Document:

Exhibit 10.2

FIRST AMENDMENT

FIRST
AMENDMENT, dated as of October 15, 2007 (this “Amendment”), to the
CREDIT AGREEMENT, dated as of April 26, 2007 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among ACA
CAPITAL HOLDINGS, INC., a Delaware corporation (the “Borrower”), the
several banks and other financial institutions or entities from time to time
parties thereto (the “Lenders”), and JPMORGAN CHASE BANK, N.A., as
administrative agent for the Lenders (in such capacity, the “Administrative
Agent”).

W I T N E S S E T H :

WHEREAS, the Borrower, the
Lenders and the Administrative Agent are parties to the Credit Agreement; and

WHEREAS, the Borrower has
requested that the Administrative Agent and Lenders agree to amend certain
provisions of the Credit Agreement on the terms set forth herein, and the
Lenders are willing to agree to such amendments;

NOW
THEREFORE, in consideration of the premises and mutual covenants contained
herein and in the Credit Agreement, the parties hereby agree as follows:

 

1.                                       Defined Terms.  Unless otherwise defined herein, capitalized
terms that are defined in the Credit Agreement are used herein as defined
therein.

2.                                       Amendments to
the Credit Agreement.  Effective
on and as of the First Amendment Effective Date (as defined in Section 3
below), the Credit Agreement is hereby amended as follows:

(a)                                  Amendments to
Section 1.01 of the Credit Agreement.

(i)    The definition of “Availability Period” is hereby amended
by adding the following proviso at the end of said definition:

“;
provided that the Availability Period shall not be in effect during the
First Amendment Suspension Period”

 

(ii)   The following definitions of “First Amendment Effective Date”
and “First Amendment Suspension Period” shall be added to Section 1.01
following the definition of “Financial Officer”:

“First
Amendment Effective Date” has the meaning set forth in the First Amendment,
dated as of October 15, 2007, to this Agreement.

 

“First
Amendment Suspension Period” means the period from the First Amendment
Effective Date to the first day thereafter on which the Net Worth of the
Borrower is at least $500,000,000 and the Borrower has delivered to the
Administrative Agent a certificate in reasonable detail evidencing such Net
Worth.”

 

 

 

 

(b)           Amendment to Section 2.01 of the Credit Agreement.  Section 2.01 of the Credit Agreement is
hereby amended by adding the following to the end of the first sentence:

“or
(c) at any time when the Net Worth of the Borrower is less than $600,000,000,
the sum of the total Revolving Credit Exposures plus the aggregate principal
amount of outstanding Competitive Loans exceeding $75,000,000”

 

(c)           Amendment to Section 2.05 of the Credit Agreement.  Section 2.05(a)(i) of the Credit Agreement is
hereby amended by deleting “$20,000,000” and substituting “$0” therefor.

(d)           Amendment to Section 2.11 of the Credit Agreement.  Section 2.11(a) of the Credit Agreement is
hereby amended by adding the following sentence at the end of said section:

“In
the event that, at any time after the end of the First Amendment Suspension
Period when the sum of the total Revolving Credit Exposures plus the aggregate
principal amount of the outstanding Competitive Loans exceeds $75,000,000, the
Net Worth of the Borrower is less than $600,000,000, the Borrower shall
promptly make a prepayment of the Revolving Loans (and, to the extent
necessary, cash collateralize the total LC Exposure in a manner reasonably
satisfactory to the Administrative Agent) as necessary to reduce such sum to
not more than $75,000,000.”

 

(e)           Amendment to Section 5.09 of the Credit Agreement.  Section 5.09 of the Credit Agreement is
hereby amended by deleting “A-” in the first sentence and replacing it with “A”.  For the avoidance of doubt, the first
sentence of Section 5.09 shall read:

                                “The
Borrower will cause ACA Financial Guaranty Corporation to maintain a minimum
financial strength rating from S&P of A or better.”

(f)            Amendment to Section 6.01 of the Credit Agreement.

(i)    Section 6.01(e) is hereby amended by adding the following proviso
at the end of said section:

“;
provided that the maximum aggregate principal amount of all such
Indebtedness of the type referred to in clause (ii) of such definition (other
than (x) Indebtedness issued in connection with the warehousing of assets for
collateralized debt obligation transactions structured by and managed by any
Subsidiary in the ordinary course of business and (y) the Indebtedness referred
to in items 6 and 7 of Schedule 6.01) that may be covered by insurance policies
in the nature of financial guarantees or by financial guarantees by Regulated
Insurance Companies shall not at any time outstanding exceed $100,000,000 minus
the principal amount then outstanding of the Indebtedness referred to in item 5
of Schedule 6.01”

 

(ii)   Section 6.01(l) is hereby amended by adding the following
parenthetical at the end of said section:

 

2

 

“(it
being understood that Indebtedness of the Borrower or any Subsidiary is not
third-party Indebtedness)”

 

(iii)          Amendment to Section 6.04 of the Credit Agreement.  Section 6.04 of the Credit Agreement is
hereby amended by deleting clause (B) at the end of said section and
substituting the following therefor:

                                “(B)
$15,000,000 (or, in the case of 2007, $20,000,000, but only $5,000,000 may be
utilized after the First Amendment Effective Date) for such fiscal year, provided
that after the 2007 fiscal year, the amount in this clause (B) may not be
utilized until after the end of the First Amendment Suspension Period”

(h)           Amendment to Section 6.06 of the Credit Agreement.  Section 6.06(a) of the Credit Agreement is
hereby amended to read as follows:

“The
Borrower will not permit its Net Worth at any time after the First Amendment
Suspension Period to be less than the sum of (i) $500,000,000, (ii) 50% of
cumulative Consolidated Net Income for each fiscal quarter of the Borrower
(beginning with the first full fiscal quarter commencing on or after the First
Amendment Suspension Period) for which Consolidated Net Income is positive, and
(iii) 50% of the Net Cash Proceeds of any offering by the Borrower of common
equity consummated after the end of the First Amendment Suspension Period.”

 

3

 

3.                                       Waiver.  The Lender parties hereto hereby waive any
Default or Event of Default that may have been in effect at any time during the
period from July 1, 2007 to the First Amendment Effective Date if such Default
of Event of Default would not have occurred had the Amendment been in effect as
of July 1, 2007.

4.                                       Effectiveness.  The amendments set forth herein shall be
effective on and as of the date (the “First Amendment Effective Date”)
on which this Amendment shall have been executed and delivered by the Borrower
and the Required Lenders.  Upon this
Amendment becoming effective, the Borrower agrees to pay to the Administrative
Agent, for the account of each Lender that has executed and delivered this
Amendment by 5:00 p.m. (New York City time) on October 15, 2007, an amendment
fee in an amount equal to 5 basis points of such Lender’s Commitment.

5.                                       Continuing
Effect of Credit Agreement.  This Amendment shall not be construed as an
amendment or waiver to any further or future action on the part of the Borrower
that would require an amendment or waiver of the Administrative Agent and/or
the Lenders.  Except as amended or waived
hereby, the provisions of the Credit Agreement are and shall remain in full
force and effect.

6.                                       Counterparts.  This Amendment may be executed in counterparts
(including counterparts by facsimile), and all of the said counterparts taken
together shall be deemed to constitute one and the same instrument.

7.                                       GOVERNING
LAW.  THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
OF THE STATE OF NEW YORK.

8.                                       Expenses.  The Borrower agrees to pay or reimburse the
Administrative Agent for all of its reasonable out-of-pocket costs and expenses
incurred in connection with the preparation, negotiation and execution of this
Amendment, including, without limitation, the reasonable fees and disbursements
of counsel to the Administrative Agent.

*   *  
*   *   *

 

4

 

IN
WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly
executed and delivered by their respective proper and duly authorized officers
as of the day and year first above written.

 

	
   

  	
  ACA
  CAPITAL HOLDINGS, INC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Edward U. Gilpin

  
	
   

  	
   

  	
  Name:
  Edward U. Gilpin

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE BANK, N.A., as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Erin O’Rourke

  
	
   

  	
   

  	
  Name:
  Erin O’Rourke

  
	
   

  	
   

  	
  Title:
  Executive Director

  
	
   

  	
   

  	
   

  
				

 

 

 

 

 

	
   

  	
  Credit
  Suisse, Cayman Islands Branch

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jay Chall

  
	
   

  	
   

  	
  Name:
  Jay Chall

  
	
   

  	
   

  	
  Title:
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Alain Schmid

  
	
   

  	
   

  	
  Name:
  Alain Schmid

  
	
   

  	
   

  	
  Title:
  Assistant Vice President

  

 

 

 

 

 

	
  ,

  	
  CHANG
  HWA COMMERCIAL BANK, LTD.

  
	
   

  	
  NEW
  YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jim C.Y. Chen

  
	
   

  	
   

  	
  Name:
  Jim C.Y. Chen

  
	
   

  	
   

  	
  Title:
  VP and General Manager

  

 

 

 

 

 

	
   

  	
  THE
  BANK OF NOVA SCOTIA 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David Mahmood

  
	
   

  	
   

  	
  Name:
  David Mahmood

  
	
   

  	
   

  	
  Title:
  Director

  

 

 

 

 

 

	
   

  	
  Bear
  Stearns Corporate Lending, Inc. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bryan J. Carter

  
	
   

  	
   

  	
  Name:
  Bryan J. Carter

  
	
   

  	
   

  	
  Title:
  Authorized Signatory

  

 

 

 

 

 

	
   

  	
  ABN
  AMRO Bank NV

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bryan Manning

  
	
   

  	
   

  	
  Name:
  Bryan Manning

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Raymond Walsh

  
	
   

  	
   

  	
  Name:
  Raymond Walsh

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  

 

 

 

 

 

	
   

  	
  Greenwich
  Capital Markets, Inc., as agent

  for The Royal Bank of Scotland plc

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  George Urban

  
	
   

  	
   

  	
  Name:
  George Urban

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

 

 

 

	
   

  	
  National
  Australia Bank Limited

  ABN 12 00 044 937

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Clinton M. Johnson 

  
	
   

  	
   

  	
  Name:
  Clinton M. Johnson

  
	
   

  	
   

  	
  Title:
  Managing Directorexhibit10_1.htm

                                                                            Exhibit
      10.1

    

    

    

    

    

    

    

    

    

    

    SECURITIES
      PURCHASE AND SALE AGREEMENT

    

    by
      and between

    

    MILLENNIUM
      CELL INC.

    

    and

    

    HORIZON
      FUEL CELL TECHNOLOGIES PTE. LTD.

    

    October
      19, 2007

    

    

    

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

     

    

      
        	
                1.

