


                                                                  EXHIBIT 10.40

                              EMPLOYMENT AGREEMENT

     EMPLOYMENT  AGREEMENT,  dated  as  of  _____  ___,  1998,  by  and  between
Programmer's  Paradise,  Inc.,  a  Delaware  corporation  with  offices  at 1163
Shrewsbury Avenue,  Shrewsbury,  New Jersey 07702-4321  (the"Corporation"),  and
Peter Lorenz,  an individual  residing at 16540  Southwest  84th Avenue,  Miami,
Florida 33157 (the "Executive").

                              W I T N E S S E T H:

     In  consideration  of the mutual  covenants herein contained and other good
and  valuable  consideration,  the  receipt and  sufficiency  of which is hereby
acknowledged by the parties hereto, the parties hereto hereby agree as follows:

     1. Employment.  The Corporation hereby agrees to employ the Executive in an
executive  capacity,  and  the  Executive  hereby  accepts  and  agrees  to such
employment, upon the terms and conditions hereinafter set forth.

     2. Term. The term of the Executive's  employment under this Agreement shall
commence as of December 1, 1998 (the "Effective  Date") and shall continue until
the close of business on December 31, 1999, and shall  automatically  be renewed
on the same terms and conditions for successive  additional terms of twelve (12)
months unless  terminated  by either party upon written  notice to the other not
less than thirty (30) days prior to the  expiration of the initial  twelve-month
term or of any  twelve-month  renewal term  thereafter (the initial term and, if
the period of employment  is so renewed,  such  additional  period or periods of
employment are collectively referred as the "Term"), unless sooner terminated as
provided elsewhere in this Agreement.

     3. Duties and Services.  (a) The Executive  agrees to serve the Corporation
as an Executive Vice President of the  Corporation  and shall also serve such of
its  subsidiaries  and  affiliated   companies  as  may  be  designated  by  the
Corporation,  faithfully,  diligently and to the best of his ability, subject to
and  under  the  direction  and  control  of  the  Board  of  Directors  of  the
Corporation,  the President of the Corporation and their  authorized  designees,
devoting his entire business time,  energy and skill to such employment,  and to
perform from time to time such executive services, advisory or otherwise, as the
Board of  Directors,  the  President  of the  Corporation  or  their  authorized
designee shall request,  and to act in such  capacities or other offices for the
Corporation  and for any of its subsidiary or affiliated  companies as the Board
of Directors,  the President of the  Corporation  or their  authorized  designee
shall request without further  compensation  other than that for which provision
is made in this  Agreement.  The Executive  shall be primarily  responsible  for
German operations and all corporate sales in the United States.

          (b) The principal place of employment of the Executive shall be at the
corporate  offices of the Corporation in Shrewsbury,  New Jersey,  or such other
new offices of the Corporation as shall be determined by the Board of Directors,
provided  that any such new office  will not be located at a place  which  would
significantly extend the commuting or travelling time of the




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Executive  beyond a  reasonable  amount of time  unless  the  Corporation  shall
relocate the Executive and his wife. Any such relocation shall be at the expense
of the Corporation.  The Executive's  responsibilities  to the Corporation shall
require  the  Executive  to spend at least  four  days a week at such  corporate
offices.  It is understood,  however,  that in connection  with his duties under
this Agreement,  the Executive may be required to travel to and perform services
at other locations on a more temporary basis.

          (c) The Executive  shall relocate from Europe to Miami,  Florida,  and
shall rent housing in New Jersey within a reasonable commuting distance from the
corporate offices of the Corporation.

     4. Compensation.  (a) The Corporation  agrees to pay to the Executive,  and
the  Executive  agrees to  accept,  a basic  salary  for all his  services  (the
"Salary")  at the rate of $190,000 per annum,  payable  from the U.S.  corporate
office of the Corporation in accordance with the Corporation's  standard payroll
policies from time to time.

          (b)  The  Corporation  agrees  to pay  the  Executive  from  the  U.S.
corporate  offices  of the  Corporation  a bonus in  accordance  with the  bonus
program set forth on Schedule A hereto, with a base bonus of $50,000.

