Document:

Exhibit 4.11

 

FORM OF WARRANT

 

TO PURCHASE COMMON
STOCK

 

OF ARMADA WATER ASSETS, INC. 

 

WARRANT NO.: 2014- [_________] 

 

THE SECURITIES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES REPRESENTED
HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT, AND WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT
BE SOLD, TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH TRANSFER OR DISPOSITION
DOES NOT VIOLATE THE SECURITIES ACT OF 1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR OTHER APPLICABLE SECURITIES LAWS.

 

This WARRANT (“Warrant”)
is being issued is to verify that, FOR VALUE RECEIVED, [_________________] (“Holder”) is entitled to
purchase, subject to the terms and conditions hereof, from Armada Water Assets, Inc., a Nevada corporation (the “Company”),
[_____________] such number of shares of common stock, $0.0001 par value per share, of the Company (the “Common
Stock”) as set forth below, at any time during the period commencing at 9:00 a.m., Eastern Time on the date hereof [the
date of first closing under the Offering] (the “Commencement Date”) and ending at 5:00 p.m. Eastern Time
on _____[__], 2019 (the “Termination Date”), at an exercise price equal to: (i) 120% of the price at which shares
of the Company’s Common Stock are sold in an initial public offering (a “Public Offering”) if such Public
Offering is completed within six months of the Commencement Date, or (ii) $4.00 per share in the absence of a Public Offering within
six months from the Commencement Date and at any time thereafter (the “Exercise Price”). This Warrant is one
of a series of warrants issued in connection with the Company’s offering of shares of Series E Preferred Stock (the “Series
E Preferred Shares”) pursuant to that certain Confidential Private Offering Summary dated April 21, 2013 (the “Series
E Offering”).

 

This Warrant shall
be exercisable to purchase (i) one share of Common Stock for every two shares of Common Stock issued upon the conversion of the
Series E Preferred Shares issued to the Holder in the Series E Offering if a Public Offering is completed within six months of
the Commencement Date, or (ii) one share of Common Stock for every two shares of Common Stock issuable upon conversion of the Series
E Preferred Shares issued to the Holder in the Series E Offering at an assumed conversion price of $4.00 per share if a Public
Offering is not completed within six months of the Commencement Date.

 

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The number of shares
of Common Stock purchasable upon exercise of this Warrant and the Exercise Price per share shall be subject to adjustment from
time to time upon the occurrence of certain events as set forth below.

 

The shares of Common
Stock or any other shares or other units of stock or other securities or property, or any combination thereof, then receivable
upon exercise of this Warrant, as adjusted from time to time, are sometimes referred to hereinafter as “Exercise Shares.”
The exercise price per share as from time to time in effect is referred to hereinafter as the “Exercise Price.”

 

1.           Exercise
of Warrant; Issuance of Exercise Shares.

 

(a)          Exercise
of Warrant. Subject to the terms hereof, the purchase rights represented by this Warrant are exercisable by the Holder in whole
or in part, at any time, or from time to time, by the surrender of this Warrant and the Notice of Exercise annexed hereto duly
completed and executed on behalf of the Holder, at the office of the Company (or such other office or agency of the Company as
it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company) accompanied
by payment of the Exercise Price in full in cash or by bank or certified check for the Exercise Shares with respect to which this
Warrant is exercised and a completed and duly executed Notice of Exercise form attached hereto as Appendix A.

 

In the event that this
Warrant shall be duly exercised in part prior to the Termination Date, the Company shall issue a new Warrant or Warrants of like
tenor evidencing the rights of the Holder thereof to purchase the balance of the Exercise Shares purchasable under the Warrant
so surrendered that shall not have been purchased.

 

(b)          Issuance
of Exercise Shares: Delivery of Warrant Certificate. The Company shall, within three (3) business days of the exercise of this
Warrant (“Warrant Share Delivery Date”), issue in the name of and cause to be delivered to the Holder one or
more certificates representing the Exercise Shares to which the Holder shall be entitled upon such exercise under the terms hereof.
Such certificate or certificates shall be deemed to have been issued and the Holder shall be deemed to have become the record holder
of the Exercise Shares as of the date of the due exercise of this Warrant.

 

(c)          Exercise
Shares Fully Paid and Non-assessable. The Company agrees and covenants that all Exercise Shares issuable upon the due exercise
of the Warrant represented by this Warrant certificate (“Warrant Certificate”) will, upon issuance and payment
therefor in accordance with the terms hereof, be duly authorized, validly issued, fully paid and non-assessable and free and clear
of all taxes (other than taxes which, pursuant to Section 2 hereof, the Company shall not be obligated to pay) or liens,
charges, and security interests created by the Company with respect to the issuance thereof.

 

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(d)          Reservation
of Exercise Shares. The Company covenants that during the term that this Warrant is exercisable, the Company will reserve from
its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Exercise Shares upon
the exercise of this Warrant.

 

(e)          Fractional
Shares. The Company shall not be required to issue fractional shares of capital stock upon the exercise of this Warrant or
to deliver Warrant Certificates that evidence fractional shares of capital stock. In the event that any fraction of an Exercise
Share would, except for the provisions of this subsection (e), be issuable upon the exercise of this Warrant, the Company shall
pay to the Holder exercising the Warrant an amount in cash equal to such fraction multiplied by the Current Market Value of the
Exercise Share on the last business day prior to the date on which this Warrant is exercised. For purposes of this Warrant, the
“Current Market Value” for any day shall be determined as follows:

 

(i)          if
the Exercise Shares are traded in the over-the-counter market and not on any national securities exchange, the average of the mean
between the last bid and asked prices per share, as reported by Bloomberg, L.P., or an equivalent generally accepted reporting
service, or if not so reported, the average of the closing bid and asked prices for an Exercise Share as furnished to the Company
by any member of the Financial Industry Regulatory Authority, selected by the Company for that purpose; or

 

(ii)         if
the Exercise Shares are listed or traded on a national securities exchange, the closing price on the principal national securities
exchange on which they are so listed or traded, on the last business day prior to the date of the exercise of this Warrant. The
closing price referred to in this clause (ii) shall be the last reported sales price or, in case no such reported sale takes place
on such day, the average of the reported closing bid and asked prices, in either case on the national securities exchange on which
the Exercise Shares are then listed; or

 

(iii)        if
the Exercise Shares are not traded in the over-the-counter market or on any national securities exchange or no such closing price
or closing bid and asked prices are available, as determined in any reasonable manner as may be prescribed by the Board of Directors
of the Company.

 

2.           Payment
of Taxes.

 

(a)          Stamp
Taxes. The Company will pay all documentary stamp taxes, if any, attributable to the initial issuance of Exercise Shares upon
the exercise of this Warrant; provided, however, that the Company shall not be required to pay any tax or taxes which
may be payable in respect of any transfer involved in the issue of any Exercise Shares in a name other than that of the Holder
of a Warrant Certificate surrendered upon the exercise of a Warrant, and the Company shall not be required to issue or deliver
such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that such tax has been paid. Except as specifically provided
in this Section 2, Holder shall be responsible for the payment of all other taxes incurred in connection with the receipt,
transfer or sale of the Warrant or the Exercise Shares.

 

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(b)          Withholding.
The Holder shall pay to the Company, or make arrangements satisfactory to the Company regarding payment of, any federal, state,
local and/or payroll taxes of any kind required by law to be withheld with respect to the grant of this Warrant or the issuance
of the Exercise Shares, if any. The Company may, to the extent permitted by law, deduct any such taxes from any payment of any
kind otherwise due to the Holder whether or not pursuant to this Warrant. The Holder may elect, with the consent of the Company,
to have such tax withholding obligation satisfied, in whole or in part, by: (i) authorizing the Company to withhold from the Exercise
Shares a number of shares of Common Stock having an aggregate Current Market Value that would satisfy the minimum withholding amount
due, or (ii) delivering to the Company a number of shares of Common Stock of which the Holder is the record and beneficial owner
and that have been held by the Holder for at least six (6) months with an aggregate Current Market Value that would satisfy the
minimum withholding amount due. The Company may require that any fractional share amount be settled in cash. For the purposes of
this Section 2, Current Market Value shall be determined as of the date on which the amount of tax to be withheld is determined.

 

3.          Mutilated
or Missing Warrant Certificates. In case any Warrant shall be mutilated, lost, stolen or destroyed, the Company may in its
discretion issue, in exchange and substitution for and upon cancellation of the mutilated Warrant, or in lieu of and in substitution
for the Warrant lost, stolen or destroyed, a new Warrant or Warrants of like tenor and in the same aggregate denomination, but
only (i) in the case of loss, theft or destruction, upon receipt of evidence satisfactory to the Company of such loss, theft or
destruction of such Warrant and indemnity or bond, if requested, also satisfactory to them and (ii) in the case of mutilation,
upon surrender of the mutilated Warrant. Applicants for such substitute Warrants shall also comply with such other reasonable regulations
and pay such other reasonable charges as the Company or its counsel may prescribe.

