Exhibit 10.1

 

Execution Copy

 

COMMON STOCK PURCHASE AGREEMENT

 

COMMON STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of July 2, 2010 by
and between BEACON POWER CORPORATION, a Delaware corporation (the “Company”),
and ASPIRE CAPITAL FUND, LLC, an Illinois limited liability company (the
“Buyer”).  Capitalized terms used herein and not otherwise defined herein are
defined in Section 10 hereof.

 

WHEREAS:

 

Subject to the terms and conditions set forth in this Agreement, the Company
wishes to sell to the Buyer, and the Buyer wishes to buy from the Company, up to
Twenty Five Million Dollars ($25,000,000) of the Company’s common stock, par
value $.01 per share (the “Common Stock”).  The shares of Common Stock to be
purchased hereunder are referred to herein as the “Purchase Shares.”

 

NOW THEREFORE, the Company and the Buyer hereby agree as follows:

 

1.             PURCHASE OF COMMON STOCK.

 

Subject to the terms and conditions set forth in this Agreement, the Company has
the right to sell to the Buyer, and the Buyer has the obligation to purchase
from the Company, Purchase Shares as follows:

 

(a)           Initial Purchase; Commencement of Additional Purchases of Common
Stock.  Following the satisfaction of the conditions (the “Commencement”) as set
forth in Sections 6 and 7 below (the date of satisfaction of such conditions,
the “Commencement Date”), the Buyer shall purchase from the Company 1,543,210
Purchase Shares and upon receipt of such Purchase Shares pay to the Company as
the purchase price therefor, via wire transfer, Five Hundred Thousand Dollars
($500,000) (such purchase the “Initial Purchase” and such Purchase Shares are
referred to herein as “Initial Purchase Shares”).  Upon issuance and payment
therefor as provided herein, such Initial Purchase Shares shall be validly
issued and are fully paid and non-assessable.  The Initial Purchase Shares shall
be issued without any restrictive legend.  Thereafter, the purchase and sale of
Purchase Shares hereunder shall occur from time to time upon written notices by
the Company to the Buyer on the terms and conditions as set forth herein.

 

(b)           The Company’s Right to Require Purchases.  Subject to the terms
and conditions set forth in this Agreement, on any given Business Day after the
Commencement Date, the Company shall have the right but not the obligation to
direct the Buyer by its delivery to the Buyer of a Purchase Notice from time to
time, and the Buyer shall thereupon have the obligation, to buy up to 400,000
Purchase Shares per Business Day (each such purchase, a “Purchase”) at the
Purchase Price on the Purchase Date. The Company and the Buyer may mutually
agree to increase the number of shares that can be sold per Business Day to as
much as an additional 1,000,000 shares per Business Day.  The Company may
deliver multiple Purchase Notices to the Buyer from time to time so long as the
most recent Purchase has been completed.  Share amounts subject to purchase
under this Section 1(b) shall be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split, reverse stock split or other
similar transaction.

 

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(c)           Payment for Purchase Shares.  In connection with any Purchase, the
Buyer shall pay to the Company an amount equal to the Purchase Amount with
respect to such Purchase Shares as full payment for such Purchase Shares via
wire transfer of immediately available funds on the same Business Day that the
Buyer receives such Purchase Shares if they are received by the Buyer before
1:00 p.m. eastern time or if received by the Buyer after 1:00 p.m. eastern time,
the next Business Day.  All payments made under this Agreement shall be made in
lawful money of the United States of America via wire transfer of immediately
available funds to such account as the Company may from time to time designate
by written notice in accordance with the provisions of this Agreement.  Whenever
any amount expressed to be due by the terms of this Agreement is due on any day
that is not a Business Day, the same shall instead be due on the next succeeding
day that is a Business Day.

 

(d)           Purchase Price Floor.  The Company and the Buyer shall not effect
any sales under this Agreement on any Purchase Date where the Closing Sale Price
is less than the Floor Price.  “Floor Price” means $0.25, which shall be
appropriately adjusted for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar transaction.

 

(e)           Records of Purchases.  The Buyer and the Company shall each
maintain records showing the remaining Available Amount at any give time and the
dates and Purchase Amounts for each purchase or shall use such other method,
reasonably satisfactory to the Buyer and the Company.

 

(f)            Taxes.  The Company shall pay any and all transfer, stamp or
similar taxes that may be payable with respect to the issuance and delivery of
any shares of Common Stock to the Buyer made under this Agreement.

 

(g)           Compliance with Principal Market Rules.  Notwithstanding anything
in this Agreement to the contrary, and in addition to the limitations set forth
in Section 1(d), unless and until such time as the shareholders of the Company
approve the transaction contemplated by this Agreement, no Purchases shall be
made under Section 1(b) of this Agreement unless the Purchase Price thereunder
equals or exceeds the Base Price.  The “Base Price” is a price per share of
$0.34, equal to (x) the Signing Market Price plus (y) $0.03, which shall be
appropriately adjusted for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar transaction. 
“Signing Market Price” shall mean $0.31, the last consolidated closing bid price
of the Common Stock on the Principal Market immediately preceding the date of
this Agreement.  The Company hereby represents and warrants to the Buyer that
the book value per share of Common Stock as of the date hereof is less than the
Signing Market Price.  The Company shall not be required or permitted to issue
any shares of Common Stock under this Agreement if such issuance would breach
the Company’s obligations under the rules or regulations of the Principal
Market.

 

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2.             BUYER’S REPRESENTATIONS AND WARRANTIES.

 

The Buyer represents and warrants to the Company that as of the date hereof and
as of the Commencement Date:

 

(a)           Investment Purpose.  The Buyer is entering into this Agreement and
acquiring the Purchase Shares and the Commitment Shares (as defined in
Section 4(e) hereof) (this Agreement, the Purchase Shares and the Commitment
Shares are collectively referred to herein as the “Securities”), for its own
account for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof; provided however, by
making the representations herein, the Buyer does not agree to hold any of the
Securities for any minimum or other specific term.

 

(b)           Accredited Investor Status.  The Buyer is an “accredited investor”
as that term is defined in Rule 501(a)(3) of Regulation D.

 

(c)           Intentionally Omitted.

 

(d)           Information.  The Buyer has been furnished with all materials
relating to the business, finances and operations of the Company and materials
relating to the offer and sale of the Securities that have been reasonably
requested by the Buyer, including, without limitation, the SEC Documents (as
defined in Section 3(f) hereof).  The Buyer understands that its investment in
the Securities involves a high degree of risk.  The Buyer (i) is able to bear
the economic risk of an investment in the Securities including a total loss,
(ii) has such knowledge and experience in financial and business matters that it
is capable of evaluating the merits and risks of the proposed investment in the
Securities and (iii) has had an opportunity to ask questions of and receive
answers from the officers of the Company concerning the financial condition and
business of the Company and other matters related to an investment in the
Securities.  Neither such inquiries nor any other due diligence investigations
conducted by the Buyer or its representatives shall modify, amend or affect the
Buyer’s right to rely on the Company’s representations and warranties contained
in Section 3 below.  The Buyer has sought such accounting, legal and tax advice
as it has considered necessary to make an informed investment decision with
respect to its acquisition of the Securities.

 

(e)           No Governmental Review.  The Buyer understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.

 

(f)            Intentionally Omitted.

 

(g)           Validity; Enforcement.  This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Buyer and is a valid and
binding agreement of the Buyer enforceable against the Buyer in accordance with
its terms, subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.

 

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(h)           Residency.  The Buyer is a resident of the State of Illinois.

 

(i)            No Prior Short Selling.  The Buyer represents and warrants to the
Company that at no time prior to the date of this Agreement has any of the
Buyer, its agents, representatives or affiliates engaged in or effected, in any
manner whatsoever, directly or indirectly, any (i) “short sale” (as such term is
defined in Section 242.200 of Regulation SHO of the Securities Exchange Act of
1934, as amended (the “1934 Act”)) of the Common Stock or (ii) hedging
transaction which establishes a net short position with respect to the Common
Stock.

