Document:

KANDERS
      & COMPANY, INC.

    One
      Landmark Square, 22nd Floor

    Stamford,
      Connecticut 06901

    

    September
      22, 2006

    

    Net
      Perceptions, Inc.

    One
      Landmark Square, 22nd floor

    Stamford,
      Connecticut 06901

    

    Dear
      Sirs:

    

    We
      are
      pleased to set forth in this agreement (the “Agreement”) the terms of the
      retention of Kanders & Company, Inc. (the “Consultant”) by Net Perceptions,
      Inc. and its affiliates and subsidiaries (collectively, the
“Company”).

    

    1. During
      the Term (as hereinafter defined) of this Agreement the Consultant will act
      as a
      consultant to the Company, and will, subject to the provisions hereinafter
      set
      forth, render investment banking and financial advisory services to the Company
      on a non-exclusive basis, including strategic planning, assisting in the
      development and structuring of corporate debt and equity financings,
      introductions to sources of capital, guidance and advice as to (i) potential
      targets for mergers and acquisitions, joint ventures, and strategic alliances,
      including facilitating the negotiations in connection with such transactions,
      (ii) capital and operational restructuring, and (iii) shareholder
      relations. In connection with the Consultant’s activities on the Company’s
      behalf, the Consultant has familiarized itself with the business, operations,
      properties and financial condition of the Company, including the business and
      operations of CRC Acquisition Co., LLC d/b/a Concord Steel. The services to
      be
      provided by the Consultant shall be primarily provided by Warren B. Kanders,
      personally, at such times and in such manner as he may reasonably determine.
      Nothing contained in this Agreement shall require the Consultant to render
      a
      fairness opinion to the Company. 

    

    2. In
      consideration for the services to be rendered by Consultant to the Company
      under
      this Agreement, the Company shall pay Consultant the following
      fees:

    

    (a) $500,000
      in cash per annum during the Term hereof, which shall be payable monthly or
      in
      such other manner as the parties hereto may agree (the “Cash Fee”);
      and

    

    (b) 1%
      of the
      amount by which the Company’s revenues (as set forth in its income statement)
      for each fiscal year, as reported in the Company’s Annual Report on Form 10-K,
      or if no such report is filed by the Company, as reflected in the Company’s
      audited financial statements for the fiscal year in question, exceeds
      $60,000,000, which shall be payable in shares of common stock of the Company
      (the “Stock Fee”). For purposes of calculating the Stock Fee, the shares of the
      Company’s common stock shall be valued at the weighted average price of the
      Company’s common stock for the fiscal year in question.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Kanders
      & Company, Inc.

    September
      22, 2006

    Page
      2

     

    The
      Consultant agrees to defer any payments of the Cash Fee and/or the Stock Fee
      due
      at the written request of the Board of Directors in order to comply with the
      terms of any credit agreement entered into between the Company and an
      institutional lender requiring such deferral, with payment of such deferred
      amounts to be made, with interest at the prevailing borrowing rate for the
      Company, such interest to commence three months after any deferral, as soon
      as
      practicable after such deferral requirement of any such credit agreement is
      no
      longer applicable, or such other time as may be permitted under Section 409A
      of
      the Internal Revenue Code of 1986, as amended (the “Code”) and the applicable
      regulations thereunder.

    

    3. In
      connection with the Consultant’s activities on the Company’s behalf, the Company
      will cooperate with the Consultant and will furnish the Consultant with all
      information and data concerning the Company which the Consultant reasonably
      believes appropriate to its assignment (all such information so furnished being
      the “Information”) and will provide the Consultant with access to the Company’s
      officers, directors, employees, independent accountants and legal counsel.
      The
      Company recognizes and confirms that the Consultant (a) will use and rely
      primarily on the Information and on information available from generally
      recognized public sources in performing the services contemplated by this
      Agreement, without having independently verified same, (b) does not assume
      responsibility for the accuracy or completeness of the Information and such
      other information and (c) will not make an independent appraisal of any of
      the
      Company’s assets. The Information to be furnished by the Company, when
      delivered, will be true and correct in all material respects and will not
      contain any material misstatement of fact or omit to state any material fact
      necessary to make the statements contained therein not misleading. The Company
      will promptly notify the Consultant if it learns of any material inaccuracy
      or
      misstatement in, or material omission from, any information theretofore
      delivered to the Consultant. The Consultant agrees to keep confidential and
      not
      disclose, without the Company’s prior written consent, any Information delivered
      to the Consultant by the Company that the Company has identified in writing
      as
      not publicly available and confidential after termination of this Agreement
      (“Confidential Information”), except to officers and employees of the Company,
      accountants, attorneys, consultants and other persons who have a need for such
      information for purposes in the best interests of the Company, and except (i)
      for such information which is or becomes of general public knowledge from
      authorized sources other than the Consultant, or (ii) as may be required by
      law,
      regulation, legal proceeding or court order, or (iii) for such information
      which
      was disclosed to Consultant from a source other than the Company or its
      representatives, provided the disclosing party did not have, to the knowledge
      of
      Consultant, a duty of confidentiality with respect to such information to the
      Company, or (iv) for such information which was in the possession of Consultant
      prior to its disclosure by the Company or its representatives. Consultant
      understands and agrees that the implementation of any recommendation or proposal
      suggested by Consultant will be subject to the sole and absolute discretion
      of
      the Company’s Board of Directors.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Kanders
      & Company, Inc.

    September
      22, 2006

    Page
      3

     

    4. In
      addition to the fees described in Section 2 herein, the Company shall reimburse
      the Consultant, upon request from time to time, upon presentation of receipts
      and such other documentation as the Company may reasonably request, for
      reasonable direct disbursements and for reasonable out-of-pocket expenses
      incurred for travel and entertainment.

    

    5. The
      Company agrees to the indemnification and other agreements set forth in the
      Indemnification Agreement attached hereto, the provisions of which are
      incorporated herein by reference and shall survive the termination of this
      Agreement.

    

    6. (a) Upon
      a
      Change-in-Control (as defined below) of the Company, the Consultant shall be
      paid a one-time lump sum cash payment equal to three times the average annual
      amount the Consultant received, or was entitled to receive, from the Company
      during the two complete fiscal years preceding such a Change-in-Control;
      provided, however, that in no event will the payment required to be made by
      this
      Section 6a.
      be more
      than three times Consultant’s “base amount” (as such term is defined in Section
      280G of the Code) minus $1. If a Change-in-Control occurs before two fiscal
      years are completed, the total payment shall be calculated based upon the one
      fiscal year preceding such Change-in-Control. Upon the occurrence of a
      Change-in-Control and the payment to Consultant of the amount described in
      this
      Section 6(a), this Agreement shall terminate.