              	
                Definitions.

              	
                1

              
	 	
                1.1           Defined
                  Terms Used in this Agreement.

              	
                1

              
	
                2.

              	
                Purchases
                  and Sales; Closing.

              	
                3

              
	
                 

              	
                2.1           MCEL
                  Common Stock.

              	
                3

              
	
                .

              	
                2.2           Horizon
                  Note.

              	
                3

              
	
                 

              	
                2.3           Closing.

              	
                3

              
	
                3.

              	
                Representations
                  and Warranties of MCEL.

              	
                4

              
	
                 

              	
                3.1           Organization,
                  Good Standing, Corporate Power and Qualification.

              	
                4

              
	
                 

              	
                3.2           Corporate
                  Power and Authorization.

              	
                4

              
	 	
                3.3           Capitalization.

              	
                4

              
	 	
                3.4           Subsidiaries.

              	
                5

              
	 	
                3.5           Valid
                  Issuance of MCEL Shares.

              	
                5

              
	 	
                3.6           Purchase
                  for Own Account; Accredited Investor.

              	
                5

              
	 	
                3.7           Restricted
                  Securities.

              	
                5

              
	 	
                3.8           Legends.

              	
                6

              
	 	
                3.9           Access
                  to Information.

              	
                6

              
	 	
                3.10         Filings,
                  Consents and Approvals; Non-Contravention.

              	
                6

              
	 	
                3.11         Litigation.

              	
                7

              
	 	
                3.12         MCEL
                  Intellectual Property.

              	
                7

              
	 	
                3.13         Compliance.

              	
                7

              
	 	
                3.14         Voting
                  Rights.

              	
                7

              
	 	
                3.15         MCEL
                  Financial Statements.

              	
                7

              
	 	
                3.16         Material
                  Changes.

              	
                8

              
	 	
                3.17         MCEL
                  Tax Returns and Payments.

              	
                8

              
	 	
                3.18         MCEL
                  Insurance.

              	
                8

              
	 	
                3.19         Private
                  Placement.

              	
                8

              
	 	
                3.20         No
                  Broker’s or Finder’s Fee.

              	
                8

              
	 	
                3.21         Environmental
                  Matters.

              	
                8

              
	 	
                3.22         Disclosure.

              	
                9

              
	
                4.

              	
                Representations
                  and Warranties of Horizon.

              	
                9

              
	 	
                4.1          Organization,
                  Good Standing, Corporate Power and Qualification.

              	
                9

              
	 	
                4.2          Corporate
                  Power and Authorization.

              	
                9

              
	 	
                4.3          Capitalization.

              	
                10

              
	 	
                4.4           Subsidiaries.

              	
                10

              
	 	
                4.5           Valid
                  Issuance of Horizon Shares.

              	
                10

              
	 	
                4.6           Purchase
                  for Own Account; Accredited Investor.

              	
                10

              
	 	
                4.7           Restricted
                  Securities.

              	
                11

              
	 	
                4.8           Legends.

              	
                11

              
	 	
                4.9          Access
                  to Information.

              	
                11

              
	 	
                4.10        Filings,
                  Consents and Approvals; Non-Contravention.

              	
                11

              
	 	
                4.11        Litigation.

              	
                12

              
	 	
                4.12        Horizon
                  Intellectual Property.

              	
                12

              
	 	
                4.13        Compliance.

              	
                12

              
	 	
                4.14        Voting
                  Rights.

              	
                12

              
	 	
                4.15        Horizon
                  Financial Statements.

              	
                13

              
	 	
                4.16        Material
                  Changes.

              	
                13

              
	 	
                4.17        Horizon
                  Tax Returns and Payments.

              	
                13

              
	 	
                4.18        Horizon
                  Insurance.

              	
                13

              
	 	
                4.19        Private
                  Placement.

              	
                13

              
	 	
                4.20        No
                  Broker’s or Finder’s Fee.

              	
                14

              
	 	
                4.21        Environmental
                  Matters.

              	
                14

              
	 	
                4.22        Disclosure.

              	
                14

              
	
                5.

              	
                Covenants
                  and Agreements.

              	
                14

              
	 	
                5.1          Continued
                  Access to Information; Confidentiality; Public Announcement
                  .

              	
                14

              
	 	
                5.2          Further
                  Assurances.

              	
                15

              
	 	
                5.3          Board
                  Observers.

              	
                15

              
	 	
                5.4          Lock-Up.

              	
                16

              
	 	
                5.5          Voting
                  Agreements.

              	
                16.

              
	 	
                5.6          Resale
                  Registration Statement.

              	
                16

              
	
                6.

              	
                Indemnification.

              	
                18

              
	 	
                6.1         Indemnification
                  of Horizon.

              	
                18

              
	 	
                6.2         Indemnification
                  of MCEL.

              	
                18

              
	 	
                6.3         Procedures.

              	
                19

              
	
                7.

              	
                Miscellaneous.

              	
                20

              
	 	
                7.1         Survival.

              	
                20

              
	 	
                7.2         Transfer;
                  Successors and Assigns.

              	
                21

              
	 	
                7.3         Governing
                  Law; Submission to Jurisdiction.

              	
                21

              
	 	
                7.4         Counterparts.

              	
                21

              
	 	
                7.5         Construction
                  of Certain Terms.

              	
                21

              
	 	
                7.6         Notices.

              	
                21

              
	 	
                7.7         Fees
                  and Expenses.

              	
                22

              
	 	
                7.8         Amendments
                  and Waivers.

              	
                22

              
	 	
                7.9         Severability.

              	
                23

              
	 	
                7.10       Delays
                  or Omissions.

              	
                23

              
	
                 

              	
                7.11       Entire
                  Agreement.

              	
                23

              

      

Exhibit
      A                     Form
      of Joint Collaboration LOI

    Exhibit
      B                      Form
      of Horizon Note

    
 

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

     

    
 

    SECURITIES
      PURCHASE AND SALE AGREEMENT

     

    THIS
      SECURITIES PURCHASE AND SALE AGREEMENT (this “Agreement”) is
      made as of October 19, 2007 by and among Millennium Cell Inc., a corporation
      organized under the laws of the State of Delaware (the “MCEL”),
      and Horizon Fuel Cell Technologies Pte. Ltd., a company limited by shares
      organized under the laws of the Republic of Singapore
      (“Horizon”).  Each of MCEL and Horizon also may be
      referred to herein individually as a “Party” or collectively as
      the “Parties.”

     

    Recitals

     

    WHEREAS,
      MCEL and Horizon desire to enter into a strategic joint development program
      and
      collaborate to develop fuel cell products which embody and/or are developed
      from
      synergistic applications of the combined expertise of the Parties on the terms
      set forth in the non-binding letter of intent attached as Exhibit A
      hereto (the “Joint Collaboration LOI”);

     

    WHEREAS,
      as an inducement to enter into such joint development program, and subject
      to
      the terms and conditions of this Agreement, MCEL and Horizon have agreed that
      at
      the Closing (as defined herein) (i) MCEL will issue to Horizon shares of MCEL
      Common Stock (as defined herein) with an agreed value of $5,000,000 and (ii)
      Horizon will issue to MCEL a promissory note in the aggregate principal amount
      of $5,000,000, substantially in the form attached as Exhibit B hereto
      (the “Horizon Note”), which, upon receipt of the Horizon
      Shareholder Approval (as defined herein), shall automatically convert into
      Horizon Ordinary Shares (as defined herein) with an agreed value of
      $5,000,000.

     

    NOW,
      THEREFORE, in consideration of the foregoing and the mutual covenants and
      agreements contained herein, and for good and valuable consideration, the
      receipt and sufficiency of which are hereby acknowledged, the Parties agree
      as
      follows:

     

    1.  Definitions.

     

    1.1.  Defined
      Terms Used in this Agreement.

     

     In
      addition to the terms specifically defined throughout this Agreement, the
      following terms used in this Agreement shall be construed to have the meanings
      set forth or referenced below.

     

    “Affiliate”
      means, with respect to any specified Person, any other Person which directly
      or
      indirectly through one or more intermediaries controls, or is controlled by,
      or
      is under common control with, such specified Person (for the purposes of this
      definition, “control” (including, with correlative meanings, the terms
“controlling,” “controlled by” and “under common control with”), as used with
      respect to any Person, means the possession, directly or indirectly, of the
      power to direct or cause the direction of the management or policies of such
      Person, whether through the ownership of voting securities, by agreement or
      otherwise); provided, however, that, for the avoidance of doubt
      (i) MCEL is not an Affiliate of Horizon and (ii) Horizon is not an Affiliate
      of
      MCEL.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

     

    “Applicable
      Law” means, with respect to any Person, any domestic or foreign,
      federal, state or local statute, law, ordinance, rule, administrative
      interpretation, regulation, order, writ, injunction, decree or other requirement
      of any Governmental Authority applicable to such Person or any of their
      respective properties, assets, officers, directors, employees, consultants
      or
      agents (in connection with such officer’s, director’s, employee’s, consultant’s
      or agent’s activities on behalf of such Person).

     

    “Business
      Day” means any day except Saturday, Sunday or any day on which banks
      are generally not open for business in New York City or Singapore.

     

    “Environmental
      Laws” shall mean all laws (i) related to releases or threatened
      releases of any Hazardous Materials in soil, surface water, groundwater,
      structures, or air; or (ii) governing the use, treatment, storage, disposal,
      transport, emissions, or handling of Hazardous Materials.  Such
      Environmental Laws shall include, but are not limited to, the Clean Air Act,
      Resource Conservation and Recovery Act and the Comprehensive Environmental
      Response, Compensation and Liability Act, as well as any other foreign, federal,
      state, or local laws addressing protection of the environment and human health
      and safety.

     

    “Environmental
      Permits” means all licenses, permits, approvals, registrations,
      authorizations, variances, certificates, clearances, consents, commissions,
      franchises, exemptions, orders and qualification filings from or with any
      authorities required under applicable Environmental Laws.

     

    “Exchange
      Act” means the Securities Exchange Act of 1934, as
      amended.

     

    “Governmental
      Authority” means any federal, state, local or foreign court or
      governmental agency, authority, instrumentality or regulatory body.

     

    “Hazardous
      Materials” shall mean any pollutant, toxic substance, contaminant,
      hazardous waste, hazardous substance or extremely hazardous material regulated
      under any Environmental Laws, including, without limitation, petroleum or any
      refined product or fraction thereof, asbestos, or polychlorinated
      biphenyls.

     

    “Horizon
      Disclosure Schedules” means the Schedules to the representations of
      Horizon contained in Article IV of this Agreement, which Schedules are annexed
      hereto.

