FRAC WATER SYSTEMS, INC. (Form: 8-K, Received: 10/17/2013 16:10:44)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 10, 2013

FRAC WATER SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Nevada		333-156480		26-1973257
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

1266 1 ST Street, Suite 4

Sarasota, FL 34236

(Address and telephone number of principal executive offices)

#149, 19744 Beach Boulevard

Huntington Beach, CA 92648

(Former name and address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

Joint Venture Agreement

On October 10, 2013, we entered into a Joint Venture Agreement (the “JV Agreement”) with Produced Water Solutions, Inc., a Colorado corporation (“PWS”) in the business of providing economically and environmentally sound solutions for the treatment and recycling of wastewater resulting principally from oil and gas exploration and production activities (the “Business”). The JV Agreement is intended to enable us to engage in and commence activities involving the Business. In furtherance thereof, pursuant to the JV Agreement, PWS has provided us with three prospective Business projects (the “Projects”) and agreed to provide us with consulting services with respect to all aspects of the Projects and certain additional Business projects that we may subsequently determine to pursue (the “Additional Projects”). The consulting services to be provided by PWS include designation of a qualified project manager (the “Project Manager”) for each of and up to three Projects and Additional Projects that we determine to pursue (the “Accepted Projects”). The consulting services of PWS, including the services to be performed by the Project Manager (collectively, the “Services”), include the direct oversight needed to undertake and complete the Accepted Projects as well as the following:

•	Provide assistance with Project diligence;

•	Project budget preparation and management;

•	Equipment pricing, specification and sourcing;

•	Sub-contractor identification and management;

•	Preparation of an operating plan;

•	System implementation and functional testing; and

•	Operational oversight.

We have agreed to accept at least one of the Projects (the “Guaranteed Project”) and have been granted a right of first refusal until December 31, 2013 with respect to the two other Projects. We have until December 8, 2013 to determine which of the Projects to accept as the Guaranteed Project. In connection with such determination, we shall perform, with the assistance of PWS, legal, technical and financial due diligence.

During the term of the JV Agreement, PWS may, in its sole discretion, also present us with additional projects (each, an “Additional Project”) for our consideration by delivering to us, in each case, a project description including a 24 month budget, projected project economics, a list of required equipment and the estimated cost thereof, a description of customer commitments required to meet financial pro-formas, and an operating plan. Until the earlier of December 31, 2013, or the acceptance by us of three projects presented by PWS (including either Projects or Additional Projects), we may acquire an interest in any Additional Project presented by PWS under the same terms and conditions as specified herein for acquisition of Projects other than the Guaranteed Project. After the earlier of December 31, 2013 or the acceptance by us of three projects presented by PWS, whether they be Projects or a combination of Projects and Additional Projects, the terms and conditions under which we may engage PWS to provide consultation and assistance on Additional Projects will be negotiated by us and PWS on a case by case basis.

All Accepted Projects, at the point of written acceptance by us, will have in place all required contracts, leases, permits, licenses, waivers, authorizations, consents, assignments and approvals necessary for the commencement of the project. PWS will assist us in the creation of a project plan for each Accepted PWS Project, which shall include projections and a proposed budget. We may independently locate projects and may, but have no obligation to, engage PWS to provide consulting services for such projects in our sole discretion. The terms of any such engagement will be negotiated by us and PWS on a case by case basis.

In consideration for the Services, we have agreed to pay PWS a Monthly Project Cash Fee, a Cash Bonus Payment, FWSI Stock Options and Net Income Payments.

Monthly Project Cash Fees.

We agreed to pay PWS for Services performed, which includes the Services of the Project Manager, at a rate of $10,000 per month for the Guaranteed Project. The initial monthly project cash fee payment for the Guaranteed Project was paid on October 15, 2013. Subsequent monthly payments are due and payable on or before the 15th of each month through the term of the JV Agreement. In the event we elect to accept additional projects, we will pay PWS for Services at a rate of $5,000 per month for each of such Accepted Projects. At such time, if ever, that a combination of three Projects (including the Guaranteed Project) and Additional Projects have been accepted, the monthly cash fees due and payable by us for any Project or Additional Project we thereafter accept, will be negotiated and agreed upon by us and PWS on a case by case basis.

Bonus Payments.

We agreed to pay PWS a cash bonus of $50,000 for the Guaranteed Project and for each of the other Projects and Additional Projects accepted by us up to a maximum of three projects (including the Guaranteed Project). The cash bonus due and payable with respect to the Guaranteed Project was paid on October 15, 2013. At such time, if ever, that a combination of three Projects (including the Guaranteed Project) and Additional Projects have been accepted by us, the cash bonus, payable by us with respect to any Projects or Additional Projects thereafter accepted by us, will be negotiated and agreed upon by us and PWS on a case by case basis.

Stock Options.

We agreed to issue 250,000 stock options to PWS for the Guaranteed Project. Until such time, if ever, that a combination of three Projects (including the Guaranteed Project) and Additional Projects have been accepted, we will also issue 250,000 stock options to PWS for each of the Projects and Additional Projects accepted by us.

Net Income Payments.

We agreed to pay PWS ten percent of the “Net Income” achieved by us during the term of the JV Agreement from the Guaranteed Project and from each of the other Projects and Additional Projects accepted by us up to a maximum of three projects (including the Guaranteed Project). Such payments will be made quarterly as projects begin operation.

Termination.

The JV Agreement (and our obligation to make payments to PWS) terminates immediately on the earlier of (a) December 31, 2014, (b) upon PWS giving us sixty calendar days’ prior written notice of termination; (c) upon our giving PWS thirty calendar days prior written notice of termination, or (d) at any time, with no notice, upon which we terminate this Agreement for “Cause”. This Agreement may be renewed by us and PWS for periods subsequent to December 31, 2014 by mutual agreement on terms to be negotiated.

In the event the JV Agreement is terminated for Cause, we have no obligation to make payments to PWS, except as otherwise required by law, for periods after the JV Agreement is terminated on account of the termination of PWS for Cause, except for PWS’s then applicable fees earned and accrued through the date of such termination. Further, if the Agreement is terminated for Cause, all unvested stock options will be cancelled.

Other Provisions.

The JV Agreement also contains customary provisions respecting project confidentiality, non-solicitation and competition.

The foregoing description of the JV Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the JV Agreement, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.

Settlement Agreement and Mutual Release.

On October 10, 2013, we entered into a Settlement Agreement and Mutual Release (the “Settlement Agreement”) with Produced Water Solutions, Inc. (“PWS”) and Montrose Capital Limited (“Montrose”) related to the termination of a June 13, 2013 Term Sheet (the “Term Sheet”) among us, PWS and Montrose. The Term Sheet contemplated a $250,000 bridge financing for PWS involving the sale of $250,000 in principal amount of secured convertible promissory notes of PWS (the “PWS Notes”) and a subsequent reverse triangular merger (the “Merger”) among us, PWS and the shareholders of PWS in which PWS would become a wholly-owned subsidiary of ours. PWS is engaged in the business of providing economically and environmentally sound solutions for the treatment of recycling wastewater resulting principally from oil and gas exploration and production activities (the “Business”). On July 1, 2013 the $250,000 bridge financing was completed and the PWS Notes were issued. The Notes were subject to mandatory conversion at the effective time of the Merger into securities of ours. The parties to the Settlement Agreement subsequently determined not to proceed with the Merger, choosing instead to have us engage directly in the Business pursuant to a Joint Venture Agreement under which PWS would provide us with consulting services and Business projects. The October 10, 2013 Joint Venture Agreement discussed above was the result thereof.

As part of the Settlement Agreement, the parties agreed to terminate the Term Sheet, a related Mutual Confidentiality, Non-Disclosure and Non-Circumvention Agreement (the “NDA”) and all other agreements among the parties related to the Term Sheet and NDA. They also agreed that upon execution of the JV Agreement and in consideration of the Guaranteed Project, as such term is defined above under the heading “Joint Venture Agreement”, $100,000 in principal and all accrued interest due on the PWS Notes would be converted into one year 10% senior convertible notes of ours (the “FWSI Notes”). The Settlement Agreement further provided that upon our acceptance, if ever, of a second project pursuant to the JV Agreement, $75,000 in principal and all accrued interest due on the PWS Notes would be converted into FWSI Notes and that upon our acceptance, if ever, of a third project pursuant to the JV Agreement, the remaining $75,000 in principal and all accrued interest due on the PWS Notes would be converted into FWSI Notes. The holders of the PWS notes entered into a similar Settlement Agreement and Mutual Release with PWS in which, among other things, they agreed to the conversion of the PWS Notes into FWSI Notes on the terms stated above.

On October 15, 2013 we closed on the sale of $500,000 in principal amount of FWSI Notes and converted $100,000 in principal amount of PWS Notes, together with accrued interest due thereon, which was convertible as the result of the Guaranteed Project into additional FWSI Notes.

The foregoing description of the Settlement Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Settlement Agreement, which is filed as Exhibit 10.2 hereto and incorporated herein by reference.

Smith Employment Agreement.

On October 10, 2013, we entered into a three year Employment Services Agreement (the “Employment Agreement”) with Nadine C. Smith, pursuant to which she will serve as our President, Chief Executive Officer and Chairman. She will earn an initial base annual salary of $120,000 which will be increased to $180,000 at such time that we deploy equipment to field operations and to $240,000 at such time that our cash flow, in the reasonable judgment of our Board of Directors, can sustain the salary increase. She is entitled to receive annual bonuses in amounts up to 100% of her base annual salary based upon achievement of budget and operational milestones as approved by our Board of Directors. In connection with her appointment, Ms. Smith purchased 20,000,000 shares of our common stock at a price of $0.01 per share for an aggregate of $200,000. Ms. Smith is also entitled to receive stock options under our 2013 Equity Incentive Plan at such times and in such amounts as determined by our Board of Directors.

In the event of Ms. Smith’s Permanent Disability, as such term is defined in the Employment Agreement, or if Ms. Smith’s employment is terminated by us for a reason other than Cause, as such term is defined in the Employment Agreement, or by Ms. Smith for Good Reason, as such term is defined in the Employment Agreement, and subject to Ms. Smith's compliance with other terms of the Employment Agreement, then we will pay her a severance amount equal to her base annual salary. In the event of termination by us without Cause or by Ms. Smith for Good Reason, Ms. Smith will also be entitled to receive a pro rata portion of her annual bonus to the extent established milestones for the payment thereof are achieved.

In the event of Ms. Smith’s death or if Ms. Smith’s employment is terminated by us for Cause or if Ms. Smith voluntarily terminates the Employment Agreement, we will have no obligation to make payment to her under the Employment Agreement subsequent to such termination except for the payment of base annual salary accrued through the date of termination.

The Employment Agreement contains non-competition, non-solicitation and confidentiality covenants of Ms. Smith.

The foregoing description of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Employment Agreement, which is filed as Exhibit 10.3 hereto and incorporated herein by reference.

Tinter Consulting Agreement.

On October 15, 2013, we entered into a Consulting Agreement with Arnold Tinter (the “Consulting Agreement”) pursuant to which Mr. Tinter will serve as our Chief Financial Officer, Treasurer and Secretary on an independent contractor basis. Either party may terminate the Consulting Agreement upon 30 days advance notice. The Consulting Agreement has a term of 12 months which will be automatically renewed for an additional 12 month period unless terminated prior to the end of the initial term by either party. The services to be provided by Mr. Tinter include, but are not limited to, the following:

•	Oversight and maintenance of our financial books and records, including the general ledger;

•	Preparation of annual cash projections (with the support of management) for review by our Board of Directors;

•	Preparation of monthly internal financial statements for review and distribution to our management and Board of Directors;

•	Preparation of quarterly financial statements and supporting documentation for review by our auditor, together with coordination of the quarterly review of our financial statements by the auditor;

•	Preparation of annual financial statements and supporting documentation in connection with the annual audit, together with coordination of the annual audit with our auditors;

•	Assistance in review and preparation of forms 10-Q and 10-K, and any other required filings with the Securities and Exchange Commission;

•	Assistance in review and preparation of private placement or other financing documentation, as needed; and

•	Accounting software selection and integration, as needed, to provide management with internal operating and financial data on a timely basis.

In connection with the Consulting Agreement, we are paying Mr. Tinter at the annual rate of $60,000 payable in equal monthly installments. We also granted him 175,000 non-statutory stock options exercisable, upon vesting, at a price of $0.01 per share (see “Item 3.02 Unregistered Sales of Equity Securities”).

The Consulting Agreement contains non-compete and non-disclosure covenants of Mr. Tinter and a mutual indemnification provision. It also contains a separate Confidentiality Agreement which contains confidentiality covenants of Mr. Tinter.

The foregoing description of the Consulting Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Consulting Agreement, which is filed as Exhibit 10.4 hereto and incorporated herein by reference.

2013 Equity Incentive Plan.

On October 15, 2013, our Board of Directors approved the Frac Water Systems, Inc. 2013 Equity Incentive Plan (the “2013 Plan”). A total of 7,500,000 shares of our common stock are reserved for issuance in connection with awards granted under the 2013 Plan. A maximum of 2,500,000 shares may be granted during the first twelve months of the 2013 Plan. If an award granted under the 2013 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to us in connection with an award, the shares subject to such award and the surrendered shares will become available for further awards under the 2013 Plan. Shares issued under the 2013 Plan through the settlement, assumption or substitution of outstanding awards or obligations to grant future awards as a condition of acquiring another entity are not expected to reduce the maximum number of shares available under the 2013 Plan. In addition, the number of shares of common stock subject to the 2013 Plan and the number of shares and terms of any incentive award are subject to adjustment in the event of any stock dividend, spin-off, split-up, stock split, reverse stock split, recapitalization, reclassification, merger, consolidation, liquidation, business combination or exchange of shares or similar transaction.

The compensation committee of the Board, or the Board in the absence of such a committee, will administer the 2013 Plan and grants made thereunder. Subject to the terms of the 2013 Plan, the compensation committee has complete authority and discretion to determine the terms of awards under the 2013 Plan. Any officer or other employee of ours or our affiliates, or an individual that we or our affiliate has engaged to become an officer or employee, or a consultant or advisor who provides services to us or our affiliates, including a non-employee director of the Board, is eligible to receive awards under the 2013 Plan.

The 2013 Plan authorizes the grant to eligible recipients of nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, performance grants intended to comply with Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) and stock appreciation rights (“SARs”) as described below:

•

Options granted under the 2013 Plan entitle the grantee, upon exercise, to purchase a specified number of shares from us at a specified exercise price per share. The exercise price for shares of our common stock covered by an option cannot be less than the fair market value of our common stock on the date of grant unless agreed to otherwise at the time of the grant. Such awards may include vesting requirements.

•

Restricted stock awards and restricted stock units may be awarded on terms and conditions established by our compensation committee, which may include performance conditions for restricted stock awards and the lapse of restrictions on the achievement of one or more performance goals for restricted stock units.

•	The compensation committee may make performance grants, each of which will contain performance goals for the award, including the performance criteria, the target and maximum amounts payable, and other terms and conditions.

•	Stock awards are permissible. The compensation committee will establish the number of shares of common stock to be awarded and the terms applicable to each award, including performance restrictions.

•

SARs, entitle the participant to receive a distribution in an amount not to exceed the number of shares of common stock subject to the portion of the SAR exercised multiplied by the difference between the market price of a share of common stock on the date of exercise of the SAR and the market price of a share of common stock on the date of grant of the SAR.

The 2013 Plan has yet to receive stockholder approval. Any awards of incentive stock options prior to such stockholder approval shall be conditioned on such approval and if such approval is not obtained by October 15, 2014, which is 12 months after the date of Board approval, such options shall be treated as non-incentive options.

Our Board of Directors or if then in place, the compensation committee of our Board of Directors, may amend, suspend or terminate the 2013 Plan without stockholder approval or ratification at any time or from time to time. No change may be made by our Board of Directors that increases the total number of shares of our common stock reserved for issuance under the 2013 Plan or reduces the minimum exercise price for options or exchange of options for other incentive awards. Unless sooner terminated, the 2013 Plan terminates ten years after the date on which it was adopted.

The foregoing description of the 2013 Plan does not purport to be complete and is qualified in its entirety by reference to the complete text of the 2013, which is filed as Exhibit 10.6 hereto and incorporated herein by reference.

Share Cancellation Agreement .

On October 10, 2013, we entered into a Share Cancellation Agreement with each of Fadi Zeidan, our former President, Secretary and Treasurer, and a former Director of ours, and Ufuk Turk, a former Director of ours (each, a “Share Cancellation Agreement”), pursuant to which, in consideration for the agreement by our new management for us to retain the existing liabilities of the business, and in an effort to enhance our ability to proceed with the implementation of our new business plan, Mr. Zeidan and Mr. Turk delivered to us an aggregate of 200,000,000 shares of common stock of ours for cancellation. In addition, pursuant to the Share Cancelation Agreements, Mr. Zeidan and Mr. Turk released us from any claims they might have had against us.

The foregoing description of the Share Cancellation Agreements does not purport to be complete and is qualified in its entirety by reference to the complete text of the Share Cancellation Agreements, which are filed as Exhibits 10.7 and 10.8 hereto and incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation of an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Reference is made to the disclosure set forth under Item 1.01 above, which disclosure is incorporated herein by reference.

On October 15, 2013, we closed on the sale of an aggregate of $500,000 in principal amount of FWSI Notes to two investors. In addition, as of October 15, 2013, $100,000 in principal and all accrued interest due on the PWS Notes was converted into FWSI Notes. The FWSI Notes have a stated maturity date of October 15, 2014. The principal bears interest at a rate of 10% per annum, which is also payable on maturity. Upon the maturity of the FWSI Notes, by acceleration or otherwise, interest on unpaid amounts shall thereafter be payable at the default interest rate of 15% per annum, until the obligations are paid in full. We may from time-to-time prepay any amount due under the FWSI Notes, in whole or in part, without penalty. The principal amount of the FWSI Notes, and any accrued and unpaid interest thereon, may be converted into shares of our common stock at a conversion rate to be agreed upon by us and the holders of the FWSI Notes (the “Holders”). Upon the occurrence of an “Event of Default” under the terms of the FWSI Notes, the entire unpaid principal balance of the FWSI Notes, together with any accrued and unpaid interest thereon, shall become due and payable, without any action by the Holders. So long as the FWSI Notes are outstanding, we may not incur any indebedtness that ranks senior in priority to, or pari passu with, the obligations under the FWSI Notes, except indebtedness created as a result of a subsequent financing if the gross proceeds to us from such financing are equal to or greater than the aggregate principal amount of the FWSI Notes and the FWSI Notes are repaid in full upon the closing of such financing.The foregoing description of the terms of the FWSI Notes does not purport to be complete and is qualified in its entirety by reference to the complete text of the FWSI Notes, the form of which is filed as Exhibit 4.1 hereto and incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

Reference is made to the disclosure set forth under Item 1.01 above, which disclosure is incorporated herein by reference.

In connection with Nadine C. Smith’s October 10, 2013 engagement as our President, Chief Executive Officer and Chairman we issued and sold 20,000,000 shares of our common stock to Ms. Smith at a price of $0.01 per share for gross proceeds of $200,000.

In connection with the October 15, 2013 engagement of Stuart A. Sundlun as a Director, we issued and sold 500,000 shares of our common stock to Mr. Sundlun at a price of $0.01 per share for gross proceeds of $5,000.

In connection with the October 15, 2013 engagement of Charles Watson as a Director, we issued and sold 2,000,000 shares of our common stock to Mr. Watson at a price of $0.01 per share for gross proceeds of $20,000.

In connection with Arnold Tinter’s October 15, 2013 engagement as our Chief Financial Officer, Secretary and Treasurer we granted and issued 175,000 non-statutory stock options to Mr. Tinter under our 2013 Equity Incentive Plan. The options have a term of ten years and are exercisable, upon vesting, at an exercise price of $0.01 per share. They vest ratably in arrears over four quarterly periods with the initial vesting date being January 10, 2014 and the subsequent vesting dates being April 10, 2014, July 10, 2014 and October 10, 2014. In the event the engagement of Mr. Tinter is terminated by us or Mr. Tinter, any unvested options at the time of termination will be cancelled and any vested options at the time of termination will be cancelled 90 days after the date of termination.

All of the foregoing issuances of securities were made in reliance on Section 4(2) of the Securities Act of 1933, as amended.

Item 5.01 Changes in Control of Registrant.

Reference is made to the disclosure set forth under Item 1.01 above, which disclosure is incorporated herein by reference.

On October 10, 2013, we sold Nadine Smith, our President and Chief Executive Officer, and the Chairman of our Board of Directors, 20,000,000 shares of our common stock for an aggregate purchase price of $200,000. The purchase of these shares was made in conjunction with Ms. Smith’s appointment as an officer and director of ours. Ms. Smith has advised us that the source of funds for the purchase was her personal finances. The shares constitute “restricted securities” within the meaning of Rule 144 of the Securities Act of 1933, as amended, and may not be sold, pledged, or otherwise disposed of by the Ms. Smith without restriction under the Securities Act and applicable state securities laws.

In addition, as of October 10, 2013, Fadi Zeidan and Ufuk Turk delivered to us an aggregate of 200,000,000 shares of common stock of ours for cancellation. The cancellation of these shares was made in conjunction with Mr. Zeidan’s resignation as an officer and director of ours, and Ufuk Turk’s resignation as a director of ours.

