NETWORKCOMPUTING DEVICES, INC.

NETWORK COMPUTING DEVICES, INC.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION UNDER SUCH ACT AND THE RULES AND REGULATIONS THEREUNDER. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

WARRANT CERTIFICATE REPRESENTING

WARRANTS TO PURCHASE COMMON STOCK OF

NETWORK COMPUTING DEVICES, INC.

FOR VALUE RECEIVED, NETWORK COMPUTING DEVICES, INC., a corporation organized and existing under the laws of Delaware (the "Company"), hereby certifies that the holder identified on the final page (the “Holder”) of this Warrant (the "Warrants", and each right to purchase a share of Common Stock, a "Warrant") is entitled, subject to the terms set forth below, at any time or from time to time hereafter, but not later than August 29, 2006, to purchase from the Company fully paid and non-assessable shares of Common Stock  in the amount set forth opposite the Holder’s name. These Warrants and all rights hereunder, to the extent such rights shall not have been exercised, shall terminate and become null and void at 5:00 p.m., New York time, on August 29, 2006.

DEFINITIONS

The terms defined below, whenever used in this Warrant, shall have the respective meanings hereinafter specified.  Whenever used in this Warrant, any noun or pronoun shall be deemed to include both the singular and plural and to cover all genders.

"Assignment" means the form of Assignment appearing at the end of this Warrant.

"Common Stock" means the Company's authorized Common Stock, $.001 par value.

"Commission" means the United States Securities and Exchange Commis­sion, or any other Federal agency then administering the Securities Act.

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and any similar or successor U.S. federal statute, and the rules and regulations of the Com­mission (or its successor) thereunder, all as the same shall be in effect at the time.

"Exercise Period" means the period commencing on the date hereof and terminating at 5:00 p.m., New York time, on August 29, 2006.

"Exercise Price" means the price per share of Common Stock set forth in Section 1A hereof, as such price may be adjusted from time to time pursuant to Section 1.

"Form of Subscription" means the Form of Subscription appearing at the end of this Warrant.

"Holder" means the person in whose name this Warrant is registered on the books of the Company maintained for such purpose.

"Securities Act" means the Securities Act of 1933, as amended, or any similar U.S. Federal statute, and the rules and regu­lations of the Commission promulgated thereunder, all as the same shall be in effect from time to time.

SECTION 1.           Exercise of Warrants: Term; Exercise Price;

Adjustments of Exercise Price

1A.          Exercise of Warrants.  Subject to the condi­tions of this Section 1, the holder of any Warrant at the holder's option may exercise such holder's rights under all or any part of the Warrants to purchase shares of the Company's Common Stock (the "Warrant Shares") at any time during the Exercise Period at a price (the "Exercise Price") equal to Fifty Cents ($.50) per share, subject to adjustment as hereinafter provided.

1B.          Adjustment of Exercise Price for Other Transactions.  If and whenever after the date hereof the Company shall issue or sell any shares of its Common Stock for a consideration per share less than the Exercise Price in effect immediately prior to the time of such issue or sale then, forthwith upon such issue or sale, the Exercise Price with respect to the exercise of any Warrant subsequent to such event shall be reduced to the lower of the prices (calculated to the nearest cent) determined as follows:

(a)           by dividing (1) an amount equal to the sum of (A) the aggregate number of shares of Common Stock outstanding immediately prior to such issue or sale multiplied by the then existing Exercise Price, and (B) the consideration, if any, received by the Company upon such issue or sale, by (2) the aggregate number of shares of Common Stock of all classes outstanding immediately after such issue or sale; and

(b)           by multiplying the Exercise Price in effect immediately prior to the time of such issue or sale by a fraction, the numerator of which shall be (1) the sum of (A) the aggregate number of shares of Common Stock outstand­ing immediately prior to such issue or sale multiplied by the Market Price immediately prior to such issue or sale plus (B) the consideration received by the Company upon such issue or sale; and the denominator of which shall be (2) the product of (A) the aggregate number of shares of Common Stock of all classes outstanding immediately after such issue or sale, multiplied by (B) the Market Price immediately prior to such issue or sale.

