**Exhibit 4.9**
**THIS CONVERTIBLE SUBORDINATED NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPONCONVERSION OF THIS CONVERTIBLE SUBORDINATED NOTE HAVE NOT BEEN REGISTERED UNDERTHE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED OR OTHERWISEDISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER SUCH ACT OR PURSUANT TO ANEXEMPTION FROM REGISTRATION UNDER SUCH ACT. IN ADDITION, THIS CONVERTIBLE NOTEIS NOT TRANSFERABLE OR ASSIGNABLE EXCEPT AS SPECIFIED IN THE CONVERTIBLE NOTEPURCHASE AGREEMENT REFERRED TO HEREIN.**
**NET PERCEPTIONS, INC.**
**2% Convertible Subordinated Note Due April 21, 2014**   Edina, Minnesota Issue Date: April 21, 2004
     **For Value Received,**the undersigned, **Net Perceptions, Inc.**(the“Company”), a Delaware corporation, hereby promises to pay to **Olden AcquisitionLLC,**a Delaware limited liability company, or registered permitted assigns (the“Holder”), the principal sum of Two Million Five-Hundred And Thirty-TwoThousand Seven Hundred And Thirty-Five Dollars ($2,532,735) (the “PrincipalSum”) on April 21, 2014 (the “Maturity Date,” which term includes anyaccelerated due date as hereinafter provided), with interest (computed on thebasis of a 360-day year of twelve 30-day months and compounded semi-annually)on the unpaid balance of the Principal Sum from Issue Date at the interest rateof 2% per annum, accruing semi-annually on the last day of June and December ineach year, commencing on June 30, 2004, which interest shall be payable,together with the Principal Sum, in full on the Maturity Date, whether at thestated maturity as aforesaid or by acceleration or otherwise. Notwithstandingthe foregoing, accrued but unpaid interest with respect to any portion of thePrincipal Sum which is converted into Common Stock as provided in Section 4hereof shall not be paid and shall be cancelled as provided in such Section.In addition, the Principal Sum shall be automatically reduced (x) by the amountof any indemnification payment(s) made by the Company in respect ofindemnification Claims (as defined in Section 7.2(a) of the Purchase Agreement(as defined below)) pursuant to Section 7.2(a) of the Purchase Agreement and/or(y) by the aggregate amount for which the Purchaser is determined to be liableunder Section 7.2(b) and Section 7.3 of the Purchase Agreement for anyindemnification Claims made by the Company pursuant to Section 7.2(b) of thePurchase Agreement.
          1. *Payments.*Payments of principal and interest shall be made in lawfulmoney of the United States of America at the principal office of the Company inEdina, Minnesota, or at such other place as the Company shall have designatedfor such purpose to the Holder in writing and may be paid by check mailed, orwire transfer as provided in the Purchase Agreement referred to below, to theregistered address designated by the Holder for such purpose.
 

 

          2.* Purchase Agreement.*This Note is issued pursuant to a certain NotePurchase Agreement (hereinafter called the “Purchase Agreement”) dated as ofthe Issue Date between the Company and the Holder. This Note is subject to theprovisions of, and the Holder is entitled to the benefits of, the PurchaseAgreement. The term “Note” as used herein refers only to the notes issuedpursuant to the Purchase Agreement, including any note(s) issued uponconversion of less than all the Principal Sum of this Note, note(s) issued insubstitution for this Note as provided in Section 1.1(c) of the PurchaseAgreement and note(s) issued to any lawful successor or permitted assignee ofthe Holder in accordance with the Purchase Agreement. Capitalized terms usedbut not otherwise defined herein shall have their respective meanings as setforth in the Purchase Agreement.
          3.* Transfer.*This Note is transferable only as provided in Section 1.2 ofthe Purchase Agreement. Notwithstanding the foregoing, however, this Note isregistered with the Company as to both principal and interest, and anypermitted transfer of this Note may be effected only by surrender of this Noteand either reissuance by the Company of this Note or by issuance by the Companyof a new Note. The Company shall maintain a register for the registration andtransfer of this Note (the “Schedule”), containing the name and address of anyholder(s) of this Note.
          4. *Conversion*.
