Document:

AMENDMENT
      NO. 3 TO RIGHTS AGREEMENT

    

    This
      AMENDMENT NO. 3 to RIGHTS AGREEMENT (this “Amendment”) is being entered into as
      of September 22, 2006, between Net Perceptions, Inc., a Delaware corporation
      (the “Company”), and Wells Fargo Bank, N.A., as rights agent (the “Rights
      Agent”).

    

    The
      Company and the Rights Agent are parties to a Rights Agreement, dated as of
      June
      1, 2001, as amended by Amendments No. 1 and 2 to Rights Agreement dated as
      of
      December 22, 2003 and April 21, 2004, respectively (as so amended, the “Rights
      Agreement”).

    

    The
      Company is proposing to enter into an Equity Compensation Agreement (the “Equity
      Agreement”) between the Company and Kanders & Company, Inc., a Delaware
      Corporation (“Kanders & Company”), whereby, upon the terms and subject to
      the conditions set forth therein, the Company will grant to Kanders &
Company without cost, and Kanders & Company will accept from the Company,
      8,274,000 fully vested, unregistered shares of common stock of the Company,
      par
      value $0.0001 per share (the “Equity Compensation Shares”).

    

    Pursuant
      to Section 27 of the Rights Agreement, the Company and the Rights Agent may
      supplement or amend the Rights Agreement in accordance with the provision of
      such Section 27. In connection with the Equity Agreement, the Company now
      desires to amend the Rights Agreement as set forth in this Amendment, and deems
      such amendments to be necessary and desirable. Capitalized terms used but not
      defined herein shall have the meanings ascribed to such terms in the Rights
      Agreement.

    

    NOW
      THEREFORE, in consideration of the premises and the mutual agreements herein
      set
      forth, the parties hereby agree as follows:

    

    1. AMENDMENT
      OF SECTION 1(a). Section 1(a) of the Rights Agreement is hereby amended to
      add
      the following new sentence at the end thereof:

    

    “Furthermore,
      notwithstanding anything in this Rights Agreement to the contrary, neither
      Kanders & Company nor any of its existing or future Affiliates or Associates
      shall be deemed to be an Acquiring Person solely by virtue of the Equity
      Agreement Transactions.”

    

    2. AMENDMENT
      OF SECTION 1(kk). Section 1(kk) of the Rights Agreement is hereby amended to
      add
      the following new proviso at the end thereof:

    

    “;
      provided further, however, that no Triggering Event shall result solely by
      virtue of the Equity Agreement Transactions.”

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3. AMENDMENT
      OF SECTION 1. Section 1 of the Rights Agreement is hereby amended to add the
      following new subparagraphs at the end thereof:

     

    (qq)
      “Kanders & Company” shall mean Kanders & Company, Inc., a Delaware
      Corporation.

    

    (rr)
      “Equity Agreement” shall mean the Equity Compensation Agreement between the
      Kanders & Company, entered into immediately after the execution and delivery
      of Amendment No. 3 to this Rights Agreement.

    

    (ss) “Equity
      Agreement Transactions” shall mean the execution and delivery by the Company and
      Kanders & Company of the Equity Agreement and the grant by the Company to
      Kanders & Company, and the acquisition and ownership by Kanders &
Company, of the Equity Compensation Shares, pursuant to the Equity
      Agreement.

    

    4. AMENDMENT
      OF SECTION 3(a). Section 3(a) of the Rights Agreement is hereby amended to
      add
      the following new sentence at the end thereof:

    

    “Furthermore,
      notwithstanding anything in this Rights Agreement to the contrary, a
      Distribution Date shall not be deemed to have occurred solely by virtue of
      the
      Equity Agreement Transactions.”

    

    5. AMENDMENT
      OF SECTION 7(a). Section 7(a) of the Rights Agreement is hereby amended to
      add
      the following new sentence at the end thereof:

    

    “Furthermore,
      notwithstanding anything in this Rights Agreement to the contrary, the Equity
      Agreement Transactions shall not be deemed to be events that cause the Rights
      to
      become exercisable pursuant to the provisions of this Section 7 or
      otherwise.”

    

    6. AMENDMENT
      OF SECTION 11. Section 11 of the Rights Agreement is hereby amended to add
      the
      following new sentence after the second sentence of said Section:

    

    “Furthermore,
      notwithstanding anything in this Rights Agreement to the contrary, the Equity
      Agreement Transactions shall not be deemed to be events of the type described
      in
      this Section 11 or to cause the Rights to be adjusted or to become exercisable
      in accordance with this Section 11 or otherwise.”

    

    7. AMENDMENT
      OF SECTION 13(d). Section 13(d) of the Rights Agreement is hereby amended to
      add
      the following new sentence at the end thereof:

    

    “Furthermore,
      notwithstanding anything in this Rights Agreement to the contrary, the Equity
      Agreement Transactions shall not be deemed to be events of the type described
      in
      this Section 13 or to cause the Rights to be adjusted or to become exercisable
      in accordance with this Section 13 or otherwise.”

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    8. EFFECTIVENESS.
      This Amendment shall be deemed effective as of the date first written above,
      as
      if executed on such date, at the time immediately prior to the execution of
      the
      Equity Agreement. Except as amended hereby, the Rights Agreement shall remain
      in
      full force and effect and shall be otherwise unaffected hereby.

    

    9. MISCELLANEOUS.
      This Amendment shall be deemed to be a contract made under the laws of the
      State
      of Delaware and for all purposes shall be governed by and construed in
      accordance with the laws of such State applicable to contracts to be made and
      performed entirely within such State. This Amendment may be executed in
      counterparts, each of which shall be deemed to be an original, and which
      together shall constitute one and the same instrument. If any provision,
      covenant or restriction of this Amendment is held by a court of competent
      jurisdiction or other authority to be invalid, illegal or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions of this Amendment
      shall remain in full force and effect and shall in no way be affected, impaired
      or invalidated.

