Exhibit 10.2

SECURITY AGREEMENT

1. Parties. This Agreement is made on June 30, 2008, between Beacon Power
Corporation, a Delaware corporation with its chief executive office presently at
65 Middlesex Road, Tyngsboro, Massachusetts 01879 (herein called "Borrower"),
and Massachusetts Development Finance Agency, a body politic and corporate
created by Chapter 289 of the Acts of 1998 and established under Massachusetts
General Laws Chapter 23G, as amended, with a principal place of business and
mailing address of 160 Federal Street, Boston, Massachusetts 02110 (herein
called "MassDevelopment").

2. Security Interest.

(a) Borrower hereby grants to MassDevelopment a continuing and exclusive first
priority security interest in all equipment purchased with proceeds of the Loan
defined below in section 2(b), including but not limited to the equipment (the
“Equipment”) and the tenant improvements (the “Tenant Improvements” and,
together with the Equipment, the “Collateral”) listed on Schedule A attached
hereto.

(b) The Collateral shall secure prompt, punctual and faithful observance,
payment and performance of each and every obligation, covenant and agreement of
Borrower under the Loan Documents, as defined below, including, but not limited
to, payment of all amounts due from time to time under that certain Promissory
Note of even date herewith in the original principal amount of Five Million
Dollars ($5,000,000), payable by Borrower to MassDevelopment (the “Note”, and
together with this Agreement, the “Loan Documents”) evidencing and securing a
loan in the same amount from the Borrower to the MassDevelopment (the “Loan”).
Upon payment in full of the Note, MassDevelopment shall at Borrower’s expense,
promptly take any reasonable steps to evidence the termination of its security
interest in the Collateral.

3. Location of Collateral. The Collateral shall be kept and used by the Borrower
solely at the manufacturing facility at 65 Middlesex Road, Tyngsboro,
Massachusetts (the “Premises”). Other than removals for the purpose of repair or
replacement in the ordinary course of any of the Collateral, the Borrower shall
not remove the Collateral, nor any part thereof, from the Premises without the
written consent of MassDevelopment.

4. After-Acquired Property. All replacements of and renewals to the Collateral
shall become and be immediately subject to the security interest provided herein
and be covered thereby. Borrower warrants and represents that all Collateral now
is, and that all replacements thereof, substitutions therefor or additions
thereto will be, free and clear of liens, encumbrances or security interests of
others, except for security interests junior in priority to the interest created
by this Agreement and to which MassDevelopment, at its option and in its sole
and absolute discretion, shall consent.

5. Representations and Warranties. Borrower warrants and represents that:

(a) Borrower is a corporation, duly established under the laws of the State of
Delaware and qualified to conduct business in the Commonwealth of Massachusetts,
and that the execution of the Loan Documents and any other instruments executed
in connection therewith constitute representations by the individual in his
capacity as a duly authorized officer of Borrower signing the Loan Documents and
said instruments, and by Borrower, that such execution has received all such
authorization as may be necessary to permit such execution, and that the Loan
Documents and said instruments are binding and in force against Borrower;

(b) prior to the date hereof Borrower has never: disposed of, transported, or
arranged for the transport of any hazardous material or oil without compliance
in all material respects with all applicable statutes, regulations, ordinances,
directives, and orders; been legally responsible for any release or threat of
release of any hazardous material or oil; received notification of any potential
or known release or threat of release of any hazardous material or oil from any
site or vessel occupied or operated by Borrower and/or of the incurrence of any
expense or loss in connection with the assessment, containment, or removal of
any release or threat of release of any hazardous material or oil from any such
site or vessel;

 
 

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(c) one-half of the principal amount of the Note does not constitute more than
twenty-five percent (25%) of the overall project expenses scheduled to be
expended for Borrower’s improvement of the Premises, including the acquisition
of the Equipment for use at the Premises;

(d) Borrower has filed any and all federal, state and local tax returns required
as of the date hereof and has paid any and all taxes due thereon, except to the
extent contested in good faith and adequate reserves are made in accordance with
generally accepted accounting principles (“GAAP”); and

(f) except as previously disclosed to MassDevelopment by Borrower or as
otherwise disclosed by Borrower in its public filings, there is no action, suit
claim, proceeding, investigation or arbitration proceeding pending (or, to the
knowledge of Borrower, threatened) against or otherwise involving Borrower or
any of the officers, directors, former officers or directors, employees,
shareholders or agents of Borrower (in their capacities as such) and there are
no outstanding court orders to which Borrower is a party or by which any of its
assets are bound that, in each case, would reasonably be expected to have a
material adverse effect on the Borrower or the collateral for the Loan. Borrower
has no reason to believe that any such action, suit, proceeding, investigation
or arbitration proceeding may be brought against Borrower.
 