 

3.             REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company represents and warrants to the Buyer that as of the date hereof and
as of the Commencement Date:

 

(a)           Organization and Qualification.  The Company and its
“Subsidiaries” (which for purposes of this Agreement means any entity in which
the Company, directly or indirectly, owns 50% or more of the voting stock or
capital stock or other similar equity interests) are corporations duly organized
and validly existing in good standing under the laws of the jurisdiction in
which they are incorporated, and have the requisite corporate power and
authority to own their properties and to carry on their business as now being
conducted.  Each of the Company and its Subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing could not reasonably be expected to have a
Material Adverse Effect.  As used in this Agreement, “Material Adverse Effect”
means any material adverse effect on any of: (i) the business, properties,
assets, operations, results of operations or financial condition of the Company
and its Subsidiaries, taken as a whole, or (ii) the authority or ability of the
Company to perform its obligations under the Transaction Documents (as defined
in Section 3(b) hereof).  The Company has no Subsidiaries except as set forth on
Schedule 3(a).

 

(b)           Authorization; Enforcement; Validity.  (i) The Company has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement, and each of the other agreements entered into
by the parties on the Commencement Date and attached hereto as exhibits to this
Agreement (collectively, the “Transaction Documents”), and to issue the
Securities in accordance with the terms hereof and thereof, (ii) the execution
and delivery of the Transaction Documents by the Company and the consummation by
it of the transactions contemplated hereby and thereby, including without
limitation, the issuance of the Commitment Shares and the reservation for
issuance and the issuance of the Purchase Shares issuable under this Agreement,
have been duly authorized by the Company’s Board of Directors and no further
consent or authorization is required by the Company, its Board of Directors or
its shareholders, (iii) this Agreement has been, and each other Transaction
Document shall be on the Commencement Date, duly executed and delivered by the
Company and (iv) this Agreement constitutes, and each other Transaction Document
upon its execution on behalf of the Company, shall constitute, the valid and
binding obligations of the Company enforceable against the Company in accordance
with their terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors’ rights and remedies.  The Board of Directors of the
Company has approved the resolutions (the “Signing

 

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Resolutions”) substantially in the form as set forth as Exhibit C attached
hereto to authorize this Agreement and the transactions contemplated hereby. 
The Signing Resolutions are valid, in full force and effect and have not been
modified or supplemented in any respect.  The Company has delivered to the Buyer
a true and correct copy of a unanimous written consent adopting the Signing
Resolutions executed by all of the members of the Board of Directors of the
Company.  No other approvals or consents of the Company’s Board of Directors
and/or shareholders are necessary under applicable laws and the Company’s
Certificate of Incorporation and/or Bylaws to authorize the execution and
delivery of this Agreement or any of the transactions contemplated hereby,
including, but not limited to, the issuance of the Commitment Shares and the
issuance of the Purchase Shares.

 

(c)           Capitalization.  As of the date hereof, the authorized capital
stock of the Company consists of (i) 400 million shares of Common Stock, of
which as of the date hereof, 190,235,448 shares are issued and outstanding,
421,692 are held as treasury shares,  18,349,526 shares are reserved for future
issuance pursuant to the Company’s stock option plans of which only
approximately 2,278,996 shares remain available for future option grants and
66,196,416 shares are issuable and reserved for issuance pursuant to securities
(other than stock options issued pursuant to the Company’s stock option plans)
exercisable or exchangeable for, or convertible into, shares of Common Stock and
(ii) 10 million shares of Preferred Stock, $0.01 par value, of which as of the
date hereof none are issued and outstanding.  All of such outstanding shares
have been, or upon issuance will be, validly issued and are fully paid and
nonassessable.  Except as disclosed in Schedule 3(c), (i) no shares of the
Company’s capital stock are subject to preemptive rights or any other similar
rights or any liens or encumbrances suffered or permitted by the Company,
(ii) there are no outstanding debt securities, (iii) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its Subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional shares of capital stock
of the Company or any of its Subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, (iv) there are no agreements or arrangements
under which the Company or any of its Subsidiaries is obligated to register the
sale of any of their securities under the 1933 Act (except the Registration
Rights Agreement), (v) there are no outstanding securities or instruments of the
Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries, (vi) there
are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Securities as described in this
Agreement and (vii) the Company does not have any stock appreciation rights or
“phantom stock” plans or agreements or any similar plan or agreement.  The
Company has furnished or made available to the Buyer true and correct copies of
the Company’s Certificate of Incorporation, as amended and as in effect on the
date hereof (the “Certificate of Incorporation”), and the Company’s By-laws, as
amended and as in effect on the date hereof (the “By-laws”), and summaries of
the terms of all securities convertible into or exercisable for Common Stock, if
any, and copies of any documents containing the material rights of the holders
thereof in respect thereto.

 

(d)           Issuance of Securities.  The Commitment Shares have been duly
authorized and, upon issuance in accordance with the terms hereof, the
Commitment Shares shall be (i) validly issued, fully paid and non-assessable and
(ii) free from all taxes, liens and charges with respect to the issue thereof.

 

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Upon issuance and payment therefor in accordance with the terms and conditions
of this Agreement, the Purchase Shares shall be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof, with the holders being entitled to all rights accorded to a
holder of Common Stock.

 

(e)           No Conflicts.  Except as disclosed in Schedule 3(e), the
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the reservation for issuance and
issuance of the Purchase Shares) will not (i) result in a violation of the
Certificate of Incorporation, any Certificate of Designations, Preferences and
Rights of any outstanding series of preferred stock of the Company or the
By-laws or (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party, or result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations and the rules and regulations of the Principal Market applicable to
the Company or any of its Subsidiaries) or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected, except in the case of
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations under clause (ii), which could not reasonably be expected to result
in a Material Adverse Effect.  Except as disclosed in Schedule 3(e), neither the
Company nor its Subsidiaries is in violation of any term of or in default under
its Certificate of Incorporation, any Certificate of Designation, Preferences
and Rights of any outstanding series of preferred stock of the Company or
By-laws or their organizational charter or by-laws, respectively.  Except as
disclosed in Schedule 3(e), neither the Company nor any of its Subsidiaries is
in violation of any term of or is in default under any material contract,
agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or
order or any statute, rule or regulation applicable to the Company or its
Subsidiaries, except for possible conflicts, defaults, terminations or
amendments which could not reasonably be expected to have a Material Adverse
Effect.  The business of the Company and its Subsidiaries is not being
conducted, and shall not be conducted, in violation of any law, ordinance,
regulation of any governmental entity, except for possible violations, the
sanctions for which either individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect.  Except as specifically
contemplated by this Agreement or as required under the 1933 Act, the rules of
the Principal Market or applicable state securities laws, the Company is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency or any regulatory or
self-regulatory agency in order for it to execute, deliver or perform any of its
obligations under or contemplated by the Transaction Documents in accordance
with the terms hereof or thereof.  Except as disclosed in Schedule 3(e) or as
expressly contemplated herein, all consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence shall be obtained or effected on or prior to the Commencement Date. 
Except as listed in Schedule 3(e), since January 1, 2009 the Company has not
received nor delivered any notices or correspondence from or to the Principal
Market.  The Principal Market has not commenced any delisting proceedings
against the Company.

 

(f)            SEC Documents; Financial Statements. Except as disclosed in
Schedule 3(f), since January 1, 2009, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the 1934 Act (all of the
foregoing filed prior to the date hereof and all exhibits included therein and
financial statements and schedules thereto and documents incorporated by
reference therein being hereinafter

 

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referred to as the “SEC Documents”).  As of their respective dates (except as
they have been correctly amended), the SEC Documents complied in all material
respects with the requirements of the 1934 Act and the rules and regulations of
the SEC promulgated thereunder applicable to the SEC Documents, and none of the
SEC Documents, at the time they were filed with the SEC (except as they may have
been properly amended), contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.  As of their respective dates (except as they
have been properly amended), the financial statements of the Company included in
the SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto.  Such financial statements have been prepared in accordance
with generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).  Except as listed
in Schedule 3(f) or routine correspondence which are available on the SEC’s
Edgar database as of the date hereof, the Company has received no notices or
correspondence from the SEC since January 1, 2009.  The SEC has not commenced
any enforcement proceedings against the Company or any of its subsidiaries.

 

(g)           Absence of Certain Changes.  Except as disclosed in Schedule 3(g),
since March 31, 2010, there has been no material adverse change in the business,
properties, operations, financial condition or results of operations of the
Company or its Subsidiaries.  The Company has not taken any steps, and does not
currently expect to take any steps, to seek protection pursuant to any
Bankruptcy Law nor does the Company or any of its Subsidiaries have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy or insolvency proceedings.  The Company is financially solvent and is
generally able to pay its debts as they become due.

