<PAGE>

                                                                     Exhibit 4.2

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "1933 ACT"), AND NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE OF THIS WARRANT CAN BE SOLD OR TRANSFERRED UNLESS THE
REGISTRATION PROVISIONS OF THE SAID ACT HAVE BEEN COMPLIED WITH OR UNLESS, IN
THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, BOTH AS TO THE IDENTITY OF
THE COUNSEL AND AS TO THE FORM AND SUBSTANCE OF THE OPINION, COMPLIANCE WITH
SUCH PROVISIONS IS NOT REQUIRED.

Date: February __, 2000                                      Warrant to Purchase
                                                          Shares of Common Stock

                             PAPEREXCHANGE.COM, INC.

                          COMMON STOCK PURCHASE WARRANT

No. __

      THIS CERTIFIES that _______________ (including any permitted transferee
hereunder, the "Holder"), or registered assigns, is entitled, at any time during
the Warrant Exercise Period (as hereinafter defined), to subscribe for and
purchase from PAPEREXCHANGE.COM, INC., a Delaware corporation (including any
entity which shall succeed to or assume the obligations of PaperExchange.com,
Inc. hereunder, the "Company"), up to the Applicable Number, as adjusted from
time to time, of the Shares (as defined in Section 1 hereof) at an initial
purchase price per Share of $2.00 (such price per Share as adjusted from time to
time as provided herein is referred to herein as the "Exercise Price"). The
number of such Shares and the Exercise Price are subject to adjustment as
provided herein.

      This Warrant is being issued in full substitution of that certain Warrant
dated October 15, 1999 (the "Original Warrant") issued by PaperExchange.com,
LLC, a Delaware limited liability company (the "LLC"), in connection with the
conversion of the LLC to the Company on February __, 2000, and is effective as
of October 15, 1999. The Original Warrant was issued in connection with a
certain Note, dated as of October 15, 1999, issued to the Holder by the LLC,
which Note automatically became an obligation of the Company upon conversion of
the LLC.

      This Warrant is subject to the following terms and conditions:

      Section 1. Definitions. As used herein the following terms, unless the
context otherwise requires, have the following respective meanings:

      Applicable Number shall mean _____________ Shares (as adjusted pursuant to
the terms hereof).
<PAGE>
                                      -2-


      Company shall have the meaning set forth in the first paragraph of this
Warrant.

      Common Stock shall mean (i) the Company's Common Stock, $0.001 par value
per share, (ii) any other capital stock of any class or classes (however
designated) of the Company, the holders of which shall have the right, without
limitation as to amount, either to all or to a share of the balance of current
dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference, and (iii) any other
securities into which or for which any of the securities described in clauses
(i) or (ii) above have been converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.

      Equity Incentive Plan shall mean the Company's 2000 Equity Incentive Plan,
which provides for the issuance of up to 4,550,000 Shares (subject to
adjustments as provided therein).

      Equivalent Number shall mean a number of Other Securities of the Company
other than Shares, which number represents the same percentage of the
outstanding units of such class (on a fully-diluted basis) as the Applicable
Number represents at such time with respect to the Shares.

      Exchange Notice shall mean a notice set forth in Section 2.1 hereof.

      Exercise Price shall have the meaning set forth in the first paragraph of
this Warrant.

      Exercise Shares shall have the meaning set forth in Section 2.1 hereof.

      Fair Market Value shall mean (i) prior to a Qualified Public Offering, the
Non-Public Company Fair Market Value, and (ii) after a Qualified Public
Offering, the average, for the period of ten (10) Business Days prior to the
date of exercise, of the closing prices (if listed on a stock exchange or quoted
on the NASDAQ National Market System or any successor thereto), or the average
of the closing bid and asked prices (if quoted on NASDAQ or otherwise publicly
traded) of the Shares.

      Holder shall have the meaning set forth in the first paragraph of this
Warrant.

      Majority Holders shall mean the holders of a majority of the aggregate
Shares then issuable under the Warrants.

      Net Consideration Per Share shall mean the amount equal to the total
amount of consideration, if any, received by the Company for the issuance of
such Shares or Other Securities, as the case may be, plus the minimum amount of
additional consideration, if any, payable to the Company upon exercise,
conversion, and/or exchange thereof for Shares or Other Securities, divided by
the maximum number of Shares or Other Securities issued or that would be issued
if all such Other Securities were exercised or converted at such Net
Consideration Per Share, as the case may be.

