Document:

Exhibit
      4.3

    

     

    THIS
      COMMON STOCK PURCHASE WARRANT AND THE SECURITIES
      ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED IN VIOLATION
      OF SUCH
      ACT, THE RULES AND REGULATIONS THEREUNDER OR THE PROVISIONS OF THIS COMMON
      STOCK
      PURCHASE WARRANT.

     

    Number
      of
      Shares of Common Stock: 750,000

     

    Warrant
      No. 2007-001

     

    COMMON
      STOCK PURCHASE WARRANT

     

    To
      Purchase Common Stock of

    ThermoEnergy
      Corporation

     

    This
      Is
      To Certify That Martin
      A. Roenigk,
      or his
      registered assign, is entitled, at any time from the Closing Date (as
      hereinafter defined) to the Expiration Date (as hereinafter defined), to
      purchase from ThermoEnergy Corporation, an Arkansas corporation (the
“Company”),
      750,000 shares of Common Stock (as hereinafter defined and subject to adjustment
      as provided herein), in whole or in part, including fractional parts, at a
      purchase price per share as set forth in Section 2.2 hereof (the “Exercise
      Price”),
      all
      on the terms and conditions and pursuant to the provisions hereinafter set
      forth.

     

    Definitions

     

    As
      used
      in this Common Stock Purchase Warrant (this “Warrant”),
      the
      following terms shall have the respective meanings set forth below:

     

    “Business
      Day”
shall
      mean any day that is not a Saturday or Sunday or a day on which banks in New
      York City, New York are required or permitted to be closed in the City of New
      York.

     

    “Closing
      Date”
shall
      mean March 21, 2007.

     

    “Commission”
shall
      mean the Securities and Exchange Commission or any other federal agency then
      administering the Securities Act and other federal securities laws.

     

    “Common
      Stock”
shall
      mean (except where the context otherwise indicates) the Common Stock, par value
      $0.001 per share, of the Company as constituted on the Closing Date, and any
      capital stock into which such Common Stock may thereafter be changed, and shall
      also include (i) capital stock of the Company of any other class (regardless
      of
      how denominated) issued to the holders of shares of Common Stock upon any
      reclassification thereof which is also not preferred as to dividends or assets
      over any other class of stock of the Company and which is not subject to
      redemption and (ii) shares of common stock of any successor or acquiring
      corporation received by or distributed to the holders of Common Stock of the
      Company in the circumstances contemplated by Section 4.4.

     

    “Convertible
      Securities”
shall
      mean evidences of indebtedness, shares of stock or other securities which are
      convertible into or exchangeable, with or without payment of additional
      consideration in cash or property, for shares of Common Stock, either
      immediately or upon the occurrence of a specified date or a specified
      event.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Event”
shall
      have the meaning set forth in Section 4.3. 

     

    “Event
      Date”
shall
      have the meaning set forth in Section 4.3.

     

    “Exchange
      Act”
shall
      mean the Securities Exchange Act of 1934, as amended, or any successor federal
      statute, and the rules and regulations of the Commission thereunder, all as
      the
      same shall be in effect from time to time.

     

    “Exercise
      Period”
shall
      mean the period during which this Warrant is exercisable pursuant to Section
      2.1.

     

    “Expiration
      Date”
shall
      mean March 21, 2013.

     

    “Fundamental
      Corporate Change”
shall
      have the meaning set forth in Section 4.4.

     

    “Holder”
shall
      mean the Person in whose name the Warrant or Warrant Stock set forth herein
      is
      registered on the books of the Company maintained for such purpose.

     

    “Market
      Price”
shall
      mean, on any date of determination, (i) the closing price of a share of Common
      Stock on such day as reported on the principal Trading Market on which the
      Common Stock is listed or traded, or (ii) if the Common Stock is not listed
      on a
      Trading Market, the closing bid price for a share of Common Stock on such day
      in
      the over-the-counter market, as reported by the OTC Bulletin Board, or (iii)
      if
      the Common Stock is not then
      listed or quoted on the OTC Bulletin Board,
      the
      closing bid price for a share of Common Stock on such day in the
      over-the-counter market as reported by the National Quotation Bureau
      Incorporated (or any similar organization or agency succeeding to its functions
      of reporting prices).

     

    “Other
      Property”
shall
      have the meaning set forth in Section 4.4.

     

    “Person”
shall
      mean any individual, sole proprietorship, partnership, joint venture, trust,
      incorporated organization, association, corporation, institution, public benefit
      corporation, entity or government (whether federal, state, county, city,
      municipal or otherwise, including, without limitation, any instrumentality,
      division, agency, body or department thereof).

     

    “Securities
      Act”
shall
      mean the Securities Act of 1933, as amended, or any successor federal statute,
      and the rules and regulations of the Commission thereunder, all as the same
      shall be in effect at the time. 

     

    “Securities
      Purchase Agreement”
shall
      mean that certain Securities Purchase Agreement dated as of the Closing Date
      between the Company and Martin Roenigk.

     

    “Subsequent
      Adjustment Date”
      shall
      have the meaning set forth in Section 4.3.

    

    “Trading
      Day”
      means
      (i) a day on which the Common Stock is traded on a Trading Market, or (ii)
      if
      the Common Stock is not listed on a Trading Market, a day on which the Common
      Stock is traded in the over-the-counter market, as reported by the OTC Bulletin
      Board, or (iii) if the Common Stock is not then
      quoted on the OTC Bulletin Board, a
      day on
      which the Common Stock is quoted in the over-the-counter market as reported
      by
      the National Quotation Bureau Incorporated (or any similar organization or
      agency succeeding to its functions of reporting prices); provided,
      that in
      the event that the Common Stock is not listed or quoted as set forth in (i),
      (ii) and (iii) hereof, then the term “Trading Day” shall mean a Business
      Day.

