EXHIBIT 10.1.20

                              EMPLOYMENT AGREEMENT

     This Employment  Agreement (the  "Agreement")  entered into as of April 25,
2004,  by and between  Beacon Power  Corporation,  a Delaware  corporation  (the
"Company"), and Matthew Lazarewicz (the "Executive")

     WHEREAS,  the  Executive  is an  employee of the  Company,  and the Company
desires to retain his services and he wishes to continue his  employment  by the
Company;

     NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt  and
sufficiency of which are hereby acknowledged, the parties agree as follows:

     SECTION  1.  TERM.  The  Company  shall  employ  the  Executive  for a term
commencing  on April 25,  2004 and  continuing  until  December  31, 2004 unless
terminated  pursuant  to  Section 9. The  period of the  Executive's  employment
hereunder is referred to as the "Employment Period."

     SECTION 2. DUTIES.  The Executive shall serve the Company as Vice President
and  Chief  Technical  Officer  and  shall  have  duties  and   responsibilities
consistent  with such  position.  The Executive will report to the President and
Chief Executive Officer of the Company. The Executive will generally perform his
services at the Company's  principal  offices,  which are  currently  located in
Wilmington, Massachusetts; provided, however, that the Executive may be required
to travel from time to time in connection with Company business.

     SECTION 3. FULL  TIME;  BEST  EFFORTS.  During  the  Employment  Period the
Executive shall use his best efforts to promote the interests of the Company and
shall devote his full business time and efforts to its business and affairs. The
Executive  shall not engage in any business  activity which could  reasonably be
expected to interfere with the performance of the Executive's  duties,  services
and responsibilities hereunder.

     SECTION 4. COMPENSATION. The Executive shall be entitled to compensation as
follows:

     (a) Base Salary. During the Employment Period, the Executive will receive a
salary at an annual  gross rate of $157,500,  (as the same may be adjusted  from
time to time, the "Base Salary"),  which shall be payable in accordance with the
Company's regular payroll practices applicable to senior executive officers. The
Executive's Base Salary shall be reviewed by the Board at least annually and may
be increased (but not decreased) in the Board's  discretion,  depending upon the
performance of the Executive and of the Company.

     (b) Annual  Bonus.  The  Executive  shall be  eligible to receive an annual
bonus based on the achievement of individual and Company performance objectives.
The amount of the annual bonus will be targeted at 50% of the  Executive's  Base
Salary, but will be granted solely at the discretion of the Board.

     (c) Withholding.  The Company may withhold from compensation payable to the
Executive all applicable federal, state, and local withholding taxes as required
by law.


     SECTION 5. BENEFITS.

     (a) Generally.  The Executive  will be entitled to such fringe  benefits as
are generally  available to the Company's  executive  officers,  including group
health and dental  insurance  coverage,  group  long and  short-term  disability
insurance coverage,  and 401(k) plan and stock plan participation.  In the event
that any insurance policy is paying disability benefits to Executive, and if the
amount of the Executive's  monthly base salary that would be paid in the absence
of such  disability  is higher than the  monthly  insurance  payments,  then the
Company  shall pay  Executive an amount per month equal to such  excess,  for so
long as the Executive is employed with the Company.  No such difference shall be
payable after the Executive's employment expires or is terminated.

     (b) Paid Vacation.  In addition to U.S. statutory  holidays,  the Executive
will be entitled to 20 business days of paid vacation per year,  accruing at the
rate of 1.66 days per month.  A maximum of ten unused  vacation days in any year
may be carried over and used in the next year,  subject to such  policies as the
Company may adopt from time to time with  respect  thereto.  If by December  31,
each year, the Executive has accrued in excess of ten unused  vacation days, the
Company shall pay (consistent with existing Company policy) the Executive a cash
amount (based on the Executive's  then current year's base salary) equal to such
excess up to a maximum not to exceed ten vacation days.

     (c) Life Insurance.  The Company will provide the Executive with group term
life  insurance in an amount equal to no less than two times his Base Salary (up
to a maximum of $200,000) plus $250,000..