 

4.          Rights
of Holder. The Holder shall not, by virtue of anything contained in this Warrant or otherwise, be entitled to any right whatsoever,
either in law or equity, of a stockholder of the Company, including without limitation, the right to receive dividends or to vote
or to consent or to receive notice as a shareholder in respect of the meetings of shareholders or the election of directors of
the Company or any other matter.

 

5.          Registration
of Transfers and Exchanges. This Warrant may be transferred or exchanged, at the option of the Holder thereof and without change,
when surrendered to the Company at its principal office, or at the office of its transfer agent, if any, for another Warrant or
other Warrants of like tenor and representing in the aggregate the right to purchase from the Company a like number and kind of
Exercise Shares as the Warrant surrendered for exchange, and the Warrant so surrendered shall be canceled by the Company or transfer
agent, as the case may be.

 

6.          Adjustment
of Exercise Shares and Exercise Price. The Exercise Price and the number and kind of Exercise Shares purchasable upon the exercise
of this Warrant shall be subject to adjustment from time to time upon the happening of certain events as hereinafter provided.
The Exercise Price in effect at any time and the number and kind of securities purchasable upon exercise of each Warrant shall
be subject to adjustment as follows:

 

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(a)          In
case of any consolidation or merger of the Company with another corporation (other than a merger with another corporation in which
the Company is the surviving corporation and which does not result in any reclassification or change — other than a change
in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination
— of outstanding Common Stock issuable upon such exercise), the rights of the Holder of this Warrant shall be adjusted in
the manner described below:

 

(i)          In
the event that the Company is the surviving corporation or is merged into a wholly owned subsidiary for the purpose of incorporating
the Company in a different jurisdiction, this Warrant shall, without payment of additional consideration therefor, be deemed modified
so as to provide that the Holder of this Warrant, upon the exercise thereof, shall procure, in lieu of each share of Common Stock
theretofore issuable upon such exercise, the kind and amount of shares of stock, other securities, money and property receivable
upon such reclassification, change, consolidation or merger by the holder of each share of Common Stock, had exercise of this Warrant
occurred immediately prior to such reclassification, change, consolidation or merger. This Warrant (as adjusted) shall be
deemed to provide for further adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 6. The provisions of this clause (i) shall similarly apply to successive reclassifications, changes,
consolidations and mergers.

 

(ii)         In
the event that the Company is not the surviving corporation (except in the case of a merger of the Company into a wholly owned
subsidiary for the purpose of incorporating the Company in a different jurisdiction), Holder shall be given at least fifteen (15)
days prior written notice of such transaction and shall be permitted to exercise this Warrant, to the extent it is exercisable
as of the date of such notice, during this fifteen (15) day period. Upon expiration of such fifteen (15) day period, this Warrant
and all of Holder’s rights hereunder shall terminate.

 

(b)          If the Company,
at any time while this Warrant, or any portion thereof, remains outstanding and unexpired, by reclassification of securities or
otherwise, shall change any of the securities as to which purchase rights under this Warrant exist into the same or a different
number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and
kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to
the purchase rights under this Warrant immediately prior to such reclassification or other change and the Exercise Price therefor
shall be appropriately adjusted, all subject to further adjustment as provided in this Section 6.

 

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(c)          In
case the Company shall (i) pay a dividend or make a distribution on its shares of Common Stock in shares of Common Stock, (ii)
subdivide or reclassify its outstanding Common Stock into a greater number of shares, or (iii) combine or reclassify its outstanding
Common Stock into a smaller number of shares, the Exercise Price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination or reclassification, shall be proportionally adjusted so
that the Holder of this Warrant exercised after such date shall be entitled to receive the aggregate number and kind of shares
that, if this Warrant had been exercised by such Holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, subdivision, combination or reclassification. For example, if the Company declares
a 2 for 1 stock dividend or stock split and the Exercise Price immediately prior to such event was $0.40 per share, the adjusted
Exercise Price immediately after such event would be $0.20 per share. Such adjustment shall be made successively whenever any event
listed above shall occur. Whenever the Exercise Price payable upon exercise of each Warrant is adjusted pursuant to this subsection
(c), the number of Exercise Shares purchasable upon exercise of this Warrant shall simultaneously be adjusted by multiplying the
number of Exercise Shares initially issuable upon exercise of this Warrant by the Exercise Price in effect on the date hereof and
dividing the product so obtained by the Exercise Price, as adjusted.

 

(d)          In
the event that at any time, as a result of an adjustment made pursuant to subsection (a), (b) or (c) above, the Holder of this
Warrant thereafter shall become entitled to receive any Exercise Shares of the Company, other than Common Stock, thereafter the
number of such other shares so receivable upon exercise of this Warrant shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock contained in subsections (a),
(b) or (c) above.

 

(e)          Irrespective
of any adjustments in the Exercise Price or the number or kind of Exercise Shares purchasable upon exercise of this Warrant, Warrants
theretofore or thereafter issued may continue to express the same price and number and kind of shares as are stated in the similar
Warrants initially issuable pursuant to this Warrant.

 

(f)          Whenever the
Exercise Price shall be adjusted as required by the provisions of the foregoing Section 6, the Company shall forthwith file
in the custody of its Secretary or an Assistant Secretary at its principal office and with its stock transfer agent, if any, an
officer’s certificate showing the adjusted Exercise Price determined as herein provided, setting forth in reasonable detail
the facts requiring such adjustment, including a statement of the number of additional shares of Common Stock, if any, and such
other facts as shall be necessary to show the reason for and the manner of computing such adjustment. Each such officer’s
certificate shall be made available at all reasonable times for inspection by the holder and the Company shall, forthwith after
each such adjustment, mail a copy of such certificate to the Holder.

 

(g)          All
calculations under this Section 6 shall be made to the nearest cent or to the nearest one one-hundredth (1/100th) of a share,
as the case may be.

 

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7.          Investment
Intent, Exercise Restrictions and Transfer Restrictions.

 

(a)          The
Warrant and the Exercise Shares may not be offered for sale or sold, or otherwise transferred or sold in any transaction which
would constitute a sale thereof within the meaning of the Securities Act of 1933, as amended (the “1933 Act”),
unless (i) such security has been registered for sale under the 1933 Act and registered or qualified under applicable state securities
laws relating to the offer and sale of securities, or (ii) exemptions from the registration requirements of the 1933 Act and the
registration or qualification requirements of all such state securities laws are available and the Company shall have received
an opinion of counsel satisfactory to the Company that the proposed sale or other disposition of such securities may be effected
without registration under the 1933 Act and would not result in any violation of any applicable state securities laws relating
to the registration or qualification of securities for sale, such counsel and such opinion to be satisfactory to the Company.

 

The Holder agrees to
indemnify and hold harmless the Company against any loss, damage, claim or liability arising from the disposition of this Warrant
or any Exercise Share held by such holder or any interest therein in violation of the provisions of Section 5 or 7 hereof, respectively.

 

(b)          The
certificates evidencing any Exercise Shares issued upon the exercise of this Warrant shall have endorsed thereon (except to the
extent that the restrictions described in any such legend are no longer applicable) substantially the following legend, 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 Exercise Shares.

 

THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES REPRESENTED
HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT, AND WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT
BE SOLD, TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH TRANSFER OR DISPOSITION
DOES NOT VIOLATE THE SECURITIES ACT OF 1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR OTHER APPLICABLE SECURITIES LAWS.

 

8.          Lock-Up
Agreement. In connection with any Public Offering that occurs after the Commencement Date, the Holder shall, unless otherwise
waived in writing by the managing underwriter, not sell or transfer any shares of Common Stock of the Company for a period of up
to 180 days, plus up to an additional 20 days to the extent necessary to comply with applicable regulatory requirements following
such public offering. Such lock-up agreement shall provide that any discretionary waiver or termination of the restrictions of
such agreements by the Company or representatives of the underwriters shall apply to investors participating in the Series E Offering,
pro rata, based on the number of shares held.

 

9.          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:

 

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If to the Company:

 

Armada Water Assets, Inc.

2425 Fountain View Drive, Suite
300

Houston, TX 77057

Fax: (832) 262-4606

Attention: Chief Financial Officer

 

with a copy to:

 

Fox Rothschild LLP

2000 Market Street, 20th
Floor

Philadelphia, PA 19103

Fax (215) 299-2744

Attention: Stephen M. Cohen,
Esquire

 

and to the Holder at the address
of the Holder appearing on the books of the Company or the Company's transfer agent, if any.

 

Either of the Company
or the Holder may from time to time change the address to which notices to it are to be mailed hereunder by notice in accordance
with the provisions of this Section 9.

 

10.         Supplements
and Amendments. The Company may from time to time supplement or amend this Warrant without the approval of the Holder of this
Warrant in order to cure any ambiguity or to correct or supplement any provision contained herein which may be defective or inconsistent
with any other provision, or to make any other provisions in regard to matters or questions herein arising hereunder which the
Company may deem necessary or desirable and which shall not materially adversely affect the interests of the Holder. Except as
set forth in the immediately preceding sentence, this Warrant 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.

