Exhibit
10.3

     

    THERMOENERGY
CORPORATION

    VOTING
AGREEMENT

    


    This Voting
Agreement (the “Agreement”) is made and
entered into as of this 19th  day
of November, 2009, by and among ThermoEnergy
Corporation, a
Delaware corporation (the “Company”), The
Quercus
Trust
(“Quercus”), Empire
Capital Partners, LP and its affiliates (“Empire”), Focus
Fund, L.P. (“Focus”) and Robert
S. Trump (“Trump”
and with Quercus, Empire and Focus, collectively referred to herein as the
“Series B Preferred
Stockholders”), .

     

    Witnesseth

     

    Whereas, the Series B Preferred
Stockholders are the beneficial owners of the majority of the outstanding shares
of the Series B Convertible Preferred Stock, $.01 par value, of the Company (the
“Series B Preferred
Stock”);

     

    Whereas, the Series B Preferred
Stockholders acquired their shares of Series B Preferred Stock pursuant to the
terms of the Securities Purchase Agreement of even date herewith (the “Purchase
Agreement”);

     

    Whereas,
the Certificate of Designation for the Series B Preferred Stock provides that
the holders of Series B Preferred Stock are entitled to elect four (4) directors
to the Board of Directors of the Company (the “Series B Directors”);
and

     

    Whereas, in connection with the
Purchase Agreement, the Series B Preferred Stockholders have agreed to provide
for the future voting of their shares of the Series B Preferred Stock for the
Series B Directors as set forth below.

     

    Now,
Therefore, in
consideration of these premises and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree, intending to be legally bound, as follows:

     

    AGREEMENT

     

    
      	
              1.

            	
              Voting.

            


    

     

    1.1           Series B Preferred Stockholders
Voting Agreement; the Shares.  The Series B Preferred
Stockholders agree to hold all their shares of Series B Preferred Stock
registered in their respective names or beneficially owned by such stockholder
as of the date hereof and any and all other shares of Series B Preferred Stock
legally or beneficially acquired by such stockholder after the date hereof
subject to, and to vote all such shares of Series B Preferred Stock in
accordance with, the provisions of this Agreement.  For purposes of
this Agreement, “Shares”
shall mean shares of Series B Preferred Stock held by the Series B Preferred
Stockholders.

     

    1.2           Election of Series B
Directors.  On all matters relating to the election and removal
of the Series B Directors, the Series B Preferred Stockholders agree to vote all
the Series B Preferred Stock held by them (or to consent pursuant to an action
by written consent of the holders of the Series B Preferred Stock of the
Company) so as to maintain the authorized size of the Company’s Board of
Directors at seven (7) members, consisting of four (4) Series B Directors and
three (3) directors to be elected by the holders of the Company’s common stock
and to elect such Series B Directors as follows:


    
      
         


      

      
        1.

        
          

        

      

      
         


      

    

     

    (a)           So
long as shares of Series B Preferred Stock remain outstanding, the Series B
Preferred Stockholders shall vote all of their respective shares of Series B
Preferred Stock so as to elect three (3) Series B Directors to be designated by
Quercus (the “Quercus Series B
Directors”) and one (1) Series B Director to be designated by Trump (the
“Trump Series B
Director”), or their respective designees.  The initial Quercus
Series B Directors shall be David Anthony, Joseph Bartlett and David
Gelbaum.  The initial Trump Series B Director shall be Shawn
Hughes.  Any vote taken to remove any director elected pursuant to
this Section 1.2(a),
or to fill any vacancy created by the resignation, removal or death of a
director elected pursuant to this Section 1.2(a),
shall also be subject to the provisions of this Section 1.2(a).  Upon
the request of any party entitled to designate a Series B Director as provided
in this Section 1.2(a),
each Series B Preferred Stockholder agrees to vote its Series B Preferred Stock
for the removal of such Series B Director.

     

    (b)           Any
Series B Director may be removed from the Company’s Board of Directors or any
committee thereof only upon the vote or written consent of the Series B
Preferred Stockholder entitled to designate such Series B Director as provided
herein and each holder of Series B Preferred Stock shall take all action
reasonably necessary, including voting their Shares, to remove any such Series B
Director.

     

    1.3           No Liability for Election of
Recommended Director. None of the parties hereto and no officer,
director, shareholder, partner, employee or agent of any party makes any
representation or warranty as to the fitness or competence of the nominee of any
party hereunder to serve on the Board of Directors by virtue of such party’s
execution of this Agreement or by the act of such party in voting for such
nominee pursuant to this Agreement.

