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                                                                   EXHIBIT 10.17

                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of January 26, 2004 (the "Effective Date"), by and between ServiceWare
Technologies, Inc. (the "Company") a Delaware corporation, with offices at One
Northshore Center, Suite 503, 12 Federal Street, Pittsburgh, Pennsylvania 15212,
and Kent Heyman (the "Employee"), an individual with a residential address at 15
Stonebridge Lane, Pittsford, New York 14534.

         WHEREAS, the Company desires to employ the Employee, and the Employee
desires to be employed by the Company; and

         WHEREAS, the Company and the Employee desire to enter into this
Agreement to set forth the terms and conditions of their employment
relationship;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:

         1. Term. The term of this Agreement shall commence on the Effective
Date and end on the first anniversary thereof, unless sooner terminated (the
"Term"). Upon termination of this Agreement, the Employee shall only be eligible
for those specific benefits stated in Section 5 below.

         2. Position and Duties. The Employee shall have the positions of
President and Chief Executive Officer of the Company. The Employee agrees to
perform all duties and responsibilities incident to the positions of President
and Chief Executive Officer as the Company's Board of Directors (the "Board")
may determine from time to time. The Employee agrees to abide by the rules,
regulations, instructions, personnel practices and policies of the Company and
any changes therein which the Company may adopt from time to time (the
Employee's position will be based out of the Company's Pittsburgh office, or
such other offices as the Board shall determine from time to time).

         3. Exclusive Services and Best Efforts. The Employee agrees to devote
his best efforts to the diligent, faithful and competent discharge of the duties
and responsibilities attributable to his position as President and Chief
Executive Officer of the Company. To this end, the Employee agrees to devote his
entire business time, attention and energies to the business interests of the
Company and may only participate in or continue to participate in those business
activities or directorships which in no way conflict with the conduct and
completion of his duties for the Company and which are approved by the Board,
which approval shall not be unreasonably withheld.

         4. Compensation and Benefits.The Employee shall receive the following
compensation during the Term:

                  (a) Base Salary. Beginning with the Effective Date, the
Company shall pay the Employee a base salary at the annualized rate of Two
Hundred Twenty-Five Thousand

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Dollars ($225,000.00) (the "Base Salary"), payable in installments in accordance
with the Company's normal payment schedules, but not less often than monthly.
The Employee's Base Salary may be subject to positive adjustment from time to
time, as determined in the sole discretion of the Board or a duly authorized
compensation committee thereof (the "Compensation Committee").

                  (b) Incentive Compensation Bonus. Each calendar year, the
Employee is eligible to receive an annual bonus up to One Hundred Thousand
Dollars ($100,000.00) (the "Bonus") upon the Company and the Employee achieving
certain milestones (the "Milestones"), which shall be established by the
Employee and the Board or the Compensation Committee during the first quarter of
the applicable year. The Board or the Compensation Committee may, at its sole
option, grant the Employee a percentage of the Bonus if he and the Company
achieve a portion, but not all, of the Milestones.

                  (c) Stock Options and Restricted Stock.The Company has
previously granted the Employee restricted stock in the Company and stock
options to purchase shares of the Common Stock of the Company. Such grants shall
not be superseded by this Agreement.

                  (d) Benefit Plans. The Employee shall be eligible to
participate in any and all employee welfare and benefit plans that the Company
establishes and makes available to other Company employees from time to time.
The Company may alter, modify, add to or delete its employee benefit plans at
any time as the Board, in its sole judgment, determines to be appropriate.
Nothing herein shall be construed as requiring the Company to establish or
continue any particular benefit plan in discharge of its obligations under this
Agreement.

                  (e) Payment or Reimbursement of Reasonable Business Expenses.
The Company shall pay or reimburse the Employee for all reasonable, ordinary,
and necessary business expenses incurred or paid by the Employee in connection
with, or related to, the performance of his duties and responsibilities under
this Agreement in accordance with Company policies in effect from time to time.
Subject to such audits as the Company may deem necessary, the Company shall
reimburse the Employee the full amount of any such expenses advanced by him in
the ordinary course of business upon presentation by the Employee to the Company
of any and all documentation, expense statements, vouchers and/or such other
supporting information as the Company may request, provided, however, that the
amount available for such business expenses may be fixed in advance by the
Company.

                  (f) Deductions. The Company shall withhold from any salary or
benefits payable to the Employee any and all required federal, state, local, and
other taxes, any and all authorized deductions, and any other amounts as
permitted or required by law, rule or regulation.

                  (g) Relocation Expenses. The Company agrees to reimburse the
Employee for reasonable relocation-related expenses incurred in his moving from
Pittsford, New York to a location within reasonable commuting distance of the
Company's headquarters office up to a maximum reimbursable amount of One Hundred
Thousand Dollars ($100,000.00), including gross-up for taxes. Employee shall not
incur any such expenses without prior authorization of the Board of Directors.

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         5. Effect of Termination. Upon termination of this Agreement prior to
the expiration of the term stated in Section 1 above, the Employee shall only be
entitled to those benefits specifically set forth below.

                  (a) Termination by the Company With Cause or at the Election
of the Employee. In the event the Employee's employment is terminated by the
Company with Cause, as defined below, or at the election of the Employee without
Good Reason (as defined below), the Company shall pay to the Employee only the
compensation and benefits otherwise due and payable to him under Section 4 of
this Agreement through the last day of his actual employment by the Company.

