EMPLOYMENT AGREEMENT

          THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH
                         MAY BE ENFORCED BY THE PARTIES.

     AGREEMENT, dated this 27th day of July, 1998, but effective as of August 1,
1998, by and between IMPERIAL WORLD, INC., an Illinois corporation  ("Company"),
and JOSEPH K. LAU ("Employee").

                                    Recitals

     WHEREAS,  the  Company  and  its  affiliates  are  engaged  in the  design,
assembly, merchandising and wholesale distribution of jewelry.

     WHEREAS,  the  Company  desires  to  retain  the  ongoing  services  of the
Employee,  and the  Employee  desires  to  serve,  as the  President  and  Chief
Executive  Officer of the Company and in such  capacities as the Company's Board
of Directors shall from time to time determine.

     WHEREAS,  the  Employee  is,  and will be,  employed  by the  Company  in a
confidential relationship wherein Employee, in the course of his employment with
the Company,  has, and will, become familiar with and aware of information as to
the specific  manner of doing  business and the customers of the Company and its
affiliates  and  future  plans  with  respect  thereto,  all of  which  has been
established  and maintained,  and will be established  and maintained,  at great
expense to the Company.

     WHEREAS,  Employee recognizes that the Company's business is dependent upon
a number of trade secrets,  the protection of which is of critical importance to
the Company.

     WHEREAS,  the Company will sustain great loss and economic damage if during
the term of this Agreement or Employee's  employment with the Company,  or for a
period of one (1) year immediately following the termination of the Agreement or
Employee's employment, for any reason, Employee should violate the provisions of
Paragraphs 3 or 4 of this Agreement.

     WHEREAS,  monetary damages for such losses would be extremely  difficult to
measure.

     WHEREAS,  the  Company  and  Employee  desire to  formally  evidence  their
relationship and the terms of employment.

     NOW, THEREFORE,  in consideration of the mutual promises,  terms, covenants
and conditions set forth herein and the performance of each, it is hereby agreed
as follows:


                                       1
<PAGE>
                                    ARTICLE I
                              Employment and Duties

     1.01  Employment.  The Company hereby employs Employee as its President and
Chief Executive Officer ("CEO").  Additional duties or titles may be assigned to
or assumed by Employee at the discretion of the Board of Directors  ("Board") of
the  Company.  However,  if the duties and title of the  Employee do not include
"President  and  Chief  Executive   Officer",   this  agreement  is  immediately
terminable  at the  discretion  of  Employee  and  Employee  is  entitled to the
compensation  for  the  remaining  term  of  this  agreement  from  the  date of
termination payable in a lump sum within 10 days from the date Employee notifies
the Company of his termination. Employee hereby accepts this employment upon the
terms and conditions  herein  contained and agrees to devote his time to promote
and further the business and services of the company.  Employee shall faithfully
adhere to,  execute and fulfill all policies  established  by the  Company.  The
company shall also nominate Employee for the company's Board of Directors.

     1.02   Duties.   Employee   shall   perform   such   duties,   assume  such
responsibilities  and devote such time,  attention and energy to the business of
the Company as the Board shall from time to time  require and shall not,  during
the term of his employment hereunder,  be engaged in any other business activity
pursued  for  gain,  profit  or  other  pecuniary  advantage  if  such  activity
interferes with Employee's duties and responsibilities  hereunder.  However, the
foregoing limitations shall not be construed as prohibiting Employee from making
personal investments in such form or manner as will neither require his services
in the  operation  or  affairs of the  companies  or  enterprises  in which such
investments are made nor violate the terms of Paragraphs 3 or 4 hereof.

     1.03 Custody of Company Funds.  All funds received by Employee on behalf of
the  Company,  if any,  shall  be held in trust  for the  Company  and  shall be
delivered to the Company as soon as practicable.

                                   ARTICLE II
                                  Compensation

     2.01 Base  Salary.  From and after the  execution  of this  Agreement,  the
Company  shall pay a base salary to Employee in the amount of $200,000  per year
from August 1, 1998 to July 31,  1999,  $225,000 per year from August 1, 1999 to
July 31,  2000 and  $250,000  per year from  August 1,  12000 to July 31,  2001,
payable in equal  installments  on a bi-weekly  basis.  The base salary shall be
adjusted  automatically on each anniversary during the term of this Agreement to
reflect the change unless the Board notifies the Employee at least 2 weeks ahead
of the change and  determines  not to honor the increase with reason and support
for Employee's non-performance. In such event, the then current base salary will
carry on for that term year.

     2.02 Expense  Reimbursement.  The Company shall reimburse  Employee for all
reasonable  travel,  entertainment  and other expenses related to his employment
by, or promotion of, the Company.  Employee  shall provide a written  accounting
and explanation of all expenses for which  reimbursement  is sought on a monthly
basis and the Company shall  reimburse  all such  expenses  within ten (10) days
following receipt of each written accounting.