     

    1.4           Failure to Designate Board
Member. In the absence of any designation from the persons or groups with
the right to designate a director as specified above, the Series B Director
previously designated by them and then serving shall be re-elected if still
eligible to serve as provided herein.

     

    1.5           Legend.

     

    (a)           Concurrently
with the execution of this Agreement, there shall be imprinted or otherwise
placed, on certificates representing the Shares the following restrictive legend
(the “Legend”):

     

    “THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS
OF A VOTING AGREEMENT WHICH PLACES CERTAIN RESTRICTIONS ON THE VOTING OF THE
SHARES REPRESENTED HEREBY.  ANY PERSON ACCEPTING ANY INTEREST IN SUCH
SHARES SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS
OF SUCH AGREEMENT.  A COPY OF SUCH VOTING AGREEMENT WILL BE FURNISHED
TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO
THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS.”

     

    (b)           The
Company agrees that, during the term of this Agreement, it will not remove, and
will not permit to be removed (upon registration of transfer, reissuance of
otherwise), the Legend from any such certificate and will place or cause to be
placed the Legend on any new certificate issued to represent the Shares
theretofore represented by a certificate carrying the Legend.

     

    1.6           Successors.  The
provisions of this Agreement shall be binding upon the successors in interest to
any of the Shares.  The Company shall not permit the transfer of any
of the Shares on its books or issue a new certificate representing any of the
Shares unless and until the person to whom such security is to be transferred
shall have executed a written agreement, substantially in the form of this
Agreement, pursuant to which such person becomes a party to this Agreement and
agrees to be bound by all the provisions hereof as if such person were Querus,
Empire, or Trump, as applicable.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    1.7           Other
Rights.  Except as provided by this Agreement or any other
agreement entered into in connection with the Purchase Agreement, each Series B
Preferred Stockholder shall exercise the full rights of a holder of capital
stock of the Company with respect to the Series B Preferred Stock.

     

    1.8           Proxy.  Each party
to this Agreement hereby constitutes and appoints the President and
Secretary of the Company, and each of them, with full power of substitution, as
the proxies of the party with respect to the matters set forth herein, including
without limitation, election of persons as members of the Company’s Board of
Directors in accordance herewith, and hereby authorizes each of them to
represent and to vote, if and only if the party (i) fails to vote or
(ii) attempts to vote (whether by proxy, in person or by written consent),
in a manner which is inconsistent with the terms of this Agreement, all of such
party’s Shares in favor of the election of persons as members of the Company’s
Board of Directors determined pursuant to and in accordance with the terms and
provisions of this Agreement.  The proxy granted pursuant to the
immediately preceding sentence is given in consideration of the agreements and
covenants of the Company and the parties in connection with the transactions
contemplated by this Agreement and, as such, is coupled with an interest and
shall be irrevocable unless and until this Agreement terminates or expires
pursuant to Section
2 hereof.  Each party hereto hereby revokes any and all
previous proxies with respect to the Shares and shall not hereafter, unless and
until this Agreement terminates or expires pursuant to Section 2 hereof,
purport to grant any other proxy or power of attorney with respect to any of the
Shares, deposit any of the Shares into a voting trust or enter into any
agreement (other than this Agreement), arrangement or understanding with any
person, directly or indirectly, to vote, grant any proxy or give instructions
with respect to the voting of any of the Shares, in each case, with respect to
any of the matters set forth herein.

     

    
      	
              2.

            	
              Termination.

            


    

     

    2.1           This
Agreement shall continue in full force and effect from the date hereof through
the earliest of the following dates, on which date it shall terminate in its
entirety:

     

    (a)           the
conversion of all of the outstanding shares of Series B Preferred Stock held by
the Series B Preferred Stockholders;

     

    (b)       
   upon a liquidation of the Company; and

     

    (c)           the
date as of which the parties hereto terminate this Agreement by written consent
of the holders of a majority of the Shares.

     

    
      	
              3.

            	
              Miscellaneous.

            


    

     

    3.1           Ownership.  The
Series B Preferred Stockholders represent and warrant to each other that
(a) such Series B Preferred Stockholder now owns its respective Shares,
free and clear of liens or encumbrances, and has not, prior to or on the date of
this Agreement, executed or delivered any proxy or entered into any other voting
agreement or similar arrangement other than one which has expired or terminated
prior to the date hereof, and (b) such Series B Preferred Stockholder has
full power and capacity to execute, deliver and perform this Agreement, which
has been duly executed and delivered by, and evidences the valid and binding
obligation of, such stockholder enforceable in accordance with its
terms.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    3.2           Further Action.  If
and whenever Shares held by a Series B Preferred Stockholder are sold, such
stockholder or the personal representative of such stockholders shall do all
things and execute and deliver all documents and make all transfers, and cause
any transferee of such Shares to do all things and execute and deliver all
documents, as may be necessary to consummate such sale consistent with this
Agreement.

