8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________

FORM 8-K
___________________

CURRENT REPORT

Pursuant to Section13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

January 14, 2010 (January 11, 2010)
___________________

MECHANICAL TECHNOLOGY, INCORPORATED
(Exact name of registrant as specified in charter)

New York	0-6890	14-1462255
(State or Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification No.)

431 New Karner Road, Albany, New York 12205(Address of Principal Executive Offices) (Zip Code)

(518) 533-2200(Registrant’s telephone number, including area code)

___________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 - Entry into a Material Definitive Agreement.

On January 11, 2010, MTI MicroFuel Cells Inc. (“MTI Micro”), a majority-owned subsidiary of Mechanical Technology, Incorporated (the “Company”), entered into a Common Stock and Warrant Purchase Agreement (the “Purchase Agreement”) with Counter Point Ventures Fund II, L.P. (“Counter Point”). Counter Point, a venture fund focused on investments in high-technology companies, is co-owned by General Electric Company and Dr. Walter L. Robb, a member of the Board of Directors of the Company and MTI Micro, and is a current stockholder of MTI Micro. Dr. Robb and Counter Point beneficially held approximately 29.5% of the fully-diluted capital stock of MTI Micro immediately prior to the First Closing described below, and now hold an aggregate of approximately 30.7% of the fully-diluted capital stock of MTI Micro after giving effect to the First Closing.

Pursuant to the Purchase Agreement, MTI Micro may issue and sell to Counter Point up to 28,571,429 shares of common stock, par value $0.01 per share (the “Micro Common Stock”), at a purchase price per share of $0.070, over a period of twelve (12) months, and warrants (“Warrants”) to purchase shares of Micro Common Stock equal to 20% of the shares of Micro Common Stock purchased under the Purchase Agreement at an exercise price of $0.070 per share. The sale and issuance of the Micro Common Stock and Warrants shall occur over multiple closings (each, a “Closing”) occurring over two (2) one month closing periods and five (5) two-month closing periods (each, a “Closing Period”), the first Closing of which occurred on January 11, 2010 with MTI Micro raising $165,000 from the sale of 2,357,143 shares of Micro Common Stock and Warrants to purchase 471,429 shares of Micro Common Stock to Counter Point (the “First Closing”). Subsequent Closings may occur thereafter at MTI Micro’s sole discretion during the Closing Periods upon delivery of written notice by MTI Micro to Counter Point of its desire to consummate a Closing, and Counter Point’s acceptance of such offer under the Purchase Agreement on the terms agreed upon with MTI Micro. In the event the terms and conditions of the Purchase Agreement no longer reflect current market conditions or otherwise following the First Closing, either party may elect not to participate in a Subsequent Closing(s) or the parties may amend the Purchase Agreement on mutually agreeable terms with respect to such Subsequent Closing(s).

The purchase price per share of the Micro Common Stock and the exercise price of the Warrants are the same as the conversion price of MTI Micro’s bridge notes that were converted into Micro Common Stock in December 2009, resulting in the conversion of an aggregate of $3,910,510 of outstanding principal and accrued interest under secured promissory notes issued by MTI Micro into an aggregate of 55,864,425 shares of Micro Common Stock at a conversion price of $0.070 per share (the “Bridge Financing”). For additional information relating to the Bridge Financing, please see the Company’s Form 8-K filed September 18, 2008, the Company’s Form 8-K filed February 20, 2009, Exhibit 10.153 to the Company’s Form 10-Q for the quarter ended September 30, 2008, Exhibit 10.158 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, the Company’s Form 8-K filed April 21, 2009, and the Company’s Form 8-K filed December 15, 2009.

If MTI Micro were to issue and sell the remainder of the 28,571,429 shares under the Purchase Agreement, the Company would continue to hold an aggregate of 55.8% of the fully-diluted capital stock of MTI Micro.

This foregoing description of the terms of the Purchase Agreement and Warrants are not complete and are qualified in its entirety by the terms and conditions of the Purchase Agreement attached hereto as Exhibit 10.1 and form of Common Stock Warrant attached hereto as Exhibit 10.2, incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit
Number	Description
10.1	Common Stock and Warrant Purchase Agreement, dated January 11, 2010, by and between MTI MicroFuel Cells Inc. and Counter Point Ventures Fund II, L.P.
10.2	Form of Common Stock Warrant.

