STOCK BUYBACK AGREEMENT

Exhibit 10.1

STOCK BUYBACK AGREEMENT

          THIS STOCK BUYBACK AGREEMENT (this “Agreement”) is entered into and effective as of August 18, 2006, by and among Avatar Systems, Inc., a Texas corporation (the “Company”), on the one hand, and Mr. Jean Junker, an individual resident of the State of Texas (“Junker”), and Mrs. Ann Hankins, an individual resident of the State of Texas ( “Hankins,” and together with Junker, each individually, a “Seller” and collectively, the “Sellers”), on the other hand.  Purchaser and the Sellers are sometimes referred to herein collectively as the “Parties” or individually as a “Party.”

          WHEREAS, this Agreement is entered into in connection with that certain Stock Purchase Agreement (the “Purchase Agreement”), dated as of July 31, 2006, by and among the Company and the Sellers, pursuant to which the Company will issue (i) to Junker, 120,000 shares and (ii) to Hankins, 80,000 shares (collectively, the “Shares”) of common stock of the Company, par value $0.001 per share (the “Common Stock”), as partial consideration for the purchase of all of the issued and outstanding capital stock of Questa Software Systems, Inc., a Texas corporation, from the Sellers; and

          WHEREAS, the Parties have each required the other to enter into this Agreement as a material condition to the closing of the Stock Purchase Agreement.

          NOW, THEREFORE, in consideration of the foregoing premises and the agreements and covenants contained in this Agreement and the Purchase Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

          1.          Buyback Right and Option; Buyback Purchase Price.  The Company hereby irrevocably grants and issues to each Seller the right and option (but not the obligation) to sell to the Company and the Company agrees to purchase from each Seller, on (and only on) the date that is five (5) years following the date hereof (or, if such day is not a day on which business is transacted by national banks in Dallas, Texas, then the next succeeding day on which such business is transacted) (the “Repurchase Date”) and subject to the terms of this Agreement, all or any portion of the Shares then held by such Seller, at a price of $1.00 per share (with respect to each Seller, a “Buyback Right”).  Each Seller may exercise his or her respective Buyback Right, in whole or in part, by providing written notice to the Company, not less than fifteen (15) days prior to the Repurchase Date, which notice shall state the number of Shares to be purchased by the Company on the Repurchase Date.  In the event any Seller fails to provide such notice at least fifteen (15) days prior to the Repurchase Date, such Seller’s Buyback Right shall expire, terminate and be of no further force or effect.  If, on the Redemption Date, the number of shares of Common Stock that may then be legally repurchased by the Company is less than the full number of Shares that the Sellers have requested to be repurchased on such date, then any Shares to be repurchased that may not be legally repurchased on the Redemption Date will be repurchased as soon as the Company has legally available funds therefor.

          2.          Fees and Expenses.  Each party hereto shall bear and pay any and all fees and expenses of such party incurred in connection with the negotiation, preparation, execution, and performance of this Agreement and the transactions contemplated by this Agreement, including, without limitation, any and all fees and expenses of any agent, representative, attorney, accountant, or printer of such party.  In the event of any termination of this Agreement, the obligation of each party to pay the fees and expenses of such party shall be subject to any right of such party arising from a breach of this Agreement by any other party.  Notwithstanding anything to the contrary in this Section 2, the prevailing party in any dispute involving any proceeding shall be entitled to recovery of any and all fees and expenses of such party, including, without, limitation, any and all reasonable fees and expenses of any attorney of such party, incurred in connection with such proceeding.