EXHIBIT
        10.5

    

    


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

    


    Number
      of
      Shares of Common Stock: __________

    Warrant
      No. W07-PPW____

    


    COMMON
      STOCK PURCHASE WARRANT

    


    To
      Purchase Common Stock of

    


    THERMOENERGY
      CORPORATION

    


    THIS
      IS
      TO CERTIFY THAT __________,
      or
      registered assigns, is entitled, at any time from the Closing Date (as
      hereinafter defined) to the Expiration Date (as hereinafter defined), to
      purchase from ThermoEnergy Corporation, a Delaware corporation (the “Company”),
_______
      shares
      of
      Common Stock (as hereinafter defined and subject to adjustment as provided
      herein), in whole or in part, including fractional parts, at a purchase price
      per share as set forth in Section 2.5, subject to adjustment as provided herein
      (the “Warrant Price”), all on the terms and conditions and pursuant to the
      provisions hereinafter set forth. 

    


    1. DEFINITIONS
      

    


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


    


    “Acceleration
      Notice”
shall
      have the meaning set forth in Section 2.4. 

    


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

    


    “Closing
      Date”
      shall
      mean _______, 2007. 

     

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


    


    “Common
      Stock”
shall
      mean (except where the context otherwise indicates) the Common Stock, par value
      $.001 per share, of the Company as constituted on the Closing Date, and any
      capital stock into which such Common Stock may thereafter be changed, and shall
      also include (i) capital stock of the Company of any other class (regardless
      of
      how denominated) issued to the holders of shares of Common Stock upon any
      reclassification thereof which is also not preferred as to dividends or assets
      over any other class of stock of the Company and which is not subject to
      redemption and (ii) shares of common stock of any successor or acquiring
      corporation received by or distributed to the holders of Common Stock of the
      Company in the circumstances contemplated by Section 4.4. 

    


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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     “Early
      Expiration Date”
      shall
      have the meaning set forth in Section 2.4. 

    


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

    


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

    


     “Expiration
      Date”
      shall
      mean _________ 2010 or such earlier date as may be determined pursuant to
      Section 2.4. 

    


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

    


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

     

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


    


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


    


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

     

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

    


    “Restricted
      Common Stock”
      shall
      mean shares of Common Stock which are, or which upon their issuance on their
      exercise of this Warrant would be, evidenced by a certificate bearing the
      restrictive legend set forth in Section 9.1(a). 

     

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

    


     “Securities
      Purchase Agreement”
      shall
      mean that certain Securities Purchase Agreement dated as of the Closing Date
      between the Company and the several Investors named therein (including the
      initial Holder of this Warrant). 

     

    
      
        
        

      

      
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    “Trading
      Day”
      means
      (i) a day on which the Common Stock is traded on a Trading Market (other than
      the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading
      Market (other than the OTC Bulletin Board), 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, the NASDAQ Small Cap Market or
      OTC
      Bulletin Board on which the Common Stock is listed or quoted for trading on
      the
      date in question. 

    


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


    Securities
      Act. 

    


     “Transfer
      Notice”
      shall
      have the meaning set forth in Section 9.2. 

    


    “Warrant
      Stock”
      shall
      mean the shares of Common Stock purchased by the holders of the Warrants upon
      the exercise thereof. 

    


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

    


    2. EXERCISE
      OF WARRANT 

    


    2.1 Manner
      of Exercise 

    


    From
      and
      after the Closing Date and until 5:00 p.m., New York time, on the Expiration
      Date, Holder may exercise this Warrant, on any Business Day, for all or any
      part
      of the number of shares of Common Stock purchasable hereunder. 

    


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

     

    
      
        
        

      

      
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    2.2 Payment
      of Taxes and Charges 

    


    All
      shares of Common Stock issuable upon the exercise of this Warrant pursuant
      to
      the terms hereof shall be validly issued, fully paid and nonassessable, freely
      tradable and without any preemptive rights. The Company shall pay all expenses
      in connection with, and all taxes and other governmental charges that may be
      imposed with respect to, the issuance or delivery thereof, unless such tax
      or
      charge is imposed by law upon Holder, in which case such taxes or charges shall
      be paid by Holder. The Company shall not be required, however, to pay any tax
      or
      other charge imposed in connection with any transfer involved in the issuance
      of
      any certificate for shares of Common Stock issuable upon exercise of this
      Warrant in any name other than that of Holder, and in such case the Company
      shall not be required to issue or deliver any stock certificate until such
      tax
      or other charge has been paid or it has been established to the satisfaction
      of
      the Company that no such tax or other charge is due. 

