EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (hereinafter "Agreement") is made and entered
into  effective as of the first day of December,  1999, by and between  DAEDALUS
BUILDING  SYSTEMS,  INC, a Delaware  Corporation  (hereinafter  "Employer")  and
EDWARD A. McCULLOCH (hereinafter "Employee").

         WHEREAS,  Employer  is engaged in the  business  of  manufacturing  and
selling building systems to build housing units worldwide, and desires to employ
Employee to act as President and CEO; and

         WHEREAS,  Employee  desires  to  accept  employment to act as President
and CEO and as an employee of Employer; and

         WHEREAS,  Employer  has offered  Employee  reasonable  compensation  in
consideration  for such employment  pursuant to certain terms and conditions set
forth herein and Employee hereby accepts such offer.

         NOW,  THEREFORE,  for and in  consideration  of the mutual promises and
agreements  contained  herein and other  good and  valuable  consideration,  the
receipt and sufficiency of which are hereby acknowledged,  Employer and Employee
hereby agree as follows:

     1. Term.  The term of  Employee's  employment  under this  Agreement  shall
commence on December 1, 1999, and shall continue  thereafter  until November 30,
2002, except as otherwise provided herein (the "Term").

     2. Duties and  Services.  Employee  agrees to devote  appropriate  time and
attention  to the  business  of  Employer  for  the  benefit  of  Employer.  The
expenditure of reasonable  amounts of time for other business  activities  shall
not be  deemed a breach  of this  Agreement,  provided  such  activities  do not
materially  interfere  with the services to be rendered  hereunder.  Any outside
employment  must be  pre-approved  by the  Employer,  except for  employment  by
companies now known as Daedalus Products, Inc., Daedalus IT, Inc., or any of the
Chesapeake companies.

         3. Compensation.  As compensation for services provided by Employee and
as long as Employee is not in default hereunder, Employer shall pay Employee per
annum  as  follows:  Year  1 the  sum  of $  225,000.00;  Year  2 the  sum  of $
275,000.00;  Year 3 the sum of $  325,000.00.  The  compensation  shall  be paid
periodically in accordance with Employer's normal payroll procedures;  provided,
however,  that compensation  payable to Employee after the Term shall be payable
in accordance with Section 11 of this Agreement.  Further,  at the option of the
Employer, the Employee may be paid a bonus based upon the financial condition of
the company and upon consideration of Employee's contributions to the company.

         4.  Disclosure and Ownership of Information.

                  a.  Employee  recognized  and  agrees  that  the  business  of
         Employer and its business interests require a confidential relationship
         between Employer and its employees and the fullest practical protection
         and  confidential  treatment  of its trade  secrets,  trade  practices,
         prospects, transactions, business lists, business information, business
         files  and  other  knowledge  of  business  which  will be or have been
         conceived, developed or learned by Employee during Employee's course of

                                       1

<PAGE>



         employment  with  Employer.  Accordingly,  during  Employee's  term  of
         employment with Employer and thereafter, Employee will: (i) keep secret
         and confidential all such information,  trade secrets, trade practices,
         prospects, transactions, business lists, business information, business
         files and other  business  practices of  Employer;  (ii) not use or aid
         others in using,  directly or indirectly,  the same in competition with
         Employer;  and  (iii)  will  not  contact  or  solicit  the  customers,
         employees or  creditors of Employer in any manner which  relates to any
         business engaged in by Employer.

                  b. Notwithstanding  anything to the contrary in subsection (a)
         of this section,  Employer and Employee agree that all housing  related
         inventions,  housing  related ideas,  housing  related  plans,  housing
         related  reports,  or housing  related  processes  which are conceived,
         invented, prepared or developed primarily by Employee during Employee's
         employment  with the Employer shall be the sole and exclusive  property
         of Employer.

