Exhibit 10.1
 
Execution Copy

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of the 1st day
of March, 2010 (the “Effective Date”), by and between Emtec, Inc., a Delaware
corporation (the “Company”) and Brian E. Mandel (the “Executive”).

WITNESSETH THAT:

WHEREAS, the parties desire to enter into this Agreement pertaining to the
employment of the Executive by the Company.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below and intending to be legally bound, it is hereby covenanted and
agreed by the Executive and the Company as follows:

1.
Employment; Position and Responsibilities: Term.

(a)            During the Agreement Term (as defined below), and subject to the
terms of this Agreement, the Executive shall be employed by the Company and
shall occupy the positions of Executive Vice President and head of Public
Sector. The Executive agrees to serve in such positions or in such other
executive offices or positions with the Company or a Subsidiary (as defined
below), as shall from time to time be determined by the Company’s Board of
Directors (the “Board”). The Executive represents that his employment with the
Company does not violate any other agreement to which he is a party.

(b)           During the Agreement Term, the Executive shall report solely and
directly to the Chief Executive Officer of the Company or his designee.

(c)            During the Agreement Term, while employed by the Company, the
Executive shall devote his full time and best efforts to the business of the
Company and shall perform all duties and services for and on behalf of the
Company as shall be reasonably requested by the Chief Executive Officer of the
Company or the Board in their absolute discretion. The Executive’s duties may
include providing executive services for both the Company and the Subsidiaries,
as determined by the Chief Executive Officer of the Company or the Board.

(d)           The term of employment under this Agreement shall commence on the
Effective Date and, unless earlier terminated under Section 3 below, shall
terminate as of the close of business on the day before the second anniversary
of the Effective Date (the “Initial Term”). Unless a Non-Renewal Notice (as
defined below) is given as herein provided or the Executive’s employment is
earlier terminated in accordance with the terms hereof, at the end of the
Initial Term and each anniversary thereof, the period of the Executive’s
employment shall thereafter be automatically extended for an additional twelve
(12)-month period. The Company or the Executive may elect to terminate the
automatic extension of the Agreement Term (as defined below) by giving written
notice of such election not less than thirty (30) days prior to the end of the
then current Agreement Term (the “Non-Renewal Notice”). The Initial Term and any
renewal term are referred to herein as the “Agreement Term”.

 
 

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(e)            For purposes of this Agreement, the following terms shall have
the meanings set forth in this Section 1(e):

(i)                “Change in Control” shall mean:

(1)    the acquisition after the Effective Date 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 (the “Exchange Act”)) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of
the total voting power of the voting securities of the Company entitled to vote
generally in the election of directors (the “Voting Securities”); provided,
however, that the following acquisitions shall not constitute a Change in
Control: (A) any acquisition, directly or indirectly by or from the Company or
any Subsidiary, by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Subsidiary or by the Executive (whether
directly or indirectly), (B) any acquisition by any underwriter in connection
with any firm commitment underwriting of securities to be issued by the Company,
(C) any acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) who, as of the Effective Date,
beneficially owns 20% or more of the Voting Securities or (D) any acquisition by
any corporation if, immediately following such acquisition, 50% or more of the
then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
(entitled to vote generally in the election of directors), are beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who, immediately prior to such acquisition, were the beneficial
owners of the Voting Securities in substantially the same proportions,
respectively, as their ownership, immediately prior to such acquisition of the
Voting Securities;

(2)    the consummation after the Effective Date of (A) a complete liquidation
or substantial dissolution of the Company or (B) the sale or other disposition,
during any 12-month period ending on the date of the most recent sale or
disposition, of assets of the Company that have a total gross fair market value
equal to or more than 75% of the total gross fair market value of all of the
assets of the Company immediately before such sale or disposition, in each case
other than to a subsidiary, wholly-owned, directly or indirectly, by the Company
or to a holding company of which the Company is a direct or indirect wholly
owned subsidiary prior to such transaction; or

(3)    the occurrence of a merger, reorganization or consolidation, other than a
merger, reorganization or consolidation with respect to which all or
substantially all of the individuals and entities who were the beneficial
owners, immediately prior to such merger, reorganization or consolidation, of
the common stock of the Company (“Common Stock”) and the Voting Securities
beneficially own, directly or indirectly, immediately after such reorganization,
merger or consolidation 50% or more of the then outstanding common stock and
voting securities (entitled to vote generally in the election of directors) of
the corporation resulting from such reorganization, merger or consolidation in
substantially the same proportions as their respective ownership, immediately
prior to such reorganization, merger or consolidation, of the Common Stock and
the Voting Securities.

 
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Notwithstanding the foregoing, a “Change in Control” shall not include any
event, circumstance or transaction which results from the action of any entity
or group which includes, is affiliated with, or is wholly or partially
controlled by, one or more executive officers of the Company and in which the
Executive participates (whether directly or indirectly).

(ii)    “Subsidiary” shall mean any corporation, partnership, joint venture or
other entity during any period in which at least a 50% interest in such entity
is owned, directly or indirectly, by the Company (or a successor to the
Company).

2.
Compensation and Other Benefits.

(a)    Base Salary. During the Agreement Term, the Executive shall receive an
annual base salary (“Base Salary”), payable in accordance with the Company’s
normal payroll practices, of $275,000. The Base Salary may be increased by the
Company’s Compensation Committee, in its discretion.

