Document:

Registration Rights Agreement

 Exhibit 4.11 
  
 REGISTRATION RIGHTS AGREEMENT 
  

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of February 10, 2006, by and among Basin Water, Inc.,
a California corporation (the “Company”), and the undersigned holder of Warrants (“Warrants”) to purchase up to an aggregate of Four Hundred Thousand (400,000) shares of Common Stock, (the “Warrant
Shares”). 
  
 RECITALS 
  
 WHEREAS, pursuant to a Subordinated Note with Warrants Purchase Agreement,
dated as of February 10, 2006 (the “Purchase Agreement”) among the Company and Aqua America, Inc. (“Aqua”), the Company issued the Warrants to Aqua; 
  
 WHEREAS, under the terms of the Note issued to Aqua pursuant to the Purchase
Agreement, interest on the Note may be payable to Aqua in shares of Common Stock (the “Interest Payment Shares”); 
  
 WHEREAS, to induce Aqua to enter into the Purchase Agreement, the Company desires to grant Aqua certain rights to cause the Company to register the
Warrant Shares and the Interest Payment Shares; and 
  
 WHEREAS,
Aqua and the Company hereby agree that this Agreement shall govern the rights of Aqua 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 1.11 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 $4,000,000, 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 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. 
  
 1.6 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. 

 1.7 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 (other than as a result of breach of this Agreement by the Company); 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 1.7), 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. 
  
 1.8 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. 
  
 1.9 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.9 (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; provided however, the obligations of a Holder hereunder shall be limited to the gross
proceeds from the offering received by such Holder. 
  
 (b) To the
extent permitted by law, each selling Holder, severally and not jointly, 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 in writing to the Company for use in connection with such registration; and each such Holder
will reimburse any person intended to be indemnified pursuant to this subsection l.9(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.9(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 1.9 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 1.9, 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 1.9, 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 1.9. 

 (d) If the indemnification provided for in this Section 1.9 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 1.9(d) exceed in the case of any Holder, the gross proceeds from the offering received by such Holder, less any amounts paid under subsection 1.9(b). 
  
 (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 1.9 shall
survive the completion of any offering of Registrable Securities in a registration statement under this Section 1, and otherwise. 
  
 1.10 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. 
  
 1.11 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 1.13 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. 
  
 1.12 “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 1.12 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. 

 
 1.13 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 Note 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/    Thomas C. Tekulve

	 Name:
	 	 Thomas C. Tekulve

	 Title:
	 	 Chief Financial Officer, Treasurer and Secretary

  
 Holders’ signatures
appear on the following pages 

			
	 Holder

		
	 Signature:
	 	 /s/ David P. Smeltzer

	 Name:
	 	David P. Smeltzer
	 Title:
	 	Chief Financial Officer and Senior Vice President—Finance
	
	 Aqua America, Inc.

	 762 West Lancaster Avenue

	 Bryn Mawr, Pennsylvania 19010

	 Attention:
	 	General Counsel
	
	 Number of Warrant Shares: 300,00 at $6.00 per share
                                        
      100,000 at $7.00 per share

  

 -2- 

 SCHEDULE A 
  

HOLDERS 
  

			
	 HOLDER

	 	 WARRANTS

	 Aqua America, Inc.
 762 West Lancaster Avenue
 Bryn Mawr, Pennsylvania 19010
                           Attention: General Counsel
	 	 300,000 Warrants at $6.00 per share

		
	 	 	 100,000 Warrants at $7.00 per share

  

 -3-Form of Director and Executive Officer Indemnification Agreement

 Exhibit 10.1 
  
 INDEMNIFICATION AGREEMENT 
  
 This Indemnification Agreement (“Agreement”) is made as of
                                    , 2006 by and between
Basin Water, Inc., a Delaware corporation (the “Company”), and
                                        
             (“Indemnitee”). 
  
