

                                                          EXHIBIT 4.1



                           WARRANT AGREEMENT

           AGREEMENT,  dated as of this  ___ day of May,  1998,  by and  between
ENERGY CONVERSION  DEVICES,  INC., a Delaware  corporation (the "Company"),  and
STATE STREET BANK AND TRUST COMPANY, as warrant agent (the "Warrant Agent").

                          W I T N E S S E T H

           WHEREAS,  the Company proposes to make a public offering (the "Public
Offering") of units (the "Units"),  each Unit  consisting of one share of Common
Stock (as defined in Section 1 hereof) and one warrant (the  "Warrants")  of the
Company to purchase one share of Common Stock; and

           WHEREAS, in relation to the Public Offering,  the Company has filed a
registration  statement on Form S-3  (Registration No. 333-50749) (as amended or
supplemented, the "Registration Statement") and a related prospectus (as amended
or supplemented,  the "Prospectus") with the Securities and Exchange Commission;
and

           WHEREAS,  the Company  desires the Warrant  Agent to act on behalf of
the Company,  and the Warrant Agent is willing so to act, in connection with the
issuance,  registration,  transfer and exchange of the Warrants, the issuance of
certificates  representing the Warrants,  the exercise of the Warrants,  and the
rights of the registered holders thereof (the "Registered Holders");

           NOW,  THEREFORE,  in  consideration  of the  premises  and the mutual
agreements  hereinafter  set forth and for the purpose of defining the terms and
provisions of the Warrants and the  certificates  representing  the Warrants and
the respective rights and obligations  thereunder of the Company, the Registered
Holders and the Warrant Agent, the parties hereto hereby agree as follows:

           SECTION 1.   Definitions.  As used herein, the following terms shall
have the following meanings, unless the context shall otherwise require:

           (a) "Common  Stock" shall mean the common  stock,  par value $.01 per
share, of the Company.

           (b) "Corporate Office" shall mean the office of the Warrant Agent (or
its successor), which office is c/o Boston EquiServe, 150 Royall Street, canton,
MA 02021 as of the date hereof.

           (c) "Exercise Date" shall mean, as to any Warrant,  the date on which
the  Warrant  Agent  shall  have  received  both  (a)  the  Warrant  Certificate
representing  such Warrant,  with the exercise form thereon duly executed by the
Registered  Holder thereof or his attorney duly authorized in writing,  with the
appropriate signature guarantees,  as described in the Warrant Certificate,  and
(b) payment in cash, or by official bank or certified check made


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payable to the  Company,  of an amount in lawful  money of the United  States of
America equal to the Exercise Price plus transfer taxes, if any.

           (d)  "Exercise  Price" shall mean the purchase  price to be paid upon
exercise of the  Warrants  (each  Warrant  exercisable  to purchase one share of
Common  Stock) in accordance  with the terms hereof,  which price shall be $____
per share  (equal  to 135% of the  offering  price of the  Units) on or prior to
January 31, 2000,  and $____ per share (155% of the offering price of the Units)
on or prior to July 31,  2001,  the Warrant  Expiration  Date  (defined  below),
subject to adjustment  from time to time pursuant to the provisions of Section 9
hereof.

           (e)  "Registered  Holder"  shall  mean the  person in whose  name any
certificate representing Warrants shall be registered on the books maintained by
the Warrant Agent pursuant to Section 7 hereof.

           (f) "Transfer  Agent" shall mean State Street Bank and Trust Company,
as the Company's transfer agent, or its authorized successor, as such.

           (g)  "Warrant  Expiration  Date" shall mean 5:00 P.M.  (New York City
time) on July 31, 2001,  provided  that, if in the State of New York,  such date
shall be a holiday or a day on which banks are  authorized  to close,  then 5:00
P.M.  (New York City time) on the next  following  day which in the State of New
York is not a holiday or a day on which banks are authorized to close.

           SECTION 2.  Appointment of Warrant Agent. The Company hereby appoints
the  Warrant  Agent to act on  behalf  of the  Company  in  accordance  with the
instructions  hereinafter  set forth,  and the Warrant Agent hereby accepts such
appointment.

           SECTION 3.   Warrants and Issuance of Warrant Certificates.

           (a) A Warrant shall  initially  entitle the Registered  Holder of the
Warrant  Certificate  representing  such Warrant to purchase one share of Common
Stock upon the exercise thereof, in accordance with the terms hereof, subject to
modification and adjustment as provided in Section 9 hereof.

           (b)  From  time to  time,  up to the  Warrant  Expiration  Date,  the
Transfer  Agent shall execute and deliver stock  certificates  in required whole
number  denominations  representing  up to an aggregate  of 2,000,000  shares of
Common Stock,  subject to adjustment as described  herein,  upon the exercise of
Warrants in accordance with this Agreement.

           (c) From time to time, up to the Warrant Expiration Date, the Warrant
Agent shall execute and deliver  Warrant  Certificates  in required whole number
denominations to the persons entitled thereto in connection with any transfer or
exchange permitted under this Agreement;  provided that no Warrant  Certificates
shall be issued except (i) those initially issued  hereunder;  (ii) those issued
upon  the  exercise  of fewer  than  all  Warrants  represented  by any  Warrant
Certificate, to evidence any unexercised Warrants held by the exercising


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Registered Holder;  (iii) those issued upon any transfer or exchange pursuant to
Section 7 hereof; (iv) those issued in replacement of lost, stolen, destroyed or
mutilated  Warrant  Certificates  pursuant  to Section 8 hereof;  and (v) at the
option  of the  Company,  in  such  form  as may be  approved  by its  Board  of
Directors,  to reflect (a) any  adjustment  or change in the number of shares of
Common Stock  purchasable upon exercise of the Warrants made pursuant to Section
9  hereof  and  (b)  other  modifications  approved  by  Registered  Holders  in
accordance with Section 16 hereof.

