EXHIBIT 10.1

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                              MANAGEMENT AGREEMENT

         This  Management  Agreement (the  "Agreement") is made and entered into
this 10th day of July,  2000  (the  "Effective  Date"),  by and  between  Avatar
Systems,  Inc., a Texas corporation  ("Employer") and Robert Charles Shreve, Jr.
("Employee").

                              W I T N E S S E T H:
                              - - - - - - - - - -

         WHEREAS,  Employee  is  experienced  and  qualified  to perform  duties
connected and associated with the business of Employer;

         WHEREAS,  Employer wishes to employ Employee, and Employee wishes to be
employed by Employer,  upon the terms and subject to the conditions  hereinafter
set forth;

         WHEREAS, as a condition of Employee's  employment,  Employer desires to
receive from Employee certain covenants and agreements; and

         WHEREAS, Employer and Employee desire to set forth in writing the terms
and  conditions  of their  agreements  and  undertakings  with  respect to these
covenants,  as this  Agreement  is a  condition  of  Employee's  employment  and
ancillary  thereto,  but does not  purport  to set  forth  all the terms of such
employment.

         NOW,  THEREFORE,  IN CONSIDERATION of the herein recited  undertakings,
the  compensation  to be paid by Employer to Employee  and the other  covenants,
agreements and consideration  contained  herein,  the receipt and sufficiency of
which are  hereby  acknowledged  and  confessed,  the  parties  hereto  agree as
follows:

         1.       Employment. Employer hereby employs Employee as an employee of
Employer upon the terms and subject to the conditions hereinafter set forth.

         2.       Term of Employment.  Employee's term of employment  under this
Agreement  shall begin on the effective  date of this  Agreement as  hereinafter
provided and shall,  subject to early  termination as  hereinafter  set forth in
this Agreement, continue until and terminate on the third (3rd) anniversary date
of the Effective Date of this Agreement (the "Initial Term"); provided, however,
that  the  term  of  employment  of  Employee  under  this  Agreement  shall  be
automatically extended for an additional period of one year after the expiration
of the Initial Term,  unless at least thirty (30) days prior to such date either
Employer or Employee shall give written notice to the other that Employee's term
of employment  under this Agreement shall end upon the expiration of the Initial
Term.  If  Employee's  term  of  employment  is  automatically  extended  at the
expiration of the Initial Term, it shall be further automatically  extended from
year  to  year  thereafter  unless  at  least  thirty  (30)  days  prior  to the
anniversary  date of any such  extension,  written  notice  is  given by  either
Employer or Employee to the other that Employee's term of employment  under this
Agreement shall end on such anniversary.

         3.       Employee  Warranties.  Employee  represents  and  warrants  to
Employer  that  Employee  (a) has the legal  power and right to enter  into this
Agreement, and that upon execution and delivery of this Agreement by Employee to
Employer,   this  Agreement  will  constitute  the  legal,  valid,  and  binding
obligation  of Employee,  fully  enforceable  in  accordance  with its terms and
provisions;  (b) is free to enter into the terms of this Agreement and he has no
obligations  inconsistent herewith; and (c) agrees to devote his best efforts to
Employer's business interests to the exclusion of any affiliation in competition
with  Employer  or that might  otherwise  utilize  Employer's  know-how or other
confidential information.

MANAGEMENT AGREEMENT - Page 1

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         4.       Duties of  Employee.  For the term  provided in Paragraph 2 of
this  Agreement  (subject  to  earlier  termination  as  hereinafter  provided),
Employee shall be employed as President and Chief Executive Officer of Employer,
and subject to  applicable  shareholder  approval,  as a director  of  Employer.
Employee shall have such other duties and  responsibilities  as may from time to
time be assigned to Employee by the Board of Directors of Employer.

