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                                                                    EXHIBIT 10.4

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT is made and entered into as of March 5, 2001
(the "Effective Date"), by and between AVIDYN, Inc., a Delaware corporation (the
"Corporation"), and Joseph A. Hensley ("Employee").

                                   WITNESSETH

         WHEREAS, the Corporation is a holding company of a health care
technology company and utilization review and case management company; and

         WHEREAS, Employee has competence and experience in operating companies
and acquiring related companies; and

         WHEREAS, the Corporation desires to hire Employee as President of the
Corporation, and Employee is willing and desirous to be so employed under
mutually satisfactory terms and conditions; and

         WHEREAS, the parties desire to provide a full statement of their
agreement in connection with Employee providing of services to the Corporation
during the term of this Agreement;

         NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and other good and valuable consideration hereinafter recited,
the Corporation and Employee agree as follows:

         1. Employment as President. The Corporation hereby offers and Employee
hereby accepts employment as President of the Corporation and will perform the
duties as may be directed from time to time by the Board of Directors of the
Corporation. Employee will also use his best efforts to preserve the business of
the Corporation and its affiliates and the goodwill of all employees, customers,
suppliers and other persons having business relations with the Corporation and
its affiliates. As used in this Agreement, "affiliates" will mean persons or
entities that directly, or indirectly through one or more intermediaries,
control or are controlled by, or are under common control with, the Corporation.

         2. Reporting Relationship. Employee, in performing his services as
President, will (i) be subject to the control and direction of the Board of
Directors of the Corporation, (ii) perform his duties in a diligent,
trustworthy, loyal, businesslike and efficient manner, and (iii) abide by all
company policies and rules, all for the purpose of advancing the business of the
Corporation and its affiliates.

         3. Exclusive Contract. Employee will engage in no other business
activities or affairs whatsoever, neither for another party nor in his own
behalf, and without regard as to whether such services are performed after
established work hours or on weekends without prior approval of the Board of
Directors of the Corporation.

         4. Base Salary; Bonus; Options.

         (a) The Corporation will pay to Employee, and Employee agrees to accept
as full consideration for his employment, $15,417 per month during the term of
this Agreement, payable in accordance to the Corporation standard payroll
practices, subject to all withholdings (i) required by federal, state or local
law and (ii) pursuant to any agreement with Employee. The Compensation Committee
of the

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Corporation's Board of Directors (the "Compensation Committee") will review the
base salary annually beginning in calendar year 2002 to determine if any
increase in base salary is appropriate. The parties have agreed that Employee
shall be entitled to 12 days of unpaid vacation prior to April 17, 2001.

         (b) Employee will receive a bonus for calendar year 2001 of one and
one-half percent (1 1/2%) of the Corporation's operating income above a mutually
agreed base level of operating income to be reflected in the minutes of the
Compensation Committee for its meeting on March 2001. The amount determined in
the preceding sentence will be reduced by twenty-five percent (25%) to reflect
the fact that Corporation will employ the Employee for only part of calendar
year 2001. Employee and the Compensation Committee will mutually agree upon a
bonus plan for subsequent years.

         (c) Employee will be granted 50,000 nonqualified options to acquire the
Corporation's common stock at an exercise price of $5.875 (the "Exercise
Price"). Such options will vest at the rate of twenty percent (20%) per year for
five (5) years except that the options will all immediately vest in the event
the stock price reaches $16.16 as defined in the stock purchase agreement.

         5. Moving Expenses. Employee will be reimbursed reasonable moving
expenses. In determining the amount of reasonable moving expenses, Employee will
obtain at least two (2) bids for his moving expenses and the most reasonable bid
will be selected. In addition, reasonable expenses for transportation to Dallas
for Employee (including one other person) will also be reimbursed. With respect
to Employee's residence in Phoenix, Arizona, the Corporation will reimburse
Employee the closing costs (commission paid to realtor, title insurance and
similar costs) incurred by Employee upon the sale of such residence. The
Corporation and Employee will cooperate with respect to such reimbursements to
be sure that both parties receive the most advantageous tax position.

