Mechanical Technology Inc – ‘10-K’ for 9/30/99 – EX-10

On:  Tuesday, 12/28/99   ·   For:  9/30/99   ·   Accession #:  64463-99-63   ·   File #:  0-06890

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Sept 30,1999 10-K for Mechanical Technology Inc.      67    280K 
 2: EX-10       Exhibit 10.32-Stock Purchase Agreement 10/21/99       48    257K 
 3: EX-10       Exhibit 10.33-Securities Purchase Agmt 10/21/99       37    194K 
 4: EX-10       Exhibit 10.34-Mti Reg Rights Agmt 10/21/99            10     52K 
 5: EX-10       Exhibit 10.35-Satcon Reg Rights Agmt 10/21/99         19     94K 
 6: EX-10       Exhibit 10.36-Mti Stock Purchase Warrant 10/21/99     11     59K 
 7: EX-10       Exhibit 10.37-Satcon Stock Pur Warrant 10/21/99       11     57K 
 8: EX-10       Exhibit 10.38-Lease (Touhey & Mti) 8/10/99            20     76K 
 9: EX-10       Exhibit 10.39-Reg Rights Agmt (Plug & Mti) 11/1/99    15     45K 
10: EX-10       Exhibit 10.40-Plug Power Lock-Up Agmt 11/1/99          3     18K 
11: EX-21       Exhibit 21-Subsidiaries of the Company                 1      5K 
12: EX-27       Exhibit 27-Financial Data Schedule 9/30/99             1      7K 

EX-10   —   Exhibit 10.33-Securities Purchase Agmt 10/21/99

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                                         Exhibit 10.33

     SECURITIES PURCHASE AGREEMENT

   between

     SATCON TECHNOLOGY CORPORATION

   and

      MECHANICAL TECHNOLOGY INCORPORATED

      Dated as of October 21, 1999

         SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is dated as of October    
21, 1999, between SatCon Technology Corporation, a Delaware corporation (the    
"Company"), and Mechanical Technology Incorporated, a New York corporation (the 
"Purchaser").                                                                   

WHEREAS, the Company and the Purchaser are executing and delivering this        
Agreement in reliance upon the exemption from securities registration afforded  
by Rule 506 under Regulation D as promulgated by the United States Securities   
and Exchange Commission (the "Commission") under Section 4(2) of the Securities 
Act of 1933, as amended (the "Securities Act");                                 

WHEREAS, subject to the terms and conditions set forth in this Agreement, the   
Company desires to issue and sell 370,800 shares ("Primary Closing Shares") of  
the Company's Common Stock par value $0.01 per share ("Common Stock") and a     
stock purchase warrant (the "A Warrant") to purchase up to 36,000 shares of the 
Company's Common Stock in the form of Exhibit A annexed hereto; and             

WHEREAS, subject to the terms and conditions set forth in this Agreement, the   
Purchaser desires to purchase the Primary Closing Shares and the A Warrant in   
exchange for $2,570,000 in cash and a stock purchase warrant (the "MA Warrant") 
to purchase up to 36,000 shares of the Purchaser's $1.00 par value Common Stock 
in the form of Exhibit B annexed hereto; and                                    

WHEREAS, subject to the terms and conditions set forth in this Agreement, the   
Company desires to issue and sell 659,200 shares ("Secondary Closing Shares",   
together with the Primary Closing Shares, collectively the "Shares") of Common  
Stock and a stock purchase warrant (the "B Warrant", together with the A        
Warrant, collectively the "Warrants") to purchase up to 64,000 shares of the    
Company's Common Stock, in the form of Exhibit A annexed hereto, if the Company 

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achieves certain Milestones (as defined below) or the Purchaser elects to waive 
such Milestones, prior to January 31, 2000; and                                 

WHEREAS, subject to the terms and conditions set forth in this Agreement, the   
Purchaser desires to purchase Secondary Closing Shares and the B Warrant in     
exchange for $4,500,000 in cash and a stock purchase warrant (the "MB Warrant") 
to purchase up to 64,000 shares of the Purchaser's $1.00 par value Common Stock 
in the form of Exhibit B annexed hereto; and                                    

WHEREAS, contemporaneously with the execution and delivery of this Agreement,   
the parties hereto are executing and delivering a Registration Rights Agreement 
substantially in the form of Exhibit C attached hereto (the "STC Registration   
Rights Agreement") pursuant to which the Company has agreed to provide certain  
registration rights under the Securities Act and the rules and regulations      
promulgated thereunder, and applicable state securities laws; and               

WHEREAS, contemporaneously with the execution and delivery of this Agreement,   
the parties hereto are executing and delivering a Registration Rights Agreement 
substantially in the form of Exhibit D attached hereto (the "MTI Registration   
Rights Agreement") pursuant to which the Company has agreed to provide certain  
registration rights under the Securities Act and the rules and regulations      
promulgated thereunder and applicable state securities laws.                    

NOW THEREFORE, in consideration of the promises and mutual covenants and        
agreements hereinafter, the Company and the Purchaser hereby agree as follows:  

ARTICLE I       

PURCHASE AND SALE OF THE SECURITIES AND WARRANTS  

1.1 Purchase and Sale. Subject to the terms and conditions set forth herein,    
the Company shall issue and sell to the Purchaser, and the Purchaser shall      
purchase from the Company, on the Primary Closing Date, the Primary Closing     
Shares and the A Warrant. The aggregate purchase price of the Primary Closing   
Shares and the A Warrant shall be $2,570,000 and the MA Warrant. Subject to the 
terms and conditions set forth herein, the Company shall issue and sell to the  
Purchaser, and the Purchaser shall purchase from the Company, on the Secondary  
Closing Date, the Secondary Closing Shares and the B Warrant. The aggregate     
purchase price of the Secondary Closing Shares and the B Warrant shall be       
$4,500,000 and the MB Warrant.                                                  

1.2 Closings. Primary Closing. The closing of the purchase and sale of the      
Primary Closing Shares and the A Warrant (the "Primary Closing") shall take     
place at the offices of Mechanical Technology Incorporated in Latham, New York, 
or by transmission by facsimile and overnight courier, immediately following    
the execution hereof or such later date or different location as the parties    
shall agree, but not prior to the date that the conditions set forth in Section 
4.1 have been satisfied or waived by the appropriate party (the "Primary        
Closing Date"). At the Primary Closing:                                         

(1)     The Purchaser shall deliver, as directed by the Company, two million,   
five hundred seventy thousand dollars ($2,570,000) in United States dollars in  
immediately available funds to an account or accounts designated in writing by  
the Company;                                                                    

(2)     The Purchaser shall deliver to the Company the MA Warrant, in the form  
of Exhibit B hereto;                                                            

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(3)     The Company shall deliver to the Purchaser a certificate evidencing the 
Primary Closing Shares;                                                         

(4)     The Company shall deliver to the Purchaser the A Warrant, in the form   
of Exhibit A hereto; and                                                        

(5) The parties shall execute and deliver each of the documents referred to in  
Section 4.1 hereof. Secondary Closing. The closing of the purchase and sale of  
the Secondary Closing Shares and the B Warrant (the "Secondary Closing") shall  
take place at the offices of Mechanical Technology Incorporated in Latham, New  
York or by transmission by facsimile and overnight courier on a date on or      
prior to January 31, 2000 selected by the Purchaser (the "Secondary Closing     
Date"). At the Secondary Closing,                                               

(1)     The Purchaser shall deliver, as directed by the Company, four million   
five hundred thousand dollars ($4,500,000) in United States dollars in          
immediately available funds to an account or accounts designated in writing by  
the Company;                                                                    

(2)     The Purchaser shall deliver to the Company the MB Warrant, in the form  
of Exhibit B hereto;                                                            

(3)     The Company shall deliver to the Purchaser a certificate evidencing the 
Secondary Closing Shares;                                                       

(4)     The Company shall deliver to the Purchaser the B Warrant, in the form   
of Exhibit A hereto; and                                                        

(5)     The parties shall execute and deliver each of the documents referred to 
in Section 4.2 hereof.                                                          

  ARTICLE II

  REPRESENTATIONS AND WARRANTIES

2.1     Representations, Warranties and Agreements of the Company. The Company  
hereby makes the following representations and warranties to the Purchaser:     

a.      Organization and Qualification. The Company is a corporation duly       
incorporated, validly existing and in good standing under the laws of the State 
of Delaware, with the requisite corporate power and authority to own and use    
its properties and assets and to carry on its business as currently conducted.  
Except for Beacon Power Corporation ("Beacon") or as set forth on Schedule      
2.1(a), the Company has no subsidiaries (collectively, the "Subsidiaries"); it  
being agreed that for purposes of this Agreement Beacon is not a subsidiary of  
the Company. Each of the Subsidiaries (which, except as provided in the prior   
sentence, for purposes of this Agreement means any entity in which the Company, 
directly or indirectly, owns the majority of such entity's capital stock or     
holds an equivalent equity or similar interest) is a corporation duly           
incorporated, validly existing and in good standing under the laws of the       
jurisdiction of its incorporation or organization (as applicable), with the     
full corporate power and authority to own and use its properties and assets and 
to carry on its business as currently conducted. Each of the Company and the    
Subsidiaries is duly qualified as a foreign corporation to do business and is   
in good standing as a foreign corporation in each jurisdiction in which the     
nature of the business conducted or property owned by it makes such             
qualification necessary, except where the failure to be so qualified or in good 
standing, as the case may be, would not, individually or in the aggregate, (x)  

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adversely affect the legality, validity or enforceability of any of this        
Agreement or the Transaction Documents (as defined in Section 2.1(b)) or any of 
the material transactions contemplated hereby or thereby, (y) have or result in 
a material adverse effect on the results of operations, assets, or financial    
condition of the Company and its Subsidiaries, taken as a whole or (z) impair   
the Company's ability to perform in all material respects on a timely basis its 
material obligations under any Transaction Document (any of (x), (y) or (z),    
being a "Material Adverse Effect"). The Company has on file with the Securities 
Exchange Commission true and correct copies of the Company's Certificate of     
Incorporation, as amended and as in effect on the date hereof (the "Certificate 
of Incorporation"), and the Company's Bylaws, as in effect on the date hereof   
(the "Bylaws").                                                                 

b.      Authorization; Enforcement. The Company has the requisite corporate     
power and authority to enter into and to consummate the transactions            
contemplated by this Agreement, the A Warrant, the B Warrant and the            
Registration Rights Agreement (collectively, the "Transaction Documents"), and  
otherwise to carry out its obligations hereunder and thereunder. The execution  
and delivery of each of this Agreement and the Transaction Documents by the     
Company and the consummation by it of the transactions contemplated hereby and  
thereby have been duly authorized by all necessary corporate action. This       
Agreement has been duly executed by the Company and the A Warrant and           
Registration Rights Agreement at the Primary Closing will be duly executed by   
the Company. Subject to the terms and conditions contained herein, the B        
Warrant at the Secondary Closing will be duly executed by the Company. When     
delivered in accordance with the terms hereof, the Transaction Documents will   
constitute the valid and binding obligation of the Company enforceable against  
the Company in accordance with its terms, except as such enforceability may be  
limited by applicable bankruptcy, insolvency, reorganization, moratorium,       
liquidation or similar laws relating to, or affecting generally the enforcement 
of, creditors' rights and remedies or by other equitable principles of general  
application and except that rights to indemnification and contribution may be   
limited by Federal or state securities laws or public policy relating thereto.  
Neither the Company nor any Subsidiary is in any material violation of any of   
the provisions of its respective certificate of incorporation, bylaws or other  
charter documents such that any right of a holder of the Common Stock would be  
affected.                                                                       

c.      Capitalization. As of the date hereof, the authorized capital stock of  
the Company is as set forth in Schedule 2.1(c). All of such outstanding shares  
of capital stock have been, or upon issuance will be, validly authorized and    
issued, fully paid and nonassessable (except as disclosed in the SEC Documents  
(as defined in Section 2.1(p)) and were issued in accordance with the           
registration or qualification provisions of the Securities Act, or pursuant to  
valid exemptions therefrom. Except as disclosed in Schedule 2.1(c), (i) no      
shares of the Company's capital stock are subject to preemptive rights or any   
other similar rights or any liens or encumbrances suffered or permitted by the  
Company, nor is any holder of the Common Stock entitled to preemptive or        
similar rights arising out of any agreement or understanding with the Company   
by virtue of any Transaction Document, (ii) there are no outstanding options,   
warrants, scrip rights to subscribe to, calls or commitments of any character   
whatsoever relating to, or securities or rights convertible into or             
exchangeable for, or giving any Person (as defined below) any right to          
subscribe for or acquire, any shares of capital stock of the Company or any of  
its Subsidiaries, or contracts, commitments, understandings or arrangements by  
which the Company or any of its Subsidiaries is or may become bound to issue    
additional shares of capital stock of the Company or any of its Subsidiaries or 
options, warrants, scrip rights to subscribe to, calls or commitments of any    
character whatsoever relating to, or securities or rights convertible into, any 

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shares of capital stock of the Company or any of its Subsidiaries, (iii) there  
are no outstanding debt securities of the Company or any of its Subsidiaries,   
(iv) there are no agreements or arrangements under which the Company or any of  
its Subsidiaries is obligated to register the sale of any of their securities   
under the Securities Act (except the Registration Rights Agreement), (v) there  
are no outstanding securities of the Company or any of its Subsidiaries which   
contain any redemption or similar provisions, and there are no contracts,       
commitments, understandings or arrangements by which the Company or any of its  
Subsidiaries is or may become bound to redeem a security of the Company or any  
of its Subsidiaries, (vi) there are no securities or instruments containing     
anti-dilution or similar provisions that will be triggered by the issuance of   
the shares of Common Stock, the A Warrant or the B Warrant as described in this 
Agreement or upon the exercise of the A Warrant or the B Warrant, (vii) the     
Company does not have any stock appreciation rights or "phantom stock" plans or 
agreements or any similar plan or agreement and (viii) except for the put       
rights granted to the holders of the Class D Preferred Stock of Beacon or       
pursuant to this Agreement or the Warrants issued to investment funds managed   
by Brown Simpson Capital Management, LLC, no Person (as defined below) or group 
of related Persons beneficially owns (as determined pursuant to Rule 13d-3      
promulgated under the Securities Exchange Act of 1934, as amended (the          
"Exchange Act")) or has the right to acquire by agreement with or by obligation 
binding upon the Company beneficial ownership of in excess of 5% of the Common  
Stock. "Person" means an individual or corporation, partnership, trust,         
incorporated or unincorporated association, joint venture, limited liability    
company, joint stock company, government (or an agency or subdivision thereof)  
or other entity of any kind.                                                    

d.      Authorization and Validity; Issuance of Shares. The Common Stock issued 
pursuant to this Agreement and the Common Stock issuable upon exercise of the A 
Warrant and, when issued, the B Warrant will at all times hereafter continue to 
be duly authorized and reserved for issuance and the shares of Common Stock     
issued upon the exercise of the A Warrant and, when issued, the B Warrant (the  
"Warrant Shares") will be validly issued, fully paid and non-assessable, free   
and clear of all liens, encumbrances and Company rights of first refusal, other 
than liens and encumbrances created by the Purchaser (collectively, "Liens")    
and will not be subject to any preemptive or similar rights. Assuming the       
accuracy of the Purchaser's representations in Section 2.2, the issuance by the 
Company of the Common Stock, the A Warrant, the B Warrant and the Warrant       
Shares is exempt from registration under the Securities Act.                    

