EXHIBIT 10(U)

EMPLOYMENT AGREEMENT

         THIS  EMPLOYMENT  AGREEMENT  (the  "Agreement"),  made this 15th day of
July,  1996,  between U.S.  TECHNOLOGIES,  INC., a Florida  Corporation with its
principal executive offices at 8160 Woodland Center Blvd., Tampa, Florida 33614,
(the "Company"), and PETER S. STEELE ("Employee").

INTRODUCTION

         The  Company  desires to  continue  to employ  Employee,  and  Employee
desires to continue his employment  with the Company.  In  consideration  of the
mutual  covenants  and promises  contained  herein,  and other good and valuable
consideration,  the receipt and  sufficiency of which is hereby  acknowledged by
the parties hereto,  the parties  hereto,  intending to be legally bound hereby,
agree as follows:

         1. Term of Employment.  The Company hereby continues to employ Employee
and Employee  hereby accept the  continuation of his employment with the Company
upon the  terms  set  forth in this  Agreement  for a period  of three (3) years
commencing  on the date of this  Agreement  (the  "Commencement  Date"),  unless
sooner terminated in accordance with the provisions of Section 4. This Agreement
shall  automatically  renew for one (1) year periods  following the  termination
date unless either party shall give at least thirty (30) days written  notice to
the other party of showing an intention to terminate the Agreement at the end of
the then current term or if this  Agreement is terminated by the mutual  consent
of the parties.

         2. Title Capacity. Employee shall serve as the President of the Company
and shall  have such  authority  as is  delegated  to  Employee  by the Board of
Directors of the Company.

         Employee  hereby  accepts the  employment  and agrees to undertake  the
duties and  responsibilities  inherent  in  Employee's  position  and such other
duties and  responsibilities as the Board of Directors of the Company shall from
time to time reasonably assign to Employee. Employee agrees to devote Employee's
entire  business  time to the business  and  interest of the Company,  and those
companies  affiliated with the Company during the Employment Period and Employee
agrees to abide by the ordinary,  customary and reasonable  rules,  regulations,
instructions,  personnel  practices  and policies of the Company and any changes
therein which may be adopted from time to time by the Company.  Because  Company
is a one hundred  percent (100%) owned  subsidiary of Pacific  Animated  Imaging
Corporation  ("PAI")  Employee  agrees to render such  services and provide such
assistance to PAI as requested by the Chief  Executive  Officer of PAI from time
to time.

         3. Compensation and Benefits.
                  3.1 Salary.  The Company shall pay Employee such annual salary
as is set forth in the  Compensation  Schedule  attached  hereto and made a part
hereof as Exhibit "A". By mutual  agreement  of the parties,  Exhibit "A" may be
revised from time to time.

                  3.2 Fringe Benefits. Employee shall be entitled to participate
in all fringe benefit programs that the Company  establishes and makes available
to its  officer-employees  generally,  if any. The Employee shall be entitled to
vacation,  sick leave and personal  leave each year of  employment in accordance
with Company  policy as revised from time to time,  to be taken at such times as
may be mutually agreeable to Employee and the Board of Directors of the Company.

                  3.3  Reimbursement  of Expenses.  The Company shall  reimburse
Employee for all reasonable travel, entertainment and other expenses incurred or
paid by  Employee  in  connection  with,  or  related  to,  the  performance  of
Employee's  duties,  responsibilities  or services  under this  Agreement,  upon
presentation  by the Employee of  documentation,  expense  statements,  vouchers
and/or such other supporting information as the Company may request.

                  3.4  Automobile  Allowance.  During the term of this Agreement
and any renewal thereof, Employee shall be provided with a lease automobile.

         4.  Employment  Termination.  The employment of Employee by the Company
pursuant to this  Agreement  shall  terminate  upon the occurrence of any of the
following:

                  4.1  Expiration of the  Employment  Period in accordance  with
Section 1;

                  4.2 At the election of the Company,  for "Cause",  immediately
upon written  notice from PAI to the Employee.  For the purposes of this Section
4.2,  "Cause" for termination  shall be deemed to include only (a) the direct or
indirect competition by Employee with Company and/or PAI (as hereinafter defined
in  Section  6.);  (b) the  conviction  of an  Employee  of a  felony  or an act
involving  moral  turpitude;  (c) the drug or alcohol  abuse by Employee,  which
impairs the performance of Employee's duties, but only if Employee fails to seek
appropriate  counseling or fails to complete a prescribed counseling program; or
(d) the failure of Employee to comply with any material  term of this  Agreement
after written  notice of such  noncompliance  or  nonperformance  is received by



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Employee and the Employee fails to comply or perform within ten (10) days of the
receipt of such  written  notice  counting  as the first day of the ten (10) day
period the first  business day after receipt of such notice.  Cause shall not be
construed as a failure of Employee to perform services for Company substantially
different  from the services  performed  by Employee  during the initial term of
this Agreement.