     

    “Horizon
      Material Adverse Effect” means any change or effect that (a) does
      or is reasonably likely to materially adversely affect the ability of Horizon
      to
      perform its obligations under this Agreement or to consummate the transactions
      contemplated hereby, or (b) does or is reasonably likely to materially adversely
      affect the business, assets (including intangible assets), liabilities,
      prospects, financial condition or results of operations of Horizon.

     

    “Horizon
      Ordinary Shares” means the ordinary shares of S$1.00 each in the share
      capital of Horizon.

     

    “Horizon
      Shareholder Approval” means the approval of a resolution at an
      extraordinary general meeting of the shareholders of Horizon granting Horizon’s
      board of directors the authority to allot the authorized but unissued share
      capital of Horizon and Horizon receiving the Preferred Shareholder Consent
      (as
      such term is defined in the Horizon Articles) required for the issuance of
      the
      Horizon Shares and the disapplication of any and all pre-emptive rights afforded
      to any of the shareholders of Horizon in connection with such
      issuance.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “MCEL
      Disclosure Schedules” means the Schedules to the representations of
      MCEL contained in Article III of this Agreement, which Schedules are annexed
      hereto.

     

    “MCEL
      Material Adverse Effect” means any change or effect that (a) does
      or is reasonably likely to materially adversely affect the ability of MCEL
      to
      perform its obligations under this Agreement or to consummate the transactions
      contemplated hereby, or (b) does or is reasonably likely to materially adversely
      affect the business, assets (including intangible assets), liabilities,
      prospects, financial condition or results of operations of MCEL.

     

    “MCEL
      Common Stock” means the common stock of MCEL, par value $0.001 per
      share.

     

    “Person”
      means and includes an individual, a limited liability company, a partnership,
      a
      joint venture, a corporation or trust, an unincorporated organization, a group
      or Governmental Authority.

     

    “SEC”
      means the Securities and Exchange Commission.

     

    “Securities
      Act” means the Securities Act of 1933, as amended.

     

    “Transaction
      Agreements” means, collectively, this Agreement, the Joint
      Collaboration LOI and the Horizon Note.

     

    2.  Purchases
      and Sales; Closing.

     

    2.1.  MCEL
      Common Stock.

     

      On
      the Closing Date (as defined in Section 2.3), and subject to the terms
      and conditions set forth in this Agreement, MCEL hereby agrees to sell, issue
      and deliver to Horizon, and Horizon hereby agrees to purchase and accept from
      MCEL, 7,936,508 shares of MCEL Common Stock (the “MCEL
      Shares”).

     

    2.2.  Horizon
      Securities.  On the Closing Date and subject to the terms and
      conditions set forth in this Agreement, Horizon hereby agrees to sell, issue
      and
      deliver to MCEL, and MCEL hereby agrees to purchase from Horizon, the Horizon
      Note which shall, upon receipt of the Horizon Shareholder Approval, be
      automatically converted into 33,740 Horizon Ordinary Shares (the
“Horizon Shares” and, together with the Horizon Note, the
“Horizon Securities”).

     

    2.3.  Closing.

     

     The
      closing of the transactions contemplated by this Agreement (the
“Closing”) shall take place contemporaneously with the
      execution and delivery of this Agreement.  The Closing shall take
      place at the offices of Dickstein Shapiro LLP, 1177 Avenue of the Americas,
      New
      York, N.Y. 10036 on the date hereof (the “Closing Date”), or at
      such other location or time as the Parties may agree.  At the Closing,
      the following shall occur:

     

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

     

    (a)  MCEL
      shall issue to Horizon, in exchange for the Horizon Shares, certificates
      representing the MCEL Shares, duly registered in the name of Horizon and
      endorsed with the restrictive legends set forth in
Section  4.8;

     

    (b)  Horizon
      shall issue to MCEL, in exchange for the MCEL Shares, the Horizon Note;
      and

     

    (c)  MCEL
      and
      Horizon shall execute and deliver any other documents, certificates and
      agreements necessary or desirable to accomplish the foregoing.

     

    3.  Representations
      and Warranties of MCEL.

     

     MCEL
      hereby represents and warrants (and each such representation and warranty shall
      be deemed to have been made with respect to MCEL and each subsidiary of MCEL
      that is set forth in Schedule 3.4), in each case as if such
      representation and warranty were made by such subsidiary) to Horizon
      that:

     

    3.1.  Organization,
      Good Standing, Corporate Power and Qualification.

     

    MCEL
      is a
      corporation duly organized, validly existing and in good standing under the
      laws
      of its jurisdiction of organization and has all requisite corporate power and
      authority to carry on its business as presently conducted and as proposed to
      be
      conducted.  MCEL is duly qualified to transact business and is in good
      standing in each jurisdiction in which the failure to so qualify would have
      a
      MCEL Material Adverse Effect.  MCEL has the requisite corporate power
      and authority to own and operate its properties and assets.

     

    3.2.  Corporate
      Power and Authorization.  MCEL

     

     has
      all requisite legal and corporate power and authority to enter into this
      Agreement and each other Transaction Agreement to which it is a party and to
      issue and sell the MCEL Shares hereunder and to carry out and perform its
      obligations in accordance with the terms of this Agreement and each other
      Transaction Agreement to which it is a party.  The execution and
      delivery by MCEL of this Agreement and each other Transaction Agreement to
      which
      MCEL is a party and the consummation by it of the transactions contemplated
      hereby and thereby have been duly authorized by all necessary corporate action
      on the part of MCEL and no further corporate action is required by
      MCEL.  This Agreement has been (and each other Transaction Agreement
      to which MCEL is a party will be) duly executed and delivered by MCEL and
      constitute the valid and binding obligation of MCEL enforceable against MCEL
      in
      accordance with the terms of this Agreement and such other Transaction
      Agreements, except (a) as limited by applicable bankruptcy, insolvency,
      reorganization, moratorium, fraudulent conveyance, or other laws of general
      application relating to or affecting the enforcement of creditors’ rights
      generally and (b) as limited by laws relating to the availability of specific
      performance, injunctive relief, or other equitable remedies.

     

    3.3.  Capitalization.

     

     The
      number of shares and type of all authorized, issued and outstanding capital
      stock of MCEL (including any treasury shares) and the number of shares of MCEL
      Common Stock underlying all outstanding options, warrants and other convertible
      securities are set forth in Schedule 3.3.  No securities of
      MCEL are entitled to preemptive rights, rights of participation, or any similar
      right to participate in the transactions contemplated by this
      Agreement.  Except as disclosed in the reports, schedules, forms,
      statements and other filings filed by MCEL with the SEC under the Securities
      Act
      and the Exchange Act (the “MCEL SEC Reports”), there are no
      outstanding options, warrants, scrip rights to subscribe to, calls or
      commitments of any character whatsoever relating to, or securities, rights
      or
      obligations convertible into or exchangeable for, or giving any Person any
      right
      to subscribe for or acquire, any shares of MCEL Common Stock, or any contracts,
      commitments, understandings or arrangements by which MCEL is or may become
      bound
      to issue additional shares of MCEL Common Stock, or securities or rights
      convertible or exchangeable into shares of MCEL Common Stock.  The
      issuance and sale of the MCEL Shares hereunder will not obligate any Person
      (other than Horizon) to purchase any securities of MCEL, and will not result
      in
      a right of any holder of MCEL securities to adjust the exercise, conversion,
      exchange or reset price under such securities.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    3.4.  Subsidiaries.

     

     Except
      as set forth in Schedule 3.4, MCEL does not currently own or control, and
      has never owned or controlled, directly or indirectly, any interest in any
      other
      corporation, partnership, trust, joint venture, limited liability company,
      association, or other business entity.  Except as disclosed in
Schedule 3.4 and except as contemplated by the Joint Collaboration LOI,
      MCEL is not a participant in any joint venture, teaming, partnership or similar
      arrangement.

     

    3.5.  Valid
      Issuance of MCEL Shares.

     

     The
      MCEL Shares, when issued, sold and delivered in accordance with the terms of
      this Agreement and in consideration of the Horizon Note, will be validly issued,
      fully paid and nonassessable and free of restrictions on transfer other than
      restrictions on transfer imposed under the this Agreement, applicable state
      and
      federal securities laws and liens or encumbrances created by or imposed by
      Horizon.  Assuming the accuracy of the representations of Horizon in
Section 4.6 of this Agreement, the MCEL Shares will be issued hereunder
      in compliance with all applicable federal and state securities
      laws.

     

    3.6.  Purchase
      for Own Account; Accredited Investor.  MCEL hereby confirms that
      the Horizon Note to be acquired by MCEL hereunder and the Horizon Shares
      issuable upon conversion of the Horizon Note (together, the “Horizon
      Securities”) will be acquired for investment for MCEL’s own account,
      not as a nominee or agent, and not with a view to the resale or distribution
      of
      any part thereof, and that MCEL has no present intention of selling, granting
      any participation in, or otherwise distributing the same.  MCEL is an
“accredited investor” as such term is defined in Rule 501(a) of Regulation D
      promulgated under the Securities Act.

     

    3.7.  Restricted
      Securities.

     

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

     

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    3.8.  Legends.

     

     MCEL
      understands that the Horizon Securities and any securities issued in respect
      of
      or in exchange for the Horizon Securities, will bear one or all of the following
      legends:

     

    (a)  “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE
      SECURITIES LAWS AND, ACCORDINGLY,  MAY NOT BE OFFERED, SOLD,
      TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT
      (A)
      PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND, TO THE EXTENT
      REQUIRED, ANY APPLICABLE STATE SECURITIES LAWS OR (B) UPON DELIVERY OF AN
      OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE ISSUER THAN AN EXEMPTION FROM
      REGISTRATION UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS IS
      AVAILABLE.”

     

    (b)  Any
      legend required by the securities laws of any jurisdiction to the extent such
      laws are applicable to the Horizon Securities.

     

    3.9.  Access
      to Information.

     

     Without
      in any way limiting the effect of the representations and warranties of Horizon
      set forth in Section 4 hereof, as of the date of this Agreement, MCEL has
      had an opportunity to discuss Horizon’s business, management and financial
      affairs with Horizon’s officers and management employees and review all
      documents and records of Horizon to the extent that MCEL has requested such
      discussions, documentation and records.

     

    3.10.  Filings,
      Consents and Approvals; Non-Contravention

     

    .

