Document:

Form of Warrant issued to The Co-Investment 2000 Fund, L.P.

 Exhibit 4.7 
  

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT. ANY
ATTEMPT TO TRANSFER, SELL, PLEDGE OR HYPOTHECATE THIS WARRANT OR THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF IN VIOLATION OF THESE RESTRICTIONS SHALL BE VOID. 
  
 THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF ARE ALSO SUBJECT TO MARKET STAND-OFF PROVISIONS PURSUANT TO THE TERMS OF A
REGISTRATION RIGHTS AGREEMENT. 
  
 WARRANT NO.
             
  
 VOID AFTER THE EXPIRATION DATE (as defined below) 
  
 Warrant To Purchase
                                        
                            
(            ) 
 Shares (the “Shares”)
of Common Stock       
  
 WARRANT TO PURCHASE COMMON STOCK 
  
 OF

  
 BASIN WATER, INC., a California Corporation

  
 This warrant (the “Warrant”)
certifies that, for value received, the Warrant Holder is entitled, subject to the terms set forth below, to purchase from the Company the number set forth above of fully paid and nonassessable Shares at the Share Price at any time or from time to
time from the date of this Warrant to and including the Expiration Date such price and number of shares being subject to adjustment as provided herein. The right to exercise this Warrant is subject to the terms and conditions set forth in
Section 3 and shall expire at the close of business on the Expiration Date. 
  
 1. DEFINITIONS. As used in this Warrant, the following terms, unless the context requires otherwise, have the following meanings: 
  
 1.1 “Change of Control” means (a) a consolidation, merger or other business combination of the Company with and into another
corporation unless the Company’s shareholders of record immediately prior to such consolidation, merger or business combination shall hold at least fifty percent (50%) of the voting power of the acquiring corporation or surviving entity
immediately after such consolidation, merger or business combination or (b) the sale of all or substantially all of the Company’s assets to a third party that is not affiliated with the Company prior to such sale. 

 1.2 “Company” means Basin Water, Inc., a California corporation, and any
corporation that shall succeed to or assume the obligations of Basin Water, Inc. under this Warrant. 
  
 1.3 “Common Stock,” when used with reference to stock of the Company, means all shares, now or hereafter authorized, of the class
of the Common Stock of the Company presently authorized and stock of any other class into which those shares may later be changed. 
  
 1.4 “Corporations Code” refers to the sections of the California Corporations Code. 
  
 1.5 “Expiration Date” means the earliest of
(i) October 14, 2010, (ii) thirty (30) months after the Initial Public Offering and (iii) immediately prior to the closing of a Change of Control; provided, however, that in the event of a Maturity Date
Extension (as defined in the Note), the Expiration Date in the foregoing clause (i) shall automatically be extended to October 14, 2012. 
  
 1.6 “Initial Public Offering” has the meaning set forth in the Purchase Agreement. 
  
 1.7 “Note” has the meaning set forth in the Purchase
Agreement. 
  
 1.8 “Opinion of Counsel”
means a written opinion, signed by legal counsel, who may be an employee of, or of counsel to, the Company or other counsel satisfactory to the Company. 
  
 1.9 “Purchase Agreement” means that certain Subordinated Note with Warrants Purchase Agreement dated as of the date hereof between
the Company and the Warrant Holder. 
  
 1.10
“Registration Rights Agreement” means that certain letter agreement dated as of the date hereof between the Company and the Warrant Holder. 
  
 1.11 “Securities Act” means the Securities Act of 1933, or any similar federal statute, and the
rules and regulations of the Securities and Exchange Commission, or any other federal agency then administering the Securities Act, under that legislation, all as they may be in effect at the time. 
  
 1.12 “Share Price” shall mean the price per share of
                            
($            ), payable in United States currency, subject to adjustment as provided herein. 
  

1.13 “Subscription” means the form attached hereto as Exhibit A and incorporated herein by reference. 
  
 1.14 The term “Warrant Holder,” or similar terms when
the context refers to a holder of the Warrants, means                     , its permitted assigns, and/or anyone who at the time is the
registered holder of the Warrant. 
  

 2 

 2. FEDERAL SECURITIES REGULATION 
  
 2.1 Representations. The Warrant Holder represents, by accepting this Warrant, that it is an “accredited
investor” as that term is defined in Rule 501 promulgated under the Securities Act and understands that this Warrant and any securities issuable upon exercise of this Warrant have not been registered for sale under Federal or state
securities laws or “Blue Sky” laws and are being offered and sold to the Warrant Holder pursuant to one or more exemptions from the registration requirements of such securities laws. The Warrant Holder further understands
that the Shares have not been qualified under any state securities laws based on the belief that they have been issued in a transaction exempt from the qualification requirements of such securities laws, which exemption depends upon, among other
things, Warrant Holder’s representations made herein. The Warrant Holder further represents to the Company that it is acquiring this Warrant and will acquire any securities issuable upon exercise of this Warrant for its own account for
investment and not with a view to, or for sale in connection with, any distribution thereof in violation of the Securities Act, and agrees that this Warrant and any such securities will not be sold or otherwise transferred unless (i) a
registration statement with respect to such transfer is effective under the Securities Act and any applicable state securities laws or “Blue Sky” laws or (ii) this Warrant or any such securities are (x) sold or
otherwise transferred only to a transferee that (A) is a subsidiary, parent, partner, limited partner, retired partner or shareholder of such Warrant Holder or (B) is acquiring at least one hundred thousand (100,000) Shares (subject
to appropriate adjustments for stock splits, stock dividends, combinations and other recapitalizations) and (y) the Warrant Holder has delivered to the Company an Opinion of Counsel reasonably satisfactory to the Company, at Warrant
Holder’s expense, that such sale or transfer is made pursuant to one or more exemptions from the Securities Act pursuant to Section 2.3 below. The Warrant Holder recognizes that an investment in the Warrants and the Shares issuable upon
exercise thereof involves a high degree of risk, including a risk of total loss of the Warrant Holder’s investment. The Warrant Holder is able to bear the economic risk of holding the Warrant and the Shares issuable upon exercise thereof, for
an indefinite period, has knowledge and experience in the financial and business matters such that it is capable of evaluating the risks of the investment in the Warrant and the Shares issuable upon exercise thereof, has been furnished ample
opportunity to request information regarding the Company and has been afforded the opportunity to ask questions of and receive answers from officers or other representatives of the Company concerning the Company, and, assuming the Company has been
responsive to the Warrant Holder’s requests and questions, has received all the information it has requested from the Company and considers necessary or appropriate for deciding whether to purchase its Warrant. 
  