    

    
      
         

      

      
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    “Trading
      Market”
      means
      whichever of the New York Stock Exchange, the American Stock Exchange, the
      Nasdaq National Market, or the Nasdaq Small Cap Market on which the Common
      Stock
      is listed or quoted for trading on the date in question.

     

    “Transfer”
shall
      mean any disposition of any Warrant or Warrant Stock or of any interest in
      either thereof, which would constitute a sale thereof within the meaning of
      the
      Securities Act. 

     

    “Warrant
      Stock”
shall
      mean the shares of Common Stock issued or issuable to the Holders of the
      Warrants upon the exercise thereof.

     

    “Warrants”
shall
      mean this Warrant and all other warrants issued pursuant to the Securities
      Purchase Agreement to Martin Roenigk prior to the first anniversary of the
      Closing Date, and all warrants issued upon transfer, division or combination
      of,
      or in substitution for, any thereof. All Warrants shall at all times be
      identical as to terms and conditions and date, except as to the number of shares
      of Common Stock for which they may be exercised.

     

    Exercise
      of Warrant

     

    Manner
      of
      Exercise

     

    From
      and
      after the Closing Date and until 6:00 p.m., New York time, on the Expiration
      Date, the Holder may exercise this Warrant, on any Business Day, for all or
      any
      part of the number of shares of Common Stock purchasable hereunder.

     

    In
      order
      to exercise this Warrant, in whole or in part, the Holder shall surrender this
      Warrant to the Company at its principal office at 124 West Capitol Avenue,
      Suite
      880, Little Rock, Arkansas 72201 or at the office or agency designated by the
      Company pursuant to Section 12, together with a written notice of the Holder’s
      election to exercise this Warrant, which notice shall specify the number of
      shares of Common Stock to be purchased, and shall be accompanied by payment
      of
      the Exercise Price in cash or wire transfer or cashier’s check drawn on a United
      States bank. Such notice shall be substantially in the form of the subscription
      form appearing at the end of this Warrant as Exhibit A, duly executed by the
      Holder or its agent or attorney. Upon receipt of the items referred to above,
      the Company shall, as promptly as practicable, and in any event within three
      Business Days thereafter, execute or cause to be executed and deliver or cause
      to be delivered to the Holder a certificate or certificates representing the
      aggregate number of full shares of Common Stock issuable upon such exercise,
      together with cash in lieu of any fraction of a share, as hereinafter provided.
      The stock certificate or certificates so delivered shall be, to the extent
      possible, in such denomination or denominations as the Holder shall request
      in
      the notice and shall be registered in the name of the Holder or, subject to
      Section 9, such other name as shall be designated in the notice. This Warrant
      shall be deemed to have been exercised and such certificate or certificates
      shall be deemed to have been issued, and the Holder or any other Person so
      designated to be named therein shall be deemed to have become the holder of
      record of such shares for all purposes, as of the date the notice, together
      with
      the cash or check or wire transfer of funds and this Warrant is received by
      the
      Company as described above and all taxes required to be paid by the Holder,
      if
      any, pursuant to Section 2.2 prior to the issuance of such shares have been
      paid. If this Warrant shall have been exercised in part, the Company shall,
      at
      the time of delivery of the certificate or certificates representing Warrant
      Stock, deliver to the Holder a new Warrant evidencing the rights of the Holder
      to purchase the unpurchased shares of Common Stock called for by this Warrant,
      which new Warrant shall in all other respects be identical with this Warrant,
      or, at the request of the Holder, appropriate notation may be made on this
      Warrant and the same returned to the Holder. Notwithstanding any provision
      herein to the contrary, the Company shall not be required to register shares
      in
      the name of any Person who acquired this Warrant (or part hereof) or any Warrant
      Stock otherwise than in accordance with this Warrant.

     

    
      
         

      

      
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    Exercise
      Price

     

    The
      Exercise Price shall be the daily volume weighted average price (“VWAP”) per
      share of the Common Stock for the three hundred and fifty six (356) day period
      immediately preceding (but not including) the date on which this Warrant is
      exercised, (i) as reported on the principal Trading Market on which the Common
      Stock is listed or traded, or (ii) if the Common Stock is not listed on a
      Trading Market, the closing bid price for a share of Common Stock on each such
      day in the over-the-counter market, as reported by the OTC Bulletin Board,
      or
      (iii) if the Common Stock is not then
      listed or quoted on the OTC Bulletin Board,
      the
      closing bid price for a share of Common Stock on each such day in the
      over-the-counter market as reported by the National Quotation Bureau
      Incorporated (or any similar organization or agency succeeding to its functions
      of reporting prices), provided,
      however, that
      in
      no event shall the Exercise Price be (i) less than $0.50 per share or (ii)
      greater than $1.00 per share.

     

    Payment
      of Taxes and Charges

     

    All
      shares of Common Stock issuable upon the exercise of this Warrant pursuant
      to
      the terms hereof shall be validly issued, fully paid and nonassessable, freely
      tradable and without any preemptive rights. The Company shall pay all expenses
      in connection with, and all taxes and other governmental charges that may be
      imposed with respect to, the issuance or delivery thereof, unless such tax
      or
      charge is a tax on income imposed by law upon the Holder, in which case such
      taxes or charges shall be paid by the Holder. 