(b)    Bonus.

(i)    Annual Bonus. In respect of each fiscal year during the Agreement Term,
the Executive shall be eligible to earn an annual bonus as set forth on Exhibit
A (the “Bonus”). Such Bonus may be based on Company performance, legacy public
sector business, new growth in public sector business and such other criteria as
determined by the Company in its sole discretion. The Executive’s target Bonus
for each fiscal year during the Agreement Term shall equal 50% of the
Executive’s Base Salary, and the Executive’s maximum Bonus for each fiscal year
during the Agreement Term shall equal 100% of Base Salary. The Company shall use
reasonable efforts to pay any Bonus earned by the Executive within ninety (90)
days of the end of the fiscal year to which such Bonus relates, but in no event
shall any earned Bonus be paid later than March 15th following the close of the
fiscal year to which the Bonus relates. Notwithstanding anything contained
herein to the contrary, the Bonus, if any, for the fiscal year ending August 31,
2010 will be pro-rated based on the number of days that the Executive was
employed by the Company during such fiscal year. With respect to the fiscal year
ending August 31, 2010, the Executive shall be guaranteed a minimum Bonus of
$35,000.

(ii)    Signing Bonus. Within ten (10) business days after the Effective Date,
the Company will pay the Executive $25,000 (less applicable tax withholdings) as
a signing bonus (the “Signing Bonus”). In the event that the Executive resigns
his employment other than for Good Reason or is terminated by the Company for
Cause, in either case, within 1 year after the Effective Date, the Executive
shall repay the entire gross amount of the Signing Bonus to the Company within
ten (10) business days of such termination.

 
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(c)    Equity. Within a reasonable period of time following the Effective Date,
the Company shall grant to the Executive under the Company’s 2006 Stock-Based
Incentive Compensation Plan (the “Plan”) 137,500 shares of restricted stock,
which restricted stock shall vest in equal annual installments on each of the
first four anniversaries of the Effective Date, provided that the Executive
remains employed by the Company on such vesting date (the “Restricted Stock”).
Notwithstanding the foregoing, the Restricted Stock shall, to the extent then
outstanding and unvested, become 100% vested in the event of the Executive’s
termination of employment during the Agreement Term due to his death or
Disability (as defined below). The Restricted Stock grant described in this
Section 2(c) shall be subject to the terms and conditions of the Plan and such
other terms and conditions as determined by the Company and set forth in the
award agreement evidencing such grant.

(d)    Employee Benefits. During the Agreement Term, the Executive shall be
entitled to participate on the same basis as the other executive employees of
the Company, in any pension, retirement, savings, medical, disability or other
welfare benefit plans maintained by the Company from time to time and in
accordance with the terms thereof.

(e)    Expense Reimbursement. During the Agreement Term, the Company shall
reimburse the Executive for all out-of-pocket travel, lodging, meal and other
reasonable expenses incurred by him in connection with his performance of
services hereunder, upon submission of appropriate evidence, in accordance with
the Company’s policy, of the incurrence and purpose of each such expense and
otherwise in accordance with the Company’s business travel and expense
reimbursement policy as in effect from time to time.

(f)    Vacation. During the Agreement Term, Executive shall be entitled to four
weeks of paid vacation on an annualized basis. Vacation shall be prorated for
part of a year worked. Such vacation shall be taken at such times as shall be
approved by the Company, in the reasonable exercise of its discretion.

3.     Termination of Employment. The Executive’s employment with the Company
during the Agreement Term may be terminated by the Company or the Executive
without breach of this Agreement only as provided in this Section 3.

(a)    Termination Due to Disability. The Executive’s employment hereunder may
be terminated by the Company in the event of the Executive’s “Disability,” which
shall mean that the Executive is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months. The determination of the
Executive’s Disability shall (i) be made by an independent physician selected by
the Company and the Executive (provided that if the Executive and the Company
cannot agree as to such an independent physician, each shall appoint one
physician and those two physicians shall appoint a third physician who shall
make such determination), (ii) be final and binding on the parties hereto and
(iii) be made taking into account such competent medical evidence as shall be
presented to such independent physician by the Executive and/or the Company or
by any physician or group of physicians or other competent medical experts
employed by the Executive and/or the Company to advise such independent
physician.

 
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(b)    Termination Due to Death. The Executive’s employment hereunder shall
terminate upon the Executive’s death.

