<PAGE>



                                                                   EXHIBIT 10.40

                              EMPLOYMENT AGREEMENT

This  Agreement is made and entered  into as of October 1, 1998,  by and between
Paravant  Computer  Systems,  Inc., a Florida  corporation (the "Company"),  and
James E. Clifford (the "Employee").

The parties hereto,  in  consideration  of the premises and the mutual covenants
herein contained, hereby agree as follows:

1. Term of  Employment.  Subject  to the terms and  conditions  hereinafter  set
forth,  the Company agrees to employ the Employee for a period of forty-two (42)
months.  The Employee commits to be employed for a period commencing on the date
hereof and ending no earlier than  December 31, 2000.  Upon  completion of forty
two (42) months of  employment  the Company and  Employee may extend the term of
employment  for an  additional  year by mutual  agreement.  Notwithstanding  the
foregoing,  the Employee  shall be entitled to terminate  his  employment at any
time  after the date  hereof  if:  (i) the  Employee  recommends  an  individual
qualified  to  perform  the  Employee's  job  responsibilities  (the  "Qualified
Replacement")  and (ii) the prior EDL and STL  shareholders,  who are  currently
employees,  first  approve  and  then  the  Company  approves  of the  Qualified
Replacement,  said approval not to be unreasonably  withheld. If such consent is
unreasonably  withheld,  then damages are limited to zero; however, the Employee
would be entitled to any  Earn-Out  ("Earn-Out")  provided for in Section 1.3 of
the  Acquisition  Agreement  dated as of March 31,  1998  between  the  Company,
Engineering  Development  Laboratories,  Incorporated ("EDL"), Signal Technology
Laboratories,  Inc. ("STL") and the  shareholders of EDL and STL,  including the
Employee,  which  should  have  been  paid as  performance  bonus or  additional
compensation.

2. Forfeiture of Earn-Out.  If the Employee  terminates his employment  prior to
December  31,2000  without the approval of the Company he will forfeit his share
of Earn-Out to be paid for any Earn- Out Period  ending  after the date on which
he terminates his employment. The Company is not entitled to any further damages
caused as a result  of the  Employee's  termination  of his  employment.  If the
employment of the Employee is terminated by death or  disability,  as defined in
paragraph 5, then he or his  beneficiary  is still  entitled to his share of the
Earn-Out and his share of the Earn-Out is not subject to forfeiture.

3. Scope of  Employment.  During the term of  employment,  the Employee shall be
employed  as  the  Executive  Vice  President,   Secretary/Treasurer  and  Chief
Operating Officer of Signal Technology Laboratories,  Inc., an Ohio corporation,
and a subsidiary  of the Company  headquartered  in Dayton,  Ohio.  The Employee
shall render such services which are in accordance with his utmost abilities and
shall use his best  efforts to promote  the  interests  of the  Company  and its
subsidiaries. The Employee will not engage in any capacity or activity which is,
or may be  considered  contrary  to the  welfare,  interest  or  benefit  of the
business  now or  hereafter  conducted  by the  Company  and  its  subsidiaries.
Employee's  duties  and/or  position may be modified by mutual  agreement of the
Company and the  Employee.  The Company  shall not relocate the Employee  either
temporarily or permanently from Dayton,  Ohio without  Employee's consent during
the term of this Agreement.

4.  Compensation and Benefits.  (Attached)

<PAGE>
<PAGE>


5. Payments on Death or Disability.  In the event that the Employee shall die or
become  disabled  while  employed  under this  Agreement,  the Company shall pay
twelve (12) months compensation at the monthly  compensation rate, including all
benefits,  then in effect for the Employee (the  "Compensation") to his heir(s),
in the  cause  of his  death,  or to him or  his  guardian(s),  in  case  of his
disability,  (i)  in a  lump  sum  payment  or  (ii)  in  twelve  equal  monthly
installments,  which  lump sum or  installment  payment  method  shall be at the
discretion  of the  Employee  or his or her heir(s) or  guardian(s).  In case of
disability, the twelve (12) month period would begin as of the date on which the
Employee's   employment   hereunder  is  terminated  because  of  disability  as
hereinafter  provided.  Employee's  employment  hereunder  shall  be  terminated
because of  disability if (a) the Employee  shall become  physically or mentally
incapable  of  properly  performing  his  services  to the  Company as  provided
hereunder,   excluding   infrequent  and  temporary  absences  due  to  ordinary
illnesses,  (b) such incapacity  shall exist or be reasonably  expected to exist
for more than one hundred  fifty (150) days in the  aggregate  during any twelve
(12) consecutive  months covered  hereunder,  and (c) either the Employee or the
Company shall have given the other thirty (30) days written notice of his or its
intention  to  terminate  the  Employee's   employment  hereunder  due  to  such
disability. For purposes of this Agreement, the Employee may provide the Company
with a written  list of heirs in order of  preference  regarding  death  payment
benefits hereunder. The list may be altered and changed from time to time by the
Employee by giving  written  notice of such  changes or new list  thereof to the
Company as provided herein.  In the event of death, if no list has been provided
by the  Employee,  then all  compensation  provided  for in this  paragraph 5 is
payable to the estate of the Employee.

