exv10w23



Exhibit 10.23



THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND APPLICABLE LAWS.




Warrant to Purchase 235,000 Shares of Series B

Convertible Preferred Stock (subject to

adjustment)




WARRANT TO PURCHASE SERIES B CONVERTIBLE PREFERRED STOCK

OF

SPS COMMERCE, INC.

Void after *February 3, 2016




     This certifies that, for value received, Ritchie Capital Finance, L.L.C., a Delaware limited
liability company (“Ritchie”), or its assigns (“Holder”) is entitled, subject to the terms set
forth below, to purchase from SPS Commerce, Inc. (the “Company”), a Delaware corporation, 235,000
shares of the Series B Convertible Preferred Stock of the Company, as constituted on the date
hereof (the “Warrant Issue Date”), upon surrender hereof, at the principal office of the Company
referred to below, with the subscription form attached hereto duly executed, and simultaneous
payment therefor in lawful money of the United States or otherwise as hereinafter provided, at the
Exercise Price as set forth in Section 2 below. The number, character and Exercise Price of such
shares of Series B Convertible Preferred Stock are subject to adjustment as provided below. The
term “Warrant” as used herein shall include this Warrant, and any warrants delivered in
substitution or exchange therefor as provided herein. This Warrant is issued in connection with
the Loan and Security Agreement (the “Loan Agreement”), made as of *February 3, 2006 by and between
Ritchie and the Company.



     1. Term of Warrant. Subject to the terms and conditions set forth herein, this
Warrant shall be exercisable, in whole or in part, at any time, or from time to time, during the
term commencing on the Warrant Issue Date and ending at 5:00 p.m., New York City time, on *February
3, 2016, and shall be void thereafter.



     2. Exercise Price. The exercise price at which this Warrant may be exercised shall be
$.97875 per share of Series B Convertible Preferred Stock (“Exercise Price”), as adjusted from time
to time pursuant to Section 12 hereof.



     3. Exercise of Warrant.



          (a) The purchase rights represented by this Warrant are exercisable by the Holder in whole or
in part, at any time, or from time to time, during the term hereof as described in Section 1 above,
by the surrender of this Warrant and the Notice of Exercise, annexed hereto




 









 







as Annex A,
duly completed and executed on behalf of the Holder, at the principal office of the Company (or
such other office or agency of the Company as it may designate by notice in writing to the Holder
at the address of the Holder appearing on the books of the Company), upon
payment (i) in cash or by check acceptable to the Company, (ii) by cancellation by the Holder
of indebtedness or other obligations of the Company to the Holder, or (iii) by a combination of (i)
and (ii), of the purchase price of the shares to be purchased.




          (b) This Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above, and the person entitled to
receive the shares of Series B Convertible Preferred Stock issuable upon such exercise shall be
treated for all purposes as the holder of record of such shares as of the close of business on such
date. As promptly as practicable on or after such date and in any event within ten days
thereafter, the Company at its expense shall issue and deliver to the person or persons entitled to
receive the same a certificate or certificates for the number of shares issuable upon such
exercise. In the event that this Warrant is exercised in part, the Company at its expense will
execute and deliver a new warrant of like tenor exercisable for the number of shares for which this
Warrant may then be exercised.




          (c) Net Issue Exercise. Notwithstanding any provisions herein to the contrary, if the
fair market value of one share of Series B Convertible Preferred Stock is greater than the Exercise
Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash,
the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or
the portion thereof being canceled) by surrender of this Warrant at the principal office of the
Company together with the properly endorsed Notice of Exercise and notice of such election in which
event the Company shall issue to the Holder a number of shares of Series B Convertible Preferred
Stock computed using the following formula:




	 	 	 	 	 	 	 
	 

	 	X =
	 	Y * (A – B)
 

A
	 	 






	 	 	 	 	 	 
	 

	 	 	X =
	 	the number of shares of Series B Convertible Preferred Stock to be
issued to the Holder
	 
	 	 	 	 	 
	 

	 	 	Y =
	 	the number of shares of Series B Convertible Preferred Stock
purchasable under the Warrant or, if only a portion of the Warrant is
being exercised, the portion of the Warrant being canceled (at the
date of such calculation)
	 
	 	 	 	 	 
	 

	 	 	A =
	 	the fair market value of one share of the Company’s Series B
Convertible Preferred Stock (at the date of such calculation)
	 
	 	 	 	 	 
	 