     5. Employee Benefits. (a) The Corporation shall reimburse the Executive for
the  reasonable  business  expenses  incurred  by him  for or on  behalf  of the
Corporation  in furtherance of the  performance  of his duties  hereunder.  Such
reimbursement  shall be subject to receipt by the Corporation from the Executive
of  such  an  expense   statements  and  such  vouchers  and  other   reasonable
verifications as the Corporation shall require to  satisfactorily  evidence such
expenses,  and shall also be subject to such policies as the  Corporation  shall
establish  from  time to time  (except  that  international  air  travel  by the
Executive may be by business class).

          (b) The Executive shall be entitled to participate, in accordance with
the terms  thereof,  in employee  benefit plans and programs  maintained for the
U.S. executives of the Corporation,  including,  without limitation, any health,
hospitalization  and medical insurance programs and in any pension or retirement
or other  similar  plans or programs.  The  foregoing  shall not be construed to
require the  Corporation to establish any such plans or programs,  or to prevent
the  Corporation  from modifying or terminating  any such plans or programs once
established. Without limiting the foregoing, the Executive shall resign from the
health plans maintained by International  Software Partners GmbH and enroll in a
U.S. health care plan maintained by the Corporation.

          (c) The Executive  shall be entitled to six (6) weeks of vacation each
employment year during the term of this  Agreement,  taken  consecutively  or in
segments,  subject to the  effective  discharge  of the duties of the  Executive
hereunder.

          (d)  During  the term of the  Executive's  employment  hereunder,  the
Corporation  shall  afford the  Executive  the use of a Mercedes  300 or similar
automobile,   chosen  by  the  Executive  and  reasonably  satisfactory  to  the
Corporation.


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          (e) In connection  with the relocation of the Executive from Europe to
Miami,  Florida,  and the  maintenance  by the Executive of local housing in New
Jersey, it is agreed as follows:

               (i) the  Corporation  shall pay or reimburse the Executive for up
to 50% of the cost of  moving  the  Executive's  household  goods  and  personal
effects  from his current  residence  in Europe to his new  residence  in Miami,
Florida, up to a maximum of $10,000;

               (ii) the Corporation shall provide the Executive,  for use in his
new home in Miami,  Florida,  with a  telephone  and fax  machine  (which may be
combined),  and  miscellaneous  office  supplies,  it being  understood that the
Corporation  shall not  absorb the cost of a full home  office,  and that all of
such equipment and supplies provided or paid for by the Corporation shall remain
the property of the Corporation;

               (iii) the  Corporation  shall  provide or reimburse the Executive
for regular  round-trip air fare or tickets  between New York and Miami airports
on a weekly basis,  so as to enable the  Executive to be at his Miami  residence
the balance of each work week; it being  understood  that the expenses of ground
transportation  to and from such  airports  shall be the  responsibility  of the
Executive;

               (iv) the Corporation shall pay or reimburse the Executive for the
rent expense for the Executive's local housing in New Jersey,  which is to be in
the range of $1,000 to $1,500 per month; and

               (v) the Corporation  shall pay or reimburse the Executive for the
fees and expenses of counsel  satisfactory to the Corporation in connection with
the  Executive  obtaining the  requisite  work permit (L-1),  up to a maximum of
$5,000.

     6.  Termination.  (a)  Notwithstanding  anything to the contrary  contained
herein,  the  Executive's  employment  with  the  Corporation,  as  well  as the
Executive's right to any compensation which thereafter otherwise would accrue to
him hereunder or in connection  therewith,  shall terminate upon the earliest to
occur of the following events:

               (i) the death or disability (as defined below) of the Executive,

               (ii) the expiration of the Term of this Agreement,

               (iii) the Executive's termination of such employment, or

               (iv) upon delivery of written notice, with or without "cause" (as
defined below), to the Executive from the Corporation of such termination.

