X0303 4 2009-09-28 0000884504 THERMOENERGY CORP TMEN 0001403463 Quercus Trust 1835 NEWPORT BLVD. A109-PMB 467 COSTA MESA CA 92627 0 0 1 0 0001391795 Gelbaum David 1835 NEWPORT BLVD. A109-PMB 467 COSTA MESA CA 92627 0 0 1 1 Co-Trustee 0001403417 Gelbaum Monica Chavez 1835 NEWPORT BLVD. A109-PMB 467 COSTA MESA CA 92627 0 0 1 1 Co-Trustee Secured Convertible Promissory Note .24 2008-09-15 4 J 0 2000000.00 A 2008-09-15 Common Stock 8333333 8333333 D Secured Convertible Promissory Note .24 2009-02-11 4 J 0 250000.00 250000.00 A 2009-02-11 Common Stock 1041667 9375000 D Secured Convertible Promissory Note .24 2009-06-25 4 J 0 150000.00 150000.00 A 2009-06-25 Common Stock 625000 10000000 D Secured Convertible Promissory Note .24 2009-09-28 4 P 0 280000.00 A 2009-09-28 Common Stock 1166667 11116667 D Warrants .50 2009-09-28 4 P 0 1120000 A 2009-09-28 2014-09-30 Common Stock 1120000 1120000 D Secured Convertible Promissory Note .75 2008-09-15 4 J 0 2000000.00 A 2008-09-15 2013-09-30 Common Stock 2666667 2666667 D Secured Convertible Promissory Note 2009-02-11 4 J 0 250000.00 250000.00 A 2009-02-11 Common Stock 0 D Secured Convertible Promissory Note 2009-06-25 4 J 0 150000.00 150000.00 A 2009-06-25 Common Stock 0 D On September 15, 2008, the Reporting Persons and Issuer entered into that certain Securities Purchase Agreement (the "2008 SPA"), pursuant to which the Issuer issued to the Reporting Persons a Secured Convertible Promissory Note in the principal amount of $2,000,000, with a conversion price of $0.75 per share and interest rate of ten percent (10%) per annum (the "2008 Note") and a Warrant to purchase up to 4,000,000 Common Stock, with an exercise price of $1.25 (the "2008 Warrant"). The total purchase price of securities issued pursuant to the 2008 SPA (including 2008 Note and 2008 Warrant) was $2,000,000. On September 28, 2009, the Issuer issued to the Reporting Persons two 8% Secured Convertible Promissory Notes in the aggregate principal amount of $280,000 (the "September 2009 Notes") and, in connection therewith, the 2008 Note was amended and restated with the following principal terms: the conversion price was reduced to $0.24 per share, the interest rate was reduced to eight percent (8%) per annum and the maturity date was amended to mature 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 Reporting Persons and certain other investors or (ii) December 31, 2010 (hereinafter, the "New Maturity Date"). On February 11, 2009, the Issuer issued to the Reporting Persons a Secured Convertible Promissory Note in the principal amount of $250,000 (the "February 2009 Note"). The original terms and conditions of the February 2009 Note are more particularly set forth in the Issuer's Form 8-K filed on 2/17/2009, which also contains a copy of the February 2009 Note as an exhibit thereto. In connection with the issuance of the September 2009 Notes, the February 2009 Note was amended and restated with the following principal terms: the conversion price was amended to $0.24 per share, the interest rate was reduced to eight percent (8%) per annum and the maturity date was amended to the New Maturity Date. On June 25, 2009, the Issuer issued to the Reporting Persons a Secured Convertible Promissory Note in the principal amount of $150,000 (the "June 2009 Note"). The original terms and conditions of the June 2009 Note are more particularly set forth in the Issuer's Form 8-K filed on 6/30/2009, which also contains a copy of the June 2009 Note as an exhibit thereto. In connection with the issuance of the September 2009 Notes, the June 2009 Note was amended and restated with the following principal terms: the conversion price was amended to $0.24 per share, the interest rate was reduced to eight percent (8%) per annum and the maturity date was amended to the New Maturity Date. The September 2009 Notes, which consists of one Secured Convertible Promissory Note in the principal amount of $250,000 and another in the principal amount of $30,000, have the following principal terms: a conversion price of $0.24 per share, the interest rate of eight percent (8%) per annum and the maturity date of the New Maturity Date. Additional terms and conditions of the September 2009 Notes are more particularly set forth in the Issuer's Form 8-K filed on 10/2/2009, which also contains a copy of a form of the September 2009 Notes as an exhibit thereto. On September 28, 2009, in connection with the issuance of the September 2009 Notes, the Reporting Persons acquired from the Issuer two Warrants, one to purchase up to 1,000,000 Common Stock and another to purchase up to 120,000 Common Stock (the "September 2009 Warrants"). Additional terms and conditions of the September 2009 Warrants are more particularly set forth in the Issuer's Form 8-K filed on 10/2/2009, which also contains a copy of a form of the Warrants as an exhibit thereto. The total purchase price of the September 2009 Notes and the September 2009 Warrants was $280,000. As explained in Comment #1, the 2008 Note was amended and restated in connection with the September 2009 Notes. Therefore, we hereby report the disposition of the 2,666,667 Common Stock of the Reporting Persons, which was based on the original conversion price of $.75. As explained in Comment #2, the February 2009 Note was amended and restated in connection with the September 2009 Notes. Therefore, we hereby report the disposition of the February 2009 Note with its original conversion and maturation terms which are described in the Issuer's Form 8-K filed on 2/17/2009. As explained in Comment #3, the June 2009 Note was amended and restated in connection with the September 2009 Notes. Therefore, we hereby report the disposition of the June 2009 Note with its original conversion and maturation terms which are described in the Issuer's Form 8-K filed on 6/30/2009. The February 2009 Note was not convertible into Common Stock at the time of its issuance. The June 2009 Note was not convertible into Common Stock at the time of its issuance. /s/ David Gelbaum, Co-Trustee, The Quercus Trust 2009-10-09 /s/ David Gelbaum, as attorney-in-fact for Monica Chavez Gelbaum, Co-Trustee, The Quercus Trust 2009-10-09