     

     MCEL
      is not 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
      Governmental Authority or other Person in connection with the execution,
      delivery and performance by MCEL of this Agreement and each other Transaction
      Agreement to which MCEL is a party in accordance with their respective terms,
      other than the filing of a Current Report on Form 8-K and a Form D with the
      SEC
      and filings required by the Nasdaq Stock Market.  The execution,
      delivery and performance of this Agreement and each other Transaction Agreement
      to which MCEL is a party and the consummation of the transactions contemplated
      hereby and thereby by MCEL do not and will not (i) contravene or conflict
      with the Certificate of Incorporation and Bylaws (and other equivalent
      organizational documents) of MCEL, (ii) contravene or conflict with or
      constitute a violation of any Applicable Law,  (iii) constitute a
      breach of or default under or give rise to any right of termination,
      cancellation or acceleration of any right or obligation of any Person or to
      a
      loss of any benefit to which MCEL is entitled under any provision of any
      material contract binding upon MCEL or by which any of the assets of MCEL or
      the
      MCEL Shares are or may be bound, or (iv) result in the creation or
      imposition of any liens, claims or encumbrances on any asset of MCEL or any
      of
      the MCEL Shares.

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    3.11.  Litigation.

     

     There
      is no claim, action, suit, proceeding, arbitration, complaint, charge or
      investigation pending or, to MCEL’s knowledge, any threat thereof
      (a) against MCEL; or (b) that questions the validity of this Agreement
      or any other Transaction Agreement to which MCEL is a party or the right of
      MCEL
      to enter into such agreements, or to consummate the transactions contemplated
      by
      such agreements in accordance with their respective terms.  There is
      no action, suit, proceeding or investigation pending that was initiated by
      MCEL
      or which MCEL currently intends to initiate.

     

    3.12.  MCEL
      Intellectual Property.

     

     MCEL
      has, or has rights to use, all patents, patent applications, trademarks,
      trademark applications, service marks, trade names, copyrights, licenses and
      other similar rights (collectively, the “MCEL Intellectual
      Property”) that are necessary or material for use in connection with
      its business and which the failure to so have, would have, or would reasonably
      be expected to result in, an MCEL Material Adverse Effect.  MCEL has
      not received a written notice that the MCEL Intellectual Property used by MCEL
      violates or infringes upon the rights of any Person which, if determined
      adversely to MCEL would, individually or in the aggregate, have an MCEL Material
      Adverse Effect.  All such MCEL Intellectual Property is enforceable
      and, to MCEL’s knowledge, there is no existing infringement by another Person of
      any of the MCEL Intellectual Property.

     

    3.13.  Compliance.

     

      MCEL
      is not (i) in default under or in violation of (and no event has occurred that
      has not been waived that, with notice or lapse of time or both, would result
      in
      a default by MCEL under), nor has MCEL received written notice of a claim that
      it is in default under or that it is in violation of, in any material respect,
      any material indenture, instrument, loan or credit agreement or any other
      material agreement to which it is a party or by which it or any of its
      properties is bound (whether or not such default or violation has been waived),
      (ii) in violation of any order of any court, arbitrator or governmental body
      applicable to MCEL, or (iii) in violation of any statute, rule or regulation
      of
      any Governmental Authority applicable to MCEL, including, without limitation,
      all foreign, federal, state and local laws relating to taxes, environmental
      protection, occupational health and safety, product quality and safety and
      employment and labor matters.

     

    3.14.  Voting
      Rights.  E

     

    xcept
      as
      set forth in Schedule 3.14, to the knowledge of MCEL, no stockholder of
      MCEL has entered into any agreements with respect to the voting of capital
      stock
      of MCEL.

     

    3.15.  MCEL
      Financial Statements.

     

     The
      financial statements of MCEL included in its Annual Report on Form 10-K filed
      with the SEC on March 30, 2007 and its Quarterly Report on Form 10-Q filed
      with
      the SEC on August 14, 2007 fairly present the financial position of MCEL and
      its
      consolidated subsidiaries as of and for the dates of such financial statements
      and the results of operations and cash flows for the periods then ended,
      subject, in the case of unaudited statements, to normal, immaterial, year-end
      audit adjustments and the absence of footnotes.

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    3.16.  Material
      Changes.

     

     Since
      the date of the financial statements included the Quarterly Report on Form
      10-Q
      filed by MCEL with the SEC on August 14, 2007:  (i) there has been no
      event, occurrence or development that has had or that could reasonably be
      expected to result in an MCEL Material Adverse Effect, (ii) MCEL has not
      incurred any liabilities (contingent or otherwise) other than: (A) trade
      payables and accrued expenses incurred in the ordinary course of business
      consistent with past practice, (B) liabilities not required to be reflected
      in
      MCEL’s financial statements pursuant to United States generally accepted
      accounting principles and (C) expenses in connection with the negotiation
      and consummation of the transactions contemplated by this Agreement, (iii)
      MCEL
      has not altered its method of accounting or the identity of its auditors, (iv)
      MCEL has not declared or paid any dividend (other than dividends payable on
      MCEL’s Series B-1 Convertible Preferred Stock and Convertible Series C2
      Preferred Stock) or distributed any cash or other property to its stockholders
      or purchased, redeemed or made any agreements to purchase or redeem any shares
      of its capital stock and (v) MCEL has not issued any equity securities to any
      officer, director or Affiliate, except pursuant to existing MCEL stock option
      plans or deferred compensation plans.

     

    3.17.  MCEL
      Tax Returns and Payments. 

     

     There
      are no federal, state, county, local or foreign taxes due and payable by MCEL
      which have not been timely paid.  There are no accrued and unpaid
      federal, state, county, local or foreign taxes of MCEL which are due, whether
      or
      not assessed or disputed.  There have been no examinations or audits
      of any MCEL tax returns by any applicable Governmental
      Authority.  MCEL has duly and timely filed all federal, state, county,
      local and foreign tax returns required to have been filed by it and there are
      in
      effect no waivers of applicable statutes of limitations with respect to taxes
      owed or payable by MCEL for any year.

     

    3.18.  MCEL
      Insurance.

     

     MCEL
      maintains insurance policies for the business and assets of MCEL against all
      risks normally insured against, and in amounts normally carried by, corporations
      of similar size engaged in similar lines of business, and all such insurance
      policies are in full force and effect and such policies, or policies providing
      substantially similar coverage (but in any event not less than the amount of
      coverage currently provided) will be maintained by MCEL after giving effect
      to
      the transactions contemplated by this Agreement.

     

    3.19.  Private
      Placement.

     

     Assuming
      the accuracy of Horizon’s representations and warranties set forth in Section
      4.6, no registration under the Securities Act is required for the offer,
      issuance and sale of the MCEL Shares by MCEL to Horizon as contemplated
      hereby.

     

    3.20.  No
      Broker’s or Finder’s Fee.

     

     Except
      as set forth in Schedule 3.20, no agent, broker, investment banker,
      Person or firm acting on behalf of MCEL, or under the authority of MCEL, is
      or
      will be entitled to any broker’s or finder’s fee or any other commission or
      similar fee directly or indirectly from any Party in connection with the
      transactions contemplated hereby.

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

     

    3.21.  Environmental
      Matters.  MCEL is in compliance with and has not received any
      notice of any violation of any Environmental Laws except with respect to any
      violation which would not reasonably be expected to result in an MCEL Material
      Adverse Effect

     

    .  MCEL
      holds and is in compliance with all Environmental Permits required to be held
      by
      it under applicable Environmental Laws, except where the failure to hold any
      such Environmental Permit or the failure to comply with any such Environmental
      Permit would not reasonably be expected to have an MCEL Material Adverse
      Effect.  There are no Hazardous Materials in, on, under, emanating
      from, or migrating onto any portion of any property or structure at any time
      owned, leased or occupied by MCEL and MCEL has not generated, handled, treated,
      recycled, stored, transported, disposed of, arranged for the disposal of,
      released, or placed any Hazardous Materials in, on or under any such property
      or
      structure.  MCEL has not assumed by any means any actual or potential
      liability of any other Person under any Environmental Laws.

     

    3.22.  Disclosure.

     

     MCEL
      understands and confirms that Horizon is relying on the foregoing
      representations in acquiring the MCEL Shares hereunder.  No
      representation or warranty by MCEL contained in this Agreement and no statement
      contained in the MCEL Disclosure Schedules contains any untrue statement of
      a
      material fact or omits to state a material fact necessary in order to make
      the
      representations and warranties herein or the statements therein not
      misleading.

     

    4.  Representations
      and Warranties of Horizon.

     

     Horizon
      hereby represents and warrants (and each such representation and warranty shall
      be deemed to have been made with respect to Horizon and each subsidiary of
      Horizon that is disclosed in Schedule 4.4, in each case as if such
      representation and warranty were made by such subsidiary) to MCEL
      that:

     

    4.1.  Organization;
      Good Standing; Corporate Power and
      Qualification.  Horizon

     

     is
      a corporation duly organized, validly existing and in good standing under the
      laws of its jurisdiction of organization and has all requisite corporate power
      and authority to carry on its business as presently conducted and as proposed
      to
      be conducted.  Horizon is duly qualified to transact business and is
      in good standing in each jurisdiction where the failure to so qualify would
      have
      a Horizon Material Adverse Effect.  Horizon has the requisite
      corporate power and authority to own and operate its properties and
      assets.

     

    4.2.  Corporate
      Power and Authorization.

     

     Horizon
      has all requisite legal and corporate power and authority to enter into this
      Agreement and each other Transaction Agreement to which Horizon is a party
      and
      to issue and sell the Horizon Note hereunder and, upon receipt of the Horizon
      Shareholder Approval, to issue the Horizon Shares upon conversion of the Horizon
      Note, and to carry out and perform its obligations in accordance with the terms
      of this Agreement and each other Transaction Agreement to which Horizon is
      a
      party.  The execution and delivery by Horizon of this Agreement and
      each other Transaction Agreement to which Horizon is a party and the
      consummation by it of the transactions contemplated hereby and thereby have
      been
      duly authorized by all necessary corporate action on the part of Horizon (except
      for the Horizon Shareholder Approval) and no further corporate action is
      required by Horizon (except for the Horizon Shareholder
      Approval).  This Agreement has been and each other Transaction
      Agreement to which Horizon is a party will be duly executed and delivered by
      Horizon and constitute the valid and binding obligation of Horizon enforceable
      against it in accordance with its respective terms except (a) as limited by
      applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
      conveyance, or other laws of general application relating to or affecting the
      enforcement of creditors’ rights generally and (b) as limited by laws relating
      to the availability of specific performance, injunctive relief, or other
      equitable remedies.

