SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 8-K
                                CURRENT REPORT

                    Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934


                               December 31, 2003
                       (Date of earliest event reported)


                             Net Perceptions, Inc.
              (Exact Name of Registrant as Specified in Charter)


        Delaware                       000-25781              41-1844584
--------------------------------   ---------------------  --------------------
(State or Other Jurisdiction of    (Commission File No.)    (IRS Employer
      Incorporation)                                        Identification No.)


               7700 France Avenue South, Edina, Minnesota 55435
         -----------------------------------------------------------
         (Address of Principal Executive Offices, Including Zip Code)


                                (952) 842-5000
              ---------------------------------------------------
             (Registrant's telephone number, including area code)


-------------------------------------------------------------------------------
         (Former Name or Former Address, If Changed Since Last Report)



<PAGE>


Item 5.  Other Events and Required FD Disclosure.

         On December 31, 2003, Net Perceptions, Inc. (the "Company") issued a
press release announcing, among other things, that it has entered into a
Patent Purchase Agreement (the "Patent Agreement") with Thalveg Data Flow LLC
("Thalveg") to sell to Thalveg the Company's patent portfolio for a purchase
price of $1.8 million. The Patent Agreement includes a royalty-free license
back to the Company under the patents, patent licenses and pending patent
applications being transferred. The transaction does not involve any other
intellectual property rights or other assets of the Company, including its
proprietary software products, which remain with the Company. Pursuant to the
Patent Agreement, Thalveg and the Company have entered into an Escrow
Agreement with Private Bank Minnesota providing for the escrow of a deposit of
$900,000 which is creditable against the purchase price at closing.
Consummation of the transaction is subject to stockholder approval as part of
the previously announced Plan of Complete Liquidation and Dissolution or
otherwise. The press release also announced that the Company's Board of
Directors has unanimously determined that Obsidian Enterprises, Inc.'s
unsolicited exchange offer for all outstanding shares of Net Perceptions
common stock is financially inadequate and not in the best interests of Net
Perceptions' shareholders and, accordingly, that the Board urges stockholders
to reject Obsidian's offer and not tender their shares.

         The foregoing summary of the Patent Agreement and the Escrow
Agreement is subject to, and qualified in its entirety by, the Patent
Agreement, the Escrow Agreement and the press release dated December 31, 2003,
issued by the Company, attached as exhibits 2.1, 2.2 and 99.1, respectively,
and incorporated herein by reference.

Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits.

(c)      Exhibits

2.1      Patent Purchase Agreement between Thalveg Data Flow LLC and Net
         Perceptions, Inc. dated December 30, 2003.

2.2      Escrow Agreement among Thalveg Data Flow LLC, Net Perceptions, Inc.
         and Private Bank Minnesota dated December 30, 2003.

99.1     Press Release dated December 31, 2003.

<PAGE>

                                  SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                                 NET PERCEPTIONS, INC.


                                                 By: /s/ Thomas M. Donnelly
                                                     --------------------------
Date: December 31, 2003                              Thomas M. Donnelly
                                                     President

<PAGE>

                                 EXHIBIT INDEX

Exhibit No.       Description
-----------       -----------

2.1               Patent Purchase Agreement between Thalveg Data Flow LLC and
                  Net Perceptions, Inc. dated December 30, 2003.

2.2               Escrow Agreement among Thalveg Data Flow LLC, Net
                  Perceptions, Inc. and Private Bank Minnesota dated December
                  30, 2003.

99.1              Press Release dated December 31, 2003.


<PAGE>


                                                                   Exhibit 2.1


                           PATENT PURCHASE AGREEMENT

         This PATENT PURCHASE AGREEMENT ("Agreement") is entered into on
December 30, 2003 ("Effective Date") by and between Thalveg Data Flow LLC a
Delaware limited liability company, with an office at 171 Main St. #271, Los
Altos, California 94022 ("Purchaser"), and Net Perceptions, Inc., a Delaware
corporation, with an office at 7700 France Avenue South, Endina, Minnesota
55345 ("Seller"). The parties hereby agree as follows.

1.       BACKGROUND

1.1      Seller owns certain United States Letters Patents and applications
         therefor and related foreign patents and applications.

1.2      Seller wishes to sell its right, title and interest in such patents
         and applications to Purchaser.

1.3      Purchaser wishes to purchase such patents and applications.

2.       DEFINITIONS

2.1      "Assignment Agreements" means the agreements assigning ownership of
         the Patents from the inventors and/or prior owners to Seller.

2.2      "Licensee" shall mean Seller and any entity to whom the license
         granted in Section 7.1 is transferred pursuant to Section 7.2.

2.3      "List of Prosecution Counsel" means the names and addresses of
         prosecution counsel who prosecuted the Patents and who are currently
         handling Patent applications.

2.4      "Patents" means those patents and applications listed in Exhibit A
         hereto, and all reissues, reexaminations, extensions, continuations,
         continuations in part, continuing prosecution applications, and
         divisions of such patents and applications; provisional patent
         applications that are or will be continuations or continuations in
         part of such patents and applications; and foreign counterparts to
         any of the foregoing including without limitation utility models.

2.5      "Plan of Liquidation" shall mean the Plan of Complete Liquidation and
         Dissolution attached as Exhibit A to Seller's Preliminary Proxy
         statement dated November 4, 2003, as amended from time to time.

2.6      "Requisite Stockholder Approval" shall mean approval by the requisite
         stockholder vote of the stockholders of Seller of (i) the Plan of
         Liquidation or (ii) this Agreement and the transactions contemplated
         hereby, whether (in the case of this clause (ii)) by such requisite
         vote approving and adopting a merger agreement which provides for the
         transfer of patents pursuant to this Agreement, or by separate vote.

3.       CLOSING CONDITIONS AND PAYMENT

3.1      The obligation of Seller to transfer the Patents pursuant to Section
         4 and the obligation of Purchaser to make the payment specified in
         Section 3.4 are contingent upon (a) receipt of the Requisite
         Stockholder Approval and (b) the Amendment 2 to the License
         Agreement, as defined below, which was executed and fully effective
         prior to the date hereof and is attached as Exhibit C, has not been
         terminated or amended.

3.2      The total purchase price payable by Purchaser for the transfer of
         patents pursuant to Section 4 by Seller shall be one million eight
         hundred thousand dollars ($1,800,000) payable as set forth in
         Sections 3.3 and 3.4.

3.3      Upon the execution of this Agreement, Purchaser shall pay to Private
         Bank Minnesota (the "Escrow Agent") nine hundred thousand dollars
         ($900,000) (the "Deposit" and, together with any interest earned
         thereon, the "Deposit Amount") by wire transfer of immediately
         available funds to an account designated by the Escrow Agent. The
         Deposit Amount will be held by the Escrow Agent pursuant to the terms
         of an Escrow Agreement by and among the Escrow Agent, Purchaser and
         Seller in the form of Exhibit D hereto which is being executed and
         delivered concurrently with the execution and delivery of this
         Agreement. If Purchaser breaches this Agreement by failing to timely
         make the payment specified in Section 3.4, in addition to any other
         remedies Seller may have, the Deposit Amount shall be transferred to
         Seller within two business days after the breach, and the parties
         hereby agree to instruct the Escrow Agent to make such transfer. If
         this Agreement is terminated pursuant to Section 8, the Deposit
         Amount will be transferred to Purchaser within two business days
         after any such termination, and the parties hereby agree to instruct
         the Escrow Agent to make such transfer.

3.4      Two business days after the satisfaction of the conditions set forth
         in Section 3.1, Purchaser shall pay to Seller the amount of one
         million eight hundred thousand dollars($1,800,000), minus the amount
         of the Deposit Amount which has been received by Seller from the
         Escrow Agent, by wire transfer of immediately available funds to an
         account designated by Seller (the date and time of such payment by
         Seller being hereafter referred to as the "Closing Date").
         Immediately prior to the Closing Date, the parties hereto agree to
         instruct the Escrow Agent to deliver the Deposit Amount to Seller.

4.       TRANSFER OF PATENTS AND LICENSE AGREEMENT

4.1      Patent Assignment. Effective on the Closing Date, Seller hereby
         sells, assigns, transfers and conveys to Purchaser all right, title
         and interest it has in and to the Patents and all inventions and
         discoveries described therein, including without limitation, all
         rights of Seller under the Assignment Agreements, and all rights of
         Seller to collect royalties under such Patents.

4.2      Assignment of Causes of Action. Effective on the Closing Date, Seller
         hereby sells, assigns, transfers and conveys to Purchaser all right,
         title and interest it has in and to all causes of action and
         enforcement rights, whether currently pending, filed, or otherwise,
         in respect of the Patents and all inventions and discoveries
         described therein, including without limitation all rights to pursue
         damages, injunctive relief and other remedies for past, current and
         future infringement of the Patents.

4.3      License Agreement. Effective on the Closing Date seller hereby
         assigns to Purchaser the License Agreement between Seller and the
         Regents of the University of Minnesota effective July 31, 1996, as
         amended (the "License Agreement"), and Purchaser agrees to accept
         such assignment and, beginning on the Closing Date, to perform all
         the obligations of Seller under the License Agreement. (This
         assignment includes a license under United States Patents numbered
         5,842,199; 6,016,475; and 6,108,493, and pending U.S. patent
         application 09/571,020. )

5.       ADDITIONAL OBLIGATIONS

5.1      Delivery. On the Closing Date, seller shall deliver to Purchaser an
         executed copy of the Assignment of Patent Rights, substantially in
         the form of in Exhibit B hereto, the Assignment Agreements, the List
         of Prosecution Counsel, and all files and original documents owned or
         controlled by Seller (including without limitation Letters Patents)
         relating to the Patents including, without limitation, all
         prosecution files for pending patent applications included in the
         Patents, and its own files relating to the issued Patents.