As of the date of this report, we have 43,000,000 shares of common stock issued and outstanding. The 20,000,000 shares purchased by Ms. Smith represent approximately 46.8% of our common equity.

As a result of the transactions described above, there was a change of control of our company. We were a shell company immediately before the change of control, and remain a shell company following the change of control. The disclosure required by Item 5.01(a)(8) of Form 8-K was previously filed with the SEC in our Registration Statement on Form S-1, filed on December 21, 2008, as amended on January 26, 2009 and February 5, 2009, as supplemented and updated by: (a) our Annual Report on Form 10-K, filed on December 26, 2012; (b) our Quarterly Report on Form 10-Q filed on January 25, 2013; (c) our Quarterly Report on Form 10-Q filed on May 10, 2013; (d) our Quarterly Report on Form 10-Q filed on July 29, 2013; (e) our Current Report on Form 8-K filed September 5, 2013; (f) our Current Report on Form 8-K filed September 13, 2013; and (e) the information contained in this report.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On October 10, 2013, our Board of Directors increased the size of the Board from two to three members and appointed Nadine C. Smith to fill the vacancy created thereby and to serve in the capacity of Chairman.

On October 10, 2013, Fadi Zeidan resigned as our Chief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer and as a member of our Board of Directors. As a result of Mr. Zeiden’s resignation, he has relinquished his roles as our “Principal Executive Officer” and “Principal Financial Officer” for SEC reporting purposes.

On October 10, 2013, Ufuk Turk resigned as a member of our Board of Directors.

The resignations of Messrs. Zeidan and Turk were not the result of any disagreements with us on any matter relating to our operations, policies or practices.

Effective October 10, 2013, Ms. Smith was appointed as our Chief Executive Officer and President to fill the vacancies in those positions created by the resignation of Fadi Zeidan.

On October 15, 2013, Arnold Tinter was appointed as our Chief Financial Officer, Treasurer and Secretary through an October 15, 2013 Consulting Agreement between us and Mr. Tinter.

For SEC reporting purposes, Ms. Smith was designated as our “Principal Executive Officer” and Mr. Tinter was designated as our “Principal Financial Officer”.

On October 15, 2013 Charles Watson and Stuart A. Sundlun were appointed to our Board of Directors through Letter Agreements between us and Messrs. Watson and Sundlun, to fill the vacancies created by the Zeidan and Turk resignations.

There are no arrangements or understandings between any of our newly-appointed officers or directors and any other person pursuant to which they were appointed as officers or directors of ours. In addition, there are no family relationships between any of our newly-appointed officers or directors and any of our other officers or directors. Further, except as otherwise disclosed in this report, there are no transactions since the beginning of our last fiscal year, or any currently proposed transaction, in which we are a participant, the amount involved exceeds $120,000, and in which any of our newly-appointed officers or directors had, or will have, a direct or indirect material interest.

Set forth below is the business experience of our newly appointed officers and directors during the past 5 years or more:

Nadine C. Smith , 56, was appointed as our Chief Executive Officer, President and Chairman on October 10, 2013. Ms. Smith has been actively engaged in the energy sector for more than thirty years in a variety of executive, managerial and financial capacities. Most recently, she has served as director and the Chairman of the Board of Directors of La Cortez Energy, Inc., a publicly held company engaged in oil and gas exploration, since February 7, 2008 and as the President since July 31, 2012. Since October 2012 Ms. Smith has served as a director and Chairman of the Audit Committee of Aly Energy Services, Inc. From November 2008 to May 2011, Ms. Smith served as a director of WaferGen Bio-systems, Inc., a publicly held company engaged in the development, manufacture and sales of systems for gene expression, genotyping and stem cell research. Ms. Smith has previously served as a founding director of Gran Tierra Energy, Inc., an oil and gas exploration and production company operating in South America, Patterson-UTI Energy Inc., American Retirement Corporation and Loreto Resources Corporation, all public companies. Ms. Smith received a Bachelor of Arts degree in economics from Smith College and a Master of Business Administration degree from Yale University.

Arnold Tinter , 68, was appointed as our Chief Financial Officer, Secretary and Treasurer on October 15, 2013. Mr. Tinter founded Corporate Finance Group, Inc., a consulting firm located in Denver, Colorado, in 1992, and is its President. Corporate Finance Group, Inc. is involved in financial consulting in the areas of strategic planning, mergers and acquisitions and capital formation. He provides Chief Financial Officer (“CFO”) services to a number of public companies, including Frac Water Systems Inc., Barfresh Food Group Inc., (“Barfresh”) and LifeApps Digital Media Inc. (“LifeApps”). Mr. Tinter is also a Director of Barfresh and LifeApps. During the period from 2010 to 2012 Mr. Tinter provided CFO services to Agrisolar Solutions Inc., T.O Entertainment Inc., and Arvana Inc. From 2006 to 2010 he has provided CFO services to Spicy Pickle Franchising, Inc., a public company, where his responsibilities included oversight of all accounting functions, including SEC reporting, strategic planning and capital formation. Prior to 2006 Mr. Tinter served in various capacities in both private and public companies including Chief Executive and Chief Financial Officer positions. Mr. Tinter served in the United States Army as an infantry officer and is a Vietnam veteran. Mr. Tinter received a B.S. degree in Accounting in 1967 from C.W. Post College, Long Island University, and is licensed as a Certified Public Accountant in Colorado.

Charles Watson , 59, was appointed as a member of our board of directors on October 15, 2013. Mr. Watson has an extensive background in both operational management and major project delivery, having spent 29 years with Royal Dutch Shell PLC (“Shell”). At Shell he held a number of senior executive positions throughout the world, culminating in his appointment, in May 2009, as Executive Vice President covering Russia and the Caspian Region, including oversight of Shell’s activities in Kazakhstan, Chairman of Shell Russia and Chairman of the board of directors of Sakhalin Energy Investment Company, positions he held through mid-2011. Prior to this, beginning in 2007, he was Executive Vice President of Shell Energy Europe accountable for Shell's gas, power and renewables businesses in Europe. Since leaving Shell, Mr. Watson has primarily focused on serving on the boards of several companies. In August 2011, he was appointed a non-executive Director of Kazakhmys PLC, a UK FTSE listed mining company, where he is chair of the HSE Committee and member of the Audit and remuneration committees. In June 2012, Mr. Watson became a Non-Executive director of Taipan Resources Inc., an exploration company operating in Kenya, listed on the Canadian TSX market. In June 2012, he was appointed as a non-executive Director of Bashneft, a vertically integrated oil company operating principally in Russia, where he is a member of the Audit, HSE, and Strategy committees. After receiving a degree in Civil Engineering from London University in 1976, Mr. Watson spent 5 years in the construction divisions of Bechtel Corporation, serving in Algeria and Saudi Arabia. Following his time at Bechtel Corporation, he obtained an MBA from INSEAD in France in 1982.

Stuart A. Sundlun , 60, was appointed as a Director on October 15, 2013. Mr. Sundlun is Vice Chairman of the BMB Group Ltd, a firm focused on global private equity opportunities which he helped organize in 2006. Additionally, since 2012 he has served as Chairman of Adaptive Technology International LLC, a corporation which develops business opportunities worldwide for selective disruptive technologies in the clean energy sector.

Since 2006, Mr. Sundlun has served on the board of Aurado Energy LLC, a public company with oil and gas interests in Kazakhstan. Additionally, Mr. Sundlun was a founding member in 2012 of Broadway Resources LLC, a private company currently drilling for oil in the Permian Basin in Texas. He structured the investment in and served as a board member of South Oil Corporation, an oil exploration company focused in the Astrakhan region in Russia from 2005 until its sale in 2011.

Since 2000, he also has been a Senior Advisor to Triago SA, a Paris-based placement agent for private equity funds and secondary fund limited partnership interests. Since 2007, Mr. Sundlun has been a member of the Advisory Board of Charitybuzz.com, a leading provider of online auction services for not-for-profits and corporations seeking to expand their social responsibility activities and on the Board of Directors of Whitewall Inc., a leading magazine on contemporary art.

Mr. Sundlun was a co-founder and served on the Board and Investment Committee of the Dignity Fund L.P. which made loans to microfinance organizations worldwide from 2006-2011.

Previously he was a Managing Director of Global Emerging Markets from 1994 to 2006, a firm which invested in emerging public and private companies worldwide and an investment banker in corporate finance at Lehman Brothers. Mr. Sundlun began his finance career at Chase Manhattan Bank where he was the Mexican Liason Officer at Chase Manhattan Bank after completing the Credit Training Program.

Since 2011, Mr. Sundlun has been a member of the Executive Committee of The Common Good, a New York based not-for-profit organization which organizes discussions of leading political issues, both domestic and international with significant policy and opinion makers of all political persuasions. Additionally, in 2013 he joined the board and became treasurer of The Art Production Fund, a not-for-profit aimed at bringing the works of leading artists to the public.

Mr. Sundlun holds an MBA in finance from the Columbia University Graduate School of Business and a BA, cum laude, in international relations from Harvard University. After Harvard he was awarded a Rotary Club Fellowship and spent one year at La Pontiifca Catolica in Lima, Peru. During this period, he also served as a Special Assistant to the Secretary General of the Organization of American States at the Sixth and Seventh General Assemblies of the OAS.

Item 9.01 Financial Statements and Exhibits.

(a) Financial statements of business acquired.

Not applicable.

(b) Pro forma financial information.

Not applicable.

(d) Exhibits

Exhibit Number		Description

4.1		Form of Registrant’s 10% Senior Convertible Promissory Note
10.1		Joint Venture Agreement dated October 10, 2013 between Registrant and Produced Water Solutions, Inc.
10.2		Settlement Agreement and Mutual Release dated October 10, 2013 among Registrant, Produced Water Solutions, Inc. and Montrose Capital Ltd.
10.3		Employment Agreement dated October 10, 2013 between Registrant and Nadine C. Smith
10.4		Consulting Agreement dated as of October 15, 2013 between Registrant and Arnold Tinter
10.5		Form of Engagement Agreement between Registrant and proposed members of Registrant’s Board of Directors
10.6		Form of Registrant’s 2013 Equity Incentive Plan
10.7		Share Cancellation Agreement dated October 10, 2013 between Registrant and Ufuk Turk
10.8		Share Cancellation Agreement dated October 10, 2013 between Registrant and Fadi Zeidan

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FRAC WATER SYSTEMS, INC.

Dated: October 17, 2013	By:	/s/ Nadine C. Smith
	Name:	Nadine C. Smith
	Title:	President

EXHIBIT 4.1

For U.S. Investors:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C) IN COMPLIANCE WITH RULE 144 OR 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (E) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE U.S. SECURITIES ACT.

For Non-U.S. Investors:

THESE SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). ACCORDINGLY, NONE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT, AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT.

10% SENIOR CONVERTIBLE PROMISSORY NOTE

Frac Water Systems, Inc.

DUE __________ __, 201__

Original Issue Date: __________ __, 201__

US$[___________]

This Secured Convertible Promissory Note is one of a series of duly authorized and issued secured convertible promissory notes of Frac Water Systems, Inc. , a Nevada corporation (the “ Company ”), designated its 10% Senior Convertible Promissory Notes due __________ __, 201__ (the “ Note ”), issued to [______________________] (together with its permitted successors and assigns, the “ Holder ”) in accordance with exemptions from registration under the Securities Act of 1933, as amended (the “ Securities Act ”), pursuant to a Securities Purchase Agreement, dated __________ __, 201__ (the “ Purchase Agreement ”) between the Company and the Holder. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement.

Article I.

Section 1.01 Principal and Interest . (a) For value received, the Company hereby promises to pay to the order of the Holder, in lawful money of the United States of America and in immediately available funds the principal sum of ____________________ Dollars ($__________) on __________ __, 201__ (the “ Maturity Date ”)

(b) The Borrower further promises to pay interest on the unpaid principal amount of this Note at a rate per annum equal to ten percent (10%), commencing to accrue on the date hereof and payable on the Maturity Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months for the actual number of days elapsed.

(c) Except as otherwise set forth in this Note, the Company may prepay any portion of the principal amount of this Note at any time, and from time to time, without the prior written consent of the Holder.

Section 1.02 Conversion. (a) At the sole discretion of the Holder, the Holder may convert all or any portion of the outstanding principal amount of, and accrued but unpaid interest on, this Note into shares of the Company’s common stock, $0.0001 par value per share (the “Common Stock”), at a price equal to the Conversion Price (as defined below). No fractional shares of the Company’s common stock will be issued upon conversion, but the number of shares shall be rounded to the nearest whole number of shares.

(b) “ Conversion Price ” means a price to be agreed to by the Company and the Holder.

(c) Notwithstanding anything to the contrary contained in this Note, this Note shall not be convertible by the Holder hereof to the extent (but only to the extent) that such conversion would cause the Holder and its affiliates (if they are not, prior to such conversion, already beneficial owners of greater than 4.99% (the “ Maximum Percentage ”) of the Company’s outstanding Common Stock) to beneficially own in excess of the Maximum Percentage of the Company’s outstanding Common Stock; provided, however, that the Holder may waive the limitation imposed by this subsection, and/or increase the Maximum Percentage to some other amount, upon at least sixty-one (61) days prior written notice to the Company. For the purposes of this paragraph, beneficial ownership and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. The limitations contained in this paragraph shall apply to a successor Holder of this Note.

Section 1.03 Reservation of Common Stock . As set forth in the Purchase Agreement, the Company shall reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of conversion of this Note, that number of shares of Common Stock equal to the number of shares of Common Stock into which the Note is convertible based upon the then applicable Conversion Price.

Section 1.04 Absolute Obligation/Ranking . Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and liquidated damages (if any) on, this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company. This Note ranks pari passu with all other Notes now or hereinafter issued pursuant to the Purchase Agreement.

Section 1.05 Paying Agent and Registrar . Initially, the Company will act as paying agent and registrar. The Company may change any paying agent, registrar, or Company-registrar by giving the Holder not less than ten (10) business days’ written notice of its election to do so, specifying the name, address, telephone number and facsimile number of the paying agent or registrar. The Company may act in any such capacity.

Section 1.06 Different Denominations . This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for such registration of transfer or exchange.

Section 1.07 Investment Representations . This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.

Section 1.08 Reliance on Note Register . Prior to due presentment to the Company for transfer or conversion of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

Article II.

Section 2.01 Amendments and Waiver of Default . Except as otherwise provided herein, the Note may not be amended without the consent of the Holder.

Article III.

Section 3.01 Events of Default . Each of the following events shall constitute a default under this Note (each an “ Event of Default ”), except as related to:

(a) failure by the Company to pay principal amount due hereunder within five (5) days of the date such payment is due;

(b) failure by the Company for five (5) days after notice to it to comply with any of its other agreements in the Note;

(c) th e Company shall: (1) make a general assignment for the benefit of its creditors; (2) apply for or consent to the appointment of a receiver, trustee, assignee, custodian, sequestrator, liquidator or similar official for itself or any of its assets and properties; (3) commence a voluntary case for relief as a debtor under the United States Bankruptcy Code; (4) file with or otherwise submit to any governmental authority any petition, answer or other document seeking: (A) reorganization, (B) an arrangement with creditors or (C) to take advantage of any other present or future applicable law respecting bankruptcy, reorganization, insolvency, readjustment of debts, relief of debtors, dissolution or liquidation; (5) file or otherwise submit any answer or other document admitting or failing to contest the material allegations of a petition or other document filed or otherwise submitted against it in any proceeding under any such applicable law, or (6) be adjudicated a bankrupt or insolvent by a court of competent jurisdiction;

(d) any case, proceeding or other action shall be commenced against the Company for the purpose of effecting, or an order, judgment or decree shall be entered by any court of competent jurisdiction approving (in whole or in part) anything specified in Section 3.01(d) hereof, or any receiver, trustee, assignee, custodian, sequestrator, liquidator or other official shall be appointed with respect to the Company, or shall be appointed to take or shall otherwise acquire possession or control of all or a substantial part of the assets and properties of the Company, and any of the foregoing shall continue unstayed and in effect for any period of sixty (60) days;

(e) default shall occur with respect to any indebtedness for borrowed money of the Company or under any agreement under which such indebtedness may be issued by the Company and such default shall continue for more than the period of grace, if any, therein specified, if the aggregate amount of such indebtedness for which such default shall have occurred exceeds $25,000;

(f) d efault shall occur with respect to any contractual obligation of the Company under or pursuant to any contract, lease, or other agreement to which the Company is a party and such default shall continue for more than the period of grace, if any, therein specified, if the aggregate amount of the Company’s contractual liability arising out of such default exceeds or is reasonably estimated to exceed $25,000;

(g) final judgment for the payment of money in excess of $25,000 shall be rendered against the Company and the same shall remain undischarged for a period of twenty (20) days during which execution shall not be effectively stayed;

(h) any event of default of the Company under any agreement, note, mortgage, security agreement or other instrument evidencing or securing indebtedness that ranks senior in priority to, or pari passu with, the obligations under this Note and the Purchase Agreement;

(i) any material breach by the Company of any of its representations or warranties under the Purchase Agreement; or

(j) any material default, whether in whole or in part, shall occur in the due observance or performance of any obligations or other covenants, terms or provisions to be performed under this Note or the Purchase Agreement which is not cured by the Company within five (5) days after receipt of written notice thereof.

Section 3.02 If any Event of Default specified in clauses 3.01(c) or (d) occurs, then the full principal amount of this Note, together with any other amounts owing in respect thereof, to the date of the Event of Default, shall become immediately due and payable without any action on the part of the Holder, and if any other Event of Default occurs, the full principal amount of this Note, together with any other amounts owing in respect thereof, to the date of acceleration shall become, at the Holder’s election, immediately due and payable in cash. Commencing five (5) days after the occurrence of any Event of Default that results in the eventual acceleration of this Note, interest on this Note shall begin to accrue at the rate of interest specified in Section 1.01(b) PLUS five percent (5%) per annum , or such lower maximum amount of interest permitted to be charged under applicable law. All Notes for which the full amount hereunder shall have been paid in accordance herewith shall promptly be surrendered to or as directed by the Company. The Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by the Holder at any time prior to payment hereunder and the Holder shall have all rights as a Note holder until such time, if any, as the full payment under this Section shall have been received by it. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

Article IV.

Section 4.01 Negative Covenants . So long as this Note shall remain in effect and until any outstanding principal and interest and all fees and all other expenses or amounts payable under this Note and the Purchase Agreement have been paid in full, unless all Holders shall otherwise consent in writing, the Company shall not:

(a) Senior or Pari Passu Indebtedness . Incur, create, assume, guaranty or permit to exist any indebtedness that ranks senior in priority to, or pari passu with, the obligations under this Note and the Purchase Agreement, except for (i) indebtedness existing on the date hereof and set forth in Schedule A attached hereto and only to the extent that such indebtedness ranks senior in priority to or pari passu with the obligations under this Note and the Purchase Agreement on the Original Issue Date, and (ii) indebtedness created as a result of a subsequent financing if the gross proceeds to the Company of such financing are equal to or greater than the aggregate principal amount of the Notes and the Notes are repaid in full upon the closing of such financing.

(b) Liens . Create, incur, assume or permit to exist any lien on any property or assets (including stock or other securities of the Company) now owned or hereafter acquired by it or on any income or revenues or rights in respect of any thereof, except:

(i) liens on property or assets of the Company existing on the date hereof and set forth in Schedule B attached hereto, provided that such liens shall secure only those obligations which they secure on the date hereof;

(ii) any lien created under this Note or the Purchase Agreement;

(iii) any lien existing on any property or asset prior to the acquisition thereof by the Company, provided that

1) such lien is not created in contemplation of or in connection with such acquisition and

2) such lien does not apply to any other property or assets of the Company;

(iv) liens for taxes, assessments and governmental charges;

(v) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlord’s or other like liens arising in the ordinary course of business and securing obligations that are not due and payable;

(vi) pledges and deposits made in the ordinary course of business in compliance, with workmen’s compensation, unemployment insurance and other social security laws or regulations;

(vii) deposits to secure the performance of bids, trade contracts (other than for indebtedness), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

(viii) zoning restrictions, easements, licenses, covenants, conditions, rights-of-way, restrictions on use of real property and other similar encumbrances incurred in the ordinary course of business and minor irregularities of title that, in the aggregate, are not substantial in amount and do not materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of the Company;

(ix) purchase money security interests in real property, improvements thereto or equipment hereafter acquired (or, in the case of improvements, constructed) by the Company, provided that

1) such security interests secure indebtedness permitted by this Note,

2) such security interests are incurred, and the indebtedness secured thereby is created, within 90 days after such acquisition (or construction),

3) the indebtedness secured thereby does not exceed 85% of the lesser of the cost or the fair market value of such real property, improvements or equipment at the time of such acquisition (or construction) and

4) such security interests do not apply to any other property or assets of the Company;

(x) liens arising out of judgments or awards (other than any judgment that constitutes an Event of Default hereunder) in respect of which the Company shall in good faith be prosecuting an appeal or proceedings for review and in respect of which it shall have secured a subsisting stay of execution pending such appeal or proceedings for review, provided the Company shall have set aside on its books adequate reserves with respect to such judgment or award; and

(xi) deposits, liens or pledges to secure payments of workmen’s compensation and other payments, public liability, unemployment and other insurance, old-age pensions or other social security obligations, or the performance of bids, tenders, leases, contracts (other than contracts for the payment of money), public or statutory obligations, surety, stay or appeal bonds, or other similar obligations arising in the ordinary course of business.

