Document:

EXHIBIT 10.2

                              INVESTMENT AGREEMENT

     THIS INVESTMENT  AGREEMENT (this "Agreement"),  dated as of April 22, 2005,
is made by and among  BEACON  POWER  CORPORATION,  a Delaware  corporation  (the
"Company"),  PERSEUS  CAPITAL,  L.L.C.,  a Delaware  limited  liability  company
("Perseus Capital"), and PERSEUS 2000 EXPANSION FUND, L.L.C., a Delaware limited
liability company (the "Purchaser").

                                    RECITALS

     WHEREAS,  on the  terms and  subject  to the  conditions  set forth in this
Agreement,  the  Company  desires to issue and sell to the  Purchaser  1,666,667
shares of the Company's Common Stock (the "Initial Shares");

     WHEREAS,  on the  terms and  subject  to the  conditions  set forth in this
Agreement, the Company desires to obtain from the Purchaser an option (the "Call
Option"),  exercisable at the election of the Company,  to issue and sell to the
Purchaser  the number of shares of the  Company's  Common  Stock  determined  in
accordance with Section 2.1(c) of this Agreement;

     WHEREAS,  in  consideration  of the  Purchaser's  agreement  to acquire the
Initial Shares and to grant the Company the Call Option,  the Company has agreed
to issue to the  Purchaser  on the date  hereof a warrant  to  purchase  certain
additional shares of the Company's Common Stock (the "Warrant");

     WHEREAS,  subject to the terms and conditions set forth in this  Agreement,
the Purchaser  desires to acquire the Initial  Shares,  grant to the Company the
Call Option, and acquire the Warrant;

     WHEREAS, the Company has entered into an Arrangement Agreement of even date
herewith with NxtPhase T&D Corp., a Canadian corporation ("NxtPhase"),  pursuant
to which the Company and NxtPhase will  consummate a business  combination  (the
"NxtPhase Transaction");

     WHEREAS,  the Purchaser has committed to invest an additional  $1.5 million
in NxtPhase in accordance  with the term sheet ("Term  Sheet") dated as of April
22, 2005 (the "NxtPhase Investment"); and

     WHEREAS,  the  Purchaser and the Company have agreed that (i) at the option
of the Purchaser (the "NxtPhase Investment Option"), the portion of the NxtPhase
Investment that has not yet been invested as of the date the NxtPhase Investment
Option is exercised by the Purchaser (the "Remaining NxtPhase  Investment") will
be  made by the  Company  instead  of by the  Purchaser,  (ii) if the  Purchaser
exercises the NxtPhase Investment Option, the Purchaser will provide the Company
with sufficient  funds to make such Remaining  NxtPhase  Investment on the terms
and subject to the  conditions  set forth  herein,  and (iii) any portion of the
NxtPhase  Investment  that has not been made on or prior to the  consummation of
the NxtPhase Transaction will be invested in the Company by the Purchaser on the
terms and subject to the conditions set forth herein;

     WHEREAS, Perseus Capital holds a warrant to acquire 1,333,333 shares of the
Company's  Common  Stock at an  exercise  price of $2.25  per  share  ("the  "PC
Warrant"), and the PC Warrant expires by its terms on May 23, 2005;

     WHEREAS,  Perseus  Capital  desires to obtain an extension for two years on
the expiration date of the PC Warrant,  and the Company is willing to grant such
extension in exchange for a payment of $100,000.

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

     For all purposes of this  Agreement the  following  terms have the meanings
set forth in this Article I.

     "Business Day" means any day other than a Saturday,  Sunday or other day on
which  commercial  banks in the Commonwealth of Massachusetts or in the District
of Columbia are authorized or required by law or executive order to close.

     "Call Date" means the effective date of the Company's Notice of Call
delivered in accordance with Section 2.1 below.

     "Charter" means the articles or certificate of  incorporation or formation,
statute, constitution, joint venture or partnership agreement, limited liability
company  agreement  or articles or other  organizational  document of any Person
other than an individual, each as from time to time amended or modified.

     "Closing" has the meaning specified in Section 2.2.

     "Closing Date" has the meaning specified in Section 2.2.

     "Common  Stock" means the common stock of the Company,  par value $0.01 per
share,  and any  securities  into  which  such  common  stock may  hereafter  be
converted or reclassified.

     "Company" has the meaning specified in the introduction to this Agreement.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Effective  Price" means with respect to any issuance of Common Stock,  the
price per share of Common Stock of such  issuance;  with respect to the issuance
of any security convertible into shares of Common Stock, the purchase price paid
for such  convertible  security  divided by the number of shares of Common Stock
issuable upon the conversion of such convertible  security;  and with respect to
any  option,  warrant or other  right to  acquire  shares of Common  Stock,  the
exercise price for one share of Common Stock thereunder.

     "Maximum  Amount"  means  the  sum of  $1,500,000,  plus  if  the  NxtPhase
Transaction is consummated,  any portion of the NxtPhase Investment that has not
been made by the Purchaser or the Company as of the date of such consummation.

     "Per Share Price" means, $0.84 per share, subject to adjustment for reverse
and forward stock splits, stock dividends,  stock combinations and other similar
transactions  involving  the  Common  Stock  that  occur  after the date of this
Agreement but prior to the applicable Closing Date.

     "Person" means an individual,  partnership,  corporation, limited liability
company, association, trust, joint venture, unincorporated organization or other
entity  and any  government,  governmental  department  or agency  or  political
subdivision thereof.

     "Purchased  Securities" means the Initial Shares,  the Requested Shares (as
defined below), the Warrant, any Additional Shares and any Additional Warrant.

     "Purchaser" has the meaning specified in introduction to this Agreement.

     "Registration  Rights  Agreement"  means that certain  Registration  Rights
Agreement  of even date  herewith by and between the Company and the  Purchaser,
substantially in the form set forth on Exhibit A.

     "Securities  Act"  means  the  United  States  Securities  Act of 1933,  as
amended.

                                   ARTICLE II

                    SALE AND PURCHASE OF PURCHASED SECURITIES

     SECTION 2.1.  Investment Transactions.
     -----------   -----------------------

     (a) Sale and Purchase of the Initial Shares. For value received, and on the
terms and  subject to all of the  conditions  set forth  herein,  at the Initial
Closing,  the Company shall issue and sell to the  Purchaser,  and the Purchaser
shall  purchase,  the  Initial  Shares  at the  Per  Share  Price,  for a  total
investment in the Company at the Initial Closing of $1,400,000.

     (b)  Extension  of PC Warrant  Term.  In  consideration  of the  payment of
$100,000 to the Company by Perseus Capital at the Initial  Closing,  the Company
agrees to extend the term of the PC  Warrant so that it expires on May 23,  2007
rather than on May 23, 2005.

     (c) Call Option. For value received, and on the terms and subject to all of
the  conditions set forth herein,  the Purchaser  hereby  irrevocably  agrees to
purchase  upon  demand by the  Company  such  number of shares of the  Company's
Common  Stock at the Per Share  Price as the Company  shall  request in its sole
discretion (the "Requested Shares") in a Notice of Call delivered by the Company
to Perseus after the date hereof  substantially in the form set forth on Exhibit
B hereto.  In no event shall the Requested  Shares in the  aggregate  exceed the
number of shares equal to the quotient  obtained by dividing the Maximum  Amount
by the Per Share Price. The Purchaser's obligations under this Section 2.1(c) to
purchase the Requested Shares shall expire upon September 30, 2005.