 2.2 Non-Registered Securities. The sale or other transfer of the
Warrant is greatly restricted because the Warrant will not be registered for sale under the Securities Act or qualified for sale under any state securities laws, and may therefore have to be held indefinitely unless subsequently registered under the
Securities Act and qualified under applicable state laws or an exemption from such registration or qualification is available. No market may exist for the Warrant, and it is unlikely that any substantial market will develop. Investors who do not
wish or who are financially unable to remain as Warrant Holders for a substantial period of time are advised against investment in the Warrant offered hereby. No market for the resale of the Warrant is expected to develop in the foreseeable future.

  

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 2.3 Restriction on Transferability of Warrants. The Shares authorized under the Warrant are
“Restricted Securities” as that term is defined in Rule 144 under the Securities Act, and accordingly, the Shares must be held unless they are subsequently registered under the Securities Act and qualified under any
applicable state securities laws or exemptions from such registration or qualification are available. Prior to any proposed transfer of this Warrant or the Shares issued upon exercise of this Warrant, the Warrant Holder and each subsequent permitted
Warrant Holder shall give written notice to the Company of such Warrant Holder’s intention to effect such transfer, which notice shall contain the details of such proposed transfer including the proposed transferee. The transfer of this Warrant
shall be conditioned upon the transferee’s agreement in writing to be subject to the terms of this Warrant. If, at the time of any exercise, transfer, or surrender for exchange of any of this Warrant or of Shares issued upon exercise of the
Warrant, such Warrant or Shares are not registered under the Securities Act, the Company may require, as a condition to allowing that exercise, transfer, or exchange, that the Warrant Holder or transferee of this Warrant or Shares, furnish to the
Company such information as, in the Opinion of Counsel, is necessary to establish that the exercise, transfer, or exchange may be made without registration under the Securities Act. That information shall include a written statement that the Warrant
Holder is purchasing the Shares or that the transferee is acquiring the Warrant or Shares for such holder’s or transferee’s own account, for investment and not with a view to the sale or distribution of the Warrant or Shares nor with any
then-present intention of distributing or selling the Warrant or Shares. Any such Warrant or Shares certificate may, at the Company’s sole option and discretion, include any legend considered necessary or desirable to comply with the Securities
Act, including the following: 
  
 THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT. ANY ATTEMPT TO TRANSFER, SELL, PLEDGE OR HYPOTHECATE THE SECURITIES REPRESENTED HEREBY IN VIOLATION OF THESE RESTRICTIONS SHALL BE VOID. 
  
 THE SECURITIES REPRESENTED HEREBY ARE ALSO SUBJECT TO MARKET STAND-OFF
PROVISIONS PURSUANT TO THE TERMS OF A REGISTRATION RIGHTS AGREEMENT. 
  

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 3. EXERCISE OF THE WARRANT 
  
 3.1 Exercising Rights Under the Warrant. 
  
 3.1.1 Cash Exercise. A Warrant Holder may exercise it in full by surrender of this Warrant, with the Subscription,
duly executed by the Warrant Holder, to the Company at its principal office at 8731 Prestige Court, Rancho Cucamonga, CA 91730, accompanied by payment in the amount obtained by multiplying the Share Price (as adjusted pursuant to Section 4) by
the number of Shares specified on the face of this Warrant. The exercise of this Warrant shall be deemed to have been effected two (2) business days after the receipt by the Company of the Warrant with the Subscription or such later time as may
be requested by the Warrant Holder in any transmittal letter. 
  
 3.1.2 Form of Payment. Payment for Shares may be in cash or by cashier’s or certified check payable to the order of the Company. 
  
 3.1.3 Partial Exercise. The Warrant Holder may exercise in part by surrendering the Warrant, accompanied by payment as provided above, except that
the amount payable by the Warrant Holder on such partial exercise shall be the amount obtained by multiplying the Share Price (as adjusted pursuant to Section 4) by the number of Shares, not to exceed the number specified on the face of this
Warrant, subject to Section 3.2 below, designated by the Warrant Holder in the Subscription at the end of this Warrant. On partial exercise, the Company shall promptly issue and deliver to the Warrant Holder a new Warrant or Warrants of like
tenor in the name of that Warrant Holder, providing for the right to purchase that number of Shares for which this Warrant has not been exercised. 
  
 3.2 Company’s Obligations Upon Exercise. At the time this Warrant is exercised, the Company will, at the Warrant Holder’s request,
acknowledge in writing its continuing obligation to afford to that Warrant Holder any rights to which that Warrant Holder shall continue to be entitled after such exercise in accordance with this Warrant, provided that, if the Warrant Holder
fails to make such request, that failure shall not affect the Company’s continuing obligation to afford to such Warrant Holder any such rights. 
  
 3.3 Delivery of Stock Certificate. As soon as possible after full or partial exercise of this Warrant, the Company at its expense will cause to be
issued in the name of, and delivered to the Warrant Holder, a certificate or certificates for the number of duly authorized, fully paid and nonassessable Shares to which that Warrant Holder shall be entitled on such exercise, together with any other
securities and property to which that Warrant Holder is entitled on such exercise under the terms of this Warrant. No fractional share will be issued upon exercise of rights to purchase under this Warrant. If on any exercise of this Warrant, a
fraction of a share results, the Company will pay the cash value of that fractional share, calculated on the basis of the fair market value of one Share as determined in good faith by the Board of Directors of the Company. The Company covenants and
agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Shares to the Warrant Holder pursuant to this Section 3.3; provided
that, the Company will not be liable for any federal or state transfer taxes and charges payable in respect of the transfer of the Warrant, or Shares issuable upon exercise thereof, by the Warrant Holder to any other person. 
  

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 4. ANTIDILUTION PROVISIONS 
  
 4.1 Stock Splits and Combinations. If the Company at any time subdivides or combines its outstanding shares of Common
Stock, whether by stock split, stock dividend or the like, this Warrant shall, after that subdivision or combination, be evidence of the right to purchase the number of Shares that would have been issuable as a result of that change with respect to
the Shares that were purchasable under this Warrant immediately before that subdivision or combination. If the Company at any time subdivides the outstanding shares of Common Stock, the Share Price then in effect immediately before that subdivision
shall be proportionately decreased, and, if the Company at any time combines the outstanding shares of Common Stock, the Share Price then in effect immediately before that combination shall be proportionately increased. Any adjustment under this
provision shall become effective at the close of business on the date the subdivision or combination becomes effective. 
  