5.2      Further Cooperation. From and after the Closing Date, at the
         reasonable request of Purchaser, Seller shall execute and deliver
         such other instruments and do and perform such other acts and things
         as may be necessary or desirable for completing the consummation of
         the transactions contemplated hereby, including without limitation
         execution, acknowledgment and recordation of other such papers, and
         using commercially reasonable efforts to obtain the same from the
         respective inventors, as necessary or desirable for fully perfecting
         and conveying unto Purchaser the benefit of the transactions
         contemplated hereby. In the event a foreign counterpart,
         continuation, or divisional is omitted from the definition of
         Patents, Seller shall use commercially reasonable efforts to include
         the omitted foreign counterpart, continuation, or divisional within
         the scope and coverage of this Agreement with no additional payment
         by Purchaser.

5.3      Meeting Date. Seller will give Purchaser at least ten (10) days prior
         written notice of the date of the stockholder meeting at which the
         Requisite Stockholder Approval is being sought and as much notice as
         reasonably practical concerning the date or dates of any adjournments
         thereof

6.       REPRESENTATIONS AND WARRANTIES

6.1      Authority. Seller represents and warrants to Purchaser that Seller
         has the right and authority to enter into this Agreement and, if the
         Requisite Stockholder Approval is obtained, to carry out its
         obligations hereunder.

6.2      Title and Contest. Seller represents and warrants to Purchaser that
         (i) it has good and marketable title to the Patents, including
         without limitation all rights, title, and interest in the Patents to
         sue for infringement thereof; (ii) the Patents are free and clear of
         all liens, mortgages, security interests or other encumbrances, and
         restrictions on transfer; (iii) to Seller's knowledge, there are no
         actions, suits, investigations, claims or proceedings threatened,
         pending or in progress relating in any way to the Patents; and (iv)
         there are no existing contracts, agreements, options, commitments,
         proposals, bids, offers, or rights with, to, or in any person to
         acquire any of the Patents.

6.3      Existing Licenses. Except as to such rights and licenses granted in
         connection with the sale, licensing or other disposition of Seller's
         services in the normal cause of business, Seller represents and
         warrants to Purchaser that no rights or licenses have been granted
         under the Patents.

6.4      Restrictions on Rights. Seller represents and warrants to Purchaser
         that Purchaser will not be subject to any covenant not to sue or
         similar restrictions on its enforcement or enjoyment of the Patents
         as a result of the transaction contemplated in this Agreement, or any
         prior transaction related to the Patents.

6.5      Conduct. Seller represents and warrants to Purchaser that, Seller,
         and to Seller's knowledge its representatives, have not intentionally
         engaged in any conduct, or intentionally omitted to perform any
         necessary act, the result of which would invalidate any of the
         Patents or hinder their enforcement, including but not limited to
         misrepresenting Seller's patent rights to a standard-setting
         organization.

6.6      Enforcement. Seller represents and warrants to Purchaser that Seller
         has not put a third party on notice of actual or potential
         infringement of any of the Patents except for the following patents
         on the following dates.

6.7      Patent Office Proceedings. Seller represents and warrants to
         Purchaser that to its knowledge none of the Patents have been or are
         currently involved in any reexamination, reissue, interference
         proceeding, or any similar proceeding and that to its knowledge no
         such proceedings are pending or threatened.

6.8      Fees. Seller represents and warrants to Purchaser that all
         maintenance fees, annuities, and the like due and payable on the
         Patents prior to the Closing Date have been timely paid.

6.9      Consents. Seller represents and warrants to Purchaser that Seller has
         obtained all third party consents, approvals, and/or other
         authorizations required to make the assignments in Section 4.

6.10     Validity and Enforceability. Seller represents and warrants to
         Purchaser that (i) the Patents have never been found invalid or
         unenforceable for any reason in any administrative, arbitration,
         judicial or other proceeding; and (ii) Seller has not received any
         notice from any source alleging that the Patents may be invalid or
         unenforceable.

6.11     Disclaimer of Warranty. Except as explicitly set forth herein, Seller
         disclaims all warranties, express and implied, with respect to the
         subject matter of this agreement. WITHOUT LIMITATION OF THE
         FOREGOING, SELLER DISCLAIMS ALL IMPLIED WARRANTIES OF VALIDITY AND
         NONINFRINGEMENT.

7.       RETAINED RIGHTS

7.1      Grant Under Patent Rights. Effective on the Closing Date, Purchaser
         hereby grants to Seller, under the Patent Rights (as defined in
         Exhibit B hereto), and for the lives thereof, a royalty-free,
         irrevocable, non-exclusive, worldwide right and license to practice
         the methods and to make, have made, use, distribute, lease, sell,
         offer for sale, import, export, develop and otherwise dispose of and
         exploit any products covered by the Patent Rights. This license shall
         apply to the reproduction and subsequent distribution of licensed
         products, in substantially identical form as they are distributed by
         the Seller or by authorized agents of the Seller such as a
         distributor, replicator, VAR or OEM. The parties acknowledge that
         Seller's products, including licensed software products and rights
         under Seller's escrow agreements shall be subject to the exhaustion
         doctrine.

7.2      Limitation on Transferability. This license is not transferable
         except to a purchaser of all, or substantially all, of a Licensee's
         assets, or to a party that by merger or otherwise acquires all, or
         substantially all, of a Licensee's outstanding capital stock. Upon
         such a transaction, this license shall apply only to products covered
         by the Patent Rights to the extent that revenue realized by any
         Licensee from products covered by the Patent Rights does not exceed
         the "Revenue Limitation" in any calendar year. The Revenue Limitation
         shall be Ten Million Dollars ($10,000,000.00) during the calendar
         year of the first such transfer, and shall be increased each
         subsequent year by seven point five percent (7.5%). Purchaser agrees
         to negotiate extensions of the license to cover revenues realized by
         any Licensee in excess of the Revenue Limitation, in good faith.

8.       TERMINATION

8.1      This Agreement may be terminated by the mutual written consent of
         Seller and Purchaser.

8.2      This Agreement may be terminated by either party if the Requisite
         Stockholder Approval is not obtained by March 30, 2004.

8.3      This Agreement may be terminated by either party if at a duly called
         special meeting of Seller's stockholders at which a vote is taken on
         the Plan of Liquidation, on a merger agreement which provides for the
         transfer of patents to Seller pursuant to this Agreement, or
         otherwise with respect to approval of this Agreement and the
         transactions contemplated hereby, the Requisite Stockholder Vote is
         not obtained.

8.4      Seller may terminate this agreement if it enters into a contract with
         another party which Seller's board of directors determines is, in
         combination with a dissolution and liquidation in the case of a sale
         of assets, reasonably likely to result in greater financial return to
         stockholders than the transaction contemplated by this Agreement, in
         combination with a dissolution and liquidation. In the event of such
         a termination, Seller shall pay Purchaser one hundred thousand
         dollars ($100,000) to compensate Purchaser for costs, fees and
         expenses incurred by Purchaser in pursuing this transaction.

9.       MISCELLANEOUS

9.1      Limitation on Consequential Damages. NEITHER PARTY SHALL BE LIABLE TO
         THE OTHER FOR LOSS OF PROFITS, OR ANY SPECIAL, CONSEQUENTIAL OR
         INCIDENTAL DAMAGES, HOWEVER CAUSED, EVEN IF ADVISED OF THE
         POSSIBILITY OF SUCH DAMAGE. THE PARTIES ACKNOWLEDGE THAT THESE
         LIMITATIONS ON POTENTIAL LIABILITIES WERE AN ESSENTIAL ELEMENT IN
         SETTING CONSIDERATION UNDER THIS AGREEMENT.

9.2      Limitation of Liability. PURCHASER'S TOTAL LIABILITY UNDER THIS
         AGREEMENT SHALL BE THE PAYMENT OF FUNDS AS REQUIRED PURSUANT TO
         SECTION 3. THE PARTIES ACKNOWLEDGE THAT THESE LIMITATIONS ON
         POTENTIAL LIABILITIES WERE AN ESSENTIAL ELEMENT IN SETTING
         CONSIDERATION UNDER THIS AGREEMENT.

9.3      Compliance with Laws. Notwithstanding anything contained in this
         Agreement to the contrary, the obligations of the parties shall be
         subject to all laws, present and future, of any government having
         jurisdiction over the parties and this transaction, and to orders,
         regulations, directions or requests of any such government.

9.4      Governing Law. Any claim arising under or relating to this Agreement
         shall be governed by the internal substantive laws of the State of
         New York, without regard to principles of conflict of laws that would
         require the application of the laws of another jurisdiction.

9.5      Jurisdiction. Each party hereby agrees to jurisdiction and venue in
         the courts of the State of Delaware or the Federal courts sitting
         therein for all disputes and litigation arising under or relating to
         this Agreement.

9.6      Entire Agreement. The terms and conditions of this Agreement,
         including its exhibits, constitute the entire agreement between the
         parties with respect to the subject matter hereof, and merges and
         supersedes all prior and contemporaneous agreements, understandings,
         negotiations and discussions. Neither of the parties shall be bound
         by any conditions, definitions, warranties, understandings, or
         representations with respect to the subject matter hereof other than
         as expressly provided herein. The section headings contained in this
         Agreement are for reference purposes only and shall not affect in any
         way the meaning or interpretation of this Agreement. No oral
         explanation or oral information by either party hereto shall alter
         the meaning or interpretation of this Agreement. No amendments or
         modifications shall be effective unless in a writing signed by
         authorized representatives of both parties. These terms and
         conditions will prevail notwithstanding any different, conflicting or
         additional terms and conditions which may appear on any purchase
         order, acknowledgment or other writing not expressly incorporated
         into this Agreement. This Agreement may be executed in separate
         counterparts which, taken together, shall be regarded as one and the
         same instrument. The following exhibits are attached hereto and
         incorporated herein: Exhibit A (entitled "Patent Rights to be
         Assigned"); Exhibit B (entitled "Assignment of Patent Rights").

