Document:

FORM OF
                               PURCHASE AGREEMENT

     THIS AGREEMENT is made as of the 10th day of February, 2005, by and between
Energy Conversion Devices, Inc. (the "Company"), a corporation organized under
the laws of the State of Delaware, with its principal offices at 2956 Waterview
Drive, Rochester Hills, Michigan 48309, and the purchaser whose name and address
is set forth on the signature page hereof (the "Purchaser").

     IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and the Purchaser agree as follows:

        SECTION 1.  Authorization of Sale of the Shares.  Subject to the terms
                    -----------------------------------
and conditions of this Agreement, the Company has authorized the issuance and
sale of up to 5,090,000 shares (the "Shares") of common stock, par value $0.01
per share (the "Common Stock"), of the Company. The Company reserves the right
to increase or decrease the number of shares of Common Stock sold in this
private placement prior to the Closing Date; provided that that a minimum of
2,000,000 Shares and a maximum of 5,090,000 Shares shall be issued and sold
pursuant to this private placement.

        SECTION 2.  Agreement to Sell and Purchase the Shares.  At the Closing
                    -----------------------------------------
(as defined in Section 3), the Company will issue and sell to the Purchaser,
and the Purchaser will buy from the Company, upon the terms and conditions
hereinafter set forth, the number of Shares (at the purchase price) set forth
in Appendix I attached hereto. The Company will enter into the same form of
purchase agreement with certain other investors (the "Other Purchasers") and
expects to complete sales of the Shares to them. The Purchaser and the Other
Purchasers are hereinafter sometimes collectively referred to as the
"Purchasers," and this Agreement and the agreements executed by the Other
Purchasers are hereinafter sometimes collectively referred to as the
"Agreements." The term "Placement Agents" shall refer collectively to Jefferies
& Company, Inc. and Merriman Curhan Ford & Co.

        SECTION 3.  Delivery of the Shares at the Closing.  The completion of
                    -------------------------------------
the purchase and sale of the Shares (the "Closing") shall occur at the offices
of Morrison & Foerster LLP, 1290 Avenue of the Americas, New York, New York
10104 as soon as practicable and as agreed to by the parties hereto, within
three business days following the execution of the Agreements, or on such later
date or at such different location as the parties shall agree in writing, but
not prior to the date that the conditions for Closing set forth below have been
satisfied or waived by the appropriate party (the "Closing Date").

        At the Closing, the Company shall deliver to the Purchaser one or more
stock certificates registered in the name of the Purchaser, or, if so indicated
on the Stock Certificate Questionnaire attached hereto as Appendix I, in such
nominee name(s) as designated by the Purchaser, representing the number of
Shares set forth on Appendix I attached hereto and bearing an appropriate legend
referring to the fact that the Shares were sold in reliance upon the exemption
from registration under the Securities Act of 1933, as amended (the "Securities
Act") provided by Section 4(2) thereof and Rule 506 thereunder. The name(s) in
which the stock certificates are to be registered are set forth in the Stock
Certificate Questionnaire attached hereto as Appendix I.

<PAGE>

The Company's obligation to complete the purchase and sale of the Shares and
deliver such stock certificate(s) to the Purchaser at the Closing shall be
subject to the following conditions, any one or more of which may be waived by
the Company: (a) receipt by the Company of same-day funds in the full amount of
the purchase price for the Shares being purchased hereunder; (b) completion of
the purchases and sales under the Agreements with the Other Purchasers; and (c)
the accuracy in all material respects of the representations and warranties made
by the Purchasers (as if such representations and warranties were made on the
Closing Date) and the fulfillment of those undertakings of the Purchasers to be
fulfilled prior to the Closing. The Purchaser's obligation to accept delivery of
such stock certificate(s) and to pay for the Shares evidenced thereby shall be
subject to the following conditions, any one or more of which may be waived by
the Purchaser: (a) each of the representations and warranties of the Company
made herein shall be accurate as of the Closing Date; (b) the delivery to the
Purchaser by counsel to the Company of a legal opinion in a form reasonably
satisfactory to the Placement Agents and their counsel; and (c) the fulfillment
in all material respects of those undertakings of the Company to be fulfilled
prior to Closing. The Purchaser's obligations hereunder are expressly not
conditioned on the purchase by any or all of the Other Purchasers of the Shares
that they have agreed to purchase from the Company.

        SECTION 4. Representations, Warranties and Covenants of the Company.
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        The Company hereby represents and warrants to, and covenants with,
the Purchaser as follows:

                4.1  Organization and Qualification.  The Company is a
                     ------------------------------
    corporation duly incorporated, validly existing and in good standing under
    the laws of the State of Delaware and the Company is qualified to do
    business as a foreign corporation in each jurisdiction in which such
    qualification is required, except where failure to so qualify would not
    reasonably be expected to have a Material Adverse Effect (as defined
    herein). The material subsidiaries of the Company are listed on Exhibit A
    (each a "Subsidiary" and collectively, the "Subsidiaries"). Except as set
    forth on Exhibit A, each Subsidiary is a direct or indirect wholly owned
    subsidiary of the Company. Each Subsidiary is duly organized, validly
    existing and in good standing under the laws of its jurisdiction of
    organization and is qualified to do business as a foreign entity in each
    jurisdiction in which such qualification is required, except where failure
    to so qualify would not reasonably be expected to have a Material Adverse
    Effect. For purposes of this Agreement, the term "Material Adverse Effect"
    shall mean a material adverse effect upon the business, prospects, condition
    (financial or otherwise), properties or results of operations of the Company
    and its Subsidiaries, taken as a whole.

              4.2  Authorized Capital Stock.  Except as disclosed in or
                   ------------------------
    contemplated by the Confidential Private Placement Memorandum dated January
    19, 2005 prepared by the Company, including all Exhibits, supplements and
    amendments thereto and all documents incorporated by reference therein (the
    "Private Placement Memorandum"), the Company had outstanding the capital
    stock set forth under the heading "Capitalization" in the Private Placement
    Memorandum as of the date set forth therein; the issued and outstanding
    shares of the Company's Common Stock have been duly authorized and validly
    issued, are fully paid and nonassessable, have been issued in compliance
    with all federal and state securities laws, were not issued in violation of
    or subject to any preemptive rights or other

                                       -2-
<PAGE>

    rights to subscribe for or purchase securities, and conform in all material
    respects to the description thereof contained in the Private Placement
    Memorandum. Except as disclosed in the Private Placement Memorandum or as
    set forth in Exhibit A, the Company does not have outstanding any options to
    purchase, or any preemptive rights or other rights to subscribe for or to
    purchase, any securities or obligations convertible into, or any contracts
    or commitments to issue or sell, shares of its capital stock or any such
    options, rights, convertible securities or obligations. The description of
    the Company's stock, stock bonus and other stock plans or arrangements and
    the options or other rights granted and exercised thereunder set forth in
    the Private Placement Memorandum accurately and fairly presents all material
    information with respect to such plans, arrangements, options and rights.
    With respect to each Subsidiary, except as set forth in Exhibit A (i) all
    the issued and outstanding shares of capital stock or other equity interests
    of each Subsidiary have been duly authorized and validly issued, are fully
    paid and nonassessable, have been issued in compliance with applicable
    federal and state securities laws, were not issued in violation of or
    subject to any preemptive rights or other rights to subscribe for or
    purchase securities, and (ii) there are no outstanding options to purchase,
    or any preemptive rights or other rights to subscribe for or to purchase,
    any securities or obligations convertible into, or any contracts or
    commitments to issue or sell, shares of the Subsidiary's capital stock or
    other equity interests or any such options, rights, convertible securities
    or obligations.

              4.3  Issuance, Sale and Delivery of the Shares.  The Shares have
                   -----------------------------------------
    been duly authorized and, when issued, delivered and paid for in the manner
    set forth in this Agreement, will be duly authorized, validly issued, fully
    paid and nonassessable and free and clear of all pledges, liens,
    restrictions and encumbrances (other than restrictions on transfer under
    state and/or federal securities laws), and will conform in all material
    respects to the description thereof set forth in the Private Placement
    Memorandum. Except as set forth in the Private Placement Memorandum, no
    preemptive rights or other rights to subscribe for or purchase exist with
    respect to the issuance and sale of the Shares by the Company pursuant to
    this Agreement (other than those which have been waived). Except as set
    forth in the Private Placement Memorandum, no stockholder of the Company has
    any right (which has not been waived or has not expired by reason of lapse
    of time following notification of the Company's intent to file the
    registration statement to be filed by it pursuant to Section 7.1 (the
    "Registration Statement")) to require the Company to register the sale of
    any shares owned by such stockholder under the Securities Act in the
    Registration Statement. No further approval or authority of the stockholders
    or the Board of Directors of the Company will be required for the issuance
    and sale of the Shares to be sold by the Company as contemplated herein.

              4.4  Due Execution, Delivery and Performance of this Agreement.
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    The Company has full legal right, corporate power and authority to enter
    into this Agreement and perform the transactions contemplated hereby. This
    Agreement has been duly authorized, executed and delivered by the Company.
    The execution, delivery and performance of this Agreement by the Company and
    the consummation of the transactions herein contemplated will not violate
    any provision of the certificate of incorporation or bylaws of the Company
    or any of its Subsidiaries and will not result in the creation of any lien,
    charge, security interest or encumbrance upon any assets of the Company or
    any of its Subsidiaries pursuant to the terms or provisions thereof, and
    will not (i) conflict with, result in the breach or violation of, or
    constitute, either by itself or upon notice or the passage of time or both,
    a default under (A)

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<PAGE>

    any agreement, lease, franchise, license, permit or other instrument to
    which the Company or any of its Subsidiaries is a party or by which the
    Company or any of its Subsidiaries or any of their respective properties may
    be bound or affected and in each case which would have a Material Adverse
    Effect, or (B) to the Company's knowledge, any statute or any judgment,
    decree, order, rule or regulation of any court or any regulatory body,
    administrative agency or other governmental body applicable to the Company
    or any of its Subsidiaries or any of their respective properties where such
    conflict, breach, violation or default is likely to result in a Material
    Adverse Effect. No consent, approval, authorization or other order of any
    court, regulatory body, administrative agency or other governmental body is
    required for the execution and delivery of this Agreement or the
    consummation of the transactions contemplated by this Agreement, except for
    compliance with the blue sky laws and federal securities laws applicable to
    the offering of the Shares. Upon the execution and delivery of this
    Agreement, and assuming the valid execution thereof by the Purchaser, this
    Agreement will constitute a valid and binding obligation of the Company,
    enforceable against the Company 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 Company in Section 7.3 hereof may
    be limited by federal or state securities laws or the public policy
    underlying such laws.