 

(h)           Absence of Litigation. There is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the knowledge of the
Company or any of its Subsidiaries, threatened against or affecting the Company,
the Common Stock or any of the Company’s Subsidiaries or any of the Company’s or
the Company’s Subsidiaries’ officers or directors in their capacities as such,
which could reasonably be expected to have a Material Adverse Effect.  A
description of each action, suit, proceeding, inquiry or investigation before or
by any court, public board, government agency, self-regulatory organization or
body which, as of the date of this Agreement, is pending or threatened in
writing against or affecting the Company, the Common Stock or any of the
Company’s Subsidiaries or any of the Company’s or the Company’s Subsidiaries’
officers or directors in their capacities as such, is set forth in Schedule
3(h).

 

(i)            Acknowledgment Regarding Buyer’s Status.  The Company
acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s
length purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby.  The Company further acknowledges that the
Buyer is not acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and any advice given by the Buyer
or any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely

 

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incidental to the Buyer’s purchase of the Securities.  The Company further
represents to the Buyer that the Company’s decision to enter into the
Transaction Documents has been based solely on the independent evaluation by the
Company and its representatives and advisors.

 

(j)           Intellectual Property Rights.  The Company and its Subsidiaries
own or possess adequate rights or licenses to use all material trademarks, trade
names, service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted.  Except as set forth on Schedule 3(j), none of the
Company’s material trademarks, trade names, service marks, service mark
registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, government authorizations, trade secrets or other
intellectual property rights have expired or terminated, or, by the terms and
conditions thereof, could expire or terminate within two years from the date of
this Agreement.  The Company and its Subsidiaries do not have any knowledge of
any infringement by the Company or its Subsidiaries of any material trademark,
trade name rights, patents, patent rights, copyrights, inventions, licenses,
service names, service marks, service mark registrations, trade secret or other
similar rights of others, or of any such development of similar or identical
trade secrets or technical information by others and, except as set forth on
Schedule 3(j), there is no claim, action or proceeding being made or brought
against, or to the Company’s knowledge, being threatened against, the Company or
its Subsidiaries regarding trademark, trade name, patents, patent rights,
invention, copyright, license, service names, service marks, service mark
registrations, trade secret or other infringement, which could reasonably be
expected to have a Material Adverse Effect.

 

(k)           Environmental Laws.  The Company and its Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where, in each of the
three foregoing clauses, the failure to so comply could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(l)            Title.  The Company and its Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its Subsidiaries, in each case free and clear of all liens, encumbrances and
defects except such as are described in Schedule 3(l) or such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and any of its
Subsidiaries.  Any real property and facilities held under lease by the Company
and any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its Subsidiaries.

 

(m)          Insurance.  The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged.  Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for and neither the Company nor any such
Subsidiary has any reason to

 

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believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not materially
and adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its Subsidiaries, taken as a whole.

 

(n)           Regulatory Permits.  The Company and its Subsidiaries possess all
material certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses as currently conducted, and neither the Company nor any
such Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit.

 

(o)           Tax Status.  The Company and each of its Subsidiaries has made or
filed all federal and state income and all other material tax returns, reports
and declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply.  There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.

 

(p)           Transactions With Affiliates.  Except as set forth on Schedule
3(p) and other than in connection with the grant or exercise of stock options or
the grant of restricted stock, restricted stock units or similar equity awards,
in each case issued for compensatory purposes, none of the officers, directors,
or employees of the Company is presently a party to any transaction with the
Company or any of its Subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has an interest or is an officer, director, trustee or
partner.

 

(q)           Application of Takeover Protections.  Assuming that at all times
the Buyer maintains its beneficial ownership of the Common Stock, as calculated
under section 13(d) of the 1934 Act and related regulations, at a level below
15%, the Company and its board of directors have taken or will take prior to the
Commencement Date all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision
under the Certificate of Incorporation or the laws of the state of its
incorporation which is or could become applicable to the Buyer as a result of
the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Securities and the Buyer’s ownership of the
Securities.

 

(r)            Registration Statements.  The Shelf Registration Statements (as
defined in Section 4(a) hereof) have been declared effective by the SEC, and no
stop order has been issued or is pending or threatened by the SEC with respect
thereto.  As of the date hereof, the Company has a maximum dollar amount certain
of securities registered and unsold under the Shelf Registration Statements, in

 

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aggregate, which are in an amount not less than the sum of (i) the Available
Amount and (ii) the market value of the Commitment Shares on the date hereof.

 

4.             COVENANTS.

 

(a)           Filing of Form 8-K and Registration Statement.  The Company agrees
that it shall, within the time required under the 1934 Act, file a Report on
Form 8-K disclosing this Agreement and the transaction contemplated hereby.  The
Company shall also file within ten (10) Business Days from the date hereof
prospectus supplements to the Company’s existing shelf registration statements
on Form S-3 (nos. 333-152140 and 333-161648, and together the “Shelf
Registration Statements”) covering the sale of the Commitment Shares and
Purchase Shares (together, the “Prospectus Supplement”) in accordance with the
terms of the Registration Rights Agreement between the Company and the Buyer,
dated as of the date hereof (“Registration Rights Agreement”).   The Company
shall use reasonable best efforts to keep the Shelf Registration Statements
effective pursuant to Rule 415 promulgated under the 1933 Act and available for
sales of all Commitment Shares and Purchase Shares until such time as (i) it no
longer qualifies to make sales under the Shelf Registration Statements or
(ii) the date on which all Purchase Shares have been sold under this Agreement
and no Available Amount remains thereunder.   The Shelf Registration Statements
(including any amendments or supplements thereto and prospectuses or prospectus
supplements, including the Prospectus Supplement, contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading.

 

(b)           Blue Sky. The Company shall take such action, if any, as is
reasonably necessary in order to obtain an exemption for or to qualify (i) the
initial sale of the Commitment Shares and any Purchase Shares to the Buyer under
this Agreement and (ii) any subsequent sale of the Commitment Shares and any
Purchase Shares by the Buyer, in each case, under applicable securities or “Blue
Sky” laws of the states of the United States in such states as is reasonably
requested by the Buyer from time to time, and shall provide evidence of any such
action so taken to the Buyer.

 

(c)           Listing.  The Company shall promptly secure the listing of all of
the Purchase Shares and Commitment Shares upon each national securities exchange
and automated quotation system, if any, upon which shares of Common Stock are
then listed (subject to official notice of issuance) and shall maintain, so long
as any other shares of Common Stock shall be so listed, such listing of all such
securities from time to time issuable under the terms of the Transaction
Documents.  The Company shall maintain the Common Stock’s authorization for
quotation on a Principal Market, and neither the Company nor any of its
Subsidiaries shall take any action that would be reasonably expected to result
in the delisting or suspension of the Common Stock on a Principal Market;
provided, that nothing in this Section 4(c) shall prevent or inhibit the Company
from causing its Common Stock to be listed or quoted on a Principal Market that
is different from the Principal Market on the date hereof.  The Company shall
promptly, and in no event later than the following Business Day, provide to the
Buyer copies of any notices it receives from the Principal Market regarding the
continued eligibility of the Common Stock for listing on such automated
quotation system or securities exchange.  The Company shall pay all fees and
expenses in connection with satisfying its obligations under this Section.

 

10

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(d)           Limitation on Short Sales and Hedging Transactions.  The Buyer
agrees that beginning on the date of this Agreement and ending on the date of
termination of this Agreement as provided in Section 11(k), the Buyer and its
agents, representatives and affiliates shall not in any manner whatsoever enter
into or effect, directly or indirectly, any (i) “short sale” (as such term is
defined in Section 242.200 of Regulation SHO of the 1934 Act) of the Common
Stock or (ii) hedging transaction, which establishes a net short position with
respect to the Common Stock.

 

(e)           Issuance of Commitment Shares.  In connection with the
Commencement, the Company shall issue to the Buyer as consideration for the
Buyer entering into this Agreement 3,086,420 shares of Common Stock (the
“Commitment Shares”).  The Commitment Shares shall be issued without any
restrictive legend.

 

(f)            Due Diligence.  The Buyer shall have the right, from time to time
as the Buyer may reasonably deem appropriate, to perform reasonable due
diligence on the Company during normal business hours.  The Company and its
officers and employees shall provide information and reasonably cooperate with
the Buyer in connection with any reasonable request by the Buyer related to the
Buyer’s due diligence of the Company, including, but not limited to, any such
request made by the Buyer in connection with (i) the filing of the registration
statement described in Section 4(a) hereof and (ii) the Commencement.  Each
party hereto agrees not to disclose any Confidential Information of the other
party to any third party and shall not use the Confidential Information for any
purpose other than in connection with, or in furtherance of, the transactions
contemplated hereby.  Each party hereto acknowledges that the Confidential
Information shall remain the property of the disclosing party and agrees that it
shall take all reasonable measures to protect the secrecy of any Confidential
Information disclosed by the other party.