 4.2 Reclassifications, Exchanges, and Substitutions. If the Common Stock issuable upon exercise of this Warrant is changed into the same or a
different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise, other than a subdivision or combination of shares provided for above, the Warrant Holder shall, on the exercise of
the Warrant, be entitled to purchase, in lieu of the Common Stock that such Warrant Holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock equivalent to the number of Shares of
Common Stock that would have been subject to purchase by the Warrant Holder on exercise of this Warrant immediately before that change. If at any time there is a capital reorganization of the Common Stock (other than a combination, reclassification,
exchange, or subdivision of shares provided for above), or a Change of Control, then, as a part of such reorganization or Change of Control, the Company shall give the Warrant Holder at least thirty (30) days’ prior written notice, by
first class mail, postage prepaid, of such event. Warrant Holder shall have the right to exercise this Warrant in whole or part, pursuant to the terms hereof, prior to such event. If Warrant Holder does not exercise this Warrant in full prior to a
Change of Control (but not a capital reorganization), then the Warrant Holder’s rights hereunder shall cease and be of no further force or effect. If the Warrant Holder does not exercise this Warrant in full prior to a reorganization, in such
case, appropriate adjustment, as determined by the Company’s Board of Directors, shall be made in applying this Warrant to the rights and interests of the Warrant Holder after the reorganization to the end that this Warrant, including
adjustment of the Share Price then in effect and number of shares purchasable on exercise of this Warrant, shall be applicable after that event, as near as reasonably may be, in relation to any Shares or other property deliverable after that event
on exercise of this Warrant. The Company shall within thirty (30) days after making such adjustment, give written notice, by first class mail, postage prepaid, to the registered Warrant Holder at the address of that Warrant Holder, as shown on
the Company’s books. That notice shall set forth, in reasonable detail, the event requiring the adjustment and the method by which the adjustment was calculated and shall specify the Share Price then in effect after the adjustment and the
increased or decreased number of purchasable Shares on exercise of this Warrant. 
  

 6 

 4.3 Prior Notice. If: (a) the Company shall declare any dividend payable in Common Stock or
make any other distribution to the holders of its Common Stock, other than a dividend in Common Stock exempt from the adjustment provisions of this Warrant, or a cash distribution to the extent that the aggregate of all such cash dividends paid or
declared after the date of this Warrant does not exceed the net income of the Company earned after that date; (b) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class
or any other rights; (c) there shall be a voluntary or involuntary dissolution, liquidation, or winding up of the Company; (d) there is a capital reorganization of the Common Stock (other than a combination, reclassification, exchange or
subdivision of shares provided for above); or (e) there shall be a Change of Control: 
  
 Then, in each such case the Company shall give at least fifteen (15) days’ prior written notice to the registered Warrant Holder at the address of that Warrant Holder shown on the books of the Company, of
the date as of which the books of the Company shall close or a record shall be taken for such stock dividend, distribution or subscription rights, or the date as of which the dissolution, liquidation, winding up, reorganization or Change of Control
shall take place. That notice also shall specify the date as of which the holders of the Common Stock of record shall either participate in that dividend, distribution, or subscription rights or shall be entitled to exchange their Common Stock for
securities or other property deliverable on such dissolution, liquidation, or winding up, on which date, in the event of a voluntary or involuntary dissolution, liquidation, or winding up of the Company, the right to exercise this Warrant shall
cease. The right to exercise this Warrant shall cease as of the effective date for a Change of Control. 
  
 4.4 Additional Issuances of Stock. Until the Initial Public Offering, the Share Price for the Shares shall be subject to adjustment as follows:

  
 (a) After the date of issuance of this Warrant, if the
Company shall issue or sell any shares of Common Stock for a consideration per share less than the Share Price in effect immediately prior to such issue or sale, then immediately upon such issue or sale, the Share Price shall automatically be
adjusted to a price equal to the price paid per share in such sale or issue. 
  
 (b) For purposes of Section 4.4(a) above, none of the following issuances occurring after the date of issuance of this Warrant shall be considered the issuance or sale of Common Stock: 
  
 (i) The issuance of Common Stock upon the conversion of any then-outstanding
Convertible Securities. “Convertible Securities” shall mean any bonds, debentures, notes or other evidences of indebtedness, and any options, warrants, shares or any other securities convertible into, exercisable for, or
exchangeable for Common Stock; 
  
 (ii) The issuance of any Common
Stock or Convertible Securities as a dividend on the Company’s stock; 
  
 (iii) The issuance of up to 2,500,000 shares of Common Stock (or options to purchase shares of Common Stock) to employees, directors or consultants of the Company under a stock option or incentive plan approved by the
Board of Directors of the Company; 
  

 7 

 (iv) The issuance of shares of Common Stock or Convertible Securities to lenders, financial institutions,
equipment lessors, or real estate lessors to the Company in connection with a bona fide borrowing or leasing transaction approved by the Board of Directors of the Company, so long as such borrowing or leasing transaction is permitted under the
Subordinated Note with Warrants Purchase Agreement (the “Purchase Agreement”) between the Company and Purchaser (as defined in the Purchase Agreement); it being understood that this subsection (iv) shall include
Convertible Securities issued to the Senior Secured Creditor (as defined in the Purchase Agreement) pursuant to the terms of the Senior Credit Agreement (as defined in the Purchase Agreement); 
  
 (v) The issuance of Common Stock or Convertible Securities pursuant to the
acquisition of another business by the Company by merger, purchase of substantially all of the assets or shares, or other reorganization whereby the Company or its shareholders own not less than a majority of the voting power of the surviving or
successor business; 
  
 (vi) The issuance of warrants to purchase
180,000 shares of Common Stock to the buyer of water treatment units and/or its affiliates in connection with the development of a proprietary process for biologically removing and destroying perchlorate load from used ion exchange resins and from
perchlorate-laden ion exchange resin regeneration brines; and 
  
 (vii) The issuance of any other Common Stock or Convertible Securities (other than pursuant to Section 4.4(b)(i) through (v)) for which the Company receives an aggregate consideration of less than One Million Dollars ($1,000,000) in
any rolling six (6) month period; 
  
 (c) In case at any time
any shares of Common Stock or Convertible Securities or any rights or options to purchase any such Common Stock or Convertible Securities shall be issued or sold for cash, the consideration received therefor shall be deemed to be the amount of cash
received by the Company therefor. In case any shares of Common Stock or Convertible Securities or any rights or options to purchase any such Common Stock or Convertible Securities shall be issued or sold for consideration other than cash, the amount
of the consideration other than cash received by the Company shall be deemed to be the fair value of such consideration as determined by the Board of Directors of the Company, which determination must include the affirmative vote of the Purchaser
Designee (as defined in the Purchase Agreement). 
  