    


    2.3 Fractional
      Shares 

    


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

    


    2.4 Early
      Expiration 

    


    If
      at any
      time the Market Price for the Common Stock equals or exceeds 125% of the Warrant
      Price for a period of thirty (30) consecutive Trading Days, then the Company
      may, by notice to the holders of the Warrants (the “Acceleration
      Notice”),
      accelerate the Expiration Date of all of the Warrants to such date as shall
      be
      determined by the Company in its sole discretion and set forth in the
      Acceleration Notice (the “Early
      Expiration Date”),
      which
      Early Expiration Date shall be not less than sixty (60) days, nor more than
      ninety (90) days, after the date of the Acceleration Notice. From and after
      the
      date of the Acceleration Notice, the term “Expiration
      Date”,
      wherever used in this Warrant shall mean and refer to the Early Expiration
      Date.

    


    2.5 Exercise
      Price

    


    The
      Exercise Price shall be the daily volume weighted average price (“VWAP”) per
      share of the Common Stock for the three hundred and fifty six (356) day period
      immediately preceding (but not including) the date on which this Warrant is
      exercised, (i) as reported on the principal Trading Market on which the Common
      Stock is listed or traded, or (ii) if the Common Stock is not listed on a
      Trading Market, the closing bid price for a share of Common Stock on each such
      day in the over-the-counter market, as reported by the OTC Bulletin Board,
      or
      (iii) if the Common Stock is not then
      listed or quoted on the OTC Bulletin Board,
      the
      closing bid price for a share of Common Stock on each such day in the
      over-the-counter market as reported by the National Quotation Bureau
      Incorporated (or any similar organization or agency succeeding to its functions
      of reporting prices), provided,
      however, that
      in
      no event shall the Exercise Price be (i) less than $0.75 per share (the “Minimum
      Exercise Price”) or (ii) greater than $1.50 per share(the “Maximum Exercise
      Price”).

    


    
      
        
        

      

      
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     3. TRANSFER,
      DIVISION AND COMBINATION 

    


    3.1 Transfer
      

    


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

    


    3.2 Division
      and Combination 

    


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

     

    3.3 Expenses
      

    


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

    


     3.4 Maintenance
      of Books 

    


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

    


     4. ADJUSTMENTS
      

    


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

    


    
      
        
        

      

      
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    4.1
      Stock Dividends, Subdivisions and Combinations 

    


      If
      at any
      time the Company shall: 

    


      (a) take
      a
      record of the holders of its Common Stock for the purpose of entitling them
      to
      receive a dividend payable in, or other distribution of, Additional Shares
      of


    Common
      Stock;

     

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

     

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


    


    4.2
      Certain Other Distributions 

    


      If
      at any
      time the Company shall take a record of the holders of its Common Stock for
      the
      purpose of entitling them to receive any dividend or other distribution of:
      

    


      (a) cash;
      

     

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

    


      (c) any
      warrants or other rights to subscribe for or purchase any evidences of its
      indebtedness, any shares of its stock or any other securities or property of
      any
      nature whatsoever (other than cash, Convertible Securities or Additional Shares
      of Common Stock); then, upon exercise of this Warrant, Holder shall be entitled
      to receive such dividend or distribution as if Holder had exercised the Warrant
      prior to the date of such dividend or distribution. A reclassification of the
      Common Stock (other than a change in par value, or from par value to no par
      value or from no par value to par value) into shares of Common Stock and shares
      of any other class of stock shall be deemed a distribution by the Company to
      the
      holders of its Common Stock of such shares of such other class of stock within
      the meaning of this Section 4.2 and, if the outstanding shares of Common Stock
      shall be changed into a larger or smaller number of shares of Common Stock
      as a
      part of such reclassification, such change shall be deemed a subdivision or
      combination, as the case may be, of the outstanding shares of Common Stock
      within the meaning of Section 4.1.  