              4.5  Accountants.  The firms of Grant Thornton LLP and Deloitte &
                   -----------
    Touche LLP, which have expressed their respective opinions with respect to
    the consolidated financial statements to be included or incorporated by
    reference in the Registration Statement and the prospectus which forms a
    part thereof (the "Prospectus"), are each an independent accountant as
    required by the Securities Act and the rules and regulations promulgated
    thereunder (the "Rules and Regulations").

              4.6  No Defaults.  Except as otherwise disclosed in the Private
                   -----------

    Placement Memorandum, neither the Company nor any of its Subsidiaries is in
    violation or default of any provision of its certificate of incorporation or
    bylaws, or in breach of or default with respect to any provision of any
    agreement, judgment, decree, order, lease, franchise, license, permit or
    other instrument to which it is a party or by which it or any of its
    properties are bound which could reasonably be expected to have a Material
    Adverse Effect and there does not exist any state of facts which, with
    notice or lapse of time or both, would constitute an event of default on the
    part of the Company or any of its Subsidiaries as defined in such documents
    and which would have a Material Adverse Effect.

              4.7  Contracts.  Except as otherwise disclosed in the Private
                   ---------
    Placement Memorandum, the Company and its Subsidiaries have no material
    contracts. Any contracts described in the Private Placement Memorandum that
    are material to the Company and its Subsidiaries, taken as a whole, are in
    full force and effect on the date hereof; and neither the Company nor any of
    its Subsidiaries is, nor, to the Company's knowledge, is any other party in
    breach of or default under any of such contracts which would have a Material
    Adverse Effect.

                                       -4-
<PAGE>

              4.8  No Actions.  Except as otherwise disclosed in the Private
                   ----------
    Placement Memorandum, (1) there are no legal or governmental actions, suits
    or proceedings pending and (2) to the Company's knowledge, there are no
    inquiries or investigations, nor are there any legal or governmental
    actions, suits, or proceedings threatened to which the Company or any of its
    Subsidiaries is or may be a party or of which property owned or leased by
    the Company or any of its Subsidiaries is or may be the subject, or related
    to environmental or discrimination matters, which actions, suits or
    proceedings, individually or in the aggregate, might reasonably be expected
    to have a Material Adverse Effect; and no labor disturbance by the employees
    of the Company exists or, to the Company's knowledge, is imminent which
    might reasonably be expected to have a Material Adverse Effect. Neither the
    Company nor any of its Subsidiaries is party to or subject to the provisions
    of any injunction, judgment, decree or order of any court, regulatory body,
    administrative agency or other governmental body which might reasonably be
    expected to have a Material Adverse Effect.

              4.9  Properties.  The Company and the Subsidiaries have good and
                   ----------
    marketable title to all properties and assets reflected as owned in the
    financial statements included in the Private Placement Memorandum, and such
    properties and assets are not subject to any lien, mortgage, pledge, charge
    or encumbrance of any kind except (i) those, if any, reflected in the
    financial statements included in the Private Placement Memorandum or
    otherwise in the Private Placement Memorandum, or (ii) those which are not
    material in amount and do not adversely affect the use of such property by
    the Company and its Subsidiaries. Each of the Company and its Subsidiaries
    holds its leased properties under valid and binding leases, with such
    exceptions as are not materially significant in relation to the business of
    the Company and its Subsidiaries, taken as a whole. Except as disclosed in
    the Private Placement Memorandum, the Company leases all such properties as
    are necessary to its operations as now conducted.

              4.10  No Material Change.  Since June 30, 2004, and except as
                    ------------------
    described in the Private Placement Memorandum (i) the Company and its
    Subsidiaries have not incurred any material liabilities or obligations,
    indirect, or contingent, or entered into any material oral or written
    agreement or other transaction which is not in the ordinary course of
    business or which could reasonably be expected to result in a material
    reduction in the future earnings of the Company and its Subsidiaries; (ii)
    the Company and its Subsidiaries have not sustained any material loss or
    interference with their businesses or properties from fire, flood,
    windstorm, accident or other calamity not covered by insurance; (iii) the
    Company and its Subsidiaries have not paid or declared any dividends or
    other distributions with respect to their capital stock and neither the
    Company nor any of its Subsidiaries is in default in the payment of
    principal or interest on any outstanding debt obligations; (iv) there has
    not been any change in the capital stock of the Company or any of its
    Subsidiaries other than the sale of the Shares hereunder, shares or options
    issued pursuant to employee equity incentive plans or purchase plans
    approved by the Company's Board of Directors and repurchases of shares or
    options pursuant to repurchase plans already approved by the Company's Board
    of Directors, or indebtedness not incurred in the ordinary course of
    business that is material to the Company and its Subsidiaries, taken as a
    whole; and (v) there has not been any other event which has caused a
    Material Adverse Effect.

                                       -5-
<PAGE>

              4.11  Intellectual Property.  Except as disclosed in the Private
                    ---------------------
    Placement Memorandum: (i) the Company owns or has obtained valid and
    enforceable licenses or options for the inventions, patent applications,
    patents, trademarks (both registered and unregistered), trade names,
    copyrights and trade secrets necessary for the conduct of the Company's
    business as currently conducted (collectively, the "Intellectual Property");
    and (ii) (a) there are no third parties who have any ownership rights to any
    Intellectual Property that is owned by, or has been licensed to, the Company
    for the products described in the Private Placement Memorandum that would
    preclude the Company from conducting its business as currently conducted and
    have a Material Adverse Effect, except for the ownership rights of the
    owners of the Intellectual Property licensed or optioned by the Company; (b)
    to the Company's knowledge, there are currently no sales of any products
    that would constitute an infringement by third parties of any Intellectual
    Property owned, licensed or optioned by the Company, which infringement
    would have a Material Adverse Effect; (c) there is no pending or, to the
    Company's knowledge, threatened action, suit, proceeding or claim by others
    challenging the rights of the Company in or to any Intellectual Property
    owned, licensed or optioned by the Company, other than claims which would
    not reasonably be expected to have a Material Adverse Effect; (d) there is
    no pending or, to the Company's knowledge, threatened action, suit,
    proceeding or claim by others challenging the validity or scope of any
    Intellectual Property owned, licensed or optioned by the Company, other than
    non-material actions, suits, proceedings and claims; and (e) there is no
    pending or, to the Company's knowledge, threatened action, suit, proceeding
    or claim by others that the Company infringes or otherwise violates any
    patent, trademark, copyright, trade secret or other proprietary right of
    others, other than non-material actions, suits, proceedings and claims.

              4.12  Compliance.  Except as disclosed in the Private Placement
                    ----------
    Memorandum, neither the Company nor any of its Subsidiaries has been
    advised, nor has reason to believe, that it is not conducting its business
    in compliance with all applicable laws, rules and regulations of the
    jurisdictions in which it is conducting its business, including, without
    limitation, all applicable local, state and federal environmental laws and
    regulations; except where failure to be so in compliance would not have a
    Material Adverse Effect.

              4.13  Taxes.  Each of the Company and its Subsidiaries has filed
                    -----
    all necessary federal, state and foreign income and franchise tax returns
    and has paid or accrued all taxes shown as due thereon, and neither the
    Company nor any of its Subsidiaries has knowledge of a tax deficiency which
    has been or might be asserted or threatened against it which might
    reasonably be expected to have a Material Adverse Effect.

              4.14  Transfer Taxes.  On the Closing Date, all stock transfer or
                    --------------
    other taxes (other than income taxes) which are required to be paid in
    connection with the sale and transfer of the Shares to be sold to the
    Purchaser hereunder will be, or will have been, fully paid or provided for
    by the Company and all laws imposing such taxes will be or will have been
    complied with.

              4.15  Investment Company.  The Company is not an "investment
                    ------------------
    company" or an "affiliated person" of, or "promoter" or "principal
    underwriter" for an investment company, within the meaning of the Investment
    Company Act of 1940, as amended.

                                       -6-
<PAGE>

              4.16  Offering Materials.  The Company has not distributed and
                    ------------------
    will not distribute prior to the Closing Date any offering material in
    connection with the offering and sale of the Shares other than the Private
    Placement Memorandum or any amendment or supplement thereto. Neither the
    Company nor any person acting on its behalf has in the past or will
    hereafter take any action independent of the Placement Agents to sell, offer
    for sale or solicit offers to buy any securities of the Company which would
    subject the offer, issuance or sale of the Shares, as contemplated by this
    Agreement, to the registration requirements of Section 5 of the Securities
    Act.

              4.17  Insurance.  The Company and its Subsidiaries maintain
                    ---------
    insurance of the types and in the amounts that the Company reasonably
    believes is adequate for their businesses, including, but not limited to,
    insurance covering all real and personal property leased by the Company and
    its Subsidiaries against theft, damage, destruction, acts of vandalism and
    all other risks customarily insured against by similarly situated companies,
    all of which insurance is in full force and effect.

              4.18  Additional Information.  The information contained in the
                    ----------------------
    following documents, which the Placement Agents have furnished to the
    Purchaser, or will furnish prior to the Closing, does not include any untrue
    statement of a material fact or omit to state any material fact required to
    be stated therein or necessary to make the statements therein, in the light
    of the circumstances in which they were made, not misleading, as of their
    respective final dates:

                 (a)    our Annual Report on Form 10-K for the fiscal year ended
                        June 30, 2004;

                 (b)    our Quarterly Report on Form 10-Q for the quarter ended
                        September 30, 2004;

                 (c)    our Quarterly Report on Form 10-Q for the quarter ended
                        December 31, 2004

                 (d)    our definitive Proxy Statement for our Annual Meeting of
                        Stockholders held on November 18, 2004; and

                 (e)    the Private Placement Memorandum, including all addenda
                        and exhibits thereto (other than the Purchase Agreement
                        and the Appendices).