      Non-Public Company Fair Market Value shall mean, with respect to Shares or
Other Securities, the fair market value of such Shares or Other Securities as
determined in good faith by the Company's Board of Directors. The Non-Public
Company Fair Market Value shall in all cases be calculated by determining the
Non-Public Company Fair Market Value of the entire stock and other securities of
the Company or of the issuer of any Other Securities taken as a
<PAGE>
                                      -3-


whole, without premium for control or discounts for minority interests or
restrictions on transfer and taking into consideration any plans or proposals
for any mergers, sales of assets, acquisitions or substantial sales of stock or
other securities of the Company by the Company or its stockholders relating to
the Company or by any such other issuer.

      Note shall mean the note due October 15, 2004 of the LLC issued to the
original Holder of this Warrant in connection with the financing evidenced by
the Notes.

      Notes shall mean the $10,000,000 aggregate principal amount of promissory
notes due October 15, 2004 issued by the LLC on the Original Issue Date.

      Original Issue Date shall mean October 15, 1999.

      Other Securities refers to any stock (other than Common Stock) and other
securities of the Company or any other entity (corporate or otherwise) (i) which
the holder of this Warrant at any time shall be entitled to receive, or shall
have received, on the exercise of this Warrant, in lieu of or in addition to
Common Stock, or (ii) which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other Securities, in
each case pursuant to Section 6, 7 or 8 hereof.

      Person shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature.

      Qualified Shares shall mean those Shares which have been held by the
Holder for not less than a six (6) month period prior to the applicable exercise
of this Warrant.

      Qualified Public Offering shall mean an offering to the public of
securities of the Company in a firm commitment underwriting providing for gross
proceeds to the Company of at least $10,000,000.00.

      Shares shall mean shares of Common Stock.

      Stockholders' Agreement shall mean the Company's Stockholders' Agreement,
dated as of February __, 2000, as in effect on the date hereof and thereafter as
amended or restated in compliance with its terms.

      Total Exercise Price shall mean the price obtained by multiplying (a)
$2.00, and (b) the total number of Shares issuable, as of the Original Issue
Date, upon exercise of this Warrant.

      Warrant Exercise Period shall mean the period beginning on October 15,
1999 and ending on the Warrant Expiration Date.

      Warrant Expiration Date shall have the meaning set forth in Section 2.2
hereof.

      Warrant Shares shall mean: (i) the Shares as they are provided for as at
the date of this Warrant and issuable upon the exercise or conversion of this
Warrant or any warrants delivered in substitution or exchange therefor; and (ii)
shall include any Other Securities which may become and be issuable upon such
exercise or conversion.
<PAGE>
                                      -4-


      Warrants shall mean all of the warrants, including this Warrant, issued on
the date hereof in full substitution of the warrants issued by the LLC on the
Original Issue Date in connection with the Notes.

      Section 2. Exercise of Warrant.

            2.1. Exercise.

      (a) This Warrant may be exercised prior to its expiration pursuant to
Section 2.2 hereof by the Holder at any time or from time to time, in whole or
in part, by surrender of this Warrant, with the form of subscription attached as
Exhibit A hereto duly executed by the Holder, to the Company at its principal
office, accompanied by payment using one of the following methods:

            (i) Upon exercise of this Warrant, in whole or in part, the Holder
      may pay cash by certified or official bank check payable to the order of
      the Company or by wire transfer to its account, in the amount obtained by
      multiplying the number of Shares for which this Warrant is then being
      exercised by the Exercise Price then in effect.

            (ii) Upon exercise of this Warrant, in whole or in part, the Holder
      may pay, subject to the approval of the Company (in its sole discretion),
      the aggregate Exercise Price with respect to the number of Shares for
      which this Warrant is then being exercised (collectively, the "Exercise
      Shares"), or any part thereof, by (A) surrendering its rights to a number
      of Exercise Shares having a Fair Market Value equal to or greater than the
      required aggregate Exercise Price, in which case the Holder would receive
      the number of Exercise Shares to which it would otherwise be entitled upon
      such exercise, less the surrendered Shares, or (B) surrendering Shares. If
      the Holder desires to surrender rights to Exercise Shares or Shares
      pursuant to the preceding sentence, instead of paying cash for the
      Exercise Shares, the Holder shall give notice to the Company thereof (an
      "Exchange Notice") and, if there has not been a Qualified Public Offering,
      the Company shall promptly begin the process of determining the Non-Public
      Company Fair Market Value; the exercise of this Warrant in whole or in
      part on or before the Warrant Expiration Date, accompanied or preceded by
      an Exchange Notice rather than cash, shall constitute exercise of this
      Warrant to that extent prior to the Warrant Expiration Date, even though
      the process for determining the Non-Public Company Fair Market Value has
      not yet been undertaken and/or completed. Notwithstanding anything
      contained in this Section 2.1(a)(ii), upon exercise of this Warrant
      pursuant to this Section 2.1(a)(ii), the effective date of exercise shall
      be not less than ten (10) business days after the date of the Exchange
      Notice. If the Holder desires to exercise this Warrant by surrendering
      Shares pursuant to Section 2.1(a)(ii)(B) hereof, the Company shall have
      the right to require that such Shares being surrendered shall constitute
      Qualified Shares.