    

    (b) For
      purposes hereof, a “Change-in-Control” of the Company shall be deemed to have
      occurred in the event that: (i) individuals who, as of the date hereof,
      constitute the Board cease for any reason to constitute at least a majority
      of
      the Board; provided, however, that any individual becoming a director subsequent
      to the date hereof whose election, or nomination for election by the Company’s
      shareholders, was approved by a vote of at least a majority of the directors
      then comprising the Board shall be considered as though such individual was
      a
      member of the Board as of the date hereof; (ii) the Company shall have been
      sold
      by either (A) a sale of all or substantially all its assets, or (B) a merger
      or
      consolidation, other than any merger or consolidation pursuant to which the
      Company acquires another entity, or (C) a tender offer, whether solicited or
      unsolicited; or (iii) any party, other than the Company, is or becomes the
      “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act
      of 1934, as amended), directly or indirectly, of voting securities of the
      Company representing 30% or more of the total voting power of all the
      then-outstanding voting securities of the Company; provided, however, that
      in
      the event that such 30% acquisition of voting securities has been approved
      by
      the Company’s Board of Directors, then no Change-in-Control shall be deemed to
      have occurred solely by virtue of clause (iii) of this Section 6(b).

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Kanders
        & Company, Inc.

      September
        22, 2006

      Page
        4

       

    

    7. Upon
      the
      death or permanent disability of Mr. Kanders, the Company shall make a one
      time
      lump sum cash payment to the Consultant, or his beneficiaries, as the case
      may
      be, equal to the amount the Consultant would be entitled to receive upon a
      Change-in-Control as provided in Section 6 herein, and subject to the
      limitations set forth therein. For the purposes of this Agreement, the term
      “permanent disability” shall mean Mr. Kanders’ inability to perform services on
      behalf of the Consultant for the benefit of the Company under this Agreement
      for
      a period of ninety (90) consecutive days or for an aggregate of one hundred
      twenty (120) days, whether or not consecutive, in any twelve (12) month period,
      due to illness, accident or any other physical or mental incapacity, as
      reasonably determined by the Board of Directors of the Company. In the event
      that a dispute arises with respect to the disability of Mr. Kanders, Consultant
      and the Company shall each select a physician licensed to practice in the State
      of Connecticut to make such a determination. If the two (2) physicians selected
      cannot agree on a determination, they will mutually select a third physician
      and
      the decision of the majority of the three (3) physicians will be binding. The
      Company shall use its best efforts to obtain a key man life insurance policy
      on
      Mr. Kanders, naming the Company as beneficiary, at the Company’s expense,
      sufficient to provide a death benefit in such amount as the Company may
      determine, to insure the Company’s obligation to the Consultant pursuant to this
      Section 7. Mr. Kanders agrees to submit to a reasonable physical examination
      as
      requested by an insurance carrier to assist the Company in obtaining such a
      policy or policies. Upon the death or permanent disability of Mr. Kanders,
      and
      the payment to Consultant of the amount described in this Section 7, this
      Agreement shall terminate.

    

    8. (a) Upon
      execution of this Agreement, Mr. Kanders shall resign as the Executive Chairman
      of the Company’s Board of Directors upon being nominated and elected to the
      position of Non-Executive Chairman of the Board of Directors.

    

    (b) This
      Agreement shall commence on the date hereof and continue for a period of five
      years. Prior to the expiration of such five year period, the Company shall
      review Consultant’s performance hereunder in good faith to determine the extent
      of the creation of shareholder value as a result of Consultant’s efforts
      hereunder, and in so doing, the Company shall review companies comparable to
      the
      Company and such other data as the Company may believe is appropriate, including
      compensation programs of private equity firms. Based on such considerations
      as
      the Company deems appropriate under the circumstances, including the increase
      in
      shareholder value for the Company as compared to other comparable companies
      and
      such other data as the Company may believe is appropriate, including
      compensation programs of private equity firms, if the Company so determines,
      and
      if Consultant so agrees, this Agreement may be renewed for a period of three
      years, and prior to the expiration of such three year period and upon a like
      review of circumstances, if the Company so determines, and if the Consultant
      so
      agrees, this Agreement may be further renewed for a period of two years. If
      no
      agreement is reached at the end of any such periods, this Agreement shall
      terminate, with no further compensation obligations hereunder other than those
      previously earned. The original five year period, and, unless terminated as
      herein provided, any renewal period, are herein collectively referred to as
      the
“Term”.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    
      Kanders
        & Company, Inc.

      September
        22, 2006

      Page
        5

    (c) In
      the
      event of a material breach by Consultant or Mr. Kanders of this Agreement not
      cured within 15 days after receipt of a notice of default from the Company
      to
      Consultant and Mr. Kanders, the Company shall have the right to terminate this
      Agreement upon expiration of such cure period, in which event the Company’s
      payment obligations to Consultant under this Agreement shall cease to accrue
      as
      of the effective date of such termination, and the Company will pay all accrued
      and unpaid amounts due Consultant under this Agreement to Consultant, including,
      without limitation, amounts under Sections 2, 4, 6 and 7 hereof, within 10
      business days of the effective date of such termination.

    

    (d) In
      the
      event of a material breach by the Company of this Agreement not cured within
      15
      days after receipt of a notice of default from the Consultant to the Company,
      Consultant shall have the right to terminate this Agreement upon expiration
      of
      such cure period, in which event the Consultant’s obligations pursuant to this
      Agreement shall terminate, and Consultant shall be entitled to all rights and
      remedies available at law or equity.

    

    9. This
      Agreement will be governed by, and construed in accordance with, the laws of
      the
      State of New York applicable to agreements made and to be fully performed
      therein.

    

    10. 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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      Kanders
        & Company, Inc.

      September
        22, 2006

      Page
        6

    with
      a
      required copy to:

    

    Kane
      Kessler, P.C.

    1350
      Avenue of the Americas, 26th Floor

    New
      York,
      New York 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
      Consultant:

    

    Kanders
      & Company, Inc.

    One
      Landmark Square, 22nd Floor

    Stamford,
      Connecticut 06901

    Attn: Warren
      B.
      Kanders

    Fax: (203)
      552-9607

    

    11. The
      benefits of this Agreement shall inure to the parties hereto and their
      respective successors and assigns, and the obligations and liabilities assumed
      in this Agreement by the parties hereto shall be binding upon their respective
      successors and assigns.

    

    12. It
      is
      intended that this Agreement, and any payments the Consultant is entitled to,
      shall comply with the provision of the Code and regulations adopted thereunder
      including Sections 280G, 162(m) and 409A of the Code. If any provision of this
      Agreement is inconsistent with the Code, such inconsistency shall not render
      this Agreement invalid and any such provision will be interpreted in a manner
      designed to comply with the Code.

    

    13. For
      the
      convenience of the parties hereto, any number of counterparts of this Agreement
      may be executed by the parties hereto. Each such counterpart shall be, and
      shall
      be deemed to be, an original instrument, but all such counterparts taken
      together shall constitute one and the same Agreement. This Agreement may not
      be
      modified or amended except in writing signed by the parties hereto. This
      Agreement shall only become effective upon the closing of the Company’s
      acquisition of the business of CRC Acquisition Co. LLC.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    
      Kanders
        & Company, Inc.