     (d) NxtPhase  Investment  Option.  The Purchaser shall have the option, but
not the  obligation,  to assign to the Company  its right to make any  Remaining
NxtPhase Investment (together with its rights under all investment documentation
pertaining to the Remaining NxtPhase  Investment) and if the Purchaser exercises
the NxtPhase  Investment  Option,  (i) the Company shall assume the  Purchaser's
obligation to make any Remaining NxtPhase  Investment,  (ii) the Purchaser shall
make an investment  in the Company's  Common Stock on each date that the Company
is required to make an investment in NxtPhase as part of the Remaining  NxtPhase
Investment,  and (iii) in consideration  of such  investment,  the Company shall
issue and deliver to the  Purchaser  additional  shares of Common Stock equal to
the quotient obtained by dividing the amount of such investment by the Per Share
Price (the "Additional  Shares").  Notwithstanding the foregoing,  the Purchaser
shall not be entitled to exercise the  NxtPhase  Investment  Option  without the
consent of the Company unless the definitive investment documentation pertaining
to the  NxtPhase  Investment  substantially  reflects the terms set forth in the
Term  Sheet  and  otherwise  is no less  favorable  to the  purchaser  than  the
investment documentation used in the most recent sale of Class A Preferred Stock
by  NxtPhase,  as  previously  provided  to the  Company.  Upon  exercise of the
NxtPhase  Investment  Option,  the  Company  shall  issue  to the  Purchaser  an
additional  warrant having  substantially the same terms as the Warrant,  except
that the initial number of shares of Common Stock issuable upon exercise of such
warrant  shall  equal the  quotient  obtained by  dividing  (i)  27.9491% of the
Remaining  NxtPhase  Investment  by  (ii)  120%  of the  Per  Share  Price  (the
"Additional Warrant").

     (e) Deliveries.  At the Initial  Closing,  the Company shall deliver to the
Purchaser the following:

          (i) the  Warrant  substantially  in the form set  forth on  Exhibit  C
     hereto duly executed by the Company;

          (ii)  evidence  that  the  Company  and its  Board of  Directors  have
     authorized the amendment of the Company's  Rights Agreement dated September
     25, 2002 (as amended,  the "Rights  Agreement")  so that the Purchaser will
     not be  considered  an  "Acquiring  Person" (as such term is defined in the
     Rights  Agreement) by reason of the Purchaser and the Company entering into
     the transactions  contemplated  hereby,  including  without  limitation the
     Company's  issuance  of  the  Purchased   Securities  and  the  Purchaser's
     ownership  of the  Purchased  Securities  or any  shares  of  Common  Stock
     issuable or issued upon exercise of the Warrant.

     (f) Unwind.  In the event that (i) the NxtPhase  Transaction  is terminated
for any reason or (ii) the NxtPhase  Transaction is not consummated within fifty
weeks  after  the  date  the  Company  makes  its  initial  Remaining   NxtPhase
Investment,  then within five Business days thereof,  the Company shall transfer
to the Purchaser all shares of capital stock of NxtPhase  purchased  pursuant to
the  Remaining  NxtPhase  Investment,  and the Purchaser  shall  transfer to the
Company all Purchased Securities issued in consideration for investments made by
the Purchaser in the Company  pursuant to subsection (d) of this Section 2.1 and
the  Additional  Warrant.  If any shares of Common  Stock have been  issued upon
exercise of the  Additional  Warrant,  such shares shall also be returned to the
Company in exchange  for the  repayment to the  Purchaser of the exercise  price
therefore.  All such required  transfers shall be made free and clear of any and
all liens and  encumbrances.  Each of the Company and the Purchaser agree not to
transfer,  encumber or  otherwise  restrict  any of the  securities  that may be
subject to a transfer in accordance  with this Section 2.1(f) for so long as the
respective transfer obligations hereunder shall be in effect.

     SECTION 2.2.  Closings.  Each closing of the purchase and sale of Purchased
Securities  hereunder will take place  remotely by means of mail,  facsimile and
electronic mail (with originally executed documents to be exchanged  immediately
thereafter). The closing (the "Initial Closing") of the purchase and sale of the
Initial  Shares  shall be held on May 13,  2005 or on such  other date as may be
agreed to by the Purchaser and the Company (the "Initial  Closing  Date").  Each
closing  (each, a "Call  Closing") of the purchase and sale of Requested  Shares
shall be held on a date specified in the  applicable  Notice of Call that is not
earlier than fifteen  Business  Days  following the delivery by the Company of a
Notice of Call with respect to such Requested  Shares (the "Call Closing Date").
Each closing (each, an "Additional  Closing" and  collectively  with the Initial
Closing and each Call Closing, each a "Closing") of the purchase and sale of any
Additional  Shares  shall  be  held  simultaneously  with  the  closing  of  the
additional  investment  to be made by the  Company  in  NxtPhase  as part of the
Remaining   NxtPhase   Investment   (each  an  "Additional   Closing  Date"  and
collectively  with the Initial  Closing Date and each Call Closing Date,  each a
"Closing Date").  At each Closing,  (i) the Company will issue, sell and deliver
to the  Purchaser  the  Purchased  Securities  to be issued at such  Closing  by
executing and  delivering one or more stock  certificates  that in the aggregate
represent  such  Purchased  Securities,  and (ii) the  Purchaser  shall  pay the
aggregate  purchase  price  therefor by wire transfer of  immediately  available
funds to an account  designated  in writing by the Company at least two Business
Days prior to such Closing Date (the  "Company  Account").  In addition,  at the
Initial  Closing,  the  Company  shall  issue to  Perseus  Capital an amended PC
Warrant  reflecting a two-year  extension of the termination date thereunder and
Perseus  Capital  shall  pay  to  the  Company  $100,000  by  wire  transfer  of
immediately  available  funds in such  amount to the  Company  Account and shall
deliver to the Company for cancellation the existing PC Warrant.

     SECTION  2.3. Use of  Proceeds.  The proceeds  from the sale of the Initial
Shares  and  any  Requested   Shares   hereunder   shall  be  used  for  capital
expenditures, acquisitions, working capital and other general corporate purposes
of the Company and its subsidiaries or otherwise as determined from time to time
by the  Company's  Board.  The proceeds from the sale of any  Additional  Shares
shall be used only to fund the  Company's  obligations  in  connection  with the
Remaining NxtPhase Investment.

     SECTION 2.4.  Certain  Adjustments.  In the event the Company  issues or is
deemed  under this  Section 2.4 to have issued any shares of Common  Stock on or
prior to a Closing Date at an Effective Price less than the Per Share Price, the
Per Share Price shall be reduced for  purposes of each  Closing  held after such
issuance or deemed issuance to the lowest such Effective Price and the number of
Shares to be issued at each such Closing  shall be increased so that the product
of the Per Share  Price,  as so  adjusted,  multiplied  by the  number of Shares
equals the aggregate  purchase price paid at such Closing by the  Purchaser.  In
the event the Company  issues or is deemed to have issued under this Section 2.4
any  shares  of  Common  Stock  after  a  Closing  and  prior  to the  six-month
anniversary of such Closing at an Effective Price less than the Per Share Price,
then within two Business Days of such issuance or deemed issuance,  the Company,
for no  additional  consideration,  shall issue and deliver to the  Purchaser an
additional number of shares of Common Stock equal to the difference  between (a)
the  number of  shares  of  Common  Stock  that  would  have been  issued to the
Purchaser  at all  Closings  held after the date that is six months prior to the
date of such  issuance  or deemed  issuance if the Per Share Price were equal to
the lowest such  Effective  Price minus (b) the number of shares of Common Stock
actually  issued to the  Purchaser  at all such  Closings.  For purposes of this
Section 2.4, the Company  shall be deemed to have issued  shares of Common Stock
if it issues any securities convertible into Common Stock or any option, warrant
or other right to acquire Common Stock. This Section 2.4 shall not apply to, and
no  adjustment  shall be made by reason  of, the  issuance  of (i) any shares of
Common Stock pursuant to the conversion of any security  outstanding on the date
hereof,  (ii) any shares of Common Stock issued  pursuant to the exercise of any
option,  warrant or other right to acquire Common Stock  outstanding on the date
hereof,  (iii) any  securities  issued  pursuant to any  employee  benefit  plan
approved by the Company's Board of Directors or its Compensation Committee, (iv)
any  securities  issued in connection  with any merger or  consolidation  of the
Company  with  another  Person  or  the  purchase  by  the  Company  of  all  or
substantially  all of the assets of any other Person,  (v) any securities issued
pursuant to a stock split,  stock  dividend or  recapitalization  involving  the
Company,  (vi) shares of Common Stock issued to the  Purchaser  pursuant to this
Section 2.4 or (vii) securities  issued in replacement of any securities  issued
pursuant to the preceding subsections (i) - (vi).

