AMENDMENT NO. 2 TO CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT, SECURITY AGREEMENT AND SECURED CONVERTIBLE PROMISSORY NOTES AND CONSENT

Exhibit 10.1

AMENDMENT NO. 2 TO
CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT, SECURITY AGREEMENT
AND SECURED CONVERTIBLE PROMISSORY NOTES AND CONSENT

      This Amendment No. 2 to Convertible Note and Warrant Purchase Agreement, Security Agreement and Secured Convertible Promissory Notes and Consent (this “ Amendment and Consent ”) is made as of April 15 ^th , 2009 (the “ Effective Date ”) by and among MTI MicroFuel Cells Inc., a Delaware corporation (the “ Company ”) and each of the “Prior Purchasers” and the “New Purchasers” listed on Exhibit A attached to this Amendment (each a “ Purchaser ” and together the “ Purchasers ”), and amends (i) that certain Convertible Note and Warrant Purchase Agreement, dated as of September 18, 2008 and amended February 20, 2009 (the “ Purchase Agreement ”) between the Company and certain of the Purchasers, (ii) that certain Security Agreement, dated as of September 18, 2008 and amended February 20, 2009 (the “ Security Agreement ”) between the Company and certain of the Purchasers, and (iii) those certain Secured Convertible Promissory Notes, each dated as of September 18, 2008 and amended February 20, 2009 (the “ Notes ”) between the Company and certain of the Purchasers.

      WHEREAS, the Company has issued Notes in the aggregate principal amount of $2,700,000, and warrants exercisable for equity securities of the Company (the “ Warrants ”), to certain of the Purchasers pursuant to the Purchase Agreement, which Notes are secured by all of the assets of the Company in accordance with the provisions of the Security Agreement;

      WHEREAS, the Company and the Purchasers desire to further amend the Purchase Agreement to permit the Company to sell additional Notes and Warrants with an aggregate principal amount of up to $800,000 to certain of the Purchasers who desire to acquire additional Notes and Warrants and in accordance with the schedule set forth on Exhibit A attached hereto, subject to prior written approval of each investment by the Company;

      WHEREAS, the Company and the Purchasers desire to further amend the Notes to extend the Maturity Date (as defined thereunder) from May 31, 2009 to March 31, 2010, and to provide that if the Next Equity Financing (as defined in the Notes) does not occur on or before the Maturity Date, all principal and (at the Company’s option) accrued interest outstanding under all of the Notes shall be converted into equity securities of the Company based upon a Company valuation and on such terms to be agreed upon by the Company and the holders of a majority in interest of the Notes within thirty (30) days following the earlier to occur of (i) the Maturity Date or (ii) the date upon which the aggregate principal amount under all the Notes equals or exceeds $3,500,000, which valuation and terms shall be negotiated in good faith by the Company and a majority in interest of the Notes; and

      WHEREAS, the Purchase Agreement and the Notes may be amended by the Company and holders of at least a majority in interest of the Notes, and the Security Agreement may be amended by Company and each of the Prior Purchasers;

      NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, receipt of which is hereby acknowledged, the parties to this Amendment and Consent agree as follows:

      1. Amendment of Section 1(b)(iii) of the Purchase Agreement . Section 1(b)(iii) of Purchase Agreement is hereby amended to permit the Company to sell additional Notes and Warrants with an aggregate principal amount of up to $800,000 under the Purchase Agreement to such Purchasers who desire to acquire additional Notes and Warrants and in accordance with the schedule set forth on Exhibit A attached hereto, subject to prior written approval of each investment by the Company (electronic acceptable).

     2. Amendment of “Maturity Date” of the Notes. The “Maturity Date” set forth in Section 1 of each of the Notes, and such additional Notes to be issued to the Purchasers as scheduled on Exhibit A attached hereto, shall be amended to provide for an amended “Maturity Date” of March 31, 2010.

     3. Amendment of Section 2(a)(ii) of the Notes . Section 2(a)(ii) of each of the Notes, and such additional Notes, shall be amended and restated in their entirety to read as follows (revised language included below in BOLD ITALICS for reference only):