      September
        22, 2006

      Page
        7

       

    

    If
      the
      foregoing correctly sets forth our Agreement, please sign the enclosed copy
      of
      this letter in the space provided and return it to us.

    
      	 	 	 
	 	
              Very
                truly yours,

               

              KANDERS
                & COMPANY, INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/
              Warren B. Kanders
	 	
              
                

              

              Warren B. Kanders

              President

            

    

           

    

    AGREED
      TO
      AND ACCEPTED:

    

    Net
      Perceptions, Inc. hereby accepts the terms and provisions of, and agrees to
      be
      bound by the terms and provisions of the foregoing letter, as of this 22 day
      of
      September, 2006.

    

    NET
      PERCEPTIONS, INC.

     

    
      	 	 	 	 
	By:
              /s/ Nigel P.
              Ekern	 	 	
            
	
              
                

              

              Name:
                Nigel P. Ekern

              Title:
                Chief Administrative Officer

            	 	 	
            

AGREED,
      with respect to Sections 7 and 8(a) only:

    

    
      	 	 	 	 
	/s/
              Warren B.
              Kanders	 	 	
            
	
              
                

              
Warren B. Kanders, personally	 	 	
            

    

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    NET
      PERCEPTIONS, INC.

    One
      Landmark Square, 22nd
      floor

    Stamford,
      Connecticut 06901

     

    September
      22, 2006

     

    

    Kanders
      & Company, Inc.

    One
      Landmark Square, 22nd floor

    Stamford,
      Connecticut 06901

    

    Gentlemen:

    

    In
      connection with the engagement of Kanders & Company, Inc. (the “Consultant”)
      to advise and assist us with the matters set forth in the Agreement dated the
      date hereof between us and the Consultant (the “Consulting Agreement”), we
      hereby agree to indemnify and hold harmless the Consultant, its affiliated
      companies, and each of the Consultant’s and such affiliated companies’
respective officers, directors, agents, employees and controlling persons
      (within the meaning of each of Section 20 of the Securities Exchange Act of
      1934
      and Section 15 of the Securities Act of 1933) (each of the foregoing, including
      the Consultant, being hereinafter referred to as an “Indemnified Person”) to the
      fullest extent permitted by New York law from and against any and all losses,
      claims, damages, expenses (including reasonable fees and disbursements of
      counsel), actions (including shareholder derivative actions), proceedings or
      investigations (whether formal or informal), or threats thereof (all of the
      foregoing being hereinafter referred to as “Liabilities”), based upon, relating
      to or arising out of such engagement or any Indemnified Person’s role therein;
      provided, however, that we shall not be liable under this paragraph: (a) for
      any
      amount paid in settlement of claims without our consent, which consent shall
      not
      be unreasonably withheld, or (b) to the extent that it is finally judicially
      determined that such Liabilities resulted primarily from the willful misconduct,
      bad faith or gross negligence of the Indemnified Person seeking indemnification.
      In connection with our obligation to indemnify for expenses as set forth above,
      we further agree to reimburse each Indemnified Person for all such expenses
      (including reasonable fees and disbursements of counsel) as they are incurred
      by
      such Indemnified Person; provided, however, that if an Indemnified Person is
      reimbursed hereunder for any expenses, such reimbursement of expenses shall
      be
      refunded to the extent it is finally judicially determined that the Liabilities
      in question resulted primarily from the willful misconduct, bad faith or gross
      negligence of such Indemnified Person.

    

    Promptly
      after the Consultant receives notice of the commencement of any action or other
      proceeding in respect of which indemnification or reimbursement may be sought
      hereunder, the Consultant will notify us thereof; but the omission so to notify
      us shall not relieve us from any obligation hereunder unless, and only to the
      extent that, such omission results in our forfeiture of substantive rights
      or
      defenses. If any such action or other proceeding shall be brought against any
      Indemnified Person, we shall, upon written notice given reasonably promptly
      following your notice to us of such action or proceeding, be entitled to assume
      the defense thereof at our expense with counsel chosen by us and reasonably
      satisfactory to the Indemnified Person; provided, however, that any Indemnified
      Person may at its own expense retain separate counsel to participate in such
      defense. Notwithstanding the foregoing, such Indemnified Person shall have
      the
      right to employ separate counsel at our expense and to control its own defense
      of such action or proceeding if (i) there are or may be legal defenses available
      to such Indemnified Person or to other Indemnified Persons that are different
      from or additional to those available to us, or (ii) in the reasonable opinion
      of counsel to such Indemnified Person, a conflict or potential conflict exists
      between us and such Indemnified Person that would make such separate
      representation advisable; provided, however, that in no event shall we be
      required to pay fees and expenses under this indemnity for more than one firm
      of
      attorneys in any jurisdiction in any one legal action or group of related legal
      actions.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    
      Kanders
        & Company, Inc.

      September
        22, 2006

      Page
        2

       

    

    If
      the
      indemnification or reimbursement provided for hereunder is finally judicially
      determined by a court of competent jurisdiction to be unavailable to an
      Indemnified Person in respect of any Liabilities (other than as a consequence
      of
      a final judicial determination of willful misconduct, bad faith or gross
      negligence of such Indemnified person), then we agree, in lieu of indemnifying
      such Indemnified Person, to contribute to the amount paid or payable by such
      Indemnified Person as a result of such Liabilities (i) in such proportion as
      is
      appropriate to reflect the relative benefits received, or sought to be received,
      by us on the one hand and by such Indemnified Person on the other hand from
      the
      transactions in connection with which the Consultant has been engaged or (ii)
      if
      (but only if) the allocation provided in clause (i) of this sentence is not
      permitted by applicable law, in such a proportion as is appropriate to reflect
      not only the relative benefits referred to in such clause (i) but also the
      relative fault of us and of such Indemnified Person; provided, however, that
      in
      no event shall the aggregate amount contributed by the Indemnified Person exceed
      the amount of fees actually received by the Consultant pursuant to this
      engagement. The relative benefits received or sought to be received by us on
      the
      one hand and by the Consultant on the other shall be deemed to be in the same
      proportion as (a) the total value of the transactions with respect to which
      the
      Consultant has been engaged bears to (b) the fees paid or payable to the
      Consultant with respect to such engagement.

    

    The
      rights accorded to Indemnified Persons hereunder shall be in addition to any
      rights that any Indemnified Person may have at common law, by separate agreement
      or otherwise.

    

    This
      agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York applicable to agreements made and to be performed entirely
      in
      such state. This agreement may not be amended or otherwise modified except
      by an
      instrument signed by both the Consultant and us. If any provision hereof shall
      be determined to be invalid or unenforceable in any respect, such determination
      shall not effect such provision in any other respect or any other provision
      of
      this agreement, which shall remain in full force and effect.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    
      Kanders
        & Company, Inc.