                                       2
<PAGE>

     2.03 Bonuses. The Employee shall be entitled to receive a bonus equal to 5%
of the Company's pre-tax profits determined from the audited financial statement
in  accordance  with  generally  accepted  accounting  principles,   before  the
deduction of any bonus, payable within 60 days after completion of audit, at the
end of each fiscal year,  commencing  from the first fiscal year ending December
31, 1999.

     2.04 Plan  Participation.  The Employee shall be entitled to participate in
any and all stock option, stock bonus,  pension,  profit sharing,  retirement or
other similar plans adopted by the Company.

     2.05  Fringe  Benefits.  The  Employee  shall be  entitled  to such  fringe
benefits as the Company shall establish for its employees  generally which shall
include with respect to the Employee three weeks paid vacation  annually,  group
life  insurance,  disability  pay and such other  benefits as the Company  shall
adopt,  subject to the  discretion of the Company to add or delete such standard
benefits as the Board deems appropriate, from time to time.

                                   ARTICLE III
                            Non-Competition Agreement

     3.01 Non-Competition  Agreement.Employee will not, during either the period
of this Agreement or of his employment by or with the Company,  whichever period
is  longer,  and  for a  period  of  one  (1)  year  immediately  following  the
termination of this Agreement,  or his employment,  whichever is longer, for any
reason  whatsoever,  directly or  indirectly,  for himself or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation or
business  of  whatever  nature  (i)  call  upon  any  customer  of  the  Company
(including,  but not  limited  to,  any  customer  obtained  for the  Company by
Employee)  for the purpose of  soliciting or selling any products or services in
competition  with  those of the  Company or its  affiliates;  (ii) call upon any
employee  of the  Company or any of its  affiliates  for the purpose or with the
intent of  enticing  them away from or out of the  employ of the  Company or any
reason whatever;  (iii) establish,  enter it, be employed by or, advise, consult
with or  become  a part  of,  any  company,  partnership,  corporation  or other
business entity or venture,  or in any way engage in business for himself or for
others,  within the city limits of Chicago,  Illinois or within 30 miles of such
city limits,  in competition with the Company or its affiliates;  or (iv) during
or after the term of his  employment  with the Company,  disclose the  Company's
customers  or any other trade  secrets of the Company  whether in  existence  or
proposed,  to any person,  firm,  partnership,  corporation  or business for any
reason or purpose whatsoever.

     3.02  Equitable  Relief.  Because of the  difficulty of measuring  economic
losses to the Company and its affiliates as a result of the Employee's breach of
the foregoing covenant, and because of the immediate and irreparable damage that
would be caused to the  Company  and its  affiliates  for which it would have no
other adequate remedy,  Employee agrees that the covenant specified in Paragraph
3.01 may be enforced by the Company and its affiliates in the event of breach by
him by injunctions, restraining orders or similar equitable relief.

                                       3
<PAGE>

     3.03  Reasonableness  of the Covenant  Not to Compete.  It is agreed by the
parties  that the  covenants  in  Paragraph  3.01 are  necessary  to protect the
goodwill and business  interests of the Company and its  affiliates and impose a
reasonable  restraint on Employee in light of the activities and business of the
Company and its  affiliates on the date of the  execution of this  Agreement and
the future  plans of the  Company;  but it is also the intent of the Company and
Employee that such  covenants be construed  and enforced in accordance  with the
activities  and  business of the Company and its  affiliates  on the date of the
termination of the employment of Employee.

     3.04  Severability  of  the  Covenant  Not to  Compete.  The  covenants  in
Paragraph  3.01 shall be  construed  as an  agreement  independent  of any other
provision in this Agreement and the existence of any claim or cause of action of
Employee  against  the Company or its  affiliates,  whether  predicated  on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company of such covenants.  It is specifically agreed that the period of one (1)
year stated at the  beginning of this  Paragraph 3, during which the  agreements
and  covenants of Employee made in Paragraph  3.01 shall be effective,  shall be
computed by excluding from such computation any time during which Employee is in
violation of any  provision of this  Paragraph 3 and any time during which there
is pending in any court of  competent  jurisdiction  any action  (including  any
appeal from any final judgment) brought by any person, whether or not a party to
this Agreement,  in which action the Company or its affiliates  seeks to enforce
the  agreements  and  covenants of Employee or in which any person  contents the
validity of such agreements and covenants or their  unenforceability or seeks to
avoid their performance or enforcement.