     

    [Signature
      Page Follows]

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    IN
      WITNESS WHEREOF, this Amendment has been duly executed by the Company and the
      Rights Agent as of the day and year first written above.

    
      	 	 	 
	 	
              NET
                PERCEPTIONS, INC.

            
	 
 	 
 	 
 
	
            	By:  	Nigel
              P.
              Ekern
	 	
              
                

              

              Name:
                Nigel P. Ekern

              Title:
                Chief Administrative Officer and
                Secretary

            

    

      

      	 	 	 
	 	
              
                WELLS
                  FARGO BANK, N.A.,

                as
                  Rights Agent

              

            
	 
 	 
 	 
 
	
            	By:  	 Steven
              J. Hoffman 
	 	
              
                

              

              Name:
                Steven J. Hoffman

              Title: Assistant
                Vice PresidentEQUITY
        COMPENSATION AGREEMENT

      

      This
        Equity Compensation Agreement (this “Agreement”)
        is
        entered into as of September 22, 2006 by and between NET
        PERCEPTIONS, INC.,
        a
        Delaware corporation (the “Company”);
        and
        (ii) KANDERS
        & COMPANY, INC. (“Kanders”).

       

      WHEREAS,
        Kanders has provided a variety of valuable strategic, consulting, investment
        banking and advisory services to the Company and has incurred substantial
        out-of-pocket expenses in connection with the implementation of the Company’s
        asset redeployment strategy and financing a portion of the Company’s operations
        since April 21, 2004; and 

       

      WHEREAS,
        Kanders has provided significant advisory and consulting services in connection
        with the Company’s asset redeployment strategy, including the strategic
        development of a global industrial business and, in connection therewith,
        the
        determination that the acquisition of the business of CRC Acquisition Co.
        LLC
        (the “Acquisition”)
        and
        the financing of such Acquisition (collectively, the “Redeployment
        Services”)
        would
        be the initial step in implementing such global strategy; and

       

      WHEREAS,
        Kanders has not been compensated or reimbursed for various expenses in providing
        the Redeployment Services; and

       

      WHEREAS,
        the Company has previously disclosed its intention to award Kanders equity
        compensation upon the completion of an acquisition implementing the Company’s
        asset redeployment strategy consistent with market practices; and 

       

      WHEREAS,
        in order to compensate Kanders for the Redeployment Services, the Company
        has
        agreed to provide the rights set forth in this Agreement.

       

      NOW,
        THEREFORE, in consideration of the foregoing and the representations,
        warranties, covenants and agreements set forth herein, the parties hereby
        agree
        as follows:

       

      1.
         Definitions

       

      As
        used
        in this Agreement, the following terms have the following meanings:

       

      
        	
                Exchange
                  Act:

              	 	
                The
                  Securities Exchange Act of 1934, as amended, and the rules and
                  regulations
                  of the SEC promulgated thereunder.

              
	 	 	 
	
                Prospectus:
                  

              	 	
                The
                  prospectus included in any Registration Statement (including, without
                  limitation, a prospectus that discloses information previously
                  omitted
                  from a prospectus filed as part of an effective registration statement
                  in
                  reliance upon Securities Act Rule 430A), as amended or supplemented
                  by any
                  prospectus supplement, with respect to the terms of the offering
                  of any
                  portion of the Registrable Securities covered by such Registration
                  Statement and all other amendments and supplements to such prospectus,
                  including post-effective amendments, and all material incorporated
                  by
                  reference or deemed to be incorporated by reference in such
                  prospectus.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

         

      

      

      
        	
                Registrable
                  Securities:
                  

              	 	
                All
                  Equity Compensation Shares (as hereinafter defined) and any securities
                  issued or issuable in respect of any of the Equity Compensation
                  Shares
                  pursuant to any stock split, stock dividend, recapitalization,
                  or similar
                  event.

              
	 	 	 
	
                Registration
                  Expenses:

              	 	
                All
                  expenses in connection with the performance of or compliance with
                  Sections
                  3 and 4 hereof by the Company including, without limitation, all
                  registration and filing fees, printing expenses, fees and disbursements
                  of
                  counsel and accountants for the Company, blue sky fees and
                  expenses.

              
	 	 	 
	
                Registration
                  Statement:
                  

              	 	
                Any
                  registration statement of the Company that covers any of the Registrable
                  Securities pursuant to the provisions of this Agreement, including,
                  without limitation, the Prospectus, amendments and supplements
                  to such
                  registration statement (including, without limitation, post-effective
                  amendments), all exhibits, and all material incorporated by reference
                  or
                  deemed to be incorporated reference in such registration statement.
                  

              
	 	 	 
	
                Restricted
                  Securities:

              	 	
                The
                  Equity Compensation Shares, until they are no longer required to
                  bear the
                  legend set forth on such securities pursuant to applicable
                  law.

              
	 	 	 
	
                Rule
                  144:
                  

              	 	
                Rule
                  144 under the Securities Act, as such Rule may be amended from
                  time to
                  time, or any similar rule or regulation hereafter adopted by the
                  SEC
                  (excluding Rule 144A).

              
	 	 	 
	
                Securities
                  Act:
                  

              	 	
                The
                  Securities Act of 1933, as amended, and the rules and regulations
                  promulgated by the SEC
                  thereunder.

              

      

      
        
          
          

        

        
          -2-

          
            

          

        

         

      

       

      2. Equity
        Compensation Grant.
        The
        Company hereby grants to Kanders 8,274,000 fully vested, unregistered shares
        of
        common stock of the Company, par value $0.0001 per share (“Common
        Stock”)
        without cost as compensation to Kanders for the Redeployment Services (the
        “Equity
        Compensation Shares”);
        subject to the conditions set forth in Section 6 herein. For the avoidance
        of
        doubt, it is intended and understood that such Equity Compensation Shares
        when
        issued, shall constitute 19.99% of the total number of shares of Common Stock
        to
        be outstanding following the Acquisition and the issuance of the Equity
        Compensation Shares, without giving effect to any shares issuable upon
        conversion of the Note as hereinafter defined in Section 6(b)). 