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

     

    4.3.  Capitalization.  Immediately
      prior to the Closing, the number of shares and type of all authorized and issued
      share capital of Horizon (including any treasury shares) is set forth in
Schedule 4.3.  Except as provided in the Articles of
      Association of Horizon as in effect as of the date hereof (the “Horizon
      Articles”), no securities of Horizon are entitled to preemptive rights,
      rights of participation, or any similar right to participate in the transactions
      contemplated by this Agreement.  Immediately prior to the Closing and
      except as disclosed in Schedule 4.3, there are no outstanding options,
      warrants, scrip rights to subscribe to, calls or commitments of any character
      whatsoever relating to, or securities, rights or obligations convertible into
      or
      exchangeable for, or giving any Person any right to subscribe for or acquire,
      any shares of Horizon Ordinary Shares, or any contracts, commitments,
      understandings or arrangements by which Horizon is or may become bound to issue
      additional Horizon Ordinary Shares, or securities or rights convertible or
      exchangeable into shares of Horizon Ordinary Shares.  Except as
      disclosed in Schedule 4.3, the issuance and sale of the Horizon Note
      hereunder and the issuance of the Horizon Shares upon conversion of the Horizon
      Note will not obligate any Person (other than MCEL) to purchase any securities
      of Horizon, and will not result in a right of any holder of Horizon securities
      to adjust the exercise, conversion, exchange or reset price under such
      securities.

     

    4.4.  Subsidiaries.  Except
      as disclosed in Schedule 4.4, Horizon does not currently own or control,
      and has never owned or controlled, directly or indirectly, any interest in
      any
      other corporation, partnership, trust, joint venture, limited liability company,
      association, or other business entity.  Except as disclosed in
Schedule 4.4 and except as contemplated by the Joint Collaboration LOI,
      Horizon is not a participant in any joint venture, teaming, partnership or
      similar arrangement.

     

    4.5.  Valid
      Issuance of Horizon Securities.  The Horizon Note, when issued,
      sold and delivered in accordance with the terms of this Agreement in
      consideration of the MCEL Shares, will be duly authorized and validly
      issued.  The Horizon Shares, when issued upon conversion of the
      Horizon Note, will be validly issued, fully paid and nonassessable and free
      of
      restrictions on transfer other than restrictions on transfer imposed under
      this
      Agreement, the Horizon Articles, applicable state and federal securities laws
      and liens or encumbrances created by or imposed by MCEL.  Assuming the
      accuracy of the representations of MCEL in Section 3.6 of this Agreement,
      the Horizon Securities will be issued hereunder and under the Horizon Note
      in
      compliance with all applicable federal and state securities laws.

     

    4.6.  Purchase
      for Own Account; Accredited Investor.    Horizon hereby
      confirms that the MCEL Shares to be acquired by Horizon hereunder will be
      acquired for investment for Horizon’s own account, not as a nominee or agent,
      and not with a view to the resale or distribution of any part thereof, and
      that
      Horizon has no present intention of selling, granting any participation in,
      or
      otherwise distributing the same.  Horizon is an “accredited investor”
as such term is defined in Rule 501(a) of Regulation D promulgated under the
      Securities Act.

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

     

    4.7.  Restricted
      Securities.

     

     Horizon
      understands that the MCEL Shares have not been, and will not be, registered
      under the Securities Act, by reason of a specific exemption from the
      registration provisions of the Securities Act which depends upon, among other
      things, the bona fide nature of the investment intent and the accuracy of
      Horizon’s representations as expressed herein.  Horizon understands
      that the MCEL Shares are “restricted securities” under applicable United States
      federal and state securities laws and that, pursuant to these laws, Horizon
      must
      hold the MCEL Shares indefinitely
      unless they are registered with the SEC and qualified by state authorities,
      or
      an exemption from such registration and qualification requirements is
      available.  Horizon acknowledges that MCEL has no obligation to
      register or qualify the Horizon Shares for resale except as set forth in
Section 5.6.  Horizon further acknowledges that if an exemption
      from registration or qualification is available, it may be conditioned on
      various requirements including, but not limited to, the time and manner of
      sale,
      the holding period for the MCEL Shares, and on requirements relating to MCEL
      which are outside of Horizon’s control, and which the MCEL is under no
      obligation and may not be able to satisfy.

     

    4.8.  Legends.

     

     Horizon
      understands that the MCEL Shares and any securities issued in respect of or
      in
      exchange for the MCEL Shares, will bear one or all of the following
      legends:

     

    (a)  “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE
      SECURITIES LAWS AND, ACCORDINGLY,  MAY NOT BE OFFERED, SOLD,
      TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT
      (A)
      PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND, TO THE EXTENT
      REQUIRED, ANY APPLICABLE STATE SECURITIES LAWS OR (B) UPON DELIVERY OF AN
      OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE ISSUER THAN AN EXEMPTION FROM
      REGISTRATION UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS IS
      AVAILABLE.”

     

    (b)  Any
      legend required by the securities laws of any state to the extent such laws
      are
      applicable to the MCEL Shares represented by the certificate so
      legended.

     

    4.9.  Access
      to Information.

     

    Without
      in any way limiting the effect of the representations and warranties of MCEL
      set
      forth in Section 3 hereof, as of the date of this Agreement, Horizon has
      had an opportunity to discuss MCEL’s business, management and financial affairs
      with MCEL’s officers and management employees and review all documents and
      records of MCEL to the extent that Horizon has requested such discussions,
      documentation and records.  

     

    4.10.  Filings,
      Consents and Approvals; Non-Contravention.  Except for the Horizon
      Shareholder Approval,

     

    Horizon
      is not 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
      Governmental Authority or other Person in connection with the execution,
      delivery and performance by Horizon of this Agreement and each other Transaction
      Agreement to which Horizon is a party in accordance with their respective terms,
      other than required by blue sky filings.  The execution, delivery and
      performance of this Agreement and each other Transaction Agreement to which
      Horizon is a party and the consummation of the transactions contemplated hereby
      and thereby by Horizon does not and will not (i) contravene or conflict with
      the
      Memorandum of Association of Horizon or the Horizon Articles (or other
      equivalent organizational documents of Horizon), (ii) contravene or conflict
      with or constitute a violation of any Applicable Law, (iii) constitute a breach
      of or default under or give rise to any right of termination, cancellation
      or
      acceleration of any right or obligation of any Person or to a loss of any
      benefit to which Horizon is entitled under any provision of any material
      contract binding upon Horizon or by which any of the assets of Horizon or the
      Horizon Shares are or may be bound, or (iv) result in the creation or imposition
      of any liens, claims or encumbrances on any asset of Horizon or any of the
      Horizon Securities.

     

     

    
      
        
        

      

      
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    4.11.  Litigation.  There
      is no claim, action, suit, proceeding, arbitration, complaint, charge or
      investigation pending or, to Horizon’s knowledge, any threat thereof (a) against
      Horizon; or (b) that questions the validity of this Agreement or the right
      of
      Horizon to enter into this Agreement or any other Transaction Agreement to
      which
      Horizon is a party, or to consummate the transactions contemplated hereby and
      thereby in accordance with their respective terms.  There is no
      action, suit, proceeding or investigation pending that was initiated by Horizon
      or which Horizon currently intends to initiate.

     

    4.12.  Horizon
      Intellectual Property.  Horizon has, or has rights to use, all
      patents, patent applications, trademarks, trademark applications, service marks,
      trade names, copyrights, licenses and other similar rights (collectively, the
      “Horizon Intellectual Property”) that are necessary or material
      for use in connection with its business and which the failure to so have, would
      have, or would reasonably be expected to result in, a Horizon Material Adverse
      Effect.  Horizon has not received a written notice that the Horizon
      Intellectual Property used by Horizon violates or infringes upon the rights
      of
      any Person which if determined adversely to Horizon would, individually or
      in
      the aggregate, have a Horizon Material Adverse Effect.  All such
      Horizon Intellectual Property is enforceable and, to Horizon’s knowledge, there
      is no existing infringement by another Person of any of the Horizon Intellectual
      Property.

     

    4.13.  Compliance.  Horizon
      is not (i) in default under or in violation of (and no event has occurred that
      has not been waived that, with notice or lapse of time or both, would result
      in
      a default by Horizon under), nor has Horizon received written notice of a claim
      that it is in default under or that it is in violation of, in any material
      respect, any material indenture, instrument, loan or credit agreement or any
      other material agreement to which it is a party or by which any of its
      properties is bound (whether or not such default or violation has been waived),
      (ii) in violation of any order of any court, arbitrator or governmental body
      applicable to Horizon, or (iii) in violation of any statute, rule or regulation
      of any Governmental Authority applicable to Horizon, including without
      limitation all foreign, federal, state and local laws relating to taxes,
      environmental protection, occupational health and safety, product quality and
      safety and employment and labor matters.

     

    4.14.  Voting
      Rights.  Except as disclosed in Schedule 4.14 and except
      for agreements whereby shareholders of Horizon have agreed to vote in favor
      of
      the approvals needed to complete the transactions contemplated by this Agreement
      and the Horizon Note, to the knowledge of Horizon, no shareholder of Horizon
      has
      entered into any agreements with respect to the voting of the share capital
      of
      Horizon.

     

     

    
      
        
        

      

      
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    4.15.  Horizon
      Financial Statements.  The most recently prepared financial
      statements of Horizon and its consolidated subsidiaries are attached hereto
      as
Schedule 4.15 (the “Horizon Financial
      Statements”).  The Horizon Financial Statements fairly
      present the financial position of Horizon and its consolidated subsidiaries
      as
      of and for the dates thereof and the results of operations and cash flows for
      the periods then ended.

     

    4.16.  Material
      Changes.  Since the date of the most recently prepared Horizon
      Financial Statements: (i) there has been no event, occurrence or development
      that has had or that would reasonably be expected to result in a Horizon
      Material Adverse Effect, (ii) Horizon has not incurred any liabilities
      (contingent or otherwise) other than: (A) trade payables and accrued expenses
      incurred in the ordinary course of business consistent with past practice,
      (B)
      liabilities not required to be reflected in Horizon’s financial statements
      pursuant to applicable accounting rules and regulations and (C) expenses in
      connection with the negotiation and consummation of the transactions
      contemplated by this Agreement, (iii) Horizon has not altered its method of
      accounting or the identity of its auditors, if any, (iv) Horizon has not
      declared or paid any dividend or distributed any cash or other property to
      its
      shareholders or purchased, redeemed or made any agreements to purchase or redeem
      any shares of its share capital and (v) Horizon has not issued any equity
      securities to any officer, director or Affiliate, except pursuant to existing
      Horizon stock option plans or deferred compensation plans.

