Document:

Exhibit
      10.1

    

    ThermoEnergy
      Corporation

    

    Securities
      Purchase Agreement

    

    This
      Securities Purchase Agreement (this“Agreement”)
      is
      dated as of August 12, 2008, by and between ThermoEnergy Corporation, a Delaware
      corporation (the“Company”),
      and
      Robert S. Trump (the“Investor”).

    

    WHEREAS,
      subject to the terms and conditions set forth in this Agreement and pursuant
      to
      Section 4(2) of the Securities Act (as defined below) and Rule 506 promulgated
      thereunder, the Company desires to issue and sell to the Investor, and the
      Investor desires to purchase from the Company certain securities of the Company,
      as more fully described in this Agreement.

    

    NOW,
      THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
      and for other good and valuable consideration the receipt and adequacy of which
      are hereby acknowledged, the Company and the Investor agree as
      follows:

    

    ARTICLE
      1

    

    Definitions

    

    Section
      1.1. Definitions.
      In
      addition to the terms defined elsewhere in this Agreement, for all purposes
      of
      this Agreement, the following terms have the meanings indicated in this Section
      1.1:

    

    “Action”
      means
      any action, suit, inquiry, notice of violation, proceeding (including any
      partial proceeding such as a deposition) or investigation pending or threatened
      in writing against or affecting the Company, any Subsidiary or any of their
      respective properties before or by any court, arbitrator, governmental or
      administrative agency, regulatory authority (federal, state, county, local
      or
      foreign), stock market, stock exchange or trading facility.

    

    “Affiliate”
      means
      any Person that, directly or indirectly through one or more intermediaries,
      controls or is controlled by or is under common control with a Person, as such
      terms are used in and construed under Rule 144.

    

    “Arkansas
      Courts”
      means
      the state and federal courts sitting in the State of Arkansas.

    

    “Business
      Day”
      means
      any day except Saturday, Sunday and any day which is a federal legal holiday
      or
      a day on which banking institutions in the City of New York are authorized
      or
      required by law or other governmental action to close.

    

    “Claim”
      has
      the
      meaning set forth in Section 4.6(c).

    

    “Closing”
      means
      the Closing of the purchase and sale of the Convertible Note and a Warrant
      pursuant to Article 2.

    

    “Closing
      Date”
      means
      the date on which the Closing occurs pursuant to Section 2.2
      hereof.

    

    “Commission”
      means
      the Securities and Exchange Commission.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Common
      Stock”
      means
      the common stock of the Company, par value $0.001 per share, and any securities
      into which such common stock may hereafter be reclassified.

    

    “Common
      Stock Equivalents”
      means
      any securities of the Company or any Subsidiary which entitle the holder thereof
      to acquire Common Stock at any time, including without limitation, any debt,
      preferred stock, rights, options, warrants or other instrument that is at any
      time convertible into or exchangeable for, or otherwise entitles the holder
      thereof to receive, Common Stock or other securities that entitle the holder
      to
      receive, directly or indirectly, Common Stock.

    

    “Contingent
      Obligations”
      has the
      meaning set forth in Section 3.1(r). 

    

    “Conversion
      Shares”
      means
      the shares of Common Stock issuable upon conversion of the Convertible Note.
      

    

    “Convertible
      Note”
      means
      the 5% Convertible Promissory Note in the form of Exhibit A,
      which
      is issuable to the Investor at the Closing.

    

    “Convertible
      Securities”
has
      the
      meaning set forth in Section 3.1(g).

    

    “Disclosure
      Materials”
      has the
      meaning set forth in Section 3.1(h). 

    

    “Effective
      Date”
      means
      the date that any Registration Statement filed pursuant to Article 4 is first
      declared effective by the Commission. 

    

    “Effectiveness
      Date”
      has the
      meaning set forth in Section 4.1. 

    

    “Environmental
      Law”
      has the
      meaning set forth in Section 3.1(aa).

    

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended, and the rules
      and regulations promulgated thereunder.

     

    “ERISA
      Affiliate” means
      any
      trade or business, whether or not incorporated, that together with the Company
      would be deemed to be a single employer for purposes of Section 4001 of ERISA
      or
      Sections 414(b), (c), (m), (n) or (o) of the Internal Revenue Code of 1986,
      as
      amended.

     

    “Evaluation
      Date” has
      the
      meaning set forth in Section 3.1(r). 

    

    “Event”
      has the
      meaning set forth in Section 4.8. 

    

    “Event
      Date”
      has the
      meaning set forth in Section 4.8.

    

    “Exchange
      Act”
      means
      the Securities Exchange Act of 1934, as amended.

    

    “Exercise
      Price”
      has the
      meaning set forth in Section 4.8.

    

    “Filing
      Date” has
      the
      meaning set forth in Section 4.1.

    

    “GAAP”
      means
      generally accepted accounting principles as in effect from time to time in
      the
      United States of America.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    “Governmental
      Authority” has
      the
      meaning set forth in Section 3.1(e). 

    

    “Hazardous
      Substance”
      has the
      meaning set forth in Section 3.1(aa).

    

    “Indebtedness”
      has the
      meaning set forth in Section 3.1(r).

    

    “Indemnified
      Party” has
      the
      meaning set forth in Section 4.6(c).

    

    “Indemnified
      Person”
      has the
      meaning set forth in Section 4.6(a). 

    

    “Indemnifying
      Party” has
      the
      meaning set forth in Section 4.6(c). 

    

    “Intellectual
      Property Rights”
      has the
      meaning set forth in Section 3.1(o).

    

    “Legend
      Removal Date” has
      the
      meaning set forth in Section 5.1(a).

    

    “Lien”
      means
      any lien, charge, encumbrance, security interest, right of first refusal or
      other restrictions of any kind.

    

    “Losses”
      has the
      meaning set forth in Section 5.7.

    

    “Material
      Adverse Effect”
      means
      any of (i) a material and adverse effect on the legality, validity or
      enforceability of any Transaction Document, (ii) a material and adverse effect
      on the results of operations, assets, prospects, business or condition
      (financial or otherwise) of the Company and the Subsidiaries, taken as a whole,
      or (iii) a material impairment of the Company’s ability to perform on a timely
      basis its obligations under any Transaction Document.

    

    “NASD
      Rules”
      has the
      meaning set forth in Section 4.3(o). 

    

    “OFAC”
      has the
      meaning set forth in Section 3.1(ee).

    

    “Person”
      means an
      individual or corporation, partnership, trust, incorporated or unincorporated
      association, joint venture, limited liability company, joint stock company,
      government (or an agency or subdivision thereof) or other entity of any
      kind.

    

    “Proceeding”
      means an
      action, claim, suit, investigation or proceeding (including, without limitation,
      an investigation or partial proceeding, such as a deposition), whether commenced
      or threatened.

    

    “Prospectus”
      has
      the
      meaning set forth in Section 4.3. 

    

    “Purchase
      Price” has
      the
      meaning set forth in Section 2.1.

    

    “Registrable
      Securities” means
      the
      Conversion Shares and the Warrant Shares; provided, however, that the Investor
      shall not be required to convert the Convertible Note or to exercise the Warrant
      in order to have the Conversion Shares issuable upon conversion of the
      Convertible Note or the Warrant Shares issuable upon exercise of the Warrant
      included in any Registration Statement.

    

    “Registration
      Period”
      means
      the period commencing on the date hereof and ending on the date on which all
      of
      the Registrable Securities may be sold to the public without registration under
      the Securities Act and without limitation as to volume, in reliance on Rule
      144.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    “Registration
      Statement”
      means a
      registration statement filed on the appropriate Form with, and declared
      effective by, the Commission under the Securities Act and covering the resale
      by
      the Investor of the Registrable Securities.

    

    “Requested
      Information”
      has the
      meaning set forth in Section 4.4(a).

    

    “Rule
      144”
      means
      Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

    

    “SEC
      Reports”
      has the
      meaning set forth in Section 3.1(h).

    

    “Securities”
      means
      the Convertible Note, the Warrant, the Conversion Shares and the Warrant
      Shares.

    

    “Securities
      Act”
      means
      the Securities Act of 1933, as amended..

    

    “Subsidiary”
      means
      any “significant subsidiary” as defined in Rule 1-02(w) of Regulation S-X
      promulgated by the Commission under the Exchange Act.

    

    “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 listed or 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 Trading Day
      shall mean a Business Day.

    

    “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.

    

    “Transaction
      Documents”
      means
      this Agreement, the Convertible Note, the Warrant and any other documents or
      agreements executed in connection with the transactions contemplated
      hereunder.

    

    “Warrant”
      means
      the Common Stock Purchase Warrant in the form of Exhibit B,
      which
      is issuable to the Investor at the Closing.

    

    “Warrant
      Shares”
      means
      the shares of Common Stock issuable upon exercise of the Warrant.

    

    ARTICLE
      2

    

    Purchase
      and Sale

    

    Section
      2.1. Issuance
      of Securities.
      Upon
      the
      terms and subject to the conditions set forth in this Agreement, and in
      accordance with applicable law, the Company agrees to sell to the Investor,
      and
      the Investor agrees to purchase from the Company, on the Initial Closing Date
      (i) a Convertible Note in the principal amount of $750,000 and (ii) a Warrant
      to
      purchase shares of Common Stock.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    Section
      2.2. Payment
      of Purchase Price.
      As
      consideration for the issuance of the Convertible Note and Warrant being
      purchased at the Closing, the
      Investor
      shall on the Closing Date pay to the Company, by a wire transfer or check,
      an
      amount equal to the principal amount of the Convertible Note being purchased
      on
      such Closing Date (the “Purchase
      Price”).