       

      3. Registration
        Rights.

       

      (a) Request
        for Registration.
        If
        Kanders submits a written request (a “Demand
        Notice”)
        to the
        Company requesting that the Company register Registrable Securities under
        and in
        accordance with the Securities Act (a “Demand
        Registration”),
        upon
        receipt of the Demand Notice, the Company shall, as soon as practicable
        thereafter, use its reasonable efforts to effect the registration of such
        Registrable Securities as may be so requested utilizing Form S-3 (or any
        successor form) if then available to the Company and if not, Form S-1 (or
        any
        successor form).

       

      (b) Limitations
        on Demand Rights.
        Notwithstanding any other provision set forth in this Section 3, Kanders
        shall not be entitled to deliver a Demand Notice within 90 days after the
        effectiveness of any registration statement filed (i) by the Company
        pursuant to an underwritten offering by the Company or (ii) on behalf of
        any other holder of demand registration rights with respect to the Common
        Stock.
        Provided that all of the Registrable Securities set forth in Kanders’ Demand
        Notice (or such lesser portion thereof as may be agreed by Kanders) are
        registered under a Registration Statement, Kanders shall only have the right
        to
        issue one Demand Notice. In addition, and notwithstanding any provision hereof,
        the Company shall not be required to register any Registrable Securities
        pursuant to Section 3(a) for any holder of Registrable Securities who holds
        less
        than 1% of the outstanding stock of the Company at such time as all Registrable
        Securities of such holder are freely tradable immediately in one transaction
        pursuant to Rule 144 of the Securities Act.

       

      (c) Deferral.
        Notwithstanding the foregoing, the Company may defer the filing (but not
        the
        preparation) of a Registration Statement required to be filed by this
        Section 3 until a date not later than 60 days after its receipt of a Demand
        Notice if: 

       

      (x) at
        the
        time the Company receives the Demand Notice, there is (A) material
        non-public information regarding the Company which the Board of Directors
        of the
        Company (the “Board”)
        reasonably determines not to be in the Company’s interest to disclose and which
        the Company is not otherwise required to disclose, or (B) there is a
        significant business opportunity (including but not limited to the acquisition
        or disposition of assets (other than in the ordinary course of business)
        or any
        merger, consolidation, tender offer or other similar transaction) available
        to
        the Company which the Board reasonably determines not to be in the Company’s
        best interest to disclose; or

      
        
          
          

        

        
          -3-

          
            

          

        

         

      

       

      (y) prior
        to
        receiving the Demand Notice, the Board had determined to effect an underwritten
        offering. 

       

      A
        deferral of the filing of a Registration Statement pursuant to this
        Section 3(c) shall be lifted, and the requested Registration Statement
        shall be filed forthwith, if, (1) in the case of a deferral pursuant to
        clause (x)(A), the material non-public information is made public by the
        Company or becomes no longer material, (2) in the case of a deferral
        pursuant to clause (x)(B), the significant business opportunity is
        disclosed by the Company or is terminated, or (3) in the case of a deferral
        pursuant to clause (y), the proposed registration for the Company’s account
        is abandoned. In order to defer the filing of a Registration Statement pursuant
        to this Section 3(c), the Company shall promptly (but in any event within
        20 days), upon determining to seek such deferral, deliver to Kanders a
        certificate signed by an executive officer of the Company stating that the
        Company is deferring such filing pursuant to this Section 3(c) and
        containing an approximation of the anticipated delay.

       

      4. Piggy-Back
        Registration.

       

      (a) Notice
        of Registration.
        If at
        any time or from time to time, the Company shall determine to register or
        shall
        be required to register any of its common stock, whether or not for its own
        account, other than a registration effected on Form S-4 (or its successor),
        or a registration relating to employee benefit plans (whether effected on
        Form S-8 or its successor), the Company shall:

       

      (i) provide
        to Kanders written notice thereof at least fifteen days prior to the filing
        of
        the Registration Statement by the Company in connection with such registration;
        and

       

      (ii) include
        in such Registration Statement, and in any underwriting involved therein
        (and on
        the same terms and conditions provided under such underwriting, including
        any
        restrictions on sale thereunder), all those Registrable Securities specified
        in
        a written request by Kanders received by the Company within five days after
        the
        Company mails the written notice referred to above, subject to the provisions
        of
        Section 4(b) below. However, if a Registration Statement covered by this
        Section 4 is an underwritten registration on behalf of the Company, and the
        underwriters advise the Company in writing that in their opinion the number
        of
        securities requested to be included in such registration exceeds the number
        which can be sold in such offering without adversely affecting the marketability
        of the offering, the Company shall include in such registration: (1) first,
        the securities the Company proposes to sell, (2) second, the Registrable
        Securities and other securities requested to be included in such registration,
        pro rata among Kanders and any other security holders that has requested
        to sell
        Company securities on the basis of the number of shares owned by each Kanders
        and other selling security holders; 

       

      provided,
        that the Company shall not be required to include in any Registration Statement
        or in any underwriting, or provide notice with respect to, any Registrable
        Securities pursuant to this Section 4 that are eligible for sale pursuant
        to
        Rule 144(k) of the Securities Act.

       

      
        
          
          

        

        
          -4-

          
            

          

        

         

      

       

      (b) Right
        to Terminate Registration.
        The
        Company shall have the right to terminate or withdraw any Registration Statement
        initiated by it under this Section 4 prior to the effectiveness of such
        Registration Statement whether or not Kanders has elected to include Registrable
        Securities in such Registration Statement.

       

      5. Expenses
        and Procedures

       

      (a)
         Expenses
        of Registration.
        All
        Registration Expenses shall be paid by the Company. Selling commissions and
        brokerage discounts of Kanders shall be paid solely by Kanders. The Company
        shall pay the reasonable fees of counsel and advisors for Kanders.

