Document:

<PAGE>

                                                                   EXHIBIT 10.45

                             EMPLOYMENT AGREEMENT
                              (JAMES SPRINGFIELD)

          THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
as of the 29th day of August, 2000 (the "Effective Date"), by and between
APPLIED VOICE RECOGNITION, INC., a Delaware corporation doing business as E-
DOCS.NET ("Employer"), and JAMES SPRINGFIELD, an individual residing in Missouri
City, Fort Bend County, Texas ("Executive").

                                 W I T N E S S E T H:

  WHEREAS, Employer and Executive desire to enter into an agreement regarding
Executive's employment with Employer pursuant to the terms and conditions set
forth herein;

  NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties covenant and agree as follows:

  1.  EMPLOYMENT.  Employer hereby employs Executive and Executive hereby
accepts employment with Employer on the terms and conditions set forth in this
Agreement.

  2.  TERM OF EMPLOYMENT.  The term of Executive's employment hereunder (the
"Term") shall commence as of October 2, 2000 (the "Commencement Date") and shall
continue (subject to extension and termination by either Employer or Executive,
all as hereinafter provided) for an initial term (the "Initial Term") expiring
on December 31, 2003 (the "Expiration Date").  The Expiration Date shall, unless
terminated by Employer or Executive, be automatically extended for successive
one (1)-year periods following the expiration of the Initial Term.  If Employer
desires to terminate Executive's employment under this Agreement at the end of
the Initial Term or at the end of any succeeding one (1)-year term, Employer
shall give written notice of such desire to Executive at least ninety (90) days
prior to the expiration of the Initial Term or any succeeding one (1)-year term.
If Executive desires to terminate Executive's employment under this Agreement at
the end of the Initial Term or at the end of any succeeding one (1)-year term,
Executive shall give written notice of such desire to Employer at least ninety
(90) days prior to the expiration of the Initial Term or any succeeding one (1)-
year term.  At the expiration of the then-existing term, Employer shall have no
further obligation to Executive other than payment of any earned and unpaid Base
Salary (as hereafter defined) under Section 3.a. and any earned and unpaid Bonus
(as hereafter defined) under Section 3.b., and Executive shall have no further
obligation to Employer except as set forth in Sections 8, 9, 10 and 11.

  3.  COMPENSATION AND OTHER BENEFITS.

  a.  As compensation for all services rendered by Executive in performance of
Executive's duties or obligations under this Agreement, Employer shall pay
Executive the following base salary (the "Base Salary"):

                                       1
<PAGE>

     (1)  for the period from the Commencement Date until August 31, 2001, a
          monthly base salary of FOURTEEN THOUSAND ONE HUNDRED SIXTY-SIX AND
          67/100 DOLLARS ($14,166.67);

     (2)  for the period from September 1, 2001, until August 31, 2002, a
          monthly base salary of FIFTEEN THOUSAND AND NO/100 DOLLARS
          ($15,000.00); and

     (3)  for the period from September 1, 2003, until the Expiration Date, a
          monthly base salary of SIXTEEN THOUSAND SIX HUNDRED SIXTY-SIX AND
          67/100 DOLLARS ($16,666.67).

Executive's Base Salary shall be payable in equal semi-monthly installments or
in the manner and on the timetable which Employer's payroll is customarily
handled or at such intervals as Employer and Executive may hereafter agree to
from time to time.

          b. In addition to receiving the Base Salary provided for in Section
3.a., (i) for the annual period commencing January 1, 2001 through December 31,
2001, Executive shall be entitled to a bonus of up to one hundred percent (100%)
of Executive's Base Salary paid during such one (1) year period, and (ii) for
each six (6) month period commencing January 1, 2002 through the Expiration
Date, Executive shall be entitled to a bonus of up to one hundred percent (100%)
of Executive's Base Salary during such six (6) month period (in each case, such
bonus being referred to herein as the "Bonus"); provided, however, Executive
shall be entitled to such Bonus if, and only if, Executive has met the
performance criteria set by the Compensation Committee of the Board of Directors
of Employer (the "Compensation Committee") for the applicable period. Executive
acknowledges that the performance criteria for Executive's Bonus to be earned
for (i) the period between January 1, 2001 and December 31, 2001, and (ii) each
six (6) month period after December 31, 2001, shall be set on or before the
beginning of each applicable bonus period, and Executive shall have the
opportunity to meet with and discuss such criteria with the Compensation
Committee prior to the finalization of such criteria. Upon completion of the
criteria for the applicable period, such criteria shall be communicated to
Executive in writing. If Executive successfully meets the performance criteria
established by Employer (in the reasonable discretion of Employer), Employer
shall pay Executive the earned Bonus amount within thirty (30) days after the
end of such applicable period.

          c. Executive shall be entitled to be reimbursed by Employer for all
reasonable and necessary expenses incurred by Executive in carrying out
Executive's duties under this Agreement in accordance with Employer's standard
policies regarding such reimbursements.

          d. Beginning with the Commencement Date, Executive shall be entitled
during the Term, upon satisfaction of all eligibility requirements, if any, to
participate in all health, dental, disability, life insurance and other benefit
programs now or hereafter established by Employer which cover substantially all
other of Employer's employees and shall receive such other benefits as may be
approved from time to time by Employer.

          e. During each twelve (12) month period of this Agreement, Executive
shall be entitled to four (4) weeks of paid vacation. In addition, Executive
shall be entitled to receive paid holidays as enjoyed by all other employees of
Employer.

                                       2
<PAGE>

          f. Executive shall be entitled to a monthly automobile allowance of
$1,000.

          g. The Employer shall (i) obtain and maintain, during the Term hereof,
officers and directors liability insurance covering Executive in the amount of
$5,000,000 containing customary terms and conditions; and (ii) to the extent
permitted under Employer's articles of incorporation and/or bylaws, indemnify
and hold harmless the Executive from and against all costs (including attorneys
fees and costs of suit), losses, liabilities or cause of action arising out of
or relating to his services as Vice Chairman, Chief Executive Officer, President
and director of the Employer.

          4.   DUTIES.

          a. Executive is employed to act as Chief Executive Officer and
President of Employer, and to perform the duties and functions that are normal
and customary to such position.

          b. Executive agrees that during the period of employment, Executive
shall devote full-time efforts to Executive's duties as an employee of Employer
and Executive shall use Executive's best efforts to perform the duties of
Executive's position in an efficient and competent manner and shall use
Executive's best efforts to promote the interests of Employer and any affiliated
companies.

          c. During the period of employment, Executive agrees not to (i) solely
or jointly with others undertake or join any planning for or organization of any
business activity competitive with the business activities of Employer, and (ii)
directly or indirectly, engage or participate in any other activities in
conflict with the best interests of Employer.

          d. Executive agrees that during the period of employment Executive
shall refer to Employer all opportunities to which Executive might become
exposed in carrying out Executive's duties and responsibilities hereunder that
relate to the Employer's business.

          e. So long as Executive is the Chief Executive Officer and President
of Employer, Employer shall utilize Employer's best efforts to cause Executive
to be elected as (i) a member of, and (ii) the Vice Chairman of, the Board of
Directors of Employer. Executive's election as a member of, and as the Vice
Chairman of, the Board of Directors of Employer shall be undertaken at the first
meeting of the Board of Directors of Employer that is held after the Effective
Date, which meeting shall be held no later than [________], 2000.

