Employment Agreement

         AGREEMENT  date  January 1, 1999 (the  Effective  Date") by and between
Geotec Thermal Generators Inc., a Florida  corporation,  (hereinafter called the
"Company"or  "Employer") and Dan Pepe, a Florida resident  (hereinafter call the
"Employee").

         WHEREAS,  Employer  desires  to  employ  Employee  upon the  terms  and
conditions  hereinafter set forth and Employee desires to accept employment upon
such terms and conditions; and

         WHEREAS, Employer and Employee desire to set forth in writing the terms
and  conditions  of their  agreements  and  understandings  with  respect to the
Employee"s employment by Employer.

         NOW,  THEREFORE,  Employer hereby employs  Employee and Employee hereby
accepts employment under the following terms and conditions:

         1.     EMPLOYMENT

         Employer  hereby   employees   Employee  and  Employee  hereby  accepts
employment by Employer, upon all the terms and conditions hereinafter set forth.

         2.     TERM

         Subject to the provisions for earlier  termination set forth in Section
9 hereof,  this Agreement shall commence on the Effective Date, January 1, 1999,
and shall end five years later unless extended by both parties.  Notwithstanding
any of the foregoing to the contrary, if this Employment Agreement is terminated
prior to the expiration of the Employment  Term, a year shall mean, with respect
to the year during which termination  occurs, the period commencing on the first
day of  such  year  and  ending  as of  the  close  of  business  of the  day of
termination of Employee"s employment,  and Employment Term shall mean the period
commencing on the  Effective  Date and ending as of the close of business of the
day of termination of Employee"s employment.

         3.     EMPLOYEE"S REPRESENTATIONS AND WARRANTIES

         Employee  represents and warrants to Employer that he is free to accept
 employment  with  Employer as  contemplated  herein and has no other written or
oral  obligations  or  commitments  of any kind or nature which would in any way
interfere with

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his  acceptance  of his  employment  pursuant  to the  terms  hereof or the full
performance of his obligations  hereunder or the exercise of his best efforts in
his  employment  hereunder.  Employee  represents and warrants that he is not in
breach of any existing confidentiality or covenant not to compete agreements, if
any,  the  Employee  may have  executed  with other third  parties  prior to the
Effective Date.

         4.     DUTIES AND EXTENT OF SERVICES

         Employee shall be employed as the Employer"s President, as such, shall,
subject to the  direction of the  Company"s  Board of  Directors,  supervise the
conduct  of all  subordinates  and  daily  operations  and  affairs  within  the
Employer"s  position,  consistent with the position of the President and perform
such other duties and  responsibilities  as may be assigned to the Employee from
time to time consistent with such title by the Board of Directors.

Employee  agrees  to  devote  sufficient  time,  skill,   attention  and  energy
diligently and competently to perform the duties and  responsibilities  assigned
to him hereunder or pursuant  hereto.  Employee shall use his best efforts to be
loyal and faithful at all times and  constantly  endeavor to improve his ability
and his knowledge of the business of Employer in an effort to increase the value
of his services for the mutual benefit of Employee and Employer.

         5.     COMPENSATION

         Employee shall receive an annualized salary of $135,000 during the term
of this Agreement.  This annual salary shall be increase to $250,000 if and when
the Company  shall obtain  monthly  sales equal or greater than  $5,000,000  per
year.

         6.     FRINGE BENEFITS AND EXPENSES

         A. Employee  shall be eligible  (subject to the terms and conditions of
the   particular   plans  and   programs)  to   participate   in  such  medical,
hospitalization,  group health, accident, disability and life insurance programs
and plans, such pension, profit sharing,






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stock option,  incentive  compensation  and stock  purchase plans and such other
employee  benefit  programs to the same extent such plans and  programs are made
generally  available  from  time  to  time  by  Employer  to all  of  its  other
similarly-situated  employees;  provide,  however,  Employer  shall  be under no
obligation  to make any such plans or programs  available  to its  employees  or
continue any which currently or in the future exist.