         Employee  shall report to the Board of  Directors of Employer.  Without
limiting the  generality  of the  foregoing,  Employee  shall have the following
reporting  obligations  to the  Board of  Directors  of  Employer:  (a)  monthly
operating  financial  statements  and (b)  quarterly  presentations  at mutually
agreed  upon  dates and times  regarding  Employer's  operations.  In  addition,
without  limiting the  generality of the  foregoing,  Employee  shall submit the
following  to the Board of Directors  of Employer  for  approval:  (a) an annual
budget;  and (b) any  proposals  regarding  capital  expenditures  exceeding  an
aggregate of $100,000,  provided that such expenditures  shall not include those
incurred in the ordinary course of business.

         5.       Place of  Employment.  The duties to be  performed by Employee
shall be  performed at the offices of  Employer,  located in Dallas,  Texas (the
"Company  Headquarters"),  as well as at such other  temporary  locations as the
Board of Directors  of Employer  may from time to time  determine or require for
the performance of his duties as an employee of Employer.  Employee shall not be
required to make a permanent  relocation as a condition of continued  employment
with Employer.

         6.       Time Requirements.  Employee shall devote substantially all of
his productive  time,  ability and attention to the business of Employer  during
the term of this Agreement. Employee shall not, directly or indirectly,  without
the prior consent of Employer, render any services of a business,  commercial or
professional  nature to any other  organization  or legal  entity,  whether  for
compensation  or  otherwise,  during the term of this  Agreement  as provided in
Paragraph  2 hereof,  except  to the  extent  such  services  do not  materially
interfere with the duties of Employee pursuant to this Agreement.

         7.       Conduct Requirements.  Employee shall, at all times during the
term of this Agreement, conduct himself in such a manner as to reflect credit to
Employer  and shall not do or perform any acts in his capacity as an employee of
Employer  and/or in his  personal  and/or  social life  and/or in his  financial
affairs which are or may be considered improper,  immoral,  illegal,  dishonest,
indiscreet  and/or  may  cause  Employee  and/or  Employer  to  suffer  loss  of
reputation and/or cause Employee and/or Employer embarrassment.

         8.       Compensation;  Benefits. Effective as of the Effective Date of
this  Agreement,  Employer  shall pay or provide to Employee  during the Initial
Term of this  Agreement  and any  extension  hereof  (unless  this  Agreement is
earlier terminated as hereinafter provided in Paragraph 10 hereof) the following
compensation   and  benefits  set  forth  in   subparagraphs   (a)  through  (c)
(collectively  the  "Benefits"),  subject to deductions,  offsets and credits as
elsewhere set forth in this Paragraph 8:

MANAGEMENT AGREEMENT - Page 2

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                  (a)      Compensation.

                           (i) Salary.  Employee  shall receive an annual salary
                  of $125,000 ("Base Salary"),  subject to mandatory  deductions
                  and  withholdings  as required by law,  payable in  accordance
                  with Employer's  established  payroll  procedures,  subject to
                  proration for any partial employment  period.  Employee's Base
                  Salary may be increased at any time at the sole  discretion of
                  the Board of Directors of Employer.

                           (ii) Warrant.  Upon signing this Agreement,  Employee
                  will be issued a  five-year  warrant to  purchase  1.6 million
                  shares of  Employer's  common  stock at an  exercise  price of
                  $1.00 per share in substantially  the same form as the Form of
                  Warrant attached hereto as Exhibit "A" (the "Shreve Warrant").

                           (iii)  Bonus.  Employee may be eligible to receive an
                  annual bonus based on  Employer's  annual  performance,  which
                  bonus may be in the form of (a) options to purchase  shares of
                  the Company's  common stock annually under terms as determined
                  by the  Board of  Directors  of  Employer,  and (b) cash in an
                  amount  not to exceed  15% of  Employee's  base  salary as set
                  forth  in  Section  (a)(i)  of  this  Paragraph,   subject  to
                  mandatory deductions and withholdings as required by law. Such
                  bonus,  if any,  shall be payable at such time as the Board of
                  Directors  of  Employee,   in  its  sole   discretion,   shall
                  determine.  Any options or warrants granted to the Employee by
                  the Board of Directors  of Employer  shall be under such terms
                  and  conditions as solely  determined  by Employer's  Board of
                  Directors.

