Document:

Exhibit 10.21

 

Definitive Execution Version

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION, OR THE AVAILABILITY OF EXEMPTION FROM REGISTRATION,
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BASED ON AN OPINION LETTER OF COUNSEL SATISFACTORY TO THE COMPANY OR A NO-ACTION
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.

 

Option No. 2014-[___]

OPTION TO PURCHASE COMMON STOCK

OF

ARMADA WATER ASSETS, INC.

 

This certifies that,
for value received, [______] ("Holder"), is entitled, subject to the terms set forth below, to purchase from ARMADA WATER
ASSETS, INC. (the "Company"), a Nevada corporation, that number of shares of the Common Stock of the Company (the "Shares")
as are set forth in Section 2 below, commencing on January 24, 2014 (the "Option Issue Date"), with the Notice of Exercise
attached hereto duly executed, and simultaneous payment therefor in lawful money of the United States or for other consideration
permitted herein, at the Exercise Price as set forth in Section 2 below. The number, character and Exercise Price of the Shares
are subject to adjustment as provided below.

 

1.          Term
of Option. Subject to compliance with, among others, the vesting provisions identified at Section 2.3 hereafter, unless otherwise
provided for in this Agreement, this Option shall be exercisable, in whole or in part, during the term (the "Term") commencing
on the Option Issue Date and ending on January 24, 2017 (the "Option Termination Date") and shall be void thereafter.

 

2.          Exercise
Price, Number of Shares and Vesting Provisions.

 

2.1           Exercise
Price. The Exercise Price at which this Option may be exercised and pursuant to which Shares of the Company's Common Stock
may be purchased shall be the “IPO Price”. For the purposes hereof, the “IPO Price” means the price at
which the newly issued shares of the Common Stock of the Company are first issued to the public by an underwriter in an “IPO”,
if the Corporation shall effect an IPO on or before January 24, 2016. For the further purposes hereof, the term “IPO”
shall means an initial public offering through an underwriter in a transaction registered under the Securities Act of 1933. If
an IPO does not occur on or before January 24, 2016, the Exercise Price at which this Option may be exercised shall be $1.00 per
share, as adjusted pursuant to Section 11 hereof.

 

2.2           Number
of Shares. The number of shares of the Company’s Common Stock, $.0001 par value per share ("Common Stock")
which may be purchased pursuant to this Option shall be [_______], as adjusted pursuant to Section 11 hereof.

 

    	 

    	 

    

 

2.3          Vesting.
As the Options granted hereunder have been awarded in recognition of the Letter Agreement entered into between the Holder and the
Company dated as of even date herewith, the Options granted hereunder shall vest 100% on the Option Issue Date.

 

3.          Exercise
of Option.

 

(a)          The
Option exercise price of each share purchased pursuant to an Option shall be paid in full at the time of each exercise (the "Payment
Date") of the Option (i) in cash; (ii) by delivering to the Company a notice of exercise with an irrevocable direction
to a broker-dealer registered under the Securities Act of 1933, as amended (the "Securities Act") to sell a sufficient
portion of the Shares and deliver the sale proceeds directly to the Company to pay the exercise price; (iii) at the request of
the Holder, and in the discretion of the Company’s Board of Directors, through the delivery to the Company of previously-owned
shares of Common Stock having an aggregate "Fair Market Value" (as defined) equal to the Option exercise price of the
Shares being purchased pursuant to the exercise of the Option; provided, however, that Shares of Common Stock delivered in payment
of the Option price must have been held by the Holder for at least six (6) months in order to be utilized to pay the Option price;
(iv) at the request of the Holder, and in the discretion of the Company’s Board of Directors, by an election to have the
Company withhold Shares otherwise issuable to the Holder having a Fair Market Value equal to the Option exercise price of the Shares
being purchased pursuant to the exercise of the Option; or (v) at the request of the Holder, and in the discretion of the Company’s
Board of Directors, through any combination of the payment procedures set forth in subsections (i)-(iv) above.

 

(i)          the
"Fair Market Value" of the Shares shall be (i) if the Company's Common Stock is listed on any stock exchange or quoted
on an automated quotation system of a national securities association, including without limitation the Nasdaq Global Select Market,
the Nasdaq Global Market or the Nasdaq Capital Market, its Fair Market Value shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day prior to the time
of determination, as reported in The Wall Street Journal or such other source as the Company’s Board of Directors deems reliable;
(ii) if the Common Stock is regularly traded on the OTC Bulletin Board, or a comparable automated quotation system, its Fair Market
Value shall be the mean between the high bid and low asked prices for the Common Stock on the last market trading day prior to
the day of determination; or (iii) in the absence of an established market for the Common Stock, the Fair Market Value thereof
shall be determined in good faith by the Company’s Board of Directors, with the Board’s determination and its analysis
leading to the determination to be shared with the Holder in full.