	 	 	B =
	 	Exercise Price (as adjusted to the date of such calculation)





For purposes of the above calculation, fair market value of one share of Series B Convertible
Preferred Stock shall be determined by the Company’s Board of Directors in good faith; provided,
however, that where there exists a public market for the Company’s Common Stock at the time of such
exercise, the fair market value per share shall be the product of (i) the average of


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the closing
bid and asked prices of the Common Stock quoted in the Over-The-Counter Market Summary or the last
reported sale price of the Common Stock or the closing price quoted on the Nasdaq National Market
or on any exchange on which the Common Stock is listed, whichever is applicable, as published in
the Western Edition of The Wall Street Journal for the five (5) trading days prior to the date of
determination of fair market value and (ii) the number of shares of Common Stock into which each
share of Series B Convertible Preferred Stock is convertible at the time of such exercise.
Notwithstanding the foregoing, in the event the Warrant is exercised
in connection with the Company’s initial public offering of Common Stock, the fair market value per
share shall be the product of (i) the per share offering price to the public of the Company’s
initial public offering, and (ii) the number of shares of Common Stock into which each share of
Series B Convertible Preferred Stock is convertible at the time of such exercise.




     4. No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. In lieu of any fractional
share to which the Holder would otherwise be entitled, the Company shall make a cash payment equal
to the Exercise Price multiplied by such fraction.



     5. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss,
theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and
substance to the Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new
warrant of like tenor and amount.



     6. Rights of Stockholders. Subject to Sections 10, 12 and 14 of this Warrant, the
Holder shall not be entitled to vote or receive dividends or be deemed the holder of Series B
Convertible Preferred Stock or any other securities of the Company that may at any time be issuable
on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer
upon the Holder, as such, 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, issuance
of stock, reclassification of stock, change of par value, or change of stock to no par value,
consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until the Warrant shall have been exercised as
provided herein.



     7. Transfer of Warrant.



          (a) Warrant Register. The Company will maintain a register (the “Warrant Register”)
containing the names and addresses of the Holder or Holders. Any Holder of this Warrant or any
portion thereof may change his or her address as shown on the Warrant Register by written notice to
the Company requesting such change. Any notice or written communication required or permitted to
be given to the Holder may be delivered or given by mail to such Holder as shown on the Warrant
Register and at the address shown on the Warrant Register. Until this Warrant is transferred on
the Warrant Register of the Company, the Company may treat the Holder as shown on the Warrant
Register as the absolute owner of this Warrant for all purposes, notwithstanding any notice to the
contrary.




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          (b) Warrant Agent. The Company may, by written notice to the Holder, appoint an agent
for the purpose of maintaining the Warrant Register referred to in Section 7(a) above, issuing the
Series B Convertible Preferred Stock or other securities then issuable upon the exercise of this
Warrant, exchanging this Warrant, replacing this Warrant, or any or all of the foregoing.
Thereafter, any such registration, issuance, exchange, or replacement, as the case may be, shall be
made at the office of such agent.




          (c) Transferability and Nonnegotiability of Warrant. This Warrant may not be
transferred or assigned in whole or in part without compliance with all applicable federal and
state securities laws by the transferor and the transferee (including the delivery of investment
representation letters reasonably satisfactory to the Company, if such are requested by the
Company). Subject to the provisions of this Warrant with respect to compliance with the Securities
Act of 1933, as amended (the “Act”), title to this Warrant may be transferred by endorsement (by
the Holder executing the Assignment Form, annexed hereto as Annex B) and delivery in the
same manner as a negotiable instrument transferable by endorsement and delivery.




          (d) Exchange of Warrant Upon a Transfer. On surrender of this Warrant for exchange,
properly endorsed on the Assignment Form and subject to the provisions of this Warrant with respect
to compliance with the Act and with the limitations on assignments and transfers contained in this
Section 7, the Company at its expense shall issue to or on the order of the Holder a new warrant or
warrants of like tenor, in the name of the Holder or as the Holder (on payment by the Holder of any
applicable transfer taxes) may direct, for the number of shares issuable upon exercise hereof.




          (e) Compliance with Securities Laws.





