<PAGE>
                                                                   Exhibit 10.18

                                 [LETTERHEAD]


                                    INHALE



December 6, 1999


Phillip H. Raiser
Harvey E. Chapman, Jr.
Harbor Belmont Associates
800 S. Claremont Street, Suite 201
San Mateo, CA 94402

Re:   260 Harbor Boulevard

Gentlemen:

In connection with the pending Sublease by and between Webvan Group, Inc. as
Sublessor and Inhale Therapeutic Systems, Inc. as Sublessee, for Subleased
Premises of approximately 7,985 rentable square feet located at 260 Harbor
Boulevard, said Sublease to be for the Term commencing on December 1, 1999
and ending on June 30, 2003, (capitalized terms as defined in the Sublease
and/or Master Lease), Sublessee, in order to induce Harbor Belmont Associates,
the Master Lessor, to consent to the Sublease and, specifically, to the Tenant
Improvement Plan (Exhibit B, dated December 2, 1999, to the Sublease) herewith
agrees that all Tenant Improvement work shall be performed by Raiser
Construction Co., Inc. or, at the option of Master Lessor, another general
contractor acceptable to Master Lessor.  It is further understood and agreed
that all Tenant Improvements of any kind made to the Subleased Premises
during the Term shall require obtaining applicable building permits.


SUBLESSEE:                                  MASTER LESSOR:


By:  /s/ Sharon Reiss-Miller                By:
   -------------------------------             --------------------------------
Name Printed:  SHARON REISS-MILLER          Name Printed:
             ---------------------                       ----------------------
Its:  V.P. OPERATIONS MGMT                  Its:
    ------------------------------              -------------------------------
Date:  12/7/99                              Date:
     -----------------------------               ------------------------------

<PAGE>

                                 [LETTERHEAD]



December 6, 1999



Ms. Sharon Reiss Miller
INHALE THERAPEUTIC SYSTEMS, INC.
150 Industial Road
San Carlos, CA 94070

RE: 260 HARBOR BOULEVARD
    BELMONT, CA

Dear Sharon:

Enclosed is your copy of the fully executed Sublease Agreement by and between
Webvan Group, Inc. (Sublessor) and Inhale Therapeutic Systems, Inc.
(Sublessee) for the property located at 260 Harbor Boulevard, Belmont.

We are excited to have Inhale Therapeutic Systems, Inc. as a tenant at Harbor
Park.

Sincerely,

CB RICHARD ELLIS, INC.

/s/ Bob McSweeney

Robert L. McSweeney
First Vice President


Enclosure


cc: Greg Domanico

<PAGE>






                                   SUBLEASE

                                BY AND BETWEEN

                        WEBVAN GROUP, INC. AS SUBLESSOR

                                      AND

                 INHALE THERAPEUTIC SYSTEMS, INC. AS SUBLESSEE


                             260 HARBOR BOULEVARD
                                  BELMONT, CA


                            DATED: NOVEMBER 3, 1999



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<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<S>                                                     <C>

RECITALS                                                  3
Section 1. Sublease.                                      3
Section 2. Warranty by Sublessor                          3
Section 3. Term.                                          4
Section 4. Rent.                                          4
Section 5. Security Deposit.                              5
Section 6. Use of Premises.                               5
Section 7. Assignment and Subletting                      6
Section 8. Other Provisions of Sublease                   6
Section 9. Hazardous Materials                            7
Section 10. Attorney Fees.                                8
Section 11. Brokers.                                      8
Section 12. Notices.                                      8
Section 13. Successors and Assigns.                       9
Section 14. Attornment.                                   9
Section 15. Entry                                         9
Section 16. Late Charge and Interest.                     9
Section 17. Master Lessor's Performance and Consent       9
Section 18. Entire Agreement.                            10
Section 19. Time of Essence.                             10
Section 20. Consent by Master Lessor                     10
Section 21. Governing Law.                               11
Section 22. Purchase of Equipment and Furniture          11
MASTER LESSOR'S CONSENT TO SUBLEASE                      11
</TABLE>

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<PAGE>

THIS SUBLEASE ("SUBLEASE") dated as of November 3, 1999, is made between
WEBVAN GROUP, INC., a California corporation ("SUBLESSOR"), and INHALE
THERAPEUTIC SYSTEMS, INC., a Delaware corporation ("SUBLESSEE").

                                   RECITALS

A.  Sublessor is the lessee under "Standard Form Industrial Net Lease" dated
    as of March 20, 1998 (hereinafter, the "MASTER LEASE"), pursuant to which
    Harbor Belmont Associates, a California General Partnership ("MASTER
    LESSOR") leased to Intelligent Systems for Retail, Inc., (prior name of
    Webvan Group, Inc.), a California Corporation, the real property located
    in the City of Belmont, County of San Mateo, State of California,
    described as 260 Harbor Boulevard (the "MASTER PREMISES").

B.  The Master Lease has been amended by the following amendments: Amendment
    to Lease dated June 4, 1998; Amendment No. 2 to Lease dated
    December 4, 1998; and Amendment No. 3 to Lease dated December 31, 1998.

C.  The Master Lease, together with any amendments, are collectively referred
    to as the "MASTER LEASE."

D.  A copy of the Master Lease and all amendments thereto, with certain
    confidential information having been omitted, is attached and
    incorporated in this Sublease as Exhibit A.

                             SECTION 1. SUBLEASE.

Sublessor subleases to Sublessee on the terms and conditions in this Sublease
the following portion of the Master Premises ("SUBLEASED PREMISES"):
Approximately 7,985 rentable square feet of office / R&D space in a building
consisting of approximately 29,425 rentable square feet, which is part of a
Project consisting of 212,000 square feet, of which Sublessee's Percentage
Share is 3.77%.

In addition, Sublessee shall have the right to use all of the parking spaces
allocated to Sublessor pursuant to the original Master Lease, pursuant to the
provisions of Section 8 of the Addendum thereto

The parties hereto acknowledge that Amendments No. 2 and No. 3 to the Master
Lease added additional premises ("ADDITIONAL PREMISES") to the original
Master Premises. These Additional Premises are not included in the Subleased
Premises, nor are the terms and conditions of Amendments No. 2 or No. 3
incorporated into this Sublease.

                      SECTION 2. WARRANTY BY SUBLESSOR

Sublessor warrants to Sublessee that the Master Lease is in full force and
effect; has not been amended or modified except as expressly set forth in
this Sublease; that neither the Master Lessor nor the Sublessor is now, and
as of the commencement of the Term (defined in this Sublease) of this
Sublease will not be, in default or breach of any of the provisions of the
Master Lease; and that Sublessor has no knowledge of any claim by Master
Lessor that Sublessor is in default or breach of any of the provisions of the
Master Lease. Sublessor agrees to keep the Master Lease in effect during the
entire Term of this Sublease Agreement (subject, however, to any earlier
termination of the Master Lease which is not the fault of the Sublessor), and
to comply with and perform all of Sublessor's obligations under the Master
Lease that Sublessee is not obligated to perform as part of Sublessee's
obligations under this Sublease Agreement.




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<PAGE>


                               SECTION 3. TERM.

The term of this Sublease (the "TERM") will commence on the later of December
1, 1999 ("COMMENCEMENT DATE"), or when Master Lessor consents to this
Sublease, whichever occurs later, and end on June 30, 2003 ("TERMINATION
DATE"), unless terminated sooner in accordance with the provisions of this
Sublease. If the Term commences on a date other than the Commencement Date,
Sublessor and Sublessee will execute a memorandum setting forth the actual
date of commencement of the Term. Possession of the Subleased Premises
("POSSESSION") will be delivered to Sublessee on the commencement of the
Term. If for any reason Sublessor does not deliver Possession to Sublessee on
the Commencement of the Term, Sublessor will not be subject to any liability
for this failure, the Termination Date will not be extended by the delay, and
the validity of this Sublease will not be impaired. Rent will be abated until
delivery of Possession. However, if Sublessor has not delivered Possession to
Sublessee within thirty (30) days after the Commencement Date, at any time
after that and before delivery of Possession, Sublessee may give written
notice to Sublessor of Sublessee's intention to cancel this Sublease. The
notice will set forth an effective date for the cancellation, which will be
at least ten (10) days after delivery of notice to Sublessor. If Sublessor
delivers Possession to Sublessee on or before this effective date, this
Sublease will remain in full force. If Sublessor fails to deliver Possession
to Sublessee on or before this effective date, this Sublease will be
canceled. Upon cancellation, all consideration previously paid by Sublessee
to Sublessor on account of this Sublease will be returned to Sublessee, this
Sublease will have no further force, and Sublessor will have no further
liability to Sublessee because of this delay or cancellation. If Sublessor
permits Sublessee to take Possession prior to the commencement of the Term,
the early Possession will not advance the Termination Date and will be
subject to the provisions of this Sublease, including, without limitation,
the payment of rent.

                               SECTION 4. RENT.

(a) BASE RENT. Sublessee will pay to Sublessor as Base Rent, without
    deduction, setoff, notice, or demand, at 1241 E. Hillsdale Boulevard,
    Suite 210, Foster City, CA 94404, or at any other place Sublessor
    designates by notice to Sublessee, the sum of $19,164.00 for Months
    1-12 of the Sublease, and thereafter such Base Rent as adjusted
    pursuant to subsection (b) below, in advance of the first day of each
    month of the Term. Sublessee will pay to Sublessor on execution of this
    Sublease the sum of $19,164 as Base Rent for December 1-31, 1999. If the
    Term begins or ends on a day other than the first or last day of a
    month, the Base Rent for the partial months will be prorated on a per diem
    basis.

(b) BASE RENT ADJUSTMENTS: Beginning on the first anniversary of the Sublease
    Commencement Date and on each successive anniversary thereafter during the
    Sublease Term ("ADJUSTMENT DATE"), Base Rent shall be increased by
    one-hundred percent (100%) of the percentage of increase, if any, shown by
    the Consumer Price Index for All Urban Consumers, San Francisco Bay Area,
    All Items (base years 1982-1984 = 100) ("INDEX"), published by the United
    States Department of Labor, Bureau of Labor Statistics, for the month
    immediately preceding the Adjustment Date as compared with the Index for
    the same month in the immediately preceding calendar year; provided,
    however, that Base Rent shall be increased by not less than three percent
    (3%) per year nor more than six percent (6%) per year. Sublessor shall
    calculate the amount of this increase in Base Rent after the United States
    Department of Labor publishes the statistics on which the amount of the
    increase will be based. Sublessor shall give written notice of the amount
    of the increase, multiplied by the number of installments of rent due
    under this Lease since the Adjustment Date. Sublessee shall pay this
    amount, together with the monthly rent next becoming due under this
    Sublease, and shall thereafter pay the monthly rent due under this
    Sublease at this increased rate, which shall constitute Base Rent.
    Sublessor's failure to make the required


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<PAGE>


    calculations promptly shall not be considered a waiver of
    Sublessor's rights to adjust the monthly rent due, nor shall it
    affect Sublessee's obligations to pay the increased Base Rent. If
    the Index is changed so that the base year differs from that in
    effect on the Sublease Commencement Date, the Index shall be
    converted in accordance with the conversion factor published by the
    United States Department of Labor, Bureau of Labor Statistics. If
    the Index is discontinued or revised during the Sublease Term, the
    government index or computation with which it is replaced shall be
    used to obtain substantially the same result as if the Index had not
    been discontinued or revised.

(c) OPERATING COSTS. The parties acknowledge that the Master Lease
    requires Sublessor to pay to Master Lessor a portion of the expenses
    of operating the project of which the Subleased Premises are a part
    (collectively, "OPERATING COSTS"), including, but not limited to,
    taxes, utilities, or insurance. During the Term of this Sublease,
    Sublessee will pay to Sublessor as additional rent one hundred
    percent (100%) of the amounts payable by Sublessor for Operating
    Costs incurred during the Term for the Subleased Premises. This
    additional rent will be payable as and when Operating Costs are
    payable by Sublessor to Master Lessor. If the Master Lease provides
    for payment by Sublessor of Operating Costs on the basis of an
    estimate, then as and when adjustments between estimated and actual
    Operating Costs for the Subleased Premises are made under the Master
    Lease, the obligations of Sublessor and Sublessee will be adjusted
    in the same manner. If this adjustment occurs after the expiration
    or earlier termination of the Term, the obligations of Sublessor and
    Sublessee under this Subsection will survive this expiration or
    termination. Sublessor will, on request by Sublessee, furnish
    Sublessee with copies of all statements submitted by Master Lessor
    of the actual or estimated Operating Costs during the Term.

                      SECTION 5. SECURITY DEPOSIT.

Sublessee will deposit with Sublessor on execution of this Sublease the
sum of Twenty Thousand ($20,000.00) Dollars as security for Sublessee's
faithful performance of Sublessee's obligations under this Sublease
("SECURITY DEPOSIT"). If Sublessee fails to pay rent or other charges
when due under this Sublease, or fails to perform any obligations under
this Sublease, Sublessor may use any portion of the Security Deposit for
the payment of any rent or other amount then due and unpaid, for the
payment of any other sum for which Sublessor may become obligated
because of Sublessee's default or breach, or for any loss sustained by
Sublessor as a result of Sublessee's default or breach. If Sublessor
uses any portion of the Security Deposit, Sublessee will, within ten
(10) days after written demand by Sublessor, restore the Security
Deposit to the full amount originally deposited. Sublessee's failure to
do so will constitute a default under this Sublease. Sublessor will not
be required to keep the Security Deposit separate from its general
accounts, and will have no obligation or liability for payment of
interest on the Security Deposit. If Sublessor assigns its interest in
this Sublease, Sublessor will deliver to its assignee as much of the
Security Deposit as Sublessor then holds. Within ten (10) days after the
Term has expired or Sublessee has vacated the Subleased Premises or any
final adjustment pursuant to Subsection 4(b) of this Sublease has been
made, whichever occurs last, and provided that Sublessee is not then in
default under this Sublease, the Security Deposit, or as much as remains
that has not been applied by Sublessor, will be returned to Sublessee or
to the last assignee, if any, of Sublessee's interest under this
Sublease.