         6. Term; Employment at Will. This Agreement will have a term of one (1)
year and will be automatically renewed for one (1) year periods. Notwithstanding
the foregoing, the employment contemplated by this Agreement will be employment
at will under the laws of the State of Texas and this Agreement may be
terminated by either party by giving fifteen (15) days written notice to the
other party. If termination of the Employee by the Corporation (i) is without
cause or (ii) as a result of a Change of Control (as defined below) of the
Corporation, Employee will be entitled to a severance payment equal to fifty
percent (50%) of his annual base salary in effect at the time of the
termination, subject to execution of the Corporation's standard release. For the
purposes of this Agreement, a "Change of Control" will be deemed to have
occurred if:

         (a) Any "person", including a "group" as determined in accordance with
Section 13(d)(3) of the Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder, is or becomes, through one or a series of
related transactions or through one or more intermediaries, the beneficial
owner, directly or indirectly, of securities of Corporation representing 51% or
more of the combined voting power of the Corporation's then outstanding
securities other than J. Ward Hunt or his heirs, The Answer Partnership Ltd.
("TAP") or any corporation or partnership owned or control by TAP or J. Ward
Hunt or his heirs;

         (b) The Corporation is merged or consolidated with another corporation
and as a result of such merger or consolidation less than 50% of the outstanding
voting securities of the surviving or resulting corporation will then be owned
in the aggregate by the former shareholders of the Corporation, other than (i)
any party to such merger or consolidation, or (ii) any affiliates of any such
party;

         (c) A tender offer or exchange offer is made and consummated for the
ownership of securities of Corporation representing 51% or more of the combined
voting power of Corporation's then outstanding voting securities; or


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         (d) The Corporation transfers all or substantially all of the assets of
the Corporation to another corporation or entity that is not wholly owned
corporation of the Corporation.

         7. Restrictive Covenants.

         (a) Nonemployment Agreement. For a period of two years after the
termination or cessation of his employment with the Corporation for any reason
whatsoever, Employee will not, on his own behalf or on behalf of any other
person, partnership, association, corporation or other entity, hire or solicit
or in any manner attempt to influence or induce any employee of the Corporation
or its affiliates to leave the employment of the Corporation or its affiliates,
nor will he use or disclose to any person, partnership, association, corporation
or other entity any information obtained while an employee of the Corporation
concerning the names and addresses of the Corporation's employees.

         (b) Noncompetition Agreement. Employee acknowledges and agrees that the
training he will receive, the experience he will gain while employed and the
information he will acquire regarding the Corporation's and its affiliates'
trade secrets and confidential and proprietary information will enable him to
injure the Corporation if he should compete with the Corporation or its
affiliates in a business that is competitive with the business conducted or to
be conducted by the Corporation or its affiliates. For these reasons, Employee
hereby agrees as follows:

         (i) Without the prior written consent of the Corporation, Employee will
not, during the period of employment with the Corporation, directly or
indirectly, either as an individual, a partner or a joint venturer, or in any
other capacity, (i) invest (other than investments in publicly-owned companies
which constitute not more than 1% of the voting securities of any such company)
or engage in any business that is competitive with that of the Corporation or
its affiliates, (ii) accept employment with or render services to a competitor
of the Corporation or any of its affiliates as a director, officer, agent,
employee or consultant, (iii) contact, solicit or attempt to solicit or accept
business from any (A) customers of the Corporation or its affiliates or (B)
person or entity whose business the Corporation or its affiliates is soliciting,
(iv) contact, solicit or attempt to solicit or accept or direct business that is
competitive with such business being conducted by the Corporation during
Employee's employment under this Agreement from any of the customers of the
Corporation or any of its affiliates, or (v) take any action inconsistent with
the fiduciary relationship of an employee to his employer.

         (ii) Upon any termination or cessation of his employment with the
Corporation for any reason whatsoever, and for a period of two years thereafter,
Employee will not, directly or indirectly, either as an individual, a partner or
a joint venturer, or in any other capacity, within the [United States of
America] (the "Restricted Area"), (i) invest (other than investments in
publicly-owned companies which constitute not more than 1% of the voting
securities of any such company) or engage in any business that is competitive
with that of the Corporation or its affiliates, (ii) accept employment with or
render services to a competitor of the Corporation or its affiliates as a
director, officer, agent, employee or consultant, or (iii) contact, solicit or
attempt to solicit or accept business (A) from any of the customers of the
Corporation or its affiliates as of the date of this Agreement or at the time of
Employee's termination or cessation of employment, or (B) from any person or
entity whose business the Corporation or its affiliates were soliciting as of
such time. For purposes of this Agreement, a competitor specifically includes
persons, firms, sole proprietorships, partnerships, companies, corporations or
other entities that market products and/or perform services in direct or
indirect competition with those marketed and/or performed by the Corporation or
its affiliates within Restricted Area.

