EMPLOYMENT AGREEMENT
--------------------

         This Agreement made as of this 1st day of April, 1997, by and between
Scangraphics, Inc., a Corporation of the Commonwealth of Pennsylvania (the
"Company"), and Colin B. Matthews (the "Employee").

WITNESSETH:

1.       Employment. The Company hereby agrees to employ Employee and
Employee hereby accepts employment by the Company for the period and the terms
and conditions hereinafter set forth.

2.       Capacity and Duties.

         a) Employee shall be employed by the Company in the capacity of
President of Sedona GeoServices, Inc. (a Subsidiary) and Employee shall have
such authority and shall perform such key executive duties and responsibilities
as may from time-to-time reasonably be specified by the Chief Operating Officer
of the Company with respect to the Company and its affiliates. It is the present
expectation of the parties that Employee will be re-elected during the entire
term of this Agreement to serve as President of Sedona GeoServices, Inc., and
Employee agrees to serve in such capacities without any compensation in addition
to that herein provided. Employee acknowledges that neither the Company nor its
Board of Directors is legally obligated to elect or re-elect Employee as
President of Sedona GeoServices, Inc.

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         b) During the term of this Agreement, Employee shall devote his full
time, in exercising his best efforts to the performance of his duties hereunder.

         c) Notwithstanding the foregoing, Employee shall be entitled to have
investments in other enterprises provided, however, that he shall not have any
investments or financial interest in any business enterprise which conducts
business activities competitive with any business activities conducted by the
Company now or at any time during the term of the Employee's employment
hereunder (other than an investment of no more than 5% of any class of equity
securities of a company the securities of which are traded on a national
securities exchange). However, in the event the Company enters into a new field
in which the Employee has previously invested, the Employee agrees to disclose
his investment, if said investment exceeds 5% of equity of the company in which
the Employee has invested. If the Employee is so requested by the Board of
Directors of the Company, the Employee shall divest himself of the said
investment within one year after said request.

3.       Compensation. Employee's compensation shall be as reflected in
Exhibit 1.

4.       Expenses. Employee is authorized to incur reasonable expenses for
promoting the business of the Company and in carrying out his duties hereunder,
including without limitation, reasonable expenses for automobile, travel and
similar items. The Company shall reimburse Employee for all such ordinary and
necessary expenses upon the presentation by Employee from time-to-time of an
itemized account of such expenditures. Employee shall present an itemized
account of expenditures not less frequently than monthly.

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5.       Term of Agreement; Separation.

         a) The term of this Employment Agreement, shall be Two (2) years
commencing on the date hereof, and thereafter shall automatically continue from
year-to-year unless and until either party shall give notice to the other at
least three (3) months prior to the end of the original, or the then current
renewal term.

         b) The Company may terminate this Employment Agreement for cause,
defined as follows:

                  1) Deliberate disclosure of Company secrets for
consideration; or

                  2) Conviction of Employee of a felony involving moral
turpitude, or of any other law which may reasonably be deemed to cause a
detrimental effect upon the Company as a result of mutual association. If the
Company separates the Employee for cause, the Company will have no further
liability or obligation except to pay the Employee earned and unpaid
compensation.

         c) The Company may separate the Employee; a) without cause, or b)
should the Employee die or become disabled such that the Employee has been
unable to perform any duties here under for ninety (90) days during any year of
this Employment Agreement or for any period of sixty (60) consecutive days. In
the event of such separation, the severance package described in Exhibit 1,
Section 5 applies.

         d) In the event, at any time during the initial term of this Employment
Agreement, or any extension thereof, Employee shall be involuntarily removed as
President of Sedona GeoServices, Inc., then Employee may terminate this
Employment Agreement and receive severance in accordance with Exhibit 1,
Section 5.

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         e) In the event of change of control of the Company, Employee may elect
to terminate his employment in which event he shall receive the severance
package describe in Exhibit 1, Section 5. For these purposes, change of control
includes the following: Sale of a majority of the outstanding shares or assets
of the Company, Change in composition of more than 50% of the Board of Directors
as presently constituted, or should Laurence L. Osterwise cease as either Chief
Executive Officer or Chief Operating Officer.

6)       Restrictions on Competition. Employee covenants and agrees that: (a)
during the initial term and any renewal terms of his employment hereunder and,
(b) if, but only if, this Employment Agreement is terminated by the Employee (as
hereinafter defined) during the initial term, or any renewal term hereof, for a
period on one (1) year after termination of his employment hereunder, he shall
not, directly or indirectly, engage in any business activities within the limits
of the Continental United States, the same as, or in competition with, business
activities carried on by the Company during the period of the Employee's
employment by the Company, or in the definitive planning stages at the time of
termination of Employee's employment.

         The term "engage in" shall include, without being limited to,
activities as proprietor, partner, stockholder, principal, agent, employee or
consultant. However, nothing contained in this Paragraph shall prevent Employee
from having investments of the types permitted in Subparagraph 2 c) hereof.

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         These restrictions shall not apply if separation is by the Company
under Section 5c and 5d or if separation is by Employee under Section 5e of this
Employment Agreement.

7.       Trade Secrets. During the term of employment under this Employment
Agreement, the Employee will have access to, and become familiar with, various
trade secrets, consisting of formulas, patterns, devices, secret inventions,
processes, compilation of information, records and specifications, which are
owned by the Company and which are regularly used in the operation of the
business of the Company.

         The Employee shall not disclose any of the aforesaid trade secrets,
directly or indirectly, nor use them in any way, either during the term of this
Agreement or at any time thereafter, except as required in the course of his
employment by the Company.

