FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

         THIS FIRST  AMENDMENT TO  EMPLOYMENT  AGREEMENT  ("Agreement")  made on
December 31, 1998,  but effective as of October 1, 1998 by and between  Dominick
Servedio   ("Employee")  and  STV  Group,   Inc.,  a  Pennsylvania   corporation
("Employer").

         WHEREAS,  Employer and Employee are parties to an Employment Agreement,
made as of  October  29,  1998,  effective  October  1,  1998  (the  "Employment
Agreement"), pursuant to which Employee has been re-employed by Employer; and

         WHEREAS,  the Employer and the Employee  desire to amend the Employment
Agreement  solely to the extent set forth  herein and  otherwise  desire to, and
hereby do, ratify and affirm the Employment Agreement;

         NOW  THEREFORE,  in  consideration  of  the  promises,   covenants  and
agreements of the parties contained herein and in the Employment Agreement,  and
intending to be legally bound, the parties hereby covenant and agree as follows:

         1. Supplemental Retirement Benefits.  Paragraph 3.6.3 of the Employment
Agreement,  entitled  "Supplemental  Retirement Benefits" is hereby deleted from
the  Employment  Agreement and the following  paragraph  enumerated as 3.6.3 and
entitled   "Supplemental   Retirement   Benefits"  is  deemed   substituted  and
incorporated into the Employment  Agreement as if originally and fully set forth
in its place and stead:

                  3.6.3(a) Supplemental  Retirement Benefits.  Commencing on the
         first day of the month following  termination of Employee's  employment
         with Employer,  Employee  shall be entitled to receive annual  benefits
         ("Supplemental Retirement Benefits") from Employer under a Supplemental
         Executive Retirement Plan ("SERP"), as described in this section in the
         amount of Three Hundred and Twenty-five Thousand Dollars  ($325,000.00)
         per annum.  The foregoing  Supplemental  Retirement  Benefits  shall be
         payable  monthly in equal  installments  for a total  period of fifteen
         (15) years of the lives

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          of  Employee  and his spouse or of the  survivor  next  following  the
          termination of Employee's employment with Employer. As of January 1 of
          each year  following  the year in which  payment  of the SERP  benefit
          commences, the amount of the Supplemental Retirement Benefits shall be
          increased  by a  cost-of-living  factor  based on the  increase in the
          Consumer Price  Index-Urban  Consumers for the  immediately  preceding
          calendar year.  The  Supplemental  Retirement  Benefits shall be fully
          vested and  non-forfeitable  in the event that  Employee's  employment
          with Employer terminates after September 30, 2003 for any reason or if
          such  employment  terminates  prior to  October  1,  2003 by reason of
          death,  disability (as described in Paragraph  4.2.2 of the Employment
          Agreement)  termination by Employer other than for cause (as described
          in Paragraph  4.2.4 of the  Employment  Agreement) or  termination  by
          Employee  for good  reason (as  described  in  Paragraph  4.2.5 of the
          Employment Agreement) other than retirement.

                  3.6.3(b)  Notwithstanding the foregoing Paragraph 3.6.3(a), in
         the event that Employee's  employment with Employer is terminated prior
         to October 1, 2003 by Employer  for cause (as  described  in  Paragraph
         4.2.3 of the  Employment  Agreement) or by Employee by  retirement  (as
         described in Paragraph  4.2.5 of the  Employment  Agreement),  then the
         annual amount of the  Supplemental  Retirement  Benefits payable to the
         Employee  shall equal the sum of (i) the annual amount of  Supplemental
         Retirement  Benefits  that was  accrued  under  the  terms of the Prior
         Employment  Agreement  and (11) the  product of (A) the excess of Three
         Hundred and Twenty-five Thousand Dollars  ($325,000.00) over the annual
         amount described in clause (i) above times (B) a fraction the numerator
         of which is the  number  of days  Employee  has  remained  employed  by
         Employer  from  the  effective  date of this  Agreement  to his date of
         termination and the denominator of which is 1,825.