(c) Dividends and Distributions . In the case of the Company, declare or pay, directly or indirectly, any dividend or make any other distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, with respect to any shares of its capital stock or directly or indirectly redeem, purchase, retire or otherwise acquire for value any shares of any class of its capital stock or set aside any amount for any such purpose.

(d) Limitation on Certain Payments and Prepayments .

(i) Pay in cash any amount in respect of any indebtedness or preferred stock that may at the obligor’s option be paid in kind or in other securities; or

(ii) Optionally prepay, repurchase or redeem or otherwise defease or segregate funds with respect to any indebtedness of the Company, other than for senior indebtedness existing on the date hereof and set forth in Schedule A attached hereto, indebtedness under this Note or the Purchase Agreement.

Article V.

Section 5.01 Adjustments . The Conversion Price and number and kind of shares or other securities to be issued upon conversion is subject to adjustment from time to time upon the occurrence of certain events, as follows:

(a) Reclassification, etc . If the Company at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes, the principal amount of this Note, and any accrued and unpaid interest thereon and fees incurred hereunder, shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change.

(b) Stock Splits, Combinations and Dividends . If the shares of Common Stock outstanding at any time after the date hereof are subdivided or combined into a greater or smaller number of shares of Common Stock, or if a dividend is paid on the Common Stock in shares of Common Stock, the Conversion Price or the Conversion Shares to be issued, as the case may be, shall be proportionately reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of shares of Common Stock outstanding immediately after such event bears to the total number of shares of Common Stock outstanding immediately prior to such event.

Article VI

Section 6.01 Notice . Notices regarding this Note shall be sent to the parties at the following addresses, unless a party notifies the other parties, in writing, of a change of address:

If to the Company, to:	Frac Water Systems, Inc.
	1266 1st Street, Suite #4 Sarasota, FL 34236 Attention: Nadine Smith, Chief Executive Officer Facsimile: (___) __________

With a copy to:	Gottbetter & Partners, LLP
	488 Madison Avenue, 12th Floor
	New York, NY 10022
	Attention: Adam S. Gottbetter, Esq.
	Facsimile: (212) 400-6901

If to the Holder:	At the address set forth in the Purchase Agreement

Section 6.02 Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

Section 6.03 Severability . The invalidity of any of the provisions of this Note shall not invalidate or otherwise affect any of the other provisions of this Note, which shall remain in full force and effect.

Section 6.04 Entire Agreement and Amendments . This Note, together with the Purchase Agreement, represents the entire agreement between the parties hereto with respect to the subject matter hereof and there are no representations, warranties or commitments, except as set forth herein. This Note may be amended only by an instrument in writing executed by the parties hereto.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF , with the intent to be legally bound hereby, the Company as executed this 10% Senior Convertible Promissory Note as of the date first written above.

	Frac Water Systems, Inc.

	By:
	Name:	Nadine Smith
	Title:	Chief Executive Officer

SCHEDULE A

SENIOR AND PARI PASSU INDEBTEDNESS

The Company owes $34,510 to its former President. The loan bears no interest, is unsecured, is convertible, and is due on demand.

SCHEDULE B

LIENS

None

EXHIBIT 10.1

JOINT VENTURE AGREEMENT

THIS JOINT VENTURE AGREEMENT (the “ Agreement ”) is made as of the 10 th day of October, 2013, by and between FRAC WATER SYSTEMS, INC., a company organized under the laws of the State of Nevada (“ FWSI ”), and PRODUCED WATER SOLUTIONS, INC., a company organized under the laws of the State of Colorado (“ PWS ”) (FWSI and PWS may hereinafter sometimes be referred to singularly as a “ Party ” or collectively as the “ Parties ”).

INTRODUCTION

WHEREAS, FWSI intends to engage in the business of providing economically and environmentally sound solutions for the treatment and recycling of wastewater resulting principally from oil and gas exploration and production activities (the “ Business ”); and

WHEREAS, PWS is presently engaged in the Business and has expertise in the Business; and

WHEREAS, FWSI and PWS desire to create a strategic relationship with each other and for that purpose PWS has presented FWSI with three (3) prospective “shovel ready” Business projects which are listed in Schedule A attached hereto (each, a “ PWS Project ”) and FWSI may independently locate “shovel ready” Business projects (each, a “ FWSI Project ”); and

WHEREAS, FWSI desires to have PWS perform consulting services as specified herein with respect to the PWS Projects, and PWS is willing to perform such consulting services for FWSI under the terms of this agreement; and

WHEREAS, FWSI is under no obligation to accept more than one (1) of the PWS Projects, or to engage PWS to provide consulting services on FWSI Projects; and

NOW, THEREFORE , in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, FWSI and PWS hereby agree as follows:

ARTICLE I

PRESENTATION AND ACCEPTANCE OF PROJECTS

Section 1.1 PWS Projects . During the term of this Agreement, PWS shall present FWSI with PWS Projects for FWSI’s consideration, as follows:

(a) PWS Projects . The three (3) initial PWS Projects are set forth on Schedule A annexed hereto (each, a “ PWS Project ”). Each of the PWS Projects is a Frac Water Depot (FWD project) and each is further described on the FWD project descriptions set forth on Schedule B annexed hereto. PWS hereby grants to FWSI a right of first refusal to the PWS Projects, subject to the terms and conditions hereof. Upon execution of this Agreement, FWSI shall be deemed to have exercised its right of first refusal as to one (1) of the PWS Projects (the “ Guaranteed Project ”). FWSI has no obligation to accept more than one (1) of the PWS Projects, and shall have up to sixty (60) days following the date hereof to determine which of the PWS Projects to accept as the Guaranteed Project under this Agreement. During such sixty (60)) day period, FWSI shall perform, with the assistance of PWS, legal, technical and financial due diligence with respect to the PWS Projects. On or before the sixtieth (60 th ) day after the date hereof, FWSI shall deliver to PWS written notice of which PWS Project it has designated as the Guaranteed Project. In the event it fails to do so, the Evans, Weld County, CO project listed on Schedule A shall be deemed to be the Guaranteed Project. As part of the diligence process respecting each PWS Project, PWS shall provide FWSI with a description of customer commitments required to meet financial pro-formas.

At any time prior to December 31, 2013, FWSI may accept either, or both, of the other PWS Projects. If FWSI desires to accept either, or both, of the other PWS Projects, FWSI shall deliver to PWS written notice thereof. If PWS does not receive a written notice on or prior to December 31, 2013, or receives written notice with respect to one, but not both of the other PWS Projects on or prior to December 31, 2013, PWS shall be free to offer the unaccepted PWS Project(s) to third parties or to pursue such PWS Project(s) itself.

(b) Additional PWS Projects . During the term of this Agreement, PWS may in its sole discretion present FWSI with additional projects (each, an “ Additional PWS Project ”) for FWSI’s consideration by delivering to FWSI, in each case, a project description including a 24 month budget, projected project economics, a list of required equipment and the estimated cost thereof, a description of customer commitments required to meet financial pro-formas, and an operating plan. Until the earlier of December 31, 2013, or the acceptance by FWSI of three (3) projects presented by PWS (including either PWS Projects or Additional PWS Projects), FSWI may acquire an interest in any Additional PWS Project presented by PWS under the same terms and conditions as specified herein for acquisition of PWS Projects other than the Guaranteed Project. After the earlier of December 31, 2013 or the acceptance by FWSI of three (3) projects presented by PWS, whether they be PWS Projects or a combination of PWS Projects and Additional PWS Projects, the terms and conditions under which FWSI may engage PWS to provide consultation and assistance on Additional PWS Projects shall be negotiated by the Parties on a case by case basis.

(c) Accepted PWS Projects . For the avoidance of doubt, FWSI may accept or reject any PWS Project or Additional PWS Project presented by PWS for any reason, or no reason, in its sole discretion; provided, however, that FWSI has agreed to accept and undertake at least one (1) of the PWS Projects. Likewise, PWS shall have the right, in its sole discretion, for any reason or no reason, to determine which, if any, additional projects to present to FWSI as Additional PWS Projects under the terms of the Agreement, and, after an aggregate of three (3) projects presented by PWS have been accepted by FWSI, to determine, in its sole discretion, the terms and conditions under which it will present any additional projects to FWSI as an Additional PWS Project. Any PWS Project or Additional PWS Project accepted by FWSI pursuant to the terms hereof shall be referred to as an “ Accepted PWS Project ”. With respect to Accepted PWS Projects:

(i) Promptly after delivery of written notice of acceptance of and Accepted PWS Projects to PWS by FWSI, the Parties shall execute any other documents, or take any other reasonable actions necessary to effectuate the transfer and commencement of such Accepted PWS Project.

(ii) All Accepted PWS Projects, at the point of written acceptance by FWSI, shall have all required contracts, leases, permits, licenses, waivers, authorizations, consents, assignments and approvals necessary for the commencement of the project shall have been obtained.

(iii) PWS shall assist FWSI in the creation of a project plan for each Accepted PWS Project, which shall include projections and a proposed budget. The project plan approved by FWSI’s board of directors for any Accepted PWS Project shall be an “ Approved Project Plan .” There shall be no material modifications to or deviations from the Approved Project Plan without approval of FWSI’s board of directors; any such approved modifications or deviations shall thereafter be part of the Accepted PWS Project’s Approved Project Plan.

(iv) FWSI shall engage PWS as a consultant to provide Services (as defined below) for Accepted PWS Projects in accordance with Article II below.

(d) FWSI Projects . FWSI may independently locate Projects and may, but has no obligation to, engage PWS to provide consulting services for FWSI Projects in FWSI’s sole discretion. The terms of any such engagement shall be negotiated by the Parties on a case by case basis.

ARTICLE II

CONSULTING SERVICES

Section 2.1 Services . PWS hereby agrees to provide consulting services to FWSI in connection with all aspects of the Accepted PWS Projects, which consulting services shall include designation of a PWS project manager (the “ Project Manager ”) for each Accepted PWS Project. The Project Manager designated by PWS for each Accepted PWS Project shall, in the reasonable determination of PWS, be qualified and have the expertise required to fulfill the obligations of PWS under the terms of this Agreement. The services to be performed by PWS for each Accepted PWS Project, including, but not limited to, services performed by the designated Project Manager, shall include direct oversight needed to undertake and complete the Accepted PWS Projects on terms reasonably consistent with projected budgetary, equipment and other guidelines set forth on Schedule B . The services include the following:

(a) Project budget preparation and management;

(b) Equipment pricing, specification and sourcing;

(d) Preparation of an operating plan;

(e) System implementation and functional testing; and

(f) Operational oversight

For purposes of this Agreement, “ Services ” shall include all services provided by PWS under the terms of this Agreement, including, but not limited to, designation by PWS of a Project Manager for each Accepted PWS Project. PWS shall be responsible for the payment of all compensation payable to the Project Manager in connection with the Services.

PWS agrees to:

(a) accept assignments regarding the Services only from the Chairman or CEO of FWSI or from individuals designated by the Chairman or CEO of FWSI;

(b) report only to the Chairman or CEO of FWSI or his or her designees; and

PWS agrees to perform the Services with the standard of care, skill and diligence of an experienced consultant with experience in performing the Services.

Section 2.2 Independent Contractor . FWSI and PWS expressly acknowledge and agree that PWS is an independent contractor to FWSI, and this Agreement does not create, and will not be deemed to create, a partnership, agency, employer-employee or master-servant relationship between the Parties. PWS acknowledges that PWS is not entitled to workers compensation or any other benefit or insurance protection provided by FWSI or its affiliates to their employees. PWS will make all filings with local, state and federal taxing authorities required of it and make all payments required by such taxing authorities, including income tax and social security tax payments, required on the payments made to PWS by FWSI hereunder. If FWSI determines that taxes should be withheld, FWSI reserves the right to withhold, as appropriate, and will give prior written notification of such decision to PWS.

ARTICLE III

PAYMENTS TO PWS

Section 3.1 Monthly Project Cash Fees . FWSI shall pay PWS for Services performed pursuant to Section 2.1 above, which shall include the Services of the Project Manager, at a rate of $10,000 per month for the Guaranteed Project. The initial monthly project cash fee payment for the Guaranteed Project shall be due and payable on or before October 14, 2013, and subsequent monthly payments shall be due and payable on or before the 15 th of each month thereafter through the term of this Agreement. In the event FWSI elects to accept two additional projects, FWSI shall pay PWS for Services performed pursuant to Section 2.1 above, which shall include the Services of the Project Manager, at a rate of $5,000 per month for each of such Accepted Projects. At such time, if ever, that a combination of three (3) PWS Projects (including the Guaranteed Project) and Additional PWS Projects have been accepted, the monthly cash fees due and payable by FWSI for any PWS Project or Additional PWS Project it thereafter accepts, shall be negotiated and agreed upon by the parties on a case by case basis.

Section 3.2 Bonus Payments . FWSI shall pay PWS a cash bonus of $50,000 for the Guaranteed Project and for each of the other PWS Projects and Additional PWS Projects accepted by FWSI up to a maximum of three (3) projects (including the Guaranteed Project). The cash bonus due and payable with respect to the Guaranteed Project shall be due and payable in full on or before October 15, 2013. At such time, if ever, that a combination of three (3) PWS Projects (including the Guaranteed Project) and Additional PWS Projects have been accepted, the cash bonus, payable by FWSI with respect to any PWS Projects or Additional PWS Projects thereafter accepted by FWSI, shall be negotiated and agreed upon by the parties on a case by case basis.

Section 3.3 Stock Options . FWSI shall issue 250,000 stock options to PWS for the Guaranteed Project and for each of the other PWS Projects accepted by FWSI. Until such time, if ever, that a combination of three (3) PWS Projects (including the Guaranteed Project) and Additional PWS Projects have been accepted, FWSI shall also issue 250,000 stock options to PWS for each of the PWS Projects and Additional PWS Projects accepted by FWSI. Each option shall have a term of ten (10) years, will vest twelve (12) months after the date of issuance, subject to Section 4.1 hereof, and will be exercisable at the fair market value for FWSI’s common stock on the date the options are granted, which shall be the date a PWS Project or Additional PWS Project, as the case may be, is accepted in writing by FWSI. As set forth in Section 4.1 hereof, upon a termination of this Agreement for Cause, all unvested stock options shall be cancelled. At such time, if ever, that a combination of three (3) PWS Projects (including the Guaranteed Project) and Additional PWS Projects have been accepted, the stock options, if any, to be granted to PWS for any PWS Project or Additional PWS Project thereafter accepted by FWSI shall be negotiated and agreed upon by the parties on a case by case basis.

Section 3.4 Net Income Payments . FWSI shall pay PWS ten percent (10%) of the “Net Income” (as defined below) achieved by FWSI during the term of this Agreement from the Guaranteed Project and from each of the other PWS Projects and Additional PWS Projects accepted by FWSI up to a maximum of three (3) projects (including the Guaranteed Project). Such payments will be made quarterly as projects begin operation. As used herein, “ Net Income ” shall mean gross PWS Project or Additional PWS Project, as applicable, operating income less PWS Project or Additional PWS Project, as applicable, direct operating expenses on PWS Projects or Additional PWS Projects, as applicable, as set forth on FWSI’s financial statements included with FWSI’s periodic reports filed with the Securities and Exchange Commission. PWS shall have the right to review and comment on the calculation of “Net Income” for the PWS Project(s) and Additional PWS Project(s), as applicable, with respect to reasonableness and completeness. PWS Project and Additional PWS Project operating expenses shall not include general FWSI overhead. After an aggregate of three (3) projects have been accepted by FWSI (including the Guaranteed Project), the amount of Net Income payments, if any, to be paid to PWS with respect to any PWS Project or Additional PWS Project thereafter accepted by FWSI shall be negotiated and agreed upon by the parties on a case by case basis.

Section 3.5 Expenses . FWSI shall be solely responsible for payment of ordinary and necessary expenses incurred, or to be incurred, by PWS in conjunction with performance of Services by PWS under the terms of this Agreement; provided, however, that PWS shall obtain prior written approval from the Chairman or CEO of FWSI for any and all expense items which are in excess of $100. To the extent PWS directly incurs ordinary and necessary expense items which are less than $100 in amount, or as to which, solely with regard to expense items of $300 or less in amount, it is unable to reasonably request prior written approval from FWSI, FWSI shall reimburse PWS for the actual cost of such items.

Reimbursement of expenses shall be made ten (10) days following submission by PWS of an appropriate invoice for such expenses to FWSI. Invoices will be submitted on a monthly basis on the last day of each month. Invoices shall include a summary of the tasks to which PWS has devoted time and the number of hours spent and amount of expenses incurred on each task. Invoices shall itemize expenses. Such expenses shall be substantiated by receipts for expenses amounting to more than $10. Expenses shall be paid only in accordance with FWSI’s then effective policy (if any) covering the reimbursement of expenses of employees.

ARTICLE IV

TERM AND TERMINATION

Section 4.1 Term and Termination . This Agreement (and FWSI’s obligation to make payments to PWS) shall be effective on the date first above written and terminate immediately on the earlier of (a) December 31, 2014, (b) upon PWS giving FWSI sixty (60) calendar days’ prior written notice of termination; (c) upon FWSI giving PWS thirty (30) calendar days prior written notice of termination, or (d) at any time, with no notice, upon which FWSI terminates this Agreement for “Cause”. This Agreement may be renewed by the parties for periods subsequent to December 31, 2014 by mutual agreement of the parties on terms to be negotiated.

As used herein, “ Cause ” shall be deemed to occur if any of the following events take place: (a) if, in its sole discretion, FWSI determines that PWS has not complied with the terms and conditions of this Agreement; (b) any act or omission that constitutes in FWSI’s sole discretion a material breach by PWS of any of his obligations under this Agreement; (c) the willful and continued failure or refusal of PWS to satisfactorily perform the duties reasonably required of it under this Agreement; (d) PWS’s conviction of, or plea of nolo contendere to, (i) any felony or (ii) a crime involving dishonesty or moral turpitude or which could reflect negatively upon FWSI’s or otherwise impair or impede its operations; (e) PWS’s engaging in any misconduct, negligence, act of dishonesty (including, without limitation, theft or embezzlement), violence, threat of violence or any activity that could result in any violation of United States federal securities laws, in each case, that is injurious to FWSI or any of its subsidiaries or affiliates; (f) PWS’s material breach of a written policy of FWSI or the rules of any governmental or regulatory body applicable to FWSI; (g) PWS’s refusal to follow the directions of the Chairman or CEO of FWSI or from individuals designated by the Chairman or CEO of FWSI, unless such directions are, in the written opinion of legal counsel, illegal or in violation of applicable regulations; (h) any other willful misconduct by PWS which is materially injurious to the financial condition or business reputation of FWSI or any of its subsidiaries or affiliates, or (i) PWS’s breach of its obligations under Sections 5.1, 5.3 or 5.4 hereof. As used herein, reference to PWS includes reference to all PWS employees, consultants, agents, advisors, and officers and directors performing services with respect to PWS Projects and Additional PWS Projects as well as the Project Manager.

In the event this Agreement is terminated for Cause, FWSI shall have no obligation to make payments to PWS in accordance with the provisions of Article III hereof, except as otherwise required by law, for periods after this Agreement is terminated on account of the termination of PWS for Cause, except for PWS’s then applicable fees earned and accrued through the date of such termination. Further, if the Agreement is terminated for Cause, all unvested stock options shall be cancelled.

Notwithstanding any termination of this Agreement, the provisions of Sections 5.1 and 5.4 shall survive and continue.

ARTICLE V

WARANTIES, REPRESENTATION AND COVENANTS OF THE PARTIES

Section 5.1 Ownership and Confidentiality of Data and Work Product . FWSI, its employees, officers, affiliates, agents and counsel, and third parties shall make information, data and documents available to PWS during the course of PWS providing the Services to FWSI (collectively, “ Data ”). PWS agrees to treat all Data as proprietary to FWSI. PWS agrees that FWSI shall have sole ownership and title to the Data, and to all, files, reports, price lists, customer lists, drawings, plans, sketches, keys, codes, software, photographs, recordings, documents, memoranda and other work products prepared, procured, produced, or worked on by PWS in the course of providing Services to FWSI with respect to the PWS Projects and any and all other projects (including but not limited to Additional PWS Projects),as to which PWS provides services to FWSI under the terms hereof (collectively, “ Work Product ”). All Data and Work Product shall be accorded treatment by PWS as confidential and proprietary. PWS agrees that (i) at any time, at FWSI’s request, and in any event on the date of termination of this Agreement by FWSI as provided herein, in sole consideration of the payments to be made pursuant to Article III above, PWS will assign and transfer, in a form acceptable to FWSI, all of its right, title and interest in and to any and all Work Product to FWSI or other entity selected by FWSI, and (ii) it will not assign or otherwise transfer any of its right, title or interest in and to the Work Product to any third party. PWS represents and warrants that it has the capacity, power and authority to enter into this Agreement. This Section 5.1 shall be effective for a period of one (1) year after the termination of this Agreement

Section 5.2 Acknowledgements . PWS acknowledges and agrees that (a) FWSI, and any other entity designated by FWSI shall have the sole, exclusive right to use the Work Product for any purpose that, in its sole discretion, it elects, (b) FWSI shall at all times have the right, in its sole discretion and without consultation with PWS, to abandon any of the Accepted PWS Projects without further obligation or liability to PWS (except for payment of fees earned and reimbursement of reimbursable expenses incurred hereunder), (c) PWS hereby waives any and all rights it may have to make a claim against FWSI or any other joint development partner of FWSI, or any of their affiliates, directors, officers, employees, attorneys and agents for any special, indirect, consequential or punitive damages in connection with, arising out of, or in any way related to this Agreement, any of the Services or any act or omission or event occurring in connection therewith, (d) PWS hereby waives, releases and agrees not to sue upon any such claim for any such special, indirect, consequential or punitive damages, whether or not accrued and whether or not known or suspected to exist in its favor, (e) PWS agrees that during the term of this Agreement it shall not hold itself out as an employee of FWSI, and (f) PWS acknowledges and agrees that it is not authorized to, shall not, and shall not represent or imply that it has authority to, bind or obligate FWSI in any way nor, without express prior written authorization of the Chairman or CEO of FWSI or their designee, negotiate the terms or conditions of any agreement on behalf of FWSI, whether relating to the Services or otherwise.