SIGNATURES

Pursuant to the requirement of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MECHANICAL TECHNOLOGY, INCORPORATED
Date: January 14, 2010		By:	/s/ PENG K. LIM
	Name:		Peng K. Lim
	Title:		Chairman and Chief Executive Officer

Index to Exhibit

Exhibit
Number	Description
10.1	Common Stock and Warrant Purchase Agreement, dated January 11, 2010, by and between MTI MicroFuel Cells Inc. and Counter Point Ventures Fund II, L.P.
10.2	Form of Common Stock Warrant.

EX-10.1

MTI MICROFUEL CELLS INC.

COMMON STOCK AND WARRANT PURCHASE AGREEMENT

     This Common Stock and Warrant Purchase Agreement (this “Agreement”) is made as of January 11, 2010 by and among MTI MicroFuel Cells Inc., aDelaware corporation (the “Company”) and Counter Point Ventures Fund II, LP (the “Purchaser”).

RECITALS

     The Company desires to issue and sell and the Purchaser desires to purchase Common Stock, par value $0.01 per share (“Common Stock”), and Warrants (each, a “Warrant”) in substantially the form attached to this Agreement as Exhibit C, over a period of twelve (12) months. The Common Stock, the Warrants, and the equity securities issuable upon exercise thereof are collectively referred to herein as the “Securities.”

AGREEMENT

     In consideration of the mutual promises contained herein and other good and valuable consideration, receipt of which is hereby acknowledged, the parties to this Agreement agree as follows:

     1. Purchase and Sale of Common Stock.

          (a) Sale and Issuance of Common Stock.

               (i) Subject to the terms and conditions of this Agreement, the Purchaser agrees to purchase and the Company agrees to sell and issue to the Purchaser (i) an aggregate of up to 28,571,429 shares of Common Stock at a purchase price per share of $0.070 (the “Purchase Price”), for an aggregate purchase price of $2,000,000.03; and (ii) Warrants exercisable for a number of shares of Common Stock equal to 20% of the shares of Common Stock purchased by the Purchaser hereunder, at an exercise price of $0.070 per share as set forth in the Warrant. The sale and issuance of the Common Stock and Warrants shall occur over multiple closings (each, a “Closing”) occurring over two (2) one month closing periods and five (5) two-month closing periods (each, a “Closing Period”), the first Closing of which shall occur on or about January 11, 2010, and with subsequent Closings occurring thereafter during the Closing Periods as set forth on Exhibit A attached hereto. No later than thirty (30) calendar days prior to each proposed Closing, or such shorter period as agreed upon by the parties in writing, the Company shall deliver to the Purchaser a written notice (each, a “Closing Notice”), in substantially the form attached hereto as Exhibit B, wherein the Company shall notify the Purchaser of the Company’s election to sell and issue to the Purchaser at such proposed Closing up to the maximum number of shares of Common Stock permitted to be sold and issued to the Purchaser during the applicable Closing Period as set forth on Exhibit A, less any shares of Common Stock already issued and sold to the Purchaser during such Closing Period, and subject to increase upon mutual agreement by the parties pursuant to Section 1(a)(ii). Within seven (7) calendar days of receipt of the Closing Notice, the Purchaser must either accept or reject in a writing delivered to the Company the offer to purchase Common Stock as set forth in the Closing Notice. If the Company does not deliver a Closing Notice to the Purchaser no less than thirty (30) calendar days prior to such proposed Closing, or such shorter period as agreed upon by the parties in writing, or the Purchaser accepts or rejects the offer to purchase the Common Stock as set forth in the Closing Notice within seven (7) calendar days of receipt of the Closing Notice, or if the Purchaser does not respond to the Closing Notice within such time, then the Closing Notice and offer to purchase the Common Stock shall be deemed rejected and the proposed Closing shall occur unless the parties otherwise agree in writing. If the Purchaser accepts the Company’s offer to purchase the Common Stock as set forth in the Closing Notice, such Closing shall occur on the date set forth in the Closing Notice and Exhibit A shall be updated accordingly to reflect the consummation of the Closing.

               (ii) Upon mutual written agreement between the Company and the Purchaser, (A) up to an aggregate additional 285,713 shares of Common Stock (the “Additional Shares”) may be included in one or more Closings for sale and issuance to the Purchaser, and (B) to the extent the actual number of shares of Common Stock issued and sold by the Company to the Purchaser at any Closing does not equal the maximum number of shares of Common Stock available for sale and issuance at such Closing as set forth on Exhibit A, the Company and the Purchaser may include such unissued shares of Common Stock from prior Closings in one or more subsequent Closings, provided the maximum total number of shares of Common Stock issued and sold under the Agreement shall not exceed 28,571,429 shares for an aggregate Purchase Price of $2,000,000.03.