                  4.3  Upon  the  Disability  of the  Employee.  As used in this
Agreement,  the term "Disability" shall mean the inability of the Employee,  due
to a physical or mental disability, for a period of thirty (30) days, whether or
not  consecutive,  during any sixty  (60) day  period to perform  the normal and
customary   services  required  of  Employee  pursuant  to  this  Agreement.   A
determination  of disability  shall be made by a physician  satisfactory to both
Employee  and the  Company,  provided  that,  if Employee and the Company do not
agree on a physician, Employee and the Company shall each select a physician and
such two physicians together shall select a third physician, whose determination
as to disability shall be binding on the parties.

                  4.4 Death of Employee.

                  4.5 By Employee for "Good  Reason".  "Good  Reason" shall mean
the following,  unless such  circumstances  are fully corrected  within ten (10)
days after the  Employee  notifies  the  Company  in writing  that he intends to
terminate his employment for Good Reason:

                           (a) the  assignment,  without  the  Employee's  prior
written  consent  to  another person,  of Employee's  primary  duties  that  the
Employee  was  responsible  for during the  initial term of this  Agreement,  or
a  significant  adverse  alteration  in the  nature or status of the  Employee's
employment  from those in effect during the initial term of this Agreement;

                           (b) any  reduction  by   the  Company  in  Employee's
aggregate  compensation (other than  as agreed to  by Employee) in effect on the
date hereof or as the same may be increased after such date.

         5. Effect of Termination.

                  5.1  Termination  due to Expiration of Employment  Period.  If
Employee' s employment is  terminated  due to the  expiration of the  Employment
Period pursuant to Section 4.1, the Company shall pay Employee the  Compensation
per Exhibit "A" (including accrued bonuses, if any) and benefits due to Employee
under  Section  3.2,  3.3 and 3.4  through  the last day of  Employee'  s actual
employment hereunder.

                  5.2  Termination  for  Cause.  In the  event  that  Employee's
employment is terminated for "Cause"  pursuant to Section 4.2, the Company shall
pay Employee the Compensation per Exhibit "A" (not including accrued bonuses, if
any) and  benefits  due to Employee  under  Section 3.2, 3.3 and 3.4 through the
last day of Employee's actual employment hereunder.

                  5.3  Termination  by Company Not for Cause.  In the event that
Employee's  employment is terminated by the Company Not for "Cause", the Company
shall pay  Employee  compensation  at the rate of two hundred  thousand  dollars
($200,000) per year for the duration of the  non-competition  section as defined
in section 6.1 herein, which at the option of the Company may be shortened.

                  5.4  Termination  for  Death  or  Disability.   If  Employee's
employment is  terminated  by reason of death or disability  pursuant to Section
4.3. or Section 4.4.,  the Company shall pay the estate of Employee or Employee,
as the case may be, the Compensation per Exhibit "A" (including accrued bonuses,
if any,) and benefits under  Sections 3.2, 3.3 and 3.4 which would  otherwise be
payable to Employee up to the end of the month in which the  termination of this
Agreement for such death or disability occurs.

                  5.5 Termination  for Good Reason.  In the event the Employee's
employment is  terminated by him for "Good Reason"  pursuant to Section 4.5, the
Company shall pay the Employee  compensation at the rate of two hundred thousand
dollars ($200,000) per year for the duration of the  non-competition  section as
defined  in  section  6.1  herein,  which at the  option of the  Company  may be
shortened.

                  5.6 Termination by Employee not for Good Reason.  In the event
Employee's  employment is terminated by him not for "Good  Reason",  the Company
shall pay  Employee  the  Compensation  per Exhibit "A" (not  including  accrued
bonus,  if any) and benefits due Employee under Section 3.2, 3.3 and 3.4 through
the last day of Employee's actual employment hereunder.