     

    Fractional
      Shares

     

    The
      Company shall not be required to issue a fractional share of Common Stock upon
      exercise of any Warrant. As to any fraction of a share which the Holder would
      otherwise be entitled to purchase upon such exercise, the Company shall pay
      a
      cash adjustment in respect of such fraction in an amount equal to the same
      fraction of the Market Price per share of Common Stock as of the date of
      exercise of the Warrant giving rise to such fraction of a share.

     

    Transfer,
      Division and Combination

     

    Transfer

     

    Subject
      to compliance with Section 9, transfer of this Warrant and all rights hereunder,
      in whole or in part, shall be registered on the books of the Company to be
      maintained for such purpose, upon surrender of this Warrant at the principal
      office of the Company referred to in Section 2.1 or the office or agency
      designated by the Company pursuant to Section 12, together with a written
      assignment of this Warrant substantially in the form of Exhibit B hereto duly
      executed by the Holder or its agent or attorney and funds sufficient to pay
      any
      transfer taxes payable upon the making of such transfer. Upon such surrender
      and, if required, such payment, the Company shall, subject to Section 9, execute
      and deliver a new Warrant or Warrants in the name of the assignee or assignees
      and in the denomination specified in such instrument of assignment, and shall
      issue to the assignor a new Warrant evidencing the portion of this Warrant
      not
      so assigned, and this Warrant shall promptly be canceled. A Warrant, if properly
      assigned in compliance with Section 9, may be exercised by a new Holder for
      the
      purchase of shares of Common Stock without having a new warrant
      issued.

     

    
      
         

      

      
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    Division
      and Combination

     

    Subject
      to Section 9, this Warrant may be divided or combined with other Warrants upon
      presentation hereof at the aforesaid office or agency of the Company, together
      with a written notice specifying the names and denominations in which new
      Warrants are to be issued, signed by the Holder or its agent or attorney.
      Subject to compliance with Sections 3.1 and 9, as to any transfer which may
      be
      involved in such division or combination, the Company shall execute and deliver
      a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
      or combined in accordance with such notice.

     

    Expenses

     

    The
      Company shall prepare, issue and deliver at its own expense (other than transfer
      taxes) the new Warrant or Warrants under this Section 3.

     

    Maintenance
      of Books

     

    The
      Company agrees to maintain, at its aforesaid office or agency, books for the
      registration and the registration of transfers of the Warrants.

     

    Adjustments

     

    The
      number of shares of Common Stock for which this Warrant is exercisable, or
      the
      price at which such shares may be purchased upon exercise of this Warrant,
      shall
      be subject to adjustment from time to time as set forth in this Section 4.
      The
      Company shall give the Holder notice of any event described below which requires
      an adjustment pursuant to this Section 4 at the time of such event.

     

    Stock
      Dividends, Subdivisions and Combinations

     

    If
      at any
      time the Company shall:

     

    declare
      or pay to the holders of its Common Stock a dividend payable in, or other
      distribution of, shares of Common Stock or in Convertible
      Securities;

     

    subdivide
      its outstanding shares of Common Stock into a larger number of shares of Common
      Stock; or

     

    combine
      its outstanding shares of Common Stock into a smaller number of shares of Common
      Stock;

     

    then
      (i)
      the number of shares of Common Stock for which this Warrant is exercisable
      immediately after the occurrence of any such event shall be adjusted to equal
      the number of shares of Common Stock which a record holder of the same number
      of
      shares of Common Stock for which this Warrant is exercisable immediately prior
      to the occurrence of such event would own or be entitled to receive after the
      occurrence of such event, and (ii) the then-current Exercise Price shall be
      adjusted to equal (A) the then-current Exercise Price multiplied by the number
      of shares of Common Stock for which this Warrant is exercisable immediately
      prior to the adjustment divided by (B) the number of shares for which this
      Warrant is exercisable immediately after such adjustment.

     

    
      
         

      

      
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    Certain
      Other Distributions

     

    If
      at any
      time the Company shall declare or pay to the holders of its Common Stock any
      dividend or other distribution of:

     

    cash;

     

    any
      evidences of its indebtedness, any shares of its stock or any other securities
      or property of any nature whatsoever (other than cash, Convertible Securities
      or
      additional shares of Common Stock); or

     

    any
      warrants or other rights to subscribe for or purchase any evidences of its
      indebtedness, any shares of its stock or any other securities or property of
      any
      nature whatsoever (other than cash, Convertible Securities or additional shares
      of Common Stock);

     

    then,
      upon exercise of this Warrant, the Holder shall be entitled to receive such
      dividend or distribution as if the Holder had exercised this Warrant prior
      to
      the date of such dividend or distribution. A reclassification of the Common
      Stock (other than a change in par value, or from par value to no par value
      or
      from no par value to par value) into shares of Common Stock and shares of any
      other class of stock shall be deemed a distribution by the Company to the
      holders of its Common Stock of such shares of such other class of stock within
      the meaning of this Section 4.2 and, if the outstanding shares of Common Stock
      shall be changed into a larger or smaller number of shares of Common Stock
      as a
      part of such reclassification, such change shall be deemed a subdivision or
      combination, as the case may be, of the outstanding shares of Common Stock
      within the meaning of Section 4.1. 

     

    Other
      Provisions Applicable to Adjustments under this Section

     

    The
      following provisions shall be applicable to the making of adjustments of the
      number of shares of Common Stock for which this Warrant is exercisable and
      the
      current Exercise Price provided for in this Section 4:

     

    When
      Adjustments to be Made.
      The adjustments required by this Section 4 shall be made whenever and as often
      as any specified event requiring an adjustment shall occur. For the purpose
      of
      any adjustment, any specified event shall be deemed to have occurred at the
      close of business on the date of its occurrence.