 

11.         Successors.
This Warrant shall inure to the benefit of and be binding on the respective successors, assigns and legal representatives of the
Holder and the Company.

 

12.         Severability.
If for any reason any provision, paragraph or terms of this Warrant is held to be invalid or unenforceable, all other valid provisions
herein shall remain in full force and effect and all terms, provisions and paragraphs of this Warrant shall be deemed to be severable.

 

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13.         Governing
Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to
the laws that might otherwise govern under applicable principles of conflicts of laws thereof, except to the extent that the Nevada
Revised Statutes shall apply to the internal corporate governance of the Company.

 

14.         Arbitration.
The parties agree that any dispute, claim or controversy directly or indirectly relating to or arising out of this Warrant, the
termination or validity hereof, any alleged breach of this Agreement or the engagement contemplated hereby (any of the foregoing,
a “Claim”) shall be submitted to the Judicial Arbitration and Mediation Services, Inc. (JAMS), or its successor, in
New York, for final and binding arbitration in front of a panel of three arbitrators with JAMS in New York, New York under the
JAMS Comprehensive Arbitration Rules and Procedures (with each of the Holder and the Company choosing one arbitrator, and the chosen
arbitrators choosing the third arbitrator). The arbitrators shall, in their award, allocate all of the costs of the arbitration,
including the fees of the arbitrators and the reasonable attorneys’ fees of the prevailing party, against the party who did
not prevail. The award in the arbitration shall be final and binding. 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. The Company and the Holder agree and consent to personal jurisdiction, service of process and venue in any federal or
state court within the Commonwealth of Pennsylvania and County of Philadelphia in connection with any action brought to enforce
an award in arbitration.

 

15.         Headings.
Section and subsection headings used herein are included herein for convenience of reference only and shall not affect the construction
of this Warrant nor constitute a part of this Warrant for any other purpose.

 

[Signature page follows]

 

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IN WITNESS WHEREOF,
the Company has caused these presents to be duly executed as of the ___ day of ______________, 2014.

 

	 	ARMADA WATER ASSETS, INC.
	 	 
	 	By:__________________________________
	 	Name:
	 	Title:

 

 

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APPENDIX A

 

NOTICE OF EXERCISE

 

	To:	Armada Water Assets, Inc.
	 	2425 Fountain View Drive, Suite 300 
	 	Houston, TX 77057

 

Attention: Chief Financial Officer

 

(1)         The
undersigned hereby elects to purchase ____________ shares of Common Stock of Armada Water Assets, Inc., a Nevada corporation,
pursuant to the terms of the attached Warrant, and tenders herewith payment of the Exercise Price for such shares in full in accordance
with the terms of the Warrant.

 

(2)         In
exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Common Stock to be issued upon conversion
hereof are being acquired solely for the account of the undersigned, not as a nominee for any other party, and for investment purposes
only (unless such shares are subject to resale pursuant to an effective prospectus), and that the undersigned will not offer, sell
or otherwise dispose of any such shares of Common Stock except under circumstances that will not result in a violation of the Securities
Act of 1933, as amended, or any state securities laws.

 

(3)         Terms
not otherwise defined in this Notice of Exercise shall have the meanings ascribed to such terms in the attached Warrant

 

(4)         Please
issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned.

 

	 	 	HOLDER
	 	 	 
	 	 	 
	(Date)	 	(Signature)MEMBER INTEREST PURCHASE AGREEMENT

 

BY AND AMONG

 

ARMADA WATER ASSETS, INC.,

 

BARSTOW PRODUCTION WATER SOLUTIONS,
LLC,

 

AND

 

THE MEMBERS OF BARSTOW PRODUCTION WATER
SOLUTIONS, LLC

 

FEBRUARY 1, 2013

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	1.	Purchase and Sale of Membership Interests.	1
	 	 	 
	 	(a)	Basic Transaction.	1
	 	(b)	Purchase Price.	1
	 	(c)	The Closing.	1
	 	(d)	Deliveries at the Closing.	1
	 	(e)	Earn-Out.	2
	 	 	 	 
	2.	Representations and Warranties of Armada.	2
	 	 	 
	 	(a)	Organization.	3
	 	(b)	Authorization of Transaction.	3
	 	(c)	Capitalization.	3
	 	(d)	Business and Assets of Armada.	4
	 	(e)	Noncontravention.	4
	 	(f)	Investment.	4
	 	(g)	Disclosure.	4
	 	 	 	 
	3.	Representations and Warranties of the Members.	4
	 	 	 
	 	(a)	Organization of BelPhil.	4
	 	(b)	Authorization of Transaction.	4
	 	(c)	Noncontravention.	5
	 	(d)	Brokers’ Fees.	5
	 	(e)	Investment.	5
	 	(f)	Barstow Interests.	6
	 	 	 	 
	4.	Representations and Warranties Concerning Barstow.	6
	 	 	 
	 	(a)	Organization, Qualification, and Corporate Power.	6
	 	(b)	Authorization of Transaction.	6
	 	(c)	Capitalization.	7
	 	(d)	Noncontravention.	7
	 	(e)	Title to Assets.	7
	 	(f)	Legal Compliance.	7
	 	(g)	Tax Matters.	8
	 	(h)	Real Property.	8
	 	(i)	Contracts.	9
	 	(j)	Litigation.	9
	 	(k)	Environmental, Health, and Safety Matters.	9
	 	(l)	Disclosure.	10
	 	 	 	 
	5.	Indemnification.	10
	 	 	 
	 	(a)	Survival of Representations and Warranties.	10
	 	(b)	Indemnification Provisions for Benefit of Armada	10

 

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	 	(c)	Indemnification Provisions for Benefit of the Members.	11
	 	(d)	Matters Involving Third Parties.	11
	 	(e)	Determination of Adverse Consequences.	12
	 	(f)	Set-Off.	12
	 	(g)	Other Indemnification Provisions.	12
	 	 	 	 
	6.	Tax Matters.	12
	 	 	 
	 	(a)	Tax Returns.	13
	 	(b)	Cooperation on Tax Matters.	13
	 	(c)	Certain Taxes.	13
	 	(d)	Tax Purchase Price Allocation.	14
	 	 	 	 
	7.	Miscellaneous.	14
	 	 	 
	 	(a)	Definitions.	14
	 	(b)	Restrictions on Transfer.	17
	 	(c)	No Third-Party Beneficiaries.	18
	 	(d)	Entire Agreement.	18
	 	(e)	Succession and Assignment.	18
	 	(f)	Counterparts.	18
	 	(g)	Headings.	18
	 	(h)	Notices.	19
	 	(i)	Governing Law.	19
	 	(j)	Amendments and Waivers.	19
	 	(k)	Severability.	20
	 	(l)	Expenses.	20
	 	(m)	Construction.	20
	 	(n)	Incorporation of Exhibits, Annexes, and Schedules.	20
	 	(o)	Release and Discharge.	20

  

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SCHEDULES AND EXHIBITS

 

	Exhibit A	Certificate of Designation of Armada Series A Preferred Stock
	Exhibit B	Form of Promissory Note
	Exhibit C	Form of Assignment of Membership Interest
	Exhibit D	Settlement and Release Agreement with Brian Mader
	 	 
	Armada Disclosure Schedule	Exceptions to Representations and Warranties of Armada
	 	 
	Barstow Disclosure Schedule	Exceptions to Representations and Warranties of Barstow

 

 

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MEMBER
INTEREST PURCHASE AGREEMENT

 

Agreement entered into as of February 1,
2013, by and among Armada Water Assets, Inc., a Nevada corporation (“Armada”), Barstow Production Water Solutions,
LLC, a Texas limited liability company (“Barstow”), BelPhil Investment Partners, LLC., a Delaware limited liability
company (“BelPhil”), Arnold Huerta, an individual (“Huerta”), and D. Lee Washington, an individual
(“Washington”). BelPhil, Huerta and Washington are referred to herein collectively as the “Members,”
and individually as a “Member.” Each of Armada, Barstow and the Members are referred to herein individually as a “Party”
and collectively as the “Parties.” Certain other capitalized terms used herein have the meanings ascribed to
them in Section 7(a) of this Agreement.

 

Now, therefore, in consideration of the
premises and the mutual promises herein made, and in consideration of the representations, warranties and covenants herein contained,
the Parties agree as follows:

 

1.            Purchase
and Sale of Membership Interests.

 

(a)          Basic
Transaction.  On and subject to the terms and conditions of this Agreement, Armada agrees to purchase from the
Members, and the Members agree to sell to Armada, all of Members’ Barstow Interests for the consideration specified below
in this Section 1.