                  "Cause" for termination for purposes of this Section 5(a)
shall be deemed to exist upon: (i) the Employee's failure, refusal or neglect,
to perform the duties of the position as assigned to him by the Company pursuant
to this Agreement, to adhere to the terms of this Agreement, or to follow
Company policies and procedures, which failure, refusal or neglect is not cured
within ten (10) days after written notice from the Company to that effect; (ii)
the Employee's commission of dishonesty, gross negligence or misconduct, whether
in connection with the Employee's responsibilities in his position with the
Company or otherwise (including, without limitation, misappropriating funds or
property of the Company; securing or attempting to secure personal profit in
connection with any transaction entered into on behalf of the Company; making
misrepresentations to the Company; breaching any provision of any employment,
consulting, advisory, nondisclosure, non-competition or other similar agreement
between the Employee and the Company, which breach is not cured within ten (10)
days after written notice from the Company to that effect; or any other act or
omission which impairs the Company's ability to conduct its business): (iii) the
Employee's commission of any act involving moral turpitude, dishonesty, theft or
unethical business conduct, or conduct that subjects the Company to public
disrespect or ridicule or injures the reputation of the Company; (iv) the
Employee's breach of his duty of loyalty and fidelity to the Company (including
without limitation, aiding a competitor; failing to devote his full business
time and best efforts to the Company's business and affairs or failing to be
employed exclusively by the Company, without authorization), which breach is not
cured within ten (10) days after written notice from the Company to that effect;
or (v) the Employee's conviction of, or the entry of a pleading of guilty or no
contest by the Employee, to any crime involving moral turpitude or any felony.

                  (b) Termination by the Company Without Cause or as a Result of
a Change in Control or by Employee for Good Reason. In the event the Employee's
employment as described therein is terminated: (i) by the Company without Cause;
or (ii) within the six (6) month period following a Change in Control, as
defined below, for a reason other than Cause; or (iii) by Employee for Good
Reason, the following shall apply:

                           (i) The Company shall, for a period of nine (9)
months following the date of the Employee's termination: (y) continue to pay the
Employee's Base Salary at his then current rate, in monthly installments; and
(z) to the extent the Employee elects to receive continued benefits (for
Employee, his wife and dependents) under the Company's group health

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benefits plan, pursuant to COBRA, the Company shall pay or reimburse (at the
Company's sole option) the cost of such COBRA benefits (collectively, the
"Separation Benefits").

                           (ii) The Company shall immediately vest the Employee
in the unvested portion of any stock option he has been previously granted to
the same extent as if he had remained employed by the Company for the
twelve-month period following the termination of his employment.

                           (iii) Employee shall remain a option plan participant
and therefore may, but shall not be obligated to, exercise any vested stock
options, for a period of 12 months following his termination of employment.
During such 12-month period, Employee shall make himself available for limited
consulting services to the Company.

                           (iv) In the event that a Change in Control, as
defined in Section 5(d) below, occurs during any calendar year, the right to
receive 100% of the target incentive compensation bonus shall immediately vest
and shall be payable as follows: (y) 50% will be paid on or within 10 days of
the closing of the transaction triggering the Change in Control; and (z) the
remaining 50% will be paid on the earliest of (I) the six (6) month anniversary
of the transaction triggering the Change in Control, (II) January 15 of the year
following the year in which the transaction triggering the Change in Control
occurred, and (III) a termination of the Employee's employment without Cause.

                           (v) In the event of termination by the Company
without Cause or termination by Employee for Good Reason and if the provisions
of subparagraph (iv) immediately above do not apply, Employee shall be entitled
to receive within fifteen (15) days after the termination, payment of a prorata
portion of the target incentive compensation bonus for the calendar year of
termination.

         "Good Reason" for termination by Employee for purposes of this Section
5(b) shall be deemed to exist if (i) Employee's job title, duties or
compensation are materially altered without Employee's consent, or (ii) the
Company defaults in the performance of any material obligation to Employee
hereunder and such default is not cured within ten (10) days after written
notice from Employee to that effect.

         The Employee shall not be required to mitigate the amount of the
Separation Benefits provided for in this Section 5(b) by offsetting such payment
with any amounts received by the Employee from subsequent employment, including
self-employment. Except as stated above, all benefits provided by the Company
shall terminate pursuant to the terms of the applicable benefit plans based on
the date of termination of the Employee's employment. In exchange for, and as a
condition precedent to, receiving any Separation Benefits or vesting from the
Company under this Section 5(b), the Employee shall execute (and shall not
revoke) a valid General Release of all Claims releasing the Company, its
directors, officers, employees, agents and affiliates, in a form reasonably
acceptable to the Company. The Employee recognizes that, except as expressly
provided herein, he has not been promised any compensation or benefits after
termination of his employment.

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                  (c) Survival. The provisions of Sections 6, 7, 8 and 9 of this
Agreement shall survive both the termination of the Employee's employment and
the termination of this Agreement. Further, the obligation of the Company to
make payments to or on behalf of the Executive under Section 5(b) of this
Agreement is expressly conditioned upon the Employee's continued full
performance of his obligations under Sections 6, 7, 8 and 9 of the Agreement.

                  (d) Change in Control. For the purposes of Section 5(b),
"Change in Control" shall be defined as the occurrence of either or both of the
following:

                           (i) The effective date or date of consummation of any
transaction or series of transactions (other than a transaction to which only
the Company and one or more of its subsidiaries are parties) pursuant to which
the Company: (1) becomes a subsidiary of another corporation or business entity;
(2) is merged or consolidated with or into another corporation or other business
entity; (3) engages in an exchange of stock with another corporation; or (4)
transfers, sells or otherwise disposes of all or substantially all of its assets
to a single purchaser (other than the Employee) or a group of purchasers (none
of whom is the Employee); provided, however, that this subsection (i) shall not
be applicable to a transaction or series of transactions in which a majority of
the capital stock of the surviving or resulting corporation immediately
following such transaction or series of transactions, is owned or controlled by
the holders of the Company's outstanding capital stock immediately before such
transaction; or

                           (ii) The date upon which any person (other than the
Employee), group of associated persons acting in concert (none of whom is the
Employee) or corporation (other than a corporation in which the Employee owns a
controlling interest) becomes a direct or indirect beneficial owner of stock of
the Company representing an aggregate of more than fifty percent (50%) of the
votes then entitled to be cast at an election of directors of the Company;
provided, however, that this subsection (ii) shall not be applicable to the
acquisition of such stock interest by Thomas Unterberg and his affiliates or to
an equity financing transaction or series of transactions, which are for the
sole purpose of raising cash to finance the continuing operations of the
Company.