          5.   STOCK OPTION PLAN.  As a further inducement to Executive to
accept employment upon the terms set forth herein and in consideration of
Executive's execution of this Agreement, Executive shall be granted options
entitling Executive to purchase 3,600,000 shares of Employer's common stock, par
value $0.001 (the "Options"), pursuant to, and Executive shall be entitled to
otherwise participate in, that certain Applied Voice Recognition, Inc. 1997
Incentive Plan, as amended from time to time (the "Option Plan").  Executive
acknowledges that, as of the Effective Date, Employer has an insufficient number
of authorized shares of common stock of Employer reserved pursuant to the Option
Plan to permit Executive to exercise any of the Options provided for in this
Agreement.  In that regard, Executive covenants that with respect to the
Options, which will be granted to Executive as of the Effective Date, Executive
shall not exercise any of the Options until the

                                       3
<PAGE>

number of authorized shares of common stock of Employer has been increased in
accordance with its Certificate of Incorporation or a sufficient number of
authorized shares otherwise becomes available. To the maximum extent permitted
by law, the Options shall be granted as incentive stock options within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended
("ISOs"). The granting instrument(s) for the Options will provide, in addition
to other terms set forth therein, (i) that the purchase price under the Options
shall be $0.31 per share in the case of Options that are not ISOs and the fair
market value of the common stock subject to the Options in the case of Options
that are ISOs, (ii) that one-twelfth of the Options (being options to purchase
300,000 shares) shall vest and become exercisable on the last day of each of the
first twelve (12) calendar quarters during the Initial Term, (iii) in the event
of Executive's termination of employment with the Employer by the Executive for
Good Reason (as defined in Section 6.f.) or by the Employer without Cause (as
defined in Section 6.e.), the Executive's unvested Options for the calendar year
during which such termination occurs shall become immediately vested and
exercisable in full and all remaining unvested Options relating to a period
after the calendar year during which such termination occurs will be forfeited,
(iv) in the event of the Executive's termination of employment by the Employer
for Cause, only those Options that are not then exercisable under the vesting
schedule specified above will be forfeited, and (v) upon the occurrence of a
Change in Control (as defined in Section 14) the Executive's Options shall
become immediately vested and exercisable in full. References to "quarters"
contained herein shall mean the three (3) months ending each March 31, June 30,
September 30 and December 31.

          6.   TERMINATION OF EMPLOYMENT.  Executive's employment and this
Agreement shall terminate upon the earliest to occur of any of the following
events (the actual date of such termination being referred to herein as the
"Termination Date"):

          a. The expiration of the Agreement pursuant to Section 2.

          b. Employer may terminate Executive's employment and this Agreement
for Cause (as defined below), provided, however, that Employer may not terminate
Executive's employment for Cause unless:

                    (1) No fewer than sixty (60) days prior to the date of
          termination (the actual date of such termination being referred to
          herein as "Date of Termination"), the Employer provides Executive with
          written notice (the "Notice of Consideration") of Employer's intent to
          consider termination of Executive's employment for Cause, which notice
          shall include a detailed description of the specific reasons which
          form the basis for such consideration, and shall specify a date and
          time for Executive to appear before the Company's Board of Directors
          to present arguments and evidence on Executive's own behalf with
          respect to the reasons for consideration identified in the Notice of
          Consideration (which date shall not be less than thirty (30) days
          after the date the Notice of Consideration is provided by Employer to
          Executive) (the "Consideration Date");

                    (2) Executive shall have the opportunity to appear before
          the Company's Board of Directors on the Consideration Date, with or
          without legal representation, at Executive's election, to present such
          arguments and evidence on Executive's own behalf with respect to such
          reasons for consideration; and

                                       4
<PAGE>

                    (3) Following the presentation to the Company's Board of
          Directors as provided in Section 6.b.(2) above or Executive's failure
          to appear before the Board of Directors on the Consideration Date,
          Executive may be terminated for Cause only if (x) the Company's Board
          of Directors, by the affirmative vote of two-thirds (2/3) of the
          members of a quorum of the Board of Directors present at such meeting
          (excluding Executive if Executive is then a member of the Board of
          Directors, and any other member of the Board of Directors reasonably
          believed by the Board of Directors to be involved in the events
          leading the Board of Directors to terminate Executive for Cause),
          determines that the actions or inactions of Executive specified in the
          Notice of Termination occurred, that such actions or inactions
          constitute Cause; and (y) the Company's Board of Directors provides
          Executive with a written determination (a "Notice of Termination for
          Cause") setting forth in specific detail the basis of such Termination
          of Employment, which Notice of Termination for Cause shall be
          consistent with the reasons set forth in the Notice of Consideration.
          Unless the Employer establishes both (i) its full compliance with the
          substantive and procedural requirements of this Section 6.b. prior to
          a termination of employment for Cause, and (ii) that Executive's
          action or inaction specified in the Notice of Termination for Cause
          did occur and constituted Cause, any termination of employment shall
          be deemed a termination by Employer without Cause for all purposes of
          this Agreement.

                    (4) After providing a Notice of Consideration pursuant to
          the provisions of Section 6.b.(1), the Employer's Board of Directors
          may, by the affirmative vote of two-thirds (2/3) of the members of a
          quorum of the Board of Directors present at such meeting (excluding
          for this purpose Executive if he is a member of the Board of
          Directors, and any other member of the Board of Directors reasonably
          believed by the Board of Directors to be involved in the events
          issuing the Notice of Consideration), suspend Executive with pay until
          a final determination pursuant to this Section 6.b. has been made.

                    (5) After receiving a Notice of Consideration pursuant to
          the provisions of Section 6.b.(1), Executive may terminate this
          Agreement without Good Reason with thirty (30) days prior written
          notice.

                    (6) If Executive's employment is terminated under this
          Section 6.b., Executive shall be entitled to receive accrued but
          unpaid compensation set forth in Section 3.a. and Section 3.b. hereof
          through the Termination Date and those benefits under Section 3.d.
          which are required under the Employee Income Retirement Security Act
          of 1974, as amended ("ERISA"), or other applicable laws.

          c.  In the event of Executive's death or disability of a permanent
nature rendering the Executive unable to perform Executive's duties hereunder
for a period of not less than ninety (90) days during any one hundred eighty
(180) consecutive day period during the Term hereof, Employer shall pay to the
Executive or the estate of the Executive, as applicable, in the year of death or
disability, compensation which would otherwise be payable to the Executive
pursuant to Section 3 hereof up to (i) the end of the one hundred eighty (180)
day period

                                       5
<PAGE>

following death, or (ii) the expiration of the one hundred eighty (180) day
period referred to above during which time the Executive was unable to perform
Executive's duties hereunder to the extent described above.

                    (1) The Term of employment shall end upon the Executive's
          death or the expiration of such one hundred eighty (180) day period
          and a determination by the Employer's Board of Directors of Employer
          that there is no reasonable accommodation (within the meaning of the
          Americans with Disabilities Act) which would enable Executive to
          perform the essential functions of Executive's position under this
          Agreement despite the existence of such disability.

                    (2) For purposes of this Agreement, Executive shall be
          deemed to be unable to perform Executive's duties hereunder when the
          Board of Directors of Employer, upon the advice of a qualified
          physician mutually agreeable to the Executive (or, if appropriate,
          Executive's representative) and the Board of Directors of Employer,
          shall have determined that Executive has become physically or mentally
          incapable (excluding infrequent and temporary absences due to ordinary
          illness) of performing Executive's duties under this Agreement.

                    (3) Before making any termination decision pursuant to this
          Section 6.c., the Board of Directors of Employer shall determine
          whether there is any reasonable accommodation (within the meaning of
          the Americans with Disabilities Act) which would enable Executive to
          perform the essential functions of Executive's position under this
          Agreement despite the existence of any such disability.  If such a
          reasonable accommodation is possible, Employer shall make that
          accommodation and shall not terminate Executive's employment hereunder
          based on such disability.

          d. The Employer may terminate the Executive's employment without Cause
with thirty (30) days prior written notice and the Executive may terminate
Executive's employment for Good Reason (as hereinafter defined) with thirty (30)
days prior written notice. In either event, the Employer shall:

                    (1) If such Termination Date occurs on or before December
          31, 2001, Employer shall continue to provide Executive the then
          applicable Base Salary for six (6) months following such Termination
          Date; if such Termination Date occurs after December 31, 2001,
          Employer shall continue to provide Executive the then applicable Base
          Salary for the shorter of (i) twelve (12) months following such
          Termination Date, or (ii) the period between the Termination Date and
          the Expiration Date, provided, however, that in any event Employer
          shall continue to provide Executive the then applicable Base Salary
          for a minimum of six (6) months following such Termination Date (the
          actual term during which Executive is to receive such Base Salary
          after the Termination Date being referred to as the "Severance Term").

                    (2) Pay the Executive any accrued but unpaid, as of the
          Termination Date, compensation under Section 3.a. and Section 3.b.

                                       6
<PAGE>

                    (3) Pay for Executive's COBRA benefits for the lesser of the
          Severance Term or the maximum period in which Executive is eligible to
          receive COBRA; however, in no event shall Employer be required to pay
          in excess of $500 per month toward such COBRA benefits.