           SECTION 4.   Form and Execution of Warrant Certificates.

           (a) The  Warrant  Certificates  shall  be  substantially  in the form
annexed  hereto as Exhibit A (the  provisions  of which are hereby  incorporated
herein) and may have such letters,  numbers or other marks of  identification or
designation and such legends,  summaries or endorsements printed,  lithographed,
engraved or typed  thereon as the Company  may deem  appropriate  and as are not
inconsistent  with the  provisions of this  Agreement,  or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange or securities  association on which
or through which the Warrants may be listed, or to conform to usage. The Warrant
Certificates  shall be dated the date of issuance  thereof (whether upon initial
issuance, transfer, exchange or in lieu of mutilated, lost, stolen, or destroyed
Warrant Certificates) and issued in registered form.
Warrants shall be numbered serially with the letter W.

           (b) Warrant  Certificates  shall be executed on behalf of the Company
by its  Chairman  of the  Board,  President  or any  Vice  President  and by its
Secretary  or an  Assistant  Secretary,  by manual  signatures  or by  facsimile
signatures  printed  thereon,  shall have  imprinted  thereon a facsimile of the
Company's  seal and shall be  countersigned  by an  authorized  signatory of the
Warrant  Agent.  In case any officer of the Company who shall have signed any of
the Warrant  Certificates  shall cease to be such officer of the Company  before
the date of issuance of the Warrant Certificates and issue and delivery thereof,
such Warrant Certificates may nevertheless be issued and delivered with the same
force and effect as though the person who signed such Warrant  Certificates  had
not ceased to be such  officer of the Company.  After  execution by the Company,
Warrant  Certificates  shall be delivered by the Warrant Agent to the Registered
Holders.

           SECTION 5. Exercise.  Each Warrant may be exercised by the Registered
Holder  thereof  at any  time  after  the  effective  date  of the  Registration
Statement and until the Warrant  Expiration  Date, upon the terms and subject to
the  conditions set forth herein and in the applicable  Warrant  Certificate.  A
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the Exercise Date and the person  entitled to receive the securities
deliverable  upon such exercise  shall be treated for all purposes as the holder
of such securities  upon exercise of the Warrant  Certificate as of the close of
business on the Exercise  Date. As soon as  practicable on or after the Exercise
Date, the Warrant Agent shall deposit the proceeds received from the exercise of
a Warrant,  and promptly  after  clearance of checks  received in payment of the
Exercise Price  pursuant to such  Warrants,  cause to be issued and delivered by
the Transfer Agent, to the person or persons entitled to


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receive the same, a certificate or certificates  for the securities  deliverable
upon such exercise (plus a certificate for any remaining unexercised Warrants of
the Registered  Holder, if applicable).  Notwithstanding  the foregoing,  in the
case  of  payment  made  in the  form of a check  drawn  on an  account  of such
investment banks and brokerage houses as the Company shall approve, certificates
shall  immediately be issued without any delay. Upon the exercise of any Warrant
and clearance of the funds received,  the Warrant Agent shall promptly remit the
payment  received for the Warrant to the Company or as the Company may direct in
writing.

           SECTION 6.   Reservation of Shares; Listing; Payment of Taxes; etc.

           (a) The Company  covenants that it will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issuance
upon  exercise of Warrants,  such number of shares of Common Stock as shall then
be issuable upon the exercise of all outstanding Warrants. The Company covenants
that all shares of Common  Stock which shall be  issuable  upon  exercise of the
Warrants  and payment of the  Exercise  Price in  compliance  with this  Warrant
Agreement and the Warrant  Certificate  shall, at the time of delivery,  be duly
and validly issued, fully paid, nonassessable and free from all taxes, liens and
charges  with respect to the issue  thereof  (other than those which the Company
shall promptly pay or discharge).

           (b) The Company  will use  reasonable  efforts to obtain  appropriate
approvals or  registrations  under state "blue sky" securities laws with respect
to the exercise of the Warrants;  provided,  however, that the Company shall not
be  obligated  to file any  general  consent to service of  process,  consent to
taxation or qualify as a foreign  corporation in any jurisdiction.  With respect
to any such  securities  laws,  however,  Warrants may not be  exercised  by, or
shares of Common  Stock issued to, any  Registered  Holder in any state in which
such exercise would be unlawful.

           (c) The Company shall pay all documentary, stamp or similar taxes and
other  governmental  charges that may be imposed with respect to the issuance of
Warrants,  or the  issuance  or  delivery  of any shares  upon  exercise  of the
Warrants; provided, however, that, if shares of Common Stock are to be delivered
in a  name  other  than  the  name  of the  Registered  Holder  of  the  Warrant
Certificate  representing  any Warrant  being  exercised,  then no such delivery
shall be made  unless the  person  requesting  the same has paid to the  Warrant
Agent the amount of transfer taxes or charges incident thereto, if any.

           (d) The Warrant Agent is hereby irrevocably authorized to requisition
the Transfer  Agent from time to time for  certificates  representing  shares of
Common  Stock  required to be issued  upon  exercise  of the  Warrants,  and the
Company  will  authorize  the  Transfer  Agent to  comply  with all such  proper
requisitions.

           SECTION 7.   Exchange and Registration of Transfer.

           Subject to the  restrictions  on  transfer  contained  in the Warrant
Certificates:


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           (a)  Warrant   Certificates   may  be  exchanged  for  other  Warrant
Certificates  representing  an equal  aggregate  number  of  Warrants  or may be
transferred in whole or in part.  Warrant  Certificates to be exchanged shall be
surrendered to the Warrant Agent at its Corporate Office,  and upon satisfaction
of the terms and provisions herein,  the Company shall execute,  and the Warrant
Agent shall  countersign,  issue and deliver in exchange  therefor,  the Warrant
Certificate  or  Certificates  which the  Registered  Holder making the exchange
shall be entitled to receive.

