Document:

AIRBEE
      WIRELESS, INC.

     

    WARRANT
      TO PURCHASE COMMON STOCK

     

    WC-2008
      - I - 

     

    THE
      OFFER
      AND SALE OF THE SECURITIES EVIDENCED BY THIS WARRANT HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE “ACT”)
      OR
      QUALIFIED UNDER STATE SECURITIES LAWS AND SUCH SECURITIES MAY NOT BE SOLD,
      TRANSFERRED, ASSIGNED OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT UNDER THE ACT AND EFFECTIVE QUALIFICATION THEREOF OR
      IF
      SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
      AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT AND THE QUALIFICATION
      REQUIREMENTS OF THE RELEVANT STATE. 

     

    This
      certifies that, for good and valuable consideration, receipt of which is hereby
      acknowledged, ___________________ (the “Holder”),
      and/or its assigns, is entitled to purchase, from time to time and subject
      to
      the terms and conditions of this Warrant, from AIRBEE WIRELESS, INC., a Delaware
      corporation (the “Company”),
      fully
      paid and nonassessable shares of Common Stock of the Company, par value $0.00004
      per share (each, a “Share”
and
      collectively, the “Shares”),
      in
      accordance with the terms hereof, during the period commencing on the date
      set
      forth on the signature page hereof (the “Commencement
      Date”).
      Terms
      not defined herein shall have the meaning ascribed to them in the Convertible
      Debenture and Warrant Purchase Agreement being executed contemporaneously
      herewith (the “Purchase
      Agreement”).
      If
      there is any conflict between the terms of the Purchase Agreement and this
      Warrant, the Purchase Agreement shall govern. If this Warrant is silent as
      to
      any term, the terms of the Purchase Agreement shall govern.

     

    1. Number
      of Shares; Vesting; Exercise Price and Expiration Date.

     

    (a) This
      Warrant may be exercised for ____________________ Shares, subject to adjustment
      pursuant to the terms hereof.

     

    (b) The
      right
      to exercise this Warrant shall fully vest on the Commencement Date.

     

    (c) The
      exercise or purchase price for the Shares shall be $_______ per Share. Such
      price shall be subject to adjustment pursuant to the terms hereof (such price,
      as adjusted from time to time, is hereinafter referred to as the “Exercise
      Price”).
      

     

    (d) The
      purchase right represented by this Warrant shall terminate on or before
      5 p.m. Pacific standard time, on the fifth (5th) anniversary of the
      Commencement Date (the “Expiration
      Date”).

     

    2. Exercise
      and Payment.

     

    (a) Cash
      Exercise.
      At any
      time after the Commencement Date, this Warrant may be exercised in whole or
      in
      part, from time to time, by the Holder by surrender of this Warrant and the
      Notice of Exercise annexed hereto duly completed and executed by the Holder
      to
      the Company at the principal executive offices of the Company, together with
      payment in the amount obtained by multiplying the Exercise Price then in effect
      by the number of Shares thereby purchased, as designated in the Notice of
      Exercise. Payment may be in cash or by check payable to the order of the
      Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) Mandatory
      Exercise.
      Promptly following the first consecutive ten (10) trading day period of time
      prior to the Expiration Date during which the closing sale price of the
      Company’s Common Stock, as reported by the Nasdaq National Market or other
      securities exchange on which the Company’s Common Stock is then listed, is equal
      to or greater than 300% of the Exercise Price on each day during such period,
      the Company shall deliver to the Holder a Mandatory Exercise Notice, together
      with a computation demonstrating the basis for such Mandatory Exercise Notice.
      In such event, notwithstanding anything to the contrary in Section 2(a) above,
      the Holder agrees to exercise this Warrant in full within ten (10) days
      following receipt of the Mandatory Exercise Notice from the Company. To the
      extent that this Warrant is not so exercised, it shall expire and be of no
      further force or effect. For purposes of this Warrant, “Mandatory Exercise
      Notice” shall mean the notice delivered by the Company to the Holder advising
      the Holder that the closing sale price of the Company’s Common Stock, as
      reported by the Nasdaq National Market or other securities exchange on which
      the
      Company’s Common Stock is then listed, has been equal to or greater than 300% of
      the Exercise Price (as adjusted for splits, reverse splits, stock dividends,
      share combinations and the like) for ten (10) consecutive trading
      days.

