Employment Agreement - Intelligent Systems for Retail Inc. and Arvind Peter Relan


January 16, 1998



Arvind Peter Relan
2472 Whitney Drive
Mountain View, Ca. 94043

Dear Peter:

We are very pleased to extend you an offer to serve as the Senior Vice
President, Software Development, for Intelligent Systems for Retail, Inc.
("ISR").

We at ISR believe that your skills, experience, and personal attributes will
enable us to be a leader in the development of this internet commerce company.

This letter serves as an offer of employment to you from ISR. The terms of the
offer supersede all prior oral and written communications between you and ISR or
any representative thereof. If the terms below are acceptable, please sign and
return one copy of the letter before Friday, January 16th, 1:00 PM to accept our
offer of employment.

POSITION

Your job title will be Senior Vice President, Software Development.

EFFECTIVE DATE

Your first date to report to work at ISR, 1241 E. Hillsdale Blvd., Suite 210,
Foster City, CA 94404, will be February 16, 1998.

DUTIES

You will report to Louis Borders, President & CEO of ISR. Your primary
responsibility will be to lead ISR's software development efforts. You will also
be a member of the Executive Team with responsibility for determining the long
term direction and goals of ISR and for developing strategies and tactics to
meet those goals, along with all other duties as assigned.



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SALARY

Your salary shall be $16,667 per month. Payroll periods occur once every two
weeks. Your salary shall be reviewed each January on an annual basis in
accordance with review procedures established by the ISR Associate Handbook. In
addition, you will receive a "sign-on" bonus of $7,692.31, payable within two
weeks of your date-of-hire.

At any time prior to June 2, 1998, by written notice to ISR, you may elect to
reduce your future salary to $12,500 per month from $16,667 per month. If you
make such election, you will be granted an additional option to purchase 25,000
shares of Common Stock at an exercise price equal to the fair market value (not
to exceed 15% of the Preferred Stock price) of the Common Stock at the date of
grant. The vesting schedule and other terms of the option will be the same as
those for your 638,000 share grant.

INCENTIVE PLAN

You shall be granted an incentive stock option (the "Option") to purchase
638,000 shares (approximately 3.7% of the total of Preferred Shares outstanding,
Common Shares outstanding and stock option pool) of ISR's common stock at an
exercise price equal to $.15. The Option shall vest at the rate of 25% of the
shares subject to Option at the end of twelve months and at the rate of 6.25% of
the shares subject to Option each three months thereafter, so that 100% of the
Option shall be vested after four years, subject to your continued full-time
employment with ISR as of each vesting date. Except as specified herein, the
Option is in all respects subject to the terms and conditions of the 1997 Stock
Plan (the "Stock Plan") and standard form of option agreement (the "Option
Agreement").

In the event that your employment with ISR is terminated for any reason
following the date of your second anniversary as an employee of ISR or for 30
days after such termination, upon written notice to ISR, ISR will at ISR's
choice either (i) pay to you a lump sum amount of $3.0 million OR (ii)
accelerate the vesting of all of the options to purchase 663,000 shares
(including the 25,000 shares which may be granted to you upon the salary
reduction described herein), in which case the options shall remain exercisable
for a period of 30 days thereafter (following which they shall terminate).

Beginning on the first anniversary of your employment with ISR, you shall have
the right to cause ISR to purchase up to 159,500 shares of your Common Stock at
a price of $4.39 per share. You must exercise such right on or prior to the date
which is 30 days following the second anniversary of your employment with ISR.
In addition, beginning on the second anniversary of your employment with ISR,
you shall have the right to cause ISR to purchase up to an additional 159,500
shares of your Common Stock at a price of $4.39 per share. You must exercise
such right on or prior to the date which is 30 days following the second
anniversary of your employment with ISR.


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In the event that ISR does not purchase shares offered for purchase pursuant to
this paragraph within 30 days following written request for such purchase, then
Louis H. Borders agrees to purchase such shares on equivalent terms within 30
days (the "Personal Guarantee").

In the event that you do not exercise any of your rights to sell shares to ISR
as contemplated by the previous paragraph, ISR agrees to loan you up to
$500,000. You may exercise your right to such loan on or prior to the date which
is 30 days following the first anniversary of your employment with ISR. Any such
loan (i) shall bear interest at the minimum rate necessary to avoid imputed
interest pursuant to the Internal Revenue Code of 1986, (ii) shall have interest
payable quarterly until loan principal is due, (iii) shall be payable in full
upon the first to occur of the second anniversary of the date of the loan or 90
days following the termination of your employment for any reason, and (iv) shall
be secured by 113,929 shares of ISR Common Stock held by you.