           (b) The Warrant  Agent  shall keep books at its  office,  in which it
shall register Warrant  Certificates and the transfer thereof in accordance with
its regular  practice.  Upon due presentment for registration of transfer of any
Warrant  Certificate  at its office,  the Company  shall execute and the Warrant
Agent shall issue and deliver to the  transferee  or  transferees  a new Warrant
Certificate or Certificates representing an equal aggregate number of Warrants.

           (c) The Warrant  Certificates shall be transferable only on the books
of the Company maintained at the office of the Warrant Agent designated for such
purpose  upon  delivery  thereof  duly  endorsed  by the  Holder  or by his duly
authorized  attorney or  representative,  or accompanied  by proper  evidence of
succession,  assignment  or authority to transfer,  which  endorsement  shall be
guaranteed by a member firm of a national securities exchange, a commercial bank
(not a savings bank or a savings and loan  association) or trust company located
in the  United  States or a member of the  National  Association  of  Securities
Dealers, Inc. (hereafter,  "Signatures Guaranteed"). In all cases of transfer by
an attorney,  the original power of attorney,  duly approved, or a copy thereof,
duly certified, shall be deposited and remain with the Warrant Agent. In case of
transfer by executors, administrators, guardians or other legal representatives,
duly  authenticated  evidence of their authority  shall be produced,  and may be
required to be deposited and remain with the Warrant Agent in its discretion.

           (d) A service  charge may be imposed  by the  Warrant  Agent upon the
Registered  Holder for any  exchange  or  registration  of  transfer  of Warrant
Certificates.  The Company may require  payment by a Registered  Holder of a sum
sufficient to cover any tax or other governmental  charge that may be imposed in
connection therewith.

           (e) Prior to due  presentment for  registration of transfer  thereof,
the Company and the Warrant  Agent may deem and treat the  Registered  Holder of
any Warrant Certificate
as  the  absolute  owner  thereof  and  of  each  Warrant   represented  thereby
(notwithstanding  any  notations of ownership or writing  thereon made by anyone
other than a duly  authorized  officer of the Company or the Warrant  Agent) for
all  purposes  and shall not be  affected  by any  notice to the  contrary.  The
Warrants,  which the Company  intends to publicly  offer with the Common  Stock,
will be separately  transferable  immediately  following  the  completion of the
Public Offering.


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           SECTION 8. Loss or  Mutilation.  Upon  receipt by the Company and the
Warrant Agent of evidence satisfactory to them of the ownership and loss, theft,
destruction or mutilation of any Warrant Certificate and (in case of loss, theft
or  destruction)  of  indemnity satisfactory  to  them,  and  (in  the  case of
mutilation) upon surrender and cancellation  thereof,  the Company shall execute
and the Warrant  Agent  shall (in the  absence of notice to the  Company  and/or
Warrant  Agent that the  Warrant  Certificate  has been  acquired by a bona fide
purchaser)  countersign  and deliver to the Registered  Holder in lieu thereof a
new Warrant  Certificate of like tenor representing an equal aggregate number of
Warrants. Registered Holders requesting a substitute Warrant Certificate will be
required  to comply  with  such  other  reasonable  regulations,  including  the
submission of an affidavit,  and pay such other  reasonable  charges,  including
payment for a surety bond, as the Warrant Agent may prescribe.

           SECTION 9.   Adjustment of Exercise Price and Number of Shares of 
Common Stock or Warrants.

           (a) Subject to the exceptions  referred to in Section 9(g) below,  in
the event the  Company  shall,  at any time or from time to time  after the date
hereof,  issue any shares of Common Stock as a stock  dividend to the holders of
Common  Stock,  or subdivide or combine the  outstanding  shares of Common Stock
into a greater or lesser number of shares (any such sale, issuance,  subdivision
or combination  being herein called a "Change of Shares"),  then, and thereafter
upon each Change of Shares,  the Exercise Price in effect  immediately  prior to
such  Change of Shares  shall be changed to a price  (including  any  applicable
fraction of a cent)  determined  by  multiplying  the  Exercise  Price in effect
immediately  prior  thereto by a fraction,  the  numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such Change of
Shares and the  denominator of which shall be the sum of the number of shares of
Common  Stock  outstanding   immediately  after  such  Change  of  Shares.  Such
adjustment shall be made successively whenever such Change of Shares.

           Upon each  adjustment of the Exercise  Price pursuant to this Section
9, the total number of shares of Common Stock  purchasable  upon the exercise of
each Warrant shall (subject to the provisions  contained in Section 9(b) hereof)
be such number of shares  (calculated to the nearest  tenth)  purchasable at the
Exercise Price  immediately  prior to such adjustment  multiplied by a fraction,
the numerator of which shall be the Exercise Price in effect  immediately  prior
to such  adjustment and the  denominator of which shall be the Exercise Price in
effect immediately after such adjustment.

           (b) The Company may elect upon any  adjustment of the Exercise  Price
hereunder,  to  adjust  the  number  of  Warrants  outstanding,  in  lieu of the
adjustment in the number of shares of Common Stock purchasable upon the exercise
of each Warrant as hereinabove  provided, so that each Warrant outstanding after
such adjustment shall represent the right to purchase one share of Common Stock.
Each Warrant held of record prior to such  adjustment  of the number of Warrants
shall  become  that  number  of  Warrants  (calculated  to  the  nearest  tenth)
determined by multiplying  the number one by a fraction,  the numerator of which
shall be the Exercise Price in effect  immediately  prior to such adjustment and
the


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denominator  of which shall be the Exercise  Price in effect  immediately  after
such adjustment. Upon each adjustment of the number of Warrants pursuant to this
Section  9,  the  Company  shall,  as  promptly  as  practicable,  cause  to  be
distributed to each Registered  Holder of Warrant  Certificates,  on the date of
such adjustment,  Warrant Certificates evidencing, subject to Section 11 hereof,
the number of  additional  Warrants to which such Holder  shall be entitled as a
result  of such  adjustment  or,  at the  option  of the  Company,  cause  to be
distributed  to such  Holder in  substitution  and  replacement  for the Warrant
Certificates  held by him prior to the date of  adjustment  (and upon  surrender
thereof,  if required by the Company) new Warrant  Certificates  evidencing  the
number of Warrants to which such Holder shall be entitled after such adjustment.