9.7      Notices: All notices required or permitted to be given hereunder
         shall be in writing, shall make reference to this Agreement, and
         shall be delivered by hand, or dispatched by prepaid air courier or
         by registered or certified airmail, postage prepaid, addressed as
         follows:

If to Seller                                            If to Purchaser
------------                                            ---------------

Net Perceptions, Inc.                                   Thalveg Data Flow LLC
7700 France Avenue South                                171 Main St. #271.
Endina, MN  55345                                       Los Altos, CA  94022

Attn:  President                                        Attn: Managing Director


         Such notices shall be deemed served when received by addressee or, if
         delivery is not accomplished by reason of some fault of the
         addressee, when tendered for delivery. Either party may give written
         notice of a change of address and, after notice of such change has
         been received, any notice or request shall thereafter be given to
         such party at such changed address.

9.8      Relationship of Parties. The parties hereto are independent
         contractors. Neither party has any express or implied right or
         authority to assume or create any obligations on behalf of the other
         or to bind the other to any contract, agreement or undertaking with
         any third party. Nothing in this Agreement shall be construed to
         create a partnership, joint venture, employment or agency
         relationship between Seller and Purchaser.

9.9      Severability. The terms and conditions stated herein are declared to
         be severable. If any paragraph, provision, or clause in this
         Agreement shall be found or be held to be invalid or unenforceable in
         any jurisdiction in which this Agreement is being performed, the
         remainder of this Agreement shall be valid and enforceable and the
         parties shall use good faith to negotiate a substitute, valid and
         enforceable provision which most nearly effects the parties' intent
         in entering into this Agreement.

9.10     Waiver. Failure by either party to enforce any term of this Agreement
         shall not be deemed a waiver of future enforcement of that or any
         other term in this Agreement or any other agreement that may be in
         place between the parties.

9.11     Assignment. The terms and conditions of this Agreement shall inure to
         the benefit of Purchaser, its successors, assigns and other legal
         representatives, and shall be binding upon Seller, its successor,
         assigns and other legal representatives

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

Thalveg Data Flow LLC                                   Net Perceptions

/s/ Julia Ceffalo                                       /s/ Thomas M. Donnelly
-----------------                                       ----------------------
Signature                                               Signature


Julia Ceffalo                                           Thomas M. Donnelly
-------------                                           ------------------
Printed Name                                            Printed Name


Authorized Person                                       President
-----------------                                       ---------
Title                                                   Title






Exhibits A and B to the Patent Purchase Agreement have been omitted pursuant
to Item 601 of Regulation S-K. Exhibit A provides a list of patent rights to
be assigned pursuant to the Patent Purchase Agreement. Exhibit B sets forth a
form of Assignment of Patent Rights to be executed by the Assignor and
delivered to the Assignee at the closing under the Patent Purchase Agreement.
A copy of either exhibit will be furnished supplementally to the Commission
upon request.


<PAGE>


                                                                   Exhibit 2.2

                               ESCROW AGREEMENT

         ESCROW AGREEMENT (this "Agreement"), dated as of December 30, 2003,
by and among Net Perceptions, Inc., a Delaware corporation ("Seller") Thalveg
Data Flow LLC, a Delaware limited liability company ("Purchaser"), and Private
Bank Minnesota ("Escrow Agent").

         WHEREAS, pursuant to a Patent Purchase Agreement dated as of December
30, 2003 (the "PPA"), Purchaser will purchase Seller's patent portfolio; and

         WHEREAS, Section 3.3 of the PPA provides for nine hundred thousand
dollars ($900,000) (the "Escrow Amount") to be delivered to the Escrow Agent
to be held in accordance with the terms thereof and hereof.

         NOW, THEREFORE, in consideration of the premises and the respective
agreements hereinafter set forth, the parties hereto agree as follows:

               1.     Definitions. Capitalized terms used herein but not
                      otherwise defined shall have the meanings ascribed
                      thereto in the PPA.

               2.     Appointment of Escrow Agent. Purchaser and Seller hereby
                      appoint the Escrow Agent to act as escrow agent
                      hereunder, and the Escrow Agent hereby accepts such
                      appointment for the purpose of receiving and disbursing
                      the Escrow Amount in accordance with the terms and
                      conditions set forth herein.

               3.     Delivery of Funds. On the Closing Date, Purchaser will
                      deliver to the Escrow Agent the Escrow Amount to be held
                      by the Escrow Agent in an interest bearing account (the
                      "Escrow Account") in accordance with the terms of this
                      Agreement. The Escrow Amount shall be invested and
                      maintained by the Escrow Agent in accordance with the
                      provisions of Section 4 hereof, and will be disbursed by
                      the Escrow Agent pursuant to the provisions of Section 5
                      hereof. Principal in the Escrow Account during the term
                      of this Agreement and the interest accrued thereon are
                      hereinafter collectively referred to as the "Escrow
                      Funds."

               4.     Investment of Escrow Funds. The Escrow Agent shall
                      invest the Escrow Funds in an interest bearing account
                      or any other investment as directed by Seller and
                      Purchaser in writing.

               5.     Demands for Payment and Release of Escrow Funds. The
                      Escrow Funds shall be disbursed by Escrow Agent (i) as
                      directed by a written notice signed by both Seller and
                      Purchaser or (ii) as directed by a non-appealable court
                      order, issued by a court of competent jurisdiction,
                      providing that such funds be disbursed.

               6.     Termination. This Escrow Agreement shall terminate and
                      be of no further force and effect on the date that no
                      funds remain in the Escrow Account to be disbursed
                      hereunder.

               7.     Rights of the Escrow Agent. The Escrow Agent shall have
                      no duties or responsibilities except those expressly set
                      forth herein.

                      (a)   The Escrow Agent may rely upon any instrument in
                            writing believed in good faith by it to be genuine
                            and sufficient and properly presented and shall
                            not be liable or responsible for any action taken
                            or omitted in accordance with the provisions
                            thereof.

                      (b)   The Escrow Agent shall not be liable or
                            responsible for any act it may do or omit to do
                            except for its gross negligence, bad faith or
                            willful misconduct. The Escrow Agent may consult
                            with counsel and shall be fully protected with
                            respect to any action taken or omitted by it in
                            good faith on written advice of counsel. Under no
                            circumstances shall the Escrow Agent be liable for
                            any special, consequential or punitive damages.

                      (c)   Seller agrees (i) to pay or reimburse the Escrow
                            Agent for its attorney's fees and expenses
                            incurred in connection with the preparation of
                            this Agreement and (ii) to pay the Escrow Agent
                            $1000 within thirty days of the date hereof as
                            compensation for its normal services hereunder.

                      (d)   Purchaser and Seller agree to reimburse the Escrow
                            Agent on demand for all costs and expenses
                            incurred in connection with the administration of
                            this Agreement or the escrow crated hereby or the
                            performance or observance of its duties hereunder
                            which are in excess of its compensation for normal
                            services hereunder, including without limitation,
                            payment of any legal fees and expenses incurred by
                            the Escrow Agent in connection with resolution of
                            any claim by any party hereunder.

                      (e)   Purchaser and Seller covenant and agree to
                            indemnity the Escrow Agent (and its directors,
                            officers and employees) and hold it (and such
                            directors, officers and employees) harmless from
                            and against any loss, liability, damage, cost and
                            expense of any nature incurred by the Escrow Agent
                            arising out of or in connection with this
                            Agreement or with the administration of its duties
                            hereunder, including but not limited to attorney's
                            fees and other costs and expenses of defending or
                            preparing to defend against any claim of liability
                            unless and except to the extent such loss,
                            liability, damage, cost and expense shall be
                            caused by the Escrow Agent's gross negligence, bad
                            faith, or willful misconduct. The foregoing
                            indemnification and agreement to hold harmless
                            shall survive the termination of this Agreement.

                      (f)   Amounts payable to the Escrow Agent shall be paid
                            by Seller.

               8.     Resignation and Removal.

                      (a)   The Escrow Agent may resign at any time by giving
                            thirty (30) days prior written notice to Purchaser
                            and Seller. Purchaser and Seller may remove the
                            Escrow Agent by jointly giving thirty (30) days
                            prior written notice to the Escrow Agent. Such
                            removal shall take effect upon delivery of the
                            Escrow Funds to a successor escrow agent
                            designated in writing by Purchaser and Seller, and
                            the Escrow Agent shall thereupon be discharged
                            from all obligations under this Agreement, and
                            shall have no further duties or responsibilities
                            in connection herewith. The obligations of
                            Purchaser and Seller to the Escrow Agent and the
                            rights of the Escrow Agent hereunder shall survive
                            termination of this Agreement or the removal of
                            the Escrow Agent.

                      (b)   In the event that the Escrow Agent submits a
                            notice of resignation, its only duty, until a
                            successor Escrow Agent shall have been appointed
                            and shall have accepted such appointment, shall be
                            to hold, invest and dispose of the Escrow Funds in
                            accordance with this Agreement, but without regard
                            to any notices, requests, instructions, demands or
                            the like received by it from the other parties
                            hereto, unless the same is a direction that the
                            Escrow Funds be paid or delivered in their
                            entirety out of the Escrow Account.

               9.     Section Headings. The section headings contained in this
                      Agreement are for reference purposes only and shall not
                      affect on any way the meaning or interpretation of this
                      Agreement.

               10.    Notices and Wires. Any notice, request, instruction or
                      other document to be given hereunder by any party to
                      another party shall be in writing and shall be deemed
                      given when delivered personally, upon receipt of a
                      transmission confirmation (with a confirming copy sent
                      by overnight courier) if sent by facsimile or like
                      transmission, and on the next business day when sent by
                      Federal Express, United Parcel Service, Express Mail, or
                      other reputable overnight courier, to the party at the
                      following addresses (or such other addresses for a party
                      as shall be specified by like notice); provided that any
                      notice required to be delivered to the Escrow Agent
                      hereunder shall be deemed delivered only when actually
                      received by the Escrow Agent:

                      (a)   if to Seller, to:

                      Net Perceptions, Inc.
                      7700 France Avenue South
                      Edina, MN  55435
                      Attention: President
                      Phone: (952) 842-5400
                      Facsimile: (952) 842-5005

                      with a copy to:

                      Skadden, Arps, Slate, Meagher & Flom LLP
                      One Beacon Street
                      Boston, Massachusetts 02108
                      Attention: Kent A. Coit, Esquire
                      Phone: (617) 573-4835
                      Facsimile:  (617) 573-4822

                      (b)   if to a Purchaser, to:

                      Thalveg Data Flow LLC
                      171 Main Street #271
                      Los Altos, California  94022
                      Attention:  Managing Director
                      Phone: (425) 467-2300
                      Facsimile: (425) 467-2350

                      (c)   if to the Escrow Agent:

                      Private Bank Minnesota
                      222 South 9th Street, Suite 3800
                      Minneapolis, MN 55402
                      Attention:  Thomas E. Cardle
                      Phone: (612) 305-4227
                      Facsimile:  (612) 321-0894

         A copy of any notice, request, demand, certificate or other
communication given hereunder by any party shall be delivered to each other
party to this Agreement as well as to the addressee at the same time as it is
given to the addressee.

