Exhibit 10.39

SETTLEMENT AGREEMENT AND RELEASE

THIS SETTLEMENT AGREEMENT AND RELEASE (“Settlement Agreement”) is entered into
effective as of the last date of any party’s signature hereto and exists by and
among Process Water Solutions, LLC (“Process Water”); Veolia Water North America
Operating Services, LLC (“Veolia”); Clean Water Technologies, LLC (“Clean
Water”); and Dr. Phosphate, Inc. (“Dr. Phosphate”); on the one hand, and Basin
Water-MPT, Inc. (“BWMPT”); Basin Water, Inc. (“BWI”); Robert Gorgol (“Gorgol”);
Robert Stark; and Michael Stark; on the other hand.

WHEREAS, Process Water, Veolia, Clean Water, and Dr. Phosphate (collectively,
“Plaintiffs”) have brought claims against BWMPT, BWI, Gorgol, Robert Stark, and
Michael Stark (collectively, “Defendants”) asserting, among other things, that
Defendants have acted to misappropriate and use to their own benefit certain
claimed confidential information, trade secrets, and other intellectual property
allegedly owned by one or more of the Plaintiffs and protected from disclosure
to or use by Defendants, and subsequently filed an action styled Process Water
Solutions, LLC; Veolia Water North America Operating Services, LLC; Clean Water
Technologies, LLC; and Dr. Phosphate, Inc. v. Basin Water-MPT, Inc.; Robert
Gorgol; Robert Stark; Basin Water, Inc.; and Michael Stark, in the United States
District Court for the Middle District of Florida, Case No. 8:07CV1944-T24-MSS
(the “Litigation”); and

WHEREAS, Defendants have denied all of the material allegations made by
Plaintiffs in the Litigation, contend that they have not misappropriated or used
any claimed trade secrets, confidential information, or other protected
intellectual property allegedly owned by one or more of the Plaintiffs, and
have, as to some of them, counterclaimed seeking, among other things, a
declaration of rights regarding the claimed intellectual property and an award
of attorneys’ fees; and

WHEREAS, in order to avoid further protracted and expensive litigation, the
parties now desire to compromise and resolve all claims and controversies which
exist between Plaintiffs and Defendants in regard to matters related to the
Litigation, including all claims set out in the Litigation.

NOW, THEREFORE, in consideration of the mutual covenants and representations
hereinafter set forth, the receipt and sufficiency of which are acknowledged by
all parties, the parties as undersigned agree as follows:

 

  1. Payment.

Defendants shall make or cause to be made one joint payment of Five Hundred
Seventy Five Thousand Dollars ($575,000.00) to Plaintiffs. Payment shall be made
in the form of one or more draft(s) made payable on a joint basis to all
Plaintiffs, and such draft(s) will be delivered to counsel for PWS within ten
(10) business days of this Settlement Agreement becoming effective and not
subject to any condition or contingency, including that hereinafter set forth in
Paragraph 3 related to action of the court in the Litigation. It shall be the
responsibility of the Plaintiffs to apportion and distribute the foregoing
payment amount among themselves as they deem appropriate, and Plaintiffs, on a
joint and several basis, will indemnify and hold harmless all Defendants with
respect to any claim or controversy that may arise with respect to the
apportionment and distribution of the foregoing payment amount.

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  2. Releases.

Plaintiffs, for themselves and their predecessors and successors, hereby release
and discharge Defendants, together with their respective officers, directors,
shareholders, agents, employees, insurers, attorneys and affiliated companies,
from any and all claims, actions, causes of action, sums of money due,
attorneys’ fees, suits, debts, covenants, contracts, agreements, promises,
demands or liabilities whatsoever, in law or in equity, whether known or
unknown, which Plaintiffs ever had, now have, or might in the future have
against any of the foregoing based upon facts occurring up to the effective date
of this Settlement Agreement and related to the subject matter of the
Litigation. This release specifically includes, without limitation, any claims
which were asserted or could have been asserted in the Litigation, but excludes
obligations arising under this Settlement Agreement.

Defendants, for themselves and their predecessors and successors, hereby release
and discharge Plaintiffs, together with their respective officers, directors,
shareholders, agents, employees, insurers, attorneys and affiliated companies,
from any and all claims, actions, causes of action, sums of money due,
attorneys’ fees, suits, debts, covenants, contracts, agreements, promises,
demands or liabilities whatsoever, in law or in equity, whether known or
unknown, which Defendants ever had, now have, or might in the future have
against any of the foregoing based upon facts occurring up to the effective date
of this Settlement Agreement and related to the subject matter of the
Litigation.

This release specifically includes, without limitation, any claims which were
asserted or could have been asserted in the Litigation with the exception of any
claim by the parties with respect to a declaration of rights to intellectual
property allegedly owned by one or more of the Plaintiffs. The scope of this
release excludes obligations arising under this Settlement Agreement, and this
release does not apply to claims based upon any conduct occurring after the
execution of this Settlement Agreement, even if such conduct is purportedly a
continuation of conduct occurring prior to such execution.