           (c) In case of any reclassification,  capital reorganization or other
similar  change  of  outstanding  shares  of  Common  Stock,  or in  case of any
consolidation or merger of the Company with or into another  corporation  (other
than  a  consolidation  or  merger  in  which  the  Company  is  the  continuing
corporation  and  which  does  not  result  in  any  reclassification,   capital
reorganization  or other change of outstanding  shares of Common  Stock),  or in
case of any sale or  conveyance  to another  corporation  of the property of the
Company  as, or  substantially  as, an entirety  (other  than a  sale/leaseback,
mortgage or other  financing  transaction),  the Company  shall cause  effective
provision  to be made so that each holder of a Warrant  then  outstanding  shall
have the right thereafter,  by exercising such Warrant, to purchase the kind and
number of shares  of stock or other  securities  or  property  (including  cash)
receivable upon such  reclassification,  capital reorganization or other change,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common  Stock that might  have been  purchased  upon  exercise  of such  Warrant
immediately  prior to such  reclassification,  capital  reorganization  or other
similar change,  consolidation,  merger, sale or conveyance.  Any such provision
shall include  provision for adjustments  that shall be as nearly  equivalent as
may be  practicable  to the  adjustments  provided  for in this  Section  9. The
foregoing  provisions  shall  similarly  apply to successive  reclassifications,
capital  reorganizations and other changes of outstanding shares of Common Stock
and to successive consolidations, mergers, sales or conveyances.

           Neither the  authorization  or issuance by the Company of  additional
shares of its Common Stock,  Class A Common Stock,  par value $.01 per share, or
any new class of  capital  stock,  nor the  modification  of the  voting  rights
attributable thereto, shall be deemed to constitute a reclassification,  capital
reorganization  or other similar change of the outstanding  shares of the Common
Stock for purposes of this Section 9.

           (d)  Irrespective of any adjustments or changes in the Exercise Price
or the  number of  shares  of Common  Stock  purchasable  upon  exercise  of the
Warrants, the Warrant Certificates  theretofore issued, unless the Company shall
exercise its option to issue new Warrant  Certificates  pursuant to Section 3(c)
hereof,  need not be amended or replaced,  but  certificates  thereafter  issued
shall bear an appropriate legend or other notice of any adjustments.



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           (e) After each  adjustment  of the  Exercise  Price  pursuant to this
Section  9, the  Company  will  promptly  prepare  a  certificate  signed by the
Chairman or President,  the Secretary or an Assistant Secretary,  of the Company
setting forth: (i) the Exercise Price as so adjusted,  (ii) the number of shares
of Common Stock purchasable upon exercise of each Warrant after such adjustment,
and, if the Company  shall have  elected to adjust the number of  Warrants,  the
number of Warrants to which the Registered  Holder of each Warrant shall then be
entitled,  and  (iii)  a  brief  statement  of the  facts  accounting  for  such
adjustment.  The Company will  promptly file such  certificate  with the Warrant
Agent and cause a brief summary  thereof to be sent by ordinary first class mail
to each Registered Holder at his last address as it shall appear on the registry
books of the Warrant Agent.  The affidavit of an officer of the Warrant Agent or
the Secretary or an Assistant Secretary of the Company that such notice has been
mailed  shall,  in the absence of fraud,  be prima  facie  evidence of the facts
stated therein.

           (f) For  purposes  of Section  9(a) and 9(b)  hereof,  the  following
provisions (A) and (B) shall also be applicable:

                (A) The  number of shares of  Common  Stock  outstanding  at any
           given time shall  include  shares of Common Stock owned or held by or
           for the  account  of the  Company  and the sale or  issuance  of such
           treasury  shares  shall not be  considered  a Change  of  Shares  for
           purposes of said sections.

                (B) No  adjustment  of the  Exercise  Price shall be made unless
           such  adjustment  would  require an  increase or decrease of at least
           $.02 in such price;  provided that any adjustments which by reason of
           this clause (B) are not required to be made shall be carried  forward
           and  shall  be  made  at the  time  of and  together  with  the  next
           subsequent  adjustment  which,  together  with any  adjustment(s)  so
           carried  forward,  shall  require an increase or decrease of at least
           $.02 in the Exercise Price then in effect hereunder.

           (g) As used in this Section 9, the term "Common Stock" shall mean and
include the Common Stock  authorized  on the date of the  original  issue of the
Warrants  and shall also  include any capital  stock of any class of the Company
thereafter authorized which shall not be limited to a fixed sum or percentage in
respect of the rights of the holders  thereof to participate in dividends and in
the  distribution  of assets  upon the  voluntary  liquidation,  dissolution  or
winding up of the Company;  provided,  however,  that the shares  issuable  upon
exercise of the Warrants  shall include only shares of such class  designated in
the Company's  Certificate of  Incorporation  as Common Stock on the date of the
original  issue of the  Warrants  or (i),  in the case of any  reclassification,
change,  consolidation,  merger, sale or conveyance of the character referred to
in Section 9(c) hereof,  the stock,  securities or property provided for in such
section  or  (ii),  in  the  case  of  any  reclassification  or  change  in the
outstanding  shares of Common Stock  issuable upon exercise of the Warrants as a
result of a subdivision  or  combination or consisting of a change in par value,
or from par  value to no par  value,  or from no par  value to par  value,  such
shares of Common Stock as so reclassified or changed.



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           (h) Any  determination  as to whether an  adjustment  in the Exercise
Price in effect hereunder is required pursuant to Section 9, or as to the amount
of any such  adjustment,  if  required,  shall be  binding  upon the  Registered
Holders of the  Warrants  and the  Company if made in good faith by the Board of
Directors of the Company.