                                       -7-

<PAGE>

              4.19  Price of Common Stock.  The Company has not taken, and will
                    ---------------------
    not take, directly or indirectly, any action designed to cause or result in,
    or which has constituted or which might reasonably be expected to
    constitute, the stabilization or manipulation of the price of the shares of
    the Common Stock to facilitate the sale or resale of the Shares.

              4.20  Corporate Legal Opinion.  As a condition to the Purchasers'
                    -----------------------
    obligation to purchase the Shares, at the Closing legal counsel to the
    Company will deliver one or more legal opinions to the Placement Agents in a
    form reasonably satisfactory to the Placement Agents and their counsel. Such
    opinions also shall state that each of the Purchasers may rely thereon as
    though it were addressed directly to such Purchaser.

              4.21  Certificate.  As a condition to the Purchasers' obligation
                    -----------
    to purchase the Shares, at the Closing the Company will deliver to Purchaser
    a certificate executed by the chief executive officer and the chief
    financial or accounting officer of the Company, dated as of the Closing
    Date, in form and substance reasonably satisfactory to the Purchasers, to
    the effect that the representations and warranties of the Company set forth
    in this Section 4 are true and correct as of the date of this Agreement and
    as of the Closing Date and that the Company has complied with all the
    agreements and satisfied all the conditions herein on its part to be
    performed or satisfied on or prior to such Closing Date.

              4.22  Reporting Company; Form S-3.  The Company is subject to the
                    ---------------------------
    reporting requirements of the Securities Exchange Act of 1934, as amended
    (the "Exchange Act") and has filed all reports required thereby. The Company
    is eligible to register the Shares for resale by the Purchaser on a
    registration statement on Form S-3 under the Securities Act. There exist no
    facts or circumstances (including without limitation any required approvals
    or waivers or any circumstances that may delay or prevent the obtaining of
    accountant's consents) that reasonably could be expected to prohibit or
    delay the preparation and filing of a registration statement on Form S-3
    that will be available for the resale of the Shares by the Purchaser.

              4.23  Use of Proceeds.  The Company shall use the proceeds from
                    ---------------
    the sale of Shares as described under "Use of Proceeds" in the Private
    Placement Memorandum.

              4.24  Non-Public Information.  The Company has not disclosed to
                    ----------------------
    the Purchaser, whether in the Private Placement Memorandum or otherwise,
    information that would constitute material non-public information as of the
    Closing Date.

              4.25  Use of Purchaser Name.  Except as may be required by
                    ---------------------
    applicable law or regulation, the Company shall not use the Purchaser's name
    or the name of any of its affiliates in any advertisement, announcement,
    press release or other similar public communication unless it has received
    the prior written consent of the Purchaser for the specific use contemplated
    or as otherwise required by applicable law or regulation.

              4.26  Related Party Transactions.  No transaction has occurred
                    --------------------------
    between or among the Company, any of the Subsidiaries and their affiliates,
    officers or directors or any affiliate or affiliates of any such officer or
    director that is required to have

                                       -8-
<PAGE>

    been described under applicable securities laws in its Exchange Act filings
    and is not so described in such filings.

              4.27  Off-Balance Sheet Arrangements.  There is no transaction,
                    ------------------------------
    arrangement or other relationship between the Company and an unconsolidated
    or other off-balance sheet entity that is required to be disclosed by the
    Company in its Exchange Act filings and is not so disclosed or that
    otherwise would be reasonably likely to have a Material Adverse Effect.
    There are no such transactions, arrangements or other relationships with the
    Company that may create contingencies or liabilities that are not otherwise
    disclosed by the Company in its Exchange Act filings.

              4.28  Governmental Permits, Etc.  Each of the Company and its
                    --------------------------
    Subsidiaries has all franchises, licenses, certificates and other
    authorizations from such federal, state or local government or governmental
    agency, department or body that are currently required for the operation of
    the business of the Company and its Subsidiaries as currently conducted,
    except where the failure to posses currently such franchises, licenses,
    certificates and other authorizations is not reasonably expected to have a
    Material Adverse Effect. The Company and its Subsidiaries have not received
    any notice of proceedings relating to the revocation or modification of any
    such permit which, if the subject of an unfavorable decision, ruling or
    finding, could reasonably be expected to have a Material Adverse Effect.

              4.29  Financial Statements.  The consolidated financial statements
                    --------------------
    of the Company and the related notes contained in its Exchange Act filings
    present fairly, in accordance with generally accepted accounting principles,
    the consolidated financial position of the Company and its Subsidiaries as
    of the dates indicated, and the results of their operations, cash flows and
    the changes in stockholders' equity for the periods therein specified,
    subject, in the case of unaudited financial statements for interim periods,
    to normal year-end audit adjustments. Such consolidated financial statements
    (including the related notes) have been prepared in accordance with
    generally accepted accounting principles applied on a consistent basis
    throughout the periods therein specified, except that unaudited financial
    statements may not contain all footnotes required by generally accepted
    accounting principles.

              4.30  Listing.  The Company shall comply with all requirements of
                    -------
    the Nasdaq National Market with respect to the issuance of Shares and shall
    use its reasonable best efforts to have the Shares listed on the Nasdaq
    National Market on or before the first date that the Registration Statement
    is declared effective by the Commission.

              4.31  Internal Accounting and Disclosure Controls.  Except as
                    -------------------------------------------
    disclosed in the "Risk Factors" section of the Private Placement Memorandum,
    the Company and each of its Subsidiaries maintain a system of internal
    accounting controls sufficient to provide reasonable assurance that (i)
    transactions are executed in accordance with management's general or
    specific authorizations, (ii) transactions are recorded as necessary to
    permit preparation of financial statements in conformity with generally
    accepted accounting principles and to maintain asset and liability
    accountability, (iii) access to assets or incurrence of liabilities is
    permitted only in accordance with management's general or specific

                                       -9-
<PAGE>

    authorization and (iv) the recorded accountability for assets and
    liabilities is compared with the existing assets and liabilities at
    reasonable intervals and appropriate action is taken with respect to any
    difference. The Company maintains disclosure controls and procedures (as
    such term is defined in Rule 13a-14 under the Exchange Act) that are
    effective in ensuring that information required to be disclosed by the
    Company in the reports that it files or submits under the Exchange Act is
    recorded, processed, summarized and reported, within the time periods
    specified in the rules and forms of the Commission, including, without
    limitation, controls and procedures designed in to ensure that information
    required to be disclosed by the Company in the reports that it files or
    submits under the Exchange Act is accumulated and communicated to the
    Company's management, including its principal executive officer or officers
    and its principal financial officer or officers, as appropriate, to allow
    timely decisions regarding required disclosure.

        SECTION 5. Representations, Warranties and Covenants of the Purchaser.
                   ----------------------------------------------------------
              (a)  The Purchaser represents and warrants to, and covenants with,
    the Company that: (i) the Purchaser is knowledgeable, sophisticated and
    experienced in making, and is qualified to make, decisions with respect to
    investments in shares representing an investment decision similar to that
    involved in the purchase of the Shares, including investments in securities
    issued by the Company and comparable entities, and has had the opportunity
    to request, receive, review and consider all information it deems relevant
    in making an informed decision to purchase the Shares; (ii) the Purchaser is
    acquiring the number of Shares set forth on Appendix I attached hereto in
    the ordinary course of its business and for its own account for investment
    only and with no present intention of distributing any of such Shares or any
    arrangement or understanding with any other persons regarding the
    distribution of such Shares (this representation and warranty not limiting
    the Purchaser's right to sell pursuant to the Registration Statement or in
    compliance with the Securities Act and the Rules and Regulations, or, other
    than with respect to any claims arising out of a breach of this
    representation and warranty, the Purchaser's right to indemnification under
    Section 7.3); (iii) the Purchaser has completed or caused to be completed
    the Registration Statement Questionnaire attached hereto as part of Appendix
    I, for use in preparation of the Registration Statement, and the answers
    thereto are true and correct as of the date hereof and will be true and
    correct as of the effective date of the Registration Statement; (iv) the
    Purchaser has, in connection with its decision to purchase the number of
    Shares set forth on Appendix I attached hereto, relied solely upon the
    Private Placement Memorandum and the documents included therein or
    incorporated by reference and the representations and warranties of the
    Company contained herein; (v) the Purchaser has had an opportunity to
    discuss this investment with representatives of the Company and ask
    questions of them; (vi) the Purchaser is an "accredited investor" within the
    meaning of Rule 501(a) of Regulation D promulgated under the Securities Act;
    and (vii) the Purchaser agrees to notify the Company immediately of any
    material change in any of the foregoing information that the Purchaser is
    required to inform the Company of until such time as the Purchaser has sold
    all of its Shares or the Company is no longer required to keep the
    Registration Statement effective.

              (b)  The Purchaser understands that the Shares are being offered
    and sold to it in reliance upon specific exemptions from the registration
    requirements of the Securities Act, the Rules and Regulations and state
    securities laws and that the Company is relying upon the truth and accuracy
    of, and the Purchaser's compliance with, the representations, warranties,
    agreements, acknowledgments and understandings of the Purchaser set forth
    herein

                                       -10-
<PAGE>

    in order to determine the availability of such exemptions and the
    eligibility of the Purchaser to acquire the Shares.

              (c)  For the benefit of the Company, the Purchaser previously
    agreed orally with the Placement Agents to keep confidential all information
    concerning this private placement. The Purchaser understands that the
    federal securities laws impose restrictions on trading based on information
    regarding this offering. The foregoing obligations will terminate upon the
    filing by the Company of a press release or press releases describing this
    offering. In addition to the above, the Purchaser shall maintain in
    confidence the receipt and content of any notice of a Suspension (as defined
    in Section 5(i) below). Such notices shall not include any material,
    nonpublic information. The foregoing agreements shall not apply to any
    information that is or becomes publicly available through no fault of the
    Purchaser, or that the Purchaser is legally required to disclose; provided,
    however, that if the Purchaser is requested or ordered to disclose any such
    information pursuant to any court or other government order or any other
    applicable legal procedure, it shall provide the Company with prompt notice
    of any such request or order in time sufficient to enable the Company to
    seek an appropriate protective order.