                     SECTION 6. USE OF PREMISES.

The Subleased Premises will be used and occupied only for office,
administration, marketing, and all related legal uses, all subject to
Master Lessor's approval; and for no other use or purpose.


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<PAGE>


                     SECTION 7. ASSIGNMENT AND SUBLETTING.

Sublessee will not assign this Sublease or further sublet all or any
part of the Subleased Premises without the prior written consent of
Sublessor (and the consent of Master Lessor, if this is required under
the terms of the Master Lease).

The foregoing notwithstanding, Sublessee shall be entitled to assign or
sublease the Subleased Premises without the consent of Sublessor to any
Affiliated Company of Sublessee, meaning any corporation which controls,
is controlled by, or is under common control with Sublessee, or to any
corporation resulting from a merger or consolidation with Sublessee, or
to any person or entity which acquires all, or substantially all, of the
assets of Sublessee as a going concern, provided that any such assignee
assumes, in full, the obligations of Sublessee under this Sublease
Agreement, and provided further that Sublessee shall not be released
from its obligations under or liabilities arising out of this Sublease
Agreement.

The above provision notwithstanding, Sublessee shall be required to
secure Master Lessor's consent to any subsequent assignment or
subletting to the full extent as required under the Master Lease, whose
terms and provisions are expressly incorporated herein.

                    SECTION 8.  OTHER PROVISIONS OF SUBLEASE.

(a)  All applicable terms and conditions of the Master Lease are
     incorporated into and made a part of this Sublease as if Sublessor
     were the Lessor, Sublessee the lessee, and the Subleased Premises
     the Master Premises, except for the following:  Section 2; Section 3
     (but only to the extent that the Base Rent payable under the Master
     Lease differs from the Rent set forth herein); Section 32; Section
     38; Section 39; Addendum Sections 1-3, Section 5, Addendum Sections
     9-10; Section 11(a); Amendment No. 2 to Lease (in its entirety);
     Amendment No. 1 to Lease (except to the extent that such amendment
     extended the term of the Master Lease); and Amendment No. 3 to Lease
     (in its entirety).

(b)  Sublessee assumes and agrees to perform the Lessee's obligations
     under the Master Lease during the Term to the extent that these
     obligations are applicable to the Subleased Premises.  However, the
     obligation to pay rent and operating costs to Master Lessor under
     the Master Lease will be considered performed by Sublessee to the
     extent and in the amount rent and operating costs are paid to
     Sublessor in accordance with Section 4 of this Sublease.

(c)  Sublessee will not commit or suffer any act or omission that will
     violate any of the provisions of the Master Lease.  Sublessor will
     exercise due diligence in attempting to cause Master Lessor to
     perform its obligations under the Master Lease for the benefit of
     Sublessee.

(d)  If the Master Lease terminates, at the option of Master Lessor, this
     Sublease will terminate and the parties will be relieved of any
     further liability or obligation under this Sublease.  However, if
     the Master Lease terminates as a result of a default or breach by
     Sublessor or Sublessee under this Sublease or the Master Lease, the
     defaulting party will be liable to the nondefaulting party for the
     damage suffered as a result of the termination.  Regardless, if the
     Master Lease gives Sublessor any right to terminate the Master Lease
     in the event of the partial or total damage, destruction, or
     condemnation of the Master Premises or the building or project of
     which the Master Premises are a part, the exercise of this right by
     Sublessor will not constitute a default or breach.

(e)  If  Sublessor fails to cure any default by Sublessor in the
     performance of its obligations, covenants and agreements under this
     Sublease Agreement, including without limitation Sublessor's
     obligation to perform its obligations under the Master Lease, either
     within ten (10) days in the case


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<PAGE>

     of a payment default under this Sublease Agreement or the Master
     Lease, or within thirty (30) days after written notice of such
     default from Sublessee in the case of other defaults, Sublessee
     shall have the right, but not the obligation, to cure any such
     default and to thereafter be reimbursed by Sublessor for the
     reasonable costs incurred in effecting such cure and by reason of
     such default by Sublessor.

(f)  Sublessor shall not amend or otherwise modify the Master Lease in a
     manner that would adversely affect the Subleased Premises,
     Sublessee's use or occupancy thereof (or its use of the Common
     Areas), or Sublessor's or Sublessee's rights or obligations under
     this Sublease Agreement without the prior written consent of
     Sublessee, which shall not be unreasonably withheld.

(g)  Sublessor shall provide to Sublessee, promptly upon receipt thereof,
     copies of any notices from the Master Lessor that are relevant to
     Sublessee's use or occupancy of the Subleased Premises, the conduct
     of Sublessee's business thereon, or Sublessee's rights and
     obligations under this Sublease Agreement, including without
     limitation copies of any notices stating that Sublessor is in
     default of its obligations under the Master Lease.

                     SECTION 9.  HAZARDOUS MATERIALS

(a)  USE OF HAZARDOUS MATERIAL. Sublessor has no knowledge of the
     presence of any Hazardous Material, as hereinafter defined, in, on
     or about the Subleased Premises.  Sublessee shall not cause or
     permit any Hazardous Material, to be generated, brought onto, used,
     stored, or disposed of in or about the Subleased Premises or the
     Project by Sublessee or its agents, employees, contractors,
     subtenants or invitees ("Sublessee's Hazardous Materials").
     Sublessee shall:

  (i)  Use, store, and dispose of all such Sublessee's Hazardous Material
       in strict compliance with all applicable statutes, ordinances, and
       regulations in effect during the Sublease Term that relate to
       public health and safety and protection of the environment
       ("ENVIRONMENTAL LAWS"), including but not limited to those
       Environmental Laws identified herein; and

  (ii) Comply at all times during the Sublease Term with all Environmental
       Laws applicable to Sublessee's Hazardous Materials.

(b)  INDEMNIFICATION.

  (i)  Sublessee shall, at Sublessee's sole expense and with counsel
       reasonably acceptable to Sublessor, indemnify, defend, and hold
       harmless Sublessor and Sublessor's shareholders, directors,
       officers, employees, partners, affiliates, and agents with respect
       to all losses arising out of or resulting from the release of any
       Hazardous Material in or about the Subleased Premises or the
       Building, or the violation of any Environmental Law, by Sublessee
       or Sublessee's agents, contractors, or invitees.

  (ii) Sublessor shall, at Sublessor's sole expense and with counsel
       reasonably acceptable to Sublessee, indemnify, defend and hold
       harmless Sublessee and Sublessee's shareholders, directors,
       officers, employees, partners, affiliates and agents with respect
       to all losses arising out of or resulting from any Hazardous
       Materials brought onto the Subleased Premises by or at the
       direction of Sublessor.

(c)  DEFINITION OF "HAZARDOUS MATERIAL."  As used in this Sublease, the
     term "HAZARDOUS MATERIAL" shall mean any hazardous or toxic
     substance, material, or waste that is or becomes regulated by


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<PAGE>


the United States, the State of California, or any local government authority
having jurisdiction over the Building. Hazardous Material includes:

(i)    Any "hazardous substance," as that term is defined in the
       Comprehensive Environmental Response, Compensation, and Liability Act of
       1980 (CERCLA) (42 United States Code sections 9601-9675);

(ii)   "Hazardous waste," as that term is defined in the Resource Conservation
       and Recovery Act of 1976 (RCRA) (42 United States Code sections
       6901-6992k);

(iii)  Any pollutant, contaminant, or hazardous, dangerous, or toxic chemical,
       material, or substance, within the meaning of any other applicable
       federal, state, or local law, regulation, ordinance, or requirement
       (including consent decrees and administrative orders imposing liability
       or standards of conduct concerning any hazardous, dangerous, or toxic
       waste, substance, or material, now or hereafter in effect);

(iv)   Petroleum products;

(v)    Radioactive material, including any source, special nuclear,
       or byproduct material as defined in 42 United States Code
       sections 2011-2297g-4;

(vi)   Asbestos in any form or condition; and

(viii) Polychlorinated biphenyls (PCBs) and substances or compounds
       containing PCBs.

                          SECTION 10. ATTORNEY FEES.

If either party commences an action against the other in connection with this
Sublease, the prevailing party will be entitled to recover costs of suit and
reasonable attorney fees.

                             SECTION 11. BROKERS.

Sublessor and Sublessee each warrant that they have not dealt with any real
estate broker in connection with this transaction except for CB Richard Ellis,
representing Sublessor and BT Commercial, representing Sublessee. Sublessor
and Sublessee each agree to indemnify, defend, and hold the other harmless
against any damages incurred as a result of the breach of the warranty
contained in this Sublease.

                             SECTION 12. NOTICES.

All notices and demands that may be required or permitted by either party to
the other will be in writing. All notices and demands by the Sublessor to
Sublessee will be sent by United States Mail, postage prepaid, addressed to
the Sublessee at the Subleased Premises, and to the address in this Sublease
below, or to any other place that Sublessee may from time to time designate
in a notice to the Sublessor. All notices and demands by the Sublessee to
Sublessor will be sent by United States Mail, postage prepaid, addressed to
the Sublessor at the address in this Sublease, and to any other person or
place that the Sublessor may from time to time designate in a notice to the
Sublessee.

To Sublessor:
Webvan Group, Inc., 1241 E. Hillsdale Blvd., Suite 210, Foster City, CA 94404
ATTENTION: Kim Marlan


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<PAGE>


To Sublessee:
Inhale Therapeutic Systems, Inc., __________________________.
ATTENTION: _______________________________________

                    SECTION 13. SUCCESSORS AND ASSIGNS.

This Sublease will be binding on and inure to the benefit of the parties to
it, their heirs, executors, administrators, successors in interest, and
assigns.

                         SECTION 14. ATTORNMENT.

If the Master Lease terminates, Sublessee will, if requested, attorn to
Master Lessor and recognize Master Lessor as Sublessor under this Sublease.
However, Sublessee's obligation to attorn to Master Lessor will be
conditioned on Sublessee's receipt of a nondisturbance agreement.

                           SECTION 15. ENTRY.

Sublessor reserves the right to enter the Subleased Premises on reasonable
notice to Sublessee to inspect the Subleased Premises or the performance by
Sublessee of the terms and conditions of this Sublease. In an emergency, no
notice will be required for entry.

                  SECTION 16. LATE CHARGE AND INTEREST.

The late payment of any Rent will cause Sublessor to incur additional costs,
including the cost to maintain in full force the Master Lease, administration
and collection costs, and processing and accounting expenses. If Sublessor
has not received any installment of Rent within five (5) days after that
amount is due, Sublessee will pay five percent (5%) of the delinquent amount,
which is agreed to represent a reasonable estimate of the cost incurred by
Sublessor. In addition, all delinquent amounts will bear interest from the
date the amount was due until paid in full at a rate per annum ("Applicable
Interest Rate") equal to the greater of (a) five percent (5%) per annum plus
the then federal discount rate on advances to member banks in effect at the
Federal Reserve Bank of San Francisco on the 25th day of the month preceding
the date of this Sublease or (b) ten percent (10%). However, in no event will
the Applicable Interest Rate exceed the maximum interest rate permitted by
law that may be charged under these circumstances. Sublessor and Sublessee
recognize that the damage Sublessor will suffer in the event of Sublessee's
failure to pay this amount is difficult to ascertain and that the late charge
and interest are the best estimate of the damage that Sublessor will suffer.
If a late charge becomes payable for any three (3) installments of Rent
within any twelve (12) month period, the Rent will automatically become
payable quarterly in advance.

              SECTION 17. MASTER LESSOR'S PERFORMANCE AND CONSENT

(a) Sublessee recognizes that Sublessor is not in a position to provide any
    of the utilities or services required or appropriate for the Building or
    the Subleased Premises or to perform any of the obligations required of
    Master Lessor by the terms of the Master Lease. To the extent that the
    provision of any services or the performance of any maintenance or any
    other act respecting the Subleased Premises or the Building is the
    responsibility of the Master Lessor, (collectively, "MASTER LESSOR
    OBLIGATIONS"), upon Sublessee's request, Sublessor shall make reasonable
    efforts to cause Master Lessor to perform such Master Lessor Obligations;
    provided, however, that in no event shall Sublessor be liable to Sublessee
    for any liability, loss or damage whatsoever in


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<PAGE>


    the event that Master Lessor should fail to perform the same, nor shall
    Sublessee be entitled to withhold that payment of Rent or terminate this
    Sublease. It is expressly understood that the services and repairs which
    are incorporated herein by reference, including but not limited to the
    maintenance of exterior walls, structural portions of the roof,
    foundations, walls and floors, driveways, parking areas, and landscaping
    will in fact be furnished by Master Lessor and not by Sublessor, except to
    the extent otherwise provided in the Master Lease. In addition, Sublessor
    shall not be liable for any maintenance, restoration (following casualty
    or destruction) or repairs in or to the Building or Premises, other than
    its obligation hereunder to use reasonable efforts to cause Master Lessor
    to perform its obligations under the Master Lease. With respect to any
    maintenance or repair to be performed by Master Lessor respecting the
    Subleased Premises, the parties expressly agree that Sublessee shall have
    the right to contact Master Lessor directly to cause it to so perform.
    Except as otherwise provided herein, Sublessor shall have no other
    obligations to Sublessee with respect to the performance of Master Lessor
    Obligations.