e.      No Conflicts. The execution, delivery and performance of this Agreement 
and each of the Transaction Documents by the Company and the consummation by    
the Company of the transactions contemplated hereby and thereby (including the  
issuance of the Warrant Shares) do not and will not (i) conflict with or        
violate any provision of the Certificate of Incorporation, Bylaws or other      
organizational documents of the Company or any of the Subsidiaries, (ii)        
subject to obtaining the consents referred to in Section 2.1(f), conflict with, 
or constitute a breach or a default (or an event which with notice or lapse of  
time or both would become a default) under, or give to others any rights of     
termination, amendment, acceleration or cancellation of, any agreement,         
indenture, patent, patent license or instrument (evidencing a Company or        
Subsidiary debt or otherwise) to which the Company or any Subsidiary is a party 
or by which any property or asset of the Company or any Subsidiary is bound or  
affected, or (iii) result in a violation of any law, rule, regulation, order,   
judgment, injunction, decree or other restriction of any court or governmental  
authority to which the Company or any Subsidiary is subject (including Federal  
and state securities laws and regulations and the rules and regulations of the  
principal market or exchange on which the Common Stock is traded or listed)     
applicable to the Company or any of its Subsidiaries, or by which any material  

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property or asset of the Company or any Subsidiary is bound or affected except, 
in each such case, for any violation, conflict, default or breach which is not  
reasonably expected to have a Material Adverse Effect.                          

f.      Consents and Approvals. Except as specifically set forth on Schedule    
2.1(f), neither the Company nor any Subsidiary is required to obtain any        
consent, waiver, authorization or order of, give any notice to, or make any     
filing or registration with, any court or other federal or state governmental   
authority, regulatory or self regulatory agency, or other Person in connection  
with the execution, delivery and performance by the Company of this Agreement   
or the Transaction Documents, other than (i) the filing of a registration       
statement with the Commission, which shall be filed in accordance with and in   
the time periods set forth in the Registration Rights Agreement, (ii) the       
application(s) or any letter(s) acceptable to the National Market System of     
Nasdaq Stock Market ("Nasdaq") for the listing of the Shares and the Warrant    
Shares with Nasdaq (and with any other national securities exchange or market   
on which the Common Stock is then listed), (iii) any filings, notices or        
registrations under applicable state securities laws, and (iv) the filing of a  
form D with the Commission (together with the consents, waivers,                
authorizations, orders, notices and filings referred to on Schedule 2.1(f), the 
"Required Approvals").                                                          

g.      Litigation; Proceedings. Except as specifically set forth on Schedule   
2.1(g), there is no action, suit, notice of violation, proceeding or            
investigation pending or, to the knowledge of the Company or any of its         
Subsidiaries, threatened against or affecting the Company or any of its         
Subsidiaries or any of their respective properties or assets before or by any   
court, governmental or administrative agency or regulatory authority (federal,  
state, county, local or foreign) which (i) adversely affects or challenges the  
legality, validity or enforceability of any of this Agreement or the            
Transaction Documents or (ii) could reasonably be expected to, individually or  
in the aggregate, have a Material Adverse Effect.                               

h.      Material Contracts. Except for this Agreement, the other agreements to  
be entered into pursuant to the terms of this Agreement, contracts attached as  
exhibits to the Company's SEC Documents and the contracts of the Company and    
its Subsidiaries set forth on Exhibit 2.1(h) attached hereto (collectively, the 
"Contracts"), neither the Company nor its Subsidiaries are a party to or        
otherwise bound by any written or oral:                                         

(1)     written contract for the employment of any officer, employee or other   
person on a full-time or consulting basis, which is not terminable on thirty    
(30) days' notice without cost or liability to the Company or any Subsidiary,   
except normal severance arrangements and accrued vacation pay;                  

(2)     bonus, pension, profit-sharing, retirement, hospitalization, insurance, 
stock purchase, stock option or other plan, contract or understanding pursuant  
to which benefits are provided to any employee of the Company or any Subsidiary 
(other than group insurance plans applicable to employees generally);           

(3)     agreement or indenture relating to the borrowing of money or to the     
mortgaging or pledging of, or otherwise placing a lien or security interest on, 
any asset of the Company or Subsidiary or any agreement or instrument           
evidencing any guaranty by the Company or any Subsidiary of payment or          
performance by any other Person;                                                

(4)     voting trust or agreement, stockholders' agreement, pledge agreement,   
buy-sell agreement or first refusal or preemptive rights agreement relating to  
any securities of the Company;                                                  

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(5)     agreement or obligation (contingent or otherwise) to issue, sell or     
otherwise distribute or to repurchase or otherwise acquire or retire any shares 
of its capital stock or any of its other equity securities;                     

(6)     agreement under which the Company or any Subsidiary has granted any     
person any registration rights, other than this Agreement;                      

(7)     agreement providing for disposition of the business, assets or          
shares of the Company or its Subsidiaries, agreement of merger or consolidation 
to which the Company or any Subsidiary is a party or letter of intent with      
respect to the foregoing;                                                       

(8)     agreement or letter of intent (other than the acquisition of Ling       
Electronics, Inc.) with respect to the acquisition of the business, assets or   
shares of any other Person.                                                     

i.      ERISA. Set forth in Exhibit 2.1(i) is a list and brief description of   
each "employee pension benefit plan," as such term is defined in Section 3(2)   
of ERISA, now or formerly maintained by the Company or any of their respective  
Subsidiaries, to which the Company or any Subsidiary is now or will be          
obligated to contribute. Except as described in Exhibit 2.1(i), no event has    
occurred, or to the knowledge of the Company or its Subsidiaries, is threatened 
or about to occur, which would constitute a reportable event within the meaning 
of Section 4043(b) of ERISA, and no notice of termination has been filed by the 
plan administrator pursuant to Section 4041 of ERISA or issued by the Pension   
Benefit Guaranty Corporation (the "PBGC") pursuant to Section 4042 of ERISA     
with respect to any pension benefit plan described in Exhibit 2.1(i) subject to 
ERISA. To the best knowledge of the Company, no prohibited transaction (as      
defined in Section 4975 of the Code) has occurred with respect to any employee  
benefit plan maintained by the Company or any of its Subsidiaries. Neither the  
Company nor any of their respective Subsidiaries nor any of their respective    
ERISA Affiliates is or has been a participant in any multiemployer plan as      
defined in ERISA. "ERISA Affiliate" means with respect to any Person, any       
entity that would be considered to be under common control with such person for 
purposes of Title IV of ERISA.                                                  

j.      Environmental Matters.                                                  

(1)     Hazardous Materials have not at any time been generated, used, treated  
or stored on any property, plants or other facilities now owned, leased, or     
operated by the Company or any Subsidiary (or at any property, plant or other   
facilities ever owned, leased or operated by any predecessor entity at such     
locations), in violation of any applicable law, ordinance, rule, regulation,    
order, judgment, decree or permit or which would require remedial action under  
any applicable law, ordinance, rule, regulation, order, judgment, decree or     
permit, and none of the Company, its Subsidiaries or its predecessors have      
received any notice of any such violation with respect to Hazardous Materials   
except for such violations that the Company reasonably does not expect will     
have a Material Adverse Effect;                                                 

(2)     There has been no spill, discharge, leak, emission, injection, escape,  
dumping or release of any kind onto any property now owned or leased by the     
Company, its Subsidiaries or any predecessor (or onto any other property ever   
owned or leased by it, or by any predecessor entity at any such location), or   
into the environment surrounding any such property, of Hazardous Materials,     
other than those releases permissible under such regulations, laws or statutes  
or allowable under applicable permits and except for such violations that the   
Company reasonably does not expect will have a material adverse effect on the   
Company;                                                                        

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(3)     The Company, its Subsidiaries or its predecessor, their operations and  
any property owned by the Company, its Subsidiaries or its predecessor are in   
material compliance with all material Environmental Laws and the material       
requirements of any permits issued under such laws;                             

(4)     There are no past, pending or, to the best of the Company's knowledge,  
threatened Environmental Claims against the Company, its Subsidiaries or its    
predecessor or any property now or previously owned or leased by the Company,   
its Subsidiaries or its predecessor;                                            

(5) To the best of the Company's knowledge, there is no condition or occurrence 
on any property now or previously owned or leased by the Company, its           
Subsidiaries or its predecessor or any property adjoining or in the vicinity of 
any such property that could reasonably be anticipated (i) to form the basis of 
an Environmental Claim against the Company, its Subsidiaries or its predecessor 
or (ii) to cause any property of the Company, its Subsidiaries or its           
predecessor to be subject to any restrictions on the ownership, occupancy, use  
or transferability of such property under any Environmental Law.                

(6)     For purposes of this Agreement, "Hazardous Materials" shall refer to    
(a) any petroleum or petroleum products, radioactive materials, asbestos in any 
form that is or could become friable, urea formaldehyde foam insulation,        
transformers or other equipment that contain dielectric fluid containing levels 
of polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or    
substances defined as or included in the definition of "hazardous substances,"  
"hazardous wastes," "hazardous materials," "extremely hazardous wastes,"        
"restricted hazardous wastes," "toxic substances," "toxic pollutants,"          
"contaminants" or "pollutants," or words of similar import, under any           
applicable Environmental Law; and (c) any other chemical, material or substance 
exposure to which is prohibited, limited or regulated by any governmental       
authority; "Environmental Law" means any federal, state or local statute, law,  
rule, regulation, ordinance, code, policy or rule of common law now or          
hereafter in effect and in each case as amended, and any judicial or            
administrative interpretation thereof, including any judicial or administrative 
order, consent decree or judgment, relating to the environment, health, safety  
or Hazardous Materials, including without limitation the Comprehensive          
Environmental Response, Compensation and Liability Act of 1980, as amended      
("CERCLA") 42 U.S.C. 9601 et seq.; the Hazardous Materials Transportation       
Act, as amended, 49 U.S.C. 1801 et seq.; the Resource Conservation and          
Recovery Act, as amended, 42 U.S.C. 6901 et seq.; the Federal Water Pollution   
Control Act, as amended, 33 U.S.C. 1251 et seq.; the Toxic Substances Control   
Act, 15 U.S.C. 2601 et seq.; the Clean Air Act, 42 U.S.C. 7401 et seq.; the     
Safe Drinking Water Act, 42 U.S.C. 3808 et seq.; and their counterparts under   
any state or local laws; "Environmental Claims" means any and all               
administrative, regulatory or judicial actions, suits, demands, demand letters, 
claims, liens, notices of non-compliance or violation, investigations or        
proceedings relating in any way to any Environmental Law or any permit issued   
under any such Law (hereafter "Claims"), including without limitation (a) any   
and all Claims by governmental or regulatory authorities for enforcement,       
cleanup, removal, response, remedial or other actions or damages, fines or      
penalties pursuant to any applicable Environmental Law, and (b) any and all     
Claims by any third party seeking damages, contribution, indemnification, cost  
recovery, compensation or injunctive relief resulting from Hazardous Materials  
or arising from alleged injury or threat of injury to health, safety or the     
environment.                                                                    

k.      Year 2000 Matters.      The Company's statements regarding "Year 2000   
Risk" set forth in the SEC Documents are true and correct in all material       
respects.                                                                       

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"Year 2000 Risk" means the risk that computer applications used by the Company  
and/or its suppliers, vendors and customers may be unable to recognize and      
perform without error date- sensitive functions involving certain dates prior   
to and any date after December 31, 1999, including, without limitation,         
September 9, 1999.                                                              

l.      No Default or Violation. Except as specifically set forth on Schedule   
2.1(l), neither the Company nor any Subsidiary (i) is in default under or in    
violation of any indenture, loan or other credit agreement or any other         
agreement or instrument to which it is a party or by which it or any of its     
properties or assets is bound and which is required to be included as an        
exhibit to any SEC Document (as defined in Section 2.1(o) hereof) or will be    
required to be included as an exhibit to the Company's next filing under either 
the Securities Act or Exchange Act, (ii) is in violation of any order of any    
court, arbitrator or governmental body applicable to it, (iii) is in violation  
of any statute, rule or regulation of any governmental authority to which it is 
subject, (iv) is in default under or in violation of its Certificate of         
Incorporation, Bylaws or other organizational documents, respectively, or (v)   
is in default under or in violation of any of the listing requirements of       
Nasdaq as in effect on the date hereof and is not aware of any facts which      
would reasonably lead to delisting or suspension of the Common Stock by Nasdaq  
in the foreseeable future except, in each such case, for any violation or       
default which is not reasonably expected to have a Materially Adverse Effect.   
The business of the Company and its Subsidiaries is not being conducted, and    
has not been conducted, in violation of any law, ordinance, rule or regulation  
of any governmental entity, except where such violations have not resulted or   
would not reasonably result, individually or in the aggregate, in a Material    
Adverse Effect. Neither the Company nor any of its Subsidiaries is in breach of 
any agreement where such breach, individually or in the aggregate, would have a 
Material Adverse Effect                                                         

m.      Disclosure; Absence of Certain Changes. None of this Agreement, the     
Schedules to this Agreement, the Transaction Documents, the SEC Documents (as   
amended to date) contained as of their respective dates, any untrue statement   
of a material fact or omitted to state any material fact necessary in order to  
make the statements made herein and therein, in light of the circumstances      
under which they were made, not misleading. Except as disclosed on Schedule     
2.1(m) or in SEC Documents filed on EDGAR through the date hereof, since the    
filing of the Company's quarterly report on Form 10-Q on August 16, 1999, there 
has been no material adverse change and no material adverse development in the  
business, properties, operations, financial condition, liabilities or results   
of operations of the Company or the Subsidiaries. The Company has not taken any 
steps, and does not currently expect to take any steps, to seek protection      
pursuant to any bankruptcy law nor does the Company or any of its Subsidiaries  
have any knowledge or reason to believe that its creditors intend to initiate   
involuntary bankruptcy proceedings.                                             

n.      Private Offering. The Company and all Persons acting on its behalf have 
not made within the six months preceding the Closing Date, directly or          
indirectly, and will not make, offers or sales of any securities or solicited   
any offers to buy any security at any time within six months after the Closing  
Date under circumstances that would require registration of the Securities, the 
Warrants or the Warrant Shares or the issuance of such securities under the     
Securities Act.                                                                 

o.      SEC Documents; Financial Statements. The Common Stock of the Company is 
registered pursuant to Section 12(g) of the Exchange Act. The Company has filed 
during its current fiscal year all reports, schedules, forms, statements and    
other documents required to be filed by it with the Commission pursuant to the  