                  (b)      Employee Benefits.

                           (i)  Medical  Benefits.  Employer  agrees to  include
                  Employee, his spouse and his dependents,  if applicable,  with
                  no delay in  coverage,  in any  hospital,  surgical,  medical,
                  disability  and  dental  plan or  plans  of  Employer  for its
                  employees  generally from time to time during the term of this
                  Agreement,  provided  Employee,  his spouse and his dependents
                  are eligible,  in accordance  with the terms and conditions of
                  such  plan or  plans,  to be  covered  by such  plan or plans.
                  Employer shall be entitled to effect a one-time  adjustment to
                  the  salary  of  Employee  to  reflect  the  premium  costs of
                  inclusion  of the spouse and  dependents  of  Employee in such
                  plans.

                           (ii) Other Benefit Plans. Employee may be eligible to
                  be  included  in  any  profit   sharing,   pension,   deferred
                  compensation  or other  benefit  plans of Employer,  including
                  group  term  life  insurance,  for all or any  portion  of its
                  employees,  including  its key  employees,  from  time to time
                  during the term of this Agreement.  The costs of participating
                  in any of such  benefit  plans  shall be borne as  provided in
                  rules and regulations adopted by Employer, if applicable, from
                  time to time dealing with any of such plans.  It is agreed and
                  understood  that there shall be no  obligation  on the part of
                  Employer to provide for the  participation  of Employee in, or
                  to  institute,   any  such  plan  or  plans  or  to  make  any
                  contribution or contributions thereunder, except that Employer
                  shall  maintain a life  insurance  policy on  Employee  in the
                  amount of  $50,000  with a  beneficiary  to be  designated  by
                  Employee.

MANAGEMENT AGREEMENT - Page 3

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                           (iii) Vacation,  Personal Days and Holidays. Employee
                  shall  be  entitled  to paid  vacation  and  personal  days as
                  follows:  Employee  shall  be  entitled  to  three  (3)  weeks
                  vacation and seven (7) personal days,  which vacation shall be
                  taken by  Employee at  reasonable  times and on or before each
                  anniversary of the Effective Date of this  Agreement.  On each
                  anniversary  of the Effective  Date,  Employee  shall have the
                  right to elect to be paid for any unused vacation day (but not
                  personal days) at the then current salary of Employee.  Unused
                  vacation  and  personal  days may be carried over if not taken
                  prior to December 1. In addition,  Employee  shall be entitled
                  to  such  holidays  as  Employer  elects  to  provide  for its
                  employees generally.

                  (c) Other Benefits. Employee may be eligible to participate in
         any stock option plan, incentive  compensation plan or bonus plan which
         may be provided by Employer or by any  affiliate of Employer to its key
         employees,  the actual participants  therein,  including Employee,  and
         benefits  granted  thereunder,  if any, to be at the sole discretion of
         Employer  or its  affiliates.  Such  plans are  subject  to any  rights
         reserved by Employer or its  affiliates to modify or terminate any such
         plans.

         9.       Business Expenses;  Reimbursement.  Employee shall be entitled
to receive reimbursement for, or payment directly by Employer of, all reasonable
expenses  incurred  by  Employee  in the  performance  of his duties  under this
Agreement,  provided that (i) Employee  accounts therefor in writing pursuant to
Section 274 of the Internal Revenue Code of 1986, as amended (the "Code"),  (ii)
such expenses are ordinary and necessary  business  expenses of Employer  within
the  meaning  of  Section  162 of the Code,  and (iii)  Employer  approves  such
expenses in advance prior to being incurred by Employee if such expenses  should
exceed $10,000. Employee shall also be issued a Company credit card of Employer.