         (c) Severability. The parties hereto intend all provisions of this
Section 7 to be enforced to the fullest extent permitted by law. Employee
acknowledges and agrees that the restrictive covenants in


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this Section 7 are reasonable and valid in geographic and temporal scope and in
all other respects. Employee also acknowledges that the enforcement of the
restrictive covenants in this Section 7 will not prevent Employee from finding
other employment. Accordingly, should a court of competent jurisdiction
determine that the scope of any provision of this Section 7 is too broad to be
enforced as written, the parties intend that the court reform the provision to
such narrower scope as it determines to be reasonable and enforceable. In
addition, however, Employee agrees that the noncompetition agreements and
nonemployment agreements set forth above each constitute separate agreements
independently supported by good and adequate consideration and will be severable
from the other provisions of, and will survive, this Agreement. The existence of
any claim or cause of action of Employee against the Corporation, whether
predicated on this Agreement or otherwise, will not constitute a defense to the
enforcement by the Corporation of the covenants and agreements of Employee
contained in the noncompetition, or nonemployment agreements. If any provision
of this Agreement is held to be illegal, invalid or unenforceable under present
or future laws effective during the term hereof, such provision will be fully
severable and this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision never comprised a part of this Agreement; and
the remaining provisions of this Agreement will remain in full force and effect
and will not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as part of this
Agreement, a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.

         8. Death. This Agreement will terminate automatically upon the death of
Employee.

         9. Disability. If at the end of any month Employee is, and has been for
substantially all the normal working days during three or more consecutive
months, unable to perform the duties specified pursuant to this Agreement, due
to mental or physical disability, then the Corporation may terminate Employee's
employment. Any determination of such an inability to perform will be made only
by the Board of Directors of the Corporation with such professional advice as he
may deem appropriate. Any determination of disability made by the Corporation's
Board of Directors will be final and conclusive. Nothing in this Section 9 will
affect Employee's disability insurance contract rights.

         10. Post-Termination Payments. Upon termination pursuant to Sections 7,
8 and 9 of this Agreement, the Corporation will pay Employee or his estate any
base salary earned and unpaid to the date of termination, and any outstanding
funds advanced by the Corporation to or on behalf of Employee will become
immediately due and payable. In the event that any funds are due from Employee
to the Corporation, the Corporation will, upon termination of Employee's
employment, have a right to reduce any payment due to Employee by the sums owed
to the Corporation. In addition, if termination is pursuant to Sections 8 or 9
of this Agreement, then within ninety (90) days after the end of the
Corporation's fiscal year during which Employee's death or commencement of
disability occurred, the Corporation will pay Employee or his estate a portion
of the annual incentive compensation, if any has been earned, as prorated by the
Corporation's Board of Directors, which proration will be final and conclusive.

         11. Prior Agreements. This Agreement terminates, cancels and supersedes
all prior verbal and written understandings between the Corporation and Employee
regarding services covered under this Agreement. Employee will execute the
Corporation's standard Employee Confidentiality Agreement on his first day of
employment.

         12. Complete Agreement. This Agreement embodies the complete, full and
exclusive understanding of the Corporation and Employee with respect to
Employee's employment by the Corporation. Any amendments, additions, or
supplements to or cancellation of this Agreement will be effective and binding
on the Corporation and Employee if in writing and signed by both parties. This


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Agreement will be binding upon the successors and assigns of the parties. No
waiver of a breach hereof will be deemed to constitute a waiver of a future
breach, whether of a similar or a dissimilar nature.

         13. No Assignment. Neither party hereto may transfer or assign its
rights or interests under this Agreement without the other party's written
consent.

