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                                                                    EXHIBIT 10.7


                                    "AGREEMENT"


     This INDEMNITY AGREEMENT made and entered into as of September 12, 1997, by
and between Aavid Thermal Technologies, Inc., a Delaware corporation (the
"Company"), and Stephen D. Eldred, the ("Indemnitee").

     WHEREAS, highly competent persons are becoming more reluctant to serve
corporations as directors, officers or in other capacities unless they are
provided with adequate protection through insurance and indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of the Company; and

     WHEREAS, the current difficulties of obtaining adequate insurance have
increased the difficulty of attracting and retaining such persons; and

     WHEREAS, the Board of Directors has determined that the inability to
attract and retain such persons I detrimental to the best interests of the
company's stockholders and that the Company should act to assure such persons
that there will be increased certainty of such protection in the future; and

     WHEREAS, it is reasonable, prudent, and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
company free from undue concern that they will not be so indemnified; and

     WHEREAS, the Indemnitee is willing to serve, continue to serve and take on
additional service for or on behalf of the Company on the condition that he be
so indemnified.

     NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and the indemnitee do hereby covenant and agree as
follows:

     SECTION 1. INDEMNIFICATION. The Company shall indemnify the Indemnitee to
the fullest extent permitted by applicable law in effect on the date hereof or
as such laws may from time to time be amended. Without diminishing the scope of
the indemnification provided by this Section 1, the rights of indemnification of
the Indemnitee provided hereunder shall include but shall not be limited to
those rights hereinafter set forth, except that no indemnification shall be paid
to the Indemnitee:

     (a) On account of any suit in which judgment is rendered against the
Indemnitee for an accounting of profits made from the purchase or sale by the
Indemnitee of securities of the Company pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state, or local statutory law;

     (b) On account of the Indemnitee's conduct which is finally adjudged to
have been knowingly fraudulent or deliberately dishonest, or to constitute
willful misconduct;

     (c) To the extent expressly prohibited by applicable law;

     (d) For which payment is actually made to the Indemnitee under a valid and
collectible insurance policy or under a valid and enforceable indemnity clause,
by-law or agreement, except in respect of any excess beyond payment under such
insurance, clause, by-law or agreement;

     (e) If a final decision by a court having jurisdiction in the matter shall
determine that such indemnification is not lawful (and, in this respect, both
the Company and the indemnitee have been advised that the Securities and
Exchange Commission believes that indemnification for liabilities arising under
the federal securities laws is against public policy and is, therefore,


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unenforceable and that claims for indemnification should be submitted to the
appropriate court for adjudication); or

     (f) In connection with any proceeding (or part thereof) initiated by the
Indemnitee, or any proceeding by the Indemnitee against the Company or its
directors, officers, employees or other Indemnitees, unless (i) such
indemnification is expressly required to be made by law, (ii) the proceeding was
authorized by the Board of Directors of the Company, (iii) such indemnification
is provided by the Company, in its sole discretion, pursuant to the powers
vested in the Company under applicable law, or (iv) except as provided in
Sections 11 and 12 hereof.

     SECTION 2. ACTION OF PROCEEDING OTHER THAN AN ACTION BY OR IN THE RIGHT OF
THE COMPANY. The Indemnitee shall be entitled to the indemnification rights
provided in this section if he is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative in nature, other than an action by or
in the right of the Company, by reason of the fact that he is or was a director,
officer, employee, agent or fiduciary of the Company, or is or was serving at
the request of the Company as a director, officer, employee, agent or fiduciary
of any other entity, including, but not limited to, another corporation,
partnership, joint venture, trust or other enterprise, or by reason of anything
done or not done by him in any such capacity. Pursuant to this Section, the
Indemnitee shall be indemnified against all expenses (including attorney's
fees), costs, judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding (including, but not limited to, the investigation, defense or appeal
thereof), if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Company, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.

     SECTION 3. ACTIONS BY OR IN THE RIGHT OF THE COMPANY. The Indemnitee shall
be entitled to the indemnification rights provided in this Section if he is a
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding brought by or in the
right of the Company to procure a judgment in its favor by reason of the fact
that he is or was a director, officer, employee, agent or fiduciary of the
Company, or is or was serving at the request of the Company as a director,
officer, employee, agent or fiduciary of another entity, including, but not
limited to, another corporation, partnership, joint venture or other enterprise,
trust, or by reason of anything done or not done by him in any such capacity.
Pursuant to this Section, the Indemnitee shall be indemnified against all
expenses (including Attorney's fees), costs and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding (including, but not limited to, the investigation, defense or appeal
thereof) if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Company; provided, however, that
no such indemnification shall be made in respect of any claim, issue, or matter
as to which the Indemnitee shall have been adjudged to be liable to the Company
unless and only to the extent that the Court of Chancery of the State of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, the Indemnitee is fairly and reasonably entitled
to indemnity for such expenses and costs which the Court of Chancery or such
other court shall deem proper.

     SECTION 4. INDEMNIFICATION FOR COSTS, CHARGES AND EXPENSES OF SUCCESSFUL
PARTY. Notwithstanding the other provisions of this Agreement, to the extent
that the Indemnitee has served as a witness on behalf of the Company or has been
successful, on the merits or otherwise, in defense of any action, suit or
proceeding referred to in Sections 2 and 3 hereof, or in defense of any claim,
issue or matter therein, including, without limitation, the dismissal of any
action without prejudice, he shall be indemnified against all costs, charges and
expenses (including attorney's fees) actually and reasonably incurred by him in
connection therewith.

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     SECTION 5. PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses (including attorney's fees), costs, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with the investigation, defense, appeal or settlement of such suit, action,
investigation or proceeding described in Section 2 or 3 hereof, but not,
however, for all of the total amount thereof, the Company shall nevertheless
indemnify the Indemnitee for the portion of such expenses (including reasonable
attorney's fees), costs, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him to which the Indemnitee is
entitled.

     SECTION 6. DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION. Upon written
request by the Indemnitee for indemnification pursuant to Section 2 or 3 hereof,
the entitlement of the Indemnitee to indemnification pursuant to the terms of
this Agreement shall be determined by the following person or persons who shall
be empowered to make such determination: (a) by a majority vote of Disinterested
Directors (as defined in Section 18 below), even though less than a quorum; (b)
if there are no Disinterested Directors, or if a majority of Disinterested
Directors so directs, by Independent Counsel (as defined in Section 18 below) in
a written opinion to the Board of Directors, a copy of which shall be delivered
to the Indemnitee; or (c) by the stockholders; provided, however, that
notwithstanding the foregoing, following the occurrence of a change in Control
of the Company (as defined in Section 18 below), the determination as to whether
or not the Indemnitee has met the applicable standard for indemnification set
forth in Section 2 or 3 hereof, which shall be applicable, shall in all events
be made by Independent counsel. Such Independent Counsel shall be selected by
the board of Directors and approved by the Indemnitee. Upon failure of the Board
to so select such Independent Counsel or upon failure of the Indemnitee to so
approve, such Independent Counsel shall be selected by the Chancellor of the
State of Delaware or such other person as the Chancellor shall designate to make
such selection. Such determination of entitlement to indemnification shall be
made not later than 45 days after receipt by the Company of a written request
for indemnification. Such request shall include documentation or information
which is necessary for such determination and which is reasonably available to
the Indemnitee. Any costs or expenses (including attorney's fees) incurred by
the Indemnitee in connection with his request for indemnification hereunder
shall be borne by the Company. The Company hereby indemnifies and agrees to hold
the Indemnitee harmless therefrom irrespective of the outcome of the
determination of the Indemnitee's entitlement to indemnification. If the person
making such determination shall determine that the Indemnitee is entitled to
indemnification as part (but not all) of the application for indemnification,
such person shall reasonably prorate such partial indemnification among such
claims, issues, or matters.

     SECTION 7. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. The Secretary of
the Company shall, promptly upon receipt of the Indemnitee's request for
indemnification, advise in writing the Board of Directors or such other person
or persons empowered to make the determination as provided in Section 6 that the
Indemnitee has made such request for indemnification. Upon making such request
for indemnification, the Indemnitee shall be presumed to be entitled to
indemnification hereunder and the Company shall have the burden of proof in
making of any determination contrary to such presumption. If the person or
persons so empowered to make such determination shall have failed to make the
requested indemnification within 45 days after receipt by the Company of such
request, the requisite determination of entitlement to indemnification shall be
deemed to have been made and the indemnitee shall be absolutely entitled to such
indemnification, absent actual and material fraud in the request for
indemnification. The termination of any action, suit, investigation or
proceeding described in Section 2 or 3 hereof by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself: (a) create a presumption that the Indemnitee did not act in good faith
and in a manner which he reasonably believed to be in or not opposed to the best
interests of the company, and, with respect to any criminal action or
proceeding, that the Indemnitee had reasonable cause to believe that his conduct
was unlawful; or (b) otherwise adversely affect the rights of the Indemnitee to
indemnification except as may be provided herein.


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     SECTION 8. ADVANCEMENT OF EXPENSES AND COSTS. All reasonable expenses and
costs incurred by the Indemnitee (including Attorneys' fees, retainers and
advances of disbursements required of the Indemnitee) shall be paid by the
Company in advance of the final disposition of such action, suit or proceeding
at the request of the Indemnitee within twenty days after the receipt by the
Company of a statement or statements from the Indemnitee requesting such advance
or advances from time to time. The Indemnitee's entitlement to such expenses
shall include those incurred in connection with any proceeding by the Indemnitee
seeking an adjudication or award in arbitration pursuant to this Agreement. Such
statement or statements shall reasonably evidence the expenses and costs
incurred by him in connection therewith and shall include or be accompanied by
an undertaking by or on behalf of the Indemnitee to repay such amount if it is
ultimately determined that the Indemnitee is not entitled to be indemnified
against such expenses and costs by the Company as provided by this Agreement or
otherwise.

     SECTION 9. REMEDIES OF THE INDEMNITEE IN CASES OF DETERMINATION NOT TO
INDEMNIFY OR TO ADVANCE EXPENSES. In the event that a determination is made that
the Indemnitee is not entitled to indemnification hereunder or if payment has
not been timely made following a determination of entitlement to indemnification
pursuant to Sections 6 and 7, or if expenses are not advanced pursuant to
Section 8, the Indemnitee shall be entitled to a final adjudication in an
appropriate court of the State of Delaware or any other court of competent
jurisdiction of his entitlement to such indemnification or advance.
Alternatively, the Indemnitee at his option may seek an aware in arbitration to
be conducted by a single arbitrator pursuant to the rules of the American
Arbitration Association, such aware to be made within sixty days following the
filing of the demand for arbitration. The Company shall not oppose the
Indemnitee's right to seek any such adjudication or award in arbitration or any
other claim. Such judicial proceeding or arbitration shall be made de novo and
the Indemnitee shall not be prejudiced by reason of a determination (if so made)
that he is not entitled to indemnification. If a determination is made or deemed
to have been made pursuant to the terms of Section 6 or Section 7 hereof that
the Indemnitee is entitled to indemnification, the Company shall be bound by
such determination and is precluded from asserting that such determination has
not been made or that the procedure by which such determination was made is not
valid, binding and enforceable. The Company further agrees to stipulate in any
such court or before any such arbitrator that the Company is bound by all the
provisions of this Agreement and is precluded from making any assertions to the
contrary. If the court or arbitrator shall determine that the Indemnitee is
entitled to any indemnification hereunder, the Company shall pay all reasonable
expenses (including attorneys' fees) and costs actually incurred by the
Indemnitee in connection with such adjudication or award in arbitration
(including, but not limited to, any appellant proceedings).

     SECTION 10. NOTIFICATION AND DEFENSE OF CLAIM. Promptly after receipt by
the Indemnitee of notice of the commencement of any action, suit or proceeding,
the Indemnitee will, if a claim in respect thereof is to be made against the
Company under this Agreement, notify the Company in writing of the commencement
thereof; but the omission to so notify the Company will not relieve it from any
liability that it may have to the Indemnitee otherwise than under this
Agreement. Notwithstanding any other provision of this Agreement, with respect
to any such action, suit or proceeding as to which the Indemnitee notified the
Company of the commencement thereof:

          (a) The Company will be entitled to participate therein at its own
expense; and

          (b) Except as otherwise provided in this Section 10(b), to the extent
that it may wish, the Company, jointly with any other indemnifying party
similarly notified, shall be entitled to assume the defense thereof, with
counsel satisfactory to the Indemnitee. After notice from the Company to the
Indemnitee of its election to so assume the defense thereof, the Company shall
not be liable to the Indemnitee under this Agreement for any legal or other
expenses subsequently incurred by the Indemnitee in connection with the defense
thereof other than reasonable costs of investigation or as otherwise provided
below. The Indemnitee shall


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have the right to employ his own counsel in such action, suit proceeding, but
the fees and expenses of such counsel incurred after notice from the Company of
its assumption of the defense thereof shall be at the expense of the Indemnitee
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Company, (ii) the Indemnitee shall have reasonably concluded that there may
be a conflict of interest between the Company and the Indemnitee in the conduct
of the defense of such action, or (iii) the Company shall not in fact have
employed counsel to assume the defense of the action, in each of which cases the
fees and expenses of counsel shall be at the expense of the Company. The Company
shall not be entitled to assume the defense of any action, suit or proceeding
brought by or on behalf of the Company or as to which the Indemnitee shall have
made the conclusion provided for in (ii) above.

          (c) The Company shall not be liable to indemnify the Indemnitee under
this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. The Company shall not settle any action or
claim in any manner that would impose any penalty or limitation on the
Indemnitee without the Indemnitee's written consent. Neither the Company nor the
Indemnitee will unreasonably withhold their consent to any proposed settlement.

     SECTION 11. OTHER RIGHTS TO INDEMNIFICATION. The indemnification and
advancement of expenses (including attorneys' fees) and costs provided by this
Agreement shall not be deemed exclusive of any other rights to which the
Indemnitee may now or in the future be entitled under any provision of the
By-Laws, agreement, provision of the Certificate of Incorporation of the
Company, vote of stock-holders or Disinterested Directors, provision of law or
otherwise.

     SECTION 12. CERTAIN AGREEMENTS OF INDEMNITEE. (i) Indemnitee agrees to do
all things reason-ably requested by the Board of Directors to enable the Company
to coordinate Indemnitee's defense with, if applicable, the Company's defense,
provided, however, that Indemnitee shall not be required to take any action that
would in any way prejudice his or her defense or waive any defense or position
available to him or her in connection with any action; and (ii) Indemnitee
agrees to cooperate with the Company and its counsel and to maintain any
confidences revealed to him or her by the Company in connection with the
Company's defense of any action. The Company agrees to cooperate with Indemnitee
and his or her counsel and to maintain any confidence revealed to it by
Indemnitee in connection with Indemnitee's defense of any action.

     SECTION 13. ATTORNEYS' FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT. In the
event that the Indemnitee is subject to or intervenes in any proceeding in which
the validity or enforceability of this Agreement is at issue or seeks an
adjudication or award in arbitration to enforce his rights under, or to recover
damages for breach of, this Agreement, the Indemnitee, if he prevails in whole
or in part in such action, shall be entitled to recover from the Company and
shall be indemnified by the Company against any actual expenses for attorneys'
fees and disbursement reasonably incurred by him.

     SECTION 14. DURATION OF AGREEMENT. This Agreement shall continue until and
terminate upon the later of: (a) ten years after the Indemnitee has ceased to
occupy any of the positions or have any relationships described in Section 2 and
3 of this Agreement; and (b) the final termination of all pending or threatened
actions, suits, proceedings or investigations to which the Indemnitee may be
subject by reason of the fact that he is or was a director, officer, employee,
agent or fiduciary of the Company or is or was serving at the request of the
Company as a director, officer, employee, agent or fiduciary of any other
entity, including, but not limited to, another corporation, partnership, joint
venture, trust or other enterprise, or by reason of anything done or not done by
him in any such capacity. The indemnification provided under this Agreement
shall continue as to the Indemnitee even though he may have ceased to be a
director or officer of the Company. This Agreement shall be binding upon the
Company and its successors and assigns and shall inure to the benefit of the
Indemnitee and his spouse,

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assigns, heirs, devises, executors, administrators or other legal
representatives. Nothing in this Agreement shall confer upon the Indemnitee the
right to continue in the employ of the Company or affect the rights of the
Company to terminate the Indemnitee's employment at any time in the sole
discretion of the Company, with or without cause.

     SECTION 15. SEVERABILITY. If any provision or provisions of this Agreement
shall be held invalid, illegal or unenforceable for any reason whatsoever, (a)
the validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, all portions of any paragraph of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid illegal or unenforceable) shall
not in any way be affected or impaired thereby, and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifest by the provision held invalid, illegal or unenforceable.

     SECTION 16. IDENTICAL COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.

     SECTION 17. HEADINGS. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.

     SECTION 18. DEFINITIONS. For purposes of this Agreement:

          (a) A "Change in control of the Company" shall be deemed to have
occurred if (i) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended), who is not currently a
stockholder of the Company, other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or a corporation owned
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 20% or more of the total
voting power of the then outstanding shares of capital stock of the Company
entitled to vote generally in the election of directors (the "Voting Stock"), or
(ii) during any period of two consecutive years, individuals, who at the
beginning of such period constitute the Board of Directors of the Company, and
any new director, whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof,
or (iii) the stockholders of the Company approved a merger or consolidation with
any other corporation, other than a merger or consolidation which would result
in the Voting Stock outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least 80% of the total voting power
represented by the Voting Stock or the voting securities of such surviving
entity outstanding immediately after such merger or consolidation, or the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.

          (b) "Disinterested Director" shall mean a director of the Company who
is not or was not a party to the action, suit, investigation or proceeding in
respect of which indemnification is being sought by the Indemnitee.


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          (c) "Independent Counsel" shall mean a law firm or a member of a law
firm that neither is presently nor in the past five years has been retained to
represent: (i) the Company or the Indemnitee in any matter material to either
such party, or (ii) any other party to the action, suit, investigation or
proceeding giving rise to a claim for indemnification hereunder. Notwithstanding
the foregoing, the term "Independent Counsel" shall not include any person who,
under the applicable standard of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or the Indemnitee
in an action to determine the Indemnitee's right to indemnification under this
Agreement.

     SECTION 19. MODIFICATION AND WAIVER. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.

     SECTION 20. NOTICES. All notices, requests, demands or other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand or by courier, on the date of delivery, or (ii) if mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

                  (a)  If to the Indemnitee, to:

                           Stephen D. Eldred
                           94 School Street
                           Concord, NH  03301

                  (b) If to the Company, to:

                           Aavid Thermal Technologies, Inc.
                           One Eagle Square, Suite 509
                           Concord, NH  03301
                           Attention:  President

                           With a copy to:

                           Paul Jacobs, Esq.
                           Fulbright & Jaworski, LLP
                           666 Fifth Avenue
                           New York, NY  10103

Or to such other address as may be furnished to the Indemnitee by the Company or
to the Company by the Indemnitee, as the case may be.

     SECTION 21. GOVERNING LAW. The parties hereto agree that this Agreement
shall be governed by, construed and enforced in accordance with, the laws of the
State of Delaware.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.

                                        AAVID THERMAL TECHNOLOGIES, INC.


 s/s  Stephen D. Eldred                 By   s/s Bharatan R. Patel
------------------------------            -------------------------------------
(Indemnitee)
                                             President & COO
                                        ---------------------------------------


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