 4.5 Good
Faith Provision. The Company covenants that it will not intentionally avoid or intentionally seek to avoid the observance or performance of any of the terms of this Warrant, but it will at all times in good faith assist in carrying out all those
terms and take all action necessary or appropriate to protect the rights of the Warrant Holder against dilution or other impairment. 
  

 8 

 5. Miscellaneous Provisions 
  
 5.1 Reservation of Stock. The Company covenants that it will at all times reserve and keep available, solely for
issuance on exercise of this Warrant, all Shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant. 
  
 5.2 Replacement. On receipt of evidence reasonable satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and,
in the event of such occurrence, on delivery of an indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilations, on surrender and cancellation of this Warrant, the Company, at the Warrant
Holder’s expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 
  
 5.3 Transfer. Warrant Holder may assign this Warrant for the aggregate number of Shares that have not been previously exercised, but in no event in
excess of the number of Shares set forth on the first page of this Warrant, subject to compliance with the other terms and conditions hereof. On surrender of this Warrant for assignment, properly endorsed on a form of assignment acceptable to the
Company, and subject to the provisions of this Warrant regarding compliance with the Securities Act (including delivery of an Opinion of Counsel), the Company, at its expense, will issue a new Warrant, in such name as the Warrant Holder, on payment
by the Warrant Holder of any applicable transfer taxes, may direct, calling in the aggregate on the face of such Warrant for the number of Shares of Common Stock that have not been previously exercised hereunder; provided, however,
that the rights of the Warrant Holder under the Registration Rights Agreement may be assigned by the Warrant Holder only to a transferee that (i) is a subsidiary, affiliate, parent, partner, limited partner, retired partner or shareholder of
such Warrant Holder, or (ii) is acquiring at least one hundred thousand (100,000) Shares (subject to appropriate adjustment for stock splits, stock dividends, combinations and other recapitalizations) from the Warrant Holder. 

 
 5.4 Warrant Agent. The Company may, on written notice to the
Warrant Holder, appoint an agent for the purpose of issuing Common Stock or other securities on the exercise of this Warrant and of replacing or exchanging this Warrant; and after that appointment occurs, any such issuance, replacement or exchange
shall be made at that office by that agent. 
  
 5.6 No Rights
as a Shareholder. No Warrant Holder, as such, shall be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any Warrant Holder, as such,
any rights of a shareholder of the Company or any right to vote, to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of stock to par value, consolidation,
merger, conveyance or otherwise), to receive notice of meetings of shareholders, or to receive dividends or subscription rights. 
  
 5.7 Modification. Except as otherwise provided in this Warrant, neither this Warrant nor any provision hereof may be waived, modified, amended,
discharged, or terminated except by an instrument in writing signed by the party against which the enforcement of such waiver, modification, amendment, discharge or termination is sought, and then only to the extent set forth in such writing.

  

 9 

 5.8 Controlling Law. This Warrant shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York, without giving effect to any choice-of-law or conflicts-of-laws rule or principle that would result in the application of any other laws. 
  
 5.9 Registration Rights and Obligations. The Warrant Holder is party
to the Registration Rights Agreement, pursuant to which the Warrant Holder will be entitled to certain rights to request the registration of the sale of the Shares under the Securities Act, subject to the terms and conditions provided therein.
Pursuant to the Registration Rights Agreement, the Common Stock issuable pursuant to the terms of this Warrant is subject to market stand-off restrictions as set forth therein. 
  
 5.10 Headings. Headings, titles and captions are for convenience only and shall not constitute a portion of this
Warrant or be used for the interpretation thereof. 
  
 5.11
Notices. Any notice, approval, consent, waiver or other communication required or permitted to be given or to be served upon the Warrant Holder or the Company in connection with this Warrant shall be in writing. Such notice shall be
personally served, sent by facsimile, or sent prepaid by registered or certified mail with return receipt requested, or sent by reputable overnight delivery service, such as Federal Express, and shall be deemed given: (a) if personally served,
when delivered to the individual or entity to whom such notice is addressed; (b) if given by facsimile, one day after being sent; (c) if given by prepaid or certified mail with return receipt requested, forty-eight (48) hours after
being deposited in the U.S. mail; or (d) if sent by reputable overnight delivery service, such as Federal Express, one business day after delivery to such delivery service. Any notice given by facsimile shall be confirmed in writing, and such
confirmation shall be delivered or sent by any of the other means of delivery set forth in this Section, within forty-eight (48) hours after notice was sent by facsimile. Such notices shall be addressed to the individual or entity to whom such
notice is to be given at the individual or entity’s address set forth below such individual or entity’s name on the signature page hereof or as such individual or entity shall otherwise direct in a writing to all other individuals or
entities delivered or sent in accordance with this Section. 
  

			
	 If to Company to:        
	  	Basin Water, Inc.
	 	  	8731 Prestige Court
	 	  	Rancho Cucamonga, California 91730
	 	  	Attn: Peter L. Jensen, President
	 	  	Phone: (619) 222-1493
	 	  	Fax No.: (619) 222-3393

  
 If to Warrant Holder,
then to the address set forth below the name of the Warrant Holder on the signature page hereof. 
  

 10 

 5.12 Severability. If any provision of this Warrant is invalid, illegal or unenforceable, the
balance of this Warrant shall remain in full force and effect notwithstanding such invalidity, illegality, or unenforceability. 
  
 5.13 Execution in Counterparts. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. The signature page of any counterpart may be detached therefrom without impairing the legal effect of the signature(s) thereon, provided such signature page is attached to any other counterpart identical
thereto except having additional signature page(s) executed by one or more of the other individuals or entities. The Company and the Warrant Holder agree that each of them may rely upon the facsimile signature of the Company or Warrant Holder on
this Warrant as constituting a duly authorized, irrevocable, actual, current delivery of this Warrant as fully as if this Warrant contained the original ink signature of the Warrant Holder or the Company supplying a facsimile signature. 

 

 11 

 IN WITNESS WHEREOF, this Warrant is executed as of the date first above set forth. 
  

							
	COMPANY
	
	Basin Water, Inc., a California corporation
		
	By:	 	  

	Peter L. Jensen
	President and Chief Executive Officer
				
	[	 	 	 	 	 	]
				
	By:	 	[	 	]	 	 
	 	 	  its
                                       
 	 	 
				
	 	 	By:	 	[	 	]
	 	 	 	 	  its
                                
			
	 	 	By:	 	  

	 	 	 	 	[ NAME         ]
	 	 	 	 	[ TITLE         ]
			
	 	 	Address:	 	    [STREET ADDRESS]
	 	 	 	 	    [CITY, STATE ZIP]

  

 12 

 EXHIBIT A 
  
 SUBSCRIPTION FORM 
  
 TO: Basin Water, Inc. 
  