         10.      Termination.  This  Agreement  shall  terminate  earlier  than
provided in Paragraph 2 hereof upon the first to occur of any of the following:

                  (a) Death or  Disability.  In the event  Employee shall die or
         become  disabled  during the term of this  Agreement,  then and in such
         event,  this Agreement shall  automatically  terminate as of such date.
         Employer shall pay to Employee or Employee's legal  representatives all
         Benefits as described in Section 8 of this Agreement,  if any, then due
         and owing to Employee  figured pro rata up to and including the date of
         death or disability.

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                  As used in this Agreement,  the term  "disability"  shall have
         the  meaning  given  such term in any  disability  insurance  policy or
         policies  covering  Employee if any such policy or policies is in force
         at the time a  determination  of  disability  is to be made. If no such
         policy is in force at such time,  the term  "disability"  or "disabled"
         shall mean the  physical or mental  incapacity  of  Employee  which has
         prevented or will prevent such Employee from  substantially  performing
         the usual duties of his  employment  with Employer for a  substantially
         continuous period of at least  one-hundred  twenty (120) days. If there
         is any dispute as to whether  Employee is disabled  (whether or not any
         disability policy is in force), Employee and Employer shall each select
         a medical  doctor duly  licensed in the state of  Employee's  permanent
         residence  within  15 days of the date the  issue of  disability  first
         arises.  The  two  doctors  so  selected  shall  then  within  15  days
         thereafter  mutually  agree on a third medical  doctor duly licensed in
         such state.  The three  doctors so  selected  shall then within 30 days
         following the selection of a third medical doctor make a  determination
         as to whether  Employee is disabled.  The decision of the three medical
         doctors so selected shall be conclusive on all parties  concerned.  The
         cost and  expense of the three  medical  doctors so  selected  shall be
         borne by Employer.

                  (b) Termination  for Cause.  This Agreement may be terminated,
         and Employee  discharged,  prior-to the  expiration of the Initial Term
         for the reasons set forth below.  Employer may at its option  terminate
         this  Agreement by giving  written  notice of  termination  to Employee
         without  prejudice  to  any  other  remedy  to  which  Employer  may be
         entitled, either at law, in equity, or under this Agreement:

                           (i)  upon  the  filing  of a  petition  in a court of
                  bankruptcy by Employer.

                  This  Agreement  shall  also  terminate   immediately  on  the
         occurrence of any one of the following events:

                  (ii)  Employee  breaches or neglects the duties or other terms
         of  this  Agreement   (including  making  any  representation  in  this
         Agreement that turns out to be-false);

                  (iii)  Employee  fails to  follow  any  requirement,  order or
         mandate of the Board of Directors of Employer;

                  (iv) Employee commits any dishonest act towards Employer;

                  (v)  Employee   engages  in  any  activity   involving  fraud,
         dishonesty, moral turpitude, addiction or dereliction of duty; or

                  (vi) subject to the  provisions of Paragraph  10(a) above,  an
         incapacity for any reason on the part of Employee to perform his duties
         for a continuous period of one hundred twenty (120) days, unless waived
         by Employer.


MANAGEMENT AGREEMENT - Page 5

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                  In the event of  termination  of this  Agreement  prior to the
         completion of the Initial Term of  employment  specified in it, for any
         reasons set forth above,  Employee shall be entitled to the Benefits as
         described  in Section 8 of this  Agreement,  including  salary,  earned
         prior to the date of termination, computed pro rata up to and including
         the date of  termination.  Employee  shall be  entitled  to no  further
         Benefits  or  compensation  and  will be  relieved  of all  duties  and
         obligations  under  this  Agreement  as of  the  date  of  termination.
         Notwithstanding  anything  provided  herein,  Employee  understands and
         agrees that Employee's obligations and agreements set forth in Sections
         12 and 13 shall survive the terminations of this Agreement.