         6. Invention Assignment, Confidentiality and Restrictive Covenants.

                  (a) Disclosure of Innovations.The Employee agrees to disclose
in writing to the Company all inventions, improvements and other innovations of
any kind that he may have made, conceived, developed or reduced to practice,
alone or jointly with others, during the term of his employment with the
Company, whether or not they are related to his work for the Company and whether
or not they are eligible for patent, copyright, trademark, trade secret or other
legal protection ("Innovations"). Examples of Innovations shall include, but are
not limited to, discoveries, research, inventions, formulas, techniques,
processes, know-how, marketing plans, new product plans, production processes,
advertising, packaging and marketing techniques and improvements to computer
hardware or software.

                  (b) Assignment of Ownership of Innovations. The Employee
agrees that all Innovations, which are in any way related to the business or
planned business of the Company, are the sole and exclusive property of the
Company and he hereby assigns all of his rights, title

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or interest in the Innovations and in all related patents, copyrights,
trademarks, trade secrets, rights of priority and other proprietary rights to
the Company. At the Company's request and expense, during and after the period
of his employment with the Company, the Employee will assist and cooperate with
the Company in all respects and will execute documents, and, subject to his
reasonable availability, give testimony and take further acts requested by the
Company to obtain, maintain, perfect and enforce for the Company patent,
copyright, trademark, trade secret and other legal protection for the
Innovations. The Employee hereby appoints the President and Chief Executive
Officer, or another authorized officer of the Company as his attorney-in-fact to
execute documents on his behalf for this purpose. The Employee has attached
hereto as Exhibit "A" a list of Innovations as of the date hereof which belong
to him and which are not assigned to the Company hereunder (the "Prior
Innovations"), or, if no such list is attached, he represents that there are no
Prior Innovations.

                  (c) Protection of Confidential Information of the Company. The
Employee understands that his work as an employee of the Company creates a
relationship of trust and confidence between himself and the Company. During and
after the period of his employment with the Company, the Employee will not use
or disclose or allow anyone else to use or disclose any "Confidential
Information" (as defined below) relating to the Company, its products, suppliers
or customers except as may be necessary in the performance of his work for the
Company or as may be authorized in advance by appropriate officers of the
Company. "Confidential Information" shall include methodologies, processes,
tools, innovations, business strategies, financial information, forecasts,
personnel information, customer lists, trade secrets and any other non-public
technical or business information, whether in writing or given to the Employee
orally, which he knows or has reason to know the Company would like to treat as
confidential for any purpose, such as maintaining a competitive advantage or
avoiding undesirable publicity. The Employee will keep Confidential Information
secret and will not allow any unauthorized use of the same, whether or not any
document containing it is marked as confidential. These restrictions, however,
will not apply to Confidential Information that has become known to the public
generally through no fault or breach of the Employee or that the Company
regularly gives to third parties without restriction on use or disclosure.

                  (d) Non-Competition, Non-Solicitation, Non-Interference.
Because the Employee acknowledges and agrees that, in conjunction with his
employment with the Company, he will have access to confidential and trade
secret information of the Company, the following restrictive covenant is
necessary to protect the interests and continued success of the Company. Except
as otherwise expressly consented to in writing by the Company, during the time
period that begins on the Effective Date and ends twelve (12) months from the
date of termination of Employee's employment (the "Restricted Period"), the
Employee shall not, directly or indirectly, acting as an employee, owner,
shareholder, partner, joint venturer, officer, director, agent, salesperson,
consultant, advisor, investor or principal of any corporation or other business
entity:

                           (i) engage, in any state or territory of the United
States of America where the Company is actively doing business (determined as of
the Effective Date), in direct or indirect competition with the business
conducted by the Company; specifically, eServices or knowledge management; or

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                           (ii) request or otherwise attempt to induce or
influence, directly or indirectly, any customer or supplier, or prospective
customer or supplier, of the Company, or other persons sharing a business
relationship with the Company, to cancel, limit or postpone their business with
the Company, or otherwise take action which might be to the material
disadvantage of the Company; or

                           (iii) hire or solicit for employment or other
business relationship, or induce or actively attempt to influence, any employee,
officer , director or other business associate of the Company to terminate his
or her employment or discontinue such person's consultant, contractor or other
business association with the Company.

                           (iv) Nothing in this section, whether express or
implied, shall prevent the Employee from being a holder or not more than one
percent (1%) of the total outstanding stock of either a publicly held company
under Section 12 of the Securities Exchange Act of 1934, as amended, or any
privately held company.

                  If the Employee violates any of the restrictions contained in
this section, the Restricted Period shall be increased by the period of time
from the commencement of any such violation until the time such violation shall
be cured by the Employee to the satisfaction of the Company, and the Company may
withhold any and all payments otherwise due and owing to the Employee under this
Agreement, if any, other than Base Salary.

                  (e) Business Opportunities. The Employee agrees that, during
the period of his employment with the Company, he will not take personal
advantage of any business opportunities that are similar or substantially
similar to the business of the Company without: (i) first offering in writing
such opportunity to the Company; and (ii) thereafter obtaining a written refusal
of such opportunity from the Company. In addition, all material facts regarding
any such business opportunities must be promptly and fully disclosed by the
Employee to the Board as soon as the Employee becomes aware of any such
opportunity.

