Document:

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                                                                Exhibit 10.43

                          RETIREMENT PLAN FOR FOUNDER,
                                  P.L. MONTESI

June 16, 2003

Board of Directors
ThermoEnergy Corporation
323 Center Street
Little Rock, AR  72201

         RE: Retirement Plan for Founder, P.L. "Buddy" Montesi

Dear Board of Directors:

The Board of Directors needs to approve the Retirement Plan (the "Plan") for the
Company Founder, P.L. "Buddy" Montesi. Mr. Montesi is considering retiring and
we need to recognize the commitment he has made to this company. I recommend the
Plan cover the following benefits for a period of twenty (20) years after his
retirement date:

         1.       Continuation of his salary equal to 50% of his current salary
                  contract.

         2.       Payment of an annual bonus equal to 50% of the largest annual
                  bonus paid to any Officer or Executive.

         3.       Continuation of his existing insurance coverage or comparable
                  coverage offered to other Executives.

         4.       In the event of Mr. Montesi's death, the Plan will continue
                  with payments being made to his heirs, assignees, etc. until
                  the completion of the 20 years.

Sincerely,

Andrew T. Melton
Director,
Member of Compensation Committee<PAGE>
                                                                   EXHIBIT 10.44

                                LICENSE AGREEMENT

                                     BETWEEN

                             ALEXANDER G. FASSBENDER

                                       AND

                            THERMOENERGY CORPORATION

                                  OCTOBER 2003

<PAGE>

         THIS AGREEMENT is made and entered into at Richland, Washington, and
effective October 1, 2003, (the "Effective Date"), by and between THERMOENERGY
CORPORATION, having a principal place of business in Little Rock, Arkansas
(herein called "Licensee"), and ALEXANDER G. FASSBENDER, having a residence in
West Richland, Washington (herein called "Inventor").

                                   WITNESSETH:

         WHEREAS, Inventor has certain rights in patents and patent applications
related to Enhanced Biogas Production with Ammonia Recovery and Sewage Treatment
System; and

         WHEREAS, Licensee recognizes that Inventor owns inventions and
intellectual property useful in the conduct of Licensee's business; and

         WHEREAS, Licensee wishes to acquire the right to practice the
inventions of such patents and patent applications.

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained and intending to be legally bound hereby, the parties agree as
follows:

         1. DEFINITIONS. As used herein, the following terms shall have the
meanings set forth below:

            A. "Patent" or "Patents" means the following patents and/or patent
applications, patents to be issued pursuant thereto, and all divisions,
continuations, reissues, substitutes, and extensions thereof:

                                 Letters Patent

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
         Title                            Country          Patent No.           Date Issued
--------------------------------------------------------------------------------------------
<S>                                     <C>                <C>                  <C>
Enhanced Biogas Production from         United States      6,391,203            May 21, 2002
Nitrogen Bearing Feed Stocks
--------------------------------------------------------------------------------------------
</TABLE>

                               Patent Applications
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
         Title                            Country           Application No.      Date Filed
----------------------------------------------------------------------------------------------
<S>                                     <C>                 <C>                 <C>
Enhanced Biogas Production from         As listed in        US01/43433          Nov. 21, 2001
Nitrogen Bearing Feed Stocks            PCT application
----------------------------------------------------------------------------------------------
Sewage Treatment System                 United States       U.S. Patent         Feb. 26, 2003
                                                            Application Serial
                                                            No. 10/375,809
----------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

            B. "Licensed Territory" means any country in which Inventor has
pending or issued Patents.

            C. "Licensed Field" means the industrial, municipal an agricultural
applications of the Patents.

            D. "Licensed Product" or "Licensed Products" means any of Licensee's
products, processes, or services or combinations thereof within the Licensed
Fields and the Licensed Territory and which fall within the claims of the Patent
or Patents.

