Document:

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THE SECURITIES EVIDENCED BY THIS WARRANT CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
BE SOLD, TRANSFERRED, OR ASSIGNED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF SUCH SECURITIES REASONABLY SATISFACTORY TO
THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

THE SALE OR TRANSFER AND CERTAIN OTHER RIGHTS RELATING TO THE SECURITIES
REPRESENTED BY THIS DOCUMENT ARE SUBJECT TO THE TERMS AND CONDITIONS OF A
CERTAIN INVESTOR RIGHTS AGREEMENT BY AND AMONG THE COMPANY AND CERTAIN
SHAREHOLDERS OF THE COMPANY. A COPY OF SUCH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICE OF THE COMPANY.

No.:  GE-1

                                     WARRANT
                            TO PURCHASE COMMON STOCK
                                       OF
                            BEACON POWER CORPORATION

                          (void after October 24, 2005)

         1. ISSUANCE OF WARRANT. FOR VALUE RECEIVED, on and after the date of
issuance of this Warrant, and subject to the terms and conditions herein set
forth, the Holder (as defined below) is entitled to purchase from Beacon Power
Corporation, a Delaware corporation (the "Company"), at any time before 5:00
p.m. New York time on October 24, 2005 (the "Termination Date"), at a price per
share equal to $4.20 (the "Warrant Price") (subject to adjustment as described
below), 120,000 shares of the Common Stock, $.01 par value per share (the
"Warrant Stock") upon exercise of this warrant (this "Warrant") subject to and
pursuant to Section 6 hereof. This Warrant is issued pursuant to the CR&D
Agreement (as defined below).

         2. DEFINITIONS. As used in this Warrant, the following terms have the
definitions ascribed to them below:

                  (a) "Additional Stock" is defined in Section 3(d)(iv).

                  (b) "Business Day" means any day other than a Saturday, Sunday
or other day on which the national or state banks located in the State of
Massachusetts or the State of New York are authorized to be closed.

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                  (c) "Change-In-Control Event" means the occurrence after the
Commencement Date of any of the following: (i) the acquisition of voting
securities of the Company by any person or group of persons that results in such
person or group, together with its affiliates, becoming, directly or indirectly,
the beneficial owner of in excess of 50% of the outstanding voting securities of
the Company; (ii) a merger or consolidation of the Company with any other
corporation or legal entity regardless of which entity is the survivor, other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or being converted into voting securities of
the surviving entity) in excess of 50% of the voting securities of the Company
or such surviving entity outstanding immediately after such merger or
consolidation; or (iii) the sale or disposition of all or substantially all of
the Company's assets other than in a transaction in which holders of the voting
securities of the Company immediately prior to such transaction receive voting
securities of the acquiror of such assets or its affiliate that represent in
excess of 50% of the voting securities of such entity after consummation of such
transaction.

                  (d) "Commencement Date" means the date of issue of this
Warrant.

                  (e) "Common Stock" means the Company's Common Stock, $.01 par
value per share.

                  (f) "Holder" means GE Capital Equity Investments, Inc., or its
assigns.

         3. ADJUSTMENTS AND NOTICES. The Warrant Price and/or the number of
shares of Warrant Stock shall be subject to adjustment from time to time in
accordance with this Section 3. The Warrant Price and/or the number of Warrant
Shares shall be adjusted to reflect all of the following events that occur on or
after the Commencement Date.

                  (a) SUBDIVISION, STOCK DIVIDENDS OR COMBINATIONS. In case the
Company shall at any time subdivide the outstanding shares of Warrant Stock or
shall issue a stock dividend with respect to the Warrant Stock, the Warrant
Price in effect immediately prior to such subdivision or the issuance of such
dividend shall be proportionately decreased, and in case the Company shall at
any time combine the outstanding shares of the Warrant Stock, the Warrant Price
in effect immediately prior to such combination shall be proportionately
increased, in each case effective at the close of business on the date of such
subdivision, dividend or combination, as the case may be.

                  (b) RECLASSIFICATION, EXCHANGE, SUBSTITUTION, IN-KIND
DISTRIBUTION. Upon any reclassifications, exchange, substitution or other event
that results in a change of the number and/or class of the securities issuable
upon exercise or conversion of this Warrant or upon the payment of a dividend in
securities or property other than shares of Warrant Stock, the Holder shall be
entitled to receive, upon exercise or conversion of this Warrant, the number and
kind of securities and property that Holder would have received if this Warrant
had been exercised or converted immediately before the record date for such
reclassification, exchange, substitution, or other event or immediately prior to
the record date for such dividend. The Company or its successor shall promptly
issue to Holder a new warrant for such new securities or other property.

                                      - 2 -

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The new warrant shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
3 including, without limitation, adjustments to the Warrant Price and to the
number of securities or property issuable upon exercise or conversion of the new
warrant. The provisions of this Section 3(b) shall similarly apply to successive
reclassifications, exchanges, substitutions, or other events and successive
dividends.