               (a)* General.*On or after April 21, 2005, and prior to the Maturity Dateor, if sooner, the Call Date (as hereinafter defined), the Holder shall havethe right, at the option of the Holder, subject to the terms and provisions ofthis Section 4, to convert all or any lesser portion of the Principal Sum ofthe Note held by such Holder into the number of fully paid and nonassessableshares of Common Stock as shall be equal to the aggregate Principal Sum ofNotes then being converted divided by the Conversion Price then in effect;provided, however, that such right of conversion shall be exercisable by Holderat any time on or after the date hereof if (i) there has been any call of theNotes by the Company in accordance with Section 5 hereof, (ii) any person orentity commences a tender offer within the meaning of Rule 14d-2 of theGeneral Rules and Regulations under the Securities Exchange Act of 1934, asamended, for percent (20%) or more of the Company’s outstanding votingsecurities, which is not recommended by the Company’s Board of Directors orotherwise acquires twenty percent (20%) or more of the outstanding CommonStock, (iii) if, in connection with a meeting of stockholders, a proposal to bevoted upon by the Company’s stockholders has been made in compliance with lawor the Company’s bylaws but has not been approved by the Company’s board ofdirectors, or (iv) a person has been nominated for election to the Company’sboard of directors in compliance with law or the Company’s bylaws and suchnomination has not been approved by the Company’s board of directors. Suchright of conversion shall be exercised by the Holder’s delivery of the Notes tothe Company at the office of the Company together with a notice signed by theHolder setting forth the amount of the Principal Sum to be converted;*provided, however,*that the Holder shall exercise its rights with respect topartial conversions as herein described in multiples of Five Thousand and00/100 ($5,000.00) Dollars of the Principal Sum of Notes; *provided, further*,that the Company shall not be required to issue any fractional shares inconnection with any conversion pursuant to this Note. If the Holder elects toconvert less than the entire aggregate Principal Sum outstanding of the Note,the Company shall, or shall direct its transfer agent to, issue to the Holdercertificates for the shares of Common Stock for which such
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Note is being converted, in such denominations as are requested fordelivery to the Holder, and the Company shall, or shall direct its transferagent to, thereupon deliver such certificates to or in accordance with theinstructions of the Holder, and the Company shall issue to the Holder a newNote, duly executed by the Company, in form and substance identical to the Notesurrendered by the Holder, for the balance of the aggregate Principal Sum ofNote that has not been so converted.
                    (ii) As of the date hereof, the Conversion Price is $0.45 per share ofCommon Stock, which is the price determined by multiplying the average closingselling price per share of Common Stock for the twenty (20) consecutive tradingdays ending on the fifth trading day prior to the Issue Date by 1.1. TheConversion Price shall be adjusted hereafter in accordance with the provisionsof paragraph (d) below.
               (b) *Delivery of Stock Certificates; Time Conversion Effective; NoAdjustment for Interest or Dividends.*(i) As promptly as practicable afterthe surrender (as herein provided) of a Note for conversion, the Company shalldeliver or cause to be delivered to or upon the written order of the holder ofthe Note so surrendered, certificates representing the number of fully paid andnonassessable shares of Common Stock into which the Note has been converted.Subject to the further provisions of this paragraph (b), such conversion shallbe deemed to have been made at the close of business on the date that such Noteshall have been surrendered for conversion at the office of the Company asprovided in paragraph 4(a) (the “Conversion Date”), so that the rights of theHolder as a holder of this Note, to the extent of the amount of the PrincipalSum so converted, shall cease at such time, and the person or persons entitledto receive any of the shares of Common Stock upon conversion of the Notes shallbe treated for all purposes as having become the record holder or holders ofsuch shares of Common Stock at such time; *provided, however,*that no suchsurrender on any date when the stock transfer books of the Company shall beclosed shall be effective to constitute the person or persons entitled toreceive shares of Common Stock upon such conversion as the record holder orholders of such shares of Common Stock on such date, but such surrender shallbe effective to constitute the person or persons entitled to receive suchshares of Common Stock as the record holder or holders thereof for all purposesat the close of business on the next succeeding day on which such stocktransfer books are open or the Company is required to convert Notes. TheCompany will, at the time of such conversion, upon request of the Holder,acknowledge in writing its continuing obligation to the Holder in respect ofany rights (including, without limitation, any right of registration of theshares of Common Stock issued upon such conversion) to which such Holder shallcontinue to be entitled under this Note and/or the Purchase Agreement aftersuch conversion, *provided,*that the failure of the Holder to make any suchrequests or the failure or refusal of the Company to so acknowledge shall notaffect the continuing obligation of the Company to such Holder in respect ofsuch rights.
                    (ii) If the day for the exercise of the conversion right shall not be abusiness day, then such conversion right will automatically be deemed to beeffective on the next succeeding day which is a business day.
                    (iii) No adjustment or payment in respect of interest or cash dividendsshall be made upon conversion of any Note. All unpaid interest on any Note, tothe extent such Note is converted, which has accrued to and including the dateupon which such
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conversion is deemed to have been effected in accordance with this Section4.2, shall automatically be cancelled.