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reporting requirements of the Exchange Act, including pursuant to Section 13,   
14 or 15(d) thereof (the foregoing materials and financial statements and       
schedules thereto being collectively referred to herein as the "SEC             
Documents"), on a timely basis or has received a valid extension of such time   
of filing and has filed any such SEC Documents prior to the expiration of any   
such extension. The Company has delivered to the Purchaser or its               
representatives true, complete and accurate copies of the SEC Documents that    
were not filed pursuant to EDGAR. As of their respective dates and giving       
effect to all amendments thereto filed with the Commission, the financial       
statements of the Company included in the SEC Documents comply as to form in    
all material respects with applicable accounting requirements and the published 
rules and regulations of the Commission with respect thereto as in effect at    
the time of filing. Such financial statements have been prepared in accordance  
with United States generally accepted accounting principles applied on a        
consistent basis during the periods involved, except as may be otherwise        
specified in such financial statements or the notes thereto, and fairly present 
in all material respects the financial position of the Company as of and for    
the dates thereof and the results of operations and cash flows for the periods  
then ended, subject, in the case of unaudited statements, to normal, year-end   
audit adjustments. The Company acknowledges that the Purchaser will be trading  
in the securities of the Company in reliance on the foregoing representation    
and warranty.                                                                   

p.      Investment Company. The Company is not, and is not controlled by or     
under common control with an affiliate (an "Affiliate") of an "investment       
company" within the meaning of the Investment Company Act of 1940, as amended.  

q. Broker's Fees. No fees or commissions or similar payments with respect to    
the transactions contemplated by this Agreement or the Transaction Documents    
have been paid or will be payable by the Company to any broker, financial       
advisor, finder, investment banker, or bank, other than as set forth in         
Schedule 2.1(q). The Purchaser shall have no obligation with respect to any     
fees or with respect to any claims made by or on behalf of other Persons for    
fees of a type contemplated in this Section 2.1(q) that may be due in           
connection with the transactions contemplated by this Agreement and the         
Transaction Documents.                                                          

r. Form S-3 Eligibility. The Company is, and at the Closing Date will be,       
eligible to register securities (including the Shares and the Warrant Shares)   
for resale with the Commission under Form S-3 (or any successor form)           
promulgated under the Securities Act.                                           

s. Listing and Maintenance Requirements Compliance. The principal market on     
which the Common Stock is currently traded is Nasdaq. Except as disclosed on    
Schedule 2.1(s), the Company has not in the three years preceding the date      
hereof received notice (written or oral) from Nasdaq (or any stock exchange,    
market or trading facility on which the Common Stock is or has been listed (or  
on which it has been quoted)) to the effect that the Company is not in          
compliance with the listing or maintenance requirements of such market or       
exchange. The Company is not aware of any facts which would reasonably lead to  
delisting or suspension of the Common Stock by Nasdaq. After giving effect to   
the transactions contemplated by this Agreement and the Transaction Documents,  
the Company is and will be in compliance with all such maintenance requirements 
except for any approval required under the NASD rules.                          

t. Intellectual Property Rights. To the best of the knowledge of the Company,   
the Company owns or possesses, or can obtain by payment of royalties in amounts 
which, in the aggregate, will not have a Material Adverse Effect, all of the    
patents, trademarks, service marks, trade names, copyrights, proprietary        

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rights, trade secrets, and licenses or rights to the foregoing, necessary for   
the conduct of the business of the Company as currently conducted. To the best  
of the Company's knowledge, the business of the Company does not cause the      
Company to infringe or violate any of the patents, trademarks, service marks,   
trade names, copyrights, licenses or proprietary rights of any person or        
entity.                                                                         

u. Registration Rights; Rights of Participation. Except as described on         
Schedule 2.1(u) hereto, (i) the Company has not granted or agreed to grant to   
any Person any rights (including "piggy-back" registration rights) to have any  
securities of the Company registered with the Commission or any other           
governmental authority which has not been satisfied and (ii) no Person,         
including, but not limited to, current or former stockholders of the Company,   
underwriters, brokers or agents, has any right of first refusal, preemptive     
right, right of participation, or any similar right to participate in the       
transactions contemplated by this Agreement or any Transaction Document.        

v. Tax Status; Firpta. Except as set forth on Schedule 2.1(v), the Company and  
each of the Subsidiaries has made or filed all federal and state income and all 
other tax returns, reports and declarations required by any jurisdiction to     
which it is subject (unless and only to the extent that the Company and each of 
its Subsidiaries has set aside on its books provisions reasonably adequate for  
the payment of all unpaid and unreported taxes) and has paid all taxes and      
other governmental assessments and charges that are material in amount, shown   
or determined to be due on such returns, reports and declarations, except those 
being contested in good faith (which are set forth on Schedule 2.1(v) hereof),  
and has set aside on it books provisions reasonably adequate for the payment of 
all taxes for periods subsequent to the periods to which such returns, reports  
or declarations apply. There are no unpaid taxes in any material amount claimed 
to be due by the taxing authority of any jurisdiction, and the officers of the  
Company know of no basis for any such claim. The Company is not a "United       
States real property holding corporation" within the meaning of Section         
847(c)(2) of the Internal Revenue Code of 1986, as amended.                     

w. Transactions With Affiliates. Except as set forth on Schedule 2.1(c) or      
Schedule 2.1(w), none of the officers, directors, or employees of the Company   
is presently a party to any transaction with the Company or any of its          
Subsidiaries (other than for services as employees, officers and directors),    
including any contract, agreement or other arrangement providing for the        
furnishing of services to or by, providing for rental of real or personal       
property to or from, or otherwise requiring payments to or from any officer,    
director or such employee or, to the knowledge of the Company, any corporation, 
partnership, trust or entity in which any officer, director, or any such        
employee has a substantial interest or is an officer, director, trustee or      
partner.                                                                        

x. Application to Takeover Protection. The Company and its Board of Directors   
have taken all necessary action, if any, in order to render inapplicable any    
control share acquisition, business combination or other similar anti-takeover  
provision under the Certificate of Incorporation, Bylaws or the laws of the     
state of incorporation which is or could become applicable to the Purchaser or  
the Transaction Documents as a result of the transactions contemplated by this  
Agreement or the Transaction Documents. None of the transactions contemplated   
by this Agreement or the Transaction Documents, including the exercise of the A 
Warrant or the B Warrant, will trigger any poison pill provisions of any of the 
Company's stockholders' rights or similar agreements.                           

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y. Solicitation Materials. The Company has not (i) distributed any offering     
materials in connection with the offering and sale of the Shares or the A       
Warrant or the B Warrant, other than the SEC Documents, the Schedules to this   
Agreement, any amendments and supplements thereto, material or information      
requested by the Purchaser or its representative in connection with the         
transaction contemplated by this Agreement, and the materials listed on         
Schedule 2.1(y), or (ii) solicited any offer to buy or sell the Shares, the A   
Warrant or the B Warrant by means of any form of general solicitation or        
advertising. Neither the Company, nor any of its Affiliates, nor any Person     
acting on its or their behalf, has engaged or will engage in any form of        
general solicitation or general advertising (within the meaning of Regulation D 
under the Securities Act) in connection with the offer or sale of the Shares or 
Warrants.                                                                       

z. Acknowledgment of Dilution. The Company understands and acknowledges the     
potentially dilutive effect to the Common Stock upon the issuance of the        
Warrant Shares upon exercise of the Warrants. The Company further acknowledges  
that its obligation to issue Warrant Shares upon exercise of the Warrants in    
accordance with this Agreement, and the Warrants is absolute and unconditional  
regardless of the dilutive effect that such issuance may have on the ownership  
interests of other stockholders of the Company.                                 

aa. Acknowledgment Regarding Purchaser's Purchase of Securities. The Company    
acknowledges and agrees that the Purchaser is acting solely in the capacity of  
arm's length Purchaser with respect to this Agreement and the transactions      
contemplated hereby. The Company further acknowledges that the Purchaser is not 
acting as a financial advisor or fiduciary of the Company (or in any similar    
capacity) with respect to this Agreement and the transactions contemplated      
hereby and any statement made by any Purchaser or any of their respective       
representatives or agents in connection with this Agreement and the             
transactions contemplated hereby is not advice or a recommendation and is       
merely incidental to the Purchaser's purchase of the securities. The Company    
further represents to each Purchaser that the Company's decision to enter into  
this Agreement has been based solely on the independent evaluation of the       
Company and its representatives.                                                

bb. Other Agreements. The Company has not, directly or indirectly, made any     
agreements with the Purchaser relating to the terms and conditions of the       
transactions contemplated by the Transaction Documents except as set forth in   
the Transaction Documents.                                                      

cc.     Investment Intent. The Company is acquiring the MA Warrant and the MB   
Warrant and any shares of stock it receives upon exercise of the MA Warrant or  
the MB Warrant (the "M Shares") for its own account and not with a present view 
to or for distributing or reselling the M Shares, the MA Warrant, the MB        
Warrant or any part thereof or interest therein in violation of the Securities  
Act; provided, however, that by making the representations herein, the Company  
does not agree to hold any of the M Shares, the MA Warrant or the MB Warrant    
for any minimum or other specific term and reserves the right to dispose of the 
M Shares, the MA Warrant or the MB Warrant at any time in accordance with or    
pursuant to a registration statement or an exemption under the Securities Act.  

dd.     Company Status. At the time the Company was offered the MA Warrant, the 
MB Warrant, and at the Primary Closing Date and Secondary Closing Date, (i) it  
was and will be an "accredited investor" as defined in Rule 501 under the       
Securities Act and (ii) the Company, either alone or together with its          
representatives, had and will have such knowledge, sophistication and           

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experience in business and financial matters so as to be capable of evaluating  
the merits and risks of the prospective investment in the Shares and the        
Warrants.                                                                       

ee.     Reliance. The Company understands and acknowledges that (i) the M       
Shares, the MA Warrant and the MB Warrant are being offered and sold to the     
Company without registration under the Securities Act in a private placement    
that is exempt from the registration provisions of the Securities Act under     
Section 4(2) of the Securities Act or Regulation D promulgated thereunder and   
(ii) the availability of such exemption depends in part on, and the Purchaser   
will rely upon the accuracy and truthfulness of, the representations set forth  
in this Section 2.1 and the Company hereby consents to such reliance.           

ff.     Governmental Review. The Company understands that no United States      
federal or state agency or any other government or governmental agency has      
passed upon or made any recommendation or endorsement of the M Shares, the MA   
Warrant or the MB Warrant.                                                      

Any information furnished in the schedules to Section 2.1 (a "Disclosure        
Schedule") shall be deemed to modify all of the Company's representations and   
warranties. The inclusion of any information in the Disclosure Schedule shall   
not be deemed to be an admission or acknowledgment, in and of itself, that such 
information is required by the terms hereof to be disclosed, is material to the 
company, has or would have a Material Adverse Effect. For purposes of this      
Agreement, the terms "to the Company's knowledge," "known by the Company" or    
other words of similar meaning shall mean the actual knowledge of David         
Eisenhaure or Michael Turmelle without any obligation of investigation, and     
shall not refer to the knowledge of any other person or entity.                 

2.2     Representations and Warranties of the Purchaser. The Purchaser hereby   
represents and warrants to the Company as follows:                              

a.      Organization; Authority. The Purchaser is a corporation duly formed,    
validly existing and in good standing under the laws of the jurisdiction of its 
incorporation or formation with the requisite power and authority, corporate or 
otherwise, to enter into and to consummate the transactions contemplated hereby 
and by the Transaction Documents and otherwise to carry out its obligations     
hereunder and thereunder. The purchase by the Purchaser of the Shares, the A    
Warrant and the B Warrant hereunder has been duly authorized by all necessary   
action on the part of the Purchaser. Each of this Agreement and the             
Registration Rights Agreement has been duly executed and delivered by the       
Purchaser and constitutes the valid and legally binding obligation of the       
Purchaser, enforceable against the Purchaser in accordance with its terms,      
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,         
moratorium and similar laws of general applicability relating to or affecting   
creditors' rights generally and to general principles of equity.                

b.      Authorization and Validity; Issuance of Shares. The common stock        
issuable upon exercise of the MA Warrant and, when issued, the MB Warrant, will 
at all times hereafter continue to be duly authorized and reserved for issuance 
and the shares of common stock issued upon the exercise of the MA Warrant, and  
when issued, the MB Warrant, will be validly issued, fully paid and             
non-assessable, free and clear of all liens, encumbrances, and Purchaser rights 
of first refusal, other than liens and encumbrances created by the Company and  
will not be subject to any preemptive or similar rights. Assuming the accuracy  
of the Company's representations in Section 2.1, the issuance by the Purchaser  
of the MA Warrant, the MB Warrant and any shares upon exercise of such warrants 
is exempt from registration under the Securities Act.                           