 RECITALS 
  
 WHEREAS, highly competent persons have become more reluctant to serve corporations as directors or in other capacities unless they are provided with adequate protection through insurance and adequate indemnification against
inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation; 
  
 WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain qualified
individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been
a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher
premiums and with more exclusions. At the same time, directors, officers and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other
things, matters that traditionally would have been brought only against the Company or business enterprise itself. The certificate of incorporation and bylaws of the Company require indemnification of the officers and directors of the Company.
Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”). The certificate of incorporation, bylaws and the DGCL expressly provide that the indemnification
provisions set forth therein are not exclusive and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect to indemnification; 
  
 WHEREAS, the uncertainties relating to such insurance and to
indemnification have increased the difficulty of attracting and retaining such persons; 
  
 WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act
to assure such persons that there will be increased certainty of such protection in the future; 
  
 WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf
of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified; 
  
 WHEREAS, this Agreement is a supplement to and in furtherance of the certificate of incorporation and bylaws of the
Company and any resolutions adopted pursuant thereto and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and 
  
 WHEREAS, Indemnitee does not regard the protection available under the Company’s certificate of incorporation,
bylaws and insurance as adequate in the present circumstances and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve 

 in such capacity. Indemnitee is willing to serve, to continue to serve and to take on additional service for or on behalf
of the Company on the condition that he or she be so indemnified. 
  
 NOW, THEREFORE, in consideration of the promises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows: 
  
 1. Services to the Company. Indemnitee will serve or continue to serve as an officer, director or key employee of the
Company for so long as Indemnitee is duly elected or appointed or until Indemnitee tenders his or her resignation. 
  
 2. Definitions. As used in this Agreement: 
  
 (a) “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided,
however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity. 
  
 (b) A “Change in Control” shall be deemed to occur upon the
earliest to occur after the date of this Agreement of any of the following events: 
  
 (i) Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing twenty percent (20%) or more of the combined voting power of the Company’s then outstanding securities; 
  
 (ii) Change in Board of Directors. During any period of two (2) consecutive years (not including any period prior to the
execution of this Agreement), individuals, who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction
described in Sections 2(b)(i), 2(b)(iii) or 2(b)(iv)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Board; 
  
 (iii) Corporate Transactions. The effective date of a
merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50.1% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or
consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity; 
  
 (iv) Liquidation. The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement or
series of agreements for the sale or disposition by the Company of all or substantially all of the Company’s assets; or 
  
 (v) Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange 

  

 2 

 
Act (as defined below), whether or not the Company is then subject to such reporting requirement. 
  
 (c) “Corporate Status” describes the status of a person who
is or was a director, officer, trustee, general partner, managing member, fiduciary, employee or agent of the Company or of any other Enterprise (as defined below) which such person is or was serving at the request of the Company. 
  
 (d) “Disinterested Director” means a director of the Company
who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee. 
  
 (e) “Enterprise” shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust, employee
benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, trustee, general partner, managing member, fiduciary, employee or agent. 
  
 (f) “Exchange Act” shall mean the Securities Exchange Act of
1934, as amended. 
  
 (g) “Expenses” shall
include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other
disbursements or expenses of the type customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also
shall include expenses incurred in connection with any appeal resulting from any Proceeding, including, without limitation, the premium, security for and other costs relating to any cost bond, supersedeas bond or other appeal bond or its equivalent.
Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee. 
  
 (h) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not
include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this
Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto. 
  
 (i)
“Person” shall have the meaning set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities
under an employee benefit plan of the Company and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. 
  
 (j) The term “Proceeding” shall include any threatened,
pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, formal or informal, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the
Company or otherwise and whether of a civil, criminal, administrative or investigative nature, 

  

 3 

 
in which Indemnitee was, is or will be involved as a party, witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the
Company, by reason of any action taken (or failure to act) by him or her or of any action (or failure to act) on his or her part while acting as a director or officer of the Company, or by reason of the fact that he or she is or was serving at the
request of the Company as a director, officer, trustee, general partner, managing member, fiduciary, employee or agent of any other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for
which indemnification, reimbursement or advancement of Expenses can be provided under this Agreement. 
  
 (k) References to “other enterprise” shall include employee benefit plans; references to “fines” shall include any
excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or
involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he or she reasonably believed to be in the best
interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement. 
  
 3. Indemnity in Third-Party Proceedings. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant (as a witness or otherwise) in any Proceeding, other than a Proceeding by or in the right of the Company
to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified against all Expenses, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses, judgments, fines, penalties and amounts paid in settlement) actually and reasonably incurred by Indemnitee or on his or her behalf in connection with such Proceeding or any claim, issue or
matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding, he or she had no reasonable cause to believe that
his or her conduct was unlawful. 
  
 4. Indemnity in
Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant (as a witness or otherwise)
in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on his or her behalf in
connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses
shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that any court in which the Proceeding was
brought or the Delaware Court of Chancery shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification. 
  