All of the options to be granted to you hereunder shall include an "early
exercise" provision so that the options may be exercised for cash prior to the
time they are vested provided that you execute a restricted stock purchase
agreement with ISR, in a form acceptable to both parties, providing ISR with the
right to repurchase your unvested shares at their original cost upon the
termination of your employment, or upon such other price and terms as provided
in this letter.

You shall also have the right to participate in future sales of Preferred Stock
by ISR to investors up to a maximum amount of $200,000 for each round of
financing. ISR will give you notice of such future financings and you must
exercise your right to participate no later than 10 days prior to the
anticipated closing date of the financing. The per share purchase price and the
other terms of your participation in such financing shall be substantially the
same as the other investors. This right shall terminate upon the first to occur
of (i) the termination of your employment with ISR for any reason and (ii) the
day prior to the closing of the initial public offering of ISR's stock.

BENEFITS

You will receive the standard benefits for full-time Associates at ISR. These
standard benefits are listed and explained in the ISR Associate Handbook,
administered via TriNet Employer Group. A copy of the policies and benefits
section of the handbook will be provided for your information.

In lieu of the standard health benefits through October 31, 1998, ISR agrees to
reimburse you for your COBRA related expenses to purchase health insurance
through October 31, 1998.


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In addition, ISR makes available a 401(k) plan to all employees at the beginning
of the month following Employee's date of hire. Eligible Employees may elect to
contribute up to 15% of their salary to the 401(k) plan, subject to the legal
maximum per year. The company will match 100% of the first $500 and 25%
thereafter up to a maximum Employer match of $2,000 per year of qualifying
Employee contributions. Further details will be provided in the 401(k) Plan
Handbook at the time of enrollment.

NON-DISCRIMINATION

ISR is an equal-opportunity employer, and will not discriminate against its
employees or applicants in any employment decision or practice because of race,
color, religion, sex, national origin, marital status, pregnancy, age, ancestry,
physical handicaps, or medical condition.

PROPRIETARY INFORMATION

You will be required, as a condition of employment, to sign a Proprietary
Information Agreement. A sample Proprietary Information Agreement is attached
hereto.

OUTSIDE WORK

All ISR Associates are expected to devote their full energies, efforts, and
abilities to their employment. Accordingly, full-time Associates are not
permitted to accept outside employment on a full-time basis without first
obtaining their supervisor's written approval.

AT-WILL EMPLOYMENT

The relationship between you and ISR will be for an unspecified term and will be
considered at will. No employment contract is created by the existence of any
policy, rule or procedure in the ISR Associate Handbook, any ISR document, or
any verbal statements made to you by representatives of ISR. Consequently, the
employment relationship between you and ISR can be terminated at will, either by
you or ISR, with or without cause or advance notice.

In the event that your employment with ISR is terminated without cause, ISR
agrees that you will receive six months salary and benefits as severance. In
addition, ISR agrees to pay you any reduction in salary that resulted from your
election to increase your stock option plan by 25,000, to the extent that the
value of these 25,000 options do not cover the reduction in salary.


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PERSONNEL POLICIES

ISR has an Associate Handbook. Employees are expected to be familiar with and
comply with the policies set forth in the Associate Handbook.

This offer is contingent on compliance with the Immigration Reform and Control
Act of 1986, which requires the company to verify that each employee hired is
legally entitled to work in the United States. Enclosed is a copy of the
Employment Verification form I-9, with instructions, as required by such act.
Please review and execute this document and be prepared to bring the appropriate
documentation on the day you first report to work.

We look forward to your favorable consideration of this offer and to the
commencement of a long and rewarding relationship.

Please sign this offer letter and hand deliver or return by FAX.

Sincerely,




Louis H. Borders
President & CEO


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I hereby acknowledge that I have reviewed the terms and conditions of this offer
of employment and have had the opportunity to consult with counsel. I hereby
accept the offer of employment upon the terms and conditions contained in this
letter.



Accepted: /S/ ARVIND PETER RELAN                   Date: February 2, 1998
          ----------------------------------             ----------------
              Arvind Peter Relan





I, Louis H. Borders, will execute a formal agreement (in a form mutually
satisfactory to me and to Mr. Relan) to replace the Personal Guarantee, but
execution of a formal agreement is not a condition of this obligation. I
represent that I have assets available to satisfy this guarantee which have a
fair market value of not less than $10 million.

Accepted: /S/ LOUIS H. BORDERS                           Date: February 2, 1998
          -------------------------------------------         ------------------
           Louis H. Borders (personally as to the
           Personal Guarantee and as to the immediately
           preceding paragraph.)


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