     

    Section
      2.3. Delivery
      of Securities.
      At the
      Closing, the Company shall
      cause the Convertible Note and Warrant to be issued to the Investor upon payment
      of the Purchase Price.

    

    ARTICLE
      3

    

    Representations
      and Warranties

    

    Section
      3.1. Representations
      and Warranties of the Company.
      The
      Company hereby makes the following representations and warranties to the
      Investor:

    

    
      	 	
              (a)

            	
              Subsidiaries.
                The Company has no direct or indirect Subsidiaries other than as
                specified
                in the SEC Reports. Except as disclosed in the SEC Reports, the Company
                owns, directly or indirectly, all of the capital stock of each Subsidiary
                free and clear of any and all Liens, and all the issued and outstanding
                shares of capital stock of each Subsidiary are validly issued and
                are
                fully paid, non-assessable and free of preemptive and similar
                rights.

            

    

    

    
      	 	
              (b)

            	
              Organization
                and Qualification.
                Each of the Company and each Subsidiary is duly incorporated or otherwise
                organized, validly existing and in good standing under the laws of
                the
                jurisdiction of its incorporation or organization (as applicable),
                with
                the requisite power and authority to own and use its properties and
                assets
                and to carry on its business as currently conducted. Neither the
                Company
                nor any Subsidiary is in violation of any of the provisions of its
                respective certificate or articles of incorporation, bylaws or other
                organizational or charter
                documents. Each of the Company and each Subsidiary is duly qualified
                to
                conduct its respective business and is in good standing as a foreign
                corporation or other entity in each jurisdiction in which the nature
                of
                the business conducted or property owned by it makes such qualification
                necessary, except where the failure to be so qualified or in good
                standing, as the case may be, could not, individually or in the aggregate,
                have or reasonably be expected to result in a Material Adverse Effect,
                and
                no proceedings have been instituted in any such jurisdiction revoking,
                limiting or curtailing, or seeking to revoke, such power and authority
                or
                qualification.

            

    

    

    
      	 	
              (c)

            	
              Authorization;
                Enforcement.
                The Company has the requisite corporate power and authority to enter
                into
                and to consummate the transactions contemplated by each of the Transaction
                Documents and otherwise to carry out its obligations thereunder.
                The
                execution and delivery of each of the Transaction Documents by the
                Company
                and the consummation by it of the transactions contemplated thereby
                have
                been duly authorized by all necessary action on the part of the Company
                and no further action is required by the Company in connection therewith.
                Each Transaction Document has been (or upon delivery will have been)
                duly
                executed by the Company and, when delivered in accordance with the
                terms
                hereof, will constitute the valid and binding obligation of the Company
                enforceable against the Company in accordance with its terms, except
                as
                such enforceability may be limited by applicable bankruptcy, insolvency,
                reorganization, moratorium, liquidation or similar laws relating
                to, or
                affecting generally the enforcement of, creditors’ rights and remedies or
                by other equitable principles of general
                application.

            

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      	 	
              (d)

            	
              No
                Conflicts.
                The execution, delivery and performance of the Transaction Documents
                by
                the Company and the consummation by the Company of the transactions
                contemplated thereby do not and will not (i) conflict with or violate
                any
                provision of the Company’s certificate of incorporation or bylaws, or (ii)
                conflict with, or constitute a default (or an event that with notice
                or
                lapse of time or both would become a default) under, or give to others
                any
                rights of termination, amendment, acceleration or cancellation (with
                or
                without notice, lapse of time or both) of, or result in the imposition
                of
                any Lien upon any of the material properties or assets of the Company
                or
                of any Subsidiary pursuant to, any agreement, credit facility, debt
                or
                other instrument (evidencing a Company or Subsidiary debt or otherwise)
                or
                other understanding to which the Company or any Subsidiary is a party
                or
                by which any property or asset of the Company or any Subsidiary is
                bound
                or affected, or (iii) result in a violation of any law, rule, regulation,
                order, judgment, injunction, decree or other restriction of any court
                or
                governmental authority to which the Company or a Subsidiary is subject
                (including federal and state securities laws and regulations), or
                by which
                any property or asset of the Company or a Subsidiary is bound or
                affected;
                except in the case of each of clauses (ii) and (iii), such as could
                not,
                individually or in the aggregate, have or reasonably be expected
                to result
                in a Material Adverse Effect.

            

    

    

    
      	 	
              (e)

            	
              Filings,
                Consents and Approvals.
                The Company is not required to obtain any consent, waiver, authorization
                or order of, give any notice to, or make any filing or registration
                with,
                any court or other federal, state, local or other governmental authority
                (a “Governmental
                Authority”)
                or other Person in connection with the execution, delivery and performance
                by the Company of the Transaction Documents and the consummation
                of the
                transactions contemplated thereby, other than (i) the filing with
                the
                Commission of one or more Registration Statements in accordance with
                the
                requirements of Article 4 of this
                Agreement, (ii) filings required by state securities laws, (iii)
                the
                filing of a Notice of Sale of Securities on Form D with the Commission
                under Regulation D of the Securities Act, (iv) any filings required
                in
                accordance with Section 4.3(d), and (v) those that have been made
                or
                obtained prior to the date of this
                Agreement.

            

    

    

    
      	 	
              (f)

            	
              Issuance
                of the Securities.
                The Securities have been duly authorized. The Convertible Note and
                Warrant, when issued and paid for in accordance with this Agreement,
                will
                be duly and validly issued. The Company has reserved and set aside
                from
                its duly authorized capital stock a sufficient number of shares of
                Common
                Stock to satisfy in full the Company’s obligations (i) to issue the
                Warrant Shares upon exercise of the Warrants and (ii) to issue the
                Conversion Shares upon conversion of the Convertible Notes. The Warrants
                Shares, when issued and paid for upon exercise of the Warrants in
                accordance with their terms, and the Conversion Shares, when issued
                upon
                conversion of the Convertible Notes in accordance with their terms,
                will
                be duly and validly issued, fully paid and nonassessable, free and
                clear
                of all Liens.

            

    

    

    
      	 	
              (g)

            	
              SEC
                Reports; Financial Statements.
                The Company has filed all reports required to be filed by it under
                the
                Securities Act and the Exchange Act, including pursuant to Section
                13(a)
                or 15(d) thereof, for the twelve months preceding the date hereof
                (the
                foregoing materials, being collectively referred to herein as
                the“SEC
                Reports”
                and sometimes as the“Disclosure
                Materials”)
                on a timely basis or has timely filed a valid extension of such time
                of
                filing and has filed any such SEC Reports prior to the expiration
                of any
                such extension. As of their respective dates, the SEC Reports complied
                in
                all material respects with the requirements of the Securities Act
                and the
                Exchange Act and the rules and regulations of the Commission promulgated
                thereunder, and none of the SEC Reports, when filed, contained any
                untrue
                statement of a material fact or omitted to state a material fact
                required
                to be stated therein or necessary in order to make the statements
                therein,
                in light of the
                circumstances under which they were made, not misleading. The financial
                statements of the Company included in the SEC Reports comply in all
                material respects with applicable accounting requirements and the
                rules
                and regulations of the Commission with respect thereto as in effect
                at the
                time of filing. Such financial statements have been prepared in accordance
                with GAAP applied on a consistent basis during the periods involved,
                except as may be otherwise specified in such financial statements
                or the
                notes thereto, and fairly present in all material respects the financial
                position of the Company and its consolidated Subsidiaries as of and
                for
                the dates thereof and the results of operations and cash flows for
                the
                periods then ended, subject, in the case of unaudited statements,
                to
                normal, immaterial, year-end audit
                adjustments.

            

    

     

    
      
         

      

      
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              (h)

            	
              Material
                Changes.
                Since the date of the latest audited financial statements included
                within
                the SEC Reports, except as specifically disclosed in the SEC Reports,
                (i)
                there has been no event, occurrence or development that has had or
                that
                could reasonably be expected to result in a Material Adverse Effect,
                (ii)
                the Company has not incurred any liabilities (contingent or otherwise)
                other than (A) trade payables, accrued expenses and other liabilities
                incurred in the ordinary course of business consistent with past
                practice
                and (B) liabilities not required to be reflected in the Company’s
                financial statements pursuant to GAAP or required to be disclosed
                in
                filings made with the Commission, (iii) the Company has not altered
                its
                method of accounting or the identity of its auditors, (iv) the Company
                has
                not declared or made any dividend or distribution of cash or other
                property to its stockholders or purchased, redeemed or made any agreements
                to purchase or redeem any shares of its capital stock, and (v) the
                Company
                has not issued any equity securities to any officer, director or
                Affiliate, except pursuant to existing Company stock option plans.
                The
                Company does not have pending before the Commission any request for
                confidential treatment of
                information.