            (iii) Upon exercise of this Warrant, in whole or in part, the Holder
      may pay the aggregate Exercise Price for the Exercise Shares, or any part
      thereof, by surrendering the Holder's Note for cancellation of principal
      outstanding under such Note in an amount equal to the aggregate Exercise
      Price being paid, in which case the Company will issue to the Holder a new
      Note in the same form but with a reduced principal amount to reflect
      payment of the Exercise Price.
<PAGE>
                                      -5-


      (b) In the event the Warrant is not exercised in full, the Company, at its
expense, will forthwith issue and deliver to or upon the order of the Holder a
new Warrant or Warrants of like tenor, in the name of the Holder or as the
Holder (upon payment by the Holder of any applicable transfer taxes) may
request, calling in the aggregate on the face or faces thereof for the number of
Shares equal (without giving effect to any adjustment therein) to the number of
such Shares called for on the face of this Warrant minus the number of such
Shares (without giving effect to any adjustment therein) for which this Warrant
shall have been exercised.

      (c) The Holder shall provide written notice to all other holders of
warrants issued in connection herewith at least ten (10) days prior to the
exercise of this Warrant.

            2.2. Expiration. This Warrant shall terminate upon the earlier to
      occur of (i) exercise in full, or (ii) October 15, 2006 (the "Warrant
      Expiration Date").

      Section 3. Registration Rights. The Holder understands that (i) this
Warrant and the Shares issuable upon exercise of this Warrant have not been
registered under the 1933 Act by reason of their issuance in a transaction
exempt from the registration requirements of the 1933 Act, (ii) this Warrant and
the Shares issuable upon exercise of this Warrant must be held indefinitely
unless a subsequent disposition thereof is registered under the 1933 Act and
applicable state securities laws or is exempt from such registration (and, upon
request, evidence satisfactory to the Company is provided by the Holder of the
availability of such exemptions, including, upon request, the delivery to the
Company of opinions of counsel to the Holder, which opinions of counsel are
satisfactory to the Company), and (iii) this Warrant and the Shares issuable
upon exercise of this Warrant may bear a legend to such effect.

      Section 4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise or conversion
of this Warrant or any portion thereof. With respect to any fraction of a share
called for upon the exercise or conversion of this Warrant or any portion
thereof, an amount equal to such fraction multiplied by the then current Fair
Market Value of a Warrant Share shall be paid to the Holder in cash by the
Company.

      Section 5. Charges, Taxes and Expenses. Issuance of Warrant Shares upon
the exercise or conversion of this Warrant or any portion thereof shall be made
without charge to the Holder for any issue or transfer taxes or any other
incidental expenses in respect of the issuance of such Warrant Shares, all of
which taxes and expenses shall be paid by the Company, and such Warrant Shares
shall be issued in the name of the Holder; provided, however, that any income
taxes or capital gains taxes or similar taxes shall be payable by the Holder.

      Section 6. Adjustment for Reorganization, Consolidation, Merger, Etc.

            6.1. Certain Adjustments. In case at any time or from time to time,
      the Company shall (a) effect a capital reorganization, reclassification or
      recapitalization, (b) consolidate with or merge into any other entity, or
      (c) transfer all or substantially all of its properties or assets to any
      other entity under any plan or arrangement contemplating the dissolution
      of the Company, then in each such case, the Holder, on the exercise hereof
      as provided in Section 2 hereof at any time after the consummation of such
      reorganization, reclassification, recapitalization, consolidation or
      merger or the effective date of such dissolution, as the case may be,
      shall receive, in lieu of the Shares (or Other Securities) issuable on
      such exercise prior to such consummation or effective date, the Shares and
      Other Securities and property (including cash) to which the Holder would
<PAGE>
                                      -6-


      have been entitled upon such consummation or in connection with such
      dissolution, as the case may be, if the Holder had so exercised this
      Warrant immediately prior thereto, all subject to further adjustment
      thereafter as provided in Sections 7 and 8 hereof.