                  (c) Termination  Without Cause.  This Agreement and Employee's
         employment  by Employer may be terminated  by Employer  without  cause;
         provided,  however,  Employer shall pay Employee an amount equal to the
         remaining  Base Salary due under the terms of this  Agreement  plus any
         other  accrued but unpaid  Benefits as  described  in Section 8 of this
         Agreement.  Payment of the remaining Base Salary shall be made in equal
         monthly  payments for the remaining term of this Agreement or in a lump
         sum  amount  at  the  discretion  of  Employer.   Notwithstanding   the
         foregoing,  Employer shall have no obligation to pay the remaining Base
         Salary or accrued Benefits if Employee violates,  breaches or otherwise
         fails to comply with each and every of the terms and  provisions of the
         Non-Compete Agreement as set forth in Section 12 hereof. Employee shall
         have no  obligation  to comply  with the terms  and  conditions  of the
         Non-Compete  Agreement  herein,  unless  Employer  shall  agree  to pay
         Employee the Base Salary and  Benefits due Employee  under this Section
         10(c).

                  (d) Early  Termination  by  Employee.  If Employee  resigns or
         otherwise   terminates  his  employment  with  Employer  prior  to  the
         expiration of the term provided in Paragraph 2 hereof,  Employee  shall
         forfeit and shall not be entitled to receive any  Benefits  (other than
         any rights under the Shreve Warrant pursuant to the terms thereof) from
         Employer  whatsoever except any salary and bonus actually earned by him
         prior to the date of termination as provided for in this Agreement. Any
         termination  pursuant to this Paragraph 10(d) shall not limit any right
         or remedy that Employer may have against Employee.

         11.      Status of Agreement.  The Benefits or payments made under this
Agreement  shall be  independent  of and in  addition  to those  under any other
agreement  which  may be in  effect  between  the  parties  hereto  or any other
compensation  payable to Employee  or his  designees  or estate by Employer  and
unless specifically referred to herein or unless otherwise provided by agreement
or law,  nothing  contained  herein shall be deemed to exclude Employee from any
pension,  profit-sharing,  insurance or other benefits to which he may otherwise
be or might become entitled as an employee of Employer.


MANAGEMENT AGREEMENT - Page 6

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         12.      Non-Compete Agreement.

                  (a)  Employee  acknowledges  that  the  services  rendered  to
         Employer  by  Employee  have been and will  continue to be of a special
         character which have a unique value to Employer and Employee has had or
         will  have  access  to  trade  secrets  and  confidential   information
         belonging  to  Employer,   the  loss  of  which  cannot  adequately  be
         compensated by damages in an action of law. Employee  acknowledges that
         Employer's  customers and the suppliers  are not generally  known,  and
         that the  documents and  information  regarding  Employer's  customers,
         suppliers,  services,  methods of operation,  sales, pricing, and costs
         are highly confidential and constitute trade secrets.

                  In  consideration  of the  disclosure of such trade secrets to
         Employee,   Employee  agrees  that,   during  the  term  of  Employee's
         employment  with  Employer and (a) for a period of two years  following
         the  termination  of  Employee's  employment  with Employer if Employee
         voluntarily  terminates his employment or is terminated for cause under
         Section 10(b)(ii)-(vi) herein or (b) for a period of one year following
         the  termination of Employee's  employment with Employer if Employee is
         terminated without cause, Employee:

                           (i) will not,  directly or indirectly,  own,  manage,
                  operate,  control,  be employed by,  perform  services for, be
                  connected with ownership, management, operation, or control of
                  any business in the oil and gas software  industry in any city
                  within  the  United  States  where the  Company  conducts  any
                  business operations or within a thirty-five mile radius of any
                  such city;

                           (ii) will not,  either on his own  account or for any
                  person,  firm,  partnership,   corporation  or  other  entity,
                  solicit,  interfere with, or endeavor to cause any employee of
                  Employer to leave his or her employment,  or induce or attempt
                  to induce any such  employee  to breach his or her  employment
                  agreement with Employer;

                           (iii) shall not solicit,  induce or attempt to induce
                  any past or  current  customer  of  Employer  to  cease  doing
                  business in whole or in part with or through  Employer,  or to
                  do  business  with  any  other  person,   firm,   partnership,
                  corporation or other entity.