 5. Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provisions of this Agreement, to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter
therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or her in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the
merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all 

  

 4 

 
Expenses actually and reasonably incurred by him or her or on his or her behalf in connection with each successfully resolved claim, issue or matter. If
Indemnitee is not wholly successful in such Proceeding, the Company also shall indemnify Indemnitee against all Expenses reasonably incurred in connection with a claim, issue or matter related to any claim, issue or matter on which Indemnitee was
successful. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

  
 6. Indemnification For Expenses of a Witness.
Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and
reasonably incurred by him or her or on his or her behalf in connection therewith. 
  
 7. Additional Indemnification. 
  
 (a) Notwithstanding any limitation in Sections 3, 4 or 5, the Company shall indemnify Indemnitee to the fullest extent permitted by law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding
by or in the right of the Company to procure a judgment in its favor) against all Expenses, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in
respect of such Expenses, judgments, fines, penalties and amounts paid in settlement) actually and reasonably incurred by Indemnitee in connection with the Proceeding. No indemnity shall be made under this Section 7(a) on account of
Indemnitee’s conduct which constitutes a breach of Indemnitee’s duty of loyalty to the Company or its stockholders or is an act or omission not in good faith or which involves intentional misconduct or a knowing violation of the law.

  
 (b) For purposes of Section 7(a), the meaning of the
phrase “to the fullest extent permitted by law” shall include, but not be limited to: 
  
 (i) the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement or
the corresponding provision of any amendment to or replacement of the DGCL; and 
  
 (ii) the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement
that increase the extent to which a corporation may indemnify its officers and directors. 
  
 8. Exclusions. Notwithstanding any other provision in this Agreement, the Company shall not be obligated under this Agreement to indemnify Indemnitee in connection with any claim made against Indemnitee:

  
 (a) for which payment has actually been received by or on
behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount actually received under any insurance policy or other indemnity provision; 
  
 (b) for an accounting of profits made from the purchase and sale (or sale and
purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law; or 
  
 (c) except as otherwise provided in Sections 13(d)-(f) hereof, prior to a Change in Control, in connection with any
Proceeding (or any part of any Proceeding) initiated by Indemnitee, 

  

 5 

 
including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other
indemnitees, unless (i) the Board of Directors of the Company authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the
powers vested in the Company under applicable law. 
  
 9.
Advances of Expenses; Defense of Claim. 
  
 (a)
Notwithstanding any provision of this Agreement to the contrary, the Company shall advance the Expenses incurred by Indemnitee in connection with any Proceeding within ten (10) days after the receipt by the Company of a statement or statements
requesting such advances from time to time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s ability to repay the expenses and
without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. Advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement,
including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. Indemnitee shall qualify for advances solely upon the execution and delivery to the Company of an undertaking providing that Indemnitee
undertakes to repay the advance to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company. This Section 9(a) shall not apply to any claim made by Indemnitee for which indemnity is excluded
pursuant to Section 8. 
  
 (b) The Company will be entitled
to participate in the Proceeding at its own expense. 
  
 (c) The
Company shall not settle any action, claim or Proceeding (in whole or in part) which would impose any Expense, judgment, fine, penalty or limitation on Indemnitee without Indemnitee’s prior written consent. 
  
 10. Procedure for Notification and Application for
Indemnification. 
  
 (a) Within sixty (60) days after the
actual receipt by Indemnitee of notice that he or she is a party to or a participant (as a witness or otherwise) in any Proceeding, Indemnitee shall submit to the Company a written notice identifying the Proceeding. The omission by Indemnitee to
notify the Company will not relieve the Company from any liability which it may have to Indemnitee (i) otherwise than under this Agreement and (ii) under this Agreement unless and only to the extent that the Company can establish that such
omission to notify resulted in actual prejudice to the Company. 
  
 (b) Indemnitee shall thereafter deliver to the Company a written application to indemnify Indemnitee in accordance with this Agreement. Such application(s) may be delivered from time to time and at such time(s) as Indemnitee deems
appropriate in his or her sole discretion. Following such a written application for indemnification by Indemnitee, Indemnitee’s entitlement to indemnification shall be determined in accordance with Section 11(a) of this Agreement.