            E. "Net Sales" means gross monies or the monetary equivalent of
consideration, whether or not invoiced, billed or received by Licensee
attributable to Licensee's use, sale, lease or transfer of any Licensed product;
less (i) prepaid outbound shipping expenses; (ii) credits or refunds not
exceeding the original invoice and borne by Licensee and imposed by a government
agency. A Licensed Product shall be deemed used, sold, leased or transferred at
the time Licensee (i) uses or performs services requiring use of such Licensed
Product or (ii) bills, invoices, ships or receives payment for such Licensed
Product, whichever event occurs first. A Licensed Product used, sold, leased or
transferred by gift or for consideration other than money shall be deemed to
have monetary value of the higher of (i) the money received by Licensee for a
similar product in an equivalent quantity and in an arms-length transaction with
a nonaffiliated third party occurring near the same time; or (ii) the average
amount of money received by Licensee during the preceding six (6) months for
similar products in arms-length transactions with nonaffiliated thirty parties.
In the event any Licensed Product is sold, leased, or transferred between
Licensee and one of its Affiliates or between two of its Affiliates, the money
or monetary equivalent of such Licensed Product shall be the higher of (i) the
monies actually exchanged in the sale, lease or transfer, or (ii) the average
amount of money received by Licensee or such Affiliates during the preceding six
(6) months for similar products or services in arms-length transactions with
nonaffiliated third parties.

            F. Affiliate or Affiliates means any company, corporation, or
business in which Licensee owns or controls at least twenty-five percent (25%)
of the voting stock or other ownership.

         2. PATENT LICENSE. Inventor hereby grants to Licensee, to the extent of
the Licensed Fields and the Licensed Territory, an exclusive license to make,
have made, use and sell the Licensed Products.

         3. LICENSE FEE. There shall be no License Fee due hereunder.

         4. ROYALTIES.

            A. Licensee shall meet the Licensee's financial obligations to
Inventor defined in the "Employment Agreement" executed November 20, 1998
between Licensee and Inventor. A condition of this License Agreement is that the
deferred compensation owed to the Inventor by Licensee under the terms of the
Employment Agreement may not exceed $100,000.

                                      -2-
<PAGE>

            B. If as a result of litigation financed by Licensee for
infringement of the Patent or Patents, damages, royalties or other consideration
is received by Licensee, Inventor shall receive ten percent (10%) of all monies
received by Licensee, after Licensee deducts all reasonable out-of-pocket costs
of prosecuting such litigation.

            C. When the cumulative sales of Licensed Products exceeds
$20,000,000, Licensee shall pay Inventor a royalty of one percent (1%) of Net
Sales thereafter.

            D. If this Agreement is for any reason terminated before all of the
earned royalties herein provided for have been paid, Licensee shall immediately
pay to Inventor any remaining unpaid balance of earned royalties even though the
due date provided in Article 8 has not been reached.

         5. DILIGENCE. Beginning in CY 2008, and for each calendar year
thereafter, Inventory may, at Inventor's sole discretion, elect to terminate
this Agreement if Licensee and/or Affiliates have not sold or leased a Licensed
Product in that calendar year.

         6. SUBLICENSING. Licensee shall have the right to grant site-specific
sublicenses for operation of the Licensed Products subject to the written
approval of Inventor.

         7. PATENTS.

            A. Inventor shall have the sole right to file, prosecute, and
maintain all of the Patents that are the property of Inventor, and shall have
the right to determine whether or not, and where, to file a patent application,
to abandon the prosecution of any patent or patent application, or to
discontinue the maintenance of any patent or patent application.

            B. Licensee is obligated to reimburse Inventor for all reasonable
patent expenses incurred by Inventor within thirty (30) days of Licensee's
receipt of notice setting forth such expenses.

         8. REPORTS AND PAYMENTS.

            A. Not later than the last of day of each February, Licensee shall
furnish to Inventor a written statement in a form provided by Inventory
(attachment one) to determine the amounts due and the appropriateness of the
royalties paid pursuant to Article 4C for each preceding calendar year, and
shall pay to Inventory all amounts due to Inventor. Such amounts are due on the
date the statement is due. If no amount is accrued during any annual period, a
written statement to that effect shall be furnished.

            B. All payments due under this Agreement shall be paid in full
without deduction of taxes or other fees, which may be imposed by any
government.

            C. Payments provided for in this Agreement shall, when overdue, bear
interest at a rate per annum equal to three percent (3%) in excess of the "Prime
Rate" published

                                      -3-
<PAGE>

by The Wall Street Journal at the time such payment is due until payment is
received by Inventor.