Section 5.3 Conflicts .

PWS hereby covenants that it shall not enter into any contract which would be violated by the performance of the Services to be provided hereunder.

Section 5.4 Non-Solicitation . During the term of, and for a period of one (1) year after the termination of, this Agreement, the Parties shall not:

(a) In connection with or in relation to the PWS Projects, interfere with any relationship, contractual or otherwise, between the other Party or any of its affiliates and any other party, including, without limitation, any supplier, distributor, co-venturer or joint venturer of the other Party or any of its affiliates or seek to have such person discontinue or reduce its business with the other Party or any of its affiliates or otherwise interfere in any way with the business of the other Party or any of its affiliates; or

(b) Take any action, including without limitation, the making of disparaging statements concerning the other Party or its officers, directors, shareholders, employees, agents, advisors and other representatives, that is reasonably likely to cause injury to the relationships between the other Party or any of its employees, customers, or clients.

Section 5.5 Right To Compete . FWSI and PWS acknowledge and agree that they will be engaged in the same Business and outside of the Accepted PWS Projects may be in direct competition with each other. FWSI and PWS further acknowledge and agree that this Agreement does not preclude them from competing with each other on any basis except with respect to the Accepted PWS Projects and as otherwise provided herein. The Parties agree that they will not, during the term of this Agreement, take any action intended to direct the benefits of any such Accepted PWS Project, exclusive of those provided to the Parties hereunder, to themselves to the detriment of the other party.

ARTICLE VI

MISCELLANEOUS

Section 6.1 Severability . If any of the provisions of this Agreement is held invalid or unenforceable, such invalidity or unenforceability shall not affect the other provisions hereof which can be given effect without the invalid provision, and to this end the provisions of this Agreement are intended to be and shall be deemed severable.

Section 6.2 Notices . Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; or (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to FWSI:	c/o Gottbetter & Partners, LLP
	488 Madison Avenue
	New York, NY 10016
	Attention: Adam S. Gottbetter, Esq.
	Telephone: 212.400.6900
	Facsimile: 212.400.6901

If to PWS:	Produced Water Solutions, Inc.
	2425 W. I-25 Frontage Road
	Erie, CO 80516
	Attention: George A. Kast, CEO
	Telephone: 303.215.9595
	Facsimile: 303.215.0595

Section 6.3 Applicable Law; Jurisdiction . THIS AGREEMENT IS MADE UNDER, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF COLORADOAPPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED SOLELY THEREIN, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. In any action between or among any of the parties arising out of this Agreement, (i) each of the parties irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of the state and federal courts having jurisdiction over Clark County, Nevada; (ii) if any such action is commenced in a state court, then, subject to applicable law, no party shall object to the removal of such action to any federal court having jurisdiction over Clark County, Nevada; (iii) each of the parties irrevocably waives the right to trial by jury; and (iv) each of the parties irrevocably consents to service of process by first class certified mail, return receipt requested, postage prepared, to the address at which such party is to receive notice in accordance with this Agreement.

Section 6.4 Counterparts . This Agreement and any amendment hereto maybe executed in any number of counterparts any one of which, or a copy of any one of which, shall be admissible into evidence, and all of which shall constitute one and the same agreement. Facsimile signatures shall be acceptable and shall have the same effect as original signature.

Section 6.5 Further Assurances . The parties agree to execute and deliver or cause to be executed and delivered such additional instruments, certificates or documents and take such actions as either party may reasonably request for the purpose of more fully giving effect to the terms hereof.

Section 6.6 No Strict Construction . The Parties hereto 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 hereto, 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.

Section 6.7 Amendment . This Agreement can be amended only by a written instrument signed by both parties.

Section 6.8 Entire Agreement . This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior agreements, whether oral or written between the parties hereto regarding the subject matter hereof.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF , the undersigned have duly executed this Agreement the day and year first above written.

	FRAC WATER SYSTEMS, INC.

	By:	/s/ Nadine Smith
	Name:	Nadine Smith
	Title:	Chief Executive Officer

	PRODUCED WATER SOLUTIONS, INC.

	By:	/s/ George Kast
	Name:	George Kast
	Title:	Chief Executive Officer

EXHIBIT 10.2

SETTLEMENT AGREEMENT AND MUTUAL RELEASE

This Settlement Agreement and Mutual Release Agreement (“Agreement”) made as of October 10, 2013 is by and among Produced Water Solutions, Inc., a Colorado corporation (“PWS”), Frac Water Systems, Inc., a Nevada corporation (“FWSI”), and Montrose Capital Limited (“Montrose”).

R E C I T A L S

WHEREAS, PWS and Montrose are parties to a June 13, 2013 Term Sheet (the “Term Sheet”); and

WHEREAS , the Term Sheet contemplated a series of transactions whereby, among other things, Montrose would arrange $250,000 in bridge financing for PWS; and

WHEREAS, on July 1, 2013 the $250,000 bridge financing was completed and PWS issued $250,000 of 10% Secured Convertible Promissory Notes of PWS dated July 1, 2013 (the “Notes”); and

WHEREAS, the Term Sheet further contemplated a reverse triangular merger (the “Merger”) among PWS, the shareholders of PWS and a publicly traded US corporation which was subsequently determined to be FWSI, under which Merger PWS would become a wholly owned operating subsidiary of FWSI; and

WHEREAS, the Notes were subject to mandatory conversion at the effective time of the Merger into units of FWSI; and

WHEREAS, PWS is engaged in the business of providing economically and environmentally sound solutions for the treatment and recycling of wastewater resulting principally from oil and gas exploration and production activities (the “Business”); and

WHEREAS, PWS, FWSI, and Montrose have determined not to proceed with the Merger contemplated by the Term Sheet, choosing instead to have FWSI engage directly in the Business and for PWS, pursuant to a Joint Venture Agreement (the “JV Agreement”) between PWS and FWSI, to provide consulting services to FWSI related to the Business and to also provide FWSI with three (3) “shovel ready” Projects (as defined in Section 2 hereof) which Projects are identified on Schedule A hereto and are related to the Business (hereinafter referred to as the “Projects”); and

WHEREAS, pursuant to the JV Agreement , FWSI shall have a right of first refusal with respect to the three (3) Projects at least one (1) of which shall be accepted by FWSI (the “Guaranteed Project”); and

WHEREAS, as partial consideration for the acquisition of the Guaranteed Project, upon execution of the JV Agreement, FWSI shall cause to be issued to the holders of the Notes, and shall cause the holders of the Notes to accept as partial payment thereof, senior convertible notes of FWSI, which shall constitute part of the senior convertible notes to be offered by FWSI to prospective subscribers in a $2,000,000 offering, in an aggregate principal amount equal to $100,000 plus accrued interest thereon, and PWS shall be relieved from liability on the Notes to the extent of the payment made by FWSI through issuance of its senior convertible notes; and

WHEREAS, following the acquisition of the Guaranteed Project, each time FWSI accepts, an additional Project pursuant to and in accordance with the terms of the JV Agreement, FWSI shall cause to be issued to the holders of the Notes and shall cause the holders of the Notes to accept as partial payment thereof, senior convertible notes of FWSI, identical in all material respects to the senior convertible notes to be offered by FWSI to prospective subscribers in a $2,000,000 offering, in an aggregate principal amount equal to $75,000 plus accrued interest thereon, and PWS shall be relieved from liability on the Notes to the extent of the payment made by FWSI through issuance of its senior convertible notes; and

WHEREAS, at such time, if ever, that FWSI has accepted all of the Projects pursuant to and in accordance with the terms of the JV Agreement, the Notes shall be cancelled in full and the UCC financing statement (the “UCC Financing Statement”) filed by PWS and its wholly owned subsidiary, PWS Well Services, LLC in favor of Gottbetter & Partners, LLP, as the Collateral Agent on behalf of the holders of the Notes, in connection with the Notes, shall be terminated; and

WHEREAS, PWS, FWSI and Montrose wish to terminate the Term Sheet, the Mutual Confidentiality, Non-Disclosure and Non-Circumvention Agreement dated June 12, 2013 between Montrose and PWS (the “NDA”), and all other Agreements among the parties related to, or arising from, or in contemplation of, the Term Sheet or the NDA.

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

1. Execution of Agreement and Settlement . This Agreement and the JV Agreement shall be executed simultaneously and shall be effective as of October 9, 2013. All persons executing this Agreement in representative capacities represent and warrant that they have full power and authority to bind their respective corporations.

2. Projects . For purposes of this Agreement, “Projects” shall mean the Projects identified in Schedule A attached hereto. Projects accepted in writing by FWSI shall be referred to as “Accepted Projects”. Shovel ready shall mean that such Projects have in place all required, permits, licenses, waivers, authorizations, consents, assignments and approvals necessary for the commencement and operation of the Project have been obtained.

3. Release by PWS . PWS hereby releases Montrose, FWSI, and their officers, directors, partners, employees, legal counsel, advisors and shareholders from any and all claims, demands, causes of action, contract obligations, damages, attorneys' fees or costs whatsoever, at law or in equity or otherwise, whether direct or indirect, known or unknown, which the releasing party now owns or holds, or has at any time heretofore owned or held, or may in the future own or hold, against the persons and entities they are releasing, or any of them, in any capacity, which are or may be based upon any facts, acts, omissions, representations, contracts, agreements, events, or matters of any kind occurring or existing at any time on or before the date of this Agreement, including those which arise out of, or are related to the Term Sheet and/or the NDA.

4. Release by Montrose and FWSI . Montrose and FWSI hereby release PWS and its officers, directors, partners, employees, legal counsel, advisors, and shareholders from any and all claims, demands, causes of action, contract obligations, damages, attorneys' fees or costs whatsoever, at law or in equity or otherwise, whether direct or indirect, known or unknown, which the releasing party now owns or holds, or has at any time heretofore owned or held, or may in the future own or hold, against the persons and entities they are releasing, or any of them, in any capacity, which are or may be based upon any facts, acts, omissions, representations, contracts, agreements, events, or matters of any kind occurring or existing at any time on or before the date of this Agreement, including those which arise out of, or are related to the Term Sheet and/or the NDA.

5. Notes . If less than all of the Projects have been accepted by FWSI on or prior to January 1, 2014 (the “Maturity Date”), the Notes will remain due at the Maturity Date, as to their then outstanding principal amount and all accrued interest due thereon, after application of the payments described herein and in the JV Agreement to made by FWSI through issuance of its senior convertible notes. Upon execution of the JV Agreement, FWSI shall make a partial payment under the Notes through the issuance of senior convertible notes, which shall constitute part of the senior convertible notes to be offered by FWSI to prospective subscribers in a $2,000,000 offering, in an aggregate principal amount equal to $100,000 plus accrued interest thereon, and the amount due and payable by PWS under the Notes shall be correspondingly reduced (e.g. to a principal amount of $150,000 plus accrued interest). If, on or prior to the Maturity Date, FWSI accepts a second Project under the terms of the JV Agreement, FWSI shall simultaneously issue senior convertible notes in an aggregate principal amount equal to $75,000 plus accrued interest thereon, and the amount due and payable by PWS under the Notes shall be correspondingly reduced (e.g. to a principal amount of $75,000 plus accrued interest). If, on or prior to the Maturity Date, FWSI accepts a third Project under the terms of the JV Agreement, FWSI shall simultaneously issue senior convertible notes in an aggregate principal amount equal to $75,000 plus accrued interest thereon, and at that time, the Notes shall be deemed to be paid in full. Until the Notes are converted or paid in full, the UCC Financing Statement shall remain in effect,

6. Unknown Claims; Equal Participation in Drafting . The parties agree that each has had the time to consult with their attorneys concerning this Agreement and that each has had the opportunity to consider whether there may be future damages, claims, liabilities or obligations that presently are unknown, unforeseen or not yet in existence and hereby consciously and knowingly accepts the risk that future damages, claims, liabilities or obligations that presently are unknown, unforeseen or not yet in existence may occur and consciously and knowingly intends to release the other party from same. The parties have participated and had an equal opportunity to participate in the drafting of this Agreement. No ambiguity shall be construed against any party based upon a claim that that party drafted the ambiguous language.

7. The Agreement Is A Bar To Any Future Action Against Any Party . The parties agree that they have not commenced or prosecuted and will not commence or prosecute any action or proceeding for recovery of damages or for any form of equitable relief, declaratory relief or any other form of action or proceeding or arbitration against the other parties or any of them arising out of any event or transaction that occurred prior to the date hereof . Except as provided above, this Agreement shall constitute a judicial bar to the institution of any such action or proceeding or any assignment thereof.

8. Denial of Liability . The parties understand and agree that this Agreement constitutes a compromise and settlement of possible disputed claims of the parties, which claims are denied and contested by each party. This settlement is premised upon the parties’ desire to terminate any potential dispute and buy their peace. No part of this Agreement shall be deemed or construed to be an admission by any party of liability, responsibility or fault of any kind.

9. Attorneys’ Fees and Costs . The parties each agree to pay their own costs and attorneys’ fees incurred with regard to any matters between the parties related to this action.

10. Confidentiality . The parties shall not disclose any of the terms or conditions of this Agreement to any person, unless such disclosure is compelled by reason of a court order, the order of any regulatory authority or if disclosure is required by reason of public company reporting requirements.

11. Entire Agreement . This Agreement, the Settlement Agreement and Mutual Release among PWS, Aton Select Fund Limited and Adrien Ellul, and the JV Agreement taken together constitute the entire agreement of the parties with respect to the subject matter of this Agreement. This Agreement may not be modified, interpreted, amended, waived or revoked orally, but only by a writing signed by all parties. No party is entering into this Agreement in reliance upon any oral or written promises, inducements, representations, understandings, interpretations or agreements other than those contained in this Agreement.

12. Counterparts . This Agreement may be executed in counterparts. A party shall be bound hereby upon the execution of this Agreement.

13. Applicable Law; Jurisdiction . THIS AGREEMENT IS MADE UNDER, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED SOLELY THEREIN, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. In any action between or among any of the parties arising out of this Agreement, (i) each of the parties irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of the state and federal courts having jurisdiction over New York County, New York; (ii) if any such action is commenced in a state court, then, subject to applicable law, no party shall object to the removal of such action to any federal court having jurisdiction over New York County, New York; (iii) each of the parties irrevocably waives the right to trial by jury; and (iv) each of the parties irrevocably consents to service of process by first class certified mail, return receipt requested, postage prepared, to the address at which such party is to receive notice in accordance with this Agreement.

14. Notices . Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; or (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to Montrose or FWSI:	c/o Gottbetter & Partners, LLP
	488 Madison Avenue
	New York, NY 10016
	Attention: Adam S. Gottbetter, Esq.
	Telephone: 212.400.6900
	Facsimile: 212.400.6901

If to PWS:	Produced Water Solutions, Inc.
	2425 W. I-25 Frontage Road
	Erie, CO 80516
	Attention: George A. Kast, CEO
	Telephone: 303.215.9595
	Facsimile: 303.215.0595

[ Signatures on following page ]

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

	PRODUCED WATER SOLUTIONS, INC.

	By:	/s/ George A. Kast
	Name:	George A. Kast
	Title:	Chief Executive Officer

	FRAC WATER SYSTEMS, INC.

	By:	/s/ Nadine Smith
	Name:	Nadine Smith
	Title:	Chief Executive Officer

	MONTROSE CAPITAL LIMITED

	By:	/s/ Mark Tompkins
	Name:	Mark Tompkins
	Title:	Chief Executive Officer

EXHIBIT 10.3

EMPLOYMENT SERVICES AGREEMENT

This Employment Services Agreement (the “ Agreement ”) is entered into as of the 10 th day of October, 2013, by and between Frac Water Systems, Inc. , a Nevada corporation, with a business address of 1266 1 st Street, Suite 4, Sarasota, FL 34236 (the “ Company ”), and Nadine C. Smith , an individual with an address at 1266 1 st Street, Suite 4, Sarasota, FL 34236 (“ Executive ”).

INTRODUCTION

WHEREAS, the Company desires to employ the Executive under the title and capacity set forth on Schedule A hereto and the Executive desires to be employed by the Company in such capacity, subject to the terms of this Agreement;

AGREEMENT

NOW, THEREFORE, in consideration of the premises and mutual promises herein below set forth, the parties hereby agree as follows:

1. Employment Period . The term of the Executive’s employment by the Company pursuant to this Agreement (the “ Employment Period ”) shall commence upon the date hereof (the “ Effective Date ”) and shall continue for that period of calendar months from the Effective Date set forth on Schedule A hereto. Thereafter, the Employment Period may be renewed by mutual agreement of the parties on terms to be negotiated. In any event, the Employment Period may be terminated as provided herein.

2. Employment; Duties .

(a) General . Subject to the terms and conditions set forth herein, the Company shall employ the Executive to act for the Company during the Employment Period in the capacities set forth on Schedule A hereto, and the Executive hereby accepts such employment. The duties and responsibilities of the Executive shall include such duties and responsibilities appropriate to such offices as the Company’s Board of Directors (the “ Board ”) may from time to time reasonably assign to the Executive, with such authority and responsibilities, including Company-wide executive, administrative and finance functions as are normally associated with and appropriate for such positions.

(b) Executive recognizes that during the period of Executive's employment hereunder, Executive owes a duty of loyalty to the Company, and Executive will use Executive's good faith efforts to promote and develop the business of the Company and its subsidiaries (the Company’s subsidiaries from time to time, together with any other affiliates of the Company, the “ Affiliates ”). Executive shall devote such amount of Executive’s business time, attention and skills to the performance of Executive’s services as an executive of the Company as is reasonably required by the duties and responsibilities being assumed hereunder. Recognizing and acknowledging that it is essential for the protection and enhancement of the name and business of the Company and the goodwill pertaining thereto, Executive shall perform the Executive’s duties under this Agreement professionally, in accordance with the applicable laws, rules and regulations and such standards, policies and procedures established by the Company and the industry from time to time. The employment of the Executive hereunder shall not preclude her from continuing to serve as an officer and director of La Cortez Energy, Inc.

(c) However, the parties agree that: (i) Executive may devote a reasonable amount of her time to civic, community, or charitable activities and may serve as a director of other corporations (provided that any such other corporation is not a competitor of the Company, as determined by the Board) and to other types of business or public activities not expressly mentioned in this paragraph and (ii) Executive may participate as a non-employee director and/or investor in other companies and projects as described by Executive to the Board, so long as Executive’s responsibilities with respect thereto do not conflict or interfere with the faithful performance of her duties to the Company.

(d) Place of Employment . The Executive’s services shall be initially performed at the Company’s offices located in Sarasota, Florida, any other locations where the Company now or hereafter has a business facility and at any other location where Executive’s presence is necessary to perform her duties. The parties acknowledge, however, that the Executive may be required to travel in connection with the performance of her duties hereunder.

3. Base Salary . The Executive shall be entitled to receive a salary from the Company during the Employment Period at the rate per year indicated on Schedule A hereto (the “ Base Salary ”). Once the Board has established the Base Salary, such Base Salary may be increased on each anniversary of the Effective Date, at the Board’s sole discretion. The parties expressly agree that what the Executive receives now or in the future, in addition to the regular Base Salary, whether this be in the form of benefits or regular or occasional aid/assistance, such as recreation, club memberships, meals, education for her family, vehicle, lodging or clothing, occasional bonuses or anything else she receives, during the Employment Period and any renewals thereof, in cash or in kind, shall not be deemed as salary. However, because the Company is a public company subject to the reporting requirements of, inter alia, the US Securities and Exchange Commission (the “SEC”), both parties acknowledge that the Executive’s annual compensation (as determined by the rules of the SEC or any other regulatory body or exchange having jurisdiction), which may include some or all of the foregoing, will be required to be publicly disclosed.

3A. Equity Purchase . The Executive shall purchase common stock from the Company in connection with the execution of this Agreement in the amount and on the terms indicated on Schedule A hereto.

4. Bonus. (a) The Company may pay the Executive an annual bonus in an amount indicated on Schedule A (the “ Annual Bonus ”), at such time and in such amount as may be determined by the Board in its sole discretion. The Board may or may not determine that all or any portion of the Annual Bonus shall be earned upon the achievement of operational, financial or other milestones (“ Milestones ”) established by the Board in consultation with the Executive and that all or any portion of any Annual Bonus shall be paid in cash, unless the Executive and the Company agree to pay such Annual Bonus in securities or other property. Notwithstanding the foregoing, the Annual Bonus shall not exceed the amount of Executive’s Base Salary for the period to which the Bonus relates.

(b) The Executive shall be eligible to participate in any other bonus or incentive program established by the Company for executives of the Company.