(b) Sublessor and Sublessee recognize that certain actions Sublessee may wish
    to undertake pursuant to this Sublease Agreement will require, in addition
    to or in lieu of the consent of Sublessor, the consent of the Master
    Lessor. Whenever the consent of the Master Lessor is required under the
    Master Lease, and whenever the Master Lessor fails to perform its
    obligations under the Master Lease, Sublessor agrees to use its
    commercially reasonable, good faith efforts to obtain, at Sublessee's sole
    cost and expense, that consent or performance on behalf of Sublessee; and
    Sublessee shall cooperate with such efforts.

(c) Subject to Master Lessor's approval, as described below, Sublessor and
    Sublessee agree that Sublessee shall have the right to install tenant
    improvements in the Subleased Premises in accordance with and subject to
    the Tenant Improvement Plan attached hereto as Exhibit B (the "INITIAL
    TENANT IMPROVEMENTS") and incorporated herein by this reference. Anything
    in this Sublease Agreement to the contrary notwithstanding, it is agreed
    and understood by Sublessor and Sublessee (i) that Sublessor shall not
    impose any obligation on Sublessee to remove, at the expiration or earlier
    termination of the Sublease, the Initial Tenant Improvements, except to
    the extent that Master Lessor imposes such an obligation upon Sublessor,
    and (ii) that Sublessee's obligation to remove such tenant improvements
    shall be only that, if any, imposed by the Master Lessor in accordance
    with the Master Lease.

                         SECTION 18. ENTIRE AGREEMENT.

This Sublease sets forth all the agreements between Sublessor and Sublessee
concerning the Subleased Premises, and there are no other agreements either
oral or written other than as set forth in this Sublease.

                         SECTION 19. TIME OF ESSENCE.

Time is of the essence in this Sublease.

                     SECTION 20. CONSENT BY MASTER LESSOR.

THIS SUBLEASE WILL HAVE NO EFFECT UNLESS CONSENTED TO BY MASTER LESSOR WITHIN
10 DAYS AFTER EXECUTION IF CONSENT IS REQUIRED UNDER THE TERMS OF THE MASTER
LEASE.


Sublease
11/16/99
Page 10 of 12

<PAGE>

                         SECTION 21. GOVERNING LAW.

This Sublease will be governed by and construed in accordance with
California law.

               SECTION 22. PURCHASE OF EQUIPMENT AND FURNITURE

Sublessee shall, separate and apart from the payment of Rent, purchase
certain furniture belonging to Sublessor presently located on the Subleased
Premises, all of which are listed on attached Exhibit A, for a purchase price
of $30,000.00. Payments in the amount of $10,000 each shall be due on
December 1, 1999, January 1, 2000 and February 1, 2000. The parties expressly
understand and agree that these payments represent compensation for the
purchase of Sublessor's personal property, and do not constitute rent.

IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THE SUBLEASE:

SUBLESSEE:                             SUBLESSOR:

By /s/Stephen L. Hurst                 By /s/ David S. Rock
  --------------------------------       -----------------------------
Name Printed: Stephen L. Hurst         Name Printed: David S. Rock
             ---------------------                  ------------------
Its: General Counsel                   Its: Vice President Real Estate
    ------------------------------         ---------------------------
Date: 23 November 1999                 Date: November 24, 1999
     -----------------------------          --------------------------

By /s/ Sharron Reiss-Muller            By
  --------------------------------       -----------------------------
Name Printed: Sharron Reiss-Muller     Name Printed:
             ---------------------                  ------------------
Its: V.P. Operations Mgmt              Its:
    ------------------------------         ---------------------------
Date:  11/23/99                        Date:
     -----------------------------          --------------------------

                     MASTER LESSOR'S CONSENT TO SUBLEASE

The undersigned ("Master Lessor"), Lessor under the Master Lease, consents to
the Sublease without waiver of any restriction in the Master Lease concerning
further assignment or subletting. Master Lessor certifies that, as of the
date of Master Lessor's execution, Sublessor is not in default or breach of
any of the provisions of the Master Lease, and that the Master Lease has not
been amended or modified except as expressly set forth in the Sublease.

Master Lessor hereby consents to the installation of the Initial Tenant
Improvements at the Subleased Premises in accordance with and subject to the
Tenant Improvement Plan attached hereto as Exhibit B and incorporated herein
by this reference. Neither Sublessor nor Sublessee shall have any obligation
to remove, at the expiration or earlier termination of the Sublease, any such
Initial Tenant Improvements.

MASTER LESSOR:

By /s/ Phillip Raiser
  --------------------------
Name Printed: Phillip Raiser
             ---------------
Its General Partner
   -------------------------
Date: 12/1/99
     -----------------------

Sublease
11/16/99
Page 11 of 12

<PAGE>

                                   EXHIBIT A
                           PERSONAL PROPERTY INVENTORY

<TABLE>
<CAPTION>
DESCRIPTION                                          QUANTITY
-----------                                          --------
<S>                                                 <C>
Corner Desk - 36 x 36 x 25                           6
Corner Desk - 36 x 36 x 26                           3
Double Ped Return - 25 x 60                          6
Conference Reference Table - 36 x 36                 1
Conference Table - 42 x 66                           1
Solo Side Arm Chairs                                 24
Opening Bookcases - 12 x 42 x 36                     8
Round Table - 42"                                    2
Driset/Desk Mounted Bookcase - 14 x 36 x 34          2
Steelcase Locking Overhead Bookshelf - 60 x 14       1
Steelcase Panel Leg                                  1
Free Standing Return Open Shell - 24 x 48 x 29       1
Return w/b-b-f 20' w/o Ped                           2
Free Standing Return Worksurface - 30 x 25           6
Free Standing Return Worksurface - 36 x 25           1
Free Standing Return Worksurface - 25 x 42           3
Free Standing Return Worksurface - 48 x 25           4
Free Standing Return Worksurface - 6/6/12 60 x 25    2
Free Standing Return Worksurface - 60 x 25           4
Free Standing Return Worksurface - 36 x 25           7
Panel End Leg - 25"                                  2
Overhead w/lock                                      3
Wall Channel                                         6
Overhead 60" w/lock                                  1
60" Tack Board                                       3
Workstations                                         10
Work stations, conference/training area, reception

</TABLE>
PROPERTY NOT INCLUDED:
Approximately 82 Aeron Chairs


Sublease
11/16/99
Page 12 of 12

<PAGE>

                   STANDARD FORM INDUSTRIAL NET LEASE

                        BASIC LEASE INFORMATION

DATE: March 20, 1998

LESSOR: Harbor Belmont Associates, a California General Partnership

LESSEE: Intelligent Systems for Retail, Inc., a California Corporation

<TABLE>
<CAPTION>
                                                                            LEASE REFERENCE

<S>                                                                           <C>
PREMISES: 260 Harbor Boulevard, Belmont, CA                                    PARAGRAPH 1

RENTABLE AREA OF PREMISES: Seven Thousand Nine Hundred Eighty-Five sq. ft.     PARAGRAPH 1
                           (7,985 sq. ft.)
TERM COMMENCEMENT: May 15, 1998                                                PARAGRAPH 2

TERM EXPIRATION: May 31, 2003                                                  PARAGRAPH 2

TENANT IMPROVEMENT ALLOWANCE: $15,000; see addendum                            PARAGRAPH 2

BASE RENT: $1.55                                                              PARAGRAPH 3

LESSEE'S PERCENTAGE SHARE: 3.77%                                               PARAGRAPH 3

USE: Research and development, administration, office and marketing, and       PARAGRAPH 4
     all other uses as approved by the City of Belmont

SECURITY DEPOSIT: Twenty Seven Thousand Nine Hundred Forty Seven and           PARAGRAPH 32
                  00/100 Dollars ($27,947.00)

LESSEE'S ADDRESS FOR NOTICES:

1241 Hillsdale Blvd., Suite 203
-------------------------------
Foster City, CA  94404
-------------------------------

-------------------------------                                                PARAGRAPH 34

LESSOR'S ADDRESS FOR NOTICES:

800 SOUTH CLAREMONT AVENUE
SAN MATEO, CA 94402                                                            PARAGRAPH 34

EXHIBIT(S) AND ADDENDUM:                                                       PARAGRAPH 41

   EXHIBIT A - DIAGRAM OF PREMISES
   Addendum to Lease

</TABLE>

THE PROVISIONS OF THE LEASE IDENTIFIED ABOVE ARE THOSE PROVISIONS WHERE
REFERENCES TO PARTICULAR BASIC LEASE INFORMATION APPEAR. EACH SUCH REFERENCE
SHALL INCORPORATE THE APPLICABLE BASIC LEASE INFORMATION. IN THE EVENT OF ANY
CONFLICT BETWEEN ANY BASIC LEASE INFORMATION AND THE LEASE, THE LATTER SHALL
CONTROL.

LESSEE: Intelligent Systems for Retail,       LESSOR: Harbor Belmont Associates,
Inc., a California Corporation                a California General Partnership

By /s/ Louis H. Borders                       By /s/ Phillip Raiser
  ------------------------------------          --------------------------------
  Louis H. Borders

Its President                                 Its General Partner
   -----------------------------------           -------------------------------

<PAGE>

                       STANDARD FORM INDUSTRIAL NET LEASE

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                      Page
<S>                                                                  <C>
 1.  The Premises..................................................    1

 2.  Term; Initial Tenant Improvements.............................    1

 3.  Rental........................................................    1

 4.  Use...........................................................    2

 5.  Services and Utilities........................................    2

 6.  Other Taxes and Charges Payable by Lessee.....................    2

 7.  Alterations and Additions.....................................    2

 8.  Liens.........................................................    2

 9.  Maintenance and Repairs.......................................    3

10.  Destruction or Damage.........................................    3

11.  Insurance.....................................................    3

12.  Waiver of Subrogation.........................................    3

13.  Indemnification...............................................    3

14.  Compliance with Legal Requirements............................    3

15.  Assignment and Subletting.....................................    3

16.  Rules.........................................................    4

17.  Entry by Lessor...............................................    4

18.  Events of Default.............................................    4

19.  Termination Upon Default......................................    5

20.  Continuation After Default....................................    5

21.  Other Relief..................................................    5

22.  Lessor's Right to Cure Defaults...............................    5

23.  Attorneys' Fees...............................................    5

24.  Eminent Domain................................................    5

25.  Subordination.................................................    5

26.  No Merger.....................................................    5

27.  Sale..........................................................    5

28.  Estoppel Certificate..........................................    5

29.  No Light, Air, or View Easement...............................    5

30.  Holding Over..................................................    5

31.  Abandonment...................................................    5

32.  Security Deposit..............................................    5

33.  Waiver........................................................    6

34.  Notices.......................................................    6

35.  Complete Agreement............................................    6

36.  Corporate Authority...........................................    6

37.  Miscellaneous.................................................    6

38.  Limitations of Lessor's Liability.............................    6

39.  Brokerage Commissions.........................................    6

40.  Parking.......................................................    6

41.  Exhibits and Addendum.........................................    6
</TABLE>

Rules and Regulations
Exhibit(s) and Addendum

<PAGE>

                       STANDARD FORM INDUSTRIAL NET LEASE


     THIS LEASE, dated March 20, 1998 for purposes of reference only, is made
     and entered into by and between Harbor Belmont Associates, a California
     General Partnership ("Lessor") and Intelligent Systems for Retail, Inc.,
     a California Corporation ("Lessee").

1.   THE PREMISES:  Lessor hereby leases to Lessee and Lessee hereby leases
     from Lessor the premises (the "premises"), designated on the floor plan
     attached hereto as Exhibit A, comprising 7985 rentable square feet
     located in unit 260 in Building A of Harbor Park, located at 300 Harbor
     Boulevard in Belmont, California for the term and subject to the
     covenants and conditions hereinafter set forth, to each and all of which
     Lessor and Lessee hereby mutually agree.

2.   TERM; INITIAL TENANT IMPROVEMENTS:  (a)  The term of this Lease shall
     commence and, unless sooner terminated as hereinafter provided, shall
     end on the dates respectively specified in the Basic Lease information.
     If Lessor, for any reason whatsoever, cannot deliver possession of the
     premises to Lessee at the commencement of said term as above specified,
     this Lease shall not be void or voidable, nor shall Lessor be liable to
     Lessee for any loss or damage resulting therefrom, but in that event
     rental shall be waived for the period between the commencement of said
     term and the time when Lessor can deliver possession. No delay of
     possession shall operate to extend the term hereof commensurately.

     (b)  Prior to the commencement of the term, Lessee shall complete the
     Tenant improvements to be constructed or installed in the premises
     pursuant to ADDENDUM attached hereto (the "Tenant Improvements"). SEE
     ADDENDUM [ILLEGIBLE].

     (c)  Lessor shall pay the cost of the Tenant improvements up to the sum
     specified in the Basic Lease information as the Tenant Improvement
     Allowance and all other Tenant Improvement Costs shall be paid by
     Lessee, as provided in the Addendum [ILLEGIBLE].

     (d)  In the event Lessor permits Lessee to occupy the premises prior to
     the commencement date of the term, such occupancy shall be subject to
     all provisions of this Lease. See Addendum paragraph 3

3.   RENTAL:  (a) Base Rent. Lessee shall pay to Lessor throughout the term
     of the Lease as rental for the premises the sum specified in the Basic
     Lease information as the Base Rent, subject to the following adjustment:

     See Addendum paragraph 1

     (b)  LESSEE'S PERCENTAGE SHARE OF OPERATING EXPENSES AND PROPERTY TAXES.
     Lessee shall pay to Lessor throughout the term hereof as additional
     rental Lessee's Percentage Share of Operating Expenses and Property
     Taxes.