 

(b)          The
purchase rights represented by this Option are exercisable by the Holder in whole or in part, at any time, or from time to time,
by the surrender of this Option 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).

 

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(c)          This
Option shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise
as provided above, and the person entitled to receive the shares of Common Stock issuable upon such exercise shall be treated for
all purposes as the holder of record of such Shares as of the close of business on such date. As promptly as practicable on or
after such date and in any event within ten (10) days thereafter, the Company at its expense shall issue and deliver to the person
or persons entitled to receive the same a certificate or certificates for the number of Shares issuable upon such exercise. In
the event that this Option is exercised in part, the Company at its expense will execute and deliver a new Option of like tenor
exercisable for the number of Shares for which this Option may then be exercised.

 

4.          No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Option. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall make a payment
to Holder by Company check equal to the Exercise Price multiplied by such fraction.

 

5.          Replacement
of Option. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this
Option and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and
substance to the Company or, in the case of mutilation, on surrender and cancellation of this Option, the Company at its expense
shall execute and deliver, in lieu of this Option, a new Option of like tenor and amount.

 

6.          Rights
of Stockholder. Except as otherwise contemplated herein, the Holder shall not be entitled to vote or receive dividends or be
deemed the holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof
for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification
of stock, change of par value, or change of stock to no par value, consolidation, merger, conveyance or otherwise) or to receive
notice of meetings, or to receive dividends or subscription rights or otherwise until the Option shall have been exercised as provided
herein.

 

7.          Transfer
of Option.

 

7.1           Non-Transferability.
No Option shall be assignable or transferable other than by the laws of descent and distribution. During the lifetime of the Holder,
an Option shall be exercisable only by the Holder or, in the event of the Holder's incapacity, by the Holder's legal guardian or
legal representative.

 

7.2           Exchange
of Option Upon a Transfer. On surrender of this Option for exchange, properly endorsed, the Company at its expense shall issue
to or on the order of the Holder a new Option or Options of like tenor, in the name of the Holder or as the Holder (on payment
by the Holder of any applicable transfer taxes) may direct, of the number of shares issuable upon exercise hereof.

 

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7.3           Representations
of the Holder. 

 

(a)          The
Holder of this Option, by acceptance hereof, acknowledges that this Option and the Shares to be issued upon exercise hereof are
being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment (unless such Shares
are subject to resale pursuant to an effective prospectus), and that the Holder will not offer, sell or otherwise dispose of this
Option or any Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of applicable
federal and state securities laws. Upon exercise of this Option, the Holder shall, if requested by the Company, confirm in writing,
in a form satisfactory to the Company, that the shares of Common Stock so purchased are being acquired solely for the Holder's
own account and not as a nominee for any other party, for investment (unless such shares are subject to resale pursuant to an effective
prospectus), and not with a view toward distribution or resale.

 

(b)          Neither
this Option nor any share of Common Stock issued upon exercise of this Option may 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, unless (i) such security
has been registered for sale under the Securities 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 Securities 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 Securities 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.

 

(c)          All
Shares issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form (in addition
to any legend required by state securities laws).

 

"THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY APPLICABLE STATE
SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION, OR THE
AVAILABILITY OF EXEMPTION FROM REGISTRATION, UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BASED ON AN OPINION LETTER OF COUNSEL
SATISFACTORY TO THE COMPANY OR A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION."

 

(d)          
Holder has such knowledge and experience in business and financial matters such that it is capable of evaluating the merits and
risks of an investment in the Shares upon exercise of the Options.

 

(e)          
Holder hereby acknowledges that it has been advised that the offer and sale of the Shares covered by this Agreement has not been
registered with, or reviewed by, the Securities and Exchange Commission ("SEC") because this offering is intended to
be a non-public offering pursuant to Section 4(2) of the Act and Regulation D promulgated thereunder. Holder represents that the
Options are being purchased for its own account and not on behalf of any other person, for investment purposes only and not with
a view towards distribution or resale to others.

 

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(f)          
Holder understands that no securities administrator of any state has made any finding or determination relating to the fairness
of this investment and that no securities administrator of any state has recommended or endorsed, or will recommend or endorse,
the offering of the Options or the Shares.

 

(g)          
Holder acknowledges that no general solicitation or general advertising (including communications published in any newspaper, magazine
or other broadcast) has been received by it and that no public solicitation or advertisement with respect to the offering of the
Options or the Shares has been made to Holder;

 

(h)          
Holder’s overall commitment to investments which are not readily marketable is not disproportionate to its net worth. Holder’s
investment in the Company upon an exercise of the Options, if at all, will not cause such overall commitment to become excessive.
Holder can afford to bear the loss of its entire investment in the Company. Holder has adequate means of providing for its current
needs and personal contingencies and Holder has no need for liquidity in its investment in the Company.