            

    

    

    
      	 	
              (i)

            	
              Litigation.
                There is no Action which (i) adversely affects or challenges the
                legality,
                validity or enforceability of any of the Transaction Documents or
                the
                Securities or (ii) except as specifically disclosed in the SEC Reports,
                could, if there were an unfavorable decision, individually or in
                the
                aggregate, have or reasonably be expected to result in a Material
                Adverse
                Effect. Neither the Company nor any Subsidiary, nor any director
                or
                officer thereof (in his or her capacity as such), is or has been
                the
                subject of any Action involving a claim of violation of or liability
                under
                federal or state securities laws or a claim of breach of fiduciary
                duty,
                except as specifically disclosed in the SEC Reports. There has not
                been,
                and to the knowledge of the Company, there is not pending any
                investigation by the Commission involving the Company or any current
                or
                former director or officer of the Company (in his or her capacity
                as
                such). The Commission has not issued any stop order or other order
                suspending the effectiveness of any registration statement filed
                by the
                Company or any Subsidiary under the Exchange Act or the Securities
                Act.
                There are no outstanding comments by the Staff of the Commission
                on any
                filing by the Company or any Subsidiary under the Exchange Act or
                the
                Securities Act.

            

    

    

    
      	 	
              (j)

            	
              Labor
                Relations.
                No
                material labor dispute exists or, to the knowledge of the Company,
                is
                imminent with respect to any of the employees of the
                Company.

            

      	 	 	 

    

    
      	 	
              (k)

            	
              Compliance.
                Except as disclosed in the SEC Reports, neither the Company nor any
                Subsidiary (i) is in default under or in violation of (and no event
                has
                occurred that has not been waived that, with notice or lapse of time
                or
                both, would result in a default by the Company or any Subsidiary
                under),
                nor has the Company or any Subsidiary received notice of a claim
                that it
                is in default under or that it is in violation of, any indenture,
                loan or
                credit agreement or any other agreement or instrument to which it
                is a
                party or by which it or any of its properties is bound (whether or
                not
                such default or violation has been waived), (ii) is in violation
                of any
                order of any court, arbitrator or governmental body, or (iii) is
                or has
                been in violation of any statute, rule or regulation of any governmental
                authority, including without limitation all foreign, federal, state
                and
                local laws relating to taxes, environmental protection, occupational
                health and safety, product quality and safety and employment and
                labor
                matters, except in each case as could not, individually or in the
                aggregate, have or reasonably be expected to result in a Material
                Adverse
                Effect.

            

    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      	 	
              (l)

            	
              Regulatory
                Permits.
                The Company and the Subsidiaries possess all certificates, authorizations
                and permits issued by the appropriate federal, state, local or foreign
                regulatory authorities necessary to conduct their respective businesses
                as
                described in the SEC Reports, except where the failure to possess
                such
                permits could not, individually or in the aggregate, have or reasonably
                be
                expected to result in a Material Adverse Effect, and neither the
                Company
                nor any Subsidiary has received any notice of proceedings relating
                to the
                revocation or modification of any such
                permits.

            

    

    

    
      	 	
              (m)

            	
              Title
                to Assets.
                The Company and the Subsidiaries have good and marketable title in
                fee
                simple to all real property owned by them that is material to their
                respective businesses and good and marketable title in all personal
                property owned by them that is material to their respective businesses,
                in
                each case free and clear of all Liens, except for Liens as do not
                materially affect the value of such property and do not materially
                interfere with the use made and proposed to be made of such property
                by
                the Company and the Subsidiaries. Any real property and facilities
                held
                under lease by the Company and the Subsidiaries are held by them
                under
                valid, subsisting and enforceable leases of which the Company and
                the
                Subsidiaries are in compliance, except as could not, individually
                or in
                the aggregate, have or reasonably be expected to result in a Material
                Adverse Effect.

            

    

    

    
      	 	
              (n)

            	
              Patents
                and Trademarks.
                The Company and the Subsidiaries have, or have rights to use, all
                patents,
                patent applications, trademarks, trademark applications, service
                marks,
                trade names, copyrights, licenses and other similar rights that are
                necessary or material for use in connection with their respective
                businesses as described in the SEC Reports and which the failure
                to so
                have could, individually or in the aggregate, have or reasonably
                be
                expected to result in a Material Adverse Effect (collectively,
                the“Intellectual
                Property Rights”).
                The SEC Reports describe all claims and Actions made or filed by
                others
                against the Company deemed material by the Company to the effect
                that
                Intellectual Property Rights used by the Company or any Subsidiary
                violate
                or infringe upon the rights of such claimant. Except as set forth
                in
                the
                SEC Reports, to the knowledge of the Company, all of the Intellectual
                Property Rights are enforceable and there is no existing infringement
                by
                another Person of any of the Intellectual Property
                Rights.

            

    

    

    
      	 	
              (o)

            	
              Insurance.
                The Company and the Subsidiaries are insured by insurers of recognized
                financial responsibility against such losses and risks and in such
                amounts
                as are prudent and customary in the businesses in which the Company
                and
                the Subsidiaries are engaged. The Company has no reason to believe
                that it
                will not be able to renew its and the Subsidiaries’ existing insurance
                coverage as and when such coverage expires or to obtain similar coverage
                from similar insurers as may be necessary to continue its business
                on
                terms consistent with the market for the Company’s and such Subsidiaries’
                respective lines of business.

            

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      	 	
              (p)

            	
              Transactions
                With Affiliates and Employees.
                Except as set forth in the SEC Reports, none of the officers or directors
                of the Company and, to the knowledge of the Company, none of the
                employees
                of the Company is a party to any transaction with the Company or
                any
                Subsidiary (other than for services as employees, officers and directors),
                including any contract, agreement or other arrangement providing
                for the
                furnishing of services to or by, providing for rental of real or
                personal
                property to or from, or otherwise requiring payments to or from any
                officer, director or such employee or, to the knowledge of the Company,
                any entity in which any officer, director, or any such employee has
                a
                substantial interest or is an officer, director, trustee or
                partner.

            

    

    

    
      	 	
              (q)

            	
              Sarbanes-Oxley;
                Internal Accounting Controls. 
                The Company is in material compliance with all provisions of the
                Sarbanes-Oxley Act of 2002 (including the rules and regulations of
                the
                Commission adopted thereunder) which are applicable to it as of the
                Closing Date.  The Company’s certifying officers have evaluated the
                effectiveness of the Company’s controls and procedures as of June 30,
                2008, the date of the most recently filed periodic report under the
                Exchange Act (such date, the “Evaluation
                Date”). 
                The Company presented in its most recently filed periodic report
                under the
                Exchange Act the conclusions of the certifying officers about the
                effectiveness of the disclosure controls and procedures based on
                their
                evaluations as of the Evaluation Date.  Since the Evaluation Date,
                there have been no significant changes in the Company’s internal controls
                (as such term is defined in Item 307(b) of Regulation S-K under the
                Exchange Act) or, to the Company’s knowledge, in other factors that could
                significantly affect the Company’s internal
                controls.

            

    

    

    
      	 	
              (r)

            	
              Solvency.
                Based on the financial condition of the Company as of the Closing
                Date
                (and assuming that the Closing shall have occurred), (i) the Company’s
                assets do not constitute unreasonably small capital to carry on its
                business for the current fiscal year as now conducted and as proposed
                to
                be conducted including its capital needs taking into account the
                particular capital requirements of the business conducted by the
                Company,
                and projected capital requirements and capital availability thereof;
                and
                (ii) the current cash flow of the Company, together with the proceeds
                the
                Company would receive, were it to liquidate all of its assets, after
                taking into account all anticipated uses of the cash, would be sufficient
                to pay all amounts on or in respect of its debt when such amounts
                are
                required to be paid. The Company does not intend to incur indebtedness
                beyond its ability to pay such debts as they mature (taking into
                account
                the timing and amounts of cash to be payable on or in respect of
                its
                debt).

            

    

    

    
      	 	
              (s)

            	
              Certain
                Fees.
                No
                brokerage or finder’s fees or commissions are or will be payable by the
                Company to any broker, financial advisor or consultant, finder, placement
                agent, investment banker, bank or other Person with respect to the
                transactions contemplated by this Agreement. The Investor shall have
                no
                obligation with respect to any fees or with respect to any claims
                (other
                than such fees or commissions owed by the Investor pursuant to written
                agreements executed by the Investor which fees or commissions shall
                be the
                sole responsibility of the Investor) made by or on behalf of other
                Persons
                for fees of a type contemplated in this Section that may be due in
                connection with the transactions contemplated by this
                Agreement.

            

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      	 	
              (t)

            	
              Certain
                Registration Matters.
                Assuming the accuracy of the Investor’s representations and warranties set
                forth in Section 3.2(b)-(e), no registration under the Securities
                Act is
                required for the offer and sale of the Securities by the Company
                to the
                Investor under the Transaction Documents.

            

    

    

    
      	 	
              (u)

            	
              Investment
                Company.
                The Company is not, and is not an Affiliate of, and immediately following
                the Closing will not have become, an “investment company” within the
                meaning of the Investment Company Act of 1940, as
                amended.

            

    

    

    
      	 	
              (v)

            	
              No
                Additional Agreements.
                The Company does not have any agreement or understanding with the
                Investor
                with respect to the transactions contemplated by the Transaction
                Documents
                other than as specified in the Transaction
                Documents.

            

    

    

    
      	 	
              (w)

            	
              Full
                Disclosure.
                All
                disclosures provided to the Investors regarding the Company, its
                business
                and the transactions contemplated hereby, furnished by or on behalf
                of the
                Company (including the Company’s representations and warranties set forth
                in this Agreement) are true and correct and do not contain any untrue
                statement of a material fact or omit to state any material fact necessary
                in order to make the statements made therein, in light of the
                circumstances under which they were made, not
                misleading.

