EXHIBIT 10.2



<PAGE>

                              CONSULTING AGREEMENT

         THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into as
of the 10th day of July,  2000,  by and  among  Avatar  Systems,  Inc.,  a Texas
corporation  (the  "Company"),  Merchant Capital  Holdings,  Limited,  a British
Virgin  Islands  company  ("MCH") and its  affiliate,  First  Merchants  Capital
Limited, a company incorporated in England and Wales ("Consultant").

                                R E C I T A L S:

         The  Company  was  introduced  by  Geoffrey  Dart,  a  director  of the
Consultant to Cybertec Holdings Plc ("Cybertec"),  who is purchasing 1.6 million
shares of the Company's  common stock for $1.6 million  pursuant to that certain
Stock  Purchase  Agreement (the "Stock  Agreement")  dated of even date herewith
between the Company and Cybertec.

         The Company desires to compensate  Consultant for its assistance to the
Company in finding a purchaser of the 1.6 million  shares of common stock of the
Company and to retain Consultant to provide the services  described herein,  and
Consultant desires to be retained pursuant to the terms of this Agreement.

         Consultant  shall,  as a  consultant  to the  Company,  have  access to
confidential  information  in  which  the  Company  and  its  affiliates  or its
customers or suppliers have a proprietary interest.

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

                  1.  Services.  Consultant  is  hereby  retained  to serve as a
         consultant  to the Company to provide the Services set forth in Exhibit
         I hereto (the "Services"). Consultant shall provide the Services to the
         Company as and when requested by the Company.

                  2. Term. The term of this Agreement shall commence on the date
         hereof  and shall  continue,  unless  earlier  terminated  pursuant  to
         Section 7 below,  for a period of one (1) year (the  "Term").  The term
         may be renewed for one  additional  one-year  term with the approval of
         the Board of  Directors  of the Company and  Consultant  under the same
         provisions  as herein  stated,  except that there will be no additional
         payments pursuant to Section 3(a) herein upon renewal.

                  3.  Compensation.  As  compensation  for rendering the Service
         during the Term,  Consultant  shall be  entitled  to  receive  from the
         Company the following compensation:

                           (a) A one-time  payment of $15,000 upon  execution by
                  the parties of this Agreement.

                           (b) An annual fee of $60,000 payable to Consultant in
                  twelve (12) monthly payments of $5,000 ("Base  Compensation").
                  The first such payment being due August 1, 2000 and continuing
                  on the  1st of each  succeeding  month  for  the  Term of this
                  Agreement until the Base Compensation is paid to Consultant.

Consulting Agreement-Page 1

<PAGE>

                           (c) Upon  execution of this Agreement by the parties,
                  the Company shall issue and deliver to MCH a five-year warrant
                  to purchase two million  shares of the Company's  common stock
                  at an exercise price of $1.00 per share (the "MCH Warrant") in
                  substantially  the same form as attached as Exhibit "D" to the
                  Stock Agreement.

                           The  compensation set forth in this Section 3 will be
                  the sole  compensation  payable to Consultant  and MCH and the
                  sole issuance of a warrant for  performing the Services and no
                  additional  compensation,  fee or issuance  will be payable by
                  the  Company  to  Consultant  or MCH by reason of any  benefit
                  gained  by  the  Company   directly  or   indirectly   through
                  Consultant's performing the Services, nor shall the Company be
                  liable  in any  way for any  additional  compensation,  fee or
                  issuance for performing the Services  unless the Company shall
                  have  expressly  agreed  thereto in  writing.  Notwithstanding
                  anything in this Agreement to the contrary,  the Company shall
                  be entitled to withhold from such compensation such amounts as
                  are  necessary  to  comply  with U.S.  tax laws as  reasonably
                  determined by counsel for the Company.  The Company shall have
                  no obligation to reimburse  Consultant,  MCH, or both, for any
                  expenses incurred pursuant to this Agreement.