         B.  For  the  term  of  this  Agreement,   Employer  shall  provide  an
automobile,  and Employer will reimburse  employee for related gas,  maintenance
and insurance  expense,  for  performance  of  Employee"s  duties to Employer as
specified herein.

         C. Other Expenses Employer shall reimburse  Employee for his reasonable
out-of-pocket  cost and expenses  incurred in connection with the performance of
his duties and responsibilities hereunder.  Reimbursement of such expenses shall
be subject to the submission by Employee of appropriate  invoices,  receipts and
other   supporting   documentation,   consistent   with   Employer"s   customary
reimbursement policies and procedures.

         7.     VACATIONS

                  Employee  shall be  entitled to normal  three  weeks  vacation
taken by other similar members of management during each twelve-month  period of
the Employment  Term.  Employee shall not be entitled to be compensated  for any
unused  vacation upon  termination  of the  Agreement.  The periods during which
Employee will be absent from work shall be  determined  by Employee  taking into
account  the  needs of the  Employer"s  business  and  shall be  subject  to the
approval  of  the  Executive  Committee  of  the  Company  (which  shall  not be
unreasonably withheld).

         8.     FACILITIES

                  Employer  shall  provide and maintain (or cause to be provided
and  maintained)  such  facilities,  equipment,  supplies  and  personnel  as it
reasonably  determines is adequate for Employee"s  performance of his duties and
responsibilities under this Agreement.

         9.     TERMINATION OF EMPLOYMENT

                  A. Termination Events.  Notwithstanding any provisions of this
Agreement to the contrary,  Employee"s  employment may be terminated by Employer
with Cause (as  hereinafter  defined)  effective  upon the  delivery  of written
notice to Employee. In addition,  Employee"s employment shall terminate (i) upon
Employee"s  death  or (ii)  upon  Employee  becoming  disabled  (as  hereinafter
defined).

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                  B.  Definition  of Disabled.  For purposes of this  Agreement,
Employee shall be deemed to be "Disabled"  when, by reason of physical or mental
illness or of injury,  he is unable to perform  substantially  all of the duties
and  responsibilities   required  of  him  in  connection  with  his  employment
hereunder.  No disability shall be deemed to exist until after Employee shall be
unable to perform his duties  hereunder  for ninety (90)  consecutive  days (the
"Disability  Period").  If Employee shall have been under a disability but shall
have  returned  to work  prior  to the  end of the  Disability  Period,  any new
disability  commencing  within thirty (30) days of the  termination of the prior
disability  shall be a continuation of the prior  disability,  and the period of
all such disabilities shall be added together to determine whether,  or how much
of, the Disability Period has elapsed.

                  C.  Definition  of  Cause.  For  purposes  of this  Agreement,
"Cause" shall include, but not be limited to: (a) arrest or conviction for fraud
or  criminal  conduct  (other  than  conviction  of, or a pleas of guilty  to, a
traffic  violation);  (b)  habitual  drunkenness  or drug  addiction;  (c) fraud
against employer or embezzlement; (d) sanctions against Employee in his capacity
as an employee of Employer by regulatory  agencies governing Employer or against
Employer because of wrongful acts or conduct of Employee; (e) material breach or
default by Employee of any of the terms or conditions of this Agreement;  or (f)
the  resignation or quitting of Employee prior to the end of the Employment Term
(in this last event, Employee"s employment shall be deemed terminated with Cause
on the date that he resigns or quits).

         10.    NON-DISCLOSURE OF CONFIDENTIAL INFORMATION

                  A. Confidential  Information.   Employee   acknowledges   that
Employee  has been  informed  that it is the policy of  Employer  to maintain as
secret and confidential all information relating to (i) the financial condition,
businesses  and  interests  of Employer  and its  affiliates,  (ii) the systems,
know-how, products,  services, costs, inventions,  patents, patent applications,
formulae,  research and  development  procedures,  notes and  results,  computer
software  programs,  marketing and sales techniques  and/or  programs,  methods,
methodologies,  manuals,  lists and other trade secrets heretofore and hereafter
acquired,  sold  developed  and/or used by Employer and its affiliates and (iii)
the nature and terms of Employer"s and its affiliate"s  relationships with their
respective  customers,   clients,  suppliers,   lenders,  vendors,  consultants,
independent  contractors and employees (all such information  being  hereinafter
collectively  referred to as "Confidential  Information"),  and Employee further
acknowledges  that such  Confidential  Information is of great value to Employer
and  its  affiliates  and,  in  and by  reason  and as a  result  of  Employee"s
employment by Employer,  Employee will be making use of, acquiring and/or adding
to such Confidential  Information.  Therefore,  Employee  understands that it is
reasonably

