Exhibit 10.1

SUBSCRIPTION AGREEMENT

Mechanical Technology Incorporated
431 New Karner Road
Albany, New York 12205

The undersigned (the "Investor") hereby confirms its agreement with you as
follows:

This Subscription Agreement (this "Agreement") is made as of the date set forth
below between Mechanical Technology Incorporated, a New York corporation (the
"Company"), and the Investor.

The Company has authorized the sale and issuance to certain investors of up to
an aggregate of _____________ units (the "Units"), each consisting of (i) 100
shares (the "Shares") of its Common Stock, par value $0.01 per share (the
"Common Stock"), and (ii) one warrant (the "Warrant," collectively, the
"Warrants") to purchase 50 Shares of Common Stock (and the fraction amount being
the "Warrant Ratio"), in substantially the form attached hereto as Exhibit B,
subject to adjustment by the Company's Board of Directors, or a committee
thereof, for a purchase price of $180.00 per Unit (the "Purchase Price"). The
Shares issuable upon exercise of the Warrants are referred to herein as the
"Warrant Shares" and, together with the Units, the Shares and the Warrants, are
referred to herein as the "Securities").

The offering and sale of the Units (the "Offering") are being made pursuant to
(a) an effective Registration Statement on Form S-3 (including the Prospectus
contained therein (the "Basic Prospectus"), the "Registration Statement") filed
by the Company with the Securities and Exchange Commission (the "Commission"),
(b) if applicable, certain "free writing prospectuses" (as that term is defined
in Rule 405 under the Securities Act of 1933, as amended), that have or will be
filed with the Commission and delivered to the Investor on or prior to the date
hereof, and (c) a Prospectus Supplement (the "Prospectus Supplement") containing
certain supplemental information regarding the Units and terms of the Offering
that has been delivered to the Investor.

The Company and the Investor agree that the Investor will purchase from the
Company and the Company will issue and sell to the Investor the Units set forth
below for the aggregate purchase price set forth below. The Units shall be
purchased pursuant to the Terms and Conditions for Purchase of Units attached
hereto as Annex I and incorporated herein by this reference as if fully set
forth herein.

The manner of settlement of the Shares included in the Units purchased by the
Investor shall be determined by such Investor as follows (check one):

[____] A. Delivery by electronic book-entry at The Depository Trust Company
("DTC"), registered in the Investor's name and address as set forth below, and
released by American Stock Transfer & Trust Company, the Company's transfer
agent (the "Transfer Agent"), to the Investor at the Closing. No later than one
(1) business day after the execution of this Agreement by the Investor AND THE
COMPANY, the Investor shall direct the broker-dealer at which the account or
accounts to be credited with the Shares are maintained to set up a
Deposit/Withdrawal at Custodian ("DWAC") instructing the Transfer Agent to
credit such account or accounts with the Shares.

- OR -

[____] B. Delivery versus payment ("DVP") through DTC (i.e., the Company shall
deliver Shares registered in the Investor's name and address as set forth below
and released by the Transfer Agent to the Investor at the Closing directly to
the account(s) at _______________ identified by the Investor and simultaneously
therewith payment shall be made from such account(s) to the Company through
DTC). NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS AGREEMENT
BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL notify ________________ of
the account or accounts AT ____________________ to be credited with the Shares
being purchased by such Investor.

- OR -

[____] C. Delivery of physical stock certificates, in no event later than one
business day after the Closing, to the Investor at the address set forth on the
signature page to this agreement.

It is the investor's responsibility to arrange for settlement by way of DWAC,
DVP or physical delivery in a timely manner. If the Investor does not make
proper arrangements for settlement in a timely manner, the Shares may not be
delivered at Closing to the Investor or the Investor may be excluded from the
closing altogether

.

The executed Warrants shall be delivered in accordance with the terms thereof.

The Investor represents that, except as set forth below, (a) it has had no
position, office or other material relationship within the past three years with
the Company or any of its affiliates and (b) it has no direct or indirect
affiliation or association with any NASD member. Exceptions:

(If no exceptions, write "none." If left blank, response will be deemed to be
"none.")

