Document:

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                                                                    EXHIBIT 4.6

                      THIS WARRANT MAY BE TRANSFERRED ONLY
                       IN ACCORDANCE WITH SECTION 3 HEREOF

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND SHALL NOT BE (1) SOLD,
PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED FOR CONSIDERATION, BY THE
HOLDER, EXCEPT UPON THE ISSUANCE TO THE CORPORATION OF A FAVORABLE OPINION OF
ITS COUNSEL AND/OR THE SUBMISSION TO THE CORPORATION OF SUCH OTHER EVIDENCE AS
MAY BE SATISFACTORY TO COUNSEL FOR THE CORPORATION, IN EITHER CASE TO THE EFFECT
THAT ANY SUCH TRANSFER FOR CONSIDERATION SHALL NOT BE IN VIOLATION OF THE ACT OR
RULE 144 PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS; OR (2) TRANSFERRED WITHOUT CONSIDERATION BY
THE HOLDER EXCEPT UPON THE ISSUANCE TO THE CORPORATION OF A FAVORABLE OPINION OF
ITS COUNSEL OR THE SUBMISSION TO THE CORPORATION OF SUCH OTHER EVIDENCE AS MAY
BE SATISFACTORY TO COUNSEL TO THE CORPORATION, IN EITHER CASE TO THE EFFECT THAT
ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND APPLICABLE STATE
SECURITIES LAWS.

                        THIS WARRANT IS ONLY EXERCISABLE
                          WITHIN FIVE YEARS OF THE DATE
                            OF ITS INITIAL ISSUANCE.

W-                                                          Warrant to Purchase
                                                                16,667 Shares of
                                                                    Common Stock

         Issued as of: October 20, 1999 ("date of the initial issuance")

                             AUCTION-SALES.COM, INC.
                Organized Under the Laws of the State of Delaware

        THIS CERTIFIES THAT for value received, _________, the registered holder
hereof (the "Holder") is entitled to purchase from Auction-Sales.com, Inc. (the
"Corporation"), at the purchase price of eight dollars ($8.00) per share (the "
Exercise Price"), within five years (60 months) from the date of the initial
issuance of this Warrant (the "Exercise Period"), up to 16,667 shares of Common
Stock, $.001 par value per share, of the Corporation ("Common Stock"). The
Exercise Price per share shall be subject to adjustment from time to time as set
forth herein.

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        This Warrant evidences the right to purchase an aggregate of up to
16,667 shares of Common Stock. The shares of Common Stock to be issued upon
exercise of the Warrant are referred to herein as "Warrant Shares."

        1. EXPIRATION DATE. The Warrant represented hereby will expire in its
entirety and no longer be exercisable after 5:00 p.m. PDT on the last day of the
sixty (60) consecutive month period beginning on the date of the initial
issuance of the Warrant, unless extended ("Expiration Date").

        2. MANNER OF EXERCISE. The Warrant may be exercised at the Corporation's
Office at 3543 Old Conejo Road #105, Newbury Park, California 91320, or upon
such other location designated by the Corporation, upon presentation and
surrender hereof, together with the Warrant Purchase Form at the end hereof,
duly completed and signed, and upon payment to the Corporation of the Exercise
Price (subject to adjustment in accordance with the provisions of Section 8
hereof), for the number of full Warrant Shares in respect of which such Warrants
are then exercised. Payment of the aggregate Exercise Price may be: (i) in cash
or cash equivalents, (ii) in the form of unrestricted Stock already owned by the
Holder (based upon the Fair Market Value of the Stock on the date the Warrant is
exercised, as determined by the Board of Directors of the Corporation in its
sole discretion. However, if the Common Stock is traded on a national securities
exchange or on Nasdaq, the Fair Market Value of the Stock shall be based on the
closing sales price of the Common Stock on the date the Warrant is exercised, or
the closing bid price, if no closing sales price is available), (iii) by
cancellation of any indebtedness owed by the Corporation to the Holder, (iv) by
requesting that the Corporation withhold whole shares of Common Stock then
issuable upon exercise of the Warrant (based on the Fair Market Value of the
Stock on the date the Warrant is exercised, as determined by the Board of
Directors of the Corporation in its sole discretion. However, if the Common
Stock is traded on a national securities exchange or on Nasdaq, the Fair Market
Value of the Stock shall be based on the closing sales price of the Common Stock
on the date the Warrant is exercised, or the closing bid price, if no closing
sales price is available), (v) in the event the Corporation's Common Stock is
registered under the Securities Exchange Act of 1934, as amended, by arrangement
with a broker which is acceptable to the Corporation where payment of the
Exercise Price is made pursuant to an irrevocable direction to the broker to
deliver all or part of the proceeds from the sale of the shares underlying the
Warrant to the Corporation, or (vi) by any combination of the foregoing.

