EXHIBIT 10.41

 

Subscription Agreement Number:             

   April     , 2003

 

Issued to:

 

SUBSCRIPTION AGREEMENT

 

in connection with

 

RATEXCHANGE CORPORATION

 

Offering of

a minimum 5 Units at

$50,000 per Unit

each Unit consisting of

 

200,000 Shares of Series C

Convertible Preferred Stock

and

one Class B Warrant to purchase

50,000 shares of common stock.

 

Ratexchange Corporation

100 Pine Street, Suite 500

San Francisco, CA 94111

(415) 274-5650

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NOTICES

 

NONE OF THE UNITS, PREFERRED STOCK OR WARRANTS INCLUDED IN THE UNITS OR THE
SECURITIES UNDERLYING PREFERRED STOCK OR WARRANTS HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THESE SECURITIES ARE BEING
OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
THESE LAWS. THE UNITS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES REGULATORY AUTHORITY NOR HAS THE
COMMISSION OR ANY SUCH AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THE
OFFERING OR THE ACCURACY OR ADEQUACY OF THIS SUBSCRIPTION AGREEMENT AND
INVESTMENT LETTER AND/OR THE OTHER INFORMATION DOCUMENTS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

 

IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION
OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING,
INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN
RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY. FURTHERMORE THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY
OR ADEQUACY OF THIS SUBSCRIPTION AGREEMENT AND INVESTMENT LETTER AND/OR THE
OTHER INFORMATION DOCUMENTS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF INVESTMENT FOR AN INDEFINITE PERIOD OF
TIME. CONSEQUENTLY, THE UNITS SHOULD BE CONSIDERED FOR PURCHASE AS A LONG-TERM
INVESTMENT ONLY.

 

THE UNDERSIGNED SHOULD NOT CONSTRUE THE INFORMATION DOCUMENTS OR ANY
COMMUNICATIONS IN CONNECTION THEREWITH AS LEGAL, TAX OR FINANCIAL ADVICE AND,
ACCORDINGLY, MUST CONSULT HIS OWN LEGAL, ACCOUNTING AND/OR FINANCIAL ADVISERS
WITH RESPECT TO LEGAL, TAX AND RELATED MATTERS CONCERNING THIS INVESTMENT.

 

UNITS SHOULD NOT BE PURCHASED BY ANY INVESTORS SEEKING TAX ADVANTAGES. THIS
INVESTMENT IS NOT A TAX SHELTER SINCE IT DOES NOT PROVIDE DEDUCTIONS WHICH WOULD
BE AVAILABLE TO

 

-ii-

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REDUCE INCOME FROM OTHER SOURCES. ACCORDINGLY, A DECISION TO PURCHASE THE UNITS
SHOULD BE BASED SOLELY ON THE UNDERSIGNED’S EVALUATION OF THE ECONOMIC
CONSIDERATIONS OF THE TRANSACTION.

 

THE INFORMATION DOCUMENTS ARE FOR THE SOLE USE OF, AND CONSTITUTE AN OFFER ONLY
TO, THE OFFEREE WHOSE NAME APPEARS ABOVE. ANY DISTRIBUTION OF THE INFORMATION
DOCUMENTS, WHETHER IN WHOLE OR IN PART, TO ANY PERSON OTHER THAN SUCH OFFEREE
AND HIS AUTHORIZED AGENTS, AND ANY REPRODUCTION OF THE INFORMATION DOCUMENTS OR
THE DIVULGENCE OF ANY OF THEIR CONTENTS, IS STRICTLY PROHIBITED. THE OFFEREE
NAMED ABOVE, BY ACCEPTING DELIVERY OF THE INFORMATION DOCUMENTS, AGREES TO
RETURN THE INFORMATION DOCUMENTS, TO THE COMPANY, IF SUCH OFFEREE DOES NOT
UNDERTAKE TO PURCHASE THE SECURITIES OFFERED HEREBY.

 

NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY REPRESENTATION OR TO GIVE ANY
INFORMATION WITH RESPECT TO THE COMPANY OR THE SECURITIES OFFERED HEREBY, EXCEPT
THE INFORMATION CONTAINED HEREIN (AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME)
OR IN THE EXHIBITS HERETO AND, IF MADE OR GIVEN, SUCH REPRESENTATION OR
INFORMATION MUST NOT BE RELIED UPON. IN MAKING THE DECISION WHETHER TO INVEST,
PROSPECTIVE INVESTORS SHOULD RELY ONLY ON INFORMATION CONTAINED IN THE
INFORMATION DOCUMENTS OR IN THE EXHIBITS HERETO. NEITHER THE DELIVERY OF THE
INFORMATION DOCUMENTS AT ANY TIME NOR ANY SALE MADE PURSUANT HERETO IMPLIES THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE SET FORTH ON THE COVER PAGE HEREOF.

 

THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. (SEE THE DESCRIPTION OF RISK
FACTORS APPENDED HERETO AS AN EXHIBIT.) CONSEQUENTLY, ONLY PERSONS WHO CAN
AFFORD A TOTAL LOSS OF THEIR INVESTMENT SHOULD CONSIDER THE PURCHASE OF THE
UNITS. SUBSCRIBERS WILL BE REQUIRED TO REPRESENT THAT THEY ARE FULLY FAMILIAR
WITH, UNDERSTAND AND CAN BEAR SUCH RISKS, AND UNDERSTAND ALL OF THE TERMS OF
THIS OFFERING.

 

THE INFORMATION DOCUMENTS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY TO ANY PERSON WHO HAS NOT COMPLETED AND RETURNED A
SUBSCRIPTION AGREEMENT AND A QUALIFIED PURCHASER QUESTIONNAIRE, OR TO ANY PERSON
WHOSE PURCHASER REPRESENTATIVE, IF ANY, HAS NOT COMPLETED AND RETURNED A
QUALIFIED PURCHASER REPRESENTATIVE QUESTIONNAIRE, IN FORM AND SUBSTANCE
SATISFACTORY TO THE COMPANY.

 

-iii-

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THE COMPANY IS MAKING THIS OFFERING ONLY TO QUALIFIED SUBSCRIBERS AND MAY, IN
ITS SOLE AND ABSOLUTE DISCRETION, REFUSE TO ACCEPT ANY SUBSCRIPTION. THE
CONVERSION RATE OF PREFERRED STOCK AND THE EXERCISE PRICE OF THE WARRANTS HAVE
BEEN ARBITRARILY DETERMINED BY THE COMPANY AND SHOULD NOT BE CONSTRUED AS AN
INDICATION OF THE ACTUAL VALUE OF AN EQUITY INTEREST IN THE COMPANY. THE COMPANY
RESERVES THE RIGHT TO WITHDRAW OR AMEND THE TERMS OF THIS OFFERING AT ANY TIME
IN ITS SOLE AND ABSOLUTE DISCRETION, AND TO REJECT ANY SUBSCRIPTION IN WHOLE OR
IN PART.

 

THE INFORMATION DOCUMENTS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY IN ANY JURISDICTION IN WHICH SUCH SALE OR OFFER OR
SOLICITATION WOULD BE PROHIBITED BY LAW.

 

THE COMPANY HEREBY EXTENDS TO EACH PROSPECTIVE INVESTOR THE OPPORTUNITY TO ASK
QUESTIONS OF, AND RECEIVE ANSWERS FROM, OFFICERS OF THE COMPANY CONCERNING THE
INFORMATION DOCUMENTS AND TO OBTAIN ANY ADDITIONAL INFORMATION HE MAY CONSIDER
NECESSARY IN MAKING AN INFORMED INVESTMENT DECISION TO THE EXTENT THAT THE
COMPANY POSSESSES SUCH INFORMATION OR CAN ACQUIRE IT WITHOUT UNREASONABLE EFFORT
OR EXPENSE. ACCESS TO SUCH INFORMATION MAY BE OBTAINED BY DIRECTING REQUESTS TO
THE COMPANY.

 

THE INFORMATION DOCUMENTS CONTAIN SUMMARIES OF THE TERMS OF CERTAIN DOCUMENTS,
BUT REFERENCE IS HEREBY MADE TO THE ACTUAL DOCUMENTS WHICH MAY BE OBTAINED FROM
THE COMPANY AT THE ADDRESS SET FORTH BELOW FOR COMPLETE INFORMATION CONCERNING
THE RIGHTS AND OBLIGATIONS OF THE PARTIES THERETO. ALL SUCH SUMMARIES ARE
QUALIFIED IN THEIR ENTIRETY BY THIS REFERENCE.

 

THE COMPANY’S ADDRESS IS RATEXCHANGE CORPORATION, 100 PINE STREET, SUITE 500,
SAN FRANCISCO, CALIFORNIA 94111-5101, ATTENTION: D. JONATHAN MERRIMAN, CHAIRMAN
AND CHIEF EXECUTIVE OFFICER. ITS TELEPHONE NUMBER IS 415-274-5650 AND ITS
FACSIMILE NUMBER IS 415-274-5669.