                    (4) If Executive is terminated without Cause or for Good
          Reason and a Change in Control occurs as described in Section 14
          within six (6) months after the termination date, the benefits under
          Section 14 shall apply.

               e.   As used in this Agreement, "Cause" shall mean:

                    (1) Any embezzlement or wrongful diversion of funds of
          Employer or any affiliate of Employer by Executive;

                    (2) Gross malfeasance by Executive in the conduct of
          Executive's duties;

                    (3) Material breach of this Agreement and the failure to
          cure such breach; or

                    (4) Gross neglect by Executive in carrying out Executive's
          duties.

               f.   As used in this Agreement, "Good Reason" shall mean:

                    (1) The failure of Executive to be elected or reelected or
          to be appointed or reappointed, without cause, to the Board of
          Directors of the Employer, to the position of Vice Chairman of the
          Board of Directors, and to the offices of Chief Executive Officer and
          President of the Employer;

                    (2) A material change by the Employer of the Executive's
          function, duties or responsibilities that would cause the Executive's
          position with the Employer to become of less dignity, responsibility,
          importance or scope from the position and attributes thereof described
          in Section 4.a.; or

                    (3) Any other material breach of this Agreement by the
          Employer that remains uncured for a period of at least thirty (30)
          days following written notice from Executive to Employee of such
          alleged breach, which written notice describes in reasonable detail
          the nature of such alleged breach.

          7.   CERTAIN ADDITIONAL PAYMENTS BY EMPLOYER.

               a.   Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payment or distribution by the
Employer to or for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (a "Payment"), would be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended (the "Code") or any
interest or penalties with respect to such excise tax (such excise tax, together
with any such interest and

                                       7
<PAGE>

penalties, are hereinafter collectively referred to as the ("Excise Tax"), then
the Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including any Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.

          b. Subject to the provisions of this Section 7, all determinations
required to be made hereunder, including whether a Gross-Up Payment is required
and the amount of such Gross-Up Payment, shall be made at the sole expense of
Employer by the public accounting firm which then audits the financial
statements of the Employer (the "Accounting Firm"), which Accounting Firm shall
provide detailed supporting calculations both to the Employer and the Executive
within 15 business days of the date of termination of the Executive's employment
under this Agreement, if applicable, or such earlier time as is requested by the
Employer. If the Accounting Firm determines that no Excise Tax is payable by the
Executive, the Accounting Firm shall furnish the Executive with an opinion that
Executive has substantial authority not to report any Excise Tax on Executive's
federal income tax return. Any determination by the Accounting Firm shall be
binding upon the Employer and the Executive.

          c. As a result of the uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments will be determined not to be
necessary when such payments will in fact later be determined to have been
necessary (an "Underpayment"). If the Employer exhausts its remedies pursuant
hereto and the Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Employer to or
for the benefit of the Executive.

          d. The Executive shall notify the Employer in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Employer of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten (10) business days after the Executive
knows of such claim and shall apprise the Employer of the nature of such claim,
in reasonable detail, and the date on which such claim is requested to be paid.
The Executive shall not pay such claim prior to the expiration of the 30-day
period following the date on which Executive gives such notice to the Employer
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Employer notifies the Executive in writing
prior to the expiration of such period that Employer desires to contest such
claim, the Executive shall:

                    (1) Give the Employer any information reasonably requested
          by the Employer relating to such claim,

                    (2) Take such action in connection with contesting such
          claim as the Employer shall reasonably request in writing from time to
          time, including (without limitation) accepting legal representation
          with respect to such claim by an attorney reasonably selected by the
          Employer,

                    (3) Cooperate with the Employer in good faith to contest
          effectively such claim, and

                                       8
<PAGE>

                    (4) Permit the Employer to participate in any proceedings
          relating to such claim;

provided that the Employer shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax, including interest and penalties with
respect thereto, imposed as a result of such representation and payment of costs
and expenses.

          e. Without limitation on the foregoing provisions hereof, the Employer
shall control all proceedings taken in connection with such contest and, at
Employer's sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at Employer's sole option, either direct the Executive to
pay the tax claimed and sue for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest to a determination
before an administrative tribunal, in a court of initial jurisdiction and in one
or more appellate courts, as the Employer shall determine; provided that if the
Employer directs the Executive to pay such claim and sue for a refund, the
Employer shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax, including interest or
penalties with respect thereto, imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of taxes
for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Employer's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.

          f. If, after the receipt by the Executive of an amount advanced by the
Employer to or on behalf of Executive pursuant to this Section 7, the Executive
becomes entitled to receive any refund with respect to such claim, the Executive
shall (subject to the Employer then having complied with the requirements of
this Section 7) promptly pay to the Employer the amount of such refund (together
with any interest paid or credited thereon after taxes applicable thereto).

          g. If, after the receipt by the Executive of an amount advanced by the
Employer to or on behalf of Executive pursuant to this Section 7, a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Employer does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of thirty (30) days after such determination, then the amount advanced by
Employer to Executive pursuant to this Section 7 shall be forgiven and shall not
be required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid.

                                       9
<PAGE>

          8.   INVENTIONS AND CREATIONS BELONG TO EMPLOYER.

               a. Any and all inventions, discoveries, improvements or creations
(collectively, "Creations") which Executive has conceived or made or may
conceive or make during the period of employment in any way, directly or
indirectly, connected with Employer's Business shall be the sole and exclusive
property of Employer. Executive agrees that all copyrightable works created by
Executive or under Employer's direction in connection with Employer's Business
are "works made for hire" and shall be the sole and complete property of
Employer and that any and all copyrights to such works shall belong to Employer.
To the extent any of the works described in the preceding sentence are not
deemed to be "works made for hire," Executive hereby assigns all proprietary
rights, including copyright, in these works to Employer without further
compensation. For purposes of this Agreement, the "Employer's Business" shall
mean:

                  (1) the operation by Employer's wholly-owned subsidiary,
e-Docs Physician Network, Inc. ("EPN") of a World Wide Web site located at
www.epn.md, which Website may be changed by EPN from time to time (the "EPN
Website"), on which EPN Website EPN provides (i) an internet browser-based,
secure medical document handling system that captures, organizes and retrieves
medical transcription files and handwritten patient notes, (ii) transcription
services, (iii) pharmaceutical information and sampling services, and (iv) such
additional medical, information, education, travel, financial and other
products, services and benefits as may be offered by EPN from time to time in
EPN's sole discretion to physicians and other medical professionals via the EPN
Website, all of which document handling system, services and benefits will be
more particularly described from time to time under on the EPN Website;

                  (2) the transcription of medical records by its wholly-owned
subsidiary, e-Docs Health Care Information Services, Inc.; and

                  (3) all other business opportunities and activities then being
pursued by Employer at the time of the termination or expiration of the Term.

               b. Executive further agrees to (i) disclose promptly to Employer
all such Creations which Executive has made or may make solely, jointly or
commonly with others during the period of employment to the extent connected
with Employer's Business, (ii) assign all such Creations to Employer, and (iii)
execute and sign any and all applications, assignments or other instruments
which Employer may deem necessary in order to enable Employer, at Employer's
expense, to apply for, prosecute and obtain copyrights, patents or other
proprietary rights in the United States and foreign countries or in order to
transfer to Employer all right, title and interest in said Creations.

