Exhibit
10.33





21211 Nordhoff Street * Chatsworth,
CA 91311


Phone: 818-734-5300 * Fax
818-734-5320


www.microturbine.com


January 31, 2007


James D. Crouse


Coto de Caza, CA


Dear James:


I am pleased to offer you
the position of Executive Vice-President of Sales, reporting to Darren Jamison,
President and Chief Executive Officer at a salary of $220,000.00 annually,
(payable $8,461.54 bi-weekly).


In addition to your
salary you will participate in an Incentive Compensation Plan that will pay you
a bonus of three quarters of one per cent of annual sales for FY 2008 that is in
excess of the total sales for FY 2007. Details of the plan will be provided
under separate cover.


Under guidelines
established by Capstone, you will receive a Stock Option to purchase 850,000 shares
of Capstone common stock which includes 25% vesting on the first anniversary
date and monthly thereafter subject to provisions of the 2000 Equity Incentive
Plan. The purchase price will be the fair market value of Capstone common stock
on the option grant date, which is expected to be the date of the start of your
employment. You will also receive 200,000 restricted stock units subject to
annual vesting of 25% and other provisions of the 2000 Equity Incentive Plan.


As a regular employee,
you will be eligible to participate in the Capstone benefit plans which include
paid holidays, four weeks of vacation per year, a 401(k) plan, and several
insurance choices for you and your family.


We would like you to
start work as soon as possible; therefore, we are suggesting a start date of
February 5, 2007. Please sign the second sheet of this letter confirming your
acceptance of this offer and its terms and indicate your start date. Unless
otherwise agreed to in writing, this offer will expire at the end of business
on February 5, 2007.


Upon your first day of
employment, you will be required to sign our standard agreement with regard to
confidentiality and the assignment of inventions as well as to show
documentation which verifies your legal right to work in the United States, as
required under the Federal Immigration and Reform Act of 1986.  Attached to this letter, as page 3, is a list
of acceptable documentation.


All of us involved in the
unique venture of Capstone Turbine look forward to working with you.


Sincerely,


	
  /s/ LARRY COLSON

  	
   

  



Larry Colson


Vice President, Human
Resources













Re: James D. Crouse


Position: Executive Vice-President of Sales


Salary: $220,000.00 annually


Stock Options: 850,000


Restricted Stock Units:
200,000


We understand that you
may possess certain confidential information of your past employer and you
hereby agree not to disclose any such confidential information to Capstone
Turbine Corporation.  Further, you agree
to indemnify and hold harmless Capstone Turbine Corporation from any adverse
consequences to Capstone Turbine Corporation caused by your disclosure of such
confidential information to Capstone Turbine Corporation.


Your employment at
Capstone will be “at will”, in that employment may be terminated with or without
cause and with or without notice, at any time, either at your option or at the
option of Capstone Turbine Corporation.


Additionally, Capstone
Turbine Corporation is committed to resolving any disputes between the Company
and employees as fairly and promptly as possible.  To meet these goals, the Company has
developed an “employee dispute resolution procedures” which provides the
exclusive remedy for resolving all employee disputes including statutory
disputes.  By accepting employment with
the Company you are agreeing to this procedure, which results in binding,
neutral arbitration for all disputes, which cannot be resolved amicably between
us.  A copy of these procedures will be
provided shortly.


Your offer of employment
is contingent upon Capstone Turbine Corporation’s receipt of an acceptable
background check, as authorized by you on the Information Authorization and
Release agreement.


Finally, you will be
subject to Capstone standard employment practices, including drug testing and
proof of U.S. citizenship or qualification to work in the U.S.


You hereby accept the
employment offer as stated above.   Your
scheduled start date will be February 5, 2007.


	
  /s/ JAMES D. CROUSE

  	
   

  	
   

  	
  January 31, 2007

  
	
  Signature

  	
  Date

  	
   

  



 


Once signed, please return this page to:


Capstone Turbine Corporation * 21211 Nordhoff Street * Chatsworth,
CA  91311


Attn:  Sherida B. Simmons,
Manager Human Resources


Fax:  818-734-5381



 2