<PAGE>   1
                                                                    EXHIBIT 10.1


                                                        

                                  EXHIBIT 10.1
                              EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT ("Agreement") is dated and effective as of July 1,
1996 by and between California ASIC Technical Services, Inc. a Nevada
corporation, (the "Company"), and Marvin W. Sepe (the "Employee").

                                   WITNESSETH

WHEREAS, the Company desires to retain the services of Employee as Executive 
Vice President/General Manager;

WHEREAS, Employee desires to provide his services to the Company, on the terms 
and conditions set forth herein;

NOW THEREFORE, in consideration of the mutual promises herein contained, the
parties hereto hereby agree as follows:

1.       EMPLOYMENT AND TERM

The Company hereby retains the Employee as Executive Vice President/General
Manager for a term commencing on the date hereof and continuing to and ending
two years thereafter, unless this Agreement is sooner terminated as set forth
herein.

2.       POSITION AND DUTIES

Employee agrees to be available to serve as Executive Vice President/General
Manager of the Company, and the Company agrees to employ Employee as Executive
Vice President/General Manager of the Company and to retain him as an employee
for the term of this Agreement and all successive renewals hereof. In addition
to, or in lieu of, serving as Executive Vice President/General Manager, Employee
may also possess such other titles and serve in such other capacities as the
Company shall from time to time determine and shall render such services and
have such duties and responsibilities as may be assigned to him from time to
time by the Company consistent with such positions. Employee shall devote his
full time, attention, and energy to the business of the Company and agrees to
perform faithfully and diligently such duties and responsibilities as may be
assigned to him to the best of his ability.

3.       COMPENSATION AND EXPENSES

3.1      For the services to be rendered by the Employee as the Executive Vice
         President/General Manager, the Company shall pay to him a salary of no
         less than $125,000 per annum, payable bi-weekly in accordance with the
         regular payroll schedule of the Company.


                                       1
<PAGE>   2


3.2      The Company  shall pay or  reimburse  the  Employee  for all  
         reasonable expenses incurred by him on the business of the Company.

3.3      In addition to the salary set forth in Paragraph 3.1 the Employee shall
         be eligible to participate in the profit sharing program for top
         management defined in the "Purchase Agreement" between the Company and
         JMAR Industries, Inc..

3.4      As an additional inducement to Employee, Employee shall be granted
         incentive stock options to purchase: (i) 100,000 shares of Common Stock
         of the Company; and (ii) 100,000 shares of Common Stock of JMAR. The
         terms of said options shall be consistent with said options being
         treated as "incentive stock options" under the Internal Revenue Code of
         1986, as amended (the "Tax Code').

3.5      In addition to the grant of options pursuant to Section 3.4 above, CATS
         and JMAR shall grant Employee additional incentive stock options as
         follows: Contingent upon the Company reporting a Net Profit for the
         fiscal period commencing at the date of Closing of the Purchase
         Agreement and ended December 31, 1996, on the first day of the fourth
         month beginning after the end of said year; Employee shall be granted
         incentive stock options to purchase: (i) 25,000 shares of the Company's
         Common Stock; and (ii) 25,000 shares of JMAR Common Stock. "Net Profit"
         shall be defined as set forth in paragraph 2.1e of the Purchase
         Agreement. The terms of said options shall be consistent with said
         options being treated as "incentive stock options" under the Tax Code.
         The grant of the JMAR Stock Option is conditional upon the approval of
         the necessary amendments to JMAR's Employee Stock Option Plan at JMAR's
         1996 Annual Shareholders Meeting.

4.       INSURANCE PLANS

The Employee shall have the right to participate in all Group Insurance and
other Employee Benefit Plans now in effect or hereafter established by the
Company for the benefit of the class of employees for which he would be a member
for so long as any such Plan is maintained in effect for the benefit of such
class, with Employee's participation or share therein being determined by the
provisions and requirements of the respective Plan.

5.       TERMINATION

5.1      This  Agreement  shall  terminate  upon the  occurrence of any of the 
         following events: (a) the death of Employee; (b) the incapacity or
         disability of Employee, which renders him unable to perform
         substantially all of the services


                                       2
<PAGE>   3


         contemplated by this Agreement for a continuous period of sixty (60)
         days; or (c) the mutual agreement of the parties of this Agreement.