 

(i)          
Holder has relied solely upon the advice of its own tax and legal advisors with respect to the tax and other legal aspects of this
investment.

 

(j)          
Holder has had access to all material and relevant information concerning the Company, its management, financial condition, capitalization,
market information, properties and prospects necessary to enable Holder to make an informed investment decision with respect to
Holder’s investment in the Options, and upon exercise thereof, the Shares.

 

(k)          
Holder is an "Accredited Investor" as that term is defined in Rule 501(a) of Regulation D promulgated by the SEC under
the Securities Act of 1933, as amended.

 

8.          Reservation
and Issuance of Stock; Payment of Taxes.

 

(a)          The
Company covenants that during the term that this Option 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 Shares upon the exercise of this Option, and from
time to time will take all steps necessary to amend its Certificate of Incorporation to provide sufficient reserves of Shares of
Common Stock issuable upon the exercise of the Option.

 

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(b)          The
Company further covenants that all Shares of Common Stock issuable upon the due exercise of this Option will be free and clear
from all taxes or liens, charges and security interests created by the Company with respect to the issuance thereof, however, the
Company shall not be obligated or liable for the payment of any taxes, liens or charges of Holder, or any other party contemplated
by Section 7, incurred in connection with the issuance of this Option or the Common Stock upon the due exercise of this Option.
The Company agrees that its issuance of this Option shall constitute full authority to its officers who are charged with the duty
of executing stock certificates to execute and issue the necessary certificates for the Shares of Common Stock upon the exercise
of this Option. The Common Stock issuable upon the due exercise of this Option, will, upon issuance in accordance with the terms
hereof, be duly authorized, validly issued, fully paid and non-assessable.

 

(c)          Whenever
Options are to be issued or exercised under this Agreement, under circumstances in which the Company’s Board of Directors
believes that any federal, state or local tax withholding may be imposed, the Company shall have the right to require the Holder
to promptly remit to the Company an amount sufficient to satisfy the minimum federal, state and local tax withholding requirements
prior to the delivery of any Options or certificate for Shares or any proceeds. If a Holder makes a disposition of Shares acquired
upon the exercise of an Incentive Stock Option within either two years after the Option was granted or one year after its exercise
by the Holder, the Holder shall promptly notify the Company and the Company shall have the right to require the Holder to pay to
the Company an amount sufficient to satisfy federal, state and local tax withholding requirements.

 

(d)          A
Holder who is obligated to pay the Company an amount required to be withheld under applicable tax withholding requirements may
pay such amount (i) in cash; (ii) in the discretion of the Company’s Board of Directors, through the delivery to
the Company of previously-owned Shares of Common Stock having an aggregate Fair Market Value on the date payment is requested by
the Company’s Board of Directors equal to the tax obligation provided that the previously owned shares delivered in satisfaction
of the withholding obligations must have been held by the Holder for at least six (6) months; (iii) in the discretion of the Company’s
Board of Directors, through an election to have the Company withhold shares of Stock otherwise issuable to the Holder having a
Fair Market Value on such date equal to the amount of tax required to be withheld, or (iv) in the discretion of the Company’s
Board of Directors, through a combination of the procedures set forth in subsections (i), (ii) and (iii) of this Section 8(d).

 

(e)          An
election by a Holder to have shares of Stock withheld to satisfy federal, state and local tax withholding requirements pursuant
to Section 8(d) must be in writing and delivered to the Company prior to the date when such payment is due.

 

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9.          Notices.

 

(a)          All
notices, advices and communications under this Option shall be deemed to have been given, (i) in the case of personal delivery,
on the date of such delivery and (ii) in the case of mailing, on the third business day following the date of such mailing, addressed
as follows:

 

If to the Company:

Armada Water Assets, Inc.

2425 Fountain View Dr., Suite 300

Houston, TX, 77057

Attention: Maarten Propper

Chief Executive Officer

 

and to the Holder:

 

[Insert Name and Address]

 

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.         Amendments.

 

(a)          Any
term of this Option may be amended with the written consent of the Company and the Holder. Any amendment effected in accordance
with this Section 10 shall be binding upon the Holder, each future Holder and the Company.

 

(b)          No
waivers of, or exceptions to, any term, condition or provision of this Option, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such term, condition or provision.

 

11.         Adjustments.
The number of Shares of Common Stock purchasable hereunder and the Exercise Price is subject to adjustment from time to time upon
the occurrence of certain events, as follows:

 

(a)          If,
through or as a result of any merger, consolidation, sale of all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, the outstanding
shares of Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the
Company, or additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed
with respect to such shares of Stock or other securities, the Company’s Board of Directors shall make an appropriate or proportionate
adjustment in (i) the number of Stock Options subject to this Option Agreement, and (ii) the exercise price for each Share subject
to any then outstanding Stock Options under this Agreement, without changing the aggregate exercise price (i.e., the exercise price
multiplied by the number of shares) as to which such Stock Options remain exercisable. The adjustment by the Company’s Board
of Directors shall be final, binding and conclusive.

