Exhibit 10.1

 
 
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
 
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is entered
into as of the 10th day of August, 2012 (the “Effective Date”), by and between
Emtec, Inc., a Delaware corporation (the “Company”) and Sunil Misra (the
“Executive”).
 
WITNESSETH THAT:
 
WHEREAS, the Company and the Executive are parties to an employment agreement
dated as of October 19, 2009 (the “Old Employment Agreement”); and
 
WHEREAS, the parties desire to enter into this Agreement to, among other things,
amend and restate the Old Employment Agreement in its entirety.
 
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; Agreement Term.
 
(a)           Employment.  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 position of Chief Strategy and Delivery Officer of
the Company.  The Executive agrees to serve in such position 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)           Reporting.  During the Agreement Term, the Executive shall report
solely and directly to the Chief Executive Officer of the Company or his
designee.
 
(c)           Duties.  During the Agreement Term, while employed by the Company,
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 in his 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.
 
 
 

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(d)           Agreement Term.  The term of employment under this Agreement shall
commence on the Effective Date and, unless earlier terminated under Section 3
hereof, shall terminate on the second anniversary of the Effective Date (the
“Agreement Term”); provided, however, that the Agreement Term shall
automatically be extended for successive one-year periods (commencing on the
second anniversary of the Effective Date and each one-year anniversary
thereafter) unless earlier terminated under Section 3 hereof or unless either
party provides the other party with a written notice of non-renewal at least 120
days prior to the expiration of the then current Agreement Term.  If the Company
provides the Executive timely notice of non-renewal of the Agreement Term and
(X) terminates Executive’s employment (other than for Cause or due to death or
Disability, as such terms are defined below) prior to, or upon, the expiration
of the Agreement Term, then such termination of employment shall be deemed a
termination of employment Without Cause entitling Executive to the severance
benefits set forth in Section 4(b) hereof or (Y) the Executive’s employment with
the Company continues on an at-will basis beyond the expiration of the Agreement
Term, then the Executive’s termination of employment with the Company for any
reason (whether by the Executive or by the Company) within 90 days after the
expiration of the Agreement Term shall be deemed a termination of employment
Without Cause entitling Executive to the severance benefits set forth in Section
4(b) hereof.  In the event that the Executive does not provide at least 120 days
advanced written notice of non-renewal of the Agreement Term (or such shorter
period as may be agreed upon by the Company), or in the event that the Executive
does not provide at least 120 days advanced written notice of his termination
without Good Reason as provided in Section 3(f) hereof (or such shorter period
as may be agreed upon by the Company), one-half of the Executive’s vested stock
appreciation rights shall be immediately forfeited with no compensation due the
Executive in connection with such forfeiture.  Notwithstanding the foregoing, if
the individual who is serving as the Company’s Chief Executive Officer as of the
Effective Date is no longer serving the Company in at least one of the two
following positions, then each reference in this Section 1(d) to “120 days”
shall be replaced with a reference to “30 days:” Chief Executive Officer or
Chairman of the Board.
 
(e)           Definitions.  For purposes of this Agreement, the following terms
shall have the meanings set forth in this Section 1(e):
 
(i)            “Affiliate” shall mean, with respect to any specified person or
entity, a person or entity that directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with, the
specified person or entity.
 
(ii)            “Change in Control” shall mean (1) the acquisition in one or
more transactions by any “person” (as such term is used for purposes of Section
13(d) or Section 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), other than an Excluded Person (as defined below), of
“beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange Act)
of more than fifty percent (50%) of the combined voting power of the Company’s
then outstanding voting securities (the “Voting Securities”); (2) the
consummation of a merger or consolidation involving the Company if the
stockholders of the Company, immediately before such merger or consolidation, do
not own, directly or indirectly, immediately following such merger or
consolidation, at least fifty percent (50%) of the combined voting power of the
outstanding voting securities of the corporation resulting from such merger or
consolidation; or (3) the acquisition by any “person” (as such term is used for
purposes of Section 13(d) or Section 14(d) of the Exchange Act), other than a
Substantial Stockholder (as defined below) or an Affiliate of a Substantial
Stockholder, in a single transaction or in a series of related transactions
occurring during any period of 12 consecutive months, of assets from the Company
that have a total gross fair market value (as determined by the Board in its
sole discretion) equal to or more than 51% of the total gross fair market value
of all of the assets of the Company immediately prior to such acquisition or
acquisitions.
 