6. Further Covenants of Borrower. Borrower further covenants as follows:

(a) to pay before the same become delinquent (and to provide, by such time,
evidence of such payment, satisfactory to MassDevelopment) all taxes (including
real estate taxes) on the Collateral; and to pay before the same become
delinquent (and upon request, to provide evidence of such payment, satisfactory
to MassDevelopment) all other charges, sewer use fees, water rates and
assessments of every name and nature, whether or not assessed against the
Borrower, if applicable or reasonably related to the Premises, or any interest
therein, or the debt, obligation or any agreement secured hereby, or the
disbursement or the application or the proceeds thereof. Borrower shall have the
right to contest the validity, applicability or amount of any asserted tax
provided that, in MassDevelopment's sole discretion exercised in good faith,
such contest will not impair the validity or priority of the lien of created by
this Agreement and the Mortgage and provided that the full amount of such tax is
either paid to the taxing authority under protest or reserved in accordance with
GAAP;

(b) to notify MassDevelopment promptly of any accidental damage to the
Collateral in excess of twenty-five thousand dollars ($25,000); to keep the
Collateral in good order, repair and condition, damage from casualty and from
ordinary wear and tear excepted; and all construction on the Premises shall
comply with, and each and every part of the Premises shall be maintained in
accordance with, any lawful requirements or provisions, public or private,
relating to the same or the use thereof;

(c) that all proceeds of casualty insurance policies relating to the Collateral
for claims in excess of twenty-five thousand dollars ($25,000) shall be paid to
MassDevelopment and shall be released to Borrower to pay for the costs of repair
and restoration of the Collateral; and to the extent MassDevelopment retains any
funds not required for repair and restoration, those funds shall be, at
MassDevelopment's option, applied toward the indebtedness secured hereby;
 
 
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(d) that the awards of damages on account of any condemnation for public use of
or injury to the Premises, to the extent affecting the Collateral, shall be paid
to MassDevelopment; and promptly upon obtaining knowledge of the institution of
any proceedings on account of any condemnation for public use of or injury to
the Premises, or any portion thereof, Borrower will notify MassDevelopment of
the pendency of such proceedings, and no settlement respecting such awards which
affect the Collateral or Borrower’s access to or ability to use the Collateral
shall be effected without the consent of MassDevelopment;

(e) to pay when due all reasonable out-of-pocket fees and charges incurred and
billed to Borrower by MassDevelopment incident to the loan transaction evidenced
by the Loan Documents, as well as any and all commitment fees remaining due
thereunder;

(f) that, from time to time, on the request of MassDevelopment, Borrower shall
furnish a written statement, signed and if requested, acknowledged, setting
forth the amount of the indebtedness which Borrower acknowledges to be due on
the Note, specifying any claims of off-set or defense which Borrower asserts
against the indebtedness secured hereby or any obligations to be paid or
performed hereunder; and to deliver to MassDevelopment promptly copies of all
junior mortgages, security agreements, assignments of leases and rents and
similar instruments which Borrower may create with respect to the Premises,
together with copies of any notices from any holder of such an instrument
claiming that Borrower is in default in the performance or observance of any of
the terms thereof;

(g) that whether or not for additional interest or other consideration paid or
payable to MassDevelopment, no forbearance on the part of MassDevelopment or
extension of the time for payment of the whole or any part of the obligations
secured hereby, whether oral or in writing, or any other indulgence given by
MassDevelopment to Borrower or to any other party claiming any interest in or to
the Collateral, shall operate except as provided by the forbearance or
indulgence to release or in any manner affect the original liability of
Borrower, or impair any right of MassDevelopment, including, without limitation,
the right to realize, upon the security or any part thereof, for the obligations
secured hereby or any of them, notice of any such extension, forbearance or
indulgence being waived by Borrower and all those claiming by, through or under
Borrower; and no consent or waiver, express or implied, by the holder to or of
any default by the Borrower shall be construed as a consent or waiver to or of
any further default in the same or any other term, condition, covenant or
provision of this Agreement or of the obligations secured hereby; in case
redemption is had by Borrower after foreclosure proceedings have begun,
MassDevelopment shall be entitled to collect all reasonable costs, charges and
expenses incurred up to the time of redemption; and in case any one or more of
the provisions of this Agreement may be found to be invalid or unenforceable for
any reason or in any respect, such invalidity shall not limit or impair
enforcement of any other provision hereof;