           (1)  The term "Operating Expenses" shall mean (1) all costs of
           management, operation and maintenance of the Project including,
           without limitation, wages, salaries, fringe benefits and payroll
           burden of employees, maintenance, guard, security and other
           services, Project office rent or rental value, water and waste
           disposal for the Project, janitorial services, gas, electricity
           and other utilities for the Building and Project common areas,
           materials and supplies, maintenance and repairs, landscaping,
           insurance, depreciation on personal property, and (2) the cost of
           any capital improvements made to the Project by Lessor that are
           anticipated to reduce other Operating Expenses or made to the
           Project by Lessor that are required under any governmental law or
           regulation, such cost or allocable portion thereof to be amortized
           over such reasonable period as Lessor shall determine together
           with interest on the unamortized balance at the reference rate
           from time to time announced by the Bank of America, San Francisco
           main office, plus 2% per annum or such higher rate as may have
           been paid by Lessor on funds borrowed for the purpose of
           constructing such capital improvements; provided, however, that
           Operating Expenses shall not include Property Taxes, depreciation
           on the buildings in the Project, costs of tenants' improvements in
           excess of tenant standard, real estate brokers' commissions,
           interest and capital items other than those referred to in clause
           (2) above and any expense to the extent Lessor receives direct
           reimbursement by tenants, insurers or other third parties. Actual
           Operating Expenses for calendar year shall be adjusted to equal
           Lessor's reasonable estimate of Operating Expenses had 100% of the
           rentable area of the Project been occupied.

           (2)  The term "Property Taxes" shall mean all real property taxes
           and personal property taxes, licenses, charges and assessments
           which are levied, assessed or imposed by any governmental or
           quasi-governmental authority, improvement or assessment district
           with respect to the Project or any other fixtures, improvements,
           equipment or other property of Lessor, real or personal, located
           in the Project and used in connection with the operation thereof,
           whether or not now customary or within the contemplation of the
           parties hereto, including, without limitation, any taxes, charges
           or assessments for public improvements, services or benefits,
           irrespective of when commenced or completed, transit fees, housing
           funds, education funds, street, highway or traffic fees, as well
           as any tax which shall be levied or assessed in addition to or in
           lieu of such taxes, any charge upon Lessor's business of leasing of
           the Project (unless included in paragraph 6) and any costs or
           expenses of contesting any such taxes, licenses, charges or
           assessments, but excluding any federal or state income or gift tax
           or any franchise, capital stock, estate or inheritance taxes. In
           the event that it shall not be lawful for Lessee to reimburse
           Lessor for Lessee's percentage share of any Property Tax, as
           defined herein, the rent payable to Lessor under this Lease shall
           be revised to yield to Lessor the same net rent from the premises
           after imposition of any such tax upon Lessor as would have been
           received by Lessor hereunder prior to the imposition of any such
           tax.

           (3)  The term "Lessee's Percentage Share" shall mean the
           percentage figure specified in the Basic Lease information. Lessor
           and Lessee acknowledge that Lessee's percentage share has been
           obtained by dividing the net rentable area of the premises,
           specified in the Basic Lease information, by the total net
           rentable area in the Project, which Lessor and Lessee agree is
           212,000 square feet, and multiplying such quotient by 100. In the
           event Lessor's Percentage Share is changed during a calendar
           year by reason of a change in the net rentable area of the
           premises, Lessee's Percentage Share shall thereafter mean the
           result obtained by dividing the new net rentable area of the
           premises by 212,000 square feet and multiplying such quotient by
           100, and for the purposes of section 3, Lessee's Percentage Share
           shall be determined on the basis of the number of days during such
           calendar year at each such Percentage Share.

           (4)  Prior to the commencement of the term hereof, and in December
           of each subsequent calendar year, or as soon thereafter as
           practicable, Lessor shall give Lessee written notice of its
           estimate of Lessee's Percentage Share of Operating Expenses and
           Property Taxes. On or before the first day of each month during
           the ensuing calendar year, Lessee shall pay to Lessor 1/12 of such
           estimated amounts, provided that if such notice is not given in
           December, Lessee shall continue to pay on the basis of the then
           applicable rental until the month after such notice is given. If at
           any time or times it

                                                          INDUSTRIAL NET LEASE
                                                          INITIAL HERE:

                                                          [ILLEGIBLE]
                                                          --------------------
                                                          Page 1
<PAGE>

          appears to Lessor that the amounts payable under this paragraph (b)
          for the current calendar year will vary from its estimate by more
          than 5%. Lessor may, by notice to Lessee, revise its estimate for
          such year, and subsequent payments by Lessee for such year shall be
          based upon such revised estimate.

          (5) Within 90 days after the close of each calendar year or as soon
          after such 90-day period as practicable, Lessor shall deliver to
          Lessee a statement of actual Property Taxes and Operating Expenses
          for such calendar year. If, on the basis of such statement, Lessee
          owes an amount that is less than the estimated payments for such
          calendar year previously made by Lessee, Lessor shall credit such
          excess against the next payment of rental due from Lessee
          hereunder, or, if at the end of the term hereof, if no payments are
          due from Lessee, Lessor shall pay the excess to Lessee within 30
          days after the statement is delivered. If on the basis of such
          statement Lessee owes an amount that is more than the estimated
          payments for such calendar year previously made by Lessee, Lessee
          shall pay the deficiency to Lessor within 30 days after delivery of
          the statement. The obligation of Lessor and Lessee to make the
          reconciling payments referred to in this paragraph (s) shall
          survive the termination of this Lease.  The payments to be made
          pursuant to this paragraph (b) for partial years at the beginning or
          end of the term hereof shall be prorated on the basis which the number
          of days from the commencement of such calendar year to and including
          such termination date bears to 365.

     (c)  Rental shall be paid to Lessor on or before the first day of the
     term hereof and on or before the first day of each and every successive
     calendar month thereafter during the term hereof. In the event the term
     of this Lease commences on a day other than the first day of a calendar
     month or ends on a day other than the last day of a calendar month, then
     the monthly rental for the first and last fractional months of the term
     hereof shall be appropriately prorated.

     (d)  Lessee hereby acknowledges that late payment by Lessee to Lessor of
     rent and other sums due hereunder after the expiration of any applicable
     grace period will cause Lessor to incur costs not contemplated by this
     Lease, the exact amount of which will be extremely difficult to
     ascertain. Such costs include, but are not limited to, processing and
     accounting charges, and late charges which may be imposed on Lessor by
     the terms of any mortgage or trust deed covering the premises.
     Accordingly, if any installment of rent or any other sums due from
     Lessee shall not be received by Lessor when due or if a grace period is
     applicable, prior to the expiration of the grace period, Lessee shall pay
     to Lessor a late charge equal to 6% of such overdue amount. The
     parties hereby agree that such late charge represents a fair and
     reasonable estimate of the costs Lessor will incur by reason of late
     payment by Lessee. Acceptance of such late charge by Lessor shall in no
     event constitute a waiver of Lessee's default with respect to such
     overdue amount, nor prevent Lessor from exercising any of the other
     rights and remedies available to Lessor hereunder or at law.

     (e)  Rental and all other payments to be made by Lessee hereunder shall
     be paid to Lessor without deduction or offset, in lawful money of the
     United States of America at Lessor's address for notices hereunder or to
     such other person or at such other place as Lessor may from time to time
     designate in writing.

     (f)  All sums of money or charges required to be paid by Lessee
     hereunder shall be deemed rental for the premises and may be designated
     in as such any statutory notice to pay rent or quit the premises.

4.   USE:  The premises shall be used for the purpose set forth in the Basic
     Lease information and no other and shall be continuously occupied by
     Lessee. Lessee shall not do or permit to be done in or about the
     premises, nor bring or keep or permit to be brought or kept therein,
     anything which is prohibited by or will in any way conflict with any
     law, statute, ordinance or governmental rule or regulation now in force
     or which may hereafter be enacted or promulgated, or which is prohibited
     by the standard form of fire insurance policy, or will in any way
     increase the existing rate of or affect any fire or other insurance upon
     the Building or any of its contents, or cause a cancellation of any
     insurance policy covering the Building or any part thereof or any of its
     contents. Lessee shall not do or permit anything to be done in or about
     the premises which will in any way obstruct or interfere with the rights
     of other tenants of the Building, or injure or annoy them, or use or
     allow the premises to be used for any improper, immoral, unlawful or
     objectionable purpose, nor shall Lessee cause, maintain or permit any
     nuisance in, on or about the premises or commit or suffer to be
     committed any waste in, on or about the premises.

5.   SERVICES AND UTILITIES:  Lessee shall pay for all gas, electricity,
     heat, cooling energy, telephone, janitorial service, water, waste
     disposal, refuse collection and other utility-type services furnished to
     Lessee or the premises, together with all related installation or
     connection charges or deposits. Lessor shall designate which of the
     above utilities shall be separately metered to the premises, and, as to
     such utilities, Lessee shall pay the cost of the metering and shall
     contract directly with and shall directly pay the provider of such
     services. Lessor reserves the right at any time or from time to time
     during the term of the Lease to require any of the above utilities to be
     separately metered to the premises, at Lessee's expense, or any of the
     above services to be contracted for directly by Lessee. Lessor shall
     furnish the premises with any of the above services and utilities not
     designated by Lessor for direct contracting or metering and the expense
     thereof shall be included in Operating Expenses, of which Lessee shall
     pay its Percentage Share pursuant to paragraph 3(b), provided that
     Lessee shall promptly reimburse Lessor upon demand for the cost of such
     utilities or services used on the premises in excess of the average
     level of such services consumed by other tenants of the Building or the
     Project. Lessor shall not be liable in damages, consequential or
     otherwise, nor shall there be any rent abatement, arising out of any
     interruption whatsoever in utility services which is due to fire,
     accident, strike, governmental authority, acts of God, or other causes
     beyond the reasonable control of Lessor or any temporary interruption
     in such service which is necessary to the making of alterations,
     repairs, or improvements to Building or the Project or any part of it.

6.   OTHER TAXES AND CHARGES PAYABLE BY LESSEE: In addition to the monthly
     rental and other charges to be paid by Lessee hereunder. Lessee shall
     pay or reimburse Lessor for any and all of the following, whether or not
     now customary or in the contemplation of the parties hereto: taxes
     (other than local, state and federal personal or corporate income taxes
     measured by the net income of Lessor from all sources), assessments
     (including, without limitation, all assessments for public improvements,
     services or benefits, irrespective of when commenced or completed),
     excises, levies, business taxes, license, permit, inspection and other
     authorization fees, transit development fees, assessments or charges for
     housing funds, service payments in lieu of taxes and any other fees or
     charges of any kind, which are levied, assessed, confirmed or imposed by
     any public authority: (a) upon, measured by or reasonably attributable to
     the cost or value of Lessee's equipment, furniture, fixtures and other
     personal property located in the premises or by the cost of any leasehold
     improvements made in or to the premises by or  for Lessee, regardless of
     whether title to such improvements shall be in Lessee or Lessor; (b) upon
     or measured by the monthly rental or other charges payable hereunder,
     including, without limitation, any gross income tax or excise tax levied
     by the City and County of San Francisco, the State of California, the
     Federal Government or any other governmental body with respect to the
     receipt of such rental; (c) upon, with respect to or by reason of the
     development, possession, leasing, operation, management, maintenance,
     alteration, repair, use or occupancy by Lessee of the premises or any
     portion thereof; (d) upon this transaction or any document to which
     Lessee is a party creating or transferring an interest or an estate in the
     premises. In the event that it shall not be lawful for Lessee so to
     reimburse Lessor, the monthly rental payable to Lessor under this Lease
     shall be revised to net Lessor the same net rental after imposition of
     any such tax or other charge upon Lessor as would have been payable to
     Lessor prior to the imposition of any such tax or other charge.

7.   ALTERATIONS AND ADDITIONS:  Lessee shall not make or suffer to be made
     any alterations, additions or improvements to or of the premises or any
     part thereof or attach any fixtures to the premises without first
     obtaining the written consent of Lessor. Any alterations, additions or
     improvements to the premises, including, but not limited to, wall
     covering, paneling and built-in cabinet work, (but excepting movable
     furniture and trade fixtures, which may be removed at the end of the
     Lease term provided their removal will not cause material damage to the
     premises and the Lessee posts reasonable security with Lessor to pay for
     any repair costs caused by such removal) shall, on the expiration of the
     term, become a part of the realty and belong to Lessor and shall be
     surrendered with the premises. Lessee shall submit detailed
     specifications and floor plans and necessary permits (if applicable)
     with respect to any requested alterations or improvements to Lessor for
     review. Lessor may require reasonable changes to such specifications or
     plans as a condition to giving its consent. In no event shall any
     alterations or improvements affect the structure of the Building or its
     facade. Any work consented to by Lessor hereunder shall be done at
     Lessee's expense and shall be performed either by Lessor a contractor or
     by contractors approved by Lessor, as Lessor may elect. In addition, as
     a condition to its consent, Lessor shall be entitled to request
     adequate assurance that all contractors who will perform such work have
     in force workmen's compensation and such other employee and public
     liability insurance as Lessor deems necessary to supplement the
     insurance coverage provided below. In case of material alterations,
     additions, improvements, Lessor may require Lessee or its contractors to
     post adequate completion and performance bonds.

8.   LIENS: Lessee shall keep the premises and the Building free from any
     liens arising out of any work performed, materials furnished or
     obligations incurred by Lessee. Lessor shall have the right to post and
     keep posted on the premises any notices that may be provided by law or
     which Lessor may deem to be proper for the protection of Lessor, the
     premises and the Building from such liens.