     

    Fractional
      Interests.
      In computing adjustments under this Section 4, fractional interests in Common
      Stock shall be taken into account to the nearest 1/10th of a
      share.

     

    When
      Adjustment not Required.
      If the Company shall take a record of the holders of its Common Stock for the
      purpose of entitling them to receive a dividend or distribution or subscription
      or purchase rights and shall, thereafter and before the distribution to the
      holders thereof, legally abandon its plan to pay or deliver such dividend,
      distribution, subscription or purchase rights, then thereafter no adjustment
      shall be required by reason of the taking of such record and any such adjustment
      previously made in respect thereof shall be rescinded and
      annulled.

     

    
      
         

      

      
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    Challenge
      to Good Faith Determination.
      Whenever the Board of Directors of the Company shall be required to make a
      determination in good faith of the fair value of any item under this Section
      4,
      such determination may be challenged in good faith by the Holder, and any
      dispute shall be resolved by an investment banking firm of recognized national
      standing selected by the Company and acceptable to the Holder. The fees and
      expenses of such investment banking firm shall be paid by the
      Company.

     

    Reorganization,
      Reclassification, Merger, Consolidation or Disposition of Assets

     

    In
      case
      the Company shall reorganize its capital, reclassify its capital stock,
      consolidate or merge with or into another Person (where the Company is not
      the
      survivor or where there is a change in or distribution with respect to the
      Common Stock of the Company), or sell, convey, transfer or otherwise dispose
      of
      all or substantially all its property, assets or business to another Person,
      or
      effectuate a transaction or series of related transactions in which more than
      50% of the voting power of the Company is disposed of (each, a “Fundamental
      Corporate Change”)
      and,
      pursuant to the terms of such Fundamental Corporate Change, shares of common
      stock of the successor or acquiring corporation, or any cash, shares of stock
      or
      other securities or property of any nature whatsoever (including warrants or
      other subscription or purchase rights) in addition to or in lieu of common
      stock
      of the successor or acquiring corporation (“Other
      Property”),
      are
      to be received by or distributed to the holders of Common Stock of the Company,
      then the Holder shall have the right thereafter to receive, upon exercise of
      the
      Warrant, such number of shares of common stock of the successor or acquiring
      corporation or of the Company, if it is the surviving corporation, and Other
      Property as is receivable upon or as a result of such
      Fundamental Corporate Change by a holder of the number of shares of Common
      Stock
      for which this Warrant is exercisable immediately prior to such Fundamental
      Corporate Change. In case of any such Fundamental Corporate Change, the
      successor or acquiring corporation (if other than the Company) shall expressly
      assume the due and punctual observance and performance of each and every
      covenant and condition of this Warrant to be performed and observed by the
      Company and all the obligations and liabilities hereunder, subject to such
      modifications as may be deemed appropriate (as determined by resolution of
      the
      Board of Directors of the Company) in order to provide for adjustments of shares
      of Common Stock for which this Warrant is exercisable which shall be as nearly
      equivalent as practicable to the adjustments provided for in this Section 4.
      For
      purposes of this Section 4.5, “common
      stock of the successor or acquiring corporation”
shall
      include stock of such corporation of any class which is not preferred as to
      dividends or assets over any other class of stock of such corporation and which
      is not subject to redemption and shall also include any evidences of
      indebtedness, shares of stock or other securities which are convertible into
      or
      exchangeable for any such stock, either immediately or upon a specified date
      or
      upon the happening of a specified event, and any warrants or other rights to
      subscribe for or purchase any such stock. The foregoing provisions of this
      Section 4.4 shall similarly apply to any successive Fundamental Corporate Change
      of the successor corporation.

     

    Other
      Action Affecting Common Stock

     

    In
      case
      at any time or from time to time the Company shall take any action in respect
      of
      its Common Stock, other than any action described in this Section 4, which
      would
      have a materially adverse effect upon the rights of the Holder, the number
      of
      shares of Common Stock and/or the purchase price thereof shall be adjusted
      in
      such manner as may be equitable in the circumstances, as determined in good
      faith by the Board of Directors of the Company.

     

    
      
         

      

      
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    Certain
      Limitations

     

    Notwithstanding
      anything herein to the contrary, the Company agrees not to enter into any
      transaction which, by reason of any adjustment hereunder, would cause the
      Exercise Price to be less than the par value per share of Common
      Stock.

     

    Notices
      to The Holder

     

    Notice
      of
      Adjustments

     

    Whenever
      the number of shares of Common Stock for which this Warrant is exercisable,
      or
      whenever the price at which a share of such Common Stock may be purchased upon
      exercise of the Warrants, shall be adjusted pursuant to Section 4, the Company
      shall forthwith prepare a certificate to be executed by the chief financial
      officer of the Company setting forth, in reasonable detail, the event requiring
      the adjustment and the method by which such adjustment was calculated (including
      a description of the basis on which the Board of Directors of the Company
      determined the fair value of any evidences of indebtedness, shares of stock,
      other securities or property or warrants or other subscription or purchase
      rights referred to in Section 4.2), specifying the number of shares of Common
      Stock for which this Warrant is exercisable and (if such adjustment was made
      pursuant to Section 4.2 or 4.5) describing the number and kind of any other
      shares of stock or Other Property for which this Warrant is exercisable, and
      any
      change in the purchase price or prices thereof, after giving effect to such
      adjustment or change. The Company shall promptly cause a signed copy of such
      certificate to be delivered to the Holder in accordance with Section 14.2.
      The
      Company shall keep, along with the transfer register maintained in accordance
      with Section 3.4, copies of all such certificates and cause the same to be
      available for inspection at said office during normal business hours by the
      Holder or any prospective purchaser of a Warrant designated by the
      Holder.