                                   ARTICLE IV
              Non-Disclosure Agreement and Proprietary Information

     4.01 Proprietary-Information. The Employee recognizes and acknowledges that
the  information,   techniques,  processes,   developments,  work  in  progress,
business,  list of the  Company's  customers and any other trade secret or other
secret or confidential  information  relating to Company's  business as they may
exist from time to time,  are  valuable,  special and unique assets of Company's
business.  In addition,  Employee recognizes that Company is continually engaged
in  research,  design  and  development  of new  products  and  innovations  and
improvements to the  information,  techniques,  processes,  developments,  trade
secrets,  and other  secrets and  confidential  matters  relating  to  Company's
business. Therefore, Employee agrees as follows:

     A.   That  Employee  will hold in strictest  confidence  and not  disclose,
          reproduce,  publish or use in any manner, whether during or subsequent
          to his employment,  without the express  authorization of the Board of
          Directors  of the  Company,  any  information,  design,  manufacturing
          technique,  process,  business  customer  lists,  trade secrets or any
          other  secrets or  confidential  matter  relating to any aspect of the
          Company's  business  as  designated  from time to time by the Board of
          Directors of Company, except as such disclosure or use may be required
          in connection with Employee's work for the Company.

                                       4
<PAGE>

     B.   That upon  request or at the time of leaving the employ of the Company
          the Employee  will deliver to the Company,  and not keep or deliver to
          anyone else, any and all notes, memoranda,  documents and, in general,
          any and all material relating to the Company's business.

     C.   That the  Board of  Directors  of the  Company  may from  time to time
          designate other subject matters requiring  confidentiality and secrecy
          which  shall be deemed to be covered  by the terms of this  Agreement.
          However,  any such  matters  must be mutually  agreed upon by both the
          Board and Employee.

     4.02 Breach.  In the event of a breach or threatened breach by the Employee
of the  provisions  of this  Paragraph  4, the  Company  shall be entitled to an
injunction:

     A.   Restraining  the Employee from  disclosing,  in whole or in part,  any
          information described in Paragraph 4.01 or from rendering any services
          to any person, firm,  corporation  association or other entity to whom
          such  information,  in  whole or in part,  has  been  disclosed  or is
          threatened to be disclosed; and/or

     B.   Requiring that Employee deliver to Company all information, documents,
          notes,  memoranda  and any and all  discoveries  or other  material as
          described  above upon  Employee's  leave of the employ of the Company.
          Nothing  herein  shall be construed  as  prohibiting  the Company from
          pursuing  other  remedies  available to the Company for such breach or
          threatened  breach,   including  the  recovery  of  damages  from  the
          Employee.

                                    ARTICLE V
                               Term; Terminations

     5.01 Term. The term os this Agreement  shall begin on the effective date of
this Agreement and continue for a term of three (3) years,  unless terminated as
herein provided.


     5.02  Termination.   This  Agreement  and  Employee's   employment  may  be
terminated in any one of the following ways:

     A.   The death of Employee shall terminate the Agreement.

     B.   The Company may terminate the Agreement after thirty (30) days written
          notice to Employee for good cause,  including,  but without limitation
          (i) Employee's  material breach of this  Agreement,  (ii) the material
          default  of  the  Company  or  its  affiliates  in  performing   their
          obligations under contracts with other persons or business entities if
          directly caused by Employee;  (iii) if, because of illness or physical
          or mental  disability or other incapacity which continues for a period
          in excess of six (6) months,  Employee is unable to perform his duties
          under  this  agreement;  (iv)  Employee's  fraud  with  respect to the
          business  affairs of the Company or its  affiliates  or if Employee is
          convicted of a felony; or (v) alcohol or drug abuse by Employee.

                                       5
<PAGE>

     C.   This  Agreement will terminate upon (i) the sale by the Company of all
          or  substantially  all  of  its  assets  to a bona  fide  third  party
          purchaser(s);   (ii)  the  sale,   exchange  or   disposition  in  one
          transaction of fifty percent (50%) or more of the  outstanding  voting
          securities of the Company to a bona fide third party purchaser;  (iii)
          a bona fide  decision by the Company to  terminate  its  business  and
          liquidate  its  assets;  or (iv) the  merger or  consolidation  of the
          Company in a transaction  wherein the shareholders of the Company hold
          less than fifty  percent (50%) of the  post-transaction  shares of the
          surviving entity.

     5.03 Rights of Termination;  Severance  Payments.  Upon termination of this
Agreement and Employee's  employment,  Employee shall be entitled to receive one
half (1/2) of the  compensation  earned under this  Agreement  for the remaining
term of this  Agreement  from the date of  termination,  or severance  pay in an
amount  equal to one year's base salary,  whichever is greater,  in one lump sum
within 10 day of termination.