                                                          INDUSTRIAL NET LEASE
                                                          INITIAL HERE:

                                                          [ILLEGIBLE]
                                                          --------------------
                                                          Page 2

<PAGE>


9.   MAINTENANCE AND REPAIRS: See Addendum, paragraph 4 Lessee shall, at all
     times during the term hereof and at Lessee's sole cost and expense, keep
     the premises and every part thereof in good condition and repair, ordinary
     wear and tear, damage thereto by fire, earthquake, act of God or the
     elements excepted, Lessee hereby waiving all rights to make repairs at the
     expense of Lessor or in lieu thereof to vacate the premises as provided by
     California Civil Code Section 1942 or any other law, statute or
     ordinance now or hereafter in effect. Lessee shall at the end of the
     term hereof surrender to Lessor the premises and all alterations,
     additions and improvements thereto in the same condition as when
     received, ordinary wear and tear and damage by fire, earthquake, act of
     God or the elements excepted. Lessor has no obligation and has made no
     promise to alter, remodel, improve, repair, decorate or paint the
     premises or any part thereof, except as specifically herein set forth.
     No representations respecting the condition of the premises or the
     Building have been made by Lessor to Lessee, except as specifically
     herein set forth.

     Lessor shall have the right to require Lessee to replace, or reimburse
     Lessor for replacement of, all plate glass, including windows, in or
     upon the premises or in the Building which may be damaged or broken by
     Lessee, its employees, agents, guests or invitees.

     (b) Lessor shall maintain the roof, exterior walls and foundation of the
     Building, driveways, parking areas and landscaping for exterior common
     areas in the Project, in reasonably good order and condition except for
     damaged caused by the act of Lessee, its agents, employees, guests, or
     invitees, which damage shall be repaired at Lessee's expense by Lessor
     or Lessee, as Lessor may elect.

10.  DESTRUCTION OR DAMAGE: (a) In the event the premises or the portion of
     the Building necessary for Lessee's occupancy are damaged by fire,
     earthquake, act of God, the elements or other casualty, Lessor shall
     forthwith repair the same, subject to the provisions of this section
     hereinafter set forth, if such repairs can, in Lessor's opinion, be made
     within 90 days and if insurance proceeds are available to pay the cost
     thereof. This Lease shall remain in full force and effect except that,
     if such damage is not the result of the negligence or willful misconduct
     of Lessee or Lessee's employees or invitees, an abatement of rental
     shall be allowed Lessee for such part of the premises as shall be
     rendered unusable by Lessee in the conduct of its business during the
     time such part is so unusable. See Addendum, paragraph 6

     (b) If such repairs cannot, in Lessor's opinion, be made within 90 days,
     or if sufficient insurance proceeds are unavailable, Lessor may elect,
     upon notice to Lessee within 30 days after the date of such fire or
     other casualty, to repair or restore such damage, in which event this
     Lease shall continue in full force and effect, but the rent shall be
     partially abated as hereinabove in this section provided. If Lessor does
     not so elect to make such repairs, this Lease shall terminate as of the
     date of such fire or other casualty.

     (c) A total destruction of the Building shall automatically terminate
     this Lease. Lessee waives California Civil Code Sections 1932(2) and
     1933(4) providing for termination of hiring upon destruction of the
     thing hired.

     (d) If the premises are to be repaired under this section, Lessor shall
     repair at its cost any injury or damage to the Building itself and all
     leasehold improvements in the premises other than tenant improvements
     made by or for Lessee. Lessee shall pay the cost of repairing any tenant
     improvements made by or for Lessee and the cost of repairs or replacing
     Lessee's fixtures and personal property in the premises.

11.  INSURANCE: Lessee shall obtain and maintain during the term of this
     Lease comprehensive general liability insurance with a combined single
     limit for personal injury and property damage in an amount not less than
     $1,000,000, and employer's liability and worker's compensation insurance
     as required by law. If Lessee's insurance contains a split limit of
     liability the liability limit shall be not less than $1,000,000 for
     bodily injury and $300,000 for property damage. Such insurance policy
     shall also specifically cover Lessee's indemnity obligations set forth
     in paragraph 13. Lessee's comprehensive general liability insurance
     policy shall (1) provide that (i) it may not be cancelled or altered in
     such a manner as adversely to affect the coverage afforded thereby
     without 30 days' prior written notice to Lessor, (ii) Lessor is named as
     additional insured, (iii) such insurance is primary with respect to
     Lessor and any entity managing the Building and that any other insurance
     maintained by Lessor or such management company is excess and
     noncontributing with such insurance, (2) contain a cross-liability
     endorsement or a severability of interest clause (3) contain a waiver of
     subrogation as provided in paragraph 12; (4) provide for blanket
     contractual coverage, broad form property damage coverage and products
     completed operations coverage (where applicable); and (6) afford
     coverage for all claims based on acts, omissions, injury or damage which
     occurred or arose (or the onset of which occurred or arose) in whole
     or in part during the policy period. Lessee shall insure the full
     replacement cost of all personal property and fixtures of tenant and all
     improvements made by or for tenant to the premises. All insurance to be
     provided by Lessee shall be provided by a carrier or carriers rated
     "A-ix" in Best's Insurance Guide or shall otherwise be satisfactory to
     Lessor. If, in the opinion of Lessor's insurance advisor, based on a
     substantial increase in recovered liability claims generally, the
     specified amounts of coverage are no longer adequate, such coverage
     shall be appropriately increased. Prior to the commencement of the term,
     a duplicate of such policy or a certificate thereof shall be delivered to
     Lessor for retention by it. If Lessee fails to obtain such insurance or to
     furnish Lessor any such duplicate policy or certificate as herein required,
     Lessor may, at its election, without notice to Lessee and without any
     obligation so to do, procure and maintain such coverage and Lessee shall
     reimburse Lessor on demand as additional rent for any premium so paid by
     Lessor. See Addendum, paragraph 10

12.  WAIVER OF SUBROGATION: To the extent of insurance proceeds received with
     respect to the loss, Lessor and Lessee each hereby waive any right of
     recovery against the other party for any loss or damage maintained by
     such other party with respect to the Building or the premises or any
     portion thereof or any contents thereof or any operation therein whether
     or not such loss is caused by the fault or negligence of such
     other party. Lessee and Lessor shall each obtain from its insurers under
     all policies of insurance maintained by it at any time during the term
     hereof in connection with Building, the premises, the contents or
     operations therein, a waiver of all rights of subrogation which the
     insurer of one party might have against the other party.

13.  INDEMNIFICATION: Lessee shall hold Lessor harmless from any damage to
     any property or injury to or death of any person arising from the
     use of the premises or the Building by Lessee, its agents, employees,
     contractors and invitees, except such as is caused solely by the gross
     negligence or willful act of Lessor. The foregoing indemnity obligation
     of Lessee shall include reasonable attorneys' fees, investigation costs
     and all other reasonable costs and expenses incurred by Lessor from the
     first notice that any claim or demand is to be made or may be made. The
     provisions of this section 13 shall survive the termination of this
     Lease with respect to any damage, injury or death occurring prior to
     such termination.

14.  COMPLIANCE WITH LEGAL REQUIREMENTS: Lessee shall at its sole cost and
     expense promptly comply with all laws, statutes, ordinances and
     governmental rules, regulations or requirements now in force or which
     may hereafter be in force, with the requirements of any board of fire
     underwriters or other similar body now or hereafter constituted, with
     any direction or occupancy certificate issued pursuant to any law by any
     public officer or officers, as well as the provisions of all recorded
     documents affecting the premises, insofar as any thereof relate to or
     affect the condition, use or occupancy of the premises.

15.  ASSIGNMENT AND SUBLETTING: (a) Lessee shall not, without the prior written
     consent of Lessor, assign this Lease or any interest herein, sublet the
     premises or any part thereof, permit the use or occupancy of the
     premises by any person other than Lessee, or hypothecate this Lease or
     any interest herein. Any of the foregoing acts without such consent
     shall be void and shall, at the option of Lessor, constitute a
     default that shall entitle Lessor to terminate this Lease. This Lease
     shall not, nor shall any interest herein, be assignable as to the interest
     of Lessee involuntarily or by operation of law without the prior written
     consent of Lessor. Any transfer of more than 50% of Lessee's stock, or
     of a majority of general partnership interests in Lessee shall
     constitute a prohibited assignment under this Section 15. See Addendum,
     paragraph 11.

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     (c) Lessor's consent to a proposed assignment or sublet shall not be
     unreasonably withheld.  Without limiting the other instances in which it
     may be reasonable for Lessor to withhold its consent to an assignment or
     subletting.  Lessor and Lessee acknowledge that it shall be reasonable
     for Lessor to withhold its consent in the following instances:

          (1) the proposed assignee or sublessee is a governmental agency;

          (2) in Lessor's reasonable judgment, the use of the premises by the
          proposed assignee or sublessee would entail any alterations which
          would lessen the value of the leasehold improvements in the premises,
          or would require increased services by Lessor;

          (3) in Lessor's reasonable judgment, the financial worth of the
          proposed assignee or sublessee does not meet the credit standards
          applied by Lessor for other tenants under leases with comparable
          terms;

          (4) in Lessor's reasonable judgment the character, reputation or
          business of the proposed assignee or sublessee is not consistent with
          the quality of the other tenancies in the Building or the Project;

          (5) Lessor has received from any prior lessor to the proposed assignee
          or subtenant a negative report concerning such prior lessor's
          experience with the proposed assignee or subtenant;

          (6) Lessor has experienced previous defaults by or is in litigation
          with the proposed assignee or subtenant;

          (7) in Lessor's reasonable judgment, the premises, or the relevant
          part thereof, will be used in a manner that will violate any negative
          covenant as to use contained in any other lease of space in the
          Building or the Project;

          (8) the used of the premises by the proposed assignee or subtenant
          will violate any applicable law, ordinance or regulation;

          (9) the proposed assignment or sublease will create a vacancy
          elsewhere in the Building or the Project;

          (11) the proposed assignment or sublease fails to include all of the
          terms and provisions required to be included therein pursuant to this
          paragraph 15;

          (12) Lessee is in default of any obligation of Lessee under this
          lease, or Lessee has defaulted under this Lease on three (3) or more
          occasions during the twelve (12) months preceding the date that
          Lessee shall request consent; or

          (13) in the case of a subletting of less than the entire premises, if
          the subletting would result in the division of the premises into more
          than two subparcels or would require access to be provided through
          space leased or held for lease to another tenant or improvements to
          be made outside of the premises.

     (d) In the case of an assignment one half of any sums or other economic
     consideration received by Lessor as compensation for its leasehold interest
     as a result of such assignment shall be paid to Lessor after first
     deducting the unamortized cost of leasehold improvements paid for by
     Lessee, and the cost of any real estate commissions incurred in connection
     with such assignment.  In the case of a subletting one half of any sum or
     economic consideration received by Lessee as compensation for its leasehold
     interest as a result of such subletting shall be paid to Lessor after first
     deducting (1) the rental due hereunder, prorated to reflect only rental
     allocable to the sublet portion of the premises, and (2) the cost of any
     real estate commissions incurred in connection with such subletting,
     amortized over the term of the sublease.  Upon Lessor's request Lessee
     shall assign to Lessor one half of all amounts to be paid to Lessee by any
     such subtenant or assignee and shall direct such subtenant or assignee to
     pay the same directly to Lessor.

     (e) Lessee agrees that the instrument by which any assignment or subletting
     consented to by Lessor is accomplished shall expressly provide that the
     assignee or subtenant will perform and observe all the agreements,
     covenants, conditions and provisions to be performed and observed by Lessee
     under this Lease as and when performance and observance is due, that no
     assignee or subtenant shall have the further right to assign or sublet, and
     that Lessor shall have the right to enforce such agreements, covenants,
     conditions and provisions directly against such assignee or subtenant.
     Consent by Lessor to an assignment or subletting shall not release Lessee
     from any of Lessee's obligations hereunder and shall not be deemed to be a
     consent to any subsequent transfer, assignment or subletting.  Lessee shall
     in all cases remain responsible for the performance by any subtenant or
     assignee as indicated thereon of all such agreements, covenants, conditions
     and provisions.  Any assignment or subletting without an instrument
     containing the foregoing provision shall be void and shall, at the option
     of Lessor, constitute a default that entitles Lessor to terminate this
     Lease.

     (f) In the event Lessee shall assign or sublet the premises or request the
     consent of Lessor to any assignment or subletting then Lessee shall pay
     Lessor's reasonable attorney's fees incurred in connection therewith.

16.  RULES:  Lessee shall faithfully observe and comply with the rules and
     regulations annexed to this Lease and, after notice thereof, all reasonable
     modifications thereof and additions thereto from time to time promulgated
     in writing by Lessor, Lessor shall not be responsible to Lessee for the
     nonperformance by any other tenant or occupant of the Building of any said
     rules and regulations.

17.  ENTRY BY LESSOR:  Lessor may enter the premises at reasonable hours and
     (except in emergencies) upon 24 hours prior notice to (a) inspect the same,
     (b) exhibit the same to prospective purchases, lenders or tenants, (c)
     determine whether Lessee is complying with all its obligations hereunder,
     (d) supply janitor service and any other service to be provided by Lessor
     to Lessee hereunder, (e) post notices of nonresponsibility, and (f) make
     repairs required of Lessor under the terms hereof or repairs to any
     adjoining space or utility services or make repairs, alterations or
     improvements to any other portion of the Building; provided, however, that
     all such work shall be done as promptly as reasonably possible and so as
     to cause as little interference to Lessee as reasonably possible.  Lessee
     hereby waives any claims for damages for any injury or inconvenience to or
     interference with Lessee's business, any loss of occupancy or quiet
     enjoyment of the premises or any other loss occasioned by such entry.
     Lessor shall at all times have and retain a key with which to unlock all
     of the doors in, on or about the premises (excluding Lessee's vaults, sales
     and similar areas designated in writing by Lessee in advance); and Lessor
     shall have the right to use any and all means which Lessor may deem proper
     to open said doors in an emergency in order to obtain entry to the
     premises, and any entry to the premises obtained by Lessor by any of said
     means, or otherwise, shall not under any circumstances be construed or
     deemed to be a forcible or unlawful entry into or a detainer of the
     premises or as eviction, actual or constructive, of Lessee from the
     premises, or any portion thereof.