The Investor acknowledges that it has received (i) the final Basic Prospectus,
dated May 18, 2006, which is a part of the Company's Registration Statement,
(ii) the Prospectus Supplement, (iii) the documents incorporated by reference in
the Registration Statement, Basic Prospectus or Prospectus Supplement (or
otherwise made available to it by the filing by the Company of an electronic
version thereof with the Commission), and (iv) any free writing prospectus
(collectively, the "Disclosure Package") prior to the execution by the Investor
of this Agreement.

No offer by the Investor to buy Units will be accepted and no part of the
purchase price will be delivered to the Company until the Company has accepted
such offer by countersigning a copy of this Agreement, and any such offer may be
withdrawn or revoked, without obligation or commitment of any kind, at any time
prior to the Company (or a Placement Agent on behalf of the Company) sending
(orally, in writing or by electronic mail) notice of its acceptance of such
offer. An indication of interest in response to the Investor signing this
Agreement will involve no obligation or commitment of any kind until this
Agreement is accepted and countersigned by the Company and notice of such
acceptance has been sent as aforesaid.

[The remainder of this page has been intentionally left blank.]

 

Number of Units:

Purchase Price Per Unit: $

Aggregate Purchase Price: $

Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.

Dated as of: December 15, 2006

 

INVESTOR

By:

Print Name:

Title:

Address:

 

Agreed and Accepted

this 15th day of December 2006:

MECHANICAL TECHNOLOGY iNCORPORATED

 

By:

Title:

ANNEX I

TERMS AND CONDITIONS FOR PURCHASE OF UNITS

Authorization and Sale of the Units.

Subject to the terms and conditions of this Agreement, the Company has
authorized the sale of the Units.

Agreement to Sell and Purchase the Units; Placement Agent.

2.1

At the Closing (as defined in Section 3.1), the Company will sell to the
Investor, and the Investor will purchase from the Company, upon the terms and
conditions set forth herein, the number of Units set forth on the last page of
the Agreement to which these Terms and Conditions for Purchase of Units are
attached as Annex I (the "Signature Page") for the aggregate purchase price
therefor set forth on the Signature Page.

2.2

The Company proposes to enter into substantially this same form of Subscription
Agreement with certain other investors (the "Other Investors") and expects to
complete sales of Units to them. The Investor and the Other Investors are
hereinafter sometimes collectively referred to as the "Investors," and this
Agreement and the Subscription Agreements executed by the Other Investors are
hereinafter sometimes collectively referred to as the "Agreements."

2.3

Investor acknowledges that the Company intends to pay Rodman & Renshaw, LLC (the
"Placement Agent") a fee (the "Placement Fee") in respect of the sale of Units
to the Investor.

2.4

The Company has entered into an Agreement (the "Placement Agreement") with the
Placement Agent that contains certain representations and warranties of the
Company that may be relied upon by the Investor, which shall be a third party
beneficiary thereof. A copy of the Placement Agreement is available upon
request.

Closings and Delivery of the Shares and Funds.

3.1 Closing.

The completion of the purchase and sale of the Units (the "Closing") will occur
at a place and time (the "Closing Date") to be specified by the Company and the
Placement Agent, and of which the Investors will be notified in advance by the
Placement Agent, in accordance with Rule 15c6-1 promulgated under the Securities
Exchange Act of 1934. At the Closing, (a) the Company shall cause the Transfer
Agent to deliver to the Investor the number of Shares set forth on the Signature
Page registered in the name of the Investor or, if so indicated on the Investor
Questionnaire attached hereto as Exhibit A, in the name of a nominee designated
by the Investor and (b) the Company shall cause to be delivered to the Investor
a Warrant to purchase a number of whole Warrant Shares determined by multiplying
the Number of Shares (and Units) set forth on the signature page by the Warrant
Ratio and rounding down to the nearest whole number, and (c) the aggregate
purchase price for the Units being purchased by the Investor will be delivered
by or on behalf of the Investor to the Company.

3.2

(a) Conditions to the Company's Obligations. The Company's obligation to issue
and sell the Units to the Investor will be subject to the receipt by the Company
of the purchase price for the Units being purchased hereunder as set forth on
the Signature Page and the accuracy of the representations and warranties made
by the Investor and the fulfillment of those undertakings of the Investor to be
fulfilled prior to the Closing Date.