 

(g)           Ownership.  The Buyer agrees to take such action as shall be
necessary at all times to maintain its beneficial ownership of the Company’s
Common Stock, as calculated under section 13(d) of the 1934 Act and related
regulations, at a level below 15%.   The Company will not issue and the Buyer
will not purchase, any Purchase Shares which, when aggregated with all other
shares of Common Stock then beneficially owned by the Buyer, would result in the
beneficial ownership by the Buyer of more than 14.99% of the then issued and
outstanding Common Stock.  The Buyer will, upon the reasonable request of the
Company, either (i) inform the Company of the number of shares of Common Stock
beneficially owned by it or (ii) confirm to the Company that its beneficial
ownership (as calculated above) at the time does not exceed 10%.

 

5.             TRANSFER AGENT INSTRUCTIONS.

 

All of the Purchase Shares to be issued under this Agreement shall be issued
without any restrictive legend unless the Buyer expressly consents otherwise. 
The Company shall issue irrevocable instructions to the Transfer Agent, and any
subsequent transfer agent, to issue Purchase Shares in the name of the Buyer for
the Purchase Shares (the “Irrevocable Transfer Agent Instructions”).  The
Company warrants to the Buyer that no instruction other than the Irrevocable
Transfer Agent Instructions referred to in this Section 5, will be given by the
Company to the Transfer Agent with respect to the Purchase Shares and that the
Commitment Shares and the Purchase Shares shall otherwise be freely transferable
on the books and records of the Company as and to the extent provided in this
Agreement and the Registration Rights Agreement.

 

11

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6.                                      CONDITIONS TO THE COMPANY’S RIGHT TO
COMMENCE SALES OF SHARES OF COMMON STOCK UNDER THIS AGREEMENT.

 

The right of the Company hereunder to commence sales of the Purchase Shares is
subject to the satisfaction of each of the following conditions on or before the
Commencement Date (the date that the Company may begin sales):

 

(a)           The Buyer shall have executed each of the Transaction Documents
and delivered the same to the Company;

 

(b)           No stop order with respect to the Company’s Shelf Registration
Statements shall be pending or threatened by the SEC.

 

7.                                      CONDITIONS TO THE BUYER’S OBLIGATION TO
MAKE PURCHASES OF SHARES OF COMMON STOCK.

 

The obligation of the Buyer to buy Purchase Shares under this Agreement is
subject to the satisfaction of each of the following conditions on or before the
Commencement Date (the date that the Company may begin sales) and once such
conditions have been initially satisfied, there shall not be any ongoing
obligation to satisfy such conditions after the Commencement has occurred:

 

(a)           The Company shall have executed each of the Transaction Documents
and delivered the same to the Buyer;

 

(b)           The Company shall have issued to the Buyer the Commitment Shares;

 

(c)           The Common Stock shall be authorized for quotation on the
Principal Market, trading in the Common Stock shall not have been within the
last 365 days suspended by the SEC or the Principal Market and the Purchase
Shares and the Commitment Shares shall be approved for listing upon the
Principal Market;

 

(d)           The Buyer shall have received the opinions of the Company’s legal
counsel dated as of the Commencement Date substantially in the form of Exhibit A
attached hereto;

 

(e)           The representations and warranties of the Company shall be true
and correct in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in
Section 3 above, in which case, such representations and warranties shall be
true and correct without further qualification) as of the date when made and as
of the Commencement Date as though made at that time (except for representations
and warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied with the covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by the Company at or prior to the Commencement Date.  The Buyer shall have
received a certificate, executed by the CEO, President or CFO of the Company,
dated as of the Commencement Date, to the foregoing effect in the form attached
hereto as Exhibit B;

 

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(f)            The Board of Directors of the Company shall have adopted
resolutions substantially in the form attached hereto as Exhibit C which shall
be in full force and effect without any material amendment or supplement thereto
as of the Commencement Date;

 

(g)           Intentionally Omitted.

 

(h)           The Irrevocable Transfer Agent Instructions, in form acceptable to
the Buyer shall have been delivered to and acknowledged in writing by the
Company and the Company’s Transfer Agent;

 

(i)            The Company shall have delivered to the Buyer a certificate
evidencing the incorporation and good standing of the Company in the State of
Delaware issued by the Secretary of State of the State of Delaware as of a date
within ten (10) Business Days of the Commencement Date;

 

(j)            The Company shall have delivered to the Buyer a certified copy of
the Certificate of Incorporation as certified by the Secretary of State of the
State of Delaware within ten (10) Business Days of the Commencement Date;

 

(k)           The Company shall have delivered to the Buyer a secretary’s
certificate executed by the Secretary of the Company, dated as of the
Commencement Date, in the form attached hereto as Exhibit D;

 

(l)            The Company’s Shelf Registration Statements shall have been
declared effective under the 1933 Act by the SEC and no stop order with respect
thereto shall be pending or threatened by the SEC.  The Company shall have
prepared and delivered to the Buyer a final and complete form of prospectus
supplement, dated and current as of the Commencement Date, to be used in
connection with any sales of any Commitment Shares or any Purchase Shares, and
to be filed by the Company one Business Day after the Commencement Date. The
Company shall have made all filings under all applicable federal and state
securities laws necessary to consummate the issuance of the Commitment Shares
and the Purchase Shares pursuant to this Agreement in compliance with such laws;

 

(m)          No Event of Default has occurred, or any event which, after notice
and/or lapse of time, would become an Event of Default has occurred;

 

(n)           On or prior to the Commencement Date, assuming that at all times
the Buyer maintains its beneficial ownership of the Common Stock, as calculated
under section 13(d) of the 1934 Act and related regulations, at a level below
15%, the Company shall take all necessary action, if any, and such actions as
reasonably requested by the Buyer, in order to render inapplicable any control
share acquisition, business combination, shareholder rights plan or poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Certificate of Incorporation or the laws of
the state of its incorporation which is or could become applicable to the Buyer
as a result of the transactions contemplated by this Agreement, including,
without limitation, the Company’s issuance of the Securities and the Buyer’s
ownership of the Securities; and

 

(o)           The Company shall have provided the Buyer with the information
requested by the Buyer in connection with its due diligence requests made prior
to, or in connection with, the Commencement, in accordance with the terms of
Section 4(f) hereof.

 

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8.                                      INDEMNIFICATION.

 

In consideration of the Buyer’s execution and delivery of the Transaction
Documents and acquiring the Securities hereunder and in addition to all of the
Company’s other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless the Buyer and all of its
affiliates, shareholders, officers, directors and employees and any of the
foregoing person’s agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the “Indemnitees”) from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(b) any breach of any covenant, agreement or obligation of the Company contained
in the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, or (c) any cause of action, suit or claim
brought or made against such Indemnitee and arising out of or resulting from the
execution, delivery, performance or enforcement of the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
other than with respect to Indemnified Liabilities which directly and primarily
result from the gross negligence or willful misconduct of the Indemnitee.  To
the extent that the foregoing undertaking by the Company may be unenforceable
for any reason, the Company shall make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law.