         9. REPRESENTATIONS.

            A. Nothing in this Agreement shall be deemed to be a representation
or warranty by Inventor of the validity of any of the Patents or the accuracy,
safety or usefulness, for any purpose, of any technical information, techniques,
or practices at any time made available by Inventor. The Inventor shall have no
liability whatsoever to Licensee or any other person for or on account of any
injury, loss, or damage, of any kind or nature sustained by, or any damage
assessed or asserted against, or any other liability incurred by or imposed upon
Licensee or any other person, arising out of or in connection with or resulting
from the production, use or sale of any Licensed Products, or the practice of
the Patents; the use of any technical information, techniques, or practices
disclosed by Inventor; or any advertising or other promotional activities with
respect to any of the foregoing, and Licensee shall hold Inventor harmless in
the event Licensee is held liable. Further, Licensee agrees to assume the
defense of any suit brought against Inventor resulting from any action of
Licensee undertaken under this License Agreement.

            B. Inventor represents that he ha the right to grant all of the
rights granted herein.

            C. Licensee understands and acknowledges that the subject matter of
this Agreement has not yet been commercially deployed, and agrees to accept the
risks incident to designing, manufacturing and operating a nascent technology.

            D. Inventor is unaware of any claims that have been, are or could be
reasonably asserted against Inventor by third parties with respect to patent
infringement or any other type of liability relevant to licensing of the
Patents, which has not been disclosed to Licensee as of the date of this
Agreement.

         10. TERMINATION.

             A. The Patent license of Article 2 shall end upon the expiration of
the last to expire of the Patents included herein, or upon the abandonment of
the last to be abandoned of any patent applications if no Patents have issued,
or a final adjudication of invalidity of all Patents included herein, whatever
is later, unless this Agreement is sooner terminated.

             B. Licensee may terminate the Patent License at any time upon sixty
(60) days' written notice in advance to Inventor, but Licensee shall thereafter
discontinue the practice and use of the licensed Patents and shall assign all
Sublicenses to Inventor.

             C. Except as provided below in paragraph 10E, if either party shall
be in default of an obligations hereunder, the other party may terminate this
Agreement by giving written Notice of Termination by U.s. Mail (postage
prepaid), Certified or Registered Mail, facsimile, or overnight courier (charges
prepaid), to the party at fault, specifying the basis for

                                      -4-
<PAGE>

termination. If within sixty (60) days after the receipt of such Notice of
Termination, the party in default shall remedy the condition forming the basis
for termination, such Notice of Termination shall cease to be operative, and
this Agreement shall continue in full force; provided that if Notice of
Termination is given by Inventor to Licensee for the third time, then this grace
period shall not be available unless permitted in such third Notice of
Termination, and this Agreement shall be finally terminated.

            D. If any report or payment due to Inventor is overdue for a third
time, then any subsequent Notice of Termination is not subject to the sixty (60)
day care provision of Paragraph 10C.

            E. Licensee shall inform Inventor of its intention to file a
voluntary petition in bankruptcy or of another's intention to file an
involuntary petition in bankruptcy to be received at least seventy-five (75)
days prior to filing such a petition. Licensee's filing without conforming to
this requirement shall be deemed a material, three petition incurable breach not
subject to the notice requirement of Paragraph 10C, and Inventor shall be deemed
to have terminated this Agreement seventy-five (75) days prior to filing such
petition.

            F. Termination of this Agreement shall not extinguish any rights or
obligations accrued hereunder at that time of termination; and obligations
undertaken independent of the license granted under Article 2 shall survive
termination to the extent necessary to permit their complete fulfillment or
discharge.

         11. LITIGATION.

            A. Licensee shall notify Inventor of any suspected infringement of
the Patents in the Licensed Fields and the Licensed Territory, and each party
shall inform the other of any evidence of such infringements.

            B. Licensee shall have the first right to institute suits for
infringements in the Licensed Fields and Licensed Territory in a court of
competent jurisdiction so long as this Agreement remains exclusive. However, if
Inventor notifies Licensee of Inventor's desire to institute suit for
infringements and Licensee fails to do so within ninety (90) days of such
notice, then Inventor may, at Inventor's own expense, bring suit or take any
other appropriate action. Any amounts recovered pursuant to such infringement
suit shall be retained by and be the property of the party bringing suit. In the
event Licensee receives any money or other consideration from a third party as a
result of Licensee's rights under this Agreement, Inventor shall receive payment
under Article 4 as applied to all such monies or other consideration whether
such monies or other consideration are denoted "royalties," "damages," "release
from prior acts," or any other designation.

