Document:

Exhibit 10.1

                              EMPLOYMENT AGREEMENT

      AGREEMENT,  made and entered into as of the 11th day of July,  2000 by and
between Thermo Electron  Corporation,  a Delaware corporation (together with its
successors and assigns permitted under this Agreement,  the "Company"),  and Mr.
Marijn Dekkers (the "Executive").

                                W I T N E S S E T H

      WHEREAS,  the Company desires to employ the Executive and to enter into an
agreement  embodying  the terms of such  employment  (the  "Agreement")  and the
Executive  desires to enter into the  Agreement  and to accept such  employment,
subject to the terms and provisions of the Agreement;

      NOW,  THEREFORE,  in  consideration  of the premises and mutual  covenants
contained herein and for other good and valuable  consideration,  the receipt of
which is mutually  acknowledged,  the Company and the Executive  (individually a
"Party" and together the "Parties") agree as follows:

      1.    Definitions.

            (a)  "Affiliate"  of a person or other entity shall mean a person or
other entity that directly or indirectly controls, is controlled by, or is under
common control with the person or other entity specified.

            (b) "Base  Salary"  shall mean the salary  provided for in Section 4
below or any increased salary granted to the Executive pursuant to Section 4.

            (c) "Board" shall mean the Board of Directors of the Company.

            (d) "Cause" shall mean:

                  (i)   the Executive commits a felony or any crime involving
moral turpitude; or

                  (ii) in carrying  out his  duties,  the  Executive  engages in
conduct  that  constitutes  gross  neglect or gross  misconduct  or any material
violation of this Agreement or any material violation of applicable Company rule
or policy, the violation of which amounts to gross neglect or gross misconduct.

            (e) "Change in Control"  means an event or  occurrence  set forth in
any one or more of  subsections  (i) through (iv) below  (including  an event or
occurrence  that  constitutes a Change in Control under one of such  subsections
but is specifically exempted from another such subsection):
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                  (i) The acquisition by an individual,  entity or group (within
the meaning of Section  13(d)(3) or 14(d)(2) of the  Securities  Exchange Act of
1934, as amended (the "Exchange  Act")) (a "Person") of beneficial  ownership of
any  capital  stock  of the  Company  if after  such  acquisition,  such  Person
beneficially  owns  (within  the  meaning  of Rule l3d-3  promulgated  under the
Exchange  Act) 40% or more of either (1) the then  outstanding  shares of common
stock of the  Company  (the  "Outstanding  Company  Common  Stock")  or (ii) the
combined voting power of the then outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding  Company Voting
Securities");  provided,  however, that for purposes of this subsection (i), the
following  acquisitions  shall  not  constitute  a Change  in  Control:  (A) any
acquisition by the Company, (B) any acquisition by any employee benefit plan (or
related  trust)  sponsored  or  maintained  by the  Company  or any  corporation
controlled by the Company, or (C) any acquisition by any corporation pursuant to
a transaction which complies with clauses (A) and (B) of subsection (iii) below;
or

                  (ii) Such time as the Continuing  Directors (as defined below)
do not  constitute  a majority  of the Board (or,  if  applicable,  the Board of
Directors of a successor corporation to the Company), where the term "Continuing
Director"  means at any date a member  of the  Board (A) who was a member of the
Board on the date of the execution of this Agreement or (B) who was nominated or
elected subsequent to such date by at least a majority of the directors who were
Continuing  Directors  at the  time of such  nomination  or  election  or  whose
election to the Board was  recommended or endorsed by at least a majority of the
directors  who  were  Continuing  Directors  at the time of such  nomination  or
election;  provided,  however, that there shall be excluded from this clause (B)
any  individual  whose initial  assumption of office  occurred as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened  solicitation of proxies or consents, by
or on behalf of a person other than the Board; or

                  (iii)   The   consummation   of   a   merger,   consolidation,
reorganization,  recapitalization  or statutory  share  exchange  involving  the
Company or a sale or other disposition of all or substantially all of the assets
of the Company in one or a series of  transactions  (a "Business  Combination"),
unless,  immediately following such Business Combination,  each of the following
two conditions is satisfied: (A) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding  Company Common Stock
and Outstanding  Company Voting  Securities  immediately  prior to such Business
Combination  beneficially  own,  directly  or  indirectly,  more than 60% of the
then-outstanding  shares of common  stock and the  combined  voting power of the
then-outstanding  securities  entitled  to vote  generally  in the  election  of
directors,  respectively,  of the  resulting  or acquiring  corporation  in such
Business  Combination (which shall include,  without  limitation,  a corporation
which as a result of such transaction  owns the Company or substantially  all of
the Company's assets either directly or through one or more subsidiaries)  (such
resulting  or  acquiring  corporation  is referred  to herein as the  "Acquiring
Corporation")  in  substantially   the  same  proportions  as  their  ownership,
immediately  prior to such  Business  Combination,  of the  Outstanding  Company
Common Stock and Outstanding Company Voting Securities, respectively; and (B) no
Person  (excluding the Acquiring  Corporation  or any employee  benefit plan (or
related  trust)  maintained  or  sponsored  by the  Company or by the  Acquiring
Corporation) beneficially owns, directly or indirectly,  40% or more of the then

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outstanding  shares  of common  stock of the  Acquiring  Corporation,  or of the
combined  voting power of the  then-outstanding  securities of such  corporation
entitled to vote generally in the election of directors; or

                  (iv) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.

            (f)  "Disability"  shall  mean  the  Executive's  inability,  due to
physical  or  mental  incapacity,   to  substantially  perform  his  duties  and
responsibilities under this Agreement as determined by a medical doctor selected
by the  Company and the  Executive.  If the  Parties  cannot  agree on a medical
doctor,  each Party  shall  select a medical  doctor and the two  doctors  shall
select a third who shall be the approved medical doctor for this purpose.

            (g) "Effective Date" shall mean July 11, 2000.

            (h)  "Exercise  Period"  shall mean the seven  year  period in which
options granted under Section 6(b) and (c) remain exercisable.

            (i) "Good  Reason"  shall mean  termination  by the Executive of his
employment,  after written  notice to the Company  within 30 days  following the
occurrence of any of the following events without his consent:

                  (i)   a reduction in the Executive's then current Base
Salary; or

                  (ii) the  failure  of the Board to  appoint  Executive  as the
Chief  Executive  Officer of the Company ("CEO") in accordance with Section 3(b)
of this Agreement; or
                  (iii) the removal by the Board of Executive  from any position
described in Section 3;

                  (iv) a  material  diminution  in  the  Executive's  duties  or
responsibilities;

                  (v) a change in the reporting  structure so that the Executive
reports to someone other than the then current chief  executive  officer (if not
Executive) of the Company or the Board;

                  (vi) the  failure of the Company to obtain the  assumption  in
writing of its  obligation to perform this  Agreement by any successor to all or
substantially  all of the assets of the  Company  within 15 days after a merger,
consolidation, sale or similar transaction; and

                  (vii) the material breach of this Agreement by the Company.

            Following written notice from the Executive, as described above, the
Company shall have 15 days in which to cure.  If the Company fails to cure,  the
Executive's  termination  shall become  effective on the 16th day  following the
written notice.

            (j) "Stock" shall mean the common stock of the Company.

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            (k) "Termination  Date" shall mean in the case of either a voluntary
or involuntary  termination,  the last day upon which  Executive  works.  In the
event of the Executive's  death,  the Termination  Date is the date of death. In
the case of a  Disability,  the  Termination  Date is the date  upon  which  the
Executive  receives written notice from the Board that it has deemed him to have
a Disability,  but in no event before the Executive is determined to be disabled
(as the term is defined in Section 1(f)).

      2.  Term of  Employment.  The  Term of  Employment  ("Term"  or  "Term  of
Employment") shall begin on the Effective Date, and shall extend until the third
anniversary of the Effective Date.  Notwithstanding  the foregoing,  the Term of
Employment  may be earlier  terminated  by either Party in  accordance  with the
provisions of Section 10.

      3.    Position, Duties and Responsibilities.

            (a) Commencing on the Effective Date, Executive shall be employed as
the Chief Operating Officer of the Company ("COO").

            (b) Conditioned  upon his continued  employment and the satisfaction
of the Board with  Executive's  performance  and  development,  the Board  shall
appoint  Executive as the Chief  Executive  Officer  ("CEO") of the Company on a
date that is no later than 30 months after the Effective Date, such  appointment
to be effective no later than six (6) months  following  the date of the Board's
action.  If he is employed by the Company as of such date, but the Board has not
voted to  appoint  Executive  to be CEO on or before  the date that is 30 months
from the Effective Date,  Executive may terminate this Agreement and be entitled
to the same benefits due to him as a result of a voluntary termination with Good
Reason, as described in Section 10(d) of this Agreement. Upon his appointment as
CEO, in addition to his duties as COO, Executive shall assume responsibility for
the operational responsibilities of the outgoing chief executive officer, except
that for a period of twelve (12) months following such appointment the Company's
financial and legal  functions shall continue to report directly to the outgoing
chief  executive  officer  in  his  capacity  as  Chairman  of  the  Board  (the
"Chairman"),  thereafter  the Chairman shall transfer such direct line reporting
responsibility for these functions to the Executive.

            (c) The Executive,  in carrying out his duties under this Agreement,
shall report to the then current chief executive  officer of the Company and the
Board,  until such time as he is  appointed  CEO.  Thereafter,  Executive  shall
report directly to the Board.

            (d) In the event of a termination of employment of the Executive for
any reason,  the Executive shall immediately  resign as a member of the Board of
the Company and each of its subsidiaries.

            (e) The  parties  understand  and  agree  that if the  Executive  is
appointed CEO, the Executive and the Company will negotiate and enter into a new
Agreement,  and the terms of this Agreement with respect to compensation,  stock
options and  benefits  will no longer be  controlling;  provided  that,  without
limiting  in any way  the  foregoing  provision,  the  parties  agree  that  the

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negotiations contemplated herein shall specifically include negotiation over the
last clause of the last sentence of Section 3(b) above,  including the scope and
duration of the provision contained therein.

      4. Base Salary.  The Executive  shall be paid an  annualized  Base Salary,
payable in  accordance  with the regular  payroll  practices of the Company,  of
$500,000,  which  will be  increased  every  twelve  to  eighteen  months in the
discretion of the Board.

      5.  Annual  Cash  Incentive  Award.  During  the Term of  Employment,  the
Executive shall participate in the annual cash incentive program of the Company,
based  on  achievement  of  Board  established  performance  objectives,   which
objectives will be communicated to Executive.  If the Board determines that such
performance  objectives have been met,  Executive's target annual cash incentive
award will be 60% of Base Salary.  It is  specifically  acknowledged  and agreed
that any cash  incentive  award for 2000  shall be  awarded  without  respect to
Executive's  July  employment  commencement  date,  and shall be  awarded  on an
annualized salary basis.

      6.    Restricted Stock and Stock Option Awards.

            (a)  Restricted  Stock Awards.  On the Effective  Date,  the Company
shall grant the  Executive an award of 60,000  shares of Stock (the  "Restricted
Stock")  subject to a transfer  restriction  which  will lapse  while  Executive
remains  employed by the Company annually ratably over the three (3) year period
beginning with the first anniversary of the Effective Date. The Restricted Stock
will be granted in  accordance  with the terms and  conditions  of the Company's
Employees Equity Incentive Plan (the "Plan"). The Company and the Executive will
execute a restricted stock agreement  substantially in accordance with the terms
set forth in  Exhibit A to this  Agreement,  as soon as  reasonably  practicable
following the Effective Date.

            (b) Initial Stock Option Award.  On the Effective  Date, the Company
shall  grant to  Executive  a stock  option to  purchase  nine-hundred  thousand
(900,000)  shares of Stock (the "Initial Stock  Option").  The exercise price of
the Initial Stock Option shall be the average of the closing prices of the Stock
on the New York Stock Exchange for the six business days preceding the Effective
Date. The Initial Stock Option will be granted in accordance  with the terms and
conditions  of the Plan.  The Company  and the  Executive  will  execute a stock
option agreement substantially in accordance with the terms set forth in Exhibit
B to this Agreement,  as soon as reasonably  practicable following the Effective
Date.  The shares of Stock  issuable  upon  exercise of the Initial Stock Option
will be subject to a  repurchase  right in the  Company  which will lapse  while
Executive remains employed by the Company ratably on the first three anniversary
dates of the grant date. The options shall be exercisable  for a period of seven
(7) years from the grant date.  The Company shall use its best efforts to adjust
the Initial Stock Option to reflect the  distribution  to shareholders of shares
of Thermo  Fibertek Inc. and Thermo  Biomedical,  Inc.,  in accordance  with the
Emerging Issues Task Force,  Issue 90-9:  Changes to Fixed Employee Stock Option
Plans as a Result of a Restructuring, Example 3, Situation 1, as the same may be
in force and effect on the date of such distributions.

            (c) Subsequent  Stock Option Awards.  Conditioned upon his continued
employment  and the Executive  achieving  financial  and  strategic  performance

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objectives established by the Board, the then current chief executive officer of
the Company (if not  Executive)  and the  Executive,  the Company shall grant to
Executive stock options to purchase  two-hundred  thousand  (200,000)  shares of
Stock on each of the first, second and third anniversaries of the Effective Date
(the  "Subsequent  Stock  Options").  The exercise price of the Subsequent Stock
Options shall be the average of the closing  prices of the Stock on the New York
Stock  Exchange for the five business  days  preceding and including the date of
each grant.  The Subsequent Stock Options will be granted in accordance with the
terms and conditions of the Plan.  Each grant will be evidenced by the Company's
then standard  employee stock option  agreement,  which shall be executed by the
Executive  and the Company.  Each  Subsequent  Stock Option shall vest while the
Executive remains employed by the Company ratably on the first three anniversary
dates of each grant  date,  and shall be  exercisable  for a period of seven (7)
years from each grant date.

            (d)  Change in  Control.  If a Change in Control  occurs  during the
Term, then, effective upon the Change in Control, (a) each outstanding option to
purchase  shares of Stock of the Company held by the  Executive,  whether or not
issued under this Employment Agreement,  shall become immediately exercisable in
full and will no longer be subject to a right of  repurchase  by the Company and
(b) each outstanding  Restricted  Stock award held by the Executive,  whether or
not issued under this Agreement, shall be deemed to be fully vested.

      7. Employee Benefit Programs. During the Term of Employment, the Executive
shall be entitled to  participate  in all employee  pension and welfare  benefit
plans and programs made available to the Company's senior level executives or to
its employees generally, as such plans or programs may be in effect from time to
time, including, without limitation,  pension, profit sharing, savings and other
retirement plans or programs, medical, dental,  hospitalization,  short-term and
long-term   disability  and  life   insurance   plans,   accidental   death  and
dismemberment  protection,  travel accident insurance,  and any other pension or
retirement  plans or programs and any other  employee  welfare  benefit plans or
programs  that may be sponsored by the Company from time to time,  including any
plans that  supplement  the  above-listed  types of plans or  programs,  whether
funded or  unfunded.  In no way  limiting  the  foregoing,  during  the Term the
Company  will  maintain,  at its cost,  term life  insurance  on the life of the
Executive for the benefit of his beneficiaries with a face amount equal to three
million  dollars  ($3,000,000.).  The Executive  shall be entitled to four weeks
paid vacation per year of employment.

      8.  Perquisites.  During the Term of  Employment,  the Executive  shall be
entitled  to  participate  in all  of the  Company's  executive  perquisites  in
accordance  with the terms and conditions of such  arrangements as are in effect
from time to time for the Company's senior-level  executives,  including without
limitation, the Company's automobile reimbursement arrangement.

      9. Reimbursement of Business and Other Expenses.

      (a) The Executive is authorized to incur  reasonable  expenses in carrying
out his duties and  responsibilities  under this  Agreement  including,  without
limitation, reasonable legal fees incurred in the negotiation and preparation of

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this Agreement,  and the Company shall promptly reimburse him for such expenses,
subject to documentation in accordance with the Company's policy.

      (b) In  connection  with  establishing  a new  principal  residence in the
Boston area, the Company agrees to pay Executive  $300,000 which may be used, in
his discretion, to cover his relocation expenses or for such other purpose as he
deems  appropriate.  Executive shall be solely responsible for the tax treatment
of such payment,  including,  without limitation,  paying any applicable tax and
retaining  such  documentation  as may  be  necessary  to  support  any  claimed
deduction based on moving expense reimbursements.

      10.   Termination of Employment.

            (a)  Termination  Due to Death.  In the event  that the  Executive's
employment is terminated due to his death, his estate or his  beneficiaries,  as
the case may be, shall be entitled to the following benefits:

                  (i) the sum of (1) the  Executive's  base  salary  through the
Termination Date; (2) a bonus payment determined as follows:  the product of (x)
the annual bonus paid or payable  (including any bonus or portion  thereof which
has been earned but deferred) for the most  recently  completed  fiscal year and
(y) a  fraction,  the  numerator  of which is the number of days in the  current
fiscal year through the  Termination  Date, and the  denominator of which is 365
(the "Severance Bonus"); and (3) the amount of any cash compensation  previously
deferred  by the  Executive  (together  with any  accrued  interest  or earnings
thereon) and any accrued vacation pay through the Termination Date, in each case
to the extent not previously  paid (the sum of the amounts  described in clauses
(1),   (2),  and  (3)  shall  be   hereinafter   referred  to  as  the  "Accrued
Obligations"); and

                  (ii) the Initial and  Subsequent  Stock Options (to the extent
previously granted), including previously exercised Initial and Subsequent Stock
Options,  shall  become  fully  vested  and no  longer  subject  to a  right  of
repurchase by the Company;  all outstanding Initial and Subsequent Stock Options
shall remain  exercisable  until two years from the Termination  Date (but in no
event beyond the end of each such option's Exercise Period); and

                  (iii)  the  transfer  restrictions  on  the  Restricted  Stock
granted pursuant to Section 6 shall lapse.