 

9.             EVENTS OF DEFAULT.

 

An “Event of Default” shall be deemed to have occurred at any time as any of the
following events occurs:

 

(a)           while any registration statement is required to be maintained
effective pursuant to the terms of the Registration Rights Agreement, the
effectiveness of such registration statement lapses for any reason (including,
without limitation, the issuance of a stop order) or is unavailable to the Buyer
for sale of all of the Registrable Securities (as defined in the Registration
Rights Agreement) in accordance with the terms of the Registration Rights
Agreement, and such lapse or unavailability continues for a period of ten
(10) consecutive Business Days or for more than an aggregate of thirty (30)
Business Days in any 365-day period;

 

(b)           the suspension from trading or (except as contemplated under
clause (c) below) failure of the Common Stock to be listed on a Principal Market
for a period of three (3) consecutive Business Days;

 

14

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(c)           the delisting of the Common Stock from the Principal Market,
provided, however, that the Common Stock is not immediately thereafter trading
on the New York Stock Exchange, the Nasdaq Global Market, the Nasdaq Global
Select Market, the NYSE Amex Equities or the OTC Bulletin Board;

 

(d)           the failure for any reason by the Transfer Agent to issue Purchase
Shares to the Buyer within five (5) Business Days after the applicable Purchase
Date which the Buyer is entitled to receive;

 

(e)           the Company breaches any representation, warranty, covenant or
other term or condition under any Transaction Document if such breach could have
a Material Adverse Effect and except, in the case of a breach of a covenant
which is reasonably curable, only if such breach continues for a period of at
least five (5) Business Days;

 

(f)            if any Person commences a proceeding against the Company pursuant
to or within the meaning of any Bankruptcy Law ;

 

(g)           if the Company pursuant to or within the meaning of any Bankruptcy
Law; (A) commences a voluntary case, (B) consents to the entry of an order for
relief against it in an involuntary case, (C) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (D) makes a
general assignment for the benefit of its creditors, (E) becomes insolvent, or
(F) is generally unable to pay its debts as the same become due; or

 

(h)           a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that (A) is for relief against the Company in an involuntary
case, (B) appoints a Custodian of the Company or for all or substantially all of
its property, or (C) orders the liquidation of the Company or any Subsidiary.

 

In addition to any other rights and remedies under applicable law and this
Agreement, including the Buyer termination rights under Section 11(k) hereof, so
long as an Event of Default has occurred and is continuing, or if any event
which, after notice and/or lapse of time, would become an Event of Default, has
occurred and is continuing, or so long as the Closing Sale Price is below the
Floor Price (or, to the extent applicable, the Purchase Price is below the Base
Price), the Buyer shall not be obligated to purchase any shares of Common Stock
under this Agreement.  If pursuant to or within the meaning of any Bankruptcy
Law, the Company commences a voluntary case or any Person commences a proceeding
against the Company, a Custodian is appointed for the Company or for all or
substantially all of its property, or the Company makes a general assignment for
the benefit of its creditors, (any of which would be an Event of Default as
described in Sections 9(f), 9(g) and 9(h) hereof) this Agreement shall
automatically terminate without any liability or payment to the Company without
further action or notice by any Person.  No such termination of this Agreement
under Section 11(k)(i) shall affect the Company’s or the Buyer’s obligations
under this Agreement with respect to pending purchases and the Company and the
Buyer shall complete their respective obligations with respect to any pending
purchases under this Agreement.

 

15

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10.          CERTAIN DEFINED TERMS.

 

For purposes of this Agreement, the following terms shall have the following
meanings:

 

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

 

(b)           “Available Amount” means initially Twenty Five Million Dollars
($25,000,000) in the aggregate which amount shall be reduced by the Purchase
Amount each time the Buyer purchases shares of Common Stock pursuant to
Section 1 hereof.

 

(c)           “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal
or state law for the relief of debtors.

 

(d)           “Business Day” means any day on which the Principal Market is open
for trading including any day on which the Principal Market is open for trading
for a period of time less than the customary time.

 

(e)           “Closing Sale Price” means, the last closing trade price for the
Common Stock on the Principal Market as reported by the Principal Market.

 

(f)            “Confidential Information” means any information disclosed by
either party to the other party, either directly or indirectly, in writing,
orally or by inspection of tangible objects (including, without limitation,
documents, prototypes, samples, plant and equipment), which is designated as
“Confidential,” “Proprietary” or some similar designation. Information
communicated orally shall be considered Confidential Information if such
information is confirmed in writing as being Confidential Information within ten
(10) Business Days after the initial disclosure. Confidential Information may
also include information disclosed to a disclosing party by third parties.
Confidential Information shall not, however, include any information which
(i) was publicly known and made generally available in the public domain prior
to the time of disclosure by the disclosing party; (ii) becomes publicly known
and made generally available after disclosure by the disclosing party to the
receiving party through no action or inaction of the receiving party; (iii) is
already in the possession of the receiving party at the time of disclosure by
the disclosing party as shown by the receiving party’s files and records
immediately prior to the time of disclosure; (iv) is obtained by the receiving
party from a third party without a breach of such third party’s obligations of
confidentiality; (v) is independently developed by the receiving party without
use of or reference to the disclosing party’s Confidential Information, as shown
by documents and other competent evidence in the receiving party’s possession;
or (vi) is required by law to be disclosed by the receiving party, provided that
the receiving party gives the disclosing party prompt written notice of such
requirement prior to such disclosure and assistance in obtaining an order
protecting the information from public disclosure.

 

(g)           “Custodian” means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.

 

(h)           “Maturity Date” means August 31, 2012.

 

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(i)            “Person” means an individual or entity including any limited
liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.

 

(j)            “Principal Market” means the Nasdaq Capital Market; provided
however, that in the event the Company’s Common Stock is ever listed or traded
on the Nasdaq Global Market, the Nasdaq Global Select Market, the OTC Bulletin
Board, the New York Stock Exchange or the NYSE Amex Equities, then the
“Principal Market” shall mean such other market or exchange on which the
Company’s Common Stock is then listed or traded.

 

(k)           “Purchase Amount” means, with respect to any particular purchase
made hereunder, the portion of the Available Amount to be purchased by the Buyer
pursuant to Section 1 hereof as set forth in a valid Purchase Notice which the
Company delivers to the Buyer.

 

(l)            “Purchase Date” means with respect to any Purchase made
hereunder, the Business Day of receipt by the Buyer of a valid Purchase Notice
that the Buyer is to buy Purchase Shares pursuant to Section 1 hereof.

 

(m)          “Purchase Notice” shall mean an irrevocable written notice from the
Company to the Buyer directing the Buyer to buy Purchase Shares as specified by
the Company therein at the applicable Purchase Price on the Purchase Date.

 

(n)           “Purchase Price” means the lower of the (A) the lowest Sale Price
of the Common Stock on the Purchase Date and (B) the arithmetic average of the
three (3) lowest Closing Sale Prices for the Common Stock during the twelve (12)
consecutive Business Days ending on the Business Day immediately preceding such
Purchase Date (to be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction).

 

(o)           “Sale Price” means, any trade price for the shares of Common Stock
on the Principal Market as reported by the Principal Market.

 

(p)           “SEC” means the United States Securities and Exchange Commission.

 

(q)           “Transfer Agent” means the transfer agent of the Company as set
forth in Section 11(f) hereof or such other person who is then serving as the
transfer agent for the Company in respect of the Common Stock.

 

11.          MISCELLANEOUS.

 

(a)           Governing Law; Jurisdiction; Jury Trial.  The corporate laws of
the State of Delaware shall govern all issues concerning the relative rights of
the Company and its shareholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Agreement and the
other Transaction Documents shall be governed by the internal laws of the State
of Illinois, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Illinois or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of Illinois.  Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and

 

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federal courts sitting in the City of Chicago, for the adjudication of any
dispute hereunder or under the other Transaction Documents or in connection
herewith or therewith, or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. 
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

 

(b)           Counterparts.  This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.

 

(c)           Headings.  The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

 

(d)           Severability.  If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

 

(e)           Entire Agreement.  With the exception of the Mutual Nondisclosure
Agreement between the parties dated as of June 28, 2010, this Agreement
supersedes all other prior oral or written agreements between the Buyer, the
Company, their affiliates and persons acting on their behalf with respect to the
matters discussed herein, and this Agreement, the other Transaction Documents
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 Buyer
makes any representation, warranty, covenant or undertaking with respect to such
matters.  The Company acknowledges and agrees that is has not relied on, in any
manner whatsoever, any representations or statements, written or oral, other
than as expressly set forth in this Agreement.

 

(f)            Notices.  Any notices, consents or other communications required
or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (i) upon receipt when delivered
personally; (ii) upon receipt when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be:

 

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If to the Company:

Beacon Power Corporation

65 Middlesex Road

Tyngsboro, MA 01879

Phone: 978-694-9121

Fax:     978-694-9127

Attention:  Chief Financial Officer

 

With a copy to:

Edwards Angell Palmer & Dodge LLP

111 Huntington Avenue

Boston, MA 02199-7613

Telephone:

617-239-0100

Facsimile:

617-227-4420

Attention:

Albert L. Sokol, Esq.