          (b) Closing; Delivery.

               (i) Thepurchase and sale of the Common Stock and Warrants shall take place at the offices of the Company at 2:00 p.m. (Eastern) on each Closing date, or at such other time and place as the Company and the Purchaser mutually agree upon, orally or in writing.

               (ii) At each Closing, the Company shall deliver to the Purchaser a certificate evidencing the Common Stock and a Warrant to be purchased by the Purchaser against: (1) payment of the Purchase Price with respect to the Common Stock purchased at such Closing, in the amount to be set forth next to the Purchaser’s name on Exhibit A with respect to the applicable Closing, by (a) a check payable to the order of the Company drawn on a U.S. bank, (b) wire transfer of immediately available funds to an account designated by the Company or (c) the surrender of promissory notes or other instruments representing indebtedness of the Company to the Purchaser, the principal amounts of which shall be exchanged dollar-for-dollar for Purchase Price of such shares of Common Stock (“Exchanged Principal”); (2) delivery of counterpart signature pages to this Agreement, the Closing Notice and the Warrant; and (3) delivery of a validly completed and executed Certificate of Accredited Investor Status, establishing the Purchaser’s status as an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), in the form is attached to this Agreement as Exhibit D (an “Investor Certification”).

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               (iii) The sale and issuance of Common Stock and Warrants under this Agreement may continue hereunder until the earlier of (a) such time as the aggregate Purchase Price of Common Stock issued and sold under this Agreement equals a total of $2,000,000.03, or such higher amount as approved by the Company’s Board of Directors and the Purchaser, or (b) the close of business on December 31, 2010. All such sales shall be made on the terms and conditions set forth in this Agreement. Effective upon delivery to the Company of the items (1) through (3) listed in Section 1(b)(ii) above by such persons or entities, any common stock and warrants sold pursuant to this Section 1(b) shall be deemed to be “Common Stock” and “Warrants,” respectively, for all purposes under this Agreement, and the purchaser thereof shall be deemed to be the “Purchaser” for all purposes under this Agreement.

2.Additional Provisions.

          (a) Stock Purchase Agreement. The Purchaser understands and agrees that the exercise of the Warrants for equity securities of the Company may require the Purchaser’s execution of certain agreements relating to the purchase and sale of such securities as well as registration, co-sale and voting rights, if any, relating to such equity securities.

     3. Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchaser that:

          (a) Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted.

          (b) Authorization. This Agreement, the Common Stock and the Warrants have been duly authorized by the Board of Directors of the Company. The Agreement and the Warrants, when executed and delivered by the Company, shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

     4. Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company that:

          (a) Authorization. The Purchaser has full power and authority to enter into this Agreement. This Agreement, when executed and delivered by the Purchaser, will constitute a valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of a specific performance, injunctive relief, or other equitable remedies.

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          (b) Purchase Entirely for Own Account. This Agreement is made with the Purchaser in reliance upon the Purchaser’s representation to the Company, which by the Purchaser’s execution of this Agreement, the Purchaser hereby confirms, that the Securities to be acquired by the Purchaser will be acquired for investment for the Purchaser’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, the Purchaser further represents that the Purchaser does not presently have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participations to such person or entity or to any third person, with respect to any of the Securities. The Purchaser has not been formed for the specific purpose of acquiring any of the Securities.

          (c) Knowledge. The Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the securities.

          (d) Restricted Securities. The Purchaser understands that the Securities have not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser’s representations as expressed herein. The Purchaser understands that the Securities are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Purchaser must hold theSecuritiesindefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. The Purchaser acknowledges that the Company has no obligation to register or qualify the Securities for resale. The Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Securities, and on requirements relating to the Company which are outside of the Purchaser’s control, and which the Company is under no obligation and may not be able to satisfy.

          (e) No Public Market. The Purchaser understands that no public market now exists for any of the securities issued by the Company, that the Company has made no assurances that a public market will ever exist for the Securities.

          (f) Legends. The Purchaser understands that the Securities, and any securities issued in respect thereof or exchange therefor, may bear one or all of the following legends:

               (i) “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

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               (ii) Any legend required by the Blue Sky laws of any state to the extent such laws are applicable to the shares represented by the certificate so legended.