     

    3.3           Specific
Performance.  The parties hereto hereby declare that it is
impossible to measure in money the damages which will accrue to a party hereto
or to their heirs, personal representatives, or assigns by reason of a failure
to perform any of the obligations under this Agreement and agree that the terms
of this Agreement shall be specifically enforceable.  If any party
hereto or his heirs, personal representatives, or assigns institutes any action
or proceeding to specifically enforce the provisions hereof, any person against
whom such action or proceeding is brought hereby waives the claim or defense
therein that such party or such personal representative has an adequate remedy
at law, and such person shall not offer in any such action or proceeding the
claim or defense that such remedy at law exists.

     

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

     

    3.5           Amendment or
Waiver.  This Agreement may be amended (or provisions of this
Agreement waived) only by an instrument in writing signed by (i) the
Company, and (ii) holders of a majority of the Shares.  Any amendment
or waiver so affected shall be binding upon the Company, each of the parties
hereto and any assignee of any such party.

     

    3.6           Severability.  In
the event one or more of the provisions of this Agreement should, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained
herein.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    3.7           Successors.  This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, successors, assigns, administrators, executors and
other legal representatives, and to such additional individuals or entities that
may become shareholders of the Company and that become parties
hereto.

     

    3.8           Additional
Shares.  In the event that subsequent to the date of this
Agreement any shares or other securities are issued on, or in exchange for, any
of the Shares by reason of any stock dividend, stock split, combination of
shares, reclassification or the like, such shares or securities shall be deemed
to be Shares subject to this Agreement, as the case may be, for purposes of this
Agreement.  Should, after the date hereof, any person become a holder
of capital stock of the Company who is not a party to this Agreement, the
Company covenants that, in connection with such event, the Company shall require
such party to execute a counterpart signature page to this
Agreement.

     

    3.9           Counterparts.  This
Agreement may be executed in one or more counterparts, each of which will be
deemed an original but all of which together shall constitute one and the same
agreement.

     

    3.10           Waiver.  No waivers
of any breach of this Agreement extended by any party hereto to any other party
shall be construed as a waiver of any rights or remedies of any other party
hereto or with respect to any subsequent breach.

     

    3.11           Attorney’s Fees.  In
the event that any suit or action is instituted to enforce any provision in this
Agreement, the prevailing party in such dispute shall be entitled to recover
from the losing party all fees, costs and expenses of enforcing any right of
such prevailing party under or with respect to this Agreement, including without
limitation, such reasonable fees and expenses of attorneys and accountants,
which shall include, without limitation, all fees, costs and expenses of
appeals.

     

    3.12           Notices.  Any
notices required in connection with this Agreement shall be in writing and shall
be deemed effectively given:  (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed electronic mail or
facsimile if sent during normal business hours of the recipient; if not, then on
the next business day, (iii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or
(iv) one (1) day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written notification of
receipt.  All notices shall be addressed to the holder appearing on
the books of the Company or at such address as such party may designate by ten
(10) days advance written notice to the other parties hereto.

     

    3.13           Manner of
Voting.     The voting of Shares pursuant to
this Agreement may be effected in person, by proxy, by written consent or in any
other manner permitted by applicable law.

     

    3.14           Further Assurances;
Interpretation.       At any time or
from time to time after the date hereof, the parties agree to cooperate with
each other, and at the request of any other party, to execute and deliver any
further instruments or documents and to take all such further action as the
other party may reasonably request in order to evidence or effectuate the
consummation of the transactions contemplated hereby and to otherwise carry out
the intent of the parties hereunder. All capitalized terms not otherwise defined
herein shall have the same definition as assigned to such term in the Purchase
Agreement.

     

    3.15           Entire
Agreement.  This Agreement and the Exhibits hereto, along with
the Purchase Agreement and each of the Exhibits and Schedules thereto,
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof and no party shall be liable or
bound to any other in any manner by any representations, warranties, covenants
and agreements except as specifically set forth herein and
therein.


     

    [THIS
SPACE INTENTIONALLY LEFT BLANK]


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    In Witness
Whereof, the parties hereto have executed this Voting
Agreement as of the date first above written.