                  (f) Injunctive Relief. The Employee acknowledges that, due to
the nature of the Company's business, the scope of the provisions set forth in
Section 6(d) are reasonable and necessary for the protection of the business and
goodwill of the Company. The Employee agrees that any breach of Section 6 will
cause the Company substantial harm and therefore, in the event of any such
breach, in addition to such other remedies which may be available, the Company
shall have the right to seek a temporary restraining order, preliminary
injunctive relief and permanent injunctive relief. In the event that either the
geographical area or the Restricted Period set forth in Section 6(d) of this
Agreement is deemed by any court of competent jurisdiction to be unreasonably
restrictive, the Employee and the Company agree that the provision shall remain
in full force and effect for the greatest time period and in the greatest area
that would not render it unenforceable.

                  (g) Disclosure of this Agreement. The Employee hereby
authorizes the Company to notify others, including but not limited to customers
of the Company and any of the Employee's future employers, of the terms of this
Agreement and his responsibilities hereunder.

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         7. Representations and Warranties of the Employee. The Employee
represents and warrants to the Company as follows: (i) he has the legal capacity
and unrestricted right to execute and deliver this Agreement and to perform all
of his obligations hereunder; (ii) the execution and delivery of this Agreement
by the Employee and the performance of his obligations hereunder will not
violate or be in conflict with any fiduciary or other duty, instrument,
agreement, document, arrangement, or other understanding to which the Employee
is a party or by which he is or may be bound or subject; (iii) the Employee is
not a party to any instrument, agreement, document, arrangement, or other
understanding with any person (other than the Company) requiring or restricting
the use or disclosure of any confidential information or the provision of any
employment, consulting or other services; and (iv) he has not and will not bring
to the Company or use in the performance of his duties for the Company any
documents or materials of a former employer or other party that are not
generally available to the public.

         8. Company Property. All records, files, lists, including computer
generated lists, drawings, documents, equipment and similar items relating to
the Company's business that the Employee shall prepare for or receive from the
Company shall remain the Company's sole and exclusive property. The Employee
agrees than upon his termination from employment, or upon demand from the
Company, he shall immediately return to the Company all property of the Company
in his possession, custody or control. The Employee further represents that he
will not copy or cause to be copied, print out, or cause to be printed out any
software, documents or other materials belonging to the Company.

         9. Cooperation. The Employee agrees that both during and after his
employment with the Company, he shall, at the request of the Company, render all
reasonable assistance and perform all lawful acts that the Company considers
necessary or advisable in connection with any litigation involving the Company
or any director, officer, employee, shareholder, agent, representative,
consultant, client or vendor of the Company.

         10. Construction of Agreement.

                  (a) Choice of Law and Jurisdiction. This Agreement shall be
construed, interpreted and the rights of the parties determined in accordance
with the laws of the State of New Jersey, without giving effect to any choice or
conflict of law provision or rule (whether in the State of New Jersey or any
other jurisdiction) that would cause the application of laws of any
jurisdictions other than those of the State of New Jersey. The parties hereby
consent to the exclusive jurisdiction of the state and federal courts located
within the State of New Jersey for the resolution of all disputes arising under
this Agreement or otherwise related to the employment of the Employee with the
Company.

                  (b) Assignment. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the Company, and the Company
shall be obligated to require any successor to expressly assume its obligations
hereunder. This Agreement shall inure to the benefit of and be enforceable by
the Employee or his legal representatives, executors, administrators,
successors, heirs, distributes, devisees and legatees. The Employee may not

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assign any of his duties, responsibility, obligations or positions hereunder to
any person and any such purported assignment by him shall be void and of no
force and effect. The Company may assign its rights hereunder to any other
party.

                  (c) Waiver. Any waiver or consent from the Company with
respect to any term or provision of this Agreement or any other aspect of the
Employee's conduct or employment shall be effective only in the specific
instance and for the specific purpose for which given and shall not be deemed,
regardless of frequency given, to be a further or continuing waiver or consent.
The failure or delay of the Company at any time or times to require performance
of, or to exercise any of its powers, rights or remedies with respect to any
term or provision of this Agreement or any other aspect of the Employee's
conduct or employment in no manner (except as otherwise expressly provided
herein) shall affect the Company's right at a later time to enforce any such
term or provision.

                  (d) Notices. All notices, requests, demands, and other
communications hereunder must be in writing and shall be deemed to have been
duly given if delivered by hand or mailed within the continental United States
by first class, registered mail, return receipt requested, postage and registry
fees prepaid, to the applicable party, at the addresses first stated above or at
such other subsequent address as is made known to the other party as an address
at which such party receives similar important correspondence.

                  (e) Amendment. This Agreement may be amended or modified only
be a written instrument executed by the Employee and a representative of the
Company duly authorized by the Board.

                  (f) Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the parties agree that the court making the
determination of invalidity or unenforceability shall have the power to limit
the term or provision, to delete specific works or phrases, or to replace any
invalid or unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision, and this Agreement shall be
enforceable as so modified.

                  (g) Entire Agreement.This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter of this
Agreement. This Agreement shall supersede the offer letter, dated August 23,
2001 and any related documents in their entirety.

                  (h) Headings. The section headings contained in this Agreement
are used for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

                  (i) Construction. Every covenant, term and provision of this
Agreement shall be construed simply according to its fair meaning and not
strictly for or against any party.

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         11. Employee Acknowledgment. The Employee represents and agrees that he
fully understands his rights to discuss all aspects of this Agreement with his
counsel, that he has been given the opportunity to avail himself of this right,
that he has carefully read and fully understands all the provisions of this
Agreement, that he is competent to execute this Agreement, that his decision to
execute this Agreement has not been obtained by any duress, that he freely and
voluntarily enters into this Agreement, and that he has read this document in
its entirety and fully understands the meaning, intent, and consequences of this
Agreement.

         12. Counterparts; Facsimile Signature. This Agreement may be executed
in two (2) or more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument. This
Agreement may be executed by facsimile signature.

Dated: January 26, 2004                SERVICEWARE TECHNOLOGIES, INC.