            

    

    

    
      	 	
              (x)

            	
              Environmental
                Matters.
                To
                the Company’s knowledge: (i) the Company and its Subsidiaries have
                complied with all applicable Environmental Laws; (ii) the properties
                currently owned or operated by Company (including soils, groundwater,
                surface water, buildings or other structures) are not contaminated
                with
                any Hazardous Substances; (iii) the properties formerly owned or
                operated
                by Company or its Subsidiaries were not contaminated with Hazardous
                Substances during the period of ownership or operation by Company
                and its
                Subsidiaries; (iv) Company and its Subsidiaries are not subject to
                liability for any Hazardous Substance disposal or contamination on
                any
                third party property; (v) Company and its Subsidiaries have not been
                associated with any release or threat of release of any Hazardous
                Substance; (vi) Company and its Subsidiaries have not received any
                notice,
                demand, letter, claim or request for information alleging that Company
                and
                its Subsidiaries may be in violation of or liable under any Environmental
                Law; and (vii) Company and its Subsidiaries are not subject to any
                orders,
                decrees, injunctions or other arrangements with any Governmental
                Authority
                or subject to any indemnity or other agreement with any third party
                relating to liability under any Environmental Law or relating to
                Hazardous
                Substances.

            

    

     

    As
      used
      in this Agreement, the term “Environmental
      Law”
means
      any federal, state, local or foreign law, regulation, order, decree, permit,
      authorization, opinion, common law or agency requirement relating to: (A) the
      protection, investigation or restoration of the environment, health and safety,
      or natural resources; (B) the handling, use, presence, disposal, release or
      threatened release of any Hazardous Substance or (C) noise, odor, wetlands,
      pollution, contamination or any injury or threat of injury to persons or
      property.

     

    As
      used
      in this Agreement, the term “Hazardous
      Substance”
means
      any substance that is: (i) listed, classified or regulated pursuant to any
      Environmental Law; (ii) any petroleum product or by-product, asbestos-containing
      material, lead-containing paint or plumbing, polychlorinated biphenyls,
      radioactive materials or radon; or (iii) any other substance which is the
      subject of regulatory action by any Governmental Authority pursuant to any
      Environmental Law.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      	
            	(y)	
              Taxes.
                The Company and its Subsidiaries have filed all necessary federal,
                state
                and foreign income and franchise tax returns when due (or obtained
                appropriate extensions for filing) and have paid or accrued all taxes
                shown as due thereon, and the Company has no knowledge of a tax deficiency
                which has been or might be asserted or threatened against it or any
                Subsidiary which would have a Material Adverse
                Effect.

            

    

     

    
      	
            	(z)	
              Private
                Offering.
                Assuming the correctness of the representations and warranties of
                the
                Investor set forth in this Agreement, the offer and sale of the
                Convertible Notes and the Warrants hereunder are, and upon (i) exercise
                of
                the Warrant, the issuance of the Warrant Shares and (ii) upon conversion
                of the Convertible Note, the issuance of the Conversion Shares will
                be,
                exempt from registration under the Securities Act. The Company has
                offered
                the Convertible Notes and the Warrants for sale only to the
                Investor.

            

    

     

    
      	
            	(aa)	
              ERISA.
                Neither the Company nor any ERISA Affiliate maintains, contributes
                to or
                has any liability or contingent liability with respect to any employee
                benefit plan subject to ERISA.

            

    

     

    
      	
            	(bb)	
              Foreign
                Assets Control Regulations and Anti-Money
                Laundering.

            

    

     

    (i)
      OFAC.
      Neither
      the issuance of the Convertible Note and Warrant to the Investor, nor the use
      of
      the respective proceeds thereof, shall cause the Investor to violate the U.S.
      Bank Secrecy Act, as amended, and any applicable regulations thereunder or
      any
      of the sanctions programs administered by the U.S. Department of the Treasury’s
      Office of Foreign Assets Control (“OFAC”)
      of the
      United States Department of Treasury, any regulations promulgated thereunder
      by
      OFAC or under any affiliated or successor governmental or quasi-governmental
      office, bureau or agency and any enabling legislation or executive order
      relating thereto. Without limiting the foregoing, neither the Company nor any
      Subsidiary (i) is a person whose property or interests in property are blocked
      or subject to blocking pursuant to Section 1 of Executive Order 13224 of
      September 23, 200l Blocking Property and Prohibiting Transactions With Persons
      Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
      (2001)), (ii) engages in any dealings or transactions prohibited by
      Section 2 of such executive order, or is otherwise associated with any such
      person in any manner violative of Section 2, or (iii) is a person on the
      list of Specially Designated Nationals and Blocked Persons or subject to the
      limitations or prohibitions under any other OFAC regulation or executive
      order.

     

    (ii)
      Patriot
      Act.
      The
      Company and each of its Subsidiaries are in compliance, in all material
      respects, with the USA PATRIOT Act. No part of the proceeds of the sale of
      the
      Shares and the Warrants hereunder will be used, directly or indirectly, for
      any
      payments to any governmental official or employee, political party, official
      of
      a political party, candidate for political office, or anyone else acting in
      an
      official capacity, in order to obtain, retain or direct business or obtain
      any
      improper advantage, in violation of the United States Foreign Corrupt Practices
      Act of 1977, as amended.

    

    Section
      3.2. Representations
      and Warranties of the Investor.
      The
      Investor hereby represents and warrants to the Company as follows:

    

    
      	 	
              (a)

            	
              Authority.
                This Agreement has been duly executed by the Investor, and when delivered
                by the Investor in accordance with terms hereof, will constitute
                the valid
                and legally binding obligation of the Investor, enforceable against
                him in
                accordance with its terms, except as such enforceability may be limited
                by
                applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
                or similar laws relating to, or affecting generally the enforcement
                of,
                creditors’ rights and remedies or by other equitable principles of general
                application.

            

    

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    
      	 	
              (b)

            	
              Investment
                Intent.
                The Investor is acquiring the Securities as principal for his own
                account
                for investment purposes only and not with a view to or for distributing
                or
                reselling such Securities or any part thereof, without prejudice,
                however,
                to the Investor’s right at all times to sell or otherwise dispose of all
                or any part of such Securities in compliance with applicable federal
                and
                state securities laws. The Investor does not have any agreement or
                understanding, directly or indirectly, with any Person to distribute
                any
                of the Securities.

            

    

    

    
      	 	
              (c)

            	
              Investor
                Status.
                The Investor is an “accredited investor” as defined in Rule 501(a) under
                the Securities Act. 

            

    

    

    
      	 	
              (d)

            	
              Access
                to Information.
                The Investor acknowledges that he has reviewed the Disclosure Materials
                and has been afforded (i) the opportunity to ask such questions as
                he has
                deemed necessary of, and to receive answers from, representatives
                of the
                Company concerning the terms and conditions of the offering of the
                Securities and the merits and risks of investing in the Securities;
                (ii)
                access to information about the Company and the Subsidiaries and
                their
                respective financial condition, results of operations, business,
                properties, management and prospects sufficient to enable him to
                evaluate
                his investment; and (iii) the opportunity to obtain such additional
                information that the Company possesses or can acquire without unreasonable
                effort or expense that is necessary to make an informed investment
                decision with respect to the
                investment.

            

    

    

    ARTICLE
      4

    

    Registration
      Rights

    

    Section
      4.1. Piggy-Back
      Registration 

     

    (a)
      Piggy-Back
      Registration. If
      (but
      without any obligation to do so) the Company proposes, at any time during the
      Registration Period, to register (including for this purpose a registration
      effected by the Company for stockholders other than the Investor) any shares
      of
      Common Stock under the Securities Act in connection with the public offering
      of
      such securities solely for cash other than (a) a registration statement relating
      to (i) the sale of securities to employees of the Company pursuant to a stock
      option, stock purchase or similar plan or (ii) a SEC Rule 145 transaction or
      (b)
      a registration on any form which does not include substantially the same
      information as would be required to be included in a registration statement
      covering the sale of the Registrable Securities, the Company shall, at such
      time, promptly give the Investor written notice of such registration. Upon
      the
      written request of the Investor given within twenty (20) days after delivery
      of
      such notice, the Company shall, subject to the provisions of
      Section 4.1(b), cause to be registered under the Securities Act all of the
      Registrable Securities that the Investor has requested to be registered. The
      Company shall have the right to terminate or withdraw any registration initiated
      by it under this Section 4.1 prior to the effectiveness of such
      registration whether or not the Investor has elected to include Registrable
      Securities in such registration; provided, however, that if, after a
      Registration Statement covering Registrable Securities has become effective
      and
      so long as any registrable Securities covered thereby have not been sold, the
      Company will not withdraw such Registration Statement without giving the
      Investor notice of its intention to withdraw such Registration Statement at
      least ten Trading Days prior to the date of withdrawal. 

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (b)
      Priority
      In Incidental Registrations.
      If the
      managing underwriter of an underwritten offering contemplated by this Article
      4
      shall inform the Company and the Investor of its belief that the number of
      securities requested to be included in such registration exceeds the number
      which can be sold in such offering, then the Company will include in such
      registration, to the extent of the number which the Company is so advised can
      be
      sold in such offering, (i) first, securities proposed by the Company to be
      sold
      for its own account, and (ii) second, securities to be sold by holders of
      securities having demand registration rights and exercising such rights in
      connection with such registration statement (iii) third, Registrable Securities
      proposed to be sold by the Investor and (iv) fourth, securities to be sold
      by
      other selling security holders.