 

(b)          Purchase
Price. The purchase price (the “Purchase Price”) for all of the Members’ Barstow Interests
will be $4,000,000 plus the earn-out amount pursuant to Section 1(e), if any. The $4,000,000 will be paid by delivery to
the Members at the Closing of : (i) 3,000,000 Armada Shares (the “Share Consideration”):1,500,000 shares
of which shall be issued to BelPhil, 750,000 shares of which shall be issued to Huerta and 750,000 shares of which shall be issued
to Washington; and (ii) promissory notes in the aggregate principal amount of $1,000,000, $800,000 of which shall be issued
to BelPhil, $100,000 of which shall be issued to Huerta, and $100,000 of which shall be issued to Washington, in each case substantially
in the form of the Promissory Note attached hereto as Exhibit B, with all blanks appropriately completed (the “Promissory
Notes”).

 

(c)          The
Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) is
taking place at the offices of Fox Rothschild, LLP, 2000 Market Street, 20th Floor, Philadelphia, Pennsylvania 19103, on the date
hereof (the “Closing Date”) concurrent with the execution of this Agreement.

 

(d)          Deliveries
at the Closing. At the Closing:

 

(i)           Deliveries
by the Members. The Members will deliver to Armada the following:

 

(A)         an
Assignment of Membership Interests in the form attached hereto as Exhibit C representing all of its Barstow Interests;

  

    	 

    	 

    

 

 

(B)         lien
searches, title searches and judgment searches with respect to Barstow and its properties, reflecting no liens, levies or Liabilities
other than as identified within the Barstow Disclosure Schedule;

 

(C)         a
certificate from the Operating Members to the effect (i) that all third party consents specified in Section 4(b) of the Barstow
Disclosure Schedule have been obtained, (ii) that all covenants of the Members in this Agreement and any Related Document have
been complied with, and (iii) that all limited liability company and other actions necessary to consummate the transactions hereby
and thereby shall have been taken;

 

(D)         certificates,
if any, representing the Barstow Interests;

 

(E)         a
Settlement and Release Agreement (the “Settlement and Release Agreement”) from Brian Mader releasing any profits
interest in Barstow in the Form of Exhibit D.

 

(F)         a
certificate of existence or good standing from its jurisdiction of organization dated as of a recent date; and

 

(G)         affidavits
of the Members, in form satisfactory to Armada, stating, under penalties of perjury, the Members’ United States taxpayer
identification number and that such Members are not foreign persons for purposes of Section 1445 of the Code.

 

(ii)         Deliveries
by Armada. Armada will deliver to the Members the following:

 

(A)         Certificates
representing the Share Consideration;

 

(B)         Certificate
for 200,000 Armada Shares registered in the name of Brian Mader representing the consideration for the Settlement and Release Agreement;

 

(C)         the
Promissory Notes;

 

(D)         a
certificate from an officer of Armada to the effect (i) that all covenants of Armada in this Agreement and any Related Document
have been complied with, and (ii) that all corporate and other actions necessary to consummate the transactions hereby and thereby
shall have been taken; and

 

(E)         a
certificate of existence or good standing from its jurisdiction of organization dated as of a recent date.

 

(e)          Earn-Out.

 

 For
a period of five (5) years following the Closing Date, if and when the annual Barstow EBITDA exceeds $2,000,000 (the “EBITDA
Target”), then Armada will pay quarterly to the Members in accordance with their Percentage Interest an amount (the
“Additional Purchase Price Payment”) equal to (i) twenty percent (20%) of (ii) the amount by which the cumulative
Barstow EBITDA during the year in question exceeds the EBITDA Target, less any prior Additional Purchase Price Payments during
the year. For the sake of clarity, it is expressly agreed that any deficit in the Barstow EBITDA shall not be carried forward
from one year to any subsequent year. At the request of the Members, Armada will prepare or cause to be prepared a statement setting
forth the Barstow EBITDA from the beginning of the fiscal year to the end of such fiscal quarter.

 

    	-2-

    	 

    

 

The Additional Purchase Price Payment, if
any, will be paid by Armada on or before the sixtieth (60th) day following the end of the quarter in cash (by wire transfer
in accordance with the written instructions of the Members given to Armada or delivery of other immediately available funds). To
the extent that the calculation of the Additional Purchase Price Payment during a quarter results in a negative number, at the
option of Armada, the Members will either repay to Armada the negative Additional Purchase Price Payment in accordance with their
Percentage Interest or Armada will have the right to set off by such negative amount the Additional Purchase Price Payments that
would otherwise be due and owing.

 

2.            Representations
and Warranties of Armada. Armada represents and warrants to the Members that the statements contained in this
Section 2 are correct and complete as of the date of this Agreement.

 

(a)          Organization. Armada
is a corporation validly existing and in good standing under the laws of the State of Nevada and has all requisite corporate power
and authority to own, lease and operate its properties and to carry on its business as it is now being conducted. Armada is duly
authorized to conduct business and is in good standing under the laws of each jurisdiction where such qualification is required.
Armada has full corporate power and authority and all licenses, permits, and authorizations necessary to carry on the businesses
in which it is engaged and to own and use the properties owned and used by it.

 

(b)          Authorization
of Transaction. Armada has full power and authority (including full corporate power and authority) to execute
and deliver this Agreement and all other agreements, documents, certificates and instruments required to be executed and delivered
pursuant hereto (collectively, the “Related Documents”) and to perform its obligations hereunder and thereunder. This
Agreement and each Related Document constitutes the valid and legally binding obligation of Armada, enforceable in accordance
with its terms. Other than filings required by the Nevada Revised Statutes and filings pursuant to the Blue Sky Laws, Armada need
not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement and the Related Documents.

 

(c)          Capitalization. The
entire authorized capital stock of Armada consists of 125,000,000 shares, of which 100,000,000 shares are designated as common
stock, par value $0.0001 per share, of which 6,750,000 shares are issued and outstanding, and of which 50,000,000 shares are designated
as preferred stock, par value $0.0001 per share, none of which are issued and outstanding, 4,000,000 shares of which have been
designated as Series A Preferred Stock. All of the outstanding shares of capital stock are duly authorized, validly issued, fully
paid and nonassessable and are not subject to any preemptive rights. All Armada Shares issuable pursuant to Section 1 will be,
when so issued, duly authorized, validly issued, fully paid and nonassessable and not subject to any preemptive rights.

  

    	-3-

    	 

    

  

(d)          Business
and Assets of Armada. Armada is newly-organized
for the purpose of entering into the transactions contemplated by this Agreement and the Related Documents and has engaged in
no business other than that incidental to its formation. With the exception of the costs and expenses of its organization and
the preparation of this Agreement and the Related Documents, and the transactions contemplated hereby and thereby, Armada has
no Liabilities.

 

(e)          Noncontravention. Neither
the execution and the delivery of this Agreement or the Related Documents, nor the consummation of the transactions contemplated
hereby and thereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental agency, or court to which Armada is subject or any provision of the
Related Documents or its certificate of incorporation or bylaws or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any
notice under, any agreement, contract, lease, license, instrument, or other arrangement to which Armada is a party or by which
it is bound or to which any of its assets is subject (or result in the imposition of any Security Interest on any of its assets),
excluding from the foregoing clauses (i) and (ii) violations or conflicts that, individually or in the aggregate, would not have
an Armada Material Adverse Effect. Other than in connection with the provisions of the Nevada Revised Statutes, the Securities
Act, and the state securities laws, Armada need not give any notice to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this
Agreement.

 

(f)          Investment. Armada
is not acquiring the Barstow Interests with a view to or for sale in connection with any distribution thereof within the meaning
of the Securities Act.

 

(g)          Disclosure. The
representations and warranties contained in this Section 2 do not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements and information contained in this Section 2 not misleading.

 

3.            Representations
and Warranties of the Members. Each Member, severally and not jointly, represents and warrants to Armada, with
respect to itself or himself only, that the statements contained in this Section 3 are correct and complete as of the date of
this Agreement.

 

(a)          Organization
of BelPhil. BelPhil is a limited liability company, duly organized, validly existing, and in good standing under
the laws of Delaware.

 

(b)          Authorization
of Transaction. The Member has full power and authority to execute and deliver this Agreement and the Related
Documents and to perform its or his obligations hereunder and thereunder. This Agreement and each Related Document to which the
Member is a Party constitutes the valid and legally binding obligation of the Member, enforceable in accordance with its terms.
The Member need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government
or governmental agency in order to consummate the transactions contemplated by this Agreement and the Related Documents.

  

    	-4-

    	 

    

 

(c)          Noncontravention. Neither
the execution and the delivery of this Agreement or the Related Documents, nor the consummation of the transactions contemplated
hereby or thereby, nor compliance by the Member with any of the provisions hereof or thereof will (i) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental
agency, or court to which the Member is subject or any provision of the Related Documents, or, in the case of BelPhil, its operating
agreement or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any notice under, any agreement, contract, lease, license,
instrument, or other arrangement to which the Member is a party or by which he or it is bound or to which any of his or its assets
is subject, except for such violations, breaches, defaults, or rights of termination, cancellation, acceleration, creation, imposition,
suspension, revocation or modification as to which requisite waivers or consents have been obtained prior to Closing and copies
of which have been delivered to Armada.

 

(d)          Brokers’
Fees. The Member has no Liability or obligation to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement for which Armada or Barstow could become liable or obligated.