          9.   CONFIDENTIALITY; OWNERSHIP OF INFORMATION.  Employer promises
that Employer will, during the Term, provide Executive with access to such
Confidential Information (as defined in Section 9.a.) owned by Employer and that
is used in the operation of Employer's Business as reasonably necessary to allow
Executive to perform Executive's obligations hereunder.  Executive acknowledges
that Employer has agreed to provide Executive with a definite term of employment
and with access to such Confidential Information of Employer during that term of
employment.

               a. DEFINITION. For purposes of this Agreement, "Confidential
Information" means any and all information relating directly or indirectly to
Employer that is not generally ascertainable from public or published
information or trade sources and that represents

                                      10
<PAGE>

proprietary information to Employer, excluding, however, (i) Executives'
business contacts, (ii) information already known to Executive prior to
Executive's employment with Employer, and (iii) information required to be
divulged in any legal or administrative proceeding in which Executive is
involved. Confidential Information shall consist of, for example, and not
intending to be inclusive, (A) software (source and object codes), algorithms,
computer processing systems, techniques, methodologies, formulae, processes,
compilations of information, drawings, proposals, job notes, reports, records
and specifications, and (B) information concerning any matters relating to
Employer's Business, any of its customers, prospective customers, customer
contacts, licenses, the prices it obtains or has obtained for the licensing of
its software products and services, or any other information concerning
Employer's Business and Employer's goodwill.

          b. NO DISCLOSURE. During the Term and at all times thereafter,
Executive shall not disclose or use in any manner, directly or indirectly, and
shall use Executive's best efforts and shall take all reasonable precautions to
prevent the disclosure of, any such trade secrets or other Confidential
Information, except to the extent required in the performance of Executive's
duties or obligations to Employer hereunder or by express prior written consent
of a duly authorized officer or director of Employer (other than Executive).

          c. OWNERSHIP OF INFORMATION. Such Confidential Information is and
shall remain the sole and exclusive property and proprietary information of
Employer or Employer's customers, as the case may be, and is disclosed in
confidence by Employer or permitted to be acquired from such customers in
reliance on Executive's agreement to maintain such Confidential Information in
confidence and not to use or disclose such Confidential Information to any other
person except in furtherance of Employer's Business.

          d. RETURN OF MATERIAL. Upon the expiration or earlier termination of
this Agreement for any reason, Executive shall immediately turn over to Employer
all documents, disks or other magnetic media, or other material in Executive's
possession or under Executive's control that (i) may contain or be derived from
Creations or Confidential Information, or (ii) are connected with or derived
from Executive's services to Employer. Executive shall not retain any
Confidential Information in any form (e.g., computer hard drive, microfilm,
etc.) upon the expiration or earlier termination of this Agreement.

          10.  NONCOMPETE; WORKING FOR COMPETITOR.  In consideration of
Executive's employment by Employer, Executive will not, at any time during the
Term or, if Executive's employment is terminated pursuant to the provisions of
Section 6 (other than Section 6.a.), at any time during the Severance Term,
directly or indirectly, within the United States, for Executive's own account or
on behalf of any direct competitors of Employer, engage in any business or
transaction the same or similar to Employer's Business (whether as an employee,
employer, independent contractor, consultant, agent, principal, partner,
stockholder, corporate officer, director or in any other individual or
representative capacity), without the prior written consent of Employer, which
consent may be withheld by Employer in Employer's sole and absolute discretion.

          11.  NON-SOLICITATION OF EMPLOYEES.  During the Term and for a period
of twenty-four (24) months after the date of termination of employment,
Executive will not in any way, directly or indirectly (i) induce or attempt to
induce any employee of Employer to quit employment with Employer; (ii) otherwise
interfere with or disrupt Employer's relationship with its employees; (iii)
solicit, entice or hire away any employee of Employer; or (iv) hire or engage
any employee of

                                      11
<PAGE>

Employer or any former employee of Employer whose employment with Employer
ceased less than one year before the date of such hiring or engagement.
Executive acknowledges that any attempt on the part of Executive to induce
others to leave Employer's employ, or any effort by Executive to interfere with
Employer's relationship with its other employees would be harmful and damaging
to Employer.

          12.  EXECUTIVE'S ACKNOWLEDGEMENT.  It is the express intention of
Executive and Employer to comply with sections 15.50 et seq. of the Texas
Business and Commerce Code in effect as of the date of execution hereof.
Executive stipulates that the provisions of this Agreement are not oppressive or
overly burdensome to Executive and will not prevent Executive from earning an
income following termination of this Agreement.  Executive warrants and
represents that:

          a. Executive is familiar with non-compete and non-solicitation
covenants;

          b. Executive has discussed or acknowledges the opportunity to discuss
the provisions of the non-compete and non-solicitation covenants contained
herein with Executive's attorney and has concluded that such provisions
(including, without limitation, the right to equitable relief and the length of
time provided for herein) are fair, reasonable and just under the circumstances;

          c. Executive is fully aware of the obligations, limitations and
liabilities included in the non-compete and non-solicitation covenants contained
in this Agreement;

          d. The scope of activities covered hereby are substantially similar to
those activities to be performed by Executive under this Agreement;

          e. The non-compete and non-solicitation periods in Section 10 and
Section 11 are reasonable restrictions, giving consideration to the following
factors: (1) Executive and Employer reasonably anticipate that this Agreement,
although terminable under certain provisions, will continue in effect for
sufficient duration to allow Executive to attain superior bargaining strength
and an ability for unfair competition with respect to the customers covered
hereby; (2) the duration of such non-compete and non-solicitation periods is a
reasonably necessary period to allow Employer to restore its position of
equivalent bargaining strength and fair competition with respect to those
customers covered hereby; and (3) historically, employees of all types have
remained with Employer for a duration of longer than the duration of such non-
compete and non-solicitation periods; and

          f. The limitations contained in this Agreement with respect to
geographic area, duration and scope of activity are reasonable; however, if any
court shall determine that the geographic area, duration or scope of activity of
any restriction contained in this Agreement is unenforceable, it is the
intention of the parties that such restrictive covenants set forth herein shall
not thereby be terminated, but shall be deemed amended to the extent required to
render such covenants valid and enforceable.

          13.  REMEDIES; INJUNCTION.  In the event of a breach or threatened
breach by Executive of any of the provisions of this Agreement, Executive agrees
that Employer, in addition to and not in limitation of any other rights,
remedies or damages available to Employer at law or in equity, shall be entitled
to a permanent injunction without the necessity of proving actual monetary loss
in order to prevent or restrain any such breach by Executive or by Executive's
partners, agents, representatives, servants, employees and/or any and all
persons directly or indirectly acting for or with

                                      12
<PAGE>

Executive. It is expressly understood between the parties that this injunctive
or other equitable relief shall not be Employer's exclusive remedy for any
breach of this Agreement, and Employer shall be entitled to seek any other
relief or remedy which it may have by contract, statute, law or otherwise for
any breach hereof.

          14.  CHANGE IN CONTROL.  A "Change in Control" shall be deemed to have
occurred if (i) in the context of a single event or series of related events,
more than 50% of the voting power of the Employer's outstanding securities
entitled to vote in elections of directors shall be acquired by any person (as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended) other than by any person which includes (A) Executive, or (B)
any shareholders of the Employer who own at least ten percent (10%) of
Employer's outstanding securities as of the Effective Date hereof, or (ii) as
the result of a tender offer, merger, consolidation or sale of assets, or any
combination of such transactions, the persons who were directors of Employer
immediately before the transaction shall cease to constitute a majority of the
Board of Directors of Employer or any successor to Employer.  In the event of a
Change in Control and any Change in Control Qualifying Event (as herein defined)
shall occur, Executive shall be permitted to terminate his employment within six
(6) months of such Change in Control Qualifying Event and notwithstanding such
termination, Executive shall be entitled to receive his Base Salary for the
remaining Term of this Agreement, which Base Salary shall be paid in accordance
with the terms of Section 3.a.  In addition, any options granted to Executive in
accordance with Section 5 shall immediately vest as of such termination date;
however, Executive shall not be eligible to receive the Bonus for any quarter
beyond the quarter in which Executive's employment is terminated.  For purposes
hereof, a Change in Control Qualifying Event shall include (i) a significant
diminution, without mutual agreement of the parties, in the nature and scope of
Executive's authority, power, functions or duties, (ii) Employer assigns to
Executive, without mutual agreement of the parties, substantial additional
duties or responsibilities which are inconsistent with the duties of Executive
under this Agreement, or (iii) Employer transfers Executive away from the
greater Houston, Texas metropolitan area.  Employer and Executive agree that if
(A) Employer does a spin-off initial public offering of e-Docs Health Care
Information Services, Inc. or EPN, or (B) any events occur that would otherwise
constitute a Change of Control for purposes of this Section 14, and as a result
of such transaction none of the circumstances described in subsections (i), (ii)
or (iii) above apply, such transaction will not be a Change in Control for
purposes of this Section 14, so long as replacement stock options reasonably
equivalent in value to the options granted to Executive in Employer are granted
to Executive in the spun-off or successor company on terms and conditions
mutually and reasonably acceptable to Employer and Executive, and equivalent
salary, benefits and responsibilities are granted to Executive.