         4.  Independent  Contractor  Status.  In all  matters  relating to this
Agreement,  Consultant  shall be acting as an  independent  contractor.  MCH may
assist  the  Consultant  with  providing  the  Services  hereunder  and shall be
compensated by Consultant,  if applicable.  Neither Consultant nor any employee,
agent or affiliate of Consultant is an employee of the Company under the meaning
or  application  of any  federal  or state  unemployment  or  insurance  laws or
worker's   compensation   laws,  or  otherwise.   Consultant  shall  assume  all
liabilities or obligations imposed by any of such laws with respect to employees
or affiliates of Consultant  in the  performance  of this  Agreement as shall be
identified  and agreed  upon,  in writing,  between the Company and  Consultant.
Consultant  shall pay timely all local,  state,  and federal  taxes arising from
payments  made to  Consultant  for the  Services  provided  hereunder  and shall
prepare and file all required U.S. tax returns,  including,  without limitation,
income, self-employment, and other taxes attributable to payments hereunder. The
Company shall not provide  Consultant  with  insurance of any kind in connection
with the  Services  to be  provided  hereunder.  Consultant  shall  not have any
authority to assume or create any obligation,  express or implied,  on behalf of
the  Company,  except as may be  requested  or  required  by the Company for the
performance  of  Consultant's  duties  and  Services.  Consultant  shall have no
authority to represent  itself or any of its employees,  officers and directors,
shareholders  or affiliates as an agent,  employee,  or in any other capacity of
the Company,  except as may be  requested  or required by the  Company,  for the
performance of Consultant's duties and Services.

         Consultant  acknowledges  that,  as an  independent  contractor  to the
Company, neither it nor any of its employees, officers, directors,  shareholders
or affiliates are entitled to participation in, coverage under, or benefits from
the Company or any of its employee benefit plan funds,  programs or arrangements
sponsored  or  maintained  by the  Company  for  its  employees.  In  the  event
Consultant's and its employees, directors, officers, shareholders or affiliates'
relationship  with the  Company  is  determined  to be as an  "employee"  of the
Company  rather than as an  independent  contractor  to the Company,  Consultant
expressly waives and declines, from the date hereof,  participation in, coverage
under, or benefits from the Company or any of its employee benefit plans, funds,
programs  or  arrangements  sponsored  or  maintained  by the  Company  for  its
employees.

Consulting Agreement-Page 2

<PAGE>

         5. Ownership of Work Product.

                  (a) The  Company  shall  own all  right,  title  and  interest
         (including patent rights,  copyrights,  trade secret rights,  mask work
         rights,  trademark  rights and all other  intellectual  and  industrial
         property  rights of any sort  throughout the world) relating to any and
         all inventions (whether or not patentable),  works of authorship,  mask
         works,  designations,  designs, know-how, ideas and information made or
         conceived or reduced to practice, in whole or in part, by Consultant or
         any employee, agent, or affiliate of Consultant,  including MCH, during
         the term of this  Agreement  that relate to the  subject  matter of, or
         arise out of, the Services  performed by  Consultant  or any  employee,
         agent,  or  affiliate  of  Consultant,  including  MCH, for the Company
         (collectively, "Inventions") and Consultant and any employee, agent, or
         affiliate of  Consultant,  including  MCH, will  promptly  disclose and
         provide all  Inventions to the Company.  All Inventions are "works made
         for hire" to the extent allowed by law and, in addition, Consultant and
         any employee, agent, or affiliate of Consultant,  including MCH, hereby
         make all assignments necessary to accomplish the foregoing ownership.