        The Corporation shall not be required to issue fractional Warrant Shares
on the exercise of Warrants. When Warrants are presented for exercise in full at
the same time by the same Holder, the number of full Warrant Shares which shall
be issuable upon the exercise thereof shall be computed on the basis of the
aggregate number of Warrant Shares purchasable on exercise of the Warrants so
presented. If any fraction of a Warrant Share would be issuable on the exercise
of any Warrants in full, the Corporation shall pay an amount in cash equal to
the then current market price per Warrant Share (as determined in the sole
discretion of the Corporation's Board of Directors, unless the Common Stock is
traded on a national securities exchange or Nasdaq, in which case, the Fair
Market Value of the Stock shall be based on the closing sales price of the
Common Stock on the date the Warrant is exercised, or the closing bid price, if
no closing sales price is available) multiplied by such fraction. When Warrants
are presented for exercise as to a

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specified portion, only full Warrant Shares shall be issuable and a new Warrant
bearing the original initial issuance date shall be issuable evidencing the
remaining Warrant or Warrants.

        Upon such surrender of Warrants and payment of the Exercise Price as
aforesaid, the Corporation shall issue and cause to be delivered with all
reasonable speed to or upon the written order of the Holder and in such name or
names as the Holder may designate, a certificate or certificates for the number
of full Warrant Shares so purchased together with payment for any fractional
shares as provided above in this Section 2, and any person so designated to be
named therein shall be deemed to have become a holder of record of such Warrant
Shares as of the date of the surrender of such Warrants and payment of the
Exercise Price, as aforesaid; provided, however, that if, at the date of
surrender of such Warrants and payment of the Exercise Price, the transfer books
for the Warrant Shares or other class of stock purchasable upon the exercise of
such Warrants shall be closed, the certificates for the Warrant Shares in
respect of which such Warrants are then exercised shall be issuable as of the
date on which such books shall next be opened (whether before or after the
Expiration Date) and until such date, the Corporation shall be under no duty to
deliver any certificate for such Warrant Shares. The rights of purchase
represented by the Warrants shall be exercisable, at the election of the Holders
thereof, either in full or from time to time in part and, in the event that a
Warrant is exercised in respect of less than all of the Warrant Shares
purchasable on such exercise at any time prior to the Expiration Date of the
Warrants, a new Warrant evidencing the remaining Warrant or Warrants will be
issued; provided, however, the Corporation shall not be required to issue
fractional Warrants. All Warrants surrendered in the exercise of the rights
thereby evidenced shall be canceled by the Corporation.

        3. LIMITATIONS ON THE TRANSFERABILITY OF WARRANTS. The Warrants shall
not be transferable unless the Holder complies with this paragraph. Any
purported transfer not in compliance with this paragraph shall be null and void.
The Warrants shall be transferable only on the books of the Corporation
maintained at its office at 3543 Old Conejo Road #105, Newbury Park, California
91320, or at such other address as the Corporation may designate to the Holder
in writing, upon delivery thereof duly endorsed with signatures properly
guaranteed by a commercial bank or securities brokerage firm or accompanied by
proper evidence of succession, assignment or authority to transfer. Upon any
registration of transfer, the Corporation shall deliver a new Warrant or
Warrants to the persons entitled thereto bearing the following or similar legend
if such Warrant or Warrants are not registered under the Act:

        THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
        UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND SHALL NOT
        BE (1) SOLD, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED FOR
        CONSIDERATION, BY THE HOLDER, EXCEPT UPON THE ISSUANCE TO THE
        CORPORATION OF A FAVORABLE OPINION OF ITS COUNSEL AND/OR THE SUBMISSION
        TO THE CORPORATION OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO
        COUNSEL FOR THE CORPORATION, IN EITHER CASE TO THE EFFECT THAT ANY SUCH
        TRANSFER FOR CONSIDERATION SHALL NOT BE IN VIOLATION OF THE ACT OR RULE
        144 PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION UNDER THE ACT
        AND

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        APPLICABLE STATE SECURITIES LAWS; OR (2) TRANSFERRED WITHOUT
        CONSIDERATION BY THE HOLDER EXCEPT UPON THE ISSUANCE TO THE CORPORATION
        OF A FAVORABLE OPINION OF ITS COUNSEL OR THE SUBMISSION TO THE
        CORPORATION OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO COUNSEL TO
        THE CORPORATION, IN EITHER CASE TO THE EFFECT THAT ANY SUCH TRANSFER
        SHALL NOT BE IN VIOLATION OF THE ACT AND APPLICABLE STATE SECURITIES
        LAWS.

        4. PAYMENT OF TAXES. The Corporation will pay all documentary stamp
taxes, if any, attributable to the initial issuance of Warrant Shares upon the
exercise of Warrants; provided, however, that the Corporation shall not be
required to pay any other tax or taxes which may be payable in respect of any
transfers involved in the issuance or delivery of any Warrants or certificates
for Warrant Shares in a name other than that of the registered Holder of the
Warrants in respect of which such Warrant Shares are issued, and in such case
the Corporation shall not be required to issue or deliver any certificate for
shares of Common Stock or any Warrant until the person requesting the same has
paid to the Corporation the amount of such tax or has established to the
Corporation's satisfaction that such tax has been paid.

        5. MUTILATED, LOST, STOLEN OR DESTROYED. In case any of the Warrants
shall be mutilated, lost, stolen or destroyed, the Corporation may at its
discretion issue, upon cancellation of the mutilated Warrant, or in lieu of and
in substitution for the Warrant lost, stolen or destroyed, a new Warrant of like
tenor and representing an equivalent right or interest; but only upon receipt of
evidence satisfactory to the Corporation of such loss, theft or destruction of
such Warrant, and indemnity, if requested, also satisfactory to the Corporation.
An applicant for such a substitute Warrant shall also comply with such other
reasonable regulations as the Corporation may prescribe.

        6. RESERVATION OF WARRANT SHARES. The Corporation shall at all times,
while the Warrants are exercisable, keep reserved, out of its authorized Common
Stock, a number of shares of Common Stock sufficient to provide for the exercise
of the rights of purchase represented by the outstanding Warrants. Immediately
after the Expiration Date, however, no shares shall be subject to reservation in
respect of such Warrants.

        7. CANCELLATION OF WARRANTS. The Corporation shall cancel any Warrants
surrendered for exchange, substitution, transfer or exercise in whole or in
part.

        8. ADJUSTMENTS. The Warrant Shares purchasable hereunder and the
Exercise Price shall be subject to adjustments from time to time upon the
happening of certain events, as hereinafter defined:

        8.1. MECHANICAL ADJUSTMENTS. The number of Warrant Shares purchasable
upon the exercise of each Warrant and the Exercise Price shall be subject to
adjustment as follows:

                (a) In the event of any merger, reorganization, consolidation,
        recapitalization, stock dividend, or other change in corporate structure
        affecting the Common Stock of the

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        Corporation, an adjustment will be made in (i) the aggregate number of
        shares reserved for issuance under the Warrants, and (ii) the kind,
        number and exercise price of shares subject to the Warrants, provided
        that the number of shares subject to the Warrants shall always be a
        whole number. The number of Warrant Shares purchasable upon exercise of
        each Warrant immediately prior thereto shall be adjusted so that the
        Holder of each Warrant shall be entitled to receive the kind and number
        of Warrant Shares or other securities of the Corporation which the
        Holder would have owned or have been entitled to receive after the
        happening of any of the events described above, had such Warrant been
        exercised immediately prior to the happening of such event or any record
        date with respect thereto. An adjustment made pursuant to this paragraph
        (a) shall become effective immediately after the effective date of such
        event retroactive to the record date, if any, for such event.