         6. Non-Competition.

                  6.1 Employee agrees that, during the Employment Period and for
a period  of time  equal  to the  duration  of  Employee's  employment  with the
Company, but in no instance to exceed two (2) years after the termination of the
employment period for any reason:

                           (a) Employee will not recruit or solicit any employee
of the Company, or its other  subsidiaries  and  affiliated  companies or other-
wise  induce  any  employee  to  leave  the  employment  of  PAI,  the  Company,
Company's  or  PAI's  subsidiaries   and   affiliated  companies  to  become  an
employee  of  or  otherwise



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become  associated  with  Employee  or  any  firm,   corporation,   business  or
institution with which Employee is or may become associated;

                           (b) Employee  will not solicit or divert the business
or  patronage  of  any  of the  customers  or  accounts  of  PAI,  the  Company,
Company's  subsidiaries  and affiliated  companies  or  prospective customers or
accounts of the aforementioned,  which were  contracted,  solicited or served by
the Company  while  Employee was  employed by the Company to a business directly
or  indirectly  in  competition  with  PAI,  the  Company,  Company's  or  PAI's
subsidiaries and affiliated companies;

                           (c) Employee  will  not engage  or participate in any
line  of business  related to or involving in any way computer  software,  as an
employer,   employee,   principal,   partner,   officer,   stockholder,   agent,
independent  contractor  or otherwise, directly  or  indirectly,  alone,  or  in
concert with another individual or entity; and

                           (d) Employee  will  not compete  with Company or PAI,
directly or this subsection (d), "compete",  or  any  variation  thereof,  means
the  Employee's  engagement  or  participation  in,  or  furnishing  of  aid  or
assistance   in   connection  with,   the   distribution,  sale,  marketing   or
rendering of products  or  services  of the  type  or  kind  distributed,  sold,
marketed or rendered by PAI, the  Company,  the Company's or PAI's  subsidiaries
or affiliated  companies during  employment or after  termination of employment,
including   those   products  or   services  that   the   Company, the Company's
subsidiaries or affiliated companies, as the case may be,  was in the process of
developing or designing for distribution,  sale, marketing  or rendering at such
time.

                  6.2 The parties to this  Agreement  consider the  restrictions
contained herein  reasonable.  If, however,  such  restrictions are found by any
court having  jurisdiction to be  unreasonable  because they are (or one of them
is, as the case may be) overly broad, then such restriction(s) will nevertheless
remain  effective,  but  shall be  considered  amended  in  whatever  manner  is
considered reasonable by that court, and as so amended shall be enforced.

                  6.3 If  there  is any  breach  by the  Employee  of any of the
covenants  contained in this  Section 6., the damage to PAI,  the  Company,  the
Company's or PAI's  subsidiaries  or affiliated  companies will be  substantial,
although  difficult to  ascertain,  and money  damages alone will not afford the
injured party an adequate remedy.  Therefore,  if any breach occurs, in addition
to such  other  remedies  as may be  provided  by law,  PAI,  the  Company,  the
Company's or PAI's subsidiaries or affiliated companies, as the case may be, has
the right to specific  performance of the covenants of the Employee contained in
this Agreement by way of temporary or permanent injunctive relief.

         7. Non-Disclosure.  Employee agrees not to disclose to any third party,
or to use for Employee's own benefit or for the benefit of any third party,  any
trade secrets or confidential or other proprietary  information  relating to the
products, services, markets, customers, suppliers or current or planned business
operations  of PAI,  the  Company,  the  Company's  and PAI's  subsidiaries  and
affiliated  companies  without the  Company's  prior written  consent.  Employee
further agrees that all documents,  notes, letters, records, models, prototypes,
computer  programs  and other  tangible  and  intangible  evidence of such trade
secrets  or  confidential  or  other  proprietary  information  are the sole and
exclusive property of PAI, the Company,  the Company's or PAI's subsidiaries and
affiliated  companies;  that  Employee  shall  surrender  all such  evidence  in
Employee's  possession  or control to the Company  upon the  termination  of the
Employment  Period or at any other time upon request and that Employee shall not
retain or use any copies or summaries thereof.