                    (iv) Each of the certificates representing shares of Common Stock issuedupon conversion of a Note shall be subject to stop transfer instructionsagainst the transfer of legended certificates representing such shares andshall bear a legend substantially as follows:
   “The shares represented by this certificate have not beenregistered under the Securities Act of 1933, as amended, andmay not be transferred or otherwise disposed of unless theyhave been registered under such Act or pursuant to anexemption from registration under such Act.”
               (c) *Notice to Holders of Election.*Upon the Company’s receipt of anelection to convert from a Holder pursuant hereto, the Company shall, as soonas practicable, notify the other Holders, if any, of the other outstandingNotes of such election.
               (d) *Adjustment of Conversion Price.*The Conversion Price as of the IssueDate shall be subject to adjustment as follows:
                    (i) In case the Company, after the Issue Date, shall (A) pay a stockdividend or make a distribution in shares of its capital stock (whether sharesof its Common Stock or of capital stock of any other class), (B) subdivide itsoutstanding shares of Common Stock, (C) combine its outstanding shares ofCommon Stock into a smaller number of shares, or (D) issue by reclassificationof its shares of Common Stock any shares of capital stock of the Company, theConversion Price in effect immediately prior to such action shall be adjustedso that the holder of a Note thereafter surrendered for conversion shall beentitled to receive an equivalent number of shares of capital stock of theCompany which he would have owned immediately following such action had suchNote been converted immediately prior thereto. Any adjustment made pursuant tothis subsection (i) shall become effective immediately after the record date inthe case of a dividend or distribution and shall become effective immediatelyafter the effective date in the case of a subdivision, combination orreclassification.
                    (ii) In case the Company, after the Issue Date, shall distribute to allholders of its outstanding Common Stock any shares of capital stock (other thanCommon Stock), evidences of its indebtedness or assets (including securitiesand cash, but excluding any cash dividend paid out of current or retainedearnings of the Company and dividends or distributions payable in stock forwhich adjustment is made pursuant to subparagraph (d)(i)) or warrants, optionsor rights to subscribe for or purchase securities of the Company, then in eachsuch case the Conversion Price shall be adjusted so that the same shall equalthe price determined by multiplying the Conversion Price in effect immediatelyprior to the record date of such distribution by a fraction of which thenumerator shall be the Conversion Price then in effect less the fair marketvalue on such record date (as determined in good faith by the Board ofDirectors of the Company, with the concurrence of a majority of IndependentDirectors, which determination shall be conclusive) of the portion of thecapital stock or the evidences of indebtedness or the assets so distributed tothe holder of one share of Common Stock or of such warrants, options orsubscription rights applicable to one share of Common Stock and of which
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the denominator shall be the Conversion Price then in effect. Suchadjustment shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such distribution. If at theend of the period during which warrants, options or rights described in thissubparagraph (d)(ii) are exercisable not all such warrants, options or rightsshall have been exercised, the adjusted Conversion Price shall be immediatelyreadjusted to what it would have been based on the number of warrants, optionsor rights actually exercised. Notwithstanding anything in thissubparagraph(d)(ii) to the contrary, with respect to any warrants, options orrights covered by this subparagraph(d)(ii), if such warrants, options or rightsare only exercisable upon the occurrence of certain triggering events, then forpurposes of this subparagraph (d)(ii), such warrants, options or rights shallnot be deemed issued or distributed, and any adjustment to the Conversion Pricerequired by this subparagraph (d)(ii) shall not be made until such triggeringevents occur and such warrants, options or rights become exercisable.
                    (iii) In case the Company, after the Issue Date, shall issue shares of itsCommon Stock pursuant to the exercise of those rights (including conversionrights), warrants, options, shares of capital stock convertible into CommonStock or evidences of its indebtedness convertible into Common Stock, any ofwhich were outstanding immediately prior to the Issue Date (“ConvertibleSecurities”) at a price per share less than the Conversion Price in effect onthe date the Company issues such Common Stock, the Conversion Price shall bereduced immediately thereafter so that it shall equal the price determined bymultiplying such Conversion Price in effect immediately prior thereto by afraction, of which the *numerator*shall be the number of shares of Common Stockoutstanding immediately prior to the issuance of such additional shares plusthe number of shares of Common Stock which the aggregate consideration, if any,received by the Company upon such issuance would purchase at the ConversionPrice then in effect, and the *denominator*shall be the number of shares ofCommon Stock that would be outstanding immediately after the issuance of suchadditional shares. Such adjustments shall be made successively whenever suchan issuance is made.