 

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(b)          In
the event that, by reason of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or
liquidation, the Board of Directors shall authorize the issuance or assumption of a stock Option or stock Options in a transaction
to which Section 424(a) of the Code applies, then, notwithstanding any other provision of the Plan, the Company’s Board
of Directors may grant an Option or Options upon such terms and conditions as it may deem appropriate for the purpose of assumption
of the old Option, or substitution of a new Option for the old Option, in conformity with the provisions of Code Section 424(a)
and the rules and regulations thereunder, as they may be amended from time to time.

 

(c)          No
adjustment or substitution provided for in this Section 11 shall require the Company to issue or to sell a fractional share
under any Option Agreement or share award agreement and the total adjustment or substitution with respect to each stock Option
and share award agreement shall be limited accordingly.

 

(d)          In
the case of (i) the dissolution or liquidation of the Company, (ii) a merger, reorganization or consolidation in which the Company
is acquired by another person or entity (other than a holding company formed by the Company), (iii) the sale of all or substantially
all of the assets of the Company to an unrelated person or entity, or (iv) the sale of all of the stock of the Company to a unrelated
person or entity (in each case, a "Fundamental Transaction"), this Option may be terminated by the Company’s Board
of Directors, unless provision is made in connection with the Fundamental Transaction for the assumption of this Option, or the
substitution of such New Options of the successor entity, with appropriate adjustment as to the number and kind of shares and,
if appropriate, the per share exercise price as provided in Subsections (a) and (b) of this Section 11. In the event of such
termination and in the event the Company’s Board of Directors does not provide for the Cash Payment described in Subsection
(e) of this Section, the Holder shall be notified of such proposed termination and permitted to exercise for a period of at least
thirty (30) days prior to the date of such termination all Options held by such Holder which are then exercisable.

 

(e)          In
the event that the Company shall be merged or consolidated with another corporation or entity, other than a corporation or entity
which is an "affiliate" of the Company under the terms of which holders of Stock of the Company will receive upon consummation
thereof a cash payment for each share of Stock of the Company surrendered pursuant to such Business Combination (the "Cash
Purchase Price"), the Company’s Board of Directors may provide that this Option shall terminate upon consummation of
such transaction and the Holder shall receive, in exchange therefor, a cash payment equal to the amount (if any) by which (i) the
Cash Purchase Price multiplied by the number of shares of Stock of the Company subject to this Option held by such Holder exceeds
(ii) the aggregate exercise price of such Options.

 

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(f)          Whenever
the Exercise Price or number of shares purchasable hereunder shall be adjusted pursuant to Section 11 hereof, the Company shall
issue a certificate signed by its Chief Financial Officer setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was calculated, and the Exercise Price and number of shares purchasable
hereunder after giving effect to such adjustment, and shall cause a copy of such certificate to be mailed (by first class mail,
postage prepaid) to the Holder of this Option.

 

12.         Severability.
Whenever possible, each provision of this Option shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Option is held to be invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability
of any other provision of this Option in such jurisdiction or affect the validity, legality or enforceability of any provision
in any other jurisdiction, but this Option shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal
or unenforceable provision had never been contained herein.

 

13.         Governing
Law. The corporate law of the State of Nevada shall govern all issues and questions concerning the relative rights of the Company
and its stockholders. All other questions concerning the construction, validity, interpretation and enforceability of this Option
and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of Nevada,
without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Nevada or any other
jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Nevada.

 

14.         Jurisdiction.
The Holder and the Company agree to submit to personal jurisdiction and to waive any objection as to venue in the federal or state
courts in Colorado. Service of process on the Company or the Holder in any action arising out of or relating to this Option shall
be effective if mailed to such party at the address listed in Section 9 hereof.

 

15.         Corporate
Power; Authorization; Enforceable Obligations. The execution, delivery and performance by the Company of this Agreement: (i)
are within the Company’s corporate power; (ii) have been duly authorized by all necessary or proper corporate action; (iii)
are not in contravention of the Company’s certificate of incorporation or by-laws; (iv) will not violate in any material
respect, any law or regulation, including any and all Federal and state securities laws, or any order or decree of any court or
governmental instrumentality; and (v) will not, in any material respect, conflict with or result in the breach or termination of,
or constitute a default under any agreement or other material instrument to which the Company is a party or by which the Company
is bound.

 

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

 

17.         Entire
Agreement; Supersedes Any Prior Arrangements. This Agreement, together with all schedules hereto, constitutes the entire agreement
and understanding of the parties with respect to the subject matter hereof.

 

IN WITNESS WHEREOF,
the Company has caused this Option to be executed by its officers thereunto duly authorized.