In addition to the releases set out above in this Paragraph 2, Plaintiffs agree
to obtain and deliver to counsel for Defendants release riders executed by
Vaughn Astley, Gwen Astley, Dennis Michalski and Donald Luke in the form
attached hereto as Exhibit “A”. Plaintiffs acknowledge, represent, and warrant
that the consideration being provided by Defendants pursuant to this Settlement
Agreement will have direct benefit to, and constitutes valuable and adequate
consideration to, said persons with respect to their giving of the subject
release riders. Said executed release riders shall be delivered to counsel for
Defendants within five (5) business days of execution of this Settlement
Agreement by all parties to the Litigation and shall be a condition to the
effectiveness of the Settlement Agreement. Said release riders shall be held in
escrow by counsel for Defendants and not released to Defendants until this
Settlement Agreement becomes effective and not subject to any condition or
contingency, including that hereinafter set forth in Paragraph 3 related to
action of the court in the Litigation.

The parties agree that, in the event any party to this Settlement Agreement is
made the object of a claim purportedly released via this Settlement Agreement,
and provided the person or entity asserting the claim is claiming by or through
the releasing party through an assignment or other intentional act of the
releasing party, then such releasing party shall indemnify and hold harmless the
party

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made the object of the claim, including payment of attorneys’ fees and expenses.
Plaintiffs represent and warrant that, as of the effective date of the
Settlement Agreement, they have no knowledge of a basis for the assertion of any
claim by Plaintiffs, or any of them, against Defendants, or any of them, except
as set forth in the Litigation.

 

  3. Stipulated Final Injunction and Order of Dismissal.

On or immediately after the last date of any party’s signature hereto, counsel
for the parties shall execute that certain Stipulated Final Injunction and Order
of Dismissal (“Injunction and Dismissal”) attached hereto as Exhibit “B” and
shall petition the court in the Litigation to enter the Injunction and
Dismissal. Notwithstanding anything else in this Settlement Agreement, the
effectiveness and of this Settlement Agreement, including executed releases in
the form attached hereto as Exhibit “A,” is conditioned upon entry by the court
of the Injunction and Dismissal in the form attached hereto as Exhibit “B”.
Absent such entry, this Settlement Agreement shall have no force or effect.
Should the court fail to enter the Injunction and Dismissal on or before the
sixtieth (60th) day following the effective date of this Settlement Agreement,
this Settlement Agreement shall terminate.

 

  4. Gorgol’s, Robert Stark’s, and Daniel Prokop’s Separation from Veolia.

Veolia acknowledges that Gorgol resigned from Veolia of his own volition. Veolia
further agrees to provide only a neutral reference as regards Gorgol, Robert
Stark and Daniel Prokop, consisting only of the dates of employment and last
position held.

 

  5. Future Disputes.

Prior to the initiation by one or more Plaintiffs of any litigation involving
any of the Defendants in relation to a claimed violation of this Settlement
Agreement or the intellectual property rights of any Plaintiff, written notice
of demand shall be sent to the appropriate Defendants and to their counsel at
the addresses provided below. If the involved parties have failed to reach a
resolution within thirty (30) days after the notice of demand is delivered, the
involved parties shall submit the dispute to good faith mediation, which shall
be completed within the next thirty (30) days and before any litigation is
commenced. Notwithstanding the foregoing, if any party is threatened with
genuine and immediate irreparable harm by another party in relation to a claimed
violation of this Settlement Agreement, such party may seek immediate injunctive
relief, but the notice and mediation requirements of this paragraph 5 shall
otherwise remain applicable.

 

  6. Attorneys’ Fees.

All parties shall bear all of their respective costs and expenses associated
with the Litigation, including but not limited to filing and attorneys’ fees. No
party to this Settlement Agreement shall be required to make any payment
relating to the Litigation other than the settlement payment specifically
provided for in Paragraph 1, above. In the event that subsequent litigation
arises in relation to claimed breach of this Settlement Agreement or an
enforcement action relating to the Injunction and Dismissal, the prevailing
party shall be entitled to recover its costs of litigation, including attorneys’
fees and costs, from the non-prevailing party.

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  7. Non-Disparagement.

The parties agree that they, as well as their affiliated and related persons and
entities, shall not make negative reference to the character or the business
reputation of the non-corporate parties to this Settlement Agreement. This
obligation excludes communications compelled by law or as may occur internally
among employees of the respective Plaintiffs or affiliated entities.

 

  8. Miscellaneous Provisions.

A) Entire Agreement. This Settlement Agreement supersedes any and all prior
agreements between the parties, and represents the entire agreement among the
parties, relating to the subject matter hereof. The parties acknowledge and
agree that there have been no offers or inducements which have led to the
execution of this Settlement Agreement other than as stated herein.

B) Amendments. Any modification, amendment, restatement or termination of this
Settlement Agreement must be in writing and executed by each and every party.

C) Governing Law. This Settlement Agreement shall be interpreted and controlled
by the substantive law of the state of Florida without reference to the
principles of conflicts of law.