       

      (b)
         Registration
        Procedures.
        Subject
        to compliance by the Company with applicable securities laws, rules and
        regulations, and the rules and regulations of the primary exchange on which
        Common Stock is listed, in the case of each registration, qualification or
        compliance effected by the Company pursuant to Section 3 or 4
        hereof:

       

      (i) The
        Company will keep Kanders advised as to the initiation of registration,
        qualification and compliance and as to the completion thereof. At its own
        expense, the Company will furnish such number of conformed copies of the
        Registration Statement and other documents incident thereto as Kanders from
        time
        to time may reasonably request.

       

      (ii) To
        the
        extent necessary for the disposition of the Equity Compensation Shares, the
        Company will use its commercially reasonable efforts to register or qualify
        any
        Registrable Securities under such state securities or blue sky laws of such
        jurisdictions as Kanders shall reasonably request, and do any and all other
        acts
        and things which may be necessary or advisable to enable Kanders to consummate
        the disposition in such jurisdictions of its Registrable Securities covered
        by
        the Registration Statement; provided,
        however,
        that
        the Company shall not be obligated to file any general consent to service
        of
        process or to qualify as a foreign corporation or subject the Company to
        taxation in any jurisdiction in which it is not so qualified.

       

      (iii) The
        Company will promptly notify each holder owning Registrable Securities covered
        by any Registration Statement, at any time when a Prospectus relating thereto
        is
        required to be delivered under the Securities Act, of the happening of any
        event
        as a result of which the Prospectus included in such Registration Statement,
        as
        then in effect, includes an untrue statement of a material fact or omits
        to
        state any material fact required to be stated therein or necessary to make
        the
        statements therein not misleading in the light of the circumstances then
        existing, and at the request of any such seller prepare and furnish to such
        seller, a reasonable number of copies of a supplement to or an amendment
        of such
        Prospectus as may be necessary so that, as thereafter delivered to the
        purchasers of such Registrable Securities, such Prospectus shall not include
        an
        untrue statement of a material fact or omit to state a material fact required
        to
        be stated therein or necessary to make the statements therein not misleading
        in
        the light of the circumstances then existing.

       

      
        
          
          

        

        
          -5-

          
            

          

        

         

      

      (iv) The
        Company will use its commercially reasonable efforts to list such Registrable
        Securities on the primary securities exchange on which the Common Stock is
        then
        listed, if such Registrable Securities are not already so listed. 

       

      (v) The
        Company will provide a transfer agent and registrar for all Registrable
        Securities on or before the date that the Equity Compensation Shares are
        registered pursuant to a Registration Statement.

       

      (vi) In
        connection with the preparation and filing of the Registration Statement,
        and
        before filing the Registration Statement or any other document in connection
        therewith, the Company will give Kanders the opportunity to review the
        Registration Statement, each prospectus included therein or filed with the
        SEC,
        each amendment thereof of supplement thereto and give each of the aforementioned
        Persons such opportunities to discuss the business of the Company with its
        officers as shall be reasonably necessary to conduct a reasonable investigation
        within the meaning of the Securities Act.

       

      (c)
         Information.
        Kanders
        shall furnish such information regarding the distribution of such Registrable
        Securities as the Company may from time to time reasonably request, and the
        Company may exclude from such registration the Registrable Securities of
        Kanders
        if it unreasonably fails to furnish such information after receiving such
        request. Such information shall be true and complete and it shall not contain
        any untrue statement of a material fact or omit to state a material fact
        necessary in order to make the statements made, in the light of the
        circumstances under which they were made, not misleading.

      

      (d) Delay
        or Suspension. Notwithstanding
        anything herein to the contrary, the Company may, at any time, suspend the
        effectiveness of any Registration Statement for a period of not more than
        45
        days in the aggregate in any period of twelve consecutive calendar months
        (a
“Suspension
        Period”)
        by
        giving notice to Kanders, if the Company shall have determined that the Company
        may be required to disclose any material corporate development which disclosure
        may have a material effect on the Company. Kanders agrees by acquisition
        of such
        Registrable Securities that, upon receipt of any notice from the Company
        of a
        Suspension Period, Kanders shall forthwith discontinue disposition of such
        Registrable Securities covered by such Registration Statement or Prospectus
        until Kanders (i) is advised in writing by the Company that the use of the
        applicable Prospectus may be resumed, (ii) have received copies of a
        supplemental or amended prospectus, if applicable, and (iii) have received
        copies of any additional or supplemental filings which are incorporated or
        deemed to be incorporated by reference in such Prospectus. The Company shall
        prepare, file and furnish to Kanders promptly upon the expiration of any
        Suspension Period, appropriate supplements or amendments, if applicable,
        to the
        Prospectus and appropriate documents, if applicable, incorporated by reference
        in the Registration Statement.

      

      6. Conditions
        Precedent.
        The
        grant of the Equity Compensation Shares shall be conditioned upon the
        following:

       

      (a) Kanders
        on behalf of itself and all of its affiliates, waive all claims for accrued
        consulting, investment banking, finders or other fees and expenses, and all
        other claims for compensation or reimbursement of expenses of any kind that
        is
        or may be due or owing to Kanders from the Company in respect of Redeployment
        Services previously rendered by Kanders, or any of its affiliates, other
        than
        arrangements contemplated by that certain Consulting Agreement by and between
        Kanders and the Company dated the date hereof.

       

      
        
          
          

        

        
          -6-

          
            

          

        

         

      

       

      (b) Olden
        Acquisition LLC, an affiliate of Kanders (“Olden”),
        waives the anti-dilution provisions contained in the 2% Convertible Subordinated
        Note issued by the Company to Olden on April 21, 2004 (the “Note”)
        with
        respect to the issuance of the Equity Compensation Shares.

       

      7. Transfer
        of Shares.
        Kanders
        may transfer the Equity Compensation Shares to (i) an affiliate of Kanders
        or
        (ii) a non-affiliate transferee provided that any transfer to a non-affiliate
        is
        in connection with at least 10% of the Equity Compensation Shares originally
        issued to Kanders; provided, however, that for all transfers (x) Kanders
        provides the Company with 10 business days written notice of such intended
        transfer, (y) Kanders provides the Company an opinion of counsel reasonably
        satisfactory to the Company that such transfer is exempt from the registration
        provisions of the Securities Act, and (z) any transferee agrees to be bound
        to
        all the terms and conditions contained in this Agreement.

