COMMON STOCK PURCHASE AGREEMENT

This Common Stock Purchase Agreement (this “ Agreement ”) is dated as of February 19, 2009, by and between Beacon Power Corporation, a Delaware corporation (the “ Company ”), and Seaside 88, LP, a Florida limited partnership (such investor, including its successors and assigns, “ Seaside ”).

WHEREAS, subject to the terms and conditions set forth in this Agreement, the Company desires to issue and sell to Seaside, and Seaside desires to purchase from the Company, up to $18,000,000 of shares of Common Stock on the Closing Dates;

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and Seaside agree as follows:

1.1            Definitions .  In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings indicated in this Section 1.1:

“ Action ” shall have the meaning ascribed to such term in Section 3.1(j).

“ Affiliate ” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 144.

“ Cap ” shall have the meaning ascribed to such term in Section 2.2.

“ Closing ” means the Initial Closing and each Subsequent Closing.

“ Closing Dates ” means the Initial Closing Date and each Subsequent Closing Date.

“ Commission ” means the Securities and Exchange Commission.

“ 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 reclassified.

“ Common Stock Equivalents ” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“ Company Counsel ” means Edwards Angell Palmer & Dodge, LLP, or other counsel (including in-house counsel) reasonably acceptable to Seaside.

“ DTC ” means the Depository Trust Company.

“ Disclosure Schedules ” means the disclosure schedules of the Company delivered concurrently herewith as updated from time to time.

“ Evaluation Date ” shall have the meaning ascribed to such term in Section 3.1(l).

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ First Extended Term ” shall have the meaning ascribed to such term in Section 5.1.

“ GAAP ” shall have the meaning ascribed to such term in Section 3.1(h).

“ Initial Closing ” means the closing of the purchase and sale of the Common Stock pursuant to Section 2.1.

“ Initial Closing Date ” means February 20, 2009 or such later date when all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) Seaside’s obligations to purchase the Shares and (ii) the Company’s obligations to deliver the Shares have been satisfied or waived.

“ Initial Term ” shall have the meaning ascribed to such term in Section 5.1.

“ Liens ” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

“ Material Adverse Effect ” shall have the meaning ascribed to such term in Section 3.1(b).

“ New Equity ” shall have the meaning ascribed to such term in Section 4.7.

“ Per Share Purchase Price ” shall be an amount equal to the daily volume weighted average of actual trading prices measured in hundredths of cents of the Common Stock of the Company on the Trading Market for the five consecutive trading days prior to a Closing Date multiplied by 80%.

“ Person ” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“ Proceeding ” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“ Prospectus Supplement ” means the supplement to the base prospectus contained in the Registration Statement to be filed in connection with the sale to Seaside, or the resale by Seaside, of the Shares.

“ Registration Statement ” means the registration statement of the Company, Commission File No. 333-152140, as amended, covering the sale to Seaside, or the resale by Seaside, of the Shares.

“ Required Approvals ” shall have the meaning ascribed to such term in Section 3.1(e).

“ Rule 144 ” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“ Seaside Party ” shall have the meaning ascribed to such term in Section 4.5.

“ SEC Reports ” shall have the meaning ascribed to such term in Section 3.1(h).

“ Second Extended Term ” shall have the meaning ascribed to such term in Section 5.1.

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

“ Shares ” means the shares of Common Stock issued or issuable to Seaside pursuant to this Agreement.

“ Short Sales ” shall include, without limitation, all “short sales” as defined in Rule 200 of Regulation SHO of the Exchange Act, but does not include any reservation or location of borrowable shares.

“ Subsequent Closing ” means each closing of the purchase and sale of the Common Stock pursuant to Section 2.2.

“ Subsequent Closing Date ” means the 20th day of each month commencing with March 2009 (or, if such day is not a Trading Day, then the first day thereafter that is a Trading Day) during the term of this Agreement in accordance with Section 5.1 hereof, except that there shall be no Subsequent Closing Date during any Delay Period.

“ Subsidiary ” shall have the meaning ascribed to such term in Section 3.1(a).

“ Trading Day ” means a day on which the Common Stock is traded on a Trading Market.

“ Trading Market ” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the New York Stock Exchange, the NYSE Alternext Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the OTCBB.

“ Transaction Documents ” means this Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder.