     

    3. Delivery
      of Certificates.
      Within
      a reasonable time after exercise, in whole or in part, of this Warrant, the
      Company shall issue in the name of and deliver to the Holder, a certificate
      or
      certificates for the number of fully paid and nonassessable Shares which the
      Holder shall have requested in the Notice of Exercise. If this Warrant is
      exercised in part, the Company shall deliver to the Holder a new Warrant for
      the
      unexercised portion of this Warrant at the time of delivery of such certificate
      or certificates.

     

    4. No
      Fractional Shares.
      No
      fractional Shares or scrip representing fractional Shares will be issued upon
      exercise of this Warrant. If upon any exercise of this Warrant a fraction of
      a
      Share results, the Company will pay the Holder the difference between the cash
      value of the fractional Share and the portion of the Exercise Price allocable
      to
      the fractional Share. 

     

    5. Charges,
      Taxes and Expenses.
      The
      Holder shall pay all transfer taxes or other incidental charges, if any, in
      connection with the transfer of the Shares purchased pursuant to the exercise
      hereof from the Company to the Holder. 

     

    6. Loss,
      Theft, Destruction or Mutilation of Warrant.
      Upon
      receipt by the Company of evidence reasonably satisfactory to it of the loss,
      theft, destruction or mutilation of this Warrant, and in case of loss, theft
      or
      destruction, of indemnity or security reasonably satisfactory to the Company,
      and upon reimbursement to the Company of all reasonable expenses incidental
      thereto, and upon surrender and cancellation of this Warrant, if mutilated,
      the
      Company will make and deliver a new Warrant of like tenor and dated as of such
      cancellation, in lieu of this Warrant.

     

    7. Saturdays,
      Sundays, Holidays, Etc.
      If the
      last or appointed day for the taking of any action or the expiration of any
      right required or granted herein shall be a Saturday or a Sunday or shall be
      a
      legal holiday, then such action may be taken or such right may be exercised
      on
      the next succeeding weekday which is not a legal holiday. 

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    8. Adjustment
      of Exercise Price and Number of Shares.
      The
      number of securities purchasable upon exercise of this Warrant and the Exercise
      Price shall be subject to adjustment from time to time as follows: 

     

    (a) Subdivisions,
      Combinations and Other Issuances.
      If the
      Company shall at any time after the date hereof but prior to the expiration
      of
      this Warrant subdivide its outstanding securities as to which purchase rights
      under this Warrant exist, by split-up or otherwise, or combine its outstanding
      securities as to which purchase rights under this Warrant exist, or declare
      a
      cash dividend, the number of Shares as to which this Warrant is exercisable
      as
      of the date of such subdivision, split-up or combination shall forthwith be
      proportionately increased in the case of a subdivision or payment of a cash
      dividend, or proportionately decreased in the case of a combination. Appropriate
      adjustments shall also be made to the purchase price payable per Share, so
      that
      the aggregate purchase price payable for the total number of Shares purchasable
      under this Warrant as of such date shall remain the same.

     

    (b) Share
      Distribution.
      If at
      any time after the date hereof the Company makes a distribution on the Shares
      into which this Warrant is exercisable payable in Shares or other securities
      or
      rights convertible into Shares (“Share
      Equivalents”)
      without payment of any consideration by such holder for the additional Shares
      or
      the Share Equivalents (including the additional Shares issuable upon exercise
      or
      conversion thereof), then the number of Shares for which this Warrant may be
      exercised shall be increased as of the record date (or the if no record date
      is
      set) for determining which holders of Shares shall be entitled to receive such
      distribution, in proportion to the increase in the number of outstanding Shares
      (and Shares issuable upon conversion of all such securities convertible into
      Shares) of Shares as a result of such distribution, and the Exercise Price
      shall
      be adjusted so that the aggregate amount payable for the purchase of all the
      Shares issuable hereunder immediately after the record date (or on the date
      of
      such distribution, if applicable), for such distribution shall equal the
      aggregate amount so payable immediately before such record date (or on the
      date
      of such distribution, if applicable). 

     

    (c) Other
      Distributions.
      If at
      any time after the date hereof the Company distributes to holders of the class
      of Shares into which this Warrant is exercised, other than as part of its
      dissolution or liquidation or the winding up of its affairs, any Shares, any
      evidence of indebtedness or any of its assets (other than cash, Shares or
      securities convertible into Shares), then the Company may, at its option, either
      (i) decrease the per Share Exercise Price of this Warrant by an appropriate
      amount based upon the value distributed on each Share as determined in good
      faith by the Company’s Board of Directors or (ii) provide by resolution of the
      Company’s Board of Directors that on exercise of this Warrant, the Holder hereof
      shall thereafter be entitled to receive, in addition to the Shares otherwise
      receivable on exercise hereof, the number of Shares or other securities or
      property which would have been received had this Warrant at the time been
      exercised without the payment by the Holder of any additional consideration.
      