                                       By:  __________________________________
                                            Thomas I. Unterberg
                                            Chairman of the Board of Directors

Dated: January 26, 2004                     __________________________________
                                            Kent F. Heyman

                                       10<PAGE>

                                                                   EXHIBIT 10.18

                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of January 26, 2004 (the "Effective Date"), by and between ServiceWare
Technologies, Inc. (the "Company") a Delaware corporation, with offices at One
Northshore Center, Suite 503, 12 Federal Street, Pittsburgh, Pennsylvania 15212
and Scott Schwartzman (the "Employee"), an individual with a residential address
at 28M Knob Hill, Roseland, NJ 07068.

         WHEREAS, the Company desires to employ the Employee, and the Employee
desires to be employed by the Company; and

         WHEREAS, the Company and the Employee desire to enter into this
Agreement to set forth the terms and conditions of their employment
relationship;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:

         1. Term. The term of this Agreement shall commence on the Effective
Date and end on the first anniversary thereof, unless sooner terminated (the
"Term"). Upon termination of this Agreement, the Employee shall only be eligible
for those specific benefits stated in Section 5 below.

         2. Position and Duties. The Employee shall have the position of Chief
Operating Officer of the Company and such other positions as may be assigned to
Employee by the Company from time to time. The parties acknowledge that Employee
also currently serves as Chief Financial Officer of the Company. The Employee
agrees to perform all duties and responsibilities incident to his positions with
the Company as the Company's Chief Executive Officer or the Company's Board of
Directors (the "Board") may determine from time to time. The Employee agrees to
abide by the rules, regulations, instructions, personnel practices and policies
of the Company and any changes therein which the Company may adopt from time to
time (the Employee's position will be based out of the Company's New Jersey
office, or such other offices as the Board shall determine from time to time).

         3. Exclusive Services and Best Efforts. The Employee agrees to devote
his best efforts to the diligent, faithful and competent discharge of the duties
and responsibilities attributable to his positions with the Company. To this
end, the Employee agrees to devote his entire business time, attention and
energies to the business interests of the Company and may only participate in or
continue to participate in those business activities or directorships which in
no way conflict with the conduct and completion of his duties for the Company
and which are approved by the Board, which approval shall not be unreasonably
withheld.

         4. Compensation and Benefits.The Employee shall receive the following
compensation during the Term:

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                  (a) Base Salary. Beginning with the Effective Date, the
Company shall pay the Employee a base salary at the annualized rate of One
Hundred Seventy-Five Thousand Dollars ($175,000.00) (the "Base Salary"), payable
in installments in accordance with the Company's normal payment schedules, but
not less often than monthly. The Employee's Base Salary may be subject to
positive adjustment from time to time, as determined in the sole discretion of
the Board or a duly authorized compensation committee thereof (the "Compensation
Committee").

                  (b) Incentive Compensation Bonus. Each calendar year, the
Employee is eligible to receive an annual bonus up to Seventy-five Thousand
Dollars ($75,000.00) (the "Bonus") upon the Company and the Employee achieving
certain milestones (the "Milestones") which shall be established by the Employee
and the Chief Executive Officer or the Compensation Committee during the first
quarter of the applicable year. The Chief Executive Officer or the Compensation
Committee may, at its sole option, grant the Employee a percentage of the Bonus
if he and the Company achieve a portion, but not all, of the Milestones.

                  (c) Stock Options and Restricted Stock.The Company has
previously granted the Employee restricted stock in the Company and stock
options to purchase shares of the Common Stock of the Company. Such grants shall
not be superseded by this Agreement.

                  (d) Benefit Plans. The Employee shall be eligible to
participate in any and all employee welfare and benefit plans that the Company
establishes and makes available to other Company employees from time to time.
The Company may alter, modify, add to or delete its employee benefit plans at
any time as the Board, in its sole judgment, determines to be appropriate.
Nothing herein shall be construed as requiring the Company to establish or
continue any particular benefit plan in discharge of its obligations under this
Agreement.

                  (e) Payment or Reimbursement of Reasonable Business Expenses.
The Company shall pay or reimburse the Employee for all reasonable, ordinary,
and necessary business expenses incurred or paid by the Employee in connection
with, or related to, the performance of his duties and responsibilities under
this Agreement in accordance with Company policies in effect from time to time.
Subject to such audits as the Company may deem necessary, the Company shall
reimburse the Employee the full amount of any such expenses advanced by him in
the ordinary course of business upon presentation by the Employee to the Company
of any and all documentation, expense statements, vouchers and/or such other
supporting information as the Company may request, provided, however, that the
amount available for such business expenses may be fixed in advance by the
Company.

                  (f) Deductions. The Company shall withhold from any salary or
benefits payable to the Employee any and all required federal, state, local, and
other taxes, any and all authorized deductions, and any other amounts as
permitted or required by law, rule or regulation.

         5. Effect of Termination. Upon termination of this Agreement prior to
the expiration of the term stated in Section 1 above, the Employee shall only be
entitled to those benefits specifically set forth below.

                                       2
<PAGE>

                  (a) Termination by the Company With Cause or at the Election
of the Employee. In the event the Employee's employment is terminated by the
Company with Cause, as defined below, or at the election of the Employee without
Good Reason (as defined below), the Company shall pay to the Employee only the
compensation and benefits otherwise due and payable to him under Section 4 of
this Agreement through the last day of his actual employment by the Company.