            6.2. Continuation of Terms. Upon any reorganization, consolidation,
      merger or transfer (and any dissolution following any transfer) referred
      to in this Section 6, this Warrant shall continue in full force and effect
      and the terms hereof shall be applicable to the Shares and Other
      Securities and property receivable on the exercise of this Warrant after
      the consummation of such reorganization, reclassification,
      recapitalization, consolidation or merger or the effective date of
      dissolution following any such transfer, as the case may be, and shall be
      binding upon the issuer of any such Shares or Other Securities, including,
      in the case of any such transfer, the Person acquiring all or
      substantially all of the properties or assets of the Company, whether or
      not such Person shall have expressly assumed the terms of this Warrant as
      provided in Section 9 hereof.

      Section 7. Adjustment of Exercise Price and Number of Shares. The Exercise
Price and number of Shares issuable upon exercise or conversion hereof shall be
subject to adjustment from time to time at any time after the Original Issue
Date as follows:

            7.1. Adjustments for Distributions of Shares or Other Securities,
      Splits and Combinations. In case at any time or from time to time, the
      Company shall (a) issue any Shares or Other Securities as a dividend or
      distribution, or (b) issue any Shares or Other Securities in subdivision
      of outstanding Shares or Other Securities by reclassification or
      otherwise, or (c) combine outstanding Shares or Other Securities by
      reclassification or otherwise, then the then current number and type of
      Warrant Shares issuable upon exercise or conversion hereof shall be
      adjusted to a number and type equal to the number and type of Warrant
      Shares issuable upon exercise immediately prior to such event plus the
      number and type of Warrant Shares the Holder would have received had the
      Holder exercised this Warrant immediately prior to such event and received
      the number and type of Shares issued in connection with such event and the
      Exercise Price shall be adjusted to an amount equal to the Total Exercise
      Price (or, if this Warrant has previously been exercised in part, the
      remaining unpaid portion of the Total Exercise Price) divided by the total
      number of Warrant Shares issuable upon exercise of this Warrant after
      giving effect to this adjustment.

            7.2. Adjustments for Certain Other Dividends and Distributions. In
      case at any time or from time to time, the Company shall declare a
      dividend or make a distribution upon any Shares or Other Securities
      payable otherwise than in Shares or Other Securities in a transaction
      subject to Section 7.1 hereof, then thereafter the Holder, upon the
      exercise of any of the rights represented by this Warrant, will be
      entitled to receive the number of Warrant Shares being purchased upon such
      exercise and, in addition and without further payment, the cash,
      securities and other property which the Holder would have received by way
      of dividends and distributions (otherwise than in Shares or Other
      Securities in a transaction subject to Section 7.1 hereof) if the Holder
      (a) had exercised this Warrant immediately prior to the declaration of or
      record date for such dividend or the making of such distribution so as to
      be entitled thereto, and (b) had retained all dividends in securities
      payable in respect of such Shares or in respect of any securities paid as
      dividends and distributions and originating directly or indirectly from
      such Shares, provided that, if the dividend or distribution was paid or
      made with respect to a class of Other Securities, then thereafter the
      Holder, upon the exercise of any of the rights represented by this
      Warrant, will be entitled to receive the number of Warrant Shares being
      purchased upon such
<PAGE>
                                      -7-


      exercise and, in addition and without further payment, the cash,
      securities and other property which the holder of the Equivalent Number of
      Other Securities of such other class received (or would have received) by
      virtue of such dividend or distribution.

            7.3. Adjustments for Issuances of Shares or Other Securities. In
      case at any time or from time to time, the Company shall issue or sell any
      Shares or Other Securities of any class, or shall be deemed to have issued
      or sold Shares or Other Securities as provided in Section 7.4 hereof,
      other than options to acquire Shares (and such other classes of Other
      Securities of the Company as may hereafter succeed to any of the rights of
      the Shares) granted pursuant to the Equity Incentive Plan and other than
      as a dividend or other distribution upon any class of stock or upon a
      subdivision or combination of Shares or Other Securities of any class, for
      a Net Consideration Per Share less than the Exercise Price in effect
      immediately prior to such issuance or sale or deemed issuance or sale,
      then (and in each such case) such Exercise Price will be adjusted to equal
      the Net Consideration Per Share at which additional Shares or Other
      Securities are issued or sold or deemed issued or sold. If Shares or Other
      Securities are issued for no consideration, then such Other Securities
      shall be deemed to have been sold for $.01 per unit.