D) Capacity; Non-Assignment. All parties warrant and represent that they have
not sold, assigned, granted, conveyed, or otherwise transferred to any other
firm, corporation, person, or other entity, any of the rights, obligations,
claims, demands, actions, or causes of action described herein or in the
Litigation, and that they have the full legal capacity to enter into, execute
and perform their respective obligations set forth in this Settlement Agreement.
The parties further represent and warrant that, as of the effective date of the
Settlement Agreement, they have no knowledge of any person or entity entitled to
claim, or contemplating claiming, legal wrongs and associated relief against one
more of the other parties to this Settlement Agreement or their related persons
and entities except as currently set forth by a party in the Litigation.

E) Binding Effect. This Settlement Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors in
interest and assigns.

F) Indemnity. The parties acknowledge that the representations and warranties
set forth in this Settlement Agreement have been relied upon and are material to
the making of this Settlement Agreement. Any party making an untrue or
inaccurate representation or warranty herein shall indemnify and hold harmless,
including but not limited to the payment of attorneys’ fees and expenses, any
other party damaged by virtue of such circumstances.

G) Counterparts. This Settlement Agreement may be executed in multiple
counterparts, at different times and places. When all parties have executed a
counterpart of this Settlement Agreement, it shall be considered fully executed
notwithstanding that all of the parties may not have signed the same
counterpart. A facsimile or other copy of an executed counterpart hereof, such
as an e-mailed PDF copy, shall have the same effect as an original.

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H) No Presumptions. The parties to this Settlement Agreement acknowledge that
they have read and understand this agreement and they have been represented by
legal counsel in its negotiation and drafting, which has been a joint
undertaking. No party shall be deemed to be the drafter of this Settlement
Agreement, in full or in part, and there shall be no presumptions raised in
relation to any drafting of this instrument.

I) Confidentiality. Except as may be otherwise required or compelled by law, all
parties agree not disclose or publish, verbally, in writing or otherwise, to any
person or entity any details regarding the negotiations leading up to the making
of this Settlement Agreement, the consideration passing pursuant to this
Settlement Agreement, or any other term or condition of this Settlement
Agreement. The only statements that shall be made regarding the Litigation or
the terms of this Settlement Agreement to any non-party to the Litigation shall
be a statement to the effect that the Litigation and the underlying disputes
have been resolved by agreement and are concluded. Notwithstanding the foregoing
provisions of this paragraph 8(I), a corporate party to this Settlement
Agreement shall be permitted to make otherwise prohibited disclosure to its
outside lawyers and auditors, as well as internally on a strict business “need
to know” basis only.

J) All Necessary Steps. The parties acknowledge and agree to take all necessary
steps, including the execution of documents, to carry through and complete the
exchange of consideration described in this Settlement Agreement.

K) Notices. All notices required hereunder shall be in writing and shall be
delivered by facsimile, delivery service, or overnight delivery service, as well
as by First Class mail, to the parties at their respective addresses set forth
below. Notice shall be deemed given upon receipt.

 

If to Process Water:    Process Water Solutions, LLC    Attn: Vaughn Astley   
2120 Clubhouse Road    Lakeland, FL 33813 With a copy to:    Fee & Jeffries,
P.A.    Attn: Richard E. Fee    1227 N. Franklin Street    Tampa, FL 33602 If to
Clean Water:    Clean Water Technologies, LLC    Attn: Donald Luke    1623
Palace Court    Valrico, FL 33594

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With a copy to:    Fee & Jeffries, P.A.    Attn: Richard E. Fee   
1227 N. Franklin Street    Tampa, FL 33602 If to Dr. Phosphate:    Dr.
Phosphate, Inc.    Attn: Vaughn Astley    2120 Clubhouse Road    Lakeland, FL
33813 With a copy to:    Fee & Jeffries, P.A.    Attn: Richard E. Fee    1227 N.
Franklin Street    Tampa, FL 33602 If to Veolia:    Veolia Water North America
Operating Services, LLC    Attn:                                 14950 Heathrow
Forest Parkway, Suite 200    Houston, Texas 77032 With a copy to:    Stephen W.
Mooney    Michael A. Sexton    Weinberg Wheeler Hudgins Gunn & Dial, LLC    950
Paces Ferry Road, Suite 3000    Atlanta, GA 30326 If to BWMPT:    Basin
Water-MPT, Inc.    Attn: Scott Hamilton    TWO Kingwood Place    700 Rockmead
Drive, Suite 105    Kingwood, TX 77339 With a copy to:    Robert P. Riordan   
Alston & Bird, LLP    1201 West Peachtree Street    Atlanta, GA 30309 If to BWI:
   Basin Water, Inc.    Attn: Scott Hamilton    TWO Kingwood Place    700
Rockmead Drive, Suite 105    Kingwood, TX 77339

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With a copy to:    Robert P. Riordan    Alston & Bird, LLP    1201 West
Peachtree Street    Atlanta, GA 30309 If to Gorgol, Robert Stark,    [Applicable
Name] or Michael Stark    Basin Water, Inc.    TWO Kingwood Place    700
Rockmead Drive, Suite 105    Kingwood, TX 77339 With a copy to:    Robert P.
Riordan    Alston & Bird, LLP    1201 West Peachtree Street    Atlanta, GA 30309

L) Titles. The parties acknowledge and agree that the titles used in this
Settlement Agreement are for informational purposes only and shall not be
considered in construing the terms hereof.