     SECTION  6.  EXPENSE  REIMBURSEMENT.  The  Executive  will be  entitled  to
reimbursement of all reasonable and necessary  business expenses incurred by the
Executive in the ordinary  course of business on behalf of the Company,  subject
to  presentation  of  appropriate  documentation  and  compliance  with policies
established by the Board.

     SECTION  7.   NON-DISCLOSURE   AND   ASSIGNMENT  OF  INVENTION   AGREEMENT;
INDEMNIFICATION  AGREEMENT.  The  Executive  shall  execute  and  deliver to the
Company the Company's standard form of Invention and Non-Disclosure Agreement. .

     SECTION 8. NON-COMPETITION AND NON-SOLICITATION COVENANTS.

     (a) Non-competition. The Executive agrees that during the Employment Period
and for the longer of 12 months thereafter, and the period for which the Company
is providing  payment to the Executive under Section 9(b)(ii) of this Agreement,
he will not own, manage,  operate,  control, be employed by, provide services as
an independent contractor or consultant to, own any stock or other investment in
or debt of,  or  otherwise  be  connected  in any  manner  with  the  ownership,
management, operation or control of, any business or enterprise that at the time
of  termination,  competes  with the Company or conducts  business in a field in
respect of which the Board is making plans to enter.

     (b)  Non-solicitation.  The  Executive  agrees that  during the  Employment
Period and for one year  thereafter,  he will not  attempt to persuade or induce
any employee of the Company to terminate his or her employment  with the Company
for any reason.

     (c)  Acknowledgments  by  Executive.  The Executive  acknowledges  that the
covenants set forth in this Section 8 are reasonable in scope and are no greater
than is necessary to protect the Company's  legitimate business  interests.  The
Executive further acknowledges that any breach by him of the covenants set forth
in this Section 8 would irreparably  injure the Company,  and that money damages
would not  adequately  compensate  the  Company for the  injuries  that it would
suffer.  The  parties  accordingly  agree  that in the  event of any  breach  or
threatened  breach by the  Executive of any of the  covenants  set forth in this
Section 8, the  Company may obtain,  from any court of  competent  jurisdiction,
both  preliminary  and  permanent  injunctive  relief  in order to  prevent  the
occurrence or  continuation  of such  injuries,  without being required to prove
actual  damages or post any bond or other  security.  Nothing in this  Agreement
shall  prohibit  the Company from  pursuing any other legal or equitable  remedy
that may be available to it in the event of the Executive's breach of any of the
covenants set forth in this Agreement.

     SECTION 9. TERMINATION.

     (a) Employment  Termination.  The  employment of the Executive  pursuant to
this Agreement shall terminate upon the occurrence of any of the following:

          (i) At the  election  of the  Company,  for  Cause,  immediately  upon
     written  notice by the  Company  to the  Executive.  For  purposes  of this
     Agreement,  "Cause"  shall be deemed to exist upon a reasonable  good faith
     finding by the Board that the Executive has:

          (1)  committed  an  act  constituting  fraud,  embezzlement  or  other
               felony,  determined in the reasonable opinion of the Board acting
               in its sole discretion, or

          (2)  materially  breached his obligations  under this Agreement or the
               Inventions and Nondisclosure  Agreement,  and failed to cure same
               within 30 days after  written  notice  thereof is given to him by
               the Company, or

          (3)  materially  breached the Company's material  policies,  including
               but not  limited  to the  Company's  policies  regarding  insider
               trading and sexual harassment, or

          (4)  engaged in willful misconduct,  so long as the Board of Directors
               provided Executive with a reasonable opportunity for Executive to
               personally present his point of view to the Board.

          (ii) At the election of the Company,  without Cause,  upon at least 90
     days written notice by the Company to the Executive.

