FOR VALUE RECEIVED, ThermoEnergy Corporation, a Delaware corporation (the “Borrower”), hereby promise to pay to the order of _________________ (the “Holder”), the sum of _________________ Dollars ($_________________) on the earlier to occur of (i) the closing of the Second Tranche of the Series B Convertible Preferred Stock financing contemplated by that certain Term Sheet dated September 16, 2009 and executed by the Holder and certain other investors (the “Financing”) or (ii) December 31, 2010 (in either case, the “Maturity Date”).  Upon the closing of the Second Tranche of the Financing, the entire outstanding principal amount of this Note, plus any accrued and unpaid interest thereon, shall convert automatically into the securities to be issued in the Financing (the “Financing Securities”) at the price per share at which such Financing Securities will be issued in the Financing.

Interest on the outstanding principal balance shall accrue at the rate of eight percent (8.0%) per annum, and shall be due and payable on the Maturity Date.  Interest shall be computed on the basis of a 365-day year, using the number of days actually elapsed.

This Note is one of six substantially identical promissory notes in the aggregate principal amount of $1,680,000 issued by the Borrower on or about the date hereof and identified on Exhibit A hereto under the heading “New Notes” (which promissory notes, together with those certain amended and restated promissory notes in the original aggregate principal amount of $4,000,000 issued by the Borrower on or about the date hereof and identified on Exhibit A hereto under the heading “Restated Notes”, are referred to herein as the “Series Notes”).

The Holder shall have the right at any time and from time to time until the principal and interest on this Note shall have been paid in full, to convert the outstanding principal amount of this Note, and any accrued and unpaid interest thereon, into shares of the Common Stock, par value $0.001 per share, of the Borrower at a price of $0.24 per share.  If the Holder desires to exercise its right of conversion, the Holder shall give the Borrower a written notice, setting forth the amount of principal and interest which the Holder desires to convert.  Should the Holder elect to convert less than the entire amount of the principal balance and accrued and unpaid interest under this Note, the amount being converted shall be credited first against accrued and unpaid interest and the balance, if any, shall be credited against principal.  Except to the extent that the entire unpaid principal balance of this Note is being presented for conversion, the Holder shall not be required to present this Note in order to effect conversion, and the Holder shall maintain a ledger setting forth each conversion of principal and interest on this Note and such ledger shall, absent manifest error, be deemed to be binding and conclusive on the Borrower.

The Borrower and the holders of the Series Notes (including the Holder) have, contemporaneously herewith, entered into a Security Agreement (the “Security Agreement”) securing the obligations of the Borrower to the Hold