       

      8. Indemnification

       

      (a) Indemnification
        by the Company.
        The
        Company shall indemnify and hold harmless, to the fullest extent permitted
        by
        law, Kanders, its respective officers, members, managers, advisors, agents
        and
        employees, each person who controls Kanders (within the meaning of Section
        15 of
        the Securities Act or Section 20 of the Exchange Act), and the officers,
        directors, stockholders, partners, members, managers, advisors, agents and
        employees of any such controlling person, from and against all losses, claims,
        damages, liabilities, costs (including, without limitation, all reasonable
        attorneys’ fees) and expenses (collectively, “Losses”),
        as
        incurred, arising out of or based upon any untrue statement or alleged untrue
        statement of a material fact contained or incorporated by reference in any
        Registration Statement, Prospectus or preliminary prospectus, or arising
        out of
        or based upon any omission or alleged omission of a material fact required
        to be
        stated therein or necessary to make the statements therein in light of the
        circumstances under which they were made (in the case of any Prospectus)
        not
        misleading, except to the extent such untrue statement or omission is contained
        in any information furnished in writing by Kanders to the Company for use
        in
        such Registration Statement, Prospectus or preliminary prospectus or any
        amendment or supplement thereto; provided,
        however,
        that
        the Company shall not be liable in any such case to the extent that any such
        Loss arises out of or is based upon an untrue statement or alleged untrue
        statement or omission or alleged omission made in any preliminary prospectus
        or
        Prospectus if (i) Kanders failed to send or deliver a copy of the Prospectus
        or
        Prospectus supplement with or prior to the delivery of written confirmation
        of
        the sale of Registrable Securities, and the Prospectus or any supplement
        thereto
        would have corrected such untrue statement or omission or (ii) Kanders sends
        or
        delivers a copy of the Prospectus or any supplement thereto after receiving
        written notification from the Company that the Prospectus or any such supplement
        contains an untrue statement of a material fact or omits to state a material
        fact necessary in order to make the statements made, in the light of the
        circumstances under which they were made, not misleading. If requested, the
        Company shall also indemnify selling brokers and similar securities industry
        professionals participating in the distribution, their officers, directors,
        agents and employees and each person who controls such persons (within the
        meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
        to the same extent as provided above with respect to the indemnification
        of
        Kanders. Such indemnifications shall remain in full force and effect regardless
        of any investigation made by or on behalf of any Kanders and any of its
        officers, directors, stockholders, partners, members, managers, advisors,
        agents, employees or controlling persons (within the meaning of Section 15
        of
        the Securities Act or Section 20 of the Exchange Act) after the date hereof
        and
        shall survive any transfer of Registrable Securities.

       

      
        
          
          

        

        
          -7-

          
            

          

        

         

      

       

      (b) Indemnification
        by Kanders.
        Kanders
        hereby agrees to indemnify and hold harmless, to the fullest extent permitted
        by
        law, the Company, its officers, directors, stockholders, partners, members,
        managers, advisors, agents and employees, each person who controls the Company
        (within the meaning of Section 15 of the Securities Act or Section 20 of
        the
        Exchange Act) and the officers, directors, stockholders, partners, members,
        managers, advisors, agents and employees of any such controlling person,
        from
        and against all Losses arising out of or based upon (y) any untrue statement
        of
        a material fact contained or incorporated by reference in any Registration
        Statement, Prospectus or preliminary prospectus, or arising out of or based
        upon
        any omission of a material fact required to be stated therein or necessary
        to
        make the statements therein in light of the circumstances under which they
        were
        made (in the case of any Prospectus) not misleading, to the extent, but only
        to
        the extent, that such untrue statement or omission is contained in any
        information furnished by Kanders to the Company for use in such Registration
        Statement, Prospectus or preliminary prospectus or any amendment or supplement
        thereto or (z) Kanders sending or delivering a copy of the Prospectus or
        any
        supplement thereto to another party after receiving written notification
        from
        the Company that the Prospectus or any such supplement contains an untrue
        statement of a material fact or omits to state a material fact necessary
        in
        order to make the statements made, in the light of the circumstances under
        which
        they were made, not misleading. If requested, Kanders shall also indemnify
        selling brokers and similar securities industry professionals participating
        in
        the distribution, their officers, directors, agents and employees and each
        person who controls such persons (within the meaning of Section 15 of the
        Securities Act or Section 20 of the Exchange Act) to the same extent as provided
        above with respect to the indemnification of the Company. The Company shall
        be
        entitled to receive indemnities from accountants, underwriters, selling brokers,
        dealer managers and similar securities industry professionals participating
        in
        the distribution to the same extent as provided above with respect to
        information so furnished by such persons for inclusion in any Registration
        Statement, Prospectus or preliminary prospectus, provided
        that the
        failure of the Company to obtain any such indemnity shall not relieve the
        Company of any of its obligations hereunder. Such indemnifications shall
        remain
        in full force and effect regardless of any investigation made by or on behalf
        of
        the Company of the information provided by Kanders prior to Closing, and
        any of
        their respective officers, directors, stockholders, partners, members, managers,
        advisors, agents, employees or controlling persons (within the meaning of
        Section 15 of the Securities Act or Section 20 of the Exchange Act) before
        or
        after the date hereof and shall survive any transfer of Registrable
        Securities.