2.1            Initial Closing .  On the Initial Closing Date, Seaside shall purchase from the Company, and the Company shall issue and sell to Seaside, that number of Shares equal to $1,000,000 divided by the Per Share Purchase Price.  Upon satisfaction or waiver of the conditions set forth in Sections 2.3, 2.4 and 2.5, the Initial Closing shall occur at the offices of White White & Van Etten PC, 55 Cambridge Parkway, Cambridge, MA 02142, or such other location as the parties shall mutually agree.

2.2           Subsequent Closings .  On each Subsequent Closing Date, Seaside shall purchase from the Company, and the Company shall issue and sell to Seaside, that number of Shares equal to $1,000,000 divided by the Per Share Purchase Price; provided, however, that in no event shall the Company issue and sell more than 21,295,288 Shares without first obtaining stockholder approval of the issuance, or potential issuance, of such excess Shares (the “Cap”).  In the event that the Per Share Purchase Price, as calculated with respect to any Subsequent Closing Date, is less than $0.20, then such Subsequent Closing will not occur that month, nor will the final Subsequent Closing Date be extended; in each such event, there will be one fewer Subsequent Closing pursuant to this Agreement and the aggregate value of Shares to be purchased hereunder shall be reduced by $1,000,000.  Upon satisfaction or waiver of the conditions set forth in Sections 2.3, 2.4 and 2.5, each Subsequent Closing shall occur at the offices of White White & Van Etten PC, 55 Cambridge Parkway, Cambridge, MA 02142, or such other location as the parties shall mutually agree.

2.3            Deliveries by the Company .  On each Closing Date, the Company shall deliver or cause to be delivered to Seaside the following:

(a)           the number of Shares equal to $1,000,000 divided by the Per Share Purchase Price, registered in the name of Seaside, via the DTC DWAC system, as specified on the signature pages hereto;

(b)           an officer’s certificate of the Company’s Chief Executive Officer or Chief Financial Officer, in form reasonably acceptable to Seaside, certifying the accuracy in all material respects (without giving effect to any limitation as to “materiality” or “knowledge” set forth therein) of the Company’s representations and warranties made in this Agreement as of the Closing Date and the Company’s performance of the covenants to be performed by it pursuant to this Agreement at or prior to the Closing;  and

(c)           a legal opinion of Company Counsel, in the form of Exhibit A attached hereto.

2.4            Deliveries by Seaside .   On each Closing Date, Seaside shall deliver or cause to be delivered to the Company:

(a)            $1,000,000 by wire transfer to the account as specified in writing by the Company less the amount due Seaside for reimbursement of its expenses as described in Section 5.2 hereof; and

(b)           a certificate of the general partner of Seaside, in form reasonably acceptable to the Company, certifying the accuracy in all material respects (without giving effect to any limitation as to “materiality” or “knowledge” set forth therein) of Seaside’s representations and warranties made in this Agreement as of the Closing Date and Seaside’s performance of the covenants to be performed by it pursuant to this Agreement at or prior to the Closing.

2.5            Closing Conditions .

(a)         The obligations of the Company hereunder in connection with each Closing are subject to the following conditions being met:

(i)           the accuracy in all material respects (without giving effect to any limitation as to “materiality” or “knowledge” set forth therein) when made and on the Closing Date of the representations and warranties of Seaside contained herein;

(ii)           all obligations, covenants and agreements of Seaside required to be performed at or prior to the Closing Date shall have been performed;

(iii)           the delivery by Seaside of the items set forth in Section 2.4 of this Agreement; and

(iv)           with respect to any Subsequent Closing, to the extent that the purchase and sale of Shares hereunder would cause the Cap to be exceeded, then stockholder approval of the issuance of such excess Shares shall have been obtained.

(b)           The respective obligations of Seaside hereunder in connection with each Closing are subject to the following conditions being met:

(i)            the accuracy in all material respects (without giving effect to any limitation as to “materiality” or “knowledge” set forth therein) on the Closing Date of the representations and warranties of the Company contained herein;

(ii)           all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;

(iii)           the delivery by the Company of the items set forth in Section 2.3 of this Agreement;

(iv)           there shall have been no Material Adverse Effect with respect to the Company since the date hereof, that has not been publicly announced by the Company at least six business days prior to such Closing;

(v)           with respect to any Subsequent Closing, to the extent that the purchase and sale of Shares hereunder would cause the Cap to be exceeded, then stockholder approval of the issuance of such excess Shares shall have been obtained; and

(vi)           from the date hereof to each Closing Date, trading in the Common Stock shall not have been suspended by the Commission and trading in securities generally as reported by Bloomberg Financial Markets shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on liquidity in the Trading Market that in the reasonable judgment of Seaside, makes it impracticable or inadvisable to purchase the Shares at the Closing because the Shares cannot be resold as readily.