    


    4.3 Other
      Provisions Applicable to Adjustments under this Section 

    


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

    


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

     

    
      
        
        

      

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

     

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


    


      (d) Challenge
      to Good Faith Determination.
      Whenever the Board of 

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

    


    4.4 Reorganization,
      Reclassification, Merger, Consolidation or Disposition
      of Assets 

    


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

     

    
      
        
        

      

      
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    4.5 Other
      Action Affecting Common Stock 

    


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

    


    4.6 Certain
      Limitations 

    


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

    


    5. NOTICES
      TO HOLDER

     

    5.1
      Notice of Adjustments 

    


      Whenever
      the number of shares of Common Stock for which this Warrant is exercisable,
      or
      whenever the price at which a share of such Common Stock may be purchased upon
      exercise of the Warrants, shall be adjusted pursuant to Section 4, the Company
      shall forthwith prepare a certificate to be executed by the chief financial
      officer of the Company setting forth, in reasonable detail, the event requiring
      the adjustment and the method by which such adjustment was calculated (including
      a description of the basis on which the Board of Directors
      of the Company determined the fair value of any evidences of indebtedness,
      shares of stock, other securities or property or warrants or other subscription
      or purchase rights referred to in Section 4.2), specifying the number of shares
      of Common Stock for which this Warrant is exercisable and (if such adjustment
      was made pursuant to Section 4.4 or 4.5) describing the number and kind of
      any
      other shares of stock or Other Property for which this Warrant is exercisable,
      and any change in the purchase price or prices thereof, after giving effect
      to
      such adjustment or change. The Company shall promptly cause a signed copy of
      such certificate to be delivered to the Holder in accordance with Section 14.2.
      The Company shall keep at its office or agency designated pursuant to Section
      12
      copies of all such certificates and cause the same to be available for
      inspection at said office during normal business hours by the Holder or any
      prospective purchaser of a Warrant designated by Holder.

     

    5.2
      Notice of Corporate Action 

    


    If
      at any
      time: 

    


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

     

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

     

    
      
        
        

      

      
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      (c) there
      shall be a voluntary or involuntary dissolution, liquidation or winding up
      of
      the Company; then, in any one or more of such cases, the Company shall give
      to
      Holder (i) at least 30 days’ prior written notice of the date on which a record
      date shall be selected for such dividend, distribution or right or for
      determining rights to vote in respect of any such reorganization,
      reclassification, merger, consolidation, sale, transfer, disposition,
      dissolution, liquidation or winding up, and (ii) in the case of any such
      reorganization, reclassification, merger, consolidation, sale, transfer,
      disposition, dissolution, liquidation or winding up, at least 30 days’ prior
      written notice of the date when the same shall take place. Such notice in
      accordance with the foregoing clause also shall specify (i) the date on which
      any such record is to be taken for the purpose of such dividend, distribution
      or
      right, the date on which the holders of Common Stock shall be entitled to any
      such dividend, distribution or right, and the amount and character thereof,
      and
      (ii) the date on which any such reorganization, reclassification, merger,
      consolidation, sale, transfer, disposition, dissolution, liquidation or winding
      up is to take place and the time, if any such time is to be fixed, as of which
      the holders of Common Stock shall be entitled to exchange their shares of Common
      Stock for securities or other property deliverable upon such reorganization,
      reclassification, merger, consolidation, sale, transfer, disposition,
      dissolution, liquidation or winding up. Each such written notice shall be
      sufficiently given if addressed to Holder at the last address of Holder
      appearing on the books of the Company and delivered in accordance with Section
      14.2. 

     

      6. NO
      IMPAIRMENT 

    


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

    


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

    


      7. RESERVATION
      AND AUTHORIZATION OF COMMON STOCK 

    


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

    


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

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

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

    


      8. TAKING
      OF RECORD; STOCK AND WARRANT TRANSFER BOOKS
      

    


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

    


      9. RESTRICTIONS
      ON TRANSFERABILITY 

    


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

    


      9.1 Restrictive
      Legend

     

      (a)
      Holder, by accepting this Warrant and any Warrant Stock agrees that this Warrant
      and the Warrant Stock issuable upon exercise hereof may not be assigned or
      otherwise transferred unless and until (i) the Company has received an opinion
      of counsel for Holder that such securities may be sold pursuant to an exemption
      from registration under the Securities Act or (ii) a registration statement
      relating to such securities has been filed by the Company and declared effective
      by the Commission. Each certificate for Warrant Stock issuable hereunder shall
      bear a legend as follows until such securities have been sold pursuant to an
      effective registration statement under the Securities Act: 

    


    “THESE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE,
      AND ARE BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THESE
      SECURITIES MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
      AN
      AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
      ACT OR SUCH OTHER LAWS.” 