           (i) If and  whenever  the  Company  shall  declare any  dividends  or
distributions  payable  otherwise than in cash out of earnings or earned surplus
(determined  in  accordance  with  generally  accepted  accounting   principles,
consistently  applied) or grant to all holders of Common Stock, as such,  rights
or warrants to subscribe for or to purchase, or any options for the purchase of,
Common Stock or securities  convertible  into or exchangeable  for or carrying a
right, warrant or option to purchase Common Stock, the Company shall notify each
of the then  Registered  Holders  of the  Warrants  of such  event  prior to its
occurrence  to enable such  Registered  Holders to exercise  their  Warrants and
participate as holders of Common Stock in such event.

           SECTION 10.   Fractional Warrants and Fractional Shares.

           (a) Regardless of whether or not the number of shares of Common Stock
purchasable upon the exercise of each Warrant is adjusted  pursuant to Section 9
hereof,  the Company shall  nevertheless  not be required to issue  fractions of
shares upon exercise of the Warrants or otherwise, or to distribute certificates
that evidence  fractional shares. With respect to any fraction of a share called
for upon any exercise hereof,  the Company shall pay to the Registered Holder an
amount in cash equal to such fraction multiplied by the current market price per
share on the last business day prior to the date of exercise. The current market
price per share shall be determined, with respect to any date, as follows:

           (1) if the Common Stock is listed on a national  securities  exchange
      or admitted to unlisted trading  privileges on such exchange or listed for
      trading on the Nasdaq National  Market System ("NMS"),  the current market
      price per share on any date shall be the last  reported  sale price of the
      Common Stock on such  exchange or system on the last business day prior to
      such date; or

           (2) if the  Common  Stock is  listed in the  over-the-counter  market
      (other than on NMS) or admitted to unlisted  trading  privileges  thereon,
      the current  market  price per share for any date shall be the mean of the
      last  reported  bid and asked prices  reported by the  National  Quotation
      Bureau, Inc. on the last business day prior to such date; or

           (3) if the  Common  Stock is not so listed or  admitted  to  unlisted
      trading  privileges  and bid and asked  prices  are not so  reported,  the
      current  market  price per share  shall be an  amount  determined  in such
      reasonable  manner as may be  prescribed  by the Board of Directors of the
      Company.

           SECTION 11.   Warrant Holders Not Deemed Stockholders.  No
Registered Holder shall, as such, be entitled to vote or to receive dividends or
be deemed  the  holder of Common  Stock  that may at any time be  issuable  upon
exercise of such Warrants for


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any purpose  whatsoever,  nor shall  anything  contained  herein be construed to
confer upon the holder of Warrants,  as such, any of the rights of a stockholder
of the Company or any right to vote for the  election of  directors  or upon any
matter submitted to stockholders at any meeting thereof,  or to give or withhold
consent to any corporate  action  (whether upon any  recapitalization,  issue or
reclassification  of  stock,  change  of par  value or change of stock to no par
value,  consolidation,  merger or conveyance or otherwise), or to receive notice
of  meetings,  or to  receive  dividends  or  subscription  rights,  until  such
Registered  Holder shall have  exercised such Warrants and been issued shares of
Common Stock in accordance with the provisions hereof.

           SECTION 12.  Rights of Action.  All rights of action with  respect to
this Agreement are vested in the respective  Registered Holders of the Warrants,
and any Registered Holder of a Warrant,  without consent of the Warrant Agent or
of the  holder of any other  Warrant,  may,  on his own  behalf  and for his own
benefit,  enforce against the Company his right to exercise his Warrants for the
purchase  of  shares of  Common  Stock in the  manner  provided  in the  Warrant
Certificate and this Agreement.

           SECTION 13. Agreement of Warrant Holders.  Every holder of a Warrant,
by his  acceptance  thereof,  consents and agrees with the Company,  the Warrant
Agent and every other holder of a Warrant that:

           (a) The Warrants are  transferable  only on the registry books of the
Warrant  Agent  by  the   Registered   Holder   thereof  in  person  or  by  his
attorney-in-fact duly authorized in writing and only if the Warrant Certificates
representing  such Warrants are  surrendered at the office of the Warrant Agent,
duly endorsed or accompanied by a proper instrument of transfer  satisfactory to
the  Warrant  Agent and the  Company in their  sole  discretion,  together  with
payment of any applicable transfer taxes; and

           (b) The  Company  may deem and  treat the  person  in whose  name the
Warrant  Certificate is registered as the  Registered  Holder thereof and as the
absolute,  true and lawful  owner of the  Warrants  represented  thereby for all
purposes,  and the Company  shall not be affected by any notice or  knowledge to
the contrary, except as otherwise expressly provided in Section 8 hereof.

           SECTION  14.  Cancellation  of Warrant  Certificates.  If the Company
shall  purchase  or acquire  any  Warrant or  Warrants,  whether  upon  exercise
thereof,  open market  purchase,  redemption  or  otherwise,  upon  presentation
thereof to the Warrant Agent,  the Warrant  Certificate or Warrant  Certificates
evidencing  the same shall  thereupon  be  cancelled  by the  Warrant  Agent and
retired. The Warrant Agent shall also cancel Warrant Certificates surrendered to
the Warrant Agent following  exercise of any or all of the Warrants  represented
thereby or delivered to it for transfer, split-up, combination or exchange.

           SECTION 15.   Concerning the Warrant Agent.  The Warrant Agent acts
hereunder as agent and in a ministerial capacity for the Company, and its duties
shall be determined solely by the provisions hereof.  The Warrant Agent shall
not, by issuing and


                                  10


<PAGE>



delivering Warrant Certificates or by any other act hereunder, be deemed to make
any  representations  as to the validity,  value or authorization of the Warrant
Certificates or the Warrants  represented  thereby or of any securities or other
property delivered upon exercise of any Warrant or whether any stock issued upon
exercise of any Warrant is fully paid and nonassessable.