     

    Section
      4.2. Registration
      Process.
      In
      connection with the registration of the Registrable
      Securities pursuant to Section 4.1, the Company shall:

     

    (a)
      Prepare
      and file
      with the
      Commission the
      Registration Statement
      and such
      amendments (including post-effective amendments) to the Registration Statement
      and supplements to the prospectus included therein (a “Prospectus”)
      as the
      Company may deem necessary or appropriate and take all lawful action such that
      the Registration Statement and any amendment thereto does not, when it becomes
      effective, contain an untrue statement of a material fact or omit to state
      a
      material fact required to be stated therein or necessary to make the statements
      therein, not misleading and that the Prospectus forming part of the Registration
      Statement, and any amendment or supplement thereto, does not at any time during
      the Registration
      Period include an untrue statement of a material fact or omit to state a
      material fact required to be stated therein or necessary to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading.;

     

    (b)
      Comply
      with the provisions of the Securities Act with respect to the Registrable
      Securities covered by the Registration Statement until the earlier of (i) such
      time as all of such Registrable Securities have been disposed of in accordance
      with the intended methods of disposition by the Investor as set forth in the
      Prospectus forming part of the Registration Statement or (ii) the date on which
      the Registration Statement is withdrawn;

     

    (c)
      Prior
      to
      the filing with the Commission of the
      Registration Statement (including any amendments thereto) and the distribution
      or delivery of any Prospectus (including any supplements thereto), provide
      draft
      copies thereof to the Investors and reflect in such documents all such comments
      as the Investor (and his counsel) reasonably may propose and furnish to the
      Investor and his legal counsel identified to the Company, (i) promptly
      after the same is prepared and publicly distributed, filed with the Commission,
      or received by the Company, one copy of the Registration Statement, each
      Prospectus, and each amendment or supplement thereto, and (ii) such number
      of copies of the Prospectus and all amendments and supplements thereto and
      such
      other documents, as the Investor may reasonably request in order to facilitate
      the disposition of the Registrable
      Securities owned by the Investor;

     

    (d)
      (i) register
      or qualify the Registrable Securities covered by the Registration Statement
      under such securities or “blue sky” laws of such jurisdictions as the Investors
reasonably
      request, (ii) prepare and file in such jurisdictions such amendments
      (including post-effective amendments) and supplements to such registrations
      and
      qualifications as may be necessary to maintain the effectiveness thereof at
      all
      times during the Registration Period, (iii) take all such other lawful
      actions as may be necessary to maintain such registrations and qualifications
      in
      effect at all times during the Registration Period, and (iv) take all such
      other lawful actions reasonably necessary or advisable to qualify the
      Registrable Securities for sale in such jurisdictions; provided,
      however,
      that the
      Company shall not be required in connection therewith or as a condition thereto
      to (A) qualify to do business in any jurisdiction where it would not
      otherwise be required to qualify, (B) subject itself to general taxation in
      any such jurisdiction or (C) file a general consent to service of process
      in any such jurisdiction;

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    (e)
      As
      promptly as practicable after becoming aware of such event, notify the Investor
      of the occurrence of any event, as a result of which the Prospectus included
      in
      the Registration Statement, as then in effect, includes an untrue statement
      of a
      material fact or omits to state a material fact required to be stated therein
      or
      necessary to make the statements therein, in light of the circumstances under
      which they were made, not misleading, and promptly prepare an amendment to
      the
      Registration Statement and supplement to the Prospectus to correct such untrue
      statement or omission, and deliver a number of copies of such supplement and
      amendment to each Investor as such Investor may reasonably request;

     

    (f)
      As
      promptly as practicable after becoming aware of such event, notify the Investor
      (or, in the event of an underwritten offering, the managing underwriters) of
      the
      issuance by the Commission of any stop order or other suspension of the
      effectiveness of the Registration Statement and take all lawful action to effect
      the withdrawal, rescission
      or
      removal of such stop order or other suspension;

     

    (g)
      Take
      all
      such other lawful actions reasonably necessary to expedite and facilitate the
      disposition by the Investor of his Registrable Securities in accordance with
      the
      intended methods therefor provided in the Prospectus which are customary under
      the circumstances;

     

    (h)
      Make
      generally available to its security holders as soon as practicable, but in
      any
      event not later than eighteen
      (18)
      months
      after the Effective Date of the Registration Statement, an earnings
      statement of the Company and its subsidiaries complying with Section 11(a)
      of the Securities Act and the rules and regulations of the Commission
      thereunder;

     

    (i)
      In
      the
      event of an underwritten offering, promptly include or incorporate in a
      Prospectus supplement or post-effective amendment to the Registration Statement
      such information as the underwriters reasonably agree should be included therein
      and to which the Company does not reasonably object and make all required
      filings of such Prospectus supplement or post-effective amendment as soon as
      practicable after it is notified of the matters to be included or incorporated
      in such Prospectus supplement or post-effective amendment;

     

    (j)
      Make
      reasonably available for inspection by the Investor, any underwriter
      participating in any disposition pursuant to the Registration Statement, and
      any
      attorney, accountant or other agent retained by such Investors or any such
      underwriter all relevant financial and other records, pertinent corporate
      documents and properties of the Company and its subsidiaries, and cause the
      Company’s officers, directors and employees to supply all information reasonably
      requested by such Investors or any such underwriter, attorney, accountant or
      agent in connection with the Registration Statement, in each case, as is
      customary for similar due diligence examinations; provided,
      however,
      that all
      records, information and documents that are designated in writing by the
      Company, in good faith, as confidential, proprietary or containing any nonpublic
      information shall be kept confidential by such Investors and any such
      underwriter, attorney, accountant or agent (pursuant to an appropriate
      confidentiality agreement in the case of any such holder or agent), unless
      such
      disclosure is made pursuant to judicial process in a court proceeding (after
      first giving the Company an opportunity promptly to seek a protective order
      or
      otherwise limit the scope of the information sought to be disclosed) or is
      required by law, or such records, information or documents become available
      to
      the public generally or through a third party not in violation of an
      accompanying obligation of confidentiality; and provided,
      further,
      that, if
      the foregoing inspection and information gathering would otherwise disrupt
      the
      Company’s conduct of its business, such inspection and information gathering
      shall, to the maximum extent possible, be coordinated on behalf of the Investors
      and the other parties entitled thereto by one firm of counsel designated
      by and
      on behalf of the majority in interest of Investors and other
      parties;

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    (k)
      In
      connection with any offering,
      make such representations and warranties to the Investor and to the underwriters
      if an underwritten offering,
      in
      form, substance and scope as are customarily made by a company to underwriters
      in secondary underwritten offerings;

     

    (l)
      In
      connection with any underwritten offering, deliver such documents and
      certificates as may be reasonably required by the underwriters; 

     

    (m)
      Cooperate
      with the Investor to facilitate the timely preparation and delivery of
      certificates representing Registrable
      Securities
      to be
      sold pursuant to the Registration Statement, which certificates shall, if
      required under the terms of this Agreement, be free of all restrictive legends,
      and to enable such Registrable
      Securities
      to be in
      such denominations and registered in such names as any Investor may request
      and
      maintain a transfer agent for the Common Stock; and

     

    (n)
      Use
      its
      commercially reasonable efforts to cause all Registrable
      Securities
      covered
      by the Registration Statement to be listed or qualified for trading on the
      principal Trading Market, if any, on which the Common Stock is traded or listed
      on the Effective Date of the Registration Statement.

     

    Section
      4.3. Obligations
      and Acknowledgements of the Investor.
      In
      connection with the registration of the Registrable
      Securities, the Investor shall have the following obligations and hereby make
      the following acknowledgements:

     

    (a)
      It
      shall
      be a condition precedent to the obligations of the Company to include
      the
      Registrable Securities in
      the
      Registration Statement
      that the
      Investor (i) shall furnish to the Company such information regarding
      itself, the Registrable Securities held by him and the intended method of
      disposition of the Registrable Securities held by him as shall be reasonably
      required to effect the registration of such Registrable Securities and
      (ii) shall execute such documents in connection with such registration as
      the Company may reasonably request. At least five (5) Business Days prior to
      the
      first anticipated filing date of a Registration Statement, the Company shall
      notify the Investor of the information the Company requires from the Investor
      (the “Requested
      Information”)
      if the
      Investor elects to have any of his Registrable Securities included in the
      Registration Statement. If at least two Business Days prior to the anticipated
      filing date the Company has not received the Requested Information from the
      Investor, then the Company may file the Registration Statement without including
      any Registrable Securities of the Investor and the Company shall have no further
      obligations under this Article 4 to the Investor
      after
      such Registration Statement has been declared effective. If the Investor
      notifies the Company and provides the Company the information required hereby
      prior to the time the Registration Statement is declared effective, the Company
      will file an amendment to the Registration Statement that includes the
      Registrable Securities of the Investor;
      provided,
      however,
      that the
      Company shall not be required to file such amendment to the Registration
      Statement at any time less than five (5) Business Days prior to the
      Effectiveness Date.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    (b)
      The
      Investor agrees to cooperate with the Company in connection with the preparation
      and filing of a Registration Statement hereunder, unless the Investor has
      notified the Company in writing of his election to exclude all of his
      Registrable Securities from such Registration Statement;

     

    (c)
      The
      Investor agrees that, upon receipt of any notice from the Company of the
      occurrence of any event of the kind described in Section 4.2(e) or 4.2(f),
      he shall immediately discontinue its disposition of Registrable Securities
      pursuant to the Registration Statement covering such Registrable Securities
      until the Investor’s receipt of the copies of the supplemented or amended
      Prospectus contemplated by Section 4.2(e) and, if so directed by the
      Company, the Investor shall deliver to the Company (at the expense of the
      Company) or destroy (and deliver to the Company a certificate of destruction)
      all copies in the Investor’s possession, of the Prospectus covering such
      Registrable Securities current at the time of receipt of such notice;
      and

     

    (d)
      The
      Investor acknowledges that he may be deemed to be a statutory underwriter within
      the meaning of the Securities Act with respect to the Registrable Securities
      being registered for resale by him, and if the Investor includes Registrable
      Securities for offer and sale within a Registration Statement he hereby consents
      to the inclusion in such Registration Statement of a disclosure to such
      effect.