          (g) Accredited Investor. The Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

          (h) Legal Advice. The Purchaser has had the opportunity to consult with his, her or its counsel regarding the matters relevant to this Agreement and the transactions contemplated hereby.

          (i) Foreign Investors. If the Purchaser is not a United States person or entity (as defined by Rule 902(k) under the Securities Act), the Purchaser hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Agreement, including: (A) the legal requirements within its jurisdiction for the purchase of the Securities; (B) any foreign exchange restrictions applicable to such purchase; (C) any governmental or other consents that may need to be obtained; and (D) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Securities. The Purchaser’s subscription and payment for, and his or her continued beneficial ownership of the Securities, will not violate any applicable securities or other laws of Purchaser’s jurisdiction.

5. Conditions of the Purchasers’ Obligations at Closing. The obligations of the Purchaser to the Company under this Agreement are subject to the fulfillment, on or before each Closing, of each of the following conditions, unless otherwise waived:

          (a) Representations and Warranties. The representations and warranties of the Company contained in Section 3 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the date of the Closing.

          (b) Qualifications. All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be obtained and effective on or following the Closing.

6. Conditions of the Company’s Obligations at Closing. The obligations of the Company to the Purchaser under this Agreement are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

          (a) Representations and Warranties. The representations and warranties of the Purchaser contained in Section 4 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the Closing.

          (b) Qualifications. All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be obtained and effective as of the Closing.

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          (c) Delivery of Investor Certification. The Purchaser shall have completed and delivered to the Company a validly executed Investor Certification establishing such Purchaser’s status as an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

7. Lock-up Agreement.

          (a) Lock-Up Period; Agreement. In connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing such offering of the Company’s securities, the Purchaser agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company, however or whenever acquired (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180 days) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the Company’s initial public offering.

          (b) Limitations. The obligations described in Section 7(a) shall apply only if all officers and directors of the Company and shareholders holding at least 1% of the Company’s outstanding Common Stock enter into similar agreements, and shall not apply to a registration relating solely to employee benefit plans, or to a registration relating solely to a transaction pursuant to Rule 145 under the Securities Act.

          (c) Stop-Transfer Instructions. In order to enforce the foregoing covenants, the Company may impose stop-transfer instructions with respect to the securities of the Purchaser (and the securities of every other person or entity subject to the restrictions in Section 7(a)).

          (d) Transferees Bound. The Purchaser agrees that prior to the Company’s initial public offering it will not transfer securities of the Company unless each transferee agrees in writing to be bound by all of the provisions of this Section 7.

8. Miscellaneous.

          (a) Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

          (b) Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law.

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          (c) Counterparts. This Agreement may be executed in two or more counterparts and by facsimile, each of which shall be deemed an original and all of which together shall constitute one instrument.

          (d) Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

          (e) Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon delivery, when delivered personally, by overnight courier three days after deposit with such courier, by facsimile (upon customary confirmation of receipt) or sent electronically (upon customary confirmation of receipt), addressed to the party to be notified at such party’s address as set forth on the signature page hereto, or as subsequently modified by written notice, and if to the Company.

          (f) Finder’s Fee. Each party represents that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction. The Purchaser agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which the Purchaser or any of its officers, employees, or representatives is responsible. The Company agrees to indemnify and hold harmless the Purchaser from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

          (g) Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the Company and the Purchaser. Any amendment or waiver effected in accordance with this Section 8(g) shall be binding upon the Purchaser and each transferee of the Securities, each future holder of all such Securities, and the Company.

          (h) Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

          (i) Entire Agreement. This Agreement, and the documents referred to herein constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements existing between the parties hereto are expressly canceled. 

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          (j) Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF DELAWARE AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE DELAWARE CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO EXEMPT.

[Signature Pages Follow]

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     The parties have executed this Common Stock and Warrant Purchase Agreement as of the date first written above.