            (b) Termination Due to Disability. In the event that the Executive's
employment  is  terminated  by either party due to his  Disability,  he shall be
entitled to the following benefits:

                  (i)  disability  benefits  in  accordance  with the  long-term
disability ("LTD") program then in effect for senior executives of the Company;

                  (ii)  Base  salary  through  the  end of the  LTD  elimination
period;

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                  (iii)  The  greater  of a  Severance  Bonus (as  described  in
Section  10(a)(i))  or six  month's  Base  Salary,  and the  amount  of any cash
compensation  previously  deferred by the Executive  (together  with any accrued
interest  or  earnings  thereon)  and  any  accrued  vacation  pay  through  the
Termination Date, in each case to the extent not previously paid;

                  (iv) the Initial and  Subsequent  Stock Options (to the extent
previously granted), including previously exercised Initial and Subsequent Stock
Options,  shall  become  fully  vested  and no  longer  subject  to a  right  of
repurchase by the Company;  all outstanding Initial and Subsequent Stock Options
shall remain  exercisable  until two years from the Termination  Date (but in no
event beyond the end of each such option's Exercise Period); and

                  (v) the transfer  restrictions on the Restricted Stock granted
pursuant to Section 6 shall lapse.

                  (vi)  the   Executive   shall   be   entitled   to   continued
participation at Company expense in all medical and dental insurance coverage in
which he was  participating on the date of his termination  until the earlier of
(x) 18 months  following the date of termination  and (y) the date, or dates, he
receives  equivalent  coverage  and  benefits  under the plans and programs of a
subsequent employer.

      In no  event  shall  a  termination  of  the  Executive's  employment  for
Disability occur until the Party terminating his employment gives written notice
to the other Party in accordance  with Section 24 below,  and until Executive is
determined to be disabled as defined in Section 1(f).

            (c)  Termination by the Company for Cause.  In the event the Company
terminates the Executive's employment for Cause:

                  (i) he shall be  entitled  to a  payment  of base  salary  and
accrued vacation pay through the Termination Date;

                  (ii) no further lapsing of the Company's repurchase right, and
no further vesting, shall occur and Executive shall have 90 days to exercise all
vested and outstanding Initial and Subsequent Stock Options; and

                  (iii) all Restricted Stock granted under Section 6 as to which
transfer restrictions have not lapsed shall be forfeited.

            (d) Termination  without Cause or for Good Reason.  In the event the
Executive's  employment  is  terminated  by the Company  without Cause or by the
Executive  with Good  Reason  (but not in any  event as a result of  Disability,
death, or as the result of a termination with Cause or without Good Reason), the
Executive shall be entitled to the following:

                  (i) the Company  shall pay to the  Executive in equal  monthly
installments,  for a  thirty-six  month  period,  beginning  30 days  after  the
Termination Date the aggregate of the following amounts:

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                        (A)   the sum of the Accrued Obligations; and

                        (B) an amount equal to 4.8 times the Executive's
then current base salary.

                  (ii) for three  years  after  the  Termination  Date,  or such
longer period as may be provided by the term of the appropriate  plan,  program,
practice or policy,  the Company  shall  continue to provide  medical and dental
benefits to the  Executive  and the  Executive's  family at least equal to those
which would have been  provided to them if the  Executive's  employment  had not
been  terminated,  in accordance with the applicable  medical and dental benefit
plans in effect on the Termination  Date and in which Executive  participated as
of such date or, if more  favorable to the Executive  and his family,  in effect
generally at any time  thereafter  with respect to other peer  executives of the
Company and its affiliated companies;  provided,  however, that if the Executive
becomes  reemployed with another employer and is eligible to receive medical and
dental  benefits  from  such  employer  on terms at  least as  favorable  to the
Executive  and his  family as those  being  provided  by the  Company,  then the
Company shall no longer be required to provide those particular  benefits to the
Executive and his family;

                  (iii) to the  extent  not  previously  paid or  provided,  the
Company  shall  timely  pay or  provide to the  Executive  any other  amounts or
benefits  required to be paid or provided or which the  Executive is eligible to
receive  following the  Executive's  termination  of employment  under any plan,
program,  policy,  practice,  contract  or  agreement  of the  Company  and  its
affiliated  companies  (such other  amounts and  benefits  shall be  hereinafter
referred to as the "Other Benefits"); and

                  (v) transfer  restrictions shall lapse on all Restricted Stock
and the Initial and Subsequent Stock Options (to the extent previously granted),
including  previously  exercised Initial and Subsequent Stock Options,  shall be
fully vested and no longer subject to a right of repurchase by the Company;  all
outstanding  Initial and Subsequent Stock Options shall remain exercisable until
two years from the Termination Date (but in no event beyond the end of each such
option's Exercise Period); and

                  (vi) the restrictions on the Restricted Stock granted pursuant
to Section 6 shall lapse.

            (e)  Voluntary  Termination.  A  termination  of  employment  by the
Executive  on his own  initiative,  other  than a  termination  due to  death or
Disability  or Good  Reason,  shall have the same  consequences  as  provided in
Section 10(c) for a termination  for Cause. A voluntary  termination  under this
Section  10(e)  shall be  effective  upon 30 days  prior  written  notice to the
Company.

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            (f)   Taxes.

                  (i) In the event  that the  Company  undergoes  a  "Change  in
Ownership or Control" (as defined below), and thereafter,  the Executive becomes
eligible to receive  "Contingent  Compensation  Payments" (as defined below) the
Company shall, as soon as administratively  feasible after the Executive becomes
so eligible determine and notify the Executive (with reasonable detail regarding
the basis for its  determinations)  (A) which of the payments or benefits due to
the  Executive   following  such  Change  in  Ownership  or  Control  constitute
Contingent Compensation Payments, (B) the amount, if any, of the excise tax (the
"Excise Tax") payable  pursuant to Section 4999 of the Internal  Revenue Code of
1986, as amended (the "Code"),  by the Executive with respect to such Contingent
Compensation  Payment and (C) the amount of the  "Gross-Up  Payment" (as defined
below)  due to the  Executive  with  respect  to  such  Contingent  Compensation
Payment.  Within 30 days after  delivery  of such notice to the  Executive,  the
Executive  shall  deliver a response to the Company (the  "Executive  Response")
stating either (1) that he agrees with the Company's  determination  pursuant to
the  preceding  sentence or (2) that he disagrees  with such  determination,  in
which  case  he  shall  indicate  which  payment  and/or   benefits   should  be
characterized as a Contingent Compensation Payment, the amount of the Excise Tax
with  respect  to such  Contingent  Compensation  Payment  and the amount of the
Gross-Up   Payment  due  to  the  Executive  with  respect  to  such  Contingent
Compensation  Payment. If the Executive states in the Executive Response that he
agrees with the  Company's  determination,  the Company  shall make the Gross-Up
Payment to the Executive  within three business days  following  delivery to the
Company of the  Executive  Response.  If the  Executive  states in the Executive
Response that he disagrees with the Company's determination,  then, for a period
of 15 days following delivery of the Executive  Response,  the Executive and the
Company shall use good faith efforts to resolve such dispute. If such dispute is
not  resolved  within  such  15-day  period,  such  dispute  shall be settled by
arbitration in accordance with Section 13 below. The Company shall, within three
business days following delivery to the Company of the Executive Response,  make
to the Executive those Gross-Up Payments as to which there is no dispute between
the Company and the Executive regarding whether they should be made. The balance
of the Gross-Up  Payments shall be made within three business days following the
resolution  of  such  dispute.  The  amount  of any  payments  to be made to the
Executive  following  the  resolution  of such dispute shall be increased by the
amount of the accrued interest thereon computed at the prime rate announced from
time to time by The Wall Street  Journal  compounded  monthly from the date that
such  payments  originally  were due. In the event that the  Executive  fails to
deliver an Executive  Response on or before the  required  date,  the  Company's
initial determination shall be final.

                  (ii) For purposes of this Section 10(f),  the following  terms
shall have the following respective meanings:

                        (A)   "Change in Ownership or Control" shall mean a
change in the ownership or effective  control of the Company or in the ownership
of a substantial  portion of the assets of the Company  determined in accordance
with Section 280G(b)(2) of the Code.

                        (B) "Contingent Compensation Payment" shall mean
 any payment (or benefit) in the nature of compensation that is made or supplied
 to a "disqualified  individual" (as defined in Section 280G(c) of the Code) and

                                       10
<PAGE>

 that is contingent (within the meaning of Section 280G(b)(2)(A)(i) of the Code)
 on a Change in Ownership or Control of the Company.

                        (C) "Gross-Up Payment" shall mean an amount equal
 to the sum of (i) the  amount of the  Excise  Tax  payable  with  respect  to a
 Contingent  Compensation  Payment  and (ii)  the  amount  necessary  to pay all
 additional taxes imposed on (or economically borne by) the Executive (including
 the Excise Taxes, state and federal income taxes and all applicable withholding
 taxes)  attributable to the receipt of such Gross-Up  Payment.  For purposes of
 the preceding  sentence,  all taxes attributable to the receipt of the Gross-Up
 Payment  shall be computed  assuming the  application  of the maximum tax rates
 provided by law.

            (g) Outplacement  Services. In the event the Executive's  employment
terminates  in  accordance  with  Section  10(d),   the  Company  shall  provide
outplacement  services  through  one or more  outside  firms of the  Executive's
choosing up to an aggregate of $50,000,  with such  services to extend until the
earlier of (i) 12 months following the termination of Executive's  employment or
(ii) the date the Executive secures full time employment.

            (h) Nature of Payments. Any amounts due under this Section 10 are in
the nature of severance payments  considered to be reasonable by the Company and
are not in the nature of a penalty.

            (i) No Mitigation; No Offset. The Executive shall not be required to
mitigate  the amount of any payment or benefit  provided  in this  Section 10 by
seeking  other  employment  otherwise.  Further,  except as provided in Sections
10(b) (vi) and 10 (d) (ii),  the amount of any payment or benefits  provided for
in this  Section  10 shall  not be  reduced  by any  compensation  earned by the
Executive  as a result of  employment  by another  employer  or be offset by any
amount claimed to be owed by the Executive to the Company.

      11. Confidentiality & Assignment of Inventions.

            (a) The  Executive  shall  execute and deliver to the Company on the
Effective Date the Company's standard employee confidentiality and assignment of
inventions agreement, substantially in the form set forth in Exhibit C, attached
and incorporated herein.

            (b)  Upon  the  termination  of  the  Executive's  employment,   the
Executive   (or  in  the  event  of  his   death,   the   Executive's   personal
representative)  shall  promptly  surrender  to the Company the original and all
copies of any materials containing confidential information of the Company which
are then in the  Executive's  possession  or  control,  provided,  however,  the
Executive shall not be required to surrender his rolodexes, personal diaries and
other items of a personal nature.

                                       11
<PAGE>

      12 .  Noncompetition; Nonsolicitation.

            (a)  The  Executive  acknowledges  (i)  that  in the  course  of his
employment  with the  Company he will  become  familiar  with trade  secrets and
customer lists of, and other confidential  information  concerning,  the Company
and its Affiliates, customers, and clients and (ii) that his services will be of
special, unique and extraordinary value to the Company.

            (b) The Executive  agrees that during the Term of Employment and for
a  period  of  one  year   following  his   termination   of   employment   (the
"Noncompetition  Period")  he shall not in any manner,  directly or  indirectly,
through any person, firm,  corporation or enterprise,  alone or as a member of a
partnership or as an officer, director, stockholder,  investor or employee of or
advisor  or  consultant  to any  person,  firm,  corporation  or  enterprise  or
otherwise,  engage or be engaged, or assist any other person, firm,  corporation
or  enterprise  in  engaging  or  being  engaged   (collectively,   ("Restricted
Activity")),  in any Competitive  Activity.  A Competitive Activity shall mean a
business that (i) is being conducted by the Company or any Affiliate at the time
in question and (ii) was being conducted,  or was under active  consideration to
be conducted, by the Company or any Affiliate, at the date of the termination of
the Executive's employment, provided that Competitive Activity shall not include
a business of the Company  contributing  less than 1% of the Company's  revenues
for the year in question  and  provided  further  that an activity  shall not be
deemed to be a Competitive  Activity if the activity contributes less than 1% of
the revenues for the year in question of the business by which the  Executive is
employed or with which he is otherwise associated;  and provided further that it
is agreed and  understood  that the  prohibitions  provided  for in this Section
12(b) shall not restrict Executive from engaging in Restricted  Activity for any
subsidiary,  division or affiliate or unit of a company (collectively a "Related
Entity")  if  that  Related  Entity  is not  engaged  in  Competitive  Activity,
irrespective  of whether some other  Related  Entity of that company  engages in
what would  otherwise  be  considered  to be  Competitive  Activity  (as long as
Executive does not engage in Restricted Activity for such other Related Entity).

            (c) The  Executive  further  agrees that  during the  Noncompetition
Period he shall not (i) in any manner, directly or indirectly,  hire or cause to
be hired any employee of or advisor or  consultant  to the Company or any of its
Affiliates any purpose or in any capacity whatsoever, or (ii) in connection with
any  business to which  Section  12(b)  applies,  call on,  service,  solicit or
otherwise do business with any customer of the Company or any of its Affiliates;
provided,  however, that the restriction contained in clause (i) of this Section
12(c)  shall not apply to, or  interfere  with,  the proper  performance  by the
Executive of his duties and responsibilities under Section 3 of this Agreement.

            (d) Nothing in this  Section 12 shall  prohibit the  Executive  from
being a passive  owner of not more than one  percent of the  outstanding  common
stock,  capital stock and equity of any firm,  corporation or enterprise so long
as the Executive has no active  participation  in the  management of business of
such firm, corporation or enterprise.

            (e) If the  restrictions  stated  herein  are found by a court to be
unreasonable,  the  parties  hereto  agree  that the  maximum  period,  scope or
geographical area reasonable under such  circumstances  shall be substituted for

                                       12
<PAGE>

the  stated  period,  scope  or  area  and  that  the  court  shall  revise  the
restrictions  contained  herein  to cover  the  maximum  period,  scope and area
permitted by law.

      13.  Resolution of Disputes.  Any disputes  arising under or in connection
with this  Agreement  shall be  resolved by binding  arbitration,  to be held in
Boston,  Massachusetts,  in  accordance  with the  rules and  procedures  of the
American  Arbitration  Association.  Judgment  upon the  award  rendered  by the
arbitrator(s) may be entered in any court having jurisdiction thereof.  Costs of
the  mediation,   arbitration  or  litigation  including,   without  limitation,
reasonable attorneys' fees of both parties, shall be borne by the Company.

      14.  Remedies.  Each of the parties to this Agreement shall be entitled to
enforce its rights under this  Agreement  specifically,  to recover  damages and
costs  (including  reasonable  attorney's  fees)  caused  by any  breach  of any
provision of this  Agreement  and to exercise  all other rights  existing in its
favor.  The parties hereto agree and acknowledge that money damages would not be
an adequate  remedy for any breach of the  provisions of this Agreement and that
any  party  may in its sole  discretion  apply to any  court of law or equity of
competent  jurisdiction  (without  posting  any bond or  deposit)  for  specific
performance  and/or other  injunctive  relief in order to enforce or prevent any
violations of the  provisions of this  Agreement.  Nothing in this  paragraph is
intended to prevent the parties from  raising any and all defenses  with respect
to the necessity for, and scope of, such injunctive or equitable relief.

      15 .  Liability  Insurance.  The Company  agrees to obtain,  continue  and
maintain a directors'  and officers'  liability  insurance  policy  covering the
Executive to the extent the Company  provides such coverage for its other senior
executives.  The parties have entered into an indemnification  agreement on July
11, 2000 (attached and incorporated herein as Exhibit D).

      16.  Assignability;  Binding Nature.  This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective  successors,  heirs
(in the case of the  Executive).  and  assigns.  Rights  or  obligations  of the
Company  under this  Agreement  may be  assigned or  transferred  by the Company
pursuant to a merger or consolidation in which the Company is not the continuing
entity,  or the sale or liquidation of all or substantially all of the assets of
the Company, provided that the assignee or transferee is the successor to all or
substantially  all of the assets of the Company and such  assignee or transferee
assumes the liabilities,  obligations and duties of the Company, as contained in
this Agreement,  either contractually or as a matter of law. The Company further
agrees that, in the event of a sale of assets or liquidation as described in the
preceding sentence,  it shall take whatever action it reasonably can in order to
cause  such  assignee  or  transferee  to  expressly   assume  the  liabilities,
obligations and duties of the Company hereunder. No rights or obligations of the
Executive  under this  Agreement may be assigned or transferred by the Executive
other than his rights to  compensation  and benefits,  which may be  transferred
only by will or operation of law.

      17.   Representations.

            (a) The Company  represents and warrants that it is fully authorized
and  empowered  to enter into this  Agreement  and that the  performance  of its
obligations  under this Agreement will not violate any agreement  between it and
any other person, firm or organization.  The Executive  represents that he knows

                                       13
<PAGE>

of no agreement  between him and any other  person,  firm or  organization  that
would be violated by the performance of his obligations under this Agreement.

            (b) Executive  hereby represent and warrants that he is not bound by
the terms of any agreement with any previous  employer or other party to refrain
from  competing,  directly or  indirectly,  with the  business of such  previous
employer or any other party.  Executive  further  represents  and warrants  that
Executive's performance of all the terms of this Agreement and as an employee of
the Company  does not and will not breach any  agreement  to keep in  confidence
proprietary  information,  knowledge or data acquired by Executive in confidence
or in trust prior to Executive's employment with the Company. Executive will not
disclose  to the  Company  or induce  the  Company  to use any  confidential  or
proprietary  information  or  material  belonging  to any  previous  employer or
others.  Executive will not hereafter grant anyone any rights  inconsistent with
the terms of this Agreement.

      18. Entire Agreement. This Agreement contains the entire understanding and
agreement  between  the  Parties   concerning  the  subject  matter  hereof  and
supersedes all prior agreements,  understandings,  discussions, negotiations and
undertakings, whether written or oral, between the Parties with respect thereto.
This is an integrated document.

