.

 

(f)               
Other Indemnification. Indemnification similar to that specified in the preceding subsections of this Section 10
(with appropriate modifications) shall be given by the Company and each Holder of Registrable Securities with respect to any required
registration or other qualification of securities under any Federal or state law or regulation other than the Securities Act or
with any governmental authority other than the Commission.

 

    	11

    	 

    

 

11.             
Restrictions Upon Resale; Holdbacks. Notwithstanding any other provision of this Agreement, if in the Initial
Registration Statement the Company elects to effect a primary offering of its common stock and/or other securities, then each Holder
of Registrable Securities agrees not to effect any public sale or distribution (including sales pursuant to Rule 144) of Equity
Securities of the Company, except in accordance with the following resale restrictions (the “Resale Restrictions”):
(i) such Holder shall only be permitted to effect any public sale or distribution covering up to fifty (50%) percent of its Registrable
Securities commencing sixty (60) days after completion of such primary offering; and (ii) such Holder shall only be permitted to
effect any public sale or distribution of the balance of its Registrable Securities no sooner than one-hundred and twenty (120)
days’ after completion of the primary offering; provided, however, if the primary offering to be undertaken by the Company
is an underwritten offering, the Resale Restriction are subject to modification and extension at the discretion of the underwriter
of any such primary offering, based upon market conditions at the time of the offering.

 

12.             
Miscellaneous.

 

(a)               
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any manner permitted by law. The prevailing party in any such litigation
shall be entitled to receive from the losing party or parties all costs and expenses, including reasonable attorney’s fees,
incurred by the prevailing party.

 

(b)              
WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,
A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

(c)               
Successors and Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit
of, and shall be binding upon, the successors, Permitted Assignees, executors and administrators of the parties hereto. In the
event that the Company merges with, or is otherwise acquired by, a direct or indirect subsidiary of a publicly traded company,
or engages in some other form of business combination with a publicly traded company, the Company shall condition the merger, acquisition
or combination on the assumption by such publicly traded company of the Company’s obligations under this Agreement.

 

    	12

    	 

    

 

(d)              
Notices, etc. All notices or other communications which are required or permitted under this Agreement shall
be in writing and sufficient if delivered by hand, by facsimile transmission, by registered or certified mail, postage pre-paid
or by courier or overnight carrier, to the persons at the addresses set forth below (or at such other address as any party shall
have delivered to the other parties in writing), and shall be deemed to have been delivered as of the date so delivered:

 

	If to the Company:	
        Armada Water Assets, Inc.

        16 E. Lincoln Avenue

        Fort Collins, CO 80524

        Attention: Mitch Burroughs

	with a copy to	
        Fox Rothschild LLP

        2000 Market Street, 20th Floor

        Philadelphia, Pennsylvania 19103

        Attention: Stephen M. Cohen

	If to Aegis, for forwarding on to each Purchaser:	
        Aegis Capital Corp.

        810 Seventh Avenue, 18th Floor

        New York, New York 10019

        Attention: Adam Stern

	with a copy to:	
        Brian C. Daughney

        Becker & Poliakoff, LLP

        45 Broadway

        8th Floor

        New York, NY 10006

 

(e)               
Delays or Omissions. No delay in exercising, or failure to exercise, any right, power or remedy afforded to
any Holder of Registrable Securities upon any breach or default of the Company under this Agreement shall impair any such right,
power or remedy of such Holder, nor shall it be construed to be a waiver of any such breach or default or an acquiescence therein,
and any waiver of a single breach or default shall not be deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Holder of any breach or default
under this Agreement, or any waiver on the part of any Holder of any provision or condition of this Agreement, must be in writing
and shall be effective only to the extent specifically set forth in such writing. All remedies, whether under this Agreement, by
law or otherwise, afforded to any Holder shall be cumulative and not alternative.

 

(f)               
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable
against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

 

(g)              
Severability. In the case any provision of this Agreement shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

(h)              
Amendments. The provisions of this Agreement may be amended at any time and from time to time, and particular
provisions of this Agreement may be waived, with and only with an agreement or consent in writing signed by the Company and by
Aegis with the prior written consent of the Majority Holders. The Purchasers acknowledge that by the operation of this Section
12(h), Aegis and the Majority Holders may have the right and power to diminish or eliminate the rights of the Purchasers under
this Agreement.

 

    	13

    	 

    

 

(i)                
Limitation on Subsequent Registration Rights. After the date of this Agreement, the Company shall not, without
the prior written consent of the Majority Holders, enter into any agreement with any holder or prospective holder of any securities
of the Company that would grant such holder registration rights senior to those granted to the Holders hereunder; provided, however,
the Company may grant registration rights equivalent to those provided to Aegis and the Holders, even if the exercise of such rights
may have an adverse effect on the distribution of the Registrable Securities by the Holders.

 

[Signature Page Follows]

 

 

    	14

    	 

    

 

This Registration Rights Agreement is hereby
executed as of the date first above written. 

 

	 	COMPANY:
	 	 
	 	Armada Water Assets, Inc.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

 

	 	
        AEGIS: 

	 	 
	 	
        Aegis Capital Corp., in its Individual Capacity and
in its Capacity as the Placement Agent for the Offering and the Attorney-in-Fact for the Purchasers 

	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

  

 

    	15

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