          (i) The Holder of this Warrant, by acceptance hereof, acknowledges that this
Warrant and the shares of Series B Convertible Preferred Stock or Common Stock to be
issued upon exercise hereof or conversion thereof are being acquired solely for the
Holder’s own account and not as a nominee for any other party, and for investment,
and that the Holder will not offer, sell or otherwise dispose of this Warrant or any
            shares of Series B Convertible Preferred Stock or Common Stock to be issued upon
exercise hereof or conversion thereof except under circumstances that will not
result in a violation of the Act or any state securities laws. Upon exercise of this
Warrant, the Holder shall, if requested by the Company, confirm in writing, in a
form satisfactory to the Company, that the shares of Series B Convertible Preferred
Stock or Common Stock so purchased are being acquired solely for the Holder’s own
account and not as a nominee for any other party, for investment; and not with a
view toward distribution or resale in violation of the Act.




          (ii) The Holder of this Warrant, by acceptance hereof, represents and warrants
to the Company that such Holder is an “accredited investor” as that term is defined
in Regulation D promulgated under the Act and, either alone or with such advisers as
it may select, has such knowledge and experience in financial and business matters
that it is capable of evaluating the



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merits and risks of its investment in this
Warrant and the shares of Series B Convertible Preferred Stock or Common Stock to be
issued upon exercise hereof or conversion thereof.




          (iii) The Company did not offer this Warrant and the shares of Series B
Convertible Preferred Stock or Common Stock to be issued upon exercise hereof or
conversion thereof to the Holder by any form of general
solicitation or general advertising, including, but not limited to, any
advertisement, article, notice or similar media or broadcast over television or
radio, or any seminar or meeting whose attendees were invited by any general
solicitation or general advertising.




          (iv) The Holder acknowledges, and upon exercise of this Warrant, the Holder
shall, if requested by the Company, confirm in writing, in a form satisfactory to
the Company, that it has received a copy of that certain Information Statement of
the Company dated *[February 3, 2006] and reviewed and discussed the Company’s
business, affairs and current prospects with such officers and others (including its
purchaser representative, if applicable) as it has deemed appropriate or desirable
in connection with the transactions contemplated hereby. The Holder further
acknowledges, and upon exercise of this Warrant, the Holder shall, if requested by
the Company, confirm in writing, in a form satisfactory to the Company, that it has
requested, received and reviewed such information, undertaken such investigation and
made such further inquiries of officers of the Company and others as it has deemed
appropriate or desirable in connection with such transactions.




          (v) The Holder understands, and upon exercise of this Warrant, the Holder
shall, if requested by the Company, confirm in writing, in a form satisfactory to
the Company, that it understands, that it must bear the economic risk of its
investment for an indefinite period of time because the Series B Convertible
Preferred Stock and Common Stock are not, and will not be, registered under the Act
or any applicable state securities laws, except as may be otherwise be determined by
the Company or in connection with the Fourth Amended and Restated Registration
Rights Agreement, dated as of May 16, 2003, by and among the Company and the parties
who have executed the counterpart signature pages thereto or are otherwise bound
thereby, as such agreement may be amended and/or restated from time to time (the
“Registration Rights Agreement”), and such shares may not be resold unless
subsequently registered under the Act and such other federal or state securities
laws or unless an exemption from such registration is available. The Holder
understands, and upon exercise of this Warrant, the Holder shall, if requested by
the Company, confirm in writing, in a form satisfactory to the Company, that it
understands, that, except as may be otherwise be determined by the Company or
pursuant to the Registration Rights Agreement, it is not contemplated that any
registration will be made under the Act or any state securities laws.



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          (vi) This Warrant and all shares of Series B Convertible Preferred Stock or
Common Stock issued upon exercise hereof or conversion thereof shall be stamped or
imprinted with a legend in substantially the following form (in addition to any
legend required by state securities laws):




THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY
NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT (i) PURSUANT TO
REGISTRATION UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR
(ii) IF, IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY, THE PROPOSED SALE OR TRANSFER MAY BE EFFECTED IN COMPLIANCE
WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS WITHOUT
REGISTRATION.



     8. Representations and Warranties of Company. In connection with the transactions
provided for herein, the Company hereby represents and warrants to the Holder that:



          (a) Organization, Good Standing, and Qualification. The Company is a corporation duly
organized, validly existing, and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to carry on its business as now conducted. The Company
is duly qualified to transact business and is in good standing in each jurisdiction in which the
failure to so qualify would have a material adverse effect on its business or properties, taken as
a whole.