COMPANY:
MTI MICROFUEL CELLS INC.
/s/ Peng K. Lim
Peng K. Lim
Chief Executive Officer
Address:	431 New Karner Road
	Albany, NY 12205
PURCHASER:
COUNTER POINT VENTURES
FUND II, LP
/s/ Walter L. Robb
Walter L. Robb
General Partner
Address:	c/o Vantage Management, Inc.
	3000 Troy Schenectady Road
	Schenectady, NY 12309
E-mail:	waltrobb@nycap.rr.com

SIGNATURE PAGE TO MTI MICROFUEL CELLS INC.
COMMON STOCK AND WARRANT PURCHASE AGREEMENT

EXHIBIT A

SCHEDULE OF CLOSINGS

Closing Period and	Maximum	Maximum	Actual Common	Actual Aggregate
Actual Closing Date	Common	Purchase Price*	Stock Issued and Sold	Purchase Price At
	Stock		At Each Closing	Each Closing
	Issuable*
January 1 – February	4,714,286	$330,000.02
28, 2010
January 11, 2010			2,357,143	$165,000.00
March 1 – April 30,	4,714,286	$330,000.02
2010
[Actual Closing
Date(s)]
May 1 – June 30, 2010	4,714,286	$330,000.02
[Actual Closing
Date(s)]
July 1 – August 31,	4,714,286	$330,000.02
2010
[Actual Closing
Date(s)]
September 1 –	4,714,286	$330,000.02
October 31, 2010
[Actual Closing
Date(s)]
November 1 –	4,714,286	$330,000.02
December 31, 2010
[Actual Closing
Date(s)]
Additional Shares*	285,713	$19,999.91
TOTAL**:	28,571,429	$2,000,000.03

*Upon mutual written agreement between the Company and the Purchaser, up to the full amount of the “Additional Shares” may be included in one or more Closings.

**To the extent the actual number of shares of Common Stock issued and sold by the Company to the Purchaser at any Closing does not include the maximum number of shares of Common Stock available for sale and issuance at such Closing as set forth herein, the Company and the Purchaser may include such unissued shares of Common Stock from prior Closings in one or more subsequent Closings, provided the maximum total number of shares of Common Stock issued and sold under the Agreement shall not exceed 28,571,429 shares for an aggregate Purchase Price of $2,000,000.03.

EXHIBIT B

FORM OF CLOSING NOTICE

To: Counter Point Ventures Fund II, LP Dated: ____________, 20__

     MTI MicroFuel Cells Inc. (the “Company”), pursuant to the provisions set forth in the Common Stock and Warrant Purchase Agreement, dated December __, 2009 (the “Agreement”), entered into by and between the Company and you, hereby notifies you of its desire to issue and sell to you ______________ shares of Common Stock of the Company (the “Common Stock”) at a purchase price of $0.070 per share, for an aggregate purchase price of $____________ (the “Aggregate Purchase Price”), the closing of which issuance and sale shall occur on __________________, 2010 (the “Closing Date”) in accordance with the terms and conditions of the Agreement.

     By countersigning this Closing Notice, you accept the Company’s offer to sell, and agree to purchase therefrom, the shares of Common Stock for the Aggregate Purchase Price on the Closing Date set forth above and on the terms and conditions set forth in the Agreement, and shall cause to be delivered to the Company the Aggregate Purchase Price on or before the Closing Date in accordance with the terms and conditions of the Agreement.

MTI MICROFUEL CELLS INC.

Peng K. Lim

Chief Executive Officer

OFFER AGREED AND ACCEPTED:

COUNTER POINT VENTURES FUND II, LP

By:

Name:

Title:

Date:

EXHIBIT C

FORM OF WARRANT

EXHIBIT D

CERTIFICATE OF ACCREDITED INVESTOR STATUS

     Except as may be indicated by the undersigned below, the undersigned is an “accredited investor,” as that term is defined in Regulation D under the Securities Act of 1933, as amended (the “Securities Act”). The undersigned has initialed the line below indicating the basis on which he is representing his status as an “accredited investor”:

_______ a bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”); an insurance company as defined in Section 2(13) of the Securities Act; an investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; a small business investment company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, and such plan has total assets in excess of $5,000,000; an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are “accredited investors”;

____ a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

____ an organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

____ a natural person whose individual net worth, or joint net worth with the undersigned’s spouse, at the time of this purchase exceeds $1,000,000;

____ a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with the undersigned’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;

____ a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment;

____ an entity in which all of the equity holders are “accredited investors” by virtue of their meeting one or more of the above standards; or

____ an individual who is a director or executive officer of MTI MicroFuel Cells Inc.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Accredited Investor Status effective as of __________________, 20__.

Signature of Purchaser

Name of Purchaser

EX-10.2

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

Warrant No. _______

Date of Issuance: ________________, 2010

MTI MICROFUEL CELLS INC.