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     In order to induce  Perseus  Capital and the  Purchaser  to enter into this
Agreement and to induce the Purchaser to purchase the Purchased Securities,  the
Company  hereby  represents  and  warrants,  as of the date  hereof  and as each
Closing Date, that:

     SECTION 3.1. Organization and Good Standing. The Company is duly organized,
validly existing and in good standing in its jurisdiction of organization and is
duly qualified and authorized to do business in all other jurisdictions in which
the nature of its business or property makes such qualification  necessary.  The
Company has the power to own its  properties and to carry on its business as now
conducted and as proposed to be conducted.

     SECTION 3.2. Authorization.  The execution, delivery and performance by the
Company of this Agreement,  the Registration Rights Agreement,  and the issuance
and sale by the Company of the Purchased  Securities  hereunder:  (a) are within
the  Company's  power  and  authority;  (b) have  been  duly  authorized  by all
necessary  corporate  and  other  proceedings;  (c) has been duly  executed  and
delivered by an authorized  officer of the Company;  and (d) do not and will not
result  in the  creation  of any lien  upon  any of the  Company's  property  or
conflict with or result in any breach of any provision of the Company's Charter,
or any law, regulation,  order,  judgment,  writ, injunction,  license,  permit,
agreement or instrument to which the Company is subject.

     SECTION 3.3.  Enforceability.  The execution and delivery by the Company of
this Agreement,  the Registration Rights Agreement, and the issuance and sale by
the  Company  of the  Purchased  Securities  hereunder,  will  result in legally
binding  obligations of the Company,  enforceable  against it in accordance with
the respective terms and provisions  hereof and thereof except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting  enforcement of creditors' rights generally,  (ii)
as  limited  by laws  relating  to the  availability  of  specific  performance,
injunctive  relief or other  equitable  remedies,  and (iii) to the  extent  the
indemnification   provisions   contained  in  this   Agreement   and/or  in  the
Registration  Rights  Agreement  may be limited by  applicable  federal or state
securities laws.

     SECTION 3.4. SEC Reports.  The Company has filed all reports required to be
filed by it under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d)  thereof,  for the three years  preceding the date hereof
(or such shorter period as the Company was required by law to file such reports)
(the  foregoing  reports,  including the exhibits  thereto,  being  collectively
referred to herein as the "SEC  Reports")  on a timely  basis or has  received a
valid  extension of such time of filing and has filed any such SEC Reports prior
to the expiration of any such extension.  As of their respective  dates, the SEC
Reports  complied  in  all  material  respects  with  the  requirements  of  the
Securities  Act and the Exchange Act and the rules and  regulations  of the U.S.
Securities  Exchange  Commission  promulgated  thereunder,  and  none of the SEC
Reports,  when  filed,  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.

                                   ARTICLE IV

              REPRESENTATIONS OF THE PURCHASER AND PERSEUS CAPITAL

     SECTION 4.1.  Investment Intent. The Purchaser hereby represents,  warrants
and  covenants to the Company  that the  Purchaser  will  acquire the  Purchased
Securities to be purchased by the Purchaser  hereunder for  investment  only for
the  Purchaser's  own account,  not as a nominee or agent and not with a view to
the sale or distribution of any part thereof.  The Purchaser  hereby agrees that
it will not transfer the Purchased  Securities or any  securities  received upon
exercise of the Warrant or the Additional  Warrant in a manner that will violate
the Securities Act.

     SECTION  4.2.  Authorization.  Each of Perseus  Capital  and the  Purchaser
hereby  represents  and  warrants to the Company  that this  Agreement  has been
executed by a duly authorized Person on its behalf; its execution,  delivery and
performance  hereof have been duly authorized by all  appropriate  action and do
not and will not conflict  with or result in any breach of any  provision of any
law, regulation,  order, judgment, writ, injunction,  license, permit, agreement
or instrument to which it is subject.  The Purchaser  hereby further  represents
and  warrants  that  the  execution  and  delivery  of the  Registration  Rights
Agreement by the Purchaser has been effected by a duly authorized  Person on the
Purchaser's  behalf,  the execution,  delivery and performance  thereof has been
duly authorized by all appropriate action on the Purchaser's behalf and will not
conflict with or result in any breach of any  provision of any law,  regulation,
order, judgment,  writ, injunction,  license, permit, agreement or instrument to
which the Purchaser is subject.

     SECTION  4.3.  Enforceability.  Each of Perseus  Capital and the  Purchaser
hereby  represents  and warrants  that the  execution and delivery by it of this
Agreement and, in the case of the Purchaser,  the Registration Rights Agreement,
will  result in legally  binding  obligations  of it  enforceable  against it in
accordance  with the respective  terms and provisions  hereof and thereof except
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium,
and other laws of general application affecting enforcement of creditors' rights
generally,  (ii) as limited by laws  relating  to the  availability  of specific
performance,  injunctive  relief or other equitable  remedies,  and (iii) to the
extent the indemnification  provisions contained in this Agreement and/or in the
Registration  Rights  Agreement  may be limited by  applicable  federal or state
securities laws.

     SECTION  4.4.  Exemption.  The  Purchaser  understands  that the  Purchased
Securities  and any  securities  received  upon  exercise of the Warrant and the
Additional  Warrant are not  registered  under the Securities Act on the grounds
that the sale  provided for in this  Agreement  and the  issuance of  securities
hereunder  is exempt from  registration  under the  Securities  Act  pursuant to
section  4(2)  thereof,  and that the  Company's  reliance on such  exemption is
predicated on the Purchaser's representations set forth herein.

     SECTION 4.5.  Experience.  The Purchaser represents that it has substantial
experience in  evaluating  and investing in private  placement  transactions  of
securities  in  companies  similar to the  Company,  is familiar  with the risks
associated  with the business and operations of the Company,  has such knowledge
and experience in financial and business  matters as to be capable of evaluating
the merits and risks of its investment, and has the ability to bear the economic
risks of its investment for an indefinite period of time,  including the risk of
a complete loss of the Purchaser's  investment in the Purchased Securities.  The
Purchaser  represents  that it has had, during the course of the transaction and
prior to the purchase of the Purchased  Securities,  the  opportunity to request
information  from and ask questions of the Company and its  officers,  employees
and agents,  concerning the Company, its assets,  business and operations and to
receive information and answers to such requests and questions.

     SECTION 4.6.  Restricted  Securities.  The Purchaser  understands  that the
Purchased  Securities and any  securities  received upon exercise of the Warrant
and the Additional  Warrant are  characterized as "restricted  securities" under
the U.S.  federal  securities  laws inasmuch as they are being acquired from the
Company in a  transaction  not  involving a public  offering and that under such
laws and  applicable  regulations  the Purchased  Securities  and any securities
received  upon exercise of the Warrant or the  Additional  Warrant may be resold
without   registration   under  the  Securities  Act  only  in  certain  limited
circumstances.  The Purchaser acknowledges that the Purchased Securities and any
securities  received upon exercise of the Warrant or the Additional Warrant must
be held indefinitely unless subsequently registered under the Securities Act and
under applicable state securities laws or an exemption from such registration is
available.  The Purchaser  acknowledges  that each certificate  representing the
Purchased Securities shall bear a legend substantially in the following form:

"THE SECURITY  REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH  REGISTRATION  IN EFFECT UNDER
SUCH ACT UNLESS THE  COMPANY  RECEIVES  AN OPINION OF COUNSEL OR OTHER  EVIDENCE
REASONABLY  ACCEPTABLE TO IT DEMONSTRATING  THAT SUCH SALE OR TRANSFER IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT OR UNLESS
SOLD PURSUANT TO RULE 144 OF SUCH ACT.

     The foregoing  legend shall be removed from the  certificates  representing
any Purchased Securities,  at the request of the holder thereof, at such time as
(i) they  become  eligible  for resale  pursuant  to an  effective  registration
statement or Rule 144(k) under the Securities Act or (ii) the Company shall have
received an opinion of counsel or other  evidence  reasonably  acceptable to the
Company to the effect that any transfer of the Purchased Securities  represented
by such  certificates  will not violate the Securities Act and applicable  state
securities laws.