                    (iv) In any case in which this Section 4 shall require that an adjustmentbe made immediately following a record date or an effective date, the Companymay elect to defer (but only until five (5) business days following the mailingby the Company to the Holders of Notes of the certificate required bysubparagraph (d)(vi)) issuing to the holder of any Note converted after suchrecord date or effective date the shares of Common Stock issuable upon suchconversion over and above the shares of Common Stock issuable upon suchconversion on the basis of the Conversion Price prior to adjustment, and payingto such holder any amount of cash in lieu of a fractional share.
                    (v) No adjustment in the Conversion Price shall be required to be madeunless such adjustment would require an increase or decrease of at least onepercent (1%) in such price; *provided, however,*that any adjustments which byreason of this subparagraph (d)(v) are not required to be made shall be carriedforward and taken into account in any subsequent adjustment. All calculationsunder this Section 4 shall be made and rounded to the nearest whole cent orshare, as applicable.
                    (vi) Whenever the Conversion Price is adjusted as provided in Section 4(d)herein, the Company will promptly mail to the Holders of the Notes, acertificate of
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the Company’s Treasurer or Chief Financial Officer setting forth theConversion Price as so adjusted and a brief statement of facts accounting forsuch adjustment.
                    (vii) Irrespective of any adjustment in the Conversion Price and thenumber of shares of Common Stock into which the Notes are convertible as aresult of such adjustment, the Notes theretofore and thereafter issued maycontinue to express the Conversion Price per share of Common Stock and thenumber of shares of Common Stock into which the Notes are convertible as theConversion Price per share of Common Stock and the number of shares of CommonStock into which the Notes are convertible as expressed upon the Notes wheninitially issued.
               (e) *Company’s Consolidation or Merger*. If the Company shall at any timeconsolidate or merge with or into another corporation, the Holder of a Noteshall thereafter be entitled to receive, upon the conversion thereof, thesecurities or property to which a holder of the number of shares of CommonStock then deliverable upon the conversion thereof would have been entitledupon such consolidation or merger, and the Company shall take such steps inconnection with such consolidation or merger as may be reasonably necessary toassure the Holder that the provisions of this Note, the Purchase Agreement andthe Registration Rights Agreement shall thereafter be applicable, as nearly asreasonably may be in relation to any securities or property thereafterdeliverable upon the conversion of the Note including, but not limited to,obtaining a written acknowledgment from the continuing corporation or otherappropriate corporation of its obligation to supply such securities or propertyupon such conversion.
               (f) *Reserve of Sufficient Shares*. The Company will reserve and keepavailable a sufficient number of shares of its Common Stock to satisfy theconversion requirements of all outstanding Notes. The Company will take allsuch action as may be necessary such that all shares of Common Stock issuedupon conversion of the Notes will be duly and validly authorized and issued andfully paid and nonassessable.
               (g)* Taxes on Conversion*. The issuance of certificates for shares ofCommon Stock upon the conversion of Notes shall be made without charge to theholders of Notes converting such Notes for any issue or stamp tax in respect ofthe issuance of such certificates, and such certificates shall be issued in therespective names of, or in such names as may be directed by, the holders of theNotes converted; *provided, however,*that the Company shall not be required topay any tax which may be payable in respect of any transfer involved in theissuance and delivery of any such certificate in a name other than that of thenamed holder of the Note, and the Company shall not be required to issue ordeliver such certificates unless or until the person or persons requesting theissuance thereof shall have paid to the Company the amount of such tax or shallhave established to the satisfaction of the Company that such tax has beenpaid.
               (h)* Cancellation of Converted Notes*. All Notes which have been convertedshall be cancelled by the Company to the extent of the Principal Sum converted,and no Notes shall be issued in lieu thereof.
               (i)* Notice to Holders of Notes*. In case at any time:
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                    (i) the Company shall take any action which would require an adjustment inthe Conversion Price pursuant to paragraph (d); or
                    (ii) there shall be any capital reorganization or reclassification of theCommon Stock (other than a change in par value or from par value to no parvalue or from no par value to par value of the Common Stock), whether or notsuch reorganization or reclassification results in an adjustment in theConversion Price, or any consolidation or merger to which the Company and itsSubsidiaries is a party and for which approval of any stockholders of theCompany is required; or
                    (iii) there shall be a voluntary or involuntary dissolution, liquidationor winding-up of the Company;
then, in any one or more of said cases, the Company shall give written noticeto the Holders of the Notes, not less than fifteen (15) days before any recorddate for, or the expected effectiveness of, such action, reorganization,reclassification, consolidation, merger, dissolution, liquidation or windingup, as the case may be. Such notice shall also set forth such facts as shallindicate the effect of such action (to the extent such effect may be known atthe date of such notice) on the current Conversion Price and the kind andamount of the shares of Common Stock or other securities or propertydeliverable upon conversion of the Notes. Such notice shall, if applicable,also specify the date as of which the holders of the Common Stock of recordshall be entitled to exchange their Common Stock for securities or otherproperty deliverable upon such action, reorganization, reclassification, sale,consolidation, merger, dissolution, liquidation or winding up, as the case maybe (on which date, in the event of voluntary or involuntary dissolution,liquidation or winding up of the Company, the right to convert the Notes intoshares of Common Stock shall terminate). Without limiting the obligation ofthe Company to provide notice to the Holders of Notes or shares of Common Stockof corporate action hereunder, it is agreed that failure of the Company to givesuch notice shall not invalidate such corporate action of the Company.