 

(e)          Investment. The
Member (i) understands that the Armada Shares constituting the Share Consideration have not been, and will not be, registered
under the Securities Act or under any Blue Sky Laws and are being offered and sold in reliance on Federal and state exemptions
for transactions not involving any public offering; (ii) represents that any Armada Shares acquired pursuant to this Agreement
are being acquired solely for its own account for investment purposes, and not with a view to the distribution thereof; (iii) is
a sophisticated investor with knowledge and experience in business and financial matters; (iv) has received certain information
concerning Armada and has had the opportunity to obtain additional information as desired in order to evaluate the merits and
the risks inherent in owning and holding Armada Shares; (v) is able to bear the economic risk and lack of liquidity inherent
in owning and holding any Armada Shares acquired pursuant to this Agreement; (vi) is an “Accredited Investor”
within the definition set forth in Rule 501(a) under the Securities Act; (vii) was not formed for the purpose of the transactions
contemplated by this Agreement; and (viii) understands that any Armada Shares issued to the Member pursuant to this Agreement
will be imprinted with a legend in substantially the following form:

 

“The shares represented by this certificate have
not been registered under the Securities Act of 1933, as amended. Said shares cannot be sold, transferred, disposed of, pledged
or hypothecated in any manner whatsoever in the absence of an effective registration statement for the shares under said Act, or
in the opinion reasonably satisfactory to the Company in form and of counsel, an exemption from the registration requirements is
in fact applicable to said shares.”

  

    	-5-

    	 

    

 

(f)          Barstow
Interests. The Member holds of record and owns beneficially the Barstow Interests being transferred, free and
clear of any restrictions on transfer (other than any restrictions under the Securities Act and state securities laws), Taxes,
Security Interests, options, warrants, purchase rights, contracts, commitments, equities, claims and demands. The Member is not
a party to any option, warrant, purchase right or other contract or commitment that could require the Member to sell, transfer
or otherwise dispose of any Barstow Interest (other than this Agreement). The Member is not a party to any voting trust, proxy
or other agreement or understanding with respect to the voting of any Barstow Interest.

 

4.            Representations
and Warranties Concerning Barstow. The Members, jointly and severally, represent and warrant to Armada that the
statements contained in this Section 4 are correct and complete as of the date of this Agreement. Nothing in the Barstow Disclosure
Schedule (referred to below) shall be deemed adequate to disclose an exception to a representation or warranty made herein unless
the Disclosure Schedule identifies the exception with reasonable particularity and describes the relevant facts in reasonable
detail. Without limiting the generality of the foregoing, the mere listing (or inclusion of a copy) of a document or other item
shall not be deemed adequate to disclose an exception to a representation or warranty made herein (unless the representation or
warranty has to do with the existence of the document or other item itself).

 

(a)          Organization,
Qualification, and Corporate Power. Barstow is a limited liability company, duly organized, validly existing,
and in good standing under the laws of the State of Texas. Except as disclosed in Section 4(a) of the Barstow Disclosure Schedule,
Barstow is duly authorized to conduct business and is in good standing under the laws of each jurisdiction where such qualification
is required. Barstow has full limited liability company power and authority and all licenses, permits, and authorizations necessary
to carry on the businesses in which it is engaged and in which it currently proposes to engage and to own and use the properties
owned and used by it. The Members have delivered to Armada correct and complete copies, as applicable, of the organizational documents
of Barstow (as amended to date). Other than its organizational documents, Barstow does not have any membership interest books
or records of meetings of members, managers, the board of managers, or any committees of the board of managers. Barstow is not
in default under or in violation of any provision of its organizational documents.

 

(b)          Authorization
of Transaction. Barstow has full power and authority to execute and deliver this Agreement and the Related Documents
and to perform its obligations hereunder and thereunder. This Agreement and each Related Document to which Barstow is a party
constitutes the valid and legally binding obligation of Barstow, enforceable in accordance with its terms. Unless otherwise identified
within the Barstow Disclosure Schedule, Barstow need not give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency to consummate the transactions contemplated by this Agreement or
the Related Documents.

  

    	-6-

    	 

    

 

(c)          Capitalization. The
Barstow Interests are owned in accordance with the Percentage Interests by the Members and constitute all of the issued and outstanding
Barstow Interests. All of the issued and outstanding Barstow Interests have been duly authorized, are validly issued, fully paid,
and nonassessable, and are held of record by the Members. There are no outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require Barstow to issue,
sell, or otherwise cause to become outstanding any of its Barstow Interests. Except for the profits interest of Brian Mader, which
is being released at Closing, there are no outstanding or authorized equity appreciation, phantom stock, profit participation,
or similar rights with respect to Barstow. There are no outstanding equity securities of Barstow other than the Barstow Interests.
There are no voting trusts, proxies, or other agreements or understandings with respect to the voting of the Barstow Interests.
None of the outstanding equity securities or other securities of the Barstow were issued in violation of the Securities Act or
any other applicable Federal, state or local laws, regulations, judgments, decrees, court orders or administrative orders.

 

(d)          Noncontravention. Neither
the execution and the delivery of this Agreement or the Related Documents, nor the consummation of the transactions contemplated
hereby or thereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental agency, or court to which Barstow is subject or any provision of,
as applicable, the organizational documents of Barstow or (ii) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice
under, any agreement, contract, lease, license, instrument, or other arrangement to which any of Barstow is a party or by which
it is bound or to which any of its assets is subject (or result in the imposition of any Security Interest upon any of its assets),
excluding from the foregoing clauses (i) and (ii) violations or conflicts that, individually or in the aggregate, would not have
a Barstow Material Adverse Effect. Barstow does not need to give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated
by this Agreement or the Related Documents.

 

(e)          Title
to Assets. Barstow has good title to, or a valid fee simple or leasehold interest in, the properties and assets
used by it or located on their premises, free and clear of all Security Interests, except where failure to have such valid interest,
individually or in the aggregate, would not have a Barstow Material Adverse Effect.

 

(f)          Legal
Compliance. Barstow has complied with all applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of Federal, state, local, and foreign governments (and all agencies
thereof) except where failure to comply with such laws would not, individually or in the aggregate, have a Barstow Material Adverse
Effect, and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or
commenced against any of them alleging any failure so to comply.

  

    	-7-

    	 

    

 

(g)          Tax
Matters.

 

(i)          Except
as set forth on Schedule 4(g) of the Disclosure Schedule, Barstow has been taxed as a partnership for the purpose of any Income
Tax applicable to business entities since the date of its formation and has never made an election to be taxed as a corporation
for such purpose. Barstow has filed all Tax Returns that it was required to file. All such Tax Returns were correct and complete
in all material respects. All Taxes owed by Barstow as of and through the Closing Date have been paid. Barstow currently is not
the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made by an Authority in a
jurisdiction where Barstow does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no
Security Interests on any of the assets of Barstow that arose in connection with any failure (or alleged failure) to pay any Tax.

 

(ii)         Barstow
has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, equity owner, or other third party.

 

(iii)        No
Member, manager, director or officer (or employee responsible for Tax matters) of Barstow has been informed formally or informally
or has any reason to believe any Authority may assess additional Taxes for any period for which Tax Returns have been filed or
is aware of any state of facts which could give rise to any claim, audit, action, suit, proceeding, or investigation which respect
to any Tax for which Barstow could be liable. No Tax Returns of Barstow have been audited or currently are the subject of audit.
Barstow has delivered to Armada correct and complete copies of all of its Income Tax Returns, examination reports, and statements
of deficiencies assessed against or agreed to by Barstow since its date of formation.

 

(iv)         Barstow
has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment
or deficiency.

 

(h)          Real
Property.

 

(i)          Except
as would not reasonably be expected to have, individually or in the aggregate, a Barstow Material Adverse Effect, Barstow has good
and marketable fee simple title to the owned real estate free and clear of any Liens other than Liens identified in Section 4(h)(i)
of the Barstow Disclosure Schedule. Section 4(h)(i) of the Barstow Disclosure Schedule contains a true and complete list (including,
without limitation, legal descriptions), as of the date hereof, of the owned real estate. As of the date hereof, Barstow does not
(i) currently lease all or any part of the owned real estate or (ii) has received written notice of any pending, and to the Knowledge
of Barstow there is no threatened, condemnation proceeding with respect to any of the owned real properties.

   

    	-8-

    	 

    

 

(ii)         Section
4(h)(ii) of the Barstow Disclosure Schedule lists and describes briefly all real property leased or subleased to Barstow. The Member
has delivered to Armada correct and complete copies of the leases and subleases listed in Section 4(h)(ii) of the Barstow
Disclosure Schedule (as amended to date). To the Knowledge of Barstow, with respect to each lease and sublease listed in Section
4(h)(ii) of the Barstow Disclosure Schedule: (A) such lease or sublease is legal, valid, binding, enforceable, and in full
force and effect; (B) no party to such lease or sublease is in breach or default, and no event has occurred which, with notice
or lapse of time, or both, would constitute a breach or default or permit termination, modification, or acceleration thereunder;
and (C) there are no disputes, oral agreements, or forbearance programs in effect as to such lease or sublease.