 

If to the Buyer:

Aspire Capital Fund, LLC

155 North Wacker Drive, Suite 1600

Chicago, IL 60606

Telephone:

312-658-0400

Facsimile:

312-658-4005

Attention:

Steven G. Martin

 

If to the Transfer Agent:

Computershare Limited

250 Royall Street

Canton, MA 02021

Telephone:  781-575-4179

Facsimile: 781-575-2549

Attention:  Monique Hughes

 

or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party one (1) Business Day prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of such
notice, consent or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, and
recipient facsimile number or (C) provided by a nationally recognized overnight
delivery service, shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.  Any party to
this Agreement may give any notice or other communication hereunder using any
other means (including messenger service, ordinary mail or electronic mail), but
no such notice or other communication shall be deemed to have duly given unless
it actually is received by the party for whom it is intended.

 

(g)                                 Successors and Assigns.  This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns.  The Company shall not assign this Agreement

 

19

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or any rights or obligations hereunder without the prior written consent of the
Buyer, including by merger or consolidation.  The Buyer may not assign its
rights or obligations under this Agreement.

 

(h)                                 No Third Party Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.

 

(i)                                     Publicity.  The Buyer shall have the
right to approve before issuance any press release, SEC filing or any other
public disclosure made by or on behalf of the Company whatsoever with respect
to, in any manner, the Buyer, its purchases hereunder or any aspect of this
Agreement or the transactions contemplated hereby; provided, however, that the
Company shall be entitled, without the prior approval of the Buyer, to make any
press release or other public disclosure (including any filings with the SEC)
with respect to such transactions as is required by applicable law and
regulations so long as the Company and its counsel consult with the Buyer in
connection with any such press release or other public disclosure at least two
(2) Business Days prior to its release.  The Buyer must be provided with a copy
thereof at least two (2) Business Days prior to any release or use by the
Company thereof.

 

(j)                                     Further Assurances.  Each party shall do
and perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

 

(k)                                  Termination.  This Agreement may be
terminated only as follows:

 

(i)                                     By the Buyer any time an Event of
Default exists without any liability or payment to the Company.  However, if
pursuant to or within the meaning of any Bankruptcy Law, the Company commences a
voluntary case or any Person commences a proceeding against the Company, a
Custodian is appointed for the Company or for all or substantially all of its
property, or the Company makes a general assignment for the benefit of its
creditors, (any of which would be an Event of Default as described in Sections
9(f), 9(g) and 9(h) hereof) this Agreement shall automatically terminate without
any liability or payment to the Company without further action or notice by any
Person.  No such termination of this Agreement under this Section 11(k)(i) shall
affect the Company’s or the Buyer’s obligations under this Agreement with
respect to pending purchases and the Company and the Buyer shall complete their
respective obligations with respect to any pending purchases under this
Agreement.

 

(ii)                                  In the event that the Commencement shall
not have occurred, the Company shall have the option to terminate this Agreement
for any reason or for no reason without any liability whatsoever of any party to
any other party under this Agreement.

 

(iii)                               In the event that the Commencement shall not
have occurred on or before August 1, 2010, due to the failure to satisfy the
conditions set forth in Sections 6 and 7 above with respect to the Commencement,
the non-breaching party shall have the option to terminate this Agreement at the
close of business on such date or thereafter without liability of any party to
any other party.

 

20

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(iv)                              At any time after the Commencement Date, the
Company shall have the option to terminate this Agreement for any reason or for
no reason by delivering notice (a “Company Termination Notice”) to the Buyer
electing to terminate this Agreement without any liability whatsoever of any
party to any other party under this Agreement.  The Company Termination Notice
shall not be effective until one (1) Business Day after it has been received by
the Buyer.

 

(v)                                 This Agreement shall automatically terminate
on the date that the Company sells and the Buyer purchases the full Available
Amount as provided herein, without any action or notice on the part of any party
and without any liability whatsoever of any party to any other party under this
Agreement.

 

(vi)                              If by the Maturity Date for any reason or for
no reason the full Available Amount under this Agreement has not been purchased
as provided for in Section 1 of this Agreement, this Agreement shall
automatically terminate on the Maturity Date, without any action or notice on
the part of any party and without any liability whatsoever of any party to any
other party under this Agreement. In such case, the Buyer shall be required to
immediately pay to the Company a termination fee (the “Termination Fee”), equal
to the number of Commitment Shares multiplied by $0.324 multiplied by Unfunded
Amount Percentage (as defined below).  The Termination Fee may, at the election
of the Buyer, be paid in cash or in shares of common stock valued at $0.324 per
share. “Unfunded Amount Percentage” means the percentage of the Aggregate Amount
that the Company did not receive from the Buyer during the term of this
Agreement.

 

Except as set forth in Sections 11(k)(i) (in respect of an Event of Default
under Sections 9(f), 9(g) and 9(h)) and 11(k)(vi), any termination of this
Agreement pursuant to this Section 11(k) shall be effected by written notice
from the Company to the Buyer, or the Buyer to the Company, as the case may be,
setting forth the basis for the termination hereof.  The representations and
warranties of the Company and the Buyer contained in Sections 2, 3 and 5 hereof,
the indemnification provisions set forth in Section 8 hereof and the agreements
and covenants set forth in Section 11, shall survive the Commencement and any
termination of this Agreement.  No termination of this Agreement shall affect
the Company’s or the Buyer’s rights or obligations (i) under the Registration
Rights Agreement which shall survive any such termination or (ii) under this
Agreement with respect to pending purchases and the Company and the Buyer shall
complete their respective obligations with respect to any pending purchases
under this Agreement.

 

(l)                                     No Financial Advisor, Placement Agent,
Broker or Finder.  The Company represents and warrants to the Buyer that it has
not engaged any financial advisor, placement agent, broker or finder in
connection with the transactions contemplated hereby.  The Buyer represents and
warrants to the Company that it has not engaged any financial advisor, placement
agent, broker or finder in connection with the transactions contemplated
hereby.  The Company shall be responsible for the payment of any fees or
commissions, if any, of any financial advisor, placement agent, broker or finder
relating to or arising out of the transactions contemplated hereby.  The Company
shall pay, and hold the Buyer harmless against, any liability, loss or expense
(including, without limitation, attorneys’ fees and out of pocket expenses)
arising in connection with any such claim.

 

21

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(m)                               No Strict Construction.  The language used in
this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be applied
against any party.

 

(n)                                 Remedies, Other Obligations, Breaches and
Injunctive Relief.  Each party’s remedies provided in this Agreement shall be
cumulative and in addition to all other remedies available to it under this
Agreement, at law or in equity (including a decree of specific performance
and/or other injunctive relief), no remedy of either party contained herein
shall be deemed a waiver of compliance with the provisions giving rise to such
remedy and nothing herein shall limit either party’s right to pursue actual
damages for any failure by other party to comply with the terms of this
Agreement.  Each party acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the other and that the remedy at law
for any such breach may be inadequate.  Each party therefore agrees that, in the
event of any such breach or threatened breach, the other party shall be
entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.

 

(0)                                  Enforcement Costs.  If: (i) this Agreement
is placed by the Buyer in the hands of an attorney for enforcement or is
enforced by the Buyer through any legal proceeding; or (ii) an attorney is
retained to represent the Buyer in any bankruptcy, reorganization, receivership
or other proceedings affecting creditors’ rights and involving a claim under
this Agreement; or (iii) an attorney is retained to represent the Buyer in any
other proceedings whatsoever in connection with this Agreement, then the Company
shall pay to the Buyer, as incurred by the Buyer, all reasonable costs and
expenses including attorneys’ fees incurred in connection therewith, in addition
to all other amounts due hereunder.

 

(p)                                 Failure or Indulgence Not Waiver.  No
failure or delay in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege.

 

*     *     *     *     *

 

22

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IN WITNESS WHEREOF, the Buyer and the Company have caused this Common Stock
Purchase Agreement to be duly executed as of the date first written above.

 

 

 

THE COMPANY:

 

 

 

BEACON POWER CORPORATION

 

 

 

By:

/s/ James M. Spiezio

 

Name:

James M. Spiezio

 

Title:

Chief Financial Officer

 

 

 

 

 

BUYER:

 

 

 

ASPIRE CAPITAL FUND, LLC

 

BY: ASPIRE CAPITAL PARTNERS, LLC

 

BY: SGM HOLDINGS CORP.