(h) that, except for real estate taxes and assessments before any delinquency
therein (delinquency with reference to such taxes and assessments being herein
defined, for the purpose of this Agreement, as meaning the time when, on the
nonpayment thereof, interest or penalties commence to accrue), Borrower shall
not create, permit or suffer to be created or permitted to remain (and shall
discharge or promptly cause to be discharged or bonded over) any mechanics' or
laborers' lien of record, or any attachment, on the Collateral or any part
thereof or interest therein, without the consent of MassDevelopment which may be
withheld in MassDevelopment's sole and absolute discretion, even if such
encumbrance is inferior to the interest secured hereby; without limitation, and
except where MassDevelopment receives independent security satisfactory to
MassDevelopment during the pendency of legal proceedings contesting the
impositions of a Governmental lien, the filing of a notice of Federal or State
tax lien with MassDevelopment or the office at which, by law, such notice is to
be filed to be effective against the Collateral, whether or not such lien
applies, in terms, to the Collateral, shall be a breach of this condition;
 
 
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(i) that Borrower shall not file a petition or any application for relief,
extension, moratorium or reorganization under any bankruptcy, insolvency or
debtor's relief law, or make an assignment for the benefit of creditors or enter
into any trust mortgage arrangements, so-called, or consent to the appointment
of a receiver of any of the property of Borrower, including the Collateral;

(j) that Borrower shall not permit any petition under any bankruptcy, insolvency
or debtor's relief law filed against it to remain undischarged for a period of
more than forty-five (45) days after the filing thereof, nor shall Borrower
permit the continuation of any receivership proceedings instituted against it
for more than a period of forty-five (45) days after the commencement thereof;

(k) that Borrower shall not dispose of any hazardous material or oil on the land
on which the Premises is located; nor store or transport or arrange for the
transport of any hazardous material or oil on such property except if such
disposal, storage or transport is in the ordinary course of Borrower's business
and is in compliance with all applicable statutes, regulations, ordinances,
directives and orders; if Borrower obtains knowledge or notice of any potential
or known release or threat of release of any hazardous material or oil at or
from any site or vessel occupied or operated by Borrower, and/or upon Borrower's
obtaining knowledge of any incurrence of any expense or loss by any governmental
authority in connection with the assessment, containment, or removal of any
hazardous material or oil for which expense or loss Borrower may be liable, then
in either of such events, Borrower shall take all such reasonable action,
including without limitation the conducting of engineering tests, to confirm
whether or not a potential or known release or threat of release of any
hazardous material or oil exists and to undertake all necessary remediation
required under Mass. Gen. Laws Ch. 21E and the Massachusetts Contingency Plan;
 
(l) that Borrower, at Borrower's expense, shall furnish to MassDevelopment (i)
copies of its audited annual financial statements prepared by a certified public
accountant in accordance with GAAP, as and when prepared, for such fiscal year,
certified as complete, true and accurate by the Borrower, within one hundred
twenty (120) days of the end of Borrower's fiscal year, (ii) copies of its
quarterly financial statements as prepared by management within sixty (60) days
after the end of each fiscal quarter throughout the term of the Loan, and (iii)
any additional financial documentation reasonably requested in writing by
MassDevelopment, including so-called Requests for Information from either
MassDevelopment or any of MassDevelopment’s participants in the Loan (but not
more than twice annually absent an Event of Default), with Borrower’s response
made to both MassDevelopment and all participants, notwithstanding that only
MassDevelopment or one or more participants may have submitted the Request for
Information; MassDevelopment shall have the right to inspect the Premises at its
sole cost and the books and records of Borrower for the purpose of verifying the
accuracy of such financial documents (or, for the purpose of conducting its own
audit at Borrower’s cost of the records and books of account of Borrower if
Borrower fails to furnish or cause to be furnished and delivered the aforesaid
financial documents), provided, however, that MassDevelopment shall not have the
right to exercise its audit rights with respect to the books and records more
than once in any calendar year, except upon and during the continuance of any
Event of Default. Notwithstanding anything to the contrary in this Section 6(l),
if the Borrower has not filed its 10-K’s or 10-Q’s by the deadlines provided in
this Section for the filing of its financial statements with MassDevelopment,
MassDevelopment agrees to keep all such financial information filed with it
confidential. Unless MassDevelopment obtains a similar agreement of
confidentiality from its participants in the Loan, MassDevelopment will not
forward such statements to its participants in the Loan before they become
available to the public; and

(m) that Borrower has not granted, and shall not grant after the date hereof and
throughout the full term of the Note, a security interest to any third party in
any of the Equipment constituting Collateral for the Loan.