      September
        22, 2006

      Page
        3

       

    

    The
      foregoing indemnification agreement shall remain in effect indefinitely,
      notwithstanding any termination of the Consultant’s engagement or the Consulting
      Agreement.

     

    
      	 	 	 
	 	
              Very
                truly yours,

               

              NET
                PERCEPTIONS, INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/
              Nigel P. Ekern
	 	
              
                

              

              Name:
                Nigel P. Ekern

              Title:
                Chief Administrative Officer

            

    

    

    ACKNOWLEDGED
      AND AGREED TO:

    

    KANDERS
      & COMPANY, INC.

    
      	 	 	 	 
	 	 	 	 
	By:
              /s/ Warrant B.
              Kanders	 	 	
            
	
              
                

              

              Warren
                B. Kanders

              PresidentEMPLOYMENT
      AGREEMENT 

    

    EMPLOYMENT
      AGREEMENT
      (the
      "Agreement"), dated as of September 22, 2006 between Net Perceptions, Inc.,
      a
      Delaware corporation, (the “Company") and Albert
      Weggeman (the
      "Employee"). 

    

    W
      I T N E S S E T H :

    

    WHEREAS,
      the
      Company desires to employ the Employee and to be assured of his services on
      the
      terms and conditions hereinafter set forth; and

    

    WHEREAS,
      the
      Employee is willing to accept such employment on such terms and
      conditions.

    

    NOW
      THEREFORE,
      in
      consideration of the mutual covenants and agreements set forth in this
      Agreement, the Company and the Employee hereby agree as follows:

    

    1.    Term. 

    

    The
      term
      of this Agreement shall commence and be effective only upon the closing (the
      “Closing”) of the transactions contemplated by that certain Asset Purchase
      Agreement (the “Purchase Agreement”), dated as of September 22, 2006, by and
      between the Company and CRC Acquisition Co., LLC (the “Commencement Date”) and
      shall expire on the third anniversary of Commencement Date (the “Term”), subject
      to earlier termination as provided herein. This Agreement shall terminate if
      the
      Closing does not occur on or prior to October 31, 2006; provided however that
      the provisions of Sections 5, 6 and 9 shall survive any such
      termination.

    

    2.    Duties.

    

    (a)
      During the Term of this Agreement, the Employee shall serve as the President
      and
      Chief Executive Officer of the Company and shall perform all duties commensurate
      with his position and as may be assigned to him by the Chairman of the Board
      of
      Directors of the Company or such other person(s) as may be designated by the
      Board of Directors of the Company (the “Board”). The Employee shall devote his
      full business time and energies to the business and affairs of the Company
      and
      shall use his best efforts, skills and abilities to promote the interests of
      the
      Company, and to diligently and competently perform the duties of his position.
      

    

    (b)
      The
      Employee shall report to the Chairman of the Board or such other person(s)
      as
      may be designated by the Board and shall at all times keep the Chairman of
      the
      Board (or such other officer as the Chairman of the Board or the Board may
      designate from time to time) promptly and fully informed (in writing if so
      requested) of his conduct and of the business or affairs of the Company, and
      provide such explanations of his conduct as may be required.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    3.    Compensation,
      Bonus, Stock Options, Benefits, etc.

    

    (a)
      Salary.
      During
      the Term of this Agreement, the Company shall pay to the Employee, and the
      Employee shall accept from the Company, as compensation for the performance
      of
      services under this Agreement and the Employee's observance and performance
      of
      all of the provisions hereof, an annual salary at the rate of $300,000 (the
      "Base Compensation"). The Base Compensation shall be payable in accordance
      with
      the normal payroll practices of the Company. The Employee’s performance and the
      Base Compensation shall be subject to annual review by the Company.

    

    (b)
      Bonus.
      In
      addition to the Base Compensation described above, the Employee shall, in the
      sole and absolute discretion of the Compensation Committee of the Board, be
      entitled to performance bonuses which may be based upon a variety of factors,
      including the Employee’s performance and the achievement of Company goals, all
      as determined in the sole and absolute discretion of the Board or Compensation
      Committee of the Board. Any bonus paid to the Employee shall be subject to
      withholding for applicable taxes and other amounts. In addition, the Employee
      may be entitled to participate in such other bonus plans, whether during the
      term of this Agreement as the Compensation Committee of the Board may, in its
      sole and absolute discretion, determine.

    

    (c)
      Stock
      Options.
      Upon the
      Commencement Date, the Company shall issue and grant to Employee options to
      purchase 2,491,419 shares of the Company’s common stock, having an exercise
      price equal to $0.64 per share, of which (i) 1,245,709 shall vest in three
      equal installments commencing on the first anniversary of the date of grant;
      and
      (ii) 1,245,710 shall vest upon satisfaction of the performance targets set
      forth
      in and in accordance with Exhibit
      A,
      attached hereto. The parties understand and agree that such options shall not
      be
      issued under any stock option plan or stock incentive plan of the Company.
      During the Term of this Agreement the Employee agrees not to sell, pledge,
      hypothecate or otherwise transfer the Common Stock issuable upon the exercise
      of
      each tranche of options identified above within a one year period after vesting
      of such tranche without the consent of the Board of Directors. The terms and
      provisions of such options shall be set forth in a stock option agreement in
      a
      form satisfactory to the Company. In addition, the Employee may be entitled,
      during the term of this Agreement, to receive such additional options, at such
      exercise prices and other terms as the Compensation Committee of the Board
      may,
      in its sole and absolute discretion, determine.

    

    (d)
      Restricted
      Stock.
      Upon
      the Commencement Date, the Company agrees to issue and grant to Employee, the
      following amounts of restricted Common Stock under
      the
      Company’s 1999 Equity Stock Incentive Plan (or such successor or other Company
      stock incentive plans as the Company may hereafter maintain or
      adopt),
      as
      priced in the manner set forth below (the “Restricted Stock”), upon the
      occurrence of the following events during the Term: (i) $1,000,000 of Restricted
      Stock shall be granted upon the Company achieving annual earnings before
      interest, taxes, depreciation and amortization, as computed by the Company
      on or
      prior to its filing of its annual report on Form 10-K, on a consistent basis
      (“EBITDA”) of at least $25,000,000 in a fiscal year of the Company; (ii)
      $1,000,000 of Restricted Stock shall be granted upon the Company achieving
      annual EBITDA of at least $50,000,000 in a fiscal year of the Company; and
      (iii)
      $1,000,000 shall be granted upon the Company achieving annual EBITDA of at
      least
      $75,000,000 in a fiscal year of the Company. Each of the grants specified in
      (i)-(iii) above are one-time grants and shall vest on the date on which the
      Company’s Form 10-K is filed in respect of the fiscal year for which the grant
      is being made and the grant price shall be the closing price of the Common
      Stock
      of the Company on the principal exchange on which it is traded on such date.
      During the Term of this Agreement the Employee agrees not to sell, pledge,
      hypothecate or otherwise transfer the Restricted Stock identified above within
      a
      one year period after grant without the consent of the Board of Directors.
      The
      terms and provisions of such Restricted Stock shall be set forth in a restricted
      stock agreement in a form satisfactory to the Company. 