          (b) Authorization. The Company has all necessary corporate power and authority to
execute, deliver and perform its obligations under this Warrant. All corporate action has been
taken on the part of the Company, its officers, directors, and stockholders necessary for the due
authorization, execution and delivery of this Warrant by the Company and the performance by the
Company of its obligations hereunder. This Warrant has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors’
rights. The shares of Series B Convertible Preferred Stock issuable upon exercise of this Warrant
and the shares of Common Stock of the Company issuable upon conversion of such shares of Series B
Convertible Preferred Stock have been duly and validly authorized and reserved for issuance by the
Company.




          (c) Compliance with Other Instruments. The authorization, execution and delivery of
this Warrant by the Company, the consummation of the transactions contemplated hereby and the
performance by the Company of its obligations hereunder will not (i) violate any judgment, order,
decree, injunction, law or regulation applicable to the Company; (ii) violate any term or provision
of the Certificate of Incorporation, as amended (the “Certificate”) or bylaws of the Company; (iii)
violate, or result in a breach or default under, any other agreement or instrument to which the
Company is a party or by which it is bound or to which its properties or




6









 







assets are subject, except
for such violations, breaches or defaults which, individually or in the aggregate, will not result
in a material adverse effect upon the business operations, properties, assets, results of
operations or condition (financial or otherwise) of the Company, taken as a whole, the
enforceability of any material provision of this Warrant or the ability of the Holder to
enforce its rights and remedies under this Warrant; or (iv) result in the creation of any
lien, claim or other encumbrance on any of the property or other assets of the Company.




          (d) Valid Issuance of Preferred and Common Stock. The shares of Series B Convertible
Preferred Stock, when issued, sold, and delivered in accordance with the terms of this Warrant for
the consideration expressed herein, will be duly and validly issued, fully paid and nonassessable
and will be issued in compliance with all applicable federal and state securities laws, and none of
such shares will be in violation of any preemptive rights of any person granted by the Company.
The issuance and delivery of the shares of Common Stock of the Company that are issuable upon
conversion of the Series B Convertible Preferred Stock, if any, when issued and delivered upon such
conversion in accordance with the terms of Series B Convertible Preferred Stock, will be duly and
validly issued, fully paid and nonassessable and will be issued in compliance with all applicable
federal and state securities laws, and none of such shares of Common Stock will be in violation of
any preemptive rights of any person granted by the Company.




     9. Reservation of Stock. The Company covenants that during the term this Warrant is
exercisable, the Company will reserve from its authorized and unissued Series B Convertible
Preferred Stock a sufficient number of shares to provide for the issuance of Series B Convertible
Preferred Stock upon the exercise of this Warrant (and shares of its Common Stock for issuance on
conversion of such Series B Convertible Preferred Stock) and, from time to time, will take all
steps necessary to amend its Certificate to provide sufficient reserves of shares of Series B
Convertible Preferred Stock issuable upon exercise of this Warrant (and shares of its Common Stock
for issuance on conversion of such Series B Convertible Preferred Stock). The Company further
covenants that all shares that may be issued upon the exercise of rights represented by this
Warrant and payment of the Exercise Price, all as set forth herein, will be free from all taxes,
liens and charges in respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously or otherwise specified herein). The Company agrees that its issuance
of this Warrant shall constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for shares of Series B
Convertible Preferred Stock upon the exercise of this Warrant.



     10. Notices.



          (a) Whenever the Exercise Price or number of shares purchasable hereunder shall be adjusted
pursuant to Section 12 hereof, the Company shall issue a certificate signed by an authorized
officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated, and the Exercise Price and number
of shares purchasable hereunder after giving effect to such adjustment, and shall cause a copy of
such certificate to be mailed (by first-class mail, postage prepaid) to the Holder of this Warrant.




          (b) In case:




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          (i) the Company shall take a record of the holders of its Common Stock (or
other stock or securities at the time receivable upon the exercise of this Warrant)
for the purpose of entitling them to receive any dividend
or other distribution, or any right to subscribe for or purchase any shares of
stock of any class or any other securities, or to receive any other right, or




          (ii) of any capital reorganization of the Company, any reclassification of the
capital stock of the Company, any consolidation or merger of the Company with or
into another corporation, or any conveyance of all or substantially all of the
assets of the Company to another corporation, or




          (iii) of any voluntary dissolution, liquidation or winding-up of the Company,


then, and in each such case, the Company will mail or cause to be mailed to the Holder or Holders a
notice specifying, as the case may be, (A) the date on which a 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, or (B) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record of Series B Convertible Preferred
Stock or Common Stock (or such stock or securities at the time receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Series B Convertible Preferred Stock or
Common Stock (or such other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation
or winding-up. Such notice shall be personally delivered, or mailed by overnight delivery, at least
ten days prior to the date therein specified.