No adjustment of the Exercise Price, however, shall be made in an amount less than 1% of the Exercise Price, but any such lesser adjustment shall be carried forward and shall be made at the time of and together with the next subsequent adjust­ment, provided, however, upon the exercise of the Warrants, the Company shall make all necessary adjustments not theretofore made to the Exercise Price up to and including the date upon which the Warrant is exercised.

1C.          Subdivision or Combination of Stock.  In case the Company shall at any time subdivide its outstanding shares of Common Stock into a greater number of shares, the number of shares issuable on exercise of this Warrant shall be proportionately increased, and conversely, in case the outstand­ing shares of Common Stock of the Company shall be combined into a smaller number of shares, the number of shares issuable on exercise of this Warrant shall be proportionately reduced.

1D.          Changes in Common Stock.  If any capital reorganization or reclassification of the capital stock of the Company, or consolidation or merger of the Company with another corporation, or sale, transfer or other disposition of all or substantially all of its properties to another corpora­tion, shall be effected, then, as a condition of such reorga­nization, reclassification, consolidation, merger, sale, transfer or other disposition, lawful and adequate provision shall be made whereby each holder of Warrants shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the shares of the Common Stock of the Company immediately thereto­fore issuable upon exercise of the Warrants, such shares of stock, securities or properties, if any, as may be issuable or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such Common Stock immediately theretofore issuable upon exercise of the Warrants had such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition not taken place, and in any such case appropriate provisions shall be made with respect to the rights and interests of each holder of Warrants to the end that the provisions hereof (including without limitation provisions for adjustment of the Exercise Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any shares of stock, securities or properties thereafter deliverable upon the exercise thereof.  The Company shall not effect any such consolidation, merger, sale, transfer or other disposition, unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing or otherwise acquiring such properties shall assume, by written instrument executed and mailed or delivered to the holders of Warrants at the last address of such holders appearing on the books of the Company, the obligation to deliver to such holders such shares of stock, securities or properties as, in accordance with the foregoing provisions, such holders may be entitled to acquire.  The above provisions of this subpara­graph shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers, or other dispositions.

1E.           Notice of Adjustment.  Upon any adjustment of the Exercise Price, then and in each such case the Company shall give written notice thereof to the registered Holder, which notice shall state the Warrant price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.  Upon written request of the Holder, the Company shall promptly obtain the opinion of a firm of independent certified public accountants (which may be the regular auditors of the Company) of recognized national standing selected by the Company's Board of Directors, which opinion shall state the Exercise Price resulting from such adjustment and the increase or decrease, if any, in the number of shares of Common Stock issuable upon Exercise of the Warrant or Warrants held by each holder of Warrants, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.  The good faith determination of the Board of Directors based upon such accountants opinion shall be final and binding with respect to any adjustment required hereunder.

1F.           Certain Events.  If any event occurs as to which in the opinion of the Board of Directors of the Company the other provisions of Section 1 hereof are not strictly applicable or if strictly applicable would not fairly protect the conversion rights of the holders of the Warrants in accordance with the essential intent and principles of such provisions, then such Board of Directors shall appoint a firm of independent certified public accountants (which may be the regular auditors of the Company) of recognized national standing, which shall give their opinion upon the adjustment, if any, on a basis consistent with such essential intent and principles, necessary to preserve, without dilution, the rights of the holders of the Warrants.  Upon receipt of such opinion by the Board of Directors, the Company shall forthwith make the adjustments described therein; provided, however, that no such adjustment pursuant to this Section 1F shall have the effect of increasing the Exercise Price as otherwise determined pursuant to Section 1 hereof except in the event of a combination of shares of the type contemplated in Section ID and then in no event to an amount larger than the exercise price as adjusted pursuant to Section ID.

1G.          Prohibition of Certain Actions.  The Company will not (i) authorize or issue, or agree to authorize or issue, any shares of its capital stock of any class preferred as to dividends or as to the distribution of assets upon voluntary or involuntary liquidation, dissolution or winding-­up of the Company otherwise than for full and fair consideration in hand paid to the  Company concurrent with any such issuance; or (ii) take any action which would result in any adjustment of the Exercise Price if the total number of shares of Common Stock issuable after such action upon exercise of all of the Warrants would exceed the total number of shares of Common Stock then authorized by the Company's Certificate of Incorporation.