      19.  Amendment or Waiver.  No provision in this  Agreement  may be amended
unless such amendment is agreed to in writing and signed by the Executive and an
authorized  officer of the  Company.  No waiver by either Party of any breach by
the other Party of any condition or provision  contained in this Agreement to be
performed  by such  other  Party  shall  be  deemed  a waiver  of a  similar  or
dissimilar  condition or provision at the same or any prior or subsequent  time.
Any waiver  must be in  writing  and signed by the  Executive  or an  authorized
officer of the Company, as the case may be.

      20.  Severability.  In the event  that any  provision  or  portion of this
Agreement shall be determined to be invalid or unenforceable  for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby  and  shall  remain  in full  force and  effect  to the  fullest  extent
permitted by law so as to achieve the purposes of this Agreement.

      21.  Survivorship.  Except  as  otherwise  expressly  set  forth  in  this
Agreement,  the respective rights and obligations of the Parties hereunder shall
survive any termination of the Executive's employment. This Agreement itself (as
distinguished  from the Executive's  employment) may not be terminated by either
Party without the written consent of the other Party.

      22.  References.  In the  event of the  Executive's  death  or a  judicial
determination of his incompetence,  reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative.

      23.  Governing  Law/Jurisdiction.  This  Agreement  shall be  governed  in
accordance  with the laws of  Massachusetts  without  reference to principles of
conflict of laws.

                                       14
<PAGE>

      24. Notices.  All notices and other  communications  required or permitted
hereunder  shall be in  writing  and shall be deemed  given  when (a)  delivered
personally,  (b) sent by certified or registered mail,  postage prepaid,  return
receipt requested or (c) delivered by overnight courier (provided that a written
acknowledgment  of receipt is  obtained by the  overnight  courier) to the Party
concerned  at the address  indicated  below or to such  changed  address as such
Party may subsequently give such notice of:

If to the Company:                        Thermo Electron Corporation
                                          81 Wyman Street
                                          Waltham, MA 02254

                                          Attention:  Vice President and
                                          General Counsel

                                          Copy: Chairman, Human Resources
                                                Committee of the Board of
                                                Directors

if to the Executive:                      Marijn Dekkers
                                          c/o Thermo Electron Corporation
                                          81 Wyman Street
                                          Waltham, MA 02254

      25. Headings. The headings of the sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.

      26.  Counterparts.   This  Agreement  may  be  executed  in  two  or  more
counterparts.

      IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.

                                        THERMO ELECTRON CORPORATION

                                        By:  /s/ Seth Hoogasian
                                             -----------------------------------
                                             Seth Hoogasian
                                             Vice-President and General Counsel

                                             /s/ Marijn Dekkers
                                             -----------------------------------
                                             Marijn Dekkers

                                       15
<PAGE>

                                                                       EXHIBIT A
                                                                       ---------
      Grant ID # 197-
      3 yr 1/3/ Employees Equity Plan

                           THERMO ELECTRON CORPORATION

                      2000 EMPLOYEES EQUITY INCENTIVE PLAN

                           RESTRICTED STOCK AGREEMENT

                                MARIJN E. DEKKERS
                                Name of Recipient

                                    60,000
                         Number of Restricted Shares of
                              Common Stock Awarded

               Vesting Schedule for Restricted Shares Awarded:
                  # of Shares                   Vesting Date
                  -----------                   ------------
                  20,000                        July 11, 2001
                  20,000                        July 11, 2002
                  20,000                        July 11, 2003

                                  JULY 11, 2000
                                   Award Date

      Thermo  Electron  Corporation  (the "Company") has selected you to receive
the restricted  stock award identified  above,  subject to the provisions of the
Plan and the terms, conditions and restrictions contained in this agreement (the
"Agreement").  Please confirm your  acceptance of this Award,  your agreement to
the terms of the Plan and this  Agreement,  your  receipt of a copy of the Plan,
and your  receipt  of a  memorandum  regarding  the tax  treatment  of awards of
restricted stock, by signing both copies of this Agreement.  You should keep one
copy for your  records and return the other copy  promptly  to the Stock  Option
Manager of the Company, c/o Thermo Electron  Corporation,  81 Wyman Street, Post
Office Box 9046, Waltham, Massachusetts 02454-9046.

                                    THERMO ELECTRON CORPORATION

                                    By: /s/ Anne Pol
                                        -------------------------------------
                                        Anne Pol
                                        Senior   Vice    President,    Human
                                        Resources

Accepted and Agreed:

/s/ Marijn E. Dekkers
---------------------------
Recipient

<PAGE>

                           THERMO ELECTRON CORPORATION

                      2000 EMPLOYEES EQUITY INCENTIVE PLAN

                           Restricted Stock Agreement

1.   Preamble. This Restricted Stock Agreement contains the terms and conditions
     of an award of shares of restricted  stock of the Company (the  "Restricted
     Shares")  made  to the  Recipient  identified  on the  first  page  of this
     Agreement  pursuant to the Plan. The Restricted Shares shall be issued from
     treasury shares held by the Company.

2.   Restrictions  on  Transfer.  The  Restricted  Shares  shall  not  be  sold,
     transferred,  pledged,  assigned  or  otherwise  encumbered  or disposed of
     except as provided  below and in the Plan,  until and unless the Restricted
     Shares shall have vested as provided in Paragraph 3 below.

3.   Vesting. The term "vest" as used in this Agreement means the lapsing of the
     restrictions  that are  described  in this  Agreement  with  respect to the
     Restricted  Shares. The Restricted Shares shall vest in accordance with the
     schedule  set forth on the first page of this  Agreement,  provided in each
     case that the Recipient is then, and since the Award Date has  continuously
     been,  employed by the  Company or its  subsidiaries.  Notwithstanding  the
     foregoing, the Recipient shall become fully vested in the Restricted Shares
     prior to the vesting dates set forth on the first page of this Agreement in
     the following circumstances:

     (a)  In the event of a Change of Control,  as defined in in Section 1(e) of
          the Employment  Agreement dated as of July 11, 2000 by and between the
          Recipient and the Company (the "Employment  Agreement"),  as in effect
          on the date of this  Agreement,  all  Restricted  Shares that have not
          previously been forfeited shall  immediately  vest,  provided that the
          Recipient  is then  employed by the Company or its  subsidiaries.  The
          references to the  Employment  Agreement in this  Agreement  shall not
          govern or be  applicable to any other stock option  agreement  between
          the Recipient and the Company,  unless  specifically so stated in such
          other agreement.

     (b)  In the event of the  Recipient's  death or disability,  all Restricted
          Shares that have not previously been forfeited shall immediately vest,
          provided  that  the  Recipient  was  employed  by the  Company  or its
          subsidiaries  immediately  prior to the  date of death or  disability.
          "Disability"  shall have the same  meaning  for the  purposes  of this
          Agreement as set forth in Section 1(f) of the Employment Agreement.

     (c)  In the event the  Recipient's  employment is terminated by the Company
          without Cause,  or by the Recipient  with Good Reason,  all Restricted
          Shares that have not previously been forfeited shall immediately vest.
          "Cause" shall have the same meaning for the purposes of this Agreement
          as set  forth  in  Section  1(d) of the  Employment  Agreement.  "Good
          Reason" shall have the same meaning for the purposes of this Agreement
          as set forth in Section 1(i) of the Employment Agreement.

                                       2
<PAGE>

4.   Forfeiture.  In the event the Company terminates the Recipient's employment
     for Cause (as defined in Section 1(d) of the Employment  Agreement),  or in
     the event of a termination  by the Recipient on his own  initiative,  other
     than a termination due to death,  Disability or Good Reason, the Restricted
     Shares,  less any Restricted Shares that have previously  vested,  shall be
     immediately forfeited to the Company.  "Disability" and "Good Reason" shall
     have the same  meanings  for  purposes  of this  Agreement  as set forth in
     Sections 1(f) and 1(i), respectively, of the Employment Agreement.

5.   Dividends and Voting Rights. The Recipient shall be entitled to any and all
     dividends or other distributions paid with respect to the Restricted Shares
     which  have  not been  forfeited  or  otherwise  disposed  of and  shall be
     entitled to vote any such Restricted  Shares;  provided  however,  that any
     property (other than cash)  distributed with respect to Restricted  Shares,
     including  without  limitation a  distribution  of shares of the  Company's
     stock  by  reason  of a stock  dividend,  stock  split or  otherwise,  or a
     distribution  of other  securities  based on the  ownership  of  Restricted
     Shares,  shall be  subject to the  restrictions  of this  Restricted  Stock
     Agreement  in the  same  manner  and for so long as the  Restricted  Shares
     remain subject to such restrictions, and shall be promptly forfeited to the
     Company if and when the Restricted Shares are so forfeited.

6.   Certificates.  (a) Legended  Certificates.  The  Recipient is executing and
     delivering  to the Company  blank  stock  powers to be used in the event of
     forfeiture.  Any certificates representing unvested Restricted Shares shall
     be held by the  Company,  and any  such  certificate  (and,  to the  extent
     determined  by the  Company,  any other  evidence of  ownership of unvested
     Restricted Shares) shall contain the following legend:

     THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED
     HEREBY ARE SUBJECT TO THE TERMS AND  CONDITIONS  (INCLUDING  FORFEITURE) OF
     THE  ISSUER'S  EMPLOYEES  EQUITY  INCENTIVE  PLAN  AND A  RESTRICTED  STOCK
     AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND THE ISSUER.  COPIES
     OF SUCH PLAN AND AGREEMENT ARE ON FILE IN THE OFFICES OF THE ISSUER.

     (b)  Book Entry. If unvested Restricted Shares are held in book entry form,
          the  Recipient   agrees  that  the  Company  may  give  stop  transfer
          instructions   to  the  depository  to  ensure   compliance  with  the
          provisions of this Agreement.  The Recipient  hereby (i)  acknowledges
          that the Restricted Shares may be held in book entry form on the books
          of the Company's  depository (or another institution  specified by the
          Company),  and irrevocably authorizes the Company to take such actions
          as may be necessary  or  appropriate  to  effectuate a transfer of the
          record  ownership of any such shares that are  unvested and  forfeited
          hereunder, (ii) agrees to deliver to the Company, as a precondition to
          the  issuance  of any  certificate  or  certificates  with  respect to
          unvested  Restricted  Shares,  one or more stock  powers,  endorsed in
          blank,  with  respect to such  shares,  and (iii)  agrees to sign such
          other powers and take such other actions as the Company may reasonably
          request to  accomplish  the  transfer or  forfeiture  of any  unvested
          Restricted Shares that are forfeited hereunder.

                                       3
<PAGE>

7.   Unrestricted  Shares.  As soon as practicable  following the vesting of any
     Restricted  Shares the Company  shall cause a certificate  or  certificates
     covering such shares, without the legend contained in Paragraph 6(a), to be
     issued  and  delivered  to the  Recipient,  subject  to the  payment by the
     Recipient by cash or other means  acceptable to the Company of any federal,
     state,  local  and  other  applicable  taxes  required  to be  withheld  in
     connection  with  such  vesting.  The  Recipient  understands  that  once a
     certificate  has been  delivered to the  Recipient in respect of Restricted
     Shares which have vested,  the Recipient will be free to sell the shares of
     common  stock  evidenced  by  such   certificate,   subject  to  applicable
     requirements of federal and state securities laws.

8.   Tax Withholding.  The Recipient  expressly  acknowledges  that the award or
     vesting  of the  Restricted  Shares  will give rise to  "wages"  subject to
     withholding.  The  Recipient  expressly  acknowledges  and agrees  that the
     Recipient's  rights hereunder are subject to the Recipient's  paying to the
     Company in cash (or by such other means as may be acceptable to the Company
     in its  discretion,  including,  if the  Committee  so  determines,  by the
     delivery of previously acquired shares of common stock of the Company or by
     having the Company hold back from the shares to be delivered, shares of the
     Company's common stock having a value calculated to satisfy the withholding
     requirement)  all  federal,  state,  local and any other  applicable  taxes
     required to be withheld in  connection  with such award or vesting.  If the
     withholding  obligation  is not satisfied by the  Recipient  promptly,  the
     Company may, without further consent from the Recipient,  have the right to
     deduct  such  taxes  from  any  payment  of any kind  otherwise  due to the
     Recipient,  including  but not limited to, the hold back from the shares to
     be  delivered  pursuant  to Section 7 of this  Agreement  of that number of
     shares calculated to satisfy all federal,  state, local or other applicable
     taxes required to be withheld in connection with such award or vesting.

9.   Administration.  The  Board  of  Directors  of the  Company,  or the  Human
     Resources Committee of the Board of Directors or other committee designated
     in the Plan,  shall have the  authority to manage and control the operation
     and  administration of this Agreement.  Any interpretation of the Agreement
     by the  Committee and any decision made by it with respect to the Agreement
     is final and binding.

10.  Plan  Definitions.  Notwithstanding  anything  in  this  Agreement  to  the
     contrary,  the terms of this Agreement shall be subject to the terms of the
     Plan, a copy of which has already been provided to the Recipient.

11.  Amendment.  This Agreement may be amended only by written agreement between
     the Recipient and the Company, without the consent of any other person.

                                       4

<PAGE>

                                                                       EXHIBIT B
Grant ID # 197-
[A/5]
                           THERMO ELECTRON CORPORATION

                      2000 EMPLOYEES EQUITY INCENTIVE PLAN

                             STOCK OPTION AGREEMENT

                                MARIJN E. DEKKERS
                                    Optionee

900,000                                                          $22.67
Number of Shares of                                              Exercise Price
Common Stock Subject                                             Per Share
to the Option

JULY 11, 2000                                                    JULY 11, 2007
Grant Date                                                       Expiration Date

      Thermo  Electron  Corporation  (the  "Company") has granted you the option
(the  "Option")  to acquire  the number of shares of common  stock (the  "Common
Stock"),  of the Company specified above,  subject to the provisions of the Plan
and the terms,  conditions  and  restrictions  contained in this  agreement (the
"Agreement").  Please confirm your acceptance of this Option,  your agreement to
the terms of the Plan and this Agreement and your receipt of a copy of the Plan,
by signing  both  copies of this  Agreement.  You should  keep one copy for your
records and return the other copy  promptly to the Stock  Option  Manager of the
Company, c/o Thermo Electron Corporation, 81 Wyman Street, Post Office Box 9046,
Waltham, Massachusetts 02454-9046.

                                    THERMO ELECTRON CORPORATION

                                    By:  /s/ Anne Pol
                                         --------------------------------------
                                         Anne Pol
                                         Senior Vice President, Human Resources

Accepted and Agreed:

/s/ Marijn E. Dekkers
---------------------------------
Optionee

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                           THERMO ELECTRON CORPORATION

                      2000 EMPLOYEES EQUITY INCENTIVE PLAN

                             Stock Option Agreement

      Preamble. This Stock Option Agreement (the "Agreement") contains the terms
and conditions of a grant of a nonqualified  stock option to purchase the shares
of the common stock of the Company (the  "Option  Shares")  made to the Optionee
identified on the first page of this Agreement pursuant to the Plan. Attached is
a copy of the Plan which is incorporated in this Agreement by reference and made
a part hereof.  This Option is intended to be a  non-statutory  stock option and
not a "qualified",  "incentive",  or "employee stock purchase plan" stock option
as those  terms may be defined in  Sections  422 and 423,  respectively,  of the
Internal Revenue Code of 1986, as amended.

       1. Termination of Option. The date on which the Option shall terminate in
whole or in part as provided in this Section 1 is hereinafter referred to as the
"Option  Termination Date". This Option shall terminate on the date which is the
earliest of:

      (a)  the  Expiration  Date of the  Option  set  forth  on page 1 of this
Agreement;

      (b) two years  after the date on which you cease to be an  employee of the
Company or or a subsidiary of the Company (the "Employment Termination Date") if
your  employment  terminates  for any reason other than the reason  specified in
Section 1(c);

      (c) 90 days after your Employment  Termination Date (as defined in Section
1(b)  of this  Agreement)  if  your  employment  terminates  by  reason  of your
termination  for Cause by the Company or you terminate  your  employment on your
own initiative,  other than a termination due to your death,  Disability or Good
Reason. "Cause", "Disability" and "Good Reason" shall have the same meanings for
the  purposes of this  Agreement as set forth in Sections  1(d),  1(f) and 1(i),
respectively,  of the  Employment  Agreement  dated as of July  11,  2000 by and
between you and the Company (the  "Employment  Agreement"),  as in effect on the
date of this  Agreement,(the  references  to the  Employment  Agreement  in this
Agreement shall not govern or be applicable to any other stock option  agreement
between the Recipient  and the Company,  unless  specifically  so stated in such
other agreement); or

      (d) the date of the dissolution or liquidation of the Company.

       2.   Transfer Restrictions and Company Repurchase Option.

            (a) Option Shares may not,  without the prior written consent of the
Company,  be sold,  assigned,  transferred,  pledged,  hypothecated or otherwise
disposed  of,  except  by  will  or  by  the  applicable  laws  of  descent  and
distribution  (the  "Transfer  Restrictions")  unless  and  until  the  Transfer
Restrictions  with  respect to such Option  Shares shall have lapsed as provided
herein.  The  Transfer  Restrictions  shall  lapse in their  entirety:  (i) with
respect to one-third of the number of Option Shares  specified on the first page
of this  Agreement  at the close of  business  on each of the first,  second and

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third  anniversaries  of the Grant  Date  that  occur  prior to your  Employment
Termination  Date and (ii) with respect to all of the Option Shares specified on
the first page of this Agreement in the event of your death, your disability (as
defined  in Section  1(f) of the  Employment  Agreement),  your  termination  of
employment  by the  Company  without  Cause (as  defined in Section  1(d) of the
Employment  Agreement) or by you with Good Reason (as defined in Section 1(i) of
the Employment Agreement), or a Change of Control (as defined in Section 1(e) of
the Employment  Agreement).  From and after your Employment Termination Date, no
further lapsing of the Transfer  Restrictions  shall occur and you shall forfeit
any  rights to and  interests  in the  Option  Shares  as to which the  Transfer
Restrictions shall not have lapsed.The Company shall have the right, exercisable
in accordance with Section 2(b) hereof,  to repurchase all or any portion of the
Option Shares purchased by you upon exercise of the Option with respect to which
the Transfer  Restrictions  shall not have lapsed, at a price per share equal to
the Exercise Price  specified on the first page of this Agreement (the "Exercise
Price").  The right of the Company to  repurchase  Option Shares at the Exercise
Price  as  provided  in this  Section  2(a) is  hereinafter  referred  to as the
"Company Repurchase Option".