          5.* Call Of Notes By The Company.*(a) The Company shall not, directly orindirectly, call for redemption, redeem, prepay, repurchase, or otherwiseacquire (any such event referred to herein as a “call”) any Notes or anyportion thereof except as set forth in this Section 5.
               (b) *Optional Conversion or Redemption Upon Call by the Company*.
                    (i) *Company Election.*The Company may, at its option, call the Notes,either in whole or in part on a pro-rata basis, at a price equal to theoutstanding Principal Sum of, plus accrued but unpaid interest on, the Notes asof the date immediately prior to the date of payment of such Principal Sum plusinterest pursuant to such call (the “Call Price”), only if:
 (A) the closing price ofthe Company’s Common Stock on a nationalsecurities exchange, the NASDAQ National Market,the Nasdaq SmallCap Market or the OTC Bulletin
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   Board shall be equal to or in excess of 150% ofthe Conversion Price, for at least twenty (20)consecutive trading days prior to the Call NoticeDate (as hereinafter defined); and  (B) for a period of atleast thirty (30) days following the Call NoticeDate, the Holders of the Notes shall be entitledto exercise their conversion rights underSection 4 hereof.
                    (ii) *Holder Option.*In the event of a call by the Company pursuant tothis Section 5, the Holders, at their option, may for a period of thirty (30)days following the Call Notice Date require the Company to convert their Notesinto fully paid and nonassessable shares of the Company’s Common Stock at theConversion Price (the “Holder’s Option”).
                    (iii) *Notice of Call*. The right of the Company to call any Notes pursuantto this Section 5 shall be conditioned upon the Company’s giving notice ofsuch call (the “Call Notice”, and the date the Call Notice is given beingreferred to as the “Call Notice Date”), by personal delivery, overnightcourier, certified mail or by facsimile, signed by an authorized officer, tothe Holders of Notes, not less than thirty (30) days prior to the date uponwhich the call is to be effective (the “Call Effective Date”). The Call Noticeshall be irrevocable and shall specify (A) the Call Price and (B) the CallEffective Date, which may not be less than 30 days after the Call Notice Date.Within thirty (30) days after the Call Notice Date, each Holder severally shallnotify the Company, by personal delivery, overnight courier, certified mail orby facsimile, signed by the Holder, whether such Holder wishes such Holder’sNotes to be converted pursuant to paragraph 5(b)(ii) hereof or redeemed inaccordance with this Section 5. If a Holder fails to respond in the mannerprovided herein to the Call Notice on or before the Call Effective Date, theHolder’s right to require conversion of such Holder’s Note, to the extent suchNote has been called in accordance with this Section 5, shall become void andof no further effect, and the Company shall redeem such Holder’s Notes at theCall Price as provided in Section 5(b)(i).
               (c) *Partial Call*. In the event of a partial call by the Company pursuantto this Section 5, the aggregate Call Price shall be allocated among the Notesas to which the Call Price is being paid as provided herein, in proportion, asnearly as practicable, to the respective Call Prices for such Notes.
               (d) *Surrender of Notes Upon Call*. In the event that any Notes shall besurrendered to the Company upon conversion as provided in this Section 5,interest shall cease to accrue upon such Notes so surrendered and anypreviously accrued and unpaid interest shall be cancelled upon such surrenderand conversion as provided in Section 4(b)(iii).
          6.* Subordination*.
               (a)* Agreement to Be Bound*. The Company covenants and agrees, and eachHolder of Notes, by the Holder’s acceptance hereof, likewise covenants andagrees, that the Notes shall be issued subject to the provisions contained inthis Section 6; and each person
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holding any Notes, whether upon original issue or upon transfer orassignment thereof, accepts and agrees to be bound by such provisions for thebenefit of any holder of any Senior Indebtedness.
               (b)* Subordination.*All Notes shall, to the extent and in the mannerhereinafter set forth, be subordinated and subject in right of payment to theprior payment in full of all Senior Indebtedness (as defined herein). Exceptas set forth in the first sentence of Section 6(i) hereof, the Notes shall bepari passu in right of payment to the Company’s trade creditors and generalunsecured creditors.