 
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(iii)           “Excluded Person” means (a) the Company or its Subsidiaries, (b)
any employee benefit plan of the Company or its Subsidiaries, (c) any person or
entity who, as of September 1, 2010, owns, directly or indirectly, 25% or more
of the voting power or value of any class of capital stock of the Company (a
“Substantial Stockholder”) and (d) any Affiliate of a Substantial Stockholder.
 
(iv)            “Good Reason” means and shall be deemed to exist if, without the
prior written mutual consent of the Executive and the Company, (1) the Executive
suffers a material adverse change in the duties, responsibilities or effective
authority associated with his titles and positions, as set forth and described
in Section 1 of this Agreement; (2) the Executive’s Base Salary (as defined
below) is reduced by the Company; (3) there is a material adverse change (i.e.,
more than 35 miles) in the geographic location of the Executive’s primary office
as of the Effective Date; or (4) there is any action or inaction that
constitutes a material breach of the Company’s obligations to the Executive
hereunder.
 
(v)            “Subsidiary” shall mean any corporation, partnership, joint
venture or other entity during any period in which a more than 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 $325,000 (which rate shall be retroactive
to March 1, 2012).  The Base Salary may be increased by the Compensation
Committee of the Board, in its discretion.
 
(b)           Bonus.  In respect of each fiscal year ending during the Agreement
Term, the Executive shall participate in the Company’s Annual Incentive Plan
(the “AIP”), as maintained by the Company for the benefit of its senior
executives, and shall be eligible to earn an annual bonus (the “Bonus”) if the
Executive and/or the Company achieve performance goals established by the
Compensation Committee of the Board consistent with the AIP.  The Executive’s
maximum Bonus opportunity under the AIP shall be 100% of his Base
Salary.  Earned Bonuses shall be payable in accordance with the terms of the
AIP, but in no event may be paid later than December 31st following the close of
the fiscal year to which the Bonus relates.
 
(c)           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.
 
(d)           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.
 
 
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(e)           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.  The ability to carry forward unused vacation time shall be
determined in accordance with Company policy.
 
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.  For purposes of this Agreement, “Disability” shall mean that the
Executive is unable to perform his material duties and responsibilities
hereunder by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or the Executive is, by reason of
any medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the
Company.  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.
 
(b)           Termination Due to Death.  The Executive’s employment hereunder
shall terminate upon the Executive’s death.
 
 
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(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 failure of the Executive
substantially to perform his duties hereunder or his 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 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) a felony or (B) a misdemeanor involving moral turpitude (or a
comparable crime in any jurisdiction that uses a different nomenclature),
including any such offense involving dishonesty as such dishonesty relates to
the Company’s material 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
Company’s 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
thirty (30) 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. 
Notwithstanding the foregoing, no act or failure to act by the Executive shall
be deemed to constitute “Cause” if done, or omitted to be done, in good faith
and with the reasonable belief that the action or omission was in the best
interests of the Company or its Subsidiaries, as applicable.
 
(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 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 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 90 days thereafter, it is determined by the Board,
after a good faith investigation, 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 Section 3(c) for all purposes of
this Agreement.
 
(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 first 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.
 
(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
120 days prior to such termination (or such lesser notice as may be mutually
agreed upon by the Company and the Executive); provided that the Board may, in
its sole discretion, terminate the Executive’s employment hereunder prior to the
expiration of the 120-day (or shorter mutually agreed upon) 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 the applicable notice
period (or such shorter time as the Board in its sole discretion may determine),
the Executive’s employment hereunder shall immediately and automatically
terminate. Notwithstanding the foregoing, if the individual who is serving as
the Company’s Chief Executive Officer as of the Effective Date is no longer
serving the Company in at least one of the two following positions, then the 120
day notice period set forth in this Section 3(f) shall be reduced to 30 days:
Chief Executive Officer or Chairman of the Board.
 