     SECTION  4.7.  Further  Limitations  on  Disposition.  Without  in any  way
limiting the  representations  set forth above,  Purchaser  will not to make any
disposition of all or any portion of the  Purchaser's  Purchased  Securities and
any securities  received upon exercise of the Warrant or the Additional  Warrant
unless and until one of the following conditions have been satisfied:

          (i)  There  is then in  effect  a  Registration  Statement  under  the
     Securities  Act  covering  the shares  intended to be disposed of, and such
     disposition is made in accordance with such Registration Statement; or

          (ii) The  Purchaser  shall have  notified  the Company of the proposed
     disposition and shall have furnished the Company with a reasonably detailed
     statement of the circumstances surrounding the proposed disposition, and if
     reasonably requested by the Company, the Purchaser shall have furnished the
     Company with an opinion of counsel,  reasonably satisfactory to the Company
     to the effect that such disposition will not require registration under the
     Securities  Act, or the  Purchaser  shall have  otherwise  sold such shares
     pursuant to Rule 144 under the Securities Act.

     SECTION 4.8.  Accredited  Investor.  The Purchaser  hereby  represents  and
warrants  that  it is  an  accredited  investor  as  defined  inRule  501(a)  of
Regulation D promulgated under the Securities Act.

     SECTION 4.9. Brokers or Finders.  The Purchaser  hereby  represents that it
has not  taken  any  action  that  would  result in the  Company  incurring  any
liability for brokerage or finders' fees or agents'  commissions for any similar
charges in connection with the transactions contemplated by this Agreement.

                                    ARTICLE V

CONDITIONS TO THE  PURCHASER'S  OBLIGATIONS TO PURCHASE THE INITIAL OR REQUESTED
SHARES

     The Purchaser's  obligation to purchase the Initial Shares or the Requested
Shares pursuant to Section 2.1 of this Agreement is subject to compliance by the
Company with its agreements and  representations  herein  contained,  and to the
satisfaction,  on or prior to the  applicable  Closing  Date,  of the  following
conditions (except to the extent any such conditions may be waived in writing by
the Purchaser):

     SECTION 5.1. Representations and Warranties.  The Company's representations
and warranties  contained in Article III hereof shall be true and correct in all
material  respects on and as of such Closing Date with the same force and effect
as  though  made on and as of such  Closing  Date  and the  Company  shall  have
performed  and  complied  with all  conditions  and  agreements  required  to be
performed or complied with by each of them prior to such Closing.

     SECTION 5.2. Legality; Governmental and Other Authorizations.  The purchase
of the Purchased Securities to be acquired on such Closing Date by the Purchaser
shall not be  prohibited by any law or  governmental  order or  regulation,  and
shall not subject the  Purchaser  to any penalty,  special tax or other  onerous
condition.  All necessary consents,  approvals,  licenses,  permits,  orders and
authorizations  of,  or  registrations,   declarations  and  filings  with,  any
governmental  or  administrative  agency  or of or with any other  Person,  with
respect to any of the  transactions  contemplated  by this Agreement  shall have
been duly  obtained or made and shall be in full force and effect other than any
applicable state securities law or blue sky filings.

                                   ARTICLE VI

                     CONDITIONS TO THE COMPANY'S OBLIGATIONS

     The  Company's  obligation  to sell  and  issue  the  Purchased  Securities
pursuant to this  Agreement is subject to compliance  by the Purchaser  with the
agreements  herein  contained,  and  to  the  satisfaction  on or  prior  to the
applicable Closing Date, of the following conditions:

     SECTION  6.1.  Representations.  The  representations  made by  Perseus  in
Article IV hereof shall be true and correct in all material  respects  when made
and shall be true and correct in all material respects as of such Closing Date.

     SECTION 6.2. Legality; Governmental and Other Authorizations.  The issuance
and sale of the Purchased Securities by the Company at such Closing shall not be
prohibited by any law or governmental order or regulation, and shall not subject
the  Company to any  penalty,  special  tax,  or other  onerous  condition.  All
necessary consents, approvals,  licenses, permits, orders and authorizations of,
or   registrations,   declarations   and  filings  with,  any   governmental  or
administrative agency or of or with any other Person, with respect to any of the
transactions  contemplated  by this  Agreement  shall have been duly obtained or
made and shall be in full  force and  effect  other  than any  applicable  state
securities law or blue sky filings.

                                   ARTICLE VII

                                  MISCELLANEOUS

     SECTION 7.1. Notices. All demands,  notices,  requests,  consents and other
communications  required or permitted  under this Agreement  shall be in writing
and  shall  be  personally  delivered  or  sent  by  facsimile  machine  (with a
confirmation copy sent by one of the other methods  authorized in this Section),
commercial  (including FedEx) or U.S. Postal Service overnight delivery service,
or,  deposited with the U.S.  Postal  Service mailed first class,  registered or
certified mail, postage prepaid, as set forth below:

     If to the Company, addressed to:

         F. William Capp President and CEO
         Beacon Power Corporation
         234 Ballardvale Street
         Wilmington, MA 01887
         Fax: (978) 988-1337

     with a copy to:

         Edwards & Angell, LLP
         101 Federal Street
         Boston, MA 02110
         Attention:  Albert L. Sokol, Esq.
         Fax: (617) 439-4170

     If to Perseus Capital or the Purchaser at the address set forth on the
signature page hereto.

     Notices  shall be deemed  given upon the earlier to occur of (i) receipt by
the party to whom such notice is directed; (ii) if sent by facsimile machine, on
the day (other than a Saturday,  Sunday or legal holiday in the  jurisdiction to
which such notice is directed)  such notice is sent if sent (as evidenced by the
facsimile  confirmed receipt) prior to 5:00 p.m. Eastern Time and, if sent after
5:00 p.m.  Eastern  Time,  on the day (other  than a  Saturday,  Sunday or legal
holiday in the  jurisdiction  to which such notice is directed) after which such
notice is sent;  (iii) on the first business day (other than a Saturday,  Sunday
or legal holiday in the jurisdiction to which such notice is directed) following
the day the same is deposited with the commercial  carrier if sent by commercial
overnight delivery service; or (iv) the fifth day (other than a Saturday, Sunday
or legal holiday in the jurisdiction to which such notice is directed) following
deposit thereof with the U.S. Postal Service as aforesaid. Each party, by notice
duly given in  accordance  therewith  may  specify a  different  address for the
giving of any notice hereunder.

     SECTION 7.2. Amendments and Waivers, Joinder. Except as otherwise expressly
provided herein, any term of this Agreement may be amended only with the written
consent of the Company and the  Purchaser.  Any amendment or waiver  effected in
accordance  with this Section  shall be binding upon the Company and each holder
of any Purchased Securities sold pursuant to this Agreement.

     SECTION  7.3.  Waiver of Jury  Trial.  EACH OF THE  PARTIES  HERETO  HEREBY
VOLUNTARILY  AND  IRREVOCABLY  WAIVES  TRIAL  BY JURY  IN ANY  ACTION  OR  OTHER
PROCEEDING  BROUGHT  IN  CONNECTION  WITH  THIS  AGREEMENT,  ANY OF THE  RELATED
AGREEMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

     SECTION 7.4. Counterparts.  This Agreement may be executed in any number of
counterparts,  each of which  will be deemed an  original  and all of which will
constitute one and the same agreement.

     SECTION  7.5.  Entire  Agreement.  This  Agreement  and the other  writings
referred to herein or delivered pursuant hereto which form a part hereof contain
the entire agreement and understanding of the parties hereto with respect to the
subject matter hereof.  This Agreement  supersedes all prior and contemporaneous
discussions, agreements and understandings related to said subject matter.

     SECTION  7.6.  Survival  of  Representations   and  Warranties,   etc.  All
representations  and warranties  contained  herein shall survive until 12 months
from the date hereof.

     SECTION 7.7. Assignment.  All of the terms and provisions of this Agreement
shall be  binding  upon and inure to the  benefit of and be  enforceable  by the
respective successors and assigns of the parties hereto, whether so expressed or
not, and, in particular, shall inure to the benefit of and be enforceable by the
holder  or  holders  at  the  time  of  any of  the  Purchased  Securities.  The
Purchaser's  obligations  hereunder may be assigned by Perseus to one or more of
its  affiliates  provided such  transferee  agrees in writing to be bound by the
provisions hereof that apply to the "Purchaser."

     SECTION 7.8. Governing Law. This Agreement shall be governed by the laws of
the  State of  Delaware,  without  regard  to the  conflicts  of law  provisions
thereunder.