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    (e)
      Benefits.
      During
      the Term of this Agreement, the Employee shall be entitled to participate in
      or
      benefit from, in accordance with the eligibility and other provisions thereof,
      the Company's medical insurance and other fringe benefit plans or policies
      as
      the Company may make available to, or have in effect for, its senior executive
      officers from time to time. The Company and its affiliates retain the right
      to
      terminate or alter any such plans or policies from time to time. The Employee
      shall also be entitled to four weeks paid vacation each year, sick leave and
      other similar benefits in accordance with policies of the Company from time
      to
      time in effect for its senior executive officers.

    

    (f)
      Reimbursement
      of Business Expenses.
      During
      the Term of this Agreement, upon submission of proper invoices, receipts or
      other supporting documentation reasonably satisfactory to the Company and in
      accordance with and subject to the Company’s expense reimbursement policies, the
      Employee shall be reimbursed by the Company for all reasonable business expenses
      actually and necessarily incurred by the Employee on behalf of the Company
      in
      connection with the performance of services under this Agreement.

    

    (g) Taxes.
      The
      Base
      Compensation and any other compensation paid to Employee shall be subject to
      withholding for applicable taxes and other amounts.

    

    4.    Representations
      of Employee. 

    

    (a)
      The
      Employee represents and warrants that he is not party to, or bound by, any
      agreement or commitment, or subject to any restriction, including but not
      limited to agreements related to previous employment containing confidentiality
      or noncompetition covenants, which presently has or may in the future have
      a
      possibility of adversely affecting the business of the Company or the
      performance by the Employee of his duties under this Agreement. 

    

    (b)
      During the Term and the Severance Period, if any, the Employee agrees that
      he
      will not offer for sale, sell, pledge, assign, hypothecate or otherwise create
      any interest in or dispose of (or enter into any transaction or device that
      is
      designed to, or could reasonably be expected to, result in any of the foregoing)
      any shares of Common Stock owned by him on the Commencement Date or any shares
      of Common Stock owned or acquired by him after the Commencement Date upon the
      conversion or exercise of options or any securities convertible into or
      exercisable or exchangeable for Common Stock, without first notifying the Board
      in writing to inquire as to whether there exists any facts or circumstances
      that
      would make it inadvisable for the Company if the Employee engaged in such
      transaction.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    (c)
      The
      representations, warranties and covenants of this Section 4 shall survive
      termination of the Employee’s employment hereunder and the expiration of the
      Term hereof.

     

    5.    Confidentiality,
      Noncompetition, Nonsolicitation and Non-Disparagement.

    

    

    For
      purposes of this Section 5, all references to the Company shall be deemed to
      include the Company’s affiliates and subsidiaries and their respective
      subsidiaries, whether now existing or hereafter established or acquired. In
      consideration for the compensation and benefits provided to the Employee
      pursuant to this Agreement, the Employee agrees with the provisions of this
      Section 5.

    

    (a)
      Confidential
      Information.
      (i) The
      Employee acknowledges that as a result of his retention by the Company, the
      Employee has and will continue to have knowledge of, and access to, proprietary
      and confidential information of the Company, including, without limitation,
      research and development plans and results, software, databases, technology,
      inventions, trade secrets, technical information, know-how, plans,
      specifications, methods of operations, product and service information, product
      and service availability, pricing information (including pricing strategies),
      financial, business and marketing information and plans, and the identity of
      customers, clients and suppliers (collectively, the “Confidential Information”),
      and that the Confidential Information, even though it may be contributed,
      developed or acquired by the Employee, constitutes valuable, special and unique
      assets of the Company developed at great expense which are the exclusive
      property of the Company. Accordingly, the Employee shall not, at any time,
      either during or subsequent to the Term of this Agreement, use, reveal, report,
      publish, transfer or otherwise disclose to any person, corporation or other
      entity, any of the Confidential Information without the prior written consent
      of
      the Company, except to responsible officers and employees of the Company and
      other responsible persons who are in a contractual or fiduciary relationship
      with the Company and who have a need for such Confidential Information for
      purposes in the best interests of the Company, and except for such Confidential
      Information which is or becomes of general public knowledge from authorized
      sources other than the Employee.

    

    (ii)
      The
      Employee acknowledges that the Company would not enter into this Agreement
      without the assurance that all the Confidential Information will be used for
      the
      exclusive benefit of the Company. 

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    (b)
      Return
      of Confidential Information.
      Upon
      the termination of this Agreement or upon the request of the Company, the
      Employee shall promptly return to the Company all Confidential Information
      in
      his possession or control, including but not limited to all drawings, manuals,
      computer printouts, computer databases, disks, data, files, lists, memoranda,
      letters, notes, notebooks, reports and other writings and copies thereof and
      all
      other materials relating to the Company’s business, including without limitation
      any materials incorporating Confidential Information.

    

    (c)
      Inventions,
      etc.
      During
      the Term and for a period of one year thereafter, the Employee will promptly
      disclose to the Company all designs, processes, inventions, improvements,
      developments, discoveries, processes, techniques, and other information related
      to the business of the Company conceived, developed, acquired, or reduced to
      practice by him alone or with others during the Term of this Agreement, whether
      or not conceived during regular working hours, through the use of Company time,
      material or facilities or otherwise (“Inventions”).

    

    The
      Employee agrees that all copyrights created in conjunction with his service
      to
      the Company and other Inventions, are “works made for hire” (as that term is
      defined under the Copyright Act of 1976, as amended). All such copyrights,
      trademarks, and other Inventions shall be the sole and exclusive property of
      the
      Company, and the Company shall be the sole owner of all patents, copyrights,
      trademarks, trade secrets, and other rights and protection in connection
      therewith. To the extent any such copyright and other Inventions may not be
      works for hire, the Employee hereby assigns to the Corporation any and all
      rights he or she now has or may hereafter acquire in such copyrights and any
      other Inventions. Upon request the Employee shall deliver to the Company all
      drawings, models and other data and records relating to such copyrights,
      trademarks and Inventions. The Employee further agrees as to all such
      Inventions, to assist the Company in every proper way (but at the Company’s
      expense) to obtain, register, and from time to time enforce patents, copyrights,
      trademarks, trade secrets, and other rights and protection relating to said
      Inventions in and all countries, and to that end the Employee shall execute
      all
      documents for use in applying for and obtaining such patents, copyrights,
      trademarks, trade secrets and other rights and protection on and enforcing
      such
      Inventions, as the Company may desire, together with any assignments thereof
      to
      the Company or persons designated by it. Such obligation to assist the Company
      shall continue beyond the termination of the Employee’s service to the Company,
      but the Company shall compensate the Employee at a reasonable rate after
      termination of service for time actually spent by the Employee at the Company’s
      request for such assistance. In the event the Company is unable, after
      reasonable effort, to secure the Employee’s signature on any document or
      documents needed to apply for or prosecute any patent, copyright, trademark,
      trade secret, or other right or protection relating to an Invention, whether
      because of the Employee’s physical or mental incapacity or for any other reason
      whatsoever, the Employee hereby irrevocably designates and appoints the Company
      and its duly authorized officers and agents as his agent coupled with an
      interest and attorney-in-fact, to act for and in his behalf and stead to execute
      and file any such application or applications and to do all other lawfully
      permitted acts to further the prosecution and issuance of patents, copyrights,
      trademarks, trade secrets, or similar rights or protection thereon with the
      same
      legal force and effect as if executed by the Employee. 