                  (c) REORGANIZATION, MERGER ETC. In case of any
Change-In-Control Event, the Company, or such successor or purchasing
corporation, as the case may be, shall, as a condition to closing any such
reorganization, merger or sale, duly execute and deliver to the Holder hereof a
new warrant so that the Holder shall have the right to receive, at a total
purchase price not to exceed that payable upon the exercise or conversion of the
unexercised or unconverted portion of this Warrant, and in lieu of the shares of
the Warrant Stock theretofore issuable upon exercise or conversion of this
Warrant, the kind and amount of shares of stock, other securities, money and
property receivable upon such reorganization, merger or sale by the Holder of
the number of shares of Warrant Stock then purchasable under this Warrant. Such
new warrant shall provide for adjustments that shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 3. The
provisions of this subparagraph (c) shall similarly apply to successive
Change-In-Control Events.

                  (d) DILUTIVE ISSUANCES ADJUSTMENT OF NUMBER OF SHARES AND
WARRANT PRICE. In order to prevent dilution of the rights granted under this
Warrant, the number of shares of Warrant Stock obtainable upon exercise of this
Warrant and the Warrant Price shall be subject to adjustment from time to time
as provided in this Section 3(d).

         (i) ADJUSTMENT OF WARRANT PRICE UPON ISSUANCE OF ADDITIONAL STOCK. If
and whenever after the Commencement Date, the Company issues, or in accordance
with Section 3(d)(ii) is deemed to have issued, any Additional Stock to any
person for a consideration per share less than the Warrant Price then in effect,
then the Warrant Price in effect immediately before each such issuance shall
forthwith be adjusted to a price determined by multiplying such Warrant Price by
a fraction, the NUMERATOR of which shall be the number of shares of Common Stock
outstanding immediately prior to such issuance plus the number of shares of
Common Stock that the aggregate consideration received by the Company for such
issuance would purchase at such Warrant Price; and the DENOMINATOR of which
shall be the number of shares of Common Stock outstanding immediately prior to
such issuance plus the number of shares of such Additional Stock. In addition,
upon each adjustment of the Exercise Price under this Section 3, the number of
Warrant Shares acquirable upon the exercise of this Warrant shall be adjusted to
equal the number of shares determined by multiplying the Exercise Price in
effect immediately prior to the adjustment of the Warrant Price by the number of
Warrant Shares acquirable upon exercise of this Warrant immediately prior to the
adjustment of the Warrant Price and dividing the product thereof by the Exercise
Price resulting from the adjustment of the Warrant Price.

                           (ii) EFFECT OF CERTAIN EVENTS.  For purposes of
determining under Section (d)(i) the adjusted number of shares of Warrant Stock
acquirable upon exercise of this Warrant, the following shall be applicable:

                                     - 3 -
<PAGE>

                                    (A) ISSUANCE OF RIGHTS OR OPTIONS.  If the
         Company in any manner issues, grants or sells (or otherwise becomes
         subject to) any options, rights, or warrants (collectively, "Options")
         to purchase Common Stock or securities that are convertible into or
         exchangeable for Common Stock ("Convertible Securities"), then the
         total maximum number of shares of Common Stock issuable upon the
         exercise of such Options or upon conversion or exchange of the total
         maximum amount of such Convertible Securities issuable upon the
         exercise of such Options shall be deemed to have been sold on the date
         of issuance, grant or sale of such Options and to be outstanding, and
         the total maximum consideration receivable for such issue, grant and
         sale of the Options, Convertible Securities and Common Stock shall be
         deemed to have been received by the Company.

                                    (B) ISSUANCE OF CONVERTIBLE SECURITIES. If
         the Company in any manner grants, issues or sells (or otherwise becomes
         subject to) any Convertible Securities, then the maximum number of
         shares of Common Stock issuable upon conversion or exchange of such
         Convertible Securities shall be deemed to have been sold on the date of
         issuance, grant or sale of such Convertible Securities and to be
         outstanding, and the total maximum consideration receivable for such
         grant, issue and sale of the Convertible Securities and Common Stock
         shall be deemed to have been received by the Company.

                                    (C) TREATMENT OF EXPIRED OPTIONS AND
         UNEXERCISED CONVERTIBLE SECURITIES. Upon the expiration of any Option
         or the termination of any right to convert or exchange any Convertible
         Securities without the exercise of such Option or right, the number of
         shares of Warrant Stock acquirable hereunder shall be adjusted to the
         number of shares which would have been in effect at the time of such
         expiration or termination had such Option or Convertible Securities, to
         the extent outstanding immediately prior to such expiration or
         termination, never been issued and the consideration for such exercise
         never been received.

                                    (D) TREASURY SHARES. The number of shares of
         Common Stock outstanding at any given time does not include shares
         owned or held by or for the account of the Company or any Subsidiary,
         and the disposition of any shares so owned or held shall be considered
         an issuance or sale of Common Stock.

                                    (E) RECORD DATE. If the Company takes a
         record of the holders of Common Stock for the purpose of entitling them
         (A) to receive a dividend or other distribution payable in Common
         Stock, Options or in Convertible Securities or (B) to subscribe for or
         purchase Common Stock, Options or Convertible Securities, then such
         record date shall be deemed to be the date of the issue or sale of the
         shares of Common Stock deemed to have been issued or sold upon the
         declaration of such dividend or the making of such other distribution
         or the date of the granting of such right of subscription or purchase,
         as the case may be.