     

    Notice
      of
      Corporate Action

     

    If
      at any
      time:

     

    the
      Company shall take a record of the holders of its Common Stock for the purpose
      of entitling them to receive a dividend or other distribution, or any right
      to
      subscribe for or purchase any evidences of its indebtedness, any shares of
      stock
      of any class or any other securities or property, or to receive any other right;
      or

     

    there
      shall be any capital reorganization of the Company, any reclassification or
      recapitalization of the capital stock of the Company or any consolidation or
      merger of the Company with, or any sale, transfer or other disposition of all
      or
      substantially all the property, assets or business of the Company to, another
      corporation; or

     

    there
      shall be a voluntary or involuntary dissolution, liquidation or winding up
      of
      the Company;

     

    then,
      in
      any one or more of such cases, the Company shall give to Holder (i) at least
      10
      days’ prior written notice of the date on which a record date shall be selected
      for such dividend, distribution or right or for determining rights to vote
      in
      respect of any such reorganization, reclassification, merger, consolidation,
      sale, transfer, disposition, dissolution, liquidation or winding up, and (ii)
      in
      the case of any such reorganization, reclassification, merger, consolidation,
      sale, transfer, disposition, dissolution, liquidation or winding up, at least
      10
      days’ prior written notice of the date when the same shall take place. Such
      notice in accordance with the foregoing clause also shall specify (i) the date
      on which any such record is to be taken for the purpose of such dividend,
      distribution or right, the date on which the holders of Common Stock shall
      be
      entitled to any such dividend, distribution or right, and the amount and
      character thereof, and (ii) the date on which any such reorganization,
      reclassification, merger, consolidation, sale, transfer, disposition,
      dissolution, liquidation or winding up is to take place and the time, if any
      such time is to be fixed, as of which the holders of Common Stock shall be
      entitled to exchange their shares of Common Stock for securities or other
      property deliverable upon such reorganization, reclassification, merger,
      consolidation, sale, transfer, disposition, dissolution, liquidation or winding
      up. Each such written notice shall be sufficiently given if addressed to the
      Holder at the last address of the Holder appearing on the books of the Company
      and delivered in accordance with Section 14.2.

     

    
      
         

      

      
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    No
      Impairment

     

    The
      Company shall not by any action, including, without limitation, amending its
      articles of incorporation or through any reorganization, transfer of assets,
      consolidation, merger, dissolution, issuance or sale of securities or other
      voluntary action, avoid or seek to avoid the observance or performance of any
      of
      the terms of this Warrant, but will at all times in good faith assist in the
      carrying out of all such terms and in the taking of all such actions as may
      be
      necessary or appropriate to protect the rights of the Holder against impairment.
      Without limiting the generality of the foregoing, the Company will (a) not
      increase the par value of any shares of Common Stock receivable upon the
      exercise of this Warrant above the amount payable therefor upon such exercise
      immediately prior to such increase in par value, (b) take all such action as
      may
      be necessary or appropriate in order that the Company may validly and legally
      issue fully paid and nonassessable shares of Common Stock upon the exercise
      of
      this Warrant, and (c) use its best efforts to obtain all such authorizations,
      exemptions or consents from any public regulatory body having jurisdiction
      thereof as may be necessary to enable the Company to perform its obligations
      under this Warrant.

     

    Upon
      the
      request of the Holder, the Company will at any time during the period this
      Warrant is outstanding acknowledge in writing, in form satisfactory to the
      Holder, the continuing validity of this Warrant and the obligations of the
      Company hereunder.

     

    Reservation
      and Authorization of Common Stock

     

    From
      and
      after the Closing Date, the Company shall at all times reserve and keep
      available for issuance upon the exercise of Warrants such number of its
      authorized but unissued shares of Common Stock as will be sufficient to permit
      the exercise in full of all outstanding Warrants. All shares of Common Stock
      which shall be so issuable, when issued upon exercise of any Warrant and payment
      therefor in accordance with the terms of such Warrant, shall be duly and validly
      issued and fully paid and nonassessable and not subject to preemptive
      rights.

     

    Before
      taking any action which would cause an adjustment reducing the then-current
      Exercise Price below the then par value, if any, of the shares of Common Stock
      issuable upon exercise of the Warrants, the Company shall take any corporate
      action which may be necessary in order that the Company may validly and legally
      issue fully paid and nonassessable shares of such Common Stock at such adjusted
      Exercise Price.

     

    Before
      taking any action which would result in an adjustment in the number of shares
      of
      Common Stock for which this Warrant is exercisable or in the then-current
      Exercise Price, the Company shall obtain all such authorizations or exemptions
      thereof, or consents thereto, as may be necessary from any public regulatory
      body or bodies having jurisdiction thereof.

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    Taking
      of Record; Stock and Warrant Transfer Books

     

    In
      the
      case of all dividends or other distributions by the Company to the holders
      of
      its Common Stock with respect to which any provision of Section 4 refers to
      the
      taking of record of such holders, the Company will in each case take such a
      record and will take such record as of the close of business on a Business
      Day.
      The Company will not at any time, except upon dissolution, liquidation or
      winding up of the Company, close its stock transfer books or Warrant transfer
      books so as to result in preventing or delaying the exercise or transfer of
      any
      Warrant.