            (b) The  Company  may  exercise  the  Company  Repurchase  Option by
mailing to you at your last address listed in the records of the Company,  or by
delivering to you, a notice that it has exercised the Company  Repurchase Option
and the  number of Option  Shares  with  respect to which it has  exercised  the
Company Repurchase Option, within six (6) months after the date that the Company
shall first have been  entitled to exercise the Company  Repurchase  Option (the
"Repurchase Option Period"). Such notice shall be accompanied by a check payable
to you in the amount of the  Exercise  Price  times the number of Option  Shares
with respect to which the Company has exercised the Company  Repurchase  Option.
Upon  exercise  by the  Company of the  Company  Repurchase  Option as  provided
herein,  the certificate or  certificates  representing  the Option Shares,  and
representing shares of Common Stock or other shares (or other property) received
in any  Non-Cash  Distribution  (as  defined  herein) in respect of such  Option
Shares,  which have been repurchased shall forthwith be released from the escrow
arrangement  provided for in Section 4 hereof and  transferred  of record to the
Company. The Company Repurchase Option shall lapse and be of no further force or
effect  if it shall  not have  been  exercised  prior to the  expiration  of the
Repurchase Option Period.

       3. No Assignment of Rights.  Except for  assignments or transfers by will
or the  applicable  laws of descent and  distribution  or with the prior written
consent of the Company,  your rights and interests  under this Agreement and the
Plan may not be assigned or transferred  in whole or in part either  directly or
by  operation  of law  or  otherwise,  including  without  limitation  by way of
execution,  levy,  garnishment,  attachment,  pledge or bankruptcy,  and no such
rights or interests shall be subject to any of your obligations or liabilities.

       4. Exercise of Option; Delivery and Deposit of Certificate(s). You (or in
the case of your death,  your legal  representative)  may exercise the Option in
whole or in part by giving  written  notice to the Company on the form  attached
hereto as Exhibit A (the  "Exercise  Notice")  prior to the  Option  Termination
Date,  accompanied by full payment for the Option Shares being  purchased (a) in
cash or by  certified  or bank  cashier's  check  payable  to the  order  of the
Company,  in an amount  equal to the  number of Option  Shares  being  purchased
multiplied by the Exercise Price (the "Aggregate Exercise Price"), (b) in shares
of the Company's Common Stock (the "Tendered  Shares") with a market value equal

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to the Aggregate  Exercise Price or (c) any  combination  of cash,  certified or
bank  cashier's  check or  Tendered  Shares  having a total  value  equal to the
Aggregate  Exercise Price (such cash,  check or Tendered  Shares with such value
being referred to as the "Exercise Consideration"). However, Tendered Shares may
be  surrendered as all or part of the Exercise  Consideration  only if you shall
have  acquired  such  Tendered  Shares more than six months prior to the date of
exercise and, if such Tendered Shares are then subject to Transfer Restrictions,
only with the prior  written  consent of the Company as provided in Section 2(a)
hereof. As a condition to such consent, the Company may require that a number of
Option  Shares  acquired by you upon your  exercise  of the Option  equal to the
number of Tendered Shares surrendered upon such exercise shall be subject to the
Transfer  Restrictions and the Company Repurchase Option to the same extent that
such Tendered Shares surrendered upon such exercise were so subject  immediately
prior to such  surrender.  Receipt by the Company of the Exercise Notice and the
Exercise  Consideration  shall  constitute  the exercise of the Option or a part
thereof. As soon as reasonably practicable thereafter, the Company shall deliver
or cause to be delivered to you a certificate or certificates  representing  the
number  of  Option   Shares   purchased,   registered  in  your  name.  If  such
certificate(s)  represent(s)  Option  Shares with  respect to which the Transfer
Restrictions shall not have lapsed, such certificate(s) shall,  immediately upon
your receipt thereof,  be deposited by you, together with a stock power endorsed
in  blank,  in  escrow  with  the  Company.  In  addition,   any  certificate(s)
representing  shares  of  Common  Stock,  or other  property  other  than  cash,
distributed  (including pursuant to any stock split) in respect of Option Shares
purchased by you (a "Non-Cash  Distribution") with respect to which the Transfer
Restrictions shall not have lapsed shall, immediately upon your receipt thereof,
be  deposited  by you,  together  with a  stock  power  endorsed  in  blank  (if
applicable),  in escrow with the  Company,  and shall be subject to the Transfer
Restrictions and the Company  Repurchase Option to the same extent as the Option
Shares in  respect  of which  such  Non-Cash  Distribution  was  made.  All such
deposited  certificate(s)  may have set forth  thereon a legend or  legends  (in
addition  to the legend  referred  to in Section 7 hereof)  indicating  that the
shares of Common Stock (or other  property)  represented by such  certificate(s)
are subject to the Transfer  Restrictions and, to the extent applicable,  to the
Company  Repurchase  Option,  as  provided  herein.  All shares of Common  Stock
delivered upon the exercise of the Option as provided herein shall be fully paid
and non-assessable.

       5. Rights With Respect to Option Shares.  Prior to the date the Option is
exercised,  you shall not be deemed for any purpose to be a  stockholder  of the
Company with respect to any of the Option Shares.  Upon initial  issuance to you
of a certificate or certificates  representing Option Shares or shares (or other
property)  received in any  Non-Cash  Distribution  in respect of Option  Shares
purchased by you, you shall have  ownership of such shares (or other  property),
including the right to vote and receive dividends, subject, however, in the case
of any such  shares  (or other  property)  with  respect  to which the  Transfer
Restrictions shall not have lapsed, to the Transfer Restrictions and the Company
Repurchase Option, to the extent  applicable,  and to the other restrictions and
limitations  imposed  thereon  pursuant to the Plan and this Agreement and which
may be now or  hereafter  imposed by the  Certificate  of  Incorporation  or the
By-Laws of the Company.

       6. Release of Option Shares. As soon as reasonably  practicable after the
Transfer  Restrictions  shall have  lapsed  with  respect  to any Option  Shares
purchased by you upon exercise of the Option,  the Company shall deliver to you,

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or your legal  representative  in the case of your  death,  the  certificate  or
certificates  representing  such  shares  and any  shares  (or  other  property)
received in any  Non-Cash  Distribution  in respect of such  shares,  previously
deposited in escrow with the Company  pursuant to Section 4 hereof,  without any
legend referring to the Transfer Restrictions or the Company Repurchase Option.

       7.  Securities  Laws. You hereby  represent and warrant that you will not
transfer, sell or otherwise dispose of any Option Shares purchased by you except
in compliance with the Securities Act of 1933, as amended (the "Act"), the rules
and  regulations  thereunder and all applicable  state  securities  laws and the
rules and  regulations  thereunder.  You hereby  acknowledge  and agree that any
routine sales of the Option Shares  purchased by you upon exercise of the Option
made in reliance upon Rule 144 under the Act may be made only in limited amounts
in accordance  with the terms and conditions of that Rule. You also  acknowledge
and agree that the  certificate(s)  representing  Option Shares delivered to you
pursuant to Section 4 hereof may have set forth thereon a legend indicating that
such shares may be transferred, sold or otherwise disposed of only after receipt
by the Company of an opinion of counsel  reasonably  satisfactory to it that the
transfer,  sale or other disposition will not violate the Act or the regulations
thereunder  or  any  applicable   state   securities  laws  or  the  regulations
thereunder.

      8.  Dilution and Other  Adjustments.  In the event of a stock  dividend or
stock split occurring after the date of this Agreement and prior to the exercise
in full of the  Option,  the  committee  appointed  by the  Company's  Board  of
Directors  to  administer  the Plan (the  "Committee")  shall  make  appropriate
adjustments  to the number of shares for which the Option may be  exercised  and
the Exercise Price for the Option. In the event of any recapitalization,  merger
or  consolidation  involving the Company,  any  transaction in which the Company
becomes a subsidiary of another entity,  any sale or other disposition of all or
a substantial  portion of the assets of the Company or any similar  transaction,
as determined by the Committee,  (any of the foregoing, a "covered transaction")
occurring while the Option is  outstanding,  the Committee in its discretion may
(i) accelerate the exercisability of the Option, or (ii) adjust the terms of the
Option  (whether  or not in a manner  that  complies  with the  requirements  of
Section  424(a) of the Internal  Revenue Code of 1986, as amended (the "Code")),
or (iii) if there is a survivor or acquiror  entity,  provide for the assumption
of the Option by such  survivor or acquiror or an  affiliate  thereof or for the
grant of one or more  replacement  options by such  survivor  or  acquiror or an
affiliate  thereof,  in each case on such terms (which may, but need not, comply
with the  requirements  of  Section  424(a)  of the Code) as the  Committee  may
determine,  or (iv)  terminate  the  Option  (provided,  that  if the  Committee
terminates the Option, it shall, in connection therewith,  either (A) accelerate
the exercisability of the Option prior to such termination, or (B) provide for a
payment to the holder of the Option of cash or other  property or a  combination
of cash or other property in an amount reasonably determined by the Committee to
approximate  the value of the Option assuming an exercise  immediately  prior to
the transaction,  or (C) if there is a survivor or acquiror entity,  provide for
the grant of one or more replacement options pursuant to clause (iii) above), or
(v) provide for none of, or any combination of, the foregoing.  No fraction of a
share or  fractional  shares  shall be  purchasable  or  deliverable  under this
Agreement.

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       9. Reservation of Shares.  The Company shall at all times during the term
of this Agreement reserve and keep available such number of shares of the Common
Stock as will be sufficient to satisfy the  requirements  of this  Agreement and
shall  pay  all  fees  and  expenses  necessarily  incurred  by the  Company  in
connection with this Agreement and the issuance of Option Shares.

      10. Taxes.  If the Company,  in its sole  discretion,  determines that the
Company or any  subsidiary  of the Company or any other  person has  incurred or
will incur any liability to withhold any federal, state or local income or other
taxes by reason of the grant of the Option, the issuance of Option Shares to you
upon the  exercise  thereof  or the lapse of the  Transfer  Restrictions  or the
Company  Repurchase Option or any other restrictions upon the Option Shares, you
will, promptly upon demand therefor by the Company or any such subsidiary of the
Company,  pay to the Company or such  subsidiary any amount  requested by it for
the purpose of satisfying such liability. If the amount so requested is not paid
promptly,  the Company may refuse to permit the issuance to you of Option Shares
and may,  without  further  consent by you,  have the right to deduct such taxes
from any payment of any kind  otherwise due to you, the Optionee,  including but
not  limited  to,  the hold back from the  shares to be  delivered  pursuant  to
Section 7 of this  Agreement of that number of shares  calculated to satisfy all
federal,  state,  local or other  applicable  taxes  required  to be withheld in
connection with such award or vesting..

      You may satisfy the minimum  statutory  withholding tax  requirement  (the
"Obligation")  arising from exercise of all or a part of the Option by making an
election (an "Election") to have the Company  withhold from the number of shares
to be issued upon exercise of the Option, or to otherwise tender to the Company,
that number of shares of Common  Stock having a value equal to the amount of the
Obligation.  The value of the shares to be withheld  or tendered  shall be based
upon the closing price of the Common Stock on the New York Stock Exchange on the
date that the amount of the  Obligation  shall be  determined  (the "Tax Date").
Each  Election must be made at the time the Option is exercised or the Tax Date,
whichever is later.  The Committee may disapprove of any Election or may suspend
or terminate the right to make Elections. An Election is irrevocable.

      11.  Determination  of  Rights.  You  hereby  represent  and  warrant  for
yourself, your personal  representatives and beneficiaries,  that as a condition
of the granting of the Option, any dispute or disagreement which may arise under
or as a result of or pursuant to the Plan or this Agreement  shall be determined
by the committee appointed by the Company's Board of Directors to administer the
Plan (the "Committee"), in its sole discretion, and that any decision made by it
in good  faith  shall be  conclusive  on all  parties.  The  interpretation  and
construction by the Committee of any provision of, and the  determination of any
question  arising  under,  this  Agreement,  the Plan, or any rule or regulation
adopted pursuant to the Plan, shall be final and conclusive.

      12. Limitation of Employment  Rights. The Option confers upon you no right
to continue in the employ of the Company or an Affiliated Employer or interferes
in any way with the right of the Company or an Affiliated  Employer to terminate
your employment at any time.

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      13.  Communications.  Any communication or notice required or permitted to
be given under this Agreement  shall be in writing,  and mailed by registered or
certified  mail or  delivered  in hand,  if to the  Company to its Stock  Option
Manager c/o Thermo Electron Corporation,  81 Wyman Street, Post Office Box 9046,
Waltham,  Massachusetts  02454-9046,  and if to the Optionee, to the address set
forth on the first page of this Agreement,  or such other address, in each case,
as the addressee shall last have furnished to the communicating party.

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                                                                       Exhibit C

                      COMPANY INFORMATION AND INVENTION AGREEMENT

      In consideration and as a condition of my employment,  or if now employed,
the continuation of my employment by Thermo Electron Corporation or a subsidiary
thereof  (hereinafter  collectively  called the "Company") and the  compensation
paid therefor:

   1. I agree not to  disclose  to others  or use for my own  benefit  during my
      employment  by the  Company  or  thereafter  any trade  secrets or Company
      private  information  pertaining  to  any  of the  actual  or  anticipated
      business of the Company or any of its customers, consultants, or licensees
      acquired  by me  during  the  period of my  employment,  except to such an
      extent  as may be  necessary  in the  ordinary  course  of  performing  my
      particular duties as an employee of the Company.

   2. I agree not to disclose to the  Company,  or to induce the Company to use,
      any confidential information or material belonging to others.

   3. I understand that the making of inventions,  improvements, and discoveries
      is one of the incidents of my employment, or that if not I may nonetheless
      make  inventions  while employed by the Company,  and I agree to assign to
      Thermo  Electron  Corporation or its nominee my entire right,  title,  and
      interest in any invention, idea, device, or process, whether patentable or
      not,  hereafter  made or  conceived  by me solely or jointly  with  others
      during  the  period  of my  employment  by the  Company  in an  executive,
      managerial,  planning, technical, research, engineering, or other capacity
      and which relates in any manner to the business of the Company, or relates
      to its actual or planned  research  or  development,  or is  suggested  or
      results  from any task  assigned to me or work  performed  by me for or in
      behalf of the  Company,  except  any  invention  or idea  which  cannot be
      assigned   by   the   Company   because   of  a   prior   agreement   with
      __________________________   effective  until   __________________________
      (give name and date or write "none").

   4. I agree,  in  connection  with any  invention,  idea,  device,  or process
      covered by paragraph 3:

      a) To disclose  it promptly in writing to the proper  officers or attorney
         of the Company.

      b) To execute promptly,  on request,  patent  applications and assignments
         thereof to Thermo Electron or its nominees and to assist the Company in
         any reasonable  manner to enable it to secure a patent  therefor in the
         United  States  and  any  foreign   countries,   all  without   further
         compensation except as provided herein.

<PAGE>

   5. I further  agree that all papers and records of every kind relating to any
      invention or improvement  included with the terms of the Agreement,  which
      shall at any time come into my possession  shall be the sole and exclusive
      property of the Company  and shall be  surrendered  to the Company or upon
      request at any other time either during or after the  termination  of such
      employment.

   6. I further  agree that the  obligations  and  undertakings  stated above in
      paragraph 4b shall continue beyond the termination of my employment by the
      Company,  but if I am called  upon to  render  such  assistance  after the
      termination  of my  employment,  then I shall  be  entitled  to a fair and
      reasonable per diem in addition to reimbursement of any expenses  incurred
      at the request of the Company.

   7. I agree to identify in an attachment to this  Agreement all  inventions or
      ideas related to the business or actual or planned research or development
      of the Company in which I have right,  title, or interest,  and which were
      conceived  either  wholly or in part by me prior to my  employment  by the
      Company but neither  published nor filed in the U.S.  Patent and Trademark
      Office.

   8. I understand  that this  Agreement  supersedes  any  agreement  previously
      executed by me relating to the  disclosure,  assignment  and  patenting of
      inventions, improvements, and discoveries made during my employment by the
      Company.  This Agreement shall inure to the benefits of the successors and
      assigns  of the  Company  and shall be  binding  upon my  heirs,  assigns,
      administrators, and representatives.

   9. I understand  that this  Agreement  does not apply to an  invention  which
      qualifies  fully under the  provisions of any statute or regulation  which
      renders  unenforceable  the  required  assignment  or  transfer of certain
      inventions  made by an employee such as, but not limited to,  Section 2870
      of the California Labor Code.