(c)    Termination by the Company for Cause. The Company may immediately
terminate the Executive’s employment hereunder at any time for Cause (as defined
below). “Cause” shall mean (i) the continued willful failure of the Executive
substantially to perform his duties hereunder or his grossly negligent
performance of such duties (other than any such failure due to the Executive’s
physical or mental illness), (ii) the Executive having engaged in misconduct
that has caused or is reasonably expected to result in material injury to the
Company or any of its Subsidiaries, (iii) a material violation by the Executive
of a Company policy, (iv) the breach by the Executive of any of his material
obligations hereunder or under any other written agreement or covenant with the
Company or any of its Subsidiaries, (v) a material failure by the Executive to
timely comply with a lawful direction or instruction given to him by the Board,
or the Company’s Chief Executive Officer or his designee, (vi) the Executive
having been convicted of, or entering a plea of guilty or nolo contendere to, a
crime that constitutes a felony or a misdemeanor involving moral turpitude (or
comparable crime in any jurisdiction that uses a different nomenclature),
including any offense involving dishonesty as such dishonesty relates to the
Company’s assets or business or the theft of Company property and (vii) the
Executive’s insobriety or use of illegal drugs, chemicals or controlled
substances either (A) in the course of performing the Executive’s duties and
responsibilities under this Agreement, or (B) otherwise affecting the ability of
the Executive to perform the same. In the event of litigation concerning the
Company’s termination of Executive for Cause, the Company shall prove that it
terminated the Executive for Cause by a standard of clear and convincing
evidence. In the case of a termination for Cause as described in clauses (i),
(ii), (iii), (iv) and (v) of this Section, the Board or the Chief Executive
Officer, as applicable, shall give the Executive written notice of its or his
intention to terminate him for Cause, such notice to state in detail the
particular circumstances that constitute the grounds on which the proposed
termination for Cause is based. The Executive shall have fifteen (15) days,
after receiving such special notice, to cure such grounds, to the extent such
cure is possible (as reasonably determined by the Board in its sole discretion).
If he fails to cure such grounds to the Board’s reasonable satisfaction, the
Executive shall thereupon be terminated for Cause.

(d)    Termination by Company Without Cause. The Company may terminate the
Executive’s employment hereunder at any time Without Cause (as defined below) by
giving the Executive prior written Notice of Termination (as defined below),
which notice shall be effective immediately, or at such later time as specified
in such notice. A termination “Without Cause” shall mean a termination of the
Executive’s employment by the Company other than as a result of his death or
Disability or for Cause. Notwithstanding the foregoing provisions of this
Section 3(d), if the Executive’s employment is terminated by the Company in
accordance with this Section 3(d) and, within a reasonable time period
thereafter, not to exceed sixty (60) days, it is determined by the Board that
circumstances existed which would have constituted a basis for termination of
the Executive’s employment for Cause in accordance with Section 3(c), the
Executive’s employment will be deemed to have been terminated for Cause in
accordance with Paragraph 3(c).

 
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(e)    Termination by the Executive for Good Reason. The Executive may terminate
his employment under this Agreement for Good Reason by providing the Company
with a Notice of Termination specifying the actions giving rise to Good Reason
within 30 days after the occurrence of such actions; provided, however, that the
Company shall have a period of 30 days following receipt of such Notice of
Termination to cure such actions. For the purpose of this Agreement, the term
“Good Reason” shall mean the occurrence of any of the following events without
the consent of the Executive: (i) any material reduction in the Executive’s Base
Salary or in the Executive’s eligibility for the Annual Bonus described in
Section 2(b)(i), above, not applicable to the Company’s executives generally;
(ii) a material diminution in the Executive’s authority, duties or
responsibilities; or (iii) the relocation by the Company of the Executive’s
primary place of employment with the Company to a location not within a 50 mile
radius of Philadelphia, PA;

(f)    Voluntary Termination by the Executive Without Good Reason. The Executive
may voluntarily terminate his employment hereunder without Good Reason at any
time by giving the Company prior written Notice of Termination at least 90 days
prior to such termination; provided that the Board may, in its sole discretion,
terminate the Executive’s employment hereunder prior to the expiration of the
90-day notice period; further provided, that, for all purposes of this
Agreement, such termination shall be deemed a voluntary termination of
employment by the Executive without Good Reason. In such event and upon the
expiration of such 90-day period (or such shorter time as the Board in its sole
discretion may determine), the Executive’s employment hereunder shall
immediately and automatically terminate. In the event that the Board elects to
terminate the Executive’s employment before the end of the 90-day notice period
in accordance with this Section 3(f), the Executive shall receive his Base
Salary until the earlier of the conclusion of the 90-day notice period or the
date on which the Executive has begun full time employment with another company.

(g)    Notice of Termination. Any termination of the Executive’s employment by
Company or the Executive, other than a termination due to the Executive’s death,
shall be communicated by a written Notice of Termination addressed to the
appropriate party. A “Notice of Termination” shall mean a notice (delivered in
accordance with Section 10(k) below) that indicates the Date of Termination as
defined below), which shall not be earlier than the date on which the notice is
provided, which indicates the specific termination provision in this Agreement
relied on and which sets forth in reasonable detail the facts and circumstances,
if any, claimed to provide a basis for termination of the Executive’s employment
under the provision so indicated.

(h)    For purposes of this Agreement, the “Date of Termination” is the last day
that the Executive is employed by the Company, provided the Executive’s
employment is terminated in accordance with the foregoing provisions of this
Section 3.

(i)     Resignation upon Termination. As of the Date of Termination, the
Executive shall resign, in writing, from all positions then held by him with the
Company and its Subsidiaries.

 
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(j)    Cessation of Professional Activity. Upon delivery of a Notice of
Termination by any party, the Company may relieve the Executive of his
responsibilities and require the Executive to immediately cease all professional
activity on behalf of the Company. In addition, in the event that the Board
determines that there is a reasonable basis for it to investigate whether
circumstances exist that would, if true, permit the Company to terminate the
Executive’s employment for Cause, the Board may relieve the Executive of his
responsibilities during the pendency of such investigation.