 

 

 

By:

/s/ Steven G. Martin

 

Name:

Steven G. Martin

 

Title:

President

 

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SCHEDULES

 

Schedule
3(a)                                                                       
Subsidiaries

Schedule
3(c)                                                                       
Capitalization

Schedule
3(e)                                                                       
Conflicts

Schedule
3(f)                                                                         
1934 Act Filings

Schedule
3(g)                                                                      
Material Changes

Schedule
3(h)                                                                      
Litigation

Schedule
3(j)                                                                          
Intellectual Property

Schedule
3(l)                                                                          
Liens

Schedule
3(p)                                                                      
Certain Transactions

 

EXHIBITS

 

Exhibit A                                                                                              
Form of Company Counsel Opinion

Exhibit B                                                                                                
Form of Officer’s Certificate

Exhibit C                                                                                                
Form of Resolutions of Board of Directors of the Company

Exhibit D                                                                                               
Form of Secretary’s Certificate

 

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DISCLOSURE SCHEDULES

 

Schedule 3(a) — Subsidiaries

 

Schedule 3(c) - Capitalization

 

Schedule 3(e) - No Conflicts

 

Schedule 3(f) - 1934 Act Filings

 

Schedule 3(g) - Absence of Certain Changes

 

Schedule 3(h) - Litigation

 

Schedule 3(j) - Intellectual Property Rights

 

Schedule 3(l) - Title

 

Schedule 3(p) - Transactions with Affiliates

 

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EXHIBIT A

 

FORM OF COMPANY COUNSEL OPINION

 

Capitalized terms used herein but not defined herein, have the meaning set forth
in the Common Stock Purchase Agreement.  Based on the foregoing, and subject to
the assumptions and qualifications set forth herein, we are of the opinion that:

 

1.               The Company is a corporation existing and in good standing
under the laws of the State of Delaware.  The Company is qualified to do
business as a foreign corporation and is in good standing in the States of
                                                    .

 

2.               The Company has the corporate power to execute and deliver, and
perform its obligations under, each Transaction Document to which it is a
party.  The Company has the corporate power to conduct its business as, to the
best of our knowledge, it is now conducted, and to own and use the properties
owned and used by it.

 

3.               The execution, delivery and performance by the Company of the
Transaction Documents to which it is a party have been duly authorized by all
necessary corporate action on the part of the Company.  The execution and
delivery of the Transaction Documents by the Company, the performance of the
obligations of the Company thereunder and the consummation by it of the
transactions contemplated therein have been duly authorized and approved by the
Company’s Board of Directors and no further consent, approval or authorization
of the Company, its Board of Directors or its stockholders is required.  The
Transaction Documents to which the Company is a party have been duly executed
and delivered by the Company and are the valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, liquidation or similar laws relating to, or
affecting creditor’s rights and remedies.

 

4.               The execution, delivery and performance by the Company of the
Transaction Documents, the consummation by the Company of the transactions
contemplated thereby including the offering, sale and issuance of the Commitment
Shares, and the Purchase Shares in accordance with the terms and conditions of
the Common Stock Purchase Agreement, and fulfillment and compliance with terms
of the Transaction Documents, does not and shall not: (i) conflict with,
constitute a breach of or default (or an event which, with the giving of notice
or lapse of time or both, constitutes or could constitute a breach or a
default), under (a) the Certificate of Incorporation or the Bylaws of the
Company, or (b) any material agreement, note, lease, mortgage, deed or other
material instrument to which to our knowledge the Company is a party or by which
the Company or any of its assets are bound, (ii) result in any violation of any
statute, law, rule or regulation applicable to the Company, or (iii) to our
knowledge, violate any order, writ, injunction or decree applicable to the
Company or any of its subsidiaries.

 

5.               The issuance of the Purchase Shares and Commitment Shares
pursuant to the terms and conditions of the Transaction Documents has been duly
authorized and the Commitment Shares are validly issued, fully paid and
non-assessable, to our knowledge, free of all taxes, liens, charges,
restrictions, rights of first refusal and preemptive rights. When issued and
paid for in accordance with the Common Stock Purchase Agreement, the Purchase
Shares shall be validly issued, fully paid and non-assessable, to our knowledge,
free of all taxes, liens, charges, restrictions, rights of first refusal and

 

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preemptive rights.  To our knowledge, the execution and delivery of the
Registration Rights Agreement do not, and the performance by the Company of its
obligations thereunder shall not, give rise to any rights of any other person
for the registration under the 1933 Act of any shares of Common Stock or other
securities of the Company which have not been waived.

 

6.               As of the date hereof, the authorized capital stock of the
Company consists of 400 million shares of common stock, par value $0.01 per
share.  Except as set forth on Schedule 3(c) of the Common Stock Purchase
Agreement, to our knowledge, there are no outstanding shares of capital stock or
other securities convertible into or exchangeable or exercisable for shares of
the capital stock of the Company.

 

7.               Other than that which has been obtained and completed prior to
the date hereof, and except as contemplated by the Common Stock Purchase
Agreement and the Registration Rights Agreement, no authorization, approval,
consent, filing or other order of any federal or state governmental body,
regulatory agency, or stock exchange or market, or any court, or, to our
knowledge, any third party is required to be obtained by the Company to enter
into and perform its obligations under the Transaction Documents or for the
Company to issue and sell the Commitment Shares and the Purchase Shares as
contemplated by the Transaction Documents.

 

8.  The Common Stock is registered pursuant to Section 12(b) of the 1934 Act. 
To our knowledge, since January 1, 2009, the Company has been in compliance with
the reporting requirements of the 1934 Act applicable to it.  To our knowledge,
since January 1, 2009, the Company has not received any written notice from the
Principal Market stating that the Company has not been in compliance with any of
the rules and regulations (including the requirements for continued listing) of
the Principal Market, except as disclosed in its filings with the SEC.

 

We further advise you that to our knowledge, except as disclosed on Schedule
3(h) in the Common Stock Purchase Agreement, there is no action, suit,
proceeding, inquiry or investigation before or by any court, public board or
body, any governmental agency, any stock exchange or market, or self-regulatory
organization, which has been threatened in writing or which is currently pending
against the Company, any of its subsidiaries, any officers or directors of the
Company or any of its subsidiaries or any of the properties of the Company or
any of its subsidiaries.

 

In addition, we have participated in the preparation of the Registration
Statement (SEC File #                ) covering the sale of the Purchase Shares,
the Commitment Shares including the prospectus supplement dated
                        , contained therein and in conferences with officers and
other representatives of the Company (including the Company’s independent
auditors) during which the contents of the Registration Statement and related
matters were discussed and reviewed and, although we are not passing upon and do
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement, on the basis of the
information that was developed in the course of the performance of the services
referred to above, considered in the light of our understanding of the
applicable law, nothing came to our attention that caused us to believe that the
Registration Statement (other than the financial statements and schedules and
the other financial and statistical data included therein, as to which we
express no belief), as of their dates, contained any untrue statement of a
material fact or omitted to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.

 

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EXHIBIT B

 

FORM OF OFFICER’S CERTIFICATE

 

This Officer’s Certificate (“Certificate”) is being delivered pursuant to
Section 7(e) of that certain Common Stock Purchase Agreement dated as of
                  , (“Common Stock Purchase Agreement”), by and between BEACON
POWER CORPORATION, a Delaware corporation (the “Company”), and ASPIRE CAPITAL
FUND, LLC (the “Buyer”).  Terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Common Stock Purchase Agreement.

 

The undersigned,                       ,                              of the
Company, hereby certifies as follows:

 

1.                                       I am the                            of
the Company and make the statements contained in this Certificate;

 

2.                                       The representations and warranties of
the Company are true and correct in all material respects (except to the extent
that any of such representations and warranties is already qualified as to
materiality in Section 3 of the Common Stock Purchase Agreement, in which case,
such representations and warranties are true and correct without further
qualification) as of the date when made and as of the Commencement Date as
though made at that time (except for representations and warranties that speak
as of a specific date);

 

3.                                       The Company has performed, satisfied
and complied in all material respects with covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by the Company at or prior to the Commencement Date.

 

4.                                       The Company has not taken any steps,
and does not currently expect to take any steps, to seek protection pursuant to
any Bankruptcy Law nor does the Company or any of its Subsidiaries have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy or insolvency proceedings. The Company is financially solvent and is
generally able to pay its debts as they become due.

 

IN WITNESS WHEREOF, I have hereunder signed my name on this        day of
                      .

 

 

 

 

Name:

 

Title:

 

The undersigned as Secretary of                 , a                 
corporation, hereby certifies that                        is the duly elected,
appointed, qualified and acting                  of                    and that
the signature appearing above is his genuine signature.