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c.      Purchaser SEC Documents; Financial Statements.  The Common Stock of the 
Purchaser is registered pursuant to Section 12(g) of the Exchange Act. The      
Purchaser has filed during its current fiscal year all reports, schedules,      
forms, statements and other documents required t be filed by it with the        
Commission pursuant to the reporting requirements of the Exchange Act,          
including pursuant to Section 13, 14 or 15(d) thereof (the foregoing materials  
and financial statements and schedules thereto being collectively referred to   
herein as the "Purchaser SEC Documents"), on a timely basis or has received a   
valid extension of such time of filing and has filed any such Purchaser SEC     
Documents prior to the expiration of any such extension. The Purchaser has      
delivered to the Company or its representatives true, complete and accurate     
copies of the Purchaser SEC Documents that were not filed pursuant to EDGAR. As 
of their respective financial statements of the Purchasers included in the      
Purchaser SEC Documents comply as to form in all material respects with         
applicable accounting requirements and the published rules and regulations of   
the Commission with respect thereto as in effect at the time of filing. Such    
financial statements have been prepared in accordance with United States        
generally accepted accounting principles applied on a consistent basis during   
the periods involved, except as may be otherwise specified in such financial    
statements or the notes thereto, and fairly present in all material respects    
the financial position of the Purchaser as of and for the dates thereof and the 
results of operations and cash flows for the periods then ended, subject, in    
the case of unaudited statements, to normal, year-end audit adjustments. The    
Purchaser acknowledges that the Company will be trading in the securities of    
the Purchaser in reliance on the foregoing representation and warranty.         

d.      Disclosure; Absence of Certain Changes. None of this Agreement, the     
Schedules to this Agreement, the Purchaser SEC Documents (as amended to date)   
contained as of their respective dates, any untrue statement of a material fact 
or omitted to state any material fact necessary in order to make the statements 
made herein and therein, in light of the circumstances under which they were    
made, not misleading. Except as disclosed in Purchaser SEC Documents files on   
EDGAR through the date hereof, since the filing of the Purchaser quarterly      
report on Form 10-Q on August 6, 1999, there has been no Material Adverse       
Change and no material adverse development in the business, properties,         
operations, financial condition, liabilities or results of operations of the    
Purchaser. The Purchaser has not taken any steps, and does not currently expect 
to take any steps, to seek protection pursuant to any bankruptcy law nor does   
the Purchaser or any of its Purchaser Subsidiaries have any knowledge or reason 
to believe that its creditors intend to initiate involuntary bankruptcy         
proceedings.                                                                    

e.      Investment Intent. The Purchaser is acquiring the Shares, the A Warrant 
and the B Warrant for its own account and not with a present view to or for     
distributing or reselling the Shares, the A Warrant, the B Warrant or the       
Warrant Shares or any part thereof or interest therein in violation of the      
Securities Act; provided, however, that by making the representations herein,   
the Purchaser does not agree to hold any of the Shares, the A Warrant, the B    
Warrant or the Warrant Shares for any minimum or other specific term and        
reserves the right to dispose of the Shares, the A Warrant, the B Warrant or    
the Warrant Shares at any time in accordance with or pursuant to a registration 
statement or an exemption under the Securities Act.                             

f.      Purchaser Status. At the time the Purchaser was offered the Shares, the 
A Warrant, the B Warrant, and at the Primary Closing Date and Secondary Closing 
Date, (i) it was and will be an "accredited investor" as defined in clause      
(a)(7) of Rule 501 under the Securities Act and (ii) the Purchaser, either      
alone or together with its representatives, had and will have such knowledge,   
sophistication and experience in business and financial matters so as to be     

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capable of evaluating the merits and risks of the prospective investment in the 
Shares and the Warrants.                                                        

g.      Reliance. The Purchaser understands and acknowledges that (i) the       
Shares, the A Warrant and the B Warrant are being offered and sold to the       
Purchaser without registration under the Securities Act in a private placement  
that is exempt from the registration provisions of the Securities Act under     
Section 4(2) of the Securities Act or Regulation D promulgated thereunder and   
(ii) the availability of such exemption depends in part on, and the Company     
will rely upon the accuracy and truthfulness of, the representations set forth  
in this Section 2.2 and the Purchaser hereby consents to such reliance.         

h.      Governmental Review. The Purchaser understands that no United States    
federal or state agency or any other government or governmental agency has      
passed upon or made any recommendation or endorsement of the Shares, the A      
Warrant or the B Warrant.                                                       

i. Residency.  The Purchaser is a resident of the State of New York.            

The Company acknowledges and agrees that the Purchaser makes no representations 
or warranties with respect to the transactions contemplated hereby other than   
those specifically set forth in this Section 2.2.                               

    ARTICLE III.

    OTHER AGREEMENTS

3.1 Transfer Restrictions.                                                      

a.      If the Purchaser should decide to dispose of the Shares, the A Warrant, 
the B Warrant or the Warrant Shares held by it, the Purchaser understands and   
agrees that it may do so only pursuant to an effective registration statement   
under the Securities Act, to the Company or pursuant to an available exemption  
from the registration requirements of the Securities Act, including Rule 144    
promulgated under the Securities Act ("Rule 144"). In connection with any       
transfer of any Shares, A Warrant, B Warrant or Warrant Shares other than       
pursuant to an effective registration statement, Rule 144 or to the Company,    
the Company may require the transferor thereof to provide to the Company a      
written opinion of counsel experienced in the area of United States securities  
laws selected by the transferor, the form and substance of which opinion shall  
be customary for opinions of counsel in comparable transactions, to the effect  
that such transfer does not require registration of such transferred securities 
under the Securities Act; provided, however, that if the Shares, A Warrant, B   
Warrant or Warrant Shares may be sold pursuant to Rule 144(k), no written       
opinion of counsel shall be required from the Purchaser if the Purchaser        
provides reasonable assurances that such security can be sold pursuant to Rule  
144(k). Notwithstanding the foregoing, the Company hereby consents to and       
agrees to register any transfer by the Purchaser to an Affiliate of the         
Purchaser, provided that the transferee certifies to the Company that it is an  
"accredited investor" as defined in Rule 501(a) under the Securities Act. Any   
such transferee shall agree in writing to be bound by the terms of this         
Agreement and shall have the rights of a Purchaser under this Agreement and the 
Transaction Documents. If the Purchaser provides the Company with an opinion of 
counsel, the form and substance of which opinion shall be customary for         
opinions of counsel in comparable transactions, to the effect that a public     
sale, assignment or transfer of the Shares, A Warrant, B Warrant and the        
Warrant Shares may be made without registration under the Securities Act or the 
Purchaser provides the Company with reasonable assurances that the Shares, A    

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Warrant, B Warrant and the Warrant Shares can be sold pursuant to Rule 144      
without any restriction as to the number of securities acquired as of a         
particular date that can then be immediately sold, the Company shall permit the 
transfer, and, in the case of the Warrant Shares, promptly instruct its         
transfer agent to issue one or more certificates in such name and in such       
denominations as specified by the Purchaser and without any restrictive legend. 
Notwithstanding the foregoing or anything else contained herein to the          
contrary, the securities may be pledged as collateral in connection with a bona 
fide margin account or other lending arrangement.                               

b.      The Purchaser agrees to the imprinting by the Company, so long as is    
required by this Section 3.1(b), of the following legend on the Shares, the A   
Warrant, the B Warrant and the Warrant Shares:                                  

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN                 
REGISTERED WITH THE SECURITIES AND EXCHANGE                     
COMMISSION IN RELIANCE UPON AN EXEMPTION FROM                   
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS               
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,               
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN                
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES           
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN           
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS     
OF THE SECURITIES ACT.                                          

Neither the Shares, the A Warrant, the B Warrant nor the Warrant Shares shall   
be required to contain the legend set forth above (or any other legend) (i) at  
any time after transfer pursuant to a registration statement is effective under 
the Securities Act covering such security, (ii) if in the written opinion of    
counsel to the Company or the Purchaser experienced in the area of United       
States securities laws such legend is not required under applicable             
requirements of the Securities Act (including judicial interpretations and      
pronouncements issued by the staff of the Commission) or (iii) if such Shares,  
the A Warrant, the B Warrant or the Warrant Shares are sold pursuant to Rule    
144. When requested, which request will be accompanied by the certificate       
representing such shares, the Company agrees that it will provide the Purchaser 
with a certificate or certificates representing the Shares, the A Warrant, the  
B Warrant or the Warrant Shares, free from such legend at such time as such     
legend is no longer required hereunder. If such certificate or certificates had 
previously been issued with such a legend or any other legend, the Company      
shall, upon request, receive such certificate or certificates free of any       
legend.                                                                         

c.      Notwithstanding the foregoing, the Purchaser's disposition of the       
Warrant Shares shall be subject to Suspension Periods (as defined in the        
Registration Rights Agreement) set forth in Section 3(r) of the Registration    
Rights Agreement.                                                               

3.2     Stop Transfer Instruction. The Company may not make any notation on its 
records or give instructions to any transfer agent of the Company which enlarge 
the restrictions on transfer set forth in Section 3.1.                          

3.3     Furnishing of Information. Until the Shares, the A Warrant, the B       
Warrant or the Warrant Shares have been sold pursuant to a registration         
statement under the Securities Act or are eligible for sale pursuant to Rule    
144(k), the Company will cause its Shares to continue at all times to be        
registered under Section 12(g) of the Exchange Act, will timely file (or obtain 
extensions in respect thereof and file within the applicable grace period) all  
reports required to be filed by the Company after the date hereof pursuant to   

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Section 13, 14 or 15(d) of the Exchange Act and, unless filed by EDGAR,         
promptly furnish, but in no event later than two (2) business days after the    
filing thereof with the Commission, the Purchaser with true and complete copies 
of all such filings, and will not take any action or file any document (whether 
or not permitted by the Exchange Act or the rules thereunder) to terminate or   
suspend such reporting and filing obligations. Until the Shares, the A Warrant, 
the B Warrant or the Warrant Shares have been sold pursuant to a registration   
statement under the Securities Act or are eligible for sale pursuant to Rule    
144(k), if the Company is not required to file reports pursuant to Section      
13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the          
Purchaser and make publicly available in accordance with Rule 144(c)            
promulgated under the Securities Act annual and quarterly financial statements, 
together with a discussion and analysis of such financial statements in form    
and substance substantially similar to those that would otherwise be required   
to be included in reports required by Section 13(a) or 15(d) of the Exchange    
Act, as well as any other information required thereby, in the time period that 
such filings would have been required to have been made under the Exchange Act. 
The Company further covenants that it will take such further action as any      
holder of the Shares, the A Warrant, the B Warrant or the Warrant Shares may    
reasonably request, all to the extent required from time to time to enable such 
Person to sell the Shares, the A Warrant, the B Warrant or the Warrant Shares   
without registration under the Securities Act within the limitation of the      
exemptions provided by Rule 144 promulgated under the Securities Act, including 
the legal opinion referenced above in Section 3.1(b).                           

3.4 Blue Sky Laws. In accordance with the Registration Rights Agreement, the    
Company shall (i) qualify the Warrant Shares under the securities or "blue sky" 
laws of such jurisdictions as the Purchaser may request (or to obtain an        
exemption from such qualification), (ii) shall provide evidence of any such     
action so taken to the Purchaser on or prior to the Closing Date and (iii)      
shall continue such qualification at all times through the resale of all        
Warrant Shares, but in any event not past the 4th anniversary of the Closing    
Date.                                                                           

3.5 Integration. The Company shall not sell, offer for sale or solicit offers   
to buy or otherwise negotiate in respect of any security (as defined in Section 
2 of the Securities Act) that would be integrated with the offer or sale of the 
Shares, the A Warrant, the B Warrant or the Warrant Shares in a manner that     
would require the registration under the Securities Act or the sale of the      
Shares, the A Warrant, the B Warrant or the Warrant Shares to any Purchaser or  
cause the offering of such securities to be integrated with any other offering  
of securities by the Company for the purpose of any stockholder approval        
provision applicable to the Company or its securities.                          

3.6 Listing and Reservation of Warrant Shares.                                  

a. The Company shall (i) not later than three (3) business days after each      
Closing Date prepare and file with Nasdaq (as well as any other national        
securities exchange or market on which the Common Stock is then listed) an      
additional shares listing application or a letter acceptable to Nasdaq covering 
and listing a number of shares of Common Stock which are issued at such Closing 
or issuable pursuant to the Warrants issuable at such Closing which is at least 
equal to 1 times the maximum number of Warrant Shares then issuable, (ii) take  
all steps necessary to cause such shares of Common Stock to be approved for     
listing on Nasdaq (as well as on any other national securities exchange or      
market on which the Common Stock is then listed) as soon as possible            
thereafter, (iii) maintain, so long as any other shares of Common Stock shall   
be so listed, such listing of all such Warrant Shares, and (iv) provide to the  
Purchaser evidence of such listing. Neither the Company nor any of its          

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Subsidiaries shall take any action which may result in the delisting or         
suspension of the Common Stock on Nasdaq. Prior to the effectiveness of the     
Initial Registration Statement (as defined in the Registration Rights           
Agreement), the Company shall promptly provide to the Purchaser copies of any   
notices it receives from Nasdaq regarding the continued eligibility of the      
Common Stock for listing on such automated quotation system, so long as such    
notice does not include material, nonpublic information. The Company shall pay  
all fees and expenses in connection with satisfying its obligations under this  
Section 3.6(a).                                                                 

b. The Company at all times shall reserve a sufficient number of shares of its  
authorized but unissued Common Stock to provide for 1 times the full exercise   
of the outstanding Warrants. If at any time the number of shares of Common      
Stock authorized and reserved for issuance is insufficient to cover 100% of the 
number of Warrant Shares issued and issuable upon exercise of the Warrants      
(based on the Exercise Price (as defined in the Warrants) of the Warrants in    
effect from time to time) without regard to any limitation on conversions or    
exercises, the Company will promptly take all corporate action necessary to     
authorize and reserve 100% of such shares, including, without limitation,       
calling a special meeting of stockholders to authorize additional shares to     
meet the Company's obligations under this Section 3.6(b), in the case of an     
insufficient number of authorized shares, and using its best efforts to obtain  
stockholder approval of an increase in such authorized number of shares. In     
addition, upon the occurrence of an adjustment of the Exercise Price (as        
defined in the Warrant), the Company shall be required to file, within ten (10) 
business days of such event, a registration statement covering the product of   
1.0 and the number Warrant Shares, less the number of Warrant Shares for which  
a registration statement is then effective. The Company shall use its best      
efforts to cause such registration statement to be declared effective under the 
Securities Act as promptly as possible after the filing thereof, but in any     
event on or prior to that date which is one hundred and twenty (120) days after 
the filing date thereof. All calculations of the above amount shall be made     
without regard to any limitation on exercises of Warrants.                      