         8.  Inventions,  Improvements,  Copyrights,  Ideas and Similar Creative
Property.  Employee  agrees  that any  inventions,  improvements  or ideas which
Employee may make or conceive,  and any  copyrightable  subject  matter of which
Employee may be the author, either solely or jointly with others, which Employee
makes, conceives, or authors during the period of Employee's employment with the
Company,  shall be the  property of PAI,  the  Company,  the  Company's or PAI's
subsidiaries or affiliated companies, as the case may be, and that Employee will
promptly disclose all such inventions,  improvements, ideas and material to PAI,
the Company, the Company's or PAI's subsidiary or affiliated  companies,  as the
case may be,  and that on  request,  Employee  will  execute  all  applications,
assignments,  and  other  papers  necessary  to enable  PAI,  the  Company,  the
Company's or PAI's  subsidiary or affiliates to obtain full protection and title
in all countries to such inventions, improvements, ideas and matter.

         9.  Arbitration.  Except as  provided  in  Section  6.3,  any  dispute,
including a'claimed breach of the terms hereof,  arising out of or in connection
with this Agreement  shall be resolved by arbitration  conducted by the American
Arbitration  Association in Tampa,  Florida in accordance with its Rules then in
existence.  The  arbitrators  shall not contravene or vary in any respect any of
the terms or provisions of this Agreement. The award of the arbitrators shall be
final  and  binding  upon  the  parties  hereto,  their  heirs,  administrators,
executors, successors and assigns and judgment upon such award may be entered in
any court having jurisdiction thereof.

         10.  Notices.  All notices  required or permitted  under this Agreement
shall be in writing and shall be deemed effective upon personal delivery or upon
deposit in the United States Post Office,  postage  prepaid,  by registered mail



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return receipt requested, or when delivered by a nationally recognized overnight
delivery service issuing a receipt,  addressed to the other party at the address
shown above or at such other  address or addresses as either party shall provide
to the other.

         11.  Pronouns.  Whenever the context may require,  any pronouns used in
this Agreement  shall include the  corresponding  masculine,  feminine or neuter
forms,  and the singular  forms of nouns and pronouns  shall include the plural,
and vice versa.

         12. Construction of Agreement.  The parties to this Agreement and their
respective  counsel have reviewed this Agreement and have had the opportunity to
revise this  Agreement,  and the normal rule of  construction to the effect that
any  ambiguities  are to be  resolved  against the  drafting  party shall not be
employed in the interpretation of this Agreement.

         13. Entire Agreement.  This Agreement  constitutes the entire agreement
between the parties and  supersedes  all prior  agreements  and  understandings,
whether written or oral, relating to the subject matter of this Agreement.

         14.  Amendment.  This  Agreement  may be amended or modified  only by a
written instrument executed by both the Company and the Employee.

         15.  Governing Law. This Agreement shall be construed,  interpreted and
enforced in accordance with the laws of the State of Florida.

         16.  Successors and Assigns.  This Agreement  shall be binding upon and
inure to the  benefit  of both  parties  and  their  respective  successors  and
assigns,  including any corporation  with which or into which the Company may be
merged or which may succeed to its assets or business,  provided  however,  that
the  obligations  of the  Employee  are  personal  and shall not be  assigned by
Employee.

         17. Miscellaneous.

                  17.1 No delay or  omission by the  Company in  exercising  any
right under this Agreement shall operate as a waiver of that or any other right.
A waiver or consent given by the Company on any one occasion  shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.

                  17.2 The  captions of the Sections of this  Agreement  are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any Section of this Agreement.

                  17.3 In the  case any  provision  of this  Agreement  shall be
invalid,  illegal  or  otherwise  unenforceable,   the  validity,  legality  and
enforceability  of the  remaining  provisions  shall  in no way be  affected  or
impaired  thereby.

IN WITNESS  WHEREOF,  the parties  hereto have executed this Agreement as of the
day and year set forth above. U.S. TECHNOLOGIES, INC.

By:

John J. Cadigan, For the Board of Directors

Peter S. Steele, Employee

EXHIBIT "A"
COMPENSATION SCHEDULE
Pursuant to the  attached  Employment  Agreement,  the  compensation  payable to
Employee shall be as follows: One hundred thousand dollars and 00/100 ($100,000)
on an annual basis.

IN WITNESS WHEREOF, the parties hereto have executed this  Compensation Schedule
the date and year written above.
U.S. TECHNOLOGIES, INC.

By:

John J. Cadigan For the Board of Directors


Peter S. Steele, Employee