               11.    Counterparts. This Agreement may be executed in two or
                      more counterparts, each of which shall be deemed an
                      original, but all of which together shall constitute one
                      and the same instrument.

               12.    Assignment. This Agreement shall inure to the benefit of
                      and be binding upon the parties hereto and their
                      respective heirs, executors, personal representatives,
                      successors and assigns; provided that any assignment of
                      this Agreement or the rights hereunder by any party
                      hereto without the written consent of the other parties
                      shall be void. Nothing in this Agreement, express or
                      implied, is intended to confer upon any other person any
                      rights or remedies under or by reason of this Agreement.

               13.    Governing Law. This Agreement shall be governed by and
                      construed and enforced in accordance with the laws of
                      the State of Minnesota without regard to the rules of
                      conflict of laws that would require the application of
                      the laws of any other jurisdiction. Each of the parties
                      hereto irrevocably and unconditionally consents to
                      submit to the jurisdiction of the courts of the State of
                      Minnesota for any litigation arising out of or relating
                      to this Agreement and the transactions contemplated
                      hereby and agrees not to commence any litigation
                      relating thereto except in such courts.

               14.    Amendment and Waiver. No amendment of any provision of
                      this Agreement shall be effective, unless the same shall
                      be in writing and signed by the parties hereto. Any
                      failure of any party to comply with any obligation,
                      agreement or condition hereunder may only be waived in
                      writing by the other parties, but such waiver shall not
                      operate as a waiver of, or estoppel with respect to, any
                      subsequent or other failure. No failure by any party to
                      take any action with respect to any breach of this
                      Agreement or default by another party shall constitute a
                      waiver of such party's right to enforce any provision
                      hereof or to take any such action.

               15.    Severability. The invalidity, illegality or
                      unenforceability of any particular provision of this
                      Agreement shall not affect the other provisions hereof
                      and this Agreement shall be construed in all respects as
                      if such invalid, illegal or unenforceable provisions
                      were omitted.

               16.    Force Majeure. The Escrow Agent shall not be responsible
                      for delays or failures in performance resulting from
                      acts beyond its control. Such acts shall include but not
                      be limited to acts of God, strikes, lockouts, riots,
                      acts of war, epidemics, governmental regulations
                      superimposed after the fact, fire, communication line
                      failures, computer viruses, power failures, earthquakes
                      or other disasters.

               17.    Authorized Signers: Unless otherwise notified, the
                      authorized signer of notices to the Escrow Agent are
                      Thomas M. Donnelly for Seller and Lily Guse for
                      Purchaser.


<PAGE>

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


                                              Private Bank Minnesota
                                                 as Escrow Agent


                                              By: /s/ Thomas E. Cardle
                                                  ----------------------------
                                              Name:  Thomas E. Cardle
                                              Title: Vice President


                                              Thalveg Data Flow LLC


                                              By: /s/ Julia Ceffalo
                                                  ----------------------------
                                              Name:  Julia Ceffalo
                                              Title: Authorized Person


                                              Net Perceptions, Inc.


                                              By: /s/ Thomas M. Donnelly
                                                  ----------------------------
                                              Name:  Thomas M. Donnelly
                                              Title: President


<PAGE>


                                                                  Exhibit 99.1


Contact:
Tom Donnelly
President and Chief Financial Officer
Net Perceptions, Inc.
952-842-5400
tdonnelly@netperceptions.com



      Net Perceptions' Board Rejects Obsidian Exchange Offer; Intends to
             File Revised Preliminary Proxy Materials For Plan of
           Liquidation; Announces Agreement to Sell Patent Portfolio

MINNEAPOLIS - Net Perceptions, Inc. (Nasdaq: NETP) announced that after
careful consideration, including a thorough review with independent financial
and legal advisors, its board of directors has unanimously determined that
Obsidian Enterprises, Inc.'s unsolicited exchange offer for all outstanding
shares of Net Perceptions common stock is financially inadequate and not in
the best interests of Net Perceptions' shareholders. Accordingly, the Net
Perceptions' board of directors urges stockholders to reject Obsidian's offer
and not tender their shares.

In making its recommendation, Net Perceptions' board of directors considered,
among other things:

o    The opinion of its financial advisor, Candlewood Partners, LLC, delivered
     to the board of directors on December 30, 2003, that, as of that date,
     the consideration offered in the Exchange Offer was inadequate from a
     financial point of view to the Company's stockholders, other than
     Obsidian and its affiliates;

o    The liquidation analysis prepared by Candlewood Partners reflecting
     estimated cash distributions pursuant to the plan of liquidation in the
     range of $.41 to $.45 per share. In this connection, the board
     unanimously concluded that, assuming there were no developments, events
     or circumstances which would result in an adverse change to the results
     of the Candlewood liquidation analysis, and assuming the cash
     consideration payable to the Company under the patent portfolio sale
     agreement and the non-exclusive source code license agreement referred to
     below is received by the Company as reflected in Candlewood Partners'
     liquidation analysis, an initial distribution estimated to be
     approximately $.40 per share could be made to stockholders shortly after
     stockholder approval and adoption of the plan of liquidation previously
     adopted by the board of directors;

o    Candlewood's financial analysis of Obsidian and the exchange offer;

o    In the view of Candlewood, the large number of shares of Obsidian common
     stock that would be received by the Company's stockholders if the
     exchange offer and proposed subsequent merger were consummated, combined
     with the small average trading volume of Obsidian common stock,
     highlights the potential difficulty of selling the shares of Obsidian
     common stock that would be received in the exchange offer and such
     subsequent merger; and

o    The fact that Obsidian's exchange offer is highly conditional, which
     results in significant uncertainty that the offer will be consummated.

Additional information with respect to the board's decision and its actions is
contained in a Schedule 14D-9 which has been filed with the Securities and
Exchange Commission (SEC) and will be mailed to the Company's stockholders.

The Company said that its board of directors continues to believe that
implementing the plan of liquidation adopted by the board on October 21, 2003
is the best available alternative at this time. Accordingly, and in order to
move forward with the SEC review process so as to minimize further delay in
providing liquidity to stockholders, the Company expects to file with the SEC
as soon as practicable a revised preliminary proxy statement relating to a
special meeting of stockholders at which the plan of liquidation would be
voted upon. A new date for that meeting, which had previously been scheduled
for December 23, 2003, has not yet been fixed. The Company also said that,
while it intends to continue at this time to pursue completion of the SEC
review process and stockholder approval of the plan of liquidation, it also
expected to continue discussions with potential acquirers who are willing to
promptly and diligently pursue, in a manner consistent with the Company's
objective of minimizing cash expenses, a definitive agreement to acquire the
Company on terms which would provide substantial transaction certainty and
higher realizable value to stockholders than implementing the plan of
liquidation.

Separately, the Company announced that it has entered into an agreement with
Thalveg Data Flow LLC to sell to Thalveg Net Perceptions' patent portfolio for
a purchase price of $1.8 million. The agreement includes a royalty-free
license back to Net Perceptions under the patents, patent licenses and pending
patent applications being transferred. The transaction does not involve any
other intellectual property rights or other assets of Net Perceptions,
including its proprietary software products, which remain with Net
Perceptions. Consummation of the transaction is subject to stockholder
approval as part of the previously announced Plan of Complete Liquidation and
Dissolution or otherwise. A copy of the agreement is being filed today with
the SEC as an exhibit to a current report on Form 8-K, and the foregoing
description of the agreement is qualified in its entirety by reference to such
copy. Finally, the Company said that it had granted to a software company a
non-exclusive source code license to a portion of the Company's intellectual
property for a cash payment of $325,000. Under the license agreement, the
Company will provide certain consulting and support services to the licensee
for additional cash payments totaling $75,000.

Additional Information About the Plan of Liquidation and Where to Find It
-------------------------------------------------------------------------

In connection with the proposed plan of complete liquidation and dissolution,
on November 4, 2003, the Company filed with the Securities and Exchange
Commission (SEC) preliminary forms of, and may file with the SEC revised
preliminary and definitive forms of, a proxy statement and other relevant
materials. SECURITY HOLDERS OF THE COMPANY SHOULD READ THE APPLICABLE PROXY
STATEMENT AND THE OTHER RELEVANT MATERIALS BECAUSE THEY CONTAIN OR WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PLAN OF LIQUIDATION.
Investors and security holders may obtain a copy of the applicable proxy
statement and such other relevant materials (when and if they become
available), and any other documents filed by the Company with the SEC, for
free at the SEC's web site at www.sec.gov, or for free from the Company by
directing a request to: Net Perceptions, Inc., 7700 France Avenue South,
Edina, Minnesota 55435, Attention: President.