           The Warrant Agent shall account  promptly to the Company with respect
to Warrants  exercised and concurrently pay the Company,  as provided in Section
5, all moneys  received by the Warrant Agent upon the exercise of such Warrants.
The Warrant Agent shall, upon request of the Company from time to time,  deliver
to the Company such complete reports of registered ownership of the Warrants and
such  complete  records of  transactions  with  respect to the  Warrants and the
shares of Common Stock as the Company may request.  The Warrant Agent shall also
make  available to the Company for  inspection by its agents or employees,  from
time to time as it may request,  such  original  books of accounts and record as
may be  maintained  by the Warrant  Agent in  connection  with the  issuance and
exercise of Warrants hereunder, such inspections to occur at the Warrant Agent's
office as specified in Section 17 hereof, during normal business hours.

           The  Warrant  Agent  shall  not at any  time  be  under  any  duty or
responsibility  to any  Registered  Holder  to make  or  cause  to be  made  any
adjustment of the Exercise Price
provided in this  Agreement,  or to determine  whether any fact exists which may
require  any such  adjustments,  or with  respect to the nature or extent of any
such adjustment, when made, or with respect to the method employed in making the
same. It shall not (i) be liable for any recital or statement of facts contained
herein or for any action  taken,  suffered  or omitted by it in  reliance on any
Warrant Certificate or other document or instrument believed by it in good faith
to be  genuine  and to have been  signed or  presented  by the  proper  party or
parties,  (ii) be  responsible  for any  failure  on the part of the  Company to
comply with any of its covenants and obligations  contained in this Agreement or
in any  Warrant  Certificate,  or (iii) be  liable  for any act or  omission  in
connection  with  this  Agreement  except  for its  own  negligence  or  willful
misconduct.

           The Warrant  Agent may at any time consult with counsel  satisfactory
to it (who may be counsel  for the  Company)  and shall  incur no  liability  or
responsibility for any action taken,  suffered or omitted by it in good faith in
accordance with the opinion or advice of such counsel.

           Any notice,  statement,  instruction,  request,  direction,  order or
demand of the Company shall be sufficiently evidenced by an instrument signed by
the Chairman of the Board,  President,  any Vice  President,  its Secretary,  or
Assistant  Secretary  (unless  other  evidence  in  respect  thereof  is  herein
specifically  prescribed).  The Warrant Agent shall not be liable for any action
taken,  suffered or omitted by it in  accordance  with such  notice,  statement,
instruction, request, direction, order or demand believed by it to be genuine.

           The Company agrees to pay the Warrant Agent reasonable  compensation,
as stated in the fee agreement,  for its services  hereunder and to reimburse it
for its reasonable


                                  11


<PAGE>



out-of-pocket  expenses  hereunder;  it further  agrees to indemnify the Warrant
Agent and save it harmless against any and all losses, expenses and liabilities,
including judgments, costs and counsel fees, for anything done or omitted by the
Warrant Agent in the execution of its duties and powers hereunder except losses,
expenses and liabilities  arising as a result of the Warrant Agent's  negligence
or willful misconduct.

           The Warrant  Agent may resign its duties and be  discharged  from all
further duties and liabilities hereunder (except liabilities arising as a result
of the Warrant  Agent's own  negligence  or willful  misconduct),  upon 30 days'
prior  written  notice to the Company and the Company may  discharge the Warrant
Agent from its duties and liabilities hereunder (except liabilities arising as a
result of the Warrant  Agent's own  negligence  or willful  misconduct)  upon 30
days' prior written notice to the Warrant  Agent.  At least 15 days prior to the
date such  resignation  or discharge is to become  effective,  the Warrant Agent
shall cause a copy of such notice of  resignation  or  discharge to be mailed to
the Registered Holder of each Warrant Certificate at the Company's expense. Upon
such  resignation or discharge,  or any inability of the Warrant Agent to act as
such hereunder, the Company shall appoint a new warrant agent in writing. If the
Company shall fail to make such appointment  within a period of 15 days after it
has been notified in writing of such resignation by the resigning Warrant Agent,
or within a period of 15 days after the Warrant  Agent has been  notified by the
Company of such discharge, then the Registered Holder of any Warrant Certificate
may apply to any court of competent  jurisdiction  for the  appointment of a new
warrant  agent.  Any new warrant agent,  whether  appointed by the Company or by
such a court, shall be a bank or trust company having a capital and surplus,  as
shown  by its last  published  report  to its  stockholders,  of not  less  than
$10,000,000 or a stock  transfer  company.  After  acceptance in writing of such
appointment  by the new warrant  agent is received by the  Company,  the Warrant
Agent's  resignation  or discharge  shall be deemed to be effective and such new
warrant  agent  shall be  vested  with  the  same  powers,  rights,  duties  and
responsibilities as if it had been originally named herein as the Warrant Agent,
without any further assurance, conveyance, act or deed; but if for any reason it
shall be necessary  or  expedient to execute and deliver any further  assurance,
conveyance,  act or deed,  the same shall be done at the  expense of the Company
and shall be legally and validly executed and delivered by the resigning Warrant
Agent.  Not later than the effective  date of any such  appointment  the Company
shall file notice thereof with the resigning  Warrant Agent and shall  forthwith
cause a copy of such  notice  to be  mailed  to the  Registered  Holder  of each
Warrant Certificate.

           Any corporation into which the Warrant Agent or any new warrant agent
may be converted or merged or any corporation  resulting from any  consolidation
to which the  Warrant  Agent or any new  warrant  agent  shall be a party or any
corporation  succeeding  to the trust  business of the Warrant  Agent shall be a
successor  warrant agent under this Agreement  without any further act, provided
that such  corporation  is eligible for  appointment as successor to the Warrant
Agent  under the  provisions  of the  preceding  paragraph.  Any such  successor
warrant agent shall  promptly cause notice of its succession as warrant agent to
be  mailed  to  the  Company  and to  the  Registered  Holder  of  each  Warrant
Certificate.