<PAGE>

     IN WITNESS WHEREOF, this Agreement is executed and delivered as of the date
first  written  above by the  undersigned  who hereby  agrees to be bound by the
terms and provisions set forth in the Agreement.

                                       BEACON POWER CORPORATION

                                       By:/s/ James M. Spiezio
                                       ----------------------------------------
                                       Name: James M. Spiezio
                                       Title: Chief Financial Officer

                                       PERSEUS 2000 EXPANSION FUND, L.L.C.

                                       By:      /s/ Kenneth M. Socha
                                       -------------------------------------
                                       Name: Kenneth M. Socha
                                       Title: Senior Managing Director
                                       Address:    2099 Pennsylvania Ave., NW
                                                   Suite 900
                                                   Washington, DC 20006

                                       PERSEUS CAPITAL , L.L.C.

                                       By:      /s/ Kenneth M. Socha
                                       -------------------------------------
                                       Name: Kenneth M. Socha
                                       Title: Senior Managing Director

                                       Address:    2099 Pennsylvania Ave., NW
                                                   Suite 900
                                                   Washington, DC 20006

<PAGE>
                                    EXHIBIT A

                      Form of Registration Rights Agreement

<PAGE>

                                    EXHIBIT B

                             Form of Notice of Call

To:  [Insert Purchaser Name]                             Dated:  ____________

     Beacon Power  Corporation (the  "Company"),  pursuant to the provisions set
forth in Section 2.1 of the Investment  Agreement by and between the Company and
the Purchaser (the  "Investment  Agreement"),  hereby provides written notice to
the Purchaser of the Company's request that the Purchaser  purchase _____ shares
of the  Company's  Common  Stock for an aggregate  purchase  price of [$__] (the
"Purchase  Price"),  all in  accordance  with  Section  2.1  of  the  Investment
Agreement. Capitalized terms used but not defined herein shall have the meanings
attributed to such terms in the Investment Agreement.

     In accordance with the provisions of the Investment Agreement,  the Company
requests the subscription and disbursement by the Purchaser of the amount of the
Purchase  Price.  The  Purchaser is requested to pay such amount to [Insert Wire
Transfer Instructions].

     Against disbursement by the Purchaser in accordance with Section 2.1 of the
Purchase  Agreement,   the  Company  will  deliver  to  the  Purchaser  a  stock
certificate  evidencing  ownership of the Requested Shares to the address of the
Purchaser set forth in the Investment  Agreement,  unless otherwise indicated in
writing by the Purchaser.

     IN WITNESS  WHEREOF,  the  undersigned  has  executed  and  delivered  this
certificate, this ___ day of __________, 2005.

                                       BEACON POWER CORPORATION

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

<PAGE>
                                    EXHIBIT C

THIS  WARRANT  AND THE  SHARES  PURCHASABLE  HEREUNDER  HAVE BEEN  ACQUIRED  FOR
INVESTMENT  AND HAVE NOT  BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933.
NEITHER THIS WARRANT NOR SUCH SHARES MAY BE SOLD OR  TRANSFERRED  IN THE ABSENCE
OF SUCH  REGISTRATION  IN EFFECT  UNDER SUCH ACT UNLESS THE COMPANY  RECEIVES AN
OPINION OF COUNSEL OR OTHER EVIDENCE  REASONABLY  ACCEPTABLE TO IT DEMONSTRATING
THAT SUCH  SALE OR  TRANSFER  IS EXEMPT  FROM THE  REGISTRATION  AND  PROSPECTUS
DELIVERY  REQUIREMENTS  OF SAID ACT OR UNLESS SOLD  PURSUANT TO RULE 144 OF SUCH
ACT.

                          Common Stock Purchase Warrant

                      To Purchase Shares of Common Stock of

                            Beacon Power Corporation

                                                             __________, 2005

     FOR VALUE RECEIVED,  Beacon Power Corporation,  a Delaware corporation (the
"Company"),  hereby  grants  to  [_____________]  (together  with its  permitted
successors and assigns, the "Registered  Holder"),  the right to purchase at any
time up to and including April ___, 2010 (the "Termination Date"), the number of
shares of fully paid and  nonassessable  Common Stock of the Company,  $0.01 par
value  per  share  (the  "Common  Stock",  and  those  shares  of  Common  Stock
purchasable under this Warrant being the "Warrant Shares"), equal to the product
of (i)  806,400  divided  by(ii) the Warrant  Price (as  defined  below) then in
effect,  for a  purchase  price  of 120% of the Per  Share  Price as of the date
hereof (as defined in the Investment Agreement,  dated as of the date hereof, by
and among the  Company,  the  Registered  Holder  and  Perseus  Capital,  L.L.C.
("Investment  Agreement")),  which Per Share Price may be adjusted  from time to
time for purposes of this Warrant and the  calculation of the Warrant Price only
during the six-month period following the date hereof pursuant to Section 2.4 of
the Investment  Agreement (the "Warrant Price"). For the avoidance of doubt, any
adjustments to the Per Share Price under the terms of the  Investment  Agreement
that may occur after the  six-month  period  following  the date hereof shall be
disregarded for purposes of calculating the Warrant Price hereunder.

     1. EXERCISE.

     (a) This Warrant may be exercised by the Registered Holder on or before the
Termination  Date, in whole or in part, by surrendering  this Warrant,  with the
purchase  form  appended  hereto as Exhibit I duly  executed  by the  Registered
Holder at the  principal  executive  offices  of the  Company,  or at such other
office or agency as the Company may  designate,  accompanied by payment in full,
in lawful money of the United States, of the Warrant Price payable in respect of
the number of Warrant Shares purchased upon such exercise.

     (b) The Registered  Holder may, at its option,  elect to pay some or all of
the Warrant  Price payable upon an exercise of this Warrant by surrender of this
Warrant  at the  principal  executive  office of the  Company,  or at such other
office or agency as the Company may  designate,  together with the purchase form
attached hereto as Exhibit I to exercise by means of a net issuance exercise, in
which event the  Company  shall  issue to the  Registered  Holder that number of
Warrant  Shares equal to the total number of Warrant  Shares,  minus the product
obtained by  multiplying  (x) the total number of Warrant  Shares (or, if only a
portion of the Warrant is being  exercised,  the  portion of the  Warrant  being
cancelled,  at the date of such calculation) by (y) a fraction, the numerator of
which shall be the Warrant Price per share and the denominator of which shall be
the Fair Market  Value per share of Common Stock as of the  Exercise  Date.  The
"Fair Market Value" per share of Common Stock shall be determined as follows:

          (i) As long as the  Common  Stock is listed on a  national  securities
     exchange,  the  NASDAQ  Small Cap  Market,  the NASDAQ  National  Market or
     another  nationally  recognized trading system as of the Exercise Date, the
     Fair  Market  Value  per share of  Common  Stock  shall be deemed to be the
     average of the high and low reported  sale prices per share of Common Stock
     thereon  on  the  trading  day  immediately  preceding  the  Exercise  Date
     (provided  that if no such price is reported  on such day,  the Fair Market
     Value per share of Common  Stock  shall be  determined  pursuant  to clause
     (ii)).

          (ii) In all other  cases,  the Fair  Market  Value per share of Common
     Stock  shall be deemed to be the amount  most  recently  determined  by the
     Board of  Directors  to  represent  the fair market  value per share of the
     Common Stock.  Notwithstanding the foregoing, if the Board of Directors has
     not made such a determination  within the  three-month  period prior to the
     Exercise Date,  then (A) the Board of Directors  shall make a determination
     of the Fair Market  Value per share of the Common Stock within 20 days of a
     request by the  Registered  Holder  that it do so, and (B) the  exercise of
     this Warrant  pursuant to this  subsection 1(b) shall be delayed until such
     determination is made.

     (c) Each  exercise of this  Warrant  shall be deemed to have been  effected
immediately  prior to the close of  business  on the day on which  this  Warrant
shall have been  surrendered to the Company as provided in subsection 1(a) above
(the  "Exercise  Date").  At such  time,  the person or persons in whose name or
names any  certificates  for Warrant Shares shall be issuable upon such exercise
as provided in  subsection  1(d) below shall be deemed to have become the holder
or holders of record of the Warrant Shares represented by such certificates.