     

    Section
      4.4. Expenses
      of Registration.
      All
      expenses (other than underwriting discounts and commissions and the fees an
      expenses of the Investor’s counsel) incurred in connection with registrations,
      filings or qualifications pursuant to this Article 4, including, without
      limitation, all registration, listing, and qualifications fees, printing and
      engraving fees, accounting fees, and the fees and disbursements of counsel
      for
      the Company, shall be borne by the Company.

     

    Section
      4.6. Indemnification
      and Contribution

     

    (a)
      Indemnification
      by the Company.
      The
      Company shall indemnify and hold harmless the Investor and each underwriter,
      if
      any, which facilitates the disposition of Registrable Securities, and each
      of
      their respective officers and directors and each Person who controls such
      underwriter within the meaning of Section 15 of the Securities Act or
      Section 20 of the Exchange Act (each such Person being sometimes
      hereinafter referred to as an“Indemnified
      Person”)
      from
      and against any losses, claims, damages or liabilities, joint or several, to
      which such Indemnified Person may become subject under the Securities Act or
      otherwise, insofar as such losses, claims, damages or liabilities (or actions
      in
      respect thereof) arise out of or are based upon an untrue statement or alleged
      untrue statement of a material fact contained in any Registration Statement
      or
      an omission or alleged omission to state therein a material fact required to
      be
      stated therein or necessary to make the statements therein, not misleading,
      or
      arise out of or are based upon an untrue statement or alleged untrue statement
      of a material fact contained in any Prospectus or an omission or alleged
      omission to state therein a material fact required to be stated therein or
      necessary to make the statements therein, in the light of the circumstances
      under which they were made, not misleading; and the Company hereby agrees to
      reimburse such Indemnified Person for all reasonable legal and other expenses
      incurred by them in connection with investigating or defending any such action
      or claim as and when such expenses are incurred; provided,
      however, that
      the
      Company shall not be liable to any such Indemnified Person in any such case
      to
      the extent that any such loss, claim, damage or liability arises out of or
      is
      based upon (i) an untrue statement or alleged untrue statement made in, or
      an omission or alleged omission from, such Registration Statement or Prospectus
      in reliance upon and in conformity with written information furnished to the
      Company by such Indemnified Person expressly for use therein or (ii) in the
      case of the occurrence of an event of the type specified in Section 4.3(e),
      the use by the Indemnified Person of an outdated or defective Prospectus after
      the Company has provided to such Indemnified Person an updated Prospectus
      correcting the untrue statement or alleged untrue statement or omission or
      alleged omission giving rise to such loss, claim, damage or
      liability.

     

    
      
         

      

      
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    (b)
      Indemnification
      by the Investor and Underwriters.
      The
      Investor agrees, as
      a
      consequence of the inclusion of any of his Registrable Securities in a
      Registration Statement, and each underwriter, if any, which facilitates the
      disposition of Registrable Securities shall agree, severally
      and not jointly, as
      a
      consequence of facilitating such disposition of Registrable Securities to
      (i) indemnify and hold harmless the Company, its directors (including any
      person who, with his or her consent, is named in the Registration Statement
      as a
      director nominee of the Company), its officers who sign any Registration
      Statement and each Person, if any, who controls the Company within the meaning
      of either Section 15 of the Securities Act or Section 20 of the
      Exchange Act, against any losses, claims, damages or liabilities to which the
      Company or such other persons may become subject, under the Securities Act
      or
      otherwise, insofar as such losses, claims, damages or liabilities (or actions
      in
      respect thereof) arise out of or are based upon an untrue statement or alleged
      untrue statement of a material fact contained in such Registration Statement
      or
      Prospectus or arise out of or are based upon the omission or alleged omission
      to
      state therein a material fact required to be stated therein or necessary to
      make
      the statements therein (in light of the circumstances under which they were
      made, in the case of the Prospectus), not misleading, in each case to the
      extent, but only to the extent, that such untrue statement or alleged untrue
      statement or omission or alleged omission was made in reliance upon and in
      conformity with written information furnished to the Company by the Investor
      or
      underwriter expressly for use therein,
      and
      (ii) reimburse the Company for any legal or other expenses incurred by the
      Company in connection with investigating or defending any such action or claim
      as such expenses are incurred;
      provided,
      however,
      that the
      Investor shall not be liable under this Section 4.5(b) for any amount in
      excess of the net proceeds paid to the Investor in respect of Registrable
      Securities sold by him.

     

    (c)
      Notice
      of Claims, etc. 
      Promptly
      after receipt by a Person seeking indemnification pursuant to this
      Section 4.5 (an “Indemnified
      Party”)
      of
      written notice of any investigation, claim, proceeding or other action in
      respect of which indemnification is being sought (each, a “Claim”),
      the
      Indemnified Party promptly shall notify the Person against whom indemnification
      pursuant to this Section 4.5 is being sought (the“Indemnifying
      Party”)
      of the
      commencement thereof; but the omission to so notify the Indemnifying Party
      shall
      not relieve it from any liability that it otherwise may have to the Indemnified
      Party, except to the extent that the Indemnifying Party is materially prejudiced
      and forfeits substantive rights and defenses by reason of such failure. In
      connection with any Claim as to which both the Indemnifying Party and the
      Indemnified Party are parties, the Indemnifying Party shall be entitled to
      assume the defense thereof. Notwithstanding the assumption of the defense of
      any
      Claim by the Indemnifying Party, the Indemnified Party shall have the right
      to
      employ separate legal counsel and to participate in the defense of such Claim,
      and the Indemnifying Party shall bear the reasonable fees, out-of-pocket costs
      and expenses of such separate legal counsel to the Indemnified Party if (and
      only if): (i) the Indemnifying Party shall have agreed to pay such fees,
      costs and expenses, (ii) the Indemnified Party shall
      reasonably have concluded that representation of the Indemnified Party by the
      Indemnifying Party by the same legal counsel would not be appropriate due to
      actual or, as reasonably determined by legal counsel to the Indemnified Party,
      potentially differing interests between such parties in the conduct of the
      defense of such Claim, or if there may be legal defenses available to the
      Indemnified Party that are in addition to or disparate from those available
      to
      the Indemnifying Party, or (iii) the Indemnifying Party shall have failed
      to employ legal counsel reasonably satisfactory to the Indemnified Party within
      a reasonable period of time after notice of the commencement of such Claim.
      If
      the Indemnified Party employs separate legal counsel in circumstances other
      than
      as described in the preceding sentence, the fees, costs and expenses of such
      legal counsel shall be borne exclusively by the Indemnified Party. Except as
      provided above, the Indemnifying Party shall not, in connection with any Claim
      in the same jurisdiction, be liable for the fees and expenses of more than
      one
      firm of counsel for the Indemnified Party (together with appropriate local
      counsel). The Indemnified Party shall not, without the prior written consent
      of
      the Indemnifying Party (which consent shall not unreasonably be withheld),
      settle or compromise any Claim or consent to the entry of any judgment that
      does
      not include an unconditional release of the Indemnifying Party from all
      liabilities with respect to such Claim or judgment
      or
      contain any admission of wrongdoing.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    (d)
      Contribution.
      If the
      indemnification provided for in this Section 4.5 is unavailable to or
      insufficient to hold harmless an Indemnified Party in respect of any losses,
      claims, damages or liabilities (or actions in respect thereof) referred to
      therein, then each Indemnifying Party shall contribute to the amount paid or
      payable by such Indemnified Party as a result of such losses, claims, damages
      or
      liabilities (or actions in respect thereof) in such proportion as is appropriate
      to reflect the relative fault of the Indemnifying Party and the Indemnified
      Party in connection with the statements or omissions or
      alleged statements or omissions which
      resulted in such losses, claims, damages or liabilities (or actions in respect
      thereof), as well as any other relevant equitable considerations. The relative
      fault of such Indemnifying Party and Indemnified Party shall be determined
      by
      reference to, among other things, whether the untrue or alleged untrue statement
      of a material fact or omission or alleged omission to state a material fact
      relates to information supplied by such Indemnifying Party or by such
      Indemnified Party, and the parties’ relative intent, knowledge, access to
      information and opportunity to correct or prevent such statement or omission.
      The parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 4.5(d) were determined by pro rata allocation
      (even if the Investors or any underwriters were treated as one entity for such
      purpose) or by any other method of allocation which does not take account of
      the
      equitable considerations referred to in this Section 4.5(d). The amount
      paid or payable by an Indemnified Party as a result of the losses, claims,
      damages or liabilities (or actions in respect thereof) referred to above shall
      be deemed to include any legal or other fees or expenses reasonably incurred
      by
      such Indemnified Party in connection with investigating or defending any such
      action or claim. No person guilty of fraudulent misrepresentation (within the
      meaning of Section 11(f) of the Securities Act) shall be entitled to
      contribution from any person who was not guilty of such fraudulent
      misrepresentation. 