 
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(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 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)           Date of Termination. 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 (and shall be deemed to have resigned), from
all positions then held by him with the Company and its Subsidiaries.
 
(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 and such shall not
provide Executive with Good Reason to terminate his employment (provided that
Executive shall be entitled to his compensation and benefits hereunder until his
employment is actually terminated).
 
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; provided
however, that if the termination is for Cause under Section 3(c), Executive
shall not be paid any unpaid Bonus:
 
(i)           any earned or accrued but unpaid Base Salary through the Date of
Termination (including, with respect to unused vacation time) and any earned but
unpaid Bonus with respect to the fiscal year of the Company ending prior to the
Date of Termination (payable at the time provided in Section 2(b)), and
 
 
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(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, with such amounts to be determined, and provided, in
accordance with the terms thereof.
 
(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, and provided Executive
executes and delivers a general release of all claims in form and substance
satisfactory to the Company (such that such release is effective, with all
revocation periods having expired unexercised, within 60 days after the Date of
Termination);
 
(i)           if such termination occurs prior to, or following the two-year
anniversary of, a Change in Control: (A) an amount equal to 12 months of Base
Salary (as in effect immediately prior to such termination), paid in equal
installments in accordance with the Company’s payroll practices over the 12
month period following such termination (provided that any such amounts that
would have otherwise been paid during the 60 day period following such
termination shall be withheld and paid in a lump sum on the first payroll date
coincident with or next following the 60th day after such termination, with the
remaining payments to be made as if no such delay had occurred); (B) a Pro-Rata
Bonus (as defined in Section 4(c)), payable at the time provided in Section
2(b); and (C) payment by the Company of the Executive’s (and his eligible
dependents’) COBRA premiums for a period of 18 months; provided, that, if the
Executive and/or his eligible dependents become eligible for comparable coverage
and benefits under an employer-provided health plan prior to the expiration of
such 18 month period, the Company’s payment obligation with respect to health
care continuation premiums covering such person(s) shall terminate; provided
further, that, the Company’s payment obligation shall be limited to the monthly
cost of providing the Executive and his eligible dependents with coverage under
its health plans immediately prior to the date of the Executive’s termination of
employment.  In addition to such benefits, (I) the Restricted Stock award
granted to Executive on December 1, 2009 shall, to the extent then outstanding
and unvested, become 100% vested on the Date of Termination and (II) all
outstanding and unvested restricted stock awards granted to the Executive
pursuant to the terms of the Company’s annual incentive plan in respect of an
earned bonus shall immediately become fully vested upon such a termination; or
 
 
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(ii)           if such termination occurs during the two year period following
the date of a Change in Control: (A) an amount equal to 12 months of Base Salary
(as in effect immediately prior to such termination), paid in (X) a lump sum
upon such termination, but only to the extent such amount or portion thereof is
not considered “non-qualified deferred compensation” within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and
(Y) equal installments in accordance with the Company’s payroll practices over
the 12 month period following such termination, but only to the extent that such
amount or portion thereof is “non-qualified deferred compensation” within the
meaning of Code Section 409A (provided that any such amounts that would have
otherwise been paid during the 60 day period following such termination shall be
withheld and paid in a lump sum on the first payroll date coincident with or
next following the 60th day after such termination, with the remaining payments
to be made as if no such delay had occurred); (B) the maximum Bonus that
Executive would have been entitled to receive under Section 2(b) for the fiscal
year in which such termination occurs (as in effect immediately prior to such
termination but without regard to any event that constitutes Good Reason),
payable at the time provided in Section 2(b) above; and (C) payment by the
Company of the Executive’s (and his eligible dependents’) COBRA premiums for a
period of 18 months; provided, that, if the Executive and/or his eligible
dependents become eligible for comparable coverage and benefits under an
employer-provided health plan prior to the expiration of such continuation
period, the Company’s payment obligation with respect to health care
continuation premiums covering such person(s) shall terminate; provided further,
that, the Company’s payment obligation shall be limited to the monthly cost of
providing the Executive and his eligible dependents with coverage under its
health plans immediately prior to the date of the Executive’s termination of
employment.  In addition to such benefits, (I) the Restricted Stock award
granted to Executive on December 1, 2009 shall, to the extent then outstanding
and unvested, become 100% vested on the Date of Termination and (II) all
outstanding and unvested restricted stock awards granted to the Executive
pursuant to the terms of the Company’s annual incentive plan in respect of an
earned bonus shall immediately become fully vested upon such a termination.
 
