Document:

Exhibit
      10.4

    NEITHER
      THIS WARRANT NOR THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
      REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
      COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
      MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
      OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
      SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE
      SKY LAWS. 

     

     

    BEACON
      POWER CORPORATION

     

    WARRANT

     

    
      	
              Warrant
                No. R-___ 

            	
              Dated:
                June 30, 2008 

            

    

     

    Beacon
      Power Corporation, a Delaware corporation (the “Company”), hereby certifies
      that, for value received, 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, or its registered
      assigns in accordance with Section
      16
      (the
“Holder”), is entitled to purchase from the Company eighty-five thousand nine
      hundred seventy-nine (85,979) shares of common stock, $0.01 par value per share
      (the “Common Stock”), of the Company (each such share, a “Warrant Share” and all
      such shares, the “Warrant Shares”) at an exercise price equal to $1.89 per share
      (as adjusted from time to time as provided in Section
      8,
      the
“Exercise Price”), at any time and from time to time on and after the date
      hereof and through and including the seventh (7th)
      anniversary of the date hereof (the “Expiration Date”), subject to the terms and
      conditions set forth herein.

     

    1. Registration
      of Warrant.
      The
      Company shall register this Warrant, upon records to be maintained by the
      Company for that purpose (the “Warrant Register”), in the name of the record
      Holder hereof from time to time. The Company may deem and treat the registered
      Holder of this Warrant as the absolute owner hereof for the purpose of any
      exercise hereof or any distribution to the Holder, and for all other purposes,
      absent actual notice to the contrary.

     

    2. Registration
      of Transfers.
      The
      Company shall register the transfer of any portion of this Warrant in accordance
      with Section
      16
      in the
      Warrant Register, upon surrender of this Warrant, with the Form of Assignment
      attached hereto duly completed and signed, to the Company’s transfer agent or to
      the Company at its address specified herein. Upon any such registration or
      transfer, a new warrant to purchase Common Stock, in substantially the form
      of
      this Warrant (any such new warrant, a “New Warrant”), evidencing the portion of
      this Warrant so transferred shall be issued to the transferee and a New Warrant
      evidencing the remaining portion of this Warrant not so transferred, if any,
      shall be issued to the transferring Holder. The acceptance of the New Warrant
      by
      the transferee thereof shall be deemed the acceptance by such transferee of
      all
      of the rights and obligations of a holder of a Warrant.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3. Exercise
      and Duration of Warrants.
      

     

    (a) This
      Warrant shall be exercisable by the registered Holder at any time and from
      time
      to time on or after the date hereof to and including the Expiration Date,
provided,
      that
      the representations and warranties set forth in Section
      17
      are
      true, and that the covenants set forth in Section
      17
      have
      been satisfied, at the time of such exercise. At 5:00 P.M., Eastern time on
      the
      Expiration Date, the portion of this Warrant not exercised prior thereto shall
      be and become void and of no value.

     

    (b) A
      Holder
      may exercise this Warrant by delivering to the Company (i) an exercise notice,
      in the form attached hereto (the “Exercise Notice”), appropriately completed and
      duly signed, and (ii) payment of the Exercise Price for the number of Warrant
      Shares as to which this Warrant is being exercised, and the date such items
      are
      delivered to the Company (as determined in accordance with the notice provisions
      hereof) is an “Exercise Date.” The Holder shall be required to deliver the
      original Warrant in order to effect an exercise hereunder. Upon the execution
      and delivery of the Exercise Notice, the Company shall issue a New Warrant
      to
      the Holder evidencing the right to purchase the remaining number of Warrant
      Shares.

     

    (c) The
      Company shall have a sufficient number of authorized but unissued and otherwise
      unreserved shares of Common Stock available to issue the Warrant Shares upon
      exercise of the Warrant. 

     

    4. Delivery
      of Warrant Shares.
      

     

    (a) Upon
      exercise of this Warrant, the Company shall promptly issue or cause to be issued
      and cause to be delivered to the Holder a certificate for the Warrant Shares
      issuable upon such exercise. Such certificate shall bear a restrictive legend
      substantially the same as the legend first set forth above. The Holder shall
      be
      deemed to have become holder of record of such Warrant Shares as of the
Exercise
      Date.

     

    (b) This
      Warrant is exercisable, either in its entirety or, from time to time from the
      Date hereof, for a portion of the number of Warrant Shares. Upon surrender
      of
      this Warrant following one or more partial exercises, the Company shall issue
      or
      cause to be issued, at its expense, a New Warrant evidencing the right to
      purchase the remaining number of Warrant Shares.

     

    5. Charges,
      Taxes and Expenses.
      Issuance and delivery of certificates for Warrant Shares shall be made without
      charge to the Holder for any issue or transfer tax, withholding tax, transfer
      agent fee or other incidental tax or expense in respect of the issuance of
      such
      certificates, all of which taxes and expenses shall be paid by the Company.
      The
      Holder shall
      be
      responsible for all other tax liability that may arise as a result of holding
      this Warrant or receiving Warrant Shares upon exercise hereof or transferring
      either this Warrant or the Warrant Shares.

