FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

         THIS FIRST  AMENDMENT TO  EMPLOYMENT  AGREEMENT  ("Agreement")  made on
December 31, 1998,  but  effective as of January 1, 1999 by and between  Michael
Haratunian  ("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  January  1,  1999  (the  "Employment
Agreement"), pursuant to which Employee has been reemployed 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 an
         amount  equal to  Employee's  salary  in the final  year of  Employee's
         employment,  by Employer as adjusted  during the term of this Agreement
         per annum.  The foregoing  Supplemental  Retirement  Benefits  shall be
         payable monthly in equal

<PAGE>

          installments  for a total period of fifteen (15) years of the lives 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  Supplemental
          Retirement  Benefits   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 Two
         Hundred  and  Twelve  Thousand  Dollars  ($212,000.00)  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,


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<PAGE>

          upon the death of Employee's  surviving spouse within the 15-year term
          of the SERP,  the  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 thisAgreement resulting in a


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<PAGE>


          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  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/ Michael Haratunian
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

<PAGE>

Voting  Securities  immediately  prior to such acquisition in substantially  the
same proportion as 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


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<PAGE>

other  disposition of all or  substantially  all of the assets of Employer other
than to a corporation 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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