                  c.  Employer and Employee  agree that all  inventions,  ideas,
         plans, reports,  prospects or processes or other results of labor which
         are conceived,  invented,  prepared or developed,  in whole or in part,
         during  Employee's  employment  with  the  employer,  by  or  with  the
         assistance  of Employee and with or without the  assistance of Employer
         or other employees of Employer shall be the sole and exclusive property
         of Employer,  and Employee shall, upon request by Employer at any time,
         execute  assignments of the same or other similar documents in favor of
         Employer.

                  d.  During  the term of this  Agreement,  Employee  shall have
         access to and become  acquainted  with  various  trade  secrets  and/or
         confidential or proprietary  information,  including but not limited to
         protocols,  procedures, policies, business or strategic plans, business
         accounts, financial information,  contracts, risk management or quality
         assurance information, and other records of Employer (some of which may
         be developed in part by Employee under this Agreement), which items are
         owned  exclusively  by Employer and, to the extent created by Employee,
         shall  be  deemed  work for  hire,  and  used in the  operation  of its
         business (the "Confidential  Information").  Employee acknowledges that
         the Confidential Information is secret, confidential and proprietary to
         Employer  and has been  disclosed  to and/or  obtained  by  Employee in
         confidence  and  trust for the sole  purpose  of using the same for the
         sole  benefit  of  Employer.   During  his  employment  and  after  the
         termination or expiration of his employment, Employee shall not divulge
         any of the  Confidential  Information  to any other person or entity or
         use the Confidential Information for his own benefit or for the benefit
         of any other  person or  entity,  without  the prior  written  consent,
         Employer, which consent may be withheld in its sole discretion.

                  e. The  parties  agree that the terms of this  Section 4 shall
         survive  termination or expiration of this Agreement.  The existence of
         any claim or cause of action  against  Employer  by  Employee,  whether
         predicated  on this  Agreement  or  otherwise,  shall not  constitute a
         defense to enforcement of this Section.

         5.  Covenant Not to Compete.

                  a. Employee  agrees that while employed by Employer,  Employee
         will  not,  directly  or  indirectly,  own,  operate,  participate  in,
         undertake  any  employment  with or have any  interest in any  business


                                       2

<PAGE>

         enterprise  which  is  competitive  with  the  business  engaged  in by
         Employer; provided, that this section shall not be interpreted to limit
         the  activities  of the  Employee  when such  Employee is acting as the
         agent of Employer.

                  b. For a period of sixty (60) months following the termination
         of employment  hereunder,  Employee shall not,  directly or indirectly,
         own, operate, participate in, undertake any employment with or have any
         interest in any  business  which is involved  in  providing  housing or
         dwelling units made of composites or other materials.

         6.  Damages  for  Breach of  Sections  6 and 7. In the  event  Employee
breaches or threatens to breach any of the covenants  contained in Sections 6 or
7 hereof,  Employer  shall  have any and all rights  and  remedies  at law or in
equity  against  Employee,  including,  but not  limited to, the right to obtain
compensatory damages from Employee. Employer may offset any amounts due Employee
from Employer  against amounts due Employer  hereunder.  The rights and remedies
provided in this  Section  are in  addition  to any and all rights and  remedies
Employer has, including the right of injunction,  pursuant to Section 16 hereof.
Upon request of Employer,  Employee  shall submit to  arbitration as provided in
Section 19 hereof.

         7.  Reasonableness of Restrictions.

                  (a) Employee has carefully  read and considered the provisions
         of  Paragraph  6,  7 and  8  and,  having  done  so,  agrees  that  the
         restrictions set forth in these paragraphs,  including, but not limited
         to, the time  period of  restriction  are fair and  reasonable  and are
         reasonably required for the protection of the interests of employer and
         its officer, directors, shareholders and other employees.

                  (b) In the event that,  notwithstanding the foregoing,  any of
         the  provisions of Paragraphs 6, 7 and 8 shall be held to be invalid or
         unenforceable,  the remaining  provisions  thereof  shall  nevertheless
         continue  to  be  valid  and  enforceable  as  though  the  invalid  or
         unenforceable  parts had not been included  therein.  In the event that
         any provision of the said Paragraphs  relating to the time period shall
         be declared by a court of competent  jurisdiction to exceed the maximum
         time  period  or  areas or  amount  such  court  deems  reasonable  and
         enforceable,  the time period deemed  reasonable and enforceable by the
         court shall become and thereafter be the maximum time period.