5.2      This Agreement may be terminated by the Company prior to the date
         specified in Section 1 hereof on the happening of one or more of the
         following events: (a) the commission of any act of fraud, dishonesty,
         or embezzlement by Employee; (b) the willful neglect by Employee in the
         performance of the services contemplated by this Agreement in such
         manner as to provide reasonable cause for terminating his services; or
         (c) the breach by the Employee of any of the covenants or obligations
         under this Agreement and such breach provides reasonable cause for the
         Company to terminate this Agreement; provided that, in order to
         terminate this Agreement pursuant to clauses (b) and (c) of this
         Section 5.2, the Company shall have given (30) days written notice of
         termination to the Employee, and the Employee shall have failed to
         fully cure and correct said willful neglect or breach within the thirty
         days immediately following such notice.

5.3      This Agreement may be terminated by the Employee prior to the date
         specified in Section 1 hereof on thirty (30) days written notice of
         termination to the Company if the Company breaches any of its covenants
         or obligations under this Agreement and such breach provides reasonable
         cause for the Employee to terminate this Agreement.

5.4      In addition to the circumstances under which this Agreement may be
         terminated by the Company pursuant to Section 5.2, the Company may
         terminate this Agreement at any time, without cause, upon thirty (30)
         days written notice of termination to the Employee; provided, however
         should the Company terminate this Agreement pursuant to this Section
         5.4 prior to the date specified in Section 1 hereof (other than a
         termination pursuant to the provisions of Section 5.2), then the
         Employee shall become entitled to receive as severance pay an amount
         equal to the balance of the compensation that would have been payable
         to the Employee pursuant to Section 3.1 hereof during the remainder of
         the term specified in Section 1 hereof (subject to earlier termination
         on the happening of the event specified in clause (a) of Section 5.1),
         payable at the rate and times as such compensation would have been
         payable to the Employee had this Agreement not been terminated pursuant
         to this Section 5.4. In addition to the payment of such severance pay,
         the Company shall also continue in force and maintain all insurance
         policies in which Employee participates during the remainder of the
         term specified in Section 1 hereof.

5.5      Notwithstanding any termination of the Employee's services hereunder,
         all of the covenants of the Employee contained in Sections 6 and 7
         shall continue in full force and effect in accordance with their
         respective terms.


                                       3
<PAGE>   4


6.       CONFIDENTIAL INFORMATION

Concurrently herewith, Employee shall enter into a form of Invention and Secrecy
Agreement substantially similar to the agreement executed by the other key
employees of JMAR or the Company. Paragraphs 6 and 7 of this Agreement are
intended to supplement and not limit or restrict the provisions of such
Invention and Secrecy Agreement. The Employee acknowledges that, in the course
of the performance of his services hereunder, he may become acquainted with
confidential information regarding JMAR or the Company (and companies affiliated
with or owned, operated, or supervised by JMAR or the Company) and their
business, operations, finances, personnel, accounts, customers, and suppliers.
This information may include information relating to persons, firms,
corporations, and other entities which are or become suppliers or customers of
JMAR or the Company (or a company affiliated with or owned, operated, or
supervised by JMAR or the Company). The Employee will not, either during the
term of this Agreement or thereafter, without the prior express written consent
of the Company, disclose or make any use of such confidential information except
as may be required in the course of the performance of his services hereunder.

6.1      The  undertakings  and  obligations of the parties under this Agreement
         shall not apply to any proprietary information which:

         a.       Is  disclosed  in a  printed  publication  available  to the 
                  public, is described in a patent anywhere in the world, or is
                  otherwise in the public domain at the time of disclosure;

         b.       Is  generally  disclosed  to third  parties  by the  Company 
                  without restriction on such third parties; or

         c.       Is approved for release by written authorization of the 
                  Company.