3.7 Notice of Breaches.                                                         

a.      The Company and the Purchaser shall give prompt written notice to the   
other of any breach by it of any representation, warranty or other agreement    
contained in this Agreement or in the Transaction Documents. However, no        
disclosure by either party pursuant to this Section 3.7 shall be deemed to cure 
any breach of any representation, warranty or other agreement contained herein  
or in the Transaction Documents.                                                

b.      Notwithstanding the generality of Section 3.7(a), the Company shall     
promptly notify, provided such notification will not constitute material        
non-public information, the Purchaser of any notice or claim (written or oral)  
that it receives from any lender of the Company or any Subsidiary to the effect 
that the consummation of the transactions contemplated hereby and by the        
Registration Rights Agreement violates or would violate any written agreement   
or understanding between such lender and the Company or any Subsidiary, and the 
Company shall promptly furnish by facsimile to the Purchaser a copy of any      
written statement in support of or relating to such claim or notice.            

c.      The default by any Purchaser of any of its obligations, representations 
or warranties under this Agreement or the Transaction Documents shall not be    
imputed to, and shall have no effect upon, any other Purchaser or affect the    
Companys' obligations under this Agreement or any Transaction Document to any   
non-defaulting Purchaser.                                                       

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3.8 Form D. The Company agrees to file a Form D with respect to the Shares, A   
Warrant and B Warrant as required by Rule 506 under Regulation D and to provide 
a copy thereof to the Purchaser promptly after such filing.                     

3.9     Use of Proceeds. The Company intends to use the proceeds from the sale  
of the Common Stock and the exercise of the Warrants (i) to enhance the         
Company's ability to satisfy purchase orders that both parties anticipate that  
the Company will receive from Plug Power, (ii) otherwise to develop the         
Company's module manufacturing capability or (iii) in connection with the       
transition and integration of Ling Electronics into the Company's other         
operations and not to fund future investment in Beacon Power Corporation. The   
Company is free to use the proceeds of the offering for other corporate         
purposes if the board of directors of the Company determines that it is in the  
best interest of the Company to do so. The Purchaser acknowledges that the      
Company may, in the future, acquire cash from other sources and that it may     
invest such cash in Beacon Power Corporation. It is not the intention of the    
parties to establish an auditable trail between receipt of the proceeds and the 
use of such funds.                                                              

3.10    Board Representation.                                                   

a.      The Company agrees to nominate and recommend to its shareholders the    
election to the Company's Board of Directors two person designated by the       
Purchaser and acceptable to the Company's Board of Directors acting reasonably  
(it being agreed that in acting reasonably the Company's Board of Directors may 
consider the desirability of having two members of the Company's Board of       
Directors affiliated with the Purchaser). The Company's obligations under this  
Section 3.10(a) shall terminate if the Purchaser does not own five percent (5%) 
or more on or before July 31, 2000 or ceases to own five percent (5%) or more   
of the Company's outstanding Common Stock. The initial nominee to the Company's 
Board of Directors will be Alan Goldberg.                                       

b.      The Purchaser agrees to nominate and recommend to its shareholders the  
election to the Company's Board of Directors one person designated by the       
Company. The initial nominee will be David Eisenhaure. The Purchaser's          
obligations under this Section 3.10(b) shall terminate if the Purchaser ceases  
to own five percent (5%) or more of the Company's outstanding Common Stock or   
the Company's obligations under Section 3.10(a) ceases, whichever occurs first. 

c.      Both parties will endeavor to have the representatives set forth above  
elected or appointed to their boards as soon as possible, but in no event later 
than December 1, 1999. The Purchaser shall have no obligation to appoint or     
elect the Company's nominee to its Board of Directors until the Company has     
appointed or elected the Purchaser's nominees to the Company's Board of         
Directors.                                                                      

3.11    Transactions with Affiliates. So long as any Shares, A Warrant or B     
Warrant are outstanding, the Company shall not, and shall cause each of its     
Subsidiaries not to, enter into, amend, modify or supplement, or permit any     
Subsidiary to enter into, amend, modify or supplement, any agreement,           
transaction, commitment or arrangement with any of its or any Subsidiary's      
officers, directors or persons who were officers or directors at any time       
during the previous two years, stockholders who beneficially own 5% or more of  
the Common Stock, or Affiliates or any individual related by blood, marriage or 
adoption to any such individual or with any entity in which any such entity or  
individual owns a 5% or more beneficial interest (each a "Related Party"),      
except for (a) customary employment arrangements and benefit programs on        
reasonable terms, (b) any agreement, transaction, commitment or arrangement on  
an arms-length basis on terms no less favorable than terms which would have     

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been obtainable from a Person other than such Related Party, or (c) any         
agreement, transaction, commitment or arrangement which is approved by a        
majority of the disinterested directors of the Company. For purposes hereof,    
any director who is also an officer of the Company or any Subsidiary of the     
Company shall not be a disinterested director with respect to any such          
agreement, transaction, commitment or arrangement. "Affiliate" for purposes of  
this section only means, with respect to any person or entity, another person   
or entity that, directly or indirectly, (i) has a 5% or more equity interest in 
that person or entity, (ii) has 5% or more common ownership with that person or 
entity, (iii) controls that person or entity, or (iv) shares common control     
with that person or entity. "Control" or "Controls" for purposes of this        
section means that a person or entity has the power, direct or indirect, to     
conduct or govern the policies of another person or entity.                     

3.12    Transfer Agent Instructions. At the Primary Closing the Company shall   
issue irrevocable instructions to its transfer agent (and shall issue to any    
subsequent transfer agent as required), to issue certificates, registered in    
the name of the Purchaser or its respective nominee(s), for the Warrant Shares  
issuable pursuant to the A Warrant in such amounts as specified from time to    
time by the Purchaser to the Company in a form acceptable to the Purchaser (the 
"Primary Closing Irrevocable Transfer Agent Instructions"). At the Secondary    
Closing the Company shall issue irrevocable instructions to its transfer agent  
(and shall issue to any subsequent transfer agent as required), to issue        
certificates, registered in the name of the Purchaser or its respective         
nominee(s), for the Warrant Shares issuable pursuant to the B Warrant in such   
amounts as specified from time to time by the Purchaser to the Company in a     
form acceptable to the Purchaser (the "Secondary Closing Irrevocable Transfer   
Agent Instructions"). So long as required pursuant to Section 3.1(b), all such  
certificates shall bear the restrictive legend specified in Section 3.1(b) of   
this Agreement. The Company warrants that no instruction other than the Primary 
Closing Irrevocable Transfer Agent Instructions and the Secondary Closing       
Irrevocable Transfer Agent Instructions referred to in this Section 3.12, and   
stop transfer instructions to give effect to Section 3.1 hereof (in the case of 
the Warrant Shares, prior to registration of the Shares under the Securities    
Act) will be given by the Company to its transfer agent and that the Shares,    
the A Warrant, the B Warrant or the Warrant Shares shall otherwise be freely    
transferable on the books and records of the Company as and to the extent       
provided in this Agreement and the Transaction Documents. The Company           
acknowledges that a breach by it of its obligations hereunder will cause        
irreparable harm to the Purchaser by violating the intent and purpose of the    
transactions contemplated hereby. Accordingly, the Company acknowledges that    
the remedy at law for a breach of its obligations under this Section 3.12 will  
be inadequate and agrees, in the event of a beach or threatened breach by the   
Company of the provisions of this Section 3.12, that the Purchaser, shall be    
entitled, in addition to all other available remedies, to an order and/or       
injunction restraining any breach and requiring immediate issuance and          
transfer, without the necessity of showing economic loss and without any bond   
or other security being required.                                               

3.13 Press Release; Filing of Form 8-K.  Subject to the provisions of Section   
6.10 hereof, prior to the opening of Nasdaq on October 21, 1999, the Company    
and the Purchaser shall file a joint press release in form and substance        
acceptable to the Company and the Purchaser.                                    

3.14    Purchaser Transfer Agent Instructions. At the Primary Closing the       
Purchaser shall issue irrevocable instructions to its transfer agent (and shall 
issue to any subsequent transfer agent as required), to issue certificates,     
registered in the name of the Company or its respective nominee(s), for the M   
Shares issuable pursuant to the MA Warrant in such amounts as specified from    

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time to time by the Company to the Purchaser in a form acceptable to the        
Company (the "Primary Closing Irrevocable Transfer Agent Instructions"). At the 
Secondary Closing the Purchaser shall issue irrevocable instructions to its     
transfer agent (and shall issue to any subsequent transfer agent as required),  
to issue certificates, registered in the name of the Company or its respective  
nominee(s), for the M Shares issuable pursuant to the MB Warrant in such        
amounts as specified from time to time by the Company to the Purchaser in a     
form acceptable to the Company (the "Secondary Closing Irrevocable Transfer     
Agent Instructions"). So long as required pursuant to Section 3.15(b), all such 
certificates shall bear the restrictive legend specified in Section 3.15(b) of  
this Agreement. The Purchaser warrants that no instruction other than the       
Primary Closing Irrevocable Transfer Agent Instructions and the Secondary       
Closing Irrevocable Transfer Agent Instructions referred to in this Section     
3.14, and stop transfer instructions to give effect to Section 3.15 hereof (in  
the case of the M Shares, prior to registration of the Shares under the         
Securities Act) will be given by the Purchaser to its transfer agent and that   
the M Shares, the MA Warrant or the MB Warrant shall otherwise be freely        
transferable on the books and records of the Purchaser as and to the extent     
provided in this Agreement and the Transaction Documents. The Purchaser         
acknowledges that a breach by it of its obligations hereunder will cause        
irreparable harm to the Company by violating the intent and purpose of the      
transactions contemplated hereby. Accordingly, the Purchaser acknowledges that  
the remedy at law for a breach of its obligations under this Section 3.14 will  
be inadequate and agrees, in the event of a beach or threatened breach by the   
Purchaser of the provisions of this Section 3.14, that the Company, shall be    
entitled, in addition to all other available remedies, to an order and/or       
injunction restraining any breach and requiring immediate issuance and          
transfer, without the necessity of showing economic loss and without any bond   
or other security being required.                                               

3.15 Purchaser Transfer Restrictions.                                           

a.      If the Company should decide to dispose of the M Shares, the MA Warrant 
or the MB Warrant held by it, the Company understands and agrees that it may do 
so only pursuant to an effective registration statement under the Securities    
Act, to the Company or pursuant to an available exemption from the registration 
requirements of the Securities Act, including Rule 144 promulgated under the    
Securities Act ("Rule 144"). In connection with any transfer of any M Shares,   
MA Warrant or MB Warrant other than pursuant to an effective registration       
statement, Rule 144 or to the Purchaser, the Purchaser may require the          
transferor thereof to provide to the Purchaser a written opinion of counsel     
experienced in the area of United States securities laws selected by the        
transferor, the form and substance of which opinion shall be customary for      
opinions of counsel in comparable transactions, to the effect that such         
transfer does not require registration of such transferred securities under the 
Securities Act; provided, however, that if the M Shares, MA Warrant or MB       
Warrant may be sold pursuant to Rule 144(k), no written opinion of counsel      
shall be required from the Company if the Company provides reasonable           
assurances that such security can be sold pursuant to Rule 144(k).              
Notwithstanding the foregoing, the Purchaser hereby consents to and agrees to   
register any transfer by the Company to an Affiliate of the Company, provided   
that the transferee certifies to the Purchaser that it is an "accredited        
investor" as defined in Rule 501(a) under the Securities Act. Any such          
transferee shall agree in writing to be bound by the terms of this Agreement    
and shall have the rights of a Company under this Agreement and the Transaction 
Documents. If the Company provides the Purchaser with an opinion of counsel,    
the form and substance of which opinion shall be customary for opinions of      
counsel in comparable transactions, to the effect that a public sale,           
assignment or transfer of the M Shares, MA Warrant and MB Warrant may be made   

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without registration under the Securities Act or the Purchaser provides the     
Company with reasonable assurances that the M Shares, MA Warrant and the MB     
Warrant can be sold pursuant to Rule 144 without any restriction as to the      
number of securities acquired as of a particular date that can then be          
immediately sold, the Purchaser shall permit the transfer, and, in the case of  
the M Shares, promptly instruct its transfer agent to issue one or more         
certificates in such name and in such denominations as specified by the Company 
and without any restrictive legend. Notwithstanding the foregoing or anything   
else contained herein to the contrary, the securities may be pledged as         
collateral in connection with a bona fide margin account or other lending       
arrangement.                                                                    

b.      The Company agrees to the imprinting by the Purchaser, so long as is    
required by this Section 3.15(b), of the following legend on the M Shares, the  
MA Warrant and the MB Warrant:                                                  

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN                 
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION          
IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER           
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES         
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD             
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT          
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE            
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE         
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.                

Neither the M Shares, the MA Warrant nor the MB Warrant shall be required to    
contain the legend set forth above (or any other legend) (i) at any time after  
transfer pursuant to a registration statement is effective under the Securities 
Act covering such security, (ii) if in the written opinion of counsel to the    
Purchaser of the Company experienced in the area of United States securities    
laws such legend is not required under applicable requirements of the           
Securities Act (including judicial interpretations and pronouncements issued by 
the staff of the Commission) or (iii) if such M Shares, the MA Warrant or the   
MB Warrant are sold pursuant to Rule 144. When requested, which request will be 
accompanied by the certificate representing such shares, the Purchaser agrees   
that it will provide the Company with a certificate or certificates             
representing the M Shares, the MA Warrant or the MB Warrant, free from such     
legend at such time as such legend is no longer required hereunder. If such     
certificate or certificates had previously been issued with such a legend or    
any other legend, the Purchaser shall, upon request, receive such certificate   
or certificates free of any legend.                                             

3.16    Purchaser Stop Transfer Instruction. The Purchaser may not make any     
notation on its records or give instructions to any transfer agent of the       
Company which enlarge the restrictions on transfer set forth in Section 3.14.   

3.17    Purchaser Furnishing of Information. Until the M Shares, the MA Warrant 
or the MB Warrant have been sold pursuant to a registration statement under the 
Securities Act or are eligible for sale pursuant to Rule 144(k), the Purchaser  
will cause its M Shares to continue at all times to be registered under Section 
12(g) of the Exchange Act, will timely file (or obtain extensions in respect    
thereof and file within the applicable grace period) all reports required to be 
filed by the Purchaser after the date hereof pursuant to Section 13, 14 or      
15(d) of the Exchange Act and, unless filed by EDGAR, promptly furnish, but in  
no event later than two (2) business days after the filing thereof with the     
Commission, the Company with true and complete copies of all such filings, and  
will not take any action or file any document (whether or not permitted by the  
Exchange Act or the rules thereunder) to terminate or suspend such reporting    

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and filing obligations. Until the M Shares, the MA Warrant or the MB Warrant    
have been sold pursuant to a registration statement under the Securities Act or 
are eligible for sale pursuant to Rule 144(k), if the Purchaser is not required 
to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will 
prepare and furnish to the Company and make publicly available in accordance    
with Rule 144(c) promulgated under the Securities Act annual and quarterly      
financial statements, together with a discussion and analysis of such financial 
statements in form and substance substantially similar to those that would      
otherwise be required to be included in reports required by Section 13(a) or    
15(d) of the Exchange Act, as well as any other information required thereby,   
in the time period that such filings would have been required to have been made 
under the Exchange Act. The Purchaser further covenants that it will take such  
further action as any holder of the M Shares, the MA Warrant or the MB Warrant  
may reasonably request, all to the extent required from time to time to enable  
such Person to sell the M Shares, the MA Warrant or the MB Warrant without      
registration under the Securities Act within the limitation of the exemptions   
provided by Rule 144 promulgated under the Securities Act, including the legal  
opinion referenced above in Section 3.15(b).                                    