(b) Conditions to the Investor's Obligations. The Investor's obligation to
purchase the Units will be subject to the accuracy of the representations and
warranties made by the Company and the fulfillment of those undertakings of the
Company to be fulfilled prior to the Closing Date, including, without
limitation, those contained in the Placement Agreement (collectively, the
"Company Closing Conditions"). The Investor's obligations are expressly not
conditioned on the purchase by any or all of the other Investors of the Units
that they have agreed to purchase from the Company.

3.3 Delivery of Funds.

(a) Delivery by Electronic Book-Entry at The Depository Trust Company. If the
Investor elects to settle the Shares purchased by such Investor through delivery
by electronic book-entry at DTC, no later than the Closing Date, the Investor
shall remit by wire transfer the amount of funds equal to the aggregate purchase
price for the shares being purchased by the Investor to the following account:

Chase Manhattan Bank

ABA#: 021-000-021

FAO Smith Barney

A/C#: XXXXXXXXXX

FBO Mechanical Technology

A/C#: XXXXXXXXXXXX

Investor shall also furnish to the Placement Agent a completed W-9 form (or, in
the case of an Investor who is not a United States citizen or resident, a W-8
form).

(b) Delivery Versus Payment through The Depository Trust Company. If the
Investor elects to settle the Shares purchased by such Investor by delivery
versus payment through DTC, no later than the Closing Date, the Investor shall
confirm that the account or accounts at ___________________ to be credited with
the Shares being purchased by the Investor have a minimum balance equal to the
aggregate purchase price for the Shares being purchased by the Investor.

(c) Physical Delivery Versus Payment through the Escrow Agent. If the investor
elects to settle the Shares purchased by such Investor by physical delivery
versus payment, the Investor shall remit by wire transfer the amount of funds
equal to the aggregate purchase price for the shares being purchased by the
Investor to the following account:

Chase Manhattan Bank

ABA#: 021-000-021

FAO Smith Barney

A/C#: XXXXXXXXXXX

FBO Mechanical Technology

A/C#: XXXXXXXXXXX

 

3.4 Delivery of Shares.

(a) Delivery by Electronic Book-Entry at The Depository Trust Company. If the
Investor elects to settle the Shares purchased by such Investor through delivery
by electronic book-entry at DTC, no later than one (1) business day after the
execution of this Agreement by the Investor and the Company, the Investor shall
direct the broker-dealer at which the account or accounts to be credited with
the Shares being purchased by such Investor are maintained, which broker/dealer
shall be a DTC participant, to set up a Deposit/Withdrawal at Custodian ("DWAC")
instructing American Stock Transfer & Trust Company, the Company's transfer
agent, to credit such account or accounts with the Shares by means of an
electronic book-entry delivery. Such DWAC shall indicate the settlement date for
the deposit of the Shares, which date shall be provided to the Investor by the
Placement Agent. On the Closing Date upon receipt by the Company of the funds
pursuant to Section 3.3 above, the Company shall direct its transfer agent to
credit the Investor's account or accounts with the Shares pursuant to the
information contained in the DWAC.

(b) Delivery Versus Payment through The Depository Trust Company. If the
Investor elects to settle the Shares purchased by such Investor by delivery
versus payment through DTC, no later than one (1) business day after the
execution of this Agreement by the Investor and the Company, the Investor shall
notify _______________ of the account or accounts at _______________ to be
credited with the Shares being purchased by such Investor. On the Closing Date,
the Company shall deliver the Shares to the Investor directly to the account(s)
at __________________, identified by Investor and simultaneously therewith
payment shall be made from such account(s) to the Company through DTC.

(c) Physical Delivery Versus Payment through the Escrow Agent. If the Investor
elects to settle the Shares purchased by such Investor by physical delivery
versus payment, the Investor shall set forth on the Signature Page the address
to which the physical certificates representing the Shares shall be delivered.
On the Closing Date, upon receipt by the Company of the funds pursuant to
Section 3.3 above, the Company shall cause the Transfer Agent to deliver the
physical certificates to such address.