IN WITNESS WHEREOF, the parties have executed this Settlement Agreement
knowingly, voluntarily and of their own free will.

 

Process Water Solutions, LLC      Veolia Water North America Operating Services,
LLC By:  

[ILLEGIBLE]

     By:  

[ILLEGIBLE]

Title:  

PRESIDENT

     Title:  

Vice President

Date:  

11/28/08

     Date  

12/1/08

Clean Water Technologies, LLC      Dr. Phosphate, Inc. By:  

[ILLEGIBLE]

     By:  

[ILLEGIBLE]

Title:  

PRESIDENT

     Title:  

PRESIDENT

Date:  

11/28/08

     Date:  

11/28/08

[SIGNATURES CONTINUED ON NEXT PAGE]

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Basin Water-MPT, Inc.      Basin Water, Inc. By:  

/s/ Michael M. Stark

     By:  

/s/ Michael M. Stark

Title:  

Chief Executive Officer

     Title:  

Chief Executive Officer

Date:  

12/8/08

     Date:  

12/8/08

Robert Gorgol      Robert Stark  

/s/ Robert Gorgol

      

/s/ Robert Stark

Date:  

12/8/08

     Date:  

12/8/08

Michael Stark         

/s/ Michael M. Stark

       Date:  

12/8/08

      

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EXHIBIT “A”

RELEASE

The undersigned Donald A. Luke (hereinafter “Releasor”), acting for
himself/herself and his/her privies, successors and assigns, and acting with the
advice of legal counsel, hereby provides this Release.

Releasor acknowledges that s/he has read and understands that certain Settlement
Agreement and Release (“Settlement Agreement”) by and among Process Water
Solutions, LLC (“Process Water”); Veolia Water North America Operating Services,
LLC (“Veolia”); Clean Water Technologies, LLC (“Clean Water”); and
Dr. Phosphate, Inc. (“Dr. Phosphate”); on the one hand, and Basin Water-MPT,
Inc. (“BWMPT”); Basin Water, Inc. (“BWI”); Robert Gorgol (“Gorgol”); Robert
Stark; and Michael Stark; on the other hand. Releasor acknowledges further that
s/he stands to gain finically and otherwise by virtue of execution of the
referenced Settlement Agreement by BWMPT, BWI, Gorgol, Robert Stark and Michael
Stark (hereinafter “Defendants”), that the Settlement Agreement would not be
executed by Defendants but for the promise contained therein with regard to the
delivery of this executed Release, and that the execution of the Settlement
Agreement by Defendants provides good and valuable consideration for the giving
of the Release by Releasor.

Accordingly, Releasor hereby releases and discharges Defendants, together with
their respective officers, directors, shareholders, agents, employees and
affiliated companies from any and all claims, actions, causes of action, sums of
money due, attorneys’ fees, suits, debts, covenants, contracts, agreements,
promises, demands or liabilities whatsoever, in law or in equity, whether known
or unknown, which Releasor ever had, now has, or might in the future have
against any of the Defendants based upon facts occurring up to and including the
execution date of this Release (as set forth below) and related to the subject
matter of the Litigation as such term is defined in the Settlement Agreement.

Releasor represents and warrants, understanding that the truth of such
representation and warranty is material to the Defendants proceeding under the
Settlement Agreement, that Releasor has not assigned or otherwise transferred,
and will not assign or otherwise transfer, to any other person or entity any
claims, causes of action, demands or similar things that Releasor may have, or
may have had, against one or more of the Defendants. Releasor further represents
and warrants that, as of the date of his/her signature below, s/he has no
knowledge of a basis for the assertion by him/her of any claim against
Defendants, or any of them. Releasor hereby covenants and agrees to indemnify
and hold Defendants harmless with respect to any damage done to any Defendant in
relation to an untrue or inaccurate representation or warranty given by Releasor
herein.

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Releasor acknowledges and agrees that there have been no offers or inducements
with respect to his making of this Release except as described herein, and that
this Release contains the entire agreement and understanding relating to the
subject matter hereof.

Executed this 28 day of Nov, 2008.

 

/s/ Donald A. Luke

Signature

Donald A. Luke

(print name)

/s/ Melissa S. Garthwaite

Witness signature

Melissa S. Garthwaite

(print name)

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EXHIBIT “A”

RELEASE

The undersigned Vaughn Astley (hereinafter “Releasor”), acting for
himself/herself and his/her privies, successors and assigns and acting with the
advice of legal counsel, hereby provides this Release.