 Capitalized terms used herein and not otherwise defined shall have the meaning assigned to them in the Warrant, dated
                    , 200   (the “Warrant”), between the undersigned and Basin Water, Inc., a
California corporation (the “Company”). 
  
 The
undersigned, Warrant Holder, hereby irrevocably elects to exercise the purchase right represented by the Warrant attached hereto, and to purchase under that Warrant,
                     (            ) Shares of Common Stock of the Company,
and herewith makes payment of Five Dollars and Fifty Cents ($5.50) per share for those Shares. As a condition to this subscription, the undersigned hereby represents and warrants to the Company that the representations and warranties contained in
Section 2.1 of the attached Warrant are true and correct as of the date of this subscription as if they had been made on such date with respect to the Shares. The undersigned further requests that the certificates for those Shares be issued in
the name of, and delivered to: 
  

			
	 Name:
	 	  

	 Address
	 	  

	 	 	  
  

  
 DATE:
                     
  

			
	 [                                      
           ]
  

	 Name:
	 	 
	  
 Title:
	 	 

  

 13Registration Rights Agreement

 Exhibit 4.8 
  
 REGISTRATION RIGHTS AGREEMENT 
  

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of October 14, 2005, by and among Basin Water, Inc., a
California corporation (the “Company”), and the undersigned holders of Warrants (“Warrants”) to purchase up to an aggregate of One Million (1,000,000) shares of Common Stock, (the “Warrant
Shares”). 
  
 RECITALS 
  
 WHEREAS, pursuant to a Subordinated Note with Warrants Purchase Agreement,
dated as of October 14, 2005 (the “Purchase Agreement”) among the Company and the Purchasers (as defined in the Purchase Agreement), the Company issued the Warrants to the Purchasers; 
  
 WHEREAS, under the terms of the Notes issued to Purchasers pursuant to the
Purchase Agreement, interest on the Notes may be payable to the Purchasers in shares of Common Stock (the “Interest Payment Shares”); 
  
 WHEREAS, to induce the Purchasers to enter into the Purchase Agreement, the Company desires to grant the Purchasers certain rights to cause the Company to
register the Warrant Shares and the Interest Payment Shares; and 
  
 WHEREAS, the Purchasers and the Company hereby agree that this Agreement shall govern the rights of the Purchasers to cause the Company to register the Warrant Shares and/or the Interest Payment Shares and certain other matters as set forth
herein; 
  
 NOW, THEREFORE, in consideration of the premises and
the mutual promises set forth in this Agreement; 
  
 THE PARTIES
HEREBY AGREE AS FOLLOWS: 
  
 1. Registration Rights. 
  
 1.1 Definitions. For purposes of this Agreement: 
  
 (a) The term “Act” means the Securities Act of 1933, as
amended. 
  
 (b) The term “Common Stock” means
the Company’s common shares, no par value. 
  
 (c) The term
“Form S-3” means such form under the Act as in effect on the date hereof or any registration form under the Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC. 
  
 (d) The term
“Holder” means any person owning or having the right to acquire Registrable Securities or any assignee thereof in accordance with Section 1.12 hereof. 

 (e) The term “Initial Offering” means the Company’s first firm commitment
underwritten public offering of its Common Stock under the Act. 
  
 (f) The term “1934 Act” means the Securities Exchange Act of 1934, as amended. 
  
 (g) The terms “register,” “registered,” and “registration” refer to a registration effected by
preparing and filing a registration statement or similar document in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement or document. 
  
 (h) The term “Registrable Securities” means (i) the Warrant Shares, (ii) the Interest Payment
Shares and (iii) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange for, or in
replacement of the shares referenced in (i) and (ii) above, excluding in all cases, however, (A) any Registrable Securities sold by a person in a transaction in which his rights under this Section 1 are not assigned, (B) any
securities previously registered and sold or sold pursuant to Rule 144 of the Act, and (C) any securities eligible for sale under Rule 144 of the Act. 
  
 (i) The number of shares of “Registrable Securities” outstanding shall be determined by the number of shares of Common Stock outstanding
that are, and the number of shares of Common Stock issuable pursuant to then exercisable or convertible securities that are, Registrable Securities. 
  
 (j) The term “SEC” means the Securities and Exchange Commission. 
  
 1.2 Demand Registration. 
  
 (a) Subject to the conditions of this Section 1.2, if the Company shall receive at any time after the earlier of (i) three (3) years after
the date of this Agreement and (ii) six (6) months after the effective date of the Initial Offering, a written request from the Holders of in excess of fifty percent (50%) of the Registrable Securities then outstanding (the
“Initiating Holders”) that the Company file a registration statement under the Act covering the registration of Registrable Securities with an anticipated offering price (net of underwriting discounts and commissions) of at least
$10,000,000, then the Company shall, within thirty (30) days of the receipt thereof, give written notice of such request to all Holders, and subject to the limitations of this Section 1.2, use commercially reasonable efforts to effect, as
soon as practicable, the registration under the Act of all Registrable Securities that the Holders request to be registered in a written request received by the Company within twenty (20) days of the mailing of the Company’s notice
pursuant to this Section 1.2(a). 
  
 (b) If the Initiating
Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 1.2 and the Company shall include such
information in the written notice referred to in Section 1.2(a). In such event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting
and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders 

 and such Holder) to the extent provided herein. All Holders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company. Notwithstanding any other provision of this Section 1.2, if the underwriter advises
the Company that marketing factors require a limitation of the number of securities underwritten (including Registrable Securities), then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant
hereto, and the number of shares that may be included in the underwriting shall be allocated on a pro rata basis to the Holders of such Registrable Securities and other shareholders seeking to register the resale of their shares under a written
agreement with the Company based on the number of Registrable Securities and such other shares held by all such holders (including the Initiating Holders). Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn
from the registration. 
  