 
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7. Insurance. Borrower agrees to maintain such insurance on the Collateral and
its use as MassDevelopment may from time to time reasonably require and as may
from time to time be required by any applicable Federal, State or local law or
regulation including, without limitation, a general liability insurance policy
naming MassDevelopment as an additional insured in an amount reasonably
acceptable to MassDevelopment, and fire and extended coverage insurance against
loss or damage to the Collateral by fire and any of the risks covered by
insurance of the type now known as "extended coverage", including without
limitation earthquake, cost of demolition, vandalism, malicious mischief,
lightning, windstorm, hail, explosion, riot, civil commotion, damage from
aircraft and vehicles, smoke damage, and sprinkler damage for not less than full
replacement cost of the Collateral from time to time during the period of time
this Agreement remains in force and effect; and certificates of insurance or
insurance binders in forms satisfactory to MassDevelopment, evidencing the
insurance required by MassDevelopment, together with any other insurance with
respect to the Collateral maintained by Borrower, shall be deposited with
MassDevelopment, and, MassDevelopment shall be added and named as an insured and
loss payee, and shall be first payable to MassDevelopment in case of loss, as
provided in Section 6(c) above; all renewals or replacements of such insurance
from time to time in force, together with evidence of payment of premiums
thereon reasonably satisfactory to MassDevelopment, shall be delivered to
MassDevelopment ten (10) days at least before the expiration date of the then
current insurance; all insurance required by MassDevelopment to be maintained
with respect to the Property shall be written by such companies on such terms,
in such form and for such periods and amounts as MassDevelopment shall from time
to time reasonably approve and shall contain a provision requiring at least
thirty (30) days' advance written notice to MassDevelopment before any such
policy may be cancelled or modified; and no settlement on account of any loss
covered by such insurance shall be effected without the consent of
MassDevelopment.

8. Remedies of MassDevelopment.

(a) In the case of (i) an Event of Default under the Note or (ii) a violation by
Borrower of its obligations under this Agreement not remedied within thirty (30)
days after written notice thereof from MassDevelopment to the attention of the
Borrower’s Chief Financial Officer and to Borrower’s counsel, Edwards Angell
Palmer & Dodge LLP, attn: Albert Sokol, Esq. (except that where, for any of the
foregoing, a period of grace is specifically otherwise provided or negated, such
specific periods of time or negation shall govern in each case), MassDevelopment
shall have all of the rights and remedies of a secured party under the Uniform
Commercial Code as currently enacted in the Commonwealth of Massachusetts (as
the same may be amended from time to time, the “UCC”), including without
limitation the right to enter into and upon the Premises and any other place
where the Collateral may be, and to retake the same in order to foreclose upon
it in any manner permitted by applicable law.

(b) In addition to the foregoing, and in addition to any remedies available to
MassDevelopment under the Note, if there shall be any breach of the conditions
of subsections (i), (j), or (k) of Section 6, the representation in Section 5(b)
or the provisions of Section 7, or if, in any respect other than the filing of a
Governmental lien, there shall be any breach of any conditions or covenants of
this Agreement continuing for more than thirty (30) days after the giving of
notice by MassDevelopment or an Event of Default under the Note continuing
beyond any applicable grace periods (except that where, for any of the
foregoing, a period of grace is specifically otherwise provided or negated, such
specific periods of time or negation shall govern in each case), or if there
occurs any default under any prior or subordinate security interest covering
Borrower’s leasehold interest in the Premises, or under any note or other
obligation secured thereby, which default may result in the acceleration of the
indebtedness secured thereby, or if there shall occur the commencement of
foreclosure or other enforcement proceedings under any prior or subordinate
security interest covering any other asset of Borrower or Borrower’s leasehold
interest in the Premises, or under any note or other obligation secured thereby,
then MassDevelopment, in addition to, and not in limitation of, any and all
other rights or remedies available to it by law or by any other provision of any
of the instruments given to secure the Note, shall have the right, during the
continuance of the default beyond any applicable grace period, and without
notice:
 