                (b) No adjustment in the number of Warrant Shares purchasable
        hereunder shall be required unless such adjustment would require an
        increase or decrease of at least one percent (1%) in the number of
        Warrant Shares purchasable upon the exercise of each Warrant; provided,
        however, that any adjustments which by reason of this paragraph (b) are
        not required to be made shall be carried forward and taken into account
        in any subsequent adjustment. All calculations shall be made to the
        nearest one-hundredth of a share.

                (c) Whenever the number of Warrant Shares purchasable upon the
        exercise of each Warrant is adjusted, as herein provided, the Exercise
        Price payable upon the exercise of each Warrant shall be adjusted by
        multiplying the Exercise Price immediately prior to the adjustment by a
        fraction, of which the numerator shall be the number of Warrant Shares
        purchasable upon the exercise of each Warrant immediately prior to the
        adjustment, and of which the denominator shall be the number of Warrant
        Shares so purchasable immediately thereafter.

                (d) For the purpose of this Subsection 8.1, the term "shares of
        Common Stock" shall mean (i) the class of stock designated as the Common
        Stock of the Corporation at the date of this Warrant, or (ii) any other
        class of stock resulting from successive changes or reclassification of
        such shares consisting solely of changes in par value, or from par value
        to no par value, or from no par value to par value. In the event that at
        any time, as a result of an adjustment made pursuant to paragraph (a)
        above, the Holder shall become entitled to purchase any shares of the
        Corporation other than shares of Common Stock, thereafter the number of
        such other shares so purchasable upon exercise of each warrant and the
        Exercise Price of such shares shall be subject to adjustment from time
        to time in a manner and on terms as nearly equivalent as practicable to
        the provisions with respect to the Warrant Shares contained in
        paragraphs (a) through (c) above, and the provisions of Sections 1 and 2
        and Subsections 8.2 through 8.4, with respect to the Warrant Shares,
        shall apply on like terms to any such other shares.

        8.2. VOLUNTARY ADJUSTMENT BY THE CORPORATION. The Corporation may at any
time during the term of the Warrants, reduce the then current Exercise Price to
any amount deemed appropriate by the Board of Directors of the Corporation,
approve additional periods for exercise

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of the Warrants or extend the Expiration Date to any time deemed appropriate by
the Board of Directors of the Corporation.

        8.3. NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
purchasable upon the exercise of each Warrant or the Exercise Price of such
Warrant Shares is adjusted, as herein provided, the Corporation shall cause to
be mailed by first class mail, postage prepaid, to each Holder notice of such
adjustment or adjustments setting forth the number of Warrant Shares purchasable
upon the exercise of each Warrant and the Exercise Price of such Warrant Shares
after such adjustment, setting forth a brief statement of the facts requiring
such adjustment and setting forth the computation by which such adjustment was
made. Any failure by the Corporation to give notice to the Holder or any defect
therein shall not affect the validity of such adjustment or of the event
resulting in the adjustment, nor of the Holder's rights to such adjustment.

        8.4. NO ADJUSTMENT FOR DIVIDENDS OR DISTRIBUTIONS. Except as provided in
Subsections 8.1 and 8.6, no adjustments in respect of any dividends or
distributions shall be made during the term of a Warrant or upon the exercise of
a Warrant.

        8.5. RIGHTS UPON CONSOLIDATION, MERGER, ETC.

                (a) In case of any consolidation of the Corporation with or
        merger of the Corporation into another corporation or in case of any
        sale or conveyance to another corporation of the property of the
        Corporation as an entirety or substantially as an entirety ("Sale"),
        such successor or purchasing corporation may assume the obligations
        hereunder, and may execute with the Corporation an agreement that each
        Holder shall have the right thereafter upon payment of the Exercise
        Price to purchase upon exercise of each Warrant the kind and amount of
        shares and other securities and property (including cash) which he would
        have owned or have been entitled to receive after the consummation of
        such Sale had such Warrant been exercised immediately prior to the Sale.
        The Corporation shall mail by first class mail, postage prepaid, to each
        Holder notice of the execution of any Sale agreement. Such agreement
        shall provide for adjustments, which shall be as nearly equivalent as
        may be practicable to the adjustments provided for in this Section 8.
        The provisions of this Subsection 8.5 shall similarly apply to
        successive consolidations, mergers, sales or conveyances.