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necessary to protect Employer"s and its affiliates" trade secrets, good will and
business  interests  that  Employee  agree and,  accordingly,  Employee will not
directly or indirectly (except where authorized by the President of Employer for
the benefit of Employer and/or its affiliate(s) and/or as required in the course
of his  employment)  at any time  hereafter  divulge or disclose for any purpose
whatsoever to any persons,  firms,  corporations  or other  entities  other than
Employer  or its  affiliates  (hereinafter  referred to  collectively  as "Third
Parties"),  or use or cause or  authorize  any Third  Parties  to use,  any such
Confidential Information, except as otherwise required by law.

                  2. Employer"s  Materials.  In  accordance  with the foregoing,
Employee  furthermore  agrees that (i) Employee will at no time retain or remove
from the premises of Employer or its  affiliates  any  research and  development
materials,  drawings,  notebooks, notes, reports, formulae, software programs or
discs or other containers of software,  manuals, data books, records,  materials
or documents of any kind or  description  for any purpose  unconnected  with the
strict performance of Employee"s duties with Employer and (ii) upon cessation or
termination  of Employee"s  employment  with  Employer for any reason,  Employee
shall  forthwith  deliver or cause to be  delivered  up to Employer  any and all
research  and  development  materials,   drawings,  notebooks,  notes,  reports,
formulae,  software programs or discs or other containers of software,  manuals,
data, books, records,  materials and other documents and materials in Employee"s
possession or under Employee"s control relating to any Confidential  Information
or any property or  information  which is otherwise  the property of Employer or
its affiliates.

         11.    COVENANT-NOT-TO-COMPETE

                  In view of the  Confidential  Information to be obtained by or
disclosed  to Employee,  because of the know-how  acquired and to be acquired by
Employee,  and as a material inducement to Employer to enter into this Agreement
and continue to employ Employee,  Employee covenants and agrees that, so long as
Employee  is  employed  by  Employer  and for a period  of two (2)  years  after
Employee  ceases for any reason to be employed by Employer,  Employee shall not,
directly or indirectly (i) divert  business  from,  (ii) solicit or transact any
business  competitive  with Employer or its  affiliates  with, or (iii) sell any
products or  services  sold or offered by  Employer  or its  affiliates  to, any
customer or former customer of Employer or its affiliates. In addition, Employee
covenants and agrees that, so long as Employee is employed by Employer and for a
period of two (2) years after  Employee  ceases for any reason to be employed by
Employer,  Employee hereby agrees to refrain from,  anywhere in the world,  (the
"Geographical  Area"),  directly  or  indirectly  owning,  managing,  operating,
controlling or financing, or participating in the ownership, management, control
or financing of, or being connected with or having an interest, in, or otherwise
taking any part as a stockholder, director, officer, employee,

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consultant, partner or otherwise, in, any business competitive with that engaged
in or being  developed by Employer or its affiliates  during  Employee"s term of
employment.  Without  limitation  of  the  foregoing,   Employer"s  business  is
acknowledged to include the development,  manufacture and sale of gas generators
for oil and gas secondary recovery and related technology. Employee acknowledges
that Employer"s  business is anticipated to be  international  in scope,  that a
similar  business could  effectively  compete with Employer"s and its affiliates
businesses from any location in the world, and that,  therefore,  the restricted
Geographical  Area  is  reasonable  in  scope  to  protect  Employer"s  and  its
affiliates" trade secrets and legitimate business interests.