     

    6. Replacement
      of Warrant.
      If this
      Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or
      cause to be issued in exchange and substitution for and upon cancellation
      hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
      only
      upon receipt of evidence reasonably satisfactory to the Company of such loss,
      theft or destruction and customary and reasonable bond or indemnity, if
      requested. Applicants for a New Warrant under such circumstances shall also
      comply with such other reasonable regulations and procedures and pay such other
      reasonable third-party costs as the Company may prescribe.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7. Reservation
      of Warrant Shares.
      The
      Company shall at all times reserve and keep available out of the aggregate
      of
      its authorized but unissued and otherwise unreserved Common Stock, solely for
      the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant
      as herein provided, the number of Warrant Shares which are then issuable and
      deliverable upon the exercise of this entire Warrant, free from preemptive
      rights or any other contingent purchase rights of persons other than the Holder
      (taking into account the adjustments and restrictions of Section
      8).
      The
      Company covenants that all Warrant Shares so issuable and deliverable shall,
      upon issuance and the payment of the applicable Exercise Price in accordance
      with the terms hereof, be duly and validly authorized, issued and fully paid
      and
      nonassessable. The Company will take all such actions as may be necessary to
      assure that such shares of Common Stock may be issued as provided herein without
      violation of any applicable law or regulation, or of any requirements of any
      securities exchange or automated quotation system upon which the Common Stock
      may be listed. 

     

    8. Certain
      Adjustments.
      The
      Exercise Price and number of Warrant Shares issuable upon exercise of this
      Warrant are subject to adjustment from time to time as set forth in this
      section.

     

    (a) Stock
      Dividends, Subdivisions, Combinations.
      In case
      the Company shall (i) pay a dividend on its Common Stock in shares of Common
      Stock, (ii) subdivide its outstanding Common Stock into a greater number of
      shares of Common Stock, or (iii) combine its outstanding Common Stock into
      a
      smaller number of shares of Common Stock, then the number of shares of Common
      Stock purchasable upon exercise of this Warrant shall be adjusted so that the
      Holder of this Warrant shall thereafter be entitled to receive that kind and
      number of shares of Common Stock or other securities of the Company that such
      Holder would have owned or have been entitled to receive after the happening
      of
      any of the events described above, had this Warrant been exercised immediately
      prior to the happening of such event or any record date with respect thereto
      and
      the Exercise Price shall be proportionately increased or decreased, as the
      case
      may be, such that the aggregate Exercise Price shall not be adjusted. An
      adjustment made pursuant to this subsection (a) shall become effective
      immediately after the record date in the case of a dividend and shall become
      effective immediately after the effective date in the case of a subdivision
      or
      combination.

     

    (b) Notice
      of Adjustment.
      Whenever there is an adjustment to this Warrant under this Section
      8,
      the
      Company will forthwith cause a notice stating the adjustment and the relevant
      Exercise Price to be mailed to the Holder of this Warrant. Such notice shall
      show in detail the facts requiring such adjustment.

     

    9. Treatment
      of Warrant Upon Acquisition.

     

    (a) Treatment
      of Warrant at Acquisition.

     

    (i) Upon
      the
      written request of the Company, Holder agrees that, in the event of an
      Acquisition in which the sole consideration is cash or Marketable Securities,
      either (i) Holder shall exercise its purchase right under this Warrant and
      such
      exercise will be deemed effective immediately prior to the consummation of
      such
      Acquisition, or (ii) if Holder elects not to exercise the Warrant, this Warrant
      will expire upon the consummation of such Acquisition. The Company shall provide
      the Holder with written notice of its request relating to the foregoing
      (together with such reasonable information as the Holder may request in
      connection with such contemplated Acquisition giving rise to such notice),
      which
      is to be delivered to Holder not less than five (5) Business Days prior to
      the
      closing of the proposed Acquisition.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii) Upon
      the
      written request of the Company, Holder agrees that, in the event of an
      Acquisition that is an “arms length” sale of all or substantially all of the
      Company’s assets (and only its assets) to a third party that is not an Affiliate
      (as defined below) of the Company (a “True Asset Sale”), either (i) Holder shall
      exercise its purchase right under this Warrant and such exercise will be deemed
      effective immediately prior to the consummation of such Acquisition, or (ii)
      if
      Holder elects not to exercise the Warrant, this Warrant will continue until
      the
      Expiration Date if the Company continues as a going concern following the
      closing of any such True Asset Sale. The Company shall provide the Holder with
      written notice of its request relating to the foregoing (together with such
      reasonable information as the Holder may request in connection with such
      contemplated Acquisition giving rise to such notice), which is to be delivered
      to Holder not less than five (5) Business Days prior to the closing of the
      proposed Acquisition.

     

    (iii) Upon
      the
      closing of any Acquisition other than those particularly described in
      subsections (i) and (ii) above, the successor entity shall assume the
      obligations of this Warrant, and this Warrant shall be exercisable for the
      same
      securities, cash, and property as would be payable for the shares issuable
      upon
      exercise of the unexercised portion of this Warrant as if such Warrant Shares
      were outstanding on the record date for the Acquisition and subsequent closing.
      The Exercise Price and/or number of Warrant Shares shall be adjusted
      accordingly.