                                    /s/ Marijn E. Dekkers
                                    ------------------------------
                                    Employee

                                   October 13, 2000
-----------------------             ------------------------------
Witness                             Date

                                    THERMO ELECTRON CORPORATION

                                    By:  /s/ Seth H. Hoogasian, Vice President
                                        and General Counsel
-----------------------             ------------------------------------
Witness                             Date  October 13, 2000

<PAGE>

                                                                       EXHIBIT D
                           THERMO ELECTRON CORPORATION

                            INDEMNIFICATION AGREEMENT

      This  Agreement,  made and  entered  into  this  11th  day of  July,  2000
("Agreement"),   by  and  between  Thermo  Electron   Corporation,   a  Delaware
corporation (the "Company"), and Marijn E. Dekkers ("Indemnitee"):

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

      WHEREAS,  uncertainties relating to the continued availability of adequate
directors and officers  liability  insurance ("D&O Insurance") and uncertainties
relating to  indemnification  have  increased the  difficulty of attracting  and
retaining such persons;

      WHEREAS,  the  Board  of  Directors  of  the  Company  (the  "Board")  has
determined  that the  difficulty  in attracting  and  retaining  such persons is
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;

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

      WHEREAS,  Indemnitee is willing to serve, continue to serve and/or take on
additional  service for or on behalf of the Company on the condition  that he or
she be so indemnified and that such indemnification be so guaranteed;

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

      1. Services by Indemnitee. Indemnitee agrees to serve or continue to serve
as a director or officer of the  Company.  This  Agreement  shall not impose any
obligation on Indemnitee or the Company to continue  Indemnitee's  position with
the Company beyond any period otherwise applicable.

      2. Indemnity.  The Company shall indemnify, and shall advance Expenses (as
hereinafter  defined) to,  Indemnitee  as provided in this  Agreement and to the
fullest extent permitted by law.

      3. General.  Indemnitee shall be entitled to the rights of indemnification
provided  in this  Section 3 if, by reason of his or her  Corporate  Status  (as
hereinafter defined), Indemnitee is, or is threatened to be made, a party to any

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<PAGE>

threatened, pending, or completed action, suit, arbitration, alternative dispute
resolution proceeding, investigation, administrative hearing or other proceeding
whether civil, criminal,  administrative or investigative (other than an action,
suit or  proceeding  covered by Section 4 hereof).  Pursuant to this  Section 3,
Indemnitee shall be indemnified against Expenses,  judgments,  penalties,  fines
and/or amounts paid in settlement incurred by Indemnitee or on his or her behalf
in  connection  with  such  action,  suit,   arbitration,   alternative  dispute
resolution proceeding, investigation, administrative hearing or other proceeding
whether civil, criminal,  administrative or investigative or any claim, issue or
matter  therein  and  whether  or not  Indemnitee  is made a party  thereto,  if
Indemnitee acted in good faith and in a manner Indemnitee 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 or her
conduct was unlawful.

      4.  Proceedings  by or in the  Right  of the  Company.  In the case of any
threatened,  pending or completed action,  suit or proceeding by or in the right
of the Company,  indemnification  shall be made to the maximum extent  permitted
under Delaware law.

      5.  Indemnification  for  Expenses  of a Party  who is  Wholly  or  Partly
Successful. Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his or her Corporate  Status, a party to and is
successful,  on the  merits or  otherwise,  in any  action,  suit,  arbitration,
alternative dispute resolution proceeding, investigation, administrative hearing
or other proceeding  whether civil,  criminal,  administrative or investigative,
Indemnitee shall be indemnified  against all Expenses  incurred by Indemnitee or
on his or her  behalf in  connection  therewith.  If  Indemnitee  is not  wholly
successful but is successful,  on the merits or otherwise, as to one or more but
less than all  claims,  issues or matters  in such  action,  suit,  arbitration,
alternative dispute resolution proceeding, investigation, administrative hearing
or other proceeding  whether civil,  criminal,  administrative or investigative,
the  Company  shall  indemnify  Indemnitee  against  all  Expenses  incurred  by
Indemnitee or on his or her behalf in connection with each successfully resolved
claim, issue or matter. For purposes of this Section and without limitation, the
termination of any claim,  issue or matter by dismissal,  or withdrawal  with or
without  prejudice,  shall be deemed to be a successful result as to such claim,
issue or matter.

      6. Advance of Expenses. The Company shall advance all Expenses incurred by
or on behalf of  Indemnitee in connection  with any action,  suit,  arbitration,
alternative dispute resolution proceeding, investigation, administrative hearing
or  other  proceeding  involving  his or her  Corporate  Status  whether  civil,
criminal,  administrative  or  investigative  within  twenty (20) days after the
receipt by the Company of a statement or statements from  Indemnitee  requesting
such  advance or  advances  from time to time,  whether  prior to or after final
disposition of such action,  suit,  arbitration,  alternative dispute resolution
proceeding,  investigation,  administrative  hearing or other proceeding whether
civil, criminal,  administrative or investigative.  Such statement or statements
shall reasonably  evidence the Expenses incurred by Indemnitee and shall include
or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to

                                       3
<PAGE>

repay any Expenses advanced if it shall ultimately be determined that Indemnitee
is not entitled to be indemnified against such Expenses, which undertaking shall
be accepted by or on behalf of the Company  without  reference to the  financial
ability of Indemnitee to make repayment.

      7. Procedure for Determination of Entitlement to Indemnification.

      (a) To obtain  indemnification  under  this  Agreement,  Indemnitee  shall
submit to the Company a written  request,  including  therein or therewith  such
documentation  and  information as is reasonably  available to Indemnitee and is
reasonably  necessary  to  determine  whether and to what extent  Indemnitee  is
entitled to indemnification.  The Secretary of the Company shall,  promptly upon
receipt of such a request for indemnification,  advise the Board in writing that
Indemnitee has requested indemnification.

      (b) Upon written  request by Indemnitee  for  indemnification  pursuant to
Section  7(a)  hereof,  a  determination,  if  required  (but only to the extent
required)  by  applicable  law as a  precondition  to payment,  with  respect to
Indemnitee's  entitlement  thereto shall be made in the specific  case: (i) if a
Change in Control (as hereinafter  defined) shall have occurred,  by Independent
Counsel (as  hereinafter  defined) in a written  opinion to the Board, a copy of
which shall be delivered to  Indemnitee  (unless  Indemnitee  shall request that
such  determination be made by the Board or the stockholders,  in which case the
determination  shall be made in the manner  provided  below in  clauses  (ii) or
(iii)); (ii) if a Change of Control shall not have occurred, (A) by the Board by
a majority vote of  Disinterested  Directors (as hereinafter  defined),  even if
less than a quorum, or (B) by a committee of Disinterested  Directors designated
by a majority vote of Disinterested  Directors,  even if less than a quorum,  or
(C) if the  Disinterested  Directors  so  direct,  by  Independent  Counsel in a
written  opinion to the Board,  a copy of which shall be delivered to Indemnitee
or (D) by the stockholders of the Company;  or (iii) as provided in Section 8(b)
of this  Agreement;  and, if it is so determined  that Indemnitee is entitled to
indemnification,  payment to Indemnitee shall be made within ten (10) days after
such  determination.  Indemnitee  shall  cooperate  with the person,  persons or
entity making such  determination  with respect to  Indemnitee's  entitlement to
indemnification,  including  providing  to such  person,  persons or entity upon
reasonable  advance  request  any  documentation  or  information  which  is not
privileged  or  otherwise  protected  from  disclosure  and which is  reasonably
available to Indemnitee  and  reasonably  necessary to such  determination.  Any
costs or expenses  (including  attorney's  fees and  disbursements)  incurred by
Indemnitee in so cooperating shall be borne by the Company  (irrespective of the
determination as to Indemnitee's entitlement to indemnification) and the Company
hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

      (c) In the event the determination of entitlement to indemnification is to
be made by Independent  Counsel pursuant to Section 7(b) of this Agreement,  the
Independent  Counsel  shall be selected as provided in this Section  7(c).  If a
Change of Control  shall not have  occurred,  the  Independent  Counsel shall be
selected by the Board,  and the Company shall give written  notice to Indemnitee

                                       4
<PAGE>

advising him or her of the identity of the Independent Counsel so selected. If a
Change of Control shall have occurred, the Independent Counsel shall be selected
by Indemnitee  (unless  Indemnitee  shall request that such selection be made by
the Board,  in which event the preceding  sentence shall apply),  and Indemnitee
shall give  written  notice to the Company  advising  it of the  identity of the
Independent Counsel so selected. In either event,  Indemnitee or the Company, as
the case may be,  may,  within  seven  (7) days  after  such  written  notice of
selection shall have been given, deliver to the Company or to Indemnitee, as the
case may be, a  written  objection  to such  selection.  Such  objection  may be
asserted  only on the ground that the  Independent  Counsel so selected does not
meet the requirements of "Independent  Counsel" as defined in Section 14 of this
Agreement,  and the  objection  shall set forth with  particularity  the factual
basis of such  assertion.  If such written  objection is made,  the  Independent
Counsel so  selected  may not serve as  Independent  Counsel  unless and until a
court has determined  that such  objection is without  merit.  If, within twenty
(20)  days  after   submission   by   Indemnitee   of  a  written   request  for
indemnification  pursuant to Section 7(a) hereof,  no Independent  Counsel shall
have been  selected or if selected,  shall have been  objected to, in accordance
with this Section 7(c),  either the Company or Indemnitee may petition the Court
of Chancery of the State of  Delaware or other court of  competent  jurisdiction
for  resolution  of any  objection  which shall have been made by the Company or
Indemnitee  to the  other's  selection  of  Independent  Counsel  and/or for the
appointment as Independent  Counsel of a person selected by the Court or by such
other person as the Court shall  designate,  and the person with respect to whom
an  objection  is  favorably  resolved or the person so  appointed  shall act as
Independent  Counsel under Section 7(b) hereof. The Company shall pay reasonable
fees and expenses of Independent  Counsel incurred in connection with its acting
in such capacity pursuant to Section 7(b) hereof.  The Company shall pay any and
all  reasonable  fees and expenses  incident to the  procedures  of this Section
7(c), regardless of the manner in which such Independent Counsel was selected or
appointed.  Upon the due commencement of any judicial  proceeding or arbitration
pursuant  to  Section  9(a) of this  Agreement,  Independent  Counsel  shall  be
discharged and relieved of any further  responsibility in such capacity (subject
to the applicable standards of professional conduct then prevailing).

      8. Presumptions and Effect of Certain Proceedings.

      (a) If a Change of Control shall have occurred,  in making a determination
with respect to entitlement to indemnification hereunder, the person, persons or
entity making such  determination  shall presume that  Indemnitee is entitled to
indemnification  under this  Agreement if Indemnitee has submitted a request for
indemnification  in  accordance  with  Section 7(a) of this  Agreement,  and the
Company  shall  have the  burden  of  proof  to  overcome  that  presumption  in
connection with the making by any person, persons or entity of any determination
contrary to that presumption.

      (b) If the person, persons or entity empowered or selected under Section 7
of this Agreement to determine whether Indemnitee is entitled to indemnification
shall not have made such  determination  within sixty (60) days after receipt by

                                       5
<PAGE>

the Company of the request therefor, the requisite  determination of entitlement
to  indemnification  shall be deemed to have been made and  Indemnitee  shall be
entitled to such  indemnification,  absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make  Indemnitee's
statement  not  materially  misleading,  in  connection  with  the  request  for
indemnification,  or (ii) a prohibition of such indemnification under applicable
law; provided, however, that such 60-day period may be extended for a reasonable
time,  not to exceed an additional  thirty (30) days, if the person,  persons or
entity making the determination  with respect to entitlement to  indemnification
in good faith requires such  additional  time for the obtaining or evaluating of
documentation and/or information relating thereto; and provided,  further,  that
the  foregoing  provisions  of this  Section  8(b)  shall  not  apply (i) if the
determination  of  entitlement  to   indemnification   is  to  be  made  by  the
stockholders  pursuant  to  Section  7(b) of this  Agreement  and if (A)  within
fifteen  (15)  days  after  receipt  by the  Company  of the  request  for  such
determination  the  Board  has  resolved  to submit  such  determination  to the
stockholders  for their  consideration  at an annual meeting  thereof to be held
within one hundred  twenty (120) days after such receipt and such  determination
is made  thereat,  or (B) a special  meeting of  stockholders  is called  within
fifteen   (15)  days  after  such   receipt  for  the  purpose  of  making  such
determination,  such  meeting is held for such  purpose  within one hundred five
(105) days after having been so called and such  determination  is made thereat,
or (ii) if the determination of entitlement to  indemnification is to be made by
Independent Counsel pursuant to Section 7(b) of this Agreement.

      (c) The termination of any action, suit, arbitration,  alternative dispute
resolution proceeding, investigation, administrative hearing or other proceeding
whether civil, criminal,  administrative or investigative or of any claim, issue
or matter therein by judgment,  order, settlement or conviction,  or upon a plea
of nolo contendere or its equivalent,  shall not (except as otherwise  expressly
provided in this Agreement) of itself  adversely  affect the right of Indemnitee
to  indemnification  or create a presumption that Indemnitee did not act in good
faith  and in a manner  which  Indemnitee  reasonably  believed  to be in or not
opposed to the best  interests  of the Company or, with  respect to any criminal
action or proceeding,  that Indemnitee had reasonable  cause to believe that his
or her conduct was unlawful.

      9.    Remedies of Indemnitee.

      (a) In the event that (i) a determination is made pursuant to Section 7 of
this Agreement  that  Indemnitee is not entitled to  indemnification  under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 6
of this Agreement,  (iii) the determination of entitlement to indemnification is
to be by Independent Counsel pursuant to Section 7(b) of this Agreement and such
determination shall not have been made and delivered in a written opinion within
ninety   (90)  days  after   receipt  by  the   Company  of  the   request   for
indemnification, (iv) payment of indemnification is not made pursuant to Section
5 of this  Agreement  within  ten (10) days after  receipt  by the  Company of a
written request therefor,  or (v) payment of  indemnification is not made within
ten (10) days after a determination has been made that Indemnitee is entitled to
indemnification  or such  determination  is deemed to have been made pursuant to

                                       6
<PAGE>

Section 8 of this Agreement,  Indemnitee shall be entitled to an adjudication in
an  appropriate  court  of the  State  of  Delaware,  or in any  other  court of
competent jurisdiction,  of Indemnitee's  entitlement to such indemnification or
advancement of Expenses.  Alternatively,  Indemnitee,  at his or her option, may
seek an award in arbitration to be conducted by a single arbitrator  pursuant to
the rules of the American  Arbitration  Association.  Indemnitee  shall commence
such proceeding  seeking an  adjudication or an award in arbitration  within one
hundred eighty (180) days following the date on which  Indemnitee  first has the
right to commence such  proceeding  pursuant to this Section  9(a).  The Company
shall not oppose  Indemnitee's  right to seek any such  adjudication or award in
arbitration.

      (b) In the event that a  determination  shall have been made  pursuant  to
Section 7 of this Agreement that Indemnitee is not entitled to  indemnification,
any judicial  proceeding  or  arbitration  commenced  pursuant to this Section 9
shall be conducted in all respects as a de novo trial,  or  arbitration,  on the
merits  and  Indemnitee  shall  not be  prejudiced  by  reason  of that  adverse
determination.  If a Change of Control  shall  have  occurred,  in any  judicial
proceeding or arbitration commenced pursuant to this Section 9 the Company shall
have the burden of proving that Indemnitee is not entitled to indemnification or
advancement of Expenses, as the case may be.

      (c) If a  determination  shall  have been made or deemed to have been made
pursuant  to Section 7 or 8 of this  Agreement  that  Indemnitee  is entitled to
indemnification,  the  Company  shall  be  bound  by such  determination  in any
judicial proceeding or arbitration  commenced pursuant to this Section 9, absent
(i) a  misstatement  by  Indemnitee  of a material  fact,  or an  omission  of a
material  fact   necessary  to  make   Indemnitee's   statement  not  materially
misleading,  in  connection  with the  request  for  indemnification,  or (ii) a
prohibition of such indemnification under applicable law.

      (d)  The  Company  shall  be  precluded  from  asserting  in any  judicial
proceeding  or  arbitration  commenced  pursuant  to  this  Section  9 that  the
procedures  and  presumptions  of this  Agreement  are not  valid,  binding  and
enforceable  and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.

      (e) In the event  that  Indemnitee,  pursuant  to this  Section 9, seeks a
judicial  adjudication  of or an award in  arbitration  to enforce  Indemnitee's
rights under, or to recover  damages for breach of, this  Agreement,  Indemnitee
shall be entitled to recover from the Company,  and shall be  indemnified by the
Company against,  any and all expenses (of the types described in the definition
of Expenses in Section 14 of this Agreement) actually and reasonably incurred by
him or her in such judicial adjudication or arbitration,  but only if Indemnitee
prevails  therein.  If it shall be determined in said judicial  adjudication  or
arbitration  that  Indemnitee  is  entitled  to receive  part but not all of the
indemnification  or advancement  of expenses  sought,  the expenses  incurred by
Indemnitee in connection with such judicial adjudication or arbitration shall be
appropriately prorated.

                                       7
<PAGE>

      10.  Security.  To the extent  requested by Indemnitee and approved by the
Board,  the Company shall at any time and from time to time provide  security to
Indemnitee for the Company's  obligations  hereunder through an irrevocable bank
line of  credit,  funded  trust or other  collateral.  Any such  security,  once
provided to Indemnitee, may not be revoked or released without the prior written
consent of Indemnitee.

      11.   Non-Exclusivity; Duration of Agreement; Insurance; Subrogation.

      (a) The rights of indemnification  and to receive  advancement of Expenses
as  provided  by this  Agreement  are in  addition  to and  shall  not be deemed
exclusive  of any other rights to which  Indemnitee  may at any time be entitled
under applicable law, the Company's certificate of incorporation or by-laws, any
other  agreement,  a vote of  stockholders  or a  resolution  of  directors,  or
otherwise.   Without  limiting  the  foregoing,   the  Company  shall  indemnify
Indemnitee to the fullest  extent  permitted  under Delaware law. This Agreement
shall  continue  until and terminate  upon the later of (a) ten (10) years after
the date that Indemnitee  shall have ceased to serve as a director or officer of
the Company or director,  officer or other  fiduciary of any other  corporation,
partnership,  joint venture,  trust,  employee  benefit plan or other enterprise
which  Indemnitee  served  at the  request  of the  Company;  or (b)  the  final
termination of all pending actions,  suits,  arbitrations,  alternative  dispute
resolution  proceedings,   investigations,   administrative  hearings  or  other
proceedings whether civil, criminal,  administrative or investigative in respect
of which  Indemnitee is granted  rights of  indemnification  or  advancement  of
Expenses  hereunder and of any  proceeding  commenced by Indemnitee  pursuant to
Section 9 of this Agreement  relating  thereto.  This Agreement shall be binding
upon the Company and its  successors  and assigns and shall inure to the benefit
of Indemnitee and his or her heirs, executors and administrators.