The Company and its executive officers and directors may be deemed to be
participants in the solicitation of proxies from the Company's stockholders
with respect to the proposed Plan of Complete Liquidation and Dissolution.
Information regarding the direct and indirect interests of the Company's
executive officers and directors in the proposed Plan of Complete Liquidation
and Dissolution is included in the preliminary form of, and will be included
in any revised preliminary and definitive form of, the proxy statement filed
with the SEC in connection with such proposed Plan.
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{"company-data": {"conformed-name": "NET PERCEPTIONS INC", "cik": "0001078203", "assigned-sic": "7372", "irs-number": "411844584", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-25781", "film-number": "031079238"}, "business-address": {"street1": "7700 FRANCE AVE SOUTH", "city": "EDINA", "state": "MN", "zip": "55435", "phone": "6129031270"}, "mail-address": {"street1": "7700 FRANCE AVE SOUTH", "city": "EDINA", "state": "MN", "zip": "55435"}}
SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 8-K
                                CURRENT REPORT

                    Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

                               December 31, 2003
                       (Date of earliest event reported)

                             Net Perceptions, Inc.
              (Exact Name of Registrant as Specified in Charter)

        Delaware                       000-25781              41-1844584
--------------------------------   ---------------------  --------------------
(State or Other Jurisdiction of    (Commission File No.)    (IRS Employer
      Incorporation)                                        Identification No.)

               7700 France Avenue South, Edina, Minnesota 55435
         -----------------------------------------------------------
         (Address of Principal Executive Offices, Including Zip Code)

                                (952) 842-5000
              ---------------------------------------------------
             (Registrant's telephone number, including area code)

-------------------------------------------------------------------------------
         (Former Name or Former Address, If Changed Since Last Report)
Item 5.  Other Events and Required FD Disclosure.

         On December 31, 2003, Net Perceptions, Inc. (the "Company") issued a
press release announcing, among other things, that it has entered into a
Patent Purchase Agreement (the "Patent Agreement") with Thalveg Data Flow LLC
("Thalveg") to sell to Thalveg the Company's patent portfolio for a purchase
price of $1.8 million. The Patent Agreement includes a royalty-free license
back to the Company under the patents, patent licenses and pending patent
applications being transferred. The transaction does not involve any other
intellectual property rights or other assets of the Company, including its
proprietary software products, which remain with the Company. Pursuant to the
Patent Agreement, Thalveg and the Company have entered into an Escrow
Agreement with Private Bank Minnesota providing for the escrow of a deposit of
$900,000 which is creditable against the purchase price at closing.
Consummation of the transaction is subject to stockholder approval as part of
the previously announced Plan of Complete Liquidation and Dissolution or
otherwise. The press release also announced that the Company's Board of
Directors has unanimously determined that Obsidian Enterprises, Inc.'s
unsolicited exchange offer for all outstanding shares of Net Perceptions
common stock is financially inadequate and not in the best interests of Net
Perceptions' shareholders and, accordingly, that the Board urges stockholders
to reject Obsidian's offer and not tender their shares.

         The foregoing summary of the Patent Agreement and the Escrow
Agreement is subject to, and qualified in its entirety by, the Patent
Agreement, the Escrow Agreement and the press release dated December 31, 2003,
issued by the Company, attached as exhibits 2.1, 2.2 and 99.1, respectively,
and incorporated herein by reference.

Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits.

(c)      Exhibits

2.1      Patent Purchase Agreement between Thalveg Data Flow LLC and Net
         Perceptions, Inc. dated December 30, 2003.

2.2      Escrow Agreement among Thalveg Data Flow LLC, Net Perceptions, Inc.
         and Private Bank Minnesota dated December 30, 2003.

99.1     Press Release dated December 31, 2003.
SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                                 NET PERCEPTIONS, INC.

                                                 By: /s/ Thomas M. Donnelly
                                                     --------------------------
Date: December 31, 2003                              Thomas M. Donnelly
                                                     President
EXHIBIT INDEX

Exhibit No.       Description
-----------       -----------

2.1               Patent Purchase Agreement between Thalveg Data Flow LLC and
                  Net Perceptions, Inc. dated December 30, 2003.

2.2               Escrow Agreement among Thalveg Data Flow LLC, Net
                  Perceptions, Inc. and Private Bank Minnesota dated December
                  30, 2003.

99.1              Press Release dated December 31, 2003.
Exhibit 2.1

                           PATENT PURCHASE AGREEMENT

         This PATENT PURCHASE AGREEMENT ("Agreement") is entered into on
December 30, 2003 ("Effective Date") by and between Thalveg Data Flow LLC a
Delaware limited liability company, with an office at 171 Main St. #271, Los
Altos, California 94022 ("Purchaser"), and Net Perceptions, Inc., a Delaware
corporation, with an office at 7700 France Avenue South, Endina, Minnesota
55345 ("Seller"). The parties hereby agree as follows.

1.       BACKGROUND

1.1      Seller owns certain United States Letters Patents and applications
         therefor and related foreign patents and applications.

1.2      Seller wishes to sell its right, title and interest in such patents
         and applications to Purchaser.

1.3      Purchaser wishes to purchase such patents and applications.

2.       DEFINITIONS

2.1      "Assignment Agreements" means the agreements assigning ownership of
         the Patents from the inventors and/or prior owners to Seller.

2.2      "Licensee" shall mean Seller and any entity to whom the license
         granted in Section 7.1 is transferred pursuant to Section 7.2.

2.3      "List of Prosecution Counsel" means the names and addresses of
         prosecution counsel who prosecuted the Patents and who are currently
         handling Patent applications.

2.4      "Patents" means those patents and applications listed in Exhibit A
         hereto, and all reissues, reexaminations, extensions, continuations,
         continuations in part, continuing prosecution applications, and
         divisions of such patents and applications; provisional patent
         applications that are or will be continuations or continuations in
         part of such patents and applications; and foreign counterparts to
         any of the foregoing including without limitation utility models.

2.5      "Plan of Liquidation" shall mean the Plan of Complete Liquidation and
         Dissolution attached as Exhibit A to Seller's Preliminary Proxy
         statement dated November 4, 2003, as amended from time to time.

2.6      "Requisite Stockholder Approval" shall mean approval by the requisite
         stockholder vote of the stockholders of Seller of (i) the Plan of
         Liquidation or (ii) this Agreement and the transactions contemplated
         hereby, whether (in the case of this clause (ii)) by such requisite
         vote approving and adopting a merger agreement which provides for the
         transfer of patents pursuant to this Agreement, or by separate vote.

3.       CLOSING CONDITIONS AND PAYMENT

3.1      The obligation of Seller to transfer the Patents pursuant to Section
         4 and the obligation of Purchaser to make the payment specified in
         Section 3.4 are contingent upon (a) receipt of the Requisite
         Stockholder Approval and (b) the Amendment 2 to the License
         Agreement, as defined below, which was executed and fully effective
         prior to the date hereof and is attached as Exhibit C, has not been
         terminated or amended.

3.2      The total purchase price payable by Purchaser for the transfer of
         patents pursuant to Section 4 by Seller shall be one million eight
         hundred thousand dollars ($1,800,000) payable as set forth in
         Sections 3.3 and 3.4.

3.3      Upon the execution of this Agreement, Purchaser shall pay to Private
         Bank Minnesota (the "Escrow Agent") nine hundred thousand dollars
         ($900,000) (the "Deposit" and, together with any interest earned
         thereon, the "Deposit Amount") by wire transfer of immediately
         available funds to an account designated by the Escrow Agent. The
         Deposit Amount will be held by the Escrow Agent pursuant to the terms
         of an Escrow Agreement by and among the Escrow Agent, Purchaser and
         Seller in the form of Exhibit D hereto which is being executed and
         delivered concurrently with the execution and delivery of this
         Agreement. If Purchaser breaches this Agreement by failing to timely
         make the payment specified in Section 3.4, in addition to any other
         remedies Seller may have, the Deposit Amount shall be transferred to
         Seller within two business days after the breach, and the parties
         hereby agree to instruct the Escrow Agent to make such transfer. If
         this Agreement is terminated pursuant to Section 8, the Deposit
         Amount will be transferred to Purchaser within two business days
         after any such termination, and the parties hereby agree to instruct
         the Escrow Agent to make such transfer.

3.4      Two business days after the satisfaction of the conditions set forth
         in Section 3.1, Purchaser shall pay to Seller the amount of one
         million eight hundred thousand dollars($1,800,000), minus the amount
         of the Deposit Amount which has been received by Seller from the
         Escrow Agent, by wire transfer of immediately available funds to an
         account designated by Seller (the date and time of such payment by
         Seller being hereafter referred to as the "Closing Date").
         Immediately prior to the Closing Date, the parties hereto agree to
         instruct the Escrow Agent to deliver the Deposit Amount to Seller.

4.       TRANSFER OF PATENTS AND LICENSE AGREEMENT

4.1      Patent Assignment. Effective on the Closing Date, Seller hereby
         sells, assigns, transfers and conveys to Purchaser all right, title
         and interest it has in and to the Patents and all inventions and
         discoveries described therein, including without limitation, all
         rights of Seller under the Assignment Agreements, and all rights of
         Seller to collect royalties under such Patents.

4.2      Assignment of Causes of Action. Effective on the Closing Date, Seller
         hereby sells, assigns, transfers and conveys to Purchaser all right,
         title and interest it has in and to all causes of action and
         enforcement rights, whether currently pending, filed, or otherwise,
         in respect of the Patents and all inventions and discoveries
         described therein, including without limitation all rights to pursue
         damages, injunctive relief and other remedies for past, current and
         future infringement of the Patents.

4.3      License Agreement. Effective on the Closing Date seller hereby
         assigns to Purchaser the License Agreement between Seller and the
         Regents of the University of Minnesota effective July 31, 1996, as
         amended (the "License Agreement"), and Purchaser agrees to accept
         such assignment and, beginning on the Closing Date, to perform all
         the obligations of Seller under the License Agreement. (This
         assignment includes a license under United States Patents numbered
         5,842,199; 6,016,475; and 6,108,493, and pending U.S. patent
         application 09/571,020. )

5.       ADDITIONAL OBLIGATIONS

5.1      Delivery. On the Closing Date, seller shall deliver to Purchaser an
         executed copy of the Assignment of Patent Rights, substantially in
         the form of in Exhibit B hereto, the Assignment Agreements, the List
         of Prosecution Counsel, and all files and original documents owned or
         controlled by Seller (including without limitation Letters Patents)
         relating to the Patents including, without limitation, all
         prosecution files for pending patent applications included in the
         Patents, and its own files relating to the issued Patents.