Releasor acknowledges that s/he has read and understands that certain Settlement
Agreement and Release (“Settlement Agreement”) by and among Process Water
Solutions, LLC (“Process Water”); Veolia Water North America Operating Services,
LLC (“Veolia”); Clean Water Technologies, LLC (“Clean Water”); and
Dr. Phosphate, Inc. (“Dr. Phosphate”); on the one hand, and Basin Water-MPT,
Inc. (“BWMPT”); Basin Water, Inc. (“BWI”); Robert Gorgol (“Gorgol”); Robert
Stark; and Michael Stark; on the other hand. Releasor acknowledges further that
s/he stands to gain finically and otherwise by virtue of execution of the
referenced Settlement Agreement by BWMPT, BWI, Gorgol, Robert Stark and Michael
Stark (hereinafter “Defendants”), that the Settlement Agreement would not be
executed by Defendants but for the promise contained therein with regard to the
delivery of this executed Release, and that the execution of the Settlement
Agreement by Defendants provides good and valuable consideration for the giving
of the Release by Releasor.

Accordingly, Releasor hereby releases and discharges Defendants, together with
their respective officers, directors, shareholders, agents, employees and
affiliated companies from any and all claims, actions, causes of action, sums of
money due, attorneys’ fees, suits, debts, covenants, contracts, agreements,
promises, demands or liabilities whatsoever, in law or in equity, whether known
or unknown, which Releasor ever had, now has, or might in the future have
against any of the Defendants based upon facts occurring up to and including the
execution date of this Release (as set forth below) and related to the subject
matter of the Litigation as such term is defined in the Settlement Agreement.

Releasor represents and warrants, understanding that the truth of such
representation and warranty is material to the Defendants proceeding under the
Settlement Agreement, that Releasor has not assigned or otherwise transferred,
and will not assign or otherwise transfer, to any other person or entity any
claims, causes of action, demands or similar things that Releasor may have, or
may have had, against one or more of the Defendants. Releasor further represents
and warrants that, as of the date of his/her signature below, s/he has no
knowledge of a basis for the assertion by him/her of any claim against
Defendants, or any of them. Releasor hereby covenants and agrees to indemnify
and hold Defendants harmless with respect to any damage done to any Defendant in
relation to an untrue or inaccurate representation or warranty given by Releasor
herein.

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Releasor acknowledges and agrees that there have been no offers or inducements
with respect to his making of this Release except as described herein, and that
this Release contains the entire agreement and understanding relating to the
subject matter hereof.

Executed this 28 day of NOV., 2008.

 

/s/ VAUGHN ASTLEY

Signature

VAUGHN ASTLEY

(print name)

/s/ KENNETH DOJKA

Witness Signature

KENNETH DOJKA

(print name)

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EXHIBIT “A”

RELEASE

The undersigned Dennis Michalski (hereinafter “Releasor”), acting for
himself/herself and his/her privies, successors and assigns, and acting with the
advice of legal counsel, hereby provides this Release.

Releasor acknowledges that s/he has read and understands that certain Settlement
Agreement and Release (“Settlement Agreement”) by and among Process Water
Solutions, LLC (“Process Water”); Veolia Water North America Operating Services,
LLC (“Veolia”); Clean Water Technologies, LLC (“Clean Water”); and
Dr. Phosphate, Inc. (“Dr. Phosphate”); on the one hand, and Basin Water-MPT,
Inc. (“BWMPT”); Basin Water, Inc. (“BWI”); Robert Gorgol (“Gorgol”); Robert
Stark; and Michael Stark; on the other hand. Releasor acknowledges further that
s/he stands to gain finically and otherwise by virtue of execution of the
referenced Settlement Agreement by BWMPI, BWl, Gorgol, Robert Stark and Michael
Stark (hereinafter “Defendants”), that the Settlement Agreement would not be
executed by Defendants but for the promise contained therein with regard to the
delivery of this executed Release, and that the execution of the Settlement
Agreement by Defendants provides good and valuable consideration for the giving
of the Release by Releasor.

Accordingly, Releasor hereby releases and discharges Defendants, together with
their respective officers, directors, shareholders, agents, employees and
affiliated companies from any and all claims, actions, causes of action, sums of
money due, attorneys’ fees, suits, debts, covenants, contracts, agreements,
promises, demands or liabilities whatsoever, in law or in equity, whether known
or unknown, which Releasor ever had, now has, or might in the future have
against any of the Defendants based upon facts occurring up to and including the
execution date of this Release (as set forth below) and related to the subject
matter of the Litigation as such term is defined in the Settlement Agreement.

Releasor represents and warrants, understanding that the truth of such
representation and warranty is material to the Defendants proceeding under the
Settlement Agreement, that Releasor has not assigned or otherwise transferred,
and will not assign or otherwise transfer, to any other person or entity any
claims, causes of action, demands or similar things that Releasor may have, or
may have had, against one or more of the Defendants. Releasor further represents
and warrants that, as of the date of his/her signature below, s/he has no
knowledge of a basis for the assertion by him/her of any claim against
Defendants, or any of them. Releasor hereby covenants and agrees to indemnify
and hold Defendants harmless with respect to any damage done to any Defendant in
relation to an untrue or inaccurate representation or warranty given by Releasor
herein.

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Releasor acknowledges and agrees that there have been no offers or inducements
with respect to his making of this Release except as described herein, and that
this Release contains the entire agreement and understanding relating to the
subject matter hereof.

Executed this 28 day of Nov, 2008.