 (c) The Company shall not be required
to effect a registration pursuant to this Section 1.2: 
  
 (i) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, unless the Company is already subject to service in such jurisdiction and except as
may be required under the Act; or 
  
 (ii) after the Company has
effected one (1) registration pursuant to this Section 1.2, and such registration has been declared or ordered effective; or 
  
 (iii) during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of the filing of, and
ending on a date one hundred eighty (180) days following the effective date of, a Company-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement
to become effective; or 
  
 (iv) if the Initiating Holders propose
to dispose of Registrable Securities that may be registered on Form S-3 pursuant to Section 1.4 hereof; or 
  
 (v) if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 1.2, a certificate signed by the
Company’s Chief Executive Officer or President stating that in the good faith judgment of the Board of Directors of the Company, it would be detrimental to the Company and its shareholders for such registration statement to be effected at such
time, in which event the Company shall have the right to defer such filing for a period of not more than one hundred twenty (120) days after receipt of the request of the Initiating Holders, provided that such right to delay a request shall be
exercised by the Company not more than twice in any twelve (12)-month period. 
  
 1.3 Piggyback Registration. 
  
 (a) If after the Initial Offering, and ending five (5) years following the date of such Initial Offering, (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the
Company for shareholders other than the 

 Holders) any of its stock or other securities under the Act in connection with the public offering of such securities
(other than the initial public offering of the Company’s Common Stock, a registration relating solely to the sale of securities to participants in a Company stock plan, a registration relating to a corporate reorganization or other transaction
under Rule 145 of the Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in
which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered), the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the
written request of each Holder given within twenty (20) days after mailing of such notice by the Company in accordance with Section 2.5, the Company shall, subject to the provisions of Section 1.3(c), use commercially reasonable
efforts to cause to be registered under the Act all of the Registrable Securities that each such Holder has requested to be registered. 
  
 (b) The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 1.3 prior to the effectiveness of
such registration whether or not any Holder has elected to include securities in such registration. The expenses of such withdrawn registration shall be borne by the Company in accordance with Section 1.8 hereof. 
  
 (c) In connection with any offering involving an underwriting of shares of
the Company’s capital stock, the Company shall not be required under this Section 1.3 to include any of the Holders’ securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company
and the underwriters selected by it (or by other persons entitled to select the underwriters) and enter into an underwriting agreement in customary form with an underwriter or underwriters selected by the Company, and then only in such quantity as
the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by shareholders to be included in such offering
exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number
of such securities, including Registrable Securities, that the underwriters determine in their sole discretion will not jeopardize the success of the offering (the securities so included to be apportioned pro rata among the selling Holders and other
selling shareholders according to the total amount of securities entitled to be included therein owned by each selling Holder and other selling shareholders or in such other proportions as shall mutually be agreed to by such selling Holders and
other selling shareholders), but in no event shall any shares being sold by a shareholder exercising a demand registration right similar to that granted in Section 1.2 be excluded from such offering. For purposes of the preceding parenthetical
concerning apportionment, for any selling shareholder that is a Holder of Registrable Securities and that is a partnership or corporation, the partners, retired partners and shareholders of such Holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon
the aggregate amount of Registrable Securities owned by all such related entities and individuals. 
  
 1.4 Form S-3 Registration. In case the Company shall receive from the Holders of at least fifty percent (50%) of the Registrable Securities a
written request or requests that the 

 
Company effect a registration on Form S-3 with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company shall:

  
 (a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders; and 
  
 (b) use commercially reasonable efforts to effect, as soon as practicable, such registration as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such
Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holders joining in such request as are specified in a written request given within fifteen
(15) days after receipt of such written notice from the Company, provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this Section 1.4: 
  
 (i) if Form S-3 is not available for such offering by the Holders;

  
 (ii) if the Holders, together with the holders of any other
securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public (net of any underwriters’ discounts or commissions) of less than
$3,000,000; 
  
 (iii) if the Company shall furnish to the Holders
a certificate signed by the Chief Executive Officer or President of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be detrimental to the Company and its shareholders for such Form S-3
Registration to be effected at such time, the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than one hundred twenty (120) days after receipt of the request of the Holder or
Holders under this Section 1.4; provided, however, that the Company shall not utilize this right more than twice in any twelve (12) month period; 
  
 (iv) if the Company has, within the twelve (12) month period preceding the date of such request, already effected one (1) registration on Form
S-3 for the Holders pursuant to this Section 1.4; or 
  
 (v)
in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance. 
  
 (c) Subject to the foregoing, the Company shall file a registration statement
covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the requisite request or requests of the Holders. Registrations effected pursuant to this Section 1.4 shall not be
counted as a request for registration effected pursuant to Section 1.2. 
  
 1.5 Inclusion in Initial Offering. The Holders of the Registrable Securities shall have the right to include their Registrable Securities in the Initial Offering to the extent provided herein. Each Holder of
Registrable Securities requesting inclusion in the Initial Offering shall (i) together with the Company and any of the Company’s other shareholders distributing their 

 securities through such underwriting, enter into an underwriting agreement in customary form with the representative of
the underwriter or underwriters selected for such underwriting and deliver any closing documents, including certificates and opinions, reasonably requested in connection therewith and (ii) execute and deliver in the form reasonably requested by
the underwriter a custody agreement for such Holder’s Registrable Securities which may be sold. Notwithstanding any other provision herein, if the underwriters advise the Company and the Holders of Registrable Securities requesting inclusion in
the Initial Offering, in writing, that in such underwriters’ sole discretion the total number of securities which the Company, such Holders and any of the Company’s other shareholders desiring to participate in the Initial Offering intend
to include in such offering is not compatible with the success of such offering, then the Company will be required to include in such Initial Offering only the number of securities which it is so advised should be included in such registration,
which number of securities shall be allocated as follows: (1) first, the number of securities sought to be registered by the Company until the Company has registered all of the securities that it sought to register and (2) second, the
balance, if any, on a pro rata basis based upon the number of securities sought to be registered by the Holders of Registrable Securities and the Company’s other shareholders desiring to participate in the Initial Offering; provided that, the
underwriters may, in their sole discretion, exclude any securities from the Initial Offering, including the Registrable Securities. No Registrable Securities or any other securities excluded from the Initial Offering by reason of the
underwriter’s marketing limitation shall be included in such offering. If any Holder whose shares are to be included in the Initial Offering disapproves of the terms of the underwriting, such Holder may elect to withdraw therefrom by written
notice to the Company and the underwriter, and the Registrable Securities so withdrawn shall also be withdrawn from the offering; provided that, any such Holder withdrawing its Registrable Securities from the Initial Offering shall be liable for its
pro rata portion of all registration expenses for all Holders in connection with the Initial Offering. 
  