          (c) All such notices, advices and communications shall be deemed to have been received (i) in
the case of personal delivery, on the date of such delivery and (ii) in the case of mailing, on the
next business day following the date of such mailing by overnight delivery.




     11. Amendments.



          (a) Any term of this Warrant may be amended with the written consent of the Company and the
Holder.




          (b) No waivers of, or exceptions to, any term, condition or provision of this Warrant, in any
one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of
any such term, condition or provision.




     12. Adjustments. The Exercise Price and the number of shares purchasable hereunder
are subject to adjustment from time to time as follows:



          12.1 Conversion or Redemption of Series B Convertible Preferred Stock. Should all of
the Company’s Series B Convertible Preferred Stock be, or if outstanding would be, at any time
prior to the expiration of this Warrant or any portion thereof, redeemed or converted into shares
of the Company’s Common Stock in accordance with Section 4.3.4(b) of the Certificate, then this
Warrant shall become immediately exercisable for that number of shares




8









 







of the Company’s Common
Stock equal to the number of shares of the Common Stock that would have been received if this
Warrant had been exercised in full and the Series B Convertible Preferred Stock received thereupon
had been simultaneously converted immediately prior to
such event, and the Exercise Price (per share of such Common Stock) shall immediately be
adjusted to equal the quotient obtained by dividing (x) the aggregate Exercise Price of the maximum
number of shares of Series B Convertible Preferred Stock for which this Warrant was exercisable
immediately prior to such conversion or redemption, by (y) the number of shares of Common Stock for
which this Warrant is exercisable immediately after such conversion or redemption. For purposes of
the foregoing Section 12.1, the “Certificate” shall mean the Certificate of Incorporation of the
Company as amended and/or restated and effective immediately prior to the redemption or conversion
of all of the Company’s Series B Convertible Preferred Stock.




          12.2 Merger, Sale of Assets, etc. If at any time while this Warrant, or any portion
hereof, is outstanding and unexpired there shall be (i) a reorganization (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for herein), (ii) a merger
or consolidation of the Company with or into another corporation in which the Company is not the
surviving entity, or a reverse triangular merger in which the Company is the surviving entity but
the shares of the Company’s capital stock outstanding immediately prior to the merger are converted
by virtue of the merger into other property, whether in the form of securities, cash, or otherwise,
or (iii) a sale or transfer of the Company’s properties and assets as, or substantially as, an
entirety to any other person, then, as a part of such reorganization, merger, consolidation, sale
or transfer, lawful provision shall be made so that the Holder of this Warrant shall thereafter be
entitled to receive upon exercise of this Warrant, during the period specified herein and upon
payment of the Exercise Price then in effect, and in lieu of the number of shares of Series B
Convertible Preferred Stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby, the number of shares of stock, securities or assets as would be
issuable or payable with respect to or in exchange for the number of shares that a holder of the
shares deliverable upon exercise of this Warrant would have been entitled to receive if this
Warrant had been exercised immediately before such reorganization, merger, consolidation, sale or
transfer, all subject to further adjustment as provided in this Section 12. The foregoing
provisions of this Section 12.2 shall similarly apply to successive reorganizations,
consolidations, mergers, sales and transfers and to the stock or securities of any other
corporation that are at the time receivable upon the exercise of this Warrant. If the per-share
consideration payable to the holder hereof for shares in connection with any such transaction is in
a form other than cash or marketable securities, then the value of such consideration shall be
determined in good faith by the Company’s or any successor’s Board of Directors. In all events,
appropriate adjustment (as determined in good faith by the Company’s or any successor’s Board of
Directors) shall be made in the application of the provisions of this Warrant with respect to the
rights and interests of the Holder after the transaction, to the end that the provisions of this
Warrant shall be applicable after that event, as near as reasonably may be, in relation to any
shares or other property deliverable after that event upon exercise of this Warrant.