1H.          Stock to be Reserved.  The Company will at all times reserve and keep available out of its authorized Common Stock, solely for the purpose of issue upon the exercise of Warrants as herein provided, such number of shares of Common Stock as shall then be issuable upon the exercise of all outstanding Warrants, and the Company will maintain at all times all other rights and privileges sufficient to enable it to fulfill all its obligations hereunder. 

1I.            Registration and Listing of Common Stock.  If any shares of Common Stock required to be reserved for purposes of exercise of Warrants hereunder require registration with or approval of any governmental authority under any Federal or state law (other than the Securities Act) before such shares may be issued upon exercise, the Company will, at its expense and as expeditiously as possible, use its best efforts to cause such shares to be duly registered or ap­proved, as the case may be.  Shares of Common Stock issuable upon exercise of the Warrants shall be registered by the Company under the Securities Act or similar statute then in effect.  If and so long as the Common Stock is listed on any national securities exchange or quoted on the Nasdaq Stock Market, the Company will, at its expense, obtain promptly and maintain the approval for listing or quotation thereon upon official notice of issuance, of shares of Common Stock issuable upon exercise of the then outstanding Warrants and maintain the listing or quotation of such shares after their issuance; and the Company will also cause the listing on such national securities exchange or quotation on Nasdaq, will register under the Exchange Act and will maintain such listing or quotation of, any other securities that at any time are issuable upon exercise of the Warrants, if and at the time that any securi­ties of the same class shall be listed on such national securities exchange  or quoted on Nasdaq by the Company or shall require registra­tion under the Exchange Act.  The Shares are subject to a separate Registration Rights Agreement.

1J.           No Charge for Issuance.  The issuance of certificates for shares of Common Stock upon exercise of Warrants shall be made without charge to the holders of the Warrants, other then payment of the exercise price.

1K.          Closing of Books.  The Company will at no time close its transfer books against the transfer of any Warrant or of any shares of Common Stock issued or issuable upon the exercise of any Warrant in any manner which interferes with the timely exercise of such Warrant.

1L.           No Rights or Liabilities as Shareholders.  No Warrant shall entitle any holder thereof to any of the rights of a shareholder of the Company.  No provision of this Warrant, in the absence of the actual exercise of such Warrant or any part thereof by the holder thereof into Common Stock issuable upon such exercise, shall give rise to any liability on the part of such holder as a shareholder of the Company, whether such liability shall be asserted by the Company or by creditors of the Company.

1M.         Fractional Shares.  The Company shall not issue fractional shares of Common Stock or scrip representing fractional shares of Common Stock upon any exercise of this Warrant.  As to any fractional share of Common Stock which the Holder would oth­er­wise be entitled to purchase from the Company upon such exercise, the Company shall purchase from the Holder such fractional share at a price equal to an amount calculated by multiplying such fractional share (calculated to the nearest 1/100th of a share) by its Market Price on the date the Form of Subscription is received by the Company.  Payment of such amount shall be made in cash or by check payable to the order of the Holder at the time of delivery of any certificate or certifi­cates arising upon such exercise.

SECTION 2.           METHOD OF EXERCISE OF WARRANTS

The Warrants may be exercised by the surrender of this Certificate, with the Form of Subscription attached hereto duly executed by the holder, to the Company at its principal office, accompanied by payment of the Exercise Price for the number of shares of Common Stock specified.  The Warrants may be exercised for less than the full number of shares of Common Stock called for hereby by surrender of this Certificate in the manner and at the place provided above, accompanied by payment for the number of shares of Common Stock being purchased.  If the Warrants should be exercised in part only, the Company shall, upon surrender of this Warrant Certificate for cancellation, execute and deliver a new Warrant Certificate evidencing the right of the holder to purchase the balance of the shares purchasable hereunder.  Upon receipt by the Company of this Warrant Certificate at the office of the Company, in proper form for exercise, accompa­nied by the full Exercise Price in cash or certified or bank cashier's check, the holder shall be deemed to be the holder of record of the shares of Common Stock issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Common Stock shall not then be actually delivered to the holder.