5. Other Benefits

(a) Stock Option Grant . The Executive shall be entitled to receive stock options under the Company’s 2013 Equity Incentive Plan at such times and in such amounts as determined by the Company’s Board of Directors.

(b) Insurance and Other Benefits . During the Employment Period, the Executive and the Executive’s dependents shall be entitled to participate in the Company’s insurance programs (or alternatively, to receive reimbursement for the cost of health insurance programs in which the Executive currently participates) and any ERISA benefit plans, as the same may be adopted and/or amended from time to time (the “ Benefits ”). The Executive shall be entitled to paid personal days on a basis consistent with the Company’s other senior executives, as determined by the Board. The Executive shall be bound by all of the policies and procedures established by the Company from time to time. However, in case any of those policies conflict with the terms of this Agreement, the terms of this Agreement shall control.

(c) Vacation . During the Employment Period, the Executive shall be entitled to an annual vacation of at least that number of working days set forth on Schedule A hereto.

(d) Expense Reimbursement . The Company shall reimburse the Executive for all reasonable business, promotional, travel and entertainment expenses incurred or paid by the Executive during the Employment Period in the performance of Executive’s services under this Agreement, provided that the Executive furnishes to the Company appropriate documentation required by the Internal Revenue Code in a timely fashion in connection with such expenses and shall furnish such other documentation and accounting as the Company may from time to time reasonably request.

6. Termination; Compensation Due . The Executive's employment hereunder may terminate, and the Executive’s right to compensation for periods after the date the Executive’s employment with the Company terminates shall be determined, in accordance with the provisions of paragraphs (a) through (e) below:

(a) Voluntary Resignation; Termination without Cause .

(i) Voluntary Resignation . The Executive may terminate her employment at any time upon thirty (30) days prior written notice to the Company. In the event of the Executive’s voluntary termination of her employment other than for Good Reason (as defined below), the Company shall have no obligation to make payments to the Executive in accordance with the provisions of Sections 3 or 4 above, except as otherwise required by this Agreement or by applicable law, or to provide the benefits described in Section 5 above, for periods after the date on which the Executive's employment with the Company terminates due to the Executive 's voluntary termination, except for the payment of the Base Salary accrued through the date of such resignation.

(ii) Termination without Cause . The Company may terminate the Executive’s employment with the Company at any time with or without cause, by delivery to the Executive of a written notice of termination from the Chief Executive Officer of the Company.

(A) If the Executive’s employment is terminated by the Company without Cause, the Company shall (x) continue to pay the Executive the Base Salary (at the rate in effect on the date the Executive’s employment is terminated) until the end of the Severance Period (as defined in Section 6(e) below), (y) with respect to the Annual Bonus, to the extent the Milestones are achieved, pay the Executive a pro rata portion of the Annual Bonus for the year of the Employment Period on the date such Annual Bonus would have been payable to the Executive had the Executive remained employed by the Company, and (z) pay any other accrued compensation and Benefits. The Executive shall not have any further rights under this Agreement or otherwise to receive any other compensation or benefits after such termination of employment.

(B) If, following a termination of employment without Cause, the Executive breaches the provisions of Sections 7 (b), 8 or 9 hereof, the Executive shall not be eligible, as of the date of such breach, for the payments and benefits described in Section 6 (a)(ii), and any and all obligations and agreements of the Company with respect to such payments shall thereupon cease.

(b) Discharge for Cause . Upon written notice to the Executive, the Company may terminate the Executive’s employment for “Cause” if any of the following events shall occur:

(i) any act or omission that constitutes a material breach by the Executive of any of her obligations under this Agreement;

(ii) the willful and continued failure or refusal of the Executive to satisfactorily perform the duties reasonably required of her as an employee of the Company;

(iii) the Executive’s conviction of, or plea of nolo contendere to, (i) any felony or (ii) a crime involving dishonesty or moral turpitude or which could reflect negatively upon the Company or otherwise impair or impede its operations;

(iv) the Executive’s engaging in any misconduct, negligence, act of dishonesty (including, without limitation, theft or embezzlement), violence, threat of violence or any activity that could result in any violation of federal securities laws, in each case, that is injurious to the Company or any of its Affiliates;

(v) the Executive’s refusal to follow the directions of the Board provided such directions do not require the Executive to violate any federal or state laws or rules;

(vi) an y other willful misconduct by the Executive which is materially injurious to the financial condition or business reputation of the Company or any of its Affiliates, or

(vii) the Executive’s breach of her obligations under Section 7, 8 or 9 of this Agreement.

In the event the Executive is terminated for Cause, the Company shall have no obligation to make payments to the Executive in accordance with the provisions of Sections 3 or 4 above, or, except as otherwise required by law, to provide the benefits described in Section 5 above, for periods after the Executive's employment with the Company is terminated on account of the Executive's discharge for Cause except for the then applicable Base Salary accrued through the date of such termination.

(c) Disability . The Company shall have the right, but shall not be obligated to terminate the Executive's employment hereunder in the event the Executive becomes disabled such that she is unable to discharge her duties to the Company for a period of ninety (90) consecutive days or one hundred twenty (120) days in any one hundred eighty (180) consecutive day period, provided longer periods are not required under applicable local labor regulations (a " Permanent Disability "). In the event of a termination of employment due to a Permanent Disability, the Company shall be obligated to continue to make payments to the Executive in an amount equal to the then applicable Base Salary for the Severance Period (as defined below) after the Executive’s employment with the Company is terminated due to a Permanent Disability. A determination of a Permanent Disability shall be made by a physician satisfactory to both the Executive and the Company; provided , however , that if the Executive and the Company do not agree on a physician, the Executive and the Company shall each select a physician and those two physicians together shall select a third physician, whose determination as to a Permanent Disability shall be binding on all parties.

(d) Death . The Executive's employment hereunder shall terminate upon the death of the Executive. The Company shall have no obligation to make payments to the Executive in accordance with the provisions of Sections 3 or 4 above, or, except as otherwise required by law or the terms of any applicable benefit plan, to provide the benefits described in Section 5 above, for periods after the date of the Executive's death except for then applicable Base Salary earned and accrued through the date of death, payable to the Executive or her successor.

(e) Termination for Good Reason . The Executive may terminate this Agreement at any time for Good Reason. In the event of termination under this Section 6(e), the Company shall pay to the Executive severance in an amount equal to the then applicable Base Salary for a period equal to the number of months set forth on Schedule A hereto (the “ Severance Period ”), subject to the Executive’s continued compliance with Sections 7(b), 8 and 9 of this Agreement for the applicable Severance Period following the Executive’s termination, and subject to the Company’s regular payroll practices and required withholdings. Such severance shall be reduced by any cash remuneration paid to the Executive because of the Executive’s employment or self-employment during the Severance Period. The Executive shall continue to receive all Benefits during the Severance Period. The Executive shall not have any further rights under this Agreement or otherwise to receive any other compensation or benefits after such resignation. For the purposes of this Agreement, “Good Reason” shall mean any of the following (without Executive’s express written consent):

(i) the assignment to the Executive of duties that are significantly different from, and that result in a substantial diminution of, the duties that she assumed on the Effective Date;

(ii) removal of the Executive from all of her positions as indicated on Schedule A hereto, or the assignment to the Executive of duties that are significantly different from, and that result in a substantial diminution of, the duties that she assumed under this Agreement, within twelve (12) months after a Change of Control (as defined below);

(iii) a reduction by the Company in the then applicable Base Salary or other compensation, unless said reduction is pari passu with other senior executives of the Company;

(iv) the taking of any action by the Company that would, directly or indirectly, materially reduce the Executive’s benefits, unless said reductions are pari passu with other senior executives of the Company; or

(v) a breach by the Company of any material term of this Agreement that is not cured by the Company within 30 days following receipt by the Company of written notice thereof.

For purposes of this Agreement, “Change of Control” shall mean the occurrence of any one or more of the following: (i) the accumulation, whether directly, indirectly, beneficially or of record, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of 50% or more of the shares of the outstanding equity securities of the Company, (ii) a merger or consolidation of the Company in which the Company does not survive as an independent company or upon the consummation of which the holders of the Company’s outstanding equity securities prior to such merger or consolidation own less than 50% of the outstanding equity securities of the Company after such merger or consolidation, or (iii) a sale of all or substantially all of the assets of the Company; provided, however, that the following acquisitions shall not constitute a Change of Control for the purposes of this Agreement: (A) any acquisitions of common stock or securities convertible into common stock directly from the Company, or (B) any acquisition of common stock or securities convertible into common stock by any employee benefit plan (or related trust) sponsored by or maintained by the Company.

(f) Notice of Termination . Any termination of employment by the Company or the Executive shall be communicated by a written ‘‘Notice of Termination’’ to the other party hereto given in accordance with Section 15 of this Agreement. In the event of a termination by the Company for Cause, the Notice of Termination shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (iii) specify the date of termination, which date shall be the date of such notice. The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

(g) Resignation from Directorships and Officerships . The termination of the Executive’s employment for any reason will constitute the Executive’s resignation from (i) any director, officer or employee position the Executive has with the Company or any of its Affiliates, and (ii) all fiduciary positions (including as a trustee) the Executive holds with respect to any employee benefit plans or trusts established by the Company. The Executive agrees that this Agreement shall serve as written notice of resignation in this circumstance, unless otherwise required by any plan or applicable law.

7. Non-Competition; Non-Solicitation .

(a) For the duration of the Employment Period and, unless the Company terminates the Executive’s employment without Cause, during the Severance Period (the “ Non-compete Period ”), the Executive shall not, directly or indirectly, except as specifically provided in Section 2(c), engage or invest in, own, manage, operate, finance, control or participate in the ownership, management, operation, financing, or control of, be employed by, associated with, or in any manner connected with, lend any credit to, or render services or advice to, any business, firm, corporation, partnership, association, joint venture or other entity that engages or conducts any business the same as or substantially similar to the Business or any other business engaged in or proposed to be engaged in or conducted by the Company and/or any of its Affiliates during the Employment Period, or then included in the future strategic plan of the Company and/or any of its Affiliates, anywhere within the states or other jurisdictions in which the Company or any of its Affiliates at that time is operating; provided , however, that the Executive may own less than 5% in the aggregate of the outstanding shares of any class of securities of any enterprise (but without otherwise participating in the activities of such enterprise) including those engaged in the frac water treatment business, other than any such enterprise with which the Company competes or is currently engaged in a joint venture, if such securities are listed on any national or regional securities exchange or have been registered under Section 12(b) or (g) of the Exchange Act. Notwithstanding the foregoing, if the Executive shall present to the Board any opportunity within the scope of the prohibited activities described above, and the Company shall not elect to pursue such opportunity within a reasonable time, then the Executive shall be permitted to pursue such opportunity, subject to the requirements of Section 2(b).

(b) During the Employment Period and for a period of twelve (12) months following termination of the Executive’s employment with the Company, the Executive shall not:

(i) persuade, solicit or hire, or attempt to recruit, persuade, solicit or hire, any employee, or independent contractor of, or consultant to, the Company, or its Affiliates, to leave the employment (or independent contractor relationship) thereof, whether or not any such employee or independent contractor is party to an employment agreement; or

(ii) attempt in any manner to solicit or accept from any customer or client of the Company or any of its Affiliates, with whom the Company or any of its Affiliates had significant contact during the term of the Agreement, business of the kind or competitive with the business done by the Company or any of its Affiliates with such customer or to persuade or attempt to persuade any such customer to cease to do business or to reduce the amount of business which such customer has customarily done or is reasonably expected to do with the Company or any of its Affiliates or if any such customer elects to move its business to a person other than the Company or any of its Affiliates, provide any services (of the kind or competitive with the Business of the Company or any of its Affiliates) for such customer, or have any discussions regarding any such service with such customer, on behalf of such other person.

The Executive recognizes and agrees that because a violation by the Executive of her obligations under this Section 7 will cause irreparable harm to the Company that would be difficult to quantify and for which money damages would be inadequate, the Company shall have the right to injunctive relief to prevent or restrain any such violation, without the necessity of posting a bond. The Non-compete Period will be extended by the duration of any violation by the Executive of any of her obligations under this Section 7.

The Executive expressly agrees that the character, duration and scope of the covenant not to compete are reasonable in light of the circumstances as they exist at the date upon which this Agreement has been executed. However, should a determination nonetheless be made by a court of competent jurisdiction at a later date that the character, duration or geographical scope of the covenant not to compete is unreasonable in light of the circumstances as they then exist, then it is the intention of the Executive, on the one hand, and the Company, on the other, that the covenant not to compete shall be construed by the court in such a manner as to impose only those restrictions on the conduct of the Executive which are reasonable in light of the circumstances as they then exist and necessary to assure the Company of the intended benefit of the covenant not to compete.

8. Inventions and Patents . The Executive acknowledges that all inventions, innovations, improvements, know-how, plans, development, methods, designs, analyses, specifications, software, drawings, reports and all similar or related information (whether or not patentable or reduced to practice) which related to any of the Company’s actual or proposed business activities and which are created, designed or conceived, developed or made by the Executive during the Executive’s past or future employment by the Company or any Affiliates, or any predecessor thereof (“Work Product”), belong to the Company, or its Affiliates, as applicable. Any copyrightable work falling within the definition of Work Product shall be deemed a “work made for hire” and ownership of all right title and interest shall rest in the Company. The Executive hereby irrevocably assigns, transfers and conveys, to the full extent permitted by law, all right, title and interest in the Work Product, on a worldwide basis, to the Company to the extent ownership of any such rights does not automatically vest in the Company under applicable law. The Executive will promptly disclose any such Work Product to the Company and perform all actions requested by the Company (whether during or after employment) to establish and confirm ownership of such Work Product by the Company (including without limitation, assignments, consents, powers of attorney and other instruments).

9. Confidentiality Covenants.

(a) The Executive understands that the Company and/or its Affiliates, from time to time, may impart to the Executive confidential information, whether such information is written, oral or graphic.

For purposes of this Agreement, “Confidential Information” means information, which is used in the business of the Company or its Affiliates and (i) is proprietary to, about or created by the Company or its Affiliates, (ii) gives the Company or its Affiliates some competitive business advantage or the opportunity of obtaining such advantage or the disclosure of which could be detrimental to the interests of the Company or its Affiliates, (iii) is designated as Confidential Information by the Company or its Affiliates, is known by the Executive to be considered confidential by the Company or its Affiliates, or from all the relevant circumstances should reasonably be assumed by the Executive to be confidential and proprietary to the Company or its Affiliates, or (iv) is not generally known by non-Company personnel. Such Confidential Information includes, without limitation, the following types of information and other information of a similar nature (whether or not reduced to writing or designated as confidential):

(i) Internal personnel and financial information of the Company or its Affiliates, vendor information (including vendor characteristics, services, prices, lists and agreements), purchasing and internal cost information, internal service and operational manuals, and the manner and methods of conducting the business of the Company or its Affiliates;

(ii) Marketing and development plans, price and cost data, price and fee amounts, pricing and billing policies, bidding, quoting procedures, marketing techniques, forecasts and forecast assumptions and volumes, and future plans and potential strategies (including, without limitation, all information relating to any acquisition prospect and the identity of any key contact within the organization of any acquisition prospect) of the Company or its Affiliates which have been or are being discussed;

(iii) Names of customers and their representatives, contracts (including their contents and parties), customer services, and the type, quantity, specifications and content of products and services purchased, leased, licensed or received by customers of the Company or its Affiliates; and

(iv) Confidential and proprietary information provided to the Company or its Affiliates by any actual or potential customer, government agency or other third party (including businesses, consultants and other entities and individuals).

The Executive hereby acknowledges the Company’s exclusive ownership of such Confidential Information.

(b) The Executive agrees as follows: (1) only to use the Confidential Information to provide services to the Company and its Affiliates; (2) only to communicate the Confidential Information to fellow employees, agents and representatives on a need-to-know basis; and (3) not to otherwise disclose or use any Confidential Information, except as may be required by law or otherwise authorized by the Board. Upon demand by the Company or upon termination of the Executive’s employment, the Executive will deliver to the Company all manuals, photographs, recordings and any other instrument or device by which, through which or on which Confidential Information has been recorded and/or preserved, which are in the Executive’s possession, custody or control.

10. Representation . The Executive hereby represents that the Executive’s entry into this Employment Agreement and performance of the services hereunder will not violate the terms or conditions of any other agreement to which the Executive is a party.

11. Arbitration. In the event of any breach arising from the performance of this Agreement, either party may request arbitration. In such event, the parties will submit to arbitration by a qualified arbitrator with the definition and laws of the State of New York. Such arbitration shall be final and binding on both parties.

12. Governing Law/Jurisdiction . This Agreement and any disputes or controversies arising hereunder shall be construed and enforced in accordance with and governed by the internal laws of the State of New York without regard to the conflicts of laws principles thereof.

13. Public Company Obligations . Executive acknowledges that the Company is a public company whose Common Stock has been registered under the US Securities Act of 1933, as amended (the “Securities Act”), and registered under the Exchange Act, and that this Agreement may be subject to the public filing requirements of the Exchange Act. Executive acknowledges and agrees that the applicable insider trading rules, transaction reporting rules, limitations on disclosure of non-public information and other requirements set forth in the Securities Act, the Exchange Act and rules and regulations promulgated by the SEC may apply to this Agreement and Executive’s employment with the Company. Executive (on behalf of himself, as well as the Executive’s executors, heirs, administrators and assigns), absolutely and unconditionally agrees to indemnify and hold harmless the Company and all of its past, present and future affiliates, executors, heirs, administrators, shareholders, employees, officers, directors, attorneys, accountants, agents, representatives, predecessors, successors and assigns from any and all claims, debts, demands, accounts, judgments, causes of action, equitable relief, damages, costs, charges, complaints, obligations, controversies, actions, suits, proceedings, expenses, responsibilities and liabilities of every kind and character whatsoever (including, but not limited to, reasonable attorneys’ fees and costs) in the event of Executive’s breach of any obligation of Executive under the Securities Act, the Exchange Act, any rules promulgated by the SEC and any other applicable federal, state or foreign laws, rules, regulations or orders.

14. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and thereof and supersedes and cancels any and all previous agreements, written and oral, regarding the subject matter hereof between the parties hereto. This Agreement shall not be changed, altered, modified or amended, except by a written agreement signed by both parties hereto.

15. Notices . All notices, requests, demands and other communications called for or contemplated hereunder shall be in writing and shall be deemed to have been given when delivered to the party to whom addressed or when sent by telecopy (if promptly confirmed by registered or certified mail, return receipt requested, prepaid and addressed) to the parties, their successors in interest, or their assignees at the following addresses, or at such other addresses as the parties may designate by written notice in the manner aforesaid:

(a) to the Company at:

Frac Water Systems, Inc.

1266 1 st Street, Suite 4

Sarasota, FL 34236

Attn: Nadine Smith

Fax: (941) 365-5426

with a copy to:

Gottbetter & Partners, LLP

488 Madison Avenue

New York, NY 10022-5718

Attn: Adam S. Gottbetter

Fax: (212) 400-6901

(b) to the Executive at:

Address listed on Schedule A attached hereto.

All such notices, requests and other communications will (i) if delivered personally to the address as provided in this Section, be deemed given upon delivery, (ii) if delivered by facsimile transmission to the facsimile number as provided for in this Section, be deemed given upon facsimile confirmation, (iii) if delivered by mail in the manner described above to the address as provided for in this Section, be deemed given on the earlier of the third business day following mailing or upon receipt and (iv) if delivered by overnight courier to the address as provided in this Section, be deemed given on the earlier of the first business day following the date sent by such overnight courier or upon receipt (in each case regardless of whether such notice, request or other communication is received by any other person to whom a copy of such notice is to be delivered pursuant to this Section). Either party may, by notice given to the other party in accordance with this Section, designate another address or person for receipt of notices hereunder.

16. Severability . If any term or provision of this Agreement, or the application thereof to any person or under any circumstance, shall to any extent be invalid or unenforceable, the remainder of this Agreement, or the application of such terms to the persons or under circumstances other than those as to which it is invalid or unenforceable, shall be considered severable and shall not be affected thereby, and each term of this Agreement shall be valid and enforceable to the fullest extent permitted by law. The invalid or unenforceable provisions shall, to the extent permitted by law, be deemed amended and given such interpretation as to achieve the economic intent of this Agreement.

17. Waiver . The failure of any party to insist in any one instance or more upon strict performance of any of the terms and conditions hereof, or to exercise any right or privilege herein conferred, shall not be construed as a waiver of such terms, conditions, rights or privileges, but same shall continue to remain in full force and effect. Any waiver by any party of any violation of, breach of or default under any provision of this Agreement by the other party shall not be construed as, or constitute, a continuing waiver of such provision, or waiver of any other violation of, breach of or default under any other provision of this Agreement.

18. Successors and Assigns . This Agreement shall be binding upon the Company and any successors and assigns of the Company. Neither this Agreement nor any right or obligation hereunder may be assigned by the Executive.

19. Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

20. Headings . Headings in this Agreement are for reference purposes only and shall not be deemed to have any substantive effect.

21. Opportunity to Seek Advice . The Executive acknowledges and confirms that she has had the opportunity to seek such legal, financial and other advice and representation as she has deemed appropriate in connection with this Agreement, that the Executive is fully aware of its legal effect, and that Executive has entered into it freely based on the Executive’s judgment and not on any representations or promises other than those contained in this Agreement.

22. Withholding and Payroll Practices . All salary, severance payments, bonuses or benefits payments made by the Company under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law and shall be paid in the ordinary course pursuant to the Company’s then existing payroll practices.