      (b) To the extent that the Company  maintains  D&O  Insurance,  Indemnitee
shall be  covered  by such D&O  Insurance  in  accordance  with its terms to the
maximum extent of the coverage  available for any director or officer under such
policy or policies.

      (c) In the event of any payment under this Agreement, the Company shall be
subrogated  to the extent of such  payment to all of the rights of  recovery  of
Indemnitee,  who shall execute all papers required and take all action necessary
to secure such rights, including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.

      (d) The  Company  shall not be liable  under  this  Agreement  to make any
payment of amounts otherwise  indemnifiable  hereunder if and to the extent that
Indemnitee  has  otherwise  actually  received  such payment under any insurance
policy, contract, agreement or otherwise.

      12.  Severability;  Reformation.  If any  provision or  provisions of this
Agreement shall be held to be invalid,  illegal or unenforceable  for any reason
whatsoever:  (a) the  validity,  legality and  enforceability  of the  remaining
provisions of this Agreement (including without limitation,  each portion of any
Section of this  Agreement  containing  any such  provision  held to be invalid,

                                       8
<PAGE>

illegal or unenforceable,  that is not itself 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,  each portion of any Section of this  Agreement  containing any such
provision  held to be  invalid,  illegal  or  unenforceable,  that is not itself
invalid,  illegal or  unenforceable)  shall be construed so as to give effect to
the intent manifested by the provision held invalid, illegal or unenforceable.

      13.  Exception to Right of  Indemnification  or  Advancement  of Expenses.
Notwithstanding  any other provision of this Agreement,  Indemnitee shall not be
entitled to indemnification or advancement of Expenses under this Agreement with
respect to any action,  suit or  proceeding,  or any claim  therein,  initiated,
brought  or made by  Indemnitee  (i)  against  the  Company,  unless a Change in
Control shall have occurred,  or (ii) against any person other than the Company,
unless approved in advance by the Board.

      14.   Definitions.      For purposes of this Agreement:

      (a) "Change in Control"  means an event or occurrence set forth in any one
or more of subsection  (i) through (iv) below  (including an event or occurrence
that  constitutes  a Change  in  Control  under one of such  subsections  but is
specifically exempted from another such subsection):

            (i) the  acquisition by an  individual,  entity or group (within the
      meaning of Section 13(d)(3) or 14(d)(2) of the Securities  Exchange Act of
      1934,  as  amended  (the  "Exchange  Act"))  (a  "Person")  of  beneficial
      ownership of any capital stock of the Company if, after such  acquisition,
      such  Person   beneficially   owns  (within  the  meaning  of  Rule  13d-3
      promulgated  under  the  Exchange  Act)  40% or  more  of  either  (A) the
      then-outstanding  shares of common stock of the Company (the  "Outstanding
      Company  Common   Stock")  or  (B)  the  combined   voting  power  of  the
      then-outstanding  securities of the Company  entitled to vote generally in
      the election of directors (the "Outstanding  Company Voting  Securities");
      provided, however, that for purposes of this subsection (i), the following
      acquisitions shall not constitute a Change in Control: (A) any acquisition
      by the  Company,  (B) any  acquisition  by any  employee  benefit plan (or
      related trust)  sponsored or maintained by the Company or any  corporation
      controlled  by the  Company,  or (C) any  acquisition  by any  corporation
      pursuant  to a  transaction  which  complies  with  clauses (A) and (B) of
      subsection (iii) of this Section 14(a); or

            (ii) such time as the Continuing Directors (as defined below) do not
      constitute  a  majority  of the Board  (or,  if  applicable,  the Board of
      Directors  of a  successor  corporation  to the  Company),  where the term
      "Continuing  Director" means at any date a member of the Board (A) who was
      a member of the Board on  September  23, 1999 or (B) who was  nominated or
      elected  subsequent  to such date by at least a majority of the  directors
      who were Continuing  Directors at the time of such nomination or election;

                                       9
<PAGE>

      provided,  however,  that there shall be excluded form this clause (B) any
      individual  whose initial  assumption of office occurred as a result of an
      actual or  threatened  election  contest  with  respect to the election or
      removal of directors or other actual or threatened solicitation of proxies
      or consents, by or on behalf of a person other than the Board; or

            (iii) the consummation of a merger,  consolidation,  reorganization,
      recapitalization  or statutory  share exchange  involving the Company or a
      sale or other disposition of all or substantially all of the assets of the
      Company in one or a series of  transactions  (a  "Business  Combination"),
      unless,  immediately  following  such  Business  Combination,  each of the
      following two conditions is satisfied: (A) all or substantially all of the
      individuals and entities who were the beneficial owners of the Outstanding
      Company Common Stock and Outstanding Company Voting Securities immediately
      prior  to  such  Business   Combination   beneficially  own,  directly  or
      indirectly,  more than 60% of the then-outstanding  shares of common stock
      and the combined voting power of the then-outstanding  securities entitled
      to vote  generally  in the  election of  directors,  respectively,  of the
      resulting or acquiring  corporation  in such Business  Combination  (which
      shall include, without limitation, a corporation which as a result of such
      transaction owns the Company or substantially  all of the Company's assets
      either  directly or through one or more  subsidiaries)  (such resulting or
      acquiring   corporation   is   referred   to  herein  as  the   "Acquiring
      Corporation")  in  substantially  the same proportions as their ownership,
      immediately prior to such Business Combination, of the Outstanding Company
      Common Stock and Outstanding Company Voting Securities,  respectively; and
      (B) no Person (excluding the Acquiring Corporation or any employee benefit
      plan (or related  trust)  maintained or sponsored by the Company or by the
      Acquiring Corporation)  beneficially owns, directly or indirectly,  40% or
      more of the then  outstanding  shares  of  common  stock of the  Acquiring
      Corporation,  or of the  combined  voting  power  of the  then-outstanding
      securities of such corporation  entitled to vote generally in the election
      of directors; or

            (iv)  approval  by the  stockholders  of the  Company  of a complete
      liquidation or dissolution of the Company; or

      (b) "Corporate  Status"  describes the status of a person who is or was or
has  agreed to become a  director  of the  Company,  or is or was an  officer or
fiduciary  of the  Company  or a  director,  officer or  fiduciary  of any other
corporation,  partnership,  joint venture, trust, employee benefit plan or other
enterprise which such person is or was serving at the request of the Company.

      (c)  "Disinterested  Director"  means a director of the Company who is not
and  was not a party  to the  action,  suit,  arbitration,  alternative  dispute
resolution  proceeding,  investigation,  administrative  hearing  or  any  other
proceeding whether civil,  criminal,  administrative or investigative in respect
of which indemnification is sought by Indemnitee.

                                       10
<PAGE>

      (d) "Expenses" shall include all reasonable  attorneys'  fees,  retainers,
court costs,  transcript costs, fees and expenses of experts,  including but not
limited to fees and expenses of investment  bankers and/or consultants which the
Company has authorized Indemnitee to hire and attorneys for such experts, travel
expenses,  duplicating  costs,  printing and binding costs,  telephone  charges,
postage,  deliver  service  fees,  a  reasonable  per  diem  fee  to  compensate
Indemnitee  for his or her  professional  time and all  other  disbursements  or
expenses of the types  customarily  incurred  in  connection  with  prosecuting,
defending,  preparing to prosecute or defend or investigating  an action,  suit,
arbitration,   alternative   dispute   resolution   proceeding,   investigation,
administrative   hearing  or  any  other  proceeding  whether  civil,  criminal,
administrative or investigative.

      (e) "Independent Counsel" means a law firm, with over 100 lawyers, that is
experienced in matters of corporation  law and neither  currently is, nor in the
past five years has been, retained to represent:  (i) the Company (including any
subsidiary thereof) or Indemnitee in any matter material to either such party or
(ii) any other  party to the  action,  suit,  arbitration,  alternative  dispute
resolution  proceeding,  investigation,  administrative  hearing  or  any  other
proceeding whether civil, criminal,  administrative or investigative giving rise
to a claim for indemnification  hereunder.  Notwithstanding  the foregoing,  the
term  "Independent  Counsel"  shall  not  include  any  person  who,  under  the
applicable  standards  of  professional  conduct then  prevailing,  would have a
conflict of  interest in  representing  either the Company or  Indemnitee  in an
action to determine Indemnitee's rights under this Agreement.

      15.  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.

      16.  Modification  and Waiver.  This Agreement may be amended from time to
time to reflect  changes in Delaware law or for other  reasons.  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)  nor shall such waiver  constitute a
continuing waiver.

      17. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company
in writing upon being served with any summons,  citation,  subpoena,  complaint,
indictment,  information or other  document  relating to any matter which may be
subject  to  indemnification  or  advancement  of  Expenses  covered  hereunder;
provided, however, that the failure to give any such notice shall not disqualify
Indemnitee from indemnification hereunder.

      18.  Notices.  All  notices,  requests,  demands and other  communications
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered  by hand and  receipted  for by the party to whom said notice or other
communication  shall  have  been  directed,  or  (ii)  mailed  by  certified  or
registered mail with postage  prepaid,  on the third business day after the date
on which it is so mailed:

                                       11
<PAGE>

      (a) If to Indemnitee, to:    The address shown beneath
                                   his or her signature on
                                   the last page hereof

      (b) If to the Company to:    Thermo Electron Corporation
                                   81 Wyman Street
                                   P.O. Box 9046
                                   Waltham, MA 02454-9046
                                   Attn: Corporate Secretary

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

      19. Governing Law. The parties agree that this Agreement shall be governed
by, and  construed  and enforced in  accordance  with,  the laws of the State of
Delaware.

      20. Entire  Agreement.  This agreement sets forth the entire  agreement of
the  parties  hereto in  respect  of the  subject  matter  contained  herein and
supersedes   all   prior   agreements,   promises,   covenants,    arrangements,
communications,  representations or warranties,  whether oral or written, by any
officer,  employee  or  representative  of any party  hereto in  respect  of the
subject matter contained  herein;  and any prior agreement of the parties hereto
in respect of the  subject  matter  contained  herein is hereby  terminated  and
cancelled.

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

Attest:                                THERMO ELECTRON CORPORATION

By: /s/ Sandra L. Lambert              By:   /s/ Seth H. Hoogasian
    -----------------------------       ------------------------------------
    Sandra L. Lambert                        Seth H. Hoogasian
    Vice President, Secretary                Vice President and General Counsel

                                        INDEMNITEE

                                        /s/ Marijn Dekkers
                                       ----------------------------------------
                                        Marijn E. Dekkers
                                        Address:ASSET PURCHASE AGREEMENT
                          (SLIDELL, LA)

      THIS  ASSET  PURCHASE AGREEMENT (this  "Agreement"),  dated
September  18, 2000, is between AEI REAL ESTATE FUND XVI  LIMITED
PARTNERSHIP, a Minnesota limited partnership, and AEI REAL ESTATE
FUND  XVIII  LIMITED PARTNERSHIP, a Minnesota limited partnership
(hereinafter   individually,  interchangeably  and   collectively
called   "Seller")  and  SOUTHERN  RIVER  RESTAURANTS,   LLC,   a
Mississippi   limited   liability   company,   or   its   nominee
(hereinafter collectively called "Purchaser").

      WHEREAS,  Gulf  Coast Restaurants, Inc. (the  "Debtor")  is
currently a Debtor-in-Possession in Proceedings No. 98-80398-MHM,
Chapter 11, pending before the United States Bankruptcy Court for
the Northern District of Georgia (the "Court"); and

      WHEREAS, Purchaser has committed to purchase and the Debtor
has  committed to sell thirteen (13) of the restaurants now owned
or  operated  by Debtor in accordance with the provisions  of  11
U.S.C.   363,  and pursuant to a bid offer filed with  the  Court
September  1,  2000 (the "Bid"), which has been approved  by  the
Court; and

     WHEREAS,  Seller, along with other owners who are affiliates
of  Seller  or  its  general partner  are  the  owners  of  three
restaurants (collectively the "Restaurants") which are leased  to
the  Debtor pursuant to those certain lease agreements more fully
described on EXHIBIT "B", attached hereto (as the same  may  have
been assigned, the "Leases" and each a "Lease"); and

      WHEREAS,  Seller  hereby commits to  sell  the  Assets,  as
hereinafter  defined, to Purchaser, subject to and in  accordance
with   the  representations,  warranties,  terms  and  conditions
specified herein; and

      WHEREAS,  the Purchaser and Seller desire to  set  forth  a
binding  agreement for the purchase and sale of the Assets  owned
by the Seller, all as provided herein;

      NOW THEREFORE, for the considerations set forth below,  the
Purchaser and Seller do hereby agree as follows.

      1.    BINDING AGREEMENT TO ACQUIRE CERTAIN ASSETS.   Seller
agrees  to sell and convey to Purchaser, and Purchaser agrees  to
purchase from Seller the following:

          A.    Real  Estate:  Seller's interest in the immovable
(real)   property  located  in  the  State  of  Louisiana,   more
particularly described on EXHIBIT "A", attached hereto and made a
part hereof, together with any rights-of-way, servitudes or other
benefits appurtenant thereto, and together with Seller's interest
in  any  and all buildings, improvements, leasehold improvements,
fixtures  and  components located thereon (sometimes  hereinafter
referred to collectively as the "Real Property", and the building
improvements  located thereon are sometimes hereinafter  referred
to collectively as the "Building").

          B.    Personal Property:  Any and all right, title  and
interest  of  Seller  if  any, in and to  any  and  all  personal
property  located at or within any and all of the above-described
Real   Property,  including  without  limitation,  any  and   all
furniture  (whether attached or unattached to the Building),  and
any  and  all  fixtures  and  signage  (hereinafter  collectively
referred to as the "Personal Property").

          The  foregoing described Real Property and the Personal
Property,  together with Seller's interest in and under  each  of
the  Lease,  are  sometimes hereinafter collectively  called  the
"Assets".

          An exact updated legal description of the Real Property
shall  be  provided,  in  accordance with  the  certified  survey
provided  for in Article 5 herein and Seller agrees to execute  a
quitclaim  deed  (in  addition  to  the  Limited  Warranty   Deed
described  in  Paragraph  3A  below)  attaching  the  new   legal
description.

     2.    PRICE.   The  purchase price for  the  Assets  is  ONE
MILLION  THREE  HUNDRED  NINETEEN  THOUSAND  AND  NO/100  DOLLARS
($1,319,000.00).  The Purchase Price shall be payable at  Closing
(as  hereinafter  described)  in  cash  or  current  and  readily
available  funds  (subject  to  adjustments  and  prorations   as
hereinafter set forth).

     3.   CONVEYANCE DOCUMENTS AND DISCLAIMER OF WARRANTIES.

          A.    CONVEYANCE  DOCUMENTS.  Seller shall  convey  the
Real  Property  free  and clear of any liens or  encumbrances  by
conveyance  and/or assignment instruments in form  and  substance
satisfactory  to  Purchaser  and the Title  Company,  as  defined
below, subject only to current real estate taxes, not delinquent,
and Permitted Exceptions, as defined below; with limited warranty
of  title  as to the Real Property (as to Seller's own  acts  and
deeds  and as to claims arising by, through or under the Seller).
Seller agrees to execute and deliver to Purchaser at Closing  (a)
a  Non-Foreign Affidavit, (b) an Owner's Affidavit certifying  to
Seller's knowledge, among other things, that there are no  unpaid
mechanic's liens affecting Seller's interest in the Real Property
that  will not be satisfied at closing, that there are  no  liens
affecting  any  of  the Real Property, that  there  has  been  no
construction  work conducted by or at the instance of  Seller  at
the Real Property for the last 120 days for which the contractors
and/or subcontractors performing such work have not been paid  in
full,  that  all taxes and special assessments that are  due  and
payable affecting each Real Property have been paid in full, that
the  Seller or the Debtor is in possession of the Assets and that
to Seller's knowledge there are no unrecorded leases or subleases
affecting the Real Property, other than the Leases, (c) any other
affidavit,  statement, or other document reasonably  required  by
the  Title Company specified in Article 5 as a condition for  the
issuance  of the title insurance policy(ies) provided for  below,
including  without  limitation the affidavit  regarding  Seller's
representations and warranties set forth in Article 13 below, and
(d)  a  Quitclaim  Bill of Sale conveying all of Seller's  right,
title and interest in and to the Personal Property.

          B.    DISCLAIMER  OF  WARRANTIES; "AS  IS"  CONVEYANCE;
INSPECTION.  PURCHASER ACKNOWLEDGES AND AGREES WITH  SELLER  THAT
(1)  PURCHASER IS PURCHASING THE ASSETS AT CLOSING IN AN "AS  IS"
CONDITION  "WITH  ALL  FAULTS"  AND  SPECIFICALLY  AND  EXPRESSLY
WITHOUT  ANY  WARRANTIES, REPRESENTATIONS OR  GUARANTEES,  EITHER
EXPRESS OR IMPLIED, OF ANY KIND, NATURE, OR TYPE WHATSOEVER  FROM
OR  ON BEHALF OF THE SELLER; AND (2) EXCEPT FOR THE WARRANTIES OF
TITLE  CONTAINED HEREIN OR TO BE CONTAINED IN THE ACT OF SALE  TO
BE EXECUTED BY SELLER, SELLER HAS NOT, DOES NOT, AND WILL NOT (a)
MAKE  ANY  WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED,  OR
ARISING BY OPERATION OF LAW, INCLUDING, BUT IN NO WAY LIMITED TO,
ANY  WARRANTY  OF  CONDITION,  MERCHANTABILITY,  HABITABILITY  OR
FITNESS  FOR  A  PARTICULAR USE, OR WITH RESPECT  TO  THE  VALUE,
PROFITABILITY, OR MARKETABILITY OF THE ASSETS, OR  (b)  MAKE  ANY
REPRESENTATION  OR  WARRANTY WITH REGARD TO COMPLIANCE  WITH  ANY
ENVIRONMENTAL  PROTECTION, POLLUTION OR  LAND  USE  LAWS,  RULES,
REGULATIONS ORDERS OR REQUIREMENTS INCLUDING BUT NOT  LIMITED  TO
THOSE  PERTAINING TO THE HANDLING, GENERATING, TREATING,  STORING
OR DISPOSING OF ANY HAZARDOUS WASTE OR SUBSTANCE.