 

 

 

 

Secretary

 

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EXHIBIT C

 

FORM OF COMPANY RESOLUTIONS

FOR SIGNING PURCHASE AGREEMENT

 

UNANIMOUS WRITTEN CONSENT OF

BEACON POWER CORPORATION

 

Pursuant to Section              of the                   , the undersigned,
being all of the directors of BEACON POWER CORPORATION, a Delaware corporation
(the “Corporation”) do hereby consent to and adopt the following resolutions as
the action of the Board of Directors for and on behalf of the Corporation and
hereby direct that this Consent be filed with the minutes of the proceedings of
the Board of Directors:

 

WHEREAS, there has been presented to the Board of Directors of the Corporation a
draft of the Common Stock Purchase Agreement (the “Purchase Agreement”) by and
between the Corporation and Aspire Capital Fund, LLC (“Aspire”), providing for
the purchase by Aspire of up to Twenty Five Million Dollars ($25,000,000) of the
Corporation’s common stock, par value $.01 (the “Common Stock”); and

 

WHEREAS, after careful consideration of the Purchase Agreement, the documents
incident thereto and other factors deemed relevant by the Board of Directors,
the Board of Directors has determined that it is advisable and in the best
interests of the Corporation to engage in the transactions contemplated by the
Purchase Agreement, including, but not limited to, the issuance of
                   shares of Common Stock to Aspire as a commitment fee (the
“Commitment Shares”) and the sale of shares of Common Stock to Aspire up to the
available amount under the Purchase Agreement (the “Purchase Shares”).

 

Transaction Documents

 

NOW, THEREFORE, BE IT RESOLVED, that the transactions described in the Purchase
Agreement are hereby approved and
                                                                                
(the “Authorized Officers”) are severally authorized to execute and deliver the
Purchase Agreement, and any other agreements or documents contemplated thereby
including, without limitation, a registration rights agreement (the
“Registration Rights Agreement”) providing for the registration of the shares of
the Company’s Common Stock issuable in respect of the Purchase Agreement on
behalf of the Corporation, with such amendments, changes, additions and
deletions as the Authorized Officers may deem to be appropriate and approve on
behalf of, the Corporation, such approval to be conclusively evidenced by the
signature of an Authorized Officer thereon; and

 

FURTHER RESOLVED, that the Authorized Officers are hereby authorized to approve
any amendments or supplements to the prospectus or prospectuses forming a part
of the Company’s outstanding shelf registration statements in Form S-3, and to
file or cause to be filed the same in order to cover the offer and sale of the
Commitment Shares and the Purchase Shares under the Purchase Agreement; and that
terms and provisions of the Registration Rights Agreement by and among the
Corporation and Aspire are hereby approved and the Authorized Officers are
authorized to execute and deliver the Registration Rights Agreement (pursuant to
the terms of the Purchase Agreement), with such amendments, changes, additions
and deletions as the Authorized Officer may deem appropriate

 

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and approve on behalf of, the Corporation, such approval to be conclusively
evidenced by the signature of an Authorized Officer thereon; and

 

FURTHER RESOLVED, that the terms and provisions of the Form of Transfer Agent
Instructions (the “Instructions”) are hereby approved and the Authorized
Officers are authorized to execute and deliver the Instructions (pursuant to the
terms of the Purchase Agreement), with such amendments, changes, additions and
deletions as the Authorized Officers may deem appropriate and approve on behalf
of, the Corporation, such approval to be conclusively evidenced by the signature
of an Authorized Officer thereon; and

 

Execution of Purchase Agreement

 

FURTHER RESOLVED, that the Corporation be and it hereby is authorized to execute
the Purchase Agreement providing for the purchase of common stock of the
Corporation having an aggregate value of up to $20,000,000; and

 

Issuance of Common Stock

 

FURTHER RESOLVED, that the Corporation is hereby authorized to issue
                 shares of Common Stock to Aspire Capital Fund, LLC as
Commitment Shares and that upon issuance of the Commitment Shares pursuant to
the Purchase Agreement, the Commitment Shares shall be duly authorized, validly
issued, fully paid and nonassessable with no personal liability attaching to the
ownership thereof; and

 

FURTHER RESOLVED, that the Corporation is hereby authorized to issue shares of
Common Stock upon the purchase of Purchase Shares up to the available amount
under the Purchase Agreement in accordance with the terms of the Purchase
Agreement and that, upon issuance of the Purchase Shares pursuant to the
Purchase Agreement, the Purchase Shares will be duly authorized, validly issued,
fully paid and nonassessable with no personal liability attaching to the
ownership thereof; and

 

FURTHER RESOLVED, that the Corporation shall initially reserve
                     shares of Common Stock for issuance as Purchase Shares
under the Purchase Agreement.

 

Listing Of The Shares On The Nasdaq Capital Market

 

FURTHER RESOLVED, that the officers of the Corporation with the assistance of
counsel be, and each of them hereby is, authorized and directed to take all
necessary steps and do all other things necessary and appropriate to effect the
listing of the Shares on the Nasdaq Capital Market.

 

Approval of Actions

 

FURTHER RESOLVED, that, without limiting the foregoing, the Authorized Officers
are, and each of them hereby is, authorized and directed to proceed on behalf of
the Corporation and to take all such steps as deemed necessary or appropriate,
with the advice and assistance of counsel, to cause the Corporation to
consummate the agreements referred to herein and to perform its obligations
under such agreements; and

 

FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby is,
authorized, empowered and directed on behalf of and in the name of the
Corporation, to take or cause to be taken

 

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all such further actions and to execute and deliver or cause to be executed and
delivered all such further agreements, amendments, documents, certificates,
reports, schedules, applications, notices, letters and undertakings and to incur
and pay all such fees and expenses as in their judgment shall be necessary,
proper or desirable to carry into effect the purpose and intent of any and all
of the foregoing resolutions, and that all actions heretofore taken by any
officer or director of the Corporation in connection with the transactions
contemplated by the agreements described herein are hereby approved, ratified
and confirmed in all respects.

 

IN WITNESS WHEREOF, the Board of Directors has executed and delivered this
Consent effective as of                     , 2010.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

being all of the directors of BEACON POWER CORPORATION.

 

EXHIBIT D

 

FORM OF SECRETARY’S CERTIFICATE

 

This Secretary’s Certificate (“Certificate”) is being delivered pursuant to
Section 7(k) of that certain Common Stock Purchase Agreement dated as of
                    , (“Common Stock Purchase Agreement”), by and between BEACON
POWER CORPORATION, a Delaware corporation (the “Company”) and ASPIRE CAPITAL
FUND, LLC (the “Buyer”), pursuant to which the Company may sell to the Buyer up
to Twenty Five Million Dollars ($25,000,000) of the Company’s Common Stock, par
value $.01 per share (the “Common Stock”).  Terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Common Stock Purchase
Agreement.

 

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The undersigned,                         , Secretary of the Company, hereby
certifies as follows:

 

1.                                       I am the Secretary of the Company and
make the statements contained in this Secretary’s Certificate.

 

2.                                       Attached hereto as Exhibit A and
Exhibit B are true, correct and complete copies of the Company’s bylaws
(“Bylaws”) and Certificate of Incorporation (“Articles”), in each case, as
amended through the date hereof, and no action has been taken by the Company,
its directors, officers or shareholders, in contemplation of the filing of any
further amendment relating to or affecting the Bylaws or Articles.

 

3.                                       Attached hereto as Exhibit C are true,
correct and complete copies of the resolutions duly adopted by the Board of
Directors of the Company on                           , at which a quorum was
present and acting throughout.  Such resolutions have not been amended, modified
or rescinded and remain in full force and effect and such resolutions are the
only resolutions adopted by the Company’s Board of Directors, or any committee
thereof, or the shareholders of the Company relating to or affecting (i) the
entering into and performance of the Common Stock Purchase Agreement, or the
issuance, offering and sale of the Purchase Shares and the Commitment Shares and
(ii) and the performance of the Company of its obligation under the Transaction
Documents as contemplated therein.

 

4.                                       As of the date hereof, the authorized,
issued and reserved capital stock of the Company is as set forth on Exhibit D
hereto.

 

IN WITNESS WHEREOF, I have hereunder signed my name on this        day of
                        .

 

 

 

 

Secretary

 

The undersigned as                        of                     , a
                 corporation, hereby certifies that                          is
the duly elected, appointed, qualified and acting Secretary of
                  , and that the signature appearing above is his genuine
signature.

 

 

 

 

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