     In the event of termination  of this  Agreement for any reason  provided in
this  Article 5, other than  Paragraph  5.02C or if  Employee  resigns  prior to
expiration of the term of this Agreement,  except as provided above,  all rights
and  obligations  under  Paragraph  3.01  and 4.01  herein  shall  survive  such
termination  and  thereafter  Employee  shall  have  no  right  to  receive  any
compensation  hereunder except as set forth in this Paragraph,  or to the extent
employee is prohibited  from competing under 3.01,  compensation  shall continue
for the non-compete period.



                                   ARTICLE VI
                           Representations of Employee

     6.01  Representations  of  Employee.  Employee has  represented  and hereby
represents and warrants to the Company that he is not subject to any restriction
or non-competition covenant in favor of a former employer or any other person or
entity and that the execution of this  Agreement by Employee and his  employment
by the Company or its  affiliates and the  performance  of his duties  hereunder
will not violate or be a breach of any agreement  with a former  employer or any
other person or entity.  Further,  Employee  agrees to indemnity the Company and
its affiliates for any claim, including, but not limited to, attorney's fees and
expenses of investigation, by any such third party that such third party may now
have or may hereafter come to have against the Company or its  affiliates  based
upon or arising out of any  non-competition  agreement or invention  and secrecy
agreement between Employee and such third party.

                                       6
<PAGE>

                                   ARTICLE VII
                                  Miscellaneous

     7.01  Complete  Agreement.  This  Agreement  is  not a  promise  of  future
employment. There are no oral representations, understandings or agreements with
the Company or any of its officers,  directors or  representatives  covering the
same subject  matter at this  Agreement.  This  written  Agreement is the final,
complete and exclusive  statement and  expressions of the agreement  between the
Company and  Employee  and of all the terms of this  Agreement  and it cannot be
varied, contradicted or supplemented by evidence of any prior or contemporaneous
oral or written  agreement may not be later modified except by a further writing
signed by the Company and Employee,  and no term of this Agreement may be waived
except by writing signed by the party waiving the benefit of such terms.

     7.02 No Waiver. No waiver by the parties hereto of any default or breach of
any term, condition or covenant of this Agreement shall be deemed to be a waiver
of any subsequent default or breach of the same or any other term,  condition or
covenant contained herein.

     7.03  Assignment;  Binding Effect.  Employee  understands  that he has been
selected  for   employment   by  the  Company  on  the  basis  of  his  personal
qualifications,  experience and skills.  Employee agrees,  therefore,  that this
Agreement  and the rights to his  services  may be  assigned  by the  Company to
another member of the Company's  affiliated  group at any time without notice to
him, but that he cannot assign all or any portion of this Agreement.  Subject to
the Preceding two sentences,  this Agreement  shall be binding upon and inure to
the benefit of the parties  hereto and their  respective  heirs,  successors and
assigns.  It is further  understood and agreed that the Company may be merged or
consolidated  with another  entity and that any such entity shall  automatically
succeed to the rights, powers and duties of the Company hereunder.


     7.04 Notice.  Whenever any notice is required hereunder,  it shall be given
in writing addressed as follows:

         To the Company:               IMPERIAL WORLD, INC.
                                       Oakmont Centre
                                       1010 Executive Court
`                                      Suite 300
                                       Westmont, Illinois 60559

         To Employee:                  JOSEPH K. LAU
                                       9100 Devon Ridge Drive
                                       Burr Ridge, Illinois  60521

     Notice shall be deemed given and effective three (3) days after the deposit
in the United  States mail of a writing  addressed as above and sent first class
mail,  certified,  return receipt requested,  or when actually received.  Either
party may change the  address  for notice by  notifying  the other party of such
change in accordance with this Section 7.04.

                                       7
<PAGE>

     7.05  Severability;  Headings.  If any  portion of this  Agreement  is held
invalid or  inoperative,  the other portions of this  Agreement  shall be deemed
valid and operative and, so far as is reasonable  and possible,  effect shall be
given to the intent  manifested by the portion held invalid or inoperative.  The
paragraph  headings herein are for reference  purposes only and are not intended
in any way to describe,  interpret, define or limit the extent or intent of this
Agreement or of any part hereof.

     7.06  Arbitration.  Any  controversy or claim arising out of or relating to
this Agreement or the breach thereof shall be settled by arbitration in the City
of Chicago,  Illinois in accordance with the rules then existing of the American
Arbitration  and  judgment  upon the award may be  entered  in any Court  having
jurisdiction thereof.

     7.07  Governing  Law.  This  Agreement  shall in all  respects be construed
according to the laws of the State of Illinois.

     IN WITNESS WHEREOF,  the parties have executed this Agreement as of the day
and date herein first set forth.


ATTEST:                             IMPERIAL WORLD, INC.




                                      By:
-------------------                     ---------------------------
                                      Title:
                                            -----------------------
                                            For and on behalf of the Board of
                                            Directors



                                     EMPLOYEE:


                                     ------------------------------
                                            Joseph K. Lau