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

[The next page is the signature page]

EXECUTIVE:

	/s/ Nadine C. Smith
	NADINE C. SMITH

	FRAC WATER SYSTEMS, INC.

	By:	/s/ Nadine C. Smith
	Name:	Nadine Smith
	Title:	President

Schedule A

1.	Employment Period: 36 calendar months (3 years).

2.	Employment

a.	Title: President, CEO and Chairwoman

3.	Base Salary: $120,000 per year increasing to

a.	$180,000 per year at such time as the Company deploys equipment to field operations, and further increasing to

b.	$240,000 per year at such time that the Company’s cash flow, in the reasonable judgment of the Company’s Board of Directors, can sustain the salary increase.

4	Bonus Potential:

a.	Equal to 100% of Base Salary, based upon achievement of budget and operational milestones as approved by the Company’s Board of Directors

5.	Initial Stock Purchase: 20,000,000 shares at $0.01 ($200,000)

6.	Vacation: Six (6) weeks.

7.	Severance Period: 12 months

Executive Contact Information:

1266 1 st Street, Suite 4

Sarasota, FL 34236

Phone: (941) 330-6404

Fax: (941) 365-5426

EXHIBIT 10.4

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (this “ Agreement ”) is made and entered into as of October 15, 2013, by and between FRAC WATER SYSTEMS, INC. , a Nevada corporation (the “ Company ”), and ARNOLD TINTER (“ Consultant ,” and together with the Company, the “ Parties ”).

RECITALS

WHEREAS, the Company desires to engage Consultant to provide the Services (as defined below), and Consultant desires to provide the Services, in each case, on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the premises, the respective agreements hereinafter set forth and the mutual benefits to be derived herefrom, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of Consultant and the Company hereby agree as follows:

TERMS

1. ENGAGEMENT; SERVICES.

(a) The Company hereby engages Consultant to provide the services set forth on the Scope of Work attached hereto as Schedule I and such other similar services, which are ancillary to and consistent with the Scope of Work, as reasonably requested by the CEO or another authorized officer of the Company (any such person, a “ Manager ”) from time to time during the Term (as defined in Section 4 ) (the “ Services ”), and Consultant hereby agrees to provide the Services to the Company during the Term, all on the terms and subject to the conditions set forth below (the “ Engagement ”).

(b) Consultant hereby agrees to provide the Services to the Company during the Term faithfully and to the best of his ability, in accordance with applicable law, and the terms and conditions provided in this Agreement. Unless otherwise agreed to by the Parties, Consultant will provide the Services at the Consultant’s office located at 90 Madison Street, Suite 701, Denver, CO 80206. Consultant shall devote such of Consultant’s business time, attention and skills to the performance of the Services as is reasonably required by the duties and responsibilities being assumed by Consultant hereunder. Consultant may engage in other business activities for other corporations and entities so long as Consultant’s responsibilities with respect thereto do not conflict or interfere with the faithful performance of his duties hereunder.

2. COMPENSATION

(a) Consulting Fee . As consideration for any Services to be rendered by Consultant during the Term, and subject to the terms and conditions of this Agreement, the Company shall pay Consultant at the annual rate of sixty thousand dollars ($60,000) (the “ Consulting Fee ”), which shall be payable monthly in advance throughout the Term. All payments to Consultant under this Agreement of Consulting Fees and other remuneration shall be paid to Corporate Finance Group, a company owned by the Consultant, or shall be paid as otherwise directed by the Consultant.

(b) Option Grant . (i) On the Effective Date, the Company shall grant options (the “Options”) to Consultant to purchase 175,000 shares of common stock (the “Common Stock”) of the Company, upon vesting, at an exercise price of $0.01 per share. The Options shall vest ratably in arrears over four quarterly periods with the initial vesting date being January 9, 2014 and the subsequent vesting dates being April 9, 2014, July 9, 2014 and October 9, 2014. On each vesting date, 43,750 of the Options shall vest. The Options shall be non-statutory options and shall be issued under the Company’s 2013 Equity Incentive Plan. They shall have a term of ten years from the date of grant. In the event that this Agreement and the Engagement of Consultant is terminated by the Company or the Consultant (i) any unvested Options at the time of termination shall be cancelled and (ii) any vested Options at the time of termination shall be cancelled 90 days after the date of termination. The Options may be exercised on a cashless basis.

(ii) Consultant represents and warrants to the Company that, as of the date hereof and the time of such issuance, Consultant (i) will acquire the Options and if exercised, the shares of Common Stock underlying the Option (the “Shares”), for investment for its own account and not with the view to, or for resale in connection with, any distribution thereof; (ii) understands and acknowledges that the Options and the Shares have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or any state or foreign securities laws, by reason of an exemption from the registration provisions of the Securities Act and applicable state and foreign securities laws; (iii) does not have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participation to any third person with respect to the Options or the underlying Shares; and (iv) understands that a limited market for the Common Stock now exists and that there may never be an active public market for the Shares.

(iii) Consultant understands that the Company is presently a “shell company” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Pursuant to Rule 144(i), securities issued by a current or former shell company (such as the Securities) that otherwise meet the holding period and other requirements of Rule 144 nevertheless cannot be sold in reliance on Rule 144 until one year after the Company (i) is no longer a shell company; and (ii) has filed current “Form 10 information” (as defined in Rule 144(i)) with the SEC reflecting that it is no longer a shell company, and provided that at the time of a proposed sale pursuant to Rule 144, the Company is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act and has filed all reports and other materials required to be filed by section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports. As a result, the restrictive legends on certificates for the securities cannot be removed except in connection with an actual sale meeting the foregoing requirements or pursuant to an effective registration statement.

(iv) Consultant understands that the certificates or other instruments representing the Options and if exercised, the Shares, shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such stock certificates):

(c) Business Expenses . The Company shall reimburse Consultant for all reasonable and necessary business expenses actually incurred by Consultant in performing the Services; including but not limited to reimbursement of all travel related to the Services on the terms set forth herein. As a condition for reimbursement of Consultant’s expenses pursuant to this Agreement, Consultant shall provide actual receipts to the Company for any such expenses and Consultant shall obtain prior written approval from the Company for any individual expense in an amount greater than $100.

(d) Tax Matters . The Company and Consultant agree that Consultant shall be treated as an independent contractor, and not as an employee of the Company, with respect to the services performed hereunder. All fees payable to Consultant hereunder shall be paid in full, without any withholding, deduction, or offset of any Federal, state, or local income taxes, employment taxes, or other withholdings. Consultant hereby covenants and agrees that he shall be solely responsible for all income taxes, payroll taxes, and other withholdings (both employer and employee portions) with respect to all fees paid by the Company hereunder, and agrees to indemnify and hold the Company harmless with respect to such taxes and withholdings, including, without limitation, any such taxes and withholdings imposed as a result of any claim or determination by any taxing authority or otherwise that Consultant is not an independent contractor with respect to the services performed hereunder.

3. TERM.

(a) Term . This Agreement, and the Services to be performed hereunder, shall commence on the date hereof, and shall continue for a twelve month period which will automatically renew for an additional twelve month period unless terminated prior thereto by either party, in writing, as provided in this Agreement (the “ Term ”).

(b) Termination . This Agreement may be terminated by either Party upon 30 days advance written notice to the other Party. Upon termination of this Agreement, Consultant shall be entitled to all Consulting Fees earned through the date of termination.

4. RESTRICTIVE COVENANTS.

(a) Non Disclosure of Trade Secrets and/or Confidential Information . In connection with the performance of the Services by Consultant, Consultant agrees to enter into the Confidentiality Assignment Agreement (the “ Confidentiality Agreement ”), in the form attached hereto as Exhibit A .

(b) Non-Competition Agreement. Consultant acknowledges and agrees that: (i) due to the nature of the Services to be provided by Consultant hereunder, he will be exposed to Confidential Information possessed by the Company, and its affiliates; and (ii) the Confidential Information is critical to the Company’s competitive success and is not made accessible to the public or to the Company’s competitors.

Consultant further acknowledges and agrees that the business in which the Company is engaged is intensely competitive and that this Agreement has required, and will continue to require, that he have access to, and knowledge of, Confidential Information.

For and in consideration of this exposure to Confidential Information, and further in consideration provided in Section 2 of this Agreement, and other incentives set forth in this Agreement, Consultant agrees that during the Term and for a period equal to the Term following the termination of this Agreement by any party or for any reason, he will not directly or indirectly engage in or associate in the United States with any (a) entity engaging in the business engaged in by the Company or (b) any competitor of the Company; or (c) solicit, for competitive business purposes, any customer of the Company with which Consultant was involved as part of his Services to the Company.

Consultant acknowledges that the Company would suffer irreparable harm if he fails to comply with the provisions of this section, and that the Company would be entitled to any appropriate relief, including money damages, equitable relief and attorneys’ fees. Consultant further acknowledges that enforcement of the covenants in this section is necessary to ensure the protection and continuity of the business and goodwill of the Company and that, due to the proprietary nature of the business of the Company, the restrictions set forth herein are reasonable as to geography, duration and global scope.

(c) Enforcement . Consultant and the Company recognize that in the event of the breach by Consultant of any of the terms and conditions to be performed by Consultant, then the Company will be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either at law or in equity, to obtain damages for any breach hereof, or to enforce the specific performance hereof by Consultant or to enjoin Consultant from performing acts prohibited by this Agreement or the Proprietary Information Agreement during the period herein covered, without the need to post any bond, but nothing herein contained will be construed to prevent such other remedy in the courts as the Company may elect to invoke.

5. REPRESENTATIONS AND WARRANTIES . Consultant hereby represents and warrants that (a) Consultant is duly authorized or has the legal capacity, as applicable, to execute, deliver and perform this Agreement, (b) this Agreement is a valid and binding agreement and is fully enforceable against Consultant according to the terms of this Agreement, and (c) Consultant is not a party to any agreement that would prevent Consultant from entering into this Agreement or performing Consultant’s obligations hereunder.

6. INDEMNIFICATION.

(a) Consultant shall indemnify the Company and its affiliates and their respective successors and assigns, and each of their respective members, managers, officers, directors, employees, stockholders, and agents (collectively, the “ Indemnified Parties ”), in respect of, and hold them harmless against, any and all claims, demands, causes of action, actions, proceedings, judgments, debts, obligations, liabilities, damages, fines, fees, penalties, interest obligations, taxes, deficiencies, losses, costs and expenses (including amounts paid to enforce the provisions of this Section 6 and amounts paid in settlement, interest, court costs, costs of investigators, fees and expenses of attorneys, accountants, financial advisors and other experts, and other expenses) (collectively, “ Damages ”) incurred or suffered by any of the Indemnified Parties arising out of, resulting from, relating to, or constituting (a) a material breach of Consultant’s representations or warranties in this Agreement or covenants in Sections 4 or 8(b) or the Proprietary Information Agreement; or (b) any fraud, gross negligence, willful misconduct or malfeasance by Consultant, except to the extent of Company’s direct participation in such fraud, gross negligence, willful misconduct or malfeasance.

(b) Company shall indemnify the Consultant and his affiliates and their respective successors and assigns, and each of their respective members, managers, officers, directors, employees, stockholders, and agents (collectively, the “ Consultant Indemnified Parties ”), in respect of, and hold them harmless against, any and all Damages incurred or suffered by any of the Consultant Indemnified Parties arising out of, resulting from, relating to (a) Consultant providing Services in accordance with this Agreement; or (b) any fraud, gross negligence, willful misconduct or malfeasance by Company, except to the extent of Consultant’s direct participation in such fraud, gross negligence, willful misconduct or malfeasance.

7. CONSULTANT AN INDEPENDENT CONTRACTOR.

Each of Consultant and the Company hereby agree that Consultant will perform the Services as an independent contractor, retaining control over and responsibility for his own operations and personnel. Consultant shall control the time, manner and place of performance of the Services. Without limiting the foregoing, Consultant acknowledges and agrees that Consultant shall not have any right to any compensation or benefits that the Company grants its employees, including any salary, pension, stock, bonus, profit sharing, insurance of any kind, health or other benefits that are available to employees of the Company. In addition, Consultant shall not use any sub-contractors to perform the Services hereunder without the prior written consent of the Company. Consultant will not be considered an employee or agent of the Company as a result of this Agreement, nor will Consultant have the authority to contract in the name of or bind the Company based on the consulting relationship established hereunder.

8. MISCELLANEOUS.

(a) Notices . Any notice or report required or permitted to be given or made under this Agreement by one party hereto to another will be deemed to have been duly given or made if personally delivered, delivered by reputable overnight courier, emailed, sent by telecopy, or, if mailed, when mailed by registered or certified mail, postage prepaid, to the other party at the following addresses (or at such other address as will be given in writing by one party to the other):

If to Consultant:

Arnold Tinter

90 Madison Street, Suite 701

Denver, CO 0206

Facsimile No.: 303.329.3819

If to the Company:

Frac Water Systems, Inc.

1266 1 st Street, Suite 4

Sarasota, FL 34236

Facsimile No.: 941.365.5426

Attention: Nadine C. Smith, President

With a copy to (which shall not constitute notice):

Gottbetter & Partners, LLP

488 Madison Avenue, 12 th Floor

New York, NY 10022

Facsimile No.: 212.400.6901

Attention: Adam S. Gottbetter, Esq.

(b) Non-Disparagement . The Company shall not, and shall cause its affiliates not to, disparage the Consultant. Consultant shall not, and shall cause his affiliates not to, disparage the Company and its affiliates.

(c) Entire Agreement; Modification . This Agreement, including any schedules or exhibits attached hereto, (i) contains the complete and entire understanding and agreement of Consultant and the Company with respect to the subject matter hereof, (ii) supersedes all prior and contemporaneous understandings, conditions and agreements, oral or written, express or implied, respecting the engagement of Consultant in connection with the subject matter hereof, and (iii) may not be modified except by an instrument in writing executed by a duly authorized representative of each of Consultant and the Company.

(d) Assignment . Neither Consultant nor the Company may assign their respective rights or obligations under this Agreement without the express written consent of the other party hereto; provided , that the Company may assign this Agreement without such consent to any person or entity that acquires its business or assets.

(e) Governing Law; Venue . This Agreement including the Confidentiality Agreement will be deemed to be a contract made under, and is to be governed and construed in the accordance with, the internal laws of the State of New York, without regard to conflict of law principles, and the parties hereby submit to the sole and exclusive jurisdiction of the courts of New York, NY in connection with any suit, action or proceeding arising from or relating to this Agreement.

(f) Severability . If any provision of this Agreement is declared by any court of competent jurisdiction to be invalid for any reason, such invalidity shall not affect the remaining provisions of this Agreement, which shall be fully severable, and given full force and effect.

(g) Attorney’s Fees . In the event that there has been a breach of any provisions of this Agreement by any party hereto, the other party will be entitled to recover its reasonable costs and attorneys’ fees in any legal proceeding to enforce the terms of this Agreement.

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

(i) Survival . The provisions of Sections 4 to 8 shall survive any termination of this Agreement.

(j) Further Assurances . Each party hereto shall take all actions and execute all documents reasonably necessary to effectuate the purposes and intents of this Agreement.

[ Remainder Left Blank – Signature Page Follows]

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

CONSULTANT:	COMPANY:

	FRAC WATER SYSTEMS, INC.

/s/ Arnold Tinter	By:	/s/ Nadine C. Smith
ARNOLD TINTER	Name:	Nadine C. Smith
	Title:	President

SCHEDULE I

Scope of Work

During the Engagement, Consultant shall serve as the Company’s Chief Financial Officer, Treasurer and Secretary and shall perform the duties required by such positions. Such duties include, without limitation, the following:

1.	Oversight and maintenance of the company’s financial books and records, including the general ledger.

2.	Preparation of annual cash projections (with the support of management) for review by the Board of Directors.

3.	Preparation of monthly internal financial statements for review and distribution to the management and Board of Directors of FWS.

4.	Preparation of quarterly financial statements and supporting documentation for review by the company’s auditor, together with coordination of the quarterly review of the company’s financial statements by the auditor.

5.	Preparation of annual financial statements and supporting documentation in connection with the annual audit, together with coordination of the annual audit with the company’s auditors

6.	Assistance in review and preparation of forms 10-Q and 10-K, and any other required filings with the Securities and Exchange Commission.

7.	Assistance in review and preparation of private placement or other financing documentation, as needed.

8.	Accounting software selection and integration, as needed, to provide management with internal operating and financial data on a timely basis.

EXHIBIT A

FRAC WATER SYSTEMS, INC.

Confidentiality Agreement

As a condition of my providing consulting services to Frac Water Systems, Inc., its subsidiaries, affiliates, successors or assigns (together, the “ Company ”), and in consideration of my engagement by the Company and my receipt of the compensation now and hereafter paid to me by the Company, I hereby agree to the following terms under this Confidentiality Agreement (the “ Confidentiality Agreement ”):

1. Consulting Services . I understand and acknowledge that my engagement by the Company to provide certain consulting services for the Company (the “ Engagement ”) is for an unspecified duration and may be terminated upon 30 days prior written notice for any reason, at the option of either of the Company or myself. I further understand and acknowledge that I am an independent contractor, and all services performed by me during the Engagement are performed as an independent contractor.

2. Confidential Information .

(a) Company Information . I agree at all times during the term of the Engagement and thereafter to hold in strictest confidence, and not to use except for the benefit of the Company or to disclose to any person, firm or corporation without written authorization of any manager of the Company (each such person, a “ Manager ”), any Confidential Information of the Company. I understand that “ Confidential Information ” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, customer lists and customers, markets, works of original authorship, photographs, negatives, digital images, software, computer programs, know-how, ideas, developments, inventions (whether or not patentable), processes, formulas, technology, concepts, designs, design-related assets, drawings, engineering, hardware configuration information, forecasts, strategies, marketing, finances or other business information disclosed to me by the Company either directly or indirectly in writing, orally or by drawings or observation or inspection of parts or equipment. I further understand that Confidential Information does not include any of the foregoing items which has become publicly known and made generally available through no wrongful act of mine or of others who were under confidentiality obligations as to the item or items involved.

(b) Other Employer Information . I agree that I will not, during the Engagement, improperly use or disclose any proprietary information or trade secrets of any former or concurrent employer or other person or entity for whom I render services and that I will not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer, person or entity.

(c) Third Party Information . I recognize that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. I agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for the Company consistent with the Company’s agreement with such third party.

A-1

(d) Return of Company Documents . I agree that, at the end of the Engagement, I will deliver to the Company (and will not keep in my possession, re-create or deliver to anyone else) any and all works of original authorship, photographs, negatives, digital images, devices, records, data, notes, reports, proposals, lists, correspondence, specifications, concepts, designs, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items provided to me pursuant to the Engagement or otherwise belonging to the Company, its successors or assigns.

3. No Solicitation of Employees . In consideration for the Engagement and other valuable consideration, receipt of which is hereby acknowledged, I agree that during the period of the Engagement, and for a period of twelve (12) months thereafter, I shall not solicit the employment of any person who shall then be employed by the Company (as an employee or consultant) or who shall have been employed by the Company (as an employee or consultant) within the prior twelve (12) month period, on behalf of myself or any other person, firm, corporation, association or other entity, directly or indirectly.

4. General Provisions .

(a) Entire Agreement . This Confidentiality Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and merges all prior discussions between us. No modification of or amendment to this Confidentiality Agreement, nor any waiver of any rights under this Confidentiality Agreement, will be effective unless in writing signed by the party to be charged. Any subsequent change or changes in my duties or compensation will not affect the validity or scope of this Confidentiality Agreement.

(b) Severability . If one or more of the provisions in this Confidentiality Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

(c) Successors and Assigns . This Confidentiality Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.

[ Remainder Of Page Intentionally Left Blank]

A-2

IN WITNESS WHEREOF, the undersigned has executed this Confidentiality Agreement as of October 15, 2013.

CONSULTANT:	COMPANY:

	FRAC WATER SYSTEMS, INC.

/s/ Arnold Tinter	By:	/s/ Nadine C. Smith
ARNOLD TINTER	Name:	Nadine C. Smith
	Title:	President

A-3

EXHIBIT 10.5

FRAC WATER SYSTEMS, INC.

1266 1st Street, Suite 4

Sarasota, FL 34236

		__________, 2013
(Name and Address)

Re:	Frac Water Systems, Inc. Directorship Offer

Dear __________:

It is my pleasure to offer you a position to serve on the Board of Directors of Frac Water Systems, Inc., a Nevada corporation (“FWSI”) on the terms described herein:

·	You will be eligible to purchase _______ shares of common stock of FWSI at a price of $____ per share or an aggregate of $_____.

·	You will attend Board meetings and Committee meetings as requested. You will make yourself reasonably available for Board and Committee meetings and to sign unanimous board consents as needed by FWSI.

·	You will be reimbursed for all reasonable and bona fide out-of-pocket expenses (including reasonable travel and lodging expenses related to attendance at Board and Committee meetings) incurred by you in your capacity as a director of FWSI.

Upon FWSI being funded and becoming operational, FWSI intends to implement a formal Board compensation plan which is expected to provide for the payment of modest annual cash retainers and Board meeting attendance fees as well as the issuance of stock options under FWSI’s 2013 Equity Incentive Plan.