                  Notwithstanding  the  foregoing,  Employee  may,  as a passive
         investor, without violating the provisions hereof, own not more than 5%
         of the issued and outstanding stock of a publicly-held company which is
         engaged in the  business of  Employer.  Additionally,  the  non-compete
         restriction  set forth in  Section  12(a)(i)  above  shall not apply if
         Employee is terminated under Section 10(b)(iv) herein.

         13.      Confidential Information.

                  (a) Employee  recognizes  that Employer's  business  interests
         require a confidential  relationship  between Employer and Employee and
         the  fullest  practical   protection  and  confidential   treatment  of
         Employer's  financial data,  writings,  computer  software,  sources of
         supply, know-how, plans and programs, and other knowledge of Employer's
         business,  including  but not limited to the identity of its  customers
         and suppliers,  its arrangements  with such suppliers and customers and
         technical data relating to its business, products, and services (all of
         which is collectively  referred to as the "Confidential  Information"),
         which may in whole or in part be conceived or learned of by Employee in
         the course of Employee's employment with Employer.

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                  (b)  Employee  agrees to keep secret and to keep  confidential
         all   of   Employer's   Confidential   Information,   whether   or  not
         copyrightable  or patentable,  both during and after the termination of
         Employee's  employment with Employer.  Employee  further  covenants and
         agrees  not to use  or  aid  others  in  learning  of or  using  any of
         Employer's Confidential  Information except in the faithful performance
         of  Employee's  duties for  Employer.  In this regard,  during the term
         hereof  and for three  (3)  years  following  the  termination  of this
         Agreement for any reason,  Employee  covenants and agrees that,  except
         insofar as authorized by Employer as a necessary  disclosure to persons
         having a need to know consistent with the working  relationship  within
         Employer and with Employer's customers:

                           (i) Employee will not directly or indirectly disclose
                  Confidential Information to others either within or outside of
                  Employer;

                           (ii) Employee will not use  Confidential  Information
                  for his own  account and will not aid or abet others in use of
                  it for either their account or his account or benefit;

                           (iii) Employee will not make or disclose documents or
                  copies of documents  containing  disclosures  of  Confidential
                  Information; and

                           (iv) As to documents  which are delivered to Employee
                  or  which  are  made  as  a  necessary  part  of  the  working
                  relationships  and duties within  Employer and with Employer's
                  customers   and   suppliers,    Employee   will   treat   them
                  confidentially and will mark them as proprietary  confidential
                  documents  not to be  reproduced  or used without  appropriate
                  authority of Employer.

                  (c) In the event of a breach or threatened  breach by Employee
         of the provisions of this Paragraph 13,  Employer shall, in addition to
         any other available remedies, be entitled to an injunction  restraining
         Employee from disclosing,  in whole or in part, any such information or
         from rendering any services to any person to whom any such  information
         may have been disclosed or is threatened to be disclosed.

                  (d) The covenants and agreements of Employee set forth in this
         Paragraph 13 are in addition to, and not in lieu of, similar provisions
         contained in Paragraph 12 hereof.

         14.      Continuing  Effect.  The provisions of Paragraphs 12 and 13 of
this Agreement shall continue to be binding upon Employee in accordance with the
terms therein contained,  notwithstanding  termination of Employee's  employment
hereunder for any reason whatsoever.