4.
Payments Upon Certain Terminations.

(a)    General. If, during the Agreement Term, the Executive’s employment
terminates for any reason, the Executive (or his estate, beneficiary or legal
representative) shall be entitled to receive the following:

(i)    any earned or accrued but unpaid Base Salary through the Date of
Termination (including, except in the case of a termination for Cause, with
respect to unused vacation time); and

(ii)    all amounts payable and vested benefits accrued under any otherwise
applicable plan, policy, program or practice of the Company (other than relating
to severance) in which the Executive was a participant during his employment
with Company in accordance with the terms thereof; provided that the foregoing
shall not be construed as requiring the Executive to be treated as employed by
the Company for purposes of any employee benefit plan or arrangement following
the date of the Executive’s Date of Termination except as otherwise expressly
provided in this Agreement or required by law.

(b)    Termination Without Cause; Termination for Good Reason. If, during the
Agreement Term, the Company terminates the Executive’s employment Without Cause
or the Executive terminates his employment for Good Reason, the Executive shall
be entitled to receive, in addition to the payments and benefits described in
Section 4(a)(i) and Section 4(a)(ii) above, (A) any earned but unpaid Bonus with
respect to any fiscal year of the Company ending prior to the Date of
Termination and (B) provided Executive executes and delivers a general release
of all claims in form and substance satisfactory to the Company within
forty-five (45) days following his termination of employment, (1) his Base
Salary, at the rate in effect hereunder immediately prior to the Date of
Termination, which shall be payable in installments as provided in the last
sentence of this Section 4(b), until the later of (i) the day before the second
anniversary of the Effective Date or (ii) one year following the Date of
Termination and (2) a pro-rata Bonus payment for the fiscal year of the
Executive’s Date of Termination, equal to the Bonus that the Executive would
have been entitled to if he had remained employed by the Company at the end of
such fiscal year multiplied by a fraction, the numerator of which is the number
of days transpired in the fiscal year up to and including the Date of
Termination, and the denominator of which is 365, which pro-rata Bonus shall be
payable at the time provided in Section 2(b) (or, if such payment date would be
earlier than the forty-fifth (45th) date following such termination, on the
forty-fifth (45th) date following such termination). For purposes of clause
(B)(1) of this Section 4(b), the Executive shall not be entitled to receive any
continued Base Salary payments during the forty-five (45) day period following
his termination of employment, and any continued Base Salary payments that would
have otherwise been paid to the Executive during such forty-five (45) day period
shall be paid to the Executive in a lump-sum on the Company’s first pay date
following the expiration of such forty-five (45) day period, with any remaining
continued Base Salary payments to be made in accordance with the Company’s
normal payroll practices, as may be in effect from time to time.

 
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(c)    Termination Due to Death or Disability. If, during the Agreement Term,
the Executive dies or the Company terminates the Executive’s employment
hereunder due to his Disability, the Executive (or his estate, beneficiary or
legal representative) shall be entitled to receive, in addition to the payments
and benefits described in Section 4(a)(i) and Section 4(a)(ii) above, (A) any
earned but unpaid Bonus with respect to any fiscal year of the Company ending
prior to the Date of Termination and (B) a pro-rata Bonus payment for the fiscal
year of the Executive’s death or Disability, equal to the Bonus that the
Executive would have been entitled to if he had remained employed by the Company
at the end of such fiscal year multiplied by a fraction, the numerator of which
is the number of days transpired in the fiscal year up to and including the Date
of Termination, and the denominator of which is 365, which pro-rata Bonus shall
be payable at the time provided in Section 2(b). In addition, if, during the
Agreement Term, the Executive dies or the Company terminates the Executive’s
employment hereunder due to his Disability, the Restricted Stock shall, to the
extent then outstanding and unvested, become 100% vested on the Date of
Termination.

(d)    No Other Obligations. If the Executive’s Date of Termination occurs
during the Agreement Term under any circumstances described in Section 3, the
Company shall have no obligation to make payments under the Agreement for
periods after the Executive’s Date of Termination other than those payments in
accordance with Sections 4(a), 4(b) and 4(c) above.

(e)    Payment. Except as otherwise provided in this Agreement, any payments to
which the Executive is entitled under Sections 4(a), 4(b) and 4(c) shall be made
as soon as administratively feasible following the Date of Termination and in no
event later than 90 days following the Date of Termination.

(f)    Certain Terminations in Connection with a Change in Control.
Notwithstanding anything contained in this Agreement to the contrary if, in
connection with a Change in Control described in Section 1(e)(i)(2)(B) (an
“Asset Sale”), the Executive is offered employment with the acquirer of the
Company’s assets (or any of its affiliates), then the Executive shall not be
entitled to any of the payments or benefits described in Section 4(b) upon his
termination of employment with the Company in connection with such Asset Sale,
unless the Executive terminates his employment for Good Reason in accordance
with Section 3(e), above.