(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)
continued Base Salary during the 12 month period following such termination,
less any disability payments received by Executive from Company sponsored or
paid disability insurance policies during such 12 month period (provided that
any such amounts that would have otherwise been paid during the 60 day period
following such termination shall be withheld and paid in a lump sum on the first
payroll date coincident with or next following the 60th day after such
termination, with the remaining payments to be made as if no such delay had
occurred), (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) (the “Pro-Rata Bonus”) and (C) payment by the
Company of the Executive’s (and his eligible dependents’) health care
continuation (COBRA) premiums for 18 months; provided, that, if the Executive
and/or his eligible dependents become eligible for comparable coverage and
benefits under an employer-provided health plan prior to the expiration of
such  period, the Company’s payment obligation with respect to health care
continuation premiums covering such person(s) shall terminate; provided further,
that, the Company’s payment obligation shall be limited to the monthly cost of
providing the Executive  and his eligible dependents with coverage under its
health plans immediately prior to the date of the Executive’s termination of
employment.  In addition, if, during the Agreement Term, the Executive dies or
the Company terminates the Executive’s employment hereunder due to his
Disability, (i) the Restricted Stock award granted to him on December 1, 2009
shall, to the extent then outstanding and unvested, become 100% vested on the
Date of Termination and (ii) all outstanding and unvested restricted stock
awards granted to the Executive pursuant to the terms of the Company’s annual
incentive plan in respect of an earned bonus shall immediately become fully
vested upon such a termination.  Payment of the amounts described in clause (A)
hereof is contingent on Executive’s or his estate’s, as applicable, execution
and non-revocation of a general release of all claims in form and substance
satisfactory to the Company, such that such release is effective, with all
revocation periods having expired unexercised, within 60 days after the Date of
Termination.
 
 
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(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 75 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)(ii)(3) (an
“Asset Sale”) either (x) this Agreement is assumed by the acquiror of the
Company’s assets (or one of its Affiliates) or (y) the Executive accepts
employment with the acquirer of the Company’s assets (or one of its Affiliates)
within 30 days after the date of such Change in Control, 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.
 
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 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.
 
6.             Restrictive Covenants.
 
(a)            Noncompetition.
 
(i)            During the Agreement Term, and for the twelve (12) month period
immediately following the Executive’s termination of employment with the Company
(the “Restrictive Period”):
 
 
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(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, for services similar in nature to
those provided by the Company or any Subsidiary, any person or entity who is
then or, during the twelve (12) 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.
 
(ii)           The term “Competitor” means any enterprise (including a person,
entity, firm or business, whether or not incorporated) that engages in, or plans
to engage in, any line of business that the Company or its Subsidiaries engages
in or has made actual 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.
 
 
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(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:
(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. 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, re-examinations, 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.
 
 
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(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:  Indemnification
 
(a)           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.
 
(b)           Indemnification.  The Company shall indemnify and defend Executive
against all claims, whether civil or criminal, including any governmental or
regulatory proceedings or investigations arising out of Executive’s activities
as an officer, director or employee of the Company or its Subsidiaries, to the
fullest extent permitted by law and under any insurance maintained by the
Company from time to time (other than claims relating to the Executive’s
unlawful conduct, bad faith or gross misconduct).
 
8.             Disclosure of Agreement.  The Executive shall provide each of his
subsequent employers during the one-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 his subsequent employers during the one-year period
following his termination of employment with the Company.
 
 
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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.
 
(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.
 