5.2      Further Cooperation. From and after the Closing Date, at the
         reasonable request of Purchaser, Seller shall execute and deliver
         such other instruments and do and perform such other acts and things
         as may be necessary or desirable for completing the consummation of
         the transactions contemplated hereby, including without limitation
         execution, acknowledgment and recordation of other such papers, and
         using commercially reasonable efforts to obtain the same from the
         respective inventors, as necessary or desirable for fully perfecting
         and conveying unto Purchaser the benefit of the transactions
         contemplated hereby. In the event a foreign counterpart,
         continuation, or divisional is omitted from the definition of
         Patents, Seller shall use commercially reasonable efforts to include
         the omitted foreign counterpart, continuation, or divisional within
         the scope and coverage of this Agreement with no additional payment
         by Purchaser.

5.3      Meeting Date. Seller will give Purchaser at least ten (10) days prior
         written notice of the date of the stockholder meeting at which the
         Requisite Stockholder Approval is being sought and as much notice as
         reasonably practical concerning the date or dates of any adjournments
         thereof

6.       REPRESENTATIONS AND WARRANTIES

6.1      Authority. Seller represents and warrants to Purchaser that Seller
         has the right and authority to enter into this Agreement and, if the
         Requisite Stockholder Approval is obtained, to carry out its
         obligations hereunder.

6.2      Title and Contest. Seller represents and warrants to Purchaser that
         (i) it has good and marketable title to the Patents, including
         without limitation all rights, title, and interest in the Patents to
         sue for infringement thereof; (ii) the Patents are free and clear of
         all liens, mortgages, security interests or other encumbrances, and
         restrictions on transfer; (iii) to Seller's knowledge, there are no
         actions, suits, investigations, claims or proceedings threatened,
         pending or in progress relating in any way to the Patents; and (iv)
         there are no existing contracts, agreements, options, commitments,
         proposals, bids, offers, or rights with, to, or in any person to
         acquire any of the Patents.

6.3      Existing Licenses. Except as to such rights and licenses granted in
         connection with the sale, licensing or other disposition of Seller's
         services in the normal cause of business, Seller represents and
         warrants to Purchaser that no rights or licenses have been granted
         under the Patents.

6.4      Restrictions on Rights. Seller represents and warrants to Purchaser
         that Purchaser will not be subject to any covenant not to sue or
         similar restrictions on its enforcement or enjoyment of the Patents
         as a result of the transaction contemplated in this Agreement, or any
         prior transaction related to the Patents.

6.5      Conduct. Seller represents and warrants to Purchaser that, Seller,
         and to Seller's knowledge its representatives, have not intentionally
         engaged in any conduct, or intentionally omitted to perform any
         necessary act, the result of which would invalidate any of the
         Patents or hinder their enforcement, including but not limited to
         misrepresenting Seller's patent rights to a standard-setting
         organization.

6.6      Enforcement. Seller represents and warrants to Purchaser that Seller
         has not put a third party on notice of actual or potential
         infringement of any of the Patents except for the following patents
         on the following dates.

6.7      Patent Office Proceedings. Seller represents and warrants to
         Purchaser that to its knowledge none of the Patents have been or are
         currently involved in any reexamination, reissue, interference
         proceeding, or any similar proceeding and that to its knowledge no
         such proceedings are pending or threatened.

6.8      Fees. Seller represents and warrants to Purchaser that all
         maintenance fees, annuities, and the like due and payable on the
         Patents prior to the Closing Date have been timely paid.

6.9      Consents. Seller represents and warrants to Purchaser that Seller has
         obtained all third party consents, approvals, and/or other
         authorizations required to make the assignments in Section 4.

6.10     Validity and Enforceability. Seller represents and warrants to
         Purchaser that (i) the Patents have never been found invalid or
         unenforceable for any reason in any administrative, arbitration,
         judicial or other proceeding; and (ii) Seller has not received any
         notice from any source alleging that the Patents may be invalid or
         unenforceable.

6.11     Disclaimer of Warranty. Except as explicitly set forth herein, Seller
         disclaims all warranties, express and implied, with respect to the
         subject matter of this agreement. WITHOUT LIMITATION OF THE
         FOREGOING, SELLER DISCLAIMS ALL IMPLIED WARRANTIES OF VALIDITY AND
         NONINFRINGEMENT.

7.       RETAINED RIGHTS

7.1      Grant Under Patent Rights. Effective on the Closing Date, Purchaser
         hereby grants to Seller, under the Patent Rights (as defined in
         Exhibit B hereto), and for the lives thereof, a royalty-free,
         irrevocable, non-exclusive, worldwide right and license to practice
         the methods and to make, have made, use, distribute, lease, sell,
         offer for sale, import, export, develop and otherwise dispose of and
         exploit any products covered by the Patent Rights. This license shall
         apply to the reproduction and subsequent distribution of licensed
         products, in substantially identical form as they are distributed by
         the Seller or by authorized agents of the Seller such as a
         distributor, replicator, VAR or OEM. The parties acknowledge that
         Seller's products, including licensed software products and rights
         under Seller's escrow agreements shall be subject to the exhaustion
         doctrine.

7.2      Limitation on Transferability. This license is not transferable
         except to a purchaser of all, or substantially all, of a Licensee's
         assets, or to a party that by merger or otherwise acquires all, or
         substantially all, of a Licensee's outstanding capital stock. Upon
         such a transaction, this license shall apply only to products covered
         by the Patent Rights to the extent that revenue realized by any
         Licensee from products covered by the Patent Rights does not exceed
         the "Revenue Limitation" in any calendar year. The Revenue Limitation
         shall be Ten Million Dollars ($10,000,000.00) during the calendar
         year of the first such transfer, and shall be increased each
         subsequent year by seven point five percent (7.5%). Purchaser agrees
         to negotiate extensions of the license to cover revenues realized by
         any Licensee in excess of the Revenue Limitation, in good faith.

8.       TERMINATION

8.1      This Agreement may be terminated by the mutual written consent of
         Seller and Purchaser.

8.2      This Agreement may be terminated by either party if the Requisite
         Stockholder Approval is not obtained by March 30, 2004.

8.3      This Agreement may be terminated by either party if at a duly called
         special meeting of Seller's stockholders at which a vote is taken on
         the Plan of Liquidation, on a merger agreement which provides for the
         transfer of patents to Seller pursuant to this Agreement, or
         otherwise with respect to approval of this Agreement and the
         transactions contemplated hereby, the Requisite Stockholder Vote is
         not obtained.

8.4      Seller may terminate this agreement if it enters into a contract with
         another party which Seller's board of directors determines is, in
         combination with a dissolution and liquidation in the case of a sale
         of assets, reasonably likely to result in greater financial return to
         stockholders than the transaction contemplated by this Agreement, in
         combination with a dissolution and liquidation. In the event of such
         a termination, Seller shall pay Purchaser one hundred thousand
         dollars ($100,000) to compensate Purchaser for costs, fees and
         expenses incurred by Purchaser in pursuing this transaction.

9.       MISCELLANEOUS

9.1      Limitation on Consequential Damages. NEITHER PARTY SHALL BE LIABLE TO
         THE OTHER FOR LOSS OF PROFITS, OR ANY SPECIAL, CONSEQUENTIAL OR
         INCIDENTAL DAMAGES, HOWEVER CAUSED, EVEN IF ADVISED OF THE
         POSSIBILITY OF SUCH DAMAGE. THE PARTIES ACKNOWLEDGE THAT THESE
         LIMITATIONS ON POTENTIAL LIABILITIES WERE AN ESSENTIAL ELEMENT IN
         SETTING CONSIDERATION UNDER THIS AGREEMENT.

9.2      Limitation of Liability. PURCHASER'S TOTAL LIABILITY UNDER THIS
         AGREEMENT SHALL BE THE PAYMENT OF FUNDS AS REQUIRED PURSUANT TO
         SECTION 3. THE PARTIES ACKNOWLEDGE THAT THESE LIMITATIONS ON
         POTENTIAL LIABILITIES WERE AN ESSENTIAL ELEMENT IN SETTING
         CONSIDERATION UNDER THIS AGREEMENT.

9.3      Compliance with Laws. Notwithstanding anything contained in this
         Agreement to the contrary, the obligations of the parties shall be
         subject to all laws, present and future, of any government having
         jurisdiction over the parties and this transaction, and to orders,
         regulations, directions or requests of any such government.

9.4      Governing Law. Any claim arising under or relating to this Agreement
         shall be governed by the internal substantive laws of the State of
         New York, without regard to principles of conflict of laws that would
         require the application of the laws of another jurisdiction.

9.5      Jurisdiction. Each party hereby agrees to jurisdiction and venue in
         the courts of the State of Delaware or the Federal courts sitting
         therein for all disputes and litigation arising under or relating to
         this Agreement.

9.6      Entire Agreement. The terms and conditions of this Agreement,
         including its exhibits, constitute the entire agreement between the
         parties with respect to the subject matter hereof, and merges and
         supersedes all prior and contemporaneous agreements, understandings,
         negotiations and discussions. Neither of the parties shall be bound
         by any conditions, definitions, warranties, understandings, or
         representations with respect to the subject matter hereof other than
         as expressly provided herein. The section headings contained in this
         Agreement are for reference purposes only and shall not affect in any
         way the meaning or interpretation of this Agreement. No oral
         explanation or oral information by either party hereto shall alter
         the meaning or interpretation of this Agreement. No amendments or
         modifications shall be effective unless in a writing signed by
         authorized representatives of both parties. These terms and
         conditions will prevail notwithstanding any different, conflicting or
         additional terms and conditions which may appear on any purchase
         order, acknowledgment or other writing not expressly incorporated
         into this Agreement. This Agreement may be executed in separate
         counterparts which, taken together, shall be regarded as one and the
         same instrument. The following exhibits are attached hereto and
         incorporated herein: Exhibit A (entitled "Patent Rights to be
         Assigned"); Exhibit B (entitled "Assignment of Patent Rights").