                  3.6.3(c) Notwithstanding the foregoing, if a change in control
         (as  defined in  Appendix A) shall occur at any time during the term of
         this Agreement or before the Supplemental Retirement Benefits have been
         fully paid, the  Supplemental  Retirement  Benefits  shall  immediately
         become and be fully vested and  non-forfeitable in the amount set forth
         in Paragraph  3.6.3 (a) above and the Employer shall within thirty (30)
         days  following  such  change of control  provide to the  Employee  and
         Employee's  spouse,  or the  survivor,  security  for the  life of such
         benefit  in the  form  of a  fully  funded  annuity  payment  or  other
         equivalent  guarantee  or the  actuarial  lump  sum  equivalent  of the
         remaining  Supplemental  Retirement  Benefits shall be accelerated  and
         paid to Employee or his  surviving  spouse in a single lump sum in cash
         within forty-five (45) days following such change of control.  Any such
         annuity  contract  or  equivalent  guarantee  shall  be  issued  by  an
         insurance  company having an A.M. Best financial  strength rating of at
         least A+ and a Standard & Poor's  claims  paying  ability  rating of at
         least AA. Actuarial  equivalence shall be determined in accordance with
         reasonable actuarial  assumptions.  The Employer,  with the consent and
         approval  of  the  Employee,  which  consent  and  approval  shall  not
         unreasonably  be  withheld,  shall  retain an  independent  third party
         actuarial firm to determine the actuarial lump sum  equivalent.  In the
         event that the Employer shall elect to make payment of the Supplemental
         Retirement  Benefits  by annuity as provided  above,  upon the death of
         Employee's surviving spouse within the 15-year term of the SERP, the


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<PAGE>


          balance of any remaining Supplemental  Retirement Benefits which would
          have  become due and owing to  Employee,  or to  Employee's  surviving
          spouse,  shall be  payable  to such  beneficiaries  as may  have  been
          designated  by Employee or  Employee's  surviving  spouse during their
          respective  lifetimes.  In addition, in the event that, as a result of
          the Employer's election to make payment of the Supplemental Retirement
          Benefits  by  annuity  as  provided  above,   any  taxable  income  is
          recognized  by  Employee  in  advance  of  receipt  of  payment of the
          Supplemental  Retirement Benefits in whole or in part, Employer shall,
          promptly upon its calculation, advance to Employee, in cash, an amount
          sufficient  to cover any of  Employee's  federal,  state and local tax
          liability  with  respect  to any such  taxable  income  recognized  by
          Employee as a consequence  of  Employer's  election to make payment of
          the Supplemental Retirement Benefits by annuity, as well as Employee's
          federal,  state and  local tax  liability  with  respect  to such cash
          payment,  which  advance  shall  be  repaid  without  interest  by the
          employee pari pasu as Employee  receives payment of such  Supplemental
          Retirement Benefits.  (Collectively,  the General Retirement Benefits,
          Medical Retirement  Benefits and Supplemental  Retirement Benefits are
          referred to as "Retirement Benefits").

         2. Termination for Cause.  Paragraph 4.2.3 of the Employment Agreement,
entitled "Termination for Cause" is hereby deleted from the Employment Agreement
and the following  paragraph  enumerated as 4.2.3 and entitled  "Termination for
Cause" is deemed  substituted and incorporated into the Employment  Agreement as
if originally and fully set forth in its place and stead:

                  4.2.3.  Termination  for Cause.  At any time  during the Term,
         Employer may terminate  Employee's  employment  hereunder for Cause (as
         defined herein), effective immediately upon notice to Employee, if at a
         duly convened  meeting of the Board of Directors of which  Employee was
         given reasonable advance notice (30 days or more) and at which Employee
         and his counsel had the  opportunity to be heard, a resolution was duly
         adopted  by the  affirmative  vote of not less than  two-thirds  of the
         Board  finding that,  in the good faith  judgment of the Board,  (1) an
         event (which is  described  in the  resolution  in  reasonable  detail)
         constituting  Cause  has  occurred,  and (2)  the  Employee  was  given
         reasonable  notice of the event and either  Employee  had a  reasonable
         opportunity  of no less than one hundred and twenty (120) days duration
         to  take  remedial  action  but  failed  or  refused  to do  so,  or an
         opportunity to take remedial  action would not have been  meaningful or
         appropriate under the circumstances.