       

      (c) Conduct
        of Indemnification Proceedings.
        If any
        action or proceeding (including any governmental investigation or inquiry)
        shall
        be brought or any claim shall be asserted against, without limitation, any
        Person entitled to indemnity hereunder (an “Indemnified
        Party”),
        such
        Indemnified Party shall promptly notify the party from which such indemnity
        is
        sought (the “Indemnifying
        Party”)
        in
        writing, and the Indemnifying Party shall assume the defense thereof, including
        the employment of counsel reasonably satisfactory to the Indemnified Party
        and
        the payment of all fees and expenses incurred in connection with the defense
        thereof; provided,
        however,
        that
        the failure or delay of an Indemnified Party to so notify the Indemnifying
        Party
        shall release the Indemnifying Party from its obligations hereunder only
        if and
        then only to the extent the Indemnifying Party is prejudiced by such failure
        or
        delay. All such fees and expenses (including, without limitation, any fees
        and
        expenses incurred in connection with investigating or preparing to defend
        such
        action or proceeding) shall be paid to the Indemnified Party, as incurred,
        within 20 days of written notice thereof to the Indemnifying Party; provided,
        however,
        that if
        the Indemnifying Party is subsequently determined not to have been liable
        to the
        Indemnified Party in accordance with this Section 8, such fees and expenses
        shall be returned promptly to the Indemnifying Party. Any such Indemnified
        Party
        shall have the right to employ separate counsel if any such action, claim
        or
        proceeding and to participate in the defense thereof, but the fees and expenses
        of such counsel shall be borne solely by such Indemnified Party unless (i)
        the
        Indemnifying Party has agreed to pay such fees and expenses, (ii) the
        Indemnifying Party shall have failed promptly to assume the defense of such
        action, claim or proceeding and to employ counsel reasonably satisfactory
        to the
        Indemnified Party in any such action, claim or proceeding or (iii) the named
        parties to any such action, claim or proceeding (including any impleaded
        parties) include both such Indemnified Party and the Indemnifying Party,
        and
        such Indemnified Party shall have been advised by counsel that there may
        be one
        or more legal defenses available to it that are different from or additional
        to
        those available to the Indemnifying Party (in which case, if such Indemnified
        Party notifies the Indemnifying Party in writing that it elects to employ
        separate counsel at the expense of the Indemnifying Party, the Indemnifying
        Party shall not have the right to assume the defense of such action, claim
        or
        proceeding on behalf of such indemnified party, it being understood, however,
        that the Indemnifying Party shall not, in connection with anyone such action,
        claim or proceeding or separate but substantially similar or related actions,
        claims or proceedings in the same jurisdiction arising out of the same general
        allegations or circumstances, be liable for the fees and expenses of more
        than
        one counsel (together with appropriate local counsel) at any time for all
        such
        Indemnified Parties, unless in the opinion of counsel for such Indemnified
        Party
        a conflict of interest may exist between such Indemnified Party and any other
        of
        such Indemnified Parties with respect to such action, claim or proceeding,
        in
        which event the Indemnifying Party shall be obligated to pay the fees and
        expenses of such additional counsel or counsels). No Indemnifying Party will
        consent to entry of any judgment or enter into any settlement that does not
        include as an unconditional term thereof the release of such Indemnified
        Party
        from all liability in respect to such claim or litigation without the written
        consent (which consent will not be unreasonably withheld) of the indemnified
        party. No Indemnified Party shall consent to entry of any judgment or enter
        into
        any settlement without the written consent (which consent will not be
        unreasonably withheld) of the Indemnifying Party from which indemnity or
        contribution is sought.

       

      
        
          
          

        

        
          -8-

          
            

          

        

         

      

       

      (d) Contribution.
        If the
        indemnification provided for in this Section 8 is unavailable to an Indemnified
        Party under Section 8(a) or (b) hereof (other than by reason of exceptions
        provided in those Sections) in respect of any Losses, then each applicable
        Indemnifying Party in lieu of indemnifying such Indemnified Party shall
        contribute to the amount paid or payable by such Indemnified Party as a result
        of such Losses, in such proportion as is appropriate to reflect the relative
        fault of the Indemnifying Party and Indemnified Party in connection with
        the
        actions, statements or omissions that resulted in such Losses as well as
        any
        other relevant equitable considerations. The relative fault of such Indemnifying
        Party and the Indemnified Party shall be determined by reference to, among
        other
        things, whether any action in question, including any untrue statement or
        alleged untrue statement of a material fact or omission or alleged omission
        of a
        material fact, has been taken or made by, or relates to information supplied
        by,
        such Indemnifying Party or Indemnified Party, and the parties’ relative intent,
        knowledge, access to information and opportunity to correct or prevent such
        action, statement or omission. The amount paid or payable by a party as a
        result
        of any Losses shall be deemed to include, subject to the limitations set
        forth
        in Section 8(c) hereof, any legal or other fees or expenses reasonably incurred
        by such party in connection with any action, suit, claim, investigation or
        proceeding.

       

      
        
          
          

        

        
          -9-

          
            

          

        

         

      

       

      The
        parties hereto agree that it would not be just and equitable if contribution
        pursuant to this Section 8(d) were determined by pro rata
        allocation or by any other method
        of
        allocation that does not take into account the equitable considerations referred
        to in the immediately preceding paragraph. No person guilty of fraudulent
        misrepresentation (within the meaning of Section 11(f) of the Securities
        Act)
        shall be entitled to contribution from any person who was not guilty of such
        fraudulent misrepresentation.

       

      9. Reports
        Under Exchange Act

       

      With
        a
        view to making available to Kanders the benefits of Rule 144 or any successor
        rule adopted by the SEC, in the event a Registration Statement with respect
        to
        the Equity Compensation Shares is not then effective with the SEC, the Company
        agrees to:

       

      
        	 	
                (a)

              	
                use
                  its commercially reasonable efforts to make and keep public information
                  available, as those terms are understood and defined in Rule
                  144;

              

      

       

      
        	 	
                (b)

              	
                use
                  its commercially reasonable efforts to file with the SEC in a timely
                  manner all reports and other documents required of the Company
                  under the
                  Securities Act or the Exchange Act;
                  and

              

      

       

      
        	 	
                (c)

              	
                furnish
                  to Kanders within a reasonable time following receipt of a written
                  request
                  therefor (1) a written statement by the Company as to its compliance
                  with
                  the reporting requirements of Rule 144, the Securities Act and
                  the
                  Exchange Act, (2) a copy of the most recent annual or quarterly
                  report of
                  the Company and such other reports and documents so filed by the
                  Company
                  and (3) such other information as may be reasonably requested in
                  availing
                  Kanders to sell Equity Compensation Shares pursuant to Rule
                  144.

