On September 17, 2009, Capstone Turbine Corporation, a Delaware corporation (the "Company"), entered into Warrant Exercise Agreements with the holders (the "Holders") of warrants to purchase an aggregate of 7,225,434 shares of the Company's common stock, par value $0.001 per share ("Common Stock"), issued by the Company to such Holders on May 7, 2009 (the "Initial Warrants"). Pursuant to the Warrant Exercise Agreements, the Company agreed to issue and sell to the Holders new warrants to purchase an aggregate of 5,780,347 shares of Common Stock (the "New Warrants") in exchange for the exercise in full of the Initial Warrants at the reduced exercise price of $0.90 per share. The offering price of the New Warrants being acquired by the Holders is $0.0625 per share of Common Stock subject to the New Warrants and the exercise price of the New Warrants is $1.42 per share. The New Warrants are exercisable during the period beginning on September 17, 2009 and continuing through May 7, 2016. The gross proceeds to the Company of the exercise of the Initial Warrants and sale of the New Warrants is approximately $6.86 million. The net proceeds of the transactions, after deducting estimated expenses, is approximately $6.68 million.

The Company is offering the New Warrants, and the shares of Common Stock issuable upon exercise of the New Warrants, pursuant to a prospectus dated February 4, 2009 and a prospectus supplement dated September 17, 2009, pursuant to the Company's shelf registration statement on Form S-3 (Registration No. 333-156459) declared effective by the Securities and Exchange Commission on February 4, 2009.

The foregoing is only a brief description of the material terms of the Warrant Exercise Agreements and the New Warrants, does not purport to be a complete description of the rights and obligations of the parties thereunder and is qualified in its entirety by reference to the forms of Warrant Exercise Agreement and New Warrant, respectively, that are filed as Exhibits 10 and 4 to this Current Report on Form 8-K and incorporated by reference herein.

(d) Exhibits

Exhibit 4                         Form of Warrant to Purchase Common Stock



Exhibit 5                         Opinion of Waller Lansden Dortch & Davis, LLP



Exhibit 10                      Form of Warrant Exercise Agreement



Exhibit 23                      Consent of Waller Lansden Dortch & Davis, LLP
(included in Exhibit 5)