          12.3 Reclassification, etc. If the Company, at any time while this Warrant, or any
portion hereof, remains outstanding and unexpired by reclassification of securities or otherwise,
shall change any of the securities as to which purchase rights under this Warrant exist into the
same or a different number of securities of any other class or classes, this Warrant shall




9









 







thereafter represent the right to acquire such number and kind of securities as would have been
issuable as the result of such change with respect to the securities that were subject to the
purchase rights under this Warrant immediately prior to such reclassification or other change and
the Exercise Price therefor shall be appropriately adjusted, all subject to further adjustment
as provided in this Section 12. No adjustment shall be made pursuant to this Section 12.3, upon any
conversion or redemption of the Series B Convertible Preferred Stock which is the subject of
Section 12.1.




          12.4 Split, Subdivision or Combination of Shares. If the Company at any time while
this Warrant, or any portion hereof, remains outstanding and unexpired shall split, subdivide or
combine the securities as to which purchase rights under this Warrant exist, into a different
number of securities of the same class, the Exercise Price for such securities shall be
proportionately decreased in the case of a split or subdivision or proportionately increased in the
case of a combination.




          12.5 Adjustments for Dividends in Stock or Other Securities or Property. If while
this Warrant, or any portion hereof, remains outstanding and unexpired, then all holders of the
securities as to which purchase rights under this Warrant exist at the time shall have received,
or, on or after the record date fixed for the determination of eligible stockholders, shall have
become entitled to receive, without payment therefor, other or additional stock or other securities
or property (other than cash) of the Company by way of dividend, then and in each case, this
Warrant shall represent the right to acquire, in addition to the number of shares of the security
receivable upon exercise of this Warrant, and without payment of any additional consideration
therefor, the amount of such other or additional stock or other securities or property (other than
cash) of the Company that such holder would hold on the date of such exercise had it been the
holder of record of the security receivable upon exercise of this Warrant on the date hereof and
had thereafter, during the period from the date hereof to and including the date of such exercise,
retained such shares and/or all other additional stock available by it as aforesaid during such
period, giving effect to all adjustments called for during such period by the provisions of this
Section 12.




          12.6 Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment pursuant to this Section 12, the Company at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and furnish to each Holder of this
Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall, upon the written request,
at any time, of any such Holder, furnish or cause to be furnished to such Holder a like certificate
setting forth: (i) such adjustments and readjustments; (ii) the Exercise Price at the time in
effect; and (iii) the number of shares and the amount, if any, of other property that at the time
would be received upon the exercise of the Warrant.




          12.7 No Impairment. The Company will not, by any voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or performed hereunder by
the Company, but will at all times in good faith assist in the carrying out of all the provisions
of this Section 12 and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the Holder of this Warrant against impairment.




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     13. Registration Rights and Voting and Co-Sale Agreements. Upon exercise of this
Warrant, and as a condition precedent to the Company issuing any shares of Series B Convertible
Preferred Stock to the Holder in connection therewith, the Holder shall duly complete, execute
and deliver the Notices of Adoption, annexed hereto as Annex C and Annex D, by
which the Holder shall become a party to the Registration Rights Agreement and to the Fourth
Amended and Restated Voting and Co-Sale Agreement, dated as of May 16, 2003, by and among the
Company and the parties who have executed the counterpart signature pages thereto or are otherwise
bound thereby, as such agreement may be amended and/or restated from time to time.



     14. Information. So long as the Holder holds the Warrant and/or shares of Preferred
Stock or Common Stock, the Company shall deliver to the Holder, promptly after mailing (i) the
fiscal year end unqualified audited financial statements of the Company, prepared in accordance
with generally accepted accounting principles, consistently applied (which shall not contain any
“going concern” exception) no later than 180 days after the related fiscal year end, and (ii)
copies of all notices, reports, financial statements, proxies or other written communication
delivered or mailed to all holders of the Series B Convertible Preferred Stock or otherwise to all
holders of the same class of stock held by the Holder.



     15. Descriptive Headings and Governing Law. The description headings of the several
sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a
part of this Warrant. This Warrant shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the State of Delaware without regard to
conflicts of law provisions.



[The Remainder Of This Page Is Intentionally Left Blank.]






11









 








     IN WITNESS WHEREOF, the parties have executed this Warrant as of the date set forth below.



Dated: February 3, 2006




	 	 	 	 	 	 	 	 	 
	RITCHIE CAPITAL FINANCE, L.L.C.	 	SPS COMMERCE, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Mary J. Caulfield
 

Name: Mary J. Caulfield
	 	By:
	 	/s/ Thomas C. Velin
 

Name: Thomas C. Velin
	 	 
	 

	 	Title: President
	 	 	 	Title: Chief Financial Officer	 	 






12









 





ANNEX A




NOTICE OF EXERCISE




	 	 	 
	To:

	 	SPS COMMERCE, INC.