          Purchaser acknowledges that except as set forth herein,
(a)  Purchaser  has  not  relied, and is not  relying,  upon  any
information, document, sales brochures or other literature,  maps
or  sketches,  projection,  proforma, statement,  representation,
guarantee  or warranty (whether express or implied,  or  oral  or
written,  or material or immaterial) that may have been given  by
or  made by or on behalf of Seller; and (b) Seller shall not make
any  warranties or representations as to (i) the quality, nature,
adequacy, or physical condition of the Assets including, but  not
limited   to,   foundations,  the  structural   elements,   roof,
appurtenances,  parking,  plumbing,  electrical  systems,   HVAC,
access, landscaping, sewage or utility systems, or facilities  at
the  Assets,  if  any;  (ii)  the quality,  nature,  adequacy  or
physical  condition of soils or the existence of ground water  at
the  Assets;  (iii) the existence, quality, nature,  adequacy  or
physical condition of any utilities serving the Assets; (iv)  the
development  potential  of  the  Assets,  its  habitability,   or
fitness, suitability or adequacy of the Assets for any particular
purpose; (v) the zoning or other legal status of the Assets; (vi)
the  Assets'  or  its operations' compliance with any  applicable
codes,   laws,  regulations,  statutes,  ordinances,   covenants,
conditions    or    restrictions   of   any    governmental    or
quasi-governmental entity or of any other person or entity; (vii)
the  quality of any labor or materials relating in any way to the
Assets;  or  (viii) the condition of title to the Assets  or  the
nature,  status and extent of any right of way, lease,  right  of
redemption, reservations, covenant, condition, restriction or any
other matter affecting title to the Assets.

           Purchaser further acknowledges that Purchaser has  had
and/or  will  be given, pursuant to this Agreement,  an  adequate
opportunity to make such legal, factual, and other inquiries  and
investigations  as  Purchaser  deems  necessary,  desirable,   or
appropriate  with  respect  to the Assets.   Such  inquiries  and
investigations of Purchaser shall be deemed to include, but shall
not  be  limited to, any leases and contracts pertaining  to  the
Assets,  the  physical components of all portions of the  Assets,
the  condition of the Assets, such state of facts as an  accurate
survey  and inspection would show, the present and future  zoning
ordinances, resolutions and regulations of the city, county,  and
state where the Assets is located and the value and marketability
of the Assets.

           Without  in  any  way limiting the generality  of  the
preceding subparagraphs of this section, but subject to  Sections
13  and 14 of this Agreement, Purchaser specifically acknowledges
and agrees that as of the date of Closing, Purchaser shall waive,
release, and discharge any claim it has, might have had,  or  may
have  against  the  Seller with respect to the condition  of  the
Assets,  either  patent or latent, its ability  or  inability  to
obtain  or maintain building permits, either temporary  or  final
certificates  of occupancy, or licenses for the use or  operation
of  the Assets, and/or certificates of compliance for the Assets,
the  actual or potential income or profits to be derived from the
Assets,  the  real estate taxes or assessments now  or  hereafter
payable   thereon,   the   compliance  with   any   environmental
protection,  pollution, or land use laws, rules,  regulations  or
requirements,  and  any  other state of facts  which  exist  with
respect to the Assets.

       4.     EARNEST   MONEY.   Purchaser  shall  deposit   with
Capdevielle Title Corporation (the Title Agent"), as escrow agent
and  agent  for the Title Company, as defined below, the  sum  of
Twenty  Five Thousand and 00/100 Dollars ($25,000.00), as earnest
money, contemporaneously with the execution of this Agreement  by
Purchaser,  to  be held in Title Agent's interest  bearing  trust
account  (with interest accruing to the benefit of the Purchaser)
and  to  be credited against the Purchase Price at Closing  (said
earnest   money,  and  any  and  all  interest  accrued  thereon,
hereinafter   collectively  called  the  "Deposit").    Purchaser
acknowledges and agrees that the Deposit is nonrefundable  except
to the extent provided in paragraph 6(c).

      5.   TITLE INSURANCE.  Seller and Purchaser acknowledge and
agree that Purchaser intends to obtain from Title Agent a current
Commitment for Title Insurance based upon Chicago Title Insurance
Company  Commitment  No. 01508.0736 in favor  of  Applejazz,  LLC
("Applejazz") issued August 17, 2000, effective August  11,  2000
("Title  Commitment")  covering  each  Real  Property  issued  by
Chicago  Title  Insurance Company (the "Title Company"),  whereby
the  Title  Company commits to issue to Purchaser a current  form
ALTA   Owner's  Policy  of  Title  Insurance  (collectively   and
interchangeably,  the  "Title Policy")  with  extended  coverage,
subject  only  to the matters identified on Exhibit "C"  attached
hereto and incorporated herein by reference, the Leases, existing
zoning,  sewer, drainage and other public utility  servitudes  of
record,  liens  for ad valorem taxes which are not  yet  due  and
payable,   subdivision  or  other  covenants,  restrictions   and
easements  which  do not adversely affect the  use  of  the  Real
Property for its current uses, and any other exceptions agreed to
by  Purchaser  in writing (collectively "Permitted  Exceptions").
Purchaser,  at  its option, may also obtain an ALTA/ACSM  "Urban"
Class  certified survey of any of the Real Property  satisfactory
to Purchaser, in its sole opinion (hereinafter, the "Survey(s)"),
bearing  a  legal  description,  made  by  a  licensed  surveyor.
Purchaser  has obtained or shall obtain from Applejazz copies  of
any  prior  title evidence, such as a current abstract  or  title
policy,   and  any  prior  surveys  Seller  may  have  previously
delivered to Applejazz, of any of the  Real Property to  expedite
further  examination of title.  Purchaser and Seller  acknowledge
and  agree  that  Purchaser is hereby deemed to  have  raised  as
objections,  effective  as of the date  of  this  Agreement,  the
matters  set  forth  in  that  certain  letter  from  counsel  to
Applejazz dated August 21, 2000 (collectively "Defects").  Seller
shall make a good faith effort to so cure such Defects and Seller
shall  have twenty (20) days from the date of Purchaser's  notice
of such Defects to furnish evidence to the extent the Defects are
cured  or  removed.   If  Seller is unable to cure  such  Defects
within  said  twenty (20) days, Purchaser may, at  its  election,
take the title as it then is upon giving to Seller notice of such
election and tendering performance on its part, or Purchaser  may
exercise  its rights to lease any of the Real Properties affected
by  such Defects as provided under paragraph 6(c).  Closing shall
be  an  insured  closing  so that when title  is  transferred  to
Purchaser,  the  Title  Policy(ies),  as  aforesaid,   shall   be
delivered to Purchaser subject only to the Permitted Exceptions.

      6.   INSPECTIONS.   (a) Seller hereby grants Purchaser, its
agents,  employees or representatives a period of time commencing
on  the  Effective  Date and ending on September  25,  2000  (the
"Inspection  Period"; 5:00 p.m. central time on the last  day  of
the  Inspection Period shall hereinafter be referred  to  as  the
"Inspection  Notification  Date")  to  conduct  such  feasibility
analyses, studies and investigations and with the approval of the
Debtor  to enter upon the Property at any time, and from time  to
time,  at  any  time approved by Debtor, to conduct  soil  tests,
borings,  percolation tests and any other tests,  inspections  or
examinations which Purchaser deems necessary or advisable, it its
sole discretion, and to review that certain Phase I Environmental
Assessment Update of the Applebee's Neighborhood Grill Restaurant
for the Real Property delivered to Applejam, Inc. under cover  of
letter dated August 25, 2000 from Malcolm Pirrie, Inc., a copy of
which  Purchaser intends to obtain from Applejazz (the "Report").
At  Seller's  option,  Seller may have a  representative  present
during  any  on  site  inspection of  the  Personal  Property  or
Building, or during any Re-Inspection (as defined below)  of  the
same.   In  furtherance  of  the foregoing,  and  to  assist  the
Purchaser in its Inspections of the Real Property, Purchaser  has
obtained  or  will obtain from Applejazz copies of  the  existing
Lease,  environmental  reports,  title  insurance  policies,  and
surveys  concerning  the Real Property.  With Debtor's  approval,
Seller hereby grants to Purchaser, its agents or contractors, the
right  to  enter upon the Real Property and within  the  Building
thereon to make the Inspections and the Surveys described herein.
Purchaser's  entry onto the Real Property shall  be  at  its  own
risk.  In connection with any such Physical Inspections conducted
by  Purchaser and its agents or contractors, Purchaser  covenants
and  agrees that all such work and tests performed by or  at  the
request of Purchaser shall be nondestructive and Purchaser shall,
immediately upon any request of Seller, restore the Assets to the
condition thereof existing immediately prior to any such work  or
tests.   Seller  makes no warranty or representation  as  to  the
quality,  accuracy  or  completeness of any  of  the  information
delivered  to  Purchaser in accordance with this section  or  the
ability  of  Purchaser to rely thereon.  Purchaser hereby  agrees
that  Purchaser shall be completely responsible for all acts  and
omissions   of   itself,  its  agents,  and  representatives   in
exercising  such  right and privilege granted in this  paragraph,
and Purchaser hereby indemnifies Seller and agrees to hold Seller
free  and  harmless from and against any and all  losses,  costs,
damages,  and expenses (including, without limitation, attorney's
fees,  costs of litigation, and the cost and expense of  removing
or  bonding  any  liens affecting the Assets)  ever  suffered  or
incurred  by Seller by reason of the exercise of the  rights  and
privileges  granted to Purchaser in this paragraph or the  breach
of   Purchaser's  covenant  to  restore  contained  herein.   The
indemnity  contained in the immediately preceding sentence  shall
expressly  survive  the  Closing  or  any  termination  of   this
Agreement.

           (b)   Purchaser shall have the right, at  its  option,
(with  a  representative of Seller present, if Seller so chooses)
to  re-inspect  the  Personal Property  and  Building  (the  "Re-
Inspection") immediately prior to Closing.  In the event such Re-
Inspection  reflects that Personal Property or the  Building  has
materially declined in condition other than normal wear and  tear
since the prior Physical Inspection,  or any portion thereof  has
been  removed since the Physical Inspection without  having  been
replaced with similar Personal Property, Purchaser shall look  to
the  Debtor for any costs, damages or reimbursement, and  not  to
Seller.

           (c)   In  the event Purchaser, in its sole discretion,
shall determine that any of the Assets are unsuitable to purchase
for  one  of  the reasons set forth in this Paragraph 6(c),  then
Purchaser shall give to Seller written notice no later  than  the
Inspection Notification Date of (i) Defects or (ii) if the Report
reveals  the presence of environmental contaminants in  violation
of applicable environmental laws other than de minimus quantities
of substances which technically could be considered environmental
contaminants provided that such substances are of a type and  are
held in a quantity normally used in connection with the occupancy
or  operation  of  comparable restaurants  or  commonly  used  as
cleaning  or office supplies and are being held, stored and  used
in  compliance with all applicable environmental laws, and  which
are  not  described in that certain Phase I Environmental  report
the  cover page of which is attached as EXHIBIT "D", (any or  all
of  which  such  conditions are hereinafter "Deficiencies"),  and
Seller  shall have thirty (30) days from the date of  receipt  of
such  notice (1) to effect a cure of such Deficiencies, provided,
however, that such Deficiency is not readily susceptible to  cure
within  thirty  (30)  days, with the consent of  the  Purchaser's
lender,  Seller shall have a reasonable period of time under  the
circumstances  to effect such cure if the Seller  commences  such
curative   efforts  within  such  thirty  (30)  day  period   and
thereafter diligently continues such efforts until the completion
of  the  cure,  or (2) to advise Purchaser that it  will  not  or
cannot cure such Deficiencies whereupon Purchaser shall have  the
option,  in  its  sole discretion, to elect (i) to  purchase  the
Assets  notwithstanding the Deficiencies for the Purchase  Price,
or  (ii)  to terminate this Agreement and, at Purchaser's option,
(x)  assume Debtor's interest in the Lease applicable to the Real
Property  (the "Subject Lease") and enter into a modification  of
the  Subject Lease with Seller on terms set forth in the  Subject
Lease,  modified only as necessary, to provide that  the  maximum
total  rental due to Seller under the Subject Lease is 7% of  the
gross  sales  of  foods  and beverages at the  Restaurant  to  be
operated  on  the  Real  Property, or (y) terminate  the  Subject
Lease.   Notwithstanding anything herein to the contrary, in  the
event   that   Seller's   curative  efforts   with   respect   to
contamination are not completed by October 24, 2000, but will  be
completed within 180 days thereafter, Purchaser agrees  to  lease
the  Real  Property in accordance with the immediately  preceding
sentence until such curative efforts are completed, at which time
Purchaser  shall purchase the Assets for the Purchase Price.   In
the event of a conflict between this paragraph 6(c) and any other
term  or provision of this Agreement, the terms of this Paragraph
shall control.

           (d)  In the event Purchaser fails to make objection to
any  alleged  Deficiencies by the Inspection  Notification  Date,
Purchaser  shall  be deemed to have approved the  Assets  in  all
matters related thereto.

     7.   CONDITIONS PRECEDENT.

            A.     FOR   PURCHASER'S  BENEFIT.    Seller   hereby
acknowledges that Purchaser has advised Seller of its  intent  to
initially use the Real Property as an Applebee's restaurant  with
associated   bar   serving  alcoholic  beverages   (collectively,
"Purchaser's Intended Use").  This purchase and sale  is  subject
to  the  satisfaction, or waiver by Purchaser, of  the  following
conditions  and covenants prior to the Closing Date  (hereinafter
defined):

               1.       There shall be no outstanding Defects  or
Deficiencies.

           B.   FOR SELLER'S BENEFIT.  As conditions precedent to
Seller's obligations under this Agreement:

               1.    All  rents  and other amounts then  due  and
payable  under the Subject Lease shall have been paid in full  by
the Debtor.

          C.    FAILURE OF CONDITIONS.  In the event that any  of
the  foregoing  Conditions Precedent have not been  satisfied  or
complied  with,  or  waived  by  Purchaser,  or  by  Seller,   as
applicable,  on or before October 24, 2000, as such date  may  be
extended  by rights of parties under express provisions  of  this
Agreement, Purchaser or Seller may, at its option terminate  this
Agreement;  in  which  case, the Deposit  shall  be  returned  to
Purchaser and the parties shall thereafter be released  from  any
further liability hereunder, except with respect to the Condition
Precedent  in  Section 7.A.1, as to which Purchaser may  exercise
its rights under Section 6(c)(i) or (ii).

      8.    EMINENT DOMAIN; DAMAGE.  If prior to Closing any part
of  the  Real  Property  is condemned or appropriated  by  public
authority or any party exercising the right of eminent domain, or
if  any  Building  is destroyed or materially  damaged  by  fire,
windstorm,  explosion or other casualty, Purchaser  may,  at  its
option, terminate the Agreement or elect to close notwithstanding
such  casualty or condemnation, in which case the Purchase  Price
shall be reduced by the amount of Seller's award and/or insurance
proceeds, or if such condemnation and/or insurance award  is  not
yet  determined,  the Purchase Price shall remain  the  same  and
Seller  shall assign to Purchaser at Closing its rights  in  such
award.

      9.    RISK OF LOSS.  Prior to Closing, the risk of loss  or
damage to the Assets shall remain with Seller.

      10.   CLOSING; ESCROW; AND CLOSING EXPENSES.   Closing  and
settlement (the "Closing") shall take place through escrow at the
office of the Title Agent referenced in Article 4 above, via mail
delivery  of  the  closing documents, and otherwise  at  a  place
mutually agreed to by the parties, on or before October 24, 2000,
as  such  date may be extended by rights of parties under express
provisions  of  this Agreement (the "Closing  Date").   Prior  to
Closing  in escrow, Purchaser shall submit to Seller for approval
a copy of the proposed conveyance documents.  Prior to Closing in
escrow,  Seller  shall submit to Purchaser a  copy  of  the  most
recent  tax  bills.   All current real estate  taxes  are  to  be
prorated  as of 11:59 p.m. on the date prior to the Closing  Date
(the  "Proration Time"), and if the amount of such taxes  is  not
then  ascertainable, the prorating shall be on the basis  of  the
amount of the most recent ascertainable taxes.  Any past due  and
unpaid special assessments, shall be paid by Seller at Closing or
Purchaser  shall receive an adjustment in the Purchase  Price  to
cover  the cost of the special assessment(s).  Any other  special
assessments  shall  be prorated as of the  Proration  Time.   All
transfer  and  conveyance  taxes and/or  documentary  transaction
taxes  and  special real estate taxes related to  conveyance,  if
any, shall be paid for by the Seller.  All base rent, common area
maintenance charges and other monetary charges under  the  Leases
shall be prorated as of the Proration Time.  All percentage rent,
if  any,  payable under the Leases shall be prorated  as  of  the
Proration  Time.  The cost of recording the conveyance  documents
called  for  herein  shall be paid for by Purchaser.   All  title
curative  work,  including the cost of  recording  any  documents
required  therewith, shall be paid for by Seller.   Any  and  all
closing  costs and escrow fees and other costs related to Closing
shall  be equally divided between Seller and Purchaser. Purchaser
shall  pay  for the cost of the Survey inspections  described  or
permitted  under Paragraph 6 and all title searches  and  charges
and  title  premiums.  Each party shall bear its  own  attorney's
fees.