               (c)* Priority of Senior Indebtedness*. (i) No payment on account of thePrincipal Sum or interest on the Notes shall be made, nor shall any assets beapplied to the purchase or other acquisition or retirement of the Notes, if, atthe time of such payment or application or immediately after giving effectthereto, there shall exist a default in the payment of any amount due on anySenior Indebtedness. Within ten (10) business days after becoming aware of anysuch default referred to in this paragraph 6(c), the Company shall providewritten notice thereof to each holder of the Notes.
                    (ii) If there shall have occurred an event of default (other than adefault in the payment of any amount due) with respect to any issue of SeniorIndebtedness, or in the instrument under which the same has been issued,permitting the holders thereof, whether or not after notice or lapse of time,or both, to accelerate the maturity thereof, then, unless and until such eventof default shall have been cured or waived or shall have ceased to exist, nopayment on account of principal or interest on the Notes shall be made, norshall any assets be applied to the redemption or other acquisition orretirement of the Notes until the earliest to occur of (A) the date on whichthe Senior Indebtedness to which such event of default relates is discharged inaccordance with its terms, or (B) the date such event of default is waived bythe holders of such Senior Indebtedness or otherwise cured. Within ten (10)business days after becoming aware of any event of default referred to in thisparagraph 6(c)(ii), the Company shall provide written notice thereof to eachholder of the Notes.
                    (iii) Upon (A) the occurrence and during the continuance of any Event ofDefault under this Note, or (B) the occurrence of an event described inparagraphs (6(c)(i) or (ii) which gives rise to the non-payment of principal orinterest due on the Notes, and notwithstanding any other provision containedherein or in the Notes to the contrary, each Holder hereby agrees, for thebenefit of the holders of Senior Indebtedness, not to ask for, demand, sue for,take or receive, including by way of set off, any amount owing under the Notesor exercise any remedy (whether pursuant hereto, including, without limitation,acceleration of the Notes, at law, in equity or otherwise) with respect thereto(1) in the case of clause (A), until the earliest of (x) 60 days after theoccurrence of such Event of Default or (y) any voluntary or involuntarypetition in bankruptcy filed by or against the Company that has not beendismissed and (2) if clause (B) is applicable (even if and whether or notclause (A) is applicable), until the earliest to occur of (x) the date on whichthe Senior Indebtedness to which such event of default related is discharged inaccordance with its terms or (y) such event of default is waived by the holdersof such Senior Indebtedness or otherwise cured. Within ten (10) business daysafter becoming aware of any Event of Default under this Note, the Company shallprovide written notice thereof
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to the holders of Senior Indebtedness in the manner and at the addressesspecified in the documents and/or agreements evidencing the applicable SeniorIndebtedness.
               (d)* Acceleration of Notes; Insolvency*. Upon (i) any acceleration of theprincipal amount due on the Notes or Senior Indebtedness or (ii) any payment ordistribution of assets of the Company of any kind or character, whether incash, property or securities, to creditors upon any dissolution or winding upor total or partial liquidation or reorganization of the Company, whethervoluntary or involuntary or in bankruptcy, insolvency, receivership or otherproceedings, all amounts due or to become due upon all Senior Indebtednessshall first be paid in full, or payment thereof duly provided for, to the fullsatisfaction of the holders of Senior Indebtedness before the holders of theNotes shall be entitled to receive or retain any assets so paid or distributedin respect thereof; and upon any such dissolution or winding up or liquidationor reorganization, any payment or distribution of assets of the Company of anykind or character, whether in cash, property or securities, to which theholders of the Notes would be entitled, except for these provisions, shall bepaid by the Company or by any receiver, trustee in bankruptcy, liquidatingtrustee, agent or other person making such payment or distribution, or by theholders of the Notes if received by them or it, as the case may be, directly tothe holders of Senior Indebtedness, to the extent necessary to pay all suchSenior Indebtedness in full, after giving effect to any concurrent payment ordistribution to or for the holders of Senior Indebtedness before any payment ordistribution is made to the holders of the Notes, except that the holders ofSenior Indebtedness of the type described in clause (i) of the definition ofSenior Indebtedness shall be entitled to receive payment in full of such SeniorIndebtedness (or provisions satisfactory to the holders of such SeniorIndebtedness shall be made for such payment) before the holders of other typesof Senior Indebtedness shall be entitled to receive payment on such otherSenior Indebtedness. Nothing contained in this Section 5(d) or any otherprovision of this Note shall be construed to limit Holder’s right to convertthe Note in full in accordance with Sections 4(a) and (b) of this Note,notwithstanding the occurrence and continuance of any Event of Default (asdefined below).