2.6            Delay Periods .  No less than twenty (20) days before any Subsequent Closing, the Company may elect at its sole option to delay that and all other Subsequent Closings for a period (the “Delay Period”) of up to six (6) months by giving notice of such Delay Period to Seaside and paying Seaside $100,000.  The Company’s rights to elect a Delay Period shall be limited to once in each of the Initial Term, the First Extended Term and the Second Extended Term.

3.1            Representations and Warranties of the Company .  Except as set forth under the corresponding section of the Disclosure Schedules, which Disclosure Schedules may be updated before any Closing and shall be deemed a part hereof, the Company hereby makes the representations and warranties set forth below to Seaside as of each Closing Date:

(a)            Subsidiaries .  All of the direct and indirect subsidiaries of the Company are listed in the Company’s most recent Annual Report on Form 10-K (each a “ Subsidiary ”).  The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.  If the Company has no subsidiaries, then references in the Transaction Documents to the Subsidiaries will be disregarded.

(b)            Organization and Qualification .  The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the Company and the Subsidiaries taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “ Material Adverse Effect ”) and, to the knowledge of the Company, no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

(c)            Authorization; Enforcement .  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations thereunder.  The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary action on the part of the Company and its stockholders, except for stockholder approval for the issuance of Shares in excess of the Cap, and no further action is required by the Company or its stockholders in connection therewith other than in connection with the Required Approvals.  Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by general equitable principles and 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) insofar as indemnification and contribution provisions may be limited by applicable law.

(d)            No Conflicts .  The execution, delivery and performance of the Transaction Documents by the Company, the issuance and sale of the Shares and the consummation by the Company of the other transactions contemplated thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, violate or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary pursuant to, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

(e)            Filings, Consents and Approvals .  The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority, the Trading Market or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than (i) the filing of the Prospectus Supplement, (ii) any notice filings as are required to be made following each Closing Date under applicable federal and state securities laws or under applicable rules and regulations of the Trading Market and (iii) stockholder approval for the issuance of Shares in excess of the Cap (collectively, the “ Required Approvals ”).

(f)            Issuance of the Shares .  The Shares are duly authorized and, when issued and paid for in accordance with the Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents or applicable federal and state securities laws.  The Company has reserved, or will reserve prior to the applicable Closing, from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement.  The issuance by the Company, or the resale by Seaside, of the Shares has been registered under the Securities Act and all of the Shares when delivered will be freely transferable and tradable on the Trading Market by Seaside without restriction (other than any restrictions arising solely from an act or omission of a Seaside).  The Registration Statement is effective and available for the issuance or resale of the Shares thereunder and the Company has not received any notice that the Commission has issued or intends to issue a stop-order with respect to the Registration Statement or that the Commission otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or intends or has threatened in writing to do so.  The “Plan of Distribution” section under the Registration Statement as supplemented by the Prospectus Supplement permits the issuance and sale or resale of the Shares hereunder.

(g)            Capitalization.   The capitalization of the Company is as set forth in the Disclosure Schedules.  No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.  Except as disclosed in the SEC Reports or Schedule 3.1(g), there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.  Except as disclosed in the SEC Reports or Schedule 3.1(g), the issue and sale of the Shares will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than Seaside) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities.  All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in material compliance with all federal and state securities laws and requirements of the Trading Market, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.  No further approval or authorization of any stockholder or the Board of Directors of the Company is required for the issuance and sale of the Shares, except for stockholder approval for the issuance of Shares in excess of the Cap.  There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

(h)            SEC Reports; Financial Statements .  The Company has filed or furnished all reports, schedules, forms, statements and other documents required to be filed or furnished by it under the Securities Act and the Exchange Act (including all required exhibits thereto), including pursuant to Section 13(a) or 15(d) thereof, for the 12 months preceding the date hereof (or such shorter period as the Company was required by law to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “ SEC Reports ”) and any notices, reports or other filings pursuant to applicable requirements of the Trading Market 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 applicable requirements of the Securities Act and the Exchange Act and the rules and regulations of the 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.  The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“ GAAP ”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments.

(i)            Material Changes .  Since the date of the latest audited financial stat