     

    (d) Reclassification,
      Etc.
      If at
      any time after the date hereof there shall be a change or reclassification
      of
      the securities as to which purchase rights under this Warrant exist into the
      same or a different number or type of securities of any other class or classes,
      then the Holder shall thereafter be entitled to receive upon exercise of this
      Warrant, during the period specified herein and upon payment of the Exercise
      Price then in effect, the number of Shares or other securities or property
      resulting from such change or reclassification, which would have been received
      by Holder for the Shares subject to this Warrant had this Warrant at such time
      been exercised. 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (e) Effect
      of Reorganization and Asset Sales.
      If any
      (i) reorganization of the securities as to which purchase rights under this
      Warrant exist, (ii) consolidation or merger of the Company with or into
      another corporation, or (iii) sale or all or substantially all of the
      Company’s operating assets to another corporation followed by a liquidation of
      the Company (any such transaction shall be referred to herein as an
“Event”),
      is
      effected in such a way that holders of Shares are entitled to receive securities
      and/or assets as a result of their ownership of the Shares, the Holder, upon
      exercise of this Warrant, shall be entitled to receive such shares of stock
      securities or assets which the Holder would have received had it fully exercised
      this Warrant on or prior the record date for such Event. The Company shall
      not
      merge into or consolidate with another corporation or sell all of its assets
      to
      another corporation for a consideration consisting primarily of securities
      of
      such corporation, unless the successor or acquiring corporation, as the case
      may
      be, shall expressly assume the due and punctual observance and performance
      of
      each and every covenant and condition of this Warrant to be performed or
      observed by the Company and all of the obligations and liabilities hereunder
      unless waived in writing by the Holder.

     

    9. Notice
      of Adjustments.
      Whenever the Exercise Price or number of Shares purchasable hereunder shall
      be
      adjusted pursuant to Section 8 hereof, the Company shall execute and
      deliver to the Holder a certificate setting forth, in reasonable detail, the
      event requiring the adjustment, the amount of the adjustment, the method by
      which such adjustment was calculated and the Exercise Price and number of Shares
      purchasable hereunder after giving effect to such adjustment, and shall cause
      a
      copy of such certificate to be mailed (by first class mail, postage prepaid)
      to
      the Holder.

     

    10. Rights
      as Shareholder.
      Prior
      to exercise of this Warrant, the Holder shall not be entitled to any rights
      as a
      Shareholder of the Company with respect to the Shares, including (without
      limitation) the right to vote such Shares, receive distributions thereon, or
      be
      notified of Shareholder meetings, and the Holder shall not be entitled to any
      notice or other communication concerning the business or affairs of the Company.
      

     

    11. Restricted
      Securities.
      The
      Holder understands that this Warrant and the Shares purchasable hereunder
      constitute “restricted
      securities”
under
      the federal securities laws inasmuch as they are, or will be, acquired from
      the
      Company in transactions not involving a public offering and accordingly may
      not,
      under such laws and applicable regulations, be resold or transferred without
      registration under the Securities Act of 1933, as amended (the “1933
      Act”),
      or an
      applicable exemption from such registration. In this connection, the Holder
      acknowledges that the securities legend on Exhibit
      A
      to the
      Notice of Exercise attached hereto shall be placed on any Shares issued to
      the
      Holder upon exercise of this Warrant. 

     

    12. Certification
      of Investment Purpose.
      Unless
      a current registration statement under the 1933 Act shall be in effect with
      respect to the securities to be issued upon exercise of this Warrant, the Holder
      covenants and agrees that, at the time of exercise hereof, it will deliver
      to
      the Company a written certification executed by the Holder that the securities
      acquired by such Holder upon exercise hereof are for the account of such Holder
      and acquired for investment purposes only and that such securities are not
      acquired with a view to, or for sale in connection with, any distribution
      thereof. 