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
assigns.  This Agreement shall also be binding on and inure to the benefit of
the Executive and his heirs, executors, administrators and legal
representatives.  This Agreement shall not be assignable by the Executive
without the prior written consent of the Company. This Agreement shall be
assignable by the Company without the consent of the Executive only to an
Affiliate or Subsidiary or to any person or entity that becomes a successor in
interest (by purchase of assets or shares, or by merger or otherwise) to the
Company.
 
 
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(b)           Entire Agreement.  This Agreement constitutes the entire agreement
among the parties hereto concerning the subject matter hereof and supercedes all
prior and contemporaneous agreements (including but not limited to the Old
Employment Agreement and all 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 or
entity); provided, however, that nothing in this Agreement shall be construed to
limit any policy or agreement (other than the Old Employment 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)           Arbitration.  Except as provided in Section 9(a) with regard to
the Company’s right to seek injunctive and other equitable relief in any court
of competent jurisdiction, any dispute or controversy between the Company and
the Executive arising out of or relating to this Agreement, the breach of this
Agreement, or otherwise, shall be settled by arbitration in Philadelphia,
Pennsylvania administered by the American Arbitration Association in accordance
with its Commercial Rules then in effect. The determination of the arbitrator
shall be final and binding on the parties, and judgment on the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof.  The
arbitrator shall have the authority to award any remedy or relief that a court
of competent jurisdiction could order or grant, including, without limitation,
the issuance of an injunction.  Except as necessary in court proceedings to
enforce this arbitration provision or an award rendered hereunder, or to obtain
interim relief, neither a party nor an arbitrator may disclose the existence,
content or results of any arbitration hereunder without the prior written
consent of the Company and the Executive.  Each party shall bear its or his
costs and expenses in any arbitration hereunder and one-half of the arbitrator’s
fees and costs; provided, however, that the arbitrator shall have the discretion
to award the prevailing party reimbursement of its or his reasonable attorney’s
fees and costs.
 
(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 or entity, 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.
 
 
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(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.
 
(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
 
 
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or to the Executive:
 
at the address in the Company’s records, with a copy (which shall not constitute
notice) to:
 
E. Gerald Riesenbach, Esquire
Cozen O’Connor
1900 Market Street
Philadelphia, PA  19103
 
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.
 
(l)            Code Section 409A Compliance.  Notwithstanding any other
provision of this Agreement to the contrary, if the Executive is a “specified
employee” within the meaning of Code Section 409A and the regulations issued
thereunder, and a payment or benefit provided for in this Agreement would be
subject to additional tax under Code Section 409A if such payment or benefit is
paid within six months after the Executive’s “separation from service” (within
the meaning of Code 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 Code 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
Code Section 409A, then any amounts payable hereunder on account of a
termination of the Executive’s employment and which are subject to Code Section
409A shall not be paid until the Executive has experienced a “separation from
service” within the meaning of Code Section 409A.  In addition, the Executive’s
right to reimbursement under this Agreement may not be liquidated or exchanged
for any other benefit and no reimbursement under this Agreement may occur later
than the last day of the calendar year immediately following the calendar year
in which such expenses were incurred, nor shall the amount available for
reimbursements in any calendar year impact the amount available for
reimbursement in any subsequent calendar year.  All payments hereunder in a
series of payments shall be treated as separate payments for purposes of Code
Section 409A.  This Agreement is intended to comply with, or be exempt from,
Code Section 409A and shall be interpreted in a manner consistent therewith
without resulting in any additional amounts owed hereunder by the
Company.  Notwithstanding the foregoing, in no event shall the Company or any of
its Affiliates have any liability to the Executive or any other person or entity
if this Agreement is not exempt from, or compliant with, Code Section 409A.
 
 
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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.
 
(n)           Execution of the Agreement.  This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
 
(o)           No Mitigation.  In no event shall Executive be required to seek
other employment or take any other action by way of mitigation of the amounts
payable to Executive under this Agreement, and such amounts shall not be reduced
whether or not Executive obtains other employment after termination of his
employment hereunder.

*           *           *           *           *
 
 
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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.
         
/s/ Gregory P.
Chandler                                                                
   
By: Gregory P. Chandler
   
Title: Chief Financial Officer
               
SUNIL MISRA
           /s/ Sunil Misra  

 
 
 
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