     (d) As soon as practicable after the exercise of this Warrant in full or in
part, and in any event within twenty (20) days thereafter,  the Company,  at its
expense,  will  cause to be  issued  in the  name  of,  and  delivered  to,  the
Registered  Holder,  or as such  Holder  (upon  payment  by such  Holder  of any
applicable transfer taxes) may direct:

          (i) a certificate or certificates  for the number of Warrant Shares to
     which the Registered Holder shall be entitled upon such exercise; and

          (ii) in case such  exercise is in part only, a new warrant or warrants
     (dated the date hereof) of like tenor, calling in the aggregate on the face
     or faces  thereof for the number of Warrant  Shares equal  (without  giving
     effect to any  adjustment  therein) to the number of such shares called for
     on the face of this Warrant minus the sum of: (a) the number of such shares
     purchased by the Registered Holder upon such exercise and (b) the number of
     Warrant Shares (if any) covered by the portion of this Warrant cancelled in
     payment of the total Warrant  Price payable upon such exercise  pursuant to
     subsection 1(b) above.

     2. ADJUSTMENTS.

     (a) Adjustment for Stock Splits and  Combinations.  If the Company shall at
any time or from time to time  after the date on which  this  Warrant  was first
issued (the  "Original  Issue Date")  effect a  subdivision  of the  outstanding
Common Stock,  the number of Warrant  Shares then in effect  immediately  before
that subdivision shall be proportionately  increased and the Warrant Price shall
be proportionately  decreased.  If the Company shall at any time or from time to
time after the  Original  Issue Date  combine the  outstanding  shares of Common
Stock, the number of Warrant Shares shall be  proportionately  decreased and the
Warrant Price shall be  proportionately  increased.  Any  adjustment  under this
paragraph  shall  become  effective  at the  close of  business  on the date the
subdivision or combination becomes effective.

     (b)  Adjustments for Other  Dividends and  Distributions.  In the event the
Company  at any time or from time to time  after the  Original  Issue Date shall
make or issue, or fix a record date for the  determination  of holders of Common
Stock  entitled  to  receive,  a  dividend  or  other  distribution  payable  in
securities  of the Company or in cash or other  property,  then and in each such
event the Registered  Holder shall receive upon exercise hereof,  in addition to
the number of shares of Common Stock issuable hereunder,  the kind and amount of
securities of the Company  and/or cash and other  property  which the Registered
Holder would have been  entitled to receive had this  Warrant been  exercised on
the date of such  event and had the  Registered  Holder  thereafter,  during the
period from the date of such event to and including the Exercise Date,  retained
any such securities receivable, giving application to all adjustments called for
during  such  period  under  this  Section 2 with  respect  to the rights of the
Registered Holder.

     (c)  Adjustment for Mergers or  Reorganizations,  etc. If there shall occur
any reclassification,  reorganization, recapitalization,  consolidation, sale of
all or  substantially  all assets or merger  involving  the Company in which the
Common  Stock is  converted  into or  exchanged  for  securities,  cash or other
property  (other than a  transaction  covered by subsection  2(a) above),  then,
following   any   such   reclassification,   reorganization,   recapitalization,
consolidation,  sale of all or substantially  all assets or merger,  and without
payment of any additional  consideration  thereof,  the Registered  Holder shall
receive upon exercise  hereof the kind and amount of  securities,  cash or other
property  which the  Registered  Holder would have been  entitled to receive if,
immediately prior to such  reclassification,  reorganization,  recapitalization,
consolidation or merger, sale of all or substantially all assets, the Registered
Holder had held the number of shares of Common  Stock  subject to this  Warrant,
giving  application to all adjustments  called for during such period under this
Section 2 with respect to the rights of the Registered Holder.

     The  foregoing  provisions  of this Section 2(c) shall  similarly  apply to
successive reorganizations,  consolidations, mergers, sales and transfers and to
the stock or securities of any other corporation that are at the time receivable
upon the exercise of this Warrant. If the per share consideration payable to the
holder hereof for Warrant Shares in connection with any such transaction is in a
form  other  than  cash  or  marketable  securities,  then  the  value  of  such
consideration  shall  be  determined  in good  faith by the  Company's  Board of
Directors. In all events, appropriate adjustment (as determined in good faith by
the  Company's  Board  of  Directors)  shall be made in the  application  of the
provisions  of this  Warrant  with  respect to the rights and  interests  of the
Holder after the  transaction,  to the end that the  provisions  of this Warrant
shall be applicable  after that event, as near as reasonably may be, in relation
to any shares or other  property  deliverable  after that event upon exercise of
this Warrant.  (d)  Certificate as to  Adjustments.  Upon the occurrence of each
adjustment  or  readjustment  pursuant  to this  Section  2, the  Company at its
expense shall promptly  compute such  adjustment or  readjustment  in accordance
with the terms hereof and furnish to the Registered Holder a certificate setting
forth  such  adjustment  or  readjustment  (including  the  kind and  amount  of
securities,  cash or other property for which this Warrant shall be exercisable,
the Warrant Price and the method of  calculation  of each) and showing in detail
the facts upon which such adjustment or readjustment is based.

     3. FRACTIONAL  SHARES.  The Company shall not be required upon the exercise
of this Warrant to issue any fractional  shares,  and shall round any fractional
shares  to the next  highest  whole  number of  shares.  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 Registered  Holder
an amount  computed by multiplying  the  fractional  interest by the Fair Market
Value of a full share of common Stock.

     4.  REPRESENTATIONS AND WARRANTIES BY THE REGISTERED HOLDER. The Registered
Holder represents and warrants to the Company as follows:

     (a) Upon each exercise hereof,  the Registered  Holder must reaffirm to the
Company that the Registered  Holder is an "accredited  investor" as that term is
defined in Rule 501 under the  Securities  Act of 1933,  as amended (the "Act").
The Registered  Holder is purchasing the Warrant and the Warrant Shares for such
Registered Holder's own account for investment purposes only and not with a view
to,  or for the  resale in  connection  with,  any  "distribution"  thereof  for
purposes of the Act. The Registered Holder  understands that the Warrant and the
Warrant  Shares  have not  been  registered  under  the Act by  reason  of their
issuance in a transaction  exempt from the registration and prospectus  delivery
requirements  of the Act  pursuant  to Section  4(2)  thereof,  which  exemption
depends upon,  among other things,  the bona fide nature of Registered  Holder's
investment intent as expressed herein. In this connection, the Registered Holder
understands  that, in the view of the U.S.  Securities  and Exchange  Commission
(the "SEC"),  the statutory  basis for such  exemption may be unavailable if the
Registered  Holder's   representation  was  predicated  solely  upon  a  present
intention  to hold the  Warrant or the Warrant  Shares for the  minimum  capital
gains period specified under tax statutes,  for a deferred sale, for or until an
increase or decrease in the market  price of the Warrant or the Warrant  Shares,
or for a period of one year or any other fixed period in the future.

     (b) The  Registered  Holder  understands  that the  Warrant and the Warrant
Shares  must  be  held by the  Registered  Holder  indefinitely,  and  that  the
Registered  Holder must  therefore  bear the  economic  risk of such  investment
indefinitely,  unless a subsequent  disposition  thereof is registered under the
Act or is  exempted  from  such  registration.  The  Registered  Holder  further
understands  that the  Warrant and the  Warrant  Shares have not been  qualified
under any state's  blue sky laws by reason of their  issuance  in a  transaction
exempt from the  qualification  requirements of applicable blue sky laws,  which
exemptions  depend  upon,  among  other  things,  the bona  fide  nature  of the
Registered  Holder's  investment  intent  expressed  above.  In  addition,   the
Registered  Holder  understands that any certificate  evidencing the Warrant and
the Warrant  Shares will be imprinted  with a legend that prohibits the transfer
of the  Warrant  and the  Warrant  Shares  unless  they are  registered  or such
registration is not required in the opinion of counsel for the Company.

     (c) The  Registered  Holder is familiar  with the  provisions  of Rule 144,
promulgated under the Act, which, in substance, permits limited public resale of
"restricted  securities"  acquired,  directly  or  indirectly,  from the  issuer
thereof,  in a  non-public  offering  subject  to the  satisfaction  of  certain
conditions.