FWSI and its affiliates will indemnify you if you are made or are threatened to be made a party to, or are otherwise involved in, as a witness or otherwise, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal, including appeals, by reason of the fact that you are or have agreed to serve as a director or officer of FWSI or any of its affiliates. The indemnification provided by this paragraph shall be from and against all loss and liability suffered and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by or on behalf of you in connection with such action, suit or proceeding, including any appeals. These indemnification rights will continue to apply after you cease to serve as a director of FWSI or its affiliates. FWSI will obtain D&O insurance in commercially reasonable amounts within approximately 30 days of your appointment as a director of FWSI.

This letter will become effective upon its execution by each of the undersigned and when the current Board of Directors of FWSI elects you as a director of FWSI. This letter agreement may be executed in two or more counterparts, any of which may be executed and transmitted by facsimile or electronic transmission, and each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[Signature page follows]

Please acknowledge your agreement to the terms hereof by signing this letter agreement as provided below and returning your signed copy of this letter agreement to me.

	FRAC WATER SYSTEMS, INC.

	a Nevada corporation

	By:
	Name:	Nadine C. Smith
	Title:	President

Accepted and Agreed:

EXHIBIT 10.6

FRAC WATER SYSTEMS, INC.

2013 EQUITY INCENTIVE PLAN

1. PURPOSE. The Frac Water Systems, Inc. 2013 Equity Incentive Plan has two complementary purposes: (a) to attract and retain outstanding individuals to serve as officers, employees, directors, consultants and advisors to the Company and its Affiliates, and (b) to increase stockholder value. The Plan will provide participants incentives to increase stockholder value by offering the opportunity to acquire shares of the Company’s Common Stock or receive monetary payments based on the value of such Common Stock, on the potentially favorable terms that this Plan provides.

2. EFFECTIVE DATE . The Plan shall become effective and Awards may be granted on and after October 15, 2013 (the “Effective Date”), subject, where required, to approval of the Plan by the stockholders of the Company within twelve (12) months after the Effective Date. Any Awards of incentive stock options granted under the Plan prior to such stockholder approval shall be conditioned on such approval and if such approval is not obtained within such twelve (12) month period, shall be treated as non-qualified stock options..

3. DEFINITIONS. Capitalized terms used in this Plan have the following meanings:

(a) “Affiliate” means any entity that, directly or through one or more intermediaries, is controlled by, controls, or is under common control with, the Company within the meaning of Code Sections 414(b) or (c), provided that, in applying such provisions, the phrase “at least fifty percent (50%)” shall be used in place of “at least eighty percent (80%)” each place it appears therein.

(b) “Award” means a grant of Options (as defined below), Stock Appreciation Rights (as defined in Section 3(w) hereof), Performance Shares (as defined in Section 3(p) hereof), Restricted Stock (as defined in Section 3(s) hereof), or Restricted Stock Units (as defined in Section 3(t) hereof).

(c) “Bankruptcy” shall mean (i) the filing of a voluntary petition under any bankruptcy or insolvency law, or a petition for the appointment of a receiver or the making of an assignment for the benefit of creditors, with respect to the Participant, or (ii) the Participant being subjected involuntarily to such a petition or assignment or to an attachment or other legal or equitable interest with respect to the Participant’s assets, which involuntary petition or assignment or attachment is not discharged within 60 days after its date, and (iii) the Participant being subject to a transfer of its Issued Shares by operation of law (including by divorce, even if not insolvent), except by reason of death.

(d) “Board” means the Board of Directors of the Company.

(e) “Change of Control” shall be deemed to have occurred as of the first day that any one or more of the following conditions is satisfied, including, but not limited to, the signing of documents by all parties and approval by all regulatory agencies, if required:

(i) The stockholders approve a plan of complete liquidation or dissolution of the Company; or

(ii) The consummation of (A) an agreement for the sale or disposition of all or substantially all of the Company’s assets (other than to an Excluded Person (as defined below)), or (B) a merger, consolidation or reorganization of the Company with or involving any other corporation or other legal entity, other than a merger, consolidation or reorganization that would result in the holders of voting securities of the Company outstanding immediately prior thereto continuing to hold (either by remaining outstanding or by being converted into voting securities of the surviving entity), at least fifty percent (50%) of the combined voting power of the voting securities of the Company (or such other surviving entity) outstanding immediately after such merger, consolidation or reorganization.

An Excluded Person means: (i) the Company or any of its Affiliates, (ii) a trustee or other fiduciary holding securities under any employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock in the Company.

Notwithstanding the foregoing, with respect to an Award that is considered deferred compensation subject to Code Section 409A, if the definition of “Change of Control” results in the payment of such Award, then such definition shall be amended to the minimum extent necessary, if at all, so that the definition satisfies the requirements of a change of control under Code Section 409A.

(f) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a specific provision of the Code includes any successor provision and the regulations promulgated under such provision.

(g) “Committee” means the Compensation Committee of the Board (or a successor committee with similar authority) or if no such committee is named by the Board, then it shall mean the Board.

(h) “Common Stock” means the Common Stock of the Company, par value $0.001 per share.

(i) “Company” means Frac Water Systems, Inc., a Nevada corporation, or any successor thereto.

(j) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time. Any reference to a specific provision of the Exchange Act shall be deemed to include any successor provision thereto.

(k) “Fair Market Value” means, per Share on a particular date, the value as determined by the Committee using a reasonable valuation method within the meaning of Code Section 409A, based on all information in the Company’s possession at such time, or if applicable, the value as determined by an independent appraiser selected by the Board or Committee.

(l) “Issued Shares” means, collectively, all outstanding Shares issued pursuant to an Award and all Option Shares.

(m) “Option” means the right to purchase Shares at a stated price upon and during a specified time. “Options” may either be “incentive stock options” which meet the requirements of Code Section 422, or “nonqualified stock options” which do not meet the requirements of Code Section 422.

(n) “Option Shares” means outstanding Shares that were issued to a Participant upon the exercise of an Option.

(o) “Participant” means an officer or other employee of the Company or its Affiliates, or an individual that the Company or an Affiliate has engaged to become an officer or employee, or a consultant or advisor who provides services to the Company or its Affiliates, including a non-employee director of the Board, whom the Committee designates to receive an Award.

(p) “Performance Shares” means the right to receive Shares to the extent the Company, Subsidiary, Affiliate or other business unit and/or Participant achieves certain goals that the Committee establishes over a period of time the Committee designates.

(q) “Permitted Transferee” means, in connection with a transfer made for bona fide estate planning purposes, either during a Participant’s lifetime or on death by will or intestacy, to his or her spouse, child (natural or adopted), or any other direct lineal descendant of such Participant (or his or her spouse) (all of the foregoing collectively referred to as “family members”), or any other relative approved unanimously by the Board of Directors of the Company, or any custodian or trustee of any trust, partnership or limited liability company for the benefit of, or the ownership interests of which are owned wholly by, such Participant or any such family members.

(r) “Plan” means this Frac Water Systems, Inc. 2013 Equity Incentive Plan, as amended from time to time.

(s) “Restricted Stock” means Shares that are subject to a risk of forfeiture and/or restrictions on transfer (including but not limited to stock grants with the recipient having the right to make an election under Section 83(b) of the Code), which may lapse upon the achievement or partial achievement of performance goals during a specified period and/or upon the completion of a period of service or upon the occurrence of other events, as determined by the Committee.

(t) “Restricted Stock Unit” means the right to receive a Share, or a cash payment, the amount of which is equal to the Fair Market Value of a Share, which is subject to a risk of forfeiture which may lapse upon the achievement or partial achievement of performance goals during a specified period and/or upon the completion of a period of service or upon the occurrence of other events, as determined by the Committee.

(u) “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

(v) “Share” means a share of Common Stock.

(w) “Stock Appreciation Right” or “SAR” means the right of a Participant to receive cash, and/or Shares with a Fair Market Value, equal to the excess of the Fair Market Value of a Share over the grant price.

(x) “Subsidiary” means any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations (other than the last corporation in the chain) owns stock possessing more than fifty percent (50%) of the total combined voting power of all classes of stock in one of the other corporations in the chain.

(y) “10% Owner-Employee” means an employee who, at the time an incentive stock option is granted, owns (directly or indirectly, within the meaning of Code Section 424(d)) more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any Subsidiary.

4. ADMINISTRATION .

(a) Committee Administration . The Committee has full authority to administer this Plan, including the authority to (i) interpret the provisions of this Plan, (ii) prescribe, amend and rescind rules and regulations relating to this Plan, (iii) correct any defect, supply any omission, or reconcile any inconsistency in any Award or agreement covering an Award in the manner and to the extent it deems desirable to carry this Plan into effect, and (iv) make all other determinations necessary or advisable for the administration of this Plan. All actions or determinations of the Committee are made in its sole discretion and will be final and binding on any person with an interest therein. If at any time the Committee is not in existence, the Board shall administer the Plan and references to the Committee in the Plan shall mean the Board.

(b) Delegation to Committees or Officers . To the extent applicable law permits, the Board may delegate to another committee of the Board or to one or more officers of the Company, or the Committee may delegate to a sub-committee, any or all of the authority and responsibility of the Committee. If the Board or Committee has made such a delegation, then all references to the Committee in this Plan include such committee, sub-committee or one or more officers to the extent of such delegation.

(c) No Liability . No member of the Committee or the Board, and no individual or officer to whom a delegation under subsection (b) has been made, will be liable for any act done, or determination made, by the individual in good faith with respect to the Plan or any Award. The Company will indemnify and hold harmless such individual to the maximum extent that the law and the Company’s bylaws permit.

5. DISCRETIONARY GRANTS OF AWARDS . Subject to the terms of this Plan, the Committee has full power and authority to: (a) designate from time to time the Participants to receive Awards under this Plan; (b) determine the type or types of Awards to be granted to each Participant; (c) determine the number of Shares with respect to which an Award relates; and (d) determine any terms and conditions of any Award including but not limited to permitting the delivery to the Company of Shares or the relinquishment of an appropriate number of vested Shares under an exercisable Option in satisfaction of part of all of the exercise price of, or withholding taxes with respect to, an Award. Awards may be granted either alone or in addition to, in tandem with, or in substitution for any other Award (or any other award granted under another plan of the Company or any Affiliate). The Committee’s designation of a Participant in any year will not require the Committee to designate such person to receive an Award in any other year.

6. SHARES RESERVED UNDER THIS PLAN .

(a) Plan Reserve . An aggregate of seven million five hundred thousand (7,500,000) Shares are reserved for issuance under this Plan, all of which may be issued as any form of Award; provided, however, that Awards for a maximum of two million five hundred thousand (2,500,000) Shares may be granted during the first twelve (12) months following the Effective Date of this Plan.

(b) Replenishment of Shares Under this Plan . If an Award lapses, expires, terminates or is cancelled without the issuance of Shares or payment of cash under the Award, then the Shares subject to or reserved for in respect of such Award, or the Shares to which such Award relates, may again be used for new Awards as determined under subsection (a), including issuance pursuant to incentive stock options. If Shares are delivered to (or withheld by) the Company in payment of the exercise price or withholding taxes of an Award, then such Shares may be used for new Awards under this Plan as determined under subsection (a), including issuance pursuant to incentive stock options. If Shares are issued under any Award and the Company subsequently reacquires them pursuant to rights reserved upon the issuance of the Shares, then such Shares may be used for new Awards under this Plan as determined under subsection (a), but excluding issuance pursuant to incentive stock options.

7. OPTIONS . Subject to the terms of this Plan, the Committee will determine all terms and conditions of each Option, including but not limited to:

(a) Whether the Option is an incentive stock option or a nonqualified stock option; provided that in the case of an incentive stock option, if the aggregate Fair Market Value (determined at the time of grant) of the Shares with respect to which such option and all other incentive stock options issued under this Plan (and under all other incentive stock option plans of the Company or any Affiliate that is required to be included under Code Section 422) are first exercisable by the Participant during any calendar year exceeds $100,000, such Option automatically shall be treated as a nonqualified stock option to the extent this limit is exceeded. Only employees of the Company or a Subsidiary are eligible to be granted incentive stock options;

(b) The number of Shares subject to the Option;

(c) The exercise price per Share, which may not be less than the Fair Market Value of a Share as determined on the date of grant; provided that an incentive stock option granted to a 10% Owner-Employee must have an exercise price that is at least one hundred ten percent (110%) of the Fair Market Value of a Share on the date of grant;

(d) The terms and conditions of exercise, including “cashless exercise”; and

(e) The termination date, except that each Option must terminate no later than the tenth (10th) anniversary of the date of grant and each incentive stock option granted to any 10% Owner-Employee must terminate no later than the fifth (5th) anniversary of the date of grant.

In all other respects, the terms of any incentive stock option should comply with the provisions of Code Section 422 except to the extent the Committee determines otherwise.

8. STOCK APPRECIATION RIGHTS . Subject to the terms of this Plan, the Committee will determine all terms and conditions of each SAR, including but not limited to:

(a) The number of Shares to which the SAR relates;

(b) The grant price, provided that the grant price shall not be less than the Fair Market Value of the Shares subject to the SAR as determined on the date of grant;

(d) The term, provided that a SAR must terminate no later than the tenth (10th) anniversary of the date of grant; and

(e) Whether the SAR will be settled in cash, Shares or a combination thereof.

9. PERFORMANCE SHARE AWARDS . Subject to the terms of this Plan, the Committee will determine all terms and conditions of each Performance Share Award, including but not limited to:

(a) The number of Shares to which the Performance Share Award relates;

(b) The terms and conditions of each Award, including, without limitation, the selection of the performance goals that must be achieved for the Participant to realize all or a portion of the benefit provided under the Award; and

(c) Whether all or a portion of the Shares subject to the Award will be issued to the Participant, without regard to whether the performance goals have been attained, in the event of the Participant’s death, disability, retirement or other circumstance.

10. RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS . Subject to the terms of this Plan, the Committee will determine all terms and conditions of each award of Restricted Stock or Restricted Stock Units, including but not limited to:

(a) The number of Shares or Restricted Stock Units to which such Award relates;

(b) The period of time over which, and/or the criteria or conditions that must be satisfied so that, the risk of forfeiture and/or restrictions on transfer imposed on the Restricted Stock or Restricted Stock Units will lapse;

(c) Whether all or a portion of the Restricted Shares or Restricted Stock Units will be released from a right of repurchase and/or be paid to the Participant in the event of the Participant’s death, disability, retirement or other circumstance;

(d) With respect to awards of Restricted Stock, the manner of registration of certificates for such Shares, and whether to hold such Shares in escrow pending lapse of the risk of forfeiture, right of repurchase and/or restrictions on transfer or to issue such Shares with an appropriate legend referring to such restrictions;

(e) With respect to awards of Restricted Stock, whether dividends paid with respect to such Shares will be immediately paid or held in escrow or otherwise deferred and whether such dividends shall be subject to the same terms and conditions as the Award to which they relate; and

(f) With respect to awards of Restricted Stock Units, whether to credit dividend equivalent units equal to the amount of dividends paid on a Share and whether such dividend equivalent units shall be subject to the same terms and conditions as the Award to which they relate.

11. TRANSFERABILITY . Except as set forth in Section 15 hereof, each award granted under this plan is not transferable other than by will or the laws of descent and distribution, or to a revocable trust, or as permitted by Rule 701 of the Securities Act.

12. TERMINATION AND AMENDMENT .

(a) Term . Subject to the right of the Board or Committee to terminate the Plan earlier pursuant to Section 12(b), the Plan shall terminate on, and no Awards may be granted after the tenth (10th) anniversary of the Plan’s Effective Date.

(b) Termination and Amendment . The Board or Committee may amend, alter, suspend, discontinue or terminate this Plan at any time, provided that:

(i) the Board must approve any amendment of this Plan to the extent the Company determines such approval is required by: (a) action of the Board, (b) applicable corporate law, or (c) any other applicable law or rule of a self-regulatory organization;

(ii) stockholders must approve any of the following Plan amendments: (a) an amendment to materially increase any number of Shares specified in Section 6(a) (except as permitted by Section 14(a)) or expand the class of individuals eligible to receive an Award to the extent required by the Code, the Company’s bylaws or any other applicable law, (b) any other amendment if required by applicable law or the rules of any self-regulatory organization, or (c) an amendment that would diminish the protections afforded by Section 12(e); provided, that such stockholder approval may be obtained within 12 months of the approval of such amendment by the Board or Committee.

(c) Amendment, Modification or Cancellation of Awards . Except as provided in subsection (e) and subject to the restrictions of this Plan, the Committee may modify or amend an Award or waive any restrictions or conditions applicable to an Award (including relating to the exercise, vesting or payment thereof), and the Committee may modify the terms and conditions applicable to any Award (including the terms of the Plan), and the Committee may cancel any Award, provided that the Participant (or any other person as may then have an interest in such Award as a result of the Participant’s death or the transfer of an Award) must consent in writing if any such action would adversely affect the rights of the Participant (or other interested party) under such Award. Notwithstanding the foregoing, the Committee need not obtain Participant (or other interested party) consent for the amendment, modification or cancellation of an Award pursuant to the provisions of Section 14(a), or the amendment or modification of an Award to the extent deemed necessary to comply with any applicable law, the listing requirements of any principal securities exchange or market on which the Shares are then traded, or to preserve favorable accounting treatment of any Award for the Company.

(d) Survival of Committee Authority and Awards . Notwithstanding the foregoing, the authority of the Committee to administer this Plan and modify or amend an Award, and the authority of the Board or Committee to amend this Plan, shall extend beyond the date of this Plan’s termination. In addition, termination of this Plan will not affect the rights of Participants with respect to Awards previously granted to them, and all unexpired Awards will continue in full force and effect after termination of this Plan except as they may lapse or be terminated by their own terms and conditions.

(e) Repricing Prohibited . Notwithstanding anything in this Plan to the contrary, neither the Committee nor any other person may decrease the exercise price of any Option or the grant price of any SAR nor take any action that would result in a deemed decrease of the exercise price or grant price of an Option or SAR under Code Section 409A, after the date of grant, except in accordance with Section 1.409A-1(b)(5)(v)(D) of the Treasury Regulations (26 C.F.R.), or in connection with a transaction which is considered the grant of a new Option or SAR for purposes of Section 409A of the Code, provided that the new exercise price or grant price is not less than the Fair Market Value of a Share on the new grant date.

(f) Foreign Participation . To assure the viability of Awards granted to Participants employed or residing in foreign countries, the Committee may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to, or amendments, restatements or alternative versions of this Plan as it determines is necessary or appropriate for such purposes. Any such amendment, restatement or alternative versions that the Committee approves for purposes of using this Plan in a foreign country will not affect the terms of this Plan for any other country.

13. TAXES.

(a) Withholding . In the event the Company or any Affiliate is required to withhold any foreign, federal, state or local taxes or other amounts in respect of any income recognized by a Participant as a result of the grant, vesting, payment or settlement of an Award or disposition of any Shares acquired under an Award, the Company may deduct (or require an Affiliate to deduct) from any payments of any kind otherwise due the Participant cash, or with the consent of the Committee, Shares otherwise deliverable or vesting under an Award, to satisfy such tax obligations. Alternatively, the Company may require such Participant to pay to the Company, in cash, promptly on demand, or make other arrangements satisfactory to the Company regarding the payment to the Company of the aggregate amount of any such taxes and other amounts required to be withheld. If Shares are deliverable upon exercise or payment of an Award, the Committee may permit a Participant to satisfy all or a portion of the foreign, federal, state and local withholding tax obligations arising in connection with such Award by electing to (a) have the Company withhold Shares otherwise issuable under the Award, (b) tender back Shares received in connection with such Award, or (c) deliver other previously owned Shares; provided that the amount to be withheld may not exceed the total minimum foreign, federal, state and local tax withholding obligations associated with the transaction to the extent needed for the Company to avoid an accounting charge. If an election is provided, the election must be made on or before the date as of which the amount of tax to be withheld is determined and otherwise as the Company requires. In any case, the Company may defer making payment or delivery under any Award if any such tax may be pending unless and until indemnified to its satisfaction.

(b) No Guarantee of Tax Treatment . Notwithstanding any provisions of the Plan, the Company does not guarantee to any Participant or any other person with an interest in an Award that any Award intended to be exempt from Code Section 409A shall be so exempt, nor that any Award intended to comply with Code Section 409A shall so comply, nor that any Award designated as an incentive stock option within the meaning of Code Section 422 qualifies as such, and neither the Company nor any Affiliate shall indemnify, defend or hold harmless any individual with respect to the tax consequences of any such failure.

14. ADJUSTMENT PROVISIONS; CHANGE OF CONTROL.

(a) Adjustment of Shares . If (i) the Company shall at any time be involved in a merger or other transaction in which the Shares are changed or exchanged; (ii) the Company shall subdivide or combine the Shares or the Company shall declare a dividend payable in Shares, other securities or other property; (iii) the Company shall effect a cash dividend the amount of which, on a per Share basis, exceeds ten percent (10%) of the Fair Market Value of a Share at the time the dividend is declared, or the Company shall effect any other dividend or other distribution on the Shares in the form of cash, or a repurchase of Shares, that the Committee determines by resolution is special or extraordinary in nature or that is in connection with a transaction that is a recapitalization or reorganization involving the Shares; or (iv) any other event shall occur, which, in the case of this subsection (iv), in the judgment of the Committee necessitates an adjustment to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan, then, in each case, the Committee shall, in such manner as it may deem equitable, adjust any or all of: (w) the number and type of Shares subject to this Plan (including the number and type of Shares that may be issued pursuant to incentive stock options), (x) the number and type of Shares subject to outstanding Awards, (y) the grant, purchase, or exercise price with respect to any Award, and (z) the performance goals established under any Award.