                                     - 4 -
<PAGE>

                           (iii) In the case of the issuance of Additional Stock
for cash, the consideration received therefor shall be deemed to be the amount
of cash paid therefor before deducting any reasonable discounts, commissions or
other expenses allowed, paid or incurred by the company for any underwriting or
otherwise in connection with the issuance and sale thereof. In the case of the
issuance of Additional Stock for a consideration in whole or in part other than
cash, the consideration other than cash received therefor shall be deemed to be
the fair value thereof as reasonably determined by the Board of Directors of the
Company in its good faith judgment irrespective of any accounting treatment.

                           (iv) "Additional Stock" shall mean any shares of
Common Stock issued (or deemed to have been issued pursuant to clause (ii) of
this Section 3(d)) by the Company after the Commencement Date, other than shares
of Common Stock issued or issuable:

                                    (A) to officers, directors, employees and
         consultants of the Company directly or pursuant to a stock option plan
         or restricted stock plan approved by the Board of Directors of the
         Company; or

                                    (B) upon conversion of the Class A, B, C, D,
         E or F Preferred Stock of the Company or the exercise of warrants
         issued by the Company before or on the Commencement Date.

                           (v)      CERTAIN EVENTS. If any event occurs of the
type contemplated by the provisions of this Section 3(d) but not expressly
provided for by such provisions (including, without limitation, the granting of
stock appreciation rights, phantom stock rights or other rights with equity
features), then the Company's board of directors shall make an appropriate
adjustment in the number of shares of Warrant Stock obtainable upon exercise of
this Warrant and in the Warrant Price so as to protect the rights of the holders
of the Warrants; provided that no such adjustment shall decrease the number of
shares of Warrant Stock obtainable as otherwise determined pursuant to this
Section 3.

                  (e) CERTIFICATE OF ADJUSTMENT. In each case of an adjustment
or readjustment of the Warrant Price, the Corporation, at its own expense, shall
cause its Chief Financial Officer to compute such adjustment or readjustment in
accordance with the provisions hereof and prepare a certificate showing such
adjustment or readjustment, and shall mail such certificate, by first class
mail, postage prepaid, to the Holder. The certificate shall set forth such
adjustment or readjustment, showing in detail the facts upon which such
adjustment or readjustment is based. No adjustment of the Warrant Price shall be
required to be made unless it would result in an increase or decrease of at
least one cent, but any adjustments not made because of this sentence shall be
carried forward and taken into account in any subsequent adjustment otherwise
required hereunder.

                  (f) NO IMPAIRMENT. The Company shall not, by amendment of its
Certificate of Incorporation or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed under this Warrant

                                     - 5 -
<PAGE>

by the Company, but shall at all times in good faith assist in carrying out all
of the provisions of this Section 3 and in taking all such action as may be
necessary or appropriate to protect the Holder's rights under this Section 3
against impairment. If the Company takes any action affecting the Common Stock
other than as described above that adversely affects the Holder's rights under
this Warrant, the Warrant Price shall be adjusted downward.

                  (g) FRACTIONAL SHARES. No fractional shares shall be issuable
upon exercise or conversion of the Warrant and the number of shares to be issued
shall be rounded down to the nearest whole share. If a fractional share interest
arises upon any exercise or conversion of the Warrant, the Company shall
eliminate such fractional share interest by paying the Holder an amount computed
by multiplying the fractional interest by the fair market value of a full share.

         4. NO SHAREHOLDER RIGHTS. This Warrant, by itself, as distinguished
from any shares purchased hereunder, shall not entitle its Holder to any of the
rights of a shareholder of the Company.

         5. RESERVATION OF STOCK. On and after the date hereof, the Company will
reserve from its authorized and unissued stock a sufficient number of shares to
provide for the issuance of Warrant Stock upon the exercise or conversion of
this Warrant. Issuance of this Warrant shall constitute full authority to the
Company's officers who are charged with the duty of executing stock certificates
to execute and issue the necessary certificates for shares of Warrant Stock
issuable upon the exercise or conversion of this Warrant.

         6. EXERCISE OF WARRANT.

         (a) VESTING OF WARRANT SHARES. The Company and the Holder are parties
to a certain Letter Agreement (the "CR&D Agreement") dated as of the date hereof
among the Company, the Holder and GE Corporate Research & Development ("CR&D")
whereby the Holder will provide certain research and development services to the
Company. The Warrant Stock shall vest as follows (i) 60,000 of the Warrant Stock
shall vest on the date hereof and (ii) 3 shares of the Warrant Stock shall vest
for each $100.00 reasonably invoiced to the Company by CR&D for work completed
under the CR&D Agreement. All Warrant Stock which has vested pursuant to this
Section 6(a) shall be considered "Vested Warrant Stock" under this Warrant.