Common Stock Warrant

     MTI MicroFuel Cells Inc. (the “Company”), for value received, hereby certifies that Counter Point Ventures Fund II, LP, or its registered assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at any time after the date hereof and on or before the Expiration Date (as defined in Section 6 below) shares of capital stock of the Company at an exercise price per share of $0.070 as set forth herein. This Common Stock Warrant (“Warrant”) is one of a series of Warrants containing substantially identical terms and conditions issued pursuant to that certain Common Stock and Warrant Purchase Agreement dated December __, 2009 (the “Purchase Agreement”). This Warrant is issued pursuant to, and is subject to the terms and conditions of, the Purchase Agreement.

     The shares purchasable upon exercise of this Warrant are hereinafter referred to as the “Warrant Stock”.

     1. Number and Type of Shares; Purchase Price. Subject to the terms and conditions hereinafter set forth, the Holder is entitled, upon surrender of this Warrant, to purchase from the Company a number of shares of Company Common Stock, par value $0.01 per share (“Common Stock”), equal to 20% of the number of shares of Common Stock issued by the Company to the Holder pursuant to the Purchase Agreement on the Date of Issuance set forth above, rounded down to the nearest whole share, at a per share purchase price equal to the purchase price per share of such Common Stock issued to the Holder under the Purchase Agreement (the “Purchase Price”).

2. Exercise.

          (a) Manner of Exercise. This Warrant may be exercised by the Holder, in whole or in part, by surrendering this Warrant, with the purchase/exercise form appended hereto as Exhibit A duly executed by such Holder or by such Holder’s duly authorized attorney, at the principal office of the Company, or at such other office or agency as the Company may designate, accompanied by payment in full of the Purchase Price payable in respect of the number of shares of Warrant Stock purchased upon such exercise. The Purchase Price may be paid by cash, check, wire transfer, or by the surrender of promissory notes or other instruments representing indebtedness of the Company to the Holder.

          (b) Effective Time of Exercise. Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided in Section 2(a) above. At such time, the person or persons in whose name or names any certificates for Warrant Stock shall be issuable upon such exercise as provided in Section 2(d) below shall be deemed to have become the holder or holders of record of the Warrant Stock represented by such certificates.

          (c) Net Issue Exercise.

               (i) In lieu of exercising this Warrant in the manner provided above in Section 2(a), the Holder may elect to receive shares equal to the value of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with notice of such election on the purchase/exercise form appended hereto as Exhibit A duly executed by such Holder or such Holder’s duly authorized attorney, in which event the Company shall issue to such Holder a number of shares of Warrant Stock computed using the following formula:

X =	Y (A - B)
	A

Where:	X	=	The number of shares of Warrant Stock to be issued to the Holder.
	Y	=	The number of shares of Warrant Stock purchasable under this Warrant (at the date of such calculation).
	A	=	The fair market value of one share of Warrant Stock (at the date of such calculation).
	B	=	The Purchase Price (as adjusted to the date of such calculation).

               (ii) For purposes of this Section 2(c), the fair market value of Warrant Stock on the date of calculation shall mean with respect to each share of Warrant Stock:

                         (A) if the exercise is in connection with an initial public offering of the Company’s Common Stock, and if the Company’s Registration Statement relating to such public offering has been declared effective by the Securities and Exchange Commission, then the fair market value shall be the product of (x) the initial “Price to Public” per share specified in the final prospectus with respect to the offering and (y) the number of shares of Common Stock into which each share of Warrant Stock is convertible at the date of calculation;

                         (B) if (A) is not applicable, the fair market value of Warrant Stock shall be at the highest price per share which the Company could obtain on the date of calculation from a willing buyer (not a current employee or director) for shares of Warrant Stock sold by the Company, from authorized but unissued shares, as determined in good faith by the Board of Directors, unless the Company is at such time subject to an acquisition as described in Section 6 below, in which case the fair market value of Warrant Stock shall be deemed to be the value received by the holders of such stock pursuant to such acquisition.

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          (d) Delivery to Holder. As soon as practicable after the exercise of this Warrant in whole or in part, and in any event within ten (10) days thereafter, the Company at its expense will cause to be issued in the name of, and delivered to, the Holder, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct:

               (i) a certificate or certificates for the number of shares of Warrant Stock to which such Holder shall be entitled; and

               (ii) in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Stock equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant minus the number of such shares purchased by the Holder upon such exercise as provided in Section 2(a) or 2(c) above.