          (iii)  The  death  of the  Executive,  or (in  the  discretion  of the
     Company) the Disability of the Executive.  For purposes of this  Agreement,
     "Disability" shall be considered to exist:

          (1)  if the Executive  fails to perform his normal duties for at least
               60 days (not  counting days taken for  vacation),  whether or not
               consecutive, during any 180-day period, or

          (2)  if the  Executive's  insurance  company  has  confirmed  that any
               disability  insurance  benefits are going to be paid by reason of
               Executive's incapacitation, or

          (3)  if the Board,  acting in its sole discretion but after reasonable
               consultation with Executive, concludes that the Executive suffers
               from a degree of physical or mental incapacitation as a result of
               illness or accident  which makes it reasonably  unlikely that the
               Executive  will be able to perform his normal duties for a period
               of 60 days.  In reaching this  conclusion,  the Board may consult
               third parties,  including,  but not limited to, other  employees,
               physicians, psychiatrists, and counselors.

          (iv) At the election of the Executive,  for any reason,  upon at least
     90 days prior written notice to the Company.

          (v) At the election of the  Executive  for Good Reason,  provided that
     the Executive shall have given written notice to the Company within 30 days
     after  he  becomes  aware of the  occurrence  of any  event of Good  Reason
     specifying such event, and such event shall be continued for a period of 30
     days following such notice.  For purposes of this Agreement,  "Good Reason"
     means any of the following events:

          (1)  a material diminution in the duties,  responsibilities,  position
               or job title of the  Executive  without the  Executive's  written
               consent, or

          (2)  a material  breach by the Company of its  obligations  under this
               Agreement or the Indemnification Agreement, or

          (3)  a change in the primary  location where the Executive is expected
               to perform his services hereunder to a location that is more than
               50 miles away from Wilmington, Massachusetts, or

          (4)  a Sale of the  Business  (as defined  below) For purposes of this
               Agreement,  a "Sale of the Business" means (A) the acquisition by
               a  person,  group,  or  party  of 50% or more of the  outstanding
               capital  stock of the Company,  (B) a change of a majority of the
               members  of the Board when the  change of the  various  directors
               occurs at  substantially  the same time,  without the approval or
               consent of the members of the Board before such  change,  (C) the
               acquisition of the Company by means of a reorganization,  merger,
               consolidation, recapitalization, or asset sale, unless the owners
               of the  capital  stock of the  Company  before  such  transaction
               continue  to  own  more  than  50% of the  capital  stock  of the
               acquiring  or  succeeding   entity  in  substantially   the  same
               proportions,  or (D) the approval of a liquidation or dissolution
               of the Company.

     (b) Effect of Termination.

               (i)  Termination   Pursuant  to  Section   9(a)(i)   relating  to
          termination for cause or Section  9(a)(iv)  relating to termination at
          the election of Executive for any reason. In the event the Executive's
          employment  is  terminated  pursuant  to  Section  9(a)(i)  or Section
          9(a)iv),  the Company  shall pay to the  Executive  his  accrued  Base
          Salary  through  the  last  date  of  his  employment  hereunder  (the
          "Termination Date") and shall continue to provide to the Executive the
          benefits   described  in  Section  5  (the  "Benefits")   through  the
          Termination  Date,  but shall have no further  responsibility  for any
          compensation  or  benefits  to  the  Executive  for  any  time  period
          subsequent to the Termination Date.

               (ii)  Termination   pursuant  to  Section  9(a)(ii)  relating  to
          termination without cause. In the event the Executive's  employment is
          terminated pursuant to Section 9(a)(ii), the Company shall:

          (1)  Within five business days after the Termination  Date, pay to the
               Executive a cash  amount  equal to his then  monthly  Base Salary
               multiplied  by the number of months  remaining in the  Employment
               Period, but in no event less than 12.

          (2)  Continue to provide the benefits  described in Sections  5(a) and
               5(c)  to  the  Executive  until  the  first  anniversary  of  the
               Termination Date.

          (3)  Within five business  days after the  Termination  Date,  pay the
               Executive  an amount  equal to his  bonus for the prior  calendar
               year  multiplied  by a fraction,  the  numerator  of which is the
               number of full  calendar  months  that have  elapsed  in the then
               current  calendar  year prior to the  Termination  Date,  and the
               denominator of which is 12. In no event, shall payment under this
               Section 9(b)(ii)(3) exceed 50% of the Executive's base salary for
               the prior year.