                  "Cause" for termination for purposes of this Section 5(a)
shall be deemed to exist upon: (i) the Employee's failure, refusal or neglect,
to perform the duties of the position as assigned to him by the Company pursuant
to this Agreement, to adhere to the terms of this Agreement, or to follow
Company policies and procedures, which failure, refusal or neglect is not cured
within ten (10) days after written notice from the Company to that effect; (ii)
the Employee's commission of dishonesty, gross negligence or misconduct, whether
in connection with the Employee's responsibilities in his position with the
Company or otherwise (including, without limitation, misappropriating funds or
property of the Company; securing or attempting to secure personal profit in
connection with any transaction entered into on behalf of the Company; making
misrepresentations to the Company; breaching any provision of any employment,
consulting, advisory, nondisclosure, non-competition or other similar agreement
between the Employee and the Company, which breach is not cured within ten (10)
days after written notice from the Company to that effect; or any other act or
omission which impairs the Company's ability to conduct its business): (iii) the
Employee's commission of any act involving moral turpitude, dishonesty, theft or
unethical business conduct, or conduct that subjects the Company to public
disrespect or ridicule or injures the reputation of the Company; (iv) the
Employee's breach of his duty of loyalty and fidelity to the Company (including
without limitation, aiding a competitor; failing to devote his full business
time and best efforts to the Company's business and affairs or failing to be
employed exclusively by the Company, without authorization), which breach is not
cured within ten (10) days after written notice from the Company to that effect;
or (v) the Employee's conviction of, or the entry of a pleading of guilty or no
contest by the Employee, to any crime involving moral turpitude or any felony.

                  (b) Termination by the Company Without Cause or as a Result of
a Change in Control or by Employee for Good Reason. In the event the Employee's
employment as described therein is terminated: (i) by the Company without Cause;
or (ii) within the six (6) month period following a Change in Control, as
defined below, for a reason other than Cause; or (iii) by Employee for Good
Reason, the following shall apply:

                           (i) The Company shall, for a period of nine (9)
months following the date of the Employee's termination: (y) continue to pay the
Employee's Base Salary at his then current rate, in monthly installments; and
(z) to the extent the Employee elects to receive continued benefits (for
Employee, his wife and dependents) under the Company's group health benefits
plan, pursuant to COBRA, the Company shall pay or reimburse (at the Company's
sole option) the cost of such COBRA benefits (collectively, the "Separation
Benefits").

                           (ii) The Company shall immediately vest the Employee
in the unvested portion of any stock option he has been previously granted to
the same extent as if he

                                       3
<PAGE>

had remained employed by the Company for the twelve-month period following the
termination of his employment.

                           (iii) Employee shall remain a option plan participant
and therefore may, but shall not be obligated to, exercise any vested stock
options, for a period of 12 months following his termination of employment.
During such 12-month period, Employee shall make himself available for limited
consulting services to the Company.

                           (iv) In the event that a Change in Control, as
defined in Section 5(d) below, occurs during any calendar year, the right to
receive 100% of the target incentive compensation bonus shall immediately vest
and shall be payable as follows: (y) 50% will be paid on or within 10 days of
the closing of the transaction triggering the Change in Control; and (z) the
remaining 50% will be paid on the earliest of (I) the six (6) month anniversary
of the transaction triggering the Change in Control, (II) January 15 of the year
following the year in which the transaction triggering the Change in Control
occurred, and (III) a termination of the Employee's employment without Cause.

                           (v) In the event of termination by the Company
without Cause or termination by Employee for Good Reason and if the provisions
of subparagraph (iv) immediately above do not apply, Employee shall be entitled
to receive within fifteen (15) days after the termination, payment of a prorata
portion of the target incentive compensation bonus for the calendar year of
termination.

         "Good Reason" for termination by Employee for purposes of this Section
5(b) shall be deemed to exist if (i) Employee's job title, duties or
compensation are materially altered without Employee's consent, or (ii) the
Company defaults in the performance of any material obligation to Employee
hereunder and such default is not cured within ten (10) days after written
notice from Employee to that effect.

         The Employee shall not be required to mitigate the amount of the
Separation Benefits provided for in this Section 5(b) by offsetting such payment
with any amounts received by the Employee from subsequent employment, including
self-employment. Except as stated above, all benefits provided by the Company
shall terminate pursuant to the terms of the applicable benefit plans based on
the date of termination of the Employee's employment. In exchange for, and as a
condition precedent to, receiving any Separation Benefits or vesting from the
Company under this Section 5(b), the Employee shall execute (and shall not
revoke) a valid General Release of all Claims releasing the Company, its
directors, officers, employees, agents and affiliates, in a form reasonably
acceptable to the Company. The Employee recognizes that, except as expressly
provided herein, he has not been promised any compensation or benefits after
termination of his employment.

                  (c) Survival. The provisions of Sections 6, 7, 8 and 9 of this
Agreement shall survive both the termination of the Employee's employment and
the termination of this Agreement. Further, the obligation of the Company to
make payments to or on behalf of the Executive under Section 5(b) of this
Agreement is expressly conditioned upon the Employee's continued full
performance of his obligations under Sections 6, 7, 8 and 9 of the Agreement.

                                       4
<PAGE>

                  (d) Change in Control. For the purposes of Section 5(b),
"Change in Control" shall be defined as the occurrence of either or both of the
following:

                           (i) The effective date or date of consummation of any
transaction or series of transactions (other than a transaction to which only
the Company and one or more of its subsidiaries are parties) pursuant to which
the Company: (1) becomes a subsidiary of another corporation or business entity;
(2) is merged or consolidated with or into another corporation or other business
entity; (3) engages in an exchange of stock with another corporation; or (4)
transfers, sells or otherwise disposes of all or substantially all of its assets
to a single purchaser (other than the Employee) or a group of purchasers (none
of whom is the Employee); provided, however, that this subsection (i) shall not
be applicable to a transaction or series of transactions in which a majority of
the capital stock of the surviving or resulting corporation immediately
following such transaction or series of transactions, is owned or controlled by
the holders of the Company's outstanding capital stock immediately before such
transaction; or

                           (ii) The date upon which any person (other than the
Employee), group of associated persons acting in concert (none of whom is the
Employee) or corporation (other than a corporation in which the Employee owns a
controlling interest) becomes a direct or indirect beneficial owner of stock of
the Company representing an aggregate of more than fifty percent (50%) of the
votes then entitled to be cast at an election of directors of the Company;
provided, however, that this subsection (ii) shall not be applicable to the
acquisition of such stock interest by Thomas Unterberg and his affiliates or to
an equity financing transaction or series of transactions, which are for the
sole purpose of raising cash to finance the continuing operations of the
Company.