     

    (b) Definitions.
      As used
      in this Section
      9:

     

    (i) “Acquisition”
      shall mean any sale, license, or other disposition of all or substantially
      all
      of the assets (including intellectual property, but excluding licenses and
      strategic collaborations entered into in the ordinary course of business) of
      the
      Company, or any reorganization, consolidation, merger or sale of outstanding
      capital stock of the Company or any other transaction where the holders of
      the
      Company's outstanding voting securities before the transaction beneficially
      own
      less than a majority of the outstanding voting securities of the surviving
      entity after the transaction.

     

    (ii) “Affiliate”
      shall mean any person or entity that owns or controls directly or indirectly
      fifty percent (50%) or more of the stock of Company (on an as-converted to
      Common Stock basis), any person or entity that controls or is controlled by
      or
      is under common control with such persons or entities, and each of such person’s
      or entity’s officers, directors, joint venturers or partners, as
      applicable.

     

    (iii) “Business
      Day” shall mean any day except a Saturday, Sunday or other day on which
      commercial banks in the City of New York or in Boston, Massachusetts are
      required or authorized by law to close.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (iv) “Marketable
      Securities” shall mean stock or other securities that may be listed or quoted
      for trading on the date in question on the Nasdaq Capital Market, the Nasdaq
      Global Market, the Nasdaq Global Select Market, or the New York Stock
      Exchange.

     

    10. Payment
      of Exercise Price.
      The
      Holder shall pay the Exercise Price in immediately available funds.

     

    11. Registration
      Rights.
      On or
      before December 31, 2008, the Company shall cause to be prepared and filed
      with
      the Securities and Exchange Commission a Registration Statement providing for
      the resale of all Warrant Shares then outstanding for an offering to be made
      by
      Massachusetts Development Finance Agency [or its anticipated assignee,
      Massachusetts Technology Park Corporation], on a continuous basis pursuant
      to
      Rule 415. Such Registration Statement shall be on Form S-3 (except if the
      Company is not then eligible to register for resale the Warrant Shares on Form
      S-3, in which case such registration shall be on another appropriate form in
      accordance herewith). The Company shall cause such Registration Statement to
      be
      declared effective under the Securities Act as promptly as reasonably possible
      after the filing thereof. The Company shall use commercially reasonable efforts
      to keep the Registration Statement continuously effective under the Securities
      Act until the date which is the earlier date of when: (i) all Warrant Shares
      have been sold or (ii) all Warrant Shares covered by such Registration Statement
      may be sold immediately without registration under the Securities Act and
      without volume restrictions pursuant to Rule 144, as determined by the counsel
      to the Company pursuant to a written opinion letter to such effect, addressed
      and acceptable to the Company’s transfer agent and the affected
      Holder.

     

    12. Fractional
      Shares.
      The
      Company shall not be required to issue or cause to be issued fractional Warrant
      Shares on the exercise of this Warrant. If any fraction of a Warrant Share
      would, except for the provisions of this Section, be issuable upon exercise
      of
      this Warrant, the number of Warrant Shares to be issued will be rounded up
      to
      the nearest whole share.

     

    13. Notices.
      Any and
      all notices or other communications or deliveries hereunder (including without
      limitation any Exercise Notice) shall be in writing and shall be deemed given
      and effective on the earliest of (i) the date of transmission, if such notice
      or
      communication is delivered via facsimile at the facsimile number specified
      in
      this Section prior to 5:00 p.m. (New York City or Boston, Massachusetts time)
      on
      a Trading Day, (ii) the next Trading Day after the date of transmission, if
      such
      notice or communication is delivered via facsimile at the facsimile number
      specified in this Section on a day that is not a Trading Day or later than
      5:00
      p.m. (New York City or Boston, Massachusetts time) on any Trading Day, (iii)
      the
      Trading Day following the date of mailing, if sent by nationally recognized
      overnight courier service, or (iv) upon actual receipt by the party to whom
      such
      notice is required to be given. “Trading Day” means (a) any day on which the
      Common Stock is listed and traded on the Nasdaq Stock Market, or (b) if the
      Common Stock is not then listed and traded on the Nasdaq Stock Market, then
      a
      day on which trading occurs on either the New York Stock Exchange or the
      American Stock Exchange (together with the Nasdaq Stock Market, each an
“Eligible Market”) (or any successor thereto), or (c) if trading ceases to occur
      on an Eligible Market (or any successor thereto), any day other than Saturday,
      Sunday or other day on which commercial banks in New York City or Boston,
      Massachusetts are authorized or required by law to remain closed.

     

    
      14. The
        address for such notices or communications shall be as set forth
        below:

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (a) if
      to the
      Company, at the office of the Company, 65 Middlesex Road, Tyngsboro, MA 01879,
      Attention: James Spiezio, with copies to Edwards Angell Palmer & Dodge LLP,
      111 Huntington Avenue, Boston, Massachusetts 02199, Attention: Albert Sokol,
      or

     

    (b) if
      to the
      Holder, Massachusetts Development Finance Agency, 160 Federal Street, Boston,
      MA
      02110, Attention: Laura L. Canter with a copy to Sherin and Lodgen, LLP, 101
      Federal Street, Boston, MA 02110 Attention: Gary M. Markoff.