     

    Restrictions
      on Transferability

     

    The
      Warrants and the Warrant Stock shall not be transferred, hypothecated or
      assigned before satisfaction of the conditions specified in legend affixed
      to
      the first page of this Warrant, which conditions are intended, in part, to
      ensure compliance with the provisions of the Securities Act with respect to
      the
      Transfer of any Warrant or any Warrant Stock. The Holder, by acceptance of
      this
      Warrant, agrees to be bound by the provisions of this Section 9.

     

    Supplying
      Information

     

    The
      Company shall cooperate with the Holder in supplying such information as may
      be
      reasonably necessary for the Holder to complete and file any information
      reporting forms presently or hereafter required by the Commission as a condition
      to the availability of an exemption from the Securities Act for the sale of
      any
      Warrant or Warrant Stock.

     

    Loss
      or Mutilation

     

    Upon
      receipt by the Company from the Holder of evidence reasonably satisfactory
      to it
      of the ownership of and the loss, theft, destruction or mutilation of this
      Warrant and indemnity reasonably satisfactory to it (it being understood that
      the written agreement of the Holder shall be sufficient indemnity), and in
      case
      of mutilation upon surrender and cancellation hereof, the Company will execute
      and deliver in lieu hereof a new Warrant of like tenor to the Holder;
provided,
      in the
      case of mutilation no indemnity shall be required if this Warrant in
      identifiable form is surrendered to the Company for cancellation.

     

    Office
      of the Company

     

    As
      long
      as any of the Warrants remain outstanding, the Company shall maintain an office
      or agency (which may be the principal executive offices of the Company) where
      the Warrants may be presented for exercise, registration of transfer, division
      or combination as provided in this Warrant.

     

    Limitation
      of Liability

     

    No
      provision hereof, in the absence of affirmative action by the Holder to purchase
      shares of Common Stock, and no enumeration herein of the rights or privileges
      of
      the Holder hereof, shall give rise to any liability of the Holder for the
      purchase price of any Common Stock or as a stockholder of the Company, whether
      such liability is asserted by the Company or by creditors of the Company.
      Nothing in the foregoing shall be construed in any manner to limit or deny
      the
      liability of a Holder in any other capacity, including, without limitation,
      as a
      director of the Company. 

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    Miscellaneous

     

    Nonwaiver
      and Expenses

     

    No
      course
      of dealing or any delay or failure to exercise any right hereunder on the part
      of the Holder shall operate as a waiver of such right or otherwise prejudice
      the
      Holder’s rights, powers or remedies. If the Company fails to make, when due, any
      payments provided for hereunder, or fails to comply with any other provision
      of
      this Warrant, the Company shall pay to the Holder such amounts as shall be
      sufficient to cover any costs and expenses including, without limitation,
      reasonable attorneys’ fees, including those of appellate proceedings, incurred
      by the Holder in collecting any amounts due pursuant hereto or in otherwise
      enforcing any of its rights, powers or remedies hereunder.

     

    Notice
      Generally

    

    Except
      as
      may be otherwise provided herein, any and all notices or other communications
      or
      deliveries required or permitted to be provided hereunder shall be in writing
      and shall be deemed given and effective on the earliest of (a) the date of
      transmission, if such notice or communication is delivered via facsimile
      (provided the sender receives a machine-generated confirmation of successful
      transmission) prior to 6:30 p.m. (Little Rock, Arkansas time) on a Business
      Day,
      (b) the next Business Day after the date of transmission, if such notice or
      communication is delivered via facsimile at the facsimile number specified
      in
      this Section on a day that is not a Business Day or later than 6:30 p.m. (Little
      Rock, Arkansas time) on any Business Day, (c) the Business Day following the
      date of mailing, if sent by U.S. nationally recognized overnight courier
      service, or (d) upon actual receipt by the party to whom such notice is required
      to be given. The address for such notices and communications shall be the same
      as provided in the Securities Purchase Agreement; or such other address as
      may
      be designated in writing hereafter, in the same manner, by such
      addressee.

     

    Indemnification

     

    The
      Company agrees to indemnify and hold harmless the Holder from and against any
      liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
      claims, costs, attorneys’ fees, expenses and disbursements of any kind which may
      be imposed upon, incurred by or asserted against the Holder in any manner
      relating to or arising out of any failure by the Company to perform or observe
      in any material respect any of its covenants, agreements, undertakings or
      obligations set forth in this Warrant; provided,
      however,
      that
      the Company will not be liable hereunder to the extent that any liabilities,
      obligations, losses, damages, penalties, actions, judgments, suits, claims,
      costs, attorneys’ fees, expenses or disbursements are found in a final
      nonappealable judgment by a court to have resulted from the Holder’s gross
      negligence, bad faith or willful misconduct in its capacity as a stockholder
      or
      warrantholder of the Company.

     

    Remedies

     

    The
      Holder in addition to being entitled to exercise all rights granted by law,
      including recovery of damages, will be entitled to specific performance of
      its
      rights under Section 2 of this Warrant. The Company agrees that monetary damages
      would not be adequate compensation for any loss incurred by reason of a breach
      by it of the provisions of Section 2 of this Warrant and hereby agrees to waive
      the defense in any action for specific performance that a remedy at law would
      be
      adequate.

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    Successors
      and Assigns

     

    Subject
      to the provisions of Sections 3.1 and 9, this Warrant and the rights evidenced
      hereby shall inure to the benefit of and be binding upon the successors of
      the
      Company and the successors and assigns of the Holder. The provisions of this
      Warrant are intended to be for the benefit of all Holders from time to time
      of
      this Warrant and, with respect to Section 9 hereof, the holders of Warrant
      Stock, and shall be enforceable by any such holder or the holder of Warrant
      Stock.