 

Dated: January 24, 2014

 

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	 	ARMADA WATER ASSETS, INC.
	 	 	 
	 	By: 	,
	 	Maarten Propper, Chief Executive Officer
	 	 	 
	 	 	 
	 	HOLDER
	 	 	 
	 	By:	 
	 	 	Please Print Name
	 	 	 
	 	 	 
	 	 	Signature

 

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NOTICE OF EXERCISE

 

TO:Armada Water Assets, Inc.

Attn. Maarten Propper

2425 Fountain View Dr., Suite 300

Houston, TX, 77057

 

(1)         The
undersigned hereby elects to purchase _______ shares of Common Stock of ARMADA WATER ASSETS, INC. pursuant to the terms of the
attached Option, and tenders herewith payment of the purchase price for such shares in full.

 

(2)         In
exercising this Option, the undersigned hereby confirms and acknowledges that the shares of Common Stock to be issued upon conversion
thereof are being acquired solely for the account of the undersigned and not as a nominee for any other party, and for investment
(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)         Please
issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name
as is specified below:

 

	 	 	 
	 	 	 
	 	 	(Name)
	 	 	 
	 	 	 
	 	 	 
	 	 	(Name)
	 	 	 
	 	 	 
	 	 	 
	(Date)	 	(Signature)

 

    	11Exhibit 10.22

 

CONVERSION AGREEMENT

 

This Conversion Agreement (this “Agreement”)
is made and entered into as of March 31, 2014 by and between Armada Water Assets, Inc., a Nevada corporation (“Issuer”),
and ___________________________________ (“Holder”).

 

Recitals

 

WHEREAS, Issuer previously issued a promissory
note in favor of Holder, as restated or otherwise, in the original principal amount of $______ (the “Note”);

 

WHEREAS, upon the terms and subject to the
conditions hereof, Holder wishes to convert and surrender the outstanding principal amount of the Note for cancellation in consideration
of the number of shares of common stock, $0.0001 par value per share (the “Common Stock”), of Issuer as set
forth on the signature page attached hereto;

 

WHEREAS, the shares of Common Stock issued
hereunder are being issued without registration under the Securities Act of 1933, as amended (the “Securities Act”),
in reliance on the exemption provided by Section 4(a)(2) of the Securities Act; and

 

WHEREAS, the parties hereto desire to make
certain representations, warranties, covenants and other agreements in connection with the transactions contemplated hereby.

 

NOW, THEREFORE, in consideration of the
covenants, promises and representations set forth herein, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE
I

CONVERSION OF SECURITIES

 

Section 1.1.          Conversion
of Note. Upon the terms and subject to the conditions of this Agreement, at the Closing, (a) Holder will convert and deem
satisfied the outstanding principal amount of the Note, to the extent set forth on the signature page hereof (the “Conversion
Amount”), which Conversion Amount shall constitute a prepayment of the outstanding principal amount of the Note,
and in consideration therefor (b) Issuer will issue and deliver to Holder, and Holder will receive from Issuer, the number
of shares of Common Stock set forth on the signature page attached hereto. Upon delivery of the shares of Common Stock to Holder,
that portion of the Note being converted will be deemed satisfied as if applying the Conversion Amount as an prepayment, and the
balance remaining due thereunder shall remain outstanding and the Note shall remain in full force and effect.

 

Section 1.2.          Closing.
The closing of the transactions contemplated by this Agreement (the “Closing”) will take place upon the execution
of this Agreement by both parties hereto and the satisfaction of the following closing conditions:

 

    	 

    	 

    

 

(a)          Issuer
will deliver to Holder or such other person as directed by Holder certificates representing the shares of Common Stock for conversion
of the Note in accordance with Section 1.1 within up to ten (10) days thereafter.

 

Section 1.3.          Release.
In consideration of the promises and covenants set forth in this Agreement and for other good and valuable consideration, Holder
for itself and on behalf of its subsidiaries, directors, officers, shareholders, members, partners, affiliates, employees, agents,
attorneys, accountants, successors, heirs and assigns, does hereby fully and irrevocably remise, release and forever discharge
each of Issuer, its subsidiaries, affiliates, officers, directors, employees, shareholders, agents, representatives, attorneys,
predecessors, successors and assigns (the “Released Parties”) 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, provincial, 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 Holder 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, solely as it relates to the Note, to the extent surrendered for conversion. Holder represents,
warrants and covenants that it has not sold, assigned, transferred, or otherwise conveyed to any other person or entity all or
any portion of its rights, claims, demands, actions, or causes of action herein released. Holder further agrees and covenants not
to sue or to bring, or assign to any third person, any claims or charges against any of the Released Parties with respect to any
matter covered by the release set forth herein and not to assert against any of the Released Parties any action, grievance, suit,
litigation or proceeding for any matter covered by the release set forth herein.