 
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(i) to enter upon the Premises and take possession of the Collateral, or any
part thereof; and to perform any acts MassDevelopment shall deem necessary or
proper to conserve the Collateral, to cure any default of the Borrower under the
Lease, and to manage and operate the Collateral, to collect and receive all
rents, revenues, income, issues and profits from the Collateral, past-due and
thereafter accruing, and to exercise all other rights of the Borrower with
respect to the Collateral;

(ii) to have a receiver appointed to enter and take possession of the
Collateral, or any part thereof, and to perform any acts said receiver shall
deem necessary or proper to conserve the Collateral (including, without
limitation, the making of repairs, replacements and alterations), to maintain
the Lease in good standing without uncured defaults, to manage and operate the
Collateral, to collect and receive all rents, revenues, income, issues and
profits from the Collateral, past-due and thereafter accruing, and to exercise
all other rights of the Borrower with respect to the Collateral;

(iii) to declare the entire indebtedness of the Borrower under the Note
forthwith due and payable;

(iv) to sell the Collateral at public auction on such terms and conditions as
MassDevelopment shall determine, having first given such notice, prior to the
sale, of the time and place of sale and terms and conditions of sale by
publication in one (1) or more newspapers having a general circulation in the
municipality in which the Premises, or part thereof, is located, all subject,
however, to the requirements of this Agreement and applicable law; or to
foreclose on the Collateral in any other manner permitted by law; and
 
(v) to obtain judgment and execution for the indebtedness secured by this
Agreement, to the extent not otherwise satisfied;

(c) If there shall be any Event of Default arising out of a breach in any
condition or covenant of this Agreement beyond any applicable grace period,
MassDevelopment shall have the right, but without any obligation so to do, to
cure such default for the account of Borrower, and, to the fullest extent
permissible according to law, apply any funds credited by or due from
MassDevelopment to Borrower against the same (without any obligation first to
enforce any other rights of MassDevelopment, including, without limitation, any
rights under the Note or this Agreement, or any guarantee thereof, and without
prejudice to any such rights); to pay the premiums for any insurance required
hereunder not paid when due; to incur and pay reasonable expenses in protecting
its rights hereunder and the security hereby granted, including, again without
limitation, all payments on account of principal, interest and such other
charges as may become due to cure default under any subordinate interest,
including the notes or obligations secured thereby, affecting the Collateral; to
pay any balance due under any security agreement on any articles, fixtures and
equipment owed by Borrower included as a part of the Collateral; and the payment
of all amounts so incurred shall be secured hereby as fully and effectually as
any other obligation of Borrower secured hereby; and, to the fullest extent
permissible according to law, to apply to any of these purposes or to the
repayment of any amounts so paid by MassDevelopment of any sums paid on the Note
or this Agreement by Borrower as interest or otherwise.

(d) At any foreclosure sale, any combination or all of the Collateral or
security given to secure the indebtedness secured hereby, may be offered for
sale for one total price, and the proceeds of such sale accounted for in one
account without distinction between the items of security or without assigning
to them any proportion of such proceeds, Borrower hereby waiving the application
of any doctrine of marshalling; and, in case MassDevelopment, in the exercise of
the power of sale herein given, elects to sell in parts or parcels, said sales
may be held from time to time, and the power shall not be fully executed until
all of the Collateral not previously sold shall have been sold.
 
 
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(e) If MassDevelopment shall exercise the right described in either subsection
(b)(i) or (b)(ii) of this Section 8, the expenses (including, without
limitation, reasonable receiver's fees and reasonable attorney's fees) incurred
pursuant to the powers herein contained likewise shall be secured hereby, and
MassDevelopment shall apply such rents, income, issues and profits as shall be
received by it first to the payment of all costs and expenses incurred and
thereafter to the indebtedness secured hereby in such order of priority as
MassDevelopment, in its sole discretion, shall determine; and the exercise of
such rights and disposition of such funds shall not constitute a waiver of any
foreclosure, once commenced, nor preclude the later commencement or foreclosure
for breach hereof.