     

    15. Warrant
      Agent.
      The
      Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’
notice to the Holder, the Company may appoint a new warrant agent. Any
      corporation into which the Company or any new warrant agent may be merged or
      any
      corporation resulting from any consolidation to which the Company or any new
      warrant agent shall be a party or any corporation to which the Company or any
      new warrant agent transfers substantially all of its corporate trust or
      shareholders services business shall be a successor warrant agent under this
      Warrant without any further act. Any such successor warrant agent shall promptly
      cause notice of its succession as warrant agent to be mailed (by first class
      mail, postage prepaid) to the Holder at the Holder’s last address as shown on
      the Warrant Register.

     

    16. Transferability.
      

     

    (a) This
      Warrant may not be assigned by the Company except to a successor in the event
      of
      an Acquisition.

     

    (b) No
      interest in this Warrant may be sold, assigned or otherwise transferred by
      the
      holder without the prior written consent of the Company, not to be unreasonably
      withheld in the event that Holder complies with this clause. Neither this
      Warrant nor the Common Stock issuable upon exercise hereof have been registered
      with the Securities and Exchange Commission or the securities commission of
      any
      state in reliance upon an exemption from registration under the Securities
      Act
      of 1933, as amended (the “Securities Act”), and, accordingly, may not be sold,
      transferred, assigned or offered for same except pursuant to an effective
      registration statement under the Securities Act or pursuant to an available
      exemption from, or in a transaction not subject to, the registration
      requirements of the Securities Act and in compliance with applicable state
      securities laws or blue sky laws, to be documented in part by the Holder
      providing the Company with an opinion of counsel reasonably satisfactory to
      the
      Company stating that such sale, transfer or assignment is exempt from the
      registration requirements of the Securities Act.  

     

    17. Holder’s
      Representations, Warranties and Covenants.
      The
      Holder represents, warrants and covenants that: (a) it (i) has such knowledge
      and experience in financial and business matters that it is fully capable of
      evaluating the merits and risks of an investment in the Warrant and Warrant
      Shares, (ii) can bear the economic risk of its investment in the Warrant and
      Warrant Shares, (iii) has been furnished with or has had full access to all
      of
      the publicly available information that it considers necessary or appropriate
      for deciding whether to acquire the Warrant and Warrant Shares, and (iv) has
      had
      an opportunity to ask questions and receive answers from the Company regarding
      the terms and conditions of this Warrant and Warrant Shares; (b) it is familiar
      with the business of and prospects for the Company; (c) it acknowledges that
      the
      Warrant is issued by the Company in a transaction not involving any public
      offering within the meaning of Section 4(2) of the Securities Act; (d) it
      intends that only the state corporate and securities laws of the Commonwealth
      of
      Massachusetts, together with the federal securities laws, govern the issuance
      and exercise of the Warrant; (e) it is acquiring the Warrant and Warrant Shares
      issuable upon exercise of the Warrant for investment for its own account, not
      for the account of any other person, and not with a view to the resale or
      distribution thereof, in whole or in part, in violation of the Securities Act
      or
      applicable state securities law; and (f) the representations, warranties and
      covenants contained in this Section
      17
      shall
      survive the execution and delivery of this Warrant and the acquisition of the
      Warrant and Warrant Shares.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    18. Miscellaneous

     

    (a) The
      Company will not, by amendment of its governing documents or through any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms 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 against impairment. Without limiting the generality
      of
      the foregoing, the Company (i) will not increase the par value of any Warrant
      Shares above the amount payable therefor on such exercise, (ii) will take all
      such action as may be reasonably necessary or appropriate in order that the
      Company may validly and legally issue fully paid and nonassessable Warrant
      Shares on the exercise of this Warrant, and (iii) will not close its shareholder
      books or records in any manner which interferes with the timely exercise of
      this
      Warrant.

     

    (b) GOVERNING
      LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
      VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED
      BY
      AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
      COMMONWEALTH OF MASSACHUSETTS WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS
      OF
      LAW THEREOF. EACH PARTY AGREES THAT ALL LEGAL PROCEEDINGS CONCERNING THE
      INTERPRETATIONS, ENFORCEMENT AND DEFENSE OF THE WARRANT (WHETHER BROUGHT AGAINST
      A PARTY HERETO OR ITS RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, SHAREHOLDERS,
      EMPLOYEES OR AGENTS) SHALL BE COMMENCED EXCLUSIVELY IN THE STATE AND FEDERAL
      COURTS SITTING IN THE CITY OF BOSTON, MASSACHUSETTS. EACH PARTY HERETO HEREBY
      IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
      COURTS SITTING IN THE CITY OF BOSTON, MASSACHUSETTS FOR THE ADJUDICATION OF
      ANY
      DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED
      HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY
      OF
      THIS WARRANT), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY
      SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO
      THE
      JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS
      IMPROPER. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF
      PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR
      PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR
      OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS
      IN
      EFFECT FOR NOTICES TO IT UNDER THIS WARRANT AND AGREES THAT SUCH SERVICE SHALL
      CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING
      CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS
      IN ANY MANNER PERMITTED BY LAW. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
      TO
      THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL
      BY
      JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT OR
      THE
      TRANSACTIONS CONTEMPLATED HEREBY. IF EITHER PARTY SHALL COMMENCE AN ACTION
      OR
      PROCEEDING TO ENFORCE ANY PROVISIONS OF THIS WARRANT, THEN THE PREVAILING PARTY
      IN SUCH ACTION OR PROCEEDING SHALL BE REIMBURSED BY THE OTHER PARTY FOR ITS
      REASONABLE ATTORNEYS FEES AND OTHER REASONABLE COSTS AND EXPENSES INCURRED
      WITH
      THE INVESTIGATION, PREPARATION AND PROSECUTION OF SUCH ACTION OR
      PROCEEDING.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c) The
      headings herein are for convenience only, do not constitute a part of this
      Warrant and shall not be deemed to limit or affect any of the provisions
      hereof.