5.     Duties on Termination. Subject to the terms and conditions of this
Agreement, to the extent that there is a period of time elapsing between the
date of delivery of a Notice of Termination, and the Date of Termination, the
Executive shall continue to perform his duties as set forth in this Agreement
during such period, and shall also perform such services for the Company as are
necessary and appropriate for a smooth transition to the Executive’s successor,
if any. Notwithstanding the foregoing provisions of this Section 5, the Company
may suspend the Executive from performing his duties under this Agreement
following the delivery of a Notice of Termination providing for the Executive’s
resignation, or delivery by the Company of a Notice of Termination providing for
the Executive’s termination of employment for any reason; provided, however,
that during the period of suspension (which shall end on the Date of
Termination), the Executive shall continue to be treated as employed by the
Company for other purposes, and his rights to compensation or benefits shall not
be reduced by reason of the suspension.

 
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6.
Restrictive Covenants.

(a)    Noncompetition.

(i)    During the Agreement Term and continuing until the later of (i) the day
before the second anniversary of the Effective Date or (ii) one year following
the Date of Termination (the “Restrictive Period”):

(1)    The Executive shall not, without the express written consent of the
Board, be employed by, serve as a consultant to, or otherwise assist or directly
or indirectly provide services to a Competitor (as defined below) if: (A) such
services are to be provided with respect to any location in which the Company or
a Subsidiary does business, or with respect to any location in which the Company
or a Subsidiary has devoted material resources to doing business; or (B) the
trade secrets, confidential information, or proprietary information (including,
without limitation, confidential or proprietary methods) of the Company and the
Subsidiaries to which the Executive had access could reasonably be expected to
benefit the Competitor if the Competitor were to obtain access to such secrets
or information.

(2)    The Executive shall not, without the express written consent of the
Board, directly or indirectly own an equity interest in any Competitor (other
than ownership of 1% or less of the outstanding stock of any corporation listed
on a national stock exchange or included in the NASDAQ System).

(3)    The Executive shall not, without the express written consent of the
Board, solicit or attempt to solicit any person or entity who is then or, during
the twelve-month period prior to such solicitation or attempt by the Executive,
was (or was solicited to become) a customer or supplier of the Company or a
Subsidiary, or a user of the services provided by the Company or a Subsidiary.

(4)    The Executive shall not without the express written consent of the Board,
solicit, entice, persuade, induce or hire any individual who is employed by the
Company or any Subsidiary (or was so employed within 90 days prior to the
Executive’s action) to terminate or refrain from renewing or extending such
employment or to become employed by or enter into contractual relations with any
other individual or entity other than the Company or any Subsidiary, and the
Executive shall not approach any such employee for any such purpose or authorize
or knowingly cooperate with the taking of any such actions by any other
individual or entity.

 
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(ii)    The term “Competitor” means any enterprise (including a person, entity,
firm or business, whether or not incorporated) during any period in which it is
engaged in or aiding others to conduct business that engages in, or plans to
engage in, any line of business that the Company or its Subsidiaries engages in
or has made plans to engage in during the Agreement Term, or within the prior 12
months was engaged in, or otherwise competes, directly or indirectly, with the
Company or any of its Subsidiaries.

(b)    Non-Disparagement. The Executive and the Company agree that each will not
make any false, defamatory or disparaging statements about the other, the
Subsidiaries, or the officers or directors of the Company or the Subsidiaries
that are reasonably likely to cause material damage to the Executive, the
Company, the Subsidiaries, or the officers or directors of the Company or the
Subsidiaries.

(c)    Confidential Information.

(i)    The Executive agrees that, during the Agreement Term and at all times
thereafter, he will (1) keep secret all Confidential Information (as defined
below) and Intellectual Property (as defined below) which may be obtained during
his employment by the Company and (2) not reveal or disclose any Confidential
Information or Intellectual Property, directly or indirectly, except with the
Company’s prior written consent. The Executive shall not make use of the
Confidential Information or the Intellectual Property for the Executive’s own
purposes or for the benefit of anyone other than the Company and shall protect
the Confidential Information and the Intellectual Property against disclosure,
misuse, espionage, loss and theft.

(ii)           The Executive acknowledges and agrees that all Intellectual
Property is and shall be owned by the Company. The Executive hereby assigns and
shall assign to the Company all ownership rights possessed in any Intellectual
Property contributed, conceived or made by the Executive (whether alone or
jointly with others) while employed by the Company, whether or not during work
hours. The Executive shall promptly and fully disclose to the Company in writing
all such Intellectual Property after such contribution, conception or other
development. The Executive agrees to fully cooperate with the Company, at the
Company’s expense, in securing, enforcing and otherwise protecting throughout
the world the Company’s interests in such intellectual Property, including,
without limitation, by signing all documents reasonably requested by the
Company.

(iii)          Immediately following the Date of Termination, the Executive
agrees to promptly deliver to the Company all memoranda, notes, manuals, lab
notebooks, computer diskettes, passwords, encryption keys, electronic mail and
other written or electronic records (and all copies thereof) constituting or
relating to Confidential Information or intellectual Property that the Executive
may then possess or have control over. The Executive shall provide written
certification that all such materials have been returned.