As soon as practicable after the exercise of these Warrants in whole or in part and, in any event, within ten (10) days thereafter, the Company at its expense will cause to be issued in the name of and delivered to the holder a certifi­cate or certificates for the number of fully paid and nonassessable shares of Common Stock (and any new Warrants) to which the holder shall be entitled upon such exercise.  Each certificate for shares of Common Stock so delivered shall be in such denominations as may be requested by the holder and shall be registered in the name of the holder or such other name as the holder may designate.

SECTION 3.           PAYMENT OF TAXES

The issuance of certificates for shares of Common Stock upon exercise of the Warrants shall be made without charge to the holders of the Warrants exercised for any issuance tax in respect thereto; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer of any certificate or Warrant.

SECTION 4.           MUTILATED OR MISSING WARRANT CERTIFICATES

Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutila­tion of this Warrant Certificate, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnifica­tion and upon surrender and cancellation of this Warrant Certificate, if mutilated, the Company will execute and deliver a new Warrant Certificate of like tenor and date.

SECTION 5.           RESTRICTIONS ON TRANSFER

5A.          In General. This Warrant and the Common Stock issued upon the exercise hereof shall not be transferable except upon the conditions hereinafter specified, which conditions are intended to insure compliance with the provisions of the Securities Act and any applicable state securities laws in respect of the transfer of this Warrant or any such Common Stock.

5B.          Restrictive Legends. This Warrant (including each Warrant issued upon the transfer of any Warrant) shall bear on the face thereof a legend substantially in the form of the notice endorsed on the first page of this Warrant.

Each certificate for shares of Common Stock initially issued upon the exercise of this Warrant and each certificate for shares of Common Stock issued to a subsequent transferee of such certificate shall, bear on the face thereof a legend reading substantially as follows:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION UNDER SUCH ACT AND THE RULES AND REGULATIONS THEREUNDER. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

In the event that a registration statement covering the shares of Common Stock issued upon exercise of this Warrant shall become effective under the Securities Act or in the event that the Company shall receive an opinion of its counsel that, in the opinion of such counsel, such legend is not, or is no longer, necessary or required (including, without limitation, because of the availability of the exemption afforded by Rule 144 of the Regulations of the Securities and Exchange Commission), the Company shall, or shall instruct its transfer agents and registrars to, remove such legend from the certificates evidencing such shares of Common Stock or issue new certificates without such legend in lieu thereof.

5C.          Notice of Proposed Transfer; Registration Not Required.  The Holder of this Warrant or the holder of any shares of Common Stock issuable upon the exercise hereof  (the “Warrant Shares”) by acceptance hereof or thereof, agrees to give written notice to the Company, prior to any transfer of this Warrant, the Warrant Shares or any portion hereof or thereof, of its intention to make such transfer which notice shall include a brief description of such proposed transfer.

If in the opinion of counsel to the Company or counsel to the transferor reasonably acceptable to the Company the proposed transfer may be effected without registration or qualification under any Federal or state law whereupon the Holder shall be entitled to transfer this Warrant or Warrant shares in accordance with the terms of the notice delivered to the Company and the opinion of counsel.  The Company shall not be required to implement any unregistered transfer of the Warrant or Warrant Shares without such opinion of counsel.

SECTION 6            MISCELLANEOUS

6A.          Nonwaiver.  No course of dealing or any delay or failure to exercise any right hereunder on the part of the Holder shall operate as a waiver of such right or otherwise prejudice the Holder's rights, powers or remedies.

6B.          Notice Generally.  Any notice, demand or delivery to be made pursuant to the provisions of this Warrant shall be sufficiently given or made if sent by first class mail, postage prepaid, addressed to (a) the Holder at its last known address appear­ing on the books of the Company maintained for such pur­pose or (b) the Company at its principal office referred to in the Purchase Agreement.  The Holder and the Company may each designate a different address by notice to the other pursuant to this Section 6B.