(i) In any such case, the Committee may also make provision for a cash payment, in an amount determined by the Committee, to the holder of an outstanding Award in exchange for the cancellation of all or a portion of the Award (without the consent of the holder of an Award), effective at such time as the Committee specifies (which may be the time such transaction or event is effective); provided that any such adjustment to an Award that is exempt from Code Section 409A shall be made in a manner that permits the Award to continue to be so exempt, and any adjustment to an Award that is subject to Code Section 409A shall be made in a manner that complies with the provisions thereof. However, with respect to Awards of incentive stock options, no such adjustment may be authorized to the extent that such authority would cause this Plan to violate Code Section 422(b). Further, the number of Shares subject to any Award payable or denominated in Shares must always be a whole number.

(ii) Without limitation, in the event of any reorganization, merger, consolidation, combination or other similar corporate transaction or event, whether or not constituting a Change of Control, other than any such transaction in which the Company is the continuing corporation and in which the outstanding Common Stock is not being converted into or exchanged for different securities, cash or other property, or any combination thereof, the Committee may provide that awards, without limitation, will be assumed by the surviving corporation or its parent, will have the vesting accelerated or will be cancelled with or without consideration, in all cases without the consent of the Participant.

(iii) Notwithstanding the foregoing, in the case of a stock dividend (other than a stock dividend declared in lieu of an ordinary cash dividend) or subdivision or combination of the Shares (including a reverse stock split), adjustments contemplated by this subsection that are proportionate shall nevertheless automatically be made as of the date of such stock dividend or subdivision or combination of the Shares.

(b) Issuance or Assumption . Notwithstanding any other provision of this Plan, and without affecting the number of Shares otherwise reserved or available under this Plan, in connection with any merger, consolidation, acquisition of property or stock, or reorganization, the Committee may authorize the cancellation, with or without consideration, issuance, assumption or acceleration of vesting of awards upon such terms and conditions as it may deem appropriate, in all cases without the consent of the Participant.

(c) Change of Control . Upon a Change of Control, the Committee may, in its discretion, determine that any or all outstanding Awards held by Participants who are then in the employ or service of the Company or any Affiliate shall vest or be deemed to have been earned in full, and:

(i) If the successor or surviving corporation (or parent thereof) so agrees, all outstanding Awards shall be assumed, or replaced with the same type of award with similar terms and conditions, by the successor or surviving corporation (or parent thereof) in the Change of Control. If applicable, each Award which is assumed by the successor or surviving corporation (or parent thereof) shall be appropriately adjusted, immediately after such Change of Control, to apply to the number and class of securities which would have been issuable to the Participant upon the consummation of such Change of Control had the Award been exercised or vested immediately prior to such Change of Control, and such other appropriate adjustments in the terms and conditions of the Award shall be made.

(ii) If the provisions of paragraph (i) do not apply, then all outstanding Awards shall be cancelled as of the date of the Change of Control and, at the option of the Committee, may be exchanged for a payment in cash and/or Shares (which may include shares or other securities of any surviving or successor entity or the purchasing entity or any parent thereof) equal to:

(1) In the case of an Option or SAR, the excess of the Fair Market Value of the Shares on the date of the Change of Control covered by the vested portion of the Option or SAR that has not been exercised over the exercise or grant price of such Shares under the Award;

(2) In the case of Restricted Stock Units, the Fair Market Value of a Share on the date of the Change of Control multiplied by the number of vested units, unless otherwise provided in the Award agreement and subject to the repurchase right set forth in Section 15 hereof; and

(3) In the case of a Performance Share Award, the Fair Market Value of a Share on the date of the Change of Control multiplied by the number of earned Shares.

(d) Parachute Payment Limitation .

(i) Except as may be set forth in a written agreement by and between the Company and the holder of an Award, in the event that the Company’s auditors determine that any payment or transfer by the Company under the Plan to or for the benefit of a Participant (a “Payment”) would be nondeductible by the Company for federal income tax purposes because of the provisions concerning “excess parachute payments” in Code Section 280G, then the aggregate present value of all Payments shall be reduced (but not below zero) to the Reduced Amount (defined herein). For purposes of this Section 14(d), the “Reduced Amount” shall be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible by the Company because of Code Section 280G.

(ii) If the Company’s auditors determine that any Payment would be nondeductible by the Company because of Code Section 280G, then the Company shall promptly give the Participant notice to that effect and a copy of the detailed calculation thereof and of the Reduced Amount, and the Participant may then elect, in his or her sole discretion, which and how much of the Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount) and shall advise the Company in writing of his or her election within ten (10) days of receipt of notice. If no such election is made by the Participant within such ten (10) day period, then the Company may elect which and how much of the Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount) and shall notify the Participant promptly of such election. For purposes of this Section 14(d), present value shall be determined in accordance with Code Section 280G(d)(4). All determinations made by the Company’s auditors under this Section 14(d) shall be binding upon the Company and the Participant and shall be made within sixty (60) days of the date when a Payment becomes payable or transferable. As promptly as practicable following such determination and the elections hereunder, the Company shall pay or transfer to or for the benefit of the Participant such amounts as are then due to him or her under the Plan and shall promptly pay or transfer to or for the benefit of the Participant in the future such amounts as become due to him or her under the Plan.

(iii) Except to the extent such payment was made in connection with a Change of Control, as a result of uncertainty in the application of Code Section 280G at the time of an initial determination by the Company’s auditors hereunder, it is possible that Payments will have been made by the Company that should not have been made (an “Overpayment”) or that additional Payments that will not have been made by the Company could have been made (an “Underpayment”), consistent in each case with the calculation of the Reduced Amount hereunder. In the event that the Company’s auditors, based upon the assertion of a deficiency by the Internal Revenue Service against the Company or the Participant that the auditors believe has a high probability of success, determine that an Overpayment has been made, such Overpayment shall be treated for all purposes as a loan to the Participant which he or she shall repay to the Company, together with interest at the applicable federal rate provided in Code Section 7872(f)(2); provided, however, that no amount shall be payable by the Participant to the Company if and to the extent that such payment would not reduce the amount subject to taxation under Code Section 4999. In the event that the auditors determine that an Underpayment has occurred, such Underpayment shall promptly be paid or transferred by the Company to or for the benefit of the Participant, together with interest at the applicable federal rate provided in Code Section 7872(f)(2).

(iv) For purposes of this Section 14(d), the term “Company” shall include affiliated corporations to the extent determined by the auditors in accordance with Code Section 280G(d)(5).

15. STOCK TRANSFER RESTRICTIONS.

(a) Restriction on Transfer of Options . No Option shall be transferable by the Participant otherwise than by will or by the laws of descent and distribution and all Options shall be exercisable, during the Participant’s lifetime, only by the Participant, or by the Participant’s legal representative or guardian in the event of the Participant’s incapacity. The Participant may elect to designate a beneficiary by providing written notice of the name of such beneficiary to the Company, and may revoke or change such designation at any time by filing written notice of revocation or change with the Company, and any such beneficiary may exercise the Participant’s Option in the event of the Participant’s death to the extent provided herein. If the Participant does not designate a beneficiary, or if the designated beneficiary predeceases the Participant, the legal representative of the Participant may exercise the Option in the event of the Participant’s death to the extent provided herein. Notwithstanding the foregoing, the Committee, in its sole discretion, may provide in the Award agreement regarding a given Option that the Participant may transfer, without consideration for the transfer, his or her Options to members of his or her immediate family, to trusts for the benefit of such family members, or to partnerships in which such family members are the only partners, provided that the transferee agrees in writing with the Company to be bound by all of the terms and conditions of this Plan and the applicable Option.

(b) Issued Shares . No Issued Shares shall be sold, assigned, transferred, pledged, hypothecated, given away or in any other manner disposed of or encumbered, whether voluntarily or by operation of law, unless such transfer is in compliance with the terms of the applicable Award, all applicable securities laws (including, without limitation, the Securities Act and the Exchange Act), and with the terms and conditions of this Section 15. In connection with any proposed transfer, the Committee may require the transferor to provide at the transferor’s own expense an opinion of counsel to the transferor and the Company, satisfactory to the Committee, that such transfer is in compliance with all foreign, federal and state securities laws (including, without limitation, the Securities Act). Any attempted disposition of Issued Shares not in accordance with the terms and conditions of this Section 15 shall be null and void, and the Company shall not reflect on its records any change in record ownership of any Issued Shares as a result of any such disposition, shall otherwise refuse to recognize any such disposition and shall not in any way give effect to any such disposition of Issued Shares.

(c) Legends . The Company may cause a legend or legends to be put on any certificates for shares to make appropriate references to any applicable legal restrictions on transfer.

(d) Adjustments for Changes in Capital Structure . If, as a result of any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar change in the outstanding Shares of the Company, the outstanding Shares are increased or decreased or are exchanged for a different number or kind of shares of the Company’s stock, the restrictions contained in this Section 15 shall apply with equal force to additional and/or substitute securities, if any, received by Participant in exchange for, or by virtue of his or her ownership of, Issued Shares.

16. MISCELLANEOUS.

(a) Other Terms and Conditions . The grant of any Award under this Plan may also be subject to other provisions (whether or not applicable to the Award awarded to any other Participant) as the Committee determines appropriate, subject to any limitations imposed in the Plan.

(b) Code Section 409A . The provisions of Code Section 409A are incorporated herein by reference to the extent necessary for any Award that is subject to Code Section 409A to comply therewith.

(c) Employment or Service . The issuance of an Award shall not confer upon a Participant any right with respect to continued employment or service with the Company or any Affiliate, or the right to continue as a consultant or director. Unless determined otherwise by the Committee, for purposes of the Plan and all Awards, the following rules shall apply:

(i) a Participant who transfers employment between the Company and any Affiliate, or between Affiliates, will not be considered to have terminated employment;

(ii) a Participant who ceases to be a consultant, advisor or non-employee director because he or she becomes an employee of the Company or an Affiliate shall not be considered to have ceased service with respect to any Award until such Participant’s termination of employment with the Company and its Affiliates;

(iii) a Participant who ceases to be employed by the Company or an Affiliate of the Company and immediately thereafter becomes a non-employee director of the Company or any Affiliate, or a consultant to the Company or any Affiliate, shall not be considered to have terminated employment until such Participant’s service as a director of, or consultant to, the Company and its Affiliates has ceased; and

(iv) a Participant employed by an Affiliate will be considered to have terminated employment when such entity ceases to be an Affiliate of the Company.

Notwithstanding the foregoing, with respect to an Award subject to Code Section 409A, a Participant shall be considered to have terminated employment (where termination of employment triggers payment of the Award) upon the date of his separation from service within the meaning of Code Section 409A.

(d) No Fractional Shares . No fractional Shares or other securities may be issued or delivered pursuant to this Plan, and the Committee may determine whether cash, other securities or other property will be paid or transferred in lieu of any fractional Shares or other securities, or whether such fractional Shares or other securities or any rights to fractional Shares or other securities will be canceled, terminated or otherwise eliminated.

(e) Unfunded Plan . This Plan is unfunded and does not create, and should not be construed to create, a trust or separate fund with respect to this Plan’s benefits. This Plan does not establish any fiduciary relationship between the Company and any Participant. To the extent any person holds any rights by virtue of an Award granted under this Plan, such rights are no greater than the rights of the Company’s general unsecured creditors.

(f) Requirements of Law . The granting of Awards under this Plan and the issuance of Shares in connection with an Award are subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required. Notwithstanding any other provision of this Plan or any award agreement, the Company has no liability to deliver any Shares under this Plan or make any payment unless such delivery or payment would comply with all applicable laws and the applicable requirements of any securities exchange or similar entity. In such event, the Company may substitute cash for any Share(s) otherwise deliverable hereunder without the consent of the Participant or any other person.

(g) Governing Law . This Plan, and all agreements under this Plan, shall be construed in accordance with and governed by the laws of the State of New York, without reference to any conflict of law principles. Any legal action or proceeding with respect to this Plan, any Award or any award agreement, or for recognition and enforcement of any judgment in respect of this Plan, any Award or any award agreement, may only be brought and determined in a court sitting in the State of New York, New York County.

(h) Limitations on Actions . Any legal action or proceeding with respect to this Plan, any Award or any Award agreement, must be brought within one year (365 days) after the day the complaining party first knew or should have known of the events giving rise to the complaint.

(i) Construction . Whenever any words are used herein in the masculine, they shall be construed as though they were used in the feminine in all cases where they would so apply; and wherever any words are used in the singular or plural, they shall be construed as though they were used in the plural or singular, as the case may be, in all cases where they would so apply. Titles of sections are for general information only, and the Plan is not to be construed with reference to such titles.

(j) Severability . If any provision of this Plan or any award agreement or any Award (i) is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to any person or Award, or (ii) would disqualify this Plan, any award agreement or any Award, then such provision should be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of this Plan, award agreement or Award, then such provision should be stricken as to such jurisdiction, person or Award, and the remainder of this Plan, such award agreement and such Award will remain in full force and effect.

C E R T I F I C A T I O N

On behalf of the Company, the undersigned hereby certifies that this Frac Water Systems, Inc. 2013 Equity Incentive Plan has been approved by the Board of Directors of the Company as of October 15, 2013.

	FRAC WATER SYSTEMS, INC.

	By:	/s/ Nadine Smith
	Name:	Nadine Smith
	Title:	President

EXHIBIT 10.7

SHARE CANCELLATION AGREEMENT

SHARE CANCELLATION AGREEMENT, dated October 10, 2013 (this “ Agreement ”), by and between, Frac Water Solutions, Inc., a Nevada corporation (the “ Company ”), and Ufuk Turk (the “ Cancelling Party ”).

BACKGROUND

WHEREAS, the Company was formed to engage in the development, sales and marketing of online video stores (the “ Legacy Business ”); and

WHEREAS, the Cancelling Party has served as a Director of the Company since February 15, 2008; and

WHEREAS, going forward, having discontinued the Legacy Business, the Company’s plan is to acquire other assets or business operations that will maximize shareholder value; and

WHEREAS, effective as of the date hereof, the Cancelling Party has resigned from all positions that he held with the Company; and

WHEREAS, the Cancelling Party is the record and beneficial owner of a total of Seventy Million (70,000,000) shares (the " Subject Shares ") of the Company's common stock, par value $0.0001 per share; and

WHEREAS, in consideration for the agreement by the new management of the Company to assume the existing liabilities of the Legacy Business, and in an effort to enhance the Company’s ability to proceed with the implementation of its new business plan, the Cancelling Party desires to have cancelled, and the Company desires to cancel, all of the Subject Shares.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual promises herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Assumption of Liabilities . The Company hereby undertakes, assumes and agrees to perform, pay or discharge in accordance with their terms, to the extent not heretofore performed, paid or discharged, the liabilities and obligations of the Legacy Business in existence as of the date hereof.

2. Cancellation of Subject Shares . The Cancelling Party has delivered to the Company for cancellation stock certificates representing the Subject Shares along with duly executed medallion guaranteed stock powers covering the Subject Shares (or such other documents acceptable to the Company’s transfer agent) and hereby irrevocably instructs the Company and the Company’s transfer agent to immediately cancel the Subject Shares, such that the Subject Shares will no longer be outstanding on the stock ledger of the Company and such that the Cancelling Party shall no longer have any interest in the Subject Shares whatsoever. The Company shall immediately deliver to the Company’s transfer agent irrevocable instructions providing for the cancellation of the Subject Shares.

3. Release by the Cancelling Party . For and in consideration of the covenants and promises contained herein, the Cancelling Party, together with his heirs, executors, administrators, and assigns (collectively, the “ Cancelling Party Releasing Parties ”), does hereby fully and forever waive, release, acquit and discharge the Company, together with all of the Company’s past and present predecessors-in-interest, successors-in-interest, assigns, parents, subsidiaries and affiliates, and all of their officers, directors, shareholders, principals, managers, members, partners, employees, agents, servants, attorneys and legal representatives (collectively, the “ Company Released Parties ”), from any and all actions, suits, arbitrations, proceedings, controversies, disputes, causes of action, claims, rights, obligations, demands, agreements, covenants, promises, responsibilities, liabilities, indemnifications, contributions, damages, costs, expenses and fees, of whatever kind and nature, whether contractual, extra-contractual, tort or otherwise, which the Cancelling Party or any of the Cancelling Party Releasing Parties may now have, ever had, or will ever have against the Company or any of the Company Released Parties, arising from the beginning of the world to date, whether known or unknown, matured or unmatured, foreseeable or unforeseeable, fixed, contingent, class, individual, derivative or otherwise (the “ Cancelling Party’s Released Claims ”). The Cancelling Party and the Cancelling Party Releasing Parties understand that they may later discover facts relating to the Cancelling Party’s Released Claims in addition to or different from the facts now known or believed by them to be true, and accept and assume such risk. Notwithstanding anything to the contrary herein, it is further understood and agreed by the parties hereto that this release shall not apply to acts of fraud or gross negligence by the Company or the Company Released Parties or release the Company or the Company Released Parties from any claims arising out of or related to this Agreement.

4. Representations by the Cancelling Party .

(a) The Cancelling Party owns the Subject Shares, of record and beneficially, free and clear of all liens, claims, charges, security interests, and encumbrances of any kind whatsoever. The Cancelling Party has sole control over the Subject Shares or sole discretionary authority over any account in which they are held. Except for this Agreement, no person has any option or right to purchase or otherwise acquire the Subject Shares, whether by contract of sale or otherwise, nor is there a “short position” as to the Subject Shares.

(b) The Cancelling Party has full right, power and authority to execute, deliver and perform this Agreement and to carry out the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Cancelling Party and constitutes a valid, binding obligation of the Cancelling Party, enforceable against it in accordance with its terms (except as such enforceability may be limited by laws affecting creditor's rights generally).

5. Further Assurances . Each party to this Agreement will use his or its best efforts to take all action and to do all things necessary, proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including the execution and delivery of such other documents and agreements as may be necessary to effectuate the cancellation of the Subject Shares).

6. Amendment and Waiver . Any term, covenant, agreement or condition of this Agreement may be amended, with the written consent of the Company and the Cancelling Party, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by one or more substantially concurrent written instruments signed by the Company and the Cancelling Party.

7. Survival of Agreements, Representations and Warranties, etc . All representations and warranties contained herein shall survive the execution and delivery of this Agreement.

8. Successors and Assigns . This Agreement shall bind and inure to the benefit of and be enforceable by the Company and the Cancelling Party, and their respective successors and assigns.

9. Governing Law . This Agreement (including the validity thereof and the rights and obligations of the parties hereunder and thereunder) and all amendments and supplements hereof and thereof and all waivers and consents hereunder and thereunder shall be construed in accordance with and governed by the internal laws of the State of New York without regard to its conflict of laws rules, except to the extent the laws of Nevada are mandatorily applicable.

10. Miscellaneous . This Agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof. In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. This Agreement may be executed in any number of counterparts and by the parties hereto on separate counterparts but all such counterparts shall together constitute but one and the same instrument. This Agreement may be reproduced by any electronic, photographic, photostatic, magnetic, microfilm, microfiche, microcard, miniature photographic, facsimile or other similar process and the original thereof may be destroyed. The parties agree that any such reproduction shall, to the extent permitted by law, be as admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not the reproduction was made in the regular course of business) and that any enlargement, facsimile or further reproduction shall likewise be admissible in evidence. Facsimile execution and delivery of this Agreement is legal, valid and binding execution and delivery for all purposes.

[ Signature Page Follows ]

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

	COMPANY:

	FRAC WATER SYSTEMS, INC.

	By:	/s/ Nadine C. Smith
	Name:	Nadine Smith
	Title:	Chief Executive Officer

	CANCELLING PARTY:

	/s/ Ufuk Turk
	Ufuk Turk

EXHIBIT 10.8

SHARE CANCELLATION AGREEMENT

SHARE CANCELLATION AGREEMENT, dated October 10, 2013 (this “ Agreement ”), by and between, Frac Water Systems, Inc., a Nevada corporation (the “ Company ”), and Fadi Zeidan (the “ Cancelling Party ”).

BACKGROUND

WHEREAS, the Company was formed to engage in the development, sales and marketing of online video stores (the “ Legacy Business ”); and

WHEREAS, the Cancelling Party has served as the Company’s President, Secretary, and Treasurer, and as a Director since February 15, 2008; and

WHEREAS, going forward, having discontinued the Legacy Business, the Company’s plan is to acquire other assets or business operations that will maximize shareholder value; and

WHEREAS, effective as of the date hereof, the Cancelling Party has resigned from all positions that he held with the Company; and

WHEREAS, the Cancelling Party is the record and beneficial owner of a total of One Hundred Thirty Million (130,000,000) shares (the " Subject Shares ") of the Company's common stock, par value $0.0001 per share; and

AGREEMENT

4. Representations by the Cancelling Party .

7. Survival of Agreements, Representations and Warranties, etc . All representations and warranties contained herein shall survive the execution and delivery of this Agreement.

8. Successors and Assigns . This Agreement shall bind and inure to the benefit of and be enforceable by the Company and the Cancelling Party, and their respective successors and assigns.

[ Signature Page Follows ]

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

	COMPANY:

	FRAC WATER SYSTEMS, INC.

	By:	/s/ Nadine C. Smith
	Name:	Nadine Smith
	Title:	Chief Executive Officer

	CANCELLING PARTY:

	/s/ Fadi Zeidan
	Fadi Zeidan