         8.  Benefit  Plans.  Employee  shall be  provided  the  opportunity  to
participate in any group health and life insurance plans, medical  reimbursement
plans, pension plans, profit sharing plans, and any other employee benefit plans
or other fringe  benefits  available to other  physician  employees of Employer,
whether now existing or hereafter  created.  Additionally,  the employee will be
provided the opportunity to participate in any program of higher  education,  at
the expense of the  company,  so long as it relates  directly to the business of
the Employer and to the functions for which the Employee is employed.

         9.  Notices.  Any notice  required or  permitted to be given under this
Agreement shall be sufficient if in writing and either  personally  delivered or
mailed by  registered  or certified  mail,  return  receipt  requested,  postage
prepaid,  to the employer at its principal place of business and to the Employee
at his or her last known residential address.

         10.  Arbitration;  Injunctive  Relief.  Except as otherwise provided in
Section 8 hereof,  any dispute or  controversy  arising under this Agreement and
relating to damages shall be settled by submitting the same to arbitration under
the commercial rules of the American Arbitration Association, as then in effect,


                                       3

<PAGE>

in Alexandria,  Virginia. Any decision or determination from such an arbitration
proceeding  shall be final and  binding  and may be entered in any court  having
jurisdiction  thereof,  unless the  decision  or  determination  is in  manifest
disregard of the applicable  law.  Employee and Employer  acknowledge,  however,
that in many situations  damages are an inadequate  remedy at law for the breach
of many of the terms  hereof  (including,  but not limited to, the  covenants of
Employee  contained  in Sections 6 and 7 hereof) and,  accordingly,  Employer is
hereby  granted and shall have the right of  injunction  (any  requirements  for
posting of bonds for injunction are hereby expressly waived), and such other and
further  relief in equity as Employer may be entitled to receive  under the laws
of the Commonwealth of Virginia,  in the event Employee breaches or threatens to
breach any of the covenants or  agreements  contained  herein.  In the event any
provisions hereof shall be modified or held ineffective by any arbitrator or any
court in any respect, such determination or adjudication shall not invalidate or
render  ineffective  the balance of the  provisions  hereof,  and the provisions
hereof shall be enforced to the maximum extent allowed by law.

         11. Entire  Agreement.  The Agreement  represents  the entire and final
agreement  between  the  parties.  The  parties  hereto  have read the terms and
conditions of their Agreement  before signing the same, and hereby agree that no
statement,  agreement or understanding,  whether oral or written,  not contained
herein will be recognized or enforced.

         12. Miscellaneous.  This Agreement shall be governed by the laws of the
Commonwealth  of Virginia and shall be  enforceable  in  Alexandria  or Fairfax,
Virginia,  and shall be binding  upon and inure to the  benefit  of the  parties
hereto  and  their   respective   successors,   assigns,   heirs  and   personal
representatives.  This  Agreement  may be  amended  only in a writing  signed by
Employer  and  Employee.  Any  waiver  by any  party  hereto  of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent  breach by any part or of any other provision hereof. A waiver of any
of the terms and conditions hereof shall not be construed as a general waiver by
Employer,  and employer  shall be free to reinstate  any such term or condition,
with or without notice to Employee.

         IN WITNESS  WHEREOF,  the parties  hereto have executed this  Agreement
effective as of the first date stated above.

                                                 EMPLOYER:
                                                 DAEDALUS BUILDING SYSTEMS, INC.


                                                 By:  /s/
                                                         ----------------------
                                                 Name: PATRICIA L. ESPINO-NAYAR
                                                 Vice President

                                                 EMPLOYEE:


                                                 /s/
                                                     --------------------------
                                                 EDWARD A. McCULLOCH







                                       4