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         15.      Corporate   Opportunities  and  Property  Rights  of  Parties.
Employee  agrees that he will promptly and fully inform and disclose to Employer
all  business  opportunities  to which  Employee  becomes  aware  related to any
business venture being  undertaken by Employer,  a subsidiary of Employer or any
entity  affiliated  with  Employer,  during the term of this  Agreement  and any
renewals of this Agreement,  whether  conceived by Employee alone or with others
and  whether  or  not  conceived   during  regular   working  hours.   All  such
opportunities,  inventions,  designs,  improvements  and discovery  shall be the
exclusive property of Employer.

         16.      Inventions, Discoveries and Improvements.

                  (a)  Employee  shall  disclose  promptly  to  Employer  or its
         nominee any and all inventions,  software  technology,  discoveries and
         improvements to any existing software  technology of Employer conceived
         or made by Employee  during the period of his employment and related to
         the business or  activities of Employer and agrees to assign all of his
         interest therein to Employer or its nominee,  whenever  requested to do
         so by Employer and shall execute any and all applications,  assignments
         or other  instruments  which Employer shall deem necessary to apply for
         and obtain Letters  Patent of the United States or any foreign  country
         or to protect otherwise Employer's interest therein.  These obligations
         shall continue  beyond the  termination  of employment  with respect to
         said  inventions,  discoveries  and  improvements  conceived or made by
         Employee  during the  period of  employment  and shall be binding  upon
         Employee's   assigns,   executors,   administrators   and  other  legal
         representatives.

                  (b)  Upon  termination  of  said  employment,  Employee  shall
         disclose  promptly to  Employer or its nominee any and all  inventions,
         software technology,  discoveries and improvements to existing software
         technology of Employer  conceived or made by Employee during the period
         of his employment and shall promptly  deliver to Employer all drawings,
         blueprints,  manuals, letters, notes, notebooks, reports, and all other
         materials of a secret or  confidential  nature  relating to  Employer's
         business  and  which are in the  possession  or under  the  control  of
         Employee.

                  (c) Employee  shall give prompt  written notice to Employer of
         any and all: (a) patent applications or provisional  applications filed
         by  Employee  that  are  based  upon any and all  inventions,  software
         technology,  discoveries  and  improvements  to any  existing  software
         technology  of  Employer  that were  conceived  by Employee at any time
         before the expiration of a two (2) year period following termination of
         employment (the "New Inventions"),  and (b) New Inventions made by him.
         Employee agrees to license Employer, at Employer's sole option, any and
         all New Inventions. As to any New Invention, the license shall be "sole
         and  exclusive"  and shall be free of  charge  for a period of one year
         from the filing date of the patent application;  provided however, that
         should  Employee  fail to file an  application  for  patent,  then  the
         royalty  free  period  shall  be  perpetual.  Employer  shall  have the
         exclusive  option,  exercisable  upon written notice to Employee at any
         time  during a period of thirty  (30) days from the date of  receipt of
         Employee's  notice  of  filing a patent  application,  to  negotiate  a
         license,  for a period of time beyond the royalty free  period,  to the
         patent  application and any  subsequently  issued patent.  Such license
         shall be at such prices and on such terms as are at least as  favorable
         as the Employee  would  receive in an  arms-length  transaction  with a
         third party.  If Employer  fails to exercise its license  option,  then
         Employee shall be free to license third parties.


MANAGEMENT AGREEMENT - Page 9

<PAGE>

         17.      Miscellaneous Provisions.

                  (a) Notice. All notices, demands, changes of address, requests
         or other communications that may be or are required to be given, served
         or sent by any  party to any other  party  pursuant  to this  Agreement
         shall be in writing and shall be mailed by  first-class,  registered or
         certified  mail,  return  receipt   requested,   postage  prepaid,   or
         transmitted by hand delivery or telegram, or by overnight courier.

                  (b)  Governing  Law.  This  Agreement  shall  be  subject  to,
         governed  by and  construed  in  accordance  with  federal  law and the
         internal  substantive  laws, not the law of conflicts,  of the State of
         Texas.