(iv)          For purposes of this Agreement, the following terms shall be
defined as set forth below:

 
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(1)    “Confidential Information” shall mean all information, in any form or
medium, that relates to the business, suppliers and prospective suppliers,
existing and potential creditors and financial backers, marketing, costs,
prices, products, processes, services, methods, computer programs and systems,
personnel, customers, potential customers, research or development of the
Company and the Subsidiaries and all other information related to the Company
and the Subsidiaries which is not readily available to the public; provided,
however, that if and to the extent such Confidential Information becomes
available to the public through no fault of the Executive, this restriction
shall not apply to such information. Confidential Information shall include any
of the foregoing information that is created or developed by the Executive
during his employment by the Company.

(2)    “Intellectual Property” shall mean, with respect to the following which
are created or existing during the period of the Executive’s employment by the
Company, any: (A) idea, know-how, invention, discovery, design, development,
software, device, technique, method or process (whether or not patentable or
reduced to practice or including Confidential Information) and related patents
and patent applications and reissues, reexaminations, renewals,
continuations-in-part, continuations, and divisions thereof; (B) copyrightable
and mask work (whether or not including Confidential Information) and related
registrations and applications for registration; (C) trademarks, trade secrets
and other proprietary rights; and (D) improvements, updates and modifications of
the foregoing made from time to time. Intellectual Property shall include any of
the foregoing that is created or developed by the Executive during his
employment by the Company.

(d)    Duty of Loyalty to the Company. Nothing in this Section 6 shall be
construed as limiting the Executive’s duty of loyalty to the Company, or any
other duty otherwise owed to the Company, while the Executive is employed by the
Company.

7.    Assistance with Claims. The Executive agrees that, during the Agreement
Term, and continuing for a reasonable period after the Executive’s Date of
Termination, the Executive will assist the Company and the Subsidiaries in
defense of any claims that may be made against the Company and the Subsidiaries,
and will assist the Company and the Subsidiaries in the prosecution of any
claims that may be made by the Company or the Subsidiaries, to the extent that
such claims may relate to services performed by the Executive for the Company
and the Subsidiaries. The Executive agrees to promptly inform the Company upon
becoming aware of any lawsuits involving such claims that may be filed against
the Company or any Subsidiary. The Company agrees to provide legal counsel to
the Executive in connection with such assistance (to the extent legally
permitted), and to reimburse the Executive for all of the Executive’s reasonable
out-of-pocket expenses associated with such assistance, including travel
expenses. For periods after the Executive’s employment with the Company
terminates, the Company agrees to provide reasonable compensation to the
Executive for such assistance. To the extent permitted by law, the Executive
also agrees to promptly inform the Company upon being asked to assist in any
investigation of the Company or the Subsidiaries (or their actions) that may
relate to services performed by the Executive for the Company or the
Subsidiaries, regardless of whether a lawsuit has then been filed against the
Company or the Subsidiaries with respect to such investigation. Nothing in this
Agreement shall be construed to limit the Executive’s right to indemnification
from the Company under applicable law, by-laws or articles of organization, or
to coverage under the Company’s Director and Officers insurance policy, as may
be in effect from time to time.

 
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8.    Disclosure of Agreement. The Executive shall provide each of his
subsequent employers during the two-year period following his termination of
employment with the Company with a copy of the restrictive covenants set forth
in Section 6 of this Agreement in order to allow such subsequent employers to
avoid inadvertently causing the violation of such covenants. The Executive shall
advise the Company of the identity of each of his subsequent employers during
the two-year period following his termination of employment with the Company.

9.
Injunctive Relief with Respect to Covenants; Certain Acknowledgments; Etc.

(a)    Injunctive Relief. The Executive acknowledges and agrees that the
covenants, obligations and agreements of Executive contained in Section 6 relate
to special, unique and extraordinary matters and that a violation of any of the
terms of such covenants, obligations or agreements will cause the Company
irreparable injury for which adequate remedies are not available at law.
Therefore, the Executive agrees that the Company shall be entitled to an
injunction, restraining order or such other equitable relief (without the
requirement to post bond unless required by applicable law) as a court of
competent jurisdiction may deem necessary or appropriate to restrain the
Executive from committing any violation of such covenants, obligations or
agreements. These injunctive remedies are cumulative and in addition to any
other rights and remedies the Company may have. The Company shall be entitled to
collect from the Executive any costs of obtaining injunctive relief, including,
without limitation, attorneys’ fees.

(b)    Blue Pencil. In the event any term of Section 6 hereof shall be
determined by any court of competent jurisdiction to be unenforceable by reason
of its duration or geographic scope, or by reason of it being too extensive in
any other respect, it will be interpreted to extend only over the maximum period
of time for which it may be enforceable, over the maximum geographical area as
to which it may be enforceable, or to the maximum extent in all other respects
as to which it may be enforceable, all as determined by such court in such
action.

(c)    Certain Acknowledgements. The Executive acknowledges and agrees that the
Executive will have a prominent role in the management of the business, and the
development of the goodwill, of the Company and its Subsidiaries and will
establish and develop relations and contacts with the principal customers and
suppliers of the Company and its Subsidiaries in the United States of America
and the rest of the world, all of which constitute valuable goodwill of, and
could be used by the Executive to compete unfairly with, the Company and its
Subsidiaries and that (i) in the course of his employment with the Company, the
Executive will obtain confidential and proprietary information and trade secrets
concerning the business and operations of the Company and its Subsidiaries in
the United States of America and the rest of the world that could be used to
compete unfairly with the Company and its Subsidiaries; (ii) the covenants and
restrictions contained in Section 6 are intended to protect the legitimate
interests of the Company and its Subsidiaries in their respective goodwill,
trade secrets and other confidential and proprietary information; (iii) the
Executive desires and agrees to be bound by such covenants and restrictions; and
(iv) the compensation to be provided to the Executive is adequate consideration
for the restrictive covenants provided in Section 6.