     

    4.17.  Horizon
      Tax Returns and Payments.  There are no federal, state, county,
      local or foreign taxes due and payable by Horizon which have not been timely
      paid.  There are no accrued and unpaid federal, state, county, local
      or foreign taxes of Horizon which are due, whether or not assessed or
      disputed.  There have been no examinations or audits of any Horizon
      tax returns by any applicable Governmental Authority.  Horizon has
      duly and timely filed all federal, state, local and foreign tax returns required
      to have been filed by it and there are in effect no waivers of applicable
      statutes of limitations with respect to taxes owed or payable by Horizon for
      any
      year.

     

    4.18.  Horizon
      Insurance.  Horizon maintains insurance policies for the business
      and assets of Horizon against all risks normally insured against, and in amounts
      normally carried, by corporations of similar size engaged in similar lines
      of
      business and all such insurance policies are in full force and effect and such
      policies, or policies providing substantially similar coverage (but in any
      event
      not less than the amount of coverage currently provided) will be maintained
      by
      Horizon after giving effect to the transactions contemplated by this
      Agreement.

     

    4.19.  Private
      Placement.  Assuming the accuracy of MCEL’s representations and
      warranties set forth in Section 3.6, no registration under the Securities
      Act is required for the offer, issuance and sale of the Horizon Securities
      by
      Horizon to MCEL as contemplated hereby.

     

     

    
      
        
        

      

      
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    4.20.  No
      Broker’s or Finder’s Fee.  Except as set forth in Schedule
      4.20, no agent, broker, investment banker, Person or firm acting on behalf
      of Horizon, or under the authority of Horizon, is or will be entitled to any
      broker’s or finder’s fee or any other commission or similar fee directly or
      indirectly from any Party in connection with the transactions contemplated
      hereby.

     

    4.21.  Environmental
      Matters.  Horizon is in compliance with and has not received any
      notice of any violation of any Environmental Laws except with respect to any
      violation which would not reasonably be expected to result in a Horizon Material
      Adverse Effect

     

    .  Horizon
      holds and is in compliance with all Environmental Permits required to be held
      by
      it under applicable Environmental Laws, except where the failure to hold any
      such Environmental Permit or the failure to comply with any such Environmental
      Permit would not reasonably be expected to have a Horizon Material Adverse
      Effect.  There are no Hazardous Materials in, on, under, emanating
      from, or migrating onto any portion of any property or structure at any time
      owned, leased or occupied by Horizon and Horizon has not generated, handled,
      treated, recycled, stored, transported, disposed of, arranged for the disposal
      of, released, or placed any Hazardous Materials in, on or under any such
      property or structure.  Horizon has not assumed by any means any
      actual or potential liability of any other Person under any Environmental
      Laws.

     

    4.22.  Disclosure.  Horizon
      understands and confirms that MCEL is relying on the foregoing representations
      in acquiring the MCEL Shares hereunder.  No representation or warranty
      by Horizon contained in this Agreement, and no statement contained in the
      Horizon Disclosure Schedules contains any untrue statement of a material fact
      or
      omits to state a material fact necessary in order to make the representations
      and warranties herein or the statements therein not misleading. 

     

    5.  Covenants
      and Agreements.

     

    5.1.  Continued
      Access to Information; Confidentiality; Public Announcement.

     

    (a)           Upon
      reasonable prior notice from the other Party, each of MCEL and Horizon will
      (i)
      give the requesting Party (the “Requesting Party”), its
      counsel, financial advisors, auditors and other authorized representatives
      full
      access to the offices, employees, properties, and books and records of MCEL
      or
      Horizon (as applicable) and provide the Requesting Party access to its employees
      during normal business hours, (ii) furnish to the Requesting Party, its
      counsel, financial advisors, auditors and other authorized representatives
      such
      financial and operating data relating to the business of MCEL or Horizon (as
      applicable) (including, without limitation, all tax returns and tax workpapers,
      audit work papers, and financial and operational budgets and forecasts) as
      such
      Persons may reasonably request, provided that the accounting firm of
      each Party shall have no obligation to furnish work papers or related materials
      in contravention of such firm’s reasonable internal policies and provided
      further that no Party shall be obligated hereunder to provide the
      Requesting Party with any information that it reasonably believes to be a trade
      secret or otherwise proprietary to such Party, and (iii) instruct the
      employees, counsel and financial advisors of MCEL or Horizon (as applicable)
      to
      cooperate with the Requesting Party with respect to the
      foregoing.  The information and inspection rights of MCEL under this
Section 5.1(a) shall terminate if either (x) the Horizon Note is not
      converted into the Horizon Shares and all amounts payable under the Horizon
      Note
      are paid in full to MCEL in accordance with the Horizon Note or (y) MCEL ceases
      to own at least 50% of the Horizon Shares issued upon conversion of the Horizon
      Note (as ratably adjusted for any share split, stock dividend, reverse share
      split, subdivision, combination, capital reorganization or reclassification,
      or
      any other similar change in the capitalization of Horizon).  The
      information and inspection rights of Horizon under this Section 5.1(a)
      shall terminate if Horizon ceases to own at least 50% of the MCEL Shares
      acquired by Horizon under this Agreement (as ratably adjusted for any stock
      split, stock dividend, reverse stock split, subdivision, combination, capital
      reorganization or reclassification, or any other similar change in the
      capitalization of MCEL).

     

     

    
      
        
        

      

      
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    (b)           Each
      of MCEL and Horizon agrees that it will hold in strict confidence and will
      not
      use or disclose to anyone other than its authorized representatives who have
      a
      need to know such information, and will use its reasonable best efforts to
      cause
      such authorized representatives to hold in strict confidence and to not disclose
      to others, the confidential documents and information concerning MCEL or Horizon
      (as applicable).  Each of MCEL and Horizon will be responsible for any
      breaches of this Section 5.1(b) by its authorized
      representatives.  For the avoidance of doubt, the termination of the
      rights afforded by Section 5.1(a) above shall not terminate the Parties’
obligations under this Section 5.1(b).

     

    (c)           MCEL
      and Horizon will issue a joint press release announcing the transactions
      contemplated by this Agreement and MCEL will file a Current Report on Form
      8-K
      reporting the execution and delivery of this Agreement, each other Transaction
      Agreement and the Closing, in each case as soon as practicable after the
      Closing.  MCEL and Horizon will consult with each other before issuing
      the joint press release and will not issue any such release or make any other
      public statement without the prior approval of the other, except as may be
      required by Applicable Law (including the regulations promulgated under the
      Exchange Act).

     

    5.2.  Further
      Assurances.

     

     Subject
      to the terms and conditions of this Agreement, each other Transaction Agreement
      and Applicable Law, upon the reasonable request of the other Party, each Party
      shall execute and deliver such further documents or instruments and take, or
      cause to be taken, all actions and to do, or cause to be done, all things
      reasonably necessary or advisable to consummate the transactions contemplated
      by
      this Agreement and each other Transaction Agreement, and to refrain from taking
      any action that would prevent or delay the consummation of transactions
      contemplated by this Agreement.  Without limiting the generality of
      the foregoing, each of MCEL and Horizon hereby agrees that it will use its
      commercially reasonable efforts to cause the execution and delivery of a
      definitive agreement on the terms set forth in the Joint Collaboration LOI
      as
      soon as practicable after the date of this Agreement.

     

    5.3.  Board
      Observers.  MCEL agrees that Horizon shall have the right to
      designate one (1) non-voting observer to MCEL’s board of directors (the
“Horizon Observer”) and Horizon agrees that MCEL shall have the
      right to designate one (1) non-voting observer to Horizon’s board of directors
      (the “MCEL Observer”).  The Horizon Observer and the
      MCEL Observer shall each be entitled to receive notice of board meetings and
      shall have the right to attend and participate in such meetings, but shall
      not
      be entitled to cast any vote at any such meeting or consent in writing to any
      matter in lieu of any such meeting.  Notwithstanding the foregoing,
      (A) neither the Horizon Observer nor the MCEL Observer shall have any right
      to
      notice of or the right to participate in any board meeting at which MCEL or
      Horizon (as applicable) considers, discusses or approves the transactions
      contemplated by the Joint Collaboration LOI or any matters related thereto,
      (B)
      either Party may condition the right of the Horizon Observer or the MCEL
      Observer (as applicable) to (i) attend meetings of its board of directors,
      (ii)
      receive notice of such meetings and (iii) receive board materials relating
      to
      such meetings upon the execution and delivery of a confidentiality agreement
      reasonably acceptable to such Party, (C) either Party may prohibit the Horizon
      Observer or the MCEL Observer (as applicable) from (x) attending meetings of
      its
      board of directors (or any portion of any such meeting) or (y) receiving
      information relating to any such meeting, in either case if and to the extent
      that such Party reasonably believes that such prohibition is necessary to (1)
      ensure preservation of the attorney-client privilege or (2) protect a trade
      secret or other proprietary information of such Party.

     

     

    
      
        
        

      

      
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    5.4.  Lock-Up.

     

    MCEL
      hereby agrees that (i) it will not sell, assign, transfer or otherwise dispose
      of any of the Horizon Shares during the period commencing on the date of this
      Agreement and ending on the first anniversary of the date of this Agreement
      (the
“Lock-Up Period”) and (ii) any sale, assignment, transfer or
      disposition of the Horizon Shares by MCEL after the expiration of the Lock-Up
      Period will be made in compliance with Applicable Law (including, without
      limitation, the Securities Act (including the rules and regulations promulgated
      thereunder) and any applicable state securities laws) and the Horizon
      Articles.  Horizon hereby agrees that (i) it will not sell, assign,
      transfer or otherwise dispose of any of the MCEL Shares during the Lock-Up
      Period and (ii) any sale, assignment, transfer or disposition of the MCEL Shares
      by Horizon after the expiration of the Lock-Up Period will be made in compliance
      with Applicable Law (including, without limitation, the Securities Act
      (including the rules and regulations promulgated thereunder) and any applicable
      state securities laws).

     

    5.5.  Voting
      Agreements.

     

    5.6.  MCEL
      hereby agrees that with respect to all matters submitted for approval of the
      shareholders of Horizon during the Lock-Up Period, MCEL will vote all of the
      Horizon Shares in accordance with the recommendation of the board of directors
      of Horizon.  Horizon hereby agrees that with respect to all matters
      submitted for approval of the stockholders of MCEL during the Lock-Up Period,
      Horizon will vote all of the MCEL Shares in accordance with the recommendation
      of the board of directors of MCEL.