     3. Adjustments.

          (a) Stock Splits and Dividends. If outstanding shares of the Company’s Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Purchase Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If outstanding shares of Common Stock shall be combined into a smaller number of shares, the Purchase Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased. When any adjustment is required to be made in the Purchase Price, the number of shares of Warrant Stock purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Purchase Price in effect immediately prior to such adjustment; by (ii) the Purchase Price in effect immediately after such adjustment.

          (b) Reclassification, Etc. In case there occurs any reclassification or change of the outstanding securities of the Company or of any reorganization of the Company (or any other corporation the stock or securities of which are at the time receivable upon the exercise of this Warrant) or any similar corporate reorganization on or after the date hereof,then and in each such case the Holder, upon the exercise hereof at any time after the consummation of such reclassification, change,or reorganization shall be entitled to receive, in lieu of the stock or other securities and property receivable upon the exercise hereof prior to such consummation, the stock or other securities or property to which such Holder would have been entitled upon such consummation if such Holder had exercised this Warrant immediately prior thereto, all subject to further adjustment pursuant to the provisions of this Section 3; provided, however, that the operation of this Section 3(b) shall not effect the termination of this Warrant upon a Change of Control (as defined in Section 6 below) pursuant to Section 6 below.

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          (c) Adjustment Certificate. When any adjustment is required to be made in the Warrant Stock or the Purchase Price pursuant to this Section 3, the Company shall promptly mail to the Holder a certificate setting forth (i) a brief statement of the facts requiring such adjustment; (ii) the Purchase Price after such adjustment; and (iii) the kind and amount of stock or other securities or property into which this Warrant shall be exercisable after such adjustment.

     4. Transfers.

          (a) Unregistered Security. Each holder of this Warrant acknowledges that this Warrant and the Warrant Stock of the Company have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this Warrant or any Warrant Stock issued upon its exercise in the absence of (i) an effective registration statement under the Act as to this Warrant or such Warrant Stock and registration or qualification of this Warrant or such Warrant Stock under any applicable U.S. federal or state securities law then in effect; or (ii) an opinion of counsel, satisfactory to the Company, that such registration and qualification are not required. Each certificate or other instrument for Warrant Stock issued upon the exercise of this Warrant shall bear a legend substantially to the foregoing effect.

          (b) Transferability. The Holder may not assign, pledge, or otherwise transfer this Warrant without the prior written consent of the Company. Subject to the preceding sentence, this Warrant may be transferred only upon surrender of the original Warrant for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Company. Thereupon, a new warrant in substantially the form hereof will be issued to, and registered in the name of, the transferee.

          (c) Warrant Register. The Company will maintain a register containing the names and addresses of the Holders of this Warrant. Until any transfer of this Warrant is made in the warrant register, the Company may treat the Holder of this Warrant as the absolute owner hereof for all purposes; provided, however, that if this Warrant is properly assigned in blank, the Company may (but shall not be required to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. Any Holder may change such Holder’s address as shown on the warrant register by written notice to the Company requesting such change.

     5. No Impairment. The Company will not, by amendment of its charter or through reorganization, consolidation, merger, dissolution, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will (subject to Section 14 below) at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment.

     6. Termination. This Warrant (and the right to purchase securities upon exercise hereof) shall automatically terminate upon the earliest to occur of the following (the “Expiration Date”): (a) the five (5) year anniversary of the Date of Issuance of this Warrant; (b)immediately prior to a Change of Control; or (c) the closing of a firm commitment underwritten public offering pursuant to a registration statementunder the Securities Act.

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     The term “Change of Control” shall mean the sale, conveyance or other disposition of all or substantially all of the Company’s property or business or the Company’s merger with or into or consolidation with any other corporation, limited liability company or other entity (other than a wholly owned subsidiary of the Company), provided that the term “Change of Control” shall not include a merger of the Company effected exclusively for the purpose of changing the domicile of the Company, to an equity financing in which the Company is the surviving corporation, or to a transaction in which the stockholders of the Company immediately prior to the transaction own 50% or more of the voting power of the surviving corporation following the transaction.