         12.    EMPLOYER"S REMEDIES FOR BREACH OF SECTIONS 10 & 11

                  Employee  covenants and agrees that if Employee  shall violate
or breach any of Employee"s  covenants or agreements  provided for in Section 10
and 11 hereof, Employer and/or its affiliates shall be entitled to an accounting
and  repayment  of all profits,  compensation,  commissions,  remunerations,  or
benefits  which  Employee  directly or indirectly  has realized or realizes as a
result of, growing out of or in connection with any such violation or breach. In
addition, in the event of a breach or violation or threatened or imminent breach
or violation of any provisions of Sections 10 or 11 hereof,  Employer and/or its
affiliates shall be entitled to a temporary or permanent injunction or any other
appropriate decree of specific performance or equitable relief,  without posting
of bond, from a court of competent jurisdiction in order to prevent, prohibit or
restrain  any such breach or  violation  or  threatened  or  imminent  breach or
violation  by  Employee,  by  Employee"s  partners,   agents,   representatives,
servants,  employers or employees and/or by any third parties. Employer shall be
entitled to such injunctive or other equitable relief in addition to any damages
which are  suffered,  and the  prevailing  party shall be entitled to reasonable
attorney"s and paralegals" fees and costs and other costs incurred in connection
with any such  litigation,  both before and at trial and at all tribunal levels.
Resort by Employer  and/or its affiliates to such  injunctive or other equitable
relief  shall not be deemed to waive or to limit in any respect any other rights
or remedies  which  Employer  or its  affiliates  may have with  respect to such
breach or violation.
                                                                 _______initials

         13.    REASONABLENESS OF RESTRICTIONS

                  A.  Reasonableness.  Employee  acknowledges that any breach or
violation of Sections 10 or 11 hereof will cause  irreparable  injury and damage
and  incalculable  harm to Employer and its affiliates and that it would be very
difficult or impossible to measure the damages resulting from any such breach or
violation.  Employee further  acknowledges  that Employee has carefully read and
considered the provisions of Sections 10, 11 and 12

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hereof and, having done so, agrees that the  restrictions and remedies set forth
in such Sections  (including  but not limited to, the time period,  geographical
and types of  restrictions  imposed) are fair and  reasonable and are reasonably
required for the protection of the business,  trade secrets,  interests and good
will of Employer and its affiliates.
                  B.  Severability.  Employee  understands and intends that each
provision  and  restriction  agreed to by Employee  in  Sections  10, 11, and 12
hereof shall be construed as separate and divisible  from every other  provision
and  restriction  and that , in the event that any one of the  provisions of, or
restrictions in, Sections 10, 11 and/or 12 hereof shall be held to be invalid or
unenforceable,  the remaining  provisions thereof and restrictions therein shall
nevertheless  continue  to be valid and  enforceable  as though  the  invalid or
unenforceable  provisions or restrictions had not been included therein, and any
one or more of such valid  provisions and  restrictions may be enforced in whole
or in part as the  circumstances  warrant.  In the event that any such provision
relating to time period and/or  geographical and/or type of restriction shall be
declared  by a  court  of  competent  jurisdiction  to  exceed  the  maximum  or
permissible  time period,  geographical  area or type of restriction  such court
deems reasonable and enforceable,  said time period and/or  geographical  and/or
type of  restriction  shall be  deemed to become  and  shall  thereafter  be the
maximum time period and/or  geographical  restriction and/or type of restriction
which such court deems reasonable and enforceable.

                  C. Survivability. The restrictions, acknowledgments, covenants
and  agreements  of Employee  set forth in  Sections  10, 11, 12, and 13 of this
Agreement  shall  survive any  termination  of this  Agreement or of  Employee"s
employment (for any reason, including expiration of the Employment Term).

         14.    EMPLOYEE"S DISCLOSURES AND REPRESENTATIONS AND WARRANTIES

                       Employee hereby acknowledges, represents and warrants to,
agrees with, Employer as follows:

                     (a) That  Employee  and  his representatives and agents (i)
have  received  and read and are  familiar  with  this  Agreement,  and (ii) are
familiar  with the  business  and  operations  conducted  and to be conducted by
Employer and the risks attendant thereto.

