1 EXHIBIT 10.16 [AQUA-CHEM, INC. LOGO] P.O. BOX 421, MILWAUKEE, WISCONSIN 53201 - 414-577-2700 - FAX: 414-577-2953 JEFFREY A. MILLER CHAIRMAN and CHIEF EXECUTIVE OFFICER June 23, 1998 Mr. Roger L. Swanson 2485 Woodcrest Lincoln, Nebraska 68502 Dear...

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                                                                EXHIBIT 10.16

[AQUA-CHEM, INC. LOGO]
X.X. XXX 000, XXXXXXXXX, XXXXXXXXX 00000 - 000-000-0000 - FAX: 000-000-0000


   XXXXXXX X. XXXXXX
CHAIRMAN and CHIEF EXECUTIVE OFFICER




June 23, 1998

Xx. Xxxxx X. Xxxxxxx
0000 Xxxxxxxxx
Xxxxxxx, Xxxxxxxx  00000

Dear Xxxxx:

         This letter will set forth the terms of the consulting arrangement
between Aqua-Chem, Inc. ("AQM") and you, which are as follows:

         1. TERM. The term of the agreement will commence on the closing date of
         AQM's acquisition of National Development Corporation ("NDC") and
         continue thereafter for such period as AQM determines to be necessary,
         but in no event more than eighteen months.

         2. DUTIES. Your duties shall consist of consulting with and advising
         AQM management on a part time basis as requested by AQM with respect to
         matters pertaining to the historic business of NDC and generally
         assisting (in a manner consistent with your status as the prior senior
         executive of NDC) with the transition and integration of that business
         into AQM. As we have discussed, it is my intention to establish a
         Boiler technical Advisory Group to provide overall guidance to all of
         AQM's boiler and related businesses and, if and when that is
         established, you would also serve as a member of the Boiler Technical
         Advisory Group.

         3. INDEPENDENT CONTRACTOR STATUS. During the term of the consulting
         arrangement, you would be a part-time independent contractor and not an
         employee of AQM. Accordingly, AQM will not withhold income, social
         security or other taxes from the payments to be made to you and you
         will be solely responsible for and indemnify AQM with respect thereto.
         During the first two or three months of the consulting arrangement, I
         would anticipate that your services would be required on a more or less
         full time basis. For the next two or three months, the time required of
         you will be no more than half-time. After the initial four to six month
         period, the time commitment on your part will be minimal and your
         duties during this period will be limited to consulting with respect to
         specific questions that may arise from time to time. I am sure that
         after the initial two to three month period we will be able to
         coordinate the performance of consulting services at mutually
         convenient times so as not to interfere with any travel or other
         personal plans you may have.

         4. COMPENSATION. During the initial four to six month period, you will
         be compensated at the rate of $1000.00 per day for services requested
         by AQM. Thereafter, you will be compensated at the rate of $125.00 per
         hour for services requested by AQM. In addition, AQM will provide you
         with an office and secretarial support at NDC's office and reimburse
         you for any out of town travel and related expenses incurred by you at
         AQM's request. In addition, you will be compensated for your duties
         related to fulfilling your role with the ABMA. In the event you are
         elected and agree to serve on the ABMA for a second one-year term, the
         compensation terms of this arrangement will be extended to cover that
         period.


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                                                                   EXHIBIT 10.16



Xx. Xxxxx X. Xxxxxxx
June 23, 1998
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         If you are in agreement with the preceding, pleased so indicate by
signing and returning the enclosed copy of this letter.

                                                     Very truly yours,

                                                         /s/ XX Xxxxxx

                                                     Xxxxxxx X. Xxxxxx




         Agreed and accepted this 19 day of June, 1998.



                                                         /s/ Xxxxx X. Xxxxxxx
                                                     ---------------------------
                                                     Xxxxx X. Xxxxxxx