     

    (d) In
      case
      any one or more of the provisions of this Warrant shall be invalid or
      unenforceable in any respect, the validity and enforceability of the remaining
      terms and provisions of this Warrant shall not in any way be affected or
      impaired thereby and the parties will attempt in good faith to agree upon a
      valid and enforceable provision which shall be a commercially reasonable
      substitute therefor, and upon so agreeing, shall incorporate such substitute
      provision in this Warrant.

     

    (e) The
      holder of this Warrant shall have no rights as a stockholder of the Company by
      virtue of holding this Warrant.

     

    (f) This
      Warrant, other than Section
      11,
      shall
      be binding on and inure to the benefit of the parties hereto and their
      respective successors and assigns pursuant to transfers in accordance with
      Section
      16.
      Subject
      to the preceding sentence, nothing in this Warrant shall be construed to give
      to
      any person other than the Company and the Holder any legal or equitable right,
      remedy or cause of action under this Warrant. 

     

    (g) This
      Warrant may be amended only in writing signed by the Company and the Holder
      and
      their successors and assigns pursuant to transfers in accordance with
Section
      16.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
      its
      authorized officer as of the date first indicated above.

     

     

    
      	 	
              BEACON
                POWER CORPORATION

            
	 	 	 	 
	 	
              By:

            	
               

            	 
	 	 	
              Name:
                

            
	 	 	
              Title:

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    FORM
      OF EXERCISE NOTICE

     

    (To
      be
      executed by the Holder to exercise the right to purchase shares of Common Stock
      under the foregoing Warrant)

     

    To: Beacon
      Power Corporation

     

    The
      undersigned is the Holder of Warrant No. _______ (the “Warrant”) issued by
      Beacon Power Corporation, a Delaware corporation (the “Company”). Capitalized
      terms used herein and not otherwise defined have the respective meanings set
      forth in the Warrant.

     

    
      	 	
              1.

            	
              The
                Warrant is currently exercisable to purchase a total of ______________
                Warrant Shares. 

            

    

     

    
      	 	
              2.

            	
              The
                undersigned Holder hereby exercises its right to purchase _______________
                Warrant Shares pursuant to the Warrant.

            

    

     

    
      	 	
              3.

            	
              The
                holder shall pay the sum of $____________ to the Company in accordance
                with the terms of the Warrant. 

            

    

     

    
      	 	
              4.

            	
              Pursuant
                to this exercise, the Company shall deliver to the holder _______________
                Warrant Shares in accordance with the terms of the Warrant.
                

            

    

     

    
      	 	
              5.

            	
              Following
                this exercise, the Warrant shall be exercisable to purchase a total
                of
                ______________ Warrant Shares.

            

    

     

    
      	 	
              6.

            	
              The
                representations and warranties set forth in Section 16 of the Warrant
                are
                true, and the covenants set forth in Section 16 of the Warrant have
                been
                satisfied, on the date hereof.

            

    

     

    
      	
              Dated:
                , 

               

            	
              Name
                of Holder: 

               

            
	 	
              (Print)
                

               

            
	 	
              By:
                

            
	 	
              Name:
                

            
	 	
              Title:
                

               

            
	 	
              (Signature
                must conform in all respects to name of holder as specified on the
                face of
                the Warrant) 

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    FORM
      OF
      ASSIGNMENT

     

    [To
      be
      completed and signed only upon transfer of Warrant]

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers unto
      ________________________________ the right represented by the within Warrant
      to
      purchase ____________ shares of Common Stock of Beacon Power Corporation to
      which the within Warrant relates and appoints ________________ attorney to
      transfer said right on the books of Beacon Power Corporation with full power
      of
      substitution in the premises.

     

    Dated:
      ,

     

    
      	 	
              (Signature
                must conform in all respects to name of holder as specified on the
                face of
                the Warrant) 

               

            
	 	
              Address
                of Transferee 

               

            

    

     

    In
      the
      presence of:Form
      of
      Note

    

    The
      payment of principal and interest on this Note is subject to certain recoupment
      provisions set forth herein and in the Purchase Agreement (defined below)
      between the issuer of this Note and the holder to whom this Note originally
      was
      issued. This Note was originally issued on June 30, 2008, and has not been
      registered under the Securities Act of 1933, as amended, or any state securities
      act, and may not be sold or transferred in the absence of such registration
      or
      qualification or an exemption therefrom under the securities act or any such
      state securities laws that may be applicable. The sale or transfer of this
      Note
      is subject to certain restrictions set forth in the Purchase Agreement. The
      issuer of this Note will furnish a copy of these provisions to the holder hereof
      without charge upon written request.