          15.  ARBITRATION.  The parties agree that all disputes or questions
arising in connection with this Agreement and/or the termination of Executive's
employment hereunder shall be settled by a single arbitrator pursuant to the
rules of the American Arbitration Association in the City of Houston, Texas, and
the award of the arbitrators shall be final, non-appealable, conclusive and
enforceable in a court of competent jurisdiction; provided, however,
notwithstanding the foregoing, in no event shall any dispute, claim or
disagreement arising under Sections 8, 9, 10 and 11 of this Agreement that
requires injunctive or other equitable relief be required to be submitted to
arbitration pursuant to this provision or otherwise.

          16.  EXPENSES.  The Employer shall promptly pay or reimburse Executive
for all costs and expenses, including, without limitation, court costs and
attorneys' fees, incurred by Executive as a result of any claim, action or
proceeding (including, without limitation, a claim, action or

                                      13
<PAGE>

proceeding by Executive against the Employer) arising out of, or challenging the
validity or enforceability of, this Agreement or any provision hereof. In
addition, Employer shall pay or reimburse Executive up to $4,000 toward
Executive's actual legal expenses incurred by Executive in connection with
reviewing and negotiating this Agreement.

          17.  NOTICES.  Any notice, demand or request which may be permitted,
required or desired to be given in connection therewith shall be given in
writing and directed to Employer and Executive as follows:

     If to Employer, at:         Applied Voice Recognition, Inc.
                                 1770 St. James Place, Suite 116
                                 Houston, Texas 77056
                                 Attention:  Chairman of the Board
                                 Facsimile No.:  (713) 621-7059

     with a copy to:             Boyar & Miller
                                 4265 San Felipe, Suite 1200
                                 Houston, Texas  77027
                                 Attention:  J. William Boyar, Esq.
                                 Facsimile No.:  (713) 552-1758

     or, if to Executive, at:    Mr. James Springfield
                                 4311 Dockside Court
                                 Missouri City, Texas 77479

     with a copy to:             Fulbright & Jaworski, L.L.P.
                                 1301 McKinney, Suite 5100
                                 Houston, Texas  77010-3095
                                 Attention:  Robert F. Corrigan, Esq.
                                 Facsimile No.:  (713) 651-5246

Notices shall be deemed properly delivered and received when and if either:  (i)
personally delivered; (ii) delivered by nationally-recognized overnight courier;
(iii) when deposited in the U.S. Mail, by registered or certified mail, return
receipt requested, postage prepaid; or (iv) sent via facsimile transmission with
confirmation mailed by regular U.S. mail.  Any party may change its notice
address for purposes hereof to any address within the continental United States
by giving written notice of such change to the other parties hereto at least
fifteen days prior to the intended effective date of such change.

          18.  SEVERABILITY.  If any provision of this Agreement is rendered or
declared illegal or unenforceable by reason of any existing or subsequently
enacted legislation or by decree of a court of last resort, Employer and
Executive shall promptly meet and negotiate substitute provisions for those
rendered or declared illegal or unenforceable, but all the remaining provisions
of this Agreement shall remain in full force and effect.

          19.  ASSIGNMENT.  This Agreement may not be assigned by any party
without the prior written consent of the other parties.

                                      14
<PAGE>

          20.  BINDING AGREEMENT.  This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, and their respective legal
representatives, heirs, successors and permitted assigns.

          21.  GOVERNING LAW.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas.

          22.  AGREEMENT READ, UNDERSTOOD AND FAIR.  Executive and Employer have
carefully read and considered all provisions of this Agreement and agree that
all of the restrictions set forth are fair and reasonable and are reasonably
required for the protection of their respective interests.

          23.  SUBJECT TO BOARD APPROVAL.  This Agreement is subject to approval
of the Board of Directors of Employer.  In connection therewith, Employer agrees
to submit a unanimous written consent of the Board of Directors approving such
transaction on or before August 29, 2000, and to advise Executive promptly
following such meeting as to whether this Agreement was approved.  In the event
this Agreement is not approved on or before such date, this Agreement shall be
void and of no further force or effect.  The parties agree that this Agreement
shall be of no force and effect unless and until it has been approved by the
Board and executed by both parties.

                    [REST OF PAGE INTENTIONALLY LEFT BLANK]

                                      15
<PAGE>

          IN WITNESS WHEREOF, the parties have executed this Agreement on the
29th day of August, 2000, effective as of the Effective Date.

                                 EMPLOYER:

                                 APPLIED VOICE RECOGNITION, INC.,
                                  a Delaware corporation d/b/a e-DOCS.net

                                 By:
                                    --------------------------------
                                    Timothy J. Connolly
                                    President and Chairman of the Board

                                 EXECUTIVE:

                                 ---------------------------------------
                                 JAMES SPRINGFIELD

                               Signature Page to
                              Employment Agreement
                              (James Springfield)

                                      16<PAGE>

                                                           EXHIBIT 4.1

                             STOCKHOLDERS AGREEMENT

                  This Stockholders Agreement (this "AGREEMENT") is entered into
as of ___________, 2001, by and among [NEWCO], a Delaware corporation (the
"COMPANY"), WPH-Schuler, LLC, a Delaware limited liability company ("LLC"),
Apollo Real Estate Investment Fund, L.P., a Delaware limited partnership
("APOLLO"), Blackacre WPH, LLC, a Delaware limited liability company
("BLACKACRE"), Highridge Pacific Housing Investors, L.P., a California limited
partnership ("HIGHRIDGE," and together with Apollo and Blackacre, the
"MEMBERS"), The James and Patricia Schuler Foundation, a Hawaii non-profit
corporation (the "FOUNDATION"), and James K. Schuler, as sole trustee for the
James K. Schuler Revocable Living Trust and the James K. Schuler 1998 Qualified
Annuity Trust (collectively with the Foundation, "JAMES SCHULER").

                                    RECITALS

                  A. The Members, Schuler Homes, Inc. ("OLD SCHULER") and
certain other parties have entered into an Agreement and Plan of Reorganization,
dated as of September 12, 2000 (the "REORGANIZATION AGREEMENT"), which provides
for, among other things, the transfer of certain partnership and memberships
interests by the Members to the Company, the merger of Old Schuler into a
wholly-owned subsidiary of the Company, and the issuance by the Company to (a)
the LLC, of shares of the Company's Class B Common Stock, par value $0.001 per
share (the "CLASS B COMMON STOCK") and (b) James Schuler and the other
stockholders of Old Schuler, of the Company's Class A Common Stock, par value
$0.001 per share (the "CLASS A COMMON STOCK").

                  B. As a condition to the closing of the transactions
contemplated by the Reorganization Agreement, the Company, the LLC, the Members
and James Schuler desire set forth certain agreements governing the
relationships amongst each other.

                  NOW, THEREFORE, in consideration of the foregoing, and of the
warranties, covenants and agreements contained herein, the parties hereto agree
as follows:

                                    AGREEMENT

1.       DEFINITIONS

                  (a) As used herein, the following terms shall have the
following respective meanings:

                    (i) "AFFILIATE" have the meanings assigned to such terms in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act;
PROVIDED, HOWEVER, that in the case of Apollo, Affiliate shall not include an
operating company in which Apollo has an interest

                                       1
<PAGE>

unless Apollo has any contract, arrangement or understanding with such operating
company with respect to any securities of the Company.