            7.4. Adjustments for Issuances of Options or Rights to Purchase
      Shares. In case at any time or from time to time, the Company shall issue
      or sell any rights to subscribe for or to purchase, or grant any options
      for the purchase of, Shares or Other Securities or securities convertible
      into Shares or Other Securities (the "Convertible Securities"), other than
      options to acquire Shares (and such other classes of Other Securities of
      the Company as may hereafter succeed to any of the rights of the Shares)
      granted pursuant to the Equity Incentive Plan, whether or not such rights
      or options or the right to convert or exchange any such Convertible
      Securities are immediately exercisable, and the price per unit at which
      Shares or Other Securities are issuable upon the exercise of such rights
      or options or upon conversion or exchange of such Convertible Securities,
      determined by dividing:

            (x) the total amount, if any, received or receivable by the Company
            as consideration for the issuance or sale of such rights or the
            granting of such options, plus the minimum aggregate amount of
            additional consideration payable to the Company upon the exercise of
            such rights or options, plus, in the case of such Convertible
            Securities, the minimum aggregate amount of additional
            consideration, if any, payable to the Company upon the conversion or
            exchange thereof; by

            (y) the maximum number of Shares or Other Securities issuable upon
            the exercise of such rights or options or upon the conversion or
            exchange of the maximum number of such Convertible Securities
            issuable on the exercise of such rights or options;

      shall be less than the Exercise Price immediately prior to the issue of
      such rights or the grant of such options, then the Shares or Other
      Securities that are the subject of the Convertible Securities will be
      deemed to have been issued for purposes of Section 7.3 hereof; provided,
      however, that upon the expiration of the right to convert or exchange such
      Convertible Securities, the number of Warrant Shares then issuable upon
      exercise or conversion of the Warrant immediately prior to such expiration
      shall forthwith be adjusted to such number of Warrant Shares as would have
      resulted had the adjustments made upon the issuance of such rights or the
      granting of such options been made upon the basis of the issuance of only
      the number of Shares or Other Securities actually issued on the exercise
      of
<PAGE>
                                      -8-


      such rights or options or on the conversion or exchange of such
      Convertible Securities (or in the case of rights or options to purchase
      Convertible Securities, actually issued and at the time still issuable
      upon the conversion or exchange of the Convertible Securities actually
      issued), and upon the basis of only the consideration applicable thereto,
      and any Other Securities issuable upon the exercise of such rights or
      options which have expired or upon the conversion or exchange of any such
      Convertible Securities for the right to convert or exchange which has
      expired, shall not thereafter be deemed to be outstanding and the
      consideration applicable thereto shall not thereafter be deemed to have
      been received. If the said rights or options are issued or granted in
      conjunction with the sale of other securities of the Company, the part of
      the consideration allocable to the said rights and options, and the part
      of the consideration allocable to the said other securities, shall be
      determined in good faith by the Company.

            7.5. Adjustments to Consideration. If the amount of consideration
      payable to the Company upon the exercise of any right or option to which
      Section 7.4 hereof is applicable or upon the conversion or exchange of any
      Convertible Securities referred to in Section 7.4 hereof shall change at
      any time (including under or by reason of provisions designed to protect
      against dilution), then, forthwith upon each such change becoming
      effective, all such rights or options or all such rights of conversion or
      exchange not theretofore exercised shall be deemed to have expired or
      terminated, as the case may be, and the number of Warrant Shares issuable
      (and other rights accruing) upon exercise or conversion of the Warrant
      shall forthwith be adjusted in accordance with the proviso contained in
      Section 7.4 hereof, as the case may be, and further adjusted as though
      such rights or options or Convertible Securities deemed expired or
      terminated were newly issued and convertible or exercisable upon the
      payment of such changed consideration. The adjustments required by this
      Section 7.5 shall not duplicate any adjustments made pursuant to Section
      7.4.

            7.6. Valuation of Consideration. In case any Shares, Other
      Securities or Convertible Securities or any rights or options to purchase
      any such Shares, Other Securities or Convertible Securities shall be
      issued or sold for cash, the consideration received by the Company
      therefor shall be deemed to be the amount received by the Company
      therefor.

            7.7. Non-cash Consideration. In case any Shares, Other Securities or
      Convertible Securities or any rights or options to purchase any such
      Shares, Other Securities or Convertible Securities shall be issued or sold
      for a consideration other than cash, then, in any such event, the amount
      of the consideration (other than cash) received by the Company shall be
      deemed to be the fair value of such consideration, as determined in good
      faith by the Company.

