Beacon Power Corporation Declares Dividend Distribution of Preferred Share Purchase Rights.

Business Editors

WILMINGTON, Mass.--(BUSINESS WIRE)--Sept. 25, 2002

The Board of Directors of Beacon Power Corporation today declared a dividend distribution of one Preferred Share Purchase Right on each outstanding share of Beacon common stock. Each Right will entitle shareholders to buy one one-hundredth of a share of a new series of preferred stock at an exercise price of $22.50.

The Rights are designed to assure that all of Beacon's shareholders receive fair and equal treatment in the event of any proposed takeover of the Company and to guard against partial tender offers and other abusive tactics to gain control of Beacon without paying all shareholders a control premium.

The Rights will be exercisable only if a person or group acquires 15% (30% in the case of Perseus Capital, L.L.C.) or more of Beacon's common stock or announces a tender offer the consummation of which would result in ownership by a person or group of 15% or more of the common stock.

When the Rights first become exercisable, a holder will be entitled to buy from the Company one one-hundredth of a share of a new series of Series A Junior Participating Preferred Stock of the Company at a purchase price of $22.50 or, at the option of the holder, a number of shares of Beacon common stock having an aggregate market value equal to twice the exercise price. If the Company is involved in a merger or other business combination, or sells 50% or more of its assets or earning power, at any time after the Rights become exercisable, the Rights will be modified so as to entitle a holder to buy a number of shares of common stock or the acquiring company having a market value of twice the exercise price of each Right.

Until ten days after the acquisition by a person or group of beneficial ownership of 15% (30% for Perseus) or more of the Company's common stock, the Rights are redeemable for $0.01 per Right at the option of the Board of Directors.

The Rights are intended to enable all Beacon shareholders to realize the long-term value of their investment in the Company. They will not prevent a takeover, but should encourage anyone seeking to acquire the Company to negotiate with the Board prior to attempting a takeover.

The dividend distribution of the Rights will be made on October 7, 2002, payable to shareholders of record on that date. The Rights will expire approximately ten years later on September 30, 2012. The Rights distribution is not taxable to shareholders.

Details of the Rights distribution will be set forth in a letter which will be mailed to all Beacon shareholders.

About Beacon Power Corporation

Beacon Power Corporation is a developmental-stage company which designs, develops, configures, and offers for sale power systems that provide highly reliable, high-quality, uninterruptible electric power. It is best known for its environmentally friendly, flywheel-based products (employing a flywheel made from proprietary composite materials) that can store and deliver energy in a variety of configurations. Such products have longer life, reduced maintenance, quicker recharging, remote monitoring and other advantages over competing solutions.

For more information, please contact James Spiezio, Chief Financial Officer at Beacon Power Corporation, tel. [phone]; fax [phone]; email [e-mail] :or send mail to 234 Ballardvale Street, Wilmington, MA 01887. Visit Beacon Power on the Internet at www.beaconpower.com

Safe Harbor Statements under the Private Securities Litigation Reform Act of 1995:

Material contained in this press release may include statements that are not historical facts and are considered "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Beacon Power Corporation's current views about future events and financial performances. These forward-looking statements are identified by the use of terms and phrases such as "believe," "expect," "plan," "anticipate," and similar expressions identifying forward-looking statements. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from Beacon Power Corporation's expectation. These factors include: a short operating history; a history of losses and anticipated continued losses from operations; a need to raise additional capital combined with a questionable ability to do so; conditions in target markets; no experience manufacturing any product on a commercial basis; no commercial contracts for sales to date; the dependence of sales on the achievement of product development and commercialization milestones; the uncertainty of the political and economic climate of any foreign countries into which Beacon hopes to sell, including the uncertainty of enforcing contracts and the potential substantial fluctuation in currency exchange rates in those countries; significant technological challenges to successfully complete product development; dependence on third-party suppliers; intense competition from companies with greater financial resources; possible government regulation that would impede the ability to market products; possible product liability claims and the negative publicity which could result; any failure to protect intellectual property; the possible need in the future to hire and retain key executives, particularly in light of the substantial workforce reductions during 2001 and 2002; the recent volatility in the stock price of companies operating in the same sector ; the power of controlling shareholders and the limited ability of others to influence the outcome of matters put to the vote of shareholders. These factors are elaborated upon and other factors may be disclosed from time to time in Beacon Power Corporation's filings with the Securities and Exchange Commission. Beacon Power Corporation expressly does not undertake any duty to update forward-looking statements.