         (b) MECHANICS OF EXERCISE. Notwithstanding anything provided in this
Section 6(b) or elsewhere in this Warrant or the CR&D Agreement, the Holder may
only exercise this Warrant for Vested Warrant Stock. This Warrant may be
exercised as a whole or in part by the Holder, at any time after the date hereof
prior to the termination of this Warrant, by the surrender of this Warrant,
together with the Notice of Exercise and Investment Representation Statement in
the forms attached hereto as ATTACHMENTS 1 AND 2, respectively, duly completed
and executed at the principal office of the Company, specifying the portion of
the Warrant to be exercised and accompanied by payment in full of the Warrant
Price in cash or by check with respect to the shares of Vested Warrant Stock
being purchased. This Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of its surrender for exercise as
provided above, and the person entitled to receive the shares of Vested Warrant
Stock issuable

                                     - 6 -
<PAGE>

upon such exercise shall be treated for all purposes as the holder of such
shares of record as of the close of business on such date. As promptly as
practicable after such date, the Company shall issue and deliver to the person
or persons entitled to receive the same a certificate or certificates for the
number of full shares of Vested Warrant Stock issuable upon such exercise. If
this Warrant shall be exercised for less than the total number of shares of
Vested Warrant Stock then issuable upon exercise, promptly after surrender of
this Warrant upon such exercise, the Company will execute and deliver a new
warrant, dated the date hereof, evidencing the right of the Holder to the
balance of the Vested Warrant Stock purchasable hereunder upon the same terms
and conditions set forth herein.

         7. CONVERSION. In lieu of exercising this Warrant or any portion
hereof, at any time after the occurrence of a Change-In-Control Event or the
filing of a registration statement for an initial underwritten public offering
of securities by the Company, the Holder hereof shall have the right to convert
this Warrant or any portion hereof into Warrant Stock by executing and
delivering to the Company at its principal office the written Notice of
Conversion and Investment Representation Statement in the forms attached hereto
as ATTACHMENTS 2 AND 3, specifying the portion of the Warrant to be converted,
and accompanied by this Warrant. The number of shares of Warrant Stock to be
issued to Holder upon such conversion shall be computed using the following
formula:

                                 X=(P)(Y)(A-B)/A

         where X =         the number of shares of Vested Warrant Stock to
                           be issued to the Holder for the portion of the
                           Warrant being converted.

                           P =      the portion of the Warrant being converted
                                    expressed as a decimal fraction.

                           Y =      the total number of shares of Warrant
                                    Stock issuable upon exercise of the Warrant
                                    in full.

                           A =      the fair market value of one share of
                                    Warrant Stock which means (i) the fair
                                    market value of the Warrant Stock as of the
                                    last Business Day immediately prior to the
                                    date the notice of conversion is received by
                                    the Company, as reported in the principal
                                    market for such securities or, if no such
                                    market exists, as determined in good faith
                                    by the Company's Board of Directors, or (ii)
                                    if this Warrant is being converted in
                                    conjunction with a public offering of stock
                                    the price to the public per share pursuant
                                    to the offering.

                           B =      the Warrant Price on the date of conversion.

                                     - 7 -
<PAGE>

Any portion of this Warrant that is converted shall be immediately canceled.
This Warrant or any portion hereof shall be deemed to have been converted
immediately prior to the close of business on the date of its surrender for
conversion as provided above, and the person entitled to receive the shares of
Warrant Stock issuable upon such conversion shall be treated for all purposes as
the holder of such shares of record as of the close of business on such date. As
promptly as practicable after such date, the Company shall issue and deliver to
the person or persons entitled to receive the same a certificate or certificates
for the number of full shares of Warrant Stock issuable upon such conversion. If
the Warrant shall be converted for less than the total number of shares of
Warrant Stock then issuable upon conversion, promptly after surrender of the
Warrant upon such conversion, the Company will execute and deliver a new
warrant, dated the date hereof, evidencing the right of the Holder to the
balance of the Warrant Stock purchasable hereunder upon the same terms and
conditions set forth herein. If this Warrant is converted, as a whole or in
part, after the occurrence of a Change-In-Control Event as to which Section 3(c)
is applicable, the Holder shall receive the consideration contemplated by
Section 3(c) in lieu of Warrant Stock of the Company.

         8. TRANSFER OF WARRANT. This Warrant may be transferred or assigned by
the Holder hereof as a whole or in part, provided that the transferor provides,
at the Company's request, an opinion of counsel satisfactory to the Company that
such transfer does not require registration under the Securities Act and the
securities law applicable with respect to any other applicable jurisdiction.

         9. TERMINATION. This Warrant shall terminate on 5:00 p.m. New York time
on the Termination Date.

         10. MISCELLANEOUS. This Warrant shall be governed by the laws of the
Commonwealth of Massachusetts, as such laws are applied to contracts to be
entered into and performed entirely in Massachusetts by Massachusetts residents.
In the event of any dispute among the Holder and the Company arising out of the
terms of this Warrant, the parties hereby consent to the exclusive jurisdiction
of the federal and state courts located in the Commonwealth of Massachusetts for
resolution of such dispute, and agree not to contest such exclusive jurisdiction
or seek to transfer any action relating to such dispute to any other
jurisdiction. The headings in this Warrant are for purposes of convenience and
reference only, and shall not be deemed to constitute a part hereof. Neither
this Warrant nor any term hereof may be changed or waived orally, but only by an
instrument in writing signed by the Company and the Holder of this Warrant. All
notices and other communications from the Company to the Holder of this Warrant
shall be delivered personally or by facsimile transmission or mailed by first
class mail, postage prepaid, to the address or facsimile number furnished to the
Company in writing by the last Holder of this Warrant who shall have furnished
an address or facsimile number to the Company in writing, and if mailed shall be
deemed given three days after deposit in the United States mail.