(f) If MassDevelopment shall exercise the right described in subsection (b)(iv)
of this Section 8, MassDevelopment may adjourn, from time to time, any sale by
announcement of such adjournment at the time and place appointed for such sale
or such adjourned sale; and, except as otherwise provided by law,
MassDevelopment may, without further notice or publication, make such sale at
the time and place to which the same shall be so adjourned. Upon completion of
any sale, MassDevelopment shall execute and deliver an instrument conveying,
assigning and transferring all right, title and interest in the Collateral, and
rights sold, in the name of MassDevelopment, or in the name of Borrower, and the
same shall operate to divest all right, title and interest of Borrower in any
property or right so sold and shall be a perpetual bar, both at law and in
equity, against Borrower and all persons claiming under Borrower unless
MassDevelopment acts with willful neglect, gross negligence or in bad faith.

(g) The rights and remedies of MassDevelopment for any default under any of the
instruments given as security for the indebtedness secured hereby are not
mutually exclusive, and may be exercised successively or concurrently and from
time to time for as long as any default exists, and the failure of
MassDevelopment to exercise any such rights in any one or more instances, or the
acceptance by MassDevelopment of partial payments of amounts in default secured
hereby, shall not constitute a waiver of such default, but such right shall
remain continuously in force; and acceleration of maturity, once claimed hereby
by MassDevelopment, may, at MassDevelopment's option, be rescinded by written
acknowledgment to that effect without waiving the default or any rights,
including the right to accelerate once again, with respect thereto; moreover,
the tender and acceptance of partial payment of amounts in default after
acceleration, or the commencement of any foreclosure action, shall not in any
way affect, rescind or terminate such acceleration of maturity or such
foreclosure action.

(h) If at any time any law or court decree prohibits the performance of any
material obligation undertaken hereby by Borrower which would impair
MassDevelopment’s interest in the Collateral or its right to payment under the
Note, or, at any time provides that any amount to be paid hereunder by Borrower,
other than a payment on account of the principal or of interest on the
indebtedness secured hereby, must be credited against Borrower's obligations
under the Note, MassDevelopment shall have the right on thirty (30) days' prior
written notice to Borrower, to require payment in full of the entire
indebtedness secured hereby unless Borrower reverses such prohibition or
otherwise reasonably satisfies MassDevelopment within said thirty (30) day
period.

9. MassDevelopment's Appointment as Attorney-in-Fact.

(a) Borrower hereby irrevocably constitutes and appoints MassDevelopment and any
officer or agent thereof, with full power of substitution, as their true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of Borrower and in the name of Borrower or in its own name, from time
to time in MassDevelopment's discretion, after the occurrence of and during the
continuance of an Event of Default, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments that may be necessary or desirable to accomplish
the purposes of this Agreement and, without limiting the generality of the
foregoing, hereby gives MassDevelopment the power and right, on behalf of
Borrower, without notice to or assent by Borrower, but only after an Event of
Default has occurred and is continuing as aforesaid, to do the following:

 
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(i) to pay or discharge taxes or liens levied or placed on or threatened against
the Collateral, to effect any repairs or any insurance called for by the terms
of this Agreement and to pay all or any part of the premiums therefor and the
costs thereof; and

(ii) (A) to direct any party liable for any payment to Borrower under the
Collateral, to make payment of any and all moneys due and to become due
thereunder directly to MassDevelopment or as MassDevelopment shall direct; (B)
to receive payment of and receipt for any and all moneys, claims and other
amounts due and to become due at any time in respect of or arising out of the
Collateral; (C) to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with the Collateral and
other documents relating to the Collateral; (D) to commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to pursue and protect MassDevelopment’s interest in the Collateral
or any part thereof and to enforce any other right in respect of the Collateral;
(E) to sign Borrower’s name on any proof of claim against account debtors with
respect to the Collateral; (F) to defend any suit, action or proceeding brought
against Borrower with respect to any Collateral; (G) to settle, compromise or
adjust any suit, action or proceeding described above and, in connection
therewith, to give such discharges or releases as MassDevelopment may deem
appropriate, all with respect solely to the Collateral; (H) to sign Borrower’s
name on and file or record any financing statement necessary to perfect
MassDevelopment's interest in the Collateral; and (I) otherwise to repair,
assemble, complete, alter, supply, use, license, sell, transfer, pledge, make
any agreement with respect to or otherwise deal with the Collateral as fully and
completely as though MassDevelopment were the absolute owner thereof for all
purposes, and to do, at MassDevelopment's option and at Borrower’s expense, at
any time or from time to time, all acts and things that MassDevelopment deems
reasonably necessary to protect, preserve or realize upon the Collateral and
MassDevelopment's security interests therein, in order to effect the intent of
this Agreement, all as fully and effectively as the Borrower might do.