              

      

       

      10. Representations
        and Warranties by Kanders.
        Kanders
        hereby represents and warrants as follows:

       

      (a) Kanders
        understands, acknowledges and agrees that the Equity Compensation Shares
        being
        acquired pursuant to this Agreement are not registered under the Securities
        Act,
        or any applicable state securities law, that the Equity Compensation Shares
        may
        not be transferred or sold except pursuant to the registration provisions
        of the
        Securities Act or pursuant to an applicable exemption therefrom and pursuant
        to
        applicable state securities laws and regulations, that the Equity Compensation
        Shares being issued to Kanders pursuant to this Agreement and in connection
        with
        the transactions contemplated hereby will bear appropriate legends to that
        effect, and that no federal or state agency has passed upon the Equity
        Compensation Shares or made any findings or determination as to the fairness
        of
        an investment in the Equity Compensation Shares. 

       

      
        
          
          

        

        
          -10-

          
            

          

        

         

      

       

      (b) The
        Equity Compensation Shares being received by Kanders pursuant to this Agreement
        and in connection with the transactions contemplated hereby are being acquired
        for Kanders’ own account, for the purpose of investment and without a view to
        the distribution or resale of such Equity Compensation Shares or any interest
        therein to the public in violation of the Securities Act. Kanders does not
        have
        any agreement or understanding with any other person to sell or otherwise
        distribute the Equity Compensation Shares. Kanders has such knowledge and
        experience in financial and business matters so as to be capable of evaluating
        the merits and risks of its investment in the Equity Compensation Shares
        and is
        capable of bearing the economic risk of such investment. Kanders understands
        that the acquisition of the Equity Compensation Shares involves substantial
        risk. Kanders has been provided, to its satisfaction, the opportunity to
        ask
        questions concerning the terms and conditions of the issuance of the Equity
        Compensation Shares pursuant to this Agreement, has had all such questions
        answered to its satisfaction and has been supplied all additional information
        deemed necessary by it to verify the accuracy of the information furnished
        to
        Kanders.

       

      (c) Kanders
        has had the opportunity to consult with counsel, tax and other professionals
        of
        its choosing in connection with its investment in the Equity Compensation
        Shares
        and has relied solely upon the advice of its advisors with respect to the
        tax
        and other legal aspects of this investment in the Equity Compensation Shares.
        

       

      (d) Kanders
        is
        an
“accredited investor” as such term is defined under Rule 501 of Regulation D of
        the Securities Act. Kanders
        understands that the Equity Compensation Shares being offered and granted
        to
        Kanders is in reliance on specific exemptions from the registration and
        qualification requirements of United States federal and state securities
        laws
        and that the Company is relying upon the truth and accuracy of, and Kanders’
compliance with the representations, warranties, agreements, acknowledgements
        and understandings set forth herein in order to determine the availability
        of
        such exemptions and Kanders’ eligibility to acquire the Equity Compensation
        Shares. 

       

      11. Miscellaneous

       

      (a)
         Amendments
        and Waivers.
        The
        provisions of this Agreement, including the provisions of this sentence,
        may not
        be amended, modified or supplemented without the written consent of those
        holders of at least a majority in interest of the Registrable Securities.
        No
        waiver of any provision of this Agreement shall be deemed or shall constitute
        a
        waiver of any other provision hereof (whether or not similar), shall constitute
        a continuing waiver unless otherwise expressly provided nor shall be effective
        unless in writing and executed by the waiving party.

       

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

         

      

      (b) Notices.
        All
        notices and other communications hereunder will be in writing and will be
        deemed
        received (a) the date delivered if delivered personally, (b) three (3) Business
        Days after being mailed by registered or certified mail (return receipt
        requested), (c) one (1) Business Day after being delivered to any reputable
        nationwide overnight courier service and (d) upon confirmation of delivery,
        if
        delivered by facsimile, at the following addresses (or at such other address
        for
        a party as will be specified by like notice):

       

      (i) If
        to the
        Company, to:

      

      Net
        Perceptions, Inc.

      One
        Landmark Square

      22nd
        Floor

      Stamford,
        Connecticut 06901

      Attn: Nigel
        P.
        Ekern

      Fax: 203-428-2022

      

      with
        a
        required copy to:

      

      Kane
        Kessler, P.C.

      1350
        Avenue of the Americas

      26th
        Floor

      New
        York,
        NY 10019

      Attn: Robert
        L.
        Lawrence

      Fax:
         (212)
        245-3009

      

      and

      

      Kirkpatrick
        & Lockhart Nicholson Graham

      State
        Street Financial Center

      One
        Lincoln Street

      Boston,
        Massachusetts 02111

      Attn: Peter
        Marathas

      Fax: (617)
        261-3175

      

      (ii) If
        to
        Kanders:

      

      Kanders
        & Company, Inc.