                                     - 8 -
<PAGE>

         ISSUED:  October 24, 2000

                  BEACON POWER CORPORATION

                  By: /s/ William E. Stanton
                     ----------------------------------
                  Name:    William E. Stanton

                  Title:   President

                                     - 9 -
<PAGE>

                                  ATTACHMENT 1

NOTICE OF EXERCISE

TO:      BEACON POWER CORPORATION

1.   The undersigned hereby elects to purchase _______________ shares of the
     Warrant Stock of Beacon Power Corporation pursuant to the terms of the
     attached Warrant, and tenders herewith payment of the purchase price in
     full, together with all applicable transfer taxes, if any.

2.   Please issue a certificate or certificates representing said shares of
     Warrant Stock in the name of the undersigned or in such other name as is
     specified below:

                         ------------------------------
                                     (Name)

                         -------------------------------
                                    (Address)

---------------------------------------     -----------------------------------
(Date)   (Name of Warrant Holder)

         By:
            ----------------------------------

         Title:
               -------------------------------

<PAGE>

                                  ATTACHMENT 2

                       INVESTMENT REPRESENTATION STATEMENT

                           Shares of the Common Stock
                     (as defined in the attached Warrant) of
                            BEACON POWER CORPORATION

         In connection with the purchase of the above-listed securities, the
undersigned hereby represents to Beacon Power Corporation (the "Company") as
follows:

(a) The securities to be received upon the exercise of the Warrant (the
"Securities") will be acquired for investment for its own account, not as a
nominee or agent, and not with a view to the sale or distribution of any part
thereof, and the undersigned has no present intention of selling, granting
participation in or otherwise distributing the same, but subject, nevertheless,
to any requirement of law that the disposition of its property shall at all
times be within its control. By executing this statement, the undersigned
further represents that it does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer, or grant participations to such
person or to any third person, with respect to any Securities issuable upon
exercise of the Warrant.

(b) The undersigned understands that the Securities issuable upon exercise of
the Warrant at the time of issuance may not be registered under the Securities
Act of 1933, as amended (the "Securities Act"), and applicable state securities
laws, on the ground that the issuance of such securities is exempt pursuant to
Section 4(2) of the Securities Act and state law exemptions relating to offers
and sales not by means of a public offering, and that the Company's reliance on
such exemptions is predicated on the undersigned's representations set forth
herein.

(c) The undersigned agrees that in no event will it make a disposition of any
Securities acquired upon the exercise of the Warrant unless and until (i) it
shall have notified the Company of the proposed disposition and shall have
furnished the Company with a statement of the circumstances surrounding the
proposed disposition, and (ii) it shall have furnished the Company with an
opinion of counsel satisfactory to the Company and Company's counsel to the
effect that (A) appropriate action necessary for compliance with the Securities
Act and any applicable state securities laws has been taken or an exemption from
the registration requirements of the Securities Act and such laws is available,
and (B) the proposed transfer will not violate any of said laws.

(d) The undersigned acknowledges that an investment in the Company is highly
speculative and represents that it is able to fend for itself in the
transactions contemplated by this statement, has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investments, and has the ability to bear the economic risks
(including the risk of a total loss) of its investment. The undersigned
represents that it has had the opportunity to ask questions of the Company
concerning the Company's business and assets and to obtain any additional
information which it considered necessary to verify the accuracy of or to

<PAGE>

amplify the Company's disclosures, and has had all questions which have been
asked by it satisfactorily answered by the Company

(e) The undersigned acknowledges that the Securities issuable upon exercise or
conversion of the Warrant must be held indefinitely unless subsequently
registered under the Securities Act or an exemption from such registration is
available. The undersigned is aware of the provisions of Rule 144 promulgated
under the Securities Act which permit limited resale of shares purchased in a
private placement subject to the satisfaction of certain conditions, including,
among other things, the existence of a public market for the shares, the
availability of certain current public information about the Company, the resale
occurring not less than one year after a party has purchased and paid for the
security to be sold from the Company or any affiliate of the Company, the sale
being through a "broker's transaction" or in transactions directly with a
"market maker" (as provided by Rule 144(f)) and the number of shares being sold
during any three month period not exceeding specified limitations.

         Dated:
               -------------------------

         ---------------------------------------
         (Typed or Printed Name)

         By:
            ----------------------------------
              (Signature)

         ---------------------------------------
         (Title)

                                     - 2 -
<PAGE>

                                  ATTACHMENT 3

NOTICE OF CONVERSION

TO:      BEACON POWER CORPORATION

1. The undersigned hereby elects to acquire _______________ shares of the
Warrant Stock of Beacon Power Corporation pursuant to the terms of the attached
Warrant, by conversion of _________ percent (_____%) of the Warrant.