 

ARTICLE
II

REPRESENTATIONS AND WARRANTIES OF HOLDER

 

Holder represents and warrants to Issuer
as follows:

 

Section 2.1.          Ownership
of Note. Holder is the sole record and beneficial owner of the Note. The Note is not subject to any encumbrances, and Holder
has not granted any rights to purchase the Note to any other person or entity. Holder has the sole right to transfer the Note to
Issuer.

 

Section 2.2.          Organization
of Holder. Holder, if an entity, is duly formed, validly existing and in good standing under the laws of its jurisdiction of
organization and has all necessary power and authority to conduct its business in the manner in which its business is currently
being conducted.

 

    	2

    	 

    

 

Section 2.3.          Authority;
Non-Contravention.

 

(a)          Holder
has all requisite power and authority to execute, deliver and perform its obligations under this Agreement. This Agreement has
been duly and validly authorized, executed and delivered by Holder and constitutes the valid and legally binding obligation of
Holder, enforceable in accordance with its terms and conditions, subject to bankruptcy, insolvency, fraudulent transfer, moratorium
or similar laws relating to or affecting creditors’ rights generally and to general principles of equity.

 

(b)          The
execution, delivery and performance of this Agreement by Holder and the consummation of the transactions contemplated hereby will
not (i) conflict with or result in a material breach or violation of any of the terms or provisions of, impose any lien, charge
or encumbrance upon any material property or assets of Holder, or constitute a default under, any material indenture, mortgage,
deed of trust, loan agreement, license or other material agreement or instrument to which Holder is a party or by which Holder
is bound or to which any of the material property or assets of Holder is subject, (ii) result in any violation of the provisions
of the governing instruments of Holder or (iii) result in any violation of any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over Holder or any of its properties or assets, except where such
violation will not, individually or in the aggregate, have a material adverse effect on the condition (financial or otherwise),
results of operations, stockholders’ equity, properties or business of Issuer and its subsidiaries taken as a whole.

 

(c)          No
consent, approval, authorization or order of, or filing or registration with, any court or governmental agency or body having jurisdiction
over Holder or any of its properties or assets is required for the execution, delivery and performance of this Agreement by Holder
or the consummation of the transactions contemplated hereby.

 

Section 2.4.          Restrictive
Legend. Holder acknowledges that the Common Stock to be issued by Issuer to Holder hereunder has not been registered under
the Securities Act and therefore cannot be sold unless subsequently registered under the Securities Act or an exemption from such
registration is available in the opinion of counsel reasonably acceptable to Issuer. Holder acknowledges that the certificate representing
the Common Stock to be issued by Issuer to Holder hereunder will bear the following legend:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SAID ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER SAID
ACT IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE TO ISSUER.

 

Section 2.5.          Accredited
Investor. Holder is an “Accredited Investor” as that term is defined in Rule 501(a) of Regulation D under
the Securities Act.

 

    	3

    	 

    

 

Section 2.6.          No
General Solicitation. Holder is unaware of, and in deciding to acquire the Shares is in no way relying upon, and did not become
aware of the conversion of the Notes through or as a result of, any form of general solicitation or general advertising including,
without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media,
or broadcast over television or radio or the internet, in connection with such conversion.

 

Section 2.7.          Placement
and Finder’s Fees. No agent, broker, investment banker, finder, financial advisor or other person acting on behalf of
Holder or under its authority is or will be entitled to any broker’s or finder’s fee or any other commission or similar
fee, directly or indirectly, in connection with this Agreement, and no person is entitled to any fee or commission or like payment
in respect thereof based in any way on agreements, arrangements or understanding made by or on behalf of Holder.

 

Section 2.8.          Investment
Intent. The Common Stock to be issued to Holder is being acquired for the Holder’s own account for investment purposes
only, not as a nominee or agent and not with a view to the resale or distribution of any part thereof, and Holder has no present
intention of selling, granting any participation in or otherwise distributing the same. By executing this Agreement, Holder further
represents that Holder does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person or third person with respect to any of the Common Stock to be issued by Issuer to Holder.

 

Section 2.9.          Investment
Risk. Holder has substantial experience in evaluating and investing in private placement transactions of securities in companies
similar to Issuer so that it is capable of evaluating the merits and risks of its investment in Issuer. Holder acknowledges that
an investment in the Shares involves a high degree of risk as Issuer remains in the early stage of its development, having only
recently commenced the operations of its various business units. Thus, Issuer and its subsidiaries have only a very brief history
of operations, and it is uncertain how these business units will operate on a combined basis and whether these various business
units can be operated at a profit. Holder understands that it must bear the economic risk of this investment until the Shares are
sold pursuant to: (i) an effective registration statement under the Securities Act; or (ii) an exemption from registration is available
with respect to such sale.