     (d) The Registered Holder further  understands that in the event all of the
applicable  requirements of Rule 144 are not satisfied,  registration  under the
Act, compliance with Regulation A, or some other registration  exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive, the
staff of the SEC has  expressed  its  opinion  that  persons  proposing  to sell
private placement  securities other than in a registered  offering and otherwise
than  pursuant  to  Rule  144  will  have  a  substantial  burden  of  proof  in
establishing that an exemption from registration is available for such offers or
sales,  and that such persons and their  respective  brokers who  participate in
such transactions do so at their own risk.

     5. REQUIREMENTS FOR TRANSFER.

     (a) This Warrant and the Warrant  Shares  shall not be sold or  transferred
unless either (i) they first shall have been registered  under the Act and under
applicable  state  securities  or blue sky laws, or (ii) the Company first shall
have been furnished with an opinion of legal counsel, reasonably satisfactory to
the  Company,  to the  effect  that such  sale or  transfer  is exempt  from the
registration requirements of the Act.

     (b)  Each  certificate  representing  Warrant  Shares  shall  bear a legend
substantially in the following form:

     "THE  SHARES  REPRESENTED  BY  THIS  CERTIFICATE  HAVE  BEEN  ACQUIRED  FOR
INVESTMENT AND HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933. SUCH
SHARES MAY NOT BE SOLD OR  TRANSFERRED  IN THE ABSENCE OF SUCH  REGISTRATION  IN
EFFECT UNDER SUCH ACT UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL OR OTHER
EVIDENCE REASONABLY ACCEPTABLE TO IT DEMONSTRATING THAT SUCH SALE OR TRANSFER IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT OR
UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.

     The foregoing  legend shall be removed from the  certificates  representing
any Warrant Shares,  at the request of the holder  thereof,  at such time as (i)
they become eligible for resale pursuant to an effective  registration statement
or Rule 144(k) under the Act or (ii) the Company shall have  received  either an
opinion of counsel or a  "no-action"  letter from the SEC to the effect that any
transfer of the Warrant Shares represented by such certificates will not violate
the Act and applicable state securities laws.

     6. NO IMPAIRMENT. The Company will not, by amendment of its charter through
reorganization, transfer of assets, consolidation, merger, dissolution, issuance
or sale of securities or any other voluntary action,  avoid or seek to avoid the
observance or performance  of any of the terms of this Warrant,  but will at all
times in good  faith  assist in the  carrying  out of all such  terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the holder of this Warrant against impairment.

     7. NOTICES OF RECORD DATE, ETC. In the event:

     (a) that the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time  deliverable upon the exercise of this
Warrant) for the purpose of  entitling or enabling  them to receive any dividend
or other distribution,  or to receive any right to subscribe for or purchase any
shares of stock of any class or any other  securities,  or to receive  any other
right; or

     (b) of any capital  reorganization of the Company,  any reclassification of
the Common Stock of the Company, any consolidation or merger of the Company with
or into another  corporation  (other than a consolidation or merger in which the
Company is the surviving  entity and its Common Stock is not  converted  into or
exchanged  for any other  securities  or  property),  or any  transfer of all or
substantially all of the assets of the Company; or

     (c) of the voluntary or involuntary dissolution,  liquidation or winding-up
of the Company,  then,  and in each such case, the Company will mail or cause to
be mailed to the Registered Holder a notice specifying,  as the case may be, (i)
the record date for such  dividend,  distribution  or right,  and the amount and
character of such dividend, distribution or right, or (ii) the effective date on
which such reorganization,  reclassification,  consolidation,  merger, transfer,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed,  as of which the  holders of record of Common  Stock (or such other
stock or securities at the time  deliverable  upon the exercise of this Warrant)
shall be entitled to exchange  their shares of Common Stock (or such other stock
or  securities)  for  securities  or  other  property   deliverable   upon  such
reorganization, reclassification,  consolidation, merger, transfer, dissolution,
liquidation or  winding-up.  Such notice shall be mailed at least ten days prior
to the record date or effective date for the event specified in such notice.

     8. STOCK  FULLY  PAID,  RESERVATION  OF STOCK.  All of the  Warrant  Shares
issuable upon the exercise of the rights  represented by this Warrant will, upon
issuance and receipt of the purchase price therefor,  be validly  issued,  fully
paid and  nonassessable,  and free from all taxes,  liens and charges except for
restrictions  on transfer  provided for herein or under  applicable  federal and
state securities laws. The Company will at all times reserve and keep available,
solely for issuance and delivery upon the exercise of this Warrant,  such number
of shares of Common Stock and other  securities,  cash and/or property,  as from
time to time shall be issuable upon the exercise of this Warrant.

     9.  EXCHANGE  OF  WARRANTS.  Upon  the  surrender  of this  Warrant  by the
Registered Holder,  properly endorsed, to the Company at the principal executive
offices of the Company,  the Company will, subject to the provisions of Sections
4 and 5 hereof,  issue and deliver to or upon the order of such  Holder,  at the
Company's  expense,  a new Warrant or Warrants of like tenor, in the name of the
Registered  Holder or as the  Registered  Holder (upon payment by the Registered
Holder of any applicable transfer taxes) may direct, calling in the aggregate on
the face or faces  thereof  for the  number of shares of Common  Stock (or other
securities, cash and/or property) then issuable upon exercise of this Warrant.

     10.   REPLACEMENT  OF  WARRANTS.   Upon  receipt  of  evidence   reasonably
satisfactory  to the Company of the loss,  theft,  destruction  or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity  agreement  (without  any  obligation  for a surety or other  security
therefor) in an amount reasonably  satisfactory to the Company,  or (in the case
of mutilation) upon surrender and cancellation of this Warrant, the Company will
issue, in lieu thereof, a new Warrant of like tenor.

     11. TRANSFERS, ETC.

     (a) The Company will maintain a register containing the name and address of
the Registered  Holder of this Warrant.  The Registered Holder may change its or
his  address as shown on the warrant  register by written  notice to the Company
requesting such change.

     (b) This Warrant and all rights hereunder are transferable,  in whole or in
part,  upon surrender of this Warrant with a properly  executed  assignment in a
form reasonably  acceptable to the Company at the principal executive offices of
the Company.

     (c) Until any transfer of this Warrant is made in the Warrant register, the
Company may treat the  Registered  Holder as the  absolute  owner hereof for all
purposes;  provided, however, that if and when this Warrant is properly assigned
in blank,  the  Company  may (but  shall not be  obligated  to) treat the bearer
hereof as the absolute owner hereof for all purposes, notwithstanding any notice
to the contrary.

     12. MAILING OF NOTICES,  ETC. All notices and other communications from the
Company to the  Registered  Holder shall be mailed by  first-class  certified or
registered mail,  postage prepaid,  to the address last furnished to the Company
in writing by the Registered Holder. All notices and other  communications  from
the Registered  Holder or in connection  herewith to the Company shall be mailed
by first-class  certified or registered mail, postage prepaid, to the Company at
its principal  executive  office.  If the Company  should at any time change the
location of its  principal  executive  office to a place other than as set forth
below,  it shall  give  prompt  written  notice  to the  Registered  Holder  and
thereafter  all  references  in this  Warrant to the  location of its  principal
executive office at the particular time shall be as so specified in such notice.

     13. NO RIGHTS AS  STOCKHOLDER.  Until the  exercise  of this  Warrant,  the
Registered  Holder shall not have or exercise  any rights by virtue  hereof as a
stockholder of the Company.

     15.  CHANGE OR WAIVER.  Any term of this  Warrant  may be amended or waived
upon the written consent of the Company and the Registered Holder.

     16.  SECTION  HEADINGS.  The Section  headings in this  Warrant are for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.

     17.  GOVERNING  LAW.  This  Warrant  will be governed by and  construed  in
accordance with the internal laws of the State of Delaware without giving effect
to the  conflict  or choice of law  provision  thereof  that would give rise the
application of the domestic substantive law of any other jurisdiction.

         EXECUTED as of the Date of Issuance indicated above.