         6. Invention Assignment, Confidentiality and Restrictive Covenants.

                  (a) Disclosure of Innovations.The Employee agrees to disclose
in writing to the Company all inventions, improvements and other innovations of
any kind that he may have made, conceived, developed or reduced to practice,
alone or jointly with others, during the term of his employment with the
Company, whether or not they are related to his work for the Company and whether
or not they are eligible for patent, copyright, trademark, trade secret or other
legal protection ("Innovations"). Examples of Innovations shall include, but are
not limited to, discoveries, research, inventions, formulas, techniques,
processes, know-how, marketing plans, new product plans, production processes,
advertising, packaging and marketing techniques and improvements to computer
hardware or software.

                  (b) Assignment of Ownership of Innovations. The Employee
agrees that all Innovations, which are in any way related to the business or
planned business of the Company, are the sole and exclusive property of the
Company and he hereby assigns all of his rights, title or interest in the
Innovations and in all related patents, copyrights, trademarks, trade secrets,
rights of priority and other proprietary rights to the Company. At the Company's
request and expense, during and after the period of his employment with the
Company, the Employee will assist and cooperate with the Company in all respects
and will execute documents, and, subject to his reasonable availability, give
testimony and take further acts requested by the Company to

                                       5
<PAGE>

obtain, maintain, perfect and enforce for the Company patent, copyright,
trademark, trade secret and other legal protection for the Innovations. The
Employee hereby appoints the President and Chief Executive Officer, or another
authorized officer of the Company as his attorney-in-fact to execute documents
on his behalf for this purpose. The Employee has attached hereto as Exhibit "A"
a list of Innovations as of the date hereof which belong to him and which are
not assigned to the Company hereunder (the "Prior Innovations"), or, if no such
list is attached, he represents that there are no Prior Innovations.

                  (c) Protection of Confidential Information of the Company. The
Employee understands that his work as an employee of the Company creates a
relationship of trust and confidence between himself and the Company. During and
after the period of his employment with the Company, the Employee will not use
or disclose or allow anyone else to use or disclose any "Confidential
Information" (as defined below) relating to the Company, its products, suppliers
or customers except as may be necessary in the performance of his work for the
Company or as may be authorized in advance by appropriate officers of the
Company. "Confidential Information" shall include methodologies, processes,
tools, innovations, business strategies, financial information, forecasts,
personnel information, customer lists, trade secrets and any other non-public
technical or business information, whether in writing or given to the Employee
orally, which he knows or has reason to know the Company would like to treat as
confidential for any purpose, such as maintaining a competitive advantage or
avoiding undesirable publicity. The Employee will keep Confidential Information
secret and will not allow any unauthorized use of the same, whether or not any
document containing it is marked as confidential. These restrictions, however,
will not apply to Confidential Information that has become known to the public
generally through no fault or breach of the Employee or that the Company
regularly gives to third parties without restriction on use or disclosure.

                  (d) Non-Competition, Non-Solicitation, Non-Interference.
Because the Employee acknowledges and agrees that, in conjunction with his
employment with the Company, he will have access to confidential and trade
secret information of the Company, the following restrictive covenant is
necessary to protect the interests and continued success of the Company. Except
as otherwise expressly consented to in writing by the Company, during the time
period that begins on the Effective Date and ends twelve (12) months from the
date of termination of Employee's employment (the "Restricted Period"), the
Employee shall not, directly or indirectly, acting as an employee, owner,
shareholder, partner, joint venturer, officer, director, agent, salesperson,
consultant, advisor, investor or principal of any corporation or other business
entity:

                           (i) engage, in any state or territory of the United
States of America where the Company is actively doing business (determined as of
the Effective Date), in direct or indirect competition with the business
conducted by the Company; specifically, eServices or knowledge management; or

                           (ii) request or otherwise attempt to induce or
influence, directly or indirectly, any customer or supplier, or prospective
customer or supplier, of the Company, or other persons sharing a business
relationship with the Company, to cancel, limit or postpone their

                                       6
<PAGE>

business with the Company, or otherwise take action which might be to the
material disadvantage of the Company; or

                           (iii) hire or solicit for employment or other
business relationship, or induce or actively attempt to influence, any employee,
officer , director or other business associate of the Company to terminate his
or her employment or discontinue such person's consultant, contractor or other
business association with the Company.

                           (iv) Nothing in this section, whether express or
implied, shall prevent the Employee from being a holder or not more than one
percent (1%) of the total outstanding stock of either a publicly held company
under Section 12 of the Securities Exchange Act of 1934, as amended, or any
privately held company.

                  If the Employee violates any of the restrictions contained in
this section, the Restricted Period shall be increased by the period of time
from the commencement of any such violation until the time such violation shall
be cured by the Employee to the satisfaction of the Company, and the Company may
withhold any and all payments otherwise due and owing to the Employee under this
Agreement, if any, other than Base Salary.

                  (e) Business Opportunities. The Employee agrees that, during
the period of his employment with the Company, he will not take personal
advantage of any business opportunities that are similar or substantially
similar to the business of the Company without: (i) first offering in writing
such opportunity to the Company; and (ii) thereafter obtaining a written refusal
of such opportunity from the Company. In addition, all material facts regarding
any such business opportunities must be promptly and fully disclosed by the
Employee to the Board as soon as the Employee becomes aware of any such
opportunity.