3.18    Purchaser Blue Sky Laws. In accordance with the MTI Registration Rights 
Agreement, the Purchaser shall (i) qualify the M Shares under the securities or 
"blue sky" laws of such jurisdictions as the Company may request (or to obtain  
an exemption from such qualification), (ii) shall provide evidence of any such  
action so taken to the Company on or prior to the Primary Closing Date and      
(iii) shall continue such qualification at all times through the resale of all  
M Shares, but in any event not past the 4th anniversary of the Primary Closing  
Date.                                                                           

3.19 Purchaser Listing and Reservation of M Shares.                             

a.      The Purchaser shall (i) not later than three (3) business days after    
each Closing Date prepare and file with Nasdaq (as well as any other national   
securities exchange or market on which the common stock is then listed) an      
additional shares listing application or a letter acceptable to Nasdaq covering 
and listing a number of shares of common stock which are issuable pursuant to   
the Warrants issuable at such Closing which is at least equal to 1 times the    
maximum number of M Shares then issuable, (ii) take all steps necessary to      
cause such shares of common stock to be approved for listing on Nasdaq (as well 
as on any other national securities exchange or market on which the Common      
Stock is then listed) as soon as possible thereafter, (iii) maintain, so long   
as any other shares of common stock shall be so listed, such listing of all     
such M Shares, and (iv) provide to the Company evidence of such listing.        
Neither the Purchaser nor any of its Subsidiaries shall take any action which   
may result in the delisting or suspension of the common stock on Nasdaq. The    
Purchaser shall pay all fees and expenses in connection with satisfying its     
obligations under this Section 3.19(a).                                         

b.      The Purchaser at all times shall reserve a sufficient number of shares  
of its authorized but unissued common stock to provide for 1 times the full     
exercise of the outstanding Warrants. If at any time the number of shares of    
common stock authorized and reserved for issuance is insufficient to cover 100% 
of the number of Warrant Shares issued and issuable upon exercise of the        
warrants (based on the Exercise Price (as defined in the Warrants) of the       
Warrants in effect from time to time) without regard to any limitation on       
conversions or exercises, the Purchaser will promptly take all corporate action 
necessary to authorize and reserve 100% of such shares, including, without      
limitation, calling a special meeting of stockholders to authorize additional   
shares to meet the Company's obligations under this Section 3.19(b), in the     
case of an insufficient number of authorized shares, and using its best efforts 

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to obtain stockholder approval of an increase in such authorized number of      
shares. 3.20    Ordinary Course Brokerage and Trading. The Purchaser represents 
and agrees that neither Purchaser, nor any person that is required by internal  
policy to pre-clear securities transactions with the Purchaser will, enter into 
any short sales of the Company's common stock, except in connection with an     
intended sale of common stock, and in such event, only to the extent covered    
within seven (7) Trading Days of such short sale. In addition, the Purchaser    
represents and agrees on behalf of itself and each of the persons identified in 
the preceding sentence that it will not establish a short position or sell any  
of the Shares during (i) the twenty (20) Trading Day period prior to the one    
(1) year anniversary of the Primary Closing Date or (ii) the seventy five (75)  
Trading Days ending on August 28, 2003 and 2006.                                

   ARTICLE IV.

  CONDITIONS

4.1 Primary Closing Conditions.                                                 

a.      Conditions Precedent to the Obligation of the Company to Sell. The      
obligation of the Company to sell the Shares, the A Warrant, the B Warrant or   
the Warrant Shares hereunder is subject to the satisfaction or waiver (with     
prior written notice to the Purchaser) by the Company, at or before the Primary 
Closing, of each of the following conditions:                                   

(1)     Accuracy of the Purchaser's Representations and Warranties. The         
representations and warranties of the Purchaser in this Agreement shall be true 
and correct in all material respects as of the date when made (except for       
representations and warranties that speak as of a specific date) and as of the  
Closing Date;                                                                   

(2)     Performance by the Purchaser. The Purchaser shall have performed,       
satisfied and complied in all material respects with all covenants, agreements  
and conditions required by this Agreement to be performed, satisfied or         
complied with by the Purchaser at or prior to the Primary Closing; and          

(3)     No Injunction. No statute, rule, regulation, executive order, decree,   
ruling or injunction shall have been enacted, entered, promulgated or endorsed  
by any court or governmental authority of competent jurisdiction which          
prohibits the consummation of any of the transactions contemplated by this      
Agreement or the Transaction Documents.                                         

(4)     Shares of Common Stock. The Purchaser shall have duly reserved the      
number of M Shares required by this Agreement and the Transaction Documents to  
be reserved for issuance upon exercise of the MA Warrant;                       

(5)     Transfer Agent Instructions. The Primary Closing Irrevocable Transfer   
Agent Instructions, in a form acceptable to the Company, shall have been        
delivered to and acknowledged in writing by the Purchaser's transfer agent with 
a copy forwarded to each Company;                                               

(6)     Resolutions. The Board of Directors of the Purchaser shall have adopted 
resolutions consistent with Section 2.1(b) and in a form reasonably acceptable  
to the Company (the "Resolutions");                                             

(7)     Litigation. No litigation shall have been instituted or threatened      
against the Purchaser which could reasonably be expected to, individually or in 
the aggregate, have an MTI Material Adverse Effect; and                         

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(8)     Adverse Changes. Since the date of the financial statements included in 
the Purchaser's Quarterly Report on Form 10-Q or Annual Report on Form 10-K,    
whichever is most recent, last filed prior to the date of this Agreement, no    
event which had a Material Adverse Effect shall have occurred which is not      
disclosed in the Schedules hereto (for purposes hereof, changes in the market   
price of the Common Stock may be considered in determining whether there has    
occurred an event which has had an MTI Material Adverse Effect).                

b.      Conditions Precedent to the Obligation of the Purchaser to Purchase.    
The obligation of the Purchaser hereunder to acquire and pay for the Primary    
Closing Shares and the A Warrant is subject to the satisfaction or waiver (with 
prior written notice to the Company) by the Purchaser, at or before the Primary 
Closing, of each of the following conditions:                                   

(1)     Accuracy of the Company's Representations and Warranties. The           
representations and warranties of the Company set forth in this Agreement shall 
be true and correct in all respects as of the date when made and as of the      
Primary Closing Date as though made at that time (except for representations    
and warranties that speak as of a specific date);                               

(2)     Performance by the Company. The Company shall have performed, satisfied 
and complied in all material respects with all covenants, agreements and        
conditions required by this Agreement to be performed, satisfied or complied    
with by the Company at or prior to the Primary Closing;                         

(3)     No Injunction. No statute, rule, regulation, executive order, decree,   
ruling or injunction shall have been enacted, entered, promulgated or endorsed  
by any court or governmental authority of competent jurisdiction which          
prohibits the consummation of any of the transactions contemplated by this      
Agreement and the Transaction Documents;                                        

(4)     No Suspensions of Trading in Common Stock. The trading in the Common    
Stock shall not have been suspended by the Commission or on Nasdaq (except for  
any suspension of trading of limited duration solely to permit dissemination of 
material information regarding the Company);                                    

(5)     Listing of Common Stock. The Common Stock shall have been at all times  
since the date hereof, and on the Primary Closing Date shall be, listed for     
trading on Nasdaq;                                                              

(6)     Required Approvals. All Required Approvals shall have been obtained and 
copies thereof delivered to the Purchaser;                                      

(7)     Shares of Common Stock. The Company shall have duly reserved the number 
of Warrant Shares required by this Agreement and the Transaction Documents to   
be reserved for issuance upon exercise of the A Warrant;                        

(8)     Change of Control. No Change of Control shall have occurred between the 
date hereof and the Closing Date. "Change of Control" means the occurrence of   
any of (i) an acquisition after the date hereof by an individual or legal       
entity or "group" (as described in Rule 13d-5(b)(1) promulgated under the       
Exchange Act), other than the Purchaser or any of their Affiliates, of in       
excess of 40% of the voting securities of the Company, (ii) a replacement of    
more than one-half of the members of the Company's Board of Directors which is  
not approved by those individuals who are members of the Board of Directors on  
the date hereof in one or a series of related transactions, (iii) the merger of 
the Company with or into another entity, consolidation or sale of all or        
substantially all of the assets of the Company in one or a series of related    
transactions, or (v) the execution by the Company of an agreement to which the  

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Company is a party or by which it is bound, providing for any of the events set 
forth above in (i), (ii) , (iii), (iv) or (v);                                  

(9)     Transfer Agent Instructions. The Primary Closing Irrevocable Transfer   
Agent Instructions, in a form acceptable to the Purchaser, shall have been      
delivered to and acknowledged in writing by the Company's transfer agent with a 
copy forwarded to each Purchaser;                                               

(10)    Resolutions. The Board of Directors of the Company shall have adopted   
resolutions consistent with Section 2.1(b) and in a form reasonably acceptable  
to the Purchaser (the "Resolutions");                                           

(11)    Litigation. No litigation shall have been instituted or threatened      
against the Company which could reasonably be expected to, individually or in   
the aggregate, have a Material Adverse Effect; and                              

(12)    Adverse Changes. Since the date of the financial statements included in 
the Company's Quarterly Report on Form 10-Q or Annual Report on Form 10-K,      
whichever is most recent, last filed prior to the date of this Agreement, no    
event which had a Material Adverse Effect shall have occurred which is not      
disclosed in the Schedules hereto (for purposes hereof, changes in the market   
price of the Common Stock may be considered in determining whether there has    
occurred an event which has had a Material Adverse Effect).                     

c.      Documents and Certificates. At the Primary Closing, the Company shall   
have delivered to the Purchaser the following in form and substance reasonably  
satisfactory to the Purchaser:                                                  

(1)     Opinion. An opinion of the Company's legal counsel in the form attached 
hereto as Exhibit D dated as of the Primary Closing Date;                       

(2)     Common Stock Certificate. A Common Stock Certificate(s) representing    
the Primary Closing Shares, registered in the name of the Purchaser, in form    
satisfactory to the Purchaser;                                                  

(3)     Warrant. A warrant representing the A Warrant purchased by the          
Purchaser, registered in the name of the Purchaser;                             

(4)     Registration Rights. The Company shall have executed and delivered the  
SatCon Registration Rights Agreement;                                           

(5)     Officer's Certificate. An Officer's Certificate dated the Primary       
Closing Date and signed by an executive officer of the Company confirming the   
accuracy of the Company's representations, warranties and covenants as of the   
Primary Closing Date and confirming the compliance by the Company with the      
conditions precedent set forth in this Section 4.1 as of the Primary Closing    
Date;                                                                           

(6)     Secretary's Certificate. A Secretary's Certificate dated the Primary    
Closing Date and signed by the Secretary or Assistant Secretary of the Company  
certifying (A) that attached thereto is a true and complete copy of the         
Certificate of Incorporation of the Company, as in effect on the Closing Date,  
(B) that attached thereto is a true and complete copy of the by-laws of the     
Company, as in effect on the Closing Date and (C) that attached thereto is a    
true and complete copy of the Resolutions duly adopted by the Board of          
Directors of the Company authorizing the execution, delivery and performance of 
this Agreement and of the Transaction Documents, and that such Resolutions have 
not been modified, rescinded or revoked;                                        

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(7)     Certificates of Incorporation. The Company shall have delivered to the  
Purchaser a copy of a certificate evidencing the incorporation and good         
standing of the Company and each Subsidiary, in such corporation's state of     
incorporation issued by the Secretary of State of such state of incorporation   
as of a date within ten days of the Primary Closing Date. The Company shall     
have delivered to the Purchaser a copy of its Certificate of Incorporation as   
certified by the Secretary of State of the State of Delaware within ten days of 
the Primary Closing Date;                                                       

(8)     Transfer Agent Letter. The Company shall have delivered to the          
Purchaser a letter from the Company's transfer agent certifying the number of   
shares of Common Stock outstanding as of a date within five days of the Primary 
Closing Date; and                                                               

(9)     Other Documents. The Company shall have delivered to each Purchaser     
such other documents relating to the transactions contemplated by the           
Transaction Documents as the Purchaser or its counsel may reasonably request.   

d.      Purchaser Documents and Certificates. At the Primary Closing, the       
Purchaser shall have delivered to the Company the following in form and         
substance reasonably satisfactory to the Company:                               

(1)     Cash Payment.   The Purchaser shall deliver, as directed by the         
Company, two million, five hundred seventy thousand dollars ($2,570,000) in     
United States dollars in immediately available funds to an account or accounts  
designated in writing by the Company;                                           

(2)     Warrant. A warrant representing the MA Warrant purchased by the         
Company, registered in the name of the Company;                                 

(3)     Registration Rights. The Purchaser shall have executed and delivered    
the MTI Registration Rights Agreement; and                                      

(4)     Officer's Certificate. An Officer's Certificate dated the Primary       
Closing Date and signed by an executive officer of the Purchaser confirming the 
accuracy of the Purchaser's representations, warranties and covenants as of the 
Primary Closing Date and confirming the compliance by the Purchaser with the    
conditions precedent set forth in this Section 4.1 as of the Primary Closing    
Date;                                                                           
4.2     Secondary Closing Conditions.                           

a.      Conditions Precedent to the Obligation of the Company to Sell. The      
obligation of the Company to sell the Secondary Closing Shares and the B        
Warrant hereunder is subject to the satisfaction or waiver (with prior written  
notice to the Purchaser) by the Company, at or before the Secondary Closing, of 
each of the following conditions:                                               

(1)     Accuracy of the Purchaser's Representations and Warranties. The         
representations and warranties of the Purchaser in this Agreement shall be true 
and correct in all material respects as of the date when made (except for       
representations and warranties that speak as of a specific date) and as of the  
Secondary Closing Date;                                                         