 

Section 2.10.         Access
to Information. In making its decision to acquire the Shares, Holder confirms that it has carefully reviewed all information
regarding Issuer as it has deemed necessary in order to make an informed investment decision with respect to an investment in the
Shares; that it has had the opportunity to ask representatives of Issuer certain questions and request certain additional information
regarding the terms and conditions of such investment and the finances, operations, business and prospects of Issuer and has had
any and all such questions and requests answered to its satisfaction; and that it understands the risks and other considerations
relating to such investment. Holder specifically acknowledges that it has been provided with and reviewed to its satisfaction,
information regarding Issuer’s finances, management team, capitalization, material acquisitions, description of outstanding
securities, plan of operations, material business risks and the like.

 

    	4

    	 

    

 

ARTICLE
III

REPRESENTATIONS AND WARRANTIES OF ISSUER

 

Issuer represents and warrants to Holder
as follows:

 

Section 3.1.          Organization
of Issuer. Issuer, if an entity, has been duly incorporated and is validly existing and in good standing as a corporation under
the laws of its jurisdiction of incorporation, with all corporate power and authority necessary to conduct the business in which
it is engaged and Issuer is duly qualified or licensed to do business and in good standing as a foreign corporation in each jurisdiction
in which its ownership or lease of its properties or assets or the conduct of its businesses requires such qualification or license,
except where the failure to be so qualified or be so licensed or in good standing would not, individually or in the aggregate,
have a material adverse effect on the condition (financial or otherwise), results of operations, stockholders’ equity, properties
or business of Issuer and its subsidiaries taken as a whole.

 

Section 3.2.          Duly
Issued Shares. The shares of Common Stock to be issued to Holder hereunder have been duly authorized and, upon delivery in
accordance with this Agreement, (a) will be validly issued, fully paid and non-assessable, and (b) will not be subject to any encumbrances,
other than those imposed by Holder or under applicable federal and state securities laws.

 

Section 3.3.          Authority;
Non-Contravention.

 

(a)          Issuer
has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement. This Agreement
has been duly and validly (i) authorized by Issuer, and (ii) executed and delivered by Issuer. This Agreement constitutes the valid
and legally binding obligation of Issuer, enforceable in accordance with its terms and conditions, subject to bankruptcy, insolvency,
fraudulent transfer, moratorium or similar laws relating to or affecting creditors’ rights generally and to general principles
of equity.

 

(b)          The
execution, delivery and performance of this Agreement by Issuer and the consummation of the transactions contemplated hereby will
not (i) conflict with or result in a material breach or violation of any of the terms or provisions of, impose any lien, charge
or encumbrance upon any material property or assets of Issuer, or constitute a default under, any material indenture, mortgage,
deed of trust, loan agreement, license or other material agreement or instrument to which Issuer or any of its subsidiaries is
a party or by which Issuer or any of its subsidiaries is bound or to which any of the material property or assets of Issuer or
any of its subsidiaries is subject, (ii) result in any violation of the provisions of the governing instruments of Issuer
or any of its subsidiaries or (iii) result in any violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over Issuer or any of its properties or assets, except where such violation will
not, individually or in the aggregate, have a material adverse effect on the condition (financial or otherwise), results of operations,
stockholders’ equity, properties or business of Issuer and its subsidiaries taken as a whole.

 

    	5

    	 

    

 

(c)          No
consent, approval, authorization or order of, or filing or registration with, any court or governmental agency or body having jurisdiction
over Issuer or any of its subsidiaries or any of their properties or assets is required for the execution, delivery and performance
of this Agreement by Issuer or the consummation of the transactions contemplated hereby.

 

(d)          The
issuance of the shares of Common Stock by Issuer to Holder pursuant to this Agreement does not require registration under the Securities
Act.

 

ARTICLE
IV

GENERAL PROVISIONS

 

Section 4.1.          General.
Each of the parties will use commercially reasonable efforts to take or cause to be taken all actions and to do or cause to be
done, as soon as possible, all things necessary, proper or advisable (subject to any applicable laws) to consummate the Closing
and the other transactions contemplated by this Agreement. In the event that at any time after the Closing any further action is
reasonably necessary to carry out the purposes of this Agreement, each of the parties will take such further action (including
the execution and delivery of such further instruments and documents) as the other party may reasonably request, at the sole cost
and expense of the requesting party.

 

Section 4.2.          Survival.

 

(a)          The
representations and warranties contained in Articles II and III will survive the Closing and continue in full force and effect
indefinitely, and

 

(b)          any
covenants or agreements contained in this Agreement, which by their terms have any remaining obligation to be performed or observed
following the occurrence of the Closing will survive and continue in full force and effect until fully performed or observed in
accordance with their terms.

 

Section 4.3.          Additional
Covenants. Holder covenants and agrees with Issuer as follows:

 

(a)          Holder
agrees that it will not disclose, and will not include in any public announcement, the name of Issuer, unless expressly agreed
to by Issuer or unless and until such disclosure is required by law or applicable regulation, and then only to the extent of such
requirement.