              (d)  The Purchaser understands that its investment in the Shares
    involves a significant degree of risk, including a risk of total loss of the
    Purchaser's investment, and the Purchaser has full cognizance of and
    understands all of the risk factors related to the Purchaser's purchase of
    the Shares, including, but not limited to, those set forth under the caption
    "Risk Factors" in the Private Placement Memorandum. The Purchaser
    understands that the market price of the Common Stock has been volatile and
    that no representation is being made as to the future value of the Common
    Stock. The Purchaser has the knowledge and experience in financial and
    business matters as to be capable of evaluating the merits and risks of an
    investment in the Shares and has the ability to bear the economic risks of
    an investment in the Shares.

              (e)  The Purchaser understands that no United States federal or
    state agency or any other government or governmental agency has passed upon
    or made any recommendation or endorsement of the Shares.

              (f)  The Purchaser understands that, until such time as the
    Registration Statement has been declared effective or the Shares may be sold
    pursuant to Rule 144 under the Securities Act without any restriction as to
    the number of securities as of a particular date that can then be
    immediately sold, the Shares will bear a restrictive legend in substantially
    the following form:

            "The Shares evidenced by this certificate have not been registered
            under the Securities Act of 1933, as amended (the "Securities Act"),
            or the securities laws of any state or other jurisdiction. The
            Shares may not be offered, sold or otherwise transferred except (1)
            pursuant to an exemption from registration under the Securities Act
            or (2) pursuant to an effective registration statement under the
            Securities Act, in each case in accordance with all applicable
            securities laws of the states and other jurisdictions, and in the
            case of a transaction exempt from registration, unless the Company
            has

                                       -11-
<PAGE>

            received an opinion of counsel reasonably satisfactory to it that
            such transaction does not require registration under the Securities
            Act and such other applicable laws. Notwithstanding the foregoing,
            the Shares may be pledged in connection with a bona fide margin
            account or other loan or financing arrangement secured by the
            Shares."

              (g)  The Purchaser's principal executive offices are in the
    jurisdiction set forth immediately below the Purchaser's name on the
    signature pages hereto.

              (h)  The Purchaser hereby covenants with the Company not to make
    any sale of the Shares under the Registration Statement without complying
    with the provisions of this Agreement and without effectively causing the
    prospectus delivery requirement under the Securities Act to be satisfied.
    The legend set forth in Section 5(f) shall be removed and the Company shall
    issue a certificate without such legend or any other legend to the holder of
    the applicable Shares upon which it is stamped, if (i) such Shares are
    registered for resale under the 1933 Act, (ii) in connection with a sale,
    assignment or other transfer, such holder provides the Company with an
    opinion of counsel, in a form reasonably acceptable to the Company, to the
    effect that such sale, assignment or transfer of such Shares may be made
    without registration under the applicable requirements of the 1933 Act, or
    (iii) such holder provides the Company with reasonable assurance that such
    Shares can be sold, assigned or transferred pursuant to Rule 144(k).
    Following the effective date of the Registration Statement (the "Effective
    Date"), the Company will as soon as reasonably practicable following the
    delivery by a Purchaser to the Company or the Company's transfer agent of a
    legended certificate representing such Shares, deliver or cause to be
    delivered to such Purchaser a certificate representing such Shares that is
    free from all restrictive and other legends. Following the Effective Date
    and upon the delivery to any Purchaser of any certificate representing
    Shares that is free from all restrictive and other legends, such Purchaser
    agrees that any sale of such Shares shall be made pursuant to the
    Registration Statement and in accordance with the plan of distribution
    described therein or pursuant to an available exemption from the
    registration requirements of the 1933 Act. The Company may not make any
    notation on its records or give instructions to any transfer agent of the
    Company that enlarge the restrictions on transfer set forth in Section 5(f).
    The Company will pay all transfer agent fees in connection with the removal
    of legends from certificates representing the Shares. The Company
    acknowledges that a breach by it of its obligations under this Section 5(h)
    will cause irreparable harm to a Purchaser. Accordingly, the Company
    acknowledges that the remedy at law for a breach of its obligations under
    this Section 5(h) will be inadequate and agrees, in the event of a breach or
    threatened breach by the Company of the provisions of this Section 5(h),
    that a Purchaser shall be entitled, in addition to all other available
    remedies, to an order and/or injunction restraining any breach and requiring
    immediate issuance and transfer, without the necessity of showing economic
    loss and without any bond or other security being required; and

              (i)  The Purchaser acknowledges that there may occasionally be
    times when the Company must suspend the use of the Prospectus forming a part
    of the Registration Statement (a "Suspension") until such time as an
    amendment to the Registration Statement has been filed by the Company and
    declared effective by the Commission, or until such time as the Company has
    filed an appropriate report with the Commission pursuant to the Exchange
    Act.

                                       -12-
<PAGE>

    The Purchaser hereby covenants that it will not sell any Shares pursuant to
    said Prospectus during the period commencing at the time at which the
    Company gives the Purchaser written notice of the Suspension of the use of
    said Prospectus and ending at the time the Company gives the Purchaser
    written notice that the Purchaser may thereafter effect sales pursuant to
    said Prospectus. Notwithstanding the foregoing, the Company agrees that no
    Suspension shall be for a period of longer than 60 days during in any
    365-day period.

              (j)  The Purchaser further represents and warrants to, and
    covenants with, the Company that (i) the Purchaser 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, (ii)
    the making and performance of this Agreement by the Purchaser and the
    consummation of the transactions herein contemplated will not violate any
    provision of the organizational documents of the Purchaser or conflict with,
    result in the breach or violation of, or constitute, either by itself or
    upon notice or the passage of time or both, a default under any material
    agreement, mortgage, deed of trust, lease, franchise, license, indenture,
    permit or other instrument to which the Purchaser is a party, or any statute
    or any authorization, judgment, decree, order, rule or regulation of any
    court or any regulatory body, administrative agency or other governmental
    body applicable to the Purchaser, (iii) no consent, approval, authorization
    or other order of any court, regulatory body, administrative agency or other
    governmental body is required on the part of the Purchaser for the execution
    and delivery of this Agreement or the consummation of the transactions
    contemplated by this Agreement, (iv) upon the execution and delivery of this
    Agreement, this Agreement shall constitute a legal, valid and binding
    obligation of the Purchaser, enforceable 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
    to the extent enforcement of the indemnification provisions, set forth in
    Section 7.3 of this Agreement, may be limited by federal or state securities
    laws or the public policy underlying such laws, and (v) there is not in
    effect any order enjoining or restraining the Purchaser from entering into
    or engaging in any of the transactions contemplated by this Agreement.

              (k)  The Purchaser further represents and warrants to the Company
    that since the initial date the Purchaser was contacted by the Placement
    Agents regarding the offering of the Shares by the Company, neither the
    Purchaser, nor any group of which it is a member, has established or
    increased, directly or indirectly, a put equivalent position, as defined in
    Rule 16(a)-1(h) under the Exchange Act, with respect to the Company's equity
    securities. From and after the Closing, for so long as the Purchaser
    continues to hold any Shares acquired hereunder, the Purchaser agrees that
    it will not, nor will it knowingly through its affiliates, engage in any
    Short Sales, except on those days (each a "Permitted Day") on which the
    aggregate short position with respect to the Common Stock of the Purchaser
    prior to giving effect to any Short Sales by the Purchaser on such Permitted
    Day does not exceed such Purchaser's Permitted Share Position (as defined
    below) on such Permitted Day; provided, however, that the Purchaser will
    only be entitled to engage in transactions that constitute Short Sales on a
    Permitted Day to the extent that following such transaction, the aggregate
    short position with respect to the Common Stock of the Purchaser does not
    exceed such Purchaser's Permitted Share Position. For purposes of this

                                       -13-
<PAGE>

    Section 5(k), a "Short Sale" by the Purchaser means a short sale of the
    Company's Common Stock executed at a time when the Purchaser has no
    equivalent offsetting long position in the Common Stock, and the Purchaser's
    "Permitted Share Position" means, with respect to any date of determination,
    the number of shares of Common Stock owned by the Purchaser (including
    Shares). In determining whether the Purchaser has an equivalent offsetting
    long position in the Company's Common Stock, shares that underlie any
    convertible securities held by the Purchaser, including warrants, will be
    included as if held long by the Purchaser. The provisions of this Section
    5(k) will not be deemed to restrict the right of any affiliate of the
    Purchaser that is a broker-dealer registered with the Commission from
    engaging in trading activities involving the Company's equity securities to
    the extent such trading activities are conducted in the ordinary course of
    its business, consistent in all material respects with its past trading
    practices, independent from the purchase of Shares by the Purchaser pursuant
    to this Agreement. For purposes of this Section 5(k), the term "Purchaser"
    shall mean the individual or institution, as applicable, purchasing the
    Shares.

        SECTION 6. Survival of Representations, Warranties and Agreements.
                   ------------------------------------------------------
Notwithstanding any investigation made by any party to this Agreement or by the
Placement Agents, all covenants, agreements, representations and warranties made
by the Company and the Purchaser herein and in the certificates for the Shares
delivered pursuant hereto shall survive the execution of this Agreement, the
delivery to the Purchaser of the Shares being purchased and the payment
therefore.