                  (b) To the extent such  Inventions are not deemed to be "works
         made for hire,"  Consultant  and any employee,  agent,  or affiliate of
         Consultant,   including   MCH,   hereby   assign  to  the  Company  all
         intellectual and industrial  property rights of any sort throughout the
         world  in  and to  the  Inventions  without  further  compensation.  If
         Consultant or any employee,  agent,  or affiliate of Consultant has any
         rights to the  Inventions  that  cannot  be  assigned  to the  Company,
         Consultant  and  any  employee,  agent,  or  affiliate  of  Consultant,
         including MCH,  unconditionally  and irrevocably waives the enforcement
         of such rights, and if such rights cannot be waived, Consultant and any
         employee,  agent,  or affiliate of Consultant,  including  MCH,  hereby
         grant to the Company an exclusive,  irrevocable,  perpetual, worldwide,
         fully paid and royalty-free  license, with rights of sublicense through
         one  or  more  levels  of  subcustomers,   to  use,  reproduce,  create
         derivative works of, distribute,  publicly distribute, publicly perform
         and  publicly  display  such  rights  by all  means  now known or later
         developed.  The Company hereby acknowledges and agrees,  however,  that
         the  Inventions  shall not include  any  Consultant  owned  proprietary
         program,  or any part thereof, or to the ideas,  concepts,  know-how or
         techniques employed by Consultant in performing the work and delivering
         the  Inventions  to  the  Company,   or  to  any  modifications  of  or
         enhancements to such Consultant owned proprietary  programs;  provided,
         however,  if and to the extent any proprietary  information or material
         of Consultant or any employee,  agent,  or affiliate of Consultant,  is
         embodied in any  Invention,  Consultant  and any  employee,  agent,  or
         affiliate  of  Consultant,  including  MCH,  hereby grant the Company a
         irrevocable, perpetual, worldwide, fully paid and royalty-free license,
         with rights of sublicense  through one or more levels of  subcustomers,
         to use,  reproduce,  create derivative works of,  distribute,  publicly
         distribute,  publicly  perform and publicly  display  such  proprietary
         information  or material by all means now known or later  developed  in
         conjunction with the Invention.

Consulting Agreement-Page 3

<PAGE>

                  (c) To the extent  allowed by law,  Section 5(a)  includes all
         rights of paternity, integrity, disclosure and withdrawal and any other
         rights that may be known as or referred to as "moral rights," "artist's
         rights,"  "droit  moral," or the like. To the extent  Consultant or any
         employee, agent, or affiliate of Consultant, including MCH, retains any
         such moral rights under  applicable  law,  Consultant and any employee,
         agent,  or affiliate of Consultant,  including  MCH,  hereby ratify and
         consent to, and provide all  necessary  ratifications  and consents to,
         any action  that may be taken with  respect to such moral  rights by or
         authorized  by the Company.  Consultant  and any  employee,  agent,  or
         affiliate of  Consultant,  including MCH, agree not to assert any moral
         rights with respect to the  Inventions.  Consultant  and any  employee,
         agent, or affiliate of Consultant, including MCH, will confirm any such
         ratifications,  consents and agreements  from time to time as requested
         by the Company.

                  (d) To the extent any of the  foregoing is  ineffective  under
         applicable law,  Consultant and MCH, if applicable,  hereby provide any
         and all ratifications and consents necessary to accomplish the purposes
         of the  foregoing  to the  extent  possible.  Consultant  and  MCH,  if
         applicable,  shall  further  assist the  Company  to further  evidence,
         record and perfect such assignments,  and to perfect, obtain, maintain,
         enforce,  and  defend any rights  assigned.  Consultant  and MCH hereby
         irrevocably  designate  and  appoint  the  Company  as its  agents  and
         attorneys-in-fact  to act for and in  Consultant's  or MCH's  behalf to
         execute and file any  document and to do all other  lawfully  permitted
         acts to further the  foregoing  with the same legal force and effect as
         if executed by Consultant.

         6. Non-Disclosure of Confidential Information.

                  (a)  Consultant  and MCH hereby agree that  Consultant and MCH
         currently  have and may  acquire  in the future  valuable  confidential
         information  concerning  the business of the Company or its  successors
         and  assigns,  including,  but not  limited  to,  inventions,  patents,
         technologies,  developments, products, processes, customers, suppliers,
         vendors,  discoveries,  trade secrets,  customer lists,  property owner
         lists,  sales  techniques,  financial  information,  sales  literature,
         canvassing or solicitation  techniques,  instruction manuals,  business
         plans,  presentation  information,   information  systems,   suppliers,
         developed or utilized promotional materials,  operating policies, rules
         of conduct, note books,  reports,  data, records and other information,
         whether  considered  confidential or not.  Consultant and MCH agree not
         to, directly or indirectly,  use,  disclose,  permit  disclosure of, or
         reveal to any person,  firm, or corporation,  or take from the premises
         of  the  Company,   at  any  time  any   Confidential  and  Proprietary
         Information  (including,  but not limited to, computer programs) except
         as may be necessary for performance of Consultant's duties and Services
         hereunder and with the written  consent of the Company.  Consultant and
         MCH  acknowledge  that all such documents and  information  are, at all
         times,  the property of the Company and  constitute  trade  secrets and
         proprietary information and property belonging to the Company.