9.7      Notices: All notices required or permitted to be given hereunder
         shall be in writing, shall make reference to this Agreement, and
         shall be delivered by hand, or dispatched by prepaid air courier or
         by registered or certified airmail, postage prepaid, addressed as
         follows:

If to Seller                                            If to Purchaser
------------                                            ---------------

Net Perceptions, Inc.                                   Thalveg Data Flow LLC
7700 France Avenue South                                171 Main St. #271.
Endina, MN  55345                                       Los Altos, CA  94022

Attn:  President                                        Attn: Managing Director

         Such notices shall be deemed served when received by addressee or, if
         delivery is not accomplished by reason of some fault of the
         addressee, when tendered for delivery. Either party may give written
         notice of a change of address and, after notice of such change has
         been received, any notice or request shall thereafter be given to
         such party at such changed address.

9.8      Relationship of Parties. The parties hereto are independent
         contractors. Neither party has any express or implied right or
         authority to assume or create any obligations on behalf of the other
         or to bind the other to any contract, agreement or undertaking with
         any third party. Nothing in this Agreement shall be construed to
         create a partnership, joint venture, employment or agency
         relationship between Seller and Purchaser.

9.9      Severability. The terms and conditions stated herein are declared to
         be severable. If any paragraph, provision, or clause in this
         Agreement shall be found or be held to be invalid or unenforceable in
         any jurisdiction in which this Agreement is being performed, the
         remainder of this Agreement shall be valid and enforceable and the
         parties shall use good faith to negotiate a substitute, valid and
         enforceable provision which most nearly effects the parties' intent
         in entering into this Agreement.

9.10     Waiver. Failure by either party to enforce any term of this Agreement
         shall not be deemed a waiver of future enforcement of that or any
         other term in this Agreement or any other agreement that may be in
         place between the parties.

9.11     Assignment. The terms and conditions of this Agreement shall inure to
         the benefit of Purchaser, its successors, assigns and other legal
         representatives, and shall be binding upon Seller, its successor,
         assigns and other legal representatives

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

Thalveg Data Flow LLC                                   Net Perceptions

/s/ Julia Ceffalo                                       /s/ Thomas M. Donnelly
-----------------                                       ----------------------
Signature                                               Signature

Julia Ceffalo                                           Thomas M. Donnelly
-------------                                           ------------------
Printed Name                                            Printed Name

Authorized Person                                       President
-----------------                                       ---------
Title                                                   Title

Exhibits A and B to the Patent Purchase Agreement have been omitted pursuant
to Item 601 of Regulation S-K. Exhibit A provides a list of patent rights to
be assigned pursuant to the Patent Purchase Agreement. Exhibit B sets forth a
form of Assignment of Patent Rights to be executed by the Assignor and
delivered to the Assignee at the closing under the Patent Purchase Agreement.
A copy of either exhibit will be furnished supplementally to the Commission
upon request.
Exhibit 2.2

                               ESCROW AGREEMENT

         ESCROW AGREEMENT (this "Agreement"), dated as of December 30, 2003,
by and among Net Perceptions, Inc., a Delaware corporation ("Seller") Thalveg
Data Flow LLC, a Delaware limited liability company ("Purchaser"), and Private
Bank Minnesota ("Escrow Agent").

         WHEREAS, pursuant to a Patent Purchase Agreement dated as of December
30, 2003 (the "PPA"), Purchaser will purchase Seller's patent portfolio; and

         WHEREAS, Section 3.3 of the PPA provides for nine hundred thousand
dollars ($900,000) (the "Escrow Amount") to be delivered to the Escrow Agent
to be held in accordance with the terms thereof and hereof.

         NOW, THEREFORE, in consideration of the premises and the respective
agreements hereinafter set forth, the parties hereto agree as follows:

               1.     Definitions. Capitalized terms used herein but not
                      otherwise defined shall have the meanings ascribed
                      thereto in the PPA.

               2.     Appointment of Escrow Agent. Purchaser and Seller hereby
                      appoint the Escrow Agent to act as escrow agent
                      hereunder, and the Escrow Agent hereby accepts such
                      appointment for the purpose of receiving and disbursing
                      the Escrow Amount in accordance with the terms and
                      conditions set forth herein.

               3.     Delivery of Funds. On the Closing Date, Purchaser will
                      deliver to the Escrow Agent the Escrow Amount to be held
                      by the Escrow Agent in an interest bearing account (the
                      "Escrow Account") in accordance with the terms of this
                      Agreement. The Escrow Amount shall be invested and
                      maintained by the Escrow Agent in accordance with the
                      provisions of Section 4 hereof, and will be disbursed by
                      the Escrow Agent pursuant to the provisions of Section 5
                      hereof. Principal in the Escrow Account during the term
                      of this Agreement and the interest accrued thereon are
                      hereinafter collectively referred to as the "Escrow
                      Funds."

               4.     Investment of Escrow Funds. The Escrow Agent shall
                      invest the Escrow Funds in an interest bearing account
                      or any other investment as directed by Seller and
                      Purchaser in writing.

               5.     Demands for Payment and Release of Escrow Funds. The
                      Escrow Funds shall be disbursed by Escrow Agent (i) as
                      directed by a written notice signed by both Seller and
                      Purchaser or (ii) as directed by a non-appealable court
                      order, issued by a court of competent jurisdiction,
                      providing that such funds be disbursed.

               6.     Termination. This Escrow Agreement shall terminate and
                      be of no further force and effect on the date that no
                      funds remain in the Escrow Account to be disbursed
                      hereunder.

               7.     Rights of the Escrow Agent. The Escrow Agent shall have
                      no duties or responsibilities except those expressly set
                      forth herein.

                      (a)   The Escrow Agent may rely upon any instrument in
                            writing believed in good faith by it to be genuine
                            and sufficient and properly presented and shall
                            not be liable or responsible for any action taken
                            or omitted in accordance with the provisions
                            thereof.

                      (b)   The Escrow Agent shall not be liable or
                            responsible for any act it may do or omit to do
                            except for its gross negligence, bad faith or
                            willful misconduct. The Escrow Agent may consult
                            with counsel and shall be fully protected with
                            respect to any action taken or omitted by it in
                            good faith on written advice of counsel. Under no
                            circumstances shall the Escrow Agent be liable for
                            any special, consequential or punitive damages.

                      (c)   Seller agrees (i) to pay or reimburse the Escrow
                            Agent for its attorney's fees and expenses
                            incurred in connection with the preparation of
                            this Agreement and (ii) to pay the Escrow Agent
                            $1000 within thirty days of the date hereof as
                            compensation for its normal services hereunder.

                      (d)   Purchaser and Seller agree to reimburse the Escrow
                            Agent on demand for all costs and expenses
                            incurred in connection with the administration of
                            this Agreement or the escrow crated hereby or the
                            performance or observance of its duties hereunder
                            which are in excess of its compensation for normal
                            services hereunder, including without limitation,
                            payment of any legal fees and expenses incurred by
                            the Escrow Agent in connection with resolution of
                            any claim by any party hereunder.

                      (e)   Purchaser and Seller covenant and agree to
                            indemnity the Escrow Agent (and its directors,
                            officers and employees) and hold it (and such
                            directors, officers and employees) harmless from
                            and against any loss, liability, damage, cost and
                            expense of any nature incurred by the Escrow Agent
                            arising out of or in connection with this
                            Agreement or with the administration of its duties
                            hereunder, including but not limited to attorney's
                            fees and other costs and expenses of defending or
                            preparing to defend against any claim of liability
                            unless and except to the extent such loss,
                            liability, damage, cost and expense shall be
                            caused by the Escrow Agent's gross negligence, bad
                            faith, or willful misconduct. The foregoing
                            indemnification and agreement to hold harmless
                            shall survive the termination of this Agreement.

                      (f)   Amounts payable to the Escrow Agent shall be paid
                            by Seller.

               8.     Resignation and Removal.

                      (a)   The Escrow Agent may resign at any time by giving
                            thirty (30) days prior written notice to Purchaser
                            and Seller. Purchaser and Seller may remove the
                            Escrow Agent by jointly giving thirty (30) days
                            prior written notice to the Escrow Agent. Such
                            removal shall take effect upon delivery of the
                            Escrow Funds to a successor escrow agent
                            designated in writing by Purchaser and Seller, and
                            the Escrow Agent shall thereupon be discharged
                            from all obligations under this Agreement, and
                            shall have no further duties or responsibilities
                            in connection herewith. The obligations of
                            Purchaser and Seller to the Escrow Agent and the
                            rights of the Escrow Agent hereunder shall survive
                            termination of this Agreement or the removal of
                            the Escrow Agent.

                      (b)   In the event that the Escrow Agent submits a
                            notice of resignation, its only duty, until a
                            successor Escrow Agent shall have been appointed
                            and shall have accepted such appointment, shall be
                            to hold, invest and dispose of the Escrow Funds in
                            accordance with this Agreement, but without regard
                            to any notices, requests, instructions, demands or
                            the like received by it from the other parties
                            hereto, unless the same is a direction that the
                            Escrow Funds be paid or delivered in their
                            entirety out of the Escrow Account.

               9.     Section Headings. The section headings contained in this
                      Agreement are for reference purposes only and shall not
                      affect on any way the meaning or interpretation of this
                      Agreement.