                (b) In the event that such successor corporation does not
        execute an agreement with the Corporation as provided in paragraph (a)
        above, then each Holder shall be entitled to exercise outstanding
        Warrants upon the payment of the Exercise Price during a period of at
        least thirty (30) days (or such lesser number of days then remaining in
        the Exercise Period) which period shall terminate not less than ten (10)
        days prior to consummation of the Sale, and thereby receive
        consideration in the transaction on the same basis as other previously
        outstanding shares of the same class as the Warrant Shares acquired upon
        exercise. Warrants not exercised in accordance with this paragraph (b)
        before consummation of the Sale will be canceled and become null and
        void. The Corporation shall mail by first class mail, postage prepaid,
        to each Holder, at least ten (10) days prior to the first date on which
        the Warrants are exercisable pursuant to this

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<PAGE>   7

        paragraph (b), notice of the proposed transaction setting forth the
        first and last date on which the Holder may exercise outstanding
        Warrants and a description of the terms of this Warrant providing for
        cancellation of the Warrants in the event the Warrants are not exercised
        by the prescribed date.

                (c) The Corporation's failure to give any notice required by
        this Subsection 8.5 or any defect therein shall not affect the validity
        of any Sale.

        8.6. RIGHTS UPON LIQUIDATION. In case (i) the Corporation shall make any
distribution of its assets to holders of its shares of Common Stock as a
liquidation or partial liquidation dividend or by way of return of capital; or
(ii) the Corporation shall liquidate, dissolve or wind up its affairs (other
than in connection with a Sale); or (iii) an involuntary liquidation occurs,
then the Corporation shall cause to be mailed to each Holder, by first class
mail, at least twenty (20) days prior to the applicable record date, a notice
stating the date on which such distribution, liquidation, dissolution or winding
up is expected to become effective, and the date on which it is expected that
holders of shares of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other property or assets (including
cash) deliverable upon such distribution, liquidation, dissolution or winding
up. The Corporation's failure to give the notice required by this Subsection 8.6
or any defect therein shall not affect the validity of such distribution,
liquidation, dissolution or winding up.

        8.7. STATEMENT ON WARRANTS. Irrespective of any adjustments in the
Exercise Price, Warrants theretofore or thereafter issued may continue to
express the same price as is stated in the Warrants initially issued.

        9. NO RIGHTS AS STOCKHOLDERS. Nothing contained in this Warrant shall be
construed as conferring upon the Holder hereof the right to vote or to receive
dividends or to consent or to receive notice as stockholders in respect of any
meeting of stockholders called for the election of directors of the Corporation
or any other matter, or any rights whatsoever as stockholders of the
Corporation.

        10. NOTICES. Any notice pursuant to this Warrant by any Holder to the
Corporation or by the Corporation to any Holder, shall be in writing and shall
be mailed first class, postage prepaid, or delivered: (i) to the Corporation, at
its office at 3543 Old Conejo Road #105, Newbury Park, California 91320, or such
other address as the Corporation may designate in writing to the Holder; or (ii)
to the Holder, at the Holder's address on the books of the Corporation. The
Corporation's failure to give any notice required by this Warrant or any defect
therein shall not affect the validity of the action taken by the Corporation in
connection therewith.

        11. APPLICABLE LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of California, to the extent not preempted
by federal law, without giving effect to principles of conflict of laws.

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        12. SECURITIES LAWS. The exercise of Warrants is prohibited unless the
issuance of the Warrant Shares has been registered or qualified under applicable
federal and state laws or unless there is an exemption available from such
requirements.

        13. CAPTIONS. The captions of the sections and subsections of this
Warrant have been inserted for convenience only and shall have no substantive
effect.