    


      (b)
      Except as otherwise provided in this Section 9, the Warrant shall be stamped
      or
      otherwise imprinted with a legend in substantially the following form:


    


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

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

      9.2 Notice
      of Proposed Transfers 

    


      Prior
      to
      any Transfer or attempted Transfer of any Warrants or any shares of Restricted
      Common Stock, the Holder shall give ten days’ prior written notice (a “Transfer
      Notice”) to the Company of Holder’s intention to effect such Transfer,
      describing the manner and circumstances of the proposed Transfer, and obtain
      from counsel to Holder who shall be reasonably satisfactory to the Company,
      an
      opinion that the proposed Transfer of such Warrants or such Restricted Common
      Stock may be effected without registration under the Securities Act. After
      receipt of the Transfer Notice and opinion, the Company shall, within five
      days
      thereof, notify the Holder as to whether such opinion is reasonably satisfactory
      and, if so, such holder shall thereupon be entitled to Transfer such Warrants
      or
      such Restricted Common Stock, in accordance with the terms of the Transfer
      Notice. Each certificate, if any, evidencing such shares of Restricted Common
      Stock issued upon such Transfer shall bear the restrictive legend set forth
      in
      Section 9.1(a), and the Warrant issued upon such Transfer shall bear the
      restrictive legend set forth in Section 9.1(b), unless in the opinion of such
      counsel such legend is not required in order to ensure compliance with the
      Securities Act. Holder shall not be entitled to Transfer
      such Warrants or such Restricted Common Stock until receipt of notice from
      the
      Company under this Section 9.2 that such opinion is reasonably satisfactory.
      

    


      9.3 Termination
      of Restrictions 

    


      Notwithstanding
      the foregoing provisions of Section 9, the restrictions imposed by this Section
      upon the transferability of the Warrants, the Warrant Stock and the Restricted
      Common Stock (or Common Stock issuable upon the exercise of the Warrants) and
      the legend requirements of Section 9.1 shall terminate as to any particular
      Warrant or share of Warrant Stock or Restricted Common Stock (or Common Stock
      issuable upon the exercise of the Warrants) (i) when and so long as such
      security shall have been effectively registered under the Securities Act and
      disposed of pursuant thereto or (ii) when the Company shall have received an
      opinion of counsel reasonably satisfactory to it that such shares may be
      transferred without registration thereof under the Securities Act. Whenever
      the
      restrictions imposed by Section 9 shall terminate as to this Warrant, as
      hereinabove provided, the Holder hereof shall be entitled to receive from the
      Company upon written request of the Holder, at the expense of the Company,
      a new
      Warrant bearing the following legend in place of the restrictive legend set
      forth hereon: 

    


    “THE
      RESTRICTIONS ON TRANSFERABILITY OF THE WITHIN WARRANT CONTAINED IN
      SECTION 9 HEREOF TERMINATED ON __________, _____, AND ARE OF NO FURTHER
FORCE
      AND
      EFFECT.” 

    


    All
      Warrants issued upon registration of transfer, division or combination of,
      or in
      substitution for, any Warrant or Warrants entitled to bear such legend shall
      have a similar legend endorsed thereon. Whenever the restrictions imposed by
      this Section shall terminate as to any share of Restricted Common Stock, as
      hereinabove provided, the holder thereof shall be entitled to receive from
      the
      Company, at the Company’s expense, a new certificate representing such Common
      Stock not bearing the restrictive legend set forth in Section 9.1(a).


    


      10. SUPPLYING
      INFORMATION 

    


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

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

      11. LOSS
      OR MUTILATION 

    


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

    


      12. OFFICE
      OF THE COMPANY 

    


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

    


      13. LIMITATION
      OF LIABILITY 

    


      No
      provision hereof, in the absence of affirmative action by Holder to purchase
      shares of Common Stock, and no enumeration herein of the rights or privileges
      of
      Holder hereof, shall give rise to any liability of Holder for the purchase
      price
      of any Common Stock or as a stockholder of the Company, whether such liability
      is asserted by the Company or by creditors of the Company. 

