Document:

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                                                                     Exh 10.1.12

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.

No.:  KP-1

                                     WARRANT
                            TO PURCHASE COMMON STOCK
                                       OF
                            BEACON POWER CORPORATION

                           (void after August 2, 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 August 2, 2005 (the "Termination Date"), at a price per
share equal to (the Warrant Price) (as defined below and subject to adjustment
as described below), 20,000 shares of the Common Stock, $.01 par value per share
(the "Warrant Stock") upon exercise of this warrant (this "Warrant") pursuant to
Section 6 hereof. This Warrant is issued pursuant to the Securities Purchase
Agreement (as defined below).

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

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

            (b)   "Commencement Time" means immediately prior to the
                  consummation of a Liquidity Event.

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

            (d)   "Holder" means Kaufman-Peters Company, or its assigns.

            (e)   "Liquidity Event" means the consummation of an underwritten
                  public offering of Common Stock pursuant to an effective
                  registration statement under the Securities Act of 1933, as
                  amended (a "Public Offering").

            (f)   "Person" means any individual, corporation, partnership,
                  limited liability company, or other entity.
<PAGE>

            (g)   "Warrant Price" means the initial offering price per share of
                  the Common Stock in the first Public Offering, in each case
                  subject to adjustment under Section 3.

            (h)   "Warrant Stock" means the Common Stock.

            (i)   "Warrant Stock Class" means the class of capital stock or
                  other securities that includes the Warrant Stock.

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

            (a)   REORGANIZATION, MERGER ETC. In case of any (i) merger or
consolidation of the Company into or with another corporation where the Company
is not the surviving corporation, (ii) sale, transfer or lease (but not
including a transfer or lease by pledge or mortgage to a bona fide lender) of
all or substantially all of the assets of the Company or (iii) sale by the
Company's shareholders of 50% or more of the Company's outstanding securities in
one or more related transactions, 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
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 (a) shall similarly apply to successive transactions of the
type described in this subparagraph (a).

            (b)   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.

            (c)   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 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 Warrant Stock Class other than as
described above that adversely affects the Holder's rights under this Warrant,
the Warrant Price shall be adjusted downward.

            (d)   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.

                                      -2-
<PAGE>

      5.    RESERVATION OF STOCK. 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. This Warrant may be exercised as a whole or in
part by the Holder, at the Commencement Time and 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 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 Warrant Stock issuable 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 Warrant Stock
issuable upon such exercise. If this Warrant shall be exercised for less than
the total number of shares of 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 Warrant Stock purchasable hereunder upon the
same terms and conditions set forth herein.

      7.    NOTICE OF LIQUIDITY EVENT. The Company shall provide the Holder with
at least 10 Business Days advance written notice prior to the consummation of
any Liquidity Event describing in reasonable detail the terms and conditions of
such Liquidity Event and an estimate of the Warrant Price derivable from such
Liquidity Event.

      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 at 5:00 p.m. New York City
time on the Termination Date.

      10.   LOCK-UP. The Holder will not, without the prior written consent of
Salomon Smith Barney Inc., offer, sell, contract to sell, pledge or otherwise
dispose of (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Holder or any affiliate of the Holder or any person in privity
with the Holder or any affiliate of the Holder), directly or indirectly, in the
filing of a registration statement with the Securities and Exchange Commission
in respect of, or establish or increase a put equivalent position or liquidate
or decrease a call equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Securities and Exchange Commission promulgated hereunder with respect to,
any shares of capital stock of the Company or any securities convertible into,
or exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 180 days after the
date of the proposed Underwriting Agreement (the "Underwriting Agreement"),
between the Company, and each of the Underwriters named therein, in connection
with the Company's pending initial public offering, other than shares of Common
Stock disposed of as bona fide gifts approved by Salomon Smith Barney Inc. If
for any reason the Underwriting Agreement shall be terminated prior to the
Closing Date (as defined in the Underwriting Agreement), this provision shall be
of no further effect.

      11.   MISCELLANEOUS. This Warrant shall be governed by the laws of the
State of Delaware, as such laws are applied to contracts to be entered into and
performed entirely in Delaware by Delaware residents. 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

                                      -3-
<PAGE>

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.

                                      ISSUED:  August 2, 2000

                                               BEACON POWER CORPORATION

                                               By:      /s/ William E. Stanton

                                               Name:    William E. Stanton

                                               Title:   President

                                      -4-
<PAGE>

                                   Attachment 1

NOTICE OF EXERCISE

TO:      BEACON POWER CORPORATION

1.   The undersigned hereby elects to purchase _______________ shares of 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

         In connection with the purchase of the shares of Warrant Stock upon
exercise of the enclosed Warrant, 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
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:________________________
<PAGE>

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

         By:____________________________________
              (Signature)

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

                                      -7-<PAGE>

                            BEACON POWER CORPORATION

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

     This Agreement, dated as of _______________, ______ (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:

<TABLE>
<S>                                                     <C>
  SHARES:                                               EXERCISE PRICE:
  ___________________                                   $________________
</TABLE>

     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.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                               NUMBER OF SHARES
                                                                                               DATE
-------------------------------------------------------------------------------------------------------------------
NEWLY VESTED ON THE INDICATED DATE               CUMULATIVE VESTED
-------------------------------------------------------------------------------------------------------------------
<S>                                              <C>                                          <C>

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

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

-------------------------------------------------------------------------------------------------------------------
</TABLE>

     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

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

                                      -5-

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