                  (f) Injunctive Relief. The Employee acknowledges that, due to
the nature of the Company's business, the scope of the provisions set forth in
Section 6(d) are reasonable and necessary for the protection of the business and
goodwill of the Company. The Employee agrees that any breach of Section 6 will
cause the Company substantial harm and therefore, in the event of any such
breach, in addition to such other remedies which may be available, the Company
shall have the right to seek a temporary restraining order, preliminary
injunctive relief and permanent injunctive relief. In the event that either the
geographical area or the Restricted Period set forth in Section 6(d) of this
Agreement is deemed by any court of competent jurisdiction to be unreasonably
restrictive, the Employee and the Company agree that the provision shall remain
in full force and effect for the greatest time period and in the greatest area
that would not render it unenforceable.

                  (g) Disclosure of this Agreement. The Employee hereby
authorizes the Company to notify others, including but not limited to customers
of the Company and any of the Employee's future employers, of the terms of this
Agreement and his responsibilities hereunder.

         7. Representations and Warranties of the Employee. The Employee
represents and warrants to the Company as follows: (i) he has the legal capacity
and unrestricted right to execute and deliver this Agreement and to perform all
of his obligations hereunder; (ii) the

                                       7
<PAGE>

execution and delivery of this Agreement by the Employee and the performance of
his obligations hereunder will not violate or be in conflict with any fiduciary
or other duty, instrument, agreement, document, arrangement, or other
understanding to which the Employee is a party or by which he is or may be bound
or subject; (iii) the Employee is not a party to any instrument, agreement,
document, arrangement, or other understanding with any person (other than the
Company) requiring or restricting the use or disclosure of any confidential
information or the provision of any employment, consulting or other services;
and (iv) he has not and will not bring to the Company or use in the performance
of his duties for the Company any documents or materials of a former employer or
other party that are not generally available to the public.

         8. Company Property. All records, files, lists, including computer
generated lists, drawings, documents, equipment and similar items relating to
the Company's business that the Employee shall prepare for or receive from the
Company shall remain the Company's sole and exclusive property. The Employee
agrees than upon his termination from employment, or upon demand from the
Company, he shall immediately return to the Company all property of the Company
in his possession, custody or control. The Employee further represents that he
will not copy or cause to be copied, print out, or cause to be printed out any
software, documents or other materials belonging to the Company.

         9. Cooperation. The Employee agrees that both during and after his
employment with the Company, he shall, at the request of the Company, render all
reasonable assistance and perform all lawful acts that the Company considers
necessary or advisable in connection with any litigation involving the Company
or any director, officer, employee, shareholder, agent, representative,
consultant, client or vendor of the Company.

         10. Construction of Agreement.

                  (a) Choice of Law and Jurisdiction. This Agreement shall be
construed, interpreted and the rights of the parties determined in accordance
with the laws of the State of New Jersey, without giving effect to any choice or
conflict of law provision or rule (whether in the State of New Jersey or any
other jurisdiction) that would cause the application of laws of any
jurisdictions other than those of the State of New Jersey. The parties hereby
consent to the exclusive jurisdiction of the state and federal courts located
within the State of New Jersey for the resolution of all disputes arising under
this Agreement or otherwise related to the employment of the Employee with the
Company.

                  (b) Assignment. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the Company, and the Company
shall be obligated to require any successor to expressly assume its obligations
hereunder. This Agreement shall inure to the benefit of and be enforceable by
the Employee or his legal representatives, executors, administrators,
successors, heirs, distributes, devisees and legatees. The Employee may not
assign any of his duties, responsibility, obligations or positions hereunder to
any person and any such purported assignment by him shall be void and of no
force and effect. The Company may assign its rights hereunder to any other
party.

                                       8
<PAGE>

                  (c) Waiver. Any waiver or consent from the Company with
respect to any term or provision of this Agreement or any other aspect of the
Employee's conduct or employment shall be effective only in the specific
instance and for the specific purpose for which given and shall not be deemed,
regardless of frequency given, to be a further or continuing waiver or consent.
The failure or delay of the Company at any time or times to require performance
of, or to exercise any of its powers, rights or remedies with respect to any
term or provision of this Agreement or any other aspect of the Employee's
conduct or employment in no manner (except as otherwise expressly provided
herein) shall affect the Company's right at a later time to enforce any such
term or provision.

                  (d) Notices. All notices, requests, demands, and other
communications hereunder must be in writing and shall be deemed to have been
duly given if delivered by hand or mailed within the continental United States
by first class, registered mail, return receipt requested, postage and registry
fees prepaid, to the applicable party, at the addresses first stated above or at
such other subsequent address as is made known to the other party as an address
at which such party receives similar important correspondence.

                  (e) Amendment. This Agreement may be amended or modified only
be a written instrument executed by the Employee and a representative of the
Company duly authorized by the Board.

                  (f) Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the parties agree that the court making the
determination of invalidity or unenforceability shall have the power to limit
the term or provision, to delete specific works or phrases, or to replace any
invalid or unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision, and this Agreement shall be
enforceable as so modified.

                  (g) Entire Agreement.This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter of this
Agreement.

                  (h) Headings. The section headings contained in this Agreement
are used for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

                  (i) Construction. Every covenant, term and provision of this
Agreement shall be construed simply according to its fair meaning and not
strictly for or against any party.

         11. Employee Acknowledgment. The Employee represents and agrees that he
fully understands his rights to discuss all aspects of this Agreement with his
counsel, that he has been given the opportunity to avail himself of this right,
that he has carefully read and fully understands all the provisions of this
Agreement, that he is competent to execute this Agreement,

                                       9
<PAGE>

that his decision to execute this Agreement has not been obtained by any duress,
that he freely and voluntarily enters into this Agreement, and that he has read
this document in its entirety and fully understands the meaning, intent, and
consequences of this Agreement.

         12. Counterparts; Facsimile Signature. This Agreement may be executed
in two (2) or more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument. This
Agreement may be executed by facsimile signature.

Dated: January 26, 2004               SERVICEWARE TECHNOLOGIES, INC.

                                      By:  ________________________________
                                           Kent F. Heyman
                                           President and Chief Executive Officer

Dated: January 26, 2004                    ________________________________
                                           Scott Schwartzman

                                       10

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