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    (d) Non-competition.
      The
      Employee will not utilize his special knowledge of the business operations
      of
      the Company and his relationships with customers, suppliers of the Company
      and
      others to compete with the Company. During the Term of this Agreement and (A)
      for a period of one year after the termination of this Agreement pursuant to
      Sections 7(a), 7(b) or 7(e) hereof (subject to extension pursuant to Section
      7(f) hereof), as applicable; or (B) in the event of termination pursuant to
      Sections 7(c) or 7(d), the duration of the Severance Period (as defined in
      Section 7(f)); the Employee shall not engage, directly or indirectly, or have
      an
      interest, directly or indirectly, anywhere in the United States of America
      or
      any other geographic area where the Company does business or in which its
      products or services are marketed, alone or in association with others, as
      principal, officer, agent, Employee, director, partner or stockholder (except
      with respect to his employment by the Company), or through the investment of
      capital, lending of money or property, rendering of services or otherwise,
      in
      any business competitive with or substantially similar to that engaged in by
      the
      Company during the Term of this Agreement (it being understood hereby, that
      the
      ownership by the Employee of five percent (5%) or less of the stock of any
      company listed on a national securities exchange shall not be deemed a violation
      of this Section 5). 

    

    (e) Non-solicitation.
      During
      the Term of this Agreement and (A) for a period of one year after the
      termination of this Agreement pursuant to Sections 7(a), 7(b) or 7(e) hereof
      (subject to extension pursuant to Section 7(f) hereof), as applicable; or (B)
      in
      the event of termination pursuant to Sections 7(c) or 7(d), the duration of
      the
      Severance Period (as defined in Section 7(f)); the Employee shall not, and
      shall
      not permit any of his employees, agents or others under his control to, directly
      or indirectly, on behalf of himself or any other person, (i) call upon, accept
      competitive business from, or solicit the competitive business of any individual
      or entity who is, or who had been at any time during the preceding two years,
      a
      customer of the Company or any successor to the business of the Company, or
      otherwise divert or attempt to divert any business from the Company or any
      such
      successor, or (ii) directly or indirectly recruit or otherwise solicit or induce
      any person who is an Employee of, or otherwise engaged by, the Company or any
      successor to the business of the Company to terminate his employment or other
      relationship with the Company or such successor, or hire or enter into any
      business with any person is employed by or who has left the employ of the
      Company or any such successor during the preceding two years. The Employee
      shall
      not at any time, directly or indirectly, use or purport to authorize any person
      to use any name, mark, logo, trade dress or other identifying words or images
      which are the same as or similar to those used at any time by the Company in
      connection with any product or service, whether or not such use would be in
      a
      business competitive with that of the Company. Any breach or violation by the
      Employee of the provisions of this Section 5 shall toll the running of any
      time
      periods set forth in this Section 5 for the duration of any such breach or
      violation. 

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    (f)
      Non-Disparagement.
       The
      Employee shall not at any time, directly or indirectly, take any action (whether
      orally or in writing or otherwise) which has or may be expected to have the
      effect of disparaging the Company or any of its subsidiaries or affiliates
      or
      their directors, officers or executives or their respective reputations,
      including, but not limited to, their business models, practices, relationships,
      internal workings, financial condition or operations, in any manner whatsoever
      at any time.

    

    6.    Remedies.
      The
      restrictions set forth in Section 5 are considered by the parties to be fair
      and
      reasonable. The Employee acknowledges that the restrictions contained in Section
      5 will not prevent him from earning a livelihood. The Employee further
      acknowledges that the Company would be irreparably harmed and that monetary
      damages would not provide an adequate remedy in the event of a breach of the
      provisions of Section 5. Accordingly, the Employee agrees that, in addition
      to
      any other remedies available to the Company, the Company shall be entitled
      to
      injunctive and other equitable relief to secure the enforcement of these
      provisions, and shall be entitled to receive reimbursement from the Employee
      for
      all reasonable attorneys' fees and expenses incurred by the Company in enforcing
      these provisions. In connection with seeking any such equitable remedy,
      including, but not limited to, an injunction or specific performance, the
      Company shall not be required to post a bond as a condition to obtaining such
      remedy. If any provisions of Sections 5 or 6 relating to the time period, scope
      of activities or geographic area of restrictions is declared by a court of
      competent jurisdiction to exceed the maximum permissible time period, scope
      of
      activities or geographic area, the maximum time period, scope of activities
      or
      geographic area, as the case may be, shall be reduced to the maximum which
      such
      court deems enforceable. If any provisions of Sections 5 or 6 other than those
      described in the preceding sentence are adjudicated to be invalid or
      unenforceable, the invalid or unenforceable provisions shall be deemed amended
      (with respect only to the jurisdiction in which such adjudication is made)
      in
      such manner as to render them enforceable and to effectuate as nearly as
      possible the original intentions and agreement of the parties. For purposes
      of
      this Section 6, all references to the Company shall be deemed to include the
      Company's affiliates and subsidiaries, whether now existing or hereafter
      established or acquired.

    

    7.    Termination;
      Non-renewal.
      This
      Agreement may be terminated prior to the expiration of the Term set forth in
      Section 1 upon the occurrence of any of the events set forth in, and subject
      to
      the terms of, this Section 7.