 

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SUBSCRIPTION AGREEMENT

AND INVESTMENT LETTER

 

April 24, 2003

 

To the Board of Directors

Ratexchange Corporation

100 Pine Street, Suite 500

San Francisco, CA 94111

 

RE: Subscription to Purchase Units of Ratexchange Corporation

 

Gentlemen:

 

This will acknowledge that the undersigned hereby agrees to irrevocably purchase
from Ratexchange Corporation (the “Company” or “RTX”),              unit(s)
(collectively the “Units”) at a price of $50,000 per Unit. RTX is a corporation
organized under the laws of the State of Delaware in 1987 under the name Venture
World, Ltd. In 1999 it changed its name to NetAmerica.com Corporation and on
April 24, 2000 it changed its name to Ratexchange Corporation. The Company had
no material operations prior to 1999. The Unit(s) to be purchased by the
undersigned is (are) part of a private placement of securities (the “Offering”)
by the Company of a maximum 10 units, which is being made only to “accredited
investors” as defined herein.

 

Each Unit will consist of two hundred thousand (200,000) shares of Ratexchange
Corporation Series C Convertible Preferred stock (collectively the “Preferred
Stock”) and one Class B Warrant to purchase 50,000 shares of Ratexchange
Corporation common stock (collectively the “Warrants”). Each warrant share of
the Company’s common stock will have a par value of $0.0001 and each warrant
share may be purchased for $0.30 (the “Exercise Price”). The Warrants will have
a term of three years, unless the closing sale price for the common stock of the
Company has closed at or above $0.90 for ten consecutive trading days. At such
time the holders will receive 30 days notice upon which to exercise the Warrants
prior to termination.

 

Holders of the Preferred Shares will be entitled to receive a dividend at the
rate of three percent (3%) per annum based on the number of shares of Series C
Preferred Stock then held on the last day of each quarter of the Company’s
fiscal year, beginning on June 30, 2003. The dividend will be paid in cash. Such
dividends shall accrue and accumulate until paid.

 

Each share of Preferred Stock shall be convertible, at the option of the holder,
at any time after the date of issuance, into an equal number of shares of common
stock. However, the Preferred Stock will automatically convert into an equal
number of shares of common stock if the closing sale price for the common stock
of the Company has closed at or above $0.75 for ten consecutive trading days.

 

Page 1 of 13

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Subscription Agreement and

Investment Letter for Units of

Ratexchange Corporation

 

For a complete description of the terms of the Warrants please see Exhibit B,
appended hereto. For a complete description of the terms of the Preferred Stock
please see the Certificate of Designation of Series C Preferred Stock, appended
hereto as Exhibit C.

 

The Company shall file a registration statement on Form S-3 for the common stock
that underlies the Series C Convertible Preferred stock and Class B Warrants
(collectively, the “Underlying Shares”) with the Securities and Exchange
Commission (the “Commission”) within 90 days of the closing of the financing and
use its reasonable best efforts to have such registration statement declared
effective. The Company will also grant the Unit purchasers certain “piggyback”
registration rights with respect to these securities. Should the Company fail to
file a registration statement listing the Underlying Shares with the Commission
within 90 days of the closing of the financing, the holder of each Unit shall be
entitled to receive a Series B Warrant to purchase a number of shares of the
Company’s common stock equal to ten (10%) percent of the aggregate number of
Preferred Shares purchased by the holder in this financing, with a term of three
years and an exercise price equal to the closing price of the Company’s common
stock on the American Stock Exchange on the 90th day following the closing of
this financing.

 

Should the Securities and Exchange Commission fail to declare the Company’s Form
S-3 Registration Statement effective on or before the 180th day after the
Closing, the annual dividend rate payable on the Preferred Stock will be
increased from 3.00% to 9.00% for the period of time from the 181st day after
Closing until the Company’s registration statement is declared effective. Upon
the Securities and Exchange Commission declaring the registration statement
effective, the annual dividend rate will return to 3.00%. Dividends will be paid
quarterly in cash, regardless of which dividend rate is applied.

 

For a complete description of the terms of the Registration Rights please see
Exhibit D, appended hereto.

 

The minimum number of Units that must be sold in order to make the Offering
effective will be 5 Units. All funds received will be remitted directly to the
Company. The Company reserves the right, in its complete discretion, to sell
fractions of a Unit and to sell additional Units if demand is present.

 

If all of the Units are sold, the Company will receive gross proceeds of two
hundred and fifty thousand dollars ($250,000). See the Schedule of Use of
Proceeds appended hereto as Exhibit E.

 

An executed copy of this Subscription Agreement and Investment Letter and the
Purchaser Questionnaire appended hereto as Exhibit A shall be delivered to the
Company.

 

Upon the Company’s acceptance of the Subscription Agreement and Investment
Letter, PAYMENT FOR THE UNITS SHALL BE MADE BY CHECK OR ELECTRONIC WIRE TRANSFER
PAYABLE IN ACCORDANCE WITH INSTRUCTIONS FROM THE COMPANY and delivered to the
Company.

 

Page 2 of 13

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Subscription Agreement and

Investment Letter for Units of

Ratexchange Corporation

 

Each closing of the purchase and sale of the Units following acceptance by the
Company of subscriptions, as evidenced by the Company’s execution of the
applicable Subscription Agreements, shall take place at the offices of the
Company.

 

Although the Common Stock is listed for trading on the AMEX under the symbol
“RTX,” there is no public market for the Units, Preferred Shares or the Warrants
and it is not anticipated that a public trading market for them will ever
develop. In addition, the market for the Common Stock has been limited. The
Company intends to file a registration statement with the Commission covering
the Underlying Shares, but no representation is made that the Commission will
declare the filing effective. In the event, however, that the registration
statement is declared effective, no assurance can be given that the Underlying
Shares will be readily tradable. ACCORDINGLY, THE UNDERSIGNED UNDERSTANDS AND
ACKNOWLEDGES THAT, EVEN AFTER THE TERMINATION OF THE RESALE RESTRICTION PERIODS
ON THE UNITS, THE UNDERLYING SECURITIES AND THE UNDERLYING SHARES NOTED BELOW,
AND/OR THE UNDERLYING SHARES ARE REGISTERED, HE MAY BE UNABLE TO RESELL THESE
SECURITIES FOR A SIGNIFICANT PERIOD OF TIME, IF EVER.

 

The undersigned acknowledges that the Unit(s), the Preferred Shares and Warrants
(the “Underlying Securities”) he is purchasing, including any Underlying Shares
he may receive upon conversion of the Preferred Shares and/or exercise of the
Warrants, have not been registered under the Securities Act or qualified under
applicable state securities laws and that the transferability thereof is
restricted by the registration provisions of the Act as well as such state laws.
Based upon the representations and agreements being made by him herein, the
Units and Underlying Securities are being sold to him pursuant to an exemption
from such registration provided by Section 4 (2) of the Act and Rule 506
promulgated thereunder and applicable state securities law qualification
exemptions. The undersigned further acknowledges that the basis for these
exemptions may not be available if, notwithstanding such representations, he
only intends to hold these securities for a fixed or determinable period in the
future, or until the market price rises or falls. The undersigned represents and
warrants that he does not have any such intention. The undersigned agrees that
the documentation representing the Underlying Securities to be received by him,
as well as the certificates representing any Underlying Shares, will bear a
legend indicating that transfer of these securities is restricted by reason of
the fact that they have not been so registered or qualified, and that the
Company will place stop-transfer instructions with the transfer agent of its
securities with respect to any Underlying Shares registered in the name of the
undersigned or beneficially owned by him.

 

The undersigned represents that he is acquiring the Unit(s) and Underlying
Securities, and will acquire any Underlying Shares, solely for his own account
as principal and not as a nominee or agent, for investment purposes only and not
with a view to resale or other distribution or fractionalization thereof, or
with the intention of selling, transferring or otherwise disposing of all or any
part of such securities for any particular event or circumstance, except
selling, transferring or disposing of them upon full compliance with

 

Page 3 of 13

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Subscription Agreement and

Investment Letter for Units of

Ratexchange Corporation

 

all applicable provisions of the Act, the Securities Exchange Act of 1934 (the
“Exchange Act”), the Rules and Regulations promulgated by the Commission
thereunder, and any applicable state securities laws. The undersigned further
understands and agrees that (i) these securities may be sold only if they are
subsequently registered under the Act and qualified under any applicable state
securities laws or, in the opinion of the Company’s counsel, an exemption from
such registration and qualification is available; (ii) any routine sales of
these securities made in reliance upon Rule 144 promulgated by the Commission
under the Act, can be effected only in the amounts set forth in and pursuant to
the other terms and conditions, including applicable holding periods, of that
Rule; and (iii) the Company is under no obligation to assist him in complying
with any exemption from registration under the Act, or, except as otherwise set
forth herein and in the Certificate of Designation of Series C Preferred Stock
and Series B Warrant attached hereto as Exhibits, to register the Units, the
Preferred Stock, the Warrants or the Underlying Shares on his behalf.