     (1) The undersigned hereby (A) elects to purchase ___shares of Series B
Convertible Preferred Stock of SPS Commerce, Inc., pursuant to the provisions of Section
3(a) of the attached Warrant, and tenders herewith payment of the
purchase price for such shares in full, or (B) elects to exercise this Warrant for the purchase of___shares of
Series B Convertible Preferred Stock, pursuant to the provisions of Section 3(c) of the
attached Warrant.




     (2) In exercising this Warrant, the undersigned hereby confirms and acknowledges that
the shares of Series B Convertible Preferred Stock or the Common Stock to be issued upon
conversion thereof are being acquired solely for the account of the undersigned and not as a
nominee for any other party, and for investment, and that the undersigned will not offer,
sell or otherwise dispose of any such shares of Series B Convertible Preferred Stock or
Common Stock except under circumstances that will not result in a violation of the
Securities Act of 1933, as amended, or any applicable state securities laws.




     (3) The undersigned represents and warrants to the Company that the undersigned is an
“accredited investor” as that term is defined in Regulation D promulgated under the
Securities Act of 1933, as amended (the “Act”) and, either alone or with such advisers as it
may select, has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of its investment in the shares of Series B
Convertible Preferred Stock or Common Stock to be issued upon exercise hereby or conversion
thereof.




     (4) In exercising this Warrant, the undersigned hereby confirms and acknowledges that
the Company did not offer the shares of Series B Convertible Preferred Stock or Common Stock
to be issued upon exercise hereby or conversion thereof to the Holder by any form of general
solicitation or general advertising, including, but not limited to, any advertisement,
article, notice or similar media or broadcast over television or radio, or any seminar or
meeting whose attendees were invited by any general solicitation or general advertising.




     (5) In exercising this Warrant, the undersigned hereby confirms and acknowledges that
it has received a copy of that certain Information Statement of the Company dated *[January
___, 2006] and reviewed and discussed the Company’s business, affairs and current prospects
with such officers and others (including its purchaser representative, if applicable) as it
has deemed appropriate or desirable in connection with the transactions contemplated hereby.
In exercising this Warrant, the undersigned hereby confirms and acknowledges that it has
requested, received and reviewed such information, undertaken such investigation and made
such further inquiries of officers of the Company and others as it has deemed appropriate or
desirable in connection with such transactions.



A-1









 






     (6) In exercising this Warrant, the undersigned understands that it must bear the
economic risk of its investment for an indefinite period of time because the Series B
Convertible Preferred Stock and Common Stock are not, and will not be, registered under the
Act or any applicable state securities laws, except as may be otherwise be determined by the
Company or in connection with the Fourth Amended and Restated Registration Rights Agreement,
dated as of May 16, 2003, by and among the Company and the parties who have executed the
counterpart signature pages thereto or are otherwise bound thereby, as such agreement may be
amended and/or restated from time to time (the “Registration
Rights Agreement”), and such shares may not be resold unless subsequently registered under the Act and such other federal
or state securities laws or unless an exemption from such registration is available. The
undersigned further understands that, except as may be otherwise be determined by the
Company or pursuant to the Registration Rights Agreement, it is not contemplated that any
registration will be made under the Act or any state securities laws.




     (7) Please issue a certificate or certificates representing said shares of Series B
Convertible Preferred Stock in the name of the undersigned or in such other name as is
specified below:



 





(Name)





     (8) Please issue a new Warrant for the unexercised portion of the attached Warrant in
the name of the undersigned or in such other name as is specified below:



	 	 	 
	 

Name:

	 	 
	Date:
	 	 






A-2









 






ANNEX B




ASSIGNMENT FORM




     FOR VALUE RECEIVED, the undersigned registered owner of this Warrant hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned under the within
Warrant, with respect to the number of shares of Series B Convertible Preferred Stock (or Common
Stock) set forth below:



	 	 	 	 	 
	Name of Assignee
	 	Address
	 	No. of Shares





and does hereby irrevocably constitute and appoint                      Attorney to make such transfer on
the books of SPS Commerce, Inc., maintained for the purpose, with full power of substitution in the
premises.