 
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10.    Miscellaneous.

(a)    Binding Effect; Assignment. This Agreement shall be binding on and inure
to the benefit of the Company, and its respective successors and permitted
assigns. This Agreement shall also be binding on and inure to the benefit of the
Executive and his heirs, executors, administrators and legal representatives. No
party may assign either this Agreement or any of its rights, interests or
obligations hereunder without the prior written approval of the other party;
provided, that the Company may assign its rights, interests and obligations
hereunder to: (a) a Subsidiary, subdivision or affiliate, provided that the
Company shall remain responsible to the Executive for such obligations in the
event they are not met by such assignee; or (b) a person, corporation,
partnership, limited liability company, organization or other entity that
acquires or otherwise succeeds to (whether by sale, stock purchase, merger or
otherwise) all or substantially all of the business or assets of the Company.

(b)    Entire Agreement. This Agreement constitutes the entire agreement among
the parties hereto concerning the subject matter hereof and supersedes all prior
and contemporaneous correspondence and proposals (including but not limited to
summaries of proposed terms and term sheets) and all prior and contemporaneous
promises, representations, understandings, arrangements and agreements, if any,
concerning such subject matter (including but not limited to those made to or
with the Executive by any other person); provided, however, that nothing in this
Agreement shall be construed to limit any policy or agreement that is otherwise
applicable relating to confidentiality, rights to inventions, copyrightable
material, business and/or technical information, trade secrets, solicitation of
employees, interference with relationships with other businesses, competition,
and other similar policies or agreement for the protection of the business and
operations of the Company and the Subsidiaries.

(c)           Applicable Law. This Agreement shall be governed in all respects,
including as to validity, interpretation and effect, by the laws of the State of
Delaware without giving effect to the conflict of laws rules of any state.

(d)           Consent to Jurisdiction; Waiver of Jury Trial; Attorneys Fees.

(i)            Consent to Jurisdiction. Each party hereby irrevocably submits to
the jurisdiction of the courts of the State of Delaware and the federal courts
of the United States of America located in the State of Delaware solely in
respect of the interpretation and enforcement of the provisions of this
Agreement and of the documents referred to in this Agreement, and in respect of
the transactions contemplated hereby and thereby. Each party hereby waives and
agrees not to assert, as a defense in any action, suit or proceeding for the
interpretation and enforcement hereof, or any such document or in respect of any
such transaction, that such action, suit or proceeding may not be brought or is
not maintainable in such courts or that the venue thereof may not be appropriate
or that this Agreement or any such document may not be enforced in or by such
courts. Each party hereby consents to and grants any such court jurisdiction
over the person of such parties and over the subject matter of any such dispute
and agree that the mailing of process or other papers in connection with any
such action or proceeding in the manner provided in Section 10(k) or in such
other manner as may be permitted by law, shall be valid and sufficient service
thereof.

 
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(ii)    Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. Each party certifies and
acknowledges that (i) no representative, agent or attorney of any other party
has represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver, (ii) each such party
understands and has considered the implications of this waiver, (iii) each such
party makes this waiver voluntarily, and (iv) each such party has been induced
to enter into this Agreement by, among other things, the mutual waivers and
certifications in this Section 10(d)(ii).

(e)    Taxes. The Company may withhold from any payments made under this
Agreement all applicable taxes, including but not limited to income, employment
and social insurance taxes, as shall be required by law.

(f)    Key Man Insurance. The Executive acknowledges that the Company may
purchase “key man” insurance on his life and hereby agrees to cooperate with the
Company in obtaining such insurance, including without limitation, submitting to
such medical examinations as may be required promptly upon request by the
Company.

(g)    Amendments. This Agreement may be amended or cancelled only by mutual
agreement of the parties in writing. So long as the Executive lives, no person,
other than the parties hereto (and the Company’s successors and assigns), shall
have any rights under or interest in this Agreement or the subject matter
hereof.

(h)    Severability. The invalidity or unenforceability of any provision of this
Agreement will not affect the validity or enforceability of any other provision
of this Agreement, and this Agreement will be construed as if such invalid or
unenforceable provision were omitted (but only to the extent that such provision
cannot be appropriately reformed or modified).

(i)    Waiver of Breach. No waiver by any party hereto of a breach of any
provision of this Agreement by any other party, or of compliance with any
condition or provision of this Agreement to be performed by such other party,
will operate or be construed as a waiver of any subsequent breach by such other
party of any similar or dissimilar provisions and conditions at the same or any
prior or subsequent time. The failure of any party hereto to take any action by
reason of such breach will not deprive such party of the right to take action at
any time while such breach continues.

 
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(j)    Survival of Agreement. Except as otherwise expressly provided in this
Agreement, the rights and obligations of the parties to this Agreement shall not
survive the termination of the Executive’s employment with the Company.