 1.6 Obligations of the Company. Whenever required under this Section 1 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible: 
  
 (a) prepare
and file with the SEC a registration statement with respect to such Registrable Securities and use commercially reasonable efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the
Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the Registration Statement has been completed;

  
 (b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such
registration statement; 
  
 (c) furnish to the Holders such
numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by
them; 

 (d) use commercially reasonable efforts to register and qualify the securities covered by such
registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify
to do business or to file a general consent to service of process in any such states or jurisdictions; 
  
 (e) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form,
with the managing underwriter of such offering; 
  
 (f) notify
each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Act or the happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances
then existing; 
  
 (g) cause all such Registrable Securities
registered hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed; and 
  
 (h) provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such registration. 
  
 1.7 Information From Holder. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 1 with respect to the Registrable Securities of any selling
Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required to effect the registration of such
Holder’s Registrable Securities. 
  
 1.8 Expenses of
Registration. All registration expenses of the Holders (other than underwriting discounts and commissions) incurred in connection with registrations, filings or qualifications pursuant to Sections 1.2, 1.3, and 1.5 and up to two (2) Form
S-3 registrations pursuant to Section 1.4, including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, and the reasonable documented fees and expenses of one counsel for the Holders of all
Registrable Securities, shall be borne by the Company. Notwithstanding the foregoing, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Sections 1.2 or 1.4 if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all participating Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to
be registered in the withdrawn registration). All expenses incurred in connection with a registration requested pursuant to Section 1.4 (except for such expenses to be borne by the Company for up to two (2) Form S-3 registrations in
accordance with the first sentence of this Section 1.8), including (without limitation) all registration, filing, qualification fees, printer’s and accounting fees and the reasonable documents fees and expenses of counsel for the selling
Holder or Holders and counsel for the Company, shall be borne pro rata by the Holder or Holders participating in the Form S-3 Registration. 

 1.9 Delay of Registration. No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 1. 
  
 1.10 Indemnification. In the event any Registrable Securities are included in a registration statement under this
Section 1: 
  
 (a) To the extent permitted by law, the
Company will indemnify and hold harmless each Holder, the partners or officers, directors and shareholders of each Holder, legal counsel and accountants for each Holder, any underwriter (as defined in the Act) for such Holder and each person, if
any, who controls such Holder or underwriter within the meaning of the Act or the 1934 Act, against any losses, claims, damages or liabilities (joint or several) to which they may become subject under the Act, the 1934 Act or any state securities
laws, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (each, a “Violation”): (i) any untrue
statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Act, the 1934 Act, any state securities laws
or any rule or regulation promulgated under the Act, the 1934 Act or any state securities laws; and the Company will reimburse each such Holder, the partners or officers, directors and shareholders of each Holder, legal counsel and accountants for
each Holder, any such underwriter or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this subsection l.10(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the written consent of the Company, nor shall the
Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation that occurs in reliance upon and in conformity with information furnished for use in connection
with such registration by any such Holder, underwriter or controlling person; provided further, however, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Holder or underwriter,
or any person controlling such Holder or underwriter, from whom the person asserting any such losses, claims, damages or liabilities purchased shares in the offering, if a copy of the prospectus (as then amended or supplemented) was not sent or
given by or on behalf of such Holder or underwriter to such person at or prior to the written confirmation of the sale of the shares to such person, and if the prospectus (as so amended or supplemented) would have cured the defect giving rise to
such loss, claim, damage or liability. 
  
 (b) To the extent
permitted by law, each selling Holder, on a joint and several basis, will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company
within the meaning of the Act, legal counsel and accountants for the Company, any underwriter (as defined 

 in the Act) or any controlling person of any such underwriter, against any losses, claims, damages or liabilities (joint
or several) to which any of the foregoing persons may become subject, under the Act, the 1934 Act or any state securities laws, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with information furnished by such Holder for use in connection with such registration; and each such Holder will reimburse
any person intended to be indemnified pursuant to this subsection l.10(b), for any legal or other expenses reasonably incurred by such person in connection with investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this subsection l.10(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the
Holder. 
  
 (c) Promptly after receipt by an indemnified party
under this Section 1.10 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 1.10,
deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel)
shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any
such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 1.10, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 1.10. 
  
 (d) If the indemnification provided for in this Section 1.10 is held by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or
omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations, provided that no person guilty of fraud shall be entitled to contribution. The relative fault of the indemnifying
party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. In no event shall any contribution under this
subsection 1.10(d) exceed (A) in the case of any Holder, the gross 

 proceeds from the offering received by such Holder, less any amounts paid under subsection 1.10(b) or (B) in
the case of the Company, the gross proceeds from the offering received by the Company, less any amounts paid under subsection 1.10(a), in each case with respect to the same claim for indemnification. 
  
 (e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

  
 (f) The obligations of the Company and Holders under this
Section 1.10 shall survive the completion of any offering of Registrable Securities in a registration statement under this Section 1, and otherwise. 
  

1.11 Reports Under Securities Exchange Act of 1934. With a view to making available to the Holders the benefits of Rule 144 promulgated under
the Act and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to: 
  
 (a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, after ninety (90) days after the effective date of the Initial Offering; and 
  
 (b) file with the SEC in a timely manner all reports and other documents required of the Company under the Act and the 1934 Act. 
  
 1.12 Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of such securities that (i) is an affiliate (as such term is defined in
the 1934 Act), subsidiary, parent, partner, limited partner, retired partner or shareholder of a Holder, or (ii) is acquiring at least one hundred thousand (100,000) shares of Registrable Securities (subject to appropriate adjustment for
stock splits, stock dividends, combinations and other recapitalizations) from the Holder, provided: (a) the Company is, within a reasonable time prior to such transfer, furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are being assigned; (b) such transferee or assignee agrees in writing, in form and substance satisfactory to the Company, to be bound by and subject to the terms and
conditions of this Agreement, including without limitation the provisions of Section 1.14 below; and (c) such assignment shall be effective only if immediately following such transfer the further disposition of such securities by the
transferee or assignee is restricted under the Act. For the purposes of determining the number of shares of Registrable Securities held by a transferee or assignee, the holdings of transferees and assignees of a partnership who are partners or
retired partners of such partnership shall be aggregated together and with the partnership. 
  
 1.13 “Market Stand-Off” Agreement. Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final
prospectus relating to the Company’s initial public offering and ending on 

 the date specified by the Company and the managing underwriter (which shall not be less than one hundred eighty
(180) days after the date of the final prospectus, unless the Company and the managing underwriter agree to a shorter period) (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock (whether
such shares or any such securities are then owned by the Holder or are thereafter acquired), or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the
Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The underwriters in connection with the Company’s initial
public offering are intended third party beneficiaries of this Section 1.13 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to the Registrable Securities of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period. 
  
