Summary of ENVIRONMENTAL POWER CORP

ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

Amendment and Supplement to Indenture and First Supplemental Trust Indenture in Connection with Xergi Cooperation Agreement

As previously announced, on April 23, 2009, Environmental Power Corporation (the "Company") entered into a Cooperation Agreement with its subsidiary, Microgy, Inc., Danish Biogas Technology, A.S. ("DBT") and DBT's parent, Xergi, A.S. (the "Cooperation Agreement"). In addition to restructuring the previous license agreement with DBT to better reflect the Company's build/own/operate business model, the Cooperation Agreement provides, among other things, that the Company would issue $3,000,000 original principal amount of its 14% Convertible Notes due January 1, 2014 (the "Notes") to DBT in payment of certain license fees. The Cooperation Agreement is described in more detail in the Company's Current Report on Form 8-K, dated April 23, 2009, as filed with the Securities and Exchange Commission on April 28, 2009 (the "Prior 8-K").

On May 22, 2009, the Company closed on the issuance of the Notes to DBT under the Cooperation Agreement. In connection with such closing, on May 22, 2009, the Company entered into Amendment and Supplement No. 1 to Indenture and First Supplemental Trust Indenture dated as of May 1, 2009 (the "Amendment and Supplement") with Wells Fargo Bank, National Association, as Trustee (the "Trustee"). The Amendment and Supplement supplements and amends that certain Indenture for Senior Debt Securities, dated as of March 1, 2009, between the Company, as Issuer, and Wells Fargo Bank, National Association, as Trustee (the "Indenture"), and that certain First Supplemental Trust Indenture for 14% Convertible Notes due January 1, 2014, dated as of March 1, 2009 (the "First Supplemental Indenture"), between the Company and the Trustee. The Amendment and Supplement amends and supplements the Indenture and the First Supplemental Indenture principally in order to include therein certain provisions necessary or desirable in connection with the issuance of securities authorized thereby in transactions exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), including the issuance of the Notes to DBT. In addition, the Amendment and Supplement makes certain other immaterial corrections and additions to the Indenture and the First Supplemental Indenture. The foregoing description of the Amendment and Supplement is qualified in its entirety by reference to the Amendment and Supplement, which is filed as an exhibit to this Current Report on Form 8-K and incorporated by reference herein.

ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES

As previously reported in the Prior 8-K, the Notes issued to the account of DBT pursuant to the terms of the Cooperation Agreement, and the shares of the Company's common stock issuable upon conversion thereof (the "Conversion Shares"), have not been registered under the Securities Act in reliance on the exemption from the registration requirements thereof set forth in Sections 4(2) and/or 4(6) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act. The Notes comprising the Consideration are convertible into a maximum of approximately 555,556 Conversion Shares, representing approximately 3.6% of the Company's outstanding shares of common stock as of the date the Cooperation Agreement was executed.