(k)    Notices. Notices and all other communications provided for in this
Agreement shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid, or sent
by facsimile or prepaid overnight courier to the parties at the addresses set
forth below (or such other addresses as shall be specified by the parties by
like notice). Such notices, demands, claims and other communications shall be
deemed given:

(i)             in the case of delivery by overnight service with guaranteed
next day delivery, the next day or the day designated for delivery;

(ii)            in the case of certified or registered U.S. mail, five days
after deposit in the U.S. mail; or

(iii)           in the case of facsimile, the date upon which the transmitting
party received confirmation of receipt by facsimile, telephone or otherwise;

provided, however, that in no event shall any such communications be deemed to
be given later than the date they are actually received. Communications that are
to be delivered by the U.S. mail or by overnight service or two-day delivery
service are to be delivered to the addresses set forth below:

to the Company:

Emtec, Inc.
11 Diamond Road
Springfield, NJ 07081
Facsimile number: 973-376-8846

or to the Executive:

at the address in the Company’s records.

All notices to the Company shall be directed to the attention of Secretary of
the Company, with a copy to the Board. Each party, by written notice furnished
to the other party, may modify the applicable delivery address, except that
notice of change of address shall be effective only upon receipt.

 
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(1)
Code Section 409A Compliance.

(i)    The intent of the parties is that payments and benefit under this
Agreement comply with or be exempt from Internal Revenue Code Section 409A and
the regulations and guidance promulgated thereunder (collectively, “Section
409A”) and, accordingly, to the maximum extent permitted, this Agreement shall
be interpreted to be in compliance therewith. If the Executive provides the
Company with documentation from Executive’s tax counsel of a national reputation
with expertise in Section 409A that any provision of this Agreement (or any
award of compensation, including equity compensation or benefits) would cause
Executive to incur any additional tax or interest under Section 409A (with
specificity as to the reason therefore) or the Company independently makes such
determination, the Company and the Executive agree to work in good faith to
reform such provision (to the extent permitted under Section 409A) to the
minimum extent reasonably necessary to conform with Section 409A. To the extent
that any provision hereof is modified in order to comply with or be exempt from
Section 409A, such modification shall be made in good faith and shall, to the
maximum extent reasonably possible, maintain the original intent and economic
benefit to Executive and the Company of the applicable provision without
violating the provisions of Section 409A. Notwithstanding anything contained
herein to the contrary, the Company shall not (i) be obligated to modify or
amend this Agreement in any manner to the extent that such modification or
amendment would (a) increase the Company’s obligations hereunder, (b) increase
any amounts owed by the Company hereunder or (c) otherwise accelerate the timing
of payments owed by the Company hereunder or (ii) be responsible for the failure
of this Agreement to comply with, or be exempt from, Section 409A, or for any
taxes, penalties or interest incurred by Executive under Section 409A.

(ii)    Notwithstanding any other provision of this Agreement to the contrary,
if the Executive is a “specified employee” within the meaning of Section 409A,
and a payment or benefit provided for in this Agreement would be subject to
additional tax under Section 409A if such payment or benefit is paid within six
months after the Executive’s “separation from service” (within the meaning
of-Section 409A), then such payment or benefit required under this Agreement
shall not be paid (or commence) during the six-month period immediately
following the Executive’s separation from service except as provided in the
immediately following sentence. In such an event, any payments or benefits that
would otherwise have been made or provided during such six-month period and
which would have incurred such additional tax under Section 409A shall instead
be paid to the Executive in a lump-sum cash payment, without interest, on the
earlier of (i) the first business day of the seventh month following the
Executive’s separation from service or (ii) the 10th business day following the
Executive’s death. If the Executive’s termination of employment hereunder does
not constitute a “separation from service” within the meaning of Section 409A,
then any amounts payable hereunder on account of a termination of the
Executive’s employment and which are subject to Section 409A shall not be paid
until the Executive has experienced a “separation from service” within the
meaning of Section 409A.

(iii)    All expenses or other reimbursements as provided herein shall be
payable in accordance with the Company’s policies in effect from time to time,
but in any event shall be made on or prior to the last day of the taxable year
following the taxable year in which such expenses were incurred by Executive. In
addition, no such reimbursement or expenses eligible for reimbursement in any
taxable year shall in any way affect the expenses eligible for reimbursement in
any other taxable year and the Executive’s right to reimbursement or in-kind
benefits shall not be subject to liquidation or exchanged for another benefit.

 
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(m)    Headings. The section and other headings contained in this Agreement are
for the convenience of the parties only and are not intended to be a part hereof
or to affect the meaning or interpretation hereof.
 
*     *     *     *     *

 
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IN WITNESS WHEREOF, the Company has duly executed this Agreement by its
authorized representative, and the Executive has hereunto set his hand, in each
case effective as of the date first above written.

 
EMTEC, INC.
     
By:
/s/ GREGORY P. CHANDLER
 
Name: GREGORY P. CHANDLER
 
Title: CHIEF FINANCIAL OFFICER
     
Date:
     
EXECUTIVE
     
/s/ Brian E. Mandel
 
Brian E. Mandel
     
Date: 2/21/2010

 
 
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