                    (ii) A Person shall be deemed the "BENEFICIAL OWNER" of, and
shall be deemed to "BENEFICIALLY OWN" and have "BENEFICIAL OWNERSHIP" of any
securities:

                              (1) which such Person or any of such Person's
               Affiliates, directly or indirectly, has the right to acquire
               (whether such right is exercisable immediately or only after the
               passage of time) pursuant to any agreement, arrangement or
               understanding (whether or not in writing, but other than
               customary agreements with and between underwriters and selling
               group members with respect to a bona fide public offering of
               securities) or upon the exercise of conversion rights, exchange
               rights, rights, warrants or options, or otherwise; PROVIDED,
               HOWEVER, that a Person shall not be deemed the "Beneficial Owner"
               of, or to "Beneficially Own," or have "Beneficial Ownership" of,
               securities tendered pursuant to a tender or exchange offer made
               by such Person or any of such Person's Affiliates until such
               tendered securities are accepted for purchase or exchange;

                              (2) which such Person or any of such Person's
               Affiliates, directly or indirectly, has the right to vote or
               dispose of or has "beneficial ownership" of (as determined
               pursuant to Rule 13d-3 of the General Rules and Regulations under
               the Exchange Act), including pursuant to any agreement,
               arrangement or understanding, whether or not in writing;
               PROVIDED, HOWEVER, that a Person shall not be deemed the
               "Beneficial Owner" of, or to "Beneficially Own," or have
               "Beneficial Ownership" of, any security under this paragraph (2)
               as a result of an agreement, arrangement or understanding to vote
               such security if such agreement, arrangement or understanding:
               (A) arises solely from a revocable proxy given in response to a
               public proxy or consent solicitation made pursuant to, and in
               accordance with, the applicable provisions of the General Rules
               and Regulations under the Exchange Act, and (B) is not also then
               reportable by such Person on Schedule 13D under the Exchange Act
               (or any comparable or successor report); or

                              (3) which are beneficially owned, directly or
               indirectly, by any other Person (or any Affiliate thereof) with
               which such Person (or any of such Person's Affiliates) has any
               agreement, arrangement or understanding (whether or not in
               writing, but other than customary agreements with and between
               underwriters and selling group members with respect to a bona
               fide public offering of securities), for the purpose of
               acquiring, holding, voting (except pursuant to a revocable proxy
               as described in the proviso to subparagraph (ii) of this
               paragraph (c)) or disposing of any shares of Voting Stock of the
               Company.

                    (iii) "BOARD" means the Board of Directors of the Company.

                    (iv) "CERTIFICATE OF INCORPORATION" means the Certificate of
Incorporation of the Company.

                                       2
<PAGE>

                    (v) "CHANGE OF CONTROL" has the meaning assigned to such
term in the Senior Notes Indenture.

                    (vi) "CLASS A DIRECTORS" means the directors serving of the
Board who are elected by the Class A Stockholders.

                    (vii) "CLASS A STOCKHOLDERS" means the holders of Class A
Common Stock.

                    (viii) "CLASS B DIRECTORS" means the persons serving on the
Board who are elected by the Class B Stockholders.

                    (ix) "CLASS B STOCKHOLDERS" means the holders of Class B
Common Stock.

                    (x) "PERSON" means any individual, firm, corporation,
partnership, limited liability company or other entity.

                    (xi) "RISK EVENT" has the meaning assigned to such term in
the Subordinated Debentures Indenture.

                    (xii) "SENIOR NOTES" means Old Schuler's currently
outstanding 9% Senior Notes, due 2008, issued pursuant to the Senior Notes
Indenture.

                    (xiii) "SENIOR NOTES INDENTURE" means the Indenture, dated
as of May 6, 1998, by and between Old Schuler and U.S. Trust Company of
California, N.A., as trustee.

                    (xiv) "SUBORDINATED DEBENTURES" means Old Schuler's
currently outstanding 6.5% Convertible Subordinated Debentures, due 2003, issued
pursuant to the Subordinated Debentures Indenture.

                    (xv) "SUBORDINATED DEBENTURES INDENTURE" means the
Indenture, dated as of January 15, 1993, by and between Old Schuler and Pacific
Century Trust, as successor trustee to Bishop Trust Company, Limited.

                    (xvi) "VOTING STOCK" means Class A Common Stock, Class B
Common Stock, any other security generally entitled to vote for the election of
directors of the Company and any outstanding convertible securities, options,
warrants or other things which are convertible into or exchangeable or
exercisable for securities entitled to vote for the election of directors of the
Company.

                  (b) Capitalized terms used herein which are not defined herein
shall the meanings assigned to them in the Reorganization Agreement.

                                       3
<PAGE>

2.       TERM OF AGREEMENT.

                  This Agreement will continue in full force and effect until
the later to occur of (a) the date upon which the Senior Notes are no longer
outstanding and (b) the fifth anniversary of the date hereof.

3.       TRANSFER OF VOTING STOCK.

                  (a) James Schuler shall not sell, assign or transfer, or
otherwise dispose of, any shares of Class A Common Stock if such sale,
assignment, transfer or disposition would result in the occurrence of a Change
of Control while any Senior Note remains outstanding or a Risk Event while any
Subordinated Debenture remains outstanding. Notwithstanding the preceding
sentence, neither James Schuler nor any of his Affiliates shall be obligated to
dispose of any shares of Class A Common Stock to the extent that the percentage
of the issued and outstanding shares of Voting Stock (or any class thereof)
Beneficially Owned by James Schuler and his Affiliates is increased as a result
of a recapitalization of the Company or any other action taken by the Company,
the LLC or any Member. So long as any Senior Note remains outstanding, James
Schuler shall not sell, assign, transfer or otherwise dispose of any shares of
Class A Common Stock if such sale, assignment, transfer or disposition would
result in James Schuler Beneficially Owning a number of shares of Class A Common
Stock which is less than the lesser of (i) seventy percent (70%) of the number
of shares of Class B Common Stock allocated to Apollo on the date hereof
pursuant to the operating agreement of the LLC and (ii) the number of shares of
Class A Common Stock or Class B Common Stock then Beneficially Owned by Apollo
plus one share

                  (b) None of the LLC, any Member or any Affiliate thereof shall
sell, assign or transfer, or otherwise dispose of, any shares of Voting Stock if
such sale, assignment, transfer or disposition (including as a result of a later
conversion of Class B Common Stock by the transferee thereof) would result in
the occurrence of a Change of Control while any Senior Note remains outstanding
or a Risk Event while any Subordinated Debenture remains outstanding. None of
the LLC, any Member or any Affiliate thereof shall, directly or indirectly,
acquire Beneficial Ownership of any shares of Voting Stock (including as a
result of a conversion of Class B Common Stock) if such acquisition would result
in the occurrence of a Change of Control while any Senior Note remains
outstanding or a Risk Event while any Subordinated Debenture remains
outstanding. Notwithstanding the preceding sentence, none of the LLC, any Member
or any Affiliate thereof shall be obligated to dispose of any shares of Voting
Stock to the extent that the percentage of the issued and outstanding shares of
Voting Stock (or any class thereof) Beneficially Owned by the LLC, any such
Member and/or any such Affiliate is increased as a result of a recapitalization
of the Company or any other action taken by the Company or James Schuler.

                  (c) The LLC shall be dissolved on or before the date that is
two days subsequent to the second anniversary of the Closing Date.

                  (d) The LLC and Apollo may not, directly or indirectly, sell,
assign or transfer, or otherwise dispose of, more than seventy percent (70%) of
the number of shares of

                                       4
<PAGE>

Class B Company Stock allocated to Apollo on the date hereof pursuant to the
operating agreement of the LLC to a single Person or related group of Persons.

                  (e) Notwithstanding anything to the contrary herein, none of
James Schuler, the LLC, any Member or an Affiliate thereof shall, directly or
indirectly, sell, assign or transfer, or otherwise dispose of, any shares of
Class A Common Stock or Class B Common Stock prior to the end of the period
ending nine months from the date hereof (the "LOCK-UP PERIOD"); PROVIDED,
HOWEVER, that during the Lock-Up Period (but subject to subsection 3(a) and
3(b)), (i) James Schuler may, sell, assign or transfer, or otherwise dispose of,
(A) any shares of Class A Common Stock to the Foundation, the James K. Schuler
Revocable Living Trust, the James K. Schuler 1998 Qualified Annuity Trust, James
K. Schuler in his individual capacity and/or any other trust of which James K.
Schuler is the sole trustee and (B) up to an aggregate of 1,000,000 shares of
Class A Common Stock to (I) any other Persons who are members of the Schuler
Family (as defined in the Senior Notes Indenture) and who agree in writing not
to, directly or indirectly, sell, assign or transfer, or otherwise dispose of,
any such shares during the Lock-Up Period and (II) the management personnel of
the Company, (ii) the LLC and any Member may sell, assign or transfer, or
otherwise dispose of, any shares of Class A Common Stock or Class B Common Stock
to those individuals listed on Exhibit A hereto pursuant to the terms of the
operating agreement of the LLC and (iii) James Schuler, the LLC, any Member or
an Affiliate thereof may otherwise make a bona fide pledge of any shares of
Class A Common Stock or Class B Common Stock to any pledgee who agrees in
writing not to, directly or indirectly, sell, assign or transfer, or otherwise
dispose of, any such shares during the Lock-Up Period. Nothing in this
subsection 3(e) shall be deemed to prevent the transfer by Blackacre of its
membership interest in the LLC to any entity that is directly or indirectly
controlled by Stephen Feinberg or to prevent the bona fide pledge by Blackacre
(or a transferee of Blackacre that is directly or indirectly controlled by
Stephen Feinberg) of its membership interest in the LLC.