     

    5.6                      Resale
      Registration Statement.  Subject to MCEL obtaining any necessary
      waivers and approvals with respect to existing registration rights, MCEL shall,
      unless MCEL reasonably concludes that the MCEL Shares held by Horizon will
      be
      freely transferable in the absence of registration without volume limitations
      upon the expiration of the Lock-Up Period  (i) not later than 90 days
      prior to the expiration of the Lock-Up Period, file with the SEC a registration
      statement on Form S-3 (or another appropriate form) (the “Registration
      Statement”) registering under the Securities Act the resale of the MCEL
      Shares by Horizon and (ii) use its reasonable best efforts to have the
      Registration Statement declared effective by the SEC on or prior to the
      expiration of the Lock-Up Period.  MCEL agrees that it shall use its
      reasonable best efforts to obtain any waivers and approvals necessary to effect
      the registration contemplated by this Section 5.6.  Horizon
      agrees that it shall be a condition precedent to MCEL’s registration obligations
      under this Section 5.6 that Horizon (i) furnish to MCEL such information
      regarding Horizon, its Affiliates and the intended method of disposition of
      the
      MCEL Shares as shall be reasonably requested by MCEL to effect the effectiveness
      of the registration contemplated by this Section 5.6 and (ii) execute and
      deliver such documents in connection with such registration as MCEL may
      reasonably request.  All registration fees, printing fees, accounting
      fees and fees and disbursements of counsel for MCEL in connection with the
      registration contemplated by this Section 5.6 shall be paid by MCEL and
      any underwriting fees, discounts and commissions and all fees and disbursements
      of counsel for Horizon in connection with the registration contemplated by
      this
Section 5.6 shall be paid by Horizon.  In connection with the
      filing of the Registration Statement, MCEL shall, as promptly as
      practicable:

     

     

    
      
        
        

      

      
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    (a)           prepare
      and file with the SEC any amendments and supplements to the Registration
      Statement and the prospectus included in the Registration Statement (the
“Prospectus”) as may be necessary to comply with the provisions
      of the Securities Act (including the anti-fraud provisions thereof) and to
      keep
      the Registration Statement effective for six months from the effective date
      or
      such lesser period until all of the MCEL Shares registered thereunder (the
      “Registrable Shares”) are sold;

     

    (b)           furnish
      to Horizon such reasonable number of copies of the Prospectus, including any
      preliminary Prospectus, in conformity with the requirements of the Securities
      Act, and such other documents as Horizon may reasonably request in order to
      facilitate the public sale or other disposition of the Registrable
      Shares;

     

    (c)           use
      its reasonable best efforts to register or qualify the Registrable Shares under
      the securities or blue sky laws of such states as Horizon shall reasonably
      request, and do any and all other acts and things that may be necessary to
      enable Horizon to consummate the public sale or other disposition of the
      Registrable Shares in such states; provided, however, that MCEL
      shall not be required, as a result of this Section 5.6(c), to qualify as
      a foreign corporation or to execute a general consent to service of process
      in
      any jurisdiction or to amend its organizational documents in a manner that
      the
      MCEL board of directors determines is inadvisable;

     

    (d)           cause
      all of the Registrable Shares to be listed on each securities exchange or
      automated quotation system on which the MCEL Common Stock is then
      listed;

     

    (e)           make
      available for inspection by Horizon, any managing underwriter participating
      in
      any disposition pursuant to the Registration Statement, and any attorney or
      accountant or other agent retained by any such underwriter or retained by
      Horizon, all financial and other records, pertinent corporate documents and
      properties of MCEL and cause its officers, directors, employees and independent
      accountants to supply all information reasonably requested by any such
      underwriter, attorney, accountant or agent in connection with the Registration
      Statement;

     

     

    
      
        
        

      

      
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    (f)           notify
      Horizon after it shall receive notice of the time when the Registration
      Statement has become effective or a supplement to any Prospectus forming a
      part
      of the Registration Statement has been filed; and

     

    (g)           notify
      Horizon of any request by the SEC for any amendment or supplement of the
      Registration Statement or the Prospectus.

     

    If
      MCEL
      has delivered a Prospectus to Horizon and, after having done so, the Prospectus
      is amended to comply with the requirements of the Securities Act, MCEL shall
      promptly notify Horizon and, if requested, Horizon shall immediately cease
      making offers and sales of Registrable Shares thereunder and return all
      Prospectuses to MCEL.  MCEL shall promptly provide Horizon with
      revised Prospectuses and, following receipt of the revised Prospectuses, Horizon
      may resume making offers and sales of the Registrable Shares pursuant thereto.
      

     

    6.  Indemnification.

     

    6.1.  Indemnification
      of Horizon.

     

     MCEL
      hereby agrees to indemnify Horizon and its Affiliates, directors, officers,
      employees and agents (and, with respect to the matters described in clauses
      (iv), (v) and (vi) below, any underwriter of the Registrable Shares and each
      other Person, if any, who controls Horizon within the meaning of the Securities
      Act or the Exchange Act) against, and agrees to hold each of them harmless
      from,
      any and all claims, demands, costs, expenses, obligations, liabilities, damages,
      recoveries and deficiencies, including, without limitation, interest, penalties,
      court costs, costs and expenses (including reasonable fees and expenses of
      external counsel and the costs and expenses of investigating and defending
      such
      claims) (“Damages”) incurred or suffered by any of them arising
      out of or based upon (i) any breach of any representation or warranty made
      by
      MCEL in this Agreement, (ii) any breach of any covenant or agreement to be
      performed by MCEL pursuant to this Agreement, (iii) violations by MCEL of
      Applicable Law with respect to the Horizon Securities, (iv) any untrue statement
      or alleged untrue statement of any material fact contained in the Registration
      Statement or the Prospectus, (v) the omission or alleged omission of a material
      fact required to be stated in the Registration Statement or the Prospectus
      or
      necessary to make the statements therein, under the circumstances in which
      they
      were made, not misleading or (vi) any violation or alleged violation by MCEL
      of
      the Securities Act, the Exchange Act, any state securities law or any rule
      or
      regulation promulgated under the Securities Act, the Exchange Act or any state
      securities law in connection with the Registration Statement or the offering
      contemplated thereby; provided, however, that with respect to the
      matters described in clauses (iv), (v) and (vi) above, MCEL will not be liable
      in any such case to the extent that any such Damages arise out of or are based
      upon any untrue statement or omission made in the Registration Statement or
      the
      Prospectus, or any amendment or supplement thereto, in reliance upon and in
      conformity with information furnished in writing to MCEL by or on behalf of
      Horizon or the underwriter in such offering specifically for use in the
      preparation thereof.

     

    6.2.  Indemnification
      of MCEL.  Horizon

     

     hereby
      agrees to indemnify MCEL and its Affiliates, directors, officers, employees
      and
      agents (and, with respect to the matters described in clauses (iv), (v) and
      (vi)
      below, each Person who controls MCEL within the meaning of the Securities Act
      or
      the Exchange Act) against, and agrees to hold each of them harmless from, any
      and all Damages incurred or suffered by any of them arising out of or based
      upon
      (i) any breach of any representation or warranty made by Horizon in this
      Agreement or in the Horizon Note, (ii) any breach of any covenant or agreement
      to be performed by Horizon pursuant to this Agreement or in the Horizon Note,
      (iii) violations by Horizon of Applicable Law with respect to the MCEL Shares,
      (iv) any untrue statement or alleged untrue statement of any material fact
      contained in the Registration Statement or the Prospectus, (v) the omission
      or
      alleged omission of a material fact required to be stated in the Registration
      Statement or the Prospectus or necessary to make the statements therein, under
      the circumstances in which they were made, not misleading or (vi) any violation
      or alleged violation by Horizon of the Securities Act, the Exchange Act, any
      state securities law or any rule or regulation promulgated under the Securities
      Act, the Exchange Act or any state securities law in connection with the
      Registration Statement or the offering contemplated thereby; provided,
however, that with respect to the matters described in clauses (iv),
      (v)
      and (vi) above, (1) Horizon will only be liable in any such case to the extent
      that any such Damages arise out of or are based upon any untrue statement or
      omission made in the Registration Statement or the Prospectus, or any amendment
      or supplement thereto, in reliance upon and in conformity with information
      furnished in writing to MCEL by or on behalf of Horizon specifically for use
      in
      the preparation thereof, and (2) Horizon’s liability shall not exceed the amount
      of net proceeds received by Horizon as a result of its sale of the Registrable
      Shares pursuant to the Registration Statement.

     

     

    
      
        
        

      

      
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    6.3.  Procedures.

     

    (a)  If
      Horizon or any of its Affiliates or any of their respective directors, officers,
      employees and agents, seek indemnification pursuant to Section 6.1, or
      MCEL or any of its Affiliates or any of their directors, officers, employees
      and
      agents, seek indemnification pursuant to Section 6.2, the Person seeking
      indemnification (the “Indemnified Party”) shall give written
      notice to the Party from whom such indemnification is sought (the
“Indemnifying Party”) promptly (and in any event within 30
      days) after the Indemnified Party becomes aware of the facts giving rise to
      such
      claim for indemnification (an “Indemnified Claim”) specifying
      in reasonable detail the factual basis of the Indemnified Claim, stating the
      amount of the Damages, if known, the method of computation thereof, containing
      a
      reference to the provision of this Agreement in respect of which such
      Indemnified Claim arises and demanding indemnification therefor.  The
      failure of an Indemnified Party to provide notice in accordance with this
Section 6.3 shall not constitute a waiver of that party’s claims to
      indemnification pursuant to Section 6.1 or Section 6.2, as
      applicable, except to the extent that any such failure or delay in giving notice
      causes the amounts paid by the Indemnifying Party to be greater than they
      otherwise would have been or otherwise materially prejudices the Indemnifying
      Party.  If the Indemnified Claim arises from the assertion of any
      claim, or the commencement of any suit, action or proceeding brought by a Person
      that is not a party hereto (a “Third Party Claim”), any such
      notice to the Indemnifying Party shall be accompanied by a copy of any papers
      served on or delivered to the Indemnified Party in connection with such Third
      Party Claim.