      11.   TIME OF THE ESSENCE; DEFAULT.  Time is of the essence
of  this Agreement.  If Purchaser defaults hereunder and fails to
cure  said  default  within thirty (30)  days  after  receipt  of
written  notice  thereof from Seller stating the  nature  of  the
default and the actions needed, then, upon demand of Seller, said
Deposit  shall  be  forfeited  as  liquidated  damages  and  this
Agreement shall become null and void.  It is specifically  agreed
by Seller and Purchaser that Seller's sole remedy in the event of
a  default  by  Purchaser under this Agreement shall  be  limited
solely  to  retention of the Deposit as liquidated  damages,  and
Seller  waives  any and all other damages and  causes  of  action
which  may have arisen pursuant to law, and that Seller's damages
in the event of a breach or default by Purchaser are difficult to
ascertain  at this time and the Deposit is a reasonable  estimate
of such damages and is not intended to be a penalty.

           If  Seller  defaults hereunder, or if  the  Seller  is
unable or unwilling to deliver title to any of the Assets on  the
Closing  Date  in the manner required herein, and fails  to  cure
said  default  within thirty (30) days after receipt  of  written
notice  thereof from Purchaser, the Deposit shall be returned  to
Purchaser only pursuant to the terms of paragraph 6(c) and in all
other  events  shall  be delivered promptly to  Seller,  and  the
Purchaser  may  demand specific performance  or  seek  any  other
remedy, available at law or in equity.

           If  either  party  hereto is required  to  engage  the
services of an attorney to enforce any of the provisions  hereof,
the  prevailing party may collect its reasonable attorney's  fees
actually incurred in connection with such actions.

      12.  NOTICE.  All notices and demands herein required shall
be  in  writing  and  shall be sent by either (a)  United  States
Certified Mail, return receipt requested, postage prepaid, or (b)
national overnight delivery service with return receipt, delivery
charge  prepaid, or (c) by fax notice with printed  confirmation,
to  Seller  at  AEI Fund Management, 1300 Minnesota  World  Trade
Center,  30  Seventh Street East, St. Paul, Minnesota 55101-4901,
Attention:  Mr.  Mark Larson, Chief Financial Officer,  Facsimile
No.  (651)  227-7705,  with  copy  to  Troutman  Sanders  at  600
Peachtree Street, N.E., Suite 5200, Atlanta, GA 30308, Attention:
A.  Michelle  Willis, Esq., Facsimile No. (404) 962-6722;  or  to
Purchaser  at  Paradise  Foods, Inc., 417 Main  Street,  Natchez,
Mississippi 39120, Attention: David Paradise, Facsimile No. (601)
445-4397,  with a copy to Paul, Hastings, Janofsky & Walker  LLP,
600  Peachtree Street, N.E., Suite 2400, Atlanta, Georgia  30308,
Attention:  Eric W. Anderson, Esq., Facsimile No. (404) 815-2424.
Notices  sent by United States Certified Mail as set forth  above
shall be effective five (5) days after the same is deposited with
the  United States Postal Service, postage prepaid.  Notices sent
by  national overnight courier service shall be effective one (1)
day after depositing the same with such courier service, delivery
fee  prepaid, marked for next day delivery.  Notices sent by  fax
shall  be  effective  on  the  same  business  day  provided  the
confirmation reflects the recipient received the same before 5:00
p.m., recipient's time; otherwise, such notice shall be effective
on the next business day.

      13.  COVENANTS.  Seller represents, covenants and warrants,
in   addition   to  any  other  representations,  covenants   and
warranties contained in this Agreement, that (a) Seller owns good
and valid title to all of the Assets subject to the Subject Lease
and  Permitted  Exceptions, only; (b) closing of the  transaction
contemplated herein will not violate the terms of any  agreements
that Seller may have with any other parties, including mortgages,
stand  still agreements, and cease and desist orders and any  by-
laws of Seller, or to the best of Seller's knowledge, any law  or
ordinance; (c) Seller has received no notice of, and to  Seller's
actual  knowledge,  there are no actions,  suits  or  proceedings
pending against, by or affecting Seller which affect title to the
Assets or which questions the validity or enforceability of  this
Agreement  or of any action taken by Seller under this Agreement,
in  any  court or before any governmental authority, domestic  or
foreign;  and Seller has received no notice of, and  to  Seller's
actual  knowledge,  there  are  no pending  condemnation  actions
involving  all  or  any portion of the Assets;  (d)  to  Seller's
actual  knowledge,  other than the Subject Lease,  there  are  no
leases  with  Seller,  including  without  limitation,  billboard
leases,  or  other  agreements for use, occupancy  or  possession
presently in force with respect to all or any portion of the Real
Property,  and  the  Subject Lease is (and shall  be  as  of  the
Closing  Date)  in  full  force and  effect;  (e)  [intentionally
deleted];  (f) [intentionally deleted]; (g) between the  date  of
this Agreement and the Closing Date, the Seller will not grant or
enter  into any agreement with any party other than the Purchaser
providing  for  the  sale, lease, option  to  acquire,  or  other
disposition  of  any of the Assets (Purchaser  acknowledges  that
Seller  has  heretofore entered into an agreement  regarding  the
Assets  with  Applejazz  which agreement  is  being  assigned  or
terminated  in accordance with this Agreement and orders  of  the
Court);  and  (h) all of the foregoing representations  covenants
and warranties will be true and correct at Closing or Seller will
advise  of  any necessary corrections or additions to render  the
same  not  misleading.   Seller agrees  to  sign  at  Closing  an
affidavit  confirming the foregoing as of  the  Closing  Date  or
advising  Purchaser of any necessary corrections or additions  to
render the foregoing not misleading as of such date.  All of  the
covenants,  warranties, representations and agreements  contained
in  this  Paragraph  13  (as modified  by  closing  additions  or
corrections in the manner specified herein) and in 14 (ii) below,
shall  survive closing and shall run with the land and extend  to
and   be  binding  upon  the  heirs,  executors,  administrators,
successors and assigns of the respective parties for a period  of
one  (1)  year.  Purchaser, in turn, covenants and warrants  that
it  has  the due power and authority to enter into this Agreement
and  to  close the transaction contemplated herein,  without  the
consent or intervention of any other parties.

     14.  Hazardous Substances.

          A.      Seller's   Representations,   Warranties    and
Covenants.    Seller  represents,  warrants  and  covenants   the
following:

               (i)   For  purposes of this Section 14  "Hazardous
Substances" means substances or pollutants known to be  hazardous
wastes,  hazardous  substances,  hazardous  constituents,   toxic
substances, whether solid, liquid or gaseous, including  but  not
limited to asbestos, radioactive materials, oil, gasoline, diesel
fuel and other hydrocarbons, and any other substances defined  as
"hazardous  wastes", "hazardous substances", "toxic  substances",
"pollutants", "contaminants", or other similar designations,  the
removal,  storage or presence of which is regulated  or  required
and/or  the  maintenance of which is penalized by  the  Resources
Conservation  Recovery  Act,  42  U.S.C.  6901,  et   seq.,   the
Comprehensive Environmental Response, Compensation and  Liability
Act,  42 U.S.C. 9601, et seq., the Toxic Substances Control  Act,
15  U.S.C. 2601, et seq., the Clean Water Act, 33 U.S.C. 1251, et
seq., the Safe Drinking Water Act, 42 U.S.C. 300(f)-300(j) -  10,
the  Clean Air Act, 42 U.S.C. 7401, et seq., or any other  local,
state or federal agency, authority or governmental unit provided,
however,  that such definition expressly excludes such  materials
which  would otherwise be "Hazardous Substances" if used  in  the
ordinary course of business or for cleaning office uses.

               (ii)  Seller has not received and is not aware  of
any  notification from any federal, state, county or city  agency
or authority to Seller relating to Hazardous Substances on, in or
at any Real Property.

     15.  MUTUAL INDEMNITIES.  Seller agrees to indemnify, defend
and   hold  Purchaser,  its  officers,  directors,  shareholders,
employees,  agents and representatives ("Purchaser et  al")  from
and   against   any   and   all  damages,  losses,   liabilities,
deficiencies,  actions, demands, judgments,  costs  and  expenses
(including  reasonable  attorneys'  fees  and  accountants'  fees
actually incurred) of any kind or nature whatsoever (except those
items  caused  by Debtor or Purchaser or which by this  Agreement
specifically become the obligation of Purchaser) caused by Seller
and  arising out of, resulting from, relating to, or incident  to
the  Assets  up  to   the Proration Time.   Purchaser  agrees  to
indemnify,  defend  and  hold Seller,  its  officers,  directors,
shareholders, employees, agents and representatives  ("Seller  et
al")  from  and against any and all damages, losses, liabilities,
deficiencies,  actions, demands, judgments,  costs  and  expenses
(including  reasonable  attorneys'  fees  and  accountants'  fees
actually incurred) of any kind or nature whatsoever (except those
items  caused  by  Debtor or Seller or which  by  this  Agreement
specifically become the obligation of Seller) caused by Purchaser
and/or  arising out of, resulting from, relating to, or  incident
to the Assets from and after the Proration Time.

      16.   BROKERS'  INDEMNITY.   Seller  and  Purchaser  hereby
covenant  and  warrant  that there are  no  real  estate  brokers
involved  in this transaction.  In connection with the foregoing,
Purchaser  hereby  agrees to indemnify, defend  and  hold  Seller
harmless  from any and all claims, costs or damages  incurred  by
Seller  resulting from Purchaser's failure to pay such commission
or  resulting  from  any other person or firm  claiming  to  have
negotiated, instituted or brought about this Agreement on  behalf
of  Purchaser other than the foregoing described broker.  Seller,
in  turn,  hereby agrees to indemnify, defend and hold  Purchaser
harmless  from any and all claims, costs or damages  incurred  by
Purchaser  resulting  from any person or firm  claiming  to  have
negotiated, instituted or brought about this Agreement on  behalf
of Seller.

      17.   APPLICABLE LAW.  This Agreement shall be governed  by
and construed under the laws of the State of Louisiana.

      18.  EFFECTIVE DATE.  This Agreement shall be effective  as
of  the  date  the last party hereto signs such Agreement.   This
Agreement shall not be binding on either party, however, until it
is fully executed by all parties hereto.

      19.  MISCELLANEOUS.

           A.      In  the event any time period provided for  in
this  Agreement  expires  on a weekend or  legal  holiday  (being
defined  by  any holiday recognized by the United  States  Postal
Service), the time period shall be automatically extended to  the
next  business  day.  If any provision of this Agreement  or  the
application thereof to any person or circumstances shall, to  any
extent, be held invalid or unenforceable, such provision shall be
construed as closely as possible to its original intent but so as
to  remain  enforceable or valid under law, and the remainder  of
the  Agreement, or the application of such term or  provision  to
persons  whose circumstances are other than those as to which  it
is held invalid or unenforceable, shall not be affected thereby.

           B.    If  at any time following the execution of  this
Agreement  another  entity is approved by the  Court  to  be  the
lessee  or  purchaser of any or all of the Assets, at either  the
Purchaser's or the Seller's option, this Agreement will terminate
and the Seller shall receive the Deposit and any interest thereon
and/or other amounts escrowed hereunder by Purchaser.

           C.    Except to the extent required by the Court,  the
Seller  will  keep, in strict confidence, all of  the  terms  and
conditions of this Agreement.

                 [SIGNATURES BEGIN ON NEXT PAGE]

      IN  WITNESS WHEREOF, Seller and Purchaser have caused their
duly authorized officers to execute this Agreement.

OFFERED BY:              PURCHASER:

                         SOUTHERN RIVER RESTAURANTS, LLC,
                         a Mississippi limited liability company

                         By:/s/ Frank C Heath
                         Name:  Frank C Heath II
                         Title: Member

                         Date of Execution:  September 18, 2000

               [SIGNATURES CONTINUED ON NEXT PAGE]

            [SIGNATURES CONTINUED FROM PREVIOUS PAGE]

ACCEPTED BY:             SELLER:

                         AEI REAL ESTATE FUND XVI LIMITED
                         PARTNERSHIP, a Minnesota limited
                         partnership

                         By:  AEI Fund Management XVI, Inc.,
                              its corporate general partner

                         By: /s/ Mark E Larson
                         Name:   Mark E. Larson
                         Title:  Chief Financial Officer

              Date of Execution:  September 15, 2000

                         AEI REAL ESTATE FUND XVIII LIMITED
                         PARTNERSHIP, a Minnesota limited
                         partnership

                         By:  AEI Fund Management XVIII, Inc.,
                              its corporate general partner

                         By:  /s/ Mark E Larson
                         Name:    Mark E. Larson
                         Title:   Chief Financial Officer

               Date of Execution:  September 15, 2000

                           EXHIBIT "A"

                  [REAL PROPERTY DESCRIPTIONS]

                          I. FEE PARCEL

A  CERTAIN  TRACT  OR PARCEL OF LAND located in  the  SW  1/4  of
Section  1,  T9 S-R 14E, Greensburgh Land District,  St.  Tammany
Parish, Louisiana, being more particularly described as follows:

COMMENCE  at  the  Northeast corner of the Southwest  quarter  of
Section 1, T9 S-R 14E, thence South 1 08' 00" East a distance  of
1,281  feet  more or less, to the Northeast corner of the  13,573
acres; thence South 1 08' 00" East along the easterly boundary of
the  13, 573 acres a distance of 874.85 feet; thence South 88 52'
00" W a distance of 601.70 feet to the POINT OF BEGINNING:

THENCE from the POINT OF BEGINNING, PROCEED South 1 08' 00 East a
distance of 305.34 feet to a point and corner;

THENCE  PROCEED  along the arc of a curve to the right  having  a
radius of 124.93 feet, a length of 69.87 feet, and a chord length
of 68.96 feet which is on a bearing of North 78 15' 36" West to a
point and corner;

THENCE PROCEED North 76 11' 04" West a distance of 53.91 feet  to
a point and corner;

THENCE PROCEED North 40 48' 46" West a distance of 40.27 feet  to
a point and corner;

THENCE PROCEED North 9 10' 07 East a distance of 249.09 feet to a
point and corner;

THENCE PROCEED North 88 52' 00" East a distance of 100.48 feet to
the POINT OF BEGINNING.

The above described portion of ground 36,217.56 square feet.  All
in  accordance  with  a plan of survey by R. P.  Fontcubera  Jr.,
Registered  Professional Land Surveyor, dated December  7,  1990,
revised January 31, 1991, recertified correct December 12, 1991.

AND

II. SERVITUDE PARCEL

Access  and  Parking  Servitude established by  that  "Reciprocal
Servitude Agreement" dated November 26 and December 17, 1991,  by
and  between  Gulf  Coast Restaurants, Inc. and Wal-Mart  Stores,
Inc.  filed on December 20, 1991, under Entry No. 802298  in  COB
1489, folio 360 covering the following property:

A  CERTAIN  TRACT  OR PARCEL OF LAND, located  in  the  southwest
quarter  of Section 1, Township 9 South-Range 14 East, Greensburg
Land   District,  St.  Tammany  parish,  Louisiana,  being   more
particularly described as follows:

COMMENCE  at  the  Northeast corner of the Southwest  quarter  of
Section 1, Township 9 South - Range 14 East;

THENCE,  go South 1 degree 08 minutes 00 seconds East, a distance
of 1,281 feet, more or less to the Northeast corner of the 13.573
acres;

THENCE  go  South 1 degree 08 minutes 00 seconds East  along  the
Easterly boundary of the 13.573 acres a distance of 874.85 feet;

THENCE, turn and go South 88 degrees 52 minutes 00 seconds  West,
a distance of 615.36 feet to the POINT OF BEGINNING;

THENCE,  continue South 88 degrees 52 minutes 00 seconds West,  a
distance of 40.00 fee to a point;

THENCE  turn and go North 1 degree 08 minutes 00 seconds West,  a
distance of 10.00 feet to a point;

THENCE,  turn and go South 88 degrees 52 minutes West, a distance
of  45.00  feet to a point on the easterly right-of-way  line  of
Interstate Highway 10 Expressway (40' Service Road);

THENCE, turn and go along the aforesaid right-of-way line,  North
9 degrees 10 minutes 07 seconds East, a distance of 30.49 feet to
a point;

THENCE, turn and go North 88 degrees 52 minutes 00 seconds  East,
a distance of 39.55 feet to a point;

THENCE, turn and go North 1 degrees 08 minutes 00 seconds West, a
distance of 60.00 feet to a point;

THENCE, turn and go North 88 degrees 52 minutes 00 seconds  East,
a distance of 60.00 feet to a point;

THENCE, turn and go South 1 degrees 08 minutes 00 seconds East, a
distance of 60.00 feet to a point;

THENCE, turn and go South 88 degrees 52 minutes 00 seconds  West,
a distance of 36.00 feet to a point;

THENCE, turn and go South 1 degree 08 minutes 00 seconds East,  a
distance of 40.00 feet to the POINT OF BEGINNING.

The   above  described  Access  and  Parking  Servitude  contains
7.428.21 square feet.  All in accordance with a plan of survey by
R.  P.  Fontcubera  Jr., Registered Professional  Land  Surveyor,
dated  December  7,  1990, revised January 31, 1991,  recertified
correct December 12, 1991.

NOTE:   DESGNATION OF TRACTS OF LAND AS FEE PARCEL AND  SERVITUDE
PARCEL  ARE FOR CONVENIENCE ONLY AND DO NOT REFLECT ANY  OFFICIAL
DESIGNATION OF RECORD.

                           EXHIBIT "B"

                      [LEASE DESCRIPTIONS]

SLIDELL,  LOUISIANA. Lease Agreement dated May 5, 1993  with  AEI
Real Estate Funds XVI and XVIII Limited Partnerships.

COVINGTON, LOUISIANA.    Lease Agreement dated June 23, 1993 with
AEI Net Lease Income & Growth Fund XIX Limited Partnership.

LAFAYETTE, LOUISIANA.    Lease Agreement dated January 17,  1995,
with AEI Net Lease Income & Growth Fund XX Limited Partnership.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}]]