All files, records, documents, drawings, specifications, equipment, and similar
items relating to the business of the Company, whether prepared by the Employee
or otherwise coming into his possession, shall remain the exclusive property of
the Company and be returned to the Company by request of the Company, provided
the same information is not available to the general public.

8.       Miscellaneous Provisions.

         a) Any notices pursuant to this Agreement shall be validly given or
served if in writing and delivered personally or sent by registered or certified
mail, postage prepaid, to the following addresses:

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                  If to Company:    SCAN-GRAPHICS, Inc.
                                    700 Abbott Drive
                                    Broomall, PA  19008
                                    Attn:  President

                  If to Employee:   Colin B. Matthews
                                    Woodlynn Manor
                                    2012 Kelly Court
                                    Amissville, VA 20106

or to such other addresses as either party may hereafter designate to the other
in writing.

         b) Notices delivered personally shall be deemed communicated as of the
actual receipt; notices mailed shall be deemed communicated as of five (5) days
after mailing.

         c) If any provision of this Agreement shall be or become illegal or
unenforceable in whole or in part for any reason whatsoever, the remaining
provisions shall nevertheless be deemed valid, binding and subsisting.

         d) The waiver by either party of a breach or violation of any provision
of this Employment Agreement shall not operate or be construed as a waiver of
any subsequent breach or violation thereof.

         e) This writing represents the entire Employment Agreement and
understanding of the parties with respect to the subject matter hereof; it may
not be altered or amended except by agreement in writing.

         f) The Employment Agreement has been made in and its validity,
performance and effect shall be determined in accordance with the laws of the
Commonwealth of Pennsylvania.

         g) The headings of paragraphs in this Employment Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.

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         h) This Employment Agreement supersedes any earlier Employment
Agreement and as such is the only Employment Agreement in force.

IN WITNESS WHEREOF, and intending to be legally bound, the parties have executed
this Employment Agreement under seal on the day and year first above written.




                                              SCAN-GRAPHICS, INC.

ATTEST:  /S/ Victoria R. Franchetti           /S/ Laurence L. Osterwise
         --------------------------           -------------------------
             Assistant Secretary             Chief Operating Officer

                                              EMPLOYEE:

                                              /S/ Colin B. Matthews
                                              ---------------------
                                              Colin B. Matthews

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SCANGRAPHICS, INC.                                                     EXHIBIT 1
------------------                                                     ---------

                            COMPENSATION AND BENEFITS
                            -------------------------

COMPENSATION PLAN FOR.... Colin B. Matthews

POSITION: President of Sedona GeoServices, Inc. a Subsidiary of
Scangraphics, Inc.

1) BASE SALARY: $160,000 per year

2) INCENTIVE COMPENSATION: In addition to the Base Salary, as set forth above,
an incentive bonus plan is provided in the event certain goals or levels of
achievement are reached, as reflected herein:

         BONUS:

         Short Term: Based on Sedona GeoServices results (weighted at 80%) and
Scangraphics results (the remaining 20%), your short term bonus will be targeted
at 40% of your base salary. To receive bonus, you must be employed on 2/28 of
the following year. For 1997, NEBT must be greater than $0. After 1997, a
formula will be determined that will include NEBT per plan. Payouts range from
0% to 80% as follows: at <80% of revenue plan =0%; 80% of plan = 15%; 100% of
plan = 40%; 125% of plan = 60%; 150% of plan = 80% of base salary...graduated
between.

         Long Term Incentive: Again based on results of Sedona GeoServices and
Scangraphics, the LTI is targeted at 25% of base salary and will be paid, if
earned, 50% in each year, 2000 and 2001. Based on performance to plan, this will
range between 0% and 37.5%.

3) EQUITY - OPTIONS

         200,000 Options to Purchase Common Shares for a period of 5 years at an
         exercise price of $3.00 (based on the bid price on 4/2/97), the date of
         beginning employment, with vesting as follows:

                  33,333 shares on each anniversary beginning on 4/1/98
                  33,333 shares on achieving each of the following revenue
                  targets within Sedona GeoServices ($1.5M, $5.0M, 10.0M, 15.0M)

4) Travel and Relocation

         An allowance not to exceed $2000 per month will be provided to defer
         reasonable and actual expenses for travel to and from work locations
         (ie Limerick, Reston, etc.)
         An allowance not to exceed $10000 will be provided to defer reasonable
         and actual relocation expenses when you relocate to the Limerick area
         or other agreed upon location.

5) SEPARATION: It is agreed that the inability of the Employee to perform in the
areas listed below is reason for separation under Section 5c of the Employment
Agreement.

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                  o Operations
                  o Financial community
                  o Attracting new corporate strategic partners
                  o Controlling costs
                  o Maximizing profits

In the event of separation, under Section 5c, 5d or 5e the Company will provide
a separation package as follows:

                  a) salary for 9 months, if separation occurs within the first
two years of employment and 6 months thereafter,

                  b) benefits for 1 year or until employee obtains full-time
employment with benefits,

                  c) prorata bonus per Section 2 above,

                  d) any accrued Long Term Incentive under Section 4 above.

6) BENEFITS; As a "Full Time" Employee, Employee will be compensated bi-weekly,
and the Employee will be included in the Company's general employee benefit
programs. In place of Scangraphics Medical/Dental coverage, an allowance, not to
exceed $560 per month, will be provided to defer costs of your COBRA expenses.

Employee:                                   For the Company:

 /S/ Colin B. Matthews                      /S/ Laurence L. Osterwise
 ---------------------                      -------------------------
Colin B. Matthews                           Laurence L. Osterwise
                                            Chief Operating Officer

Date:    April 01, 1997                              Date:  4/1/97
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