                  (f) James Schuler, the LLC, any Member or any Affiliate
thereof shall provide to the Company prompt written notice of any purchase,
sale, assignment or transfer, or other disposition of, by such Person of any
Voting Stock. Upon receipt of such notice, the Company shall promptly provide
the transferee of such Voting Stock with reasonable written notice of the
existence of the Change of Control and Risk Event provisions under the Senior
Notes Indenture and the Subordinated Debentures Indenture, respectively.

                  (g) Neither Schuler, the Company nor any of their Affiliates
shall purchase or sell any Class A Common Stock or Class B Common Stock during
(i) the period thirty (30) trading days prior to and thirty (30) trading days
after the first anniversary of the Closing Date and (ii) the period sixty (60)
trading days prior to (a) December 31, 2002 or (b) such other date as the LLC
may give written notice will be the date of its dissolution (to the extent
Schuler and the Company receive written notice during such period).

4.       ACTING IN CONCERT WITH OTHER PARTIES; PROXY SOLICITATIONS.

                  (a) So long as the LLC remains in existence, except pursuant
to this Agreement, none of the parties hereto or any Affiliates thereof shall
deposit any shares of Voting Stock in a voting trust or subject any shares of
Voting Stock to any arrangement or agreement

                                       5
<PAGE>

with respect to the voting of such shares of Voting Stock (other than shares of
Class B Common Stock held by the LLC).

                  (b) So long as the LLC remains in existence, none of the
parties hereto or any Affiliates thereof shall join a partnership, limited
partnership, syndicate or other group, or otherwise act in concert with any
other Person (except with respect to the Members' ownership of the LLC), for the
purpose of acquiring, holding, voting or disposing of shares of Voting Stock.

                  (c) So long as the LLC remains in existence, none of the
parties hereto or any Affiliates thereof shall solicit proxies or become a
"participant" in a "solicitation" (as such terms are defined in Regulation 14A
(or any successor regulation or rule) under the Securities Exchange Act of 1934,
as amended) in opposition to the recommendation of the majority of the directors
of the Company with respect to any matter.

5.       DESIGNATION OF DIRECTORS.

                  (a) Following the automatic conversion of all Class B Common
Stock into Class A Common Stock pursuant to subsection (c)(iii)(B) of Article
FOURTH of the Certificate of Incorporation: (i) the Board shall adopt an
amendment to the Bylaws of the Company establishing nine as the number of
directors which shall constitute the whole Board and (ii) the Class B Directors
serving on the Board immediately preceding such conversion shall continue to
serve on the Board as Class A Directors until their successors are duly elected
and qualified or until their earlier death, resignation or removal.

                  (b) From and after the automatic conversion of all Class B
Stock into Class A Stock pursuant to subsection (c)(iii)(B) of Article FOURTH of
the Certificate of Incorporation, at any time that James Schuler or a Member
Beneficially Owns one-ninth (1/9) or more of the total number of the then issued
and outstanding shares of Class A Common Stock, such party shall have the
option, in its sole discretion, to notify the Company of such party's designee
or designees to be included in the slate of nominees to be recommended by the
Board to the stockholders for election as a director or directors at the next
meeting of stockholders of the Company held to elect directors. The Board or its
nominating committee shall include such designee or designees in the slate of
nominees to be recommended by the Board to the stockholders for election as a
director or directors at the next meeting of the stockholders of the Company
held to elect directors; PROVIDED, HOWEVER, that the maximum number of persons
so designated by such party shall be equal to the result (rounded to the nearest
whole number) of applying the following formula:

            (The number of outstanding shares of Class A Common Stock
            Beneficially Owned by such party / the total number of issued
            and outstanding shares of Class A Common Stock) x 9

                  (c) At any time a Person who has been designated by Apollo and
is not otherwise a Person whose primary business is the design, construction,
marketing and/or selling of single-family homes, townhomes and/or condominiums
(an "ELIGIBLE HOLDER") Beneficially Owns, as the result of a transfer of Class A
Common Stock or Class B Common Stock by Apollo to such Eligible Holder,
one-ninth (1/9) or more of the total number of the then issued and

                                       6
<PAGE>

outstanding shares of Class A Common Stock and Class B Common Stock, taken in
the aggregate, such Eligible Holder shall have the option, in its sole
discretion, to notify the Company of such Eligible Holder's designee to be
included in the slate of nominees to be recommended by the Board to the
stockholders for election as a director at the next meeting of stockholders of
the Company held to elect directors, provided that such Eligible Holder
continues to hold such number of shares through the date of such meeting. The
Board or its nominating committee shall include such designee in the slate of
nominees to be recommended by the Board to the stockholders for election as a
director at the next meeting of the stockholders of the Company held to elect
directors. Notwithstanding anything to the contrary contained herein, an
Eligible Holder shall not be entitled to designate more than one such designee.
Notwithstanding anything to the contrary contained herein, Apollo may designate
only one Person as an Eligible Holder during the term of this Agreement;
PROVIDED, HOWEVER, that nothing in this subsection 5(c) shall limit Apollo's
other rights to designate directors in accordance with subsection 5(b).

                  (d) In the event that a person nominated and elected to the
Board pursuant to subsection 5(b) or 5(c) shall cease to serve as a director for
any reason, a successor shall be designated and nominated in the same manner and
procedure as such former director was designated and nominated pursuant to
subsection 5(b) or 5(c).

                  (e) With respect to any Class A Director seat on the Board
which is not to be filled pursuant to subsections 5(b), 5(c) or 5(d), the Board
shall recommend to the stockholders of the Company for election as a director
any person designated by a majority of the Board to fill such seat.

                  (f) Each party hereto shall take such action as may be
required so that all Class A Common Stock Beneficially Owned by it and all its
Affiliates are voted, at any meeting of the stockholders of the Company held to
elect directors, for the persons nominated to the Board pursuant to subsection
5(b), 5(c), 5(d) or 5(e). Each party and all its Affiliates, as Class A
Stockholders, shall be present, in person or by proxy, at all meetings of
stockholders of the Company so that all Class A Common Stock Beneficially Owned
by such party and its Affiliates may be counted for the purpose of determining
the presence of a quorum at such meetings.

                  (g) Upon request by Apollo, one of the directors designated by
Apollo in accordance with subsection 5(b) shall (i) serve on the Compensation
Committee of the Board so long as such director is an independent director under
Delaware law (it being agreed that being an employee or otherwise a
representative of Apollo shall not by itself disqualify any such director from
being independent) and (ii) serve on the Executive Committee, if any, of the
Board (it being agreed that the Company shall be under no obligation to
establish an Executive Committee).

6.       MISCELLANEOUS.

                  (a) If the Company shall request in writing, the LLC, the
Members or James Schuler, as applicable, shall present or cause to be presented
promptly all certificates representing shares of Voting Stock acquired by such
party and its Affiliates for the placement

                                       7
<PAGE>

thereon of the following legend, which will remain thereon as long as such
shares of Voting Stock are subject to the restrictions contained in this
Agreement:

                           "The securities represented by this certificate are
                  subject to the provisions of a Stockholders Agreement, dated
                  as of ________, 2001, by and among by and among [NEWCO], a
                  Delaware corporation, WPH-Schuler, LLC, a Delaware limited
                  liability company, Apollo Real Estate Investment Fund, L.P., a
                  Delaware limited partnership, Blackacre WPH, LLC, a Delaware
                  limited liability company, Highridge Pacific Housing
                  Investors, L.P., a California limited partnership, The James
                  and Patricia Schuler Foundation, a Hawaii non-profit
                  corporation, and James K. Schuler, as sole trustee for the
                  James K. Schuler Revocable Living Trust and the James K.
                  Schuler 1998 Qualified Annuity Trust, and may not be sold or
                  transferred except in accordance therewith. A copy of said
                  Agreement is on file at the office of the Corporate Secretary
                  of [NEWCO].

The Company may enter a stop transfer order with the transfer agent or agents of
Voting Stock against the transfer of shares of Voting Stock except in compliance
with the requirements of this Agreement. The Company agrees to remove promptly
any stop transfer order with respect to, and issue promptly unlegended
certificates in substitution for, certificates for any shares of Voting Stock
that are no longer subject to the restrictions contained in this Agreement.