    

    PROMISSORY
      NOTE

    

      
        	
                US$1,750,000.00

              	
                June
                  30, 2008

              

      

    

    

    1. Principal
      and Interest.

    

    (a)
       FOR
      VALUE
      RECEIVED, New Motion, Inc., a Delaware corporation (“Maker”),
      promises to pay in lawful money of the United States of America to the order
      of
      Ringtone.com, LLC, a Minnesota limited liability company (“Payee”),
      the
      total principal sum of One Million Seven Hundred Fifty Thousand Dollars
      ($1,750,000.00), with interest thereon until fully paid. This Note is being
      entered into pursuant to the Asset Purchase Agreement (the “Purchase
      Agreement”)
      entered into on June 30, 2008, by and between Maker and Payee.

    

    (b) This
      Note
      shall bear interest until paid at a rate of ten percent (10%) per annum;
      provided, however, that from
      and
      after an Event of Default and written notice from the Payee to the Maker, this
      Note shall bear interest at fifteen percent (15%) per annum. Interest
      shall accrue from the date of this Note. Interest shall be computed on the
      basis
      of a year of 365 days and the actual number of days elapsed.

    

    2. Maturity
      Date. 

    

    On
      the
      earliest to occur of (i) July 1, 2009, (ii) when declared due and payable by
      the
      Payee upon the occurrence of an Event of Default (as defined below), or (iii)
      five (5) days after the Maker gives written notice to the Payee of its intent
      to
      prepay the Note (such earliest date, the “Maturity
      Date”),
      Payee, in its sole discretion may: (i) demand Maker to pay Payee the amount
      by
      which the principal amount of this Note plus accrued interest thereon (after
      reduction for Uncontested Setoff Amounts, if any, as described below) exceeds
      any Contested Amounts (as defined below) plus any amounts which Payee may
      contest pursuant to Section 3(c) below (the “Payoff
      Amount”),
      or,
      (ii) convert, in accordance with the procedure set forth in Section 4, the
      Payoff Amount into that number of fully paid and nonassessable shares of the
      Maker’s common stock (the “Equity
      Interests”)
      at a
      conversion price equal to $5.42 per share (subject to adjustment for any stock
      splits or stock dividends). Upon payment in full, or conversion into Equity
      Interests, of all principal and interest payable hereunder, this Note shall
      be
      surrendered to the Maker for cancellation, and the Maker shall be forever
      released from all of its obligations and liabilities under this
      Note.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3. Setoff.

    

    (a) At
      anytime or from time to time on or prior to the Maturity Date, Maker shall
      have
      the right to setoff against any amounts due Payee pursuant to this Note for
      Adverse Consequences (as defined in the Purchase Agreement) Maker, its
      affiliates, and their respective officers, directors and employees may have
      suffered, which entitle Maker to indemnification under the Purchase Agreement.
      Such setoff will be first applied to reduce any accrued interest under this
      Note. Maker shall notify Payee prior to setting off such losses against amounts
      due Payee pursuant to this Note (such notification, the “Setoff
      Notice”).
      The
      Setoff Notice shall (i) state that Maker believes that there is or has been
      a
      breach of a representation or warranty contained in the Purchase Agreement
      or
      that Maker is otherwise entitled to indemnification under the Purchase
      Agreement, (ii) set forth the estimated amount of the Adverse Consequences
      claimed (the “Setoff
      Amount”)
      and
      (iii) include a summary of known, relevant facts with respect to the
      claim.

    

    (b) If
      Payee
      does not contest a Setoff Notice in writing within thirty (30) days of the
      date
      of the Setoff Notice, Maker shall proceed with the setoff described in the
      Setoff Notice and the principal amount of this Note shall be automatically
      reduced in an amount equal to such uncontested Setoff Amount (the “Uncontested
      Setoff Amount”);
      provided, if Payee pays to Maker in cash (in immediately available funds) all
      or
      a portion of such Uncontested Setoff Amount within five (5) days following
      the
      determination of such Uncontested Setoff Amount, this Note shall not be reduced
      to the extent of such payment. 

    

    (c) If
      Payee
      gives written notice to Maker contesting all or a portion of the Setoff Notice
      within thirty (30) days of the date of the Setoff Notice (such notice, the
      “Dispute
      Notice”
and
      the
      amount so contested the “Contested
      Amount”),
      the
      parties shall meet within ten (10) business days from the date of the Dispute
      Notice for the purpose of resolving the dispute. Any portion of a Setoff Notice
      that is not contested or is subsequently settled in Makers favor shall be
      treated as an Uncontested Setoff Amount. 