                  (c) Captions.  The captions used herein are for administrative
         and convenience purpose only and shall not be construed in interpreting
         this Agreement.

                  (d) Gender.  Whenever the context so requires,  the  masculine
         shall include the feminine and neuter,  and the singular  shall include
         the plural, and conversely.

                  (e) Legal Construction. If any portion of this Agreement shall
         be held invalid or inoperative,  then so far as reasonable and possible
         (i) the  remainder  of this  Agreement  shall be  considered  valid and
         operative,  and (ii) effect shall be given to the intent  manifested by
         the portion  held  invalid or  inoperative  and that  portion  shall be
         modified to the extent necessary to render it enforceable.

                  (f)  Amendments.  This  Agreement  may be amended from time to
         time by an instrument in writing signed by all those who are parties to
         this Agreement at the time of such  amendment,  such  instrument  being
         designated on its face as an "Amendment" to this Agreement.

                  (g) Waiver.  The failure of any party to insist in one or more
         instances  upon the  performance  of any of the terms or  conditions of
         this Agreement shall not be construed as a waiver or  relinquishment of
         any right granted  hereunder or of the future  performance  of any such
         term or  condition,  but the  obligations  of any  party  with  respect
         thereto shall continue in full force and effect.

                  (h)  Counterparts.  This  Agreement may be executed in several
         counterparts,  each of which  shall be deemed an  original,  but all of
         which together shall constitute one instrument.

                  (i) Remedies.  Each party hereto acknowledges that a remedy at
         law for any  breach  or  attempted  breach  of this  Agreement  will be
         inadequate,  agrees that each other party  hereto  shall be entitled to
         specific  performance and injunctive and other equitable relief in case
         of any such breach or attempted  breach and further agrees to waive any
         requirement  for securing or posting of any bond in connection with the
         obtaining of any such injunctive or other equitable relief. Such remedy
         shall be  cumulative  and not exclusive and shall be in addition to any
         other rights or remedies any party may have against the other.

MANAGEMENT AGREEMENT - Page 10

<PAGE>

                  (j)  Attorneys'  Fees.  If any  action  at  law or in  equity,
         including any action for injunctive or declaratory  relief,  is brought
         to enforce or interpret any of the  provisions of this  Agreement,  the
         prevailing  party shall be entitled  to recover  reasonable  attorneys'
         fees and expenses from the other party,  which fees and expenses may be
         set by the court in the trial of such  action or may be  enforced  in a
         separate  action  brought for that  purpose and which fees and expenses
         shall be in addition to any other relief which may be awarded.

                  (k) Prior Agreements. This Agreement (and the exhibits hereto)
         contains the entire agreement between the parties hereto and supersedes
         any and all prior  agreements,  whether  written or oral,  between  the
         parties  with  respect  to  the  within  subject   matter.   All  other
         employment,  salary  continuation,  bonus,  incentive  compensation and
         other similar  agreements  heretofore entered into between Employer and
         Employee and in effect as of the date hereof are hereby  cancelled  and
         shall be of no further force or effect.

         18.      Time of the Essence.  Time shall be of the essence  throughout
the term of this Agreement.




MANAGEMENT AGREEMENT - Page 11

<PAGE>


                                 EMPLOYER:

                                 AVATAR SYSTEMS, INC.


                                 By:          /s/ Robert Charles Shreve, Jr.
                                    -------------------------------------------
                                       Robert Charles Shreve, Jr., President

                                 Address:          5728 LBJ Freeway, Suite 270
                                                   Dallas, Texas 75240

                                 EMPLOYEE:


                                              /s/ Robert Charles Shreve, Jr.
                                 ----------------------------------------------
                                 Robert Charles Shreve, Jr.

                                 Address:          18712 Flatstone Court
                                                   Dallas, Texas 75252







MANAGEMENT AGREEMENT - Page 12