 1.14 Termination of Registration Rights. No Holder shall be entitled
to exercise any right provided for in this Section 1 after three (3) years following the consummation of the Initial Offering (except that the piggyback right provided for in Section 1.3 shall expire in accordance with the terms of
Section 1.3), nor, as to any Holder, such earlier time at which all Registrable Securities held by such Holder (and any affiliate of the Holder with whom such Holder must aggregate its sales under Rule 144) can be sold in any three (3)-month
period without registration in compliance with Rule 144 of the Act. 
  
 2.
Miscellaneous. 
  
 2.1 Successors and Assigns. Except
as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any shares of Registrable Securities). Nothing
in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement. 
  
 2.2 Governing
Law. This Agreement shall be governed by and construed under the laws of the State of New York, without giving effect to any choice-of-law or conflicts-of-laws rule or principle that would result in the application of any other laws. 

 
 2.3 Counterparts. This Agreement may be executed in two or more
counterparts (including facsimile versions), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  

2.4 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement. 

 2.5 Notices. Any notice required or permitted by any provision of this Agreement shall be given in
writing and shall be delivered personally or by courier, or by registered or certified mail, postage prepaid, addressed (i) in the case of a Holder to such Holder’s address as set forth in the signature pages hereto or such other address
as such Holder may designate in writing from time to time, (ii) in the case of the Company, to its principal office, and (iii) in the case of any permitted transferee of a party to this Agreement or its transferee, to such transferee at
its address as designated in writing by such transferee to the Company from time to time. Notices that are mailed shall be deemed received upon the date of delivery entered on the return receipt. Notices sent by courier or overnight
delivery shall be deemed received two (2) days after they have been so sent. Notices delivered personally shall be deemed received upon delivery. 
  
 2.6 Expenses. Should any party to this Agreement reasonably retain counsel for the purpose of enforcing any provision of this Agreement, including
without limitation the institution of any action or proceeding to enforce any provision of this Agreement, or to recover damages if otherwise available hereunder, or to obtain injunctive or other relief by reason of any alleged breach of any
provision of this Agreement, or for a declaration based on a demonstrated necessity of such party’s rights or obligations under this Agreement, or for any other judicial or equitable remedy, then if the matter is settled by judicial or
quasi-judicial determination (including arbitration, if such arbitration is agreed to by the parties), the prevailing party or parties shall be entitled, in addition to such other relief as may be granted, to be reimbursed by the losing party for
all reasonable costs and expenses incurred, including without limitation all reasonable attorneys’ fees and costs for services rendered to the prevailing party or parties and any reasonable attorneys’ fees and costs incurred in enforcing
any judgment or order entered. The prevailing party or parties shall be determined by the court (or arbitrator, if arbitration is agreed to by the parties) in the initial or any subsequent proceeding. 
  
 2.7 Entire Agreement: Amendments and Waivers. This Agreement, the
Purchase Agreement, the Warrants, the Notes and the documents referred to herein and therein (including the exhibits hereto and thereto, if any) constitute the full and entire understanding and agreement among the parties with regard to the subjects
hereof and thereof and supersede any prior or contemporaneous agreement. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Company and the holders of a majority of the Registrable Securities. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Registrable
Securities each future holder of all such Registrable Securities, and the Company. 
  
 2.8 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 
  
 [Remainder of Page Intentionally Left Blank] 

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

  

			
	 “COMPANY”

	
	 Basin Water, Inc.,
 a California corporation

		
	 By:
	 	/s/    PETER L. JENSEN
	 Name:
	 	
 Peter L. Jensen

	 Title:
	 	 President

  
 Holders’ signatures
appear on the following pages 

			
	            Holder
		
	Signature:	 	 /S/    RICHARD M. FOX

	Name:	 	Richard M. Fox
	Title:	 	Executive Vice President
		
	By:	 	Co-Invest Management, L.P., its general partner
		
	 	 	 By:   Co-Invest Capital Partners, Inc., its general partner

	
	The Co-Investment 2000 Fund, L.P.
	Five Radnor Corporate Center, Suite 555
	100 Matsonford Road
	Radnor, Pennsylvania 19087
	Attention: Richard Fox, Executive Vice President
	
	Number of Warrant Shares:    337,500 at $5.50 per share
	 	 	                             112,500 at $7.00 per share

			
	            Holder
		
	 Signature:
	 	 /S/ RICHARD M. FOX

	 Name:
	 	 Richard M. Fox

	 Title:
	 	 Vice President

		
	 By:
	 	XATF Management II, L.P., its general partner
		
	 	 	 By:   Cross Atlantic Capital Partners II, Inc., its general partner

	
	 Cross Atlantic Technology Fund II, L.P.

	 Five Radnor Corporate Center

	 Suite 555

	 100 Matsonford Road

	 Radnor, Pennsylvania 19087

	 Attention: Richard Fox, Vice President

	
	 Number of Warrant Shares:    337,500 at $5.50 per share

	 	 	                               112,500 at $7.00 per
 share

			
	            Holder
		
	Signature:	 	 /s/    MICHAEL MIKOLAJCZYK

	Name:	 	Michael Mikolajczyk
	Title:	 	Manager
	
	Catalyst Basin Water, LLC
	c/o Diamond Cluster International
	875 N. Michigan Avenue, Suite 3000
	Chicago, Illinois 60611
	Attention: Michael Mikolajczyk
	
	Number of Warrant Shares:    75,000 at $5.50 per share
	 	 	                              25,000 at $7.00 per
 share

 SCHEDULE A 
  
 HOLDERS 
  

			
	 HOLDER

	 	 WARRANTS

	 The Co-Investment 2000 Fund, L.P.
 Five Radnor Corporate Center, Suite 555
 100 Matsonford Road
 Radnor, Pennsylvania 19087
	 	337,500 Warrants at $5.50 per share
	Attention: Richard Fox, Executive Vice President	 	112,500 Warrants at $7.00 per share
		
	 Cross Atlantic Technology Fund II, L.P.
 Five Radnor Corporate Center
 Suite 555
 100 Matsonford Road
 Radnor, Pennsylvania 19087
	 	337,500 Warrants at $5.50 per share
	Attention: Richard Fox, Vice President	 	112,500 Warrants at $7.00 per share
		
	 Catalyst Basin Water, LLC
 c/o Diamond Cluster International
 875 N. Michigan Avenue, Suite 3000
 Chicago, Illinois 60611
	 	75,000 Warrants at $5.50 per share
	Attention: Michael Mikolajczyk	 	25,000 Warrants at $7.00 per share
		
	TOTAL:	 	750,000 Warrants at $5.50 per share
		
	 	 	250,000 Warrants at $7.00 per share

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