     

    Amendment

     

    This
      Warrant and all other Warrants may be modified or amended or the provisions
      hereof waived with the written consent of the Company and the
      Holder.

     

    Severability

     

    Wherever
      possible, each provision of this Warrant shall be interpreted in such manner
      as
      to be effective and valid under applicable law, but if any provision of this
      Warrant shall be prohibited by or invalid under applicable law, such provision
      shall only be ineffective to the extent of such prohibition or invalidity,
      without invalidating the remainder of such provision or the remaining provisions
      of this Warrant.

     

    Headings

     

    The
      headings used in this Warrant are for the convenience of reference only and
      shall not, for any purpose, be deemed a part of this Warrant.

     

    Governing
      Law

     

    This
      Warrant shall be governed by the laws of the State of New York, without regard
      to the provisions thereof relating to conflicts of law.

     

    In
      Witness Whereof,
      the
      Company has caused this Warrant to be duly executed and its corporate seal
      to be
      impressed hereon and attested by its Treasurer.

     

    Dated:
      March 21, 2007

     

    
      
        	 	ThermoEnergy
                Corporation

      

    

     

    Attest:

    
      	 	
              By: _______________________________

              Dennis
                C. Cossey, President

            

    

    _____________________________

    Andrew
      T.
      Melton, Treasurer

    

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

     

    SUBSCRIPTION
      FORM

     

    [To
      be
      executed only upon exercise of Warrant]

     

    The
      undersigned registered owner of this Warrant irrevocably exercises this Warrant
      for the purchase of __________ shares of Common Stock of ThermoEnergy
      Corporation and herewith makes payment therefor, all at the price and on the
      terms and conditions specified in this Warrant and requests that certificates
      for the shares of Common Stock hereby purchased (and any securities or other
      property issuable upon such exercise) be issued in the name of and delivered
      to

     

    
      
        

      

    

     

    whose
      address is

     

      
        

      

    

     

    and,
      if
      such shares of Common Stock shall not include all of the shares of Common Stock
      issuable as provided in this Warrant, that a new Warrant of like tenor and
      date
      for the balance of the shares of Common Stock issuable hereunder be delivered
      to
      the undersigned.

     

     

    
      	 	  
	
               

            	
              (Name
                of Registered Owner)

            
	
               

            	
               

            
	
               

            	
                  

            
	
               

            	
              (Signature
                of Registered
                Owner)

            
	 	 
	 	  
	 	
              (Street
                Address)

            
	 	 
	 	  
	 	
              (City)
                           (State)
                           (Zip
                Code)

            
	 	 
	 	 
	 	
              Notice:
                The
                signature on this subscription must correspond with the name as written
                upon the face of the within Warrant in every particular, without
                alteration or enlargement or any change
                whatsoever.

            

    

    
 

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

     

    EXHIBIT
      B

     

    ASSIGNMENT
      FORM

     

     

    For
      Value
      Received the
      undersigned registered owner of this Warrant hereby sells, assigns and transfers
      unto the Assignee named below all of the rights of the undersigned under this
      Warrant, with respect to the number of shares of Common Stock set forth
      below:

    
      	
               

              Name
                and Address of Assignee

            	
              No.
                of Shares of

              Common
                Stock

            
	 	 
	 	 
	 	 

    

     

    and
      does
      hereby irrevocably constitute and appoint

     

     

    attorney-in-fact
      to register such transfer on the books of ThermoEnergy Corporation maintained
      for the purpose, with full power of substitution in the premises.

     

     

    
      
        	Dated:
                	   	 

      

    

    
       

      
        	 	  
	
                 

              	
                (Print
                  Name)

              
	
                 

              	
                 

              
	
                 

              	
                    

              
	
                 

              	
                (Signature)

              
	 	 
	 	  
	 	
                (Print
                  Name of Witness)

              
	 	 
	 	  
	 	
                (Witness’s
                  Signature)

              
	 	 
	 	 
	 	
                Notice:
                  The
                  signature on this assignment must correspond with the name as written
                  upon
                  the face of the within Warrant in every particular, without alteration
                  or
                  enlargement or any change
                  whatsoever.

              

      

    

     

     

     

    
      
         

      

      
        B-1AMENDMENT
      AGREEMENT III

    TO
      SALE AND PURCHASE AGREEMENT

     

    
      among

       

      
        	1.	
                Nokia
                  Ventures, L.P.

              

      

      545
        Middlefield Road

      Suite
        210

      Menlo
        Park, CA 94025

      USA

       

      
        	2.	
                Apax
                  Europe IV - A LP

              

      

      13
        - 15
        Victoria Road

      ST
        Peter
        Port

      Guernsey

      Channel
        Islands

       

      
        	3.	
                ARGC
                  IV, L.P.

              

      

      c/o
        Argo
        Global Capital

      601
        Edgewater Drive

      Wakefield,
        MA 01880 

      USA

       

      
        	4.	
                ARGO
                  II, L.P.

              

      

      c/o
        Argo
        Global Capital

      601
        Edgewater Drive

      Wakefield,
        MA 01880 

      USA

       

      
        	5.	
                ARGO
                  II THE WIRELESS INTERNET FUND (EUROPE)
                  LP

              

      

      c/o
        Argo
        Global Capital

      601
        Edgewater Drive

      Wakefield,
        MA 01880 

      USA

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

    

    - referred to individually as "Seller"
      or
      collectively as the “Sellers”

     

    
      and

       

      
        
          	2.	
                  NeoMedia
                    Technologies, Inc.

                

        

        2201
          Second Street, Suite 600

        Ft.
          Myers, Florida 33901

        USA

         

        -
          herein
          referred to as the “Purchaser”.