                                  12


<PAGE>



           The Warrant Agent, its subsidiaries and affiliates, and any of its or
their  officers  or  directors,  may buy and  hold or  sell  Warrants  or  other
securities of the Company and otherwise deal with the Company in the same manner
and to the same  extent  and with like  effects  as  though it were not  Warrant
Agent.  Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.

           SECTION 16.   Modification of Agreement.

           (a) Subject to the  provisions  of Section 5(b)  hereof,  the parties
hereto may by  supplemental  agreement  make any changes or  corrections in this
Agreement  (i) that they  shall deem  appropriate  to cure any  ambiguity  or to
correct any  defective or  inconsistent  provision or manifest  mistake or error
herein  contained or (ii) that they may deem  necessary  or desirable  and which
shall not adversely affect the interests of the holders of Warrant Certificates;
provided,  however,  that except as otherwise indicated in this Section and this
Agreement,  this  Agreement  shall not  otherwise be modified,  supplemented  or
altered in any  respect  except  with the  consent in writing of the  Registered
Holders of Warrant  Certificates  representing  not less than a majority  of the
Warrants then outstanding.

           (b) The Company shall have the right to reduce the Exercise  Price on
not less than thirty days' prior written notice to the Registered Holders of the
Warrants.

           SECTION  17.  Notices.  All  notices,  requests,  consents  and other
communications  hereunder  shall be in writing  and shall be deemed to have been
made when delivered or mailed first class registered or certified mail,  postage
prepaid as follows: if to the Registered Holder of a Warrant Certificate, at the
address of such holder as shown on the registry books  maintained by the Warrant
Agent;  if to the  Company,  at 1675 West  Maple  Road,  Troy,  Michigan  48084,
Attention:  Corporate  Secretary;  if to the  Warrant  Agent,  at its  Corporate
Office.

           SECTION 18.   Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts, 
without reference to principles of conflict of laws.

           SECTION 19. Binding Effect.  This Agreement shall be binding upon and
inure to the benefit of the Company and the Warrant Agent (and their  respective
successors   and  assigns)  and  the  holders  from  time  to  time  of  Warrant
Certificates.  Nothing in this  Agreement  is intended or shall be  construed to
confer upon any other person any right, remedy or claim, in equity or at law, or
to impose upon any other person any duty, liability or obligation.

           SECTION 20.   Termination.  This Agreement shall terminate on the
earliest to occur of (i) the Expiration Date of all the Warrants, (ii) the date
upon which all Warrants have been exercised and (iii) the date on which the
Company certifies to the


                                  13


<PAGE>



Warrant  Agent  that  no  Warrants  are  outstanding;   provided  however,  that
notwithstanding  any such  termination,  the Warrant Agent shall be obligated to
deliver funds to the Company in accordance with this Agreement.

           SECTION 21.   Counterparts.  This Agreement may be executed in all
counterparts, all of which taken together shall constitute a single document.

           IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to
be duly executed as of the date first above written.


                                    ENERGY CONVERSION DEVICES, INC.



                                    By:   __________________________
                                          Nancy M. Bacon
                                          Senior Vice President



                                    STATE STREET BANK AND
                                    TRUST COMPANY



                                    By:   __________________________
                                          Authorized Officer


                                  14


<PAGE>



CERTIFICATE
NUMBER W _________                                         ____________WARRANTS


                    NOT EXERCISABLE AFTER 5:00 P.M.,
                (NEW YORK CITY TIME), ON JULY 31, 2001,
                   
                    ENERGY CONVERSION DEVICES, INC.

                              COMMON STOCK
                           PURCHASE WARRANTS                    CUSIP _________


           THIS  CERTIFIES   THAT:   ______________________________________   or
registered  assigns is the registered  holder (the  "Registered  Holder") of the
number  of  Warrants  set forth  above,  each of which  represents  the right to
purchase one fully paid and nonassessable  share of common stock, par value $.01
per share (the "Common Stock"), of Energy Conversion  Devices,  Inc., a Delaware
corporation (the  "Company"),  at any time until the Expiration Date hereinafter
referred to, by surrendering  this Warrant  Certificate,  with the exercise form
set forth hereon duly executed with signatures  guaranteed as provided below, at
the office maintained pursuant to the Warrant Agreement  hereinafter referred to
for that purpose by State  Street Bank and Trust  Company,  or its  successor as
warrant agent (any such warrant agent being herein called the "Warrant  Agent"),
and by paying in full the sum of $_____  per share,  on or prior to January  31,
2000 and $____ per share after January 31, 2000 and on or prior to July 31, 2001
(the "Exercise  Price"), plus transfer taxes,  if any.  Payment of the Exercise
Price shall be made in United States currency, by certified check or money order
payable to the order of the Company.

           Upon certain events provided for in the Warrant Agreement hereinafter
referred  to,  the  Exercise  Price and the  number  of  shares of Common  Stock
issuable upon the exercise of each Warrant are required to be adjusted.

           No Warrant may be exercised  after 5:00 P.M.  (New York City time) on
the expiration date (the  "Expiration  Date") which will be July 31, 2001. After
the Expiration Date, all Warrants evidenced hereby shall thereafter become void,
and the holders thereof shall have no rights thereunder.