               10.    Notices and Wires. Any notice, request, instruction or
                      other document to be given hereunder by any party to
                      another party shall be in writing and shall be deemed
                      given when delivered personally, upon receipt of a
                      transmission confirmation (with a confirming copy sent
                      by overnight courier) if sent by facsimile or like
                      transmission, and on the next business day when sent by
                      Federal Express, United Parcel Service, Express Mail, or
                      other reputable overnight courier, to the party at the
                      following addresses (or such other addresses for a party
                      as shall be specified by like notice); provided that any
                      notice required to be delivered to the Escrow Agent
                      hereunder shall be deemed delivered only when actually
                      received by the Escrow Agent:

                      (a)   if to Seller, to:

                      Net Perceptions, Inc.
                      7700 France Avenue South
                      Edina, MN  55435
                      Attention: President
                      Phone: (952) 842-5400
                      Facsimile: (952) 842-5005

                      with a copy to:

                      Skadden, Arps, Slate, Meagher & Flom LLP
                      One Beacon Street
                      Boston, Massachusetts 02108
                      Attention: Kent A. Coit, Esquire
                      Phone: (617) 573-4835
                      Facsimile:  (617) 573-4822

                      (b)   if to a Purchaser, to:

                      Thalveg Data Flow LLC
                      171 Main Street #271
                      Los Altos, California  94022
                      Attention:  Managing Director
                      Phone: (425) 467-2300
                      Facsimile: (425) 467-2350

                      (c)   if to the Escrow Agent:

                      Private Bank Minnesota
                      222 South 9th Street, Suite 3800
                      Minneapolis, MN 55402
                      Attention:  Thomas E. Cardle
                      Phone: (612) 305-4227
                      Facsimile:  (612) 321-0894

         A copy of any notice, request, demand, certificate or other
communication given hereunder by any party shall be delivered to each other
party to this Agreement as well as to the addressee at the same time as it is
given to the addressee.

               11.    Counterparts. This Agreement may be executed in two or
                      more counterparts, each of which shall be deemed an
                      original, but all of which together shall constitute one
                      and the same instrument.

               12.    Assignment. This Agreement shall inure to the benefit of
                      and be binding upon the parties hereto and their
                      respective heirs, executors, personal representatives,
                      successors and assigns; provided that any assignment of
                      this Agreement or the rights hereunder by any party
                      hereto without the written consent of the other parties
                      shall be void. Nothing in this Agreement, express or
                      implied, is intended to confer upon any other person any
                      rights or remedies under or by reason of this Agreement.

               13.    Governing Law. This Agreement shall be governed by and
                      construed and enforced in accordance with the laws of
                      the State of Minnesota without regard to the rules of
                      conflict of laws that would require the application of
                      the laws of any other jurisdiction. Each of the parties
                      hereto irrevocably and unconditionally consents to
                      submit to the jurisdiction of the courts of the State of
                      Minnesota for any litigation arising out of or relating
                      to this Agreement and the transactions contemplated
                      hereby and agrees not to commence any litigation
                      relating thereto except in such courts.

               14.    Amendment and Waiver. No amendment of any provision of
                      this Agreement shall be effective, unless the same shall
                      be in writing and signed by the parties hereto. Any
                      failure of any party to comply with any obligation,
                      agreement or condition hereunder may only be waived in
                      writing by the other parties, but such waiver shall not
                      operate as a waiver of, or estoppel with respect to, any
                      subsequent or other failure. No failure by any party to
                      take any action with respect to any breach of this
                      Agreement or default by another party shall constitute a
                      waiver of such party's right to enforce any provision
                      hereof or to take any such action.

               15.    Severability. The invalidity, illegality or
                      unenforceability of any particular provision of this
                      Agreement shall not affect the other provisions hereof
                      and this Agreement shall be construed in all respects as
                      if such invalid, illegal or unenforceable provisions
                      were omitted.

               16.    Force Majeure. The Escrow Agent shall not be responsible
                      for delays or failures in performance resulting from
                      acts beyond its control. Such acts shall include but not
                      be limited to acts of God, strikes, lockouts, riots,
                      acts of war, epidemics, governmental regulations
                      superimposed after the fact, fire, communication line
                      failures, computer viruses, power failures, earthquakes
                      or other disasters.

               17.    Authorized Signers: Unless otherwise notified, the
                      authorized signer of notices to the Escrow Agent are
                      Thomas M. Donnelly for Seller and Lily Guse for
                      Purchaser.
IN WITNESS WHEREOF, the parties hereto have duly executed this Escrow
Agreement as of the date first above written.

                                              Private Bank Minnesota
                                                 as Escrow Agent

                                              By: /s/ Thomas E. Cardle
                                                  ----------------------------
                                              Name:  Thomas E. Cardle
                                              Title: Vice President

                                              Thalveg Data Flow LLC

                                              By: /s/ Julia Ceffalo
                                                  ----------------------------
                                              Name:  Julia Ceffalo
                                              Title: Authorized Person

                                              Net Perceptions, Inc.

                                              By: /s/ Thomas M. Donnelly
                                                  ----------------------------
                                              Name:  Thomas M. Donnelly
                                              Title: President
Exhibit 99.1

Contact:
Tom Donnelly
President and Chief Financial Officer
Net Perceptions, Inc.
952-842-5400
tdonnelly@netperceptions.com

      Net Perceptions' Board Rejects Obsidian Exchange Offer; Intends to
             File Revised Preliminary Proxy Materials For Plan of
           Liquidation; Announces Agreement to Sell Patent Portfolio

MINNEAPOLIS - Net Perceptions, Inc. (Nasdaq: NETP) announced that after
careful consideration, including a thorough review with independent financial
and legal advisors, its board of directors has unanimously determined that
Obsidian Enterprises, Inc.'s unsolicited exchange offer for all outstanding
shares of Net Perceptions common stock is financially inadequate and not in
the best interests of Net Perceptions' shareholders. Accordingly, the Net
Perceptions' board of directors urges stockholders to reject Obsidian's offer
and not tender their shares.

In making its recommendation, Net Perceptions' board of directors considered,
among other things:

o    The opinion of its financial advisor, Candlewood Partners, LLC, delivered
     to the board of directors on December 30, 2003, that, as of that date,
     the consideration offered in the Exchange Offer was inadequate from a
     financial point of view to the Company's stockholders, other than
     Obsidian and its affiliates;

o    The liquidation analysis prepared by Candlewood Partners reflecting
     estimated cash distributions pursuant to the plan of liquidation in the
     range of $.41 to $.45 per share. In this connection, the board
     unanimously concluded that, assuming there were no developments, events
     or circumstances which would result in an adverse change to the results
     of the Candlewood liquidation analysis, and assuming the cash
     consideration payable to the Company under the patent portfolio sale
     agreement and the non-exclusive source code license agreement referred to
     below is received by the Company as reflected in Candlewood Partners'
     liquidation analysis, an initial distribution estimated to be
     approximately $.40 per share could be made to stockholders shortly after
     stockholder approval and adoption of the plan of liquidation previously
     adopted by the board of directors;

o    Candlewood's financial analysis of Obsidian and the exchange offer;

o    In the view of Candlewood, the large number of shares of Obsidian common
     stock that would be received by the Company's stockholders if the
     exchange offer and proposed subsequent merger were consummated, combined
     with the small average trading volume of Obsidian common stock,
     highlights the potential difficulty of selling the shares of Obsidian
     common stock that would be received in the exchange offer and such
     subsequent merger; and

o    The fact that Obsidian's exchange offer is highly conditional, which
     results in significant uncertainty that the offer will be consummated.

Additional information with respect to the board's decision and its actions is
contained in a Schedule 14D-9 which has been filed with the Securities and
Exchange Commission (SEC) and will be mailed to the Company's stockholders.

The Company said that its board of directors continues to believe that
implementing the plan of liquidation adopted by the board on October 21, 2003
is the best available alternative at this time. Accordingly, and in order to
move forward with the SEC review process so as to minimize further delay in
providing liquidity to stockholders, the Company expects to file with the SEC
as soon as practicable a revised preliminary proxy statement relating to a
special meeting of stockholders at which the plan of liquidation would be
voted upon. A new date for that meeting, which had previously been scheduled
for December 23, 2003, has not yet been fixed. The Company also said that,
while it intends to continue at this time to pursue completion of the SEC
review process and stockholder approval of the plan of liquidation, it also
expected to continue discussions with potential acquirers who are willing to
promptly and diligently pursue, in a manner consistent with the Company's
objective of minimizing cash expenses, a definitive agreement to acquire the
Company on terms which would provide substantial transaction certainty and
higher realizable value to stockholders than implementing the plan of
liquidation.

Separately, the Company announced that it has entered into an agreement with
Thalveg Data Flow LLC to sell to Thalveg Net Perceptions' patent portfolio for
a purchase price of $1.8 million. The agreement includes a royalty-free
license back to Net Perceptions under the patents, patent licenses and pending
patent applications being transferred. The transaction does not involve any
other intellectual property rights or other assets of Net Perceptions,
including its proprietary software products, which remain with Net
Perceptions. Consummation of the transaction is subject to stockholder
approval as part of the previously announced Plan of Complete Liquidation and
Dissolution or otherwise. A copy of the agreement is being filed today with
the SEC as an exhibit to a current report on Form 8-K, and the foregoing
description of the agreement is qualified in its entirety by reference to such
copy. Finally, the Company said that it had granted to a software company a
non-exclusive source code license to a portion of the Company's intellectual
property for a cash payment of $325,000. Under the license agreement, the
Company will provide certain consulting and support services to the licensee
for additional cash payments totaling $75,000.

Additional Information About the Plan of Liquidation and Where to Find It
-------------------------------------------------------------------------

In connection with the proposed plan of complete liquidation and dissolution,
on November 4, 2003, the Company filed with the Securities and Exchange
Commission (SEC) preliminary forms of, and may file with the SEC revised
preliminary and definitive forms of, a proxy statement and other relevant
materials. SECURITY HOLDERS OF THE COMPANY SHOULD READ THE APPLICABLE PROXY
STATEMENT AND THE OTHER RELEVANT MATERIALS BECAUSE THEY CONTAIN OR WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PLAN OF LIQUIDATION.
Investors and security holders may obtain a copy of the applicable proxy
statement and such other relevant materials (when and if they become
available), and any other documents filed by the Company with the SEC, for
free at the SEC's web site at www.sec.gov, or for free from the Company by
directing a request to: Net Perceptions, Inc., 7700 France Avenue South,
Edina, Minnesota 55435, Attention: President.

The Company and its executive officers and directors may be deemed to be
participants in the solicitation of proxies from the Company's stockholders
with respect to the proposed Plan of Complete Liquidation and Dissolution.
Information regarding the direct and indirect interests of the Company's
executive officers and directors in the proposed Plan of Complete Liquidation
and Dissolution is included in the preliminary form of, and will be included
in any revised preliminary and definitive form of, the proxy statement filed
with the SEC in connection with such proposed Plan.