     7. Notices of Certain Transactions. In case:

          (a) the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time deliverable upon the exercise of this Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right;

          (b) of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company, any consolidation or merger of the Company with or into another corporation (other than a consolidation or merger in which the Company is the surviving entity), or any transfer of all or substantially all of the assets of the Company;

          (c) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company; or

          (d) of any redemption of the Common Stock;

then, and in each such case, the Company will mail or cause to be mailed to the Holder of this Warrant a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right; or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation, winding-up, redemption or conversion is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other stock or securities at the time deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation, winding-up, redemption or conversion) are to be determined. Such notice shall be mailed at least ten (10) days prior to the record date or effective date for the event specified in such notice.

     8. Reservation of Stock. The Company will at all times reserve and keep available, solely for the issuance and delivery upon the exercise of this Warrant, such shares of Warrant Stock and other stock, securities and property, as from time to time shall be issuable upon the exercise of this Warrant. 

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     9. Exchange of Warrants. Upon the surrender by the Holder of any Warrant or Warrants, properly endorsed, to the Company at the principal office of the Company, the Company will, subject to the provisions of Section 4 hereof, issue and deliver to or upon the order of such Holder, at the Company’s expense, a new Warrant or Warrants of like tenor, in the name of such Holder or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Stock called for on the face or faces of the Warrant or Warrants so surrendered.

     10. Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.

     11. Mailing of Notices. Any notice required or permitted pursuant to this Warrant shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or sent by courier, three days after deposit with an overnight delivery service, or confirmed facsimile, addressed (a) if to the Holder, to the address of the Holder most recently furnished in writing to the Company; and (b) if to the Company, to the address set forth below or subsequently modified by written notice to the Holder.

     12. No Rights as Stockholder. Until the exercise of this Warrant, the Holder of this Warrant shall not have or exercise any rights by virtue hereof as a stockholder of the Company.

     13. No Fractional Shares. No fractional shares of Warrant Stock will be issued in connection with any exercise hereunder. In lieu of any fractional shares which would otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the fair market value of one share of Warrant Stock on the date of exercise, as determined in good faith by the Company’s Board of Directors.

     14. Amendment or Waiver. Any term of this Warrant may be amended or waived upon written consent of the Company and the holders of at least a majority of the Warrant Stock issuable upon exercise of outstanding warrants purchased pursuant to the Purchase Agreement. By acceptance hereof, the Holder acknowledges that in the event the required consent is obtained, any term of this Warrant may be amended or waived with or without the consent of the Holder; provided, however, that any amendment hereof that would materially adversely affect the Holder in a manner different from the holders of the remaining warrants issued pursuant to the Purchase Agreement shall also require the consent of Holder.

     15. Headings. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

     16. Governing Law. This Warrant shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law.

     17.Counterparts. This Warrant may be executed in counterparts and by facsimile, each of which will be deemed to be an original and all of which together will constitute a single agreement.

[Signature Page Follows]

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     This Common Stock Warrant was executed as of the date first above written.

COMPANY:

MTI MICROFUEL CELLS INC.

Peng K. Lim

Chief Executive Officer

Address:

AGREED TO AND ACCEPTED:
HOLDER:
COUNTER POINT VENTURES FUND II, LP
Walter L. Robb, General Partner
Address:	c/o Vantage Management, Inc.
	3000 Troy Schenectady Road
	Schenectady, NY 12309

SIGNATURE PAGE TO COMMON STOCK WARRANT

EXHIBIT A

PURCHASE/EXERCISE FORM

To: MTI MICROFUEL CELLS INC. Dated: ________________

     The undersigned, pursuant to the provisions set forth in the attached Warrant No. _______, hereby irrevocably elects to (i) purchase __________ shares of the _________ Stock covered by such Warrant and herewith makes payment of $ __________, representing the full purchase price for such shares at the price per share provided for in such Warrant; or (ii) exercise such Warrant for __________ shares purchasable under the Warrant pursuant to the Net Issue Exercise provisions of Section 2(c) of such Warrant.

     The undersigned acknowledges that it has reviewed the representations and warranties contained in Section 4 of the Purchase Agreement (as defined in the Warrant) and by its signature below hereby makes such representations and warranties to the Company. Defined terms contained in such representations and warranties shall have the meanings assigned to them in the Purchase Agreement, provided that the term “Purchaser” shall refer to the undersigned and the term “Securities” shall refer to the Warrant Stock and the Common Stock of the Company issuable upon conversion of the Warrant Stock, if applicable.

      The undersigned further acknowledges that it has reviewed the lock-up agreement set forth in Section 7 of the Purchase Agreement, and agrees to be bound by such provisions.

Print Name of Holder

Signature

Print Name and Title of Signatory (if entity)