               (e)* Payments in Trust.*In the event that, notwithstanding the provisionsof Sections 6(c) and 6(d), any payment or distribution of assets of the Companyprohibited by such Sections shall be received by the Holders of the Notesbefore all Senior Indebtedness is paid in full, or provision made for suchpayment, to the full satisfaction of the holders of Senior Indebtedness, inaccordance with its terms, such payment or distribution shall be held in trustfor the benefit of, and shall be paid over or delivered to, the holders ofSenior Indebtedness or their representative or representatives, or to thetrustee or trustees under any indenture pursuant to which any instrumentsevidencing any Senior Indebtedness may have been issued, as their respectiveinterests may appear, for application to the payment of all Senior Indebtednessremaining unpaid to the extent necessary to pay all Senior Indebtedness in fullin accordance with its terms, after giving effect to any concurrent payment ordistribution to or for the holders of such Senior Indebtedness. All paymentsapplied to Senior Indebtedness pursuant to this paragraph shall be allocatedamong the holders of Senior Indebtedness in accordance with the provisions ofSection 6(d).
               (f)* Subrogation, Etc.*Upon payment in full of all Senior Indebtedness,the Holders of Notes shall be subrogated to the rights of the holders of SeniorIndebtedness, *pro rata*in proportion to the respective amounts then owing tothe Holders of
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Notes; and for purposes of such subrogation, no payments or distributionsto the holders of Senior Indebtedness of any cash, property or securities towhich the holders of Notes would be entitled except for the provisions of thisSection 6, and no payment over pursuant to such provisions to the holders ofSenior Indebtedness, shall, as between the Company and its creditors (otherthan the Holders of Notes and the holders of the Senior Indebtedness), bedeemed to be a payment by the Company to or on account of Senior Indebtedness,it being understood that the provisions of this Section 6 are and are intendedsolely for the purpose of defining the relative rights of the holders of Noteson the one hand and the holders of Senior Indebtedness on the other hand. Anyholder of Senior Indebtedness may amend, modify and otherwise deal with SeniorIndebtedness without any notice to or approval of any holder of indebtednessranking junior to Senior Indebtedness (including, without limitation, theHolders of any Notes).
               (g)* Enforcement*. The foregoing subordination provisions shall be for thebenefit of the holders of Senior Indebtedness and may be enforced directly bysuch holders against the Holders of the Notes. Each Holder of Notes by itsacceptance thereof shall be deemed to acknowledge and agree that thesubordination provisions of this Section 6 are, and are intended to be, aninducement and a consideration to each holder of any Senior Indebtedness,whether such Senior Indebtedness was created or acquired before or after theissuance of the Notes, to acquire and continue to hold, or to continue to hold,such Senior Indebtedness and each holder of Senior Indebtedness shall be deemedconclusively to have relied on such subordination provisions in acquiring andcontinuing to hold, or in continuing to hold, such Senior Indebtedness.
               (h)* Certificate of receiver, et al.*Upon any payment or distribution ofassets of the Company, the Holders of the Notes shall be entitled to rely upona certificate of the receiver, trustee in bankruptcy, liquidation trustee,Company, agent or other person making such payment or distribution, deliveredto the Holders of the Notes, for the purpose of ascertaining the personsentitled to participate in such distribution, the holders of the SeniorIndebtedness and other indebtedness of the Company, the amount thereof orpayable thereon, the amount or amounts paid or distributed thereon and allother facts pertaining thereto or to the provisions of this Section 6.
               (i)* Obligations Unimpaired*. Nothing contained in this Section 6 orelsewhere in this Note is intended to or shall impair as between the Companyand its creditors other than the holders of Senior Indebtedness and the Holdersof the Notes, the obligation of the Company, which shall be absolute andunconditional, to pay the holders of the Notes the principal of and interest onthe Notes as and when the same shall become due and payable in accordance withthe terms thereof, or, except as provided in the second sentence of Section6(b), affect the relative rights of the Holders of the Notes and othercreditors of the Company other than the holders of Senior Indebtedness.Without limitation of the second sentence of Section 6(b), nothing contained inthis Section 6 or elsewhere in this Note shall prevent the Company from makingpayment of the principal of or interest on the Notes at any time except underthe conditions described in Section 6(c) or 6(d) or during the pendency of anydissolution, winding up, liquidation or reorganization of the Company.