18.  EVENTS OF DEFAULT:  The occurrence of any one or more of the following
     events ("Events of Default") shall constitute a breach of this Lease by
     Lessee:  (a) if Lessee shall fail to pay any rental when and as the same
     becomes due and payable; or (b) if Lessee shall fail to pay any other sum
     when and as the same becomes due and payable and such failure shall
     continue for more that 10 days; or (c) if Lessee shall fail to perform or
     observe any other term hereof or of the rules and regulations described in
     section 16 to be performed or observed by Lessee, such failure shall
     continue for more than 30 days after notice therefore from Lessor, and
     Lessee shall not within such period commence with due diligence and
     dispatch the curing of such default, or, having so commenced, shall
     thereafter fail or neglect to prosecute or complete with due diligence
     and dispatch the curing of such default; (d) if Lessee shall make a
     general assignment for the benefit of creditors, shall become insolvent
     or shall admit in writing its inability to pay its debts as they become
     due or shall file a petition in bankruptcy, or shall be adjudicated as
     bankrupt or insolvent, or shall file a petition in any proceeding seeking
     any reorganization, arrangement, composition, readjustment, liquidation,
     dissolution or similar relief under any present or future statute, law or
     regulation, or shall file an answer admitting or fail timely to contest
     the material allegations of a petition filed against it in any such
     proceeding, or shall seek or consent to or acquiesce in the appointment of
     any trustee, receiver or liquidator of Lessee or any material part of its
     properties; or (e) if within 90 days after the commencement of any
     proceeding against Lessee seeking any reorganization, arrangement,
     composition, readjustment, liquidation, dissolution or similar relief
     under any present or future statute, law or regulation, such proceeding
     shall not have been dismissed, or if, within 90 days after the appointment
     without the consent is acquiescence of Lessee, of any trustee, receiver
     or liquidator of Lessee or of any material part of its properties, such
     appointment shall not have been vacated; or (f) if this Lease or any
     estate of Lessee hereunder shall be levied upon under any attachment
     or execution and such attachment or execution is not vacated within 10
     days.


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19.  TERMINATION UPON DEFAULT: (a) If an Event of Default shall occur, Lessor
     at any time thereafter may give a written termination notice to Lessee,
     and on the date specified in such notice Lessee's right to possession
     shall terminate and this Lease shall terminate, unless on or before
     such date all arrears of rental and all other sums payable by Lessee
     under this Lease and all costs and expenses incurred by or on behalf of
     Lessor hereunder shall have been paid by Lessee and all other breaches
     of this Lease by Lessee at the time existing shall have been fully
     remedied to the satisfaction of Lessor. Upon such termination, Lessor
     may recover from Lessee: (a) the worth at the time of award of the
     unpaid rental which had been earned at the time of termination; (b) the
     worth at the time of award of the amount by which the unpaid rental
     which would have been earned after termination until the time of award
     exceeds the amount of such rental loss that Lessee proves could have
     been reasonably avoided; (c) the worth at the time of award of the
     amount by which the unpaid rental for the balance of the term of this
     Lease after the time of award exceeds the amount of such rental loss
     that Lessee proves could be reasonably avoided; and (d) any other amount
     necessary to compensate Lessor for all the detriment proximately caused
     by Lessee's failure to perform its obligations under this Lease or which
     in the ordinary course of things would be likely to result therefrom.
     The "worth at the time of award" of the amounts referred to in clauses
     (a) and (b) above is computed by allowing interest at the rate of 10%
     per annum or, if a higher rate is legally permissible, at the highest
     rate legally permitted. The "worth at the time of award" of the amount
     referred to in clause (c) above is computed by discounting such amount
     at the discount rate of the Federal Reserve Bank of San Francisco at the
     time of award plus 1%.

     (b) Lessee hereby waives all right now or hereafter existing to redeem
     the premises after termination pursuant to this Paragraph 19 or by order
     or judgment of any court or by any legal process.

20.  CONTINUATION AFTER DEFAULT: Even though Lessee has breached this Lease
     and abandoned the premises, this Lease shall continue in effect for so
     long as Lessor does not terminate Lessee's right to possession, and
     Lessor may enforce all its rights and remedies under this Lease,
     including the right to recover the rental as it becomes due under this
     Lease. Acts of maintenance or preservation or efforts to relet the
     premises or the appointment of a receiver upon initiative of Lessor to
     protect Lessor's interest under this Lease shall not constitute a
     termination of Lessee's right to possession.

21.  OTHER RELIEF: The remedies provided for in this Lease shall be
     cumulative and are in addition to any other remedies available to Lessor
     at law or in equity by statute or otherwise.

22.  LESSOR'S RIGHT TO CURE DEFAULTS. All agreements and provisions to be
     performed by Lessee under any of the terms of this Lease shall be at its
     sole cost and expense and without any abatement of rental. If Lessee
     shall fail to pay any sum of money, other than rental, required to be
     paid by it hereunder or shall fail to perform any other act on its part
     to be performed hereunder and such failure shall continue for 30 days
     after notice thereof by Lessor, Lessor may, but shall not be obligated
     so to do, and without waiving or releasing Lessee from any obligations
     of Lessee, make any such payment or perform any such other act on
     Lessee's part to be made or performed as in this Lease provided. All
     sums so paid by Lessor and all necessary incidental costs shall be
     deemed additional rent hereunder and shall be payable to Lessor on
     demand, and Lessor shall have (in addition to any other right or remedy
     of Lessor) the same rights and remedies in the event of the nonpayment
     thereof by Lessee as in the case of default by Lessee in the payment of
     rental.

23.  ATTORNEYS' FEES: If as a result of any breach or default in the
     performance of any of the provisions of this Lease, Lessor uses the
     services of an attorney in order to secure compliance with such
     provisions or recover damages therefor, or to terminate this Lease or
     evict Lessee, Lessee shall reimburse Lessor upon demand for any and all
     attorneys' fees and expenses so incurred by Lessor, provided that if
     Lessee shall be the prevailing party in any legal action brought by
     Lessor against Lessee, Lessee shall be entitled to recover for the fees
     of its attorneys in such amount as the court may adjudge reasonable.

24.  EMINENT DOMAIN: If all or any part of the premises shall be taken as a
     result of the exercise of the power of eminent domain, this Lease shall
     terminate as to the part so taken as of the date of taking, and, in the
     case of a partial taking, either Lessor or Lessee shall have the right
     to terminate this Lease as to the balance of the premises by written
     notice to the other within 30 days after such date, provided, however,
     that a condition to the exercise by Lessee of such right to terminate
     shall be that the portion of the premises taken shall be of such extent
     and nature as substantially to handicap, impede or impair Lessee's use
     of the balance of the premises. In the event of any taking, Lessor shall
     be entitled to any and all compensation, damages, income, rent, awards,
     or any interest therein whatsoever which may be paid or made in
     connection therewith, and Lessee shall have no claim against Lessor for
     the value of any unexpired term of this Lease or otherwise. In the event
     of a partial taking of the premises which does not result in a
     termination of this Lease, the monthly rental thereafter to be paid
     shall be equitably reduced.

25.  SUBORDINATION: This Lease shall be subject and subordinated at all times
     to (1) all ground or underlying leases now existing or which may
     hereafter be executed affecting the Building, and (2) the lien of all
     mortgages and deeds of trust in any amount or amounts whatsoever now or
     hereafter placed on or against the Building, the Project or on or
     against Lessor's interest or estate therein or on or against all such
     ground or underlying leases, all without the necessity of having further
     instruments executed on the part of Lessee to effectuate such
     subordination. Lessee agrees to execute and deliver upon demand such
     further instruments evidencing such subordination of this Lease to said
     deed, to such ground or underlying leases, and to the lien of any such
     mortgages or deeds of trust as may reasonably be required by Lessor.

26.  NO MERGER: The voluntary or other surrender of this Lease by Lessee, or
     a mutual cancellation thereof, shall not work a merger, and shall, at
     the option of Lessor terminate all or any existing subleases or
     subtenancies, or may, at the option of Lessor, operate as an assignment
     to it of any or all such subleases or subtenancies.

27.  SALE: In the event the original Lessor hereunder, or any successor owner
     of the Building, shall sell or convey the Building, all liabilities and
     obligations on the part of the original Lessor, or such successor owner,
     under this Lease accruing thereafter shall terminate, and thereupon all
     such liabilities and obligations shall be binding upon the new owner.
     Lessee agrees to attorn to such new owner.

28.  ESTOPPEL CERTIFICATE: At any time and from time to time but on not less
     than 10 days prior written request by Lessor, Lessee will execute,
     acknowledge and deliver to Lessor, promptly upon request, a certificate
     certifying (a) that this Lease is unmodified and in full force and
     effect (or, if there have been modifications, that this Lease is in full
     force and effect, as modified, and stating the date and nature of each
     modification), (b) the date, if any, to which rental and other sums
     payable hereunder have been paid, (c) that no notice has been received
     by Lessee of any default which has not been cured, except as to defaults
     specified in said certificate, and (d) such other matters as may be
     reasonably requested by Lessor. Any such certificates may be relied upon
     by a prospective purchaser, mortgagee or beneficiary under any deed of
     trust on the Building or any part thereof.

29.  NO LIGHT, AIR OR VIEW EASEMENT: Any diminution or shutting off of light,
     air or view by any structure which may be erected on lands adjacent to
     the Building shall in no way affect this Lease or impose any liability
     on Lessor.

30.  HOLDING OVER: If, without objection by Lessor, Lessee holds possession
     of the premises after expiration of the term of this Lease, Lessee shall
     become a tenant from month to month upon the terms herein specified but
     at a monthly rental equivalent to 200% of the then prevailing monthly
     rental paid by Lessee at the expiration of the term of this Lease,
     payable in advance on or before the first day of each month. Each party
     shall give the other notice at least one month prior to the date of
     termination of such monthly tenancy of its intention to terminate such
     tenancy.

31.  ABANDONMENT: If Lessee shall abandon or surrender the premises, or be
     dispossessed by process of law or otherwise, any personal property
     belonging to Lessee and left on the premises shall be deemed to be
     abandoned, at the option of Lessor, except such property as may be
     mortgaged to Lessor.

32.  SECURITY DEPOSIT: Lessee has deposited with Lessor the sum specified in
     the Basic Lease information (the "deposit"). The deposit shall be held
     by Lessor as security for the faithful performance by Lessee of all of
     the provisions of this Lease to be performed or observed by Lessee. If
     Lessee fails to pay rent or other charges due hereunder, or otherwise
     defaults with respect to any provision of this Lease, Lessor may use,
     apply or retain all or any portion of the deposit for the payment of any
     rent or other charge in default or for the payment of any other sum to
     which Lessor may become obligated by reason of Lessee a default, or to
     compensate Lessor for any loss or damage which Lessor may suffer
     thereby. If Lessor so uses or applies all or any portion of the deposit,
     Lessee shall within 10 days after demand therefor deposit cash with
     Lessor in an amount sufficient to restore the deposit to the full amount
     thereof and Lessee's failure to do so shall be a material breach of this
     Lease. Lessor shall not be required to keep the deposit separate from
     its general accounts. If Lessee performs all of Lessee's obligations
     hereunder, the deposit, or so much thereof as has not theretofore been
     applied by Lessor, shall be returned, without payment of interest or
     other increment for its use, to Lessee (or, at Lessor's option, to the
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     hereunder) at the expiration of the term hereof, and after Lessee has
     vacated the premises.  No trust relationship is created herein between
     Lessor and Lessee with respect to the deposit.

33.  WAIVER:  The waiver by Lessor of any agreement, condition or provision
     herein contained shall not be deemed to be a waiver of any subsequent
     breach of the same or any other agreement, condition or provision
     herein contained, nor shall any custom or practice which may grow up
     between the parties in the administration of the terms hereof be
     construed to waive or to lessen the right of Lessor to insist upon the
     performance by Lessee in strict accordance with said terms.  The
     subsequent acceptance of rental hereunder by Lessor shall not be deemed
     to be a waiver of any preceding breach by Lessee of any agreement,
     condition or provision of this Lease, other than the failure of Lessee to
     pay the particular rental so accepted, regardless of Lessor's knowledge
     of such preceding breach at the time of acceptance of such rental.

34.  NOTICES:  All notices and demands which may be or are required to be
     given by either party to the other hereunder shall be in writing and
     shall be deemed to have been fully given when deposited in the United
     States mail, certified or registered, postage prepaid, and addressed as
     follows: to Lessee at the address specified in the Basic Lease
     Information, or to such other place as Lessee may from time to time
     designate in a notice to Lessor: to Lessor at the address secified in
     the Basic Lease information, or to such other place as Lessor may from
     time to time designate in a notice to Lessee; or, in the case of Lessee,
     delivered to Lessee at the premises.  Lessee hereby appoints as its agent
     to receive the service of all dispossessory or distraint proceedings and
     notices thereunder the person in charge of or occupying the premises at
     the time, and, if no person shall be in charge of or occupying the same,
     then such service may be made by attaching the same on the main entrance
     of the premises.