 

/s/ Dennis Michalski

Signature

Dennis Michalski

(print name)

/s/ VAUGHN ASTLEY

Witness signature

VAUGHN ASTLEY

(print name)

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EXHIBIT “A”

RELEASE

The undersigned G. Astley (hereinafter “Releasor”), acting for himself/herself
and his/her privies, successors and assigns, and acting with the advice of legal
counsel, hereby provides this Release.

Releasor acknowledges that s/he has read and understands that certain Settlement
Agreement and Release (“Settlement Agreement”) by and among Process Water
Solutions, LLC (“Process Water”); Veolia Water North America Operating Services,
LLC (“Veolia”); Clean Water Technologies, LLC (“Clean Water”); and
Dr. Phosphate, Inc. (“Dr. Phosphate”); on the one hand, and Basin Water-MPT,
Inc. (“BWMPT”); Basin Water, Inc. (“BWI”); Robert Gorgol (“Gorgol”); Robert
Stark; and Michael Stark; on the other hand. Releasor acknowledges further that
s/he stands to gain finically and otherwise by virtue of execution of the
referenced Settlement Agreement by BWMPT, BWI, Gorgol, Robert Stark and Michael
Stark (hereinafter “Defendants”), that the Settlement Agreement would not be
executed by Defendants but for the promise contained therein with regard to the
delivery of this executed Release, and that the execution of the Settlement
Agreement by Defendants provides good and valuable consideration for the giving
of the Release by Releasor.

Accordingly, Releasor hereby releases and discharges Defendants, together with
their respective officers, directors, shareholders, agents, employees and
affiliated companies from any and all claims, actions, causes of action, sums of
money due, attorneys’ fees, suits, debts, covenants, contracts, agreements,
promises, demands or liabilities whatsoever, in law or in equity, whether known
or unknown, which Releasor ever had, now has, or might in the future have
against any of the Defendants based upon facts occurring up to and including the
execution date of this Release (as set forth below) and related to the subject
matter of the Litigation as such term is defined in the Settlement Agreement.

Releasor represents and warrants, understanding that the truth of such
representation and warranty is material to the Defendants proceeding under the
Settlement Agreement, that Releasor has not assigned or otherwise transferred,
and will not assign or otherwise transfer, to any other person or entity any
claims, causes of action, demands or similar things that Releasor may have, or
may have had, against one or more of the Defendants. Releasor further represents
and warrants that, as of the date of his/her signature below, s/he has no
knowledge of a basis for the assertion by him/her of any claim against
Defendants, or any of them. Releasor hereby covenants and agrees to indemnify
and hold Defendants harmless with respect to any damage done to any Defendant in
relation to an untrue or inaccurate representation or warranty given by Releaser
herein.

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Releaser acknowledges and agrees that there have been no offers or inducements
with respect to his making of this Release except as described herein, and that
this Release contains the entire agreement and understanding relating to the
subject matter hereof.

Executed this 28 day of Nov, 2008.

 

/s/ G. Astley

Signature

G. ASTLEY

(print name)

/s/ VAUGHN ASTLEY

Witness signature

VAUGHN ASTLEY

(print name)

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EXHIBIT “B”

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

PROCESS WATER SOLUTIONS, LLC,

et al.,

Plaintiffs,

Case No. 8:07-CV-1944-T-33MSS

vs.

BASIN WATER, INC., et al.,

Defendants.

                                         /

STIPULATED FINAL INJUNCTION AND ORDER OF DISMISSAL

Plaintiffs and Defendants, acting by and through their undersigned respective
counsel of record, hereby consent to the entry of this Stipulated Final
Injunction and Order of Dismissal (“Injunction”) in the above-styled action.

WHEREAS, Plaintiffs have brought claims against Defendants asserting, among
other things, that Defendants have acted to misappropriate and use to their own
benefit certain claimed confidential information, trade secrets, and other
intellectual property allegedly owned by one or more of the Plaintiffs and
protected from disclosure or use by Defendants.

WHEREAS, Defendants have denied all of the material allegations made by
Plaintiffs, contend that they have not misappropriated or used any claimed trade
secrets, confidential information, or other protected intellectual property
allegedly owned by one or more of Plaintiffs, and have counterclaimed seeking,
among other things, a declaration of rights regarding the claimed intellectual
property and an award of attorneys’ fees.

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WHEREAS, neither Defendants nor any of their parent, subsidiary, or affiliate
companies presently intend to enter into or continue any business relationship
with any member of the Phosphate Industry involving any project related to the
treatment of phosphate-laden process pond water in a manner designed to yield a
saleable phosphate byproduct or otherwise recover the soluble phosphorous for
beneficial uses; as used herein “Phosphate Industry” is defined as including
USAC, Mosaic, CF, PCS, Mississippi Phosphates, Agrium, Agrifos, Simplot, OCP,
FosFertil, Bunge, PhosCan, and any other company that produces phosphate or
processes any waters containing residues or residuals from phosphate industry
sources;

WHEREAS, the parties desire to enter into this Injunction to avoid the further
expense of litigation, and do so without any admission of liability.