               (j)* Definition of Senior Indebtedness.*The term “Senior Indebtedness”shall mean the principal and interest on (i) all indebtedness of the Companyand its Subsidiaries
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for money borrowed from time to time, including that owing to banks orother financial institutions, an agency or agencies of the federal governmentor other institutions engaged in the business of lending money, (ii) allcapital leases of the Company and its Subsidiaries, (iii) obligations of theCompany for the reimbursement of any obligor on any letter of credit, banker’sacceptance or similar credit transaction, and (iv) any deferrals, renewals andextensions of any indebtedness described in clauses (i) through (iii) above,unless under the express provisions of the instrument creating or evidencingany such indebtedness, or pursuant to which the same is outstanding, suchindebtedness is not superior in right of payment to the Notes; *provided,however,*that Senior Indebtedness shall not include indebtedness owed or owingto any Subsidiary or any officer, director or employee of the Company or anySubsidiary.
          7.* Events of Default; Acceleration of Maturity Date.*If any of thefollowing events (herein called an “Event of Default”) shall occur and becontinuing:
               (a) If the Company shall default in the payment of any part of thePrincipal Sum of or interest on any Note when the same shall become due andpayable, whether at maturity or by acceleration in accordance with the termshereof; or
               (b) If the Company shall (1) make an assignment for the benefit ofcreditors; (2) admit in writing its inability to pay its debts; (3) suffer theappointment of a receiver or trustee for it or substantially all of its assetsand, if appointed without its consent, not to be discharged or stayed withinsixty (60) days; (4) suffer proceedings under any law relating to bankruptcy,insolvency or the reorganization or relief of debtors to be instituted by oragainst it, and, if contested by it, not to be dismissed or stayed within sixty(60) days; or (5) fail generally to pay its debts as they become due;
then and in each such event the Holders of twenty-five (25%) percent or more inaggregate principal amount of the Notes then outstanding may at any time(unless all defaults shall theretofore have been remedied) at its or theiroption, by written notice or notices to the Company, declare all the Notes tobe due and payable, whereupon the same shall forthwith mature and become dueand payable, together with all interest accrued thereon, without presentment,demand, protest or notice, all of which are hereby waived; *provided, however*,that this provision is subject to the condition that if, at any time after theprincipal of the Notes shall so become due and payable, any arrears ofprincipal and interest on the Notes (with interest at the rate specified in theNotes on any overdue principal and, to the extent legally enforceable, on anyinterest overdue) shall be paid by or for the account of the Company, then theholder or holders of at least fifty-one percent (51%) in aggregate principalamount of the Notes then outstanding, by written notice or notices to theCompany, may waive such Event of Default and its consequences (other thannon-payment of any portion of the Principal Sum or interest) and rescind orannul such declaration, but no such waiver shall extend to or affect anysubsequent Event of Default or impair any right resulting therefrom; *provided,further*, that notwithstanding the foregoing, if there shall occur an Event ofDefault under clause (b) above, then the Notes, together with all interestaccrued thereon, shall immediately mature and become due and payable, withoutthe necessity of any action by the Holders or notice to the Company. If anyHolder of a Note shall give any notice or take any other action with respect toa claimed default, the Company, forthwith upon receipt of such notice orobtaining knowledge of such other action, will give written notice thereof toall other holders of the Notes then outstanding, describing such
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notice or other action and the nature of the claimed default. Nothing hereinshall preclude any Holder (including any Holder who has elected to acceleratethe Maturity Date of the Notes) from electing, in such Holder’s discretion, toconvert all or any lesser portion of the Principal Sum at any time prior topayment in full thereof.
          8.* Absolute Obligation.*Subject to Section 6 hereof, no reference hereinto the Purchase Agreement and no provision hereof or thereof, shall alter orimpair the obligation of the Company, which is absolute and unconditional, topay the Principal Sum and interest thereon at the respective times and placesset forth herein.
          9.* Governing Law.*This Note is delivered in and shall be construed andenforced in accordance with and governed by the laws of the State of New York,without giving effect to any conflict of laws rule which would result in theapplication of any laws other than those of the State of New York.
          10.* Successors and Assigns.*The Company may treat the person in whosename this Note is registered as the owner and holder of this Note for thepurpose of receiving payment of principal and interest on this Note and for allother purposes whatsoever, and the Company shall not be affected by any noticeto the contrary.
          11.* No Third Party Beneficiary.*Nothing expressed or implied in this Noteis intended, or shall be construed, to confer upon or give any person otherthan the Company and the Holders and their respective heirs, personalrepresentatives, legal representatives, successors and permitted assigns, anyrights or remedies under or by reason of this Note.
**[Signature Page Follows:]**
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     **In Witness Whereof, NET PERCEPTIONS, INC.**has caused this ConvertibleSubordinated Note to be dated, and to be executed on its behalf by its officerthereunto duly authorized.      **NET PERCEPTIONS, INC.**