          (b) For the purpose of this Section 6, (i) the term "cause" is defined
as (A) the commission by the Executive of a felony or an offense involving moral
turpitude,  the Executive's engaging in theft,  embezzlement,  fraud,  obtaining
funds or property under false pretenses, or similar


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acts of  misconduct  with  respect to the  property  of the  Corporation  or its
employees,   stockholders,   affiliates,   customers,  licensees,  licensors  or
suppliers,  (B) the  repeated  failure by the  Executive  to perform  his duties
hereunder  or comply  with  reasonable  policies or  directives  of the Board of
Directors or President of the  Corporation,  or (C) the breach of this Agreement
or the  Conditions of Employment by the Executive in any material  respect,  and
(ii) the Executive shall be deemed "disabled" if, at the  Corporation's  option,
it gives notice to the Executive or his  representative  that due to a disabling
mental or physical condition, he has been prevented,  for a continuous period of
90 days during the Term or for an  aggregate  of 120 days  during any  six-month
period during the Term, from substantially  performing those duties which he was
required  to perform  pursuant  to the  provisions  of this  Agreement  prior to
incurring such disability.

          (c) In  the  event  of  the  termination  by  the  Corporation  of the
employment of the Executive  under this Agreement  without "cause" in accordance
with  Section  6(a)(iv)  above,  the  giving  by the  Corporation  of  notice of
non-renewal of this Agreement pursuant to Section 2 or the voluntary resignation
or retirement of the Executive, in addition to the Salary and other compensation
(including  cash bonuses) earned  hereunder and unpaid or not delivered  through
the date of termination  and any benefits  referred to in Section 5(b) hereof in
which the  Executive  has a vested right under the terms and  conditions  of the
plan or program  pursuant to which such benefits were granted (without regard to
such   termination),   the  Corporation   shall  pay  the  Executive   severance
("Severance")  in an amount equal to his monthly Salary for nine (9) months from
the date of  termination.  The  Severance  shall be paid to the Executive or his
estate in nine  consecutive,  equal  monthly  installments  of  $15,833.33  each
(subject to withholding), on the fifteenth day of each calendar month commencing
during the month next  following  the month in which the  Executive is no longer
employed  by the  Corporation,  and  shall  be in lieu  of any  other  claim  to
severance or similar payments or benefits which the Executive may otherwise have
or make. Without limiting any other rights or remedies which the Corporation may
have, it is understood that the Corporation shall be under no further obligation
to make any such  Severance  payments  and shall be  entitled  to be  reimbursed
therefor by the  Executive  or his estate if the  Executive  violates any of the
covenants  set forth in the  Conditions  of  Employment  attached  as  Exhibit A
hereto.  In the event that the Severance  shall become payable to the Executive,
the Executive  shall not be required,  either in mitigation of damages or by the
terms of any provisions of this Agreement or otherwise,  to seek or accept other
employment,  and if the Executive does accept other employment,  any benefits or
payments under this Agreement shall not be reduced by any compensation earned or
other benefits received as a result of such employment.

     7. Deductions and  Withholding.  The Executive  agrees that the Corporation
shall  withhold  from any and all payments  required to be made to the Executive
pursuant to this  Agreement all federal,  state,  local and/or other taxes which
are  required to be withheld  in  accordance  with  applicable  statutes  and/or
regulations from time to time in effect.

     8. Non-Solicitation,  Restrictive Covenants, Confidentiality and Injunctive
Relief.  (a) The  Executive  shall execute and deliver to and for the benefit of
the  Corporation,  the  Conditions of  Employment  attached as Exhibit A hereto,
pertaining,  among other matters,  to proprietary  information,  confidentiality
obligations, and non-competition obligations, the provisions


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of which shall be deemed incorporated herein by reference as if set forth herein
(the "Conditions of Employment").

          (b) The provisions of this Section 8 shall survive the  termination or
expiration of this  Agreement,  irrespective of the reason  therefor,  including
under circumstances in which the Executive continues thereafter in the employ of
the Corporation.

     9. Warranty.  The Executive  warrants and represents that he is not a party
to any agreement, contract or understanding, whether of employment or otherwise,
which would in any way restrict or prohibit him from undertaking his position as
an executive of the Corporation and complying with his obligations in accordance
with  the  terms  and  conditions  of  this  Agreement  and  the  Conditions  of
Employment.