        SECTION 7. Registration of the Shares; Compliance with the Securities
                   Act.
                   ----------------------------------------------------------

              7.1  Registration Procedures and Expenses.  The Company shall:
                   ------------------------------------
              (a) as soon as reasonably practicable, but in no event later than
    ten (10) days following the Closing Date (provided that the Purchasers have
    provided the Company with completed Registration Statement Questionnaires
    prior to such date), prepare and file with the Commission the Registration
    Statement on Form S-3 relating to the sale of the Shares by the Purchaser
    and the other Purchasers from time to time on the Nasdaq National Market or
    the facilities of any national securities exchange on which the Common Stock
    is then traded or in privately-negotiated transactions;

              (b) provide a copy of the Registration Statement to the Purchaser
    for its review and comment prior to filing the Registration Statement with
    the Commission;

              (c) notify the Purchaser promptly upon being informed whether the
    staff of the Commission intends to review or not review the Registration
    Statement;

              (d) file a request for acceleration of the Registration Statement
    with the commission within five business days after the date the Company
    receives notice from the staff of the Commission that the Commission does
    not intend to review the Registration Statement or has completed such
    review;

              (e) use its reasonable best efforts, subject to receipt of
    necessary information from the Purchasers and notwithstanding the liquidated
    damages provision provided

                                       -14-
<PAGE>

    below in this Section 7.1, to cause the Commission to declare the
    Registration Statement effective by the date which is 90 days after the
    Closing Date (the "Effectiveness Target Date");

              (f) use its reasonable best efforts to promptly prepare and file
    with the Commission such amendments and supplements to the Registration
    Statement and the prospectus used in connection therewith as may be
    necessary to keep the Registration Statement effective until the earliest of
    (i) two years after the effective date of the Registration Statement, or
    (ii) such time as the Shares become eligible for resale by non-affiliates
    pursuant to Rule 144(k) under the Securities Act;

              (g) furnish to the Purchaser with respect to the Shares registered
    under the Registration Statement (and to each underwriter, if any, of such
    Shares) such number of copies of prospectuses and such other documents as
    the Purchaser may reasonably request, in order to facilitate the public sale
    or other disposition of all or any of the Shares by the Purchaser;

              (h) file documents required of the Company for normal Blue Sky
    clearance in states specified in writing by the Purchaser; provided,
    however, that the Company shall not be required to qualify to do business or
    consent to service of process in any jurisdiction in which it is not now so
    qualified or has not so consented;

              (i) bear all expenses in connection with the procedures in
    paragraphs (a) through (h) of this Section 7.1 and the registration of the
    Shares pursuant to the Registration Statement, other than fees and expenses,
    if any, of counsel or other advisers to the Purchaser or the Other
    Purchasers or underwriting discounts, brokerage fees and commissions
    incurred by the Purchaser or the Other Purchasers, if any;

              (j) file a Form D with respect to the Shares as required under
    Regulation D and to provide a copy thereof to the Purchaser promptly after
    filing;

              (k) issue a press release describing the transactions contemplated
    by this Agreement not later than 9:00 a.m., New York City time, on the first
    business day after the date of this Agreement; and

              (l) make available, while the Registration Statement is effective
    and available for resale, its Chief Executive Officer, Chief Financial
    Officer, and Chief Administrative Officer for questions regarding
    information which the Purchaser may reasonably request in order to fulfill
    any due diligence obligation on its part; provided however, that such
    information may not include material, non-public information.

           If the Commission does not declare the Registration Statement
effective by the Effectiveness Target Date, the Company shall become obligated
to pay to the Purchaser an amount in cash, as liquidated damages and not as a
penalty, equivalent to 1% of the aggregate purchase price paid by the Purchaser
for any Shares then held by the Purchaser or its affiliates for each full month
that effectiveness is delayed beyond the Effectiveness Target Date (pro-rated on
a daily basis for partial months). The Company shall pay in full any liquidated
damages pursuant to this Section 7.1 within 30 days after the date on which the
Company becomes obligated to pay such damages. Provided that the Company
continues to use its reasonable best efforts to cause the Registration Statement
to be declared effective by the Commission in

                                       -15-
<PAGE>

accordance with this Agreement, the liquidated damages provided in this
paragraph shall constitute the sole and exclusive remedy of the Purchaser in
connection with any failure of the Registration Statement to be declared
effective by the Target Effective Date.

           The Company understands that the Purchaser disclaims being an
underwriter, but the Purchaser being deemed an underwriter shall not relieve the
Company of any obligations it has hereunder. A draft of the proposed form of the
Registration Statement is included in the Private Placement Memorandum and a
questionnaire related thereto to be completed by the Purchaser is attached
hereto as Appendix I.

              7.2  Transfer of Shares After Registration.  The Purchaser agrees
                   -------------------------------------
    that it will not effect any disposition of the Shares or its right to
    purchase the Shares that would constitute a sale within the meaning of the
    Securities Act or any applicable state securities laws, except as
    contemplated in the Registration Statement referred to in Section 7.1 or as
    otherwise permitted by law, and that it will promptly notify the Company of
    any changes in the information set forth in the Registration Statement
    regarding the Purchaser or its plan of distribution (other than changes in
    the number of Shares held by the Purchaser).

              7.3  Indemnification.
                   ---------------
              (a) The Company agrees to indemnify and hold harmless each
    Purchaser and each Purchaser/Affiliate (as hereinafter defined) against any
    losses, claims, damages, liabilities or expenses, joint or several, to which
    such Purchaser or Purchaser/Affiliate may become subject, under the
    Securities Act, the Exchange Act, or any other federal or state statutory
    law or regulation, or at common law or otherwise (including in settlement of
    any litigation, if such settlement is effected with the prior written
    consent of the Company), insofar as such losses, claims, damages,
    liabilities or expenses (or actions in respect thereof as contemplated
    below) arise out of or are based upon any untrue statement or alleged untrue
    statement of any material fact contained in the Registration Statement (as
    hereinafter defined), including the Prospectus, financial statements and
    schedules, and all other documents filed as a part thereof, as amended at
    the time of effectiveness of the Registration Statement, including any
    information deemed to be a part thereof as of the time of effectiveness
    pursuant to paragraph (b) of Rule 430A, or pursuant to Rule 434, of the
    Rules and Regulations, or the Prospectus, in the form first filed with the
    Commission pursuant to Rule 424(b) of the Regulations, or filed as part of
    the Registration Statement at the time of effectiveness if no Rule 424(b)
    filing is required, or any amendment or supplement thereto, or arise out of
    or are based upon the omission or alleged omission to state in any of them a
    material fact required to be stated therein or necessary to make the
    statements in any of them, in light of the circumstances under which they
    were made, not misleading, or arise out of or are based in whole or in part
    on any inaccuracy in the representations or warranties of the Company
    contained in this Agreement, or any failure of the Company to perform its
    obligations hereunder or under law, and will promptly reimburse each such
    Purchaser and each such Purchaser/Affiliate for any legal and other expenses
    as such expenses are reasonably incurred by such Purchaser or such
    Purchaser/Affiliate in connection with investigating, defending or preparing
    to defend, settling, compromising or paying any such loss, claim, damage,
    liability, expense or action; provided, however, that the Company will not
    be liable in any such case to the extent, but only to the extent, that any
    such loss, claim, damage, liability or expense arises out of or is based
    upon (i) an untrue statement or alleged untrue

                                       -16-
<PAGE>

    statement or omission or alleged omission made in the Registration
    Statement, the Prospectus or any amendment or supplement thereto in reliance
    upon and in conformity with written information furnished to the Company by
    or on behalf of the Purchaser expressly for use therein, or (ii) the failure
    of such Purchaser to comply with the covenants and agreements contained in
    Sections 5 or 7.2, or (iii) the inaccuracy of any representation or warranty
    made by such Purchaser herein or (iv) any statement or omission in any
    Prospectus that is corrected in any subsequent Prospectus that was delivered
    to the Purchaser prior to the pertinent sale or sales by the Purchaser.

              (b)  Each Purchaser, severally and not jointly and severally with
    any other Purchaser, will indemnify and hold harmless the Company, each of
    its directors, each of its executive officers, including such officers who
    signed the Registration Statement, and each person, if any, who controls the
    Company within the meaning of Section 15 of the Securities Act or Section 20
    of the Exchange Act, against any losses, claims, damages, liabilities or
    expenses to which the Company, each of its directors, each of its officers
    who signed the Registration Statement or controlling person may become
    subject, under the Securities Act, the Exchange Act, or any other federal or
    state statutory law or regulation, or at common law or otherwise (including
    in settlement of any litigation, if such settlement is effected with the
    written consent of such Purchaser) insofar as such losses, claims, damages,
    liabilities or expenses (or actions in respect thereof as contemplated
    below) arise out of or are based upon (i) any failure by such Purchaser to
    comply with the covenants and agreements contained in Sections 5 or 7.2
    hereof, or (ii) the inaccuracy of any representation or warranty made by
    such Purchaser herein, or (iii) any untrue or alleged untrue statement of
    any material fact contained in the Registration Statement, the Prospectus,
    or any amendment or supplement thereto, or arise out of or are based upon
    the omission or alleged omission to state therein a material fact required
    to be stated therein or necessary to make the statements therein not
    misleading, in each case to the extent, but only to the extent, that such
    untrue statement or alleged untrue statement or omission or alleged omission
    was made in the Registration Statement, the Prospectus, or any amendment or
    supplement thereto, in reliance upon and in conformity with written
    information furnished to the Company by or on behalf of such Purchaser
    expressly for use therein, and will reimburse the Company, each of its
    directors, each of its officers who signed the Registration Statement or
    controlling person for any legal and other expense reasonably incurred by
    the Company, each of its directors, each of its officers who signed the
    Registration Statement or controlling person in connection with
    investigating, defending, settling, compromising or paying any such loss,
    claim, damage, liability, expense or action. Notwithstanding anything herein
    contained to the contrary, in no event shall the liability of any Purchaser
    be greater in amount than the dollar amount of the net proceeds received by
    such Purchaser upon the sale of the Shares giving rise to such
    indemnification obligation.