The Borrower hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.

(b) The powers conferred on MassDevelopment hereunder are solely to protect the
interests of MassDevelopment in the Collateral and shall not impose any duty
upon MassDevelopment to exercise any such powers for the benefit of Borrower or
any other person. MassDevelopment shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers, and neither it nor
any of its officers, directors, employees or agents shall be responsible to
Borrower for any act or failure to act, except for its own willful misconduct
taken or omitted in bad faith.

(c) Any expenses reasonably incurred by MassDevelopment under this Section shall
be paid by Borrower on demand and until so paid shall be added to the principal
amount of any Obligations secured hereby and shall bear interest (calculated on
the basis of a 360-day year for the actual days elapsed) at the same rate as
provided in the Loan Documents after maturity or during an Event of Default.
 
 
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10. Miscellaneous.

(a) This Agreement (i) shall be governed by the internal laws of the
Commonwealth of Massachusetts; (ii) may be amended and any rights or obligations
hereunder may be waived, only by a writing signed by the party against whom
enforcement thereof is sought; (iii) may be enforced by an action brought in any
court of competent jurisdiction, including the Massachusetts Superior Court in
and for Suffolk County, to the personal jurisdiction of which court each party
hereby submits, and in any such action each party hereby knowingly and
irrevocably waives the right to trial by jury; and (iv) is intended to provide
MassDevelopment with all rights and remedies of a secured party under the UCC.

(b) Any notice, request, instruction or other document to be given hereunder or
under the Note to either party by the other shall be in writing and delivered
personally or sent by recognized overnight courier, receipt confirmed or sent by
certified or registered mail, postage prepaid, to the addresses set forth in
this Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
9

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Executed under seal this 30th day of June, 2008.

BORROWER:
MASSDEVELOPMENT:
           
BEACON POWER CORPORATION
MASSACHUSETTS DEVELOPMENT
     
FINANCE AGENCY
                       
By:
/s/ James M. Spiezio
 
By:
  /s/ Laura L. Canter
   
Name: James M. Spiezio
 
Name: Laura L. Canter
 
Title: Chief Financial Officer
 
Title: Executive Vice President
 
Hereunto Duly Authorized
 
Hereunto Duly Authorized

 

 
10

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Schedule A - Equipment Collateral
Machinery and Equipment located at 65 Middlesex Road, Tyngsboro, MA
             
Date
Acquired
Beacon
Asset Tag
Asset Description
Vendor
Original Cost
Model
Serial #
12/31/07
 