The undersigned also represents that, by assignment hereof, the Assignee acknowledges that this
Warrant and the shares of stock to be issued upon exercise hereof or conversion thereof are being
acquired for investment and that the Assignee will not offer, sell or otherwise dispose of this
Warrant or any shares of stock to be issued upon exercise hereof or conversion thereof except under
circumstances which will not result in a violation of the Securities Act of 1933, as amended, or
any state securities laws. Further, the Assignee has acknowledged that upon exercise of this
Warrant, the Assignee shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the shares of stock so purchased are being acquired for
investment and not with a view toward distribution or resale.



The undersigned, by assignment hereof, agrees to be bound by the terms and conditions of this
Warrant as the Holder of this Warrant.




	 	 	 	 	 
	Name:
	 	 	 	 
	Dated:

	 	 

	 	 






B-1









 






ANNEX C




NOTICE OF ADOPTION

(Registration Rights Agreement)




     This Notice of Adoption (“Adoption Notice”) is executed by the undersigned (the “Adopting
Party”) pursuant to the terms of that certain Fourth Amended and Restated Registration Rights
Agreement dated as of May 16, 2003, as may be amended from time to time (the “Agreement”), by and
among SPS Commerce, Inc., a Delaware corporation, and the other parties thereto. Capitalized terms
used but not defined herein will have the respective meanings ascribed to such terms in the
Agreement. By the execution and delivery of this Adoption Notice, the Adopting Party agrees as
follows:



     1. Acknowledgment. Adopting Party acknowledges that Adopting Party is purchasing the
shares of the Company’s capital stock set forth below (the “Shares”).



     2. Agreement. Adopting Party: (i) agrees that the Shares acquired by Adopting Party
will be bound by and subject to the terms of the Agreement; and (ii) hereby adopts the Agreement
with the same force and effect as if Adopting Party were originally an “Investor.”



     3. Notice. Any notice required or permitted by the Agreement will be given to
Adopting Party at the address or facsimile listed beside Adopting Party’s signature below.



     IN WITNESS WHEREOF, the Adopting Party has caused this Notice of Adoption to be executed by
its duly authorized representative as of the date first written below.



	 	 	 
	Shares Purchased:          
                     
         

	 	                
                   
                              
	Class of Stock:        
                                
      

	 	Printed Name of Adopting Party






Date:                                        




	 	 	 
	                                                
	 	 
	                                                

	 	                                                    
	                                                

	 	Signature
	Address
	 	 






	 	 	 
	Facsimile: (___)                                         

	 	                                                       
     
	 

	 	Printed Name and Title of Authorized
	 

	 	Signatory of Adopting Party






C-1









 





ANNEX D




NOTICE OF ADOPTION

(Voting and Co-Sale Agreement)




     This Notice of Adoption (“Adoption Notice”) is executed by the undersigned (the “Adopting
Party”) pursuant to the terms of that certain Fourth Amended and Restated Voting and Co-Sale
Agreement dated as of May 16, 2003, as may be amended from time to time (the “Agreement”), by and
among SPS Commerce, Inc., a Delaware corporation, and the other parties thereto. Capitalized terms
used but not defined herein will have the respective meanings ascribed to such terms in the
Agreement. By the execution and delivery of this Adoption Notice, the Adopting Party agrees as
follows:



     1. Acknowledgment. Adopting Party acknowledges that Adopting Party is purchasing the
shares of the Company’s capital stock set forth below (the “Shares”).



     2. Agreement. Adopting Party: (i) agrees that the Shares acquired by Adopting Party
will be bound by and subject to the terms of the Agreement; and (ii) hereby adopts the Agreement
with the same force and effect as if Adopting Party were originally an “Investor.”



     3. Notice. Any notice required or permitted by the Agreement will be given to
Adopting Party at the address or facsimile listed beside Adopting Party’s signature below.



     IN WITNESS WHEREOF, the Adopting Party has caused this Notice of Adoption to be executed by
its duly authorized representative as of the date first written below.





	 	 	 
	Shares Purchased:                                        

	 	                                                             
	Class of Stock:                                        

	 	Printed Name of Adopting Party






Date:                                        




	 	 	 
	                                                
	 	 
	                                                

	 	                                                    
	                                                

	 	Signature
	Address
	 	 






	 	 	 
	Facsimile: (___)                                         

	 	                                                       
     
	 

	 	Printed Name and Title of Authorized
	 

	 	Signatory of Adopting Party








D-1