 

The undersigned represents and warrants that he has received (i) a copy of the
form of the Warrant appended hereto as Exhibit B; (ii) a copy of the form of the
Certificate of Designation of Series C Preferred Stock appended hereto as
Exhibit C; (iii) a copy of the Registration Rights Agreement appended hereto as
Exhibit D; (iv); a Schedule of the Use of Proceeds of this Offering appended
hereto as Exhibit E; (v) a copy of the Company’s Form 10-Q for the quarterly
period ended March 31, 2003 appended hereto as Exhibit F; (vi) a copy of the
Company’s Form 10-K for fiscal year 2003 included in the Annual Report and
appended hereto as Exhibit G; (vii) a copy of the Company’s Proxy Statement for
the Year 2003 Annual Meeting of Stockholders appended hereto as Exhibit H; and
(viii) a Description of Risk Factors relating to the Company and this Offering
appended hereto as Exhibit I; (all of the foregoing documents and the
Subscription Agreement collectively are herein referred to as the “Information
Documents”) and that he has read and understood all of these documents. In
addition, the undersigned is aware that the Company files annual, quarterly and
special reports, proxy statements and other information with the Commission and
he can access these filings on the Commission’s Internet site, which is
http://www.sec.gov.

 

The undersigned acknowledges that he has been granted a reasonable time prior to
the date hereof, during which he has had the opportunity to obtain such
additional information, as he deemed necessary to permit him to make an informed
decision with respect to the purchase of his Unit(s). He also represents and
warrants that he (i) has reviewed such other documents and obtained such other
information from the Company as he deems necessary in order for him to make an
informed investment decision; (ii) has had access to all relevant documents,
instruments, books, and other records of or pertaining to the Company and has
had the opportunity to ask questions of and receive answers from management and
other representatives of the Company; and (iii) is fully aware of the current
business prospects, financial condition, and operating history as set forth
herein and in the Information Documents relating to the Company. Except as may
be provided in this Subscription Agreement and Investment Letter and in the
other Information Documents, he warrants that no representations, statements or
inducements were made to him to purchase the Unit(s) and in subscribing for the
Unit(s) he is not relying upon any representations other than those contained
herein or in the other Information Documents.

 

Page 4 of 13

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Subscription Agreement and

Investment Letter for Units of

Ratexchange Corporation

 

The undersigned understands that this Subscription Agreement and Investment
Letter and the other Information Documents, contain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995,
including without limitation, statements regarding future cash requirements,
sales forecasts, and profit and loss, cash flow and balance sheet projections.
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance and
achievements of the Company, or industry results, to be materially different
from any future results, performance, or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, general
economic and business conditions, industry capacity, industry trends,
competition, litigation, the loss of any significant management personnel, the
inability to acquire and retain significant customers, changes in business
strategy or development plans, quality of management, availability, terms and
deployment of capital, business abilities and judgment of personnel,
availability of qualified personnel, changes in, or the failure to comply with,
government regulations, and other factors referenced herein and in the other
Information Documents.

 

THE UNDERSIGNED UNDERSTANDS THAT, BECAUSE OF THE SIGNIFICANT RISK FACTORS SET
FORTH HEREIN OR IN THE OTHER INFORMATION DOCUMENTS, INCLUDING BUT NOT LIMITED TO
THE DESCRIPTION OF RISK FACTORS, IF THE OFFERING IS CONSUMMATED, HE COULD LOSE
HIS ENTIRE INVESTMENT.

 

The undersigned also understands that the Company is a securities broker-dealer
and investment bank focused on emerging growth companies and growth-oriented
institutional investors. It provides sales and trading services primarily to
institutions. The Company’s mission is to become a leader in the researching,
advising, financing and trading of emerging growth equities. The Company has 44
employees and is headquartered in San Francisco with additional offices in
Boston and Irvine, California. Our RTX Securities subsidiary is registered with
the Securities and Exchange Commission as a broker-dealer and is a member of the
National Association of Securities Dealers, Inc.

 

On November 20, 2002, the Company and Forsythe McArthur Associates Inc. (“FMA”)
entered into an agreement wherein the Company purchased an option to restructure
the terms of the Convertible Promissory Note held by FMA and dated September 1,
2001 (See Exhibit 10-33, attached to the Company’s Annual Report on Form 10K,
filed March 28, 2002, SEC file no. 02592121.) The Company and FMA agreed to the
following terms: 1. FMA currently holds a Convertible Promissory Note with
principal sum of $5,949,042 and accruing interest at a rate equal to 9.0% per
annum. The interest on the Convertible Promissory Note is payable quarterly, 2.
The Company will pay interest on the Convertible Promissory Note for the fourth
quarter of year 2002. The Company will not accrue or pay additional interest on
the Convertible Promissory Note for the period from January 1, 2003 through June
30, 2003, as described further below, 3. The

 

Page 5 of 13

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Subscription Agreement and

Investment Letter for Units of

Ratexchange Corporation

 

Company will purchase an option from FMA in exchange for 500,000 shares of the
Company’s common stock and registration rights on those shares (the “Option”).
The Option will have a term beginning on November 20, 2002 and ending on June
30, 2003. Upon the Company’s exercise of the Option, the Convertible Promissory
Note will be cancelled and FMA will receive the following restructured
consideration in full and complete satisfaction of all obligations owed to it by
the Company: a. $500,000 in cash; b. 2,000,000 shares of the Company’s common
stock, including demand registration rights; and c. a new Promissory Note of
principal sum equal to $1,000,000 bearing interest at 3.5% per annum payable
quarterly in cash, maturing on December 31, 2005, 4. The 2,000,000 shares of the
Company’s common stock will include a registration rights agreement wherein FMA
will receive both piggyback and demand rights. The Company will file the
appropriate registration statement with the Securities and Exchange Commission
on or before June 30, 2003. The registration statement will include the 500,000
shares granted to FMA for the Option and the interest shares earned by FMA under
the Restructure Agreement of October 4, 2001. The 2,000,000 shares included in
the restructure consideration will be registered for resale if the Company
exercises the Option, 5. Beginning on January 1, 2003 and ending on June 30,
2003, the Company will pay quarterly interest in cash to FMA based upon the
terms of the new Promissory Note, i.e. 3.5% per annum against the principal sum
of $1,000,000. Should the Company exercise the Option, no interest will be due
or payable under the Convertible Promissory Note subsequent to December 31, 2002
and the restructure terms set forth in Point 3, will apply and continue through
maturity of the new Promissory Note. The Company may pre-pay its obligation
under the new Promissory Note at anytime prior to maturity without penalty.
Should the Company not exercise the Option; the amount of interest paid to FMA
during the Option Period will be credited against interest payments owed under
the Convertible Promissory Note that will be paid on June 30, 2003.

 

RTX is authorized to issue 300 million shares of Common Stock. Of this amount,
23,067,546 shares are issued and outstanding as of March 6, 2003. Holders of
Common Stock are entitled to receive dividends when, as and if declared by the
Board of Directors out of funds legally available therefor. They have no
preemptive or other rights to subscribe for additional shares and the Common
Stock has no redemption, sinking fund or conversion provisions. Each share of
Common Stock is entitled to one vote on any matter submitted to the holders
thereof and to equal rights in the assets of the Company upon liquidation
subject to the prior rights of creditors and holders of any preferred stock. The
outstanding shares of Common Stock are validly issued, fully paid and
non-assessable.

 

The shares of Common Stock have non-cumulative voting rights, which means that
the holders of more than 50% of the shares voting for the election of directors
can elect all of the Directors of the Company. In such event, the holders of the
remaining shares will not be able to elect any of the Directors. After the
completion of this Offering but before the conversion of any Notes or exercise
of any Warrants, the Company’s Directors and executive officers together with
their affiliates, will own or control an aggregate of approximately 25% of the
then outstanding Common Stock.

 

Page 6 of 13

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Subscription Agreement and

Investment Letter for Units of

Ratexchange Corporation

 

RTX has reserved an aggregate of 5 million shares of Common Stock for issuance
to directors, officers and other key employees in the form of incentive or
nonqualified stock options, stock appreciation rights, or restricted stock
awards pursuant to its Ratexchange Corporation 2001 Stock Option and Incentive
Plan (the “Plan”). Additionally, there are currently 13 million outstanding
options to purchase Common Stock, most of which are exercisable. The exercise
prices range from $0.34 per share to $7.00 per share.