  
 11. Procedure Upon Application for Indemnification.

  
 (a) Upon written request by Indemnitee for indemnification
pursuant to Section 10(b), a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (i) by a majority vote of the Disinterested Directors, even if
constituting less than a quorum of the Board; or (ii) if so requested by Indemnitee, in his or her sole discretion, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee. If it is so
determined that Indemnitee is entitled to indemnification, payment to Indemnitee 

  

 6 

 
shall be made within ten (10) days after such determination. Indemnitee shall reasonably cooperate with the person, persons or entity making such
determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected
from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person,
persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

  
 (b) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 11(a) hereof, the Independent Counsel shall be selected as provided in this Section 11(b). If a Change in Control shall not have occurred, the Independent Counsel
shall be selected by the Board of Directors, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected and the basis for the Board determination that such counsel qualified as
Independent Counsel. If a Change in Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of Directors, in which event the preceding sentence
shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within 10 days after such written notice
of selection shall have been received, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent
Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and
timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn
or a court of competent jurisdiction has determined that such objection is without merit. If, within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 10(b) hereof, no Independent Counsel shall
have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction (the “Court”) for resolution of any objection which shall have been made by the Company or Indemnitee to the
other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel under Section 11(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 13(a) of this Agreement, Independent Counsel shall be
discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing). 
  
 (c) The Company agrees to pay the reasonable fees of Independent Counsel and to fully indemnify such Independent Counsel against any and all Expenses,
claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. 
  
 12. Presumptions and Effect of Certain Proceedings. 
  

(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall
presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 10(b) of this Agreement, and the Company shall have the burden of proof to overcome
that presumption in connection with the making by any person, persons or 

  

 7 

 
entity of any determination contrary to that presumption. Neither the failure of the Company (including by the Board or Independent Counsel) to have made a
determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including
by the Board or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct. 
  
 (b) If the person, persons or entity empowered or selected under
Section 11 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make
Indemnitee’s statement not materially misleading, in connection with the request for indemnification or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period shall be
extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining
or evaluating of documentation and/or information relating thereto. 
  
 (c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in
this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests
of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful. 
  
 (d) For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the
records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on
information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected by the Enterprise. The provisions of this Section 12(d) shall not be deemed to be exclusive
or to limit in any way the other circumstances in which Indemnitee may be deemed or found to have met the applicable standard of conduct set forth in this Agreement. 
  
 (e) The knowledge and/or actions, or failure to act, of any other director, trustee, partner, managing member, fiduciary,
officer, agent, advisor or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. 
  
 13. Remedies of Indemnitee. 
  

(a) In the event that (i) a determination is made pursuant to Section 11 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 9 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 11(a) of this
Agreement within the time period specified in Section 12(b) of this Agreement, (iv) payment of indemnification is not made pursuant to Section 5, 6, 7 or the last sentence of Section 11(a) of this Agreement within ten
(10) days after receipt by the Company of a written request therefor or (v) payment of indemnification pursuant to Section 3 or 

  

 8 

 
Section 4 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification,
Indemnitee shall be entitled to an adjudication by a court of his or her entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his or her option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration. 
  
 (b) In the event that a determination shall have been made pursuant to
Section 11(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 13 shall be conducted in all respects as a de novo trial or arbitration on
the merits, and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 13, the Company shall have the burden of proving Indemnitee is not entitled
to indemnification or advancement of Expenses, as the case may be, and the Company may not refer to or introduce into evidence any determination pursuant to Section 11(a) of this Agreement adverse to Indemnitee for any purpose. If Indemnitee
commences a judicial proceeding or arbitration pursuant to this Section 13, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 9 until a final determination is made with respect to
Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed). 
  
 (c) If a determination shall have been made pursuant to Section 11(a) of this Agreement that Indemnitee is entitled to indemnification, the Company
shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 13, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make
Indemnitee’s statement not materially misleading, in connection with the request for indemnification or (ii) a prohibition of such indemnification under applicable law. 
  
 (d) In the event that Indemnitee, pursuant to this Section 13, seeks a judicial adjudication of or an award in
arbitration to enforce his or her rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all Expenses actually and
reasonably incurred by him or her in such judicial adjudication or arbitration. If it shall be determined in said judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advancement of
Expenses sought, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all Expenses reasonably incurred by Indemnitee in connection with such judicial adjudication or arbitration.

  
 (e) The Company shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section 13 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the
Company is bound by all the provisions of this Agreement. 
  
