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A123 Systems Receives Court Approval of "First Day" Motions to Support Business

    A123 Systems Receives Court Approval of "First Day" Motions to Support
                                   Business

Obtains Interim Approval to Access $15.5 Million of DIP Financing from Johnson
Controls

Company Authorized to Continue Payment of Employee Wages, Salaries and
Benefits

PR Newswire

WALTHAM, Mass., Oct. 19, 2012

WALTHAM, Mass., Oct. 19, 2012 /PRNewswire/ --A123 Systems, Inc. (Nasdaq:
AONE) ("A123" or "the Company"), a developer and manufacturer of advanced
Nanophosphate® lithium iron phosphate batteries and systems, today announced
that yesterday the United States Bankruptcy Court for the District of Delaware
(the "Court") granted the Company's request for certain "first day" orders
that help support its business.

The Court granted A123 interim approval to use $15.5 million of its $72.5
million Debtor-in Possession ("DIP") financing from Johnson Controls, Inc.
(NYSE: JCI) ("Johnson Controls") to support the Company's operations
throughout the transaction process. A court hearing for final approval of the
DIP has been scheduled for October 30, 2012. The Company also received
approval to, among other things, continue paying employee wages, salaries,
benefits and other employee obligations.

As previously announced, A123 entered an asset purchase agreement with Johnson
Controls, in which Johnson Controls expects to acquire A123's automotive
business assets. A123 also continues to engage in active discussions
regarding strategic alternatives for its grid, commercial, government and
other operations, and has received several indications of interest for these
businesses. To facilitate the transaction process, A123 and all of its U.S.
subsidiaries filed voluntary petitions for reorganization under Chapter 11 of
the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of
Delaware. The Company's subsidiaries located outside the U.S. were not
included in the filings.

Additional information, including the terms of the Company's updated DIP
agreement with Johnson Controls, which is expected to be filed shortly, is
available on A123's website at www.a123systems.com or by calling A123's
Restructuring Hotline, toll-free in the U.S., at 1-800-224-7654. For calls
originating outside the U.S., please dial +1 973-509-3190. Court documents and
additional information can be found at a dedicated website administrated by
the Company's Claims Agent, Logan & Company: www.loganandco.com.

Latham & Watkins LLP and Richards, Layton & Finger are serving as legal
advisors, Lazard is serving as financial advisor, and Alvarez & Marsal is
serving as restructuring advisor to A123.

About A123 Systems

A123 Systems, Inc. (Nasdaq: AONE) is a leading developer and manufacturer of
advanced lithium-ion batteries and energy storage systems for transportation,
electric grid and commercial applications. The company's proprietary
Nanophosphate® lithium iron phosphate technology is built on novel nanoscale
materials initially developed at the Massachusetts Institute of Technology and
is designed to deliver high power and energy density, increased safety and
extended life. A123 leverages breakthrough technology, high-quality
manufacturing and expert systems integration capabilities to deliver
innovative solutions that enable customers to bring next-generation products
to market. For additional information please visit www.a123systems.com.

Safe Harbor Disclosure

This press release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended that are subject to risks,
uncertainties and other important factors, including statements with respect
to the expected benefits of A123's proposed asset sale and financing
transactions with Johnson Controls, the potential of the transactions and
Chapter 11 filing to create value for A123 and its stakeholders, the
satisfaction of conditions to closing of the transactions, the anticipated
growth of the market for energy efficient vehicles, the expectation that a
Chapter 11 filing will enable A123 to sell its automotive and other assets in
an orderly manner and maximize value to its stakeholders, and the necessity of
bankruptcy court and other approvals, including antitrust and other regulatory
approvals, to conduct and complete the transactions and other potential asset
sales. Among the factors that could cause actual results to differ materially
from those indicated by such forward-looking statements are: failure to obtain
required bankruptcy court and other approvals, failure to satisfy the
conditions to closing of the transactions, delays in the development of A123's
products, adverse economic conditions in general and adverse economic
conditions specifically affecting the markets in which A123 and Johnson
Controls operate, and other risks detailed in A123 Systems' quarterly report
on Form 10-Q for the quarter ended June 30, 2012 and other publicly available
filings with the Securities and Exchange Commission. All forward-looking
statements reflect A123's expectations only as of the date of this release and
should not be relied upon as reflecting A123's views, expectations or beliefs
at any date subsequent to the date of this release.

SOURCE A123 Systems, Inc.

Website: http://www.a123systems.com
Contact: Dan Borgasano, +1-617-972-3471, dborgasano@a123systems.com
 
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