     

    
      
        
          	
                  COMPANY:

                	 
      
	 
      	 
      
	
                  ThermoEnergy
      Corporation

                	 
      
	 
      	 
      
	 	 
	
                  By:

                	
                  /s/  Dennis C.
    Cossey

                	 
      
	
                  Dennis
      C. Cossey

                	 
      
	
                  Chairman
      and CEO

                	 
      
	 
      	 
      
	
                  124
      West Capital Avenue, Suite 880

                	 
      
	
                  Little
      Rock, Arkansas 72201

                	 
      
	 
      	 
      
	
                  Telephone:  (501)
      376-6477

                	 
      
	
                  Facsimile:  (501)
      375-5249

                	 
      
	 
      	 
      
	
                  With
      a copy to:

                	 
      
	 
      	 
      
	
                  Nixon
      Peabody LLP

                	 
      
	
                  Attn.:  William
      E. Kelly, Esq.

                	 
      
	
                  100
      Summer Street

                	 
      
	
                  Boston,
      Massachusetts  02110

                	 
      
	 
      	 
      
	
                  Telephone:  (617)
      345-1195

                	 
      
	
                  Facsimile:  (866)
      743-4899

                	 
      


        

      

    

    


    VOTING
AGREEMENT

    SIGNATURE
PAGE


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    QUERCUS:

     

    The
Quercus Trust

    


    


    
      
        	
                  /s/  David
      Gelbaum

              	 
      
	
                David
      Gelbaum

              	 
      
	
                Trustee

              	 
      


      

    

    


    2309
Santiago Drive

    Newport
Beach, California 92660

    


    With a
copy to:

    


    Joseph P.
Bartlett, Esq.

    1900
Avenue of the Stars, Suite 2100

    Los
Angeles, California  90067

    


    Telephone:  (310)
201-7481

    Facsimile:  (310)
201-2380

    


    VOTING
AGREEMENT

    SIGNATURE
PAGE


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EMPIRE:

     

    
      
        	
                Empire
      Capital Partners, lp

              	 
      	
                Empire
      Capital Partners, ltd

              
	
                By:
      Empire
      gp, llc, its General Partner

              	 
      	
                By:
      Empire
      Capital Management, llc,

              
	 
      	 
      	
                its
      Investment Manager

              
	 
      	 
      	 
      
	
                By:

              	
                  /s/  Peter J.
      Richards

              	 
      	 
      
	 
      	
                Peter
      J. Richards

              	 
      	
                By:

              	
                  /s/  Peter J.
      Richards

              
	 
      	 
      	 
      	
                Peter
      J. Richards

              
	
                Empire
      Capital Partners Enhanced

                Master
      Fund, ltd

              	 
      	 
      
	
                By:
      Empire
      Capital Management, llc,

              	 
      	 
      
	
                its
      Investment Manager

              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                By:

              	
                  /s/  Peter J.
      Richards

              	 
      	
                  /s/   Peter J.
      Richards

              
	 
      	
                Peter
      J. Richards

              	 
      	
                Peter
      J. Richards

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                  /s/  Scott A.
      Fine

              
	 
      	 
      	
                Scott
      A. Fine

              


      

    

    


    c/o J.
Markham Penrod

    Empire
Capital Management, LLC

    One
Gorham Island, Suite 201

    Westport,  Connecticut
06880

    


    Telephone:  (203)
454-6925

    Facsimile:  (203)
454-1539

    VOTING
AGREEMENT

    SIGNATURE
PAGE


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    
      
        
          
            	
                    FOCUS:

                  
	 
	 
	
                    Focus
      Fund, l.p.

                  
	 
      
	 
      
	 
      
	
                    By:

                  	
                    /s/ J. Winder Hughes III

                  	 
      
	 
      	
                    J.
      Winder Hughes III

                  
	 
      
	
                    Hughes
      Capital

                  
	
                    P.O.
      Box 389

                  
	
                    Ponte
      Vedra, Florida 32004

                  
	 
      
	 
      
	
                    Telephone:  (904)
      612-4452

                  


          

        

      

    

     

    VOTING
AGREEMENT

    SIGNATURE
PAGE


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
      
        	
                TRUMP:

              
	 
      
	 
      
	
                /s/  Robert S.
    Trump

              	 
      
	
                Robert
      S. Trump

              
	 
      
	 
      
	
                Trump
      Management Inc.

              
	
                89
      10th
      Street

              
	
                Garden
      City, New York 11530

              
	 
      
	
                Telephone:  (516)
      746-6194

              


      

    

     

    VOTING
AGREEMENT

    SIGNATURE
PAGE