              (c)  Promptly after receipt by an indemnified party under this
    Section 7.3 of notice of the threat or commencement of any action, such
    indemnified party will, if a claim in respect thereof is to be made against
    an indemnifying party under this Section 7.3, promptly notify the
    indemnifying party in writing thereof; but the omission so to notify the
    indemnifying party will not relieve it from any liability which it may have
    to any indemnified party for contribution or otherwise under the indemnity
    agreement contained in this Section 7.3 to the extent it is not prejudiced
    as a result of such failure. In case any such action is brought against any
    indemnified party and such indemnified party seeks or intends to seek
    indemnity

                                       -17-
<PAGE>

    from an indemnifying party, the indemnifying party will be entitled to
    participate in, and, to the extent that it may wish, jointly with all other
    indemnifying parties similarly notified, to assume the defense thereof with
    counsel reasonably satisfactory to such indemnified party; provided,
                                                               --------
    however, if the defendants in any such action include both the indemnified
    -------
    party and the indemnifying party and the indemnified party shall have
    reasonably concluded, based on an opinion of counsel reasonably satisfactory
    to the indemnifying party, that there may be a conflict of interest between
    the positions of the indemnifying party and the indemnified party in
    conducting the defense of any such action or that there may be legal
    defenses available to it and/or other indemnified parties which are
    different from or additional to those available to the indemnifying party,
    the indemnified party or parties shall have the right to select separate
    counsel to assume such legal defenses and to otherwise participate in the
    defense of such action on behalf of such indemnified party or parties. Upon
    receipt of notice from the indemnifying party to such indemnified party of
    its election to assume the defense of such action and approval by the
    indemnified party of counsel, the indemnifying party will not be liable to
    such indemnified party under this Section 7.3 for any legal or other
    expenses subsequently incurred by such indemnified party in connection with
    the defense thereof unless (i) the indemnified party shall have employed
    such counsel in connection with the assumption of legal defenses in
    accordance with the proviso to the preceding sentence (it being understood,
    however, that the indemnifying party shall not be liable for the expenses of
    more than one separate counsel, reasonably satisfactory to such indemnifying
    party, representing all of the indemnified parties who are parties to such
    action) or (ii) the indemnifying party shall not have employed counsel
    reasonably satisfactory to the indemnified party to represent the
    indemnified party within a reasonable time after notice of commencement of
    action, in each of which cases the reasonable fees and expenses of counsel
    shall be at the expense of the indemnifying party. In no event shall any
    indemnifying party be liable in respect of any amounts paid in settlement of
    any action unless the indemnifying party shall have approved in writing the
    terms of such settlement; provided that such consent shall not be
    unreasonably withheld. No indemnifying party shall, without the prior
    written consent of the indemnified party, effect any settlement of any
    pending or threatened proceeding in respect of which any indemnified party
    is or could have been a party and indemnification could have been sought
    hereunder by such indemnified party from all liability on claims that are
    the subject matter of such proceeding.

              (d)  If the indemnification provided for in this Section 7.3 is
    required by its terms but is for any reason held to be unavailable to or
    otherwise insufficient to hold harmless an indemnified party under
    paragraphs (a), (b) or (c) of this Section 7.3 in respect to any losses,
    claims, damages, liabilities or expenses referred to herein, then each
    applicable indemnifying party shall contribute to the amount paid or payable
    by such indemnified party as a result of any losses, claims, damages,
    liabilities or expenses referred to herein (i) in such proportion as is
    appropriate to reflect the relative benefits received by the Company and the
    Purchaser from the private placement of Common Stock hereunder or (ii) if
    the allocation provided by clause (i) above is not permitted by applicable
    law, in such proportion as is appropriate to reflect not only the relative
    benefits referred to in clause (i) above but the relative fault of the
    Company and the Purchaser in connection with the statements or omissions or
    inaccuracies in the representations and warranties in this Agreement and/or
    the Registration Statement which resulted in such losses, claims, damages,
    liabilities or expenses, as well as any other relevant equitable
    considerations. The respective relative benefits received by the Company on
    the one hand and each Purchaser on the other shall be deemed to be in the
    same

                                       -18-
<PAGE>

    proportion as the amount paid by such Purchaser to the Company pursuant to
    this Agreement for the Shares purchased by such Purchaser that were sold
    pursuant to the Registration Statement bears to the difference (the
    "Difference") between the amount such Purchaser paid for the Shares that
    were sold pursuant to the Registration Statement and the amount received by
    such Purchaser from such sale. The relative fault of the Company, on the one
    hand, and each Purchaser on the other shall be determined by reference to,
    among other things, whether the untrue or alleged statement of a material
    fact or the omission or alleged omission to state a material fact or the
    inaccurate or the alleged inaccurate representation and/or warranty relates
    to information supplied by the Company or by such Purchaser and the parties'
    relative intent, knowledge, access to information and opportunity to correct
    or prevent such statement or omission. The amount paid or payable by a party
    as a result of the losses, claims, damages, liabilities and expenses
    referred to above shall be deemed to include, subject to the limitations set
    forth in paragraph (c) of this Section 7.3, any legal or other fees or
    expenses reasonably incurred by such party in connection with investigating
    or defending any action or claim. The provisions set forth in paragraph (c)
    of this Section 7.3 with respect to the notice of the threat or commencement
    of any threat or action shall apply if a claim for contribution is to be
    made under this paragraph (d); provided, however, that no additional notice
                                   -----------------
    shall be required with respect to any threat or action for which notice has
    been given under paragraph (c) for purposes of indemnification. The Company
    and each Purchaser agree that it would not be just and equitable if
    contribution pursuant to this Section 7.3 were determined solely by pro rata
    allocation (even if the Purchaser were treated as one entity for such
    purpose) or by any other method of allocation which does not take account of
    the equitable considerations referred to in this paragraph. Notwithstanding
    the provisions of this Section 7.3, no Purchaser shall be required to
    contribute any amount in excess of the amount by which the Difference
    exceeds the amount of any damages that such Purchaser has otherwise been
    required to pay by reason of such untrue or alleged untrue statement or
    omission or alleged omission. No person guilty of fraudulent
    misrepresentation (within the meaning of Section 11(f) of the Securities
    Act) shall be entitled to contribution from any person who was not guilty of
    such fraudulent misrepresentation. The Purchasers' obligations to contribute
    pursuant to this Section 7.3 are several and not joint.

              (e)  For the purpose of this Section 7.3: (i) the term
    "Purchaser/Affiliate" shall mean any affiliate of the Purchaser, including a
    transferee who is an affiliate of the Purchaser, and any person who controls
    the Purchaser or any affiliate of the Purchaser within the meaning of
    Section 15 of the Securities Act or Section 20 of the Exchange Act; and (ii)
    the term "Registration Statement" shall include any preliminary prospectus,
    final prospectus, exhibit, supplement or amendment included in or relating
    to, and any document incorporated by reference in, the Registration
    Statement referred to in Section 7.1.

              7.4  Termination of Conditions and Obligations.  The restrictions
                   -----------------------------------------
    imposed by this Section 7 upon the transferability of the Shares shall cease
    and terminate as to any particular number of the Shares upon the passage of
    two years from the Closing Date or at such time as an opinion of counsel
    satisfactory in form and substance to the Company shall have been rendered
    to the effect that such conditions are not necessary in order to comply with
    the Securities Act.

                                       -19-
<PAGE>

              7.5  Information Available.  So long as the Registration Statement
                   ---------------------
    is effective covering the resale of Shares owned by the Purchaser, the
    Company will furnish to the Purchaser:

              (a)  as soon as practicable after available (but in the case of
    the Annual Report to the Stockholders, within 150 days after the end of each
    fiscal year of the Company), one copy of (i) its Annual Report to
    Stockholders (which Annual Report shall contain financial statements audited
    in accordance with generally accepted accounting principles by a national
    firm of certified public accountants), (ii) if not included in substance in
    the Annual Report to Stockholders, upon the request of Purchaser, its Annual
    Report on Form 10-K, (iii) upon request of Purchaser, its quarterly reports
    on Form 10-Q, and (iv) a full copy of the particular Registration Statement
    covering the Shares (the foregoing, in each case, excluding exhibits); and

              (b)  upon the reasonable request of the Purchaser, a reasonable
    number of copies of the Prospectuses, and any supplements thereto, to supply
    to any other party requiring such Prospectuses. The Company, upon the
    reasonable request of the Purchaser and with prior notice, will be available
    to the Purchaser or a representative thereof at the Company's headquarters
    to discuss information relevant for disclosure in the Registration Statement
    covering the Shares and will otherwise cooperate with any Purchaser
    conducting an investigation for the purpose of reducing or eliminating such
    Purchaser's exposure to liability under the Securities Act, including the
    reasonable production of information at the Company's headquarters, subject
    to appropriate confidentiality limitations.

        SECTION 8.  Independent Nature of Purchasers' Obligations and Rights.
                    --------------------------------------------------------
The obligations of each Purchaser under the Agreements are several and not joint
with the obligations of any Other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any Other
Purchaser under any Agreement. Nothing contained herein or in any other
Agreement, and no action taken by any Purchaser pursuant hereto or thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Agreements and the Company
acknowledges that the Purchasers are not acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Agreements.
Each Purchaser confirms that it has independently participated in the
negotiation of the transaction contemplated hereby with the advice of its own
counsel and advisors. Each Purchaser shall be entitled to independently protect
and enforce its rights, including, without limitation, the rights arising out of
this Agreement or out of any other Agreement, and it shall not be necessary for
any Other Purchaser to be joined as an additional party in any proceeding for
such purpose.

        SECTION 9.  Broker's Fee.  The Purchaser acknowledges that the Company
                    ------------
intends to pay to the Placement Agents a fee in respect of the sale of the
Shares to the Purchaser. The Purchaser and the Company hereby agree that the
Purchaser shall not be responsible for such fee and that the Company will
indemnify and hold harmless the Purchaser and each Purchaser/Affiliate against
any losses, claims, damages, liabilities or expenses, joint or

                                       -20-
<PAGE>

several, to which such Purchaser or Purchaser/Affiliate may become subject with
respect to such fee. Each of the parties hereto hereby represents that, on the
basis of any actions and agreements by it, there are no other brokers or
finders entitled to compensation in connection with the sale of the Shares to
the Purchaser.

        SECTION 10.  Notices.  All notices required or permitted hereunder shall
                     -------
be in writing and shall be deemed effectively given: (i) upon delivery to the
party to be notified; (ii) when received by confirmed facsimile or (iii) one
(1) business day after deposit with a nationally recognized overnight carrier,
specifying next business day delivery, with written verification of receipt. All
communications shall be sent to the Company and the Purchaser as follows or at
such other addresses as the Company or the Purchaser may designate upon ten (10)
days' advance written notice to the other party:

              (a)  if to the Company, to:

                        Energy Conversion Devices, Inc.
                        2956 Waterview Drive
                        Rochester Hills, Michigan 48309
                        Attn: Roger John Lesinski, Esq
                        Fax: (248) 293-1214

              (b)  if to the Purchaser, at its address as set forth at the end
    of this Agreement.