          (iii) Termination  pursuant to Section 9(a)(v) relating to termination
     at the election of Executive for Good Reason.  In the event the Executive's
     employment is terminated pursuant to Section 9(a)(v), the Company shall:

          (1)  Within five business days after the  Termination  Date pay to the
               Executive a cash  amount  equal to his then  monthly  Base Salary
               multiplied  by the number of months  remaining in the  Employment
               Period, but in no event less than 12.

          (2)  Continue to provide the benefits  described in Sections  5(a) and
               5(c)  to  the  Executive  until  the  first  anniversary  of  the
               Termination Date.

          (3)  Within five business  days after the  Termination  Date,  pay the
               Executive  an amount  equal to his  bonus for the prior  calendar
               year  multiplied  by a fraction,  the  numerator  of which is the
               number of full  calendar  months  that have  elapsed  in the then
               current  calendar  year prior to the  Termination  Date,  and the
               denominator of which is 12. In no event, shall payment under this
               Section 9(b)(ii)(3) exceed 50% of the Executive's base salary for
               the prior year.

               (iv) Termination  pursuant to Section  9(a)(iii)  relating to the
          death or disability  of the  Executive.  In the event the  Executive's
          employment is terminated  pursuant to Section  9(a)(iii),  the Company
          shall:

          (1)  Continue to pay to Executive  or his estate,  as the case may be,
               an  amount  equal  to  his  then  current  Base  Salary  for  the
               three-month period following the Termination Date.

          (2)  Continue for the 12-month period  following the Termination  Date
               all  health and  dental  insurance  benefits  the  Executive  was
               entitled to at the Termination Date.

               (v) Golden Parachute Payment Excise Tax Protection.  In the event
          that the excise tax imposed by Section  4999 of the  Internal  Revenue
          Code of 1986,  as amended (the "Code"),  (or any successor  penalty or
          excise tax  subsequently  imposed by law)  applies to any  payments or
          benefits paid or conferred under this Agreement,  an additional amount
          shall be paid by the Company to the Executive  such that the aggregate
          after-tax amount that he shall receive under this Agreement, including
          this Section 9(iv),  shall have a present value equal to the aggregate
          after-tax  amount that he would have  received  and  retained had such
          excise tax not applied to him. For this purpose,  the Executive  shall
          be  assumed  to be  subject  to  tax  in  each  year  related  to  the
          computation  at the  then  maximum  applicable  combined  Federal  and
          Massachusetts  income tax rate, and the  determination  of the present
          value payments to him shall be made  consistent with the principles of
          Section 280G of the Code.

               (vi) Survival.  The provisions of Sections 6-19 shall survive the
          termination  of the  Executive's  employment in accordance  with their
          terms.

          (c) Continuation/Nonrenewal.  Unless this Agreement has been otherwise
     terminated before December 31, 2004, the Company and the Executive agree to
     discuss  in  good  faith  the  possible  continuation  of  the  Executive's
     employment,  commencing  six months  prior to  December  31,  2004.  If the
     Company fails to offer the Executive a new  employment  agreement,  with at
     least equivalent material terms to this Agreement, by December 31, 2004 and
     in fact the  Executive  ceases to be an employee  of the Company  following
     December 31, 2004,  the Company  shall pay the  Executive a monthly  amount
     until December 31, 2005, equal to the sum of one-twelfth of the Executive's
     Base Salary in effect at the expiration of the Agreement  plus  one-twelfth
     of the Executive's bonus for the most recent fiscal year of the Company, in
     accordance with the Company's  regular payroll  practices,  less applicable
     withholdings required by law. In the event the Executive and the Company do
     not  sign  a  new  employment  agreement  by  December  31,  2004  but  the
     Executive's  employment with the Company continues on an at-will basis past
     that date but terminates for any reason before  December 31, 2005,  payment
     of the foregoing  monthly amount will commence after such  termination  and
     continue only until December 31, 2005. If the at-will employment  continues
     after December 31, 2005 but then terminates, no such monthly amount will be
     paid.

     SECTION  10.  NO  CONFLICTING  AGREEMENTS.  The  Executive  represents  and
warrants  to  the  Company   that  he  is  not  a  party  to  or  bound  by  any
confidentiality,   non-competition,   non-solicitation  or  other  agreement  or
restriction  that could  conflict with or be violated by the  performance of his
duties for the Company.