     

    13. Transferability.
      This
      Warrant shall be transferable on the books of the Company maintained at its
      principal office wherever then located, upon delivery thereof duly endorsed
      by
      the Holder or its assign(s), or their duly authorized attorney or
      representative, accompanied by proper evidence of succession, assignment or
      authority to transfer. Upon any registration of transfer, the Company shall
      execute and deliver new Warrants to the person entitled thereto. This Warrant
      may be transferred, divided or combined, upon request to the Company by the
      Holder, into a certificate or certificates representing the right to purchase
      the same aggregate number of Shares.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    14. No
      Impairment.
      The
      Company shall not, by amendment of its certificate of incorporation or through
      a
      reorganization, transfer of assets, consolidation, merger, dissolution, issue,
      or sale of securities or any other voluntary action, avoid or seek to avoid
      the
      observance or performance of any of the terms to be observed or performed under
      this Warrant by the Company, but shall at all times in good faith assist in
      carrying out all of the provisions of this Warrant and in taking all such action
      as may be reasonable necessary or appropriate to protect the Holder’s rights
      hereunder against impairment. If the Company takes any action affecting its
      Shares other than as described in this Warrant that adversely affect the
      Holder’s rights under this Warrant, the Exercise Price shall be adjusted
      downward and the number of Shares issuable upon exercise of this Warrant shall
      be adjusted upward in such a manner that the aggregate Exercise Price of this
      Warrant is unchanged. 

     

    15. Miscellaneous.

     

    (a) Construction.
      Unless
      the context indicates otherwise, the term “Holder”
shall
      include any transferee or transferees of this Warrant pursuant to Section 13
      and
      the term “Warrant”
shall
      include any and all warrants outstanding pursuant to this Agreement, including
      those evidenced by a certificate or certificates issued upon division, exchange,
      substitution or transfer pursuant to Section 13. 

     

    (b) Restrictions.
      By
      receipt of this Warrant, the Holder makes the same representations with respect
      to the acquisition of this Warrant as the Holder is required to make upon the
      exercise of this Warrant and acquisition of the Shares purchasable hereunder
      as
      set forth in the Form of Investment Letter attached as Exhibit
      A
      to the
      Notice of Exercise, the form of which are attached hereto as Exhibit
      A.

     

    (c) Notices.
      Unless
      otherwise provided, any notice required or permitted under this Warrant shall
      be
      given in writing and shall be deemed effectively given upon personal delivery
      to
      the party to be notified or three (3) days following deposit with the United
      States Post Office, by registered or certified mail, postage prepaid and
      addressed to the party to be notified (or one (1) day following timely deposit
      with a reputable overnight courier with next day delivery instructions), or
      upon
      confirmation of receipt by the sender of any notice by facsimile transmission,
      at the address indicated below or at such other address as such party may
      designate by ten (10) days’ advance written notice to the other
      parties.

     

    
      	
              To
                Holder:

            	
              John
                W. Bartman and Thomas F. Bartman

            
	 	
              11777
                San Vicente Blvd Suite 600

            
	 	
              Los
                Angeles, California 90049

            
	 	
              Facsimile:
                310 826-8477

            
	 	 
	
              With
                copies to:

            	
              Samuel
                W. Halper, Esq.

            
	 	
              10866
                Wilshire Blvd., Suite 400

            
	 	
              Los
                Angeles, CA 90024

            
	 	
              Facsimile:
                424-901-8399

            

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    
      	
               

            	
              and

            
	 	 
	 	
              Allen
                & Associates LLC

            
	 	
              12400
                Wilshire Blvd Suite 1080

            
	 	
              Los
                Angeles, California 90025

            
	 	
              Facsimile:
                310 371-7272

            
	 	 
	
              To
                the Company:

            	
              AIRBEE
                WIRELESS, Inc.

            
	 	
              9400
                Key West Avenue

            
	 	
              Rockville,
                MD 20850

            
	 	
              Attention:
                E. Eugene Sharer, President

            
	 	
              Facsimile:
                (301) 517-1861

            
	 	 
	
              With
                copies to:

            	
              Stradling
                Yocca Carlson & Rauth

            
	 	
              660
                Newport Center Drive

            
	 	
              Newport
                Beach, California 92660

            
	 	
              Attention:
                Shivbir S. Grewal, Esq.