Representations, Warranties and Covenants of the Investor.

The Investor represents and warrants to, and covenants with, the Company that
(a) the Investor is knowledgeable, sophisticated and experienced in making, and
is qualified to make decisions with respect to, investments in shares presenting
an investment decision like that involved in the purchase of the Units,
including investments in securities issued by the Company and investments in
comparable companies, and has requested, received, reviewed and considered all
information it deemed relevant in making an informed decision to purchase the
Units, (b) the Investor has answered all questions on the Signature Page and
Exhibit A attached hereto for use in preparation of the Prospectus Supplement
and the answers thereto are true and correct as of the date hereof and will be
true and correct as of the Closing Date and (c) the Investor, in connection with
its decision to purchase the number of Units set forth on the Signature Page,
relied only upon any or all of the following: the Registration Statement, the
Basic Prospectus, the Prospectus Supplement, the Company's regular reports on
Forms 10-K, 10-Q and 8-K as filed by the Company with the Commission, any Time
of Sale Prospectus (as defined in the Placement Agreement) provided to the
Investor and the representations and warranties of the Company contained herein.

The Investor acknowledges, represents and agrees that no action has been or will
be taken in any jurisdiction outside the United States by the Company or any
Placement Agent that would permit an offering of the Units, or possession or
distribution of offering materials in connection with the issue of the Units in
any jurisdiction outside the United States where action for that purpose is
required. Each Investor outside the United States will comply with all
applicable laws and regulations in each foreign jurisdiction in which it
purchases, offers, sells or delivers Units or has in its possession or
distributes any offering material, in all cases at its own expense. The
Placement Agent is not authorized to make and have not made any representation
or use of any information in connection with the issue, placement, purchase and
sale of the Units, except as set forth or incorporated by reference in the
Registration Statement, the Basic Prospectus, the Prospectus Supplement or the
Time of Sale Prospectus (as defined in the Placement Agreement).

The Investor further represents and warrants to, and covenants with, the Company
that (a) the Investor has full right, power, authority and capacity to enter
into this Agreement and to consummate the transactions contemplated hereby and
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement, and (b) this Agreement constitutes a valid and
binding obligation of the Investor enforceable against the Investor in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as the indemnification agreements of the Investors herein may be
legally unenforceable.

The Investor understands that nothing in this Agreement or any other materials
presented to the Investor in connection with the purchase and sale of the Units
constitutes legal, tax or investment advice. The Investor has consulted such
legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of Units.

The Investor represents, warrants and agrees that, since the earlier to occur of
(i) the date on which the Placement Agent first contacted the Investor about the
Offering and (ii) the date that is the tenth (10th) trading day prior to the
date of this Agreement, it has not engaged in any short selling of the Company's
securities, or established or increased any "put equivalent position" as defined
in Rule 16(a)-1(h) under the Securities Exchange Act of 1934 with respect to the
Company's securities.

Additional Issuances of Securities.

For purposes of this Section 5, the following definitions shall apply.

"Convertible Securities" means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for shares of Common Stock.

"Options" means any rights, warrants or options to subscribe for or purchase
shares of Common Stock or Convertible Securities.

"Common Stock Equivalents" means, collectively, Options and Convertible
Securities.

"Fletcher Agreement" means the private placement agreement between the Company
and Fletcher International Ltd. dated as of January 29, 2004, as amended.

"Excluded Securities" shall mean any Common Stock issued or issuable: (i) in
connection with any employee benefit plan which has been approved by the Board
of Directors of the Company, pursuant to which the Company's securities may be
issued to any employee, consultant, officer or director for services provided to
the Company; (ii) upon the exercise of the Warrants; (iii) in connection with
any strategic acquisition or transaction by the Company, whether through an
acquisition of stock or a merger of any business, assets or technologies the
primary purpose of which is not to raise equity capital; (iv) to officers and
directors of the Company, (v) to Fletcher International Ltd. as required by the
provisions of the Fletcher Agreement, and (vi) upon exercise of any Options or
Convertible Securities which are outstanding on the day immediately preceding
the Closing Date, provided that the terms of such Options or Convertible
Securities are not amended, modified or changed on or after the Closing Date.