 

The Company is authorized to issue 60 million shares of preferred stock, par
value $0.0001 per share, (the “Preferred Stock”) of which 599,999 shares of
non-redeemable Series A Convertible Preferred Stock (the “Series A”) are
currently issued and outstanding. The Series A is convertible into Common Stock
at the ratio of 1:1. Holders of the Series A are entitled to (i) dividends in
kind at the rate of 6% per annum; (ii) a liquidation preference equal to $2.75
per share; (iii) one vote for each share of Common Stock into which the Series A
is convertible; and (iv) nominate two directors as long as no less than 600,000
shares of Series A stock is outstanding.

 

The Company has currently issues 12,500,000 shares of non-redeemable Series B
Convertible Preferred Stock (the “Series B”). The Series B is convertible into
Common Stock at the ratio of 1:1. Holders of the Series B are entitled to (i)
dividends in cash at a rate of 3.0% per annum; (ii) one vote for each share of
Common Stock into which the Series B is convertible; and (iii) subject to
automatic conversion if the Company’s common stock has a closing price of $0.60
or above for 10 consecutive trading days.

 

The Company’s amended certificate of incorporation authorizes the Board of
Directors, without any vote or action by the holders of the Common Stock, to
issue Preferred Stock from time to time in one or more series. The Board is
authorized to determine the number of shares and to fix the powers,
designations, preferences and relative, participating, optional or other special
rights of any series of Preferred Stock. Issuances of Preferred Stock, if
convertible into Common Stock, would be subject to the applicable rules of the
AMEX or other markets in which the Common Stock is then quoted or listed for
trading. Depending on the terms established by the Board, any or all series of
Preferred Stock could have preference over the Common Stock with respect to
dividends and other distributions and upon the liquidation of the Company as
well as other matters.

 

If the Company issues any shares of Preferred Stock with voting powers, or it
issues additional shares of Common Stock, the voting power of the currently
outstanding Common Stock would be diluted.

 

The Delaware General Corporation Law may subject the Company to certain
provisions which, subject to certain exceptions, require that, any business
combination of the Company with a 15% or greater stockholder (an “Interested
Stockholder”) or an affiliate thereof is prohibited for a period of three years
following the time that such stockholder became an Interested Stockholder,
unless at or subsequent to such time the business combination is approved by the
board of directors and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at least
66 2/3% of the outstanding voting stock which is not owned by the Interested
Stockholder. These provisions could delay or frustrate the removal of incumbent
directors or a change in

 

Page 7 of 13

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Subscription Agreement and

Investment Letter for Units of

Ratexchange Corporation

 

control of the Company. The undersigned understands that the foregoing
provisions could also discourage or make more difficult a merger or other type
of corporate reorganization, whether or not management favors such transactions,
even if it could be favorable to the interests of the stockholders.

 

OTC Stock Transfer, Inc. serves as the Company’s registrar and transfer agent
for its Common Stock.

 

In connection with the subscription being made hereby the undersigned also
warrants and represents that:

 

(a) If the undersigned is not an individual, it has not been organized for the
purpose of purchasing the Unit(s);

 

(b) He has not received any general solicitation or advertising regarding the
Offering or been furnished with any oral representation or oral information in
connection with the Offering which is not set forth herein or in the other
Information Documents;

 

(c) He has sufficient knowledge and experience of financial and business matters
so that he is able to evaluate the merits and risks of purchasing the Unit(s)
and has determined that the Unit(s) is (are) a suitable investment for him;

 

(d) He has the means to provide for his personal needs, possesses the ability to
bear the economic risk hereunder indefinitely, and can afford a complete loss of
his investment;

 

(e) He does not have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participations to such person or to any
third person, with respect to the Unit(s) for which he is subscribing or any of
the Underlying Securities or Underlying Shares;

 

(f) His overall commitment to investments that are not readily marketable is not
disproportionate to his net worth, and his purchase of the Unit(s) will not
cause such overall commitment to become excessive;

 

(g) He has carefully read and reviewed this Subscription Agreement and
Investment Letter, the Certificate of Designation of Series B Preferred Stock,
the form of the Warrant, the Description of Risk Factors, the Schedule of Use of
Proceeds and the other Information Documents, and has asked such questions of
the Company’s management and received from them such information as he deems
necessary in order for him to make an informed decision with respect to the
purchase of the Unit(s);

 

(h) He understands that the Company will prohibit the transfer of the
undersigned’s Unit(s), Underlying Securities and Underlying Shares absent full
compliance with the Securities Act, the Exchange Act and all applicable state
securities laws, as described herein;

 

Page 8 of 13

--------------------------------------------------------------------------------

Subscription Agreement and

Investment Letter for Units of

Ratexchange Corporation

 

(i)                      (insert name of Purchaser Representative: if none,
leave blank) has acted as the undersigned’s Purchaser Representative for
purposes of the private placement exemption under the Securities Act. If the
undersigned has appointed a Purchaser Representative (which term is used herein
with the same meaning as given in Rule 501(h) of Regulation D), he has been
advised by his Purchaser Representative as to the merits and risks of an
investment in the Company in general and the suitability of an investment in the
Unit(s) for the undersigned in particular, and is aware that the Purchaser
Representative may be receiving compensation from the Company in connection with
the services being performed by such Purchaser Representative for the
undersigned relating to his purchase of the Unit(s);

 

(j) He has had substantial experience in previous private and public purchases
of speculative securities and is not relying on the Company and/or any of their
respective affiliates or attorneys with respect to economic or other
considerations involved in this investment; and

 

(k) He has reviewed carefully the definition of “accredited investor” as set
forth below, and the particular subparagraph or subparagraphs by which the
undersigned qualifies as such is (are) checked by him below.

 

Definition of Accredited Investor

 

The undersigned represents that he is an “accredited investor” as that term is
defined in Rule 501 (a) of Regulation D promulgated under the Securities Act as
follows (CHECK APPLICABLE BOXES):

 

  ¨   (a) Certain banks, savings and loan institutions, broker-dealers,
investment companies and other entities including an employee benefit plan
within the meaning of Title I of the Employee Retirement Income Security Act of
1974 with total assets in excess of $5,000,000; any private business development
company as defined in Section 202 (a) (22) of the Investment Advisers Act of
1940; any organization described in Section 501 (c) (3) of the Internal Revenue
Code, not formed for the specific purpose of acquiring the Units, with total
assets in excess of $5,000,000; any director, executive officer or general
partner of the issuer of the securities being offered or sold, or any director,
executive officer or general partner of a general partner of that issuer; or any
trust with total assets in excess of $5,000,000 not formed for the specific
purpose of acquiring the securities offered, whose purchase is directed by a
sophisticated person as described in Section 230.506 (b) (2) (ii) of Regulation
D;

 

  ¨   (b) Any natural person whose individual net worth, or joint net worth with
that person’s spouse, at the time of his purchase exceeds $1,000,000;

 

Page 9 of 13

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Subscription Agreement and

Investment Letter for Units of

Ratexchange Corporation

 

  ¨   (c) Any natural person who had an individual income in excess of $200,000
or, with that person’s spouse a joint income in excess of $300,000 in each of
the two most recent years and who reasonably expects an income in excess of
$200,000, or $300,000 with that person’s spouse, in the current year;

 

  ¨   (d) Any director, executive officer, or general partner of the issuer of
the securities being offered or sold, or any director, executive officer, or
general partner of a general partner of that issuer; or

 

  ¨   (e) Any entity in which all of the equity owners are accredited investors
under any of the paragraphs above.

 

In connection with the foregoing representations the undersigned has appended
hereto as Exhibit A, a Purchaser Questionnaire which he has completed and
executed. He represents and warrants that the information set forth therein as
well as all other information which he is furnishing to the Company with respect
to his financial condition and business and investment experience is accurate
and complete as of the date hereof and he covenants that, in the event a
material change should occur in such information, he will immediately provide
the Company with such revised or corrected information.

 

All notices, requests, demands and other communications under this Subscription
Agreement shall be in writing and shall be deemed to have been given only when
delivered in person or, if mailed, when mailed by certified or registered mail
prepaid, to the parties at their respective addresses set forth herein, or at
such other address as may be given in writing in future by either party to the
other.