      One
        Landmark Square

      22nd
        Floor

      Stamford,
        Connecticut 06901

      Attn: Warren
        B.
        Kanders

      Fax: 203-552-9607

      

      (c) Governing
        Law, Venue and Waiver of Jury Trial.
        THIS
        AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER AND IN ACCORDANCE WITH
        THE
        INTERNAL LAWS OF THE STATE OF NEW YORK, EXCLUDING ANY CHOICE OF LAW RULES
        THAT
        MAY DIRECT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

       

      
        
          
          

        

        
          -12-

          
            

          

        

         

      

      EACH
        PARTY TO THIS AGREEMENT, BY ITS EXECUTION HEREOF, (I) HEREBY IRREVOCABLY
        SUBMITS, TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
        COURT
        FOR THE SOUTHERN DISTRICT OF NEW YORK (OR IF JURISDICTION THERETO IS NOT
        PERMITTED BY LAW, THE STATE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW
        YORK
        COUNTY FOR THE PURPOSE OF ANY ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN
        CONTRACT, TORT OR OTHERWISE), INQUIRY PROCEEDING OR INVESTIGATION ARISING
        OUT OF
        OR BASED UPON THIS AGREEMENT OR RELATING TO THE SUBJECT MATTER HEREOF, (II)
        HEREBY WAIVES, AND AGREES TO CAUSE EACH OF ITS SUBSIDIARIES TO WAIVE, TO
        THE
        EXTENT NOT PROHIBITED BY APPLICABLE LAW, AND AGREES NOT TO ASSERT, AND AGREES
        NOT TO ALLOW ANY OF ITS SUBSIDIARIES TO ASSERT, BY WAY OF MOTION, AS A DEFENSE
        OR OTHERWISE, IN ANY SUCH ACTION, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY
        TO
        THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR
        IMMUNE FROM ATTACHMENT OR EXECUTION, THAT ANY SUCH PROCEEDING BROUGHT IN
        ONE OF
        THE ABOVE-NAMED COURTS IS IMPROPER, OR THAT THIS AGREEMENT OR THE SUBJECT
        MATTER
        HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT AND (III) HEREBY AGREES NOT
        TO
        COMMENCE OR TO PERMIT ANY OF ITS SUBSIDIARIES TO COMMENCE ANY ACTION, CLAIM,
        CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY PROCEEDING
        OR
        INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR RELATING TO
        THE
        SUBJECT MATTER HEREOF OTHER THAN BEFORE ONE OF THE ABOVE-NAMED COURTS NOR
        TO
        MAKE ANY MOTION OR TAKE ANY OTHER ACTION SEEKING OR INTENDING TO CAUSE THE
        TRANSFER OR REMOVAL OF ANY SUCH ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN
        CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION TO ANY
        COURT
        OTHER THAN ONE OF THE ABOVE-NAMED COURTS WHETHER ON THE GROUNDS OF INCONVENIENT
        FORUM OR OTHERWISE. EACH PARTY HEREBY CONSENTS TO SERVICE OF PROCESS IN ANY
        SUCH
        PROCEEDING IN ANY MANNER PERMITTED BY NEW YORK LAW, AND AGREES THAT SERVICE
        OF
        PROCESS BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AT ITS
        ADDRESS SPECIFIED PURSUANT TO SECTION 11(b) IS REASONABLY CALCULATED TO GIVE
        ACTUAL NOTICE. 

       

      EACH
        OF
        THE PARTIES HERETO HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER
        AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM
        IN
        RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT,
        TORT OR OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR
        BASED
        UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED
        WITH OR
        RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE
        WHETHER NOW EXISTING OR HEREAFTER ARISING. EACH OF THE PARTIES AGREE AND
        ACKNOWLEDGE THAT IT HAS BEEN INFORMED THAT THIS SECTION 11(c) CONSTITUTES
        A
        MATERIAL INDUCEMENT UPON WHICH THE OTHER PARTIES HERETO ARE RELYING AND WILL
        RELY IN ENTERING INTO THIS AGREEMENT AND ANY OTHER AGREEMENTS RELATING HERETO
        OR
        CONTEMPLATED HEREBY. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR
        A COPY
        OF THIS SECTION 11(c) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
        EACH
        SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY. 

       

      
        
          
          

        

        
          -13-

          
            

          

        

         

      

       

      (d)
         Counterparts.
        This
        Agreement may be executed in any number of counterparts and by the parties
        hereto in separate counterparts, each of which when so executed shall be
        deemed
        to be an original and all of which taken together shall constitute one and
        the
        same Agreement.

       

      (e) Headings.
        The
        headings in this Agreement are for convenience of reference only and shall
        not
        limit or otherwise affect the meaning hereof.

       

      (f)
         Severability.
        If any
        term, provision, covenant or restriction of this Agreement is held by a court
        of
        competent jurisdiction to be invalid, void or unenforceable, the remainder
        of
        the terms, provisions, covenants and restrictions set forth herein shall
        remain
        in full force and effect and shall in no way be affected, impaired or
        invalidated, and the parties hereto shall use their best efforts to find
        and
        employ an alternative means to achieve the same or substantially the same
        result
        as that contemplated by such term, provision, covenant or restriction. It
        is
        hereby stipulated and declared to be the intention of the parties that they
        would have executed the remaining terms, provisions, covenants and restrictions
        without including any of such that may be hereafter declared invalid, void
        or
        unenforceable.

       

      (g) Successors
        and Assigns.
        All of
        the terms and provisions of this Agreement shall be binding upon and shall
        inure
        to the benefit of the successors and permitted assigns of the parties
        hereto;
        provided, however, that no party shall be able to transfer or assign any
        of
        their rights and obligations hereunder without the prior written consent
        of the
        other party hereto except as otherwise provided in Section 7
        herein.

       

      (h) Entire
        Agreement.
        Kanders
        acknowledges that this Agreement constitutes the entire agreement among the
        parties hereto pertaining to the subject matter hereof and supersede all
        prior
        and contemporaneous agreements, understandings, negotiations and discussions,
        whether oral or written, of the parties with respect to such subject matter.
        

       

      [signature
        page follows]

      
        
          
          

        

        
          -14-

          
            

          

        

         

      

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

       

      
        	 	 	 
	
                The
                  Company:

              	NET
                PERCEPTIONS, INC. 
	 	 	 
	 	 	 
	
              	By:  	/s/
                Nigel P. Ekern
	 	
                
                  

                

                Name:
                  Nigel P. Ekern

                Title:
                  Chief Administrative Officer

              

      

       

      
        	 	 	 
	Kanders:	KANDERS
&
                COMPANY, INC.
	 
 	 
 	 
 
	
              	By:  	/s/
                Warren B. Kanders
	 	
                
                  

                

                Name:
                  Warren B. Kanders

                Title:
                  President

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