                     (b) That  Employee  and/or  his  representatives and agents
have had an  opportunity  to ask questions of and receive  satisfactory  answers
from Employer and/or a person or persons  authorized to act on Employer"s behalf
concerning the terms and

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conditions of this  Agreement,  this  transaction and Employer and its currently
contemplated business and operations.

                     (c) That  Employee  has  been represented by such legal and
other professional  advisors (if any), each of whom has been personally selected
by  Employee,  as  Employee  has  found  necessary  to  consult  concerning  the
transactions contemplated in or by this Agreement.

                     (d) That  Employee  has  full right, power and authority to
perform all obligations under this Agreement.

Employee  hereby  agrees  to  indemnify  and  hold  harmless  Employer  and  its
shareholders, directors, officers, employees and agents from and against any and
all loss, damage,  liability,  cost or expense (including  reasonable attorneys"
and paralegals" fees and costs before and at trial and at all appellate  levels)
due to or arising out of any  inaccuracy  in, or breach of, any  representation,
warranty or covenant of Employee contained in this Section 14.

         15.    INDEPENDENT COUNSEL

         Employer  and  Employee  agree  that  each  of  them have been, or were
advised  fully  understand  that  they  are  entitled  to  be,   represented  by
independent legal counsel with respect to all matters  contemplated herein, from
the commencement of negotiations at all times through the execution hereof.

         16.    LAW APPLICABLE

                  This Agreement shall be governed by and construed  pursuant to
the laws of the State of Florida,  without  giving  effect to  conflicts of laws
principles. Any action brought will be pursued in Broward County, Florida.

        17.     NOTICES

                  Any notices required or permitted to be given pursuant to this
Agreement  shall be sufficient,  if in writing,  and if personally  delivered or
sent  by  certified  or  registered  mail,  return  receipt  requested,  to  his
residence, in the case of Employee, or to its then principle office, in the case
of Employer.




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         18.    SUCCESSION

                  This  Agreement  shall  inure to the benefit of and be binding
upon the  parties  hereto and their  respective  legal  representatives,  heirs,
assignees  and/or  successors  in  interest  of any kind  whatsoever;  provided,
however, that Employee acknowledges and agrees that he cannot assign or delegate
any of his rights,  duties,  responsibilities  or  obligations  hereunder to any
other person or entity.

         19.    ENTIRE AGREEMENT

                  This Agreement  constitutes the entire final agreement between
the parties with respect to, and supercedes any and all prior agreements between
the parties hereto both oral and written  concerning,  the subject matter hereof
and may not be amended, modified or terminated except by a writing signed by the
parties hereto.

         20.      SEVERABILITY

                  If any provision of this Agreement shall be held to be invalid
or unenforceable, and is not reformed by a court of competent jurisdiction, such
invalidity or unenforceability shall attach only to such provision and shall not
in any way affect or render invalid or unenforceable any other provision of this
Agreement,  and  this  Agreement  shall be  carried  out as if such  invalid  or
unenforceable provision were not contained herein.

         21.      NO WAIVER

                  A waiver of any breach or violation of any term,  provision or
covenant contained herein shall not be deemed a continuing waiver or a waiver of
any future or past breach or violation. No oral waiver shall be binding.

         22.    ATTORNEYS" FEES"

         In the event that  either of the parties to this  Agreement  institutes
suit  against  the other  party to this  Agreement  to enforce any of his or its
rights  hereunder,  the  prevailing  party in such  action  shall be entitled to
recover from the other party all reasonable costs thereof,  including reasonable
attorneys" and paralegals" fees and cost incurred before and at trial and at all
tribunal levels.



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IN WITNESS WHEREOF, the undersigned have hereunto set their hands on the day and
year first above written.


Geotec Thermal Generators, Inc.                      By:________________________
                                                        W. Richard Lueck, CEO

Individually----------------------------------By:____________________________
                                                 Dan Pepe































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