6. Covenant Not to Compete.  During the Term of  Employment  and for a period of
five (5) years  thereafter,  the  Employee  shall not  (except  on behalf of the
Company or a subsidiary  of the Company while the Employee is employed by either
the Company or a subsidiary of the Company or otherwise in  accordance  with the
Company's written consent) engage, directly or indirectly, in any business which
competes  in any manner  within the United  States of America  (the  "Geographic
Area"), with the Company's business of design,  manufacture,  repair and sale of
rugged and customized computer systems and medical computer assemblies or in any
other business of design, development,  manufacturing,  sales or service engaged
in or acquired by the Company or any subsidiary of the Company as of the date of
this  Agreement  or in  which  the  Company  employs  the  Employee  during  his
employment  under this Agreement.  For purposes of this Agreement,  the Employee
will be deemed to be engaged in a business if he  participates in such business,
directly or indirectly, as a stockholder, partner, owner, investor, principal or
agent, employee,  officer, director,  creditor,  consultant, or otherwise in any
manner in such business. The Employee shall not, for purposes of this paragraph,
be  deemed  a  stockholder  if he  holds  less  than  five  percent  (5%) of the
outstanding shares of any publicly-owned  corporation. In addition, the Employee
shall not at any time, during or after the termination of this Agreement, engage
in any business which uses as its name, in whole or in part,  "Paravant Computer
Systems,  Inc.",  "PCS" or any other name then used by the Company or any of its
affiliates or subsidiaries.

7. Non-Disclosure.  Except as may be required by law or on behalf of the Company
or a  subsidiary  of the  Company  while the  Employee is employed by either the
Company or a  subsidiary  of the


                                        2

<PAGE>
<PAGE>


Company or otherwise in  accordance  with the  Company's  written  consent,  the
Employee will not at any time,  directly or  indirectly,  disclose or furnish to
any other  person,  firm or  corporation;  (a) the  methods  of  conducting  the
business of the Company or its subsidiaries or affiliates;  (b) a description of
any of the  methods of  obtaining  business,  or  manufacturing  or  advertising
products,  or  of  obtaining  customers  thereof;  (c)  any  technology,  design
drawings,  software,  or other  intellectual  property or property rights of the
Company or its  subsidiaries  or  affiliates  owned by the Company or any of its
subsidiaries  as of the date of this Agreement or acquired by the Company or any
of its subsidiaries  during the Employee's  employment under this Agreement;  or
(d) any  confidential  information  acquired  by him  during  the  course of his
employment  by  the  Company,  its  predecessors,  subsidiaries  or  affiliates,
including, without limitation, the generality of the foregoing, the names of any
new customers or prospective  customers of, or any person,  firm or corporation,
who or which have, or shall have,  traded or dealt with (whether such  customers
have been obtained by the Employee or otherwise) the Company,  its predecessors,
subsidiaries or affiliates.

8. Intellectual Property. As between the Employee and the Company, all products,
designs, styles, processes, discoveries, materials, ideas, creations, inventions
and properties,  whether or not furnished by the Employee,  created,  developed,
invented or used in connection  with the Employee's  employment with the Company
or any  subsidiary of the Company or the business  markets of the Company or any
subsidiary  of the Company  under this  Agreement  will be the sole and absolute
property of the Company and its subsidiaries for any and all purposes whatsoever
in perpetuity,  whether or not conceived,  discovered  and/or  developed  during
regular  working hours.  The Employee will not have, and will not claim to have,
under this Agreement or otherwise,  any right,  title or interest of any kind or
nature whatsoever in or to any such products, processes,  discoveries,  material
ideas,  creations,  inventions and properties which are related to the Company's
business markets.

9.  Arbitration.  Any  controversy  arising out of or relating to this Agreement
shall be resolved by  arbitration  in the State of Ohio pursuant to the rules of
the  American  Arbitration  Association  then in  effect.  The  decision  of the
arbitrator(s) is binding on both the Company and the Employee.

10. Termination for Convenience. The Company may terminate Employee's employment
under  this  Agreement  for  convenience  at any  time.  In the  event  of  such
termination  the Company shall make lump sum payments  equal to the value of the
compensation  (1 and 2 attached)  and benefits (3 of attached as would have been
normally  paid  if the  employment  continued),  including  but not  limited  to
non-qualified  deferred  compensation and health  insurance,  for forty-two (42)
months less the amount which has previously been paid or used.