                  The parties  expressly  understand,  acknowledge,  agree,  and
         stipulate  that  any  and  all  of  the  information  described  in the
         immediately  preceding  paragraph shall  constitute  "Confidential  and
         Proprietary Information" for all purposes of this Agreement.

Consulting Agreement-Page 4

<PAGE>

                  (b)  Notwithstanding  the right to cure  defaults  under  this
         Agreement,  Consultant  and MCH understand and recognize that breach of
         this Agreement by them may cause immediate and irreparable  harm to the
         legitimate  business  interests  of the  Company,  not  necessarily  or
         readily compensable by ascertainable money damages.  Consultant and MCH
         agree  that in the  event  it is  determined  by a court  of  competent
         jurisdiction  that  they  have  individually  or  jointly  violated  or
         breached any of the covenants,  conditions, or terms of this Agreement,
         the Company shall have the right in accordance  with the Texas rules of
         civil procedure to obtain injunctive  relief against  Consultant or MCH
         or both  restraining  and  enjoining  one or  both  from  breaching  or
         violating  or further  breaching  or  violating  this  Agreement.  Such
         injunctive  relief  shall be in addition to the right of the Company to
         seek  damages for any such breach or violation  of this  Agreement,  to
         recover all costs thus expended,  including reasonable attorneys' fees,
         and to obtain all other relief, whether legal,  equitable,  or both, to
         which the Company may be entitled.

         7. Termination.  This Agreement and the consulting relationship created
hereby shall terminate upon the earlier to occur of any of the following events:

                  (a) The  expiration of the Term of this Agreement as set forth
         in Section 2 above;

                  (b)  Agreement by written  instrument  executed by each of the
         parties hereto;

                  (c) A material  breach by Consultant or by MCH of Section 6 of
         this  Agreement  that remains  uncured  thirty (30) days after  written
         notice of such  breach by the  Company  to  Consultant  or to MCH or to
         both; or

                  (d) A material  breach by  Consultant  or by MCH or by both of
         this  Agreement  (including but not limited to the refusal or inability
         of Consultant to provide the Services) that remains uncured thirty (30)
         days after  written  notice of such breach by the Company to Consultant
         or to MCH or to both.

                  If this  Agreement  is  terminated  for any  reason,  all Base
         Compensation  due and payable to such termination date shall be paid to
         Consultant  within thirty (30) days of such  termination.  The Company,
         Consultant and MCH further  acknowledge  and agree that the termination
         of this  Agreement  pursuant  to  Section  7(c) and (d),  shall have no
         affect on the  enforceability of the Non-Disclosure of Confidential and
         Proprietary  Information  provisions  of this  Agreement.  In all other
         events,  termination of this Agreement and/or default by the Company of
         any of the  terms  of this  Agreements  voids  Consultant's  and  MCH's
         obligations   pursuant  to  the   Non-Disclosure  of  Confidential  and
         Proprietary Information.

         8. Notices. Any notices,  consents,  demands,  requests,  approvals and
other  communications  to be given under this  Agreement  by either party to the
other shall be deemed to have been duly given if given in writing and personally
delivered or sent by facsimile transmission, courier service, overnight delivery
service or by mail, registered or certified, postage prepaid with return receipt
requested, as follows:

Consulting Agreement-Page 5

<PAGE>


         If to the Company:         Avatar System, Inc.
                                    5728 LBJ Freeway, Suite 270
                                    Dallas, Texas 75240
                                    Attention: Robert C. Shreve, Jr., President
                                    Fax:  972-720-1900

         with a copy to:            Paul Wehrmann, Esq.
                                    Haynes and Boone LLP
                                    1600 N. Collins, Suite 2000
                                    Richardson, Texas 75080
                                    Fax:  972-692-9064

         If to Consultant:          First Merchant Capital Limited
                                    133 Ebury Street
                                    London ENGLAND
                                    SW1W9QU
                                    Fax: 011-44-207-7305

         If to MCH:                 Merchant Capital Holdings Limited
                                    Trident Chambers
                                    Wickham Cay.
                                    P.O. Box 146
                                    Roadtown, Tontola BVI
                                    Fax:  011-44-207-7305

                                    with a copy to:   Richard B. Goodner
                                    Jackson Walker L.L.P.
                                    901 Main Street, Suite 6000
                                    Dallas, Texas 75021
                                    Fax:  214-953-5822

         Notices  delivered  personally  or by facsimile  transmission,  courier
service or overnight delivery shall be deemed communicated as of actual receipt;
mailed notices shall be deemed  communicated  as of three days after the date of
mailing.