    

    (a)
      Death
      or Permanent Disability.
      If
      the
      Employee dies or becomes permanently disabled, this Agreement shall terminate
      effective at the end of the calendar month during which his death occurs or
      when
      his disability is deemed to have become permanent. If the Employee is unable
      to
      perform his normal duties for the Company because of illness or incapacity
      (whether physical or mental) for 45 consecutive days during the Term of this
      Agreement, or for 60 days (whether or not consecutive) out of any calendar
      year
      during the Term of this Agreement, his disability shall be deemed to have become
      permanent. If this Agreement is terminated on account of the death or permanent
      disability of the Employee, then the Employee or its estate shall be entitled
      to
      receive accrued Base Compensation through the date of such termination and
      the
      Employee and the Employee’s estate shall have no further entitlement to Base
      Compensation, bonus, or benefits, except in the case of the Employee’s death,
      the proceeds of any life insurance policies payable to his beneficiaries shall
      be paid pursuant to the terms and conditions of such policies following the
      effective date of such termination.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    (b)
      Cause.
      This
      Agreement may be terminated at the Company’s option, immediately upon written
      notice to the Employee, upon: (i) the Employee’s commission of a misdemeanor or
      felony that, in the Board’s reasonable judgment, adversely affects the Company’s
      or any of the Company’s affiliates’ reputation, business or interests, or the
      ability of the Employee to perform his duties as an employee of the Company;
      (ii) the Employee’s act of fraud or dishonest act upon, or misappropriation of
      funds of, the Company or any of the Company’s affiliates; (iii) the Employee’s
      gross negligence, willful or intentional act or omission in the performance
      of
      his duties under this Agreement as determined by the Board; (iv) the Employee’s
      disregard of a lawful direction of the Board or the executive officer to whom
      the Employee reports; (v) the Employee’s appropriation for himself of a Company
      corporate opportunity without the express prior written consent of the Board;
      (vi) the Employee’s material breach of any of his obligations under this
      Agreement (other than Section 5 of this Agreement) that continues unremedied
      for
      14 days following the Employee’s receipt of written notice from the Board
      thereof; (vii) the Employee’s breach of any of his obligations of any of the
      provisions of Section 5 of this Agreement; or (viii) the Employee is convicted
      of a felony. If this Agreement is terminated by the Company for cause, then
      the
      Employee shall be entitled to receive accrued Base Compensation through the
      date
      of such termination.

    

    (c)
      Without
      Cause.
      This
      Agreement may be terminated, at any time by the Company without cause
      immediately upon giving written notice to the Employee of such termination.
      The
      Company shall have the right, at its election if made on or before the time
      of
      termination, to continue to pay the Employee his Base Compensation for an
      additional period of up to 12 months, and if the Company so elects, the Employee
      shall be bound by the provisions of Sections 5(d) and 5(e) of this Agreement
      for
      such additional period. 

    

    (d)
      Non-renewal.
      In the
      event the Company fails to renew or extend the Term, the Company shall have
      the
      right, at its election, to continue to pay the Employee his Base Compensation
      for an additional period of up to 12 months after the expiration of the Term,
      and if the Company so elects, the Employee shall be bound by the provisions
      of
      Sections 5(d) and 5(e) of this Agreement for such additional period, provided,
      however, Employee’s right to receive any such payment shall be subject to the
      Employee complying with the terms of this Agreement. Any such election shall
      be
      made in writing at least 90 days prior to the expiration of the Term and shall
      specify the length of such additional period.

    

    (e)
      By
      Employee.
      The
      Employee may terminate the Agreement at anytime upon providing the Company
      with
      two weeks prior written notice. If this Agreement is terminated by the Employee
      pursuant to this Section 7(e), then the Employee shall be entitled to receive
      his accrued Base Compensation and benefits through the effective date of such
      termination and the Employee shall have no further entitlement to Base
      Compensation, bonus, or benefits from the Company following the effective date
      of such termination.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    (f)
      Severance
      Payment and Period.
      The
      period of time during which the Company continues to pay (or would continue
      to
      pay, but for any breach by the Employee of this Agreement) the Employee
      following the termination or expiration of this Agreement pursuant to Sections
      7(b), (c), (d), (e) or this Section 7(f) shall be referred to as the “Severance
      Period”, and the amounts due thereunder shall be referred to as the “Severance
      Payment.” Upon termination of this Agreement pursuant to Sections 7(b), (c), (d)
      or (e) the Company shall have the election (such election to be exercised within
      10 days after the termination of Employee’s employment pursuant to such
      provisions), to extend the applicable period that the covenants set forth in
      Sections 5(d) and (e) are applicable to the Employee through and including
      the
      second anniversary of the date of termination (or through and including any
      lesser period) provided that the Company agrees to pay the Employee (or would
      continue to pay, but for any breach by the Consultant of this Agreement) the
      Base Compensation (based on the highest rate of annual base salary paid to
      the
      Employee during the Term) during such extension period during which the
      covenants are extended. The Severance Payment shall be payable, bi-monthly
      in
      accordance with the normal payroll practices of the Company and shall be subject
      to withholding for applicable taxes and other amounts. In lieu of cash, at
      the
      option of the Company, the Severance Payment may be payable through the issuance
      of Common Stock on the effective date of such termination or expiration, based
      upon the closing price of the Common Stock on such date. 

    

    8.     Key
      Man Life Insurance. The
      Employee acknowledges that the Company will seek to obtain key man life
      insurance policy on his life with the Company as the named beneficiary. The
      Employee hereby agrees to provide such information and to submit to such medical
      examinations and otherwise cooperate as may be required to assist the Company
      in
      obtaining such policy.

    

    9.     Miscellaneous.

    

    (a)
      Survival.
      The
      provisions of Sections 4, 5, 6, 7 and 9 shall survive the termination of this
      Agreement.

    

    (b) Entire
      Agreement.
      This
      Agreement sets forth the entire understanding of the parties and, except as
      specifically set forth herein, merges and supersedes any prior or
      contemporaneous agreements between the parties pertaining to the subject matter
      hereof.

    

    (c) Modification.
      This
      Agreement may not be modified or terminated orally, and no modification,
      termination or attempted waiver of any of the provisions hereof shall be binding
      unless in writing and signed by the party against whom the same is sought to
      be
      enforced.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    (d) Waiver.
      Failure
      of a party to enforce one or more of the provisions of this Agreement or to
      require at any time performance of any of the obligations hereof shall not
      be
      construed to be a waiver of such provisions by such party nor to in any way
      affect the validity of this Agreement or such party’s right thereafter to
      enforce any provision of this Agreement, nor to preclude such party from taking
      any other action at any time which it would legally be entitled to
      take.

    

    (e)
      Successors
      and Assigns.
      Neither
      party shall have the right to assign this Agreement, or any rights or
      obligations hereunder, without the consent of the other party; pro-vided,
      however,
      that
      upon the sale of all or substantially all of the assets, business and good-will
      of the Company to another company, or upon the merger or consolidation of the
      Company with an-other company, this Agreement shall inure to the benefit of,
      and
      be binding upon, both Employee and the company purchasing such assets, business
      and goodwill, or surviving such merger or con-soli-da-tion, as the case may
      be,
      in the same manner and to the same extent as though such other com-pany were
      the
      Company; and provided,
      further,
      that the
      Company shall have the right to assign this Agreement to any affiliate or
      subsidiary of the Company. Subject to the fore-going, this Agree-ment shall
      inure to the benefit of, and be binding upon, the parties hereto and their
      legal
      representatives, heirs, successors and assigns.