 

(b)          Holder
agrees not to effect any sales in the shares of Issuer’s Common Stock while in possession of material, non-public information
regarding Issuer if such sales would violate applicable securities laws.

 

(c)          Holder
agrees in connection with an initial public offering that occurs after the Closing, that unless waived in writing by the managing
underwriter, not to sell or transfer any shares of Common Stock of Issuer for a period of up to 180 days from the completion of
any such initial public offering, plus up to an additional 20 days to the extent necessary to comply with applicable regulatory
requirements following such public offering.

 

    	6

    	 

    

 

Section 4.4.          Notices.
Any notice, request, instruction or other communication to be given hereunder will be in writing and delivered personally or sent
by reputable, overnight courier service (charges prepaid), or by facsimile, according to the instructions set forth below. Such
notices will be deemed given (a) at the time delivered by hand, if personally delivered, (b) on the day of delivery if during normal
business hours (or on the following business day if not sent during normal business hours), if sent by reputable, overnight courier
service, and (c) at the time when confirmation of successful transmission is received by the sending facsimile machine, if sent
by facsimile. Such notices, demands and other communications will be sent to Issuer and Holder, as the case may be at the addresses
indicated below:

 

if to Issuer:

 

Armada Water Assets, Inc.

2425 Fountain View Drive, Suite 300

Houston, Texas 77057

Facsimile: (832) 262-4606

Attention: Sami Ahmad, CFO

 

with a copy to (which will not constitute notice to
Issuer):

 

Fox Rothschild LLP

2000 Market Street, 20th Floor

Philadelphia, Pennsylvania 19103

Facsimile: (215) 299-2150

Attention: Stephen M. Cohen, Esq.

 

if to Holder:

 

To such address indicated on the signature page hereof

 

Section 4.5.          Counterparts.
this Agreement may be executed in any number of counterparts and each of such counterparts will for all purposes be deemed to be
an original, and all such counterparts will together constitute but one and the same instrument. Facsimiles or other electronic
copies of signatures will be deemed to be originals.

 

Section 4.6.          Governing
Law. This Agreement will be deemed to be a contract made under the laws of the State of Nevada and for all purposes will be
governed by and construed in accordance with the internal laws of said State. The parties hereto irrevocably consent to the jurisdiction
of the state and federal courts sitting in the City of Philadelphia, Pennsylvania in connection with any action, suit or proceeding
arising out of or relating to this Agreement.

 

Section 4.7.          Entire
Agreement. This Agreement constitutes the entire agreement of Issuer and Holder with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, between Issuer and Holder with respect to the subject
matter hereof.

 

Section 4.8.          Amendment
and WaiverThis Agreement may be amended, modified or supplemented, and any of the provisions hereof may be waived, provided
that the same are in writing and signed by Issuer and Holder.

 

    	7

    	 

    

 

Section 4.9.          Assignment.
Neither this Agreement nor any of the rights, interests or obligations provided by this Agreement will be assigned by either party
(whether by operation of law or otherwise) without the prior written consent of the other party. Subject to the preceding sentence,
this Agreement will be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted
assigns.

 

Section 4.10.         Counsel
Review. Holder acknowledges that he has read and understands the contents of this Agreement. Holder acknowledges that he has been
specifically advised by the Issuer: (i) that this Agreement has been prepared by Fox Rothschild LLP specifically on behalf of the
Issuer; and (ii) to consult with an attorney before signing it. Holder further acknowledges that this Agreement was reached after
negotiation in which Holder was advised to be, and afforded the opportunity to be, represented by counsel. Holder acknowledges
that he has executed this Agreement voluntarily and of his own free will, without coercion and with full knowledge of what it means
to do so.

 

[Signature page follows]

 

 

    	8

    	 

    

 

IN WITNESS WHEREOF, Issuer and Holder have
caused this Agreement to be signed, all as of the date first written above.

 

	 	ISSUER: ARMADA WATER ASSETS, INC.
	 	 	 
	 	By:	 
	 	 	Maarten Propper, Chief Executive Officer
	 	 	 
	 	HOLDER:
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	Phone:	 
	 	Address:
	 	 
	 	 
	 	 
	 	 
	 	Social Security or Tax Id No.:
	 	 
	 	 
	 	Original Principal Amount of Note:
	 	 
	 	 
	 	Note Amount Currently Outstanding (principal and interest):
	 	 
	 	 
	 	Amount to be Converted:
	 	 
	 	 
	 	New Principal Amount of the Note (after conversion):
	 	 
	 	 
	 	No. of Shares of Common Stock Issuable upon conversion:
	 	 
	 	 
	 	Delivery Instructions (if different than address)
	 	 
	 	 
	 	 

 

[Signature Page to Conversion Agreement]

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