35.  COMPLETE AGREEMENT:  There are no oral agreements between Lessor and
     Lessee affecting this Lease, and this Lease supersedes and cancels any
     and all previous negotiations, arrangements, brochures, agreements and
     understandings, if any, between Lessor and Lessee or displayed by Lessor
     to Lessee with respect to the subject matter of this Lease or the
     Building.  There are no representations between Lessor and Lessee other
     than those contained in this Lease and all reliance with respect to any
     representations is solely upon such representations.

36.  CORPORATE AUTHORITY:  If Lessee signs as a corporation, each of the
     persons executing this Lease on behalf of Lessee does hereby convenant
     and warrant that Lessee is a duly authorized and existing corporation,
     that Lessee has and is qualified to do business in California, that the
     Corporation has full right and authority to enter into this Lease, and that
     each and both of the persons signing on behalf of the corporation were
     authorized to do so.

37.  MISCELLANEOUS:  The words "Lessor" and "Lessee" as used herein shall
     include the plural as well as the singular.  If there be more than one
     Lessee, the obligations hereunder imposed upon Lessee shall be joint and
     several. Time is of the essence of this Lease and each and all of its
     provisions. Submission of this instrument for examination or signature by
     Lessee does not constitute a reservation of or option for lease, and it is
     not effective as a lease or otherwise until execution and delivery by both
     Lessor and Lessee.  The agreements, conditions and provisions herein
     contained shall, subject to the provisions as to assignment, apply to and
     bind the heirs, executors, administrators, successors and assigns of the
     parties hereto.  If any provision of this Lease shall be determined to
     be illegal or unenforceable, such determination shall not affect any other
     provision of this Lease and all such other provisions shall remain in full
     force and effect.  This Lease shall be governed by and construed pursuant
     to the laws or the State of California.

38.  LIMITATIONS OF LESSOR'S LIABILITY:  Lessor shall not be responsible for
     or liable to Lessee ane Lessee hereby waives all claims against Lessor
     for any injury, loss or damage to any person or property in or about the
     premises by or from any cause whatsoever (other than Lessor's gross
     negligence or willful misconduct) including, without limitation, acts or
     omissions of persons occupying adjoining premises or any part of the
     Building adjacent to or connected with the premises; theft; burst,
     stopped or leaking water, gas, sewer or steam pipes; or gas, fire, oil
     or electricity in, on or about the premises or the Building.  The
     liability of Lessor under this Lease shall be and is hereby limited to
     Lessor's interest in the Building, and no other assets of Lessor shall be
     affected by reason of any liability which Lessor may have to Lessee or to
     any other person by reason of this Lease.

39.  BROKERAGE COMMISSIONS:  Lessee represents and warrants that it has dealt
     with no broker, agent or other person in connection with this transaction
     other than CB COMMERCIAL REAL ESTATE GROUP, INC and Lessee agrees to
     indemnify and hold Lessor harmless from and against any claims by any
     other broker, agent or other person claiming a commission or other form
     of compensation by virtue of having dealt with Lessee with regard to
     this leasing transaction. The provisions of this paragraph shall survive
     the termination of this Lease.

40.  PARKING:  Lessee shall have the non-exclusive right to park in common
     with other tenants in the Project in the Project parking facilities
     provided by Lessor for tenants subject to Lessor's right to alter,
     modify, reduce or change the location of such parking facilities.  Lessee
     agrees not to overburden the parking facilities and agrees to cooperate
     with Lessor and other lessees in the use of the parking facilities.
     Lessor reserves the right to determine whether the parking facilities are
     becoming crowded and, in such event, to allocate parking spaces among
     Lessee and other lessees or to otherwise limit the number of parking
     spaces available for use by Lessee and its employees and invitees.
     SEE ADDENDUM, PARAGRAPH 8.

41.  EXHIBITS AND ADDENDUM:  The exhibits and addendums hereto are a part of
     this Lease and are incorporated herein by this reference.

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

     LESSEE:  Intelligent Systems for       LESSOR:  Harbor Belmont Associates,
     Retail, Inc., a California             a California General Partnership
     corporation

     By /s/ Louis H. Borders                By /s/ Phillip Raisen
       ------------------------------         ---------------------------------
            Louis H. Borders

       Its   President/CEO                    Its    General Partner
          ---------------------------             -----------------------------

42.  Lessor will furnish each Lessee free of charge with two (2) keys to
     each door lock in the premises.  Lessor shall require payment of a $10.00
     ($5.00 of which is refundable upon return of keys) deposit for each key
     provided to Lessee.  No Lessee shall have any keys made.  No Lessee shall
     alter any lock or install a new or additional lock or any bolt on any
     door of its premises without the prior written consent of Lessor.  Lessee
     shall in each case furnish Lessor with a key for any such lock.  Each
     Lessee, upon the termination of its tenancy, shall deliver to Lessor all
     keys to doors in the building which shall have been furnished to Lessee.


                                                          INDUSTRIAL NET LEASE
                                                          INITIAL HERE:

                                                          [ILLEGIBLE]
                                                          --------------------
                                                          Page 6

<PAGE>


                               ADDENDUM TO LEASE
                                    BETWEEN
                     HARBOR BELMONT ASSOCIATES, AS LESSOR,
                                      AND
                INTELLIGENT SYSTEMS FOR RETAIL, INC., AS LESSEE
                   260 HARBOR BOULEVARD, BELMONT, CALIFORNIA


          1.     BASE RENT SCHEDULE. Lessee shall pay to Lessor base monthly
rental according to the following schedule:

     Months 01-12          $   per sq. ft. NNN          $   00 per month
     Months 13-24          $   per sq. ft. NNN          $   00 per month
     Months 25-36          $   per sq. ft. NNN          $   00 per month
     Months 37-48          $   per sq. ft. NNN          $   00 per month
     Months 49-60          $   per sq. ft. NNN          $   00 per month

          2.     CURRENT ESTIMATE OF OPERATING EXPENSES AND PROPERTY TAXES.
Lessor and Lessee acknowledge and agree that Lessee's estimated Percentage
Share of Operating Expenses and Property Taxes for calendar year 1998 is
20 CENTS per square foot per month, based on Lessor's current estimate of
such Operating Expenses and Property Taxes, provided that Lessee and Lessor
acknowledge that such amount is an estimate only, and is subject to change in
accordance with the terms of paragraph 3 of the Lease.

          3.     EARLY OCCUPANCY. Lessee shall be entitled to occupy the
Premises prior to the Commencement Date upon mutual execution and delivery of
the Lease, subject to the provisions of paragraph 2(d) of the Lease;
provided, however, that during such period of occupancy prior to the
Commencement Date, no Base Rent, or Lessee's Percentage Share of Operating
Expenses and Property Taxes shall be due or payable by Lessee. Without
limiting the provisions of paragraph 2(d) of the Lease, Lessee acknowledges
that it shall be responsible for the cost of gas, electricity, and any other
utilities metered separately to its Premises, and for the maintenance of
insurance in accordance with the requirements of the Lease during the early
occupancy period.

         4.      CONDITION OF PREMISES. Lessor, at its sole expense, shall
deliver the Premises to Lessee clean and free of debris on the Commencement
Date (other than any condition caused by Lessee in connection with its early
occupancy of the Premises).

                 (a)     Lessor warrants to Lessee that, as of the
Commencement Date, all of the fixtures and equipment in the men's and women's
restrooms are complete and operable, and in good and working condition,
including without


                                      -1-
<PAGE>


limitation, all exhaust and supply HVAC, lighting, water heaters, partitions,
doors and fixtures;

                 (b)     Lessor further warrants to Lessee that all
electrical, HVAC, plumbing, fire sprinkler, and lighting equipment and
equipment, fixtures and systems, and loading doors, if any, existing in the
Premises as of the date of this Lease, shall be in good operating condition
as of the Commencement Date, and shall not be subject to deferred maintenance
or in need of immediate replacement.

                 (c)     If non-compliance with any of the warranties set
forth above exists as of the Commencement Date, then Lessor shall, except as
otherwise provided in the Lease, rectify the same at Lessor's expense,
promptly after receipt of written notice from Lessee setting forth with
specificity the nature and extent of such non-compliance. Notwithstanding
the foregoing, if Lessee does not give Lessor written notice of
non-compliance with any of the warranties set forth above within sixty (60)
days after the Commencement Date, then the above warranties shall be of no
force and effect, and correction of any such noncompliance shall be the
obligation of Lessee at Lessee's sole cost and expense. Notwithstanding
anything to the contrary above, Lessor shall have no obligation for any
failure of the above warranties due to the acts of Lessee, its agents,
employees or contractors.

          5.     INITIAL TENANT IMPROVEMENTS.

                 (a)     Lessor shall provide Lessee with a $15,000.00 tenant
improvement allowance (the "Tenant Improvement Allowance"). All additional
costs of tenant improvements shall be paid by Lessee. All tenant improvement
work shall be made in accordance with paragraph 7 of the Lease, provided that
all such improvement work shall be performed by Lessor's contractor, Raiser
Construction Company. Lessee shall enter into a general construction contract
with Raiser Construction Company on terms to be mutually agreed by Lessee and
Raiser Construction Company. Lessor agrees that Raiser Construction Company
shall solicit competitive bids from subcontractors for all major trades, and
shall disclose all such bid to Lessee. The Tenant Improvement Allowance
shall be paid to Raiser Construction Company upon completion of the tenant
improvements in reduction of the sum owed by Lessee to Raiser Construction
Company under its construction contract.

                 (b)     Notwithstanding any other provision of the Lease to
the contrary, Lessee shall not be required to remove its initial tenant
improvements from the Premises at the expiration or termination of the Lease,
and such improvements shall become the sole property of Lessor.


                                      -2-
<PAGE>


          6.     DESTRUCTION OR DAMAGE. Paragraph 10 of the Lease is modified
by the addition of the following provision at the end of subparagraph (b):

          If such repairs cannot, in Lessor's reasonable opinion, be
          made within 180 days after the date of such fire or other
          casualty, then Lessor shall notify Lessee, and Lessee shall
          have the right, by notice given to Lessor within 30 days
          after receipt of Lessor's notice, to terminate this Lease
          effective as of the date of such fire or other casualty.

          7.     SIGNAGE. Lessor shall allow, at Lessee's sole cost and
expense, the installation of signage on the Building consistent with Harbor
Park's current signage program and subject to the approval of Lessor and the
City of Belmont.

          8.     PARKING.

                 (a)     Lessee shall have a total of nineteen (19) reserved
parking stalls free of additional charge throughout the term of this Lease.
Thirteen (13) of said spaces shall face Harbor Boulevard, three (3) shall be
located at the front entrance of the Premises, and three (3) shall be near
the back roll-up doors. Lessor shall, at its sole cost and expense, have such
space as marked for Lessee's exclusive use.

                 (b)     In addition to the parking spaces set forth in
Subparagraph (a) above, Lessee shall be entitled to the nonexclusive use in
common with other tenants of the Property of five (5) unreserved parking
spaces in the Harbor Park parking area.

          9.     ADDITIONAL DEPOSIT. In addition to the Security Deposit
described in the Basic Lease Information, Lessee shall, upon execution of
this Lease, deliver to Lessor the additional sum of $49,348.00 in cash as
additional security for this Lease (the "Additional Deposit"). Provided that
Lessee is not in default and has met all of its obligations under the Lease,
Lessor shall apply said Additional Deposit to the rental obligations coming
due in the beginning of the second, thirteenth, twenty-fifth and
thirty-seventh month of the Lease Term.

          10.    LESSOR'S INSURANCE. Lessor shall maintain throughout the
term of this Lease casualty insurance with respect to the Premises in an
amount and with coverages at least equivalent to insurance customarily
carried by comparable owners of comparable industrial property in the City of
Belmont, California, provided that in no event shall Lessor be required to
carry earthquake or flood insurance. Lessor's costs in connection with
such insurance are included in the Operating Expenses as set forth in
paragraph 3(b) of the Lease.


                                      -3-

<PAGE>


          11.    ASSIGNMENT AND SUBLETTING.

                 (a)     Notwithstanding the provisions of paragraphs 15(a)
through (c) of the Lease, Lessee shall have the right, without the consent
of Lessor, to assign the Lease to a franchisee of Lessee, or any entity
controlled by or under common control with the Lessee, or to a corporation
with which Lessee has merged or consolidated. In such event the provisions
of paragraphs 15(a) through (d) of the Lease shall not apply. Any such
assignment shall conform to the provisions of paragraphs (d) and (f) of the
Lease, and Lessee shall notify Lessor of such assignment prior to the
execution thereof, and shall deliver to Lessor a copy of such assignment
and any other documents evidencing such assignment. In the event of any
assignment contemplated hereby, Lessee shall remain fully liable for all
obligations of Lessee under the Lease.

                 (b)     Paragraph 15(b) of the Lease is hereby amended in
its entirety to read as follows:

                 "(b)    Before entering into any sublease or
          assignment of this Lease for all or part of the premises,
          Lessee shall deliver to Lessor a letter of intent executed by
          Lessee and the proposed sublessee or assignee, specifying
          the terms of the intended sublease or assignment. For a
          period of thirty (30) days after such letter of intent is
          delivered to Lessor, Lessor shall have the right by written
          notice to Lessee to recapture the premises or port[illegible]
          there of, as fol[illegible] (1) in the case of a proposed
          sublease, either (A) sublet from Lessee any portion of the
          premises proposed to be sublet for the term for which such
          portion is proposed to be sublet but at the same rent as
          Lessee is required to pay to Lessor under this Lease for
          the same space, computed on a pro-rata square foot basis, or
          (B) if the proposed subletting is for substantially the
          remaining period of the term of this Lease, terminate this
          Lease as it pertains to the portion of the premises so
          proposed by Lessee to be sublet, or (ii) in the case of a
          proposed assignment, terminate this Lease. Lessor may, if
          it elects, enter into a new lease covering the recaptured
          premises or portion thereof with any intended assignee or
          subtenant on such terms as Lessor and such person may agree,
          or enter into a new lease covering the premises or a portion
          thereof with any other person. In the event that Lessor
          exercises its rights to recapture set forth herein, Lessee
          shall not be entitled to any portion of the profit, if any,
          which Lessor may realize on account of such recapture,
          termination and


                                      -4-
<PAGE>


          reletting; however, Lessee shall be entitled to recover from
          Lessor the unamortized actual costs of all Initial Tenant
          Improvements (less the Tenant Improvements Allowance),
          as well as any additional permanent improvements installed
          by Lessee during the initial one hundred twenty (120) days
          of the Lease. Lessor's exercise of its aforesaid option
          shall not be construed to impose any liability upon
          Lessor with respect to any real estate brokerage
          commissions or any other costs or expenses incurred by
          Lessee in connection with its proposed subletting or
          assignment."