(2)     Performance by the Purchaser. The Purchaser shall have performed,       
satisfied and complied in all material respects with all covenants, agreements  
and conditions required by this Agreement to be performed, satisfied or         
complied with by such Purchaser at or prior to the Secondary Closing; and       

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(3)     No Injunction. No statute, rule, regulation, executive order, decree,   
ruling or injunction shall have been enacted, entered, promulgated or endorsed  
by any court or governmental authority of competent jurisdiction which          
prohibits the consummation of any of the transactions contemplated by this      
Agreement or the Transaction Documents.                                         

(4)     Shares of Common Stock. The Purchaser shall have duly reserved the      
number of M Shares required by this Agreement and the Transaction Documents to  
be reserved for issuance upon exercise of the MB Warrant;                       

(5)     Transfer Agent Instructions. The Secondary Closing Irrevocable Transfer 
Agent Instructions, in a form acceptable to the Company, shall have been        
delivered to and acknowledged in writing by the Purchaser's transfer agent with 
a copy forwarded to each Company;                                               

(6)     Resolutions. The Board of Directors of the Purchaser shall have adopted 
resolutions consistent with Section 2.2(b) and in a form reasonably acceptable  
to the Company (the "Resolutions");                                             

(7)     Litigation. No litigation shall have been instituted or threatened      
against the Purchaser which could reasonably be expected to, individually or in 
the aggregate, have an MTI Material Adverse Effect; and                         

(8)     Adverse Changes. Since the date of the financial statements included in 
the Purchaser's Quarterly Report on Form 10-Q or Annual Report on Form 10-K,    
whichever is most recent, last filed prior to the date of this Agreement, no    
event which had a Material Adverse Effect shall have occurred which is not      
disclosed in the Schedules hereto (for purposes hereof, changes in the market   
price of the Common Stock may be considered in determining whether there has    
occurred an event which has had an MTI Material Adverse Effect).                

b.      Conditions Precedent to the Obligation of the Purchaser to Purchase.    
The obligation of the Purchaser hereunder to acquire and pay for the Secondary  
Closing Shares and the B Warrant at the Secondary Closing is subject to the     
satisfaction or waiver (with prior written notice to the Company) by the        
Purchaser, as of the date of the Secondary Closing, of each of the following    
conditions:                                                                     

(1)     Accuracy of the Company's Representations and Warranties. The           
representations and warranties of the Company set forth in this Agreement shall 
be true and correct in all material respects as of the date when made and as of 
the Secondary Closing Date as though made at that time (except for              
representations and warranties that speak as of a specific date);               

(2)     Performance by the Company. The Company shall have performed, satisfied 
and complied in all material respects with all covenants, agreements and        
conditions required by this Agreement to be performed, satisfied or complied    
with by the Company at or prior to the Secondary Closing;                       

(3)     No Injunction. No statute, rule, regulation, executive order, decree,   
ruling or injunction shall have been enacted, entered, promulgated or endorsed  
by any court or governmental authority of competent jurisdiction which          
prohibits the consummation of any of the transactions contemplated by this      
Agreement and the Transaction Documents;                                        

(4)     No Suspensions of Trading in Common Stock. The trading in the Common    
Stock shall not have been suspended by the Commission or on Nasdaq (except for  
any suspension of trading of limited duration solely to permit dissemination of 
material information regarding the Company);                                    

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(5)     Listing of Common Stock. The Common Stock shall have been at all times  
since the date hereof, and on the Secondary Closing Date shall be, listed for   
trading on Nasdaq;                                                              

(6)     Required Approvals. All Required Approvals shall have been obtained and 
copies thereof delivered to such Purchaser;                                     

(7)     Shares of Common Stock. The Company shall have duly reserved the number 
of Warrant Shares required by this Agreement and the Transaction Documents to   
be reserved for issuance upon exercise of the Warrants;                         

(8)     Change of Control. No Change of Control shall have occurred between the 
date hereof and the Secondary Closing Date. "Change of Control" means the       
occurrence of any of (i) an acquisition after the date hereof by an individual  
or legal entity or "group" (as described in Rule 13d-5(b)(1) promulgated under  
the Exchange Act), other than the Purchasers or any of their Affiliates, of in  
excess of 40% of the voting securities of the Company, (ii) a replacement of    
more than one-half of the members of the Company's Board of Directors which is  
not approved by those individuals who are members of the Board of Directors on  
the date hereof in one or a series of related transactions, (iii) the merger of 
the Company with or into another entity, consolidation or sale of all or        
substantially all of the assets of the Company in one or a series of related    
transactions, or (v) the execution by the Company of an agreement to which the  
Company is a party or by which it is bound, providing for any of the events set 
forth above in (i), (ii) , (iii), (iv) or (v);                                  

(9)     Transfer Agent Instructions. The Irrevocable Transfer Agent             
Instructions, in a form acceptable to the Purchaser, shall have been delivered  
to and acknowledged in writing by the Company's transfer agent with a copy      
forwarded to the Purchaser;                                                     

(10)    Litigation. No litigation shall have been instituted or threatened      
against the Company which could reasonably be expected to, individually or in   
the aggregate, have a Material Adverse Effect; and                              

(11)    Adverse Changes. Since the date of the Primary Closing, no event which  
had a Material Adverse Effect shall have occurred which is not disclosed in the 
Schedules hereto (for purposes hereof, changes in the market price of the       
Common Stock may be considered in determining whether there has occurred an     
event which has had a Material Adverse Effect but shall not themselves          
constitute a Material Adverse Effect).                                          
c.      Documents and Certificates. At the Secondary Closing, the Company shall 
have delivered to the Purchaser the following in form and substance reasonably  
satisfactory to the Purchaser:                                                  

(1)     Stock Certificate. A Stock Certificate representing the Secondary       
Closing Shares, registered in the name of the Purchaser, in form satisfactory   
to the Purchaser;                                                               

(2)     Warrant. A warrant representing the B Warrant purchased by the          
Purchaser, registered in the name of the Purchaser;                             

(3)     Officer's Certificate. An Officer's Certificate dated the Secondary     
Closing Date and signed by an executive officer of the Company confirming the   
accuracy of the Company's representations, warranties and covenants as of the   
Secondary Closing Date and confirming the compliance by the Company with the    
Milestones and the conditions precedent set forth in this Section 4.1 as of the 
Secondary Closing Date;                                                         

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(4)     Certificates of Incorporation. The Company shall have delivered to each 
of the Purchasers a copy of a certificate evidencing the incorporation and good 
standing of the Company and each Subsidiary, in such corporation's state of     
incorporation issued by the Secretary of State of such state of incorporation   
as of a date within ten days of the Secondary Closing Date. The Company shall   
have delivered to the Purchaser a copy of its Certificate of Incorporation as   
certified by the Secretary of State of the State of Delaware within ten days of 
the Secondary Closing Date; and                                                 

(5)     Other Documents. The Company shall have delivered to the Purchaser such 
other documents relating to the transactions contemplated by the Transaction    
Documents as the Purchaser or its counsel may reasonably request.               

d.      Purchaser Documents and Certificates. At the Secondary Closing, the     
Purchaser shall have delivered to the Company the following in form and         
substance reasonably satisfactory to the Company:                               

(1)     Cash Payment.   The Purchaser shall deliver, as directed by the         
Company, four million, five hundred thousand dollars ($4,500,000) in United     
States dollars in immediately available funds to an account or accounts         
designated in writing by the Company;                                           

(2)     Warrant. A warrant representing the MB Warrant purchased by the         
Company, registered in the name of the Company;                                 

(3)     Officer's Certificate. An Officer's Certificate dated the Secondary     
Closing Date and signed by an executive officer of the Purchaser confirming the 
accuracy of the Purchaser's representations, warranties and covenants as of the 
Secondary Closing Date and confirming the compliance by the Purchaser with the  
conditions precedent set forth in this Section 4.2 as of the Secondary Closing  
Date;                                                                           

    ARTICLE V.

   INDEMNIFICATION

5.1     Indemnification. In addition to all of the Company's other obligations  
under this Agreement and the Transaction Documents, the Company shall defend,   
protect, indemnify and hold harmless the Purchaser, its past and present        
Affiliates and their successors and assigns (in accordance with the provisions  
of Section 6.5 hereof), each other holder of the Warrant Shares and all of      
their stockholders, officers, directors, employees and direct or indirect       
investors and any of the foregoing Person's agents or other representatives     
(including, without limitation, those retained in connection with the           
transactions contemplated by this Agreement) (collectively, the "Indemnitees")  
from and against any and all actions, causes of action, suits, claims, losses,  
proceedings, costs (as incurred), penalties, fees (including legal fees and     
expenses), liabilities and damages, and expenses in connection therewith        
(irrespective of whether any such Indemnity is a party to the action for which  
indemnification hereunder is sought), and including interest, penalties and     
attorneys' fees and disbursements (the "Indemnified Liabilities"), incurred by  
any Indemnitee as a result of, or arising out of, or relating to (a) any        
misrepresentation or breach of any representation or warranty made by the       
Company in this Agreement or in the Transaction Documents, or any other         
certificate, instrument or document contemplated hereby or thereby or (b) any   
breach of any covenant, agreement or obligation of the Company contained in     
this Agreement or the Transaction Documents, or any other certificate,          
instrument or document contemplated hereby or thereby. The indemnification      

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obligations of the Company under this paragraph shall be in addition to any     
liability which the Company may otherwise have, shall extend upon the same      
terms and conditions to any affiliate of the Purchaser and officers, directors, 
agents, employees and controlling Persons (if any), as the case may be, of the  
Purchaser and any such affiliate, and shall be binding upon and inure to the    
benefit of any successors, assigns, heirs and personal representatives of the   
Company, the Purchaser and any such affiliate and any such Person. The Company  
also agrees that neither the Purchaser nor any such Affiliates, officers,       
directors, agents, employees or controlling Persons shall have any liability to 
the Company or any Person asserting claims on behalf of or in right of the      
Company in connection with or as a result of the consummation of this Agreement 
or any of the Transaction Documents except to the extent that any losses,       
claims, damages, liabilities or expenses incurred by the Company result from    
the gross negligence or willful misconduct of the Purchaser or entity in        
connection with the transactions contemplated by this Agreement or the          
Transaction Documents. To the extent that the foregoing undertaking by the      
Company may be unenforceable for any reason, the Company shall make the maximum 
contribution to the payment and satisfaction of each of the Indemnified         
Liabilities which is permissible under applicable law.                          

5.2 Purchaser Indemnification. In addition to all of the Purchaser's other      
obligations under this Agreement and the Transaction Documents, the Purchaser   
shall defend, protect, indemnify and hold harmless the Company, its past and    
present Affiliates and their successors and assigns (in accordance with the     
provisions of Section 6.5 hereof), each other holder of the M Shares and all of 
their stockholders, officers, directors, employees and direct or indirect       
investors and any of the foregoing Person's agents or other representatives     
(including, without limitation, those retained in connection with the           
transactions contemplated by this Agreement) (collectively, the "Indemnitees")  
from and against any and all actions, causes of action, suits, claims, losses,  
proceedings, costs (as incurred), penalties, fees (including legal fees and     
expenses), liabilities and damages, and expenses in connection therewith        
(irrespective of whether any such Indemnity is a party to the action for which  
indemnification hereunder is sought), and including interest, penalties and     
attorneys' fees and disbursements (the "Indemnified Liabilities"), incurred by  
any Indemnitee as a result of, or arising out of, or relating to (a) any        
misrepresentation or breach of any representation or warranty made by the       
Purchaser in this Agreement or in the Transaction Documents, or any other       
certificate, instrument or document contemplated hereby or thereby or (b) any   
breach of any covenant, agreement or obligation of the Purchaser contained in   
this Agreement or the Transaction Documents, or any other certificate,          
instrument or document contemplated hereby or thereby. The indemnification      
obligations of the Purchaser under this paragraph shall be in addition to any   
liability which the Purchaser may otherwise have, shall extend upon the same    
terms and conditions to any affiliate of the Company and officers, directors,   
agents, employees and controlling Persons (if any), as the case may be, of the  
Company and any such affiliate, and shall be binding upon and inure to the      
benefit of any successors, assigns, heirs and personal representatives of the   
Purchaser, the Company and any such affiliate and any such Person. The          
Purchaser also agrees that neither the Company nor any such Affiliates,         
officers, directors, agents, employees or controlling Persons shall have any    
liability to the Purchaser or any Person asserting claims on behalf of or in    
right of the Purchaser in connection with or as a result of the consummation of 
this Agreement or any of the Transaction Documents except to the extent that    
any losses, claims, damages, liabilities or expenses incurred by the Purchaser  
result from the gross negligence or willful misconduct of the Company or entity 
in connection with the transactions contemplated by this Agreement or the       
Transaction Documents. To the extent that the foregoing undertaking by the      
Purchaser may be unenforceable for any reason, the Purchaser shall make the     

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maximum contribution to the payment and satisfaction of each of the Indemnified 
Liabilities which is permissible under applicable law.                          

5.3     Procedures.                                             

a.      If a third party shall notify an indemnified party (the "Indemnified    
Party") with respect to any matter that may give rise to a claim for            
indemnification under the indemnity set forth above in Sections 5.1 and 5.2,    
the procedure set forth below shall be followed.                                