 

The undersigned acknowledges and agrees that:

 

(a) He has full power and authority to enter into this Agreement which, upon his
execution, will constitute a valid and legally binding obligation by him;

 

(b) Notwithstanding prior receipt by him of notice of acceptance of his
subscription, the Company may, in its sole discretion (i) reject this
Subscription Agreement in whole or in part; and (ii) accept subscription
agreements other than in the order received;

 

(c) If for any reason this Offering does not close or the undersigned’s
subscription is not accepted by the Company, the undersigned shall have no
claims against the Company or its respective officers, directors, employees or
affiliates and shall have no interest in the Units, the Underlying Securities,
the Underlying Shares or the Company;

 

(d) He shall indemnify and hold harmless the Company and its respective
officers, directors, employees, affiliates and attorneys against any loss,
liability, claim,

 

Page 10 of 13

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Subscription Agreement and

Investment Letter for Units of

Ratexchange Corporation

 

damage or expense, (including, but not limited to, any and all expenses
reasonably incurred in investigating, preparing or defending against any
litigation commenced or threatened or any claim) arising out of or based upon
any false representation or warranty or breach or failure to comply by the
undersigned with any covenant or agreement made by him herein or in any other
document provided by him to any of the foregoing in connection with this
transaction;

 

(e) The representations, warranties, covenants and agreements made by the
undersigned set forth herein shall survive the closing of the Offering;

 

(f) Neither this Subscription Agreement nor any provisions hereof shall be
modified, discharged or terminated except by an instrument in writing signed by
the party against whom any waiver, change, discharge or termination is sought;

 

(g) This Agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the internal laws of the State of
California applicable to contracts made and to be performed entirely within such
State. Any action, suit or proceeding in connection with this Agreement may be
brought in a court of record of the State of California, the City and County of
San Francisco, or in the United States District Court for the Northern District
of California, with the parties hereto hereby consenting and submitting to the
jurisdiction thereof.

 

(h) This Subscription Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute the same
instrument;

 

(i) Except as otherwise provided herein, this Subscription Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, successors, legal representatives and assigns.
If the undersigned is more than one person, the obligations of each undersigned
shall be joint and several and the agreements, representations, warranties and
acknowledgments herein contained shall be deemed to be made and binding upon
such undersigned and his heirs, executors, administrators, successors, legal
representatives and assigns;

 

(j) This Subscription Agreement is not transferable or assignable by the
undersigned;

 

(k) The use herein of the masculine pronouns or similar terms shall be deemed to
include the feminine and neuter genders as well and the use of the singular
pronouns shall be deemed to include the plural as well; and

 

(l) This Subscription Agreement constitutes the entire agreement of the parties
hereto, and supersedes all prior understandings with respect to the subject
matter hereof.

 

THE UNDERSIGNED ACKNOWLEDGES THAT THIS SUBSCRIPTION AGREEMENT CONSISTS OF 13
PAGES AND INCLUDES EXHIBITS A THROUGH J.

 

Page 11 of 13

--------------------------------------------------------------------------------

Subscription Agreement and

Investment Letter for Units of

Ratexchange Corporation

 

A.   SUBSCRIBER INFORMATION

 

Number of Units purchased      aggregate dollar amount of purchase $            
.

 

B.   MANNER IN WHICH TITLE IS TO BE HELD (Please check One):

 

1.

   ¨    Individual    7.    ¨   

Trust/Estate/Pension or
Profit Sharing Plan, and

date opened:             

2.

   ¨    Joint Tenants with Right of
Survivorship    8.    ¨   

As a Custodian for                         
                                                           

UGMA              (State)

3.

   ¨    Community Property               

4.

   ¨    Tenants in Common    9.    ¨    Married with Separate Property

5.

   ¨    Corporation/Partnership/
Limited Liability Company    10.    ¨    Keogh

6.

   ¨    IRA    11.    ¨    Tenants by the Entirety

12.

   Other                                         
                                        
                                        
                                                                       

 

C.   TITLE

 

PLEASE GIVE THE EXACT AND COMPLETE NAME IN WHICH TITLE TO THE UNIT(S) IS TO BE
HELD:

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

Page 12 of 13

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Subscription Agreement and

Investment Letter for Units of

Ratexchange Corporation

 

IN WITNESS WHEREOF, the Subscriber has executed this Agreement on the      day
of March 2003.

 

Name of Entity (if applicable):
_________________________________________________________

Signature: _______________________

  

Signature: ____________________________

Name: ____________________________

  

Name: ____________________________

Title (if applicable): _____________________________

Street Address: _____________________________

City: ______________________________

  

State: ____________

  

ZIP: ____________

Telephone: (            )                           
                                              

Social Security or Federal Tax ID Number:
________________________________________

Date of Organization (if applicable):
____________________________________________________

 

***DO NOT WRITE BELOW DOTTED LINE***

 

.....................................................................................................................................................................................

 

ACCEPTED ON BEHALF OF THE COMPANY:

 

RATEXCHANGE CORPORATION

 

BY:

 

 

--------------------------------------------------------------------------------

          No. of Units:                             

Name: D. Jonathan Merriman

          Aggregate dollar amount    

Title: Chairman and CEO

          of Purchase: $                    

 

Page 13 of 13

--------------------------------------------------------------------------------

EXHIBIT B

TO

RATEXCHANGE CORPORATION

SUBSCRIPTION AGREEMENT

AND

INVESTMENT LETTER

 

THIS WARRANT, AND THE SECURITIES ISSUABLE UPON THE EXERCISE OF THIS WARRANT,
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS (1) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND SUCH LAWS, OR (2)
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS IS
AVAILABLE AND THE COMPANY HAS RECEIVED EITHER AN OPINION OF COUNSEL, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT
REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR OTHER
EVIDENCE THAT IS SATISFACTORY TO THE COMPANY, WHICH EVIDENCE ESTABLISHES THAT
ANY SUCH DISPOSITION WILL NOT VIOLATE THE SECURITIES ACT, SUCH LAWS OR ANY RULE
OR REGULATION PROMULGATED THEREUNDER.

 

RateXchange Corporation

 

CLASS B WARRANT TO PURCHASE COMMON STOCK

 

             Shares of Common Stock

 

Issued this      day of March 2003.

 

FOR VALUE RECEIVED, RATEXCHANGE CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the “Company”), promises to
issue in the name of, and sell and deliver to [name of holder], or its
registered assigns (in each case, the “Holder”), a certificate or certificates
for an aggregate of [number of shares (            )] shares (the “B Warrant
Shares”) of common stock, $0.0001 par value per share (“Common Stock”), upon
compliance with the terms of this Class B Warrant (“B Warrant Agreement.”)

 

1.   Grant of Warrants.

 

The Company hereby grants to the Holder the right to purchase [number of shares
(            )] shares of Common Stock for a price equal to $0.30 per share (the
“Exercise Price”). This B Warrant Agreement may be exercised, except as
otherwise provided herein, in whole or in part at any time commencing upon the
date of issuance and terminating at 5:00 P.M., New York time, on March     ,
2006, unless the closing sale price for the common stock of the Company has
closed at or above $0.90 for ten consecutive trading days. At such time the
Holder will receive 30 days notice upon which to exercise the warrant prior to
its expiration. (the “Expiration Date”)

 

Page 1 of 9

--------------------------------------------------------------------------------

Common Stock Purchase Warrant (Series B)

issued by Ratexchange Corporation

to XXXXXXX

 

2.   Manner of Exercise.

 

This B Warrant Agreement may be exercised in whole or in part by its surrender,
with the form of subscription at the end hereof duly executed by the Holder, to
the Company at its principal office or at the office of its stock transfer
agent, accompanied by payment in full in cash or by certified or official bank
check to the order of the Company of the Exercise Price of the shares to be
purchased. As soon as practicable, but in no event more than 15 days after the
Holder has given the aforesaid written notice and made the aforesaid payment,
the Company shall, without charging stock issue or transfer taxes to the Holder,
issue or caused to be issued the number of shares of duly authorized Common
Stock issuable upon such exercise, which shall be duly issued, fully paid and
non-assessable, and shall deliver to the Holder a certificate or certificates
therefor, registered in the Holder’s name. In the event of a partial exercise of
this B Warrant Agreement, the Company shall also issue and deliver to the Holder
a new B Warrant Agreement of like tenor, in the name of the Holder, for the
exercise of the number of B Warrant Shares for which such B Warrant Agreement
may still be exercised.

 

3.   Investment Representation.

 

The Holder acknowledges that this B Warrant Agreement, as well as, the B Warrant
Shares for which this B Warrant Agreement may be exercised, have not been and,
except as otherwise provided herein, will not be registered under the Securities
Act of 1933 (the “Act”) or qualified under applicable state securities laws and
that the transferability thereof is restricted by the registration provisions of
the Act as well as such state laws. The Holder represents that he is acquiring
the B Warrant Agreement and will acquire the B Warrant Shares for his own
account, for investment purposes only and not with a view to resale or other
distribution thereof, nor with the intention of selling, transferring or
otherwise disposing of all or any part of such securities for any particular
event or circumstance, except selling, transferring or disposing of them upon
full compliance with all applicable provisions of the Act, the Securities
Exchange Act of 1934 (the “Exchange Act”), the Rules and Regulations promulgated
by the Securities and Exchange Commission (the “Commission”) thereunder, and any
applicable state securities laws. The Holder further understands and agrees that
(i) neither the B Warrant Agreement nor the B Warrant Shares may be sold unless
they are subsequently registered under the Act and qualified under any
applicable state securities laws or, in the opinion of the Company’s counsel, an
exemption from such registration and qualification is available; (ii) any
routine sales of the Company’s securities made in reliance upon Rule 144
promulgated by the Commission under the Act, can be effected only in the amounts
set forth in and pursuant to the other terms and conditions, including
applicable holding periods, of that Rule; and (iii) except as otherwise set
forth herein, the Company is under no obligation to register the B Warrant
Agreement or the B Warrant Shares on his behalf or to assist him in complying
with any exemption from registration under the Act. The Holder agrees that each
certificate representing any B Warrant Shares for which the B Warrant Agreement
may be exercised will bear on its face a legend in substantially the following
form:

 

These securities have not been registered under the Securities Act of 1933 or
qualified under any state securities laws. They may not be sold, hypothecated or
otherwise transferred in the absence of an effective registration statement
under that Act or qualification under applicable state securities laws without
an opinion acceptable to counsel to the Company that such registration and
qualification are not required.