            
	 	
              Facsimile:
                (949) 725-4100

            
	 	 
	 	
              and

            
	 	 
	 	
              Allen
                & Associates LLC

            
	 	
              12400
                Wilshire Blvd Suite 1080

            
	 	
              Los
                Angeles, California 90025

            
	 	
              Facsimile:
                310 371-7272

            

    

     

    (d) Governing
      Law. Any
      dispute in the meaning, effect or validity of this Warrant shall be resolved
      in
      accordance with the laws of the State of New York without regard to the conflict
      of laws provisions thereof.

     

    (e) Attorneys’
      Fees.
      In the
      event that any suit or action is instituted under or in relation to this
      Warrant, including without limitation to enforce any provision in this Warrant,
      the prevailing party in such dispute shall be entitled to recover from the
      losing party all fees, costs and expenses of enforcing any right of such
      prevailing party under or with respect to this Warrant, including without
      limitation, such reasonable fees and expenses of attorneys and accountants,
      which shall include, without limitation, all fees, costs and expenses of
      appeals.

     

    (f) Entire
      Agreement.
      This
      Warrant, the exhibits and schedules hereto, and the Convertible Debenture and
      Warrant Purchase Agreement to which it is attached, constitute the entire
      agreement and understanding of the parties hereto with respect to the subject
      matter hereof, and supersede all prior and contemporaneous agreements and
      understandings, whether oral or written, between the parties hereto with respect
      to the subject matter set froth below.

     

    (g) Binding
      Effect.
      This
      Warrant and the various rights and obligations arising hereunder shall inure
      to
      the benefit of and be binding upon the Company and its successors and assigns,
      and Holder and its successors and assigns.

     

    (h) Waiver;
      Consent.
      This
      Warrant may not be changed, amended, terminated, augmented, rescinded or
      discharged (other than by performance), in whole or in part, except by a writing
      executed by the parties hereto, and no waiver of any of the provisions or
      conditions of this Warrant or any of the rights of a party hereto shall be
      effective or binding unless such waiver shall be in writing and signed by the
      party claimed to have given or consented thereto.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (i) Severability.
      If one
      or more provisions of this Warrant are held to be unenforceable under applicable
      law, such provision shall be excluded from this Warrant and the balance of
      the
      Warrant shall be interpreted as if such provision were so excluded and the
      balance shall be enforceable in accordance with its terms.

     

    (j) Assignment.
      Holder
      shall have the right, without the prior written consent of the Company, to
      (i)
      sell, assign, mortgage, pledge or otherwise transfer any interest or right
      created hereby, or (ii) delegate its duties or obligations under this Agreement.
      This Agreement is made solely for the benefit of the parties hereto, and no
      other person, partnership, association or corporation shall acquire or have
      any
      right under or by virtue of this Agreement.

     

    [Remainder
      of the page is intentionally left blank. Signature page
      follows]

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Warrant effective as
      of
      the date set forth below.

     

    
      	
              DATED:
                _________________, 2008

            	
              “Company”

            
	 	 
	 	
              AIRBEE
                WIRELESS, INC.

            
	 	 	 
	 	
              By:
                

            	 
	 	
              Name:
                

            	E. Eugene
              Sharer
	 	
              Title:
                

            	President
	 	 
	 	
              “Holder”

            
	 	 
	 	
              [___________________________]

            
	 	 	 
	 	
              By:
                

            	 
	 	
              Name:
                

            	 
	 	
              Title:
                

            	 

    

     

    
      Signature
        Page to WC – 2008 – I -

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      A

     

    NOTICE
      OF EXERCISE

     

    To:   AIRBEE
      WIRELESS, INC.

     

    The
      undersigned hereby elects to purchase _____________ Shares (the “Shares”)
      of
      AIRBEE WIRELESS, INC., a Delaware corporation (the “Company”)
      pursuant to the terms of the attached Warrant, and tenders herewith payment
      of
      the purchase price pursuant to the terms of the Warrant.

     

    Attached
      as Exhibit
      A
      is an
      investment representation letter addressed to the Company and executed by the
      undersigned as required by Section 12 of the Warrant.

     

    Please
      issue certificates representing the Shares purchased hereunder in the names
      and
      in the denominations indicated on Exhibit
      A
      attached
      hereto.

     

    Please
      issue a new Warrant for the unexercised portion of the attached Warrant, if
      any,
      in the name of the undersigned.

     

    
      	
              Dated:
                

            	 	 	 
	 	 	 	
              Name:
                

            	 
	 	 	 	
              Title:
                

            	 

    

     

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    Exhibit
      A

     

    To: 
        AIRBEE
      WIRELESS, INC.