(1)     Notice. The Indemnified Party shall give to the party providing         
indemnification (the "Indemnifying Party") written notice of any claim, suit,   
judgment or matter for which indemnity may be sought under Section 6.1 promptly 
but in any event within thirty days after the Indemnified Party receives notice 
thereof; provided, however, that failure by the Indemnified Party to give such  
notice shall not relieve the Indemnifying Party from any liability it shall     
otherwise have pursuant to this Agreement except to the extent that the         
Indemnifying Party is actually prejudiced by such failure. Such notice shall    
set forth in reasonable detail (i) the basis for such potential claim and (ii)  
the dollar amount of such claim.                                                

(2)     Defense of Claim. With respect to a claim by a third party against an   
Indemnified Party for which indemnification may be sought under this Agreement, 
the Indemnifying Party shall have the right, at its option, to be represented   
by counsel of its choice and to assume the defense or otherwise control the     
handling of any claim, suit, judgment or matter for which indemnify is sought,  
which is set forth in the notice sent by the Indemnified Party, by notifying    
the Indemnified Party in writing to such effect within fifteen days of receipt  
of such notice; provided, however, that the Indemnified Party shall have the    
right to employ counsel to represent it if, in the Indemnified Party's          
reasonable judgment based upon the advice of counsel, it is advisable in light  
of the separate interests of the Indemnified Party, to be represented by        
separate counsel, and in that event the reasonable fees and expenses of such    
separate counsel shall be paid by the Indemnifying Party. If the Indemnifying   
Party does not give timely notice in accordance with the preceding sentence,    
the Indemnifying Party shall be deemed to have given notice that it does not    
wish to control the handling of such claim, suit or judgment. In the event the  
Indemnifying Party elects (by notice in writing within such fifteen day period) 
to assume the defense of or otherwise control the handling of any such claim,   
suit, judgment or matter for which indemnity is sought, the Indemnifying Party  
shall indemnify and hold harmless the Indemnified Party from and against any    
and all reasonable professional fees (including attorneys' fees, accountants,   
consultants and engineering fees) and investigation expenses incurred by the    
Indemnifying Party prior to such election, notwithstanding the fact that the    
Indemnifying Party may not have been so liable to the Indemnified Party had the 
Indemnifying Party not elected to assume the defense of or to otherwise control 
the handling of such claim, suit, judgment or other matter. In the event that   
the Indemnifying Party does not assume the defense or otherwise control the     
handling of such matter, the Indemnified Party may retain counsel, as an        
indemnification expense, to defend such claim, suit, judgment or matter.        

(3)     Final Authority. The parties shall cooperate in the defense of any such 
claim or litigation and each shall make available all books and records which   
are relevant in connection with such claim or litigation. In connection with    
any claim, suit or other proceeding with respect to which the Indemnifying      
Party has assumed the defense or control, the Indemnifying Party will not       
consent to the entry of any judgment or enter into any settlement with respect  
to any matter which does not include a provision whereby the plaintiff or       
claimant in the matter releases the Indemnified Party from all liability with   

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respect thereto, without the written consent of the Indemnified Party. In       
connection with any claim, suit or other proceeding with respect to which the   
Indemnifying Party has not assumed the defense or control, the Indemnified      
Party may not compromise or settle such claim without the consent of the        
Indemnifying Party, which shall not be unreasonably withheld and shall be       
deemed to have been given if the Indemnified Party provides the Indemnifying    
Party with a written notice setting forth the material terms of such compromise 
or settlement and the Indemnifying Party does not object thereto in writing     
within ten days of its receipt of such notice.                                  

ARTICLE VI. 

MISCELLANEOUS 

6.1     Entire Agreement. This Agreement, together with the Exhibits and        
Schedules hereto and the Transaction Documents contain the entire understanding 
of the parties with respect to the subject matter hereof and supersede all      
prior agreements and understandings, oral or written, with respect to such      
matters.                                                                        

6.2     Notices. Any notices, consents, waivers or other communications         
required or permitted to be given under the terms of this Agreement must be in  
writing and will be deemed to have been delivered (i) upon receipt, when        
delivered personally; (ii) upon receipt, when sent by facsimile, provided       
confirmation of transmission is mechanically or electronically generated and    
kept on file by the sending party (if received by 7:00 p.m. EST where such      
notice is received) or the first business day following such delivery (if       
received after 7:00 p.m. EST where such notice is received); or (iii) one       
business day after deposit with a nationally recognized overnight delivery      
service, in each case properly addressed to the party to receive the same. The  
addresses and facsimile numbers for such communications shall be:               

If to the Company:                                                              

SatCon Technology Corporation                                                   
161 First Street                                                                
Cambridge, MA 02142-1221                                                        
Telephone: (617)                                                                
Facsimile: (617) 576-7455                                                       
Attention: President and Chief Executive Officer                                

With a copy to:                                                                 

Hale & Dorr LLP                                                                 
60 State Street                                                                 
Boston, MA 02109                                                                
Telephone: (617) 526-6468                                                       
Facsimile: (617) 526-5000                                                       
Attention: Jeffrey N. Carp, Esq.                                                

If to Mechanical Technology Incorporated:                                       

968 Albany-Shaker Road                                                          
Latham, New York  12110                                                         
Telephone:  (518) 785-2211                                                      
Facsimile:   (518) 785-2127                                                     
Attention:  Cynthia A. Scheuer, Chief Financial Officer                         

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With a copy, in the case of Notice to Mechanical Technology Incorporated, to:   

Catherine S. Hill, PLLC                                                         
4 Global View                                                                   
Troy, New York  12180                                                           
Telephone:  (518) 285-7586                                                      
Facsimile:  (518) 285-7564                                                      
Attention:  Catherine S. Hill                                                   

Each party shall provide written notice to the other party of any change in     
address or facsimile number in accordance with the provisions hereof.           

6.3     Amendments; Waivers. No provision of this Agreement may be waived or    
amended except in a written instrument signed, in the case of an amendment, by  
both the Company and each of the Purchaser or, in the case of a waiver, by the  
party against whom enforcement of any such waiver is sought. No waiver of any   
default with respect to any provision, condition or requirement of this         
Agreement shall be deemed to be a continuing waiver in the future or a waiver   
of any other provision, condition or requirement hereof, nor shall any delay or 
omission of either party to exercise any right hereunder in any manner impair   
the exercise of any such right accruing to it thereafter.                       

6.4     Headings. The headings herein are for convenience only, do not          
constitute a part of this Agreement and shall not be deemed to limit or affect  
any of the provisions hereof.                                                   

6.5     Successors and Assigns. This Agreement shall be binding upon and inure  
to the benefit of the parties and their successors and permitted assigns.       
Neither the Company nor the Purchaser may assign this Agreement or any rights   
or obligations hereunder without the prior written consent of each of the other 
party hereto. This provision shall not limit either the Purchaser's right or    
the Company's right to transfer securities in accordance with all of the terms  
of this Agreement or the Transaction Documents.                                 

6.6     No Third-Party Beneficiaries. This Agreement is intended for the        
benefit of the parties hereto and their respective permitted successors and     
assigns and is not for the benefit of, nor may any provision hereof be enforced 
by, any other Person.                                                           

6.7     Governing Law. This Agreement shall be governed by and construed and    
enforced in accordance with the internal laws of the State of New York without  
regard to the principles of conflicts of law thereof. Each party hereby         
irrevocably submits to the nonexclusive jurisdiction of the federal courts      
sitting in the City of Albany, County of Albany or if diversity jurisdiction    
cannot be obtained, then in the state courts sitting in the City of Albany,     
County of Albany for the adjudication of any dispute hereunder or in connection 
herewith or with any transaction contemplated hereby or discussed herein, and   
hereby irrevocably waives, and agrees not to assert in any suit, action or      
proceeding, any claim that it is not personally subject to the jurisdiction of  
any such court, that such suit, action or proceeding is improper. Each party    
hereby irrevocably waives personal service of process and consents to process   
being served in any such suit, action or proceeding by mailing a copy thereof   
to such party at the address for such notices to it under this Agreement and    
agrees that such service shall constitute good and sufficient service of        
process and notice thereof. Nothing contained herein shall be deemed to limit   
in any way any right to serve process in any manner permitted by law. EACH      
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO        

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REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN       
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION         
CONTEMPLATED HEREBY.                                                            

6.8     Survival. The representations and warranties of the Company and the     
Purchaser contained in Sections 2.1 and 2.2, the agreements and covenants set   
forth in Section 3, and the indemnification provisions set forth in Section 5,  
shall survive the Closing and any exercise of the A Warrant, the B Warrant and  
the M Warrant regardless of any investigation made by or on behalf of the       
Purchaser or by or on behalf of the Company, except that, in the case of        
representations, warranties and indemnities such survival shall be limited to   
the period of 18 months following the Closing Date on which they were made or   
deemed to have been made, except for representations in 2.1(a), 2.1(b), 2.1(d), 
2.1(i) and 2.1(v) which shall survive for the applicable statute of limitations 
and 2.1(j) which shall survive for the period of two (2) years. This section    
shall have no effect on the survival of the indemnification provisions of the   
Registration Rights Agreement.                                                  

6.9     Counterparts. This Agreement may be executed in two or more             
counterparts, all of which when taken together shall be considered one and the  
same agreement and shall become effective when counterparts have been signed by 
each party and delivered to the other party, it being understood that both      
parties need not sign the same counterpart. In the event that any signature is  
delivered by facsimile transmission, such signature shall create a valid and    
binding obligation of the party executing (or on whose behalf such signature is 
executed) the same with the same force and effect as if such facsimile          
signature page were an original thereof.                                        

6.10    Publicity. The Company and the Purchaser shall consult with each other  
in issuing any press releases or otherwise making public statements with        
respect to the transactions contemplated hereby and neither party shall issue   
any such press release or otherwise make any such public statement without the  
prior written consent of the other, which consent shall not be unreasonably     
withheld or delayed, except that no prior consent shall be required if such     
disclosure is required by law, in which such case the disclosing party shall    
provide the other party with prior notice of such public statement. The Company 
shall not publicly or otherwise disclose the names of the Purchaser without the 
Purchaser's prior written consent. Subject to the Company's review and          
approval, the Purchaser and its affiliated companies shall, without further     
cost, have the right to use in its advertising, marketing or other similar      
materials, the Company's logo and trademarks and all or parts of the Company's  
press releases that focus on the Transaction forming the subject matter of this 
Agreement or which make reference to the Transaction; provided, however, that   
Company approval is not required with regard to formal newspaper announcements  
of transactions or "tombstones." The Purchaser understands that this grant by   
the Company only waives objections that the Company might have to the use of    
such materials by the Purchaser and in no way constitutes a representation by   
the Company that references in such materials to the activities of              
third-parties have been cleared or constitute a fair use.                       

6.11    Severability. In case any one or more of the provisions of this         
Agreement shall be invalid or unenforceable in any respect, the validity and    
enforceability of the remaining terms and provisions of this Agreement shall    
not in any way be affected or impaired thereby and the parties will attempt to  
agree upon a valid and enforceable provision which shall be a reasonable        
substitute therefor, and upon so agreeing, shall incorporate such substitute    
provision in this Agreement.                                                    

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6.12    Remedies. In addition to being entitled to exercise all rights provided 
herein or granted by law, including recovery of damages, the Purchaser will be  
entitled to specific performance of the obligations of the Company under this   
Agreement or the Transaction Documents without the showing of economic loss and 
without any bond or other security being required. The Company and the          
Purchaser (severally and not jointly) agree that monetary damages would not be  
adequate compensation for any loss incurred by reason of any breach of its      
obligations described in the foregoing sentence and hereby agree to waive in    
any action for specific performance of any such obligation the defense that a   
remedy at law would be adequate.                                                

6.13    Further Assurances. Each party shall do and perform, or cause to be     
done and performed, all such further acts and things, and shall execute and     
deliver all such other agreements, certificates, instruments and documents, as  
the other party may reasonably request in order to carry out the intent and     
accomplish the purposes of this Agreement and the consummation of the           
transactions contemplated hereby.                                               

6.14    Fees and Expenses. Except as set forth in the Registration Rights       
Agreement, each party shall pay the fees and expenses of its advisers, counsel, 
accountants and other experts, if any, and all other expenses incurred by such  
party incident to the negotiation, preparation, execution, delivery and         
performance of this Agreement. The Company shall pay all stamp and other taxes  
and duties levied in connection with the issuance of the Warrant Shares         
pursuant hereto.                                                                

[SIGNATURE PAGE TO FOLLOW]        

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase     
Agreement to be duly executed by their respective authorized persons as of the  
date first indicated above.                                                     

               SATCON TECHNOLOGY CORPORATION

            By:/s/Daniel B. Eisenhaure
           Name:Daniel B. Eisenhaure
                             Title:President and Chief Executive Officer

       MECHANICAL TECHNOLOGY
INCORPORATED  

          By:/s/Cynthia A. Scheuer
         Name:Cynthia A. Scheuer
                              Title:Vice President/Chief Financial Officer

EXHIBIT A     

Form of SatCon Warrant      

EXHIBIT B     

Form of MTI Warrant       

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EXHIBIT C     

Form of SatCon Registration Rights Agreement    

EXHIBIT D     

Form of MTI Registration Rights Agreement   

EXHIBIT E     

Form of Legal Opinion     

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K’ Filing		Date		First		Last			Other Filings
		8/28/06		24
		8/28/03		24
		7/31/00		19
		1/31/00		2		3			8-K,  PRE 14A
		12/31/99		9					10-Q,  11-K,  4,  5/A
Filed on:		12/28/99
		12/1/99		19
		10/21/99		1		20			8-K
For Period End:		9/30/99							10-K/A,  5,  5/A,  NT 10-K/A
		9/9/99		9
		8/16/99		9
		8/6/99		14					10-Q
									List all Filings

15 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 3/31/22  Soluna Holdings, Inc.             10-K       12/31/21  113:10M                                    Genesis Filings LLC/FA
 8/16/21  Soluna Holdings, Inc.             S-1/A                  2:2.6M                                   Genesis Filings LLC/FA
 8/13/21  Soluna Holdings, Inc.             S-1/A                  4:3.5M                                   Genesis Filings LLC/FA
 7/23/21  Soluna Holdings, Inc.             S-1/A                  2:1.9M                                   Genesis Filings LLC/FA
 7/19/21  Soluna Holdings, Inc.             S-1/A                  5:3.5M                                   Genesis Filings LLC/FA
 6/22/21  Soluna Holdings, Inc.             S-1                    3:2.7M                                   Genesis Filings LLC/FA
 4/29/21  Soluna Holdings, Inc.             10-K/A     12/31/20    3:318K                                   EDGARX.com, LLC/FA
 4/21/21  Soluna Holdings, Inc.             S-1/A                  2:252K                                   Genesis Filings LLC/FA
 4/12/21  Soluna Holdings, Inc.             S-1/A                  4:1.7M                                   Genesis Filings LLC/FA
 4/02/21  Soluna Holdings, Inc.             S-1/A                  7:1.8M                                   Genesis Filings LLC/FA
 3/31/21  Soluna Holdings, Inc.             10-K       12/31/20   94:8.2M                                   EDGARX.com, LLC/FA
 3/10/21  Soluna Holdings, Inc.             S-1                    4:2.4M                                   EDGARX.com, LLC/FA
 1/04/21  Soluna Holdings, Inc.             10-12G/A               1:2.1M                                   EDGARX.com, LLC/FA
11/25/20  Soluna Holdings, Inc.             10-12G/A¶  11/25/20    2:2.1M                                   EDGARX.com, LLC/FA
 9/30/20  Soluna Holdings, Inc.             10-12G                18:4.9M                                   EDGARX.com, LLC/FA