        14. FORUM DESIGNATION. Any action or proceeding against any of the
parties hereto relating in any way to this Warrant or the subject matter hereof
shall be brought and enforced exclusively in the competent courts of California,
and the parties hereto consent to the exclusive jurisdiction of such courts in
respect of such action or proceeding.

        WITNESS the seal of the Corporation and the signatures of its duly
authorized officers.

                                    AUCTION-SALES.COM, INC.
                                    a Delaware corporation

                                    By:
                                       -------------------------
                                       President

                                    By:
                                       -------------------------
                                       Secretary

                                       Initial Date of Issuance:

                                       October 20, 1999
(Corporate Seal)

                                       -8-

<PAGE>   9

                                SUBSCRIPTION FORM

       (TO BE EXECUTED UPON EXERCISE OF THE WARRANT PURSUANT TO SECTION 2)

        THE UNDERSIGNED HEREBY IRREVOCABLY ELECTS TO EXERCISE THE RIGHT OF
PURCHASE REPRESENTED BY THE WITHIN WARRANT CERTIFICATE FOR, AND TO PURCHASE
THEREUNDER ______________ SHARES OF COMMON STOCK, AS PROVIDED FOR THEREIN, AND
TENDERS HEREWITH PAYMENT OF THE PURCHASE PRICE IN FULL IN THE FORM OF CASH OR A
CERTIFIED OR OFFICIAL BANK CHECK IN THE AMOUNT OF $____________, OR OTHERWISE
EXERCISES THIS WARRANT IN ACCORDANCE WITH SUBSECTION ___ OF SECTION 2 OF THIS
WARRANT.

        PLEASE ISSUE A CERTIFICATE OR CERTIFICATES FOR SUCH COMMON STOCK IN THE
NAME OF:

               NAME:
                     -----------------------------

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

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

               -----------------------------------
               (PLEASE PRINT NAME, ADDRESS AND
               SOCIAL SECURITY NUMBER)

               SIGNATURE
                       ---------------------------

NOTE: THE ABOVE SIGNATURE SHOULD CORRESPOND EXACTLY WITH THE NAME ON THE FIRST
PAGE OF THIS WARRANT CERTIFICATE OR WITH THE NAME OF THE ASSIGNEE APPEARING IN
THE ASSIGNMENT FORM BELOW.

        IF SAID NUMBER OF SHARES SHALL NOT BE ALL OF THE SHARES PURCHASABLE
UNDER THE WITHIN WARRANT CERTIFICATE, A NEW WARRANT CERTIFICATE IS TO BE ISSUED
IN THE NAME OF AFOREMENTIONED FOR THE BALANCE OF THE REMAINING SHARES
PURCHASABLE THEREUNDER, ROUNDED DOWN TO THE NEAREST WHOLE NUMBER OF SHARES, IF
APPLICABLE.

                                       -9-<PAGE>   1
                                                                     EXHIBIT 4.7

        THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT
        BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY
        NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
        AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT
        OR AN OPINION OF COUNSEL SATISFACTORY TO COMPANY THAT SUCH REGISTRATION
        IS NOT REQUIRED.

$__________          UNSECURED SUBORDINATED CONVERTIBLE PROMISSORY NOTE

$___________                                                  October ___, 1999
Note __                                                Newbury Park, California

        FOR VALUE RECEIVED, AUCTION-SALES.COM, INC., a Delaware corporation
("Company"), promises to pay to __________ ("Holder"), or ___ registered
assigns, the principal sum of __________ Dollars ($________), or such lesser
amount as shall equal the outstanding principal amount hereof, together with
interest from the date of this Note on the unpaid principal balance at a rate
equal to eight percent (8.00%) per annum, computed on the basis of the actual
number of days elapsed and a year of 365 days (366 days in the event of a leap
year).

        The following is a statement of the rights of Holder and the conditions
to which this Note is subject, and to which Holder, by the acceptance of this
Note, agrees:

        1. DEFINITIONS. As used in this Note, the following capitalized terms
have the following meanings:

           (a) "Company" includes the corporation initially executing this Note
and any Person which shall succeed to or assume the Obligations of Company under
this Note.

           (b) "Common Stock" shall mean the common stock, $.001 par value per
share of Company.

           (c) "Event of Default" has the meaning given in Section 3 hereof.