WHEREAS, this Injunction, effective for five (5) years from the date of its
entry, does not supersede nor prejudice the rights or remedies afforded any
party at law or equity as to any alleged wrongs that may occur subsequent to the
entry of this order.

In consideration of the foregoing, the consent of all parties as indicated
below, and for good cause shown, IT IS HEREBY ORDERED follows:

1. Defendants, their subsidiaries, parent companies, or affiliate companies, and
any of their officers, employees, agents, servants, attorneys or other persons
in active concert or participation with any of the Defendants who receive actual
notice of this Injunction and are acting with regard to any project related to
the treatment of phosphate-laden process pond water in a manner designed to
yield a saleable phosphate byproduct or otherwise recover the soluble
phosphorous for beneficial uses, shall be and are hereby enjoined from
disclosing or using intellectual property meeting all of the following criteria:
(a) in existence and owned by one or more of the Plaintiffs as of the date of
the filing of this action and (b) fitting within the general process description
first set out below. Defendants do not concede that Plaintiffs, or any of them,
enjoy rights to any of the subject intellectual property, but acknowledge
Plaintiffs’ contention, that the subject intellectual property fits within the
following general process description:

That certain process, or processes, described in Provisional Patent Application
No. 60/597630 as such existed when filed with the United States Patent Office on
December 14, 2005, together with all modifications and amendments thereto which
were filed or prepared for filing in attorney work product form, on or before
May 9, 2007.

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A complete copy of the modifications or amendments prepared for filing in work
product form shall be sworn to be such by authorized representatives of
Plaintiffs and maintained in a sealed envelope at Fee & Jeffries, P.A., as a
condition to the effectiveness of this Injunction. Further, Plaintiffs
acknowledge that the subject intellectual property does not fit within the
following general process description:

Neutralization of phosphate pond water utilizing a three stage process with
precipitation of mono-, di-, or tri-calcium phosphate from the various stages of
neutralization, as well as any other process to produce or purify mono-, di-, or
tri-calcium phosphate material from phosphate pond water outside of the process
description (relating to Provisional Patent Application No. 60/597630) first set
forth above in this Paragraph 1.

Without limiting the generality of the foregoing, the general process
description described in this paragraph 1 shall be referenced hereinafter as the
“Subject Process.” Plaintiffs, or any of them, may seek relief under this
paragraph in the manner, and only in the manner, described in paragraph 2,
below. Nothing in this Paragraph 1 or otherwise set forth in this Injunction
shall preclude a non-party to this action from seeking to dissolve this
Injunction as to such non-party based upon due process or other rights held by
such non-party.

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2. Third-Party Neutral.

(A) Subsequent to the expiration of the one (1) year period set forth in
Paragraph 4 below, and prior to the expiration of this Injunction, should
Defendants, or any of them, desire to utilize any process involving the
treatment of phosphate-laden process pond water in a manner designed to yield a
saleable phosphate byproduct or otherwise recover the soluble phosphorous for
beneficial uses (hereinafter, “Pond Water Sales”), they must first utilize the
Third-Party Neutral process described in this paragraph. Specifically, within
fifteen (15) days prior to entering into any agreement (formal or informal) with
any member of the Phosphate Industry regarding the testing or implementation of
any system related to Pond Water Sales or any commercial implementation
(whichever occurs first), Defendants, or any of them, shall notify Plaintiffs of
the fact of such agreement or intent to undertake commercial implementation (the
“Notifying Defendants”). With respect to any such agreement with a non-member of
the Phosphate Industry, notice shall not be required and the Third-Party Neutral
process described in this paragraph shall not apply, but Defendants may proceed
under such agreement only upon such non-member (or if an entity, the chief
executive officer or managing partner) swearing in writing and under oath an
acknowledgment that it is bound by this Injunction. When required, notice shall
be given in writing and delivered to the Plaintiffs via an officer, director,
similar such office holder, or registered agent for the receipt of legal
service, and notice shall be effective upon receipt provided the Plaintiffs have
provided adequate current contact information to Defendants, and upon issuing to
the last know address in the event Plaintiffs have failed to provide adequate
contact information. Upon such notice, Plaintiffs, or any of them, may demand
within five (5) business days that the Notifying Defendants submit the technical
specifications

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for the proposed agreement or commercial implementation to the Third-Party
Neutral, who shall be selected in the manner described below. Such demand shall
be in writing and delivered to the Notifying Defendants at the location
specified in the Notifying Defendants’ notice. Defendants so notified must
submit the technical specifications to the Third-Party Neutral within three
(3) business days of such notice. Further, within three (3) business days of
such notice, Plaintiffs must submit the technical specifications for the Subject
Process to the Third-Party Neutral. The Third-Party Neutral shall keep
Defendants’ technical specifications, as well as the Subject Process,
confidential, including but not limited to from the other parties.