    

    (f) Communications.
      All
      notices, requests, demands and other communications under this Agreement shall
      be in writing and shall be deemed to have been given at the time per-sonally
      delivered or when mailed in any United States post office enclosed in a
      registered or cer-ti-fied postage prepaid envelope and addressed to the
      addresses set forth below, or to such other ad-dress as any party may specify
      by
      notice to the other party; provided,
      however,
      that any
      notice of change of address shall be effective only upon receipt.

    

    
      	
              If
                to the Company:

              Net
                Perceptions, Inc.

              One
                Landmark Square, 22nd
                Floor

              Stamford,
                Connecticut 06901

              Facsimile:
                (203) 428-2024 

              Attention:
                

            	
              With
                a copy to:

              Kane
                Kessler, P.C.

              1350
                Avenue of the Americas

              New
                York, New York 10019

              Facsimile:
                (212) 245-3009

              Attention:
                Robert L. Lawrence, Esq.

            
	 	 
	
              If
                to the Employee, to:

            	 
	 	 
	
              Albert
                Weggeman

              15
                Sidecut Road

              Redding,
                Connecticut 06896

              Facsimile:
                (203) 428-2041

            	
               

            

    

     

    
      
         

      

      
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    (g) Severability.
      If any
      provision of this Agreement is held to be invalid or unenforceable by a court
      of
      competent jurisdiction, such invalidity or unenforceability shall not affect
      the
      validity and enforceability of the other provisions of this Agreement and the
      provisions held to be invalid or unenforceable shall be enforced as nearly
      as
      possible according to its original terms and intent to eliminate such invalidity
      or unenforceability.

    

    (h) Jurisdiction;
      Venue.
      This
      Agreement shall be subject to the non-exclusive jurisdiction of the courts
      of
      New York County, New York. Any breach of any provision of this Agreement shall
      be deemed to be a breach occurring in the State of New York by virtue of a
      failure to perform an act required to be performed in the State of New York,
      and
      the parties irrevocably and expressly agree to submit to the non-exclusive
      jurisdiction of the courts of New York County, New York for the purpose of
      resolving any disputes among them relating to this Agreement or the transactions
      contemplated by this Agreement and waive any objections on the grounds of forum
      non conveniens or otherwise. The parties hereto agree to service of process
      by
      certified or registered United States mail, postage prepaid, addressed to the
      party in question.

    

    (i) Governing
      Law; Indemnification.
      This
      Agreement is made and executed and shall be governed by the laws of the State
      of
      New York, without regard to the conflicts of law principles thereof.
      Notwithstanding the foregoing, the Employee shall have the right to be
      indemnified by the Company in accordance with the provisions of the Company's
      certificate of incorporation, bylaws, and the provisions of Delaware
      law.

    

    (j) Counterparts.
      This
      Agreement may be executed in any number of counterparts, but all counterparts
      will together constitute but one agreement.

    

    (k)
      Third
      Party Beneficiaries.
      This
      Agreement is for the sole and exclusive benefit of the parties hereto and,
      except as provided herein, shall not be deemed for the benefit of any other
      person or entity.

    

    (l)
      IRC
      Section 409A.
      The
      parties to this Agreement intend that the Agreement complies with Section 409A
      of the Internal Revenue Code of 1986, as amended (the “Code”), where applicable,
      and this Agreement shall be interpreted in a manner consistent with that
      intention. Notwithstanding any provision of this Agreement, no payment or other
      distribution required to be made to the Employee hereunder (including any
      payment of cash, any transfer of property and any provision of taxable benefits)
      as a result of his termination with the Company shall be made prior to the
      earliest date that Employee may receive such payments without a penalty,
      remedial measure or similar effect being imposed against the Company or the
      Employee pursuant to Section 409A of the Code.

     

    

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
         

      

      
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    IN
      WITNESS WHEREOF,
      each of
      the parties hereto has duly executed this Employment Agreement as of the date
      set forth above.

     

    
      	 	 	 
	Net
              Perceptions, Inc.	    
              	Employee
	 
 	 
 	
 
	By: 
/s/
              Warren B. Kanders	  	/s/ Albert
              Weggeman
	
              
                

              

              Name: Warren B. Kanders

            	
              

              Albert
                Weggeman

            
	
              Title:
                Executive Chairman of the Board

            	 

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Exhibit
      A to Employment Agreement

    between

    Net
      Perceptions, Inc., and Albert Weggeman

    

    This
      Exhibit A sets forth the vesting provisions of the portion of options which
      are
      to be awarded to the Employee pursuant to Section 3(c)(ii) of the Employment
      Agreement (such portion, the “Performance Options”).

    

    1.    415,237
      Performance Options (the “First Performance Options”) shall vest as of
March
      31, 2008,
      if the
      Company’s EBITDA for the year ending December 31, 2007 (“Year 1”) is not
      less than $13,800,000 (the “Year 1 Target”); if the Year 1 Target is not
      achieved, and if the sum of the Company’s EBITDA for the years ending December
      31, 2007 and 2008 is not less than the sum of the Year 1 Target plus the Year
      2
      Target (as defined below), then the First Performance Options shall vest, as
      of
      March 31, 2009.

    

    2.    415,237
      Performance Options (the “Second Performance Options”) shall vest as of
March
      31, 2009,
      if the
      Company’s EBITDA for the year ending December 31, 2008 (“Year 2”) is not
      less than $15,700,000 (the “Year 2 Target”); if the Year 2 Target is not
      achieved, and if the sum of the Company’s EBITDA for the years ending December
      31, 2008 and 2009 is not less than the sum of the Year 2 Target plus the Year
      3
      Target (as defined below), then the Second Performance Options shall vest,
      as of
      March 31, 2010.

    

    3.    415,236
      Performance Options (the “Third Performance Options”) shall vest as of
March
      31, 2010,
      if the
      Company’s EBITDA for the year ending December 31, 2009 (“Year 3”) is not
      less than $17,200,000 (the “Year 3 Target”); if (i) the Year 3 Target is
      not achieved, and (ii) the Company renews the employment agreement of the
      Employee for another three-year term, and (iii) the sum of the Company’s
      EBITDA for the years ending December 31, 2009 and 2010 is not less than the
      sum
      of the Year 3 Target plus the Year 4 Target (as defined hereinafter), then
      the
      Third Performance Options shall vest, as of March 31, 2011. “Year 4 Target”
means an amount of the Company’s EBITDA for the year ending December 31, 2010
      that will be agreed upon by the parties in the renewed employment agreement,
      if
      any.

    

    4.    For
      purposes hereof, the Company’s EBITDA for any year shall be the amount so
      determined by reference to the Company’s audited financial statements for such
      year without giving effect to any acquisitions from and after the Commencement
      Date.

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