     

      14. MISCELLANEOUS
      

     

      14.1
      Nonwaiver and Expenses 

    


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

    


      14.2
      Notice Generally 

    


      Except
      as
      may be otherwise provided herein, any and all notices or other communications
      or
      deliveries required or permitted to be provided hereunder shall be in writing
      and shall be deemed given and effective on the earliest of (a) the date of
      transmission, if such notice or communication is delivered via facsimile
      (provided the sender receives a machine-generated confirmation of successful
      transmission) at the facsimile number specified in this Section 14.2 prior
      to
      6:30 p.m. (New York City 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. (New York City 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: 

     

    
      
        	If to the Company:	ThermoEnergy Corporation	 	 
	 	Attn.: Chairman 	 	 
	 	
                124
                  West Capitol Avenue

                Suite
                  880

                Little
                  Rock, AR 72201

              	 	 
	 	 	 	 
	 	
                Telephone:
                  (501) 376-6477 

                Facsimile:
                  (501) 375-5249 

              	 	 


      

       

      
        
          
            
            

          

          
            -12-

            
              

            

          

          
            
            

          

        

         

      

      
        	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 Holder:  	Robert S. Trump	 	 


      

    

     

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

    


       14.3
      Indemnification 

    


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

    


     
       14.4
      Remedies 

    


      The
      Holder in addition to being entitled to exercise all rights granted by law,
      including recovery of damages, will be entitled to specific performance of
      its
      rights under Section 9 of this Warrant. The Company agrees that monetary damages
      would not be adequate compensation for any loss incurred by reason of a breach
      by it of the provisions of Section 9 of this Warrant and hereby agrees to waive
      the defense in any action for specific performance that a remedy
      at
      law would be adequate. 

    


     
       14.5
      Successors and Assigns 

    


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


     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

      

    14.6
      Amendment

    


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

    


       14.7
      Severability 

    


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

    


    14.8
      Headings 

    


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

    


      14.9
      Governing Law 

    


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

    


      IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant to be duly executed and its corporate seal
      to be
      impressed hereon and attested by its Secretary or an Assistant Secretary.


    


    Dated:
      _______, 2007 

     

    
      	 	 	 
	 	THERMOENERGY
              CORPORATION 
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Dennis
              C. Cossey,
	 	Chairman
              & CEO


    

     

    
      Attest:

    

    
      	 	 	 	 
	 	 	 	 
	
              
Andrew
              T. Melton	 	 	
            
	Secretary and Chief Financial
              Officer	 	 	 


    

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    


    EXHIBIT
      A

    


    SUBSCRIPTION
      FORM

    


    [To
      be
      executed only upon exercise of Warrant]

    


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


    


    ______________________________________________________________________________
      

    


    whose
      address is 

     

    ______________________________________________________________________________

    


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

     

    
      	 	 	 	 
	 	 	 	 
	
            	 	 	
              
(Name
              of Registered Owner)
	
            	 	 	
            
	 	 	 	 
	 	 	 	
              
(Name
              of Registered Owner) 
	 	 	 	 
	 	 	 	 
	 	 	 	
              
                

              

              (Street Address)

            
	 	 	 	 
	 	 	 	 
	 	 	 	
              
                

              

              (City) (State) (Zip Code)

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


    

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    


    EXHIBIT
      B

    


    ASSIGNMENT
      FORM


    


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

    

      
        	 	 	
                No.
                  of Shares of

              	
                 

              
	
                Name
                  and Address of Assignee

              	
                 

              	
                Common
                  Stock

              	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 


      

    

     

    and
      does
      hereby irrevocably constitute and appoint 

    


    _______________________________________________________________________
      

    


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

    


    Dated:
      

    
      
        	 	 	 	 
	 	 	 	 
	
              	 	 	
                
Print
                Name)
	
              	 	 	
              
	 	 	 	 
	 	 	 	
                
(Signature)
	 	 	 	 
	 	 	 	 
	 	 	 	
                
                  

                

                (Print Name of Witness)

              
	 	 	 	 
	 	 	 	 
	 	 	 	
                
                  

                

                (Witness’s Signature)

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


      

       

      
        
          
          

        

        
          B-1