    

    (d) If
      the
      parties are unable to reach agreement with respect to the Contested Amount,
      at
      the time payment would otherwise be due to Payee pursuant to this Note, Maker
      shall deposit an amount in cash equal to the Contested Amount with a third
      party
      escrow agent designated by Maker, and reasonably acceptable to Payee, pending
      resolution of the dispute. Such escrow agent shall be based in the United States
      and shall be in the business of regularly providing escrow services. At the
      time
      the Contested Amount is placed into escrow, Maker, Payee and the escrow agent
      shall enter into an escrow agreement reasonably acceptable to the parties.
      The
      escrow agreement shall provide for the investment of the Contested Amount in
      accordance with the directions of Payee, so long as such directions are
      reasonably acceptable to Maker. Any accrued interest, earnings or income earned
      on such investment shall be added to the Contested Amount. Payee shall be
      responsible for any taxes on the interest, earnings or income related to the
      investment of the Contested Amount, provided,
      however,
      that
      Payee may request the escrow agent to release from escrow an amount equal to
      Payee’s tax obligation so long as the original Contested Amount remains intact.
      The Contested Amount shall be held by the escrow agent: (i) until receipt of
      a
      settlement agreement executed by Maker and Payee setting forth a resolution
      of
      the Contested Amount and the amount to be delivered to the parties; or (ii)
      until receipt of a written notice from a party attaching a copy of a judgment
      or
      an order of a court with proper jurisdiction specifying the release of the
      Contested Amount, or (iii) in the event that the indemnification claim, which
      formed the subject of the Setoff Notice related to a third party claim, then
      the
      Contested Amount will be released upon proof of settlement or payment in full,
      and related releases, of such claim, whichever of the foregoing events occurs
      first. Maker and Payee shall be equally responsible for the fees of the escrow
      agent. Maker shall not be responsible for and shall have no further obligation
      with respect to the payment of the Contested Amount, or interest thereon,
      pursuant to this Note once such amount is placed into escrow and Payee shall
      look solely to the escrow agent for payment of such amount. In accordance with
      the provisions of this Note, Payee may elect to convert into Equity Interests
      any Contested Amount it is ultimately entitled to receive by delivery of written
      notice to Maker during the five (5) day period following the resolution,
      judgment or determination of such Contested Amount. 

     

    
      
        
        

      

      
        Page
          2 of
          6

        
          

        

      

      
        
        

      

    

     

    4. Mechanics
      of Conversion.

    

    In
      connection with any conversion of this Note, Payee shall execute and deliver
      to
      the Maker a purchase agreement and other agreements or documents governing
      the
      issuance of the Equity Interests to Payee. Upon conversion of this Note, Payee
      shall surrender this Note, duly endorsed, at the principal office of the Maker.
      As promptly as practicable after the conversion and surrender of this Note,
      the
      Maker, at its expense, will issue and deliver to the Payee of this Note a
      certificate or certificates for the number of full shares of Equity Interests
      issuable upon such conversion (bearing such legends as are required by
      applicable state and federal securities laws in the opinion of counsel to the
      Maker). No fractional shares of Equity Interests shall be issued upon conversion
      of this Note. In lieu of the Maker issuing any fractional shares to the Payee
      upon the conversion of this Note, the number of shares of Equity Interests
      to be
      issued shall be rounded to the nearest whole number. 

     

    5. Currency.

    

    This
      Note
      is denominated in U.S. Dollars and all cash payments hereunder shall be
      calculated and paid in U.S. Dollars.

    

    6. Waivers.

    

    Maker
      and
      any endorsers of this Note hereby waive demand, grace, notice, presentment
      for
      payment, and protest, and agree and consent that this Note may be renewed,
      and
      the time of payment extended without notice, and without releasing any party
      hereto.

    

    7. Events
      of Default.

    

    Upon
      the
      happening of an Event of Default (as defined below), the Payee shall be
      entitled, by written notice to the Maker, to declare the principal amount of
      this Note, together with accrued interest, to be, and upon receipt of such
      declaration by the Maker, this Note shall be accelerated and become, immediately
      due and payable.

    

    The
      occurrence of any of the following events shall constitute an “Event
      of Default”:
      (a)
      failure by Maker to pay amounts due under this Note within five (5) days after
      they become due; (b) the commencement of any proceedings under any
      bankruptcy or insolvency laws by or against Maker; (c) the sale or transfer
      by
      Maker (or any affiliate of Maker) to a third party of all or substantially
      all
      of the Acquired Assets (as that term in defined in the Purchase Agreement);
      (d)
      change-of-control (a merger, consolidation, or other reorganization as a result
      of which a third party acquires more than 50% of the outstanding voting
      securities of Maker); (e) if Maker’s common stock is no longer listed on the
      NASDAQ Global Market, NASDAQ Capital Market, AMEX or NYSE; and (f) any material
      breach of the representations and warranties of Maker set forth in this Note
      or
      the Purchase Agreement.

     

    
      
        
        

      

      
        Page
          3 of
          6

        
          

        

      

      
        
        

      

    

     

    8. Representations
      and Warranties of Maker.
      This
      Note has been duly authorized, and upon issuance in accordance with the terms
      of
      the Purchase Agreement, will be validly issued, will be issued in compliance
      with all applicable federal and state securities laws as presently in effect,
      and will not be subject to any preemptive rights, rights of first refusal or
      restrictions on transfer other than under the Purchase Agreement and under
      applicable federal and state securities laws. The shares of Maker’s common stock
      issuable upon conversion of this Note have been duly and validly reserved for
      issuance and, upon issuance in accordance with the terms of this Note, will
      be
      duly and validly issued, fully paid and nonassessable, will be issued in
      compliance with all applicable federal and state securities laws as presently
      in
      effect, and will not be subject to any preemptive rights, rights of first
      refusal or restrictions on transfer other than under the Purchase Agreement
      and
      under applicable federal and state securities laws.