 (f)
The Company shall indemnify Indemnitee to the fullest extent permitted by law against all Expenses and, if requested by Indemnitee, shall (within ten (10) days after the Company’s receipt of such written request) advance such Expenses to
Indemnitee, which are incurred by Indemnitee in connection with any judicial proceeding or arbitration brought by Indemnitee for (i) indemnification or advances of Expenses by the Company under this Agreement or any other agreement or provision
of the Company’s certificate of incorporation or bylaws now or hereafter in effect or (ii) recovery or advances under any insurance policy maintained by any person for the benefit of Indemnitee, regardless of whether Indemnitee ultimately
is determined to be entitled to such indemnification, advance or insurance recovery, as the case may be. 
  

 9 

 14. Non-exclusivity; Survival of Rights; Insurance; Subrogation. 
  
 (a) The rights of indemnification and to receive advancement of Expenses as
provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Company’s certificate of incorporation, the Company’s bylaws, any agreement, a vote of
stockholders, a resolution of directors or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by
such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. The parties hereto intend that, to the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or
advancement of Expenses than would be afforded currently under the Company’s bylaws and this Agreement, the Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is
intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law, in equity or otherwise. The assertion or
employment of any right or remedy hereunder or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy. 
  
 (b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, trustees, partners,
managing members, fiduciaries, employees or agents of the Company or of any other Enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the
maximum extent of the coverage available for any such director, trustee, partner, managing member, fiduciary, officer, employee or agent under such policy or policies. If, at the time the Company receives notice from any source of a Proceeding as to
which Indemnitee is a party or a participant (as a witness or otherwise), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures
set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such
policies. 
  
 (c) In the event of any payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights. 
  
 (d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder (or for which advancement is provided hereunder) if and to the extent that Indemnitee has
otherwise actually received such payment under any insurance policy, contract, agreement or otherwise. 
  
 (e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a
director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such Enterprise.

  
 15. Duration of Agreement. This Agreement shall
continue until and terminate upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as a director or officer of the Company or as a director, officer, trustee, partner, managing member, fiduciary,
employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which 

  

 10 

 
Indemnitee served at the request of the Company; or (b) one (1) year after the final termination of any Proceeding (including any rights of appeal
thereto) then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any Proceeding commenced by Indemnitee pursuant to Section 13 of this Agreement relating thereto (including
any rights of appeal of any Section 13 Proceeding). 
  
 16.
Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement
(including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or
impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of
the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby. 
  
 17. Enforcement and Binding Effect. 
  
 (a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce
Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company. 
  
 (b) This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof. 
  
 (c) The indemnification and advancement of expenses provided by or granted
pursuant to this Agreement shall apply to Indemnitee’s service as an officer, director or key employee of the Company prior to the date of this Agreement. 
  

(d) The indemnification and advancement of expenses provided by or granted pursuant to this Agreement shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. 
  
 18. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver. 
  
 19. Notice by Indemnitee. Indemnitee agrees promptly to notify the
Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered
hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise, except as provided in Section 10(a). 
  

 11 

 20. Notices. All notices, requests, demands and other communications under this Agreement shall be
in writing and shall be deemed to have been duly given (a) if delivered by hand and if receipt is acknowledged in writing by the party to whom said notice or other communication shall have been directed or (b) if mailed by certified or
registered mail with postage prepaid, on the third business day after the date on which it is so mailed: 
  
 (a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide in writing to
the Company. 
  
 (b) If to the Company to: 
  
 Basin Water, Inc. 
 8731 Prestige Court 
 Rancho Cucamonga, California 91730 
 Attn.: Chief Executive Officer 
  
 or to any other address as may have been furnished to
Indemnitee in writing by the Company. 
  
 21. Contribution.
To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as
is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect: (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving rise to such
Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s). 
  
 22. Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be
governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 13(a) of this
Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the
“Delaware Court”) and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any
action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not a resident of the State of Delaware, irrevocably Corporation Service Company, 2711 Centerville Road, Suite 400, in the City
of Wilmington, County of New Castle, as its agent in the State of Delaware as such party’s agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if
served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court and (v) waive and agree not to plead or to make any claim that any such
action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum. 
  
 23. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. 
  

 12 

 24. Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine
pronoun where appropriate. The headings of the sections and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. 
  
  
  
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 13 

 IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first
above written. 
  

							
	 BASIN WATER, INC.,
	  	INDEMNITEE
	 a Delaware corporation
	  	 	  	 
			
	 By:
	 	
	  	

	 Name:
	 	
	  	[NAME]
	 Title:
	 	
	  	 	  	 
				
	 	 	 	  	 Address:
	  	

	 	 	 	  	

	 	 	 	  	

  

 14

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