 

Page 2 of 9

--------------------------------------------------------------------------------

Common Stock Purchase Warrant (Series B)

issued by Ratexchange Corporation

to XXXXXXX

 

4.   Holder Not Deemed Stockholder.

 

The Holder shall not, as holder of the B Warrant Agreement, be entitled to vote
or to receive dividends, except as may be provided in Section 5 below, or be
deemed the holder of Common Stock that may at any time be issuable upon exercise
of the B Warrant Agreement for any purpose whatsoever, nor shall anything
contained herein be construed to confer upon the Holder, as holder of the B
Warrant Agreement, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issue or reclassification
of stock, change of par value or change of stock to no par value, consolidation,
merger or conveyance or otherwise), or to receive notice of meetings, or to
receive dividends or subscription rights, until the Holder shall have exercised
the B Warrant Agreement and been issued shares of Common Stock in accordance
with the provisions hereof.

 

5.   Warrant Adjustments.

 

The Exercise Price and the number of shares purchasable upon exercise of the B
Warrant Agreement shall be subject to adjustment with respect to events after
the date hereof as follows:

 

(a) Subdivision or Combination of Shares. If the Company is recapitalized
through the subdivision or combination of its outstanding shares of Common Stock
into a larger or smaller number of shares, the number of B Warrant Shares shall
be increased or reduced, as of the record date for such recapitalization, in the
same proportion as the increase or decrease in the outstanding shares of Common
Stock, and the Exercise Price shall be adjusted so that the aggregate amount
payable for the purchase of all of the B Warrant Shares issuable hereunder
immediately after the record date for such recapitalization shall equal the
aggregate amount so payable immediately before such record date.

 

(b) Dividends in Common Stock or Securities Convertible into Common Stock. If
the Company declares a dividend or distribution on Common Stock payable in
Common Stock or securities convertible into Common Stock, the number of shares
of Common Stock for which this B Warrant Agreement may be exercised shall be
increased, as of the record date for determining which

 

Page 3 of 9

--------------------------------------------------------------------------------

Common Stock Purchase Warrant (Series B)

issued by Ratexchange Corporation

to XXXXXXX

 

holders of Common Stock shall be entitled to receive such dividend, in
proportion to the increase in the number of outstanding shares (and shares of
Common Stock issuable upon conversion of all such securities convertible into
Common Stock) of Common Stock as a result of such dividend or distribution, and
the Exercise Price shall be adjusted so that the aggregate amount payable for
the purchase of all the B Warrant Shares issuable hereunder immediately after
the record date for such dividend or distribution shall equal the aggregate
amount so payable immediately before such record date.

 

(c) Notice of Adjustment. Whenever the number of B Warrant Shares purchasable
upon the exercise of the B Warrant Agreement or the Exercise Price of the B
Warrant Shares is adjusted as provided herein, the Company shall mail to the
Holder a notice of such adjustment or adjustments, prepared and signed by the
Chief Executive Officer, Chief Financial Officer or Secretary of the Company,
which sets forth the number of B Warrant Shares purchasable upon the exercise of
the B Warrant Agreement and the Exercise Price of such B Warrant Shares after
such adjustment, a brief statement of the facts requiring such adjustment, and
the computation by which such adjustment was made. Upon an adjustment described
herein, the Company may elect to issue a new B Warrant Agreement reflecting such
adjustment, and if the Company so elects, the Holder will return this B Warrant
Agreement to the Company in exchange for such new B Warrant Agreement.

 

(d) The provisions of this Section 3 are for the purpose of, and shall be
interpreted to the effect that, upon any exercise of this B Warrant Agreement,
the Holder shall be entitled to receive the same amount and kind of securities
and other property that it would have been entitled to receive as the owner at
all times subsequent to the date hereof of the number of shares of Common Stock
issuable upon conversion of the B Warrant Shares purchased upon any such
exercise.

 

(e) It is agreed and understood that no adjustments shall be made hereunder
solely as a result of the issuance by the Company of: (i) Common Stock issued
pursuant to any future public or private issuance of stock; or (ii) Common Stock
issued upon the exercise of warrants or options granted by the Company.

 

(f) No adjustment of the Exercise Price shall be made in an amount of less than
1% of the Exercise Price in effect at the time such adjustment is otherwise
required to be made, but any such lesser adjustment shall be carried forward and
shall be made at the time and together with the next subsequent adjustment
which, together with any adjustments so carried forward, shall amount to not
less than 1% of such Exercise Price.

 

(g) Irrespective of any adjustment or change in the Exercise Price, or the
number of shares of Common Stock actually purchasable under each B Warrant
Agreement of like tenor, the B Warrant Agreement theretofore and thereafter
issued may continue to express the Exercise Price per Share and the number of B
Warrant Shares purchasable thereunder as the Exercise Price per Share and the
number of B Warrant Shares purchasable were expressed on the B Warrant Agreement
when initially issued.

 

Page 4 of 9

--------------------------------------------------------------------------------

Common Stock Purchase Warrant (Series B)

issued by Ratexchange Corporation

to XXXXXXX

 

6.   Fractional Shares.

 

If the number of B Warrant Shares purchasable upon the exercise of the B Warrant
Agreement is adjusted pursuant to Section 5 hereof, the Company shall
nevertheless not be required to issue fractions of shares upon exercise of the B
Warrant Agreement or otherwise, or to distribute certificates that evidence
fractional shares. Instead the Company will round any fractional share to the
nearest share so that if the fraction is less than 0.5 no share shall be issued
and if the fraction is 0.5 or higher the Company shall issue one full share

 

7.   Inclusion of B Warrant Shares in Registration Statement; Right to
Registration.

 

(a) Holder’s Right to Registration. The Company shall file a registration
statement on Form S-3 for the common stock that underlies the Class B Warrant
Agreement with the Securities and Exchange Commission (the “Commission”) within
120 days of the closing of the financing and use its reasonable best efforts to
have such registration statement declared effective. Should the Company fail to
file a registration statement listing the Underlying Shares with the Commission
within 120 days of the closing of the financing, the Holder shall be entitled to
receive an additional B Warrant Agreement to purchase a number of shares of the
Company’s common stock equal to ten (10%) percent of the aggregate number of
Preferred Shares purchased by the Holder in this financing, with a term of three
years, unless the closing sale price for the common stock of the Company has
closed at or above $0.90 for ten consecutive trading days. At such time the
Holder will receive 30 days notice upon which to exercise the warrant prior to
its expiration. The exercise price shall be equal to the closing price of the
Company’s common stock on the American Stock Exchange on the 120th day following
the closing of this financing.

 

(b) “Piggyback” Registration Rights. If at any time after the date hereof, the
Company proposes to file a Registration Statement under the Act with respect to
any of its securities (except one relating to employee benefit plans or a merger
or similar transaction), it shall give written notice of its intention to effect
such filing to the Holder at least 30 days prior to filing such Registration
Statement (the “Piggyback Registration Statement”). If the Holder’s Registerable
Securities have not been previously registered as provided in Paragraph 7 (a)
above, and he desires to include his Registerable Securities in the Piggyback
Registration Statement, he shall notify the Company in writing within 15 days
after receipt of such notice from the Company, in which event the Company shall
include the Holder’s Registerable Securities in the Piggyback Registration
Statement. If the Holder elects to include his Registerable Securities in the
Piggyback Registration Statement as set forth herein, he shall, in a timely
fashion, provide the Company and its counsel with such information and execute
such documents as its counsel may reasonably require to prepare and process the
Piggyback Registration Statement.

 

Page 5 of 9

--------------------------------------------------------------------------------

Common Stock Purchase Warrant (Series B)

issued by Ratexchange Corporation

to XXXXXXX

 

(c) Copies of Registration Statements and Prospectuses. The Company will provide
the Holder with a copy of the Demand Registration Statement or Piggyback
Registration Statement, as the case may be, and any amendments thereto, and
copies of the final prospectus included therein in such quantities as may
reasonably be required to permit the Holder to sell his Registerable Securities
after the Registration Statement or Piggyback Registration Statement, as the
case may be, is declared effective by the Commission.