2. Please issue a certificate or certificates representing said shares of
Warrant Stock in the name of the undersigned or in such other name as is
specified below:

                         ------------------------------
                                     (Name)

                         -------------------------------
                                    (Address)

---------------------------------------     -----------------------------------
(Date)   (Name of Warrant Holder)

         By:
            ----------------------------------

         Title:
               -------------------------------
              (Title and signature of authorized person)

                                      - 3 -<PAGE>
                                                                 Exhibit 10.1.17

                            BEACON POWER CORPORATION

                         NON-QUALIFIED OPTION AGREEMENT
       GRANTED UNDER SECOND AMENDED AND RESTATED 1998 STOCK INCENTIVE PLAN

         This Agreement, dated as of July 24, 2000 (the "GRANT DATE"), is
between Beacon Power Corporation (the "COMPANY") and _____________________ (the
"OPTIONEE"), a consultant, service provider or other independent contractor of
the Company.

1.       GRANT OF OPTION. This agreement evidences the grant by the COMPANY to
the Optionee, of an option to purchase, in whole or in part, on the terms
provided herein and in the Company's Second Amended and Restated 1998 Stock
Incentive Plan (the "PLAN"), the shares (the "SHARES") of common stock, $0.01
par value per share, of the Company ("COMMON STOCK") at an exercise price per
share, as set forth below:

  SHARES:                               EXERCISE PRICE:
                                        $      8.20
  -----------------                      ----------------

         Unless earlier terminated, this option shall expire one day before the
10th anniversary of the Grant Date (the "FINAL EXERCISE DATE"). It is intended
that the option evidenced by this agreement shall be a non-qualified stock
option. Except as otherwise indicated by the context, the term "Optionee", as
used in this option, shall be deemed to include any person who acquires the
right to exercise this option validly under its terms.

2.       VESTING SCHEDULE. Subject to the other terms of this Agreement
regarding the exercisability of this option, the shares covered by this
option shall vest and become exercisable as follows: one-half of the shares
covered by this option shall vest and become exercisable on the Grant Date
and the remaining one-half of the shares (the "REMAINING SHARES") covered by
this option shall vest and become exercisable on the first anniversary of the
Grant Date, provided that Optionee has been continuously providing services
to the Company from the Grant Date until the first anniversary of the Grant
Date. Should the Company discontinue accepting the services of the Optionee
at any time prior to the first anniversary of the Grant Date, and if the
Optionee is still providing services at that time, then the Remaining Shares
shall vest and become exercisable at that time.

================================================================================
                                 NUMBER OF SHARES
                                                                       DATE
--------------------------------------------------------------------------------
 NEWLY VESTED ON THE INDICATED DATE            CUMULATIVE VESTED
--------------------------------------------------------------------------------

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

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

================================================================================

         The right of exercise shall be cumulative so that to the extent the
option is not exercised in any period to the maximum extent permissible it shall
continue to be exercisable, in whole or in part, with respect to all shares for
which it is vested until the earlier of the Final Exercise Date or the
termination of this option under this Agreement or the Plan.

3.       EXERCISE OF OPTION.

         (a) FORM OF EXERCISE. Each election to exercise this option shall be in
writing, signed by the Optionee, and received by the Company at its principal
office, accompanied by a copy of this agreement and by payment in full as
provided below. The Optionee may purchase less than the number of shares covered
hereby, provided that no partial exercise of this option may be for any
fractional share or for fewer than 100 whole shares. Payment shall be as
follows:

<PAGE>

                  (i)   in cash or by check, payable to the order of the
Company;

                  (ii)  in the sole discretion of the authorized administrator
of the Plan, (A) delivery of an irrevocable and unconditional undertaking by a
creditworthy broker to deliver promptly to the Company sufficient funds to pay
the exercise price or (B) delivery by the Optionee to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker to deliver
promptly to the Company cash or a check sufficient to pay the exercise price;

                  (iii) at such time as the Common Stock is registered under the
Exchange Act, delivery of shares of Common Stock owned by the Optionee valued at
Fair Market Value, which Common Stock was owned by the Optionee at least six
months prior to such delivery;

                  (iv)  to the extent permitted by the authorized administrator
of the Plan, in its sole discretion, by payment of such other lawful
consideration as the authorized administrator of the Plan may determine; or

                  (v)   any combination of the above permitted forms of payment.

         A certificate or certificates for the Common Shares purchased shall be
issued by the Company after the exercise of the option and payment therefor,
including the provision for any federal and state withholding taxes, and other
applicable employment taxes.

         (b) TERMINATION OF OPTION UPON TERMINATION OF SERVICE PROVISION, DEATH
OR DISABILITY.

         (i) FOR REASONS OTHER THAN BREACH OF CONDUCT, DEATH OR DISABILITY. Upon
the termination of Optionee's service provision to the Company for any reason
OTHER THAN a Breach of Conduct (as defined in subparagraph (iii) below) or death
or disability, any portion of this option that is not vested as described in
Section 2 hereof shall immediately terminate, and any portion that vested before
the service provision termination date shall continue to be exercisable until
the Final Exercise Date.