            7.8. Record of Holders. In case the Company shall take a record of
      the holders of its Shares for the purpose of entitling them (a) to receive
      a dividend or other distribution payable in Shares, Other Securities or in
      Convertible Securities, or (b) to subscribe for or purchase Shares, Other
      Securities or Convertible Securities, then such record date shall be
      deemed to be the date of the issue or sale of the Shares, Other Securities
      or Convertible Securities deemed to have been issued or sold upon the
      declaration of such dividend or the making of such other distribution or
      the date of the issue of such right of subscription or purchase, as the
      case may be.
<PAGE>
                                      -9-


      Section 8. Adjustments for Issuance of Other Securities. In case any Other
Securities shall have been issued, or shall then be subject to issue upon the
conversion or exchange of any stock or other securities of the Company (or any
other issuer of Other Securities or any other entity referred to in Section 6
hereof) or to subscription, purchase or other acquisition pursuant to any rights
or options granted by the Company (or such other issuer or entity), the Holder
shall be entitled to receive upon exercise hereof such amount of Other
Securities (in lieu of or in addition to Shares) as is determined in accordance
with the terms hereof, treating all references to Shares herein as references to
Other Securities to the extent applicable, and the computations, adjustments and
readjustments provided for in Section 6 and Section 7 hereof with respect to the
number of Warrant Shares issuable upon exercise of this Warrant shall be made as
nearly as possible in the manner so provided and applied to determine the amount
of Other Securities from time to time receivable on the exercise of the Warrant,
so as to provide the Holder with the benefits intended by Section 6 and Section
7 hereof and the other provisions of this Warrant.

      Section 9. No Dilution. The Company will not, by amendment of its
Certificate of Incorporation, or through any reorganization, transfer of assets,
consolidation, merger or dissolution, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant. Without limiting the generality
of the foregoing, the Company (a) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and non-assessable Shares on the exercise of the Warrant from time to time,
and (b) will not transfer all or substantially all of its properties and assets
to any other entity, or consolidate with or merge into any other entity or
permit any such entity to consolidate with or merge into the Company, unless
such other entity shall expressly assume in writing and will be bound by all the
terms of this Warrant.

      Section 10. Accountants' Certificate as to Adjustments. In the case of
each event that may require any adjustment or readjustment in the Warrant Shares
issuable on the exercise of this Warrant, the Company at its expense will
promptly prepare a certificate setting forth such adjustment or readjustment, or
stating the reasons why no adjustment or readjustment is being made, and
showing, in detail, the facts upon which any such adjustment or readjustment is
based, including a statement of (a) the number of shares of each class of the
Company's Common Stock then outstanding on a fully diluted basis, and (b) the
number of shares of each class of Warrant Shares to be received upon exercise of
this Warrant, in effect immediately prior to such adjustment or readjustment and
as adjusted and readjusted (if required by Section 6 or Section 7) on account
thereof. The Company will forthwith mail a copy of each such certificate to each
holder of a Warrant, and will, on the written request at any time of any holder
of a Warrant, furnish to such holder a like certificate setting forth the
calculations used to determine such adjustment or readjustment. At its option,
the holder of a Warrant may confirm the adjustment noted on the certificate by
causing such adjustment to be computed by an independent certified public
accountant at the expense of the Company.

      Section 11. Notices of Record Date. In the event of:

            (a) any taking by the Company of a record of the holders of any
      class of securities for the purpose of determining the holders thereof who
      are entitled to receive any dividend or other distribution, or any right
      to subscribe for, purchase or otherwise acquire any shares of stock or
      other securities of any class or property, or to receive any other right;
      or

            (b) any capital reorganization of the Company, any reclassification
      or recapitalization of the capital stock of the Company or any transfer of
      all or substantially all

<PAGE>
                                      -10-


      the assets of the Company to or any consolidation or merger of the Company
      with or into any other Person; or

            (c) any voluntary or involuntary dissolution, liquidation or
      winding-up of the Company; or

            (d) any proposed issue or grant by the Company of any shares of
      stock or other securities of any class, or any right or option to
      subscribe for, purchase or otherwise acquire any shares of stock or other
      securities of any class (other than the issue of Warrant Shares on the
      exercise of this Warrant and other than pursuant to the Equity Incentive
      Plan),

then, and in each such event, the Company will mail or cause to be mailed to the
Holder a notice specifying (a) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, (b) the date on which any
such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is anticipated to
take place, and the time, if any is to be fixed, as of which the holders of
record of Shares (or Other Securities) shall be entitled to exchange their
Shares (or Other Securities) for securities or other property deliverable on
such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up and (c) the amount
and character of any shares of stock or other securities, or rights or options
with respect thereto, proposed to be issued or granted, the date of such
proposed issue or grant and the persons or class of persons to whom such
proposed issue or grant is to be offered or made.