6C.          Successors and Assigns.  This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the Holder.  The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant, and shall be en­force­able by any such Holder.

6D.          Amendment.  This Warrant may not be modified or amended except by written agreement of the parties.

6E.           Headings.  The headings of the Sections of this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

6F.           Governing Law.  Except to the extent the corporation statute of Delaware applies, this Agreement shall be governed by and construed and enforced under the laws of California without reference to the principles of the conflicts of laws thereof.

IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed, as of the day and year first above written.

FORM OF SUBSCRIPTION

DATE:  _______________, 200__

WARRANT # ____________

TO: NETWORK COMPUTING DEVICES, INC.

The Undersigned, the holder of the within Warrants, hereby, irrevocably elects to exercise all or part of the purchase right represented by such Warrants for, and to purchase thereunder, shares of Common Stock of NETWORK COMPUTING DEVICES, INC. (the "Company") and herewith makes payment of $__________ to the Company, evidenced by delivery of the Holder’s certified or bank check and requests that the certificate representing such shares be issued in the name of, and be delivered to Holder, at the address indicated below.

The Undersigned represents that he is acquiring the Common Stock  for his own account, for investment and without any view to resale or distribution of the Common Stock or any portion thereof. The Undersigned acknowledges that the sale of the Common Stock hereunder has not been registered or qualified under the Securities Act, or under any state securities laws, and that any retransfer of the Common Stock by the Undersigned will accordingly be restricted.  The certificates representing the Common Stock will bear a legend to the effect that the Common Stock may not be transferred except in a transaction registered or qualified under applicable securities laws or in a transaction exempt from such registration or qualification, as evidenced by an opinion of counsel or other evidence satisfactory to the Company and its counsel.

The Undersigned acknowledges that the Common Stock must be held indefinitely unless subsequently registered under the Securities Act or the Company receives an opinion of counsel satisfactory to the Company that such registration is not required. The Undersigned is aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of stock purchased in a private placement subject to the satisfaction of certain conditions, including, among other things, the existence of a public market for the stock.  In the absence of a prior registration of the Common Shares underlying the securities being sold, the Undersigned agrees to be bound by any applicable restrictions, and acknowledges that the Undersigned may be required to hold the Shares for an indefinite period of time, subject to prior registration of the Common Stock into which the Shares are convertible.

The Undersigned further acknowledges that, in the event all of the requirements of Rule 144 are not met, compliance with another registration exemption will be required; and that, although Rule 144 is not exclusive, the staff of the SEC has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and other than pursuant to Rule 144, will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, that such persons and the brokers who participate in the transactions do so at their own risk.  There is no assurance that any exemption from registration under the Securities Act will be available or, if available, will allow such person to dispose of, or otherwise transfer, all or any portion of the Common Stock.

The Undersigned acknowledges that he can bear the economic risk and complete loss of his investment in the Common Stock and has such knowledge and experience in financial or business matters that he is capable of evaluating the merits and risks of the investment contemplated hereby.

ASSIGNMENT FORM

(To be executed only upon the assignment of the within Warrant)

To:          NETWORK COMPUTING DEVICES, INC.

FOR VALUE RECEIVED the undersigned registered Holder of the within Warrant

hereby sells, assigns and transfers unto

whose address is

all of the rights of the under­signed under the within Warrant, with respect to a certain Warrant to purchase shares of Common Stock of NETWORK COMPUTING DEVICES,  INC. and if such shares of Common Stock shall not include all the shares of Common Stock issuable as provided in the within Warrant, then a new Warrant of like tenor for the number of shares of Common Stock of NETWORK COMPUTING DEVICES, INC., not being transferred hereunder shall be issued in the name of and delivered to the undersigned, and does hereby irre­vocably constitute and appoint

as attorney in fact to register such transfer on the books of The Company maintained for the purpose, with full power of substitution in the premises.

NOTICE:  The signature to this Assignment must correspond with the name as written upon the face of the within Warrant in every particular, without alteration or enlargement or any change whatever.

The signature to this Assignment must be guaranteed by a commercial bank or trust company of the United States or a member firm of the New York Stock Exchange.