     

    (e)
      Limitation
      on Investor’s and Underwriters’ Obligations.
      Notwithstanding any other provision of this Section 4.5, in no event shall
      (i) the Investor have
      any
      liability under
      this Section 4.5 for any amounts in excess of the dollar amount of the
      proceeds actually
      received
      by the Investor from the sale of Registrable Securities (after deducting any
      fees, discounts and commissions applicable thereto) pursuant to any Registration
      Statement under which such Registrable Securities are
      registered under the Securities Act and (ii) any underwriter be required to
      undertake liability to any Person hereunder for any amounts in excess of the
      aggregate discount, commission or other compensation payable to such underwriter
      with respect to the Registrable Securities underwritten by it and distributed
      pursuant to the Registration Statement.

     

    (f)
      Other
      Liabilities.
      The
      obligations of the Company under this Section 4.5 shall be in addition to
      any liability which the Company may otherwise have to any Indemnified Person
      and
      the obligations of any Indemnified Person under this Section 4.5 shall be
      in addition to any liability which such Indemnified Person may otherwise have
      to
      the Company. The remedies provided in this Section 4.5 are not exclusive and
      shall not limit any rights or remedies which may otherwise be available to
      an
      indemnified party at law or in equity.

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    Section
      4.6. Rule
      144.
      With a
      view to making available to the Investors the benefits of Rule 144, the
      Company agrees to use its best efforts to file with the Commission in a timely
      manner all reports and other documents required to be filed by the Company
      pursuant to Section 13 or 15(d) under the Exchange Act; and, if at any time
      it is not required to file such reports but in the past had been required to
      or
      did file such reports, it will, upon the request of any Investor, make available
      other information as required by, and so long as necessary to permit sales
      of,
      its Registrable Securities pursuant to Rule 144.

     

    Section 4.7.
      Common
      Stock Issued Upon Stock Split, etc.
      The
      provisions of this Article 4 shall apply to any shares of Common Stock or
      any other securities issued as a dividend or distribution in respect of the
      Conversion Shares or the Warrant Shares.

    

    ARTICLE
      5

    

    Other
      Agreements of the Parties

    

    Section
      5.1. Certificates;
      Legends.

    

    (a)
       The
      Securities may only be transferred if in compliance with state and federal
      securities laws. In connection with any transfer of the Securities other than
      pursuant to an effective registration statement, to the Company, to an Affiliate
      of the Investor or in connection with a pledge as contemplated in Section
      5.1(b), the Company may require the transferor thereof
      to
      provide to the Company an opinion of counsel selected by the transferor (which
      may be such transferor’s in-house counsel), the form and substance of which
      opinion shall be reasonably satisfactory to the Company, to the effect that
      such
      transfer does not require registration of such transferred Securities under
      the
      Securities Act.

    

    (b)
       The
      Convertible Note and the Warrant to be delivered at the Closing and certificates
      evidencing the Conversion Shares and the Warrant Shares to be delivered upon
      conversion of the Convertible Note or exercise of the Warrants, as the case
      may
      be, will contain appropriate legends referring to restrictions on transfer
      relating to the registration requirements of the Securities Act and applicable
      state securities laws.

    

    (c) 
      Certificates evidencing the Registrable Securities shall not contain any legend
      (including the legend referred to in Section 5.1(b)), (i) while a Registration
      Statement covering the resale of such Security is effective under the Securities
      Act, or (ii) following any sale of such Registrable Securities pursuant to
      Rule
      144, or (iii) if such Registrable Securities are eligible for sale under Rule
      144(k), or (iv) if such legend is not required under applicable requirements
      of
      the Securities Act (including judicial interpretations and pronouncements issued
      by the Staff of the Commission) and such lack of requirement is confirmed by
      a
      legal opinion satisfactory to the Company.  If all or any portion of a
      Warrant is exercised at a time when there is an effective Registration Statement
      to cover the resale of the Warrant Shares, or if such Warrant Shares may be
      sold
      under paragraph (k) of Rule 144 or if such legend is not otherwise required
      under applicable requirements of the Securities Act (including judicial
      interpretations thereof) then such Warrant Shares shall be issued free of all
      legends.  The Company agrees that following the Effective Date or at such
      time as such legend is no longer required under this Section 5.1(c), it will,
      no
      later than five (5) Trading Days following the delivery by the Investor to
      the
      Company or the Company’s transfer agent of a certificate representing
      Registrable Securities, as the case may be, issued with a restrictive legend
      (such date, the “Legend
      Removal Date”),
      deliver or cause to be delivered to such Investor a certificate representing
      such Securities that is free from all restrictive and other legends.  The
      Company may not make any notation on its records or give instructions to any
      transfer agent of the Company that enlarge the restrictions on transfer set
      forth in this Section.

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    (d) The
      Investor agrees that the removal of the restrictive legend from certificates
      representing Securities as set forth in this Section 5.1 is predicated upon
      the
      Company’s reliance that the Investor will sell any Securities pursuant to either
      the registration requirements of the Securities Act, including any applicable
      prospectus delivery requirements, or an exemption therefrom.

    

    Section
      5.2. Integration.
      The
      Company has not and shall not, and shall use its best efforts to ensure that
      no
      Affiliate of the Company shall, sell, offer for sale or solicit offers to buy
      or
      otherwise negotiate in respect of any security (as defined in Section 2 of
      the
      Securities Act) that would be integrated with the offer or sale of the
      Securities in a manner that would require the registration under the Securities
      Act of the sale of the Securities to the Investors, or that would be integrated
      with the offer or sale of the Securities for purposes of the rules and
      regulations of any Trading Market in a manner that would require stockholder
      approval of the sale of the securities to the Investors.

    

    Section
      5.3. Use
      of Proceeds.
      Except
      as otherwise disclosed in the Disclosure Materials, the Company shall use the
      net proceeds from the sale of the Securities hereunder (i) for working capital
      purposes, (ii) to purchase fixed assets used in the development or production
      of
      the Company’s products or (iii) for investment in new technologies related to
      the Company’s business (including without limitation through the acquisition of
      other companies). 

    

    ARTICLE
      6

    

    Conditions
      Precedent to Closing

    

    Section
      6.1. Conditions
      Precedent to the Obligations of the Investor to Purchase
      Securities.
      The
      obligation of the Investor to acquire Securities at the Closing is subject
      to
      the satisfaction or waiver by the Investor, at or before the Closing, of each
      of
      the following conditions:

    

    
      	 	
              (a)

            	
              Representations
                and Warranties.
                The Company shall have delivered a certificate of the Company’s Chief
                Executive Officer certifying that the representations and warranties
                of
                the Company contained herein shall be true and correct in all material
                respects as of the date when made and as of the Closing as though
                made on
                and as of such date;

            

    

    

    
      	 	
              (b)

            	
              Performance.
                The Company shall have performed, satisfied and complied in all material
                respects with all covenants, agreements and conditions required by
                the
                Transaction Documents to be performed, satisfied or complied with
                by it at
                or prior to the Closing;

            

    

    

    
      	 	
              (c)

            	
              No
                Injunction.
                No
                statute, rule, regulation, executive order, decree, ruling or injunction
                shall have been enacted, entered, promulgated or endorsed by any
                court or
                governmental authority of competent jurisdiction that prohibits the
                consummation of any of the transactions contemplated by the Transaction
                Documents;

            

    

    

    
      	 	
              (d)

            	
              No
                Adverse Changes.
                Since the date of execution of this Agreement, no event or series
                of
                events shall have occurred that reasonably could have or result in
                a
                Material Adverse Effect; and

            

    

    

    
      	 	
              (e)

            	
              No
                Suspensions of Trading in Common Stock.
                From the date hereof to the Closing Date, trading in the Common Stock
                shall not have been suspended by the Commission (except for any suspension
                of trading of limited duration agreed to by the Company, which suspension
                shall be terminated prior to the Closing), and, at any time prior
                to the
                Closing Date, trading in securities generally as reported by Bloomberg
                Financial Markets shall not have been suspended or limited, or minimum
                prices shall not have been established on securities whose trades
                are
                reported by such service, or on any Trading Market, nor shall a banking
                moratorium have been declared either by the United States or New
                York
                State authorities nor shall there have occurred any material outbreak
                or
                escalation of hostilities or other national or international calamity
                of
                such magnitude in its effect on, or any material adverse change in,
                any
                financial market which, in each case, in the reasonable judgment
                of each
                Investor, makes it impracticable or inadvisable to purchase the Shares
                and
                the Warrants at the Closing.

