Document:

EXHIBIT 10.1.26

                        AMENDMENT TO EMPLOYMENT AGREEMENT

This Amendment to Employment  Agreement (the  "Amendment") is entered into as of
October  25,  2003,  by  and  between  Beacon  Power  Corporation,   a  Delaware
corporation (the "Company"), and Matthew Lazarewicz (the "Executive").

WHEREAS,  the Company and  Executive  are  entering  into this  Amendment to the
Employment  Agreement (the "Agreement")  dated as of May 6, 2002 between them in
order to extend the duration of the Agreement by six months, NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

1.   Section 1 of the  Agreement  is hereby  amended in its  entirety to read as
     follows:

"Section 1. Term.  This  Agreement  shall be effective for a term  commencing on
October 25, 2002  (provided  the Executive is an employee of the Company on that
date), and continuing until April 25, 2004, unless earlier  terminated  pursuant
to Section 9. The period of the Executive's  employment hereunder is referred to
as the "Employment Period"."

2.   Section  9(c)  of the  Agreement  is  amended  in its  entirety  to read as
     follows:

"(c)  Continuation  /Nonrenewal.   Unless  this  Agreement  has  been  otherwise
terminated before April 24, 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 April 24, 2004. If the Company fails to offer the
Executive a new employment agreement, with at least equivalent material terms to
this  Agreement,  by April 24,  2004 and in fact the  Executive  ceases to be an
employee of the company  following  April 24,  2004,  the Company  shall pay the
Executive a monthly amount until April 24, 2005,  equal to the sum of one-twelve
of the Executive's Base Salary in effect at the expiration of the Agreement plus
one-twelve  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  holdings required by law. In the event the Executive and the Company
do not sign a new  employment  agreement  by April 24, 2004 but the  Executive's
employment  with the  Company  continues  on an at-will  basis past that date by
terminates  for any reason  before  April 24,  2005,  payment  of the  foregoing
monthly  amount will  commence  after such  termination  and continue only until
April 24, 2005.  If the at-will  employment  continues  after April 24, 2005 but
then terminates, no such monthly amount will be paid."

3.   In all other respects, the Agreement shall remain unamended.

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

  EXECUTIVE                                  BEACON POWER CORPORATION
  /s/Matthew Lazarewicz
  ----------------------                     -----------------------
  Matthew LazarewiczExhibit 10(aj)

 

 

 

	
  DATE:

  	
   

  	
  Sep 10, 2003

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TO:

  	
   

  	
  MAINE PUBLIC SERVICE COMPANY,

  	
   

  	
  (Party B)

  
	
  ATTN:

  	
   

  	
  KURT A TORNQUIST

  	
   

  	
   

  
	
  FAX:

  	
   

  	
  207-764-6586

  	
   

  	
   

  
	
  PHONE:

  	
   

  	
  207-768-5811

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FROM:

  	
   

  	
  Fleet National
  Hank,           (Party
  A)

  	
   

  	
   

  
	
  ATTN:

  	
   

  	
  Derivatives Confirmation Unit

  	
   

  	
   

  
	
  FAX:

  	
   

  	
  (617) 434-4284

  	
   

  	
   

  
	
  PHONE:

  	
   

  	
  (617) 434-4787 or (617) 434-7878

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RE:

  	
   

  	
  INTEREST RATE SWAP

  Our Ref: 80642FB/129890

  	
   

  	
   

  

 

 

The purpose of this letter
agreement is to set forth the terms and conditions of the Transaction entered
into between Fleet National Bank Party A and MAINE PUBLIC SERVICE COMPANY Party
B, on the Trade Date specified below (the “Transaction”). This letter
constitutes a “Confirmation”  as referred to in the ISDA Master
Agreement specified below.

 

The definitions and provisions contained in
the 2000 ISDA Definitions (the “Definitions”), as published by the
International Swaps and Derivatives Association, Inc. (“ISDA”), are
incorporated into this confirmation. In  the event of any inconsistency between the
Definitions and provisions in this Confirmation, this Confirmation will govern.

 

1.                                       This  confirmation
constitutes a “Confirmation” as referred to in, and supplements, forms a part
of and is subject to, the ISDA Master Agreement dated as of 9//09/03, as
amended and supplemented from time to time (the “Agreement”), between you and
us. All provisions contained in the Agreement govern this Confirmation except
as expressly modified below.

 

2.                                       The terms of the particular Transaction to
which this Confirmation relates are as follows:

 

	
  Trade Date

  	
   

  	
  Sep 09, 2003

  
	
   

  	
   

  	
   

  
	
  Effective Date

  	
   

  	
  Sep 09, 2003

  
	
   

  	
   

  	
   

  
	
  Termination Date

  	
   

  	
  Apr 01, 2021 subject to
  adjustment in accordance with the Modified Following Business Day Convention.

  
	
   

  	
   

  	
   

  
	
  Notional Amount

  	
   

  	
  USD 13,600,000.00

  

 

1

 

Floating
Amounts

 

	
  Floating Rate Payer

  	
   

  	
  Fleet
  National Bank

  
	
   

  	
   

  	
   

  
	
  Floating Rate Payment Dates

  	
   

  	
  Monthly on
  the 1st, commencing Oct 01, 2003 and ending on the Termination Date subject
  to adjustment in accordance with the Modified Following Business Day
  Convention.

  
	
   

  	
   

  	
   

  
	
  Floating Rate Option

  	
   

  	
  USD-BMA; meaning the rate
  in effect for a Reset Date shall be determined on the basis of “The Bond
  Market Association Municipal Swap Index”, a trademark of the Bond Market
  Association and formerly named the PSA Municipal Swap Index, announced by
  Municipal Market Data on Wednesday, or if the rate is not announced on such
  day, the next succeeding Business Day on which the rate is announced;
  provided, however, that Floating Rate for the initial calculation Period
  shall be the rate in effect for the immediately preceding date that would
  have been a Reset Date for the relevant transaction. If for a Calculation
  Period the Bond Market Association Municipal Swap Index for a Reset Date in
  that Calculation Period is not announced, the rate for such Reset Date shall
  be determined as if the parties had specified “USD-JJKENNY” (as defined
  herein below) as the applicable Floating Rate Option. The rate so determined
  will be deemed USD-BMA for the purpose of this transaction. “USD-JJKENNY”;
  meaning the rate in effect for a Reset Date shall be determined on the basis
  of the “Kenny S&P 7-day High Grade Index” (the “Kenny Index”) announced
  by Kenny S&P Evaluation Services at the beginning of business on Tuesday,
  or if the rate is not announced on such day, the next succeeding Business Day
  on which the rate is announced; provided, however, the Floating Rate for the
  initial calculation Period shall be the rate in effect for the immediately
  preceding date that would have been a Reset Date for the

  

 

2

 

	
   

  	
   

  	
  relevant
  transaction. If, at any time, both the Kenny Index and USD-BMA are no longer
  determined and announced or are materially modified a comparable alternative
  index mutually agreed upon by both parties shall be used. The rate so
  determined will be deemed USD-BMA for the purpose of this Transaction.

  
	
   

  	
   

  	
   

  
	
  Designated Maturity

  	
   

  	
  1 week

  
	
   

  	
   

  	
   

  
	
  Spread

  	
   

  	
  None

  
	
   

  	
   

  	
   

  
	
  Floating Rate Day Count Fraction

  	
   

  	
  ACTUAL /
  ACTUAL

  
	
   

  	
   

  	
   

  
	
  Floating Rate Reset Dates

  	
   

  	
  The last
  Business Day of each Calculation Period

  
	
   

  	
   

  	
   

  
	
  Compounding

  	
   

  	
  Inapplicable

  
	
   

  	
   

  	
   

  
	
  Method of Averaging

  	
   

  	
  Weighted
  Average

  
	
   

  	
   

  	
   

  
	
  Business Days

  	
   

  	
  New York

  

 

Fixed Amounts

 

	
  Fixed Rate
  Payer

  	
   

  	
  MAINE PUBLIC
  SERVICE COMPANY

  
	
   

  	
   

  	
   

  
	
  Fixed Rate
  Payment Dates

  	
   

  	
  Monthly on the 1st,
  commencing Oct 01, 2003 and ending on the Termination Date subject to
  adjustment in accordance with the Modified Following Business Day Convention.

  
	
   

  	
   

  	
   

  
	
  Fixed Rate

  	
   

  	
  4.420000%

  
	
   

  	
   

  	
   

  
	
  Fixed Rate
  Day Count Fraction

  	
   

  	
  ACTUAL /360

  
	
   

  	
   

  	
   

  
	
  Business
  Days

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  
	
  Calculation
  Agent

  	
   

  	
  Fleet
  National Bank

  
	
   

  	
   

  	
   

  
	
  Governing
  Law

  	
   

  	
  New York law

  
	
   

  	
   

  	
   

  
	
  Documentation

  	
   

  	
  ISDA Master
  Agreement to be provided by Fleet National Bank

  

 

3

 

3.                                     Relationship
between Parties

 

Each party represents to the other party
that:

 

(a)  Non-Reliance. It is acting
for its own account, and it has made its own independent decisions to enter
this Transaction and as to whether this Transaction is appropriate or proper
for it based upon its own judgment and upon advice from such advisors as it has
deemed necessary. It is not relying on any communication (written or oral) from
the other party
as investment advice or as a recommendation to enter into this
Transaction; it being understood that information and explanations related to
the terms and conditions of this Transaction shall not be considered investment
advice or a recommendation to enter into this Transaction. It has not received
from the other party any assurance or guarantee as to the expected results of
this Transaction.

 

(b)  Evaluation and
Understanding. It is capable of evaluating and understanding (on its own behalf
or through independent professional advice), and understands and accepts, the
terms, conditions and risks of this Transaction. It is also capable of
assuming, and assumes, the financial and other risks of this Transaction.

 

(c) 
Statue of Parties. The other party is not acting as a fiduciary or an
advisor for it in respect of this Transaction.

 

(d) 
Risk Management. It has entered into this Transaction for the purpose of
(i) managing its borrowings or investments, (ii) hedging its underlying assets
or liabilities or (iii) in connection with its line of business.

 

(e) 
It is an “eligible contract participant” as defined in section la(12) of
the Commodity Exchange Act.

 

 

4.                                       Additional
Termination Event will apply.

 

(i)             The occurrence of any of the following shall
constitute an Additional Termination Event with respect to Party B for which
Party B will be the Affected Party:

 

(1)                             Party A is
no longer party to any or all of the credit support Documents identified in
Part 4(f)(ii) of the Schedule to the Agreement, as such documents are amended,
modified, or supplemented from time to time.

 

(2)                             Any or all
of the Credit support Documents identified in Part 4(f)(ii) of the Schedule to
the Agreement, as such documents are amended, modified, or supplemented from
time to time, are terminated or ceases to exist for any reason prior to the
satisfaction of the obligations of this Transaction.

 

4

 

(ii)          Notwithstanding
Section 6(b) of the Agreement or any other provision of the Agreement, Party A
shall not initially have the right to designate
an Early Termination Date upon the occurrence of an Additional Termination
Event. In lieu of the right to designate an Early Termination Date, Party A
grants Party B the rights specified in the following subparts (1) or (2) to
assign, as applicable, either Party A or Party B’s rights and obligation under
this Transaction.

 

(1)                             Party
B shall be permitted to instruct Party A to assign Party A’s rights and
obligation under the Agreement to a substitute swap provider reasonably
acceptable to Party A and Party B (“Substitute Swap Provider”), provided the
Substitute Swap Provider expressly assumes Party A’s rights and obligations
under this Agreement in a writing reasonably satisfactory to Party A and Party
B.

 

(2)                             Party
B shall be permitted to assign its rights and obligations under the Agreement
to a Substitute Swap Provider, provided the Substitute Swap Provider expressly
assumes Party B’s rights and obligations under this Agreement in a writing
reasonably satisfactory to Party A and Party B.

 

 

Party A shall have the right to designate an Early Termination Date
under Section 6(b) of the Agreement and this Additional Termination Event if
this Transaction is not assigned pursuant within twenty (20) Business Days from
the date the Additional Termination Event occurs.

 

 

5.                                       Acknowledgement

 

MAINE PUBLIC SERVICE COMPANY
acknowledges and agrees that:

 

(a)                                  absent an express
written agreement to the contrary, an agreement by the parties to voluntarily
terminate the Transaction before its scheduled termination date is contingent
upon the payment by one party to the other of the costs associated with
terminating the Transaction. Such costs shall include, but may not be limited
to, the aggregate difference between the market value of the terminated portion
of the Transaction and the market value of a similar transaction executed on
the termination date with a notional amount and term equal to the
terminated portion of the Transaction. Any termination cost paid by MAINE
PUBLIC SERVICE COMPANY to terminate the Transaction is in addition to and not
part of any yield maintenance fee, prepayment penalty or other expense that
MAINE PUBLIC SERVICE COMPANY may pay in connection with the prepayment of a
loan transaction with Fleet National Bank or its affiliate; and

 

5

 

(b)                                 this acknowledgement
or the provision by Fleet National Bank of a valuation or indicative
termination price does not constitute a commitment by Fleet National Bank to
terminate the Transaction at such price, or otherwise, prior to its scheduled
termination date. The price and terms at which the Transaction may be
terminated will be individually negotiated and, accordingly, may vary from the
price and terms offered by other financial institutions. Any commitment to
terminate the Transaction shall not be binding upon the parties unless
expressly agreed to by Fleet National Bank.

 

6.                                       Settlement Instructions

 

Payments
to MAINE PUBLIC SERVICE COMPANY in USD

 

*** Payment Instructions To Be
Advised ***

 

 

Payments
to Fleet National Bank in USD

 

	
  To

  	
   

  	
  Fleet
  National Bank ABA: 011000138

  
	
  Favor Of
  Account

  	
   

  	
  Fleet
  National Bank

  
	
  Number

  	
   

  	
  1026103-29480

  

 

7. Contact Instructions

 

	
  Fleet
  National Bank:

  	
   

  	
  Tel:
  617-434-7953

  
	
  Resets/Payments

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:
  617-434-3588

  
	
  Confirmations

  	
   

  	
  Tel:
  617-434-4787

  
	
   

  	
   

  	
  Fax:
  617-434-4284

  

 

6

 

	
  MAINE PUBLIC SERVICE COMPANY:

  	
   

  	
  Tel: 207-768-5811

  
	
   

  	
   

  	
  Fax: 207-764-6586

  

 

Very truly yours,

 

Fleet National Bank

 

	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  By:

  	
  /s/
  [ILLEGIBLE]

  	
   

  
	
  Name:

  	
  Name:

  
	
  Title:

  	
  Title:

  

 

Agreed and accepted as of the
date first above written:
MAINE PUBLIC SERVICE COMPANY

 

	
  By:

  	
  /s/ Kurt A. Tornquist

  	
   

  
	
  Name:

  	
  Kurt A. Tornquist

  	
   

  
	
  Title:

  	
  Senior VP & CFO

  	
   

  
					

 

PLEASE COUNTERSIGN AND FAX TO:
(617) 434-4284

ATTN. Derivatives Confirmations

REQUEST CORRECTIONS: (617)
434-4787

Please be advised telephone
calls may be recorded to ensure

transaction accuracy.

80642FB

 

7

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