 

(d) The Company’s Obligation to Bear Expenses of Registration. The Company will
bear all expenses (except underwriting discounts and commission, if any, and the
legal fees and expenses, if any, of counsel to the Holder) necessary and
incidental to the performance of its obligations under this Section 7.

 

(e) Indemnification. The Company and the Holder, if the Holder’s Registerable
Securities are included in a Registration Statement pursuant to this Section 7,
shall provide appropriate cross indemnities to each other covering the
information supplied by the indemnifying party for inclusion in such
Registration Statement.

 

(f) Restriction on Sale of Registerable Securities. The Holder agrees that as a
condition for the Company registering the Registerable Securities as provided in
Paragraph 7 (a), in the event that the Piggyback Registration Statement in which
the Registerable Securities are included relates to an offering to be effected
through or with the assistance of an underwriter, he will consent to restrict
the sale of the Registerable Securities or reduce the number of Registerable
Securities that may be included in such registration in accordance with the
requirements of such underwriter.

 

(g) Cancellation of Registration Rights. Anything to the contrary
notwithstanding, the Company shall not be required to register any Registerable
Securities that, in the reasonable opinion of the Company’s counsel, may be sold
pursuant to the exemption from registration provided by Section (k) of Rule 144
promulgated under the Act.

 

8.   Covenants of the Company.

 

The Company covenants that it will at all times reserve and keep available out
of its authorized Common Stock, solely for the purpose of issue upon exercise of
a B Warrant Agreement, such number of shares of Common Stock as shall then be
issuable upon the exercise of all outstanding B Warrant Agreement. The Company
covenants that all shares of Common Stock which shall be issuable upon exercise
of the B Warrant Agreement shall, at the time of delivery thereof, be duly and
validly issued and fully paid and nonassessable and free from all preemptive or
similar rights, taxes, liens and charges with respect to the issue thereof, and
that upon issuance such shares shall be listed on each securities exchange, if
any, on which the other shares of outstanding Common Stock of the Company are
then listed.

 

Page 6 of 9

--------------------------------------------------------------------------------

Common Stock Purchase Warrant (Series B)

issued by Ratexchange Corporation

to XXXXXXX

 

9.   Amendments.

 

This Agreement shall not be amended, modified or revoked except by agreement in
writing, signed by the Company and the Holder.

 

10.   Governing Law.

 

The B Warrant Agreement shall be governed by the laws of the State of
California.

 

IN WITNESS WHEREOF, the Company has caused these B Warrant Agreement to be
executed on its behalf by an officer thereunto duly authorized and the Holder
has executed this Agreement as of November 26, 2001.

 

RateXchange Corporation            

By:

 

 

--------------------------------------------------------------------------------

         

 

--------------------------------------------------------------------------------

   

D. Jonathan Merriman,

         

Holder

   

Chief Executive Officer

           

 

Page 7 of 9

--------------------------------------------------------------------------------

SUBSCRIPTION FORM

 

To Be Executed by the Holder

in Order to Exercise B Warrants

 

The undersigned Holder hereby irrevocably elects to exercise the B Warrants, and
to purchase              shares of Common Stock issuable upon the exercise
thereof, and requests that certificates for such shares shall be issued in the
name of

 

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

 

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[please print or type name and address]

 

to be delivered to

 

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[please print or type name and address]

 

and if such number of shares of Common Stock shall not be all the shares
issuable upon the exercise of the B Warrant Agreement, that a new B Warrant
Agreement exercisable for the balance of the shares issuable upon the exercise
of the B Warrant Agreement be delivered to the Holder at the address stated
below.

 

Dated:

 

 

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X

 

 

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                Address                

 

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                Taxpayer Identification Number

 

Page 8 of 9

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[FORM OF ASSIGNMENT]

 

To be executed by the registered holder if such holder

desires to transfer the Warrant Certificate.

 

FOR VALUE RECEIVED                                        
                                          hereby sells, assigns and transfers
unto

 

                                                                               
                                        
                                        
                                                            

(Please print name and address of transferee)

 

this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint              Attorney, to
transfer the within Warrant Certificate on the books of the within-named
Company, with full power of substitution.

 

Dated:                     

 

Signature

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(Signature must conform in all respects to name of holder as specified on the
face of the Warrant Certificate.)

 

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(Insert Social Security or Other

Identifying Number of Holder)

 

Page 9 of 9

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EXHIBIT D

 

TO

 

RATEXCHANGE CORPORATION

 

SUBSCRIPTION AGREEMENT

 

AND

 

INVESTMENT LETTER

 

Registration Rights Agreement

 

AGREEMENT dated as of March     , 2003 between Ratexchange Corporation, a
Delaware corporation (with its successors and assigns, the “Issuer”), and each
person or entity listed on the signature pages hereof (each, with its
successors, a “Subscriber”).

 

WHEREAS, pursuant to the Subscription Agreement and Investment Letter dated
March     , 2003, the Issuer is issuing, on the date hereof, to each of the
Subscribers a certain number of shares of the Issuer’s Series B Preferred Stock,
convertible into the Issuer’s common stock and a Class B Warrant to purchase
shares of the Issuer’s common stock (the “Convertible Securities”);

 

WHEREAS, the Issuer wishes to agree that the Subscribers will have the right to
participate in certain registrations of the Issuer’s common stock pursuant to
the Securities Act of 1933;

 

NOW, THEREFORE the parties agree as follows:

 

1. Definitions

 

1.1 Standard Definitions. The following terms, when capitalized, are used herein
with the following meanings:

 

“Covered Shares” means the common stock of the Issuer that is issuable or issued
upon conversion or exercise of the Convertible Securities.

 

“Majority Subscribers” means Subscribers that own, at the time of determination,
in the aggregate, not less than 51% of the total number of Covered Shares then
owned by all of the Subscribers.

 

“1933 Act” means the Securities Act of 1933 and the rules and regulations issued
thereunder, as amended from time to time.

 

“1934 Act” means the Securities Exchange Act of 1934 and the rules and
regulations issued thereunder, as amended from time to time.

 

“Other Seller of Stock of Issuer” means, if a Subscriber’s Covered Shares are
Registered pursuant to this Agreement, each other holder (not including the
Issuer itself) of securities of the Issuer that are sold as part of the same
offering of the Issuer’s securities.

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To “Register” any securities means to effect the registration of such securities
by preparing and filing a registration statement or similar document in
compliance with the 1933 Act, and the declaration or ordering of effectiveness
of such registration statement or document. The words “Registered” and
“Registration” have corresponding meanings.

 

“Rule 144” means Rule 144 promulgated by the Securities and Exchange Commission
under the 1933 Act and any successor rule to substantially the same effect, in
each case as amended from time.

 

2. Registration Rights

 

2.1 Mandatory Registration. The Issuer shall file a registration statement on
Form S-3 for the common stock that underlies the Series B Convertible Preferred
stock and Class B Warrants (collectively, the “Covered Shares”) with the
Securities and Exchange Commission (the “Commission”) within 90 days of the
closing of the financing and use its reasonable best efforts to have such
registration statement declared effective. The Issuer will also grant the
Subscribers certain “piggyback” registration rights with respect to these
securities. Should the Issuer fail to file a registration statement listing the
Covered Shares with the Commission within 90 days of the closing of the
financing, the Subscriber shall be entitled to receive a Class B Warrant to
purchase a number of shares of the Issuer’s common stock equal to ten (10%)
percent of the aggregate number of Series B Preferred Shares purchased by the
Subscriber in this financing, with a term of three years and an exercise price
equal to the closing price of the Issuer’s common stock on the American Stock
Exchange on the 90th day following the closing of this financing.

 

Should the Commission fail to declare the Issuer’s Form S-3 Registration
Statement effective on or before the 180th day after the Closing, the annual
dividend rate payable on the Series B Preferred Stock will be increased from
3.00% to 9.00% for the period of time from the 181st day after Closing until the
Issuer’s registration statement is declared effective. Upon the Commission
declaring the registration statement effective, the annual dividend rate will
return to 3.00%. Dividends will be paid quarterly in cash, regardless of which
dividend rate is applied.

 

2.2 Piggyback Registration. If the Issuer proposes to Register any of its common
stock (other than a Registration (a) relating to the sale of securities to
employees of the Issuer pursuant to a stock option, stock purchase or similar
plan which is Registered on Form S-8 or otherwise, (b) relating to an exchange
offer or offering of securities solely to the Issuer’s existing security
holders, (c) relating to a Rule 145 transaction or (d) on any form which does
not include substantially the same information as would be required to be
included in a registration statement covering the sale of Covered Shares owned
by the Subscribers), the Issuer shall cause to be Registered all of the Covered
Shares of each Subscriber and (ii) to cause such Covered Shares to be registered
and qualified under the securities or Blue Sky laws of such states in which the
other shares included in such public offering are generally registered and
qualified, provided that such Subscriber has provided to the Issuer such
information regarding itself and the disposition of the Covered Shares as is
required to effect such Registration, registration and qualification.