      Section 12. Reservation of Shares Issuable on Exercise of Warrant.
Sufficient shares of authorized but unissued Common Stock of the Company have
been reserved by appropriate action in connection with the prospective exercise
of the Warrant. The Company represents and warrants that the issuance of the
Warrant or the Warrant Shares will not require any further action by the members
of the Company, will not be subject to pre-emptive rights in any present or
future members of the Company and will not conflict with any provision of any
agreement to which the Company is a party or by which it is bound, and such
Shares, when issued upon exercise of the Warrant in accordance with their terms
or upon such conversion, will be duly authorized, fully paid and non-assessable.

      Section 13. No Rights or Responsibilities as Member. This Warrant neither
entitles the Holder to any rights, nor subjects the Holder to any
responsibilities, as a stockholder of the Company.

      Section 14. Exchange. This Warrant is exchangeable, upon the surrender
hereof by the registered holder at the principal office of the Company, for new
warrants of like tenor and date representing in the aggregate the right to
purchase the number of Warrant Shares purchasable hereunder, each of such new
warrants to represent the right to purchase such number of Warrant Shares as
shall be designated by said registered holder at the time of such surrender.

      Section 15. Loss, Theft, Destruction or Mutilation of Warrant. Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which may
be the unsecured agreement of the Holder to indemnify the Company for any loss
on account thereof), and upon reimbursement to the Company of all

<PAGE>
                                      -11-


reasonable expenses incidental thereto, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will make and deliver a new warrant of
like tenor and date, in lieu of this Warrant.

      Section 16. Remedies. The Company stipulates that the remedies at law of
the Holder in the event of any default or threatened default by the Company in
the performance of or compliance with any of the terms of this Warrant are not
and will not be adequate, and that such terms may be specifically enforced by a
decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.

      Section 17. Transfer of Warrant. (a) This Warrant and all rights hereunder
are transferable, in whole or in part, only to the extent that, had the Holder
exercised this Warrant, in whole or in part, the Holder would be able to
transfer the Shares received upon exercise of this Warrant pursuant to Section 2
of the Stockholders' Agreement, except that Section 2.6 of the Stockholders'
Agreement shall apply to such transfer only as provided in paragraph (b) below.

      (b) In the event that the Holder transfers any portion of this Warrant,
then all other holders of Warrants will be entitled to rights of first refusal
and tag-along rights with respect to their Warrants on the same terms as set
forth in Section 2.6 of the Stockholders' Agreement, the provisions of which are
hereby incorporated into this Warrant, mutatis mutandis.

      (c) In addition, this Warrant and all rights hereunder are subject to the
"Drag-Along" rights set forth in Section 2.7 of the Stockholders' Agreement to
the same extent as if the Holder had exercised this Warrant for Shares, provided
that in exercise of the Drag-Along rights the Holder shall be entitled to
receive only the amount payable to holders of Shares, less the unpaid Exercise
Price.

      (d) Any transfer permitted by this Section 17 hereof shall take place at
the office or agency of the Company by the registered Holder in person or by a
duly authorized attorney, upon surrender of this Warrant together with an
assignment hereof in the form of Exhibit B attached hereto properly endorsed.
Until transfer hereof on the registration books of the Company, the Company may
treat the registered Holder as the owner hereof for all purposes.
Notwithstanding anything contained in this Section 17, this Warrant is
transferable only to the extent, and only for the pro rata portion, that the
note issued to the Holder hereof simultaneously with this Warrant is
transferred.

      Section 18. Amendments and Waivers. Any term of this Warrant may be
amended only with the written consent of the Company and the Holder; provided,
however, that any amendment to Section 2.1(c) hereof shall also require the
written consent of the Majority Holders. Any amendment or waiver effected in
accordance with this Section 18 shall be binding upon the Company, the Holder
and each transferee of this Warrant.

      Section 19. Communications and Notices. All communications and notices
hereunder must be in writing, either delivered in hand or sent by first-class
mail, postage prepaid, or sent by telecopier, and, if to the Company, shall be
addressed to it at the address set forth on the first page hereof, or at such
other address as the Company may hereafter designate in writing by notice to the
registered Holder, and, if to such registered Holder, addressed to such Holder
at the address of such Holder as shown on the books of the Company.
<PAGE>
                                      -12-


      Section 20. Sundays, Holidays, etc. If the last or appointed day for the
taking of any action required or the expiration of any right granted herein
shall be a Sunday or a Saturday or shall be a legal holiday or a day on which
banking institutions in Boston, Massachusetts are authorized or required by law
to remain closed, then such action may be taken or right may be exercised on the
next succeeding day which is not a Sunday, a Saturday or a legal holiday and not
a day on which banking institutions in Boston, Massachusetts are authorized or
required by law to remain closed.