     

    In
      connection with the purchase by the undersigned of _________ Shares of (the
      “Shares”)
      of
      AIRBEE WIRELESS, INC., a Delaware corporation (the “Company”),
      upon
      exercise of that certain Warrant dated as of January 30, 2008, the undersigned
      hereby represents and warrants as follows:

     

    The
      Shares to be received by the undersigned upon exercise of the Warrant are being
      acquired for its own account, not as a nominee or agent, and not with a view
      to
      resale or distribution of any part thereof, and the undersigned has no present
      intention of selling, granting any participation in, or otherwise distributing
      the same. The undersigned believes it has received all the information it
      considers necessary or appropriate for deciding whether to purchase the
      Shares.

     

    The
      undersigned understands that the Shares are characterized as “restricted
      securities” under the federal securities laws inasmuch as they are being
      acquired from the Company in transactions not involving a public offering and
      that under such laws and applicable regulations such securities may be resold
      without registration under the Securities Act of 1933, as amended (the
“Act”),
      only
      in certain limited circumstances. In this connection, the undersigned represents
      that it is familiar with Rule 144 of the Act, as presently in effect, and
      understands the resale limitations imposed thereby and by the Act.

     

    The
      undersigned understands the instruments evidencing the Shares may bear the
      following legend:

     

    THE
      OFFER
      AND SALE OF THE SECURITIES EVIDENCED BY THIS WARRANT CERTIFICATE HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE “ACT”)
      OR
      QUALIFIED UNDER STATE SECURITIES LAWS AND SUCH SECURITIES MAY NOT BE SOLD,
      TRANSFERRED, ASSIGNED OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT UNDER THE ACT, OR, THAT SUCH SALE, TRANSFER, ASSIGNMENT
      OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
      REQUIREMENTS OF THE ACT AND THE QUALIFICATION REQUIREMENTS OF THE RELEVANT
      STATE.

     

    
      	
              Dated:
                

            	 	 	 
	 	 	 	
              Name:
                

            	 
	 	 	 	
              Title:
                

            	 

    

     

    
      
         

      

      
        A-2AMENDMENT
      NO. 4 TO RIGHTS AGREEMENT

    

    This
      Amendment No. 4, dated February 11, 2008 (the “Amendment”), by and between
      Stamford Industrial Group, Inc. (formerly, Net Perceptions, Inc.) a Delaware
      corporation (the “Company”) with its principal executive offices at One Landmark
      Square, 21st
      Floor,
      Stamford, Connecticut 06901, and American Stock Transfer & Trust Company
      (the “Rights Agent”), a New York corporation with its principal executive
      offices at 59 Maiden Lane New York, New York 10038, amends the Rights Agreement,
      dated as June 1, 2001, between the Company and Wells Fargo Bank, N.A., as rights
      agent, as amended by Amendments No. 1, 2 and 3 on December 22, 2003, April
      21,
      2004 and September 22, 2006, respectively (as so amended, the “Agreement”).
      Capitalized terms used but not defined herein shall have the meanings ascribed
      to such terms in the Agreement.

    

    WHEREAS,
      the Company has experienced substantial operating losses in previous years,
      and
      under the Internal Revenue Code of 1986, as amended (the “Code”), and rules
      promulgated by the Internal Revenue Service, and the Company may “carry forward”
its net
      operating losses (the “NOLs”) in certain circumstances to offset current and
      future earnings, and thus reduce its federal income tax liability (subject
      to
      certain requirements and restrictions); 

    

    WHEREAS,
      if the Company experiences an “Ownership Change,” as defined in Section 382
      of the Code, its ability to use its NOLs could be substantially limited or
      lost
      altogether; 

    

    WHEREAS,
       Pursuant
      to Section 27 of the Agreement, the Company and the Rights Agent may supplement
      or amend the Agreement in accordance with the provision of such Section 27;
      and

    

    WHEREAS,
      the Company believes that its NOLs are a substantial asset of the Company and
      that it is in the best interest of the Company and its stockholders that the
      Company adopt an amendment to its Agreement pursuant to Section 27 thereof
      to
      provide for the protection of the Company’s NOLs on the terms and conditions set
      forth herein.