         12. RECORDS. Licensee shall keep accurate records of all operations
affecting payments hereunder, and shall permit Inventor or Inventor's duly
authorized agent to inspect all such records and to make copies of or extracts
from such records during regular business hours throughout the term of this
Agreement and for a reasonable period of not less than three (3) years
thereafter.

                                      -5-
<PAGE>

         13. ASSIGNABILITY. Licensee shall not assign any rights under this
Agreement not specifically transferable by its terms without the written consent
of Inventor. Inventor may assign Inventor's rights hereunder.

         14. REFORM.

             A. The parties agree that if any part, term or provision of this
Agreement shall be found illegal or in conflict with any valid controlling law,
the validity of the remaining provisions shall not be affected thereby.

             B. In the event the legality of any provision of this Agreement is
brought into question because of a decision by a court of competent jurisdiction
of any country in which this Agreement applies, Inventor, by written notice to
Licensee, may revise the provision in question or may delete it entirely so as
to comply with a decision of said court.

         15. WAIVER AND ALTERATION.

             A. The wavier of a breach hereunder may be effected only by a
writing signed by the waiting party and shall not constitute the wavier of any
other breach.

             B. A provision of this Agreement may be altered only by a writing
signed by both parties, except as provided in Article 14 above.

         16. MARKING. Licensee shall place in a conspicuous location on any
product made or sold under any Patent coming with this Agreement, a patent
notice in accordance with the laws concerning the marking of patented articles.

         17. IMPLEMENTATION. Each party shall execute any instruments reasonably
believed by the other party to be necessary to implement the provisions of this
Agreement.

         18. CONSTRUCTION. This Agreement shall be construed in accordance with
the laws of the State of Washington of the United States of America and in the
English language, and any action brought to enforce any provision or obligation
hereunder shall be brought in a court of competent jurisdiction in the State of
Washington.

         19. ENTIRE UNDERSTANDING. This Agreement and the referenced Employment
Agreement represent the entire understanding between the parties, and supersedes
all other agreements, express or implied, between the parties concerning the
subject matter of this Agreement.

                                      -6-
<PAGE>

         20. ADDRESSES. For the purpose of all written communication between the
parties, their addresses shall be:

             Alexander G. Fassbender               ThermoEnergy Corporation
             4407 Laurel Drive                     323 Center Street, Suite 1300
             West Richland, WA 99353               Little Rock, AR 72201
             509-967-5819                          501-376-6477

or any other addresses of which either party shall notify the other party in
writing.

         21. EXPIRATION. The offer to execute this Agreement shall expire if not
signed by both parties and returned to the Inventor on or before November 15,
2003.

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by the duly authorized officers on the respective dates and at the
respective places hereinafter set forth.

THERMOENERGY CORPORATION                    INVENTOR

By:      /s/ Dennis C. Cossey               By:     /s/ Alexander G. Fassbender
     ---------------------------------          --------------------------------
         Dennis C. Cossey                           Alexander G. Fassbender
         CEO                                        Inventor

By:      /s/ Primo Montesi
     ---------------------------------
         Primo Montesi
         President

Date:    October 27, 2003                   Date:   September 25, 2003
     ---------------------------------              ----------------------------

                                      -7-
<PAGE>
                                  ATTACHMENT 1

                           ROYALTY REPORT TO INVENTOR

From ThermoEnergy Corporation:

Reporting Period

Calendar Year: __________________

Cumulative Net Sales from the Effective Date of the License Agreement through
this Reporting Period: $______________

If cumulative Net Sales is less than $20,000,000, no Royalty is owed or due.

If cumulative Net Sales greater than $20,000,000 were first achieved in the
current Reporting Period, then the Royalties owed are:

(Cumulative Net Sales - $20,000,000) x. .01 = $_________________________

If cumulative Net Sales greater than $20,000,000 were achieved in a previous
Reporting Period, then the Royalties owned are:

(Current Reporting Period Net Sales - $20,000,000) x. .01 = $___________________

INDICATE TOTAL ROYALTIES DUE:                          $
                                                       -------------------------

Signed by:                                    Telephone No.
          --------------------------------                 ---------------------

Printed Name:                                 Fax No.
             -----------------------------           ---------------------------

Date:
     -------------------------------------

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