        SECTION 11.  Changes.  This Agreement may not be modified or amended
                     -------
except pursuant to an instrument in writing signed by the Company and the
Purchaser. No provision hereunder may be waived other than in a written
instrument executed by the waiving party.

        SECTION 12.  Headings.  The headings of the various sections of this
                     --------
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.

        SECTION 13.  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 shall not in any way be affected or impaired thereby.

        SECTION 14.  Governing Law.  This Agreement shall be governed by and
                     -------------
construed in accordance with the laws of the State of New York and the federal
law of the United States of America.

        SECTION 15.  Counterparts.  This Agreement may be executed in two or
                     ------------
more counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered (including by facsimile) to the other parties.

                                       -21-
<PAGE>

        SECTION 16.  Entire Agreement.  This Agreement and the instruments
                     ----------------
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Purchaser makes any
representation, warranty, covenant or undertaking with respect to such matters.

        SECTION 17.  Assignment.  Except as otherwise expressly provided herein,
                     ----------
the provisions hereof shall inure to the benefit of, and be binding upon, the
parties hereto and their respective permitted successors, assigns, heirs,
executors and administrators. This Agreement and the rights of the Purchaser
hereunder may be assigned by the Purchaser with the prior written consent of the
Company, except such consent shall not be required in cases of assignments by an
investment adviser to a fund for which it is the adviser or by or among funds
that are under common control, provided that such assignee agrees to be bound by
the terms of this Agreement.

        SECTION 18.  Further Assurances.  Each party agrees to cooperate fully
                     ------------------
with the other parties and to execute such further instruments, documents and
agreements and to give such further written assurance as may be reasonably
requested by any other party to evidence and reflect the transactions described
herein and contemplated hereby and to carry into effect the intents and purposes
of this Agreement.

                  [Remainder of Page Left Intentionally Blank]

                                       -22-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.

                                 Energy Conversion Devices, Inc.

                                 By
                                       ----------------------------------------
                                       Name:
                                       Title:

            Print or Type:

                                 Name of Purchaser
                                 (Individual or Institution):

                                 ---------------------------------
                                 Name of Individual representing
                                 Purchaser (if an Institution):

                                 ---------------------------------

                                 Title of Individual representing
                                 Purchaser (if an Institution):
                                 ---------------------------------

            Signature by:

                                 Individual Purchaser or Individual
                                 representing Purchaser:

                                 ---------------------------------

                                 Address:
                                             ---------------------------

                                             ---------------------------

                                 Telephone:  ---------------------------

                                 Telecopier: ---------------------------

                                       -23-
<PAGE>

                     SUMMARY INSTRUCTION SHEET FOR PURCHASER
                     ---------------------------------------

                     (to be read in conjunction with the entire
                       Purchase Agreement which this follows)

           A. Complete the following items on BOTH Purchase Agreements (Please
           sign two originals):

       1.  Page 23 - Signature:

           (i)   Name of Purchaser (Individual or Institution)

           (ii)  Name of Individual representing Purchaser (if an Institution)

           (iii) Title of Individual representing Purchaser (if an Institution)

           (iv)  Signature of Individual Purchaser or Individual representing
                 Purchaser

       2.  Appendix I - Stock Certificate Questionnaire/Registration Statement
           Questionnaire:

           Provide the information requested by the Stock Certificate
           Questionnaire and the Registration Statement Questionnaire.

       3.  Return BOTH properly completed and signed Purchase Agreements
           including the properly completed Appendix I to (initially by
           facsimile with hand copy by overnight delivery):

                        Jefferies & Company, Inc.
                        520 Madison Avenue
                        New York, NY 10022
                        Attention: Adam Bergman
                        Facsimile: (212) 284-3460

           B. Instructions regarding the transfer of funds for the purchase of
           Shares are as follows:

                        The Bank of New York
                        ABA # 021000018
                        Acct Name: Jefferies & Company, Inc.
                        Acct # 8900007001
                        Ref: Purchaser's name and number of shares purchased.

           If you have any questions regarding settlement, please contact Mark
Sahler at (212) 336-7122.

<PAGE>

           C. Upon the resale of the Shares by the Purchasers after the
           Registration Statement covering the Shares is effective, as
           described in the Purchase Agreement, the Purchaser must deliver a
           current prospectus of the Company to the buyer (prospectuses must be
           obtained from the Company at the Purchaser's request).

<PAGE>

                                                                  Appendix I
                                                                  (Page 1 of 4)
                         Energy Conversion Devices, Inc.
                         STOCK CERTIFICATE QUESTIONNAIRE
                         -------------------------------

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

1.    The exact name that your Shares are to
      be registered in (this is the name
      that will appear on your stock
      certificate(s)). You may use a nominee
      name if appropriate:                     ---------------------------------

2.    The relationship between the Purchaser
      of the Shares 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 response to item 1
      above:                                   ---------------------------------

5.    If you would like to verify the stock
      certificate prior to closing, please
      include the name, phone number and fax
      number of a contact:                     ---------------------------------
                                               ---------------------------------
                                               ---------------------------------

<PAGE>

                                                                  Appendix I
                                                                  (Page 2 of 4)
                         Energy Conversion Devices, Inc.
                      REGISTRATION STATEMENT QUESTIONNAIRE
                      ------------------------------------

      In connection with the preparation of the Registration Statement, please
provide us with the following information:

              SECTION 1.  Pursuant to the "Selling Stockholder" section of the
Registration Statement, please state your or your organization's name exactly as
it should appear in the Registration Statement:

      -------------------------------------------------------------

              SECTION 2.  The number of shares being purchased and the purchase
price being paid by you:

                                    Price Per
         Number to Be                Share In                Aggregate
          Purchased                  Dollars                   Price
        --------------             -----------             ------------

                                   $                       $

              SECTION 3.  Please provide the number of shares that you, your
organization or any affiliates will own immediately after Closing, including
those Shares purchased by you or your organization pursuant to this Purchase
Agreement and those shares purchased by you or your organization through other
transactions:

               Your Name (or name of           Number Of Shares
                Affiliated Entity)                  Owned
               ---------------------           ----------------

              SECTION 4.  Have you or your organization had any position, office
or other material relationship within the past three years with the Company or
its affiliates?

                            Yes                No
                      -----              -----

      If yes, please indicate the nature of any such relationships below:

      -----------------------------------------------------------------

<PAGE>

                                                                  Appendix I
                                                                  (Page 3 of 4)

       -----------------------------------------------------------------

       -----------------------------------------------------------------

              SECTION 5.  Are you (i) an NASD Member (see definition), (ii) a
Controlling (see definition) shareholder of an NASD Member, (iii) a Person
Associated with a Member of the NASD (see definition), or (iv) an Underwriter
or a Related Person (see definition) with respect to the proposed offering; or
(b) do you own any shares or other securities of any NASD Member not purchased
in the open market; or (c) have you made any outstanding subordinated loans to
any NASD Member?

        Answer:  [  ] Yes    [  ] No    If "yes," please describe below

       -----------------------------------------------------------------

       -----------------------------------------------------------------

       -----------------------------------------------------------------

<PAGE>

                                                                  Appendix I
                                                                  (Page 4 of 4)

      NASD Member.  The term "NASD member" means either any broker or dealer
      -----------
admitted to membership in the National Association of Securities Dealers, Inc.
("NASD").  (NASD Manual, By-laws Article I, Definitions)

      Control.  The term "control" (including the terms "controlling,"
      -------
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power, either individually or with others, to direct or cause
the direction of the management and policies of a person, whether through the
ownership of voting securities, by contract, or otherwise. (Rule 405 under the
Securities Act of 1933, as amended)

      Person Associated with a member of the NASD.  The term "person associated
      -------------------------------------------
with a member of the NASD" means every sole proprietor, partner, officer,
director, branch manager or executive representative of any NASD Member, or any
natural person occupying a similar status or performing similar functions, or
any natural person engaged in the investment banking or securities business who
is directly or indirectly controlling or controlled by a NASD Member, whether or
not such person is registered or exempt from registration with the NASD pursuant
to its bylaws. (NASD Manual, By-laws Article I, Definitions)

      Underwriter or a Related Person.  The term "underwriter or a related
      -------------------------------
person" means, with respect to a proposed offering, underwriters, underwriters'
counsel, financial consultants and advisors, finders, members of the selling or
distribution group, and any and all other persons associated with or related to
any of such persons. (NASD Interpretation)

<PAGE>

                                                                     EXHIBIT A

   Name of Subsidiary          Percentage Ownership   Jurisdiction of Formation

   Ovonic Battery Company, Inc.      91.4% (1)               Delaware
   United Solar Ovonic Corp.         100%                    Delaware
   United Solar Ovonic LLC           100%                    Delaware
   Ovonic Fuel Cell Company LLC      100%                    Delaware
   Ovonic Hydrogen Systems LLC       100%                    Delaware

-----------------
(1)   Pursuant to his employment agreement with Ovonic Battery Company, Inc.
      ("Ovonic Battery"), Stanford R. Ovshinsky, the Company's President and
      Chief Technology Officer, was granted stock options, exercisable at a
      price of $16,129 per share, to purchase 186 shares (adjusted from a price
      of $50,000 per share to purchase 60 shares pursuant to the anti-dilution
      provisions of the option agreement) of Ovonic Battery's common stock,
      representing approximately 6% of Ovonic Battery's outstanding common
      stock. The Ovonic Battery stock options vested on a quarterly basis over
      six years commencing with the quarter beginning October 1, 1993, and are
      now fully vested.

                                      30

<PAGE>Exhibit 10(a)

FORM OF FPL GROUP, INC.

AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN

SHAREHOLDER VALUE AWARD

AGREEMENT

AGREEMENT dated as of, between FPL Group, Inc. (hereinafter called the "Company"), and  (hereinafter called the "Participant").

1.  Grant of Shareholder Value Award - The Company hereby grants to the Participant a Shareholder Value Award, which shall confer upon the Participant the rights set forth below to receive  shares of Common Stock ("Shareholder Value Shares"). These Shareholder Value Shares shall be credited to the Shareholder Value Share Account maintained on behalf of the Participant under the Company's Amended and Restated Long-Term Incentive Plan of, as amended from time to time (the "Plan").  This Shareholder Value Award shall be deemed to have been granted on  and shall have a term ending on  (such period hereinafter referred to as the "Performance Period").