 

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2.3 Actions on Registration. Whenever required by this Agreement to effect the
Registration of any Covered Shares, the Issuer will, as expeditiously as
reasonably possible, furnish to the Subscribers such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as the Subscribers may
reasonably request in order to facilitate the disposition of such shares.

 

2.4 Expenses of Registration. The Issuer shall bear the costs and expenses of
any Registration pursuant to this Agreement, including without limitation all
registration, filing and qualification fees, printers’ and accounting fees
relating thereto.

 

2.5 Indemnification.

 

(a) The Issuer agrees to indemnify and hold harmless each Subscriber from and
against any and all losses, claims, damages and liabilities (each, a “Loss”)
under the 1933 Act, the 1934 Act and the state laws of the state or states in
which the Issuer registers or qualifies the Covered Shares, and reasonable fees
and expenses of counsel in connection therewith, insofar as such Losses are
caused by (i) any untrue statement or alleged untrue statement of a material
fact contained in any registration statement or prospectus relating to the
Covered Shares (as amended or supplemented if the Issuer shall have furnished
any amendments or supplements thereto), (ii) any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or (iii) any violation or alleged
violation by the Issuer of the 1993 Act, the 1934 Act, the laws of any state in
which the Issuer registers or qualifies the Covered Shares, or any rules or
regulations promulgated thereunder, provided that no Subscriber is entitled to
indemnification under this Section for any Loss:

 

(i) arising from any untrue statement or omission or alleged untrue statement or
omission based upon written information furnished to the Issuer by or on behalf
of such Subscriber expressly for use in connection with such registration;

 

(ii) arising in connection with any preliminary prospectus, if the person or
entity asserting any such Loss was not provided with a current copy of the
prospectus and such current copy of the prospectus would have cured the defect
giving rise to such Loss; or

 

(iii) under any settlement effected without the consent of the Issuer, which
consent shall not unreasonably be withheld.

 

(b) Each Subscriber severally agrees to indemnify and hold harmless the Issuer,
its officers, directors and agents, and each person or entity, if any, who
controls the Issuer within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act, from and against any and all Losses under the 1933 Act, the
1934 Act or applicable state law, and reasonable fees and expenses of counsel in
connection therewith, insofar as such Losses are caused by any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement or prospectus relating to a distribution of the Issuer’s common stock
in which such Subscriber is a selling Subscriber (as amended or supplemented if
the Issuer shall have furnished any amendments or supplements thereto) or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only to the extent such untrue statement or omission or alleged untrue
statement or omission is based upon information furnished to the Issuer in
writing by or on behalf of such Subscriber concerning such Subscriber expressly
for use in connection with such registration.

 

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(c) In case any proceeding (including any governmental investigation) shall be
instituted involving any person or entity in respect of which indemnity may be
sought pursuant to this Section, such person or entity (an “Indemnitee”) shall
promptly notify each person or entity against whom such indemnity may be sought
(an “Indemnitor”) in writing and the Indemnitors (all, jointly, or one or more
of them, pursuant to an agreement among such Indemnitors) shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such Indemnitee, and shall assume the payment of all fees and expenses. In any
such proceeding, each Indemnitee shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense of such
Indemnitee. It is understood that no Indemnitor shall, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) at any time for all Indemnitees, and that all
such fees and expenses shall be reimbursed as they are incurred. The Indemnitor
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent, or if there be a final
judgment for the plaintiff, the Indemnitor shall indemnify and hold harmless
such Indemnitees from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment.

 

(d) If the indemnification provided for in this Section 2.5 is, as a matter of
applicable law, unavailable to an Indemnitee on account of any Loss, then each
Indemnitor, in lieu of indemnifying such Indemnitee, shall contribute to the
amount paid or payable by such Indemnitee on account of such Loss (and fees and
expenses of counsel) in such proportion as is appropriate to reflect the
relative fault of the parties in connection with the statements or omissions
that resulted in such Loss, as well as any other relevant equitable
considerations. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or allegedly untrue
statement or omission or alleged omission relates to information supplied by the
Issuer or a Subscriber, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Issuer and each Subscriber agree that it would not be just and equitable if
contribution pursuant to this paragraph were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to above.

 

2.6 No Delay of Registration. Each Subscriber hereby irrevocably waives and
covenants not to assert any right such Subscriber might have to obtain or seek
an injunction, administrative order or other action restraining or otherwise
delaying the Registration of securities of the Issuer in connection with any
controversy that may arise with respect to the interpretation and enforcement of
this Agreement.

 

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2.7 Rule 144. To the extent necessary to make available to the Subscribers the
benefits of Rule 144, the Issuer will:

 

(i) make and keep public information available as required by Rule 144;

 

(ii) file with the Securities and Exchange Commission in a timely manner all
reports and other documents required of the Issuer under the 1934 Act; and

 

(iii) furnish to any Subscriber upon request (x) a written statement by the
Issuer that it has complied with the reporting requirements of Rule 144, the
1933 Act and the 1934 Act, or that it qualifies as a registrant whose securities
may be resold pursuant to Form S-1 or Form S-3; (y) a copy of the most recent
annual or quarterly report of the Issuer and such other reports and documents as
the Issuer has filed pursuant to the 1933 Act or the 1934 Act; and (z) such
other information as may be reasonably requested by a Subscriber to permit it to
sell Covered Shares without the requirement of Registration, pursuant to Rule
144.

 

3. Miscellaneous

 

3.1 Notices. All notices and other communications hereunder shall be in writing
(including facsimile transmission), and shall be given to each party at the
address or telecopier number set forth under its name on the signature page
hereof, or such other address or telecopier number as such party may hereafter
specify for the purpose by notice to the other. Each such notice or other
communication shall be effective (a) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (b) otherwise, when delivered at the address or
received at the telecopier number specified in this Section.

 

3.2 Amendment; No Waivers; Integration. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the Issuer and the Majority Subscribers
or, in the case of a waiver, by the party against whom the waiver is to be
effective (or, in the case of waiver that is to be effective against any
Subscriber, by the Majority Subscribers). This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings and negotiations, both written
and oral, among any of the parties with respect to the subject matter of this
Agreement.

 

3.3 Assignment.

 

(a) Except as expressly set forth in this Section 3.3, no party hereto may
assign, delegate or otherwise transfer any of its obligations or rights under
this Agreement.

 

(b) A Subscriber’s rights to cause the Issuer to register Covered Shares
pursuant to this Agreement may be assigned (but only with all related
obligations) by a Subscriber to a “Qualified Transferee” as defined below (who
shall thereafter be deemed a “Subscriber” under this Agreement) if, but only if,
all of the following conditions are satisfied;

 

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(i) the Subscriber provides the Issuer with advance written notice of the name
and address of such transferee or assignee and the securities with respect to
which such registration rights are being assigned;

 

(ii) the Subscriber satisfies the Issuer to its reasonable satisfaction that the
transfer of Covered Shares to the Qualified Transferee satisfies all
requirements of the 1933 Act and the 1934 Act and the regulations promulgated
thereunder, and that there is no legal restriction on the Issuer’s recording
such transfer on the records of the Issuer;

 

(iii) the Qualified Transferee completes all investor questionnaires or similar
documents reasonably requested by the Issuer with respect to the foregoing;

 

(iv) the Qualified Transferee agrees in writing to be bound by and subject to
the terms and conditions of this Agreement, including without limitation the
provisions of Section 2.5; and

 

(v) the Issuer gives its consent, which will not be unreasonably withheld.

 

(c) A “Qualified Transferee” is (i) a direct or indirect member or Subscriber of
a Subscriber that initially holds such Shares as a limited liability company or
corporation, (ii) any family member or trust for the benefit of a Subscriber
that is a natural person, or (iii) any transferee or assignee who after giving
effect to such transfer holds not less than two hundred fifty thousand (250,000)
Covered Shares.

 

3.4 Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of California. Each party
submits to the nonexclusive jurisdiction of the United States District Court for
the Northern District of California and of any California state court sitting in
the City and County of San Francisco for purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. Each party irrevocably waives any objection that it may now or hereafter
have to the laying of venue in any proceeding brought in such a court, and any
claim that any such proceeding was brought in an inconvenient forum.

 

3.5 Headings. The headings and captions in this Agreement are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.

 

3.6 Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement shall become
effective only when each party hereto shall have received (including without
limitation by facsimile transmission) a counterpart hereof signed by each other
party hereto.

 

[Signature pages follow]

 

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

 

Ratexchange Corporation

By

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D. Jonathan Merriman

Chairman and Chief Executive Officer

Address for Notices:

100 Pine Street, Suite 500

San Francisco, CA 94111

Facsimile: (415) 274-5651

Investor

 

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SIGNATURE

 

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Print Name

 

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Title, if applicable

 

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