          12.    WARRANTY OF AUTHORITY. Each individual executing this Lease
on behalf of Lessor and Lessee represents and warrants that he or she is
authorized to execute and deliver this Lease on its behalf, and to bind said
Lessor and Lessee, as applicable.


                                      -5-
<PAGE>

                             HARBOR PARK, BELMONT

                                 [FLOOR PLAN]







                                260 HARBOR BLVD.

                                   EXHIBIT A


<PAGE>


                          AMENDMENT NO. ONE TO LEASE

                      INTELLIGENT SYSTEMS FOR RETAIL, INC.


This Amendment, dated June 4, 1998, is by and between Harbor Belmont
Associates ("Lessor") and Intelligent Systems for Retail, Inc. ("Lessee").
Lessor and Lessee entered into a lease agreement dated March 20, 1998 (the
"Lease") for the Premises known as 260 Harbor Boulevard, Belmont, California.
Such Lease is hereby amended as follows:

LEASE COMMENCEMENT DATE:      June 15, 1998

LEASE TERMINATION DATE:       June 30, 2003

COST OF IMPROVEMENTS:

It is hereby agreed that the total cost of the Initial Tenant Improvements
shall be $287,207.00 according to the estimate from Raiser Construction Co.,
Inc. dated May 29, 1998. Lessee's net cost for the Initial Tenant
Improvements is $272,207.00 after the deduction of Lessor's Tenant
Improvement Allowance of $15,000.00.

Simultaneously with the execution of this Amendment No. One to Lease, Lessee
shall deposit the sum of $99,999.04 with Raiser Construction Co., Inc., which
amount shall be credited against the contract for the Initial Tenant
Improvements as earned during the course of construction. All other terms and
conditions of the Lease shall remain unchanged.


AGREED & ACCEPTED:

LESSOR: Harbor Belmont Associates  LESSEE: Intelligent Systems for Retail, Inc.

/s/ Phillip [illegible]                 /s/ David A. [illegible]
-----------------------                 ------------------------
AS AGENT FOR THE TRUST,                 Vice President, Retail
GENERAL PARTNER

Date: 6/4/98                            Date: 6/4/84
      ------                                  ------


<PAGE>

                          AMENDMENT NO. TWO TO LEASE
                    HARBOR BELMONT ASSOCIATES AS LESSOR AND
               INTELLIGENT SYSTEMS FOR RETAIL, INC. AS LESSEE

                              PROPERTY ADDRESS
                    260 HARBOR BOULEVARD, BELMONT, CALIFORNIA
               AMENDMENT DATE (FOR REFERENCE PURPOSES): DECEMBER 4, 1998

This Amendment is incorporated into and made a part of that certain lease
dated March 20, 1998 as described above, as amended by Amendment No. 1 to
Lease dated June 4, 1998 (collectively, the "Lease").  In the event of any
conflict between the terms of the lease and the terms of this Amendment, the
terms of this Amendment shall prevail, as to the Additional Premises only. All
capitalized terms not otherwise defined herein shall have the meaning set forth
in the Lease.

1.  ADDITIONAL PREMISES: Lessee hereby leases from Lessor, and Lessor leases
    to Lessee, as Additional Premises, those premises located at 498 Harbor
    Boulevard in Belmont, California (the "Additional Premises") designated
    on the floor plan attached hereto as Exhibit B, comprising 2,475 rentable
    square feet.  The provisions of this Lease Amendment apply only to the
    Additional Premises.  No terms or conditions of this Second Addendum shall
    be deemed to alter or affect the original terms of the Lease, except as
    the same apply to the Additional Premises and except as expressly set forth
    herein.

2.  TERM APPLICABLE TO ADDITIONAL PREMISES ONLY:  The Term of the lease of
    the Additional Premises shall commence on December 1, 1998 (the
    "Additional Premises Commencement Date") and, unless sooner terminated as
    provided in the Lease, shall end on November 30, 2000 (the "Additional
    Premises Termination Date").

3.  BASE RENTAL SCHEDULE APPLICABLE TO ADDITIONAL PREMISES ONLY:  Lessee
    shall pay as monthly Base Rent for the Additional Premises the following
    sums:

      Months 1-12:     $    per sq. ft NNN -  $       per month
      Months 13-24:    $    per sq. ft NNN -  $       per month

4.  EARLY OCCUPANCY:  Lessee shall be entitled to occupy the Additional
    Premises prior to the Commencement Date upon mutual execution and
    delivery of this Lease Amendment, subject to the provisions of paragraph
    3 of the Addendum to Lease.

5.  CONDITION OF PREMISES; WARRANTIES:  Lessor shall deliver the Premise to
    Lessee clean and free of debris on the Commencement Date, in good and
    operating condition and repair as more fully set forth in paragraph 4 of
    the Addendum to Lease.  Except as expressly set forth in this paragraph
    5, Lessee accepts the Premises "as is," and  Lessor has no obligation to
    repair, alter or improve the Additional Premises.

Addendum to Lease
Rev. 12/02/98
Page 1 of 2
<PAGE>

6.  INITIAL TENANT IMPROVEMENTS:  Lessee shall construct its Initial Tenant
    Improvements for the Additional Premises, consisting of HVAC and other
    non-structural improvements, at Lessee's sole cost and expense, subject
    to Lessor's prior written approval thereof, which shall not be
    unreasonably withheld or delayed.  Lessor shall provide no tenant
    improvement allowance for the Additional Premises. Lessee may construct
    its Initial Tenant Improvements utilizing licensed contractors and
    subcontractors selected by Lessee and approved by Lessor.  Such work shall
    comply with section 7 of the Lease.

7.  PARKING:  During the term of this lease of the Additional Premises,
    Lessee shall have the use of an additional 3 reserved and 10 nonreserved
    parking spaces at no additional cost.

8.  OTHER TERMS AND CONDITIONS:  Except as set forth herein, each and every
    other term and condition of the Lease and the Addendum thereto applies to
    the Additional Premises, as if set forth fully herein; provided, however,
    that any warranties, rights or obligations that accrue to either party
    shall, for purposes of this Amendment and with respect to the Additional
    Premises only, accrue on the Additional Premises Commencement Date set
    forth above, and shall terminate with respect to the Additional Premises
    on the Additional Premises Termination Date (except with respect to any
    obligations under the Lease that expressly survive the termination of the
    Lease).

9.  LESSEE'S PERCENTAGE SHARE:  The Lease is hereby amended, effective
    during the Term for the Additional Premises only, as follows:  Lessee's
    Percentage Share under the Lease (for both the original and the
    Additional Premises) shall be 4.93%.

10. SECURITY DEPOSIT:  Lessee shall deliver a security deposit of    upon
    execution of this Amendment.

LESSEE:                                  LESSOR:
INTELLIGENT SYSTEMS FOR RETAIL, INC., a  HARBOR BELMONT ASSOCIATES, a California
California corporation                   General Partnership



By /s/ Louis H. Borders                  By /s/ Philip Raiser
  -------------------------------          -----------------------------------
  Louis H. Borders                         Philip Raiser
Its President                            Its General Partner


Addendum to Lease
Rev. 12/02/98
Page 2 of 2
<PAGE>


                                   EXHIBIT B

                                  [FLOOR PLAN]


<PAGE>


                                   EXHIBIT "C"
                               EXISTING FLOOR PLAN

                                  [FLOOR PLAN]


<PAGE>

                        AMENDMENT NO. THREE TO LEASE
                  HARBOR BELMONT ASSOCIATES AS LESSOR AND
               INTELLIGENT SYSTEMS FOR RETAIL, INC. AS LESSEE

                             PROPERTY ADDRESS
                  260 HARBOR BOULEVARD, BELMONT, CALIFORNIA
          Amendment Date (for reference purposes):  December 31, 1998

This Amendment is incorporated into and made a part of that certain lease
dated March 20, 1998 as described above, as amended by Amendment No. 1 to
Lease dated June 4, 1998 and Amendment No. 2 to Lease dated December 4, 1998
(collectively, the "Lease"). In the event of any conflict between the terms
of the lease and the terms of the Amendments, the terms of this Amendment
shall prevail, as to the Additional Premises only. All capitalized terms not
otherwise defined herein shall have the meaning set forth in the Lease.

1.   ADDITIONAL PREMISES:  Lessee hereby leases from Lessor, and Lessor
     leases to Lessee, as Additional Premises, those premises located at 288
     Harbor Boulevard in Belmont, California (the "Additional Premises")
     designated on the floor plan attached hereto as Exhibit B, comprising
     1,375 rentable square feet. The provisions of this Lease Amendment apply
     only to the Additional Premises. No terms or conditions of this Amendment
     No. 3 shall be deemed to alter or affect the original terms of the
     Lease, except as the same apply to the Additional Premises and except as
     expressly set forth herein.

2.   TERM APPLICABLE TO ADDITIONAL PREMISES ONLY:  The Term of the lease of
     the Additional Premises shall commence on January 15, 1999 (the
     "Additional Premises Commencement Date") and, unless sooner terminated
     as provided in the Lease, shall end on January 31, 2002 (the "Additional
     Premises Termination Date").

3.   BASE RENTAL SCHEDULE APPLICABLE TO ADDITIONAL PREMISES ONLY:  Lessee
     shall pay as monthly Base Rent for the Additional Premises the following
     sums:

<TABLE>
<S>                                                <C>
           January 15 - 31, 1999                    _______ Total
           February 1999 - January 2000             _______ Per Month
           February 2000 - January 2001             _______ Per Month
           February 2001 - January 2002             _______ Per Month
</TABLE>

4.   EARLY OCCUPANCY:  Lessee shall be entitled to occupy the Additional
     Premises prior to the Commencement Date upon mutual execution and
     delivery of this Lease Amendment, subject to the provisions of paragraph
     3 of the Addendum to Lease.

5.   CONDITION OF PREMISES; WARRANTIES:  Lessor shall deliver the Premises to
     Lessee clean and free of debris on the Commencement Date, in good and
     operating condition and repair as more fully set forth in paragraph 4 of
     the Addendum to Lease. Except as expressly set forth in this

                                                                 INITIAL

                                                               [ILLEGIBLE]

Addendum to Lease
Rev. 12/20/98
Page 1 of 2
<PAGE>

     paragraph 5. Lessee accepts the Premises "as is," and Lessor has no
     obligation to repair, alter or improve the Additional Premises.

6.   INITIAL TENANT IMPROVEMENTS:  Lessee shall construct its Initial Tenant
     Improvements for the Additional Premises, at Lessee's sole cost and
     expense, subject to Lessor's prior WRITTEN approval thereof, which shall
     not be unreasonably withheld or delayed. Lessor shall provide no tenant
     improvement allowance for the Additional Premises. Lessee may construct
     its Initial Tenant Improvements utilizing licensed contractors and
     subcontractors selected by Lessee and approved by Lessor, in writing.
     Such work shall comply with section 7 of the Lease. All work involving
     wall changes, electrical, fire sprinklers and HVAC shall have a building
     permit.

7.   PARKING:  During the term of this lease of the Additional Premises,
     Lessee shall have the use of an additional 2 reserved parking spaces at
     no additional cost.

8.   OTHER TERMS AND CONDITIONS:  Except as set forth herein, each and every
     other term and condition of the Lease and the Addendum thereto applies
     to the Additional Premises, as if set forth fully herein; provided,
     however, that any warranties, rights or obligations that accrue to
     either party shall, for purposes of the Amendment and with respect to
     the Additional Premises only, accrue on the Additional Premises
     Commencement Date set forth above, and shall terminate with respect to
     the Additional Premises on the Additional Premises Termination Date
     (except with respect to any obligations under the Lease that expressly
     survive the termination of the Lease).

9.   LESSEE'S PERCENTAGE SHARE:  The Lease is hereby amended, effective
     during the Terms for the Additional Premises only, as follows: Lessee's
     Percentage Share under the Lease (for both the original and the
     Additional Premises) shall be 5.58%.

10.  SECURITY DEPOSIT:  Lessee shall deliver a security deposit of $2,118.00
     upon execution of this Amendment.

LESSEE                                    LESSOR:
INTELLIGENT SYSTEMS FOR RETAIL, INC.,     HARBOR BELMONT ASSOCIATES,
a California corporation                  a California General Partnership


By /s/ Louis H. Borders                   By /s/ Phillip Raiser
   -----------------------------------       -----------------------------------
   Louis H. Borders                          Phillip Raiser
Its President                             Its General Partner


                                                                   INITIAL

                                                                 [ILLEGIBLE]

Addendum to Lease
Rev. 12/20/98
Page 2 of 2

<PAGE>




                                  [FLOORPLAN]






LEASE EXHIBIT A

INITIAL

LHB/PR
                                                        HARBOR PARK
                                                        BUILDING 'D' - STE. 288
                                                        HARBOR BOULEVARD
1,375 SQ. FT.                                           BELMONT, CA.