                  (b) All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered or mailed if delivered personally or by
recognized overnight delivery service or mailed by registered or certified mail
(postage prepaid, return receipt requested), or sent by facsimile transmission
(confirmation received) to the parties at the following addresses and facsimile
transmission numbers (or at such other address or number for a party as shall be
specified by like notice), except that notices after the giving of which there
is a designated period within which to perform an act and notices of changes of
address or number shall be effective only upon receipt:

                  (i) if to the Company and James Schuler:

                           Schuler Homes, Inc.
                           828 Fort Street Mall, 4th Floor
                           Honolulu, Hawaii  96813
                           Facsimile No.:  (808) 524-8927

                           with a copy to:

                           Richard V. Smith, Esq.
                           Orrick, Herrington & Sutcliffe LLP
                           400 Sansome Street
                           San Francisco, California  94111
                           Facsimile No.:  (415) 773-5759

                                       8
<PAGE>

                  (ii) if to the LLC or the Members:

                           Eugene Rosenfeld
                           c/o Western Pacific Housing
                           300 Continental Boulevard, Suite 390
                           El Segundo, California 90246
                           Facsimile No.:  (310) 414-0514

                           AND

                           Rick Koenigsberger
                           Apollo Real Estate Advisors
                           1301 Avenue of the Americas, 38th Floor
                           New York, New York  10019
                           Facsimile No.:  (212) 515-3282

                           AND

                           Ronald J. Kravit
                           Blackacre WPH, LLC
                           450 Park Avenue, 28th Floor
                           New York, New York 10022
                           Facsimile No.:  (212) 891-2103

                           with a copy to:

                           Peter P. Wallace, Esq.
                           Morgan, Lewis & Bockius LLP
                           300 S. Grand Ave., 22nd Floor
                           Los Angeles, California  90071
                           Facsimile No.:  (213) 612-2554

                           AND

                           Stuart D. Freedman, Esq.
                           Schulte, Roth & Zabel LLP
                           900 3rd Avenue
                           New York, New York  10022
                           Facsimile No.:  (212) 832-4169

                  (c) When a reference is made in this Agreement to a Section
and subsection, such reference shall be to a Section or subsection to this
Agreement unless otherwise indicated. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be followed by the
words "without limitation." The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. The words "herein" and "hereby" and similar
references mean, except where a specific Section reference is expressly
indicated, the entire Agreement rather than any specific

                                       9
<PAGE>

Section. All capitalized terms defined herein are equally applicable to both the
singular and plural forms of such terms.

                  (d) If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party hereto. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the greatest extent
possible.

                  (e) This Agreement may not be assigned by operation of law or
otherwise.

                  (f) This Agreement is for the sole benefit of the parties
hereto and nothing herein expressed or implied shall give or be construed to
give to any Person, other than the parties hereto, any legal or equitable rights
or remedies hereunder.

                  (g) This Agreement may not be amended or modified except by an
instrument in writing signed by all of the parties hereto.

                  (h) Each party agrees to cooperate fully with the other
parties and to execute such further instruments, documents and agreements and to
give such further written assurances as may be reasonably requested by any other
party to evidence and reflect the transactions described herein and contemplated
hereby and to carry into effect the intents and purposes of this Agreement.

                  (i) This Agreement is the joint product of the parties hereto
and each provision hereof has been subject to the mutual consultation,
negotiation and agreement of the parties hereto and shall not be construed for
or against any party hereto.

                  (j) This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Delaware applicable to
agreements made and to be performed entirely within such State (without giving
effect to such State's choice of law principles).

                  (k) Notwithstanding any other provision of this Agreement,
each party acknowledges and agrees that irreparable damage would occur in the
event any of the provisions, of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that the parties hereto shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically
the terms and provisions hereof in either the Delaware Chancery Court or the
United States District Court for Delaware.

                  (l) Except as otherwise provided in subsection 6(k) above, any
dispute, controversy or claim among the parties relating to, arising out of or
in connection with this Agreement (or any subsequent agreements or amendments
thereto), including as to its existence, enforceability, validity,
interpretation, performance or breach or as to indemnification or

                                       10
<PAGE>

damages, including claims in tort, whether arising before or after the
termination of this Agreement, shall be settled without litigation and only by
use of the alternative dispute resolution procedure set forth in Section 12.13
of the Reorganization Agreement. Subsections (a) through (d) of Section 12.13 of
the Reorganization Agreement are hereby incorporated herein, except that the
parties thereunder shall be deemed to be the Company, the LLC, Apollo,
Blackacre, Highridge and James Schuler.

                  (m) Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of (i) the Delaware Chancery Court, and (ii) the United
States District Court for Delaware, for the purposes of either an injunction
action or confirming, modifying or vacating any alternative dispute resolution
award provided in accordance with subsection 6(l) above ("Award Action"). Each
of the parties agrees to commence any Award Action relating hereto either in the
United States District Court for Delaware or if such Award Action may not be
brought in such court for jurisdictional reasons, in the Delaware Chancery
Court. Each of the parties further agrees that service of any process, summons,
notice or document by U.S. registered mail to such party's respective address
set forth in subsection 6(b) above shall be effective service of process for any
Award Action in Delaware with respect to any matters to which it has submitted
to jurisdiction in this subsection 6(m). Each of the parties irrevocably and
unconditionally waives any objection to the laying of venue of any Award Action
arising out of this Agreement in the Delaware Chancery Court, or the United
States District Court for Delaware, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such Award Action brought in any such court has been brought in an
inconvenient forum.

                  (n) Each party hereto irrevocably and unconditionally waives
trial by jury in any Action relating to this Agreement, any transaction
contemplated hereby, and for any counterclaim with respect thereto.

                  (o) This Agreement may be executed in one or more
counterparts, and by the different parties in separate counterparts, each of
which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.

                  (p) This Agreement constitutes the entire agreement and
supersedes all prior agreements and undertakings, both written and oral, among
the parties hereto with respect to the subject matter hereof.

                            [Signature Page Follows]

                                       11

<PAGE>

                  The parties have executed this Agreement as of the date first
above written.

                                     [NEWCO]

                                   By:
                                      ------------------------------------
                                        Name:
                                        Title:

                                    WPH-SCHULER, LLC, a Delaware limited
                                    liability company

                                    By:
                                       ------------------------------------
                                         Name:
                                         Title:

                                    APOLLO REAL ESTATE INVESTMENT FUND, L.P.,
                                    a Delaware limited partnership

                                    By: APOLLO REAL ESTATE ADVISORS, L.P.,
                                        a Delaware limited partnership,
                                        Its General Partner

                                        By: APOLLO REAL ESTATE MANAGEMENT, INC.,
                                            a Delaware corporation,
                                            Its General Partner

                                            By:
                                               --------------------------------
                                               Michael D. Weiner
                                               Its Vice President

                                       12
<PAGE>

                                     BLACKACRE WPH, LLC,
                                     a Delaware limited liability company

                                     By:    BLACKACRE CAPITAL GROUP, L.P.,
                                            a Delaware limited partnership,
                                            Its Managing Member

                                            By:  BLACKACRE CAPITAL
                                                 MANAGEMENT CORP.,
                                                 a Connecticut corporation,
                                                 Its General Partner

                                                 By:
                                                    ------------------------
                                                       Ronald J. Kravit
                                                       Its Vice President

                                     HIGHRIDGE PACIFIC HOUSING INVESTORS, L.P.,
                                     a California limited partnership

                                     By:    WPH ACQUISITIONS, INC.,
                                            a California corporation,
                                            Its General Partner

                                            By:
                                               -----------------------------
                                                Steven A. Berlinger
                                                Its CFO and Secretary

                                     THE JAMES AND PATRICIA SCHULER FOUNDATION,
                                     a Hawaii non-profit corporation

                                     By:
                                        ------------------------------------
                                          Name:  James K. Schuler
                                          Title:

                                       13
<PAGE>

                                     JAMES K. SCHULER, as sole trustee for the
                                     James K. Schuler Revocable Living Trust
                                     and the James K. Schuler 1998 Qualified
                                     Annuity Trust

                                     ---------------------------------------
                                                 James K. Schuler

                                       14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}]]