         9. Entire  Agreement.  This Agreement,  the Investors' Rights Agreement
and Shareholders' Agreement included as part of the Stock Agreement, and the MCH
Warrant  contain the entire  agreement of the parties  hereto and  supersede all
prior agreements and understandings, oral or written between the parties hereto.
No  modification  or amendment  of any of the terms,  conditions  or  provisions
herein may be made  otherwise  than by written  agreement  signed by the parties
hereto.

         10. Governing Law. THE RIGHTS AND OBLIGATIONS OF THE PARTIES  HEREUNDER
SHALL BE INTERPRETED, CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS, WITHOUT REGARD TO ITS CHOICE OF LAW PRINCIPLES,  AND VENUE SHALL
BE IN THE COURTS OF DALLAS COUNTY, TEXAS.

Consulting Agreement-Page 6

<PAGE>

         11.  Parties  Bound.  This  Agreement  and the rights  and  obligations
hereunder  shall be  binding  upon  and  inure to the  benefit  of the  Company,
Consultant  and MCH,  and  their  respective  heirs,  personal  representatives,
successors and assigns. The Company,  Consultant and MCH shall have the right to
assign this  Agreement to any  affiliate or to their  respective  successors  or
assigns.  The  terms  "successors"  and  "assigns"  shall  include  any  person,
corporation,  partnership or other entity that buys all or substantially  all of
the Company's, Consultant's or MCH's assets or all of their stock, or with which
the Company, Consultant or MCH merges or consolidates.

         12. Enforceability. If, for any reason, any provision contained in this
Agreement  should be held invalid in part by a court of competent  jurisdiction,
then it is the intent of each of the  parties  hereto  that the  balance of this
Agreement  be  enforced to the  fullest  extent  permitted  by  applicable  law.
Accordingly,  should a court of competent  jurisdiction determine that the scope
of any covenant is too broad to be enforced as written, it is the intent of each
of the parties that the court should reform such covenant to such narrower scope
as it determines enforceable.

         13. Waiver of Breach. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by any party.

         14.  Captions.  The captions in this  Agreement are for  convenience of
reference  only and  shall  not limit or  otherwise  affect  any of the terms or
provisions hereof.

         15. Costs. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which it may be entitled.

         16. Other  Obligations.  Consultant  and MCH represent and warrant that
each is not  subject to any  agreement  which would be violated or breached as a
direct or indirect result of Consultant or MCH executing this Agreement.

         17. Affiliate. An "affiliate" of any party hereto shall mean any person
controlling, controlled by or under common control with such party.

         18.  Counterparts.  This  Agreement  may be  executed  in  one or  more
counterparts,  each of which shall be deemed an original  and all of which shall
constitute one and the same instrument, but only one of which need be produced.

Consulting Agreement-Page 7

<PAGE>

         IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.

                    AVATAR SYSTEMS, INC.


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


                            MERCHANTS CAPITAL HOLDINGS LIMITED.


                            By:/s/ Geoffrey Dart
                               -------------------------------------------------
                               Geoffrey Dart, Director


                            FIRST MERCHANT CAPITAL LIMITED


                            By:/s/ Geoffrey Dart
                               -------------------------------------------------
                               Geoffrey Dart, Director

Consulting Agreement-Page 8

<PAGE>

                                    EXHIBIT I

Services:

Financial and business consulting services as requested by the Company.

Development of new business relationships as requested by the Company.

Assist the  Company  and  Cybertec  with  locating a U.S.  non-operating  public
company (the "Public  Company") which will acquire the Company or into which the
Company  will  merge  upon  terms  agreed  to by the  Company  and its  Board of
Directors and shareholders,  if required.  Such duties may include  conducting a
due  diligence  investigation  of the Public  Company as may be  required by the
Company.  Additionally,  Consultant  shall assist the Company  with  securing an
underwriter  or  investment  banker for a public  offering of  securities of the
Company.

Consulting Agreement-Page 9