           (d) "Holder" shall mean the Person specified in the introductory
paragraph of this Note or any Person who shall at the time be the registered
holder of this Note.

           (e) "Maturity Date" shall mean the earlier to occur of December 31,
2000 or three business days following the effective date of a registered initial
public offering of Company's Common Stock.

<PAGE>   2

           (f) "Obligations" shall mean and include all loans, advances, debts,
liabilities and obligations, howsoever arising, owed by Company to Holder of
every kind and description (whether or not evidenced by any note or instrument
and whether or not for the payment of money), now existing or hereafter arising
under or pursuant to the terms of this Note, including all interest, fees,
charges, expenses, attorneys' fees and costs and accountants' fees and Costs
chargeable to and payable by Company hereunder and thereunder, in each case,
whether direct or indirect absolute or contingent, due or to become due, and
whether or not arising after the commencement of a proceeding under Title 11 of
the United States Code (11 U.S.C. Section 101 et seq.), as amended from time to
time (including post-petition interest) and whether or not allowed or allowable
as a claim in such proceeding.

           (g) "Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, a limited
liability company, an unincorporated association, a joint venture or other
entity or a governmental authority.

        2. PAYMENTS. The principal amount outstanding, plus any accrued but
unpaid interest, shall be paid on the Maturity Date, but is payable at Company's
option at any time prior to the Maturity Date without any prepayment penalty or
premium.

        3. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" under this Note and the other Transaction
Documents:

           (a) Failure to Pay. Company shall fail to pay the principal amount
outstanding, plus any accrued but unpaid interest on the Maturity Date and such
payment shall not have been made within five (5) business days of the Maturity
Date.

           (b) Voluntary Bankruptcy or Insolvency Proceedings. Company shall (i)
apply for or consent to the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of its property, (ii) be
unable, or admit in writing its inability, to pay its debts generally as they
mature, (iii) make a general assignment for the benefit of its or any of its
creditors, (iv) be dissolved or liquidated, (v) become insolvent (as such term
may be defined or interpreted under any applicable statute), (vi) commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or consent to any such relief or to
the appointment of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it, or (vii) take any
action for the purpose of effecting any of the foregoing; or

           (c) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for
the appointment of a receiver, trustee, liquidator or custodian of Company or of
all or a substantial part of the property thereof or an involuntary case or
other proceedings seeking liquidation, reorganization or other relief with
respect to Company or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and

                                       2
<PAGE>   3

an order for relief entered or such proceeding shall not be dismissed or
discharged within thirty (30) days of commencement.

        4. RIGHTS OF HOLDER UPON DEFAULT. Upon the occurrence or existence of
any Event of Default and at any time thereafter during the continuance of such
Event of Default, the rate of interest equal to the maximum rate permitted by
law shall be imposed on the unpaid principal balance under the Note. To the
extent permitted by applicable law, the maximum rate of interest permitted by
law shall also be imposed on all accrued but unpaid interest existing under the
Note on the date of an Event of Default.

        5. CONVERSION. If the principal and unpaid accrued interest is not paid
in full by June 30, 2001, Holder may convert this Note into one share of Common
Stock for every dollar of principal and accrued but unpaid interest owing under
the Note on the date of conversion. No fractional share shall be issued by
Company and any fractional share owing as a result of the conversion of the Note
shall be paid by Company in cash. Upon conversion of this Note, the Note shall
be delivered to Company for cancellation and all Company indebtedness to Holder
as a result of this Note shall upon delivery of this Note and delivery of such
shares of Common Stock, be discharged.

        6. SECURITY AND SUBORDINATION. This Note shall be an unsecured
obligation of Company and shall be subordinated to any bank debt or subsequent
bank debt, or debt similar to bank debt.

        7. RESERVATION OF SHARES. Until the Obligations arising under this Note
are discharged, Company shall reserve a sufficient number of shares of Common
Stock for delivery to Holder upon conversion of this Note in accordance with
Section 5.

        8. SUCCESSORS AND ASSIGNS. Subject to the restrictions on transfer
described in Sections 10 and 11 below, the rights and Obligations of Company and
Holder of this Note shall be binding upon and benefit the successors, assigns,
heirs, administrators and transferees of the parties.