         (ii) DEATH OR DISABILITY. If termination of service provision is by
reason of death or disability, any portion of this option which is not vested
before such termination of service provision shall immediately terminate.
However, no portion of the option is exercisable after the Final Exercise Date.

         (iii) BREACH OF CONDUCT. In the event of a Breach of Conduct by
Optionee at any time while providing service to the Company or within two years
after termination of service provision, any portion of this option which has not
been exercised by the time of such Breach, whether or not vested under Section
2, shall immediately terminate upon written declaration by the authorized
administrator of the Plan. Such declaration shall be communicated in writing to
the Optionee. In addition, upon a Breach of Conduct, the Company may, in its
sole discretion, by written notice demand that any or all stock certificates for
Common Shares acquired pursuant to the exercise of this option, or any profit
realized from the sale or transfer of such Common Shares, be returned to the
Company within five (5) days of receipt of such notice, and any exercise price
paid by the Optionee shall be returned to Optionee by the Company immediately
thereafter, without interest. The Company shall be entitled to reimbursement of
reasonable attorney fees and expenses incurred in seeking to enforce its rights
under this paragraph.

         "BREACH OF CONDUCT" shall mean activities which constitute a serious
breach of conduct as determined by the authorized administrator of the Plan in
its sole discretion, including, but not limited to: (i) the disclosure or misuse
of confidential information, trade secrets or other intellectual property of the
Company or third parties who have disclosed such information, secrets or
intellectual property to the Company or a company that controls, is controlled
by or is under common control with the Company (collectively, an "AFFILIATE");
(ii) activities in violation of the policies of the Company or any Affiliate,
including without limitation, the Company's insider trading policy; (iii) the
violation or breach of any material provision in any applicable contract or
agreement between the Optionee and the Company (or an Affiliate), including, for
example, a violation or breach which is grounds for discharge for cause; (iv)
engaging in conduct relating to the Optionee's service provision for which
either criminal or civil

                                      -2-
<PAGE>

penalties have been sought; (v) engaging in activities which adversely affect or
which are contrary or harmful to the interests of the Company or Affiliate, or
(vi) in the event that the Optionee and Company have not signed a noncompetition
agreement (which therefore otherwise would govern issues of noncompetition),
engaging in competition with the Company or any Affiliate during service
provision or within one (1) year following termination of service provision to
the Company or Affiliate. The determination of Breach of Conduct shall be
determined by the authorized administrator of the Plan in good faith and in its
sole discretion.

4.       RIGHT OF FIRST REFUSAL.

         (a) If the Optionee proposes to sell, assign, transfer, pledge,
hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively, "TRANSFER") any Shares acquired upon exercise of this option,
then the Optionee shall first give written notice of the proposed transfer (the
"TRANSFER NOTICE") to the Company. The Transfer Notice shall name the proposed
transferee and state the number of such Shares the Optionee proposes to transfer
(the "OFFERED SHARES"), the price per share and all other material terms and
conditions of the transfer.

         (b) For 30 days following its receipt of such Transfer Notice, the
Company shall have the option to purchase all (but not less than all) of the
Offered Shares at the price and upon the terms set forth in the Transfer Notice.
In the event the Company elects to purchase all of the Offered Shares, it shall
give written notice of such election to the Optionee within such 30-day period.
Within 10 days after his receipt of such notice, the Optionee shall tender to
the Company at its principal offices the certificate or certificates
representing the Offered Shares, duly endorsed in blank by the Optionee or with
duly endorsed stock powers attached thereto, all in a form suitable for transfer
of the Offered Shares to the Company. Upon receipt of such certificate or
certificates, the Company shall deliver or mail to the Optionee a check in
payment of the purchase price for the Offered Shares; PROVIDED THAT if the terms
of payment set forth in the Transfer Notice were other than cash against
delivery, the Company may pay for the Offered Shares on the same terms and
conditions as were set forth in the Transfer Notice.

         (c) At and after the time at which the Offered Shares are required to
be delivered to the Company for transfer to the Company pursuant to subsection
(b) above, the Company shall not pay any dividend to the Optionee on account of
such Shares or permit the Optionee to exercise any of the privileges or rights
of a stockholder with respect to such Offered Shares, but shall, in so far as
permitted by law, treat the Company as the owner of such Offered Shares.

         (d) If the Company does not elect to acquire all of the Offered Shares,
the Optionee may, within the 30-day period following the expiration of the
option granted to the Company under subsection (b) above, transfer the Offered
Shares to the proposed transferee, PROVIDED THAT such transfer shall not be on
terms and conditions more favorable to the transferee than those contained in
the Transfer Notice. Notwithstanding any of the above, all Offered Shares
transferred pursuant to this Section 4 shall remain subject to the right of
first refusal set forth in this Section 4 and such transferee shall, as a
condition to such transfer, deliver to the Company a written instrument
confirming that such transferee shall be bound by all of the terms and
conditions of this Section 4.