      Section 21. Miscellaneous.

      (a) THIS WARRANT SHALL BE BINDING UPON THE COMPANY'S SUCCESSORS AND
ASSIGNS. THIS WARRANT SHALL CONSTITUTE A CONTRACT UNDER SEAL AND, FOR ALL
PURPOSES, SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF DELAWARE.

      (b) For all purposes of this Warrant, the original Holder and its
permitted transferees (pursuant to Section 17 hereof) shall be bound by all of
the terms and conditions contained in, and entitled to all of the benefits of,
this Warrant.

<PAGE>
                                      -13-


      IN WITNESS WHEREOF, PAPEREXCHANGE.COM, INC. has caused this COMMON STOCK
PURCHASE WARRANT to be signed in its corporate name and its corporate seal to be
impressed hereon by its duly authorized officers.

                                    The Company:

Dated as of:                        PAPEREXCHANGE.COM, INC.

February __, 2000


                                    By:________________________________
                                       Name:
                                       Title:

Attest:

_________________________
<PAGE>

                                                                       Exhibit A

                              FORM OF SUBSCRIPTION

(To be signed only on exercise of Common Stock Purchase Warrant)

TO: PAPEREXCHANGE.COM, INC.

      The undersigned, the registered Holder of the within Common Stock Purchase
Warrant of PaperExchange.com, Inc., hereby irrevocably elects to exercise this
Common Stock Purchase Warrant for, and to purchase thereunder, _____* Shares of
PaperExchange.com, Inc. and the undersigned herewith makes payment of $_______
therefor.

The undersigned requests that the Shares be issued in the name of
____________________, whose address is _______________________.


Dated: __________________        _____________________________________
                                    (Signature must conform in all
                                    respects to name of registered
                                    holder as specified on the face
                                    of the Warrant)

                                 _____________________________________
                                 (Address)

Signed in the presence of:

_________________________


----------
      *Insert here the number of shares (all or part of the number of shares
called for in the Common Stock Purchase Warrant) as to which the Common Stock
Purchase Warrant is being exercised without making any adjustment for any other
stock or other securities or property or cash which, pursuant to the adjustment
provisions of the Common Stock Purchase Warrant, may be deliverable on exercise;
this subscription shall also automatically entitle the Holder of the Warrant to
any other amounts and securities which do not require the payment of additional
consideration, and this subscription also entitles the Holder to purchase any
other Shares or Other Securities which, pursuant to the adjustment provisions of
the Warrant, the Holder is entitled to purchase.
<PAGE>

                                                                       Exhibit B

                               FORM OF ASSIGNMENT

(To be signed only on transfer of Common Stock Purchase Warrant)

                                   ASSIGNMENT

      For value received, the undersigned, _______________________, hereby
sells, assigns, and transfers unto ____________________ the right represented by
the within Common Stock Purchase Warrant to purchase _____________ Shares of
PaperExhange.com, Inc. (and the other rights with respect thereto provided by
the Warrant) to which the within Common Stock Purchase Warrant relates, and
appoints ___________ Attorney to transfer such right on the books of
PaperExchange.com, Inc. with full power of substitution in the premises.


Dated:_____________           _____________________________________
                                 (Signature must conform in all
                                 respects to name of registered
                                 holder as specified on the face
                                 of the Warrant)

                              _____________________________________
                              (Address)

Signed in the presence of:

_________________________

<PAGE>

                             SCHEDULE OF WARRANTS
<TABLE>
<CAPTION>
      HOLDER                                     NUMBER OF SHARES
<S>   <C>                                        <C>
1     Kraft Group LLC                            993,056
2     Terrapin Partners LLC                      112,500
3     Hilton Plein                                50,000
4     Roger Stone                                 50,000
5     Roger Stone and Matthew Kaplan,              8,333
        each as voting trustee for Jennifer
        Stone
6     Roger Stone and Matthew Kaplan,             16,667
        each as voting trustee for Matthew and
        Karen Kaplan
7     Roger Stone and Matthew Kaplan,              8,333
        each as voting trustee for Lauren
        Stone
8     Steven Kaplan                                1,389
9     PE.com Holdings LLC                        426,389
</TABLE>