                             For purposes of this  Agreement,  Cause shall mean:
         (1)  Employee is grossly  negligent  in the  performance  of his duties
         under this Agreement  resulting in a material  impairment of Employer's
         performance,  and  Employee  continues  to be grossly  negligent  after
         demand  for  corrective  action  is  delivered  by  the  Employer  that
         specifically  identifies the manner in which the employer  believes the
         Employee has been grossly


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<PAGE>


          negligent  under this  Agreement  or (2)  Employee is  convicted of or
          pleads  guilty or nolo  contendere  to a felony.  For purposes of this
          Agreement  "grossly  negligent" means that Employee willfully breaches
          or  habitually  neglects  the duties  which he is  required to perform
          under  the  terms  of this  Agreement.  A  termination  of  Employee's
          employment  shall not be deemed a termination  for Cause if the notice
          of  termination  is delivered  to Employee  more than thirty (30) days
          after the  Board of  Directors  knows or  should  know of the event or
          action alleged to constitute Cause.

                             On termination  of this Agreement  pursuant to this
         Section 4.2.3,  with the exception of any benefits under the SERP which
         survive such  termination and except that Employee shall be entitled to
         any unpaid portion of his Compensation and Benefits earned prior to the
         date of  termination,  all  rights  to  Compensation  and  Benefits  of
         Employee shall cease as of the Date of Termination.

         3. Entire Understanding.  This Agreement,  together with the Employment
Agreement,  all  other  documents,  instruments,   certificates  and  agreements
executed in connection  herewith  shall be read and construed  together and sets
forth the entire  understanding  between the parties with respect to the subject
matter  hereof and  supersedes  all prior and  contemporaneous,  written,  oral,
expressed or implied, communications, agreements and understandings with respect
to the subject matter hereof.

         4.  Modification.  This  Agreement  shall  not  be  amended,  modified,
supplemented or terminated  except in writing signed by both parties.  No action
taken by Employer hereunder, including without limitation any waiver, consent or
approval, shall be effective unless approved by a majority of the Board.

         5.  Counterparts.  This  Agreement  may be  executed  in any  number of
counterparts,  each of which when so executed and delivered shall be an original
hereof,  and it shall not be  necessary  in making  proof of this  Agreement  to
produce or account for more than one counterpart hereof.


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<PAGE>


         6. Controlling Law. This Agreement is made under, and shall be governed
by,  construed  and  enforced  in  accordance  with,  the  substantive  laws  of
Pennsylvania applicable to agreements made and to be performed entirely therein.

         7.  Ratification.   Other  than  as  amended  by  this  Agreement,  the
Employment Agreement is ratified, affirmed and remains in force and effect.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above  mentioned,  under Seal,  intending to be legally bound
hereby.


EMPLOYEE:                                        EMPLOYER:

/s/ Dominick M. Servedio
Attest:                                     By:   /s/ Harry Prystowsky, MD

                                                  (Authorized Officer)
/s/ Peter W. Knipe
Secretary

(Corporate Seal)