         (e) The following transactions shall be exempt from the provisions of
this Section 4:

                  (1)      any transfer of Shares to or for the benefit of any
                           spouse, child or grandchild of the Optionee, or to a
                           trust for their benefit;

                  (2)      any transfer pursuant to an effective registration
                           statement filed by the Company under the Securities
                           Act of 1933, as amended (the "Securities Act"); and

                  (3)      any transfer of the Shares pursuant to the sale of
                           all or substantially all of the business of the
                           Company;

PROVIDED HOWEVER, that in the case of a transfer pursuant to clause (1) above,
such Shares shall remain subject to the right of first refusal set forth in this
Section 4 and such transferee shall, as a condition to such transfer, deliver to
the

                                      -3-
<PAGE>

Company a written instrument confirming that such transferee shall be bound by
all of the terms and conditions of this Section 4.

         (f) The Company may assign its rights to purchase Offered Shares in any
particular transaction under this Section 4 to one or more persons or entities.

         (g) The provisions of this Section 4 shall terminate upon the earlier
of the following events.

                  (1) the closing of the sale of shares of Common Stock in an
underwritten public offering pursuant to an effective registration statement
filed by the Company under the Securities Act; or

                  (2) the sale of all or substantially  all of the capital
stock,  assets or business of the Company,  by merger,  consolidation,  sale of
assets or otherwise.

         (h) The Company shall not be required (i) to transfer on its books any
of the Shares which shall have been sold or transferred in violation of any of
the provisions set forth in this Section 4, or (ii) to treat as owner of such
Shares or to pay dividends to any, transferee to whom any such Shares shall have
been so sold or transferred.

5.       AGREEMENT IN CONNECTION WITH PUBLIC OFFERING. The Optionee agrees, in
connection with the initial underwritten public offering of the Company's
securities pursuant to a registration statement under the Securities Act, (a)
not to sell, make short sale of, loan, grant any options for the purchase of, or
otherwise dispose of any shares of Common Stock held by the Optionee (other than
those shares included in the offering) without the prior written consent of the
Company or the underwriters managing such initial underwritten public offering
of the Company's securities for a period of 180 days from the effective date of
such registration statement, and (b) to execute any agreement reflecting clause
(a) above as may be requested by the Company or the managing underwriters at the
time of such offering.

6.       WITHHOLDING. No Shares will be issued pursuant to the exercise of this
option unless and until the Optionee pays to the Company, or makes provision
satisfactory to the Company for payment of, any federal, state or local
withholding taxes required by law to be withheld in respect of this option.

7.       NONTRANSFERABILITY OF OPTION. This option may not be sold, assigned,
transferred, pledged or otherwise encumbered by the Optionee, either voluntarily
or by operation of law, except by will or the laws of descent and distribution,
and, during the lifetime of the Optionee, this option shall be exercisable only
by the Optionee.

8.       PROVISIONS OF THE PLAN. This option is subject to the provisions of
the Plan, a copy of which Optionee hereby acknowledges receiving with this
option.

9.       NO RIGHT TO CONTINUED EMPLOYMENT. This option shall not confer upon the
Optionee any right with respect to continuance of service provision to the
Company, nor shall it interfere in any way with the right of the Company to
terminate the Optionee's service provision at any time.

10.      COMPLIANCE WITH LAW AND REGULATIONS. This option and the obligation of
the Company to sell and deliver shares hereunder shall be subject to all
applicable federal and state laws, rules and regulations and to such approvals
by any government or regulatory agency as may be required. The Company shall not
be required to issue or deliver any certificates for Common Shares prior to (a)
the listing of such Common Shares on any stock exchange on which the Common
Shares may then be listed, and (b) the completion of any registration or
qualification of such Common Shares under any federal or state law, or any rule
or regulation of any government body which the Company shall, in its sole
discretion, determine to be necessary or advisable. Moreover, this option may
not be exercised if its exercise, or the receipt of Common Shares pursuant
thereto, would be contrary to applicable law.

11.      NOTICES. Any notice hereunder to the Company shall be addressed to it
at its principal business office, 6D Gill Street Woburn, MA 01801, and any
notice hereunder to the Optionee shall be sent to the address reflected on

                                      -4-
<PAGE>

the payroll records of the Company, subject to the right of either party to
designate at any time hereafter in writing some other address.

12.      DELAWARE LAW TO GOVERN. This Agreement shall be construed and
administered in accordance with and governed by the laws of Delaware.

         IN WITNESS WHEREOF, the parties have executed this Agreement as a
sealed instrument, as of the date first set forth above.

OPTIONEE:                                       BEACON POWER CORPORATION

-------------------------------
         SIGNATURE                              BY:
                                                    ----------------------------
                                                         SIGNATURE

-------------------------------                 --------------------------------
         ADDRESS                                         PRINT NAME, TITLE

                                      -5-
<PAGE>

         List of Beacon Power Corporation issues to consultants under
Non-Qualified Option Agreement.

<TABLE>
<CAPTION>
                                                 Number of Shares Underlying
 Name                                                      Option
 ----                                                      ------

<S>                                              <C>
Tom Pitman                                                 30,000
John Doherty                                               15,000
Reciprocal Designs                                          5,000
Kaufman-Peters                                             30,000
</TABLE>

                                      -6-

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