     10.  Insurance.  The Executive agrees that the Corporation may from time to
time and for the Corporation's own benefit apply for and take out life insurance
covering the Executive,  either  independently  or together with others,  in any
amount and form which the Corporation may deem to be in its best interests.  The
Corporation  shall own all rights in such  insurance  and in the cash values and
proceeds  thereof and the Executive shall not have any right,  title or interest
therein.  The Executive agrees to assist the Corporation,  at the  Corporation's
expense,  in obtaining  any such  insurance  by,  among  things,  submitting  to
customary  examinations  and correctly  preparing,  signing and delivering  such
applications  and  other  documents  as  reasonably  may  be  required.  Nothing
contained  in  this  Section  10  shall  be  construed  as a  limitation  on the
Executive's right to procure any life insurance for his own personal needs.

     11.  Notices.  All notices  shall be in writing and shall be deemed to have
been duly given to a party  hereto on the date of such  delivery,  if  delivered
personally,  or on the third day after being deposited in the mail if mailed via
registered or certified mail, return receipt requested,  postage prepaid,  or on
the next business day after being sent by recognized  national overnight courier
service, in the case of the Executive at his current address as set forth in the
Corporation's  records,  and in the case of the  Corporation,  at it address set
forth above.

     12.  Assignability  and Binding  Effect.  This Agreement shall inure to the
benefit  of and shall be  binding  upon the  heirs,  executors,  administrators,
successors and legal  representatives  of the Executive,  and shall inure to the
benefit of and be binding upon the  Corporation  and its successors and assigns.
The  Executive  may not  assign,  transfer,  pledge,  encumber,  hypothecate  or
otherwise  dispose  of  this  Agreement,  or any of his  rights  or  obligations
hereunder,  and any such attempted  delegation or disposition  shall be null and
void and without effect.

     13. Severability.  In the event that any provisions of this Agreement would
be held to be invalid,  prohibited or  unenforceable in any jurisdiction for any
reason (including,  but not limited to, any provisions which would be held to be
unenforceable  because of the  scope,  duration  or area of its  applicability),
unless narrowed by construction,  this Agreement shall, as to such  jurisdiction
only, be construed as if such invalid, prohibited or unenforceable provision had
been more narrowly  drawn so as not to be invalid,  prohibited or  unenforceable
(or if such language cannot be drawn narrowly enough,  the court making any such
determination shall have the power to modify


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such scope, duration or area or all of them, but only to the extent necessary to
make such  provision or provisions  enforceable in such  jurisdiction,  and such
provision shall then be applicable in such modified form).  If,  notwithstanding
the  foregoing,  any  provision of this  Agreement  would be held to be invalid,
prohibited  or  unenforceable  in any  jurisdiction,  such  provision  shall  be
ineffective to the extent of such invalidity,  prohibition or  unenforceability,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.

     14.  Governing  Law. This  Agreement  shall be governed by and construed in
accordance with the internal laws of the State of New Jersey,  without regard to
principles  of  conflict  of laws and  regardless  of where  actually  executed,
delivered or performed.

     15. Complete  Understanding;  Counterparts.  This Agreement constitutes the
complete   understanding  and  supersedes  any  and  all  prior  agreements  and
understandings  between the parties with respect to its subject  matter,  and no
statement,  representation,  warranty or covenant  has been made by either party
with respect thereto except as expressly set forth herein.  This Agreement shall
not be altered,  modified,  amended or terminated  except by written  instrument
signed  by each of the  parties  hereto.  The  Section  and  paragraph  headings
contained  herein  are for  convenience  only,  and are not  part of and are not
intended to define or limit the contents of said Sections and  paragraphs.  This
Agreement  may be  executed  in  counterparts,  each of which shall be deemed an
original and all of which,  when taken  together,  shall  constitute one and the
same agreement.


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

                                                   PROGRAMMER'S PARADISE, INC.

                                                   By:
                                                      --------------------------


                                                   -----------------------------
                                                   Peter Lorenz
















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