        9. WAIVER AND AMENDMENT. Any provision of this Note may be amended,
waived or modified upon the written consent of Company and Holder.

        10. TRANSFER OF THIS NOTE OR SECURITIES ISSUABLE ON CONVERSION HEREOF.
With respect to any offer, sale or other disposition of this Note or securities
into which such Note may be converted, Holder will give written notice to
Company prior thereto, describing briefly the manner thereof, together with a
written opinion of Holder's counsel, to the effect that such offer, sale or
other distribution may be effected without registration or qualification (under
any federal or state law then in effect). Promptly upon receiving such written
notice and reasonably satisfactory opinion, if so requested, Company, as
promptly as practicable, shall notify Holder that Holder may sell or otherwise
dispose of this Note or such securities in accordance with the

                                       3
<PAGE>   4

terms of the notice delivered to Company. If a determination has been made
pursuant to this Section 10 that the opinion of counsel for Holder is not
reasonably satisfactory to Company, Company shall so notify Holder promptly
after such determination has been made. Each Note thus transferred and each
certificate representing the securities thus transferred shall bear a legend as
to the applicable restrictions on transferability in order to ensure compliance
with any federal or state securities laws, unless in the opinion of counsel for
Company such legend is not required in order to ensure compliance with such
securities laws. Company may issue stop transfer instructions to its transfer
agent in connection with such restrictions. Subject to the foregoing transfers
of this Note shall be registered upon registration books maintained for such
purpose by or on behalf of Company. Prior to presentation of this Note for
registration of transfer, Company shall treat the registered holder hereof as
the owner and holder of this Note for the purpose of receiving all payments of
principal and interest hereon and for all other purposes whatsoever, whether or
not this Note shall be overdue and Company shall not be affected by notice to
the contrary.

        11. ASSIGNMENT BY COMPANY. Neither this Note nor any of the rights,
interests or Obligations hereunder may be assigned, by operation of law or
otherwise, in whole or in part, by Company without the prior written consent of
Holder except in connection with an assignment in whole to a successor
corporation to Company, provided that such successor corporation acquires all or
substantially all of Company's property and assets and Holder's rights hereunder
are not impaired.

        12. NOTICES. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or mailed by registered or certified mail, postage
prepaid, or by recognized overnight courier or personal delivery at the
respective addresses of the parties as set forth on the register maintained by
Company. Any party hereto may by notice so given change its address for future
notice hereunder. Notice shall conclusively be deemed to have been given when
received.

        13. PAYMENT. Payment shall be made in lawful tender of the United
States.

        14. EXPENSES; WAIVERS. If action is instituted to collect this Note,
Company promises to pay all costs and expenses, including, without limitation,
reasonable attorneys' fee, and costs, incurred in connection with such action.
Company hereby waives notice of default, presentment or demand for payment,
protest or notice of nonpayment or dishonor and all other notices or demands
relative to this instrument.

        15. GOVERNING LAW. This Note and all actions arising out of or in
connection with this Note shall be governed by and construed in accordance with
the laws of the State of California, without regard to the conflicts of law
provisions of the State of California, or of any other state.

                                       4
<PAGE>   5

        16. WAIVER OF JURY TRIAL. To the fullest extent permitted by applicable
law, Company and the Secured Party hereby irrevocably and expressly waive all
right to a trial by jury in any action, proceeding, counterclaim (whether based
upon contract, tort or otherwise) arising out of or relating to this Agreement,
or other documents entered in connection herewith or the transactions
contemplated hereby.

        17. HEADINGS. The headings of the sections and subsections of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.

        18. SEVERABILITY. In case any one or more of the provisions contained in
this Agreement shall be deemed invalid, illegal, or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.

            [the remainder of this page is intentionally left blank]

                                        5
<PAGE>   6

        IN WITNESS WHEREOF, Company has caused this Note to be issued as of the
date first written above.

                                        AUCTION-SALES.COM, INC.

                                        By:
                                            -----------------------------------
                                            Name: Zahid Rafiq
                                            Title: Chief Executive Officer

                                        6

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