11. Termination for Cause. The Company may terminate this Employee's  employment
under this Agreement for "cause" without any liability to the Company other than
to pay the  compensation  benefits  provided for in this  Agreement for services
rendered prior to the date of such  termination.  The following shall constitute
grounds for termination of the Employee for cause:  (i) willful or gross neglect
by the Employee of his duties of employment under, or any willful  misconduct of
the  Employee  in  connection  with the  performance  of his  duties  under this
Agreement; (ii) conviction of the Employee of any felony, or of any lesser crime
or offense  materially  and  adversely  affecting  the  property,  reputation or
goodwill of the Company, any subsidiary of the Company or any successor


                                        3

<PAGE>
<PAGE>

or  assignee  of the  Company or any  subsidiary  of the  Company;  or (iii) any
material breach by the Employee of the terms of this Agreement.

12. Equitable  Remedies and Remedies at Law. The parties recognize that, because
of the nature of the subject matter of this Agreement it would be  impracticable
and extremely  difficult to determine  actual damages for a breach of certain of
the provisions of this Agreement,  specifically those provisions of paragraphs 6
and 7. Accordingly,  in the event of a violation or threatened  violation or any
provisions  of  this  Agreement,  specifically  including  those  provisions  of
paragraphs  6 and  7,  all  legal  and  equitable  remedies,  including  without
limitation,   injunctive  relief,  both  preliminary  and  permanent,  shall  be
available  and the posting of a surety bond shall not be required in  connection
therewith and money damages for any loss suffered as a consequence  of violation
of such provisions shall also be available.

13. Severability. The invalidity or unenforceability of any term or provision of
this  Agreement  or the  nonapplicability  of any such term or  provision to any
person or  circumstances  shall  not  impair or  affect  the  remainder  of this
Agreement,   and  the  remaining  terms  and  provisions  hereof  shall  not  be
invalidated, but shall remain in full force and effect and shall be construed as
if  such  invalid,  unenforceable  or  nonapplicable  provisions  were  omitted.
Further,  if  any  of the  covenants  contained  in  paragraphs  6 or 7 of  this
Agreement,  or any part  thereof,  are held to be  unenforceable  because of the
duration of such  provisions  or the area covered  thereby,  or the scope of the
activities sought to be restricted, the parties hereto agree that the arbitrator
or court  making  such  determination  shall  have  the  power  to  reform  such
provisions of this  Agreement to the maximum time,  geographic  limitations,  or
time permitted by applicable law.

14.  Governing Law. All of the provisions of this Agreement other than those set
forth in paragraphs 2, 6, and 7 shall be governed by,  construed and enforced in
all respects in accordance with the laws of the State of Ohio. The provisions of
paragraphs  2, 6, and 7 shall be  governed  by,  construed  and  enforced in all
respects in accordance with the laws of the State of Florida.

15. Captions.  Titles or captions of paragraphs  contained in this Agreement are
inserted  only as a  matter  of  convenience  and for  reference,  and in no way
define,  limit, extend or prescribe the scope of this Agreement or the intent of
any provision hereof.

16. Counterparts.  This Agreement may be executed in counterparts, each of which
shall constitute one and the same Agreement.

17. Construction.  The parties acknowledge that they have had the opportunity to
participate equally in the drafting of this Agreement and that in the event of a
dispute,  no party  shall be  treated,  for any  purpose,  as the author of this
Agreement or have any ambiguity resolved against such party on account thereof.


IN WITNESS WHEREOF,  the parties hereto have executed this Agreement,  as of the
day and year first above written.

Paravant Computer Systems, Inc.

                                        4

<PAGE>
<PAGE>


By:        /s/   Krishan K. Joshi
       -----------------------------
       Krishan K. Joshi,
       Chairman of the Board and CEO

             /s/   James E. Clifford
       -----------------------------
       James E. Clifford, Employee

                                        5

<PAGE>
<PAGE>


COMPENSATION AND BENEFITS OF James E. Clifford

POSITION:  Executive  Vice  President,  Secretary/Treasurer  &  Chief  Operating
Officer of STL

1.  An annual salary of $ 169,300

2. A non-qualified deferred compensation (funded) of 40 % of No. 1 $67,720 based
on plan (attached).

3. Standard EDL/STL benefits package attached, modified as follows:

         a.  2x (twice) All Employee Incentive Program payment percentage.

         b. 16 hours of personal leave per payroll period.

         c. Life insurance of $ 169,300.

         d.  Continuation  of Health Care coverage for employee and spouse until
         each is eligible for Medicare coverage under existing plan benefits and
         at a cost no greater  than current  plan (see  attached).  This benefit
         continues  after  retirement  or  separation.  This  provision  will be
         interpreted  based upon laws and other  benefits that were in effect as
         of March 30, 1998.

Note:    The plans  referred to above as attached  have  been  furnished  to the
         parties to the Acquisition Agreement.

                                        6



<PAGE>