    

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

    

    1. Appointment
      of Rights Agent.
      The
      Company hereby appoints the Rights Agent to act as agent for the Company and
      the
      holders of the Rights (who, in accordance with Section 3 of the Agreement,
      shall
      prior to the Distribution Date also be the holders of the Common Stock) in
      accordance with the terms and conditions hereof, and the Rights Agent hereby
      accepts such appointment.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    2. Amendment
      of Section 1(a).
      Section
      1(a) of the Agreement is hereby amended and restated in its entirety as follows:
      

    

    “(a)
      “Acquiring Person” shall mean any Person (other than (i) the Company,
      (ii)

    any
      Subsidiary of the Company, (iii) any employee benefit plan of the Company,
      or of
      any Subsidiary of the Company, (iv) any Person or entity organized, appointed
      or
      established by the Company for or pursuant to the terms of any such plan, and
      (v) any Exempt Person) who or which, together with all Affiliates and Associates
      of such Person, shall be the Beneficial Owner of 4.9% or more of the then
      outstanding Common Stock (other than as a result of a Qualified Offer);
provided,
      however,
      that:
      (i) if, as of February 11, 2008, any Person is the Beneficial Owner of 4.9%
      or
      more of the outstanding Common Stock, such Person shall not be deemed to be
      an
      Acquiring Person unless and until such time as (A) such Person or any Affiliate
      or Associate of such Person thereafter becomes the Beneficial Owner of any
      additional Common Stock, other than as a result of a stock dividend, stock
      split
      or similar transaction effected by the Company in which all holders of Common
      Stock are treated substantially equally, or (B) any other Person who is the
      Beneficial Owner of Common Stock thereafter becomes an Affiliate or Associate
      of
      such Person, provided
      that the
      foregoing exclusion shall cease to apply with respect to any Person at such
      time
      as such Person, together with all Affiliates and Associates of such Person,
      ceases to Beneficially Own 4.9% or more of the then outstanding Common Stock,
      and (ii) a Person will not be deemed to have become an Acquiring Person solely
      as a result of an acquisition of Common Stock by the Company which reduces
      the
      number of Common Stock outstanding unless and until such time as (A) such Person
      or any Affiliate or Associate of such Person thereafter becomes the Beneficial
      Owner of additional Common Stock, other than as a result of a stock dividend,
      stock split or similar transaction effected by the Company in which all holders
      of Common Stock are treated substantially equally, or (B) any other Person
      who
      is the Beneficial Owner of Common Stock thereafter becomes an Affiliate or
      Associate of such Person. Notwithstanding the foregoing, if the Company’s Board
      of Directors determines that a Person who would otherwise be an “Acquiring
      Person” as defined pursuant to the foregoing provisions of this Section 1(a),
      has become such inadvertently (including, without limitation, because (A) such
      Person was unaware that it Beneficially Owned a percentage of Common Stock
      that
      would otherwise cause such Person to be an Acquiring Person or (B) such Person
      was aware of the extent of its Beneficial Ownership of Common Stock but had
      no
      actual knowledge of the consequences of such Beneficial Ownership under this
      Agreement), and such Person divests as promptly as practicable (as determined
      by
      the Company’s Board of Directors) a sufficient number of shares of Common Stock
      so that such Person would no longer be an “Acquiring Person” as defined pursuant
      to the foregoing provisions of this Section 1(a), then such Person shall not
      be
      deemed to be an “Acquiring Person” for any purposes of this Agreement unless and
      until such Person shall again become an Acquiring Person.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3. Amendment
      of Section 1(c).
      Section
      1(c) of the Agreement is hereby amended by adding the following language after
      the phrase “Exchange Act” and before the “.”:

    

    “,
      and to
      the extent not included within the foregoing clause of this Section 1(c),
      shall also include, with respect to any Person, any other Person (other than
      (i)
      the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit
      plan
      of the Company, or of any Subsidiary of the Company, (iv) any Person or entity
      organized, appointed or established by the Company for or pursuant to the terms
      of any such plan, and (v) any Exempt Person) whose Common Stock would be deemed
      constructively owned by such first Person pursuant to the provisions of
      Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”),
      or any successor provision or replacement provision, provided,
      however,
      that a
      Person will not be deemed to be the Affiliate or Associate of another Person
      solely because either or both Persons are or were directors of the
      Company.”.