                                       BEACON POWER CORPORATION

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

<PAGE>

                                    EXHIBIT I

                                  PURCHASE FORM

To:  Beacon Power Corporation                           Dated:  ____________

     The  undersigned,  pursuant  to the  provisions  set forth in the  attached
Warrant, hereby irrevocably elects to purchase (check applicable box):

         |_|      _____ shares of the Common Stock covered by such Warrant; or

         |_|      the maximum number of shares of Common Stock covered by such
                  Warrant pursuant to the cashless exercise procedure set forth
                  in Section 1(b).

     The  undersigned  herewith makes payment of the full Warrant Price for such
shares at the price per share provided for in such Warrant, which is $____. Such
payment takes the form of (check applicable box or boxes):

         |_|      $______ in lawful money of the United States; and/or

         |_|      the cancellation of such number of Warrant Shares as is
                  necessary, in accordance with the formula set forth in Section
                  1(b), to exercise this Warrant with respect to the maximum
                  number of Warrant Shares purchasable pursuant to the cashless
                  exercise procedure set forth in Section 1(b).

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

     The  undersigned  is an  "accredited  investor" as defined in  Regulation D
promulgated under the Securities Act of 1933, as amended.

                                       Name of Entity:
                                                      -----------------------

                                       Signature of
                                       Authorized Person:
                                                          --------------------

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

                                            Date:
                                                     -------------------------Exhibit
10.1

 

April 5, 2005

 

Mr. Richard Daly

1233 University Avenue

Palo Alto, CA 94301

 

Dear Dick:

 

The purpose of this Letter Agreement (the “Agreement”) is to set forth
the terms of the consultancy with Aerogen, Inc. (“Aerogen”) by yourself (“Consultant”),
which are as follows:

 

1.             Consultant shall act
as a consultant to Aerogen from time to time during the period from April 1
through May 1, 2005.

 

2.             Consultant shall
consult in the field of strategic planning and analysis as it relates to Aerogen.  The consultancy will be in the form of
meetings, advice and the like, at facilities of Aerogen or at other mutually
convenient locations as shall be agreed to by the parties in advance.

 

3.             In recognition of
these services, Aerogen agrees to compensate Consultant at the rate of $2,000
per full day of consulting time (exclusive of travel time), prorated for
partial hours, plus reasonable documented out-of-pocket expenses incurred in
connection with the consulting services provided and consistent with Aerogen’s reimbursement
policies.  Amounts payable hereunder for
consulting services and expenses shall not exceed $40,000 during the term of
this Agreement.  Consultant shall invoice
Aerogen not more frequently than bi-weekly and such invoices shall be payable
10 days after receipt by Aerogen. 
Payment for consulting services rendered hereunder shall be subject to
the completion of such services to the reasonable satisfaction of Aerogen.

 

4.             “Confidential
Information” means all information, including without limitation data,
technology, samples and specimens relating to Aerogen and its products, product
concepts, technologies, businesses, financial, marketing, clinical or
regulatory affairs, manufacturing processes and procedures, or those of any
third party from whom Aerogen receives information on a confidential basis,
whether written, graphic or oral, furnished to Consultant by or on behalf of
Aerogen, either directly or indirectly, or obtained or observed by Consultant
while providing services hereunder, and the services to be provided by
Consultant hereunder, with the
exception only of the following:

 

a)             information that is
now in the public domain or subsequently enters the public domain without fault
on the part of Consultant;

 

b)            information
that is presently known by Consultant from Consultant’s own sources as
evidenced by Consultant’s prior written records; and information disclosed to
Consultant by a third party legally and contractually entitled to make such
disclosures.

 

Any combination of features or disclosures shall not be deemed to fall
within the foregoing exclusions merely because certain individual features are
published or available to the general public or in the rightful possession of
Consultant unless the combination as a whole falls within any of the above
exceptions.

 

Except as required in Consultant’s duties to Aerogen, Consultant agrees
not to disclose or use at any time or for any purpose, either during or
subsequent to the term of this Agreement, any Confidential Information, without
the prior written consent of Aerogen, to be given or withheld in Aerogen’s
absolute discretion.  Consultant shall
take all necessary and reasonable precautions to prevent the disclosure of
Confidential Information to any unauthorized third parties.  In furtherance of and without in any way
limiting the foregoing, Consultant agrees that no public disclosure of
Confidential Information shall be made at research seminars, lectures or
professional meetings, or in publications or papers submitted for publication
without Aerogen’s prior written consent, to be given or withheld in Aerogen’s
absolute discretion.  Notwithstanding the
foregoing, Confidential Information may be disclosed to the extent required by
applicable laws or regulations or as ordered by a court or regulatory body
having competent jurisdiction provided that

 

 

Consultant uses her best efforts to limit the disclosure and maintain
confidentiality to the extent possible and provides reasonable prior written
notice to Aerogen.

 

5.             All inventions,
ideas, improvements, discoveries, enhancements, modifications, know-how, data
and information of every kind and description conceived, generated, made, or
reduced to practice, as the case may be, by Consultant, either alone or jointly
with others, which arise out of or relate to this Agreement (the “Inventions”)
shall be the sole and exclusive property of Aerogen.  Consultant agrees to disclose such Inventions
promptly to Aerogen, to assign all of Consultant’s right, title and interest in
and to any such Inventions promptly to Aerogen without royalty or any other
consideration and to execute all applications, assignments or other instruments
reasonably requested by Aerogen, in order for Aerogen to establish Aerogen’s
ownership of such Inventions and to obtain whatever protection for such
Inventions, including patent and copyright rights in any and all countries on
such Inventions as Aerogen shall determine. 
Consultant further agrees to cooperate fully with Aerogen in the process
of securing and enforcing Aerogen’s rights to such Inventions and Aerogen shall
compensate Consultant for Consultant’s reasonable time devoted to such
activities at Aerogen’s request and reimburse Consultant for reasonable
expenses incurred in connection therewith.

 

6.             All Confidential
Information disclosed by or on behalf of Aerogen to Consultant pursuant to this
Agreement shall be and remain the property of Aerogen and all written or
graphic Confidential Information and copies thereof, including those in
electronic form, shall be promptly returned or lawfully destroyed upon Aerogen’s
request, provided that Consultant shall be entitled to retain one set of all
such information for the sole purpose of monitoring Consultant’s obligations
hereunder.

 

7.             It is understood that
Consultant shall be serving under this Agreement as an independent contractor,
and shall not be eligible to participate in any benefits extended by Aerogen to
its employees.

 

8.             Consultant represents
and warrants to Aerogen that Consultant is legally able to enter into this
consulting arrangement with Aerogen and that this Agreement will not and does
not conflict with any agreement, arrangement or understanding, written or oral,
to which Consultant is a party or by which Consultant is bound.

 

9.             Either (i) Consultant
is covered by current Workers’ Compensation coverage and a Certificate of
Workers’ Compensation is attached hereto, or (ii) Consultant agrees that
Consultant will not make any claims against Aerogen for personal injury or
damage to property which may occur as a result of or in connection with the
activities contemplated hereby, but rather, Consultant will look to Consultants
own resources in connection with any such claim.

 

10.           For a period of one
year following termination of this Agreement, Consultant will not solicit or in
any manner encourage any employee of Aerogen to leave its employ.

 

11.           Either party may
terminate this Agreement at any time upon 30 days’ written notice to the other
party.  The provisions regarding
Confidential Information and Inventions under this Agreement, and the
provisions of Paragraph 9, shall survive expiration or termination of this
Agreement for any reason.  In the event
of termination by Aerogen, subject to Paragraph 3, Consultant shall be entitled
to compensation for services rendered and reimbursement for noncancellable
expenses incurred under this Agreement prior to the date of termination.

 

12.           This Agreement shall be
governed and construed in accordance with the laws of the State of California,
excluding any choice of law rules which may direct the application of the laws
of another jurisdiction.

 

If the foregoing is acceptable, please have both copies of this
Agreement executed and dated and return one fully executed original to Aerogen.

 

Very truly yours,

 

Aerogen, Inc.

 

	
  /s/ Robert S. Breuil

  	
   

  

 

Robert S. Breuil

Chief Financial Officer and Vice President, Corporate Development

 

 

Agreed and accepted this 5th day of April, 2005

 

	
  /s/ Richard Daly

  	
   

  
	
  Richard Daly

  
	
   

  
	
  Social Security No.:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]