           Prior to the Expiration  Date,  subject to any applicable laws, rules
or  regulations   restricting   transferability   and  to  any   restriction  on
transferability  that may appear on this Warrant  Certificate in accordance with
the terms of the  Warrant  Agreement  hereinafter  referred  to, the  Registered
Holder shall be entitled to transfer this Warrant Certificate in whole


                                   1


<PAGE>



or in part upon  surrender  of this  Warrant  Certificate  at the  office of the
Warrant Agent  maintained for that purpose with the form of assignment set forth
hereon duly executed,  with signatures guaranteed by a member firm of a national
securities  exchange,  a  commercial  bank, a savings bank or a savings and loan
association  or a trust company  located in the United  States,  a member of the
National  Association of Securities  Dealers,  Inc. or other eligible  guarantor
institution  which is a participant  in a signature  guarantee  program (as such
terms are defined in Reg. 240.17Ad-15 under the Securities Exchange Act of 1934)
applicable  to  the  Warrant  Agent.  Upon  any  such  transfer,  a new  Warrant
Certificate or Warrant  Certificates  representing  the same aggregate number of
Warrants  will be  issued in  accordance  with the  instructions  in the form of
assignment.

           Upon the exercise of less than all of the Warrants  evidenced by this
Warrant  Certificate,  there  shall be  issued  to the  Registered  Holder a new
Warrant Certificate in respect of the Warrants not exercised.

           Prior to the Expiration Date, the Registered Holder shall be entitled
to  exchange   this  Warrant   Certificate,   with  or  without   other  Warrant
Certificates, for another Warrant
Certificate or Warrant  Certificates  for the same aggregate number of Warrants,
upon  surrender of this Warrant  Certificate  at the office  maintained for such
purpose by the Warrant Agent.

           No fractional shares will be issued upon the exercise of Warrants. As
to any final  fraction of a share,  which the  Registered  Holder of one or more
Warrant  Certificates,  the  rights  under  which  are  exercised  in  the  same
transaction,  would  otherwise be entitled to purchase upon such  exercise,  the
Company shall pay the cash value  thereof  determined as provided in the Warrant
Agreement.

           This Warrant  Certificate  is issued under and in  accordance  with a
Warrant  Agreement  between  the Company  and the  Warrant  Agent (the  "Warrant
Agreement") and is subject to the terms and provisions contained in said Warrant
Agreement,  to all of which terms and provisions the Registered  Holder consents
by acceptance hereof.

           This Warrant  Certificate  shall not entitle the Registered Holder to
any  of  the  rights  of  a  stockholder  of  the  Company,  including,  without
limitation, the right to vote, to receive dividends and other distributions,  or
to  attend or  receive  any  notice of  meetings  of  stockholders  or any other
proceedings of the Company.

           This Warrant  Certificate shall not be valid for any purpose until it
shall have been countersigned by the Warrant Agent.


                                   2


<PAGE>



           IN WITNESS WHEREOF,  the Company has caused this Warrant  Certificate
to be duly executed under its corporate seal.


DATED:                                     COUNTERSIGNED:
                                           STATE STREET AND TRUST COMPANY
                                           WARRANT AGENT



                                           BY: ____________________________
                                             AUTHORIZED OFFICER



                                           ENERGY CONVERSION DEVICES, INC.



                                           BY: _____________________________
                                             PRESIDENT AND CHIEF
                                             EXECUTIVE OFFICER


-----------------------------
SECRETARY


















                                   3


<PAGE>



                             EXERCISE FORM

                To Be Executed by the Registered Holder
                     in Order to Exercise Warrants

The  undersigned   Registered  Holder  hereby  irrevocably  elects  to  exercise
___________ Warrants  represented by this Warrant  Certificate,  and to purchase
the securities  issuable upon the exercise of such  Warrants,  and requests that
certificates for such securities shall be issued in the name of:

       PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

                   ==================================
                   ==================================
                [please print or type name and address]

and be delivered to:

                   ==================================
                   ==================================
                [please print or type name and address]

and if such number of Warrants  shall not be all the Warrants  evidenced by this
Warrant  Certificate,  that a new  Warrant  Certificate  for the balance of such
Warrants be registered in the name of, and delivered to, the  Registered  Holder
at the address stated above.

Accepted and Agreed To:

X______________________________                Address:
                                          ==========================
                                          ==========================

                                          Social Security or Tax Payer
                                          Identification Number
                                          --------------------------

                                          Signature Guaranteed
                                         --------------------------


                                  A-1


<PAGE>



                               ASSIGNMENT

                To Be Executed by the Registered Holder
                      in Order to Assign Warrants


FOR VALUE RECEIVED, ______________________________________ hereby sells, assigns
and transfers unto:

       PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

                   ==================================
                   ==================================
                [please print or type name and address]


_______________________________ of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitutes and appoints  __________________
---------------------------------------------------------------------
Attorney-in-fact  to  transfer  this  Warrant  Certificate  on the  books of the
Company, with full power of substitution in the premises.


Dated: __________________________              Signature(s) Guaranteed:

Signed: _________________________              __________________________


                                          THE SIGNATURE(S)  SHOULD BE GUARANTEED
                                          BY AN ELIGIBLE  GUARANTOR  INSTITUTION
                                          (BANKS, STOCKBROKERS, SAVINGS AND LOAN
                                          ASSOCIATIONS  AND CREDIT  UNIONS  WITH
                                          MEMBERSHIP  IN AN  APPROVED  SIGNATURE
                                          GUARANTEE MEDALLION PROGRAM), PURSUANT
                                          TO S.E.C. RULE 17Ad-15

THE SIGNATURE TO THE  ASSIGNMENT  OR THE EXERCISE  FORM MUST  CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS WARRANT  CERTIFICATE IN EVERY  PARTICULAR,
WITHOUT  ALTERATION  OR  ENLARGEMENT  OR ANY  CHANGE  WHATSOEVER,  AND  MUST  BE
GUARANTEED  BY A COMMERCIAL  BANK,  TRUST COMPANY OR SAVINGS BANK OR SAVINGS AND
LOAN ASSOCIATION OR A MEMBER FIRM OF THE AMERICAN STOCK EXCHANGE, NEW YORK STOCK
EXCHANGE, PACIFIC STOCK EXCHANGE OR MIDWEST STOCK EXCHANGE.

                                  A-2