        
          
            	 	
                    -
                      the Seller and Purchaser herein collectively referred
                      to as the “Parties”,
                      and each of them as a “Party”-
                      ,

                  

          

           

          
            
               

            

            
              2

              
                

              

            

            
               

            

          

           

        

      

    

    WHEREAS,
      the
      Parties have executed on February 10, 2006, a Sale and Purchase Agreement (the
      “Sale and Purchase Agreement”) with regard to shares of 12Snap AG, a German
      privately held stock corporation with its legal seat in Munich, and on February
      22, 2006 an Amendment Agreement I (“Amendment Agreement I”), and on February 28,
      2006 an Amendment Agreement II (“Amendment Agreement II”) to the Sale and
      Purchase Agreement.

     

    R
      E C I T A L S:

     

    NOW,
      THEREFORE, the Parties desire to amend certain provisions under the Agreement
      as
      follows:

     

    1.    The
      parties agree that Section 4.3.3 of the Agreement is amended by deleting all
      of
      the current language and replacing such language with the
      following:

     

    
      
        
          	
                	“4.3.3	
                  In
                    order to make the Sellers whole with respect to the value of
                    the
                    Consideration Shares, Purchasers shall issue to the Sellers for
                    no
                    additional consideration, on or before March 30, 2007, the number
                    of
                    shares of common stock, par value $0.01, of the Purchaser, evidenced
                    by a
                    share certificate bearing a standard restrictive legend (the
“Top-Up
                    Shares”), as follows:

                

        

      

    

     

    
      	
              Seller

            	 	
              Number
                of Shares

            
	
              Apax
                Europe IV

            	 	
              77,397,302
                

            
	
              Argo
                II, L.P.

            	 	
              73,828,938
                

            
	
              ARGO
                II The Wireless Internet Fund (Europe) L.P.

            	 	
              2,634,432
                

            
	
              ARGC
                IV, L.P.

            	 	
              772,361
                

            
	
              Nokia
                Ventures, L.P.

            	 	
              42,987,915
                

            

    

     

    
      	
            	 	
              The
                Top-Up Shares, when issued and delivered in accordance with the terms
                of
                this Agreement, will be duly and validly issued, fully paid, and
                nonassessable, will be free of restrictions on transfer other than
                restrictions on transfer under applicable state and federal securities
                laws, and will be issued in compliance with all applicable
                laws.

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    2.    The
      parties agree to add as Section 17.7 the following:

     

    
      	
            	“17.7	
              Registration
                Rights for Top-Up Shares 

            

    

     

    
      	
            	 	
              The
                Purchaser shall use its best efforts to file with the SEC, no later
                than
                June 30, 2007, an S-1, SB-2 or S-3 registration statement registering
                for
                resale all of the Top-Up Shares (the “Top-Up
                Registration Statement”).
                The Purchaser shall use its best efforts to cause the Top-Up Registration
                Statement to be declared effective by the SEC as soon as practicable.
                The
                Purchaser shall cause the Seller Registration Statement to remain
                effective until the date on which the Consideration Shares may be
                sold by
                the Sellers pursuant to Rule 144 under the U.S. Securities Act, as
                amended, or such earlier time as all of the Consideration Shares
                covered
                by the Seller Registration Statement have been sold pursuant thereto.
                The
                provisions of Sections 17.3 (“Registration Procedures”), 17.4
                (“Requirements of Company Stockholders”), 17.5 (“Indemnification”) and
                17.6 (“Assignment of Rights”) shall apply equally with respect to the
                Top-Up Shares and the Top-Up Registration
                Statement.

            

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF,
      the
      Parties hereto have caused this Amendment III to be executed by their duly
      authorized representatives, as of this 16th day of March, 2007.

     

    
      	
              For
                Sellers:

            	
              For
                Purchaser:

            
	 	 
	
              Nokia
                Ventures, L.P.

            	
              NeoMedia
                Technologies, Inc.

            
	 	 
	 	 
	
              /s/
                David Jaques

            	
              /s/
                David A. Dodge

            
	
              By:
                N.V. I, L.L.C. 

            	
              Title:
                CFO

            
	
              Its:
                General Partner

            	 
	 	 
	 	 
	
              Apax
                Europe IV - A LP

            	 
	 	 
	 	 
	
              /s/
                Denise Fallaize

            	 
	
              By:
                Denise Fallaize

            	 
	
              Its:
                for Apax Europe IV, LP Co. Limited as general partner Apax Europe
                IV-A
                LP

            	 
	 	 
	 	 
	
              ARGC
                IV, L.P.

            	 
	 	 
	 	 
	
              /s/
                Vesa Jormakka

            	 
	
              By:
                Vesa Jormakka

            	 
	
              Its:
                Senior Partner

            	 
	 	 
	 	 
	
              ARGO
                II, L.P.

            	 
	 	 
	 	 
	
              /s/
                Vesa Jormakka

            	 
	
              By:
                Vesa Jormakka

            	 
	
              Its:
                Senior Partner

            	 
	 	 
	 	 
	
              ARGO
                II THE WIRELESS INTERNET FUND (EUROPE) LP

            	 
	 	 
	 	 
	
              /s/
                Vesa Jormakka

            	 
	
              By:
                Vesa Jormakka

            	 
	
              Its:
                Senior Partner

            	 

    

     

    
      
         

      

        5

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