            

    

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    Section
      6.2. Conditions
      Precedent to the Obligations of the Company to Sell
      Securities.
      The
      obligation of the Company to sell Securities at the Closing is subject to the
      satisfaction or waiver by the Company, at or before the Closing, of each of
      the
      following conditions:

    

    
      	 	
              (a)

            	
              Representations
                and Warranties.
                The representations and warranties of the Investor contained herein
                shall
                be true and correct in all material respects as of the date when
                made and
                as of the Closing Date as though made on and as of such
                date;

            

    

    

    
      	 	
              (b)

            	
              Performance.
                The Investor shall have performed, satisfied and complied in all
                material
                respects with all covenants, agreements and conditions required by
                the
                Transaction Documents to be performed, satisfied or complied with
                by such
                Investor at or prior to the Closing;

            

    

    

    
      	 	
              (c)

            	
              No
                Injunction.
                No
                statute, rule, regulation, executive order, decree, ruling or injunction
                shall have been enacted, entered, promulgated or endorsed by any
                court or
                governmental authority of competent jurisdiction that prohibits the
                consummation of any of the transactions contemplated by the Transaction
                Documents; and

            

    

    

    
      	 	
              (d)

            	
              Payment
                of Purchase Price.
                The Investor shall have delivered the Purchase Price to the
                Company.

            

    

    

    ARTICLE
      7

    

    Miscellaneous

    

    Section
      7.1. Fees
      and Expenses.
      Each
      party shall pay the fees and expenses of its advisers, counsel, accountants
      and
      other experts, if any, and all other expenses incurred by such party incident
      to
      the negotiation, preparation, execution, delivery and performance of the
      Transaction Documents. The Company shall pay all stamp and other taxes and
      duties levied in connection with the sale of the Shares.

    

    Section
      7.2. Entire
      Agreement.
      The
      Transaction Documents, together with the Exhibits thereto, contain the entire
      understanding of the parties with respect to the subject matter hereof and
      supersede all prior agreements, understandings, discussions and representations,
      oral or written, with respect to such matters, which the parties acknowledge
      have been merged into such documents and exhibits.

    

    Section
      7.3. Notices.
      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) at the facsimile number specified
      in
      this Section prior to 6:30 p.m. (Little Rock time) on a Trading Day, (b) the
      next Trading 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 Trading Day or later than 6:30 p.m. (Little Rock time)
      on
      any Trading Day, (c) the Trading 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 as follows:

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    
      	If
              to the Company:	
              ThermoEnergy
                Corporation

            

    

    Attn.:
      Andrew T. Melton

    124
      West
      Capitol Avenue, Suite 880

    Little
      Rock, AR 72201

    

    Telephone:
      (501) 376-6477

    Facsimile:
      (501) 376-5249

    

    
      	With
              a copy to:	
              Nixon
                Peabody, LLP

            

    

    Attn.:
      William E. Kelly

    100
      Summer Street

    Boston,
      MA 02110-2131

    

    Telephone:
      (617) 345-1195

    Facsimile:
      (866) 743-4899

    

    If
      to the
      Investor: 

    Mr.
      Robert S. Trump 

    

    Telephone:
      

    Facsimile:
      ; 

    

    or
      such
      other address as may be designated in writing hereafter, in the same manner,
      by
      such Person.

    

    Section
      7.4. Amendments;
      Waivers; No Additional Consideration.
      No
      provision of this Agreement may be waived or amended except in a written
      instrument signed by the Company and by the Investor. No waiver of any default
      with respect to any provision, condition or requirement of this Agreement shall
      be deemed to be a continuing waiver in the future or a waiver of any subsequent
      default or a waiver of any other provision, condition or requirement hereof,
      nor
      shall any delay or omission of either party to exercise any right hereunder
      in
      any manner impair the exercise of any such right. No consideration shall be
      offered or paid to any Investor to amend or consent to a waiver or modification
      of any provision of any Transaction Document unless the same consideration
      is
      also offered to all Investors who then hold Shares.

    

    Section
      7.5  Construction.
      The
      headings herein are for convenience only, do not constitute a part of this
      Agreement and shall not be deemed to limit or affect any of the provisions
      hereof. The language used in this Agreement will be deemed to be the language
      chosen by the parties to express their mutual intent, and no rules of strict
      construction will be applied against any party. This Agreement shall be
      construed as if drafted jointly by the parties, and no presumption or burden
      of
      proof shall arise favoring or disfavoring any party by virtue of the authorship
      of any provisions of this Agreement or any of the Transaction
      Documents.

    

    Section
      7.6. Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and permitted assigns. The Company may not assign this
      Agreement or any rights or obligations hereunder without the prior written
      consent of the Investor. The Investor may assign any or all of his rights under
      this Agreement to any Person to whom the Investor assigns or transfers any
      Securities, provided such transferee agrees in writing to be bound, with respect
      to the transferred Securities, by the provisions hereof that apply to the
“Investor.”

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    Section
      7.7. No
      Third-Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      successors and permitted assigns and is not for the benefit of, nor may any
      provision hereof be enforced by, any other Person, except as otherwise set
      forth
      in Article 4. or Section 5.7 (with respect to rights to indemnification and
      contribution).

    

    Section
      7.8. Governing
      Law; Jurisdiction.
      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 New York, 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, Little Rock, Arkansas (the
      “Arkansas Courts”). Each party hereto hereby irrevocably submits to the
      exclusive jurisdiction of the Arkansas 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 Arkansas 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.

     

    Section
      7.09. Survival.
      The
      representations, warranties, agreements and covenants contained herein shall
      survive the Closing and the delivery of the Securities.

    

    Section
      7.10. Execution.
      This
      Agreement may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission, such signature shall create a valid and binding obligation of
      the
      party executing (or on whose behalf such signature is executed) with the same
      force and effect as if such facsimile signature page were an original
      thereof.

    

    Section
      7.11. Severability.
      If any
      provision of this Agreement is held to be invalid or unenforceable in any
      respect, the validity and enforceability of the remaining terms and provisions
      of this Agreement shall not in any way be affected or impaired thereby and
      the
      parties will attempt to agree upon a valid and enforceable provision that is
      a
      reasonable substitute therefor, and upon so agreeing, shall incorporate such
      substitute provision in this Agreement.

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    Section
      7.12. Replacement
      of Securities.
      If any
      certificate or instrument evidencing any Securities is mutilated, lost, stolen
      or destroyed, the Company shall issue or cause to be issued in exchange and
      substitution for and upon cancellation thereof, or in lieu of and substitution
      therefor, a new certificate or instrument, but only upon receipt of evidence
      reasonably satisfactory to the Company of such loss, theft or destruction and
      customary and reasonable indemnity, if requested. The applicants for a new
      certificate or instrument under such circumstances shall also pay any reasonable
      third-party costs associated with the issuance of such replacement Securities.
      If a replacement certificate or instrument evidencing any Securities is
      requested due to a mutilation thereof, the Company may require delivery of
      such
      mutilated certificate or instrument as a condition precedent to any issuance
      of
      a replacement.

    

    Section
      7.13. Remedies.
      In
      addition to being entitled to exercise all rights provided herein or granted
      by
      law, including recovery of damages, each of the Investors and the Company will
      be entitled to specific performance under the Transaction Documents. The parties
      agree that monetary damages may not be adequate compensation for any loss
      incurred by reason of any breach of obligations described in the foregoing
      sentence and hereby agrees to waive in any action for specific performance
      of
      any such obligation the defense that a remedy at law would be
      adequate.

    

    Section
      7.14. Payment
      Set Aside.
      To the
      extent that the Company makes a payment or payments to the Investor pursuant
      to
      any Transaction Document or the Investor enforces or exercises its rights
      thereunder, and such payment or payments or the proceeds of such enforcement
      or
      exercise or any part thereof are subsequently invalidated, declared to be
      fraudulent or preferential, set aside, recovered from, disgorged by or are
      required to be refunded, repaid or otherwise restored to the Company, a trustee,
      receiver or any other person under any law (including, without limitation,
      any
      bankruptcy law, state or federal law, common law or equitable cause of action),
      then to the extent of any such restoration the obligation or part thereof
      originally intended to be satisfied shall be revived and continued in full
      force
      and effect as if such payment had not been made or such enforcement or setoff
      had not occurred.

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
      Agreement to be duly executed by their respective authorized signatories as
      of
      the date first indicated above.

    

    
      	 	 	
              ThermoEnergy
                Corporation

            
	 	 	 
	
                 /s/
                Robert S. Trump       

            	 	
              By:

            	
                   /s/
                Andrew T.
                Melton        

            
	
              Robert
                S. Trump

            	 	 	
              Andrew
                T. Melton

              Executive
                Vice President and CFO

            

    

    

    
      
         

      

      
        24exv4w5

Exhibit 4.5

			
	 	 	 
	
	 	

	 	 	 
	H T Stitzer

	 	Letter of Variation

30 March 2007

Dear Todd,

Service Agreement

I am writing to you to confirm our agreement with you that your service agreement dated as of
1st July 2004 should be varied in the manner set out in this letter.

	1.	 	Clause 2(B) shall be deleted in its entirety and replaced as follows:-

“This Agreement and the Executive’s employment shall, in any event, terminate on 31 March,
2017.”
	 
	2.	 	An additional sentence shall be added to Clause 5(A) Pensions as follows:-

“Notwithstanding the provisions of Clause 2(B) above, the Executive’s normal retirement date
for the purposes of his membership of the Company’s pension plans shall be age 60”.
	 
	3.	 	In addition Clause 18(B) shall be deleted in its entirety.

I should be grateful if you would sign and return this letter of variation by way of acceptance of
its terms.

Yours sincerely,

_____________________________________________

Sir John Sunderland

For and on behalf of

Cadbury Schweppes Plc and CBI Holdings Inc

I hereby accept the above variation to the terms and conditions of my service agreement

Signed:         
           
           
         
           
         
    
         
         

Dated:

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