2.  Rights to Payment of Shareholder Value Award - Payment of this Shareholder Value Award shall be conditioned upon achievement of the net income goals established by the Company for the Participant in connection with the Annual Incentive Awards for each of the three calendar years of the Performance Period (the "Net Income Goals").  Subject to the provisions of the Plan and the achievement of the Net Income Goals, the Participant shall have the right to payment of an amount of shares of Common Stock, which may not exceed 160% of the target Shareholder Value Award.  The Shareholder Value Award Pool is equal to the sum of (A) all target Shareholder Value Awards for eligible executive participants and (B) the product of (i) the Sharing Percentage and (ii) the product of (a) the difference between the three-year average annual total shareholder return ("TSR") of the Company Common Stock and the median TSR of the Peer Group for the three-year period, and (b) the market capitalization of the Company at the beginning of the Performance Period.  The Sharing Percentage is .4 percent if the TSR of the Common Stock is at or above the TSR for the median of the Peer Group and is .8 percent if the TSR of the Common Stock is below the TSR for the median of the Peer Group.  The Individual Award Allocation Percentage is the percentage derived by dividing the value of the Participant's Shareholder Value Award at the time of grant by the sum of the values of Shareholder Value Awards of all executive participants in the Plan for the Performance Period.  Total shareholder return or TSR means the stock price appreciation or depreciation plus reinvested dividends on Common Stock for the three calendar years of the Performance Period.  The Peer Group is the utility companies comprising the Dow Jones & Company, Inc. Electric Utility Standard & Poor's Electric Utility Companies Index operating primarily within the United States which are publicly traded on a nationally recognized United States exchange as of the final day of the Performance Period. The maximum number of shares of Common Stock which a Participant may receive in any year from this Shareholder Value Award and all other stock-based awards which are also subject to performance criteria is 100,000 shares.  The Compensation Committee of the Board or such other Board committee designated to administer the Plan (the "Committee") has the discretion to reduce the payout, but not to increase it.  

3.  Payment of Shareholder Value Award  - Payments made hereunder shall be made in such form as the Committee may determine, including in cash, in shares of Common Stock, or a combination of both.  If payment of all or any portion of this Shareholder Value Award is to be made in the form of cash, the amount of such payment shall be determined by multiplying the number of shares of Common Stock determined under Section 2 hereof by the fair market value of a share of Common Stock as of the close of business on the date of determination.  For the purpose of this Agreement, the date of determination shall be the date as of which the Participant's right to a payment under this Shareholder Value Award is determined by the Committee.

Payment of amounts due shall be made as soon as administratively practicable following the end of the Performance Period and the Committee's determination of the Participant's right to payment.

4.  Termination of Employment - In the event the Participant terminates his employment with the Company during the Performance Period, his right to a payment of the Shareholder Value Award will be determined as follows:

	If his termination of employment is due to resignation, discharge, or early retirement    at the Participant's request, all rights to a payment under this Shareholder Value Award shall be forfeited. 
	If his termination of employment is due to retirement on or after his normal retirement age (as defined under the provisions of the FPL Group Employee Pension Plan), early retirement at the Company's request, or total and permanent disability, he shall be entitled to the amount of shares of Common Stock described in Section 2 hereof prorated for the period of service during the Performance Period, such proration to be based solely on the number of full years of service completed during the Performance Period.  Payment of this Shareholder Value Award shall be made at the time and manner specified in Section 3 hereof.

If the Participant's employment is terminated during the Performance Period for any reason other than as set forth in paragraphs (a) and (b) above, or if an ambiguity exists as to the interpretation of those paragraphs, the Committee shall have the right to determine whether the Participant's right to this Shareholder Value Award shall be forfeited or whether the Participant shall be entitled to a pro rata payment based upon full years of service completed during the Performance Period.

5.  Adjustments  -   In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, reclassification, merger, consolidation, combination or exchange of shares or similar corporate change, then the number and price of Shareholder Value Shares then held in the Participant's Shareholder Value Share Account and the number of shares of Common Stock that may be granted under the Plan to the Participant shall be adjusted proportionately.  No adjustment will be made in connection with the payment by the Company of any cash dividend on its Common Stock or in connection with the issuance by the Company of any warrants, rights, or options to acquire additional shares of Common Stock or of securities convertible into Common Stock.

6.  No Rights of Stock Ownership - This grant of Shareholder Value Shares will not entitle the Participant to any interest in or to any dividend, voting, or other rights normally attributable to Common Stock ownership.

7.  Tax Withholding - The Company, or any Subsidiary as appropriate, is authorized to withhold from any payment relating to this Shareholder Value Award, including a distribution of shares of Common Stock, or any payroll or other payment due to the Participant, amounts of withholding and any other taxes due with respect thereto, and to take any other action as the Company may deem necessary or advisable to enable the Company and the Participant to satisfy obligations for the payment of withholding taxes and other tax liabilities relating to this Shareholder Value Award.   

8.  Nonassignability - The Participant's rights and interest in this Shareholder Value Award may not be assigned, pledged, or transferred except, in the event of death, to a designated beneficiary or by will or by the laws of descent and distribution.

9.  Effect Upon Employment - This Agreement is not to be construed as giving any right to the Participant for continuous employment by the Company or a Subsidiary.  The Company and its Subsidiaries retain the right to terminate an employee at will and with or without cause at any time.

10.  Protective Covenants - In consideration of this Award granted under this Agreement, the Participant covenants and agrees as follows: (the "Protective Covenants"):

	During Participant's employment with the Company, and for a two-year period following the termination of the Participant's employment with the Company, Participant agrees not to compete or attempt to compete for, or act as a broker or otherwise participate in, any projects in which the Company has at any time done any work or undertaken any development efforts. Furthermore, during the Participant's employment with the Company, Participant shall not directly or indirectly solicit any of the Company's customers, vendors, contractors, agents, or any other parties with which the Company has an existing or prospective business relationship, for the benefit of Participant or for the benefit of any third party, nor shall the Participant accept consideration or negotiate or enter into agreements with such parties for the benefit of Participant or any third party.
	During the Participant's employment with the Company and for a two-year period following the termination of the Participant's employment with the Company, the Participant shall not, directly or indirectly, on behalf of the Participant or for any other business, person or entity, entice, induce or solicit or attempt to entice, induce or solicit any employee of the Company to leave the Company's employ or to hire or to cause any employee of the Company to become employed for any reason whatsoever.
	Participant shall not, at any time in the future and in any way, disparage the Company or its current or former officers, directors, and employees, orally or in writing, or make any statements that may be derogatory or detrimental to the Company's good name or business reputation.  
	Participant acknowledges that the Company would not have an adequate remedy at law for monetary damages if Participant breaches these Protective Covenants.  Therefore, in addition to all remedies to which the Company may be entitled for a breach or threatened breach of these Protective Covenants, including but not limited to monetary damages, the Company will be entitled to specific enforcement of these Protective Covenants and to injunctive or other equitable relief as a remedy for a breach or threatened breach.  In addition, upon any breach of these Protective Covenants or any separate Confidentiality Agreement between the Company and the Participant, all rights to receive payments under these awards shall be forfeited.
	For purposes of this Section 10, the term "Company" shall include all subsidiaries and affiliates of the Company, including, without limitation, Florida Power & Light Company and FPL Energy, LLC, and their respective subsidiaries and affiliates. 
	Notwithstanding anything to the contrary contained in this Agreement, the terms of these Protective Covenants shall survive the termination of this Agreement and shall remain in effect.

11.  Successors - This Agreement shall be binding upon any successor of the Company.

12.  Incorporation of Plan's Terms - This Agreement is made under and subject to the provisions of the Plan, and all the provisions of the Plan are also provisions of this Agreement (including, but not limited to the provisions of Section 9 of the Plan pertaining to a Change in Control).  If there is a difference or conflict between the provisions of this Agreement and the Plan, the provisions of the Plan will govern.  All terms used herein are used as defined in the Plan as it may be amended from time to time.  The Company and Committee retain all authority and powers granted by the Plan as it may be amended from time to time not expressly limited by this Agreement.

13.  Interpretation - The Committee has the sole and absolute right to interpret the provisions of this Agreement.

14.  Governing Law/Jurisdiction - This Agreement shall be construed and interpreted in accordance with the laws of the State of Florida, without regard to its conflict of laws principles.  All suits, actions, and proceedings relating to this Agreement may be brought only in the courts of the State of Florida located in Palm Beach County or in the United States District Court for the Southern District in West Palm Beach, Florida.  The Company and Participant shall consent to the nonexclusive personal jurisdiction of the courts described in this section for the purpose of all suits, actions, and proceedings.  The Company and Participant each waive all objections to venue and to all claims that a court chosen in accordance with this section is improper based on a venue or a forum non conveniens claim.

15.  Acknowledgement - The Participant hereby agrees and acknowledges that the provisions of any outstanding Shareholder Value Award granted to the Participant under the Plan prior to February 11, 2002, insofar as such provisions relate to  Section 2, Rights to Payment of Shareholder Value Award, shall be deemed amended, effective as of the date of grant of such award, to incorporate the provisions of Section 2 of  this Agreement, and to remove any provisions which conflict with said Section 2.  Further, the Participant hereby agrees and acknowledges that the provisions of any outstanding award granted to the Participant under the Plan prior to February 11, 2002, insofar as such provisions relate to a Change of Control, shall be deemed amended, effective as of the date of grant of such award, to incorporate the provisions of Section 9 of the Plan, as in effect as of February 11, 2002, and to remove any provisions which conflict with said Section 9. 

By signing this Agreement, the Participant accepts and agrees to all of the foregoing terms and provisions and to all the terms and provisions of the Plan incorporated herein by reference and confirms that he has received or has access to a copy of the Plan.

 

IN WITNESS WHEREOF, the parties have signed this Agreement as of the date and year first above written.

FPL GROUP, INC.

BY:            __________________________________

ACCEPTED:  __________________________________

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