     

    9. Attorney’s
      Fees.

     

    If
      this
      Note is placed in the hands of an attorney for collection or collected through
      bankruptcy or other judicial proceedings, or if suit is brought hereon, Maker
      agrees to pay in cash, in addition to all other amounts owing hereunder, all
      reasonable expenses and costs of collection, including reasonable attorneys’
fees, incurred by the owner or holder hereof in connection with such collection
      or proceedings.

     

    10. Transfer.

     

    This
      obligation is registered as to both principal and any stated interest with
      Maker
      (or its agent) and transfer of the obligation may be effected only by surrender
      of the old instrument and either the reissuance by Maker of the old instrument
      to the new holder or the issuance by Maker of a new instrument to the new
      holder. Maker agrees that Payee may assign or transfer this Note to its
      Affiliates (as defined in the Purchase Agreement) or to one or more holders
      of
      Payee’s Membership Interests pursuant to the terms of the Purchase Agreement.
      Maker may not assign or transfer this Note without the prior approval of
      Payee.

     

    11. Governing
      Law. 

     

    All
      terms, obligations, and provisions of this Note are to be determined and
      governed by the laws of the State of New York, excluding that body of law
      relating to conflict of laws. Should any term or provision of this Note be
      declared invalid, such determination shall not affect the remaining provisions
      hereof, which shall remain in full force and effect. Notwithstanding any
      provision contained herein to the contrary, the Payee shall not be entitled
      to
      receive, collect, or apply as interest on the obligation evidenced hereby,
      any
      amount in excess of the maximum rate of interest permitted by applicable
      law.

     

    12. Notices.

     

    All
      notices and communications required or permitted to be given under this Note
      shall be in writing and shall be deemed to have been duly given if delivered
      (i) by hand (including by reputable overnight courier), (ii) by mail
      (certified or registered mail, return receipt requested) or (iii) by
      telecopy facsimile transmission (receipt of which is confirmed):

     

    
      
        
        

      

      
        Page
          4 of
          6

        
          

        

      

      
        
        

      

    

     

    If
      to
      Maker:

    

    New
      Motion, Inc.

    42
      Corporate Park, Suite 250

    Irvine,
      CA 92606

    Attention:
      Chief Executive Officer

    

    And
      a
      copy (which shall not constitute notice) to:

     

    Stubbs
      Alderton & Markiles, LLP

    15260
      Ventura Boulevard, 20th
      Floor

    Sherman
      Oaks, CA 91403

    Attention:
      Scott Galer

    

    If
      to
      Payee:

    

    Ringtone.com,
      LLC

    1900
      Medical Arts Ave S 

    Sartell
      MN 56377

    Attention:
      General Counsel

    

    or
      to
      such other person or address as a person named above shall specify by notice
      in
      writing to the other persons. All such notices and communications shall be
      deemed to have been given (i) on the date on which so hand-delivered,
      (ii) on the third business day following the date on which so mailed and
      (iii) on the date on which telecopied and confirmed, except for a notice of
      change of address, which shall be effective only upon receipt
      thereof.

     

    13. Heading;
      References.
      

     

    All
      headings used herein are used for convenience only and shall not be used to
      construe or interpret this Note. Except where otherwise indicated, all
      references herein to Sections refer to Sections hereof.

     

    14. Entire
      Agreement; Amendments.
      

     

    Any
      term
      of this Note may be amended or terminated and the observance of any term of
      this
      Note may be waived (either generally or in a particular instance and either
      retroactively or prospectively), with the written consent of the Maker and
      the
      Payee. No waivers of or exceptions to any term, condition or provision of this
      Note, in any one or more instances, shall be deemed to be, or construed as,
      a
      further or continuing waiver of any such term, condition or provision. Any
      waiver or amendment effected in accordance with this Section shall be binding
      upon and inure to the benefit of the parties and their successors,
      assigns,
      heirs,
      administrators and transferees.

     

    15. Stockholder’s
      Rights.

     

    Nothing
      contained in this Note shall be construed as conferring upon the Payee or any
      other person the right to vote or to consent or to receive notice as a
      stockholder in respect of meetings of stockholders for the election of directors
      of the Maker or any other matters or any rights whatsoever as a stockholder
      of
      the Maker; and no dividends or interest shall be payable or accrued in respect
      of this Note or the Equity Interests issuable upon the conversion hereunder
      until, and only to the extent that, this Note shall have been
      converted.

     

    [REMAINDER
      OF THIS PAGE INTENTIONALLY BLANK]

     

    
      
        
        

      

      
        Page
          5 of
          6

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, Maker has caused this Convertible Promissory Note to be issued
      as of the date first set forth above.

    

      
        	 	
                MAKER:

              
	 	 
	 	
                New
                  Motion, Inc.

              
	 	 
	 	 
	 	
                By:
                  

              
	 	
                Its:
                  

              

      

    

    

    
      
        
        

      

      
        Page
          6 of
          6

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