7.       PROTECTION OF PROPERTY

All records, files, manuals, lists of customers, blanks, forms, materials,
furnished to the Employee by the Company (or any company affiliated with or
owned, operated, or supervised by the Company), used on their behalf or
generated or obtained during the course of the performance of the Employee's
services hereunder, shall be and remain the property of the Company (or any
company affiliated with or owned, operated, or supervised by the Company, as the
case may be). The Employee shall be a holder thereof for the sole use and
benefit of the Company (or any company affiliated with or owned, operated, or
supervised by the Company, as the case may be) and shall safely keep and
preserve such property, except as consumed in the normal business operations of
the Company (or any company affiliated with or owned, operated, or supervised by
the Company, as the case may be). The Employee acknowledges that this property
is confidential and is not readily accessible to the Company's competitors. Upon
termination of this Agreement hereunder, the Employee shall immediately deliver


                                       4
<PAGE>   5


to the Company, or its authorized representative, all such property, including
all copies, remaining in the Employee's possession or control.

8.       INDEMNIFICATION

The Company will protect, defend, indemnify, and hold harmless Employee from and
against any and all demands, claims, recoveries, obligations, losses, damages,
and liabilities, and all related costs, expenses (including reasonable
attorney's fees), interest and penalties, except for those liabilities related
to the obligations assumed by the Employee pursuant to the Purchase Agreement,
which Employee shall incur or suffer which arise from, result from, or relate to
the performance of his services under this Agreement, unless a judgment or other
final adjudication adverse to the Employee shall establish that he committed
acts of active and deliberate dishonesty, which acts were material to the cause
of action so adjudicated.

9.       ASSIGNMENT

Neither the rights nor obligations under this Agreement may be assigned,
transferred, pledged, or hypothecated by any party hereto, except that this
Agreement shall be binding upon and inure to the benefit of any successor of the
Company, whether by merger, purchase, or otherwise, and the Company may assign
this Agreement to any subsidiary or affiliate of the Company.

10.      NOTICES

Any notice required or permitted to be given under this Agreement shall be
deemed to have been duly given if in writing and if personally delivered or sent
by registered or certified mail, return receipt requested, with postage prepaid.

If to the Company:

         California ASIC Technical Services, Inc.
         13845-B Alton Parkway
         Irvine, California 92718

With a copy to:

         JMAR Industries, Inc.
         3956 Sorrento Valley Blvd., Suite D
         San Diego, California 92121
         ATTN: Dennis Valentine


                                       5
<PAGE>   6


If to the Employee:

         Marvin W. Sepe
         24701 Woodhill Lane
         Lake Forest, California 92630

Any party may change the address to which notices are to be sent by giving ten
(10) days written notice of such change of address to the other party in the
manner provided for giving notice. Notices will be considered delivered on the
day of personal delivery on the date of deposit in the United States mail in the
manner above provided for giving notice by mail.

11.      WAIVER

The waiver by any party hereto of a breach of any of the provisions of this
Agreement by the other party shall not operate or be construed as a waiver of
any subsequent breach hereof by such party.

12.      SEVERABILITY

If any one or more covenants, agreements, or provisions herein contained shall
be held or determined for any reason whatsoever to be invalid or unenforceable,
either in whole or in part, then such covenants, agreements, or provisions, or
portions thereof, shall be null and void and shall be deemed separable from the
remaining covenants, agreements, or provisions hereof and shall in no way affect
the validity of any of the other provisions hereof.

13.      ATTORNEY'S FEES

The prevailing party in any litigation concerning the enforcement or
interpretation of this Agreement shall be entitled to recover reasonable costs
and attorney's fees.

14.      CHOICE OF LAW

This Agreement shall be governed by and construed in accordance with the laws of
the State of California.

15.      ENTIRE AGREEMENT

This Agreement contains the entire agreement of the parties with respect to the
transactions contemplated hereby, and no party shall be liable or bound except
as expressly provided herein.


                                       6
<PAGE>   7


16.      HEADINGS

The subject headings of the sections of this Agreement are included for the
purpose of convenience only and shall not affect the construction or
interpretation of any term or provision hereof.


IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth below.

California ASIC Technical Services, Inc:
<TABLE>
<S>       <C>                                <C>
By:      /s/ John S. Martinez                Date:        7/1/96
         ----------------------------              ---------------------
             John S. Martinez, Ph.D.
             Chairman of the Board
             "Company"


By:      /s/ Marvin W. Sepe                  Date:        7/1/96
         ----------------------------              ----------------------
             Marvin W. Sepe

</TABLE>