The Company covenants with the Investor that from the date hereof until

the date that is one hundred eighty (180) days following the Closing Date (the
"Trigger Date"), the Company will not, directly or indirectly, file any
registration statement with the SEC other than one or more resale registration
statements required to be filed pursuant to the Fletcher Agreement. From the
date hereof until the Trigger Date, the Company will not, directly or
indirectly, offer, sell, grant any option to purchase, or otherwise dispose of
(or announce any offer, sale, grant or any option to purchase or other
disposition of) any of its or its subsidiaries' equity or equity equivalent
securities, including without limitation any debt, preferred stock or other
instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for shares of
Common Stock or Common Stock Equivalents, except the Excluded Securities.

Survival of Representations, Warranties and Agreements.

Notwithstanding any investigation made by any party to this Agreement or by the
Placement Agent, all covenants, agreements, representations and warranties made
by the Company and the Investor herein will survive the execution of this
Agreement, the delivery to the Investor of the Units being purchased and the
payment therefor.

Notices.

All notices, requests, consents and other communications hereunder will be in
writing, will be mailed (a) if within the domestic United States by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, or by facsimile or (b) if delivered from outside the
United States, by International Federal Express or facsimile, and will be deemed
given (i) if delivered by first-class registered or certified mail domestic,
three business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by
International Federal Express, two business days after so mailed and (iv) if
delivered by facsimile, upon electric confirmation of receipt and will be
delivered and addressed as follows:

if to the Company, to:

Cynthia A. Scheuer

Vice President, Chief Financial Officer and Secretary

Mechanical Technology Incorporated

431 New Karner Road

Albany, New York 11205

with a copy to:

Knute J. Salhus, Esq.

WilmerHale

399 Park Avenue

New York, NY 10022

if to the Investor, at its address on the Signature Page hereto, or at such
other address or addresses as may have been furnished to the Company in writing.

Changes.

This Agreement may not be modified or amended except pursuant to an instrument
in writing signed by the Company and the Investor.

Headings.

The headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this
Agreement.

Severability.

In case any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein will not in any way be affected or
impaired thereby.

Governing Law.

This Agreement will be governed by, and construed in accordance with, the
internal laws of the State of New York, without giving effect to the principles
of conflicts of law that would require the application of the laws of any other
jurisdiction.

Counterparts.

This Agreement may be executed in two or more counterparts, each of which will
constitute an original, but all of which, when taken together, will constitute
but one instrument, and will become effective when one or more counterparts have
been signed by each party hereto and delivered to the other parties. The Company
and the Investor acknowledge and agree that the Company shall deliver its
counterpart to the Investor along with the Prospectus Supplement.

Confirmation of Sale.

The Investor acknowledges and agrees that such Investor's receipt of the
Company's counterpart to this Agreement shall constitute written confirmation of
the Company's sale of Units to such Investor.

Press Release.

The Company and the Investor agree that the Company shall issue a press release
announcing the Offering and summarizing the material terms of the Securities
prior to the opening of the financial markets in New York City on the business
day immediately after the date hereof.

Termination

. In the event that the Placement Agreement is terminated by the Placement Agent
pursuant to the terms thereof, this Agreement shall terminate without any
further action on the part of the parties hereto.

Exhibit A

.

INVESTOR QUESTIONNAIRE

Pursuant to Section 3 of Annex I to the Agreement, please provide us with the
following information:

1. The exact name that your Shares and Warrants are to be registered in. You may
use a nominee name if appropriate:

2. The relationship between the Investor and the registered holder listed in
response to item 1 above:

3. The mailing address of the registered holder listed in response to item 1
above:

4. The Social Security Number or Tax Identification Number of the registered
holder listed in the response to item 1 above:

5. Name of DTC Participant (broker-dealer at which the account or accounts to be
credited with the Shares are maintained), if applicable:

6. DTC Participant Number, if applicable:

7. Name of Account at DTC Participant being credited with the Shares, if
applicable:

8. Account Number at DTC Participant being credited with the Shares, if
applicable: