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                                                                  EXHIBIT 10.16
                            INDEMNIFICATION AGREEMENT


         THIS INDEMNIFICATION AGREEMENT (the "Agreement") is entered into as of
the [insert day]th day of [insert month], [insert year], by and between Illinois
Superconductor Corporation, a Delaware corporation (the "Company"), and [insert
name of officer] ("Indemnitee").

                                    RECITALS

         Indemnitee has been asked to serve as an officer of the Company
(service in such a capacity shall hereafter be described as service as an
"Agent").

         Section 145 of the General Corporation Law of Delaware ("Section 145")
empowers the Company to indemnify its Agents and expressly provides that the
indemnification that it authorizes is not exclusive.

         The Company now maintains Directors' and Officers' Liability Insurance
("D & O Insurance") covering certain liabilities that may be incurred by certain
of its Agents and others in the performance of their duties for the Company.
Developments with respect to the terms and availability of D & O Insurance,
however, have raised questions concerning the adequacy and reliability of the
protection afforded thereby. The Company is aware that, as a result, competent
and experienced persons have become increasingly reluctant to serve as directors
or officers of corporations.

         To induce Indemnitee to continue to serve as an Agent, the Company is
prepared to provide Indemnitee with the protections described in this Agreement.

         NOW, THEREFORE, in consideration of the willingness of Indemnitee to
continue to serve as an Agent, the Company hereby agrees as follows:

         1.    INDEMNIFICATION GENERALLY. The Company agrees to hold harmless 
and to indemnify Indemnitee to the fullest extent authorized or permitted by
Section 145, or, to the extent that any amendment to Section 145 or to other
applicable law may expand indemnification rights, to the fullest extent
authorized or permitted by Section 145 or such other applicable law as may be in
effect. However, such indemnification shall not apply to expenses that
Indemnitee has incurred in a suit brought by Indemnitee against the Company,
except for expenses that Indemnitee has incurred in an action brought to enforce
rights or to collect sums due under this Agreement in which Indemnitee is the
prevailing party.

         2.    MAINTENANCE OF LIABILITY INSURANCE.

               2.1 The Company agrees that, so long as Indemnitee shall continue
to serve as an Agent and, thereafter, for so long as Indemnitee shall
potentially be subject to any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative (a
"Proceeding"), by reason of the fact that Indemnitee is or was an Agent of the
Company, the Company, subject to Section 3 of this Agreement, shall maintain in
amounts reasonably available to the Company D & O Insurance from established and
reputable insurers.

               2.2 Notwithstanding the Company's agreement in Section 2.1 above,
the Company shall have no obligation to maintain D & O Insurance if the Company
determines in good faith and in its reasonable business judgment that such
insurance is not reasonably available, the premium costs for such insurance are
disproportionate to the amount of coverage provided, or the coverage provided by
such insurance is limited by exclusions so as to provide an insufficient
benefit, or Indemnitee is covered adequately by similar insurance maintained by
an affiliate of the Company.

         3.    SELF INSURANCE. If the Company does not maintain D & O Insurance
in accordance with Section 2.1 of this Agreement, or if the coverage provided by
such insurance is less than that provided by the D & O Insurance maintained by
the Company at the time that this Agreement is signed or the D & O Insurance
first 


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procured by the Company after this Agreement is signed, the Company, subject
only to the exclusions contained in Section 5 of this Agreement, agrees to hold
harmless and to indemnify Indemnitee to the fullest extent of the coverage that
otherwise would have been provided to Indemnitee under the D & O Insurance that
the Company currently maintains or ultimately procures.

         4.    ADDITIONAL INDEMNITY. Subject only to the exclusions set forth in
Section 5 of this Agreement, the Company agrees to hold harmless and to
indemnify Indemnitee against any and all expenses (including attorneys' fees and
expenses), judgments, fines, and amounts paid in settlement that Indemnitee
actually and reasonably has incurred in connection with any Proceeding to which
Indemnitee is or was a party, or at any time either becomes a party or is
threatened to be made a party by reason of the fact that Indemnitee is or was an
Agent, subject to the same exclusion provided in the last sentence of Section 1
of this Agreement.

         5.    LIMITATIONS ON SELF INSURANCE AND ADDITIONAL INDEMNITY. The
Company shall not pay any indemnity under Sections 3 or 4 of this Agreement:

               5.1 to the extent that Indemnitee is indemnified in full under
Sections 1 or 2 of this Agreement or under any D & O Insurance or any other
insurance; or

               5.2 with respect to (a) remuneration paid to Indemnitee if it
shall be determined by a final adjudication that such remuneration was in
violation of law or (b) expenses (including attorneys' fees) incurred by
Indemnitee in connection with any Proceeding relating to such remuneration,
unless Indemnitee is the prevailing party therein; or

               5.3 either (a) on account of any suit in which a final,
non-appealable judgment is rendered against Indemnitee under the provisions of
Section 16 of the Securities Exchange Act of 1934 and amendments thereto or
under similar provisions of any federal or state law or (b) on account of
amounts paid in settlement of any litigation instituted or threatened under
Section 16 or such law as a result of Indemnitee's purchase or sale of
securities of the Company or of any affiliate of the Company; or

               5.4 on account of Indemnitee's conduct, which finally and
non-appealably has been adjudged to have been knowingly fraudulent or
deliberately dishonest or to have involved willful misconduct; or

               5.5 for expenses or other losses incurred in connection with
Indemnitee's having in fact gained any personal profit or advantage to which
Indemnitee was not legally entitled; or

               5.6 if a court having jurisdiction in the matter shall finally
and non-appealably determine that such indemnification would violate public
policy or be otherwise unlawful.

         6.    PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for a portion of
any expenses or liabilities incurred by Indemnitee in the investigation,
defense, settlement, or appeal of a Proceeding, but is not entitled to
indemnification for the total amount of the expenses or liabilities, the Company
shall indemnify Indemnitee for the portion of such expenses or liabilities to
which Indemnitee is entitled.

         7.    DETERMINATION OF INDEMNIFICATION.

               7.1 Notwithstanding any other provision of this Agreement (i) the
obligations of the Company under Section 1 of this Agreement shall be subject to
the condition that the Reviewing Party (as defined in Section 7.6 below) shall
have determined (in a written opinion, in any case in which the Independent
Legal Counsel referred to in Section 7.3 below is involved) that the Indemnitee
would be permitted to be indemnified under this Agreement and (ii) the
obligation of the Company to make an expense advance pursuant to Section 9 of
this Agreement shall be subject to the condition that the Reviewing Party shall
not have determined, in good faith, that the Indemnitee has failed to cooperate
with any internal Company inquiry of any alleged misconduct committed by the
Indemnitee.

               7.2 The Reviewing Party shall be selected by the Company's Board
of Directors; provided,



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however, that if there has been a Change in Control (other than a Change in
Control which has been approved by a majority of the Company's Board of
Directors who were directors immediately prior to such Change in Control) the
Reviewing Party shall be the Independent Legal Counsel referred to in Section
7.3 below. If there has been no determination by the Reviewing Party within the
fifteen (15) day period referred to in Section 9 of this Agreement, the
Reviewing Party shall be deemed to have made a determination that it is
permissible to indemnify the Indemnitee under this Agreement.

               7.3 The Company agrees that if there is a Change in Control
(other than a Change in Control which has been approved by a majority of the
Company's Board of Directors who were directors immediately prior to such Change
in Control) then the Independent Legal Counsel (as defined in Section 7.7 below)
shall be selected by the Indemnitee and approved by the Company (which approval
shall not be unreasonably withheld) and such Independent Legal Counsel shall
determine whether the officer is entitled to indemnification for expenses,
judgments, fines, penalties and amounts paid in settlement (including, without
limitation, all interest, assessments and other charges paid or payable in
connection therewith) under this Agreement. Such Independent Legal Counsel shall
render its written opinion to the Company and the Indemnitee as to whether and
to what extent the Indemnitee will be permitted to be indemnified for expenses,
judgments, fines, penalties and amounts paid in settlement (including, without
limitation, all interest, assessments and other charges paid or payable in
connection therewith). The Company agrees to pay the reasonable fees of the
Independent Legal Counsel and to indemnify fully such Independent Legal Counsel
against any and all expenses (including reasonable attorneys' fees), claims,
liabilities and damages arising out of or relating to this Agreement or the
engagement of such Independent Legal Counsel pursuant hereto.

               7.4 If a determination denying the Indemnitee's claim is made by
the Reviewing Party (other than the Independent Legal Counsel), notice of such
determination shall disclose with particularity the reasons for such
determination. If a determination denying the Indemnitee's claim is made by the
Independent Legal Counsel, the notice shall include a copy of the related legal
opinion of such counsel.

               7.5 For purposes of this Agreement, a "Change in Control" 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, 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
the Securities Exchange Act of 1934), directly or indirectly, of securities of
the Company representing 15% or more of the total voting power represented by
the Company's then outstanding Voting Securities (as defined in Section 7.8
below), 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 Company's 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 approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the Voting Securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 85% of the total voting power represented by the
Voting Securities of the Company or 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 (in one transaction or a series of
transactions) of all or substantially all of the assets of the Company.

               7.6 For purposes of this Agreement, the "Reviewing Party" shall
mean any appropriate person or body consisting of a member or members of the
Board of Directors of the Company or any other person or body appointed by the
Board who is not a party to the particular action, suit or proceeding with
respect to which the Indemnitee is seeking indemnification, or the Independent
Legal Counsel.

               7.7 For purposes of this Agreement, the "Independent Legal
Counsel" shall mean an attorney, selected in accordance with the provisions of
Section 7.3 above, who shall not have otherwise performed services for the
Company or the Indemnitee within the five years preceding such selection (other
than in


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connection with seeking indemnification under this Agreement). The Independent
Legal Counsel shall not be any person who, under the applicable standards 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 rights under this Agreement, nor shall the Independent Legal
Counsel be any person who has been sanctioned or censured for ethical violations
of applicable standards of professional conduct.

               7.8 For purposes of this Agreement, "Voting Securities" shall
mean any securities of the Company or another entity which vote generally in the
election of directors of the Company or such other entity.

         8.    INDEMNIFICATION PROCEDURES.

               8.1 Promptly after the receipt by Indemnitee of notice of the
commencement or the threat of commencement of any Proceeding, Indemnitee shall,
if Indemnitee believes that indemnification with respect to the Proceeding may
be sought from the Company under this Agreement, notify the Company, consistent
with Section 14 of this Agreement of the commencement or the threat of
commencement of the Proceeding, but the failure of the Indemnitee to so notify
the Company shall not relieve the Company from any liability it may have under
this Agreement except to the extent that it has been prejudiced in any material
extent by such failure, or from any liability which it may have otherwise.

               8.2 If, at the time that the Company receives notice under
Section 8.1 of this Agreement of the commencement or the threat of commencement
of any Proceeding, the Company has D & O Insurance in effect, the Company shall
give prompt notice of the commencement or the threat of commencement of such
Proceeding to the insurer(s) in accordance with the procedures set forth in its
insurance policy or policies. The Company then shall take all appropriate action
to cause such insurer(s) immediately to pay all amounts payable as a result of
such Proceeding or threatened Proceeding in accordance with the terms of such
policy or policies, provided that the Company shall remain liable to pay any
such amount in the event the insurer(s) fail to pay such amount.

               8.3 If the Company is obligated to pay to Indemnitee the expenses
of any Proceeding or threatened Proceeding, the Company, upon the delivery to
Indemnitee of written notice of its election to do so, shall be entitled to
assume Indemnitee's defense. The Company's assumption of Indemnitee's defense
shall be subject to Indemnitee's approval of the counsel who is to conduct the
defense. Counsel shall be approved or disapproved by Indemnitee within seven (7)
days after the Company notifies Indemnitee of counsel's identity and shall be
deemed approved unless Indemnitee provides the Company with notice to the
contrary. After the approval of counsel selected by the Company, the Company
will not be liable to Indemnitee under this Agreement for any attorneys' fees
that Indemnitee subsequently incurs with respect to the same Proceeding,
provided that (a) Indemnitee shall have the right to employ Indemnitee's own
counsel in any such Proceeding at Indemnitee's own expense, and (b) Indemnitee
may retain Indemnitee's own counsel, the fees and expenses of whom shall be paid
by the Company, if (i) Indemnitee shall reasonably have concluded that a
conflict or potential conflict exists between the Company and Indemnitee in the
conduct of any such defense or (ii) the Company shall not, in fact, have
employed counsel to assume the defense of such Proceeding.

         9.    ADVANCES OF EXPENSES. Prior to a determination that this
Agreement in fact entitles Indemnitee to indemnification, expenses that
Indemnitee has incurred or for which Indemnitee might be entitled to indemnity
under this Agreement shall be advanced to Indemnitee by the Company within
fifteen (15) days after the Company's receipt of Indemnitee's written request
for such an advance, provided that Indemnitee undertakes in writing to repay
such advance(s) to the extent that Indemnitee ultimately is determined not to be
entitled to indemnification under the provisions of Section 145, this Agreement,
or otherwise.

         10.   NON-EXCLUSIVITY. The provisions for indemnification and 
advancement of expenses contained in this Agreement shall not be deemed
exclusive of any other rights that Indemnitee may have under any provision of
law, the Company's Certificate of Incorporation or Bylaws, the vote of the
Company's stockholders or disinterested directors, other agreements, or
otherwise. Indemnitee's rights hereunder shall continue after Indemnitee has
ceased acting as an Agent of the Company and shall inure to the benefit of
Indemnitee's heirs, executors, and administrators.


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         11.   SEVERABILITY. If any provision or provisions of this Agreement
shall for any reason be held to be invalid, illegal, or unenforceable, (i) the
validity, legality, and enforceability of the remaining provisions of this
Agreement (including, without limitation, all portions of any paragraphs of the
Agreement containing the provision or provisions held to be invalid, illegal, or
unenforceable) shall not in any way be affected or impaired, and (ii) to the
fullest extent possible, the provisions of this Agreement (including, without
limitation, all portions of any paragraph of this Agreement held to be invalid,
illegal, or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision or provisions that have been held to be invalid,
illegal, or unenforceable to the maximum extent permitted by law.

         12.   MODIFICATION AND WAIVER. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar), and no such waiver shall constitute a continuing
waiver.

         13.   SUCCESSORS AND ASSIGNS. The terms of this Agreement shall bind,
and shall inure to the benefit of, the successors, assigns, heirs, executors,
and administrators of the parties hereto.

         14.   NOTICE. All notices, consents, requests, approvals, and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been properly given if hand delivered or if sent by
a courier freight prepaid (in either case, effective upon receipt or when
refused), in the case of the Company, at the addresses listed below, and in the
case of Indemnitee, at Indemnitee's address of record with the Company, or to
such other addresses of which the parties may notify one another in writing.

                 To the Company: Illinois Superconductor Corporation
                                    451 Kingston Court
                                    Mount Prospect, IL 60056
                                    Attn: General Counsel

                 with a copy to:    Katten Muchin & Zavis
                                    525 West Monroe Street
                                    Suite 1600
                                    Chicago, IL 60661-3693
                                    Attn: Lawrence Levin, Esq.

         15.   GOVERNING LAW. This Agreement shall be governed exclusively by
and construed according to the laws of the State of Delaware, as applied to
contracts between Delaware residents entered into and to be performed entirely
within Delaware.

         16.   THIRD PARTIES. This Agreement is entered into solely for the
benefit of the Company and its successors and assigns, on the one hand, and of
Indemnitee and Indemnitee's heirs, executors, and administrators, on the other
hand, and no third party shall have any rights hereunder.

         17.   DURATION. This Agreement shall terminate upon the expiration of
all statutes of limitations that would be applicable to any cause of action that
could arise out of Indemnitee's service as an Agent.

         IN WITNESS WHEREOF, the parties to this Agreement have entered into
this Indemnification Agreement effective as of the date first above written.


                                  ILLINOIS SUPERCONDUCTOR CORPORATION


                                  By: ______________________________________
                                      Edward W. Laves
                                      President and Chief Executive Officer



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                                                 (Signature)

                                  [NAME OF OFFICER]

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                                     (Print Address)