December 16, 1998


Mr. Andre Szykier
3082 Arbolado Court
Walnut Creek, CA 94598

Dear Andre:

         This  letter  serves as a term sheet that will be the basis on which to
formalize an agreement. It refers to your current and future involvement as both
an employee and board member with QueryObject  Systems,  and your involvement in
the new  "knowledge  management"  subsidiary  (NewCo  for the  purposes  of this
letter), which we have proposed establishing.

1)       QueryObject  Systems  will  extend  your  contract as an Officer of the
         Company for the period from January 1, 1999 to April 30,  1999.  During
         this period, you will devote the majority of your efforts to building a
         business plan for NewCo.

2)       At least for the 1999 fiscal year, subject to shareholder  re-approval,
         you will remain as both a member of the QueryObject Board of Directors,
         and (in that roll) as titular Chief Technology Officer.

3)       You will exercise best efforts to present to the  QueryObject  Board of
         Directors  at  its  February  meeting  a  viable  business  plan  for a
         knowledge  management  subsidiary  (NewCo) which will  sub-license  the
         QueryObject  technology and apply it into a  new-to-QueryObject  market
         application.

4)       As additional  compensation  for the duties  outlined in 10, 2) and 3),
         the new option  grant  proposed  at this  week's  board  meeting(75,000
         shares)  will be revised to 150,000  shares.  Attached to this grant to
         you will be a special convertibility feature outlined in 7) below.

5)       Pursuant to item 3), QueryObject System will cover all normal operating
         expenses occurred in preparation of this business plan.

6)       At the February  Board  Meeting,  the Board will examine your  business
         plan with a view to financing and managing NewCo.

7)       If the Board agrees to go ahead with NewCo:

<PAGE>



         -We  will  establish  a legal  structure  of  NewCo  as a  wholly-owned
         subsidiary of QueryObject Systems;

         -You may elect, at point of incorporation,  to convert the shares grant
         outlined in 5) to a 20% equity  option in the Portion of NewCo owned by
         QueryObject Systems, such equity stake to be protected from dilution as
         a  percentage  of  QueryObject  holdings for a period of 18 months from
         date of incorporation;

         -and, we will exercise best efforts to provide the seed  infrastructure
         and raise the capital  necessary to develop NewCo until such time as it
         can be offered to outside investors for venture or operational funding.

8)       If the Board elects not to proceed with NewCo:

         -Subject to your contractual obligation with respect to the non-compete
         and  intellectual  property  rights  of  QueryObject  Systems  and your
         entering into a re-licensing  agreement for any QueryObject  technology
         that is appropriate  for NewCo,  you may exercise the option to acquire
         full right to the proposed venture in exchange for re-payment or normal
         costs such as T&E, legal advice, incorporation expenses, investment and
         technology  consultants and other material expenses associated with the
         venture,  and  incurred by QOS during the period  from  January 1, 1999
         onward.

         -QOS will agree not to enter into a  competitive  knowledge  management
         initiative except when it is a direct and logical extension of its then
         current business, for a period of not less than 24 months from the date
         you are assigned rights to NewCo.

9)       Unless you are  offered a further  contract  extension  by the Board of
         Directors,  and elect to accept it,  effective  May 1,  1999,  you will
         cease  active  employment  with  QueryObject  Systems and your  current
         contractual severance agreement will go into effect.

         This  will  provide  salary  for one year to April  30,  2000,  paid in
         accordance  with normal  company  policy at your current annual rate of
         $150,000  per annum.  In  addition,  the Company will agree to continue
         medical and dental benefits or a period of five years from May 1, 1999,
         or until you acquire  such  benefits by virtue of  employment  or other
         means.  All then existing options will become fully vested by April 30,
         2000,  and must be exercised  by December  31,  2000.  Payment for your
         accrued  vacation and any outstanding  expenses  through April 30, 1999
         will be  discharged in equal  installments  over the period to December
         31, 1999.

The above  fairly  reflect  my  understanding  of our  agreement.  If you are in
agreement,  please sign and return a copy and,  based on this  letter,  Dan Pess
will draw up any contractual documents that may be required.


<PAGE>


Andre, as we discussed  yesterday,  the essence of QOS is not just this Company,
not  the  current  or  the  past  employees,  it  is  a  profoundly  interesting
technological  idea that we live in a number of  iterations.  I am very  excited
about this direction, and the market timing for its success, and look forward to
working closely with you on it.

Sincerely,


/s/ Robert Thompson
Robert Thompson
President and CEO


I am in agreement with the above:


/s/ Andre Szykier                                  12/31/98
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Andre Szykier                                     Date