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<PAGE>


                                   APPENDIX A

                         Definition of Change in Control

         For  purposes of this  Agreement,  "change of  control"  shall mean the
occurrence of one or more of the following: (A) The acquisition, other than from
Employer,  by any  individual,  entity or group  (within  the meaning of Section
13(d)(3) or 14(d)(2) of the  Securities  Exchange  Act of 1934,  as amended (the
"Exchange  Act")) of  beneficial  ownership  (within  the  meaning of Rule 13d-3
promulgated  under the  Exchange  Act) (a "Person") of 30% or more of either (i)
the then  outstanding  shares  of Common  Stock of  Employer  (the  "Outstanding
Employer  Common  Stock")  or  (ii)  the  combined  voting  power  of  the  then
outstanding  voting  securities  of Employer  entitled to vote  generally in the
election of directors (the "Employer  Voting  Securities"),  provided,  however,
that any acquisition by (x) Employer or any of its subsidiaries, or any employee
benefit plan (or related  trust)  sponsored or  maintained by Employer or any of
its  subsidiaries or (y) any Person that is eligible,  pursuant to Rule 13d-1(b)
under the Exchange  Act, to file a statement on Schedule 13G with respect to its
beneficial  ownership of Employer Voting Securities,  whether or not such Person
shall have filed a statement  on  Schedule  13G,  unless such Person  shall have
filed a statement on Schedule 13D with respect to beneficial ownership of 30% or
more of Employer Voting Securities or (z) any corporation with respect to which,
following such acquisition, more than 60% of, respectively, 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 is then beneficially  owned,  directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners,  respectively,  of the Outstanding  Employer Common Stock
and  Employer  Voting  Securities  immediately  prior  to  such  acquisition  in
substantially the same proportion as

<PAGE>


their  ownership,  immediately  prior to such  acquisition,  of the  Outstanding
Employer Common Stock and Employer Voting Securities,  as the case may be, shall
not  constitute  a Change of  Control;  or (B)  Individuals  who, as of the date
hereof,  constitute the Board of Directors of Employer (the  "Incumbent  Board")
cease for any reason to  constitute  at least a majority of the Board,  provided
that any  individual  becoming a director  subsequent  to the date hereof  whose
election or nomination for election by Employer's shareholders,  was approved by
a vote of at least a majority of the  directors  then  comprising  the Incumbent
Board  shall be  considered  as  though  such  individual  were a member  of the
Incumbent  Board,  but excluding,  for this purpose,  any such individual  whose
initial  assumption  of office  is in  connection  with an actual or  threatened
election  contest relating to the election of the Directors of Employer (as such
terms are used in Rule 14a-11 of Regulation 14A  promulgated  under the Exchange
Act);  or (C)  Approval by the  shareholders  of  Employer of a  reorganization,
merger or consolidation (a "Business  Combination"),  in each case, with respect
to which all or  substantially  all of the individuals and entities who were the
respective  beneficial  owners  of the  Outstanding  Employer  Common  Stock and
Employer Voting  Securities  immediately  prior to such Business  Combination do
not,  following  such  Business  Combination,   beneficially  own,  directly  or
indirectly,  more  than 60% of,  respectively,  the then  outstanding  shares of
common  stock  and the  combined  voting  power of the then  outstanding  voting
securities entitled to vote generally in the election of directors,  as the case
may be, of Employer  resulting from Business  Combination in  substantially  the
same  proportion  as  their  ownership   immediately   prior  to  such  Business
Combination  of the  Outstanding  Employer  Common  Stock  and  Employer  Voting
Securities, as the case may be; or (D) (i) a complete liquidation or dissolution
of Employer or of (ii) sale or other  disposition of all or substantially all of
the assets of Employer other than to a corporation


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<PAGE>


with respect to which,  following  such sale or  disposition,  more than 60% of,
respectively,  the then  outstanding  shares  of common  stock and the  combined
voting  power  of the  then  outstanding  voting  securities  entitled  to  vote
generally in the election of directors is then owned  beneficially,  directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners,  respectively,  of the Outstanding  Employer Common Stock
and Employer Voting Securities  immediately prior to such sale or disposition in
substantially the same proportion as their ownership of the Outstanding Employer
Common Stock and Employer  Voting  Securities,  as the case may be,  immediately
prior to such sale or disposition.


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