     SECTION 11. NO DISPARAGEMENT. Each party agrees that at all times following
the termination of the Executive's  employment  hereunder,  such party shall not
make or cause to be made,  directly or  indirectly,  any statements to any third
party  that  disparage  or  denigrate  the  other  party  or, in the case of the
Company, any of its current or former directors,  officers or employees,  unless
required by law.

     SECTION 12.  ENFORCEABILITY,  ETC. This  Agreement  shall be interpreted in
such a manner as to be  effective  and valid under  applicable  law,  but if any
provision  hereof  shall be  prohibited  or  invalid  under any such  law,  such
provision shall be ineffective to the extent of such  prohibition or invalidity,
without  invalidating or nullifying the remainder of such provision or any other
provisions of this Agreement.  If any one or more of the provisions contained in
this  Agreement  shall  for any  reason  be held to be  excessively  broad as to
duration,  geographical scope,  activity,  or subject,  such provisions shall be
construed  by limiting and  reducing it so as to be  enforceable  to the maximum
extent permitted by applicable law.


<PAGE>

     SECTION 13. NOTICES.  Any notice or other  communication  given pursuant to
this Agreement  shall be in writing and shall be personally  delivered,  sent by
nationally  recognized  overnight  courier or express  mail,  or mailed by first
class certified or registered mail, postage prepaid, return receipt requested as
follows:

  (a) If to the Executive:             (b) If to the Company:
       Address withheld                        Beacon Power Corporation
                                               Attn: Chief Executive Officer
                                               234 Ballardvale Street
                                               Wilmington, MA  01887

or to such other address as a party shall have designated by notice to the other
party.

     SECTION  14.  GOVERNING  LAW.  This  Agreement  shall  be  governed  by and
construed  in  accordance  with  the  internal  laws  of  the   Commonwealth  of
Massachusetts  without giving effect to any choice or conflict of laws provision
or rule that would cause the application of the domestic substantive laws of any
other jurisdiction.

     SECTION  15.  AMENDMENTS  AND  WAIVERS.  No  amendment  or  waiver  of this
Agreement or any  provision  hereof shall be binding upon the party against whom
enforcement  of such  amendment or waiver is sought unless it is made in writing
and signed by or on behalf of such party. The waiver by either party of a breach
of any  provision of this  Agreement by the other party shall not operate and be
construed  as a waiver or a  continuing  waiver by that party of the same or any
subsequent breach of any provision of this Agreement by the other party.

     SECTION 16. BINDING EFFECT. This Agreement shall be binding on and inure to
the benefit of the parties  hereto and their  respective  heirs,  executors  and
administrators,  successors  and assigns,  except that it may not be assigned by
the  Company  without the  Executive's  consent,  provided  that the Company may
assign  this  Agreement  to an entity  that  acquires  substantially  all of the
Company's  assets  by means of an asset  sale,  merger  or  otherwise,  provided
further  that such entity  shall agree in writing to assume and be bound by this
Agreement.  This Agreement is personal to the Executive and is not assignable by
him.

     SECTION 17. ENTIRE  AGREEMENT.  This  Agreement  constitutes  the final and
entire  agreement of the parties with respect to the matters  covered hereby and
replaces and supersedes all other agreements and understandings  relating hereto
(including the Employment Agreement dated December 1, 2001 between the parties).

     SECTION 18. PRONOUNS.  Whenever the context may require,  any pronouns used
in this Agreement shall include the corresponding masculine,  feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.

     SECTION 19.  COUNTERPARTS.  This Agreement may be executed in any number of
counterparts,  and with  counterpart  signature  pages,  each of which  shall be
deemed an original,  but all of which together shall constitute one and the same
instrument.

     IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument
as of the date first above written.

EXECUTIVE                              BEACON POWER CORPORATION

/s/Matthew L. Lazarewicz               By: /s/Jack P. Smith
------------------------                  ------------------------
Matthew L. Lazarewicz                     Jack P. Smith
Chief Technical Officer                   Director