(B) Within seven (7) days from receiving the technical specifications set forth
in paragraph 2(A), the Third-Party Neutral shall determine and inform the
parties in writing whether reasonable cause exists to believe that the
Defendants’ technical specifications are substantially similar to the Subject
Process. If reasonable cause is found to exist, then Defendants must refrain
from any commercial implementation or use of the technical specifications at
issue for a period of thirty (30) days after the Third-Party Neutral renders
his/her decision provided such decision is rendered as called for in this
Paragraph 2. Conversely, if the Third-Party Neutral does not find reasonable
cause, then Defendants may proceed with the commercial use and implementation of
the technical specifications at issue seven (7) days after the Third-Party
Neutral renders his/her decision. The parties agree that the Third-Party
Neutral’s finding of reasonable cause (or finding of no reasonable cause) shall
not be admissible or carry any weight in any court proceeding, except for
enforcement of waiting periods described in this paragraph 2(B).

(C) The parties hereby select the American Arbitration Association as the body
to oversee the appointment of the Third-Party Neutral. In the event a
Third-Party Neutral shall become necessary, the parties shall immediately
request that the American

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Arbitration Association select an individual from its panel of arbitrators who
specializes in intellectual property disputes, such individual being subject to
challenge by the parties on grounds of conflict of interest only. The parties
shall share the fees and costs of the Third-Party Neutral’s services equally.

(D) During the time period between Plaintiffs’ notice pursuant to paragraph 2(A)
and the Third-Party Neutral’s decision, as called for by paragraph 2(B),
Defendants shall not proceed with the commercial use and implementation of the
technical specifications at issue.

3. Notwithstanding anything else set forth in this Injunction except the
Third-Party Neutral process described above, in the event there should ever be a
litigated dispute or other dispute about one or more Defendants’ ability to use
or commercialize in any fashion any process or intellectual property claimed to
fall within the scope of the Subject Process, nothing in this Injunction,
including the provisions of paragraph 1, above, shall operate to relieve the
person or entity opposing such use or commercialization by one or more of the
Defendants of any otherwise existing burden of establishing currently held
rights in the subject process or intellectual property sufficient to preclude
the use or commercialization intended by one or more of the Defendants. For
purposes of this subparagraph 3, Defendants shall be defined to include
Defendants as well as their subsidiaries, parent companies, affiliate companies
and the successors and assigns of any of the foregoing, and any of their
officers, directors, employees, attorneys, or other agents.

4. For a period of one (1) year following the entry of this Injunction,
Defendants, theft subsidiaries, parent companies, or affiliate companies, and
any of their officers, employees, agents, servants, attorneys or other persons
in active concert or participation with any of the Defendants who receive actual
notice of this Injunction and are acting with regard to any project related to
the

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treatment of phosphate-laden process pond water in a manner designed to yield a
saleable phosphate byproduct or otherwise recover the soluble phosphorous for
beneficial uses, shall be and hereby are enjoined from, directly or indirectly,
soliciting, contacting, or contracting with any member of the Phosphate Industry
for purposes of engaging in any project related to the treatment of
phosphate-laden process pond water in a manner designed to yield a saleable
phosphate byproduct or otherwise recover the soluble phosphorous for beneficial
uses.

5. Within three (3) business days from its entry, Defendant Basin Water, Inc.
and Basin Water – MPT, Inc. shall provide actual notice of this Injunction to
the officers and directors of their parent, subsidiary, and affiliate companies,
as well as the sales, marketing, and product development personnel of such
companies.

6. The Court shall retain jurisdiction over this action for the limited purpose
of enforcing this order upon application of any party. Except as so stated, this
action, and each and every claim asserted therein, is dismissed with each party
to bear its own attorneys fees, costs and expenses. This dismissal shall be with
prejudice as to all of the parties’ claims, except for claims seeking a
declaration of rights with respect to intellectual property allegedly owned by
Plaintiffs, or some of them. This dismissal shall not in any way preclude any
party’s right to bring a separate action in the future based upon conduct
occurring subsequent to this dismissal, even if such conduct is purportedly a
continuation of conduct occurring prior to such dismissal.

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DONE AND ORDERED, this      day of             , 2008.

 

 

United States District Judge

Consented to by all parties as follows:

 

 

    

 

Stephen W. Mooney      Richard E. Fee Florida Bar No. 0041678      Florida Bar
No. 813680 Michael A. Sexton      Kathleen M. Wade Florida Bar No. 131520     
Florida Bar No. 127965 WEINBERG WHEELER HUDGINS GUNN & DIAL, LLC      FEE &
JEFFRIESS, P.A. 950 Paces Ferry Road, Suite 3000      1227 N. Franklin Street
Atlanta, GA 30326      Tampa, FL 33602 (404) 876-2700 (phone)      (813)
229-8008 (phone) (404) 875-9433 (facsimile)      (813) 299-0046 (facsimile)
Attorneys for Plaintiff      Attorneys for Plaintiffs Veolia Water North America
     Process Water Solutions, LLC, Operation Services, LLC      Clean Water
Technologies, LLC, and      Dr. Phosphate, Inc.     

 

     Robert P. Riordan      Georgia Bar No. 606431      ALSTON & BIRD LLP     
1201 West Peachtree Street      Atlanta, Georgia 30309-3424      (404) 881-7000
(phone)      (404) 881-7777 (facsimile)      Attorneys for Defendants