     

    (b)  Upon
      receipt of notice of a Third Party Claim from an Indemnified Party pursuant
      to
Section 6.3(a), the Indemnifying Party will be entitled to assume the
      defense and control of such Third Party Claim subject to the provisions of
      this
Section 6.3.  After written notice by the Indemnifying Party to
      the Indemnified Party of its election to assume the defense and control of
      a
      Third Party Claim, the Indemnifying Party shall not be liable to such
      Indemnified Party for any legal fees or expenses subsequently incurred by such
      Indemnified Party in connection therewith.  Notwithstanding anything
      in this Section 6.3 to the contrary, if the Indemnifying Party does not
      assume defense and control of a Third Party Claim as provided in this Section
      6.3, the Indemnified Party shall have the right to defend such Third Party
      Claim, subject to the limitations set forth in this Section 6.3, in such
      manner as it may deem appropriate.  Whether the Indemnifying Party or
      the Indemnified Party is defending and controlling any such Third Party Claim,
      they shall select counsel, contractors, experts and consultants of recognized
      standing and competence, shall take all steps necessary in the investigation,
      defense or settlement thereof, and shall at all times diligently and promptly
      pursue the resolution thereof.  The Party conducting the defense
      thereof shall at all times act as if all Damages relating to the Third Party
      Claim were for its own account and shall act in good faith and with reasonable
      prudence to minimize Damages therefrom.  The Indemnified Party shall,
      and shall cause each of its Affiliates, directors, officers, employees, and
      agents to, cooperate fully with the Indemnifying Party in connection with any
      Third Party Claim.

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (c)  The
      Indemnifying Party shall be authorized to consent to a settlement of, or the
      entry of any judgment arising from, any Third Party Claims, and the Indemnified
      Party shall consent to a settlement of, or the entry of any judgment arising
      from, such Third Party Claims; provided, however, that the
      Indemnifying Party shall (1) pay or cause to be paid all amounts arising out
      of
      such settlement or judgment concurrently with the effectiveness thereof; (2)
      shall not encumber any of the assets of any Indemnified Party or agree to any
      restriction or condition that would apply to such Indemnified Party or to the
      conduct of that party’s business; and (3) shall obtain, as a condition of any
      settlement or other resolution, a complete and irrevocable release of each
      Indemnified Party and such settlement or judgment (x) shall not require any
      admission of liability, fault or wrongdoing by any Indemnified Party or impose
      any non-monetary obligation on an Indemnified Party (such as, by way of example,
      and not in limitation, injunctive relief) and (y) shall not require any
      admission or statement that could reasonably be expected to materially impair,
      disparage or otherwise adversely affect, the business reputation of the
      Indemnified Party.  Except to the extent of the foregoing, no
      settlement or entry of judgment in respect of any Third Party Claim shall be
      consented to by any Indemnifying Party or Indemnified Party without the express
      written consent of the other Party.

     

    (d)  If
      an
      Indemnifying Party makes any payment on an Indemnified Claim, the Indemnifying
      Party shall be subrogated, to the extent of such payment, to all rights and
      remedies of the Indemnified Party to any insurance benefits or other claims
      or
      benefits of the Indemnified Party with respect to such claim.

     

    7.  Miscellaneous.

     

    7.1.  Survival.

     

     The
      representations and warranties of MCEL and Horizon contained in or made pursuant
      to this Agreement shall survive the execution and delivery of this Agreement
      and
      shall continue in full force and effect until the second anniversary of the
      termination of this Agreement, except that:

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

     

    (a)  the
      representations and warranties in Sections 3.1, 3.2, 3.3,
3.4, 3.5, 3.6, 4.1, 4.2, 4.3,
4.4,
4.5
      and 4.6 shall survive indefinitely;

     

    (b)  the
      representations and warranties in Sections3.17, 3.21,
4.17 and 4.21 shall survive until 30 days after
      the expiration of
      the applicable statute of limitations; and

     

    (c)  those
      covenants and agreements set forth in this Agreement and the Horizon Note that,
      by their terms, are to have effect after the Closing (including, without
      limitation, Section 5.1 hereof) shall survive for the period contemplated
      by such covenants and agreements, or, if no period is expressly set forth,
      until
      the expiration of the statute of limitations applicable to any claim relating
      thereto.

     

    7.2.  Transfer;
      Successors and Assigns.

     

     No
      Party shall assign any rights or obligations under this Agreement without the
      prior written consent of the other Party.  The terms and conditions of
      this Agreement shall inure to the benefit of and be binding upon the respective
      successors and assigns of the Parties.  Nothing in this Agreement,
      express or implied, is intended to confer upon any party other than the Parties
      or their respective successors and assigns any rights, remedies, obligations,
      or liabilities under or by reason of this Agreement, except as expressly
      provided in this Agreement.

     

    7.3.  Governing
      Law; Submission to Jurisdiction.

     

     This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York without regard to its principles of conflicts of
      laws.  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
      MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES
      OF
      AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY
      OF
      THIS AGREEMENT, THE PARTIES ACCEPT, FOR THEMSELVES AND IN RESPECT OF THEIR
      PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF AFORESAID
      COURTS.  EACH PARTY HERETO IRREVOCABLY AND EXPRESSLY WAIVES ANY
      OBJECTION TO VENUE LAID THEREIN.  Each Party hereto irrevocably
      consents to the service of process of any of the aforementioned courts in any
      such action or proceeding by the mailing of copies thereof by registered or
      certified mail, postage prepaid, to it at its address as set forth
      herein.

     

    7.4.  Counterparts.

     

     This
      Agreement may be executed in two (2) or more counterparts, each of which shall
      be deemed an original, but all of which together shall constitute one and the
      same instrument.  This Agreement may be executed and delivered by
      facsimile signature.

     

    7.5.  Construction
      of Certain Terms.

     

     The
      titles of the articles, sections, and subsections of this Agreement are for
      convenience of reference only and are not to be considered in construing this
      Agreement.  Wherever the words “including,” “include” or “includes”
are used in this Agreement, they shall be deemed followed by the words “without
      limitation.”  References to any gender shall be deemed to mean any
      gender.  The Parties hereto have participated jointly in the
      negotiation and drafting of this Agreement.  In the event an ambiguity
      or question of intent or interpretation arises, this Agreement shall be
      construed as if drafted jointly by the Parties, and no presumption or burden
      of
      proof shall arise favoring or disfavoring any Party by virtue of the authorship
      of any provisions of this Agreement.

     

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    7.6.  Notices.

     

     All
      notices and other communications given or made pursuant to this Agreement shall
      be in writing and shall be deemed effectively given:  (a) upon
      personal delivery to the Party to be notified, (b) when sent by confirmed
      electronic mail or facsimile if sent during normal business hours of the
      recipient, and if not so confirmed, then on the next Business Day, (c) five
      (5)
      days after having been sent by certified mail, return receipt requested, postage
      prepaid, or (d) one (1) day after deposit with a nationally recognized overnight
      courier, specifying next day delivery, with written verification of
      receipt.  All communications shall be sent to the address or facsimile
      number set forth below or to such other address or facsimile number as delivered
      by notice to the other Party in accordance with this
Section 7.6:

     

    If
      to
      MCEL:

     

    Millennium
      Cell Inc.

    One
      Industrial Way West

    Eatontown,
      NJ 07724

    Attention:  Adam
      Briggs,
      President

    Facsimile:  (732)
      542-4010

    

    With
      a
      copy to:

    

    Dickstein,
      Shapiro LLP

    1177
      Avenue of the
      Americas

    New
      York, NY 10036

    Attention:  Malcolm
      I. Ross,
      Esq.

    Facsimile:  (212)
      319-7616

    

    If
      to
      Horizon:

    

    Horizon
      Fuel Cell Technologies Pte. Ltd.

    4th
      Floor, Block 39, #2041 Jinshajiang Road

    200333,
      Shanghai, P.R. Cina

    Attention:  George
      Gu

    Facsimile:  (+86)
      21 5270 5064

    

    With
      a
      copy to:

    

    Wilmer
      Cutler Hale and Dorr LLP

    Alder Castle

    10
      Noble
      Street

    London
      EC2V 7QJ

    Attention:  Trisha L. Johnson,
      Esq.

    Facsimile:  +44
      (0)20 7645 2424

     

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    
 

    7.7.  Fees
      and Expenses.

     

    MCEL
      and
      Horizon shall each pay their own costs and expenses in connection with the
      negotiation and documentation of this Agreement and the transactions
      contemplated hereby.

     

    7.8.  Amendments
      and Waivers.

     

     Neither
      this Agreement nor any term of this Agreement may be amended, terminated or
      waived without the prior written consent of MCEL and Horizon.  Any
      amendment or waiver effected in accordance with this Section 7.8
      shall be binding upon MCEL, Horizon, each transferee of the MCEL Shares and
      Horizon Securities issued hereunder and each future holder of all such
      securities.

     

    7.9.  Severability.

     

     The
      invalidity or unenforceability of any provision hereof shall in no way affect
      the validity or enforceability of any other provision.

     

    7.10.  Delays
      or Omissions.

     

     No
      delay or omission to exercise any right, power or remedy accruing to any Party
      under this Agreement, upon any breach or default of any other Party under this
      Agreement, shall impair any such right, power or remedy of such non-breaching
      or
      non-defaulting Party nor shall it be construed to be a waiver of any such breach
      or default, or an acquiescence therein, or of or in any similar breach or
      default thereafter occurring; nor shall any waiver of any single breach or
      default be deemed a waiver of any other breach or default theretofore or
      thereafter occurring.  Any waiver, permit, consent or approval of any
      kind or character on the part of any Party of any breach or default under this
      Agreement, or any waiver on the part of any Party of any provisions or
      conditions of this Agreement, must be in writing and shall be effective only
      to
      the extent specifically set forth in such writing.  All remedies,
      either under this Agreement or by law or otherwise afforded to any Party, shall
      be cumulative and not alternative.

     

    7.11.  Entire
      Agreement.

     

     This
      Agreement (including the Exhibits and Schedules hereto), the Joint Collaboration
      LOI and the Horizon Note constitute the full and entire understanding and
      agreement between the Parties with respect to the subject matter hereof, and
      supersede any other written or oral agreement relating to the subject matter
      hereof and thereof.

     

    [Remainder
      of Page Intentionally Left Blank]

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    

 

    IN
      WITNESS WHEREOF, MCEL and Horizon have executed this Securities Purchase and
      Sale Agreement as of the date first written above.

     

    

     

    MILLENNIUM
      CELL INC.

    

    

    By:  /s/John
      D.
      Giolli                    
       

            Name:
      John D. Giolli

            Title:   Chief
      Financial Officer

    

    

    HORIZON
      FUEL CELL TECHNOLOGIES

    PTE
      LTD.

    

    

    By:  Taras
      Wankewycz                  
   
                                                                       

            Director

    

    

    By:  Zhijun
      Gu                                      
                                                                      

            Director,
      Chief Executive Officer

    

    

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    

     

    EXHIBIT
      A

     

    FORM
      OF JOINT COLLABORATION LOI

     

    

     

    

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    FORM
      OF HORIZON NOTE

     

    
      
        
        

      

      
        26

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