    

    4. Amendment
      of Section 1(d).
      Section
      1(d) of the Agreement is hereby amended by adding the following sentence to
      the
      end of such Section 1(d):

    

    “Notwithstanding
      anything in this definition of a Beneficial Owner to the contrary, to the extent
      not within the foregoing provisions of this Section 1(d), a Person shall be
      deemed the “Beneficial Owner” of and shall be deemed to “beneficially own” or
      have “beneficial ownership” of, securities which such Person (i) would be deemed
      to constructively own pursuant to Section 382 of the Code, or any successor
      provision or replacement provision; or (ii) would be deemed to have a direct
      or
      indirect economic or pecuniary interest, including, without limitation,
      interests or rights acquired through derivative, hedging or similar transactions
      relating to such securities with a counterparty, as determined by the Company’s
      Board of Directors in its sole and absolute discretion.

    

    5. Amendment
      of Section 1(x).
      Section
      1(x) of the Agreement is hereby amended and restated in its entirety as follows:
      

    

    (x) “Rights
      Agent” shall mean American
      Stock Transfer & Trust Company, a Delaware corporation with its principal
      executive offices at 59 Maiden Lane New York, New York 10038

     

    6. Amendment
      of Section 1.
      Section
      1 of the Agreement is hereby amended by adding the following clauses following
      Section 1(ss):

    

    
      	 	
              (tt)

            	
              “Exempt
                Person” shall mean a Person whose Beneficial Ownership (together with all
                Affiliates and Associates of such Person) of 4.9% or more of the
                then-outstanding Common Stock will not, as determined by the Company’s
                Board of Directors in its sole discretion, jeopardize or endanger
                the
                availability to the Company of its NOLs, provided,
                however,
                that such a Person will cease to be an “Exempt Person” if the Company’s
                Board of Directors makes a contrary determination with respect to
                the
                effect of such Person’s Beneficial Ownership (together with all Affiliates
                and Associates of such Person) upon the availability to the Company
                of its
                NOLs.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	 	
              (uu)

            	
              “NOLs”
                shall mean the Company’s net operating loss carryforwards, to be used to
                offset its taxable income in the current year or future year or
                years.

            

    

    

    7. Amendment
      to Section 7 (Exercise Rights; Purchase Price; Expiration Date of
      Rights).
      Section 7(a)(i) of the Rights Agreement is hereby amended and restated in
      its entirety as follows:

    

    “
the
      time at which the Company’s Board of Directors determines that the NOLs are
      fully utilized or no longer available under Section 382 of the Code (the “Final
      Expiration Date”),”

    

    8. Amendment
      to Section 22 (Issuance of New Right Certificates).
      Section 22 of the Rights Agreement is hereby amended by adding the
      following language after the phrase “made in lieu of the issuance thereof” in
      the second sentence thereof and before the “.”: 

     

    “;
      and
provided
      further, however,
      that no
      Right Certificates shall be issued if, and to the extent that the Company’s
      Board of Directors determines that the issuance of such Right Certificates
      could
      have a material adverse tax consequence to the Company or to the Person to
      whom
      or which such Right Certificates otherwise would be issued.” 

    

    9. Amendment
      to Section 29 (Determination and Actions by the Board of Directors,
      etc.).
      Section 29 of the Agreement is hereby amended by adding the following
      language after the phrase “Exchange Act” and before the “.” from the first
      sentence thereof:

      “or
      the
      provisions of Section 382 of the Code, or any successor provision or
      replacement provision, as applicable.” 

      

    10. Exhibit
      B and Exhibit C.
      Exhibit
      B (Form of Right Certificate) and Exhibit C (Summary of Rights to Purchase
      Preferred Stock) are hereby amended to the extent necessary to give effect
      to
      this Amendment.

    

    11. Effectiveness.
      This
      Amendment shall be deemed effective as of the date first written above. Except
      as amended hereby, the Agreement shall remain in full force and effect and
      shall
      be otherwise unaffected hereby.

    

    12. 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.

    

        

      
        	 	
                STAMFORD
                  INDUSTRIAL GROUP, INC.

              
	 	 	 
	 	
                By:

              	
                /s/
                  Jonathan LaBarre

              
	 	 	
                Name:
                  Jonathan LaBarre

              
	 	 	
                Title:
                  Chief Financial Officer 

              
	 	 	 
	 	 	 
	 	 	 
	 	
                AMERICAN
                  STOCK TRANSFER & TRUST COMPANY

              
	 	 	
                as
                  Rights Agent

              
	 	 	
              
	 	
                By:

              	
                /s/Herbert
                  J. Lemmer 

              
	 	 	
                Name:
                  Herbert J. Lemmer

              
	 	 	
                Title:
                  Vice President

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