         14. Notice. Any written notice given under this Agreement by either
party will be delivered via certified mail, return receipt requested, via
courier or in person directed to the addressee at the address of such addressee
as hereinafter set forth, unless prior written notice of a change of address has
been furnished, in which case such changed address will be used:


                                  AVIDYN, Inc.
                         16980 Dallas Parkway, Suite 120
                               Dallas, Texas 75248

                                Joseph A. Hensley
                             3025 N. Manor Dr. East
                             Phoenix, Arizona, 85014

         Notice will be deemed to be given upon the date when delivery is first
attempted at the address of the addressee.

         15. Governing Law. This Agreement will be construed and enforced in
accordance with the laws of the State of Texas.

         16. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same Agreement.

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




                                         /s/ Joseph A. Hensley
                                         ---------------------------------------
                                         Joseph A. Hensley



                                         AVIDYN, Inc.


                                         By: /s/ J. Ward Hunt
                                             -----------------------------------
                                             J. Ward Hunt, Chairman of the Board


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                     FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

         THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT is made and entered into
as of May 8, 2001, by and between by and between AVIDYN, Inc., a Delaware
corporation (the "Corporation"), and Joseph A. Hensley ("Employee").

                                   WITNESSETH:

         WHEREAS, the Corporation and Employee have entered into that certain
Employment Agreement dated March 5, 2001 (the "Agreement");

         WHEREAS, certain misstatements were made the Agreement and his bonus
for 2001 has been set;

         NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and other good and valuable consideration hereinafter recited,
the Corporation and Employee agree as follows:

         1. BONUS. The first sentence of Section 4(b) shall read in its entirety
as follows: "Employee will receive a bonus for calendar year 2001 of one and
one-half percent (1 1/2%) of the Corporation's operating income for the twelve
months ended December 31, 2001."

         2. OPTIONS. The second sentence of Section 4(c) shall read in its
entirety as follows: "Such options will vest at the rate of twenty percent (20%)
per year for five (5) years except that the vesting will accelerate (if not
already vested) as to 12,500, 25,000, 37,500 and 50,000 options in the event the
trading price reaches $7.19, $8.63, $10.06 and $11.50, respectively, as defined
in the stock option agreement."

         3. BINDING EFFECT. The Agreement is hereby ratified and confirmed and
shall remain and continue in full force and effect in accordance with its
original terms and provisions, except as specifically amended hereby.

         4. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one document.

         5. CONFLICT OF LAWS. The laws of the State of Texas shall govern this
Amendment without giving effect to its conflict of law provisions.

         IN WITNESS WHEREOF, the parties have executed this First Amendment to
Employment Agreement as of the date first written above.

                                        AVIDYN, Inc.


                                        By: /s/ J. Ward Hunt
                                            ------------------------------------
                                            J. Ward Hunt, Chairman of the Board

                                            /s/ Joseph A. Hensley
                                            ------------------------------------
                                            Joseph A. Hensley

<PAGE>


                                SECOND AMENDMENT
                             TO EMPLOYMENT AGREEMENT


         THIS SECOND AMENDMENT TO EMPLOYMENT AGREEMENT is made and entered into
as of December 11, 2001, by and between by and between AVIDYN, Inc., a Delaware
corporation (the "Corporation"), and Joseph A. Hensley ("Employee").

                                   WITNESSETH:


         WHEREAS, the Corporation and Employee have entered into that certain
Employment Agreement dated March 5, 2001 and amended as of May 8, 2001 (the
"Agreement");

         NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and other good and valuable consideration hereinafter recited,
the Corporation and Employee agree as follows:

         1. OPTIONS. Section 4(c) of the Agreement shall be deleted in its
entirety.

         2. BINDING EFFECT. The Agreement is hereby ratified and confirmed and
shall remain and continue in full force and effect in accordance with its
original terms and provisions, except as specifically amended hereby.

         3. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one document.

         4. CONFLICT OF LAWS. The laws of the State of Texas shall govern this
Amendment without giving effect to its conflict of law provisions.

         IN WITNESS WHEREOF, the parties have executed this Second Amendment to
Employment Agreement as of the date first written above.

                                         AVIDYN, Inc.


                                         By: /s/ J. Ward Hunt
                                             -----------------------------------
                                             J. Ward Hunt, Chairman of the Board



                                             /s/ Joseph A. Hensley
                                             -----------------------------------
                                             Joseph A. Hensley