1227
 
Mfg Bridge Cranes
 
Mass Crane and Hoist
 
34,981.50
 
5 Ton Cap.
 
070907-2
 
12/31/07
 
1228
 
Mfg Bridge Cranes
 
Mass Crane and Hoist
 
34,981.50
 
5 Ton Cap.
 
070907-4
 
12/31/07
 
1229
 
Mfg Bridge Cranes
 
Mass Crane and Hoist
 
34,981.50
 
5 Ton Cap.
 
070907-3
 
12/31/07
 
1230
 
Mfg Bridge Cranes
 
Mass Crane and Hoist
 
34,981.50
 
5 Ton Cap.
 
070907-1
 
12/31/07
 
1231
 
Assembly Build Stand Area
 
Various
 
45,921.43
 
N/A
 
N/A
 
12/31/07
 
1232
 
Balance Pits Tyngsboro Pit #1
 
Mulitple
 
117,934.42
 
N/A
 
N/A
 
12/31/07
 
1233
 
Balance Pits Tyngsboro Pit #2
 
Mulitple
 
19,336.58
 
N/A
 
N/A
 
12/31/07
 
1234
 
Balance Pits Tyngsboro Pit #3
 
Mulitple
 
19,336.58
 
N/A
 
N/A
 
03/15/08
 
Untagged
 
Safety Pit Crane
 
D&W
 
50,000.00
 
7 Ton Cap.
 
122007
 
03/31/08
 
Untagged
 
Safety rails and ladders for all 4 Pits
 
D&W
 
27,576.00
 
N/A
 
N/A
 
03/31/07
 
1052
 
Lambda Power Supply - Model 303L-2.5KV-POS-DC
 
Airak Inc
 
15,604.29
 
303L-2.5KV-POS-DC
 
22M8019
 
06/30/07
 
1097
 
Chiller
 
Lytron
 
5,838.00
 
RC045J03BG2M007
 
773965-01
 
06/30/07
 
1100
 
Scissor Lift - Skyjack 3219
 
United Rental Equipment
 
11,970.00
 
SJ111-3219
 
22000350
 
06/30/07
 
1098
 
36000# Fork Truck
 
Nitco
 
163,552.20
 
T360L
 
SBG34155
 
08/31/07
 
LIC
 
Upgrade to 2006-10 Dynamic sampler card for CAR 2006-10
 
Bentley Nevada
 
17,608.00
 
168905-02
 
N/A
 
09/30/07
 
1362
 
Safety pit in Wilmington - Will move to Tyngsboro- Pit #4
 
designed by Beacon
 
129,206.62
 
N/A
 
N/A
 
12/31/07
 
1123
 
Positioner Table
 
Mitrowski
 
57,510.01
 
WP003864
 
648
 

 
 
11

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01/31/08
 
1218
 
Fluke 434 Power Analyzer
 
Newark InOne
 
4,995.00
 
434/003
 
DM92400624
 
01/31/08
 
1213
 
Vacuum Sweeping
 
The Durkin Company
 
5,244.75
 
EAG-TKS510ET
 
265504
 
01/31/08
 
1214
 
Squeegie Machine for floor
 
The Durkin Company
 
5,909.49
 
CT70
 
N/A
 
01/31/08
 
1215
 
Color Scanner goes with Tag 1212
 
OCE North America Inc.
 
7,659.75
 
TC4
 
8373
 
01/31/08
 
1219
 
Thermal Image Camera
 
Fotronic Corporation
 
12,594.75
 
FLKT140FT-20
 
T140FT-0712038
 
01/31/08
 
1217
 
Loop Analyzer
 
Venable Industries
 
17,655.00
 
3120
 
7063249
 
01/31/08
 
1212
 
Color Plotter goes with Scanner tag 1215
 
OCE North America Inc.
 
24,682.00
 
TC5500
 
5400
 
03/14/08
 
1241
 
Large Floor Sweeper
 
NITCO
 
26,256.75
 
Condor 403OC-AXP
 
2038377
 
03/31/08
 
Untagged
 
Fire Suppresstion System
 
D&W
 
4,620.00
 
N/A
 
N/A
 
04/15/08
 
1247
 
Balance Machine
 
Hoffman
 
101,396.09
 
PCH-25.1
 
84401
 
04/25/08
 
1245
 
Oven
 
CW Wood Machining
 
22,759.00
 
13913
 
8389AO605
 
04/30/08
 
1243/1294
 
Xerox Copier
 
Conway Office Products
 
17,787.00
 
Workstation 7345/5638
 
E153709/FKA625358
 
12/31/07
 
1226
 
Nortel BCM 400 Phone System
 
Boston Wireless
 
28,697.33
 
508AA36
 
FOB671100000
 
03/01/08
 
Untagged
 
Phone - Phase 2
 
Boston Wireless
 
7,881.41
 
   
08/31/07
 
1140
 
Dell Precision 690 Work station
 
Dell
 
5,228.68
 
PWS690
 
G4LFDDT
 
08/31/07
 
1141
 
Dell Precision 690 Work station
 
Dell
 
5,228.68
 
PWS690
 
DC00
 
03/01/08
 
Untagged
 
Tyngsboro Network
 
Microdots Computer Services
 
10,000.00
 
   
03/01/08
 
Untagged
 
Wireless Network Equipment
 
PC Connection
 
12,379.42
 
   
03/01/08
 
Untagged
 
Network Switch Gear
 
PC Connection
 
28,920.64
 
   
03/01/08
 
Untagged
 
Network Security
 
PC Connection
 
5,643.11
 
   

 
 
12

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03/14/08
 
1242
 
Projector in Boardroom
 
HB Communications
 
8,616.50
 
LVP-XD1000U
 
 
1/24/2008
 
Untagged
 
IP Phone Expansion (3 sets)
 
Boston Wireless
 
16,046.50
 
       
Total
 
 
1,201,521.98
 
                 

 
 
13

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