 

(i)          Contracts. 
Except as executed in connection with the transactions contemplated herein, Section 4(i) of the Barstow Disclosure Schedule
identifies all contracts and other agreements to which Barstow is a party which were entered into other than in the Ordinary Course
of Business, agreements relating to confidentiality or non-competition or involve aggregate payments in excess of $50,000.

 

The Members have delivered to Armada a correct and complete
copy of each agreement listed in Section 4(i) of the Barstow Disclosure Schedule. With respect to each such agreement: (A) such
agreement is legal, valid, binding, enforceable, and in full force and effect; (B) such agreement will continue to be legal,
valid, binding, enforceable, and in full force and effect on identical terms following the consummation of the transactions contemplated
hereby; (C) no party is in breach or default, and no event has occurred which with notice or lapse of time, or both, would
constitute a breach or default, or permit termination, modification, or acceleration, under such agreement; and (D) no party
has repudiated any provision of such agreement.

 

(j)          Litigation. Section
4(j) of the Barstow Disclosure Schedule sets forth each instance in which Barstow or any of its directors, managers or officers
in their capacity as such (i) (A) is subject to any outstanding injunction, judgment, order, decree, ruling, or charge or (B)
is a party or, to the Knowledge of Barstow, is threatened to be made a party to any action, suit, proceeding, hearing, or investigation
of, in, or before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator; and (ii) identifies if such instance, including associated litigation costs, is covered by insurance. None
of the actions, suits, proceedings, hearings and investigations set forth in Section 4(j) of the Disclosure Schedule could result
in a Barstow Material Adverse Effect. None of the Members nor any of the directors and officers (and employees with responsibility
for litigation matters) of Barstow has any reason to believe that any such action, suit, proceeding, hearing, nor investigation
may be brought or threatened against Barstow.

 

(k)          Environmental,
Health, and Safety Matters. To the Knowledge of Barstow, each of Barstow and its predecessors and Affiliates has
complied and is in compliance with all Environmental, Health, and Safety Requirements. Without limiting the generality of the
foregoing, Barstow and its Affiliates has obtained and complied with, and is in compliance with, all permits, licenses and other
authorizations that are required pursuant to Environmental, Health, and Safety Requirements for the occupation of its facilities
and the operation of its business, except where such compliance, individually or in the aggregate, would not have a Barstow Material
Adverse Effect. Neither Barstow nor its predecessors or Affiliates has received any written or oral notice, report or other information
regarding any actual or alleged violation of Environmental, Health, and Safety Requirements, or any liabilities or potential liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise), including any investigatory, remedial or corrective obligations,
relating to any of its facilities arising under Environmental, Health, and Safety Requirements.

  

    	-9-

    	 

    

 

(l)          Disclosure. None
of the representations and warranties contained in this Section 4, any other portion of this Agreement, the Exhibits, Annexes
and Schedules to this Agreement or any report, certificate or instrument furnished to Armada or its representatives in connection
with the transactions contemplated by this Agreement, contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements and information contained herein or therein not misleading. To the Knowledge
of Barstow, there is no information or fact that has or would have a Barstow Material Adverse Effect that has not been disclosed
to Armada either verbally or in writing.

 

5.            Indemnification.

 

(a)          Survival
of Representations and Warranties. All representations and warranties of the Parties contained in this Agreement
or any other agreement, schedule, certificate, instrument or other writing delivered by Armada or the Members in connection with
this transaction shall survive for two (2) years after the Closing Date. If a Party hereto determines that there has been a breach
by any other Party hereto of any such representation or warranty and notifies the breaching Party in writing reasonably promptly
after learning of such breach, such representation or warranty and liability therefor shall survive with respect to the specified
breach until such breach has been resolved, but no Party shall have any liability after such two (2) year period for any matters
not specified in a writing delivered within such two (2) year period. Notwithstanding any term in this Section 5(a) the applicable
statute of limitations shall be the survival period for any matter relating to (a) fraud or willful misrepresentation or omission,
or (b) any violation of the representations and warranties made in any of the following sections of this Agreement: Sections 2(c),
3(f), 4(g) and 4(k) (collectively, the “Fundamental Representations”).

 

(b)          Indemnification
Provisions for Benefit of Armada. In the event any Member breaches (or in the event any third party alleges facts
that, if true, would mean the Member has breached) any of their respective representations, warranties or covenants contained
herein and, if there is an applicable survival period pursuant to Section 5(a), provided that Armada makes a written claim for
indemnification against the Member pursuant to Section 7(h) within such survival period, then the Members agree to indemnify Armada
from and against the entirety of any Adverse Consequences Armada may suffer through and after the date of the claim for indemnification
(including any Adverse Consequences Armada may suffer after the end of any applicable survival period) resulting from, arising
out of, relating to, in the nature of, or caused by such breach (or the alleged breach). Notwithstanding the foregoing, in no
event shall any Member’s liability for indemnification exceed the Purchase Price received by such Member.

  

    	-10-

    	 

    

 

(c)          Indemnification
Provisions for Benefit of the Members. In the event Armada breaches (or in the event any third party alleges facts
that, if true, would mean Armada has breached) any of its representations, warranties, covenants contained herein, and, if there
is an applicable survival period pursuant to Section 5(a), provided that a Member makes a written claim for indemnification against
Armada pursuant to Section 7(h) within such survival period, then Armada agrees to indemnify the Members from and against the
entirety of any Adverse Consequences the Member may suffer through and after the date of the claim for indemnification (including
any Adverse Consequences the Members may suffer after the end of any applicable survival period) resulting from, arising out of,
relating to, in the nature of, or caused by such breach (or the alleged breach).

 

(d)          Matters
Involving Third Parties.

 

(i)          If
any third party shall notify any Party (the “Indemnified Party”) with respect to any matter (a “Third
Party Claim”) which may give rise to a claim for indemnification against any other Party (the “Indemnifying
Party”) under this Section 7, then the Indemnified Party shall promptly notify each Indemnifying Party thereof in writing;
provided, however, that no delay on the part of the Indemnified Party in notifying any Indemnifying Party shall relieve
the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party is actually
prejudiced by such delay.

 

(ii)         Any
Indemnifying Party will have the right to defend the Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party as long as (A) the Indemnifying Party notifies the Indemnified Party in writing
not later than fifteen (15) days after the Indemnified Party has given notice of the Third Party Claim that the Indemnifying Party
will indemnify the Indemnified Party from and against the entirety of any Adverse Consequences the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim, (B) the Indemnifying Party provides
the Indemnified Party with evidence reasonably acceptable to the Indemnified Party that the Indemnifying Party will have the financial
resources to defend against the Third Party Claim and fulfill its indemnification obligations hereunder, (C) the Third Party Claim
involves only money damages and does not seek an injunction or other equitable relief, (D) settlement of, or an adverse judgment
with respect to, the Third Party Claim is not, in the good faith judgment of the Indemnified Party, likely to establish a precedential
custom or practice materially adverse to the continuing business interests of the Indemnified Party, and (E) the Indemnifying Party
conducts the defense of the Third Party Claim actively and diligently.

 

(iii)        As
long as the Indemnifying Party is conducting the defense of the Third Party Claim in accordance with Section 5(d)(ii) above, (A)
the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party
Claim, (B) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the Indemnifying Party (not to be withheld unreasonably), and (C) the Indemnifying
Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without
the prior written consent of the Indemnified Party (not to be withheld unreasonably).

  

    	-11-

    	 

    

 

(iv)         In
the event any of the conditions in Section 5(d)(ii) above is or becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any settlement with respect to, the Third Party Claim in any manner
it reasonably may deem appropriate (and the Indemnified Party need not consult with, or obtain any consent from, any Indemnifying
Party in connection therewith), (B) the Indemnifying Parties will reimburse the Indemnified Party promptly and periodically for
the costs of defending against the Third Party Claim (including reasonable attorneys’ fees and expenses and the amount paid
in settlement), and (C) the Indemnifying Parties will remain responsible for any Adverse Consequences the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim to the fullest extent
provided in this Section 7.

 

(e)          Determination
of Adverse Consequences. All indemnification payments under this Section 7 shall be deemed adjustments to the
Purchase Price.

 

(f)          Set-Off.
 Subject to and in accordance with the terms of this Section 7, any claim of Armada for indemnification under this
Section 5 or under any other provision of this Agreement may be satisfied, at Armada’s sole discretion, by:

 

(i)          Cancellation
of the Armada Shares, or any common stock into which the Armada Shares have been converted;

 

(ii)         the
exercise of Armada’s set-off right against the unpaid Additional Purchase Price Payment, if any;

 

(iii)        any
combination of (i) and (ii) above.

 

For purposes of determining the number of Armada Shares that
shall be released to Armada pursuant to this Section 5 (f), each Armada Share shall be valued at liquidation preference thereof,
and if any Armada Shares have been converted into shares of common stock, then if such common stock is listed on a national securities
exchange or on an automated interdealer quotation system, the shares of common stock shall be valued at the volume weighted average
trading price reported by Bloomberg for the twenty trading days prior to the date of set off, and if not so listed or quoted, at
the fair value thereof determined in good faith by the Board of Directors of Armada.

 

(g)          Other
Indemnification Provisions. The foregoing indemnification provisions are in addition to, and not in derogation
of, any statutory, equitable, or common law remedy (including without limitation any such remedy arising under Environmental,
Health, and Safety Requirements) any Party may have with respect to any other Party or the transactions contemplated by this Agreement.
The Members hereby agree that they will not make any claim for indemnification against Barstow, nor shall the Members have any
right of contribution against Barstow for any breach of representation, warranty, covenant or agreement of the Members under this
Agreement, or for any claim amount for which the Members may be responsible to indemnify Armada.

 

6.          Tax
Matters. The following provisions shall govern the allocation of responsibility as between Armada and the Members
for certain tax matters following the Closing Date:

  

    	-12-

    	 

    

 

(a)          Tax
Returns. The Members shall prepare or cause to be prepared at their own expense all Income Tax Returns of Barstow
for Tax periods ending on or prior to the Closing Date (“pre-Closing Periods”), for all purposes, including
Income Tax Returns for jurisdictions that do not impose Taxes on Barstow at the business entity level (i.e. those jurisdictions
that tax Barstow as a pass through entity) for pre-Closing Periods, the due date of which Tax Returns is on or after the Closing
Date. The items of income, gain, loss, deduction and credit of Barstow shall be allocated between any pre-Closing Period and any
Tax period ending after the Closing Date in accordance with the closing-of-the-books method so long as such method is consistent
with the Code and all applicable Treasury Regulations. The Members shall afford Armada a reasonable opportunity to review and
comment upon such Tax Returns prior to their filing. Armada shall prepare or cause to be prepared and file or cause to be filed
all other Tax Returns of Barstow, the due date of which Tax Returns is after the Closing Date.

 

(b)          Cooperation
on Tax Matters.

 

(i)          Armada,
Barstow and the Members shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with
the filing of Tax Returns pursuant to this Section and any audit, litigation or other proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon the other Party’s request) the provision of records and information which are reasonably
relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. Barstow and the Members agree (A) to retain all books
and records with respect to Tax matters pertinent to Barstow relating to any Tax period beginning before the Closing Date until
the expiration of the statute of limitations (and, to the extent notified by Armada or the Members, any extensions thereof) of
the respective Tax periods, and to abide by all record retention agreements entered into with any Authority, and (B) to give the
other Party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other
Party so requests, Barstow and or the Members, as the case may be, shall allow the other Party to take possession of such books
and records.

 

(ii)         Armada
and the Members further agree, upon request, to use their best efforts to obtain any certificate or other document from any Authority
or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including, but not limited
to, with respect to the transactions contemplated hereby).

 

(c)          Certain
Taxes. All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees (including any
penalties and interest) incurred in connection with this Agreement, shall be paid by the Members when due, and the Members will,
at its or his own expense, file all necessary Tax Returns and other documentation with respect to all such transfer, documentary,
sales, use, stamp, registration and other Taxes and fees, and, if required by applicable law, Armada will, and will cause its
affiliates to, join in the execution of any such Tax Returns and other documentation.

  

    	-13-

    	 

    

 

(d)          Tax
Purchase Price Allocation. The purchase of the Barstow Interests shall be treated as a sale of the assets of Barstow
for federal Income Tax purposes and for the purposes of any other Income Tax that treats any of Barstow as an entity disregarded
from its owner. The Tax Purchase Price shall be allocated among the assets of Barstow in accordance with the requirements of the
Code (the “Allocation”). The Allocation shall be prepared by Armada for the review and approval of Members
within ninety (90) business days after the Closing Date. If within thirty (30) days after delivery of the Allocation, Members
notify Armada in writing that the Members object to the allocation set forth in the Allocation, Armada and Members shall use commercially
reasonable efforts to resolve such dispute within twenty (20) business days. In the event the Parties are unable to resolve any
such dispute within the twenty (20) business day period, the Parties will engage a Neutral Accounting Firm to resolve such dispute
as promptly as practicable in accordance with rules to be established by Armada, the Members and the Neutral Accounting Firm.
The Neutral Accounting Firm’s decision shall be final, non-appealable and binding on Armada and the Members, and the fees
and expenses of the Neutral Accounting shall be paid one-half by Armada and one-half by the Members. The Members, Barstow, and
Armada agree to report, pursuant to Section 1060 of the Code and the regulations promulgated thereunder or any other similar provision
under state, local or foreign law, as and when required, the Allocation of the Purchase Price (including subsequent adjustments,
if any), among the assets of Barstow in a manner entirely consistent with such Allocation in the preparation and filing of all
Tax Returns (including IRS Form 8594 and any amendment thereto). Neither Armada nor the Member shall take any position (whether
in audits, Tax Returns, or otherwise) that is inconsistent with such Allocation unless required to do so by applicable law.

 

7.          Miscellaneous.

 

(a)          Definitions.

 

“Additional Purchase Price Payment”
has the meaning set forth in Section 1(f) below.

 

“Adverse Consequences”
means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid in settlement, Liabilities, obligations, Taxes,
liens, losses, expenses, and fees, including court costs and reasonable attorneys’ fees and expenses associated with the
foregoing, net of any insurance proceeds actually realized by the Party claiming indemnification resulting from, arising out of,
relating to or caused by the applicable breach.

 

“Affiliate” has the meaning set
forth in Rule 12b-2 of the regulations promulgated under the Exchange Act.

 

“Allocation” has the meaning set
forth in Section 6(d) above.

 

“Armada” has the meaning set forth
in the preface above.

 

“Armada Material Adverse Effect”
means an adverse effect on: (i) the business, operations, results of operations, properties (including intangible properties),
conditions (financial or otherwise), assets or liabilities (including contingent liabilities) of Armada, which would have an economic
impact of more than $50,000; or (ii) the ability of Armada to perform its obligations under this Agreement and each other agreement
contemplated by this Agreement.

 

    	-14-

    	 

    

  

“Armada Share” means a share of
Series A Preferred Stock, $.0001 par value per share, of Armada, with the designation, rights and privileges set forth in the certificate
of designation attached as Exhibit A.

 

“Authority” means any Federal,
state, local or foreign, court, governmental bureau, commission, board, agency or instrumentality.

 

“Barstow” has the meaning set
forth in the preface above.

 

“Barstow EBITDA” means the net
income before interest, income taxes, depreciation and amortization of Barstow for such period, determined in accordance with GAAP
subject to the following adjustments:

 

(a)          For
so long as the current business operations of Barstow as of the Closing Date are conducted in Barstow or a separate subsidiary
of Armada, the Barstow EBITDA shall be calculated based on the unconsolidated financial statements of Barstow or such subsidiary,
less an allocation of Armada’s parent-level selling, general and administrative expense based upon the percentage of Barstow’s
or such subsidiary’s revenue bears to the total revenue of Armada; and

 

(b)          If
the current business operations of Barstow are combined with Armada or another business, the Barstow EBITDA shall be calculated
on a pro forma basis as if it were a separate business based upon the current business of Barstow at the time of such combination,
less an allocation of all indirect expenses based upon the percentage the revenue the Barstow business bears to the total revenue
of Armada.

 

“Barstow Interest” means any membership
interest in Barstow.

 

“Barstow Material Adverse Effect”
means an adverse effect on or change to: (i) the business, operations, results of operations, properties (including intangible
properties), conditions (financial or otherwise), assets or liabilities (including contingent liabilities) of Barstow, which would
have an economic impact of more than $50,000; or (ii) the ability of Barstow to perform its obligations under this Agreement and
each other agreement contemplated by this Agreement.

 

“Blue Sky Laws” means the laws
of any state, the District of Columbia, or any territory or other jurisdiction in the United States governing the offer and/or
sale of securities in such jurisdiction.

 

“Closing” has the meaning set
forth in Section 2(c) below.

 

“Closing Date” has the meaning
set forth in Section 2(c) below.

 

“Code” means the Internal Revenue
Code of 1986, as amended.

 

“Nevada Revised Statutes” means
Article 78 of the Nevada Revised Statutes.

  

    	-15-

    	 

    

 

“EBITDA Target” has the meaning
set forth in Section 1(f)(ii).

 

“Environmental, Health, and Safety Requirements”
shall mean all Federal, state, local and foreign statutes, regulations, ordinances and other provisions having the force or effect
of law, all judicial and administrative orders and determinations, all contractual obligations and all common law concerning public
health and safety, worker health and safety, and pollution or protection of the environment, including without limitation all those
relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling,
testing, processing, discharge, release, threatened release, control, or cleanup of any hazardous materials, substances or wastes,
chemical substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation, each as amended and as now or hereafter in effect.

 

“Exchange Act” means the Securities
Exchange Act of 1934, as amended.

 

“GAAP” means generally accepted
accounting principles as in effect from time to time in the United States of America.

 

“Income Tax” means any Tax imposed
on net income.

 

“Knowledge” means, as to Barstow,
the actual knowledge of the Members of Barstow.

 

“Liability” means any liability
(whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.

 

“Member” has the meaning set forth
in the preface above.

 

“Neutral Accounting Firm” means
an accounting firm selected by Armada which is acceptable to the Members.

 

“Operating Members” means Huerta
and Washington.

 

“Ordinary Course of Business”
means, with respect to a Person, the conduct of business consistent with past custom and practice (including with respect to quantity
and frequency) of such Person.

 

“Party” has the meaning set forth
in the preface above.

 

“Percentage Interest” means, with
respect to BelPhil, 50%, Huerta 25%, and Washington 25%.

 

“Person” means an individual,
a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization,
or a governmental entity (or any department, agency, or political subdivision thereof).

 

    	-16-

    	 

    

 

“Promissory Notes” has the meaning
set forth in Section 1(b).

 

“Purchase Price” has the meaning
set forth in Section 1(b).

 

“Related Documents” has the meaning
set forth in Section 2(b).

 

“SEC” means the Securities and
Exchange Commission.

 

“Securities Act” means the Securities
Act of 1933, as amended.

 

“Security Interest” means any
mortgage, pledge, lien, encumbrance, charge, or other security interest, other than (i) mechanic’s, materialmen’s,
and similar liens, (ii) liens for Taxes not yet due and payable, and (iii) other liens arising in the Ordinary Course of Business
and not incurred in connection with the borrowing of money.

 

“Settlement and Release Agreement”
has the meaning given to such term in Section 1(d).

 

“Share Consideration” has the
meaning set forth in Section 1(b).

 

“Tax” or “Taxes” means
any Federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section 59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration,
value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.

 

“Tax Purchase Price” means the
sum of the Purchase Price and the Liabilities of Barstow immediately after the Closing.

 

“Tax Return” means any return,
declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.

 

“Third Party Claim” has the meaning
set forth in Section 5(d)(i).

 

(b)          Restrictions
on Transfer.

  

(i) The Armada Shares, and the shares of
common stock into which they may be converted, shall not be sold for 18 months from Closing unless such shares are listed on a
national securities exchange and the common stock is trading in excess of $6 per share (subject to adjustment for stock splits,
recapitalizations and the like) for a period of thirty consecutive trading days.

  

    	-17-

    	 

    

  

(ii) At the request of Armada, each Member
shall execute a Market Standoff Agreement pursuant to which such Member will agree, if so requested by Armada or any underwriter's
representative in connection with the first two public offerings of Armada’s Common Stock, not to sell or otherwise transfer
any securities of Armada during a period of up to 180 days following the effective date of the applicable registration statements.
Armada agrees that future purchasers of stock prior to Armada’s initial public offering will execute such a Market Standoff
Agreement.

 

(c)          No
Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the
Parties and their respective successors and permitted assigns.

 

(d)          Entire
Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among
the Parties and supersedes any prior or contemporaneous understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they related in any way to the subject matter hereof.

 

(e)          Succession
and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and
their respective successors and permitted assigns. No Party may assign either this Agreement or any of his or its rights, interests,
or obligations hereunder without the prior written approval of Armada and the Member; provided, however, that Armada
may: (i) assign any or all of its rights and interests hereunder to one or more of its Affiliates; (ii) designate one or more
of its Affiliates to perform its obligations hereunder (in any or all of which cases Armada nonetheless shall remain responsible
for the performance of all of its obligations hereunder); and (iii) assign any or all of its rights and interests hereunder to
any Person with which or into which Armada may be merged or which may succeed to its assets or business.

 

(f)          Counterparts. This
Agreement may be executed in one or more counterparts and/or by facsimile, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.

 

(g)          Headings. The
section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

    	-18-

    	 

    

 

(h)          Notices. All
notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two business days after) it is sent by registered or
certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below:

 

	If to Barstow:	Barstow Production Water
	 	Solutions, LLC
	 	 
	Copy to:	 
	 	 
	If to BelPhil:	BelPhil Investment Partners, LLC
	 	630 W Germantown Pike, Suite 180
	 	Plymouth Meeting, PA  19462
	 	 
	Copy to:	 
	 	 
	If to Armada	Armada Water Assets, Inc.
	 	1716 E. Lincoln Avenue
	 	Fort Collins, CO 80524
	 	 
	Copy to:	 
	 	 
	If to Huerta:	Arnold Huerta
	 	114 South Texas Avenue
	 	Odessa, Texas 79761
	 	 
	Copy to:	 
	 	 
	If to Washington:	D. Lee Washington
	 	114 South Texas Avenue
	 	Odessa, Texas 79761
	 	 
	Copy to:	 

  

Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand,
claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are
to be delivered by giving the other Parties notice in the manner herein set forth.

 

(i)          Governing
Law. This Agreement shall be governed by and construed in accordance with laws of the State of Nevada without
giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction
other than the State of Nevada.

 

(j)          Amendments
and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing
and signed by Armada and the Members. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach
of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

   

    	-19-

    	 

    

 

(k)          Severability. Any
term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term
or provision in any other situation or in any other jurisdiction.

 

(l)          Expenses. Each
of the Members and Armada will bear its own costs and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby. The Members agree to bear any and all of the Barstow transaction costs
and expenses.

 

(m) 
       Construction. The
Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question
of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption
or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this
Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules
and regulations promulgated thereunder, unless the context requires otherwise. The word “including” shall mean
including without limitation. The Parties intend that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation, warranty, or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the Party has not breached shall not detract from or mitigate the
fact that the Party is in breach of the first representation, warranty, or covenant.

 

(n)          Incorporation
of Exhibits, Annexes, and Schedules. The Exhibits, Annexes, and Schedules identified in this Agreement are incorporated
herein by reference and made a part hereof.

 

(o)          Release
and Discharge.

 

BY VIRTUE OF THEIR
EXECUTION AND DELIVERY OF THIS AGREEMENT, AS OF THE CLOSING AND THEREAFTER, THE MEMBERS, FOR AND ON BEHALF OF THEIR HEIRS, ASSIGNS,
BENEFICIARIES, EXECUTORS AND ADMINISTRATORS DO: (i) HEREBY FULLY AND IRREVOCABLY REMISE, RELEASE AND FOREVER DISCHARGE BARSTOW
, AND ITS SUBSIDIARIES, DIRECTORS, OFFICERS, MEMBERS, MANAGERS, AFFILIATES, EMPLOYEES, AGENTS, ATTORNEYS, ACCOUNTANTS, SUCCESSORS
AND ASSIGNS OF AND FROM ANY AND ALL MANNER OF CLAIMS, ACTIONS, CAUSES OF ACTION, GRIEVANCES, LIABILITIES, OBLIGATIONS, PROMISES,
DAMAGES, AGREEMENTS, RIGHTS, DEBTS AND EXPENSES (INCLUDING CLAIMS FOR ATTORNEYS’ FEES AND COSTS), OF EVERY KIND, EITHER IN
LAW OR IN EQUITY, WHETHER CONTINGENT, MATURE, KNOWN OR UNKNOWN, OR SUSPECTED OR UNSUSPECTED, INCLUDING, WITHOUT LIMITATION, ANY
CLAIMS ARISING UNDER ANY FEDERAL, STATE, LOCAL OR MUNICIPAL LAW, COMMON LAW OR STATUTE, WHETHER ARISING IN CONTRACT OR IN TORT,
AND ANY CLAIMS ARISING UNDER ANY OTHER LAWS OR REGULATIONS OF ANY NATURE WHATSOEVER, THAT SUCH MEMBERS EVER HAD, NOW HAS OR MAY
HAVE, FOR OR BY REASON OF ANY CAUSE, MATTER OR THING WHATSOEVER, FROM THE BEGINNING OF THE WORLD TO THE DATE HEREOF; AND (ii) UPON
THE CLOSING DO HEREBY AGREE TO TERMINATE ANY AND ALL OPERATING AGREEMENTS OR OTHER SIMILAR AGREEMENTS AMONG THE MEMBERS. .

  

    	-20-

    	 

    

  

IN WITNESS WHEREOF, the Parties hereto have
executed this Agreement as of the date first above written.

 

	 	ARMADA WATER ASSETS, INC.
	 	 
	 	By:	/s/ Mitch Burroughs
	 	Name: Mitch Burroughs
	 	Title: President
	 	 
	 	BARSTOW PRODUCTION WATER

 SOLUTIONS, LLC, 
	 	 
	 	By:	/s/ Don Lee Washington
	 	Name: Don Lee Washington
	 	Title: President
	 	 
	 	BELPHIL INVESTMENT PARTNERS,  LLC.
	 	 
	 	By: 	/s/ Kyung Won Lee
	 	Name: Kyung Won Lee
	 	Title: Managing Member
	 	 
	 	/s/